EU External Relations Law: The Cases in Context 9781509939695, 9781509939725, 9781509939718
Marking the 50th anniversary of the influential ERTA doctrine, this book analyses and contextualises the entire breadth
239 48 15MB
English Pages [1047] Year 2022
Outline Table of Contents
Detailed Table of Contents
List of Contributors
List of Abbreviations
EU External Relations Law and Navigating the Case Law of the Court of Justice of the European Union
I. EU External Relations Law
II. Celebrating Half a Century of EU External Relations
III. About the Book
IV. Acknowledgements
V. The Future
1. Implied Powers of the EU, Limits to Political Expediency and Internationally Inspired Pragmatism: Commission v Council (ERTA)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
2. International Agreements in the EU Legal Order: International Fruit
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
3. International Agreements as an Integral Part of EU Law: Haegeman
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
4. Common Commercial Policy and the Determination of Exclusivity: Opinion 1/75 (Local Cost Standard)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
5. The EU Customs Union, International Agreements of EU Member States, and the Doctrine of Substitution: Nederlandse Spoorwegen
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
6. Establishing Direct Effect of Provisions in International Agreements: Bresciani
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
7. Refining and Expanding Implied Powers of the Union: Kramer
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
8. Linking Internal and External Trade in a Perfect Customs Union: Donckerwolcke
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
9. EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty: Opinion 1/76 (Laying Up Fund for Inland Waterway Vessels)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
10. The Birth of the Principle of Close Cooperation, Declaration of Competences, and the Ruling Procedure: Ruling 1/78 (Convention on Nuclear Protection)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
11. Defining the Scope of the Treaty-Making Competence for the Formulation of the Common Commercial Policy: Opinion 1/78 (Natural Rubber)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
12. International Agreements Concluded by Member States Prior to their EU Accession: Burgoa
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
13. The Purpose of International Agreements and their Direct Effect: Polydor
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
14. Status and Enforceability of EU International Agreements within the Domestic Legal Systems of the Member States: Kupferberg
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
15. The EU's Common Customs Tariff, Uniform Application of International Agreements, and the Demarcation between EU and Member State 'Spheres of International Law': SPI/SAMI
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
16. Direct Effect of Association Agreements and the Meaning of 'Association': Demirel
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
17. Judicial Review of EU Measures in the Light of WTO Rules: Fediol and Nakajima
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
18. The Integration of Decisions of Association Councils in EU Law: Greece v Commission (Special Aid to Turkey)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
19. The Legal Effects of Decisions of Autonomous Bodies Established under an International Agreement: Sevince
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
20. The Union's Participation in Legally Binding International Third-Party Dispute Settlement: Opinion 1/91 (EEA I) and Opinion 1/92 (EEA II)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
21. Setting the Multiple Functions of Customary International Law in the EU Legal Order: Poulsen
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
22. ERTA, Mixity and the Duty of Cooperation in the Conclusion of International Agreements: Opinion 2/91 (ILO Convention)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
23. The Reviewability of Acts Adopted by the Member States Meeting within the Council: Parliament v Council and Commission (Bangladesh Aid)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
24. Legality of the European Development Fund and the European Parliament's Prerogatives: Parliament v Council (European Development Fund)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
25. Unrecognised 'States' and EU Law: Anastasiou I
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
26. No General Treaty-Making Power of the Commission to Conclude International Administrative Agreements: France v Commission I
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
27. Consistent Interpretation and Continuous Dialogue between the EU and the WTO: Germany v Council (Bananas)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
28. A Setback in a Never-Ending Expansion to External Competence? Opinion 1/94 (WTO)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
29. The Scope of the Union's Exclusive External Competences and the Verification of Competence: Opinion 2/92 (OECD)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
30. Unilateral Measures of Member States Affecting the Internal Market and the Law/Politics Divide in External Relations: Commission v Greece (FYROM)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
31. EU Membership in International Organisations and the Joint Exercise of Membership Rights: Commission v Council (FAO)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
32. The First Attempt at EU Accession to the ECHR: Opinion 2/94
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
33. Enforcement of International Sanctions within the EU Legal Order: Bosphorus
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
34. Scope of EU Development Policy: Portugal v Council (India Cooperation Agreement)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
35. Legal Certainty and Customary International Law: Opel Austria
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
36. Invoking Customary International Law before the Court: Racke
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
37. The Effect of WTO Law in the EU Legal Order: Portugal v Council
Keywords
I. Introduction AND THE CASE LAW BEFORE PORTUGAL V COUNCIL
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
38. The Member States' Duty to Denounce Anterior Treaties: Commission v Portugal (Maritime Policies)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
39. The Relationship between the Common Commercial Policy and Other External Competences of the EU: Opinion 2/00 (Cartagena Protocol)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
40. Autonomy of the EU Legal Order and International Agreements Extending the Acquis: Opinion 1/00 (European Common Aviation Area)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
41. Clarification of Exclusive Implied External Competence of the Union: Open Skies
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
42. Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements: France v Commission II
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
43. The Effect of WTO Dispute Settlement Body Decisions in EU Law: Van Parys
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
44. Direct Effect of the EU-Russia Partnership and Cooperation Agreement, Non-discrimination and the Beautiful Game: Simutenkov
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
45. The Indissociable Link between Environmental Policy and the Common Commercial Policy: Commission v Council (Rotterdam Convention I)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
46. Lowering the Threshold for Finding Implied Powers: Opinion 1/03 (Lugano Convention)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
47. The Exclusive Jurisdiction of the Court and International Courts: Commission v Ireland (Mox Plant)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
48. Judicial Protection in Autonomous Restrictive Measures Involving Composite Administrative Procedures: OMPI
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
49. The Autonomy of EU Law vis-a-vis International Law: Kadi I and Kadi II
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
50. Laying the Foundation for a Broad Scope of EU Development Cooperation Policy and its Delimitation with Other EU External Competence: Parliament v Commission (Philippines Border Management)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
51. The Pre-Lisbon Machinery for the Delimitation of the CFSP: Commission v Council (ECOWAS)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
52. The Legal Effects of the MARPOL Convention and the UN Convention on the Law of the Sea: Intertanko
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
53. Implied External Exclusivity and the Duty of Loyal Cooperation in International Organisations: Commission v Greece (International Maritime Organisation)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
54. Visa Requirements for Turkish Citizens: Soysal & Savatli and Demirkan
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Cases
V. Additional Reading
55. The Application of EU Law in an Unrecognised Entity: Apostolides v Orams
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
56. Potential Incompatibility of International Agreements Concluded by Member States before Accession: Commission v Austria, Commission v Sweden and Commission v Finland
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
57. The Application of EU International Agreements to Occupied and Disputed Territories: Brita
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
58. Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts: Commission v Sweden (PFOS)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
59. The Ambivalent Clarification of the Effects of International Conventional and Customary Law in the European Union: Air Transport Association of America
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
60. The Choice of Legal Basis between the AFSJ and the CFSP: Parliament v Council (Smart Sanctions)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
61. Common Commercial Policy or Internal Market Rules as the Legal Basis for the Conclusion of International Agreements after Lisbon: Commission v Council (Conditional Access Convention)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
62. The Choice of Legal Basis for Coordination of Social Security Systems with Associated Third Countries: UK v Council (EEC-Turkey)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
63. Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget: Elitaliana
Keywords
I. Introduction
II. Facts
III. The EU Courts
IV. The Importance of the Case
V. Additional Reading
64. Intellectual Property and the Post-Lisbon Common Commercial Policy: Daiichi Sankyo
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
65. The Application of EU Internal Competences in an External Context: UK v Council (EEA)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
66. The Normalisation of CFSP International Agreements in the EU Legal Order: Parliament v Council (Mauritius) and Parliament v Council (Tanzania)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
67. The Legal Basis for International Agreements in the field of Development Cooperation Post-Lisbon, and its Potential as a Catch-All Provision: Commission v Council (Philippines PCA)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
68. Member States as Trustees of the Union in International Organisations: Germany v Council (OIV)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
69. The ERTA Doctrine Post-Lisbon: Opinion 1/13 (Convention on the Civil Aspects of International Child Abduction)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
70. The Second Attempt at EU Accession to the ECHR: Opinion 2/13
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
71. The Impact of Obligations under International Agreements on the (Judicial) Review of EU Measures: Stichting Natuur en Milieu and Pesticide Action Network Europe
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
72. Hybrid Acts of the EU and its Member States Concerning International Agreements: Commission v Council (US Air Transport Agreement)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
73. Balancing Institutional Powers in Negotiating Directives and EU External Environmental Relations: Commission v Council (Australia ETS)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
74. EU Representation in International Litigation: Council v Commission (International Tribunal for the Law of the Sea)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
75. The Compatibility of EU International Agreements Extending to Occupied Territories with International Law: Front Polisario and Western Sahara Campaign UK
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Cases
V. Additional Reading
76. The Scope of the Court's Jurisdiction in the CFSP: H v Council and Others
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
77. Institutional Balance in the Conclusion of Non-binding International Agreements Revisited: Council v Commission (Swiss MoU)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
78. The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon: Opinion 3/15 (Marrakesh Treaty)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
79. Attribution of Authorship of 'EU' Legal Acts: NF and Others v European Council
Keywords
I. Introduction
II. Facts
III. The Courts
IV. The Importance of the Case
V. Additional Reading
80. The Absence of Rights to Humanitarian Visas, and Missions of EU Member States in Third Countries: X and X v Belgium
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
81. Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures: Rosneft
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
82. The EU Competence to Conclude the New Generation of Free Trade Agreements: Opinion 2/15 (EU-Singapore FTA)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
83. International Agreements Assessed Through the Prism of the Charter of Fundamental Rights: Opinion 1/15 (EU-Canada PNR)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
84. The Unitary Representation of the Union in an International Forum and Clarification of Shared Competence and Facultative Mixity Post-Lisbon: Germany v Council (COTIF I) and Commission v Germany (COTIF II)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Cases
V. Additional Reading
85. The Web of Autonomy of the EU Legal Order: Achmea
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
86. The Delineation between CFSP and Non-CFSP Matters: Commission v Council (Kazakhstan)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
87. Mixity and Exercising Shared Competence in International Fora: Commission v Council (Antarctic Marine Protected Areas)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
88. Investor–State Dispute Tribunals Established under EU International Agreements: Opinion 1/17 (EU–Canada CETA)
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
89. Ensuring Respect for International Humanitarian Law Through Labelling Requirements: OJE and Vignoble Psagot
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
90. Inter se Agreements between Member States, and the Outer Limits of the Court's Jurisdiction in Infringement Proceedings: Slovenia v Croatia
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
91. Jurisdiction of the Court for Non-contractual Liability and Actions for Damages Claims within the CFSP: Bank Refah Kargaran
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
92. The Right of Third States to Challenge EU Restrictive Measures before the Court: Venezuela v Council
Keywords
I. Introduction
II. Facts
III. The Court
IV. The Importance of the Case
V. Additional Reading
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- Graham Butler
- Ramses A Wessel (editors)
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EU EXTERNAL RELATIONS LAW: THE CASES IN CONTEXT Marking the 50th anniversary of the influential ERTA doctrine, this book analyses and contextualises the entire breadth of the jurisprudence of EU external relations law through a systematic, case-by-case account of the field. The entire framework of EU external relations law has been built from the ground up by the jurisprudence of the Court of Justice of the European Union. At the beginning of the field’s emergence, the legal questions to be answered concerned the division of powers and competence between, firstly, the Member States and that of the Union; and secondly, the division of powers and competence between the different institutions of the Union. Questions on such matters continue to be asked, but, more contemporarily, new legal questions have arisen that have been in need of adjudication, including questions concerning the autonomy of Union law; the relationship between the Union and other international organisations; the relationship between Union law and international law; and the scope and breadth of international agreements; amongst others. The book features established academic scholars, judges, agents of institutions and Member States, and legal practitioners in the field of EU external relations law, analysing over 90 cases in which the Court has legally shaped the theory and practice of the external dimension of legal Europe.
Reviews ‘This book is a positive smorgasbord of treats from across the entire field of EU external relations law. Featuring incisive and authoritative case commentary from an impressive line-up of leading scholars in the field, who analyse no fewer than 92 of the canonical EU cases, this book will be an invaluable resource for all those interested in the subject.’ – Gráinne de Búrca, Florence Ellinwood Allen Professor of Law, New York University. ‘This volume is rich in analysis and admirably comprehensive. All the leading cases are covered, as well as others perhaps less well known, of which it is extremely useful to be reminded. The history of the development of this area of EU law, in which the Court of Justice has played such a key role, is unfolded chapter by chapter. The star-studded cast of commentators offers new insights on cases we thought we were all familiar with.’ – Sir Alan Dashwood QC, Henderson Chambers; Professor Emeritus of European Law, University of Cambridge. ‘Long regarded as the Cinderella of EU law, this important book shows how outdated this view of EU external relations law actually is. In fact, from ERTA onwards right up to cases such as Opinion 1/17, cases on EU external relations are increasingly at the heart of EU law. Indeed, this marvellous anthology of the case law and commentaries thereon simply demonstrates the broad, international reach of EU law, affecting states ranging from Iran and Venezuela on the one hand, to disputed territories such Western Sahara and the West Bank on the other. This book consists of over 90 vivid and concise essays, each with further references and reading. This is precisely what the modern legal anthology should look like and it reflects so well on the industry and erudition of the authors and editors alike.’ – The Hon. Mr. Justice Gerard Hogan, Judge of the Supreme Court of Ireland; Former Advocate General, Court of Justice of the European Union. ‘EU law on external relations has evolved over the years into a self-standing part of EU law with its own specificities. The founding treaties remaining rather silent on the subject, it fell to the Court of Justice, not to be accused of denial of justice, to fill the gaps. As from ERTA, it has answered the challenge in a highly dynamic case law; and that until today, being confronted with a host of new questions. This book offers a thorough analysis of the evolution of that case law. The impressive tableau of expert authors, both from academia and practice, vouches for its quality. The book enriches existing literature and is highly welcomed.’ – Christiaan Timmermans, Former Judge, Court of Justice, Court of Justice of the European Union.
EU External Relations Law: The Cases in Context Edited by
Graham Butler and
Ramses A Wessel
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Outline Table of Contents Detailed Table of Contents����������������������������������������������������������������������������������������������xiii List of Contributors�������������������������������������������������������������������������������������������������������� xxv List of Abbreviations�����������������������������������������������������������������������������������������������������xxxi EU External Relations Law and Navigating the Case Law of the Court of Justice of the European Union������������������������������������������������������������������������������������������������� 1 Graham Butler and Ramses A Wessel 1. Implied Powers of the EU, Limits to Political Expediency and Internationally Inspired Pragmatism: Commission v Council (ERTA)���������������������������������������������������� 9 Inge Govaere 2. International Agreements in the EU Legal Order: International Fruit��������������������������� 21 Alessandro Petti and Joanne Scott 3. International Agreements as an Integral Part of EU Law: Haegeman��������������������������� 35 Ramses A Wessel 4. Common Commercial Policy and the Determination of Exclusivity: Opinion 1/75 (Local Cost Standard)���������������������������������������������������������������������������� 45 Marise Cremona and Jaka Kukavica 5. The EU Customs Union, International Agreements of EU Member States, and the Doctrine of Substitution: Nederlandse Spoorwegen���������������������������������������� 57 Graham Butler 6. Establishing Direct Effect of Provisions in International Agreements: Bresciani������������ 67 Timothy Roes 7. Refining and Expanding Implied Powers of the Union: Kramer������������������������������������ 77 Tobias Lock 8. Linking Internal and External Trade in a Perfect Customs Union: Donckerwolcke�������� 89 Piet Eeckhout 9. EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty: Opinion 1/76 (Laying Up Fund for Inland Waterway Vessels)��������������������������������������� 97 Allan Rosas 10. The Birth of the Principle of Close Cooperation, Declaration of Competences, and the Ruling Procedure: Ruling 1/78 (Convention on Nuclear Protection)��������������� 111 Anna Södersten
vi Outline Table of Contents 11. Defining the Scope of the Treaty-Making Competence for the Formulation of the Common Commercial Policy: Opinion 1/78 (Natural Rubber)����������������������������������� 123 Per Cramér 12. International Agreements Concluded by Member States Prior to their EU Accession: Burgoa��������������������������������������������������������������������������������������������������������������������� 133 Panos Koutrakos 13. The Purpose of International Agreements and their Direct Effect: Polydor����������������� 145 Jan Klabbers 14. Status and Enforceability of EU International Agreements within the Domestic Legal Systems of the Member States: Kupferberg������������������������������������������������������� 155 Eleftheria Neframi 15. The EU’s Common Customs Tariff, Uniform Application of International Agreements, and the Demarcation between EU and Member State ‘Spheres of International Law’: SPI/SAMI������������������������������������������������������������������������������ 167 Dylan Geraets 16. Direct Effect of Association Agreements and the Meaning of ‘Association’: Demirel��������173 Guillaume Van der Loo 17. Judicial Review of EU Measures in the Light of WTO Rules: Fediol and Nakajima���������183 Tamara Perišin and Ilektra Antonaki 18. The Integration of Decisions of Association Councils in EU Law: Greece v Commission (Special Aid to Turkey)����������������������������������������������������������� 195 Fernando Castillo de la Torre 19. The Legal Effects of Decisions of Autonomous Bodies Established under an International Agreement: Sevince������������������������������������������������������������������������� 205 Nathan Cambien 20. The Union’s Participation in Legally Binding International Third-Party Dispute Settlement: Opinion 1/91 (EEA I) and Opinion 1/92 (EEA II)������������������������������������� 215 Esa Paasivirta 21. Setting the Multiple Functions of Customary International Law in the EU Legal Order: Poulsen������������������������������������������������������������������������������������������������� 225 Charlotte Beaucillon 22. ERTA, Mixity and the Duty of Cooperation in the Conclusion of International Agreements: Opinion 2/91 (ILO Convention)������������������������������������������������������������� 235 Mirka Kuisma 23. The Reviewability of Acts Adopted by the Member States Meeting within the Council: Parliament v Council and Commission (Bangladesh Aid)����������������������� 247 Luca Pantaleo 24. Legality of the European Development Fund and the European Parliament’s Prerogatives: Parliament v Council (European Development Fund)���������������������������� 259 Sandra Bartelt 25. Unrecognised ‘States’ and EU Law: Anastasiou I������������������������������������������������������� 269 Alina Tryfonidou
Outline Table of Contents vii 26. No General Treaty-Making Power of the Commission to Conclude International Administrative Agreements: France v Commission I�������������������������������������������������� 279 Andrea Ott 27. Consistent Interpretation and Continuous Dialogue between the EU and the WTO: Germany v Council (Bananas)���������������������������������������������������������������������������������� 289 Joseph A McMahon 28. A Setback in a Never-Ending Expansion to External Competence? Opinion 1/94 (WTO)������������������������������������������������������������������������������������������������ 299 Enzo Cannizzaro 29. The Scope of the Union’s Exclusive External Competences and the Verification of Competence: Opinion 2/92 (OECD)��������������������������������������������������������������������� 311 Daniel Sarmiento 30. Unilateral Measures of Member States Affecting the Internal Market and the Law/Politics Divide in External Relations: Commission v Greece (FYROM)�������������� 321 Henri de Waele 31. EU Membership in International Organisations and the Joint Exercise of Membership Rights: Commission v Council (FAO)����������������������������������������������� 329 Rita Guerreiro Teixeira and Jan Wouters 32. The First Attempt at EU Accession to the ECHR: Opinion 2/94��������������������������������� 341 Stian Øby Johansen 33. Enforcement of International Sanctions within the EU Legal Order: Bosphorus��������� 351 Aindrias Ó Caoimh 34. Scope of EU Development Policy: Portugal v Council (India Cooperation Agreement)����� 359 Morten Broberg 35. Legal Certainty and Customary International Law: Opel Austria������������������������������ 367 Marcus Klamert 36. Invoking Customary International Law before the Court: Racke������������������������������� 377 Jed Odermatt 37. The Effect of WTO Law in the EU Legal Order: Portugal v Council��������������������������� 387 Holger P Hestermeyer 38. The Member States’ Duty to Denounce Anterior Treaties: Commission v Portugal (Maritime Policies)��������������������������������������������������������������������������������������������������� 397 Hannes Lenk 39. The Relationship between the Common Commercial Policy and Other External Competences of the EU: Opinion 2/00 (Cartagena Protocol)������������������������������������� 407 Koen Lenaerts and Stanislas Adam 40. Autonomy of the EU Legal Order and International Agreements Extending the Acquis: Opinion 1/00 (European Common Aviation Area)����������������������������������������������������� 421 Cécile Rapoport 41. Clarification of Exclusive Implied External Competence of the Union: Open Skies��������433 Wybe Th Douma
viii Outline Table of Contents 42. Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements: France v Commission II�������������������������������������������������������������������������������������������� 443 Paula García Andrade 43. The Effect of WTO Dispute Settlement Body Decisions in EU Law: Van Parys����������� 455 Karsten Engsig Sørensen 44. Direct Effect of the EU–Russia Partnership and Cooperation Agreement, Non-discrimination and the Beautiful Game: Simutenkov������������������������������������������ 465 Adam Łazowski 45. The Indissociable Link between Environmental Policy and the Common Commercial Policy: Commission v Council (Rotterdam Convention I)����������������������� 477 Geert De Baere 46. Lowering the Threshold for Finding Implied Powers: Opinion 1/03 (Lugano Convention)������������������������������������������������������������������������������������������������ 489 Merijn Chamon 47. The Exclusive Jurisdiction of the Court and International Courts: Commission v Ireland (Mox Plant)��������������������������������������������������������������������������� 501 Andrés Delgado Casteleiro 48. Judicial Protection in Autonomous Restrictive Measures Involving Composite Administrative Procedures: OMPI����������������������������������������������������������������������������� 511 Trevor Redmond 49. The Autonomy of EU Law vis-à-vis International Law: Kadi I and Kadi II���������������� 523 Christina Eckes 50. Laying the Foundation for a Broad Scope of EU Development Cooperation Policy and its Delimitation with Other EU External Competence: Parliament v Commission (Philippines Border Management)����������������������������������������������������������������������������� 533 Tina Van den Sanden 51. The Pre-Lisbon Machinery for the Delimitation of the CFSP: Commission v Council (ECOWAS)��������������������������������������������������������������������������������������������������������������� 543 Rass Holdgaard and Gustav Krohn Schaldemose 52. The Legal Effects of the MARPOL Convention and the UN Convention on the Law of the Sea: Intertanko����������������������������������������������������������������������������� 557 Mario Mendez 53. Implied External Exclusivity and the Duty of Loyal Cooperation in International Organisations: Commission v Greece (International Maritime Organisation)������������ 567 Thomas Ramopoulos 54. Visa Requirements for Turkish Citizens: Soysal & Savatli and Demirkan�������������������� 579 Bruno De Witte 55. The Application of EU Law in an Unrecognised Entity: Apostolides v Orams������������ 589 Nikos Skoutaris
Outline Table of Contents ix 56. Potential Incompatibility of International Agreements Concluded by Member States before Accession: Commission v Austria, Commission v Sweden and Commission v Finland������������������������������������������������������������������������������������������������������������������ 599 Luigi Lonardo 57. The Application of EU International Agreements to Occupied and Disputed Territories: Brita������������������������������������������������������������������������������������������������������� 609 Paul James Cardwell 58. Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts: Commission v Sweden (PFOS)������������������������������������������������������� 619 Pieter Jan Kuijper 59. The Ambivalent Clarification of the Effects of International Conventional and Customary Law in the European Union: Air Transport Association of America��������� 633 Isabelle Bosse-Platière 60. The Choice of Legal Basis between the AFSJ and the CFSP: Parliament v Council (Smart Sanctions)����������������������������������������������������������������������������������������������������� 645 José Manuel Cortés Martín and Gloria Fernández Arribas 61. Common Commercial Policy or Internal Market Rules as the Legal Basis for the Conclusion of International Agreements after Lisbon: Commission v Council (Conditional Access Convention)������������������������������������������������������������������������������ 655 Roberto Mastroianni and Giorgia Lo Tauro 62. The Choice of Legal Basis for Coordination of Social Security Systems with Associated Third Countries: UK v Council (EEC–Turkey)����������������������������������������������������������� 669 Katarina Hyltén-Cavallius 63. Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget: Elitaliana�������679 Ricardo da Silva Passos 64. Intellectual Property and the Post-Lisbon Common Commercial Policy: Daiichi Sankyo��������������������������������������������������������������������������������������������������������� 689 Joris Larik 65. The Application of EU Internal Competences in an External Context: UK v Council (EEA)������������������������������������������������������������������������������������������������� 701 Tarjei Bekkedal 66. The Normalisation of CFSP International Agreements in the EU Legal Order: Parliament v Council (Mauritius) and Parliament v Council (Tanzania)��������������������� 713 Juan Santos Vara 67. The Legal Basis for International Agreements in the field of Development Cooperation Post-Lisbon, and its Potential as a Catch-All Provision: Commission v Council (Philippines PCA)����������������������������������������������������������������� 725 Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero 68. Member States as Trustees of the Union in International Organisations: Germany v Council (OIV)���������������������������������������������������������������������������������������� 735 Theodore Konstadinides
x Outline Table of Contents 69. The ERTA Doctrine Post-Lisbon: Opinion 1/13 (Convention on the Civil Aspects of International Child Abduction)���������������������������������������������������������������������������� 745 Christian Thorning 70. The Second Attempt at EU Accession to the ECHR: Opinion 2/13����������������������������� 755 Katja S Ziegler 71. The Impact of Obligations under International Agreements on the (Judicial) Review of EU Measures: Stichting Natuur en Milieu and Pesticide Action Network Europe������������������������������������������������������������������������������������������������������� 775 Anne Thies 72. Hybrid Acts of the EU and its Member States Concerning International Agreements: Commission v Council (US Air Transport Agreement)����������������������������������������������� 787 Joni Heliskoski 73. Balancing Institutional Powers in Negotiating Directives and EU External Environmental Relations: Commission v Council (Australia ETS)����������������������������� 797 Sanja Bogojević 74. EU Representation in International Litigation: Council v Commission (International Tribunal for the Law of the Sea)���������������������������������������������������������� 805 Alexander Kornezov 75. The Compatibility of EU International Agreements Extending to Occupied Territories with International Law: Front Polisario and Western Sahara Campaign UK��������������� 817 Eva Kassoti 76. The Scope of the Court’s Jurisdiction in the CFSP: H v Council and Others��������������� 831 Luca Prete 77. Institutional Balance in the Conclusion of Non-binding International Agreements Revisited: Council v Commission (Swiss MoU)�������������������������������������� 841 Anders Neergaard 78. The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon: Opinion 3/15 (Marrakesh Treaty)������������������������������������������������������������������������������ 851 Gesa Kübek 79. Attribution of Authorship of ‘EU’ Legal Acts: NF and Others v European Council���� 861 Mauro Gatti 80. The Absence of Rights to Humanitarian Visas, and Missions of EU Member States in Third Countries: X and X v Belgium��������������������������������������������������������������������� 871 Louise Halleskov 81. Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures: Rosneft���������������������������������������������������������������������������������������������������� 881 Peter Van Elsuwege 82. The EU Competence to Conclude the New Generation of Free Trade Agreements: Opinion 2/15 (EU–Singapore FTA)���������������������������������������������������������������������������� 891 Christine Kaddous
Outline Table of Contents xi 83. International Agreements Assessed Through the Prism of the Charter of Fundamental Rights: Opinion 1/15 (EU–Canada PNR)����������������������������������������� 907 Suzanne Kingston 84. The Unitary Representation of the Union in an International Forum and Clarification of Shared Competence and Facultative Mixity Post-Lisbon: Germany v Council (COTIF I) and Commission v Germany (COTIF II)��������������������������������������������������� 917 Maciej Szpunar and Roland Klages 85. The Web of Autonomy of the EU Legal Order: Achmea�������������������������������������������� 927 Xavier Groussot and Marja-Liisa Öberg 86. The Delineation between CFSP and Non-CFSP Matters: Commission v Council (Kazakhstan)������������������������������������������������������������������������������������������������������������ 939 Thomas Verellen 87. Mixity and Exercising Shared Competence in International Fora: Commission v Council (Antarctic Marine Protected Areas)��������������������������������������� 949 Frederik Naert 88. Investor–State Dispute Tribunals Established under EU International Agreements: Opinion 1/17 (EU–Canada CETA)���������������������������������������������������������������������������� 959 Kieran Bradley 89. Ensuring Respect for International Humanitarian Law Through Labelling Requirements: OJE and Vignoble Psagot������������������������������������������������������������������� 971 Sara Poli 90. Inter se Agreements between Member States, and the Outer Limits of the Court’s Jurisdiction in Infringement Proceedings: Slovenia v Croatia�������������������������������������� 981 Federico Casolari 91. Jurisdiction of the Court for Non-contractual Liability and Actions for Damages Claims within the CFSP: Bank Refah Kargaran��������������������������������������������������������� 991 Graham Butler and Ramses A Wessel 92. The Right of Third States to Challenge EU Restrictive Measures before the Court: Venezuela v Council�������������������������������������������������������������������������������������������������1001 Francesca Finelli
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Detailed Table of Contents Outline Table of Contents�������������������������������������������������������������������������������������������������� v List of Contributors�������������������������������������������������������������������������������������������������������� xxv List of Abbreviations�����������������������������������������������������������������������������������������������������xxxi EU External Relations Law and Navigating the Case Law of the Court of Justice of the European Union������������������������������������������������������������������������������������������������� 1 Graham Butler and Ramses A Wessel 1. Implied Powers of the EU, Limits to Political Expediency and Internationally Inspired Pragmatism: Commission v Council (ERTA)���������������������������������������������������� 9 Case 22/70, Commission of the European Communities v Council of the European Communities, ECLI:EU:C:1971:32 (ERTA), delivered 31 March 1971. Inge Govaere 2. International Agreements in the EU Legal Order: International Fruit��������������������������� 21 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, delivered 12 December 1972. Alessandro Petti and Joanne Scott 3. International Agreements as an Integral Part of EU Law: Haegeman��������������������������� 35 Case 180/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41, delivered 30 April 1974. Ramses A Wessel 4. Common Commercial Policy and the Determination of Exclusivity: Opinion 1/75 (Local Cost Standard)���������������������������������������������������������������������������� 45 Opinion 1/75, Draft understanding on a local cost standard, ECLI:EU:C:1975:145, delivered 11 November 1975. Marise Cremona and Jaka Kukavica 5. The EU Customs Union, International Agreements of EU Member States, and the Doctrine of Substitution: Nederlandse Spoorwegen���������������������������������������� 57 Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:154, delivered 19 November 1975. Graham Butler 6. Establishing Direct Effect of Provisions in International Agreements: Bresciani������������ 67 Case 87/75, Conceria Daniele Bresciani v Amministrazione Italiana delle Finanze, ECLI:EU:C:1976:18, delivered 5 February 1976. Timothy Roes
xiv Detailed Table of Contents 7. Refining and Expanding Implied Powers of the Union: Kramer������������������������������������ 77 Joined Cases 3, 4, 6/76, Cornelis Kramer and Others, ECLI:EU:C:1976:114, delivered 14 July 1976. Tobias Lock 8. Linking Internal and External Trade in a Perfect Customs Union: Donckerwolcke�������� 89 Case 41/76, Suzanne Criel née Donckerwolcke and Henri Schou v Procureur de la République au tribunal de grande instance de Lille and Director General of Customs, ECLI:EU:C:1976:182, delivered 15 December 1976. Piet Eeckhout 9. EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty: Opinion 1/76 (Laying Up Fund for Inland Waterway Vessels)��������������������������������������� 97 Opinion 1/76, Draft agreement establishing a European laying-up fund for inland waterway vessels, ECLI:EU:C:1977:63, delivered 26 April 1977. Allan Rosas 10. The Birth of the Principle of Close Cooperation, Declaration of Competences, and the Ruling Procedure: Ruling 1/78 (Convention on Nuclear Protection)��������������� 111 Ruling 1/78, Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202, delivered 14 November 1978. Anna Södersten 11. Defining the Scope of the Treaty-Making Competence for the Formulation of the Common Commercial Policy: Opinion 1/78 (Natural Rubber)����������������������������������� 123 Opinion 1/78, International Agreement on Natural Rubber, ECLI:EU:C:1979:224, delivered 4 October 1979. Per Cramér 12. International Agreements Concluded by Member States Prior to their EU Accession: Burgoa��������������������������������������������������������������������������������������������������������������������� 133 Case 812/79, Attorney General v Juan C Burgoa, ECLI:EU:C:1980:231, delivered 14 October 1980. Panos Koutrakos 13. The Purpose of International Agreements and their Direct Effect: Polydor����������������� 145 Case 270/80, Polydor Limited and RSO Records Inc and Harlequin Record Shops Limited and Simons Limited, ECLI:EU:C:1982:43, delivered 9 February 1982. Jan Klabbers 14. Status and Enforceability of EU International Agreements within the Domestic Legal Systems of the Member States: Kupferberg������������������������������������������������������� 155 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362, delivered 26 October 1982. Eleftheria Neframi
Detailed Table of Contents xv 15. The EU’s Common Customs Tariff, Uniform Application of International Agreements, and the Demarcation between EU and Member State ‘Spheres of International Law’: SPI/SAMI������������������������������������������������������������������������������ 167 Joined Cases 267–269/81, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI) and SpA Michelin Italiana (SAMI), ECLI:EU:C:1983:78, delivered 16 March 1983. Dylan Geraets 16. Direct Effect of Association Agreements and the Meaning of ‘Association’: Demirel��������173 Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400, delivered 30 September 1987. Guillaume Van der Loo 17. Judicial Review of EU Measures in the Light of WTO Rules: Fediol and Nakajima���������183 Case 70/87, Fédération de l’industrie de l’huilerie de la CEE (Fediol) v Commission of the European Communities, ECLI:EU:C:1989:254, delivered 22 June 1989; Case C-69/89, Nakajima All Precision Co Ltd v Council of the European Communities, ECLI:EU:C:1991:186, delivered 7 May 1991. Tamara Perišin and Ilektra Antonaki 18. The Integration of Decisions of Association Councils in EU Law: Greece v Commission (Special Aid to Turkey)����������������������������������������������������������� 195 Case 30/88, Greece v Commission, ECLI:EU:C:1989:422 (Special Aid to Turkey), delivered on 14 November 1989. Fernando Castillo de la Torre 19. The Legal Effects of Decisions of Autonomous Bodies Established under an International Agreement: Sevince������������������������������������������������������������������������� 205 Case C-192/89, SZ Sevince v Staatssecretaris van Justitie, ECLI:EU:C:1990:322, delivered 20 September 1990. Nathan Cambien 20. The Union’s Participation in Legally Binding International Third-Party Dispute Settlement: Opinion 1/91 (EEA I) and Opinion 1/92 (EEA II)������������������������������������� 215 Opinion 1/91, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1991:490, delivered 14 December 1991; Opinion 1/92, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1992:189, delivered 10 April 1992. Esa Paasivirta 21. Setting the Multiple Functions of Customary International Law in the EU Legal Order: Poulsen������������������������������������������������������������������������������������������������� 225 Case C-286/90, Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp, ECLI:EU:C:1992:453, delivered 24 November 1992. Charlotte Beaucillon
xvi Detailed Table of Contents 22. ERTA, Mixity and the Duty of Cooperation in the Conclusion of International Agreements: Opinion 2/91 (ILO Convention)������������������������������������������������������������� 235 Opinion 2/91, International Labour Organization concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, delivered 19 March 1993. Mirka Kuisma 23. The Reviewability of Acts Adopted by the Member States Meeting within the Council: Parliament v Council and Commission (Bangladesh Aid)����������������������� 247 Joined Cases C-181/91 and C-248/91, European Parliament v Council of the European Communities and Commission of the European Communities, ECLI:EU:C:1993:271 (Bangladesh Aid), delivered 30 June 1993. Luca Pantaleo 24. Legality of the European Development Fund and the European Parliament’s Prerogatives: Parliament v Council (European Development Fund)���������������������������� 259 Case C-316/91, European Parliament v Council of the European Union, ECLI:EU:C:1994:76, delivered 2 March 1994 (European Development Fund). Sandra Bartelt 25. Unrecognised ‘States’ and EU Law: Anastasiou I������������������������������������������������������� 269 Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:1994:277 (Anastasiou I), delivered 5 July 1994. Alina Tryfonidou 26. No General Treaty-Making Power of the Commission to Conclude International Administrative Agreements: France v Commission I�������������������������������������������������� 279 Case C-327/91, French Republic v Commission of the European Communities, ECLI:EU:C:1994:305, delivered 9 August 1994 (France v Commission I). Andrea Ott 27. Consistent Interpretation and Continuous Dialogue between the EU and the WTO: Germany v Council (Bananas)���������������������������������������������������������������������������������� 289 Case C-280/93, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:1994:367 (Bananas), delivered 5 October 1994. Joseph A McMahon 28. A Setback in a Never-Ending Expansion to External Competence? Opinion 1/94 (WTO)������������������������������������������������������������������������������������������������ 299 Opinion 1/94, Competence of the Community to conclude international agreements concerning services and the protection of intellectual property, ECLI:EU:C:1994:384, delivered 15 November 1994. Enzo Cannizzaro 29. The Scope of the Union’s Exclusive External Competences and the Verification of Competence: Opinion 2/92 (OECD)��������������������������������������������������������������������� 311 Opinion 2/92, Third Revised Decision of the OECD on national treatment, ECLI:EU:C:1995:83, delivered 24 March 1995. Daniel Sarmiento
Detailed Table of Contents xvii 30. Unilateral Measures of Member States Affecting the Internal Market and the Law/Politics Divide in External Relations: Commission v Greece (FYROM)�������������� 321 Case C-120/94 and Case C-120/94 R, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:1994:275 and ECLI:EU:C:1996:116 (Former Yugoslav Republic of Macedonia), delivered 29 June 1994 and 19 March 1996. Henri de Waele 31. EU Membership in International Organisations and the Joint Exercise of Membership Rights: Commission v Council (FAO)����������������������������������������������� 329 Case C-25/94, Commission of the European Communities v Council of the European Union, ECLI:EU:C:1996:114 (FAO), delivered 19 March 1996. Rita Guerreiro Teixeira and Jan Wouters 32. The First Attempt at EU Accession to the ECHR: Opinion 2/94��������������������������������� 341 Opinion 2/94, Accession by the Community to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:1996:140, delivered 28 March 1996. Stian Øby Johansen 33. Enforcement of International Sanctions within the EU Legal Order: Bosphorus��������� 351 Case C-84/95, Bosphorus Hava Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and Communications and others, ECLI:EU:C:1996:312, delivered 30 July 1996. Aindrias Ó Caoimh 34. Scope of EU Development Policy: Portugal v Council (India Cooperation Agreement)�����359 Case C-268/94, Portuguese Republic v Council of the European Union, ECLI:EU:C:1996:461 (India Cooperation Agreement), delivered 3 December 1996. Morten Broberg 35. Legal Certainty and Customary International Law: Opel Austria������������������������������ 367 Case T-115/94, Opel Austria GmbH v Council of the European Union, ECLI:EU:T:1997:3, delivered 22 January 1997. Marcus Klamert 36. Invoking Customary International Law before the Court: Racke������������������������������� 377 Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293, delivered 16 June 1998. Jed Odermatt 37. The Effect of WTO Law in the EU Legal Order: Portugal v Council��������������������������� 387 Case C-149/96, Portuguese Republic v Council of the European Union, ECLI:EU:C:1999:574, delivered 23 November 1999. Holger P Hestermeyer 38. The Member States’ Duty to Denounce Anterior Treaties: Commission v Portugal (Maritime Policies)��������������������������������������������������������������������������������������������������� 397 Case C-62/98, Commission of the European Communities v Portuguese Republic, ECLI:EU:C:2000:358, delivered 4 July 2000; Case C-84/98, Commission of the European Communities v Portuguese Republic, ECLI:EU:C:2000:359, delivered 4 July 2000. Hannes Lenk
xviii Detailed Table of Contents 39. The Relationship between the Common Commercial Policy and Other External Competences of the EU: Opinion 2/00 (Cartagena Protocol)������������������������������������� 407 Opinion 2/00, Cartagena Protocol on Biosafety, ECLI:EU:C:2001:664, delivered 6 December 2001. Koen Lenaerts and Stanislas Adam 40. Autonomy of the EU Legal Order and International Agreements Extending the Acquis: Opinion 1/00 (European Common Aviation Area)����������������������������������������������������� 421 Opinion 1/00, Proposed agreement between the European Community and non-Member States on the establishment of a European Common Aviation Area, ECLI:EU:C:2002:231, delivered 18 April 2002. Cécile Rapoport 41. Clarification of Exclusive Implied External Competence of the Union: Open Skies����������433 Cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, Commission v United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany, ECLI:EU:C:2002:624, ECLI:EU:C:2002:625, ECLI:EU:C:2002:626, ECLI:EU:C:2002:627, ECLI:EU:C:2002:628, ECLI:EU:C:2002:629, ECLI:EU:C:2002:630, ECLI:EU:C:2002:631 (Open Skies), delivered 5 November 2002. Wybe Th Douma 42. Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements: France v Commission II�������������������������������������������������������������������������������������������� 443 Case C-233/02, French Republic v Commission of the European Communities, ECLI:EU:C:2004:173 (France v Commission II), delivered 23 March 2004. Paula García Andrade 43. The Effect of WTO Dispute Settlement Body Decisions in EU Law: Van Parys����������� 455 Case C-377/02, Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB), ECLI:EU:C:2005:121, delivered 1 March 2005. Karsten Engsig Sørensen 44. Direct Effect of the EU–Russia Partnership and Cooperation Agreement, Non-discrimination and the Beautiful Game: Simutenkov������������������������������������������ 465 C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura and Real Federación Española de Fútbol, ECLI:EU:C:2005:213, delivered 12 April 2005. Adam Łazowski 45. The Indissociable Link between Environmental Policy and the Common Commercial Policy: Commission v Council (Rotterdam Convention I)����������������������� 477 Case C-94/03, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2006:2 (Rotterdam Convention I), delivered 10 January 2006. Geert De Baere 46. Lowering the Threshold for Finding Implied Powers: Opinion 1/03 (Lugano Convention)������������������������������������������������������������������������������������������������ 489 Opinion 1/03, Competence of the Community to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, ECLI:EU:C:2006:81, delivered 7 February 2006. Merijn Chamon
Detailed Table of Contents xix 47. The Exclusive Jurisdiction of the Court and International Courts: Commission v Ireland (Mox Plant)��������������������������������������������������������������������������� 501 Case C-459/03, Commission of the European Communities v Ireland, ECLI:EU:C:2006:345 (Mox Plant), delivered 30 May 2006. Andrés Delgado Casteleiro 48. Judicial Protection in Autonomous Restrictive Measures Involving Composite Administrative Procedures: OMPI����������������������������������������������������������������������������� 511 Case T-228/02, Organisation des Modjahedines du peuple d’Iran v Council of the European Union, ECLI:EU:T:2006:384 (OMPI), delivered 12 December 2006. Trevor Redmond 49. The Autonomy of EU Law vis-à-vis International Law: Kadi I and Kadi II���������������� 523 Case T-315/01, Yassin Abdullah Kadi v Council of the European Union and Commission of the European Communities, ECLI:EU:T:2005:332, delivered 21 September 2005; Case C-402/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:461, delivered 3 September 2008; Case T-85/09, Yassin Abdullah Kadi v European Commission, ECLI:EU:T:2010:418, delivered 30 September 2010; Case C-584/10, European Commission and Others v Yassin Abdullah Kadi, ECLI:EU:C:2013:518, delivered 18 July 2013. Christina Eckes 50. Laying the Foundation for a Broad Scope of EU Development Cooperation Policy and its Delimitation with Other EU External Competence: Parliament v Commission (Philippines Border Management)����������������������������������������������������������������������������� 533 Case C-403/05, European Parliament v Commission of the European Communities, ECLI:EU:C:2007:624 (Philippines Border Management), delivered 23 October 2007. Tina Van den Sanden 51. The Pre-Lisbon Machinery for the Delimitation of the CFSP: Commission v Council (ECOWAS)��������������������������������������������������������������������������������������������������������������� 543 Case C-91/05, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2008:288 (ECOWAS), delivered 30 May 2008. Rass Holdgaard and Gustav Krohn Schaldemose 52. The Legal Effects of the MARPOL Convention and the UN Convention on the Law of the Sea: Intertanko����������������������������������������������������������������������������� 557 Case C-308/06, The Queen, on the application of International Association of Independent Tanker Owners (Intertanko) and Others v Secretary of State for Transport, ECLI:EU:C:2008:312, delivered 3 June 2008. Mario Mendez 53. Implied External Exclusivity and the Duty of Loyal Cooperation in International Organisations: Commission v Greece (International Maritime Organisation)������������ 567 Case C-45/07, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:2009:81 (International Maritime Organisation), delivered 12 February 2009. Thomas Ramopoulos
xx Detailed Table of Contents 54. Visa Requirements for Turkish Citizens: Soysal & Savatli and Demirkan�������������������� 579 Case C-228/06, Mehmet Soysal and Ibrahim Savatli v Bundesrepublik Deutschland, ECLI:EU:C:2009:101, delivered 19 February 2009; Case C-221/11, Leyla Ecem Demirkan v Bundesrepublik Deutschland, ECLI:EU:C:2013:583, delivered 24 September 2013. Bruno De Witte 55. The Application of EU Law in an Unrecognised Entity: Apostolides v Orams������������ 589 Case C-420/07, Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams, ECLI:EU:C:2009:271, delivered 28 April 2009. Nikos Skoutaris 56. Potential Incompatibility of International Agreements Concluded by Member States before Accession: Commission v Austria, Commission v Sweden and Commission v Finland������������������������������������������������������������������������������������������������������������������ 599 Case C-205/06, Commission of the European Communities v Republic of Austria, ECLI:EU:C:2009:118 and Case C-249/06, Commission of the European Communities v Kingdom of Sweden, ECLI:EU:C:2009:119, delivered 3 March 2009; Case C-118/07, Commission of the European Communities v Republic of Finland, ECLI:EU:C:2009:715, delivered 19 November 2009. Luigi Lonardo 57. The Application of EU International Agreements to Occupied and Disputed Territories: Brita������������������������������������������������������������������������������������������������������� 609 Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2010:91, delivered 25 February 2010. Paul James Cardwell 58. Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts: Commission v Sweden (PFOS)������������������������������������������������������� 619 Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2010:203 (PFOS), delivered 20 April 2010. Pieter Jan Kuijper 59. The Ambivalent Clarification of the Effects of International Conventional and Customary Law in the European Union: Air Transport Association of America��������� 633 Case C-366/10, Air Transport Association of America and others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA), delivered 21 December 2011. Isabelle Bosse-Platière 60. The Choice of Legal Basis between the AFSJ and the CFSP: Parliament v Council (Smart Sanctions)����������������������������������������������������������������������������������������������������� 645 Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:472 (Smart Sanctions), delivered 19 July 2012. José Manuel Cortés Martín and Gloria Fernández Arribas 61. Common Commercial Policy or Internal Market Rules as the Legal Basis for the Conclusion of International Agreements after Lisbon: Commission v Council (Conditional Access Convention)������������������������������������������������������������������������������ 655 Case C-137/12, European Commission v Council of the European Union, ECLI:EU:C:2013:675 (Conditional Access Convention), delivered 22 October 2013. Roberto Mastroianni and Giorgia Lo Tauro
Detailed Table of Contents xxi 62. The Choice of Legal Basis for Coordination of Social Security Systems with Associated Third Countries: UK v Council (EEC–Turkey)����������������������������������������������������������� 669 Case C-81/13, United Kingdom of Great Britain and Northern Ireland v Council of the European Union, ECLI:EU:C: 2014:2449 (EEC–Turkey), delivered 18 December 2014. Katarina Hyltén-Cavallius 63. Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget: Elitaliana�������679 Case T-213/12, Elitaliana SpA v Eulex Kosovo, ECLI:EU:T:2013:292, delivered 4 June 2013; Case C-439/13 P, Elitaliana SpA v Eulex Kosovo, ECLI:EU:C:2015:753, delivered 12 November 2015. Ricardo da Silva Passos 64. Intellectual Property and the Post-Lisbon Common Commercial Policy: Daiichi Sankyo��������������������������������������������������������������������������������������������������������� 689 Case C-414/11, Daiichi Sankyo Co Ltd and Sanofi-Aventis Deutschland GmbH v DEMO Anonimos Viomikhaniki kai Emporiki Etairia Farmakon, ECLI:EU:C:2013:520, delivered 18 July 2013. Joris Larik 65. The Application of EU Internal Competences in an External Context: UK v Council (EEA)������������������������������������������������������������������������������������������������� 701 Case C-431/11, United Kingdom of Great Britain and Northern Ireland v Council of the European Union, ECLI:EU:C:2013:589 (EEA), delivered 26 September 2013. Tarjei Bekkedal 66. The Normalisation of CFSP International Agreements in the EU Legal Order: Parliament v Council (Mauritius) and Parliament v Council (Tanzania)��������������������� 713 Case C-658/11, European Parliament v Council of the European Union, ECLI:EU:C:2014:2025 (Mauritius), delivered 24 June 2014; Case C-263/14, European Parliament v Council of the European Union, ECLI:EU:C:2016:435 (Tanzania), delivered 14 June 2016. Juan Santos Vara 67. The Legal Basis for International Agreements in the field of Development Cooperation Post-Lisbon, and its Potential as a Catch-All Provision: Commission v Council (Philippines PCA)����������������������������������������������������������������� 725 Case C-377/12, European Commission v Council of the European Union, ECLI:EU:C:2014:1903 (Philippines PCA), delivered 11 June 2014. Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero 68. Member States as Trustees of the Union in International Organisations: Germany v Council (OIV)���������������������������������������������������������������������������������������� 735 Case C-399/12, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:2014:2258 (OIV), delivered 7 October 2014. Theodore Konstadinides 69. The ERTA Doctrine Post-Lisbon: Opinion 1/13 (Convention on the Civil Aspects of International Child Abduction)���������������������������������������������������������������������������� 745 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303, delivered 14 October 2014. Christian Thorning
xxii Detailed Table of Contents 70. The Second Attempt at EU Accession to the ECHR: Opinion 2/13����������������������������� 755 Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:2014:2454, delivered 18 December 2014. Katja S Ziegler 71. The Impact of Obligations under International Agreements on the (Judicial) Review of EU Measures: Stichting Natuur en Milieu and Pesticide Action Network Europe������������������������������������������������������������������������������������������������������� 775 Joined Cases C-404/12 P and C-405/12 P, Council and Commission v Stichting Natuur en Milieu and Pesticide Action Network Europe, ECLI:EU:C:2015:5, delivered 13 January 2015. Anne Thies 72. Hybrid Acts of the EU and its Member States Concerning International Agreements: Commission v Council (US Air Transport Agreement)����������������������������������������������� 787 Case C-28/12, European Commission v Council of the European Union, ECLI:EU:C:2015:282 (US Air Transport Agreement), delivered 28 April 2015. Joni Heliskoski 73. Balancing Institutional Powers in Negotiating Directives and EU External Environmental Relations: Commission v Council (Australia ETS)����������������������������� 797 Case C-425/13, European Commission v Council of the European Union, ECLI:EU:C:2015:483 (Australia ETS), delivered 16 July 2015. Sanja Bogojević 74. EU Representation in International Litigation: Council v Commission (International Tribunal for the Law of the Sea)���������������������������������������������������������� 805 Case C-73/14 Council of the European Union v European Commission, ECLI:EU:C:2015:663 (International Tribunal for the Law of the Sea), delivered 6 October 2015. Alexander Kornezov 75. The Compatibility of EU International Agreements Extending to Occupied Territories with International Law: Front Polisario and Western Sahara Campaign UK��������������� 817 Case T-512/12, Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) v Council of the European Union, ECLI:EU:T:2015:953, delivered 10 December 2015; Case C-104/16 P, Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario), ECLI:EU:C:2016:973, delivered 21 December 2016; Case C-266/16, Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs, ECLI:EU:C:2018:118, delivered 27 February 2018. Eva Kassoti 76. The Scope of the Court’s Jurisdiction in the CFSP: H v Council and Others��������������� 831 Case C-455/14 P, H v Council of the European Union, European Commission and European Union Police Mission (EUPM) in Bosnia and Herzegovina, ECLI:EU:C:2016:569, delivered 19 July 2016. Luca Prete
Detailed Table of Contents xxiii 77. Institutional Balance in the Conclusion of Non-binding International Agreements Revisited: Council v Commission (Swiss MoU)�������������������������������������� 841 Case C-660/13, Council of the European Union v European Commission, ECLI:EU:C:2016:616 (Swiss MoU), delivered 28 July 2016. Anders Neergaard 78. The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon: Opinion 3/15 (Marrakesh Treaty)������������������������������������������������������������������������������ 851 Opinion 3/15, Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled, ECLI:EU:C:2017:114, delivered 14 February 2017. Gesa Kübek 79. Attribution of Authorship of ‘EU’ Legal Acts: NF and Others v European Council���� 861 Case T-192/16, NF v European Council, ECLI:EU:T:2017:128; Case T-193/16, NG v European Council, ECLI:EU:T:2017:129; T-257/16, NM v European Council, ECLI:EU:T:2017:130, delivered 28 February 2017; Joined Cases C-208/17 P to C-210/17 P, NF and Others v European Council, ECLI:EU:C:2018:705, delivered 12 September 2018. Mauro Gatti 80. The Absence of Rights to Humanitarian Visas, and Missions of EU Member States in Third Countries: X and X v Belgium��������������������������������������������������������������������� 871 Case C-638/16 PPU, X and X v Belgium, ECLI:EU:2017:173, delivered 7 March 2017. Louise Halleskov 81. Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures: Rosneft���������������������������������������������������������������������������������������������������� 881 Case C-72/15, PJSC Rosneft Oil Company v Her Majesty’s Treasury and Others, ECLI:EU:C:2017:236, delivered 28 March 2017. Peter Van Elsuwege 82. The EU Competence to Conclude the New Generation of Free Trade Agreements: Opinion 2/15 (EU–Singapore FTA)������������������������������������������������������������������������������������ 891 Opinion 2/15, Free Trade Agreement between the European Union and the Republic of Singapore, ECLI:EU:C:2017:376, delivered 16 May 2017. Christine Kaddous 83. International Agreements Assessed Through the Prism of the Charter of Fundamental Rights: Opinion 1/15 (EU–Canada PNR)����������������������������������������� 907 Opinion 1/15, Draft Agreement between Canada and the European Union on the transfer and processing of Passenger Name Record data, ECLI:EU:C:2017:592, delivered 26 July 2017. Suzanne Kingston 84. The Unitary Representation of the Union in an International Forum and Clarification of Shared Competence and Facultative Mixity Post-Lisbon: Germany v Council (COTIF I) and Commission v Germany (COTIF II)��������������������������������������������������� 917 Case C-600/14, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:2017:935 (COTIF I), delivered 5 December 2017; Case C-620/16, European Commission v Federal Republic of Germany, ECLI:EU:C:2019:256 (COTIF II), delivered 27 March 2019. Maciej Szpunar and Roland Klages
xxiv Detailed Table of Contents 85. The Web of Autonomy of the EU Legal Order: Achmea�������������������������������������������� 927 Case C-284/16, Slowakische Republik (Slovak Republic) v Achmea BV, ECLI:EU:C:2018:158 delivered 6 March 2018. Xavier Groussot and Marja-Liisa Öberg 86. The Delineation between CFSP and Non-CFSP Matters: Commission v Council (Kazakhstan)������������������������������������������������������������������������������������������������������������ 939 Case C-244/17, European Commission v Council of the European Union, ECLI:EU:C:2018:662 (Kazakhstan), delivered 4 September 2018. Thomas Verellen 87. Mixity and Exercising Shared Competence in International Fora: Commission v Council (Antarctic Marine Protected Areas)��������������������������������������� 949 Joined Cases C-626/15 and C-659/16, European Commission v Council of the European Union, ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas), delivered 20 November 2018. Frederik Naert 88. Investor–State Dispute Tribunals Established under EU International Agreements: Opinion 1/17 (EU–Canada CETA)���������������������������������������������������������������������������� 959 Opinion 1/17, EU–Canada CET Agreement, ECLI:EU:C:2019:341, delivered 30 April 2019. Kieran Bradley 89. Ensuring Respect for International Humanitarian Law Through Labelling Requirements: OJE and Vignoble Psagot������������������������������������������������������������������� 971 Case C-363/18, Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954, delivered 12 November 2019. Sara Poli 90. Inter se Agreements between Member States, and the Outer Limits of the Court’s Jurisdiction in Infringement Proceedings: Slovenia v Croatia�������������������������������������� 981 Case C-457/18, Republic of Slovenia v Republic of Croatia, ECLI:EU:C:2020:65, delivered 31 January 2020. Federico Casolari 91. Jurisdiction of the Court for Non-contractual Liability and Actions for Damages Claims within the CFSP: Bank Refah Kargaran��������������������������������������������������������� 991 Case C-134/19 P, Bank Refah Kargaran v Council of the European Union, ECLI:EU:C:2020:793, delivered 6 October 2020. Graham Butler and Ramses A Wessel 92. The Right of Third States to Challenge EU Restrictive Measures before the Court: Venezuela v Council�������������������������������������������������������������������������������������������������1001 Case C-872/19 P, Bolivarian Republic of Venezuela v Council of the European Union, ECLI:EU:C:2021:507, delivered 22 June 2021. Francesca Finelli
List of Contributors (Alphabetically, by surname) EDITORS
Graham Butler, Associate Professor of Law, Aarhus University, Denmark. Ramses A Wessel, Professor of European Law and Vice-Dean, University of Groningen, the Netherlands.
CONTRIBUTORS
Stanislas Adam, Legal Secretary (Référendaire), Court of Justice of the European Union, Luxembourg; Professor of European Union Law, Ghent European Law Institute, Ghent University, Belgium. Ilektra Antonaki, Legal Secretary (Référendaire), General Court, Court of Justice of the European Union, Luxembourg. Sandra Bartelt, Deputy Head of Cabinet, Commissioner for International Partnerships, European Commission, Brussels, Belgium. Tarjei Bekkedal, Professor of Law, Centre for European Law, University of Oslo, Norway. Sanja Bogojević, Fellow and Professor of Law, Lady Margaret Hall and Faculty of Law, University of Oxford, UK. Isabelle Bosse-Platière, Professor of Law, Jean Monnet Chair and Director, Western Institute for Law and Europe, National Centre for Scientific Research, University of Rennes, France. Charlotte Beaucillon, Professor of Law of International and EU Law, University of Lille, France. Kieran Bradley, Judge, Administrative Tribunal of the Inter-American Development Bank, Washington, DC, USA; former Judge, EU Civil Service Tribunal, Court of Justice of the European Union, Luxembourg; former Special Adviser to the Court of Justice of the European Union on Brexit; Adjunct Professor, School of Law, Trinity College, University of Dublin, Ireland. Morten Broberg, Professor and Honorary Jean Monnet Professor, University of Copenhagen, Denmark; Judge of the Court of Appeal of Eastern Denmark (Østre Landsret) (ad interim), Denmark. Graham Butler, Associate Professor of Law, Aarhus University, Denmark.
xxvi List of Contributors Nathan Cambien, Legal Secretary (Référendaire), General Court, Court of Justice of the European Union, Luxembourg; Associate Professor, University of Antwerp, Belgium. Enzo Cannizzaro, Professor of International and European Law, Sapienza University of Rome, Italy. Paul James Cardwell, Professor of Law and Vice Dean, Dickson Poon School of Law, King’s College London, UK. Federico Casolari, Associate Professor of European Union Law, University of Bologna, Italy. Fernando Castillo de la Torre, Director, Legal Service, European Commission, Brussels, Belgium. Merijn Chamon, Assistant Professor of European Union Law, Maastricht University, the Netherlands; Visiting Professor, College of Europe, Bruges, Belgium. José Manuel Cortés Martín, Professor of Public International Law, University Pablo de Olavide, Seville, Spain. Per Cramér, Professor of International Law, Jean Monnet Professor of European Integration Law, Dean, School of Business, Economics and Law, University of Gothenburg, Sweden. Marise Cremona, Professor Emeritus, European University Institute, Florence, Italy. Ricardo da Silva Passos, Judge, General Court, Court of Justice of the European Union, Luxembourg; former Director of Institutional and Parliamentary Affairs, Legal Service, European Parliament, Brussels, Belgium. Geert De Baere, Judge, General Court, Court of Justice of the European Union, Luxembourg; Associate Professor of EU Law and International Law, KU Leuven, Belgium. Henri de Waele, Professor of International and European Law, Radboud University, Nijmegen, the Netherlands; Guest Professor of EU External Relations Law, University of Antwerp, Belgium; Senior Fellow, Centre for European Integration Studies, University of Bonn, Germany. Bruno De Witte, Professor of European Law, Maastricht University, the Netherlands and European University Institute, Florence, Italy. Andrés Delgado Casteleiro, Assistant Professor, Autonomous University of Chile, Santiago, Chile. Wybe Th. Douma, Senior Legal Advisor at European Environmental Law Consultancy; Ministry of Social Affairs and Employment, the Netherlands; Voluntary Researcher, Ghent University, Belgium. Christina Eckes, Professor of European Law and Director, Amsterdam Centre for European Law and Governance, University of Amsterdam, the Netherlands. Piet Eeckhout, Professor of EU Law and Dean, Faculty of Laws, University College London, UK. Gloria Fernández Arribas, Associate Professor of Public International Law, University Pablo de Olavide, Seville, Spain. Francesca Finelli, Doctoral Researcher, Faculty of Law, Economics and Finance, University of Luxembourg, Luxembourg.
List of Contributors xxvii Paula García Andrade, Associate Professor of Public International Law and European Union Law, Universidad Pontificia Comillas, Madrid, Spain. Mauro Gatti, Assistant Professor of European Union Law, University of Bologna, Italy. Dylan Geraets, Associate, Mayer Brown Europe-Brussels LLP, Brussels, Belgium; Docent in World Trade Law, University of Eastern Finland, Joensuu, Finland; Associate Fellow, Leuven Centre for Global Governance Studies, KU Leuven, Belgium. Inge Govaere, Professor of EU Law, Director of the Ghent European Law Institute, Ghent University, Belgium; Director of the European Legal Studies Department, College of Europe, Bruges, Belgium. Xavier Groussot, Professor of European Law and Vice-Dean of Law, Lund University, Sweden. Rita Guerreiro Teixeira, Doctoral Researcher, Leuven Centre for Global Governance Studies and Institute for International Law, KU Leuven, Belgium. Louise Halleskov, Associate Professor of Law, Aarhus University, Denmark. Joni Heliskoski, Justice, Supreme Administrative Court, Helsinki, Finland; formerly Agent of the Government of Finland before the Court of Justice of the European Union. Holger P Hestermeyer, Professor of International and EU Law, King’s College London, UK. Rass Holdgaard, Partner, Kammeradvokaten, Law Firm Poul Smith (Legal Adviser to the Government), Copenhagen, Denmark. Katarina Hyltén-Cavallius, Assistant Professor of Law, Linnaeus University, Växjö, Sweden. Stian Øby Johansen, Associate Professor, Centre for European Law, University of Oslo, Norway. Christine Kaddous, Professor of European Union Law, Jean Monnet Chair ad personam, Director, Centre for European Legal Studies, University of Geneva, Switzerland. Eva Kassoti, Senior Researcher in European and International Law, Academic Coordinator of the Centre for the Law of European External Relations (CLEER), TMC Asser Institute, The Hague, the Netherlands. Suzanne Kingston, Judge, General Court, Court of Justice of the European Union, Luxembourg; Professor of Law, University College Dublin, Ireland. Jan Klabbers, Professor of International Law, University of Helsinki, Finland. Roland Klages, Member of the Legal Service, European Court of Auditors, Luxembourg. Marcus Klamert, Professor of European Law, University of Graz, Austria; Legal Advisor, Federal Chancellery, Vienna, Austria. Theodore Konstadinides, Professor of Law, University of Essex, UK. Alexander Kornezov, Judge, General Court, Court of Justice of the European Union, Luxembourg. Panos Koutrakos, Professor of EU Law and Jean Monnet Professor of EU Law, City, University of London, UK.
xxviii List of Contributors Gesa Kübek, Assistant Professor in European Law, University of Groningen, the Netherlands. Pieter Jan Kuijper, Professor Emeritus, Faculty of Law, University of Amsterdam, the Netherlands; former Director of the Legal Affairs Division, WTO Secretariat (1999–2002), Geneva, Switzerland; former Director, Trade and International Relations Division, Legal Service, European Commission (2002–07), Brussels, Belgium. Mirka Kuisma, Judicial Secretary (Oikeussihteeri), Supreme Administrative Court (korkein hallinto-oikeus), Helsinki, Finland. Jaka Kukavica, PhD Researcher, European University Institute, Florence, Italy. Joris Larik, Assistant Professor of Comparative, EU and International Law, Leiden University, the Netherlands. Adam Łazowski, Professor of EU Law, Westminster Law School, University of Westminster, London, UK; Visiting Professor, College of Europe, Natolin, Poland. Koen Lenaerts, President, Court of Justice of the European Union, Luxembourg; Professor of European Union Law, KU Leuven, Belgium. Hannes Lenk, Assistant Professor of Law, Aarhus University, Denmark; Senior Researcher, Swedish Institute for European Policy Studies, Stockholm, Sweden. Tobias Lock, Professor of Law and Jean Monnet Chair in EU Law, Maynooth University, Maynooth, Ireland. Luigi Lonardo, Lecturer in EU Law, University College Cork, Ireland. Giorgia Lo Tauro, PhD Candidate in EU Law, University of Catania, Italy. Stephan Marquardt, Head of the Legal Affairs Division, European External Action Service, Brussels, Belgium. Roberto Mastroianni, Judge, General Court, Court of Justice of the European Union, Luxembourg; Professor of European Union Law, University of Naples ‘Federico II’, Italy. Mario Mendez, Reader in Law, Queen Mary, University of London, UK. Joseph McMahon, Full Professor of Commercial Law, Sutherland School of Law, University College Dublin, Ireland. Frederik Naert, Member of the Legal Service, Council of the European Union, Brussels, Belgium; Affiliated Senior Researcher, KU Leuven, Belgium. Anders Neergaard, Head of Unit, Legal Service, European Parliament, Brussels, Belgium. Eleftheria Neframi, Professor of Law, University of Luxembourg, Luxembourg. Aindrias Ó Caoimh, Senior Counsel, Bar of Ireland; Chair, Regulatory Decisions Panel, Central Bank of Ireland; former Judge, Court of Justice, Court of Justice of the European Union, Luxembourg; former Judge, High Court of Ireland, Dublin, Ireland. Jed Odermatt, Lecturer in Law, City, University of London, UK. Andrea Ott, Professor of EU External Relations Law and Jean Monnet Chair in EU Law, Maastricht University, the Netherlands.
List of Contributors xxix Marja-Liisa Öberg, Senior Lecturer in EU Law, Lund University, Sweden. Esa Paasivirta, Adjunct Professor, University of Helsinki, Finland; former Legal Adviser, European Commission, Brussels, Belgium. Luca Pantaleo, Assistant Professor of European Union Law, University of Cagliari, Italy. Tamara Perišin, Judge, General Court, Court of Justice of the European Union, Luxembourg; Professor of EU and WTO Law, University of Zagreb, Croatia. Alessandro Petti, Max Weber Fellow, Department of Law, European University Institute, Florence, Italy. Sara Poli, Professor of EU Law, University of Pisa, Italy. Luca Prete, Legal Secretary (Référendaire), Court of Justice of the European Union, Luxembourg; Guest Professor, Vrije Universiteit, Brussels, Belgium. Thomas Ramopoulos, Member of the Legal Service, European Commission, Brussels, Belgium. Cécile Rapoport, Professor of Law, University of Rennes, France. Trevor Redmond, Legal Counsellor, Department of Foreign Affairs, Dublin, Ireland. Soledad Rodríguez Sánchez-Tabernero, Legal Adviser, Legal Affairs Division, European External Action Service, Brussels, Belgium. Timothy Roes, Attorney, Demos Public and European Law, Belgium. Allan Rosas, President of the Article 255 TFEU panel (2020–); former Judge, Court of Justice, Court of Justice of the European Union (2002–19), Luxembourg; former Deputy DirectorGeneral, Legal Service, European Commission (1995–2002), Brussels, Belgium; former Professor of Law, University of Turku (1978–81) and Åbo Akademi University (1981–95), Finland. Juan Santos Vara, Professor of Public International Law and Jean Monnet Professor in EU External Action, University of Salamanca, Spain. Daniel Sarmiento, Professor of EU Law, Complutense University, Madrid, Spain. Gustav Krohn Schaldemose, Deputy Head of Division, Ministry of Justice, Copenhagen, Denmark. Joanne Scott, Professor of European Law and Head, Department of Law, European University Institute, Florence, Italy; Professor of European Law, Faculty of Laws, University College London, UK. Nikos Skoutaris, Associate Professor in EU Law, University of East Anglia, Norwich, UK. Maciej Szpunar, First Advocate General, Court of Justice of the European Union, Luxembourg; Professor of Law, University of Silesia, Katowice, Poland. Karsten Engsig Sørensen, Professor of Law, Aarhus University, Denmark. Anna Södersten, Senior Researcher, Swedish Institute for European Policy Studies, Stockholm, Sweden.
xxx List of Contributors Anne Thies, Associate Professor in Law, Joint Deputy Head of School, School of Law, University of Reading, UK. Christian Thorning, Ambassador, Responsible for the Conference on the Future of Europe, Ministry of Foreign Affairs, Copenhagen, Denmark; formerly Agent of Denmark before the Court of Justice of the European Union. Alina Tryfonidou, Professor of European Law, Neapolis University Paphos, Cyprus; Visiting Professor of Law, University of Reading, UK. Guillaume Van der Loo, Research Fellow, European Policy Centre and Egmont (Royal Institute for International Relations), Brussels, Belgium; Visiting Professor, Ghent University, Belgium. Tina Van den Sanden, Legal Officer, Directorate-General for International Partnerships, European Commission, Brussels, Belgium; Senior Affiliated Researcher, Institute for European Law; KU Leuven, Belgium. Peter Van Elsuwege, Professor of EU Law and Jean Monnet Chair, Ghent European Law Institute, Ghent University, Belgium. Thomas Verellen, Assistant Professor of European Union and International Law, Utrecht University, the Netherlands; Research Fellow, Institute for European Law, KU Leuven, Belgium. Ramses A Wessel, Professor of European Law and Vice-Dean, University of Groningen, the Netherlands. Jan Wouters, Professor of International Law and International Organisations, Jean Monnet Chair ad personam; Director, Leuven Centre for Global Governance Studies and Institute for International Law, KU Leuven, Belgium. Katja S Ziegler, Sir Robert Jennings Professor of International Law; Co-Director, Centre for European Law and Internationalisation, University of Leicester, UK.
List of Abbreviations ACCC
Aarhus Convention Compliance Committee
ACP
African, Caribbean and Pacific Ocean States
AFSJ
Area of Freedom, Security and Justice
AG
Advocate General
AIA
Advance Informed Agreement
API
Advance Passenger Information
ASEAN
Association of Southeast Asian Nations
ATAA
Air Transport Association of America
ATC
Agreement on Textiles and Clothing
BIT
Bilateral Investment Treaty
CAMMLR
Conservation of Antarctic Marine Living Resources
CAP
Common Agricultural Policy
CBSA
Canada Border Services Agency
CCC
Community Customs Code
CCP
Common Commercia Policy
CCT
Common Customs Tariff
CEAS
Common European Asylum System
CETA
EU-Canada Comprehensive Economic and Trade Agreement
CFI
Court of First Instance
CFP
Common Fisheries Policy
CFR
Charter of Fundamental Rights
CFSP
Common Foreign and Security Policy
CITES
Convention on International Trade in Endangered Species of Wild Fauna and Flora
CJEU
Court of Justice of the European Union
COMET
Working Party on Restrictive Measures to Combat Terrorism
COREPER
Committee of Permanent Representatives
xxxii List of Abbreviations COTIF
Convention concerning International Carriage by Rail
COVID
Corona Virus Disease
CPPNM
Convention on the Physical Protection of Nuclear Material
CRS
Computerised Reservation System
CSDP
Common Security and Defence Policy
DAA
Draft Accession Agreement
DDT
Dichlorodiphenyltrichloroethane
DSB
Dispute Settlement Body (WTO)
DSM
Dispute Settlement Mechanism
DSU
Dispute Settlement Understanding (WTO)
EAEC
European Atomic Energy Community (Euratom)
EC
(Treaty establishing the) European Community
ECAA
European Common Aviation Area
ECB
European Central Bank
ECHR
European Convention of Human Rights and Fundamental Freedoms
ECOWAS
Economic Community of West African States
ECSC
European Coal and Steel Community
ECT
Energy Charter Treaty
ECtHR
European Court of Human Rights
ECU
European Currency Unit
EDA
European Defence Agency
EDF
European Development Fund
EDPS
European Data Protection Supervisor
EEA
European Economic Area
EEAS
European External Action Service
EEC
European Economic Community
EFTA
European Free Trade Association
EIB
European Investment Bank
ENP
European Neighbourhood Policy
EPC
European Political Cooperation
EPCA
Enhanced Partnership and Cooperation Agreement
ERTA (AETR)
European Road Transport Agreement
List of Abbreviations xxxiii ESM
European Stability Mechanism
ETS
Emissions Trading System
EU
European Union
EUA
European units of account (also UCE)
EUPM
EU Police Mission
FAC
Foreign Affairs Council
FAO
Food and Agricultural Organisation
FDI
Foreign Direct Investment
FPA
Fisheries and Partnership Agreement
FRY
Federal Republic of Yugoslavia
FTA
Free Trade Agreement
FYROM
Former Yugoslav Republic of Macedonia
GATS
General Agreement on Trade in Services
GATT
General Agreement on Tariffs and Trade
GCM
Global Compact for Safe, Orderly and Regular Migration
GDP
Gross Domestic Product
GDPR
General Data Protection Regulation
GFCC
German Federal Constitutional Court
GNP
Gross National Product
GSP
Generalised Scheme of Preferences
HRVP
High Representative of the Union for Foreign Affairs and Security Policy
IAEA
International Atomic Energy Agency
IATA
International Air Transport Association
ICAO
International Civil Aviation Organisation
ICJ
International Court of Justice
ICS
Investment Court System
ICSID
International Centre for Settlement of Investment Disputes
ILC
International Law Commission
ILO
International Labour Organisation
IMO
International Maritime Organisation
IPRs
Intellectual property rights
ISPS
International Ship and Port Facility Security (ISPS Code)
xxxiv List of Abbreviations ITLOS
International Tribunal for the Law of the Sea
ITU
International Telecommunication Union
JAT
Jugoslovenski Aerotransport (Yugoslav Air Transport)
JHA
Justice and Home Affairs
LMO
Living modified organism
LTTE
Liberation Tigers of Tamil Eelam
MARPOL
International Convention for the Prevention of Pollution from Ships
Marsec
Martime Safety
MDGs
Millennium Development Goals
MEA
Multilateral Environmental Agreement
MEP
Member of European Parliament
MEPP
Middle East Peace Process
MFF
Multiannual Financial Framework
MIDSI
Multilateral Institution for Dispute Settlement on Investments
MoU
Memorandum of Understanding
MOX
Mixed oxide fuel
MPA
Marine Protected Area
NATO
North Atlantic Treaty Organisation
NAVFOR
Naval force
NEAFC
North-East Atlantic Fisheries Convention
NGO
Non-Governmental Organisation
NIEO
New International Economic Order
OCTs
Overseas Countries and Territories
OECD
Organisation for Economic Cooperation and Development
OIV
International Organisation of Wine and Vine
OJ
Official Journal of the European Union
OJE
Organisation Juive Européenne
OMPI
Organisation des Modjahedines du peuple d’Iran
OSPAR
Convention for the Protection of the Marine Environment of the North-East Atlantic
OTIF
Intergovernmental Organisation for International Carriage by Rail
PCA
Partnership and Cooperation Agreement
List of Abbreviations xxxv PCBs
Polychlorinated biphenyls
PCIJ
Permanent Court of International Justice
PFOS
Perfluorooctane sulfonates
PIC
Prior informed consent
PKK
Kurdistan Worker’s Party
PLO
Palestinian Liberation Organisation
PNR
Passenger Name Records
POAC
Proscribed Organisations Appeal Commission
POP
Conference of the Parties
POPs
Persistent organic pollutants
PSC
Political and Security Committee
QMV
Qualified Majority Voting
REIO
Regional Economic Integration Organisation
RoC
Republic of Cyprus
RoP
Rules of Procedure
SAMI
SpA Michelin Italiana
SFR
Socialist Federal Republic (of Yugoslavia)
SIOT
Società Italiana per l’Oleodotto Transalpino
SMEs
Medium-sized enterprises
SOLAS
International Convention for the Safety of Life at Sea (SOLAS Convention)
SPC
Supplementary protection certificate
SPI
Società Petrolifera Italiana SpA
SRFC
Sub-Regional Fisheries Commission
TCT
Treaty Establishing the Transport Community
TEC
Treaty on European Community
TEP
Transatlantic Economic Partnership
TEU
Treaty on European Union
TFEU
Treaty on the Functioning of the European Union
TRIPs
Trade-Related Intellectual Property Rights
TRNC
Turkish Republic of Northern Cyprus
UCC
Union Customs Code
xxxvi List of Abbreviations UCE
European units of account (also EUA)
UK
United Kingdom
UN
United Nations
UNCLOS
UN Convention on the Law of the Sea
UNCTAD
UN Conference on Trade and Development
UNEP
UN Environment Programme
UNFRD
UN Friendly Relations Declaration
UNGA
UN General Assembly
UNSC
UN Security Council
US(A)
United States of America
VCDR
Vienna Convention on Diplomatic Relations
VCLT
Vienna Convention on the Law of Treaties
VIP
Very Important Person
WCO
World Customs Organisation
WIPO
World Intellectual Property Organisation
WRC
World Radio Conference
WTO
World Trade Organisation
EU External Relations Law and Navigating the Case Law of the Court of Justice of the European Union GRAHAM BUTLER AND RAMSES A WESSEL I. EU EXTERNAL RELATIONS LAW
T
he first thing that the onlooker, even a lawyer might ask, is what exactly is EU ‘external relations’ law? After years of research in this field (and other fields), it is perhaps apt to explain from the outset what EU external relations law is not. In no way is it about external or foreign relations in terms of international law, international and European policy, or global politics of any kind. Nor is it external to the EU. Moreover, there is no such thing as an EU external relations lawyer, but yet oddly, there is such a field called EU external relations law (sometimes called EU international relations law, or EU foreign relations law). Rather, EU external relations law is just one area of EU law, with details and nuances like any other area of EU law. This is because EU external relations law, entirely counterintuitively, is actually internal EU law, and should be treated as such. It is as much EU constitutional law, EU free movement law, EU internal market law, EU institutional law, EU administrative law, EU procedural law, EU trade law and EU human rights law as it is anything else within EU law. Like any areas of law, EU law as a whole is shaped by not only the wording of the EU Treaties themselves, and the accompanying legislation within the framework of the EU Treaties, but also by the jurisprudence of the Court of Justice of the European Union (the Court), which is given an extensive mandate to interpret EU law. As will be seen throughout this book, the cases that the Court has dealt with over time – be it decades ago or in the modern era – are as wide-ranging and varied as one can imagine of the Court’s busy docket. Individually, cases can and have been landmarks in developing EU external relations law, as well as other given fields within EU law. Yet cumulatively, when taken together, the cases reveal the ups and downs in a process of European integration, and a clear link between internal and external competences. It is that link that renders EU external relations law cases essential to grasping EU law more generally. As Allan Rosas, a former judge of the Court, aptly stated in recent times: ‘Any meaningful study of the constitutional order of the EU must include the external relations of the Union. In fact, EU external relations law offers one of the best ways of understanding the essential features of the Union legal order in general.’1 We, as editors of this book, agree entirely with this assessment. 1 A Rosas, ‘Mixity Past, Present and Future: Some Observations’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Nijhoff, 2020).
2 Graham Butler and Ramses A Wessel II. CELEBRATING HALF A CENTURY OF EU EXTERNAL RELATIONS
This book is to mark the formal celebration of 50 years of EU external relations law. The ‘birth’ of the discipline was formally marked when, in March 1971, the Court delivered its judgment in Commission v Council (ERTA)2 – the first ever inter-institutional dispute before the Court.3 This ruling of the Court has come to shape the field of EU external relations law, following the proclamation of the existence of an implied external powers doctrine (the ERTA doctrine), upon which nearly all of the case law relies. Within EU law more generally, the existence of ERTA doctrine is known to some extent, but half a century after its delivery, the ramifications of the ERTA doctrine, and the resulting case law that followed, are not as well understood as they ought to be. Much of the leading literature on EU law, without singling any out, and with respect, does not give sufficient attention to EU external relations law. This is a mistake, and one that, over time, will begin to be rectified as the understanding of EU external relations law becomes stronger within the overall discipline of EU law and European integration. As people working in EU law, we would even go as far as to argue that ERTA is just as important a milestone on the nature of the EU legal order as Van Gend en Loos4 is to the doctrine of direct effect and Costa v ENEL5 is to the doctrine of primacy. ERTA, on the doctrine of implied external powers, is a similarly shiny trophy in the Court’s cabinet, worthy of greater appreciation. Whilst ERTA is subject to full analysis in the first substantive chapter, it is worth summarising it briefly here, given its importance to the field of law as a whole. In the late 1960s and early 1970s, within the Council, the Member States were negotiating a position for a proposed international agreement (a treaty). This eventually led to an agreed position of the Member States on the ratification of such an international agreement that came to be known as the ‘European Agreement concerning the work of crews of vehicles engaged in international road transport’ (ERTA). The Member States were of the view that this international agreement was a product of the Member States, and not of the Council itself. The negotiations leading to the ratification of the international agreement by the Member States saw concern expressed by the Commission that the Council was impinging upon an area – in this case, transport – that would affect internal EU law, given the existence of a prior Regulation in this regard. Thus, the Commission brought proceedings against the Council to the Court, on the basis that EU powers were potentially being impinged. The Commission was particularly aggrieved, given that the Council had requested the Commission to propose an amendment to the prior Regulation, so that EU law could comply with the proposed international agreement. Prior to the judgment of the Court, the Opinion of the Advocate General (AG) laid the basis for the eventual reasoning of the Court. For him, the Member States’ practice of negotiating an international agreement – ERTA – constituted a threat to the ‘new legal order’ of the EU, as had only recently been stated in Van Gend en Loos.6 Subsequently, the Court, though delivering a judgment that departed from its AG to some extent, set out the doctrine of implied external powers. On the capacity of the then 2 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). 3 On the exact date of the 50th birthday of ERTA, we marked the occasion with a post on the European Law Blog. See G Butler and RA Wessel, ‘Happy Birthday ERTA! 50 Years of the Implied External Powers Doctrine in EU Law’ (European Law Blog, 31 March 2021). Some sections in this Introduction are borrowed from that blog post, which was in initially written in anticipation of this book eventually being published. 4 Case 26/62, Van Gend en Loos, ECLI:EU:C:1963:1. 5 Case 6/64, Costa v ENEL, ECLI:EU:C:1964:66. 6 Opinion of AG Dutheillet de Lamothe, Case 22/70, Commission v Council, ECLI:EU:C:1971:23 (ERTA).
EU External Relations Law and Navigating the Case Law of the Court 3 Communities to enter into international agreements, the Court read beyond the narrow treatybasis for this, and understood that primary law entailed the possibility of a general treaty power. In particular, the Court stated that ‘regard must be had to the whole scheme of the Treaty no less than to its substantive provisions’7 and that such external powers ‘may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions’ (emphasis added).8 Further, the Court stated that each time the [Union], with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form these may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules (emphasis added).9
The effects of what became known as the pre-emption arising from ERTA were manifest, with the wings of Member States in international fora being clipped by the Court in one foul swoop. In no uncertain terms, the Court also stated that, to the extent to which [Union] rules are promulgated for the attainment of the objectives of the Treaty, the Member States cannot, outside the framework of the [Union] institutions, assume obligations which might affect those rules or alter their scope (emphasis added).10
This – the ERTA doctrine – was nothing short of a revolution for the Union. At least potentially, this notion of implied external powers covered the entirety of the EU legal order, and not merely areas fused to the explicit external powers which were stipulated in the Treaty of Rome on the common commercial policy or association agreements. In other words, explicit external powers of the EU were to be supplemented by implied external powers of the EU, possibly even leading to exclusivity. The Court unambiguously tied the internal aspects of Union law with its external aspect. It further stated that ‘the implementation of the provisions of the Treaty the system of internal [Union] measures may not therefore be separated from that of external relations’ (emphasis added).11 This thus meant that there was no clear method upon which internal and external dimensions could be clearly detached. Put another way, ERTA did something truly remarkable, for where it is established that EU competence is present, such EU competence has primacy over that of Member State’s external acts. At a purely functional level, this meant that the Court was unwilling to accept a view of the Member States that the Council was to be a mere secretariat for their cooperation in international relations of their own individual accord. To sustain an intergovernmental view of the Council, as the Council tried to plead, would have relegated any true sense of supranationality about the nature of EU law. ERTA thus represented a further step away from the EU being a mere intergovernmental organisation, and being a more complete legal order in its own right. The external powers of the Member States individually, and collectively as the Council, were limited; and were, thereafter, to function within the EU system of government. In sum, the ERTA case made clear that international commitments undertaken by Member States could not have the potential to impinge on commitments the Member States have undertaken as regards the Union, and laid the basis for the EU to become a global legal actor.
7 Case
22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA), para 15. para 16. 9 ibid para 17. 10 ibid para 22. 11 ibid para 19. 8 ibid
4 Graham Butler and Ramses A Wessel The contemporary evidence of ERTA’s ramifications are easily seen, by reference to just a few select examples. Firstly, the Union post-ERTA had the possibility to negotiate and conclude international agreements in an array of areas and policy fields. This allowed for affirmative safeguards on the effectiveness of EU law. Secondly, ERTA had an impact on who negotiated international agreements, which has dramatically changed over time. In the case, the Commission wanted to attend the negotiations, but the Member States ignored such requests, and did not even keep the Commission informed. By contrast, in the modern era, it is the Commission who ordinarily conducts the negotiations for international agreements within the meaning of Article 218 TFEU – be it ‘EU-only’ or mixed international agreements. Thirdly, ERTA laid the basis for potentially making the implied external powers doctrine one concerning exclusive competence of the Union. As the EU legislates internally, that, in turn, means there is more exclusive competence for the EU. A codification of the basic ERTA doctrine was attempted with the Treaty of Lisbon in 2009, and seen in Article 3(2) TFEU and Article 216(1) TFEU. Despite this attempt at codification being far from perfect, and certainly dubious as regards catching the entirety of the case law in EU external relations law up to that point, this attempted (yet botched) codification, by cementing it into the EU Treaties, can be interpreted as clear acceptance by the Member States of the judge-made ERTA doctrine of implied external powers of the EU. Neither Van Gend en Loos on direct effect nor Costa v ENEL on primacy has ever received such clear acceptance through explicit textual incorporation into EU primary law. In the post-Lisbon era, debate and litigation continues before the Court about the state of the implied external powers doctrine arising from ERTA, as seen in Opinion 1/1312 and Opinion 2/15,13 amongst others. The ERTA doctrine will continue to see litigation brought on foot of the evolving application of the doctrine to new situations. Rightly, ERTA is to be celebrated half a century on, and needs better recognition within EU law as being one of the true landmarks in the legal development of Europe. III. ABOUT THE BOOK
In light of ERTA, we pondered what we were to do to mark the influential judgment for its 50th birthday. Together with all the authors herein, we decided that a book containing analyses of ERTA, and all the cases following ERTA that have further defined EU external relations law, would be the perfect gift. The book, however, is much more than a collection of cases. It is a testimonial of European integration through law. The many cases underline what many EU external relation scholars have always taught their students: the field is much more about internal turf battles than about the outside world. As the chapters that follow will attest, it confirms the fact that the cases are always (or at least mostly) about competence conferral, either vertically (between the Union and its Member States) or horizontally (between the Union’s institutions). These issues return in relation to fundamentally important questions on, for instance, the scope of a certain policy field (eg Common Commercial Policy – trade), the external representation of the Union, relations with other international organisations, parliamentary oversight, the legal form of international agreements, extraterritorial effects of fundamental rights or 12 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303. See this volume, ch 69. 13 Opinion 2/15, Free Trade Agreement between the European Union and the Republic of Singapore, ECLI:EU:C:2017:376. See this volume, ch 82.
EU External Relations Law and Navigating the Case Law of the Court 5 other EU norms, or the full review by the Court in perhaps unexpected areas, such as the Common Foreign and Security Policy (CFSP). When we approached authors about contributing to the book, we asked a further open-ended question beyond whether they would be interested in contributing, assuming they would be: we also asked them to identity a list of cases which they would be most interested in writing about. Owing to the sheer popularity of some cases, we had to exercise prudent project management (and a bit of diplomacy) in order to get everyone a case they would be satisfied with. Much to our surprise, however, some of the lesser-known cases were actually the ones that contributors were keen to analyse. These included Haegeman,14 Opinion 1/91 and Opinion 1/92,15 Racke,16 Open Skies,17 Opinion 1/03,18 Commission v Ireland (Mox Plant),19 Commission v Greece (IMO),20 Commission v Sweden (PFOS),21 Air Transport Association of America,22 Parliament v Council (Mauritius) and Parliament v Council (Tanzania),23 and Germany v Council (COTIF I) and Commission v Germany (COTIF II).24 Whilst all very important in their own right, these are far from the most obvious cases which we anticipated might have appealed to the writers of EU external relations law. We wrongly suspected them to have jumped at the big Opinions from the 1970s,25 the Kadi cases26 or Opinion 2/13.27 This all the more demonstrates the diversity of interests in EU external relations law, where it acts as a meeting point for an array of issues in EU law. 14 Case 181/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41. See this volume, ch 3. 15 Opinion 1/91, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1991:490; Opinion 1/92, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1992:189. See this volume, ch 20. 16 Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293. See this volume, ch 36. 17 Joined Cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, Commission v United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany, ECLI:EU:C:2002:624, ECLI:EU:C:2002:625, ECLI:EU:C:2002:626, ECLI:EU:C:2002:627, ECLI:EU:C:2002:628, ECLI:EU:C:2002:629, ECLI:EU:C:2002:630, ECLI:EU:C:2002:631 (Open Skies). See this volume, ch 41. 18 Opinion 1/03, Competence of the Community to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, ECLI:EU:C:2006:81. See this volume, ch 46. 19 Case C-459/03, Commission of the European Communities v Ireland, ECLI:EU:C:2006:345 (Mox Plant). See this volume, ch 47. 20 Case C-45/07, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:2009:81 (IMO). See this volume, ch 53. 21 Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2010:203 (PFOS). See this volume, ch 58. 22 Case C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864. See this volume, ch 59. 23 Case C-658/11, European Parliament v Council of the European Union, ECLI:EU:C:2014:2025 (Mauritius) and Case C-263/14, European Parliament v Council of the European Union, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66. 24 Case C-600/14, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:2017:935 (COTIF I) and Case C-620/16, European Commission v Federal Republic of Germany, ECLI:EU:C:2019:256 (COTIF II). See this volume, ch 84. 25 Opinion 1/75, Draft understanding on a local cost standard, ECLI:EU:C:1975:145. See this volume, ch 4; Opinion 1/76, Draft Agreement establishing a European laying-up fund for inland waterway vessels, ECLI:EU:C:1977:63. See this volume, ch 9. Opinion 1/78, International Agreement on Natural Rubber, ECLI:EU:C:1979:224. See this volume, ch 11. 26 Case T-315/01, Yassin Abdullah Kadi v Council of the European Union and Commission of the European Communities, ECLI:EU:T:2005:332, Case C-402/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:461, Case T-85/09, Yassin Abdullah Kadi v European Commission, ECLI:EU:T:2010:418 and Case C-584/10, European Commission and Others v Yassin Abdullah Kadi, ECLI:EU:C:2013:518. See this volume, ch 49. 27 Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:2014:2454. See this volume, ch 70.
6 Graham Butler and Ramses A Wessel In the 1979 volume of the Common Market Law Review, some articles were dedicated to 25 years of EU external relations.28 Whilst this made sense as far as the relations were concerned,29 the fact remains that the case law of EU external relations only really commenced with the establishment of the ERTA doctrine, as analysed in this book. Of course, what is an ‘important’ case in EU external relations law, subsequent to ERTA, is a relative concept, situationally dependent, and highly subjective. Although we have tried to be as comprehensive as possible – with great help by our contributors – the cases that are the subject of analysis in this book are far from the only ones that are relevant to fully understand this field of study. Obviously, there will be those wondering why other cases were not covered (or why some were included). As the project came together, the book naturally swelled in size, and thus has resulted in us making difficult yet practical choices, such as omitting an index. While we were tempted to wait for other potentially relevant pending cases (see below), both our contract with the publisher and the fact that we realised that there would not be a natural end to the continuing stream of interesting cases caused us to stop during the summer of 2021. Whilst today there are now a range of books on EU external relations law of many different kinds – from initial practitioner materials to monographs, edited collections, and now even textbooks30 – there has never been a casebook, which is where this book finds its niche. We are pleased to present to you analyses of 92 cases, in chronological order by their date of delivery, which we believe to be important for understanding the field and allows the reader to navigate the case law. In analysing them, we were very pleased to have worked with over 100 authors on this book – friends, colleagues, and acquaintances. Some we have collaborated with extensively in the past, some have evaluated each other’s work,31 some have even taught one another32 and some are even colleagues who have offices just down the corridor.33 IV. ACKNOWLEDGEMENTS
Behind any book are a lot of people: some known and some hidden. This is where we need to show our hand, and give an insight into what goes on behind the scenes.
28 See E Wellenstein, ‘Twenty-Five Years of European Community External Relations’ (1979) 16 CML Rev 407; P Pescatore, ‘External Relations in the Case-Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615. 29 For a (very) early assessment, see P Pescatore, ‘Les relations extérieures des Communautés européennes (Vol 103)’ [1961] Collected Courses of the Hague Academy of International Law. 30 Just by way of illustration on the most recent editions of some textbooks, see RA Wessel and J Larik (eds), EU External Relations Law: Text, Cases and Materials, 2nd edn (Hart Publishing, 2020); J Wouters and others, The Law of EU External Relations: Cases, Materials, and Commentary on the EU as an International Legal Actor, 3rd edn (Oxford University Press, 2021); P Koutrakos, EU International Relations Law, 2nd edn (Hart Publishing 2015); P Eeckhout, EU External Relations Law, 2nd edn (Oxford University Press, 2011). 31 As an initial starting point commencing this collaboration, Ramses A Wessel (Haegeman and Bank Refah Kargaran) once upon a time, many years ago, served on the committee evaluation for the PhD/doctoral thesis of Graham Butler (Nederlandse Spoorwegen and Bank Refah Kargaran) at the University of Copenhagen. 32 For example, Joseph A McMahon (Germany v Council (Bananas)) and Suzanne Kingston (Opinion 1/15) both taught the ‘External Relations Law of the European Union’ course/module at UCD, on which the first editor of this book – Graham Butler – was enrolled. The book that was used for the seminars at UCD was that of another contributor to this book, Piet Eeckhout (Donckerwolcke). 33 In our respective institutions, at Aarhus University are Graham Butler, Louise Halleskov, Katarina HylténCavallius, Hannes Lenk, and Karsten Engsig Sørensen; and at the University of Groningen are Gesa Kübek and Ramses A Wessel.
EU External Relations Law and Navigating the Case Law of the Court 7 Firstly, we would like to thank all of our authors who contributed to this book. Initially conceived in 2019, and with the final chapters completed in early September 2021, this twoand-a-half-year project was the culmination of a truly European endeavour. Across the 92 substantive chapters, there are contributions from all across Europe (and beyond). Their expertise comes from different worlds of the law based in academia, practice, the judiciary (national and EU), public service (national and EU), and otherwise. As will be evident from the subsequent List of Contributors, they are located in Austria, Belgium, Chile, Croatia, Cyprus, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Norway, Poland, Spain, Sweden, Switzerland, the Netherlands and the UK. A diverse geographic spread of contributors makes the book a genuine European contribution. In the midst of the writing period came the COVID-19 pandemic, lockdowns/shutdowns and other difficulties that were imposed upon many people’s lives. Whether it was day-care or school closures, experiments in online teaching or otherwise, the pandemic affected many people’s daily habits in an immense way. Some were affected more than others, but a change in the norm was for all. Yet notwithstanding these challenges, this book was still able to come to fruition. We are all too aware of family members behind the authors who assisted in making this happen, and for them, our gratitude is rightly owed. Secondly, this book would not have been possible without the support of our families (thank you!) and without our respective institutions – Aarhus University and the University of Groningen – providing us with the resources and facilities needed to coordinate such a largescale profile. Moreover, support from the Max Sørensen Memorial Foundation (Professor dr. jur. Max Sørensens Mindefond) and the Aarhus University Research Foundation (Aarhus Universitets Forskningsfond) is gratefully acknowledged as it provided a supporting basis for the publication of the book. Thirdly, acknowledgement is rightly owed to the Historical Archives of the European Union, located at the European University Institute in Fiesole, near Florence, Italy. There, Valérie Mathevon and her colleagues were very helpful in sourcing the case files from the collection that were open for inspection, and which were utilised as source material for the first 12 chapters of the book. As the archives continue to be open in the years ahead, there is no doubt that these new sources will be of immense use for further research in all areas of EU law. Fourthly, we had assistance with proofreading and formatting from both Helle Hjorth Christiansen and Jytte Mønster at Aarhus University. Their patience and persistence have been very much appreciated throughout the entire process, and we are both grateful to them for their meticulousness behind the scenes in bringing this book to completion. Fifthly, we are very thankful to Gráinne de Búrca, Alan Dashwood, Gerard Hogan and Christiaan Timmermans, who were all provided with advanced copies of the book prior to us handing it over to the publishers, and have all kindly provided endorsements of the book that appear therein. Last, but not least, our final words of thanks are to the team at Hart Publishing/Bloomsbury: our own trusted editor Sinead Moloney and Sasha Jawed, as well as Tom Adams and the production team, who collectively make publishing with Hart a pleasure, time and again. V. THE FUTURE
As final touches were being put to the book, a number of important cases were recently decided, or still pending before the Court. These included, amongst others, Commission v Council (Geneva
8 Graham Butler and Ramses A Wessel Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications),34 on the accession of the Union to an international agreement without a Commission proposal; Bank Melli,35 on interpretation of the EU’s ‘blocking statute’, given its design to counteract extraterritorial effects of third country sanctioning regimes; Commission v Council (International Maritime Organisation),36 on the extent of the EU’s exclusive competence in an area covered by common rules applicable to intra-EU situations, and the question of who participates in the external representation of the Union in such situations; Commission v Council (Armenia),37 on Council decisions related to positions of the EU within the Partnership Council of the Comprehensive and Enhanced Partnership Agreement, which is one of the ‘new generation’ partnership agreements the EU has with third states; Commission v Council (South Korea),38 on the applicable decision-making procedure within the Council when making modifications/ amendments to international agreements of the EU, which is governed by Article 218(7) TFEU; Opinion 1/19,39 on the legal basis of the EU concluding the Istanbul Convention (Council of Europe Convention on preventing and combating violence against women and domestic violence); Opinion 1/20,40 on the compatibility of the draft text to modernise the Energy Charter Treaty with the EU Treaties, particular concerning intra-EU application of the dispute settlement mechanism contained therein; and Commission v Council (Gabon),41 on whether the Council can designate a Member State’s representative to sign a Protocol to a Fisheries Partnership Agreement with a third party on behalf of the Union, absent sufficient cooperation with the Commission. These cases will have to be analysed elsewhere, at another time, but will no doubt provide more pieces to the enlarging jigsaw that is EU external relations law. The field of EU external relations law will continue to develop and evolve, raising novel questions of EU law on which parties of many descriptions will turn to the Court. Whilst the initial case law beginning with ERTA was slow and steady, the frequency of the developments in this field of EU law is now less intermittent than it was in the past, and we hope this book serves as the appropriate guide to any reader in trying to navigate this case law. The foundations of EU external relations law have now been well and truly built, and are the cases that have been subjected to extensive analysis within this book. We hope that the reader enjoys the book as much as we have enjoyed editing it. From here, the future of EU external relations law has much more in store.
34 Case C-24/20, Commission v Council (Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications), pending. 35 Case C-124/20, Bank Melli Iran, Aktiengesellschaft nach iranischem Recht v Telekom Deutschland GmbH, ECLI:EU:C:2021:1035. See Opinion of AG Hogan, Case C-124/20, Bank Melli Iran, Aktiengesellschaft nach iranischem Recht v Telekom Deutschland GmbH, ECLI:EU:C:2021:386. 36 Case C-161/20, Commission v Council (International Maritime Organisation), pending. See Opinion of AG Szpunar, Case C-161/20, Commission v Council ECLI:EU:C:2021:957 (International Maritime Organisation). 37 Case C-180/20, Commission v Council, ECLI:EU:C:2021:658 (Armenia). See Opinion of AG Pitruzzella, Case C-180/20, Commission v Council, ECLI:EU:C:2021:495 (Armenia). 38 Case C-275/20, Commission v Council (South Korea), ECLI:EU:C:2022:142. See Opinion of AG Richard de la Tour, Case C-275/20, Commission v Council, ECLI:EU:C:2021:882 (South Korea). See G Butler, ‘The Modification/ Amendment of EU International Agreements – Unanimous or Qualified Majority Decision-Making? The Opinion of AG Richard de la Tour in Commission v Council (South Korea)’ (EU Law Live, 2 November 2021), and G Butler, ‘EU Secondary Law Unable to Impose Unanimity within the Council for Modifying/Amending EU International Agreements: Commission v Council (South Korea)’ (EU Law Live, 16 March 2022). 39 Opinion 1/19, ECLI:EU:C:2021:198 (Istanbul Convention). See Opinion of AG Hogan, Opinion 1/19, ECLI:EU:C:2021:198 (Istanbul Convention). 40 Opinion 1/20, pending. 41 Case C-551/21, Commission v Council (Gabon), pending. See also, Order of the President of the Court in Case C-551/21, Commission v Council, ECLI:EU:C:2022:163 (Gabon), concerning the possible right of intervention in certain cases for the High Representative of the Union for Foreign Affairs and Security Policy (HRVP).
1 Implied Powers of the EU, Limits to Political Expediency and Internationally Inspired Pragmatism: Commission v Council (ERTA) INGE GOVAERE Case 22/70, Commission of the European Communities v Council of the European Communities, ECLI:EU:C:1971:32 (ERTA), delivered 31 March 1971. KEYWORDS Legal personality – Capacity of the Union to conclude international agreements – Implied competence of the Union to negotiate and conclude international agreements – Effet utile doctrine – Exclusive and shared competence – in foro interno, in foro externo – Transport – Limits to political expediency – Conferment of powers in the course of negotiations entered into by the Member States – International context – Joint action by the Member States in the interests of the Union.
I. INTRODUCTION
E
RTA (or AETR) is a landmark case, if not the most important case, in EU external relations law. The ongoing impact of the case can hardly be overestimated. Not only was it the very first of a long line of cases of the Commission opposing the Council; ERTA is synonymous with the doctrine of implied EU powers. The Court famously ruled that EU external competence is not limited to what is expressly provided, but extends potentially to all fields covered by the EU Treaties. The original ERTA test held that ‘Member States may no longer act externally if this would affect internal rules or alter their scope’.1 As such, it is a perfect illustration of the effet utile doctrine and may lead to exclusive or shared EU competence. The ERTA doctrine of affectation was subsequently elaborated upon to include respectively ‘an area which is already covered to a large extent by Community rules’2 as well as
1 Case 22/70, Commission of the European Communities v Council of the European Communities, ECLI:EU:C:1971:32 (ERTA), para 22. 2 Opinion 2/91, Convention No 170 of the International Labour Organization concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, para 25. See this volume, ch 22.
10 Inge Govaere ‘its future development, insofar as that is foreseeable’.3 The Treaty of Lisbon codified only the original ERTA test in Articles 3(2) and 216 TFEU. This triggered the question of the necessity to discontinue those subsequently broader interpretations of ERTA post-Lisbon to respect the principle of conferral – an argument which was forcefully rejected by the Court.4 ERTA paved the way for the so-called ‘second track’ of implied powers introduced a few years later in Opinion 1/76. In the absence of the internal measures necessary to trigger the ERTA test, exceptionally, the Union has implied powers to conclude an agreement where ‘necessary for the attainment of one of the objectives’ of the EU Treaties.5 This second implied powers track was also codified by the Treaty of Lisbon in both Article 3(2) TFEU and Article 216 TFEU. Codification of the two implied powers tracks by the Treaty of Lisbon logically entails that the nature of such powers fundamentally transforms from ‘implicit’ into ‘express’ competence with the same legal value as other provisions of the EU Treaties. The potential impact thereof on the scope of application of other express powers, in particular the Common Commercial Policy (CCP), was illustrated pre-Lisbon in relation to environmental protection.6 Not surprisingly, the express inclusion of both the ERTA and Opinion 1/76 tests, coupled with the catalogue of competences introduced in the Treaty of Lisbon in Articles 2–6 TFEU, has exponentially increased the need for clarification by the Court. Instead of offering certainty and transparency, the Treaty of Lisbon thus provoked a relaunch and exponential growth of case law related to EU competence and legal basis of EU external action. The odd one out is the field of transport. As the two tracks of implied powers rest on respectively road and waterway transport, the Court firmly stated that transport services remained exclusively subject to the transport chapter and could not come under the CCP.7 The codification of the EU Treaties as rubber stamped in Article 207(5) TFEU established a ‘fundamental parallelism’ between internal and external competence under the transport chapter of the EU Treaties, also post-Lisbon.8 Although best known for implied powers, ERTA was also groundbreaking for shaping EU external relations law beyond this doctrine. For the first time, the Court spelled out the limits to pure political expediency by firmly claiming jurisdiction on ‘whether to proceed through intergovernmental or Community channels’.9 Post-Lisbon, this important division between areas of political discretion and judicial control is reflected, inter alia, in Article 275 TFEU, which grants the Court jurisdiction with respect to Article 40 TEU and thus enables it to delineate between CFSP and other EU external action. In ERTA, the Court further offered a pragmatic solution to tackle the concurring dynamics of EU competence and international
3 Opinion 1/03, Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, ECLI:EU:C:2006:81, para 126. See this volume, ch 46. 4 Case C-114/12, Commission of the European Communities v Council of the European Union (Convention of the Council of Europe on the protection of the rights of broadcasting organisations), ECLI:EU:C:2014:2151; Opinion 1/13, The 1980 Hague Convention on the civil aspects of international child abduction, ECLI:EU:C:2014:2303, para 4. See this volume, ch 69. 5 Opinion 1/76, Draft Agreement establishing a European laying-up fund for inland waterway vessels, ECLI:EU:C:1977:63. See this volume, ch 9. 6 Opinion 2/00, Cartagena Protocol, ECLI:EU:C:2001:664. See this volume, ch 39; Case C-281/01, Commission of the European Communities v Council of the European Union (Energy Star Agreement), ECLI:EU:C:2002:761; Case C-94/03, Commission of the European Communities v Council of the European Union (Rotterdam Convention I), ECLI:EU:C:2006:2. See this volume, ch 45. 7 Opinion 1/94, WTO Agreement, ECLI:EU:C:1994:384. See this volume, ch 28. 8 Opinion 2/15, Singapore Agreement, ECLI:EU:C:2017:376, paras 57–59. See this volume, ch 82. 9 ERTA (n 1) para 70.
Implied Powers of the EU, Limits to Political Expediency 11 negotiations.10 Having regard in particular to the international context and position of third countries, Member States jointly could continue to act ‘on behalf of’ and ‘in the defence of the EU interest’, despite the fact that competence had shifted to the EU, pursuant to the principle of sincere cooperation.11 Although the latter principle was later on deftly invoked especially to facilitate EU participation in other international organisations,12 its early potential to solve practical conundrums pertaining to dynamics of EU external relations law has remained underexplored. II. FACTS
The ERTA case related to the negotiation and conclusion of the European Agreement on Road Transport (ERTA/AETR)13 concerning the work of crews of vehicles engaged in international road transport under the auspices of the United Nations Economic Commission for Europe. Negotiations for a revised agreement resumed in 1967, after the first 1962 agreement concluded by five out of the six Member States failed to meet the requisite ratification numbers. On 19 May 1970, the Commission lodged an application before the Court whereby it requested the annulment of the proceedings of the Council of 20 March 1970 allowing for the Member States to negotiate and conclude this international agreement. In essence, the Commission claimed that since the EU had in the meantime adopted an internal EU measure on similar matters relating to standardising driving and rest periods of drivers of road transport vehicles, namely Regulation No 543/69 of the Council of 25 March 1969 on the harmonisation of certain social legislation relating to road transport,14 the competence to deal with this international agreement had, from that moment in time, shifted to the EU on an exclusive basis. The Commission pointed out that it simply transposed to international agreements the reasoning also applicable to unilateral measures relating to transport policy. According to the Commission, Member States could no longer act only if and to the extent that the Union has exercised its competence. EU competence was therefore necessarily and progressively exclusive in pace with the adoption of internal measures. To underscore its argument, the Commission alleged that the Council had infringed the provisions in the EU Treaties on the common transport policy (now Article 91(d) TFEU), combined with the procedural provision for the conclusion of agreements (now Article 218 TFEU).15 It further argued that the Council had failed to indicate a legal basis, nor had it given a statement of reasons pertaining to the link between its contested decision and the EU Treaties. The Council mainly retorted that its contested proceedings were not a decision with binding legal effects which could be contested before the Court, but merely constituted the ‘recognition’ of an existing situation of coordination between the Member States. It pointed, inter alia,
10 ibid para 86. 11 ibid para 90. See Art 4(3) TEU. 12 Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2010:203 (PFOS). See this volume, ch 58; Case C-45/07, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:2009:81 (International Maritime Organisation). See this volume, ch 53. 13 The French abbreviation ‘AETR’ stands for Accord européen relatif au travail des équipages de véhicules effectuant des transports internationaux par route. 14 [1969] OJ L77/49. 15 The Commission also invoked the possibility, if need be, to further combine this with the flexibility clause (now Art 352 TFEU).
12 Inge Govaere to the fact that the proceedings were neither published in the Official Journal (OJ) nor notified to the Member States. The Council was also firmly opposed to the proposed deduction of EU exclusive external competence, by analogy, to the adoption of unilateral measures, by pointing out that ‘The EEC Treaty does not confer on the Community treaty-making powers precisely co-extensive with its internal authority’. Instead, the Council argued that ‘The power of the Community to promulgate legal measures was deliberately confined to unilateral measures except where unequivocal provisions such as [Article 207 TFEU and Article 217 TFEU]16 has conferred authority on the Community to enter into international agreements’.17 The Council thus called for the Commission’s application to be dismissed as inadmissible or, alternatively, as unfounded. III. THE COURT
The competence issue was dealt with before the admissibility question. In line with the position taken by Advocate General (AG) Dutheillet De Lamothe, who had invoked a dual function fulfilled by the Council,18 the Court held that whether or not the contested proceedings could be deemed to have a legal effect would depend on its qualification as a coordination of the position of the Member States, or instead, the exercise of powers conferred on the Union.19 The very first issue to be decided by the Court thus related to the constraints ensuing from the principle of conferral. Were EU external powers necessarily limited to expressly conferred powers in the EU Treaties, as argued by the Council? Or, to the contrary, could a parallelism be drawn between internal and external competence, as the Commission had put forward? This crucial question went straight to the core of the Union’s capacity to engage in international relations and thus largely superseded the sole domain of transport. In order to provide an answer, the Court stated that consideration needed to be given to ‘the general system of Community law in the sphere of relations with third countries’.20 In so doing, it firmly departed from the Opinion of the AG, who had warned against ‘a discretionary construction of the law, or, in other words, a judicial interpretation far exceeding the bounds which the Court has hitherto set regarding its power to interpret the Treaty’.21 The Court proceeded to look at the whole scheme of the EU Treaties. In particular, the fact that the provision expressly recognising the legal personality of the Union was situated in the ‘general and final provisions’ of the EU Treaties was held to imply that the Union had the capacity to contract international obligations in all fields covered by the EU Treaties. Opting for this approach allowed the Court to state that the authority to conclude international agreements therefore not only arises from ‘express conferment by the Treaty’, but, to the contrary,
16 Reference was made to the original ‘Articles 111, 113 and 238’; Art 111 was repealed as it related to Member State measures in the field of CCP during the transitional period; Art 113 EC is now Art 207 TFEU on CCP, whereas Art 238 EC (now Art 217 TFEU) related to association agreements. 17 ERTA (n 1) 271. 18 Opinion of Advocate General (AG) Dutheillet De Lamothe, Case 22/70, Commission of the European Communities v Council of the European Communities (ERTA), ECLI:EU:C:1971:23, 287–88, where he pointed to the dual nature of the function of the Council as follows: ‘at times an organ of the Community established between the six States, and at others an organ of the collectivity formed by those States’. 19 ERTA (n 1) paras 3–5. 20 ibid para 12. 21 Opinion of AG Dutheillet De Lamothe, ERTA (n 18) 289.
Implied Powers of the EU, Limits to Political Expediency 13 may also be implied from other provisions of the EU Treaties and EU measures adopted accordingly.22 The effet utile reasoning of the Court underlying the doctrine of implied powers was apparent from the introduction of the so-called ‘ERTA test’. The Court held that: In particular, each time the Community, with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form these may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules.23
If this test is fulfilled, then only the Union can act, to the exclusion of the Member States.24 The Court expressly endorsed an ‘in foro interno, in foro externo’ approach by concluding that ‘With regard to the implementation of the provisions of the Treaty the system of internal Community measures may not therefore be separated from that of external relations’.25 Interestingly, the Court proceeded to rely on a joint reading of the provisions of the EU Treaties on the common transport policy and the principle of sincere cooperation in applying the ERTA test to the facts at issue.26 Internal measures relating to ERTA were taken in the form of Regulation No 543/69, and from that point in time the power to conclude and negotiate the agreement had shifted to the Union.27 The reasons given for the exclusive nature of the ensuing EU competence in casu were not external, for instance the need for unity in external representation, but merely internal, pertaining to the unity of the common market as well as the uniform application of Union law.28 In view of the above reasoning, the Court quite easily found that the action for annulment was admissible. By adopting provisions on the negotiation and conclusion of an international agreement which derogated from Article 228 EEC (now Article 218 TFEU), the provision of the EU Treaties detailing the procedural steps to be taken for the conclusion of international agreements, the contested proceedings of the Council had ‘definite legal effects’ not only on the relations between the Union and its Member States, but also on the inter-institutional relations.29 In its analysis on substance, the Court clarified further that whereas the decision to engage in negotiations with third countries is a matter of political expediency, whether to then proceed through intergovernmental or Union channels is no longer at the discretion of the Council.30 The Court thus proceeded to effectively exercise judicial control as to the compatibility of the contested Council’s proceedings with the EU Treaties, and in particular Article 228 EC (now Article 218 TFEU). Interestingly, the outcome of this ex post and purely EU law analysis was then mitigated by also taking into account the ex ante situation as well as the international context, in line with the subsidiary reasoning developed by the AG. The Court pertinently pointed out that ‘the Council acted in a situation where it no longer enjoyed complete freedom of action in its relations with the third countries taking part in the same negotiations’ and that ‘to have suggested
22 ERTA (n 1) para 16. It is noteworthy to point out that AG Dutheillet De Lamothe substantiated to the contrary that ‘the argument of implied and automatic transfer of authority outside the cases laid down by the Treaty meets with very serious objections’, see Opinion of AG Dutheillet De Lamothe, ERTA (n 18) 291. 23 ERTA (n 1) para 17. 24 ibid para 15. 25 ibid para 19. 26 ibid paras 20–31. 27 ibid paras 28–30. 28 ibid para 31. 29 ibid para 55. 30 ibid para 70.
14 Inge Govaere to the third countries concerned that there was now a new distribution of powers within the Community might well have jeopardized the successful outcome of the negotiations’.31 Having regard to this special situation, it was incumbent on the Council and the Commission to reach agreement on ‘appropriate methods of cooperation’ in order to most effectively defend the interests of the Union.32 Since the Commission had failed to take appropriate action, the Council had, by adopting the contested proceedings, acted in the Union’s interest in accordance with the principle of sincere cooperation. Upon this finding, the Court also succinctly set aside the additional arguments pertaining to the alleged breach of Article 235 EC (now Article 352 TFEU) and Article 190 EC (now Article 296 TFEU). The application was therefore plainly dismissed. IV. THE IMPORTANCE OF THE CASE
ERTA was the very first case ever initiated by the Commission against the Council. Set against the Treaty of Rome, characterised by a scarcity of provisions expressly tackling international relations (the AG counted only 11), the judgment of the Court was bound to be elucidating and groundbreaking, whatever its outcome. Pressing fundamental questions pertaining to EU external relations needed to be addressed, not only in terms of the principle of conferral and delimitation of competence between the EU and its Member States, but also concerning the role, function and discretion of the various EU institutions, including the Court itself. But it was the fact that the Court resolutely opted for the ‘more audacious method of interpretation’, against the advice of the AG,33 which immediately propelled this ruling to historic proportions. By openly embracing the doctrine of implied powers and firmly exerting judicial control, the Court forever changed the legal landscape of EU (and Member State) relations with third countries (and international organisations). Perhaps not entirely surprisingly, ERTA has triggered much debate, controversy and ample case law. Yet the original ERTA ruling has never lost its zest. The Treaty of Lisbon firmly and openly gave it post factum democratic legitimation by rubber stamping the judge-made doctrine into written primary law. In so doing, it fuelled renewed questions, not least in relation to the potential implications of the very ‘express’ codification of the ERTA ‘implied’ powers test. A. Implied Powers in EU Law The ERTA case is often equated with implied powers and vice versa. However, the doctrine of implied powers is not, as such, an invention of the Court. As long ago as the 1949 Advisory Opinion of the International Court of Justice (ICJ) in the Reparations case, a landmark judgment on the existence and exercise of legal personality by international organisations, the ICJ invoked implied powers in relation to the United Nations (UN).34 In ERTA, the Court
31 ibid paras 85–86. 32 ibid para 87. 33 Opinion of AG Dutheillet De Lamothe, ERTA (n 18) 294. 34 Reparation for Injuries Suffered in the Service of the United Nations (Advisory Opinion) [1949] ICJ Rep 174. For an analysis of the implied powers doctrine in that context, see RA Wessel, ‘Reparation for Injuries Suffered in the Service of the United Nations’ in C Ryngaert, IF Dekker, RA Wessel and J Wouters (eds), Judicial Decisions on the Law of International Organizations (Oxford, Oxford University Press, 2016), 11–18.
Implied Powers of the EU, Limits to Political Expediency 15 resolutely, and for the very first time, introduced this doctrine of implied powers into EU law. Upon finding that the Union was given legal personality by the EU Treaties, the Court held that the possibility to contract international obligations thus potentially applied to the whole of the EU Treaties and not just to competences expressly conferred on the Union. Significantly, in so doing, the Court also transformed the doctrine of implied powers into a specific EU law concept under its exclusive jurisdiction. A two-pronged test emerged. Applying its purposive method of interpretation coupled with the effet utile doctrine, the Court elaborated the ‘ERTA test’, which was codified with the Treaty of Lisbon. The logic goes that whenever the EU has adopted internal measures, then ‘Member States may no longer act externally if this would affect the internal rules or alter their scope’.35 This ERTA doctrine of affectation constitutes the main stream (or first track) of implied power reasoning, which has been further clarified and elaborated upon in subsequent case law. In Opinion 1/76, it was complemented by a second track of implied powers to the effect that the EU may, exceptionally, immediately act externally if it simultaneously serves to achieve an objective of the EU Treaties which could not be achieved by unilateral internal measures alone.36 This second track of implied powers was also codified by the Treaty of Lisbon, together with the ERTA test, in Articles 3(2) and 216 TFEU. B. The ERTA Test Revisited With the ERTA test, the Court pointed to the necessary link between the exercise of internal competence and the ensuing external effects. More precisely, it spelled out the consequences for Member States of the adoption of internal measures by the EU, by stating that Member States can no longer act externally if and when such action ‘would affect the internal rules or alter their scope’.37 The implication was that it was therefore the EU that should act externally, instead of the Member States, which has led to the emergence of the theory of parallelism, or ‘in foro interno, in foro externo’ reasoning; external competence of the EU necessarily follows on from its internal competence. Further case law addressed the modalities of such parallelism. In particular, the subsequent Opinion 2/91 is highly enlightening in several respects. Firstly, it clarified that implied power reasoning is not restricted to internal measures adopted in relation to common EU policies, such as the common transport policy, but extends to the whole of the EU Treaties.38 Secondly, a distinction is made between the ‘existence’ of EU external competence in parallel to the existence of internal competence, and the modalities of the ‘exercise’ thereof.39 Thirdly, contrary to the general assumption made after ERTA, the nature of EU competence ensuing from implied power reasoning can be either exclusive or shared with the Member States.40 An application in concreto of the ERTA test to the circumstances of the case led to the conclusion of shared competence in particular where the internal and external measures both merely lay down minimum norms.41 Given this, the continuing exercise of external competence by Member States will, in practice, never ‘affect’ the internal measures nor ‘alter their scope’.
35 ERTA
(n 1) para 22. 1/76 (n 5).
36 Opinion 37 ibid.
38 Opinion
2/91 (n 2) paras 10–11. See this volume, ch 22. paras 15–18. 40 ibid para 9. 41 ibid para 18. 39 ibid
16 Inge Govaere In most instances, implied power reasoning will, however, quasi-automatically lead to exclusive EU competence, in particular as the Court in Opinion 2/91 applied the ERTA test very broadly to also take into consideration ‘an area which is already covered to a large extent by Community rules progressively adopted’.42 In Opinion 1/03, the ERTA test was further relaxed to take as a benchmark not only internal EU measures already adopted, but also ‘foreseeable future developments’.43 This very broad sweep of the ERTA test is instrumental in introducing ERTA supervening exclusivity to bypass difficult questions pertaining to the exercise of shared external competence, even in a post-Lisbon setting,44 not least in relation to facultative mixity.45 C. Treaty Codification of the ERTA Test Both the ERTA and Opinion 1/76 tests were codified by the Treaty of Lisbon in Article 3(2) TFEU, detailing grounds for exclusive EU competence, as well as Article 216 TFEU, stipulating when the EU may conclude international agreements with third countries or international organisations. Although this can be applauded as an exercise in transparency, the mere fact of codification of implied powers case law has also brought about important and related systemic changes. Importantly, post factum democratic legitimation was given to this famous judgemade doctrine. For the first time, the ERTA logic was unanimously and positively endorsed by all the Member States, as well as democratically ratified according to their respective constitutional rules. But in so doing, ‘implied’ powers reasoning was inherently transformed into competence ‘expressly’ conferred to the EU by the EU Treaties. This, in turn, had two direct consequences. Firstly, codification of the ERTA test underpinned the position that the Treaty of Lisbon clarified unequivocally that Member States, as ‘Masters of the Treaties’, determine the delimitation of competence. Together with the insertion of the catalogue of competence in Articles 2–6 TFEU, it again fuelled the discussion whether competence is for Member States to give rather than for the Court to grab.46 Issue was taken in particular with the fact that the Treaty of Lisbon codified the original ERTA test, but failed to openly refer to the broadening thereof in the later Opinion 2/91 and Opinion 1/03. The Council argued in Broadcasting that if the Court were to conclude to exclusive EU competence in the absence of common rules, it would ‘unlawfully’ extend the scope of Article 3(2) TFEU and breach the very principle of conferral.47 Both in the Broadcasting case and Opinion 1/13, the Court forcefully rejected the idea that the Treaty of Lisbon had enacted only a piecemeal codification of its implied power doctrine.
42 ibid para 25. 43 Opinion 1/03 (n 3) para 126. See this volume, ch 46. 44 M Cremona, ‘EU External Competence – Rationales for Exclusivity’ in S Garben and I Govaere (eds), The Division of Competences between the EU and the Member States: Reflections on the Past, the Present and the Future (Oxford, Hart Publishing, 2017) 134; M Chamon, ‘Implied Exclusive Powers in the ECJ’S post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1101. 45 M Chamon, ‘Existence or Exercise of EU Competence? From Supervening Exclusivity to Institutional Balance in Limiting Facultative Mixity’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Nijhoff, 2020) 112–34. 46 I Govaere, ‘To Give or to Grab: The Principle of Full, Crippled and Split Conferral of Powers Post-Lisbon’ in M Cremona (ed), Structural Principles in EU External Relations Law (Oxford, Hart Publishing, 2018) 71–91. 47 Convention of the Council of Europe on the protection of the rights of broadcasting organisations (n 4) paras 52–60.
Implied Powers of the EU, Limits to Political Expediency 17 It pointedly stated that Opinions 2/91 and 1/03 did not establish new tests alongside ERTA, but merely served to ‘explain’ the original ERTA test.48 Pre-Lisbon case law interpreting the original ERTA test thus unrestrictedly continues to apply post-Lisbon.49 Conversely, post-Lisbon case law may further clarify and refine the previous understanding of the ERTA test, as is illustrated by Opinion 3/15 in relation to the concept of minimum harmonisation.50 The codification of the second track of implied powers by the Treaty of Lisbon in both Article 3(2) TFEU and Article 216 TFEU has also called for a renewed interpretation thereof, as seen in particular in Opinion 2/15 in relation to non-direct investments.51 Secondly, the very act of codification elevated the ERTA test to the rank of primary law. As a consequence, it can no longer be invoked merely in subsidiary order to argue in favour of external EU competence in the absence of an express conferral, as was the case pre-Lisbon. Articles 3(2) and 216 TFEU instead need to be given a useful effect alongside the domainspecific express competences conferred in the EU Treaties, not least the CCP. This means that not only the place and effect of the ERTA test need to be revaluated, but also the scope of, for instance, the CCP. Such an unwarranted effect of codification of implied powers on previously existing express competence was already apparent pre-Lisbon when EU environmental competence was linked to the ERTA test by the Single European Act (SEA), as seen in Opinion 2/00,52 Energy Star53 and Rotterdam Convention I.54 Through codifying the ERTA test, coupled with the insertion of the catalogue of competence, multiple legal bases for external EU action have newly become available in the EU Treaties. The ensuing difficulty is therefore twofold. The scope of application of each legal basis needs to be clarified both on its own as well as in relation to other potential legal bases for external action. Moreover, international negotiations and agreements usually do not fit neatly into one narrowly defined field, so that additional answers need to be provided as to which of the many new EU legal bases should then prevail, or on the basis of what criteria. This new legal context explains why early post-Lisbon external relations cases – Daiichi Sankyo on intellectual property rights55 and Conditional Access Convention on services56 – invoked for the first time both the CCP and the internal market as equivalent potential legal bases for EU external action. Immediately apparent was that many other similar situations would arise with respect to different policy areas and fields, questioning the choice or combination of newly available legal bases for EU external action.57 Determining the proper
48 ibid paras 66–67; Opinion 1/13 (n 4) paras 70–73. 49 I Govaere, ‘“Setting the International Scene£: EU External Competence and Procedures Post-Lisbon Revisited in the Light of ECJ Opinion 1/13’ (2015) 52 CML Rev 1277. 50 Opinion 3/15, Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled, ECLI:EU:C:2016:657. See this volume, ch 78. 51 Opinion 2/15 (n 8) paras 57–59. See this volume, ch 82; Opinion 1/76 (n 5). See this volume, ch 9. 52 Opinion 2/00 (n 6). See this volume, ch 39. 53 Energy Star Agreement (n 6). 54 Rotterdam Convention I (n 6). See this volume, ch 45. 55 Case C-414/11, Daiichi Sankyo, ECLI:EU:C:2013:520. See this volume, ch 64; Case C-389/15, European Commission v Council of the European Union (Lisbon Agreement), ECLI:EU:C:2017:798. Compare to Opinion 3/15 (n 50), whereby, to the contrary, the Internal Market rather than the CCP was withheld as the proper legal basis by the Court. See this volume, ch 78. 56 Case C-137/12, European Commission v Council of the European Union (Conditional Access Convention), ECLI:EU:C:2013:675 See this volume, ch 61. 57 For an illustration of this post-Lisbon difficulty of coming to terms with potential multiple legal bases, see C-377/12, European Commission v Council of the European Union (Philippines PCA), ECLI:EU:C:2014:1903. See this volume, ch 67.
18 Inge Govaere legal basis of EU external action has constitutional significance.58 It is not surprising, therefore, that the codification of the ERTA test in the Treaty of Lisbon, rather than providing legal certainty coupled with transparency, has to the contrary set in motion an exponential growth in EU external relations case law.59 D. Competence for Transport Both ERTA and Opinion 1/76 related to transport, respectively by road and waterways. The EU’s common transport policy thus constituted the very basis for both tracks of implied powers. The importance of this finding to determine the legal basis of EU external action relating to transport can hardly be overestimated. In Opinion 1/94, the Court plainly refuted the argument that the inclusion of transport services in the World Trade Organization (WTO) Agreement implied that EU competence had shifted towards the CCP. The Court pointed out that in introducing implied powers in ERTA, the ‘very idea underlying that decision’ was that international agreements in transport matters are not covered by the CCP.60 Transport policy could also not be divided into commercial and other aspects, such as resting periods for drivers, as this would unduly reduce the scope of application of ERTA and Opinion 1/76, whereas the latter did not make such a distinction.61 Interestingly, also in Opinion 1/94, the Court had no difficulty in finding, to the contrary, that EU competence for Common Agricultural Policy-related matters had indeed shifted to the CCP.62 This seemingly inconsistent approach, embracing versus rejecting a dynamic development of EU competence over time, points to an overriding concern by the Court to preserve, in full, the foundations on which the implied powers’ acquis was built. The reasoning of Opinion 1/94 in relation to transport services was thereupon firmly anchored in the EU Treaties, a codification which has survived the Treaty of Lisbon reforms unscratched. In the Title on CCP, Article 207(5) TFEU unequivocally states that: ‘The negotiation and conclusion of international agreements in the field of transport shall be subject to Title VI of Part Three and to Article 218 [TFEU].’ This allows the Court to plainly refer to this provision of the EU Treaties, for instance in Opinion 2/15, and to settle EU external competence issues relating to transport in favour of a ‘fundamental parallelism’ between internal and external competence under the transport chapter of the EU Treaties.63 E. Limits to Political Expediency Besides implied powers, ERTA is also instrumental in delimiting the respective powers of the EU institutions, including the Court. In essence, all the major ‘w’ questions (such as ‘what’, ‘with whom’, ‘when’ and ‘where’) about entering into international relations are purely
58 Opinion 2/00 (n 6) para 5. 59 For a pending case, for instance, see the application lodged by the Commission on 14 April 2020 in Case C-161/20, European Commission v Council of the European Union (International Maritime Organisation), pending [2020] OJ C209/18–19. 60 Opinion 1/94 (n 7) para 48. See this volume, ch 28. 61 ibid paras 49–50. 62 ibid para 29. 63 Opinion 2/15 (n 8) paras 57–59 See this volume, ch 82.
Implied Powers of the EU, Limits to Political Expediency 19 political decisions and thus come under purely political expediency. But as soon as political discretion is exercised, the choice of means and procedures firmly comes under judicial control for compliance with the EU Treaties. The Court pointedly underlined that ‘Although the Council may … decide in each case whether it is expedient to enter into an agreement with third countries, it does not enjoy a discretion to decide whether to proceed through intergovernmental or Community channels’.64 The control exercised by the Court thus extends to all aspects of compatibility with the EU Treaties, whether substantive or procedural. To facilitate judicial control over external action, the obligation rests on the Council to always state the correct substantive legal basis65 as well as to scrupulously respect the procedures prescribed in Article 218 TFEU.66 Both were firmly anchored by the Court as having constitutional significance. Such delimitation between political expediency and judicial control of external action is also reflected in Article 275 TFEU. Whilst, according to the EU Treaties, the Court does not in principle have jurisdiction over the CFSP,67 this is different for Article 40 TEU, so that it is unequivocally up to the Court to delineate between the CFSP and other EU external action, not political expediency.68 F. International Context Inspired Pragmatism ERTA is also crucial in understanding and reconciling the inherently dynamic nature of EU competence with the wider constraints of negotiating international agreements in an international setting and, in particular, with third countries who are themselves not bound by EU law. The Court pointed out that: ‘At that stage of the negotiations, to have suggested to the third countries concerned that there was now a new distribution of powers within the Community might well have jeopardized the successful outcome of the negotiations.’69 Where an important part of the negotiations takes place before the shift of competence from the Member States to the EU, a pragmatic approach may be warranted whereby Member States jointly continue to act ‘on behalf of’ and ‘in the defence of the EU interest’, pursuant to the principle of sincere cooperation as expressed in Article 4(3) TEU.70 The duty of sincere cooperation has developed into a key structural principle of EU external relations law,71 not least as it underpinned the participation of the EU in other international organisations.72 But the early potential to solve practical conundrums in terms of dynamics of EU external relations law, by also taking into account the wider perspective of the international context in which the EU operates, has so far
64 ERTA (n 1) para 70. 65 Case C-370/07, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2009:590 (CITES), paras 45–47; Case C-687/15, European Commission v Council of the European Union (WRC-15), ECLI:EU:C:2017:803. 66 Case C-425/13, European Commission v Council of the European Union (Negotiating directive), ECLI:EU:C:2015:483, para 62. 67 Though that is changing. See G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 145–222. 68 See the first post-Lisbon case, Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:472 (Smart Sanctions). See this volume, ch 60. 69 ERTA (n 1) para 90; see also paras 86–87. 70 ibid para 90. 71 See J Larik, ‘Pars Pro Toto: The Member States’ Obligations of Sincere Cooperation, Solidarity and Unity’ in Cremona (n 46) 175–99. 72 PFOS (n 12). See this volume, ch 58; International Maritime Organisation (n 12). See this volume, ch 53.
20 Inge Govaere remained largely underexplored.73 It is symptomatic that ERTA is mainly cited for conferring exclusive competence on the EU by virtue of implied powers. Rarely is it thereby invoked that the Court nonetheless favoured a pragmatic over a strictly legal outcome and plainly dismissed the application in favour of the conclusion of ERTA by joint action of the Member States. V. ADDITIONAL READING Chamon, M, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1101. Govaere, I, ‘External Competence: What’s in a Name? The Difficult Conciliation between Dynamism of the ECJ and Dynamics of European Integration’ in P Demaret, I Govaere and D Hanf (eds), European Legal Dynamics (Brussels, Peter Lang, 2007) 461–83. Mengozzi, P, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (London, Bloomsbury, 2010) 213–17. Rosas, A, ‘EU External Relations: Exclusive Competence Revisited’ (2015) 38 Fordham International Law Journal 1073. Temple Lang, J, ‘The ERTA Judgment and the Court’s Case Law on Competence and Conflict’ (1986) 6(1) Yearbook of European Law 183.
73 Such reference to ERTA could have helped to underpin the ‘functional mixity’ reasoning of the Court in the Antarctica Marine Protected Areas case, whereby due attention was given to the international context in which the EU had to exercise its external competence, see Joined Cases C-626/15 and C-659/16, European Commission v Council of the European Union, ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas) paras 125–33. For the concept of functional mixity, see I Govaere, ‘“Facultative” and “Functional” Mixity Consonant with the Principle of Partial and Imperfect Conferral’ in Chamon and Govaere (n 45) 21–47.
2 International Agreements in the EU Legal Order: International Fruit ALESSANDRO PETTI AND JOANNE SCOTT* Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, delivered 12 December 1972. KEYWORDS General Agreement on Tariffs and Trade (GATT) – The GATT and Union law – Functional succession doctrine – Invocability of international agreements – The EU as an international legal actor – Historical Archives of the European Union.
I. INTRODUCTION
I
n its memorandum to the Court, the Commission highlighted that International Fruit is the first preliminary reference concerning the influence of international law on the validity of secondary Union (then the European Economic Community) law.1 The international law at issue in the case was the General Agreement on Tariffs and Trade 1947 (the GATT). Given the novelty and importance of the issues arising, this case was destined to influence the posture of the Union as an international legal actor and the role played by international law in the EU legal order. The Court’s judgment in International Fruit has been harshly criticised, by public international lawyers among others, who have questioned both the Court’s stance on the relationship between international law and domestic law and the actual operation of the GATT. Provocatively, it has been suggested that the Court’s reasoning ‘sinks below criticism’.2 Regardless of one’s * Many thanks to Mario Mendez and to the editors, Graham Butler and Ramses A Wessel, for their very helpful comments on an earlier draft. Thanks also to Siemen van den Broecke for translating parts of the Dossier de Procédure for International Fruit and the Historical Archives of the European Union at the EUI for making this Dossier available to us. 1 Court de Justice de l’Union Européene, Dossier de Procédure, affaires jointes 21–24/72 (Fonds codes CJEU-1313) provided by the Historical Archives of the European Union, Commission Submission, 44. See, however, Joined Cases 41–44/70, NV International Fruit Company and others v Commission of the European Communities (International Fruit 1), ECLI:EU:C:1971:53. This was brought under Art 263 TFEU (previously Art 173 EEC). 2 B Conforti, International Law and the Role of Domestic Legal Systems (Martinus Nijhoff Publishers, 1993) 30. See also by way of example G Sacerdoti, ‘Application of GATT by Domestic Courts: European and Italian Case Law’ (1976) 2 Italian Yearbook of International Law 224.
22 Alessandro Petti and Joanne Scott evaluation of the judgment, International Fruit exemplifies the Court’s interest in defending the Union’s diplomatic interests by implicitly distinguishing the specificities of the EU legal order from the GATT system. II. FACTS
International Fruit is the third in a series of cases initiated by fruit-importing firms operating in the Netherlands. These cases dealt with temporary restrictions on imports of eating apples from third countries. Restrictions were adopted under the ‘protective clause’ laid down in the Regulation coordinating and unifying the regime for the importation of fruit and vegetables from third countries.3 This allowed for the adoption of temporary measures when the internal market suffered, or was threatened with, serious disturbances as a result of imports or exports, and where this was liable to jeopardise the objectives of the Common Agricultural Policy (CAP). As a result, imports of eating apples from third countries were made conditional on the granting of import certificates which were to be administered in accordance with Union law.4 A number of applications for import licences submitted by Dutch fruit-importing firms were rejected by the Dutch competent authority, and legal actions ensued. In the first of the three cases, the firms brought a direct action for annulment of the Commission measures forming the basis for the Dutch authority’s refusal to issue import certificates.5 The Court established that their applications were unfounded. In the second case, the firms appealed to the national court on economic matters, requesting annulment of the Dutch authority’s decision to reject their applications. While the Court responded to the two questions of interpretation of Union law referred by the Dutch court,6 this was considered insufficient by the Dutch court to conclude the case. In the third case, which is discussed in this chapter, the plaintiff argued before the Dutch court that the contested regulations were contrary to Article XI GATT.7 The Dutch Appeal Court submitted a reference for a preliminary ruling to the Court posing two questions. First, broadly, it asked if review of the validity of Union measures in the context of the preliminary ruling procedure also covers the validity of those measures under international law. Second, more narrowly, it asked if the contested regulations are invalid as being contrary to Article XI GATT.8
3 Règlement (CEE) n° 2513/69 du Conseil, du 9 décembre 1969, relatif à la coordination et à l’unification des régimes d’importation des fruits et légumes appliqués par chaque État membre à l’égard des pays tiers [1969] OJ L318/6. Note that this Regulation was repealed in 1972. 4 Règlement (CEE) n° 459/70 de la Commission arrêtant les mesures de sauvegarde applicables à l’importation des pommes de table [1979] OJ L57/20; Règlement (CEE) n° 565/70 du 25 mars 1970, relatif à la gestion du système de titres d’importation des pommes de table et modifiant le règlement (CEE) n° 459/70 [1970] OJ L69/70; Règlement (CEE) n° 686/70 de la Commission, du 15 avril 1970, portant troisième modification du règlement (CEE) n° 565/70 relatif à la gestion du système de titre d’importation des pommes de table et modifiant le règlement (CEE) n° 459/70 [1970] OJ L84/21. Note, the period of validity of these three Regulations ended on 30 June 1970. 5 International Fruit 1 (n 1). 6 Joined Cases 51–54/71, International Fruit Company NV and others v Produktschap voor groenten en fruit (International Fruit 2), ECLI:EU:C:1971:12. The relevant measure was Regulation 459/70 (n 4). 7 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115 (International Fruit). 8 These are the three Regulations included in n 4.
International Agreements in the EU Legal Order 23 In addressing the first question, the Court decided that the validity of a Union measure may only be judged by reference to a provision of international law when that provision binds the Union, and is capable of conferring rights on individuals which they can invoke before national courts. On the second question, it decided that Article XI GATT did not have this effect and, therefore, could not affect the validity of the contested regulations. This chapter discusses the general findings of the Court (section III) and subsequently tackles the two main issues raised in the case: namely, whether the GATT is binding on the Union by means of ‘functional succession’ (section IVA) and whether it confers rights on individuals that can be directly invoked before the courts (section IVB). The chapter also assesses the value of the dossier de procédure in shedding light on the arguments of the parties and the manner in which these were handled by the Court (section IVC). III. THE COURT
In International Fruit, the Court established that ‘[before] the incompatibility of a [Union] measure with a provision of international law can affect the validity of that measure, the [Union] must first of all be bound by that provision’ (emphasis added).9 For the first time, it thereby laid down general criteria for the invocability of international law in the context of challenges to the validity of EU acts under the preliminary ruling procedure. This raised an important and complex issue in relation to the GATT. While the Member States had entered into this agreement before the conclusion of the Treaty of Rome, the Union was not a contracting party to it. Nonetheless, in a famous passage establishing the binding nature of the GATT, the Court observed that ‘in so far as under the [EU Treaty] the [Union] has assumed the powers previously exercised by Member States in the area governed by the [GATT], the provisions of that agreement have the effect of binding the [Union]’.10 A number of different factors were highlighted by the Court in reaching this conclusion. First, it observed that the Member States were bound by the GATT at the time they concluded the Treaty of Rome, and that they could not withdraw from their obligations to third countries by concluding a treaty between them.11 Second, it stated that the ‘desire’ of the Member States to observe the GATT follows as much from the very provisions of the [EU] Treaty as from the declarations made by Member States on the presentation of the Treaty to the contracting parties of the [GATT] in accordance with the obligation under Article XXIV thereof.12
In terms of the EU Treaty’s expression of this desire, the Court pointed first to Article 206 TFEU (then Article 110 EEC), which ‘seeks the adherence of the [Union] to the same aims’ as the GATT.13 Crucially, the Court also pointed to Article 351(1) TFEU (then Article 234(1) EEC), which establishes that the rights and obligations arising from agreements concluded
9 International Fruit (n 7) para 7. 10 ibid para 18. 11 ibid paras 10 and 11. 12 International Fruit (n 7) para 12. 13 International Fruit (n 7) para 13. The Court did not expand on this point, and indeed the wording of Art 206 TFEU (then Art 110 EEC) and the statement of the GATT’s objectives in its preamble are markedly different. Nonetheless, the Advocate General helpfully emphasised the consistency of the EEC’s objectives with those of the GATT.
24 Alessandro Petti and Joanne Scott by Member States before the entry into force of the EU Treaties shall not be affected the provisions of the EU Treaties.14 In paragraph 15 of its judgment, the Court moved from reasoning based on the Member States’ desire to observe the GATT to their wish to bind the Union to it. The Court regarded this as being evident from the decision of the Member States to confer powers on the Union in tariff and trade policy. It stated that ‘[t]he [Union] has assumed the functions inherent in the tariff and trade policy, progressively during the transitional period and in their entirety on the expiry of that period’.15 The Court also stressed that this transfer of power ‘has been put into concrete form in different ways within the framework of the [GATT] and has been recognised by the other contracting parties’.16 This recognition by other contracting parties is an important but sometimes overlooked element of the Court’s reasoning. In considering whether the GATT is binding on the Union, the Court’s judgment is brief. While its conclusion is emphatic, it is difficult to ascertain which of the arguments it presented were indispensable. The Court appeared to regard the transfer of powers from the Member States to the Union as particularly important.17 It observed that: It therefore appears that, in so far as under the [EU] Treaty the [Union] has assumed the powers previously exercised by Member States in the area governed by the [GATT], the provisions of that agreement have the effect of binding the [Union] (emphasis added).18
It is interesting to pinpoint the role that Article 351(1) TFEU (then Article 234(1) EEC) played in the Court’s judgment. The Court makes an implicit reference to it when it stated that Member States cannot withdraw from their obligations to third countries as a result of the conclusion of the EU Treaty.19 However, the only express reference to it occurs when it is invoked as evidence of the Member States’ desire to continue to observe the GATT.20 Contrary to the suggestion put forward by the plaintiffs,21 the Court did not invoke this article as the basis for evaluating whether the Commission had acted ultra vires in adopting the contested regulations, because the regulations were contrary to the GATT. Had it accepted the plaintiff’s invitation to approach the question referred from this ‘different angle’,22 it would have been necessary for the Court to interpret the GATT, but not to determine whether it was binding on the Union or to pronounce more generally on the relationship between EU and international law. In relation to functional succession, it is pertinent to make one final observation. The Commission argued that the ‘GATT binds the [Union] in a similar way to those international agreements which the [Union] has concluded pursuant to Article 228 of the Treaty (now Article 218 TFEU)’.23 While the Court did not address this submission,24 there is nothing in its 14 International Fruit (n 7) para 13. 15 This was by virtue of Art 111 EEC, which has no equivalent in the Treaties today, and Art 113 EEC (now Art 207 TFEU). International Fruit (n 7) para 14. 16 International Fruit (n 7) para 16. 17 This was further confirmed in Joined Cases 267/81, 268/81 and 269/81, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI), ECLI:EU:C:1983:78. 18 International Fruit (n 7) para 18. 19 ibid para 11. 20 ibid para 13. 21 ibid summary of the observations submitted in accordance with Art 20 of the Protocol of the Statute of the Court of Justice of the European Communities, 1124. 22 ibid. 23 Dossier de Procédure, Commission’s submission (n 1) 49. 24 The AG instead asserted that in case ‘the Community is bound by the General Agreement in the same way as it is bound by the agreements which it itself concludes in accordance with Article 228 of the Treaty, the argument
International Agreements in the EU Legal Order 25 judgment to suggest any difference in the binding nature of agreements depending on whether they have been entered into by the EU or become part of EU law by way of functional succession. Less than two years after the Court’s judgment in International Fruit, the Court stated that international agreements concluded by the Union on the basis of Article 218 TFEU (then Article 228 EEC) are binding on the Union and form an integral part of Union law.25 Though the GATT is similarly binding on the Union, the Court never described it as forming an integral part of Union law. In relation to the capacity of an international agreement to serve as a basis for review of the validity of an EU act, the Court decided in International Fruit that the agreement in question ‘must also be capable of conferring rights on citizens of the [Union] which they can invoke before the courts’.26 To ascertain whether this second condition was met in the case of the GATT, the Court considered its ‘spirit, general scheme and terms’.27 By contrast with the Advocate General, the Court did not expressly characterise this inquiry as raising a question of ‘direct effect’ or ‘direct applicability’.28 However, while the Court used the terms ‘invoke’ or ‘rely on’, it did in practice apply the test that it had previously developed for assessing the direct effect of an internal EU measure, which considers whether a measure is capable of conferring rights on individuals which national courts must protect.29 The Court concluded that the GATT ‘is characterised by the great flexibility of its provisions, in particular those conferring the possibility of derogation, the measures to be taken when confronted with exceptional difficulties and the settlement of conflicts between the contracting parties’.30 It went on to exemplify this by reference to a number of specific provisions. While it described these provisions, rather than analysing them, it seems principally to be concerned with their non-absolute nature. The Court offered the example of the safeguard clause which permits parties to unilaterally suspend obligations or to withdraw or modify concessions where, ‘by reason of’ these, some producers suffer or are threatened with serious damage.31 It also stressed the great importance the agreement attaches to consultations between contracting parties, and the nature of the remedies that are available in the event of a failure by a party to carry out its obligations.32
which the plaintiff companies advance on the basis of the first paragraph of Article 234 is not relevant’. Opinion of AG Mayras, Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit), ECLI:EU:C:1972:89, 1237. 25 Case 181/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41. See also, Art 216(2) TFEU (then Art 228(2) EEC), which recognises the binding nature of international agreements entered into by the EU. See this volume, ch 3. 26 International Fruit (n 7) para 8. 27 ibid para 20. 28 Opinion of AG Mayras, International Fruit (n 24) 1234 and 1235. The AG used these terms interchangeably, using the term ‘directly applicable’ in the second paragraph of his proposed ruling. 29 A discussion about the appropriate use of the terms ‘direct applicability’ and ‘direct effect’ has developed in the literature. See K Lenaerts, ‘Direct Applicability and Direct Effect of International Law in the EU Legal Order’ in I Govaere et al (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Brill, 2013), who argues that the two terms refer to different stages of the Court’s reasoning in relation to the invocability of international treaties. While direct applicability is concerned with the nature of the treaty as a whole and especially its capacity to confer rights on individuals, direct effect is concerned with the precise wording of a relevant provision asking if it is unconditional and sufficiently clear and precise. For a discussion, including contemporary case law, see B de Witte, ‘Accession to International Instruments as an EU Legality Constraint’ in C Kilpatrick and J Scott (eds), Challenging EU Legality (Oxford, Oxford University Press, 2021), who uses the term ‘direct effect’ to describe both elements of the Court’s reasoning. 30 International Fruit (n 7) para 21. 31 GATT, Art XIX. International Fruit (n 7) para 26. 32 International Fruit (n 7) paras 24–25.
26 Alessandro Petti and Joanne Scott Even where a party is in breach of its obligations under the GATT, the worst that it can suffer is a suspension of obligations or concessions, meaning that the affected party or parties can adopt trade restrictions against it.33 Given this flexibility, the Court determined that when Article XI of the GATT is examined in the context of the agreement as a whole, it is not capable of conferring rights on individuals which they can invoke before the courts.34 The Court reached this conclusion without examining the specific wording of Article XI.35 IV. THE IMPORTANCE OF THE CASE
A. Functional Succession The intricate passages of the Court’s judgment are today regarded as providing the foundation for the doctrine of ‘functional succession’ (or ‘substitution’). It was Pierre Pescatore, a prominent scholar and judge in the International Fruit case,36 who was the first to distil some of the specificities of this doctrine in the EU legal order.37 Referring to both International Fruit and the Nederlandse Spoorwegen case,38 Pescatore later clarified that ‘the succession of the [Union] to its Member States’ occurs ‘whenever functions have been transferred by Member States to the [Union] in the field of external relations’, noticing how these functions were ‘transmitted … cum onere et emolumento’ (with associated burdens and benefits).39 The subsequent case law helped to define the precise contours of functional succession. As explained by Butler, the Court’s wording in Nederlandse Spoorwegen offered a clearer indication of the legal consequences of the succession doctrine, entailing the replacement of the Member States by the Union in the commitments envisaged by international agreements.40 The Court later established stricter conditions for functional succession to operate. In particular,
33 GATT, Art XXIII. International Fruit (n 7) para 25. 34 International Fruit (n 7) para 27. The Advocate General, by contrast, emphasised that Art XI includes a conditional exception for agriculture. 35 This is in contrast to the Opinion of AG Mayras, International Fruit (n 24) 1239. 36 Pescatore was one of the seven judges sitting in this case. 37 P Pescatore, L’ ordre juridique des Communautés européennes: étude des sources du droit communautaire (Presses Universitaires de Liège, 1973) 147–48. Although Pescatore used the terms ‘succession’ and ‘substitution’, linking them to the transfer of functions in Union law, it appears that it was the German legal scholarship that first employed the notion of ‘functional succession’ for the EU. See W Schroeder and M Selmayr, ‘Die EG, das GATT und die Vollzugslehre: oder: Warum der EuGH manchmal das Völkerrecht ignoriert’ (1998) 53 JuristenZeitung (here, however, functional succession is regarded as a doctrine of international law with few EU specificities); C Tomuschat, ‘Artikel 281 EG’ in H von der Groeben and J Schwartze (eds), Kommentar zum Vertrag über die Europaische Union und zur Gründung der Europäischen Gemeinschaft (Nomos, 2004). The notion of functional succession was also employed by AG Kokott in the ATAA case, Opinion of AG Kokott, Case C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2015:273, paras 60–65. See this volume, ch 59. For further references to the broader discussion of functional succession in international law in the German legal scholarship, see R Schütze, ‘The “Succession Doctrine” and the European Union’ in A Arnull et al (eds), A Constitutional Order of States?: Essays in EU Law in Honour of Alan Dashwood (Hart Publishing, 2011) 461. 38 Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:154. See this volume, ch 5. 39 P Pescatore, ‘External Relations in the Case-Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615, 637. The Latin phrase was italicised in the original. 40 See this volume, ch 5. Here, Butler notes that ‘substitution’ is the term to be used as a matter of Union law, whereas ‘succession’ is how it is understood as a matter of international law. He also points out that ‘The terminological usage on succession or substitution between international law and EU law has never fully settled’. In this chapter we refer to the ‘functional succession doctrine in EU law’ to distinguish it from succession in international law.
International Agreements in the EU Legal Order 27 and contrary to Pescatore’s expectations, the transfer of functions per se was not enough, as the Union had to assume the entirety of the powers previously exercised by the Member States in the areas covered by the relevant international agreement. Therefore, it may be argued that functional succession applies when the areas covered by an agreement fall within the Union’s exclusive competence. It is on this basis that the Court concluded in subsequent cases that the Union is not bound by the International Convention on the Prevention of Pollution from Ships or the Chicago Convention on International Civil Aviation.41 In light of this, it emerges that the specific considerations leading the Court to establish functional succession for the GATT are rather exceptional, albeit not unique.42 Schütze has endeavoured to systematise the three main principles relied upon by the Court in this case: first, all Member States must be party to an international agreement;43 second, it is not necessary that the Member States concluded the international agreement in question before1958;44 and third, a full transfer of the powers previously exercised by the Member States to the Union has to occur in the areas covered by the relevant international agreement.45 A close reading of International Fruit may suggest an additional principle governing functional succession, namely teleological convergence between the EU constitutional framework and the international agreement in question.46 This emerges also from Advocate General Capotorti’s account of the Court’s finding in International Fruit, where he highlights that the desire of the Member States to ‘pledge the [Union] to observe the [GATT] agreement’ was evident from the fact that the aims of the GATT were shared by the Union.47 The succession of a union of states to obligations under an international agreement is not an entirely new phenomenon in international law, and its legal categorisation has been highly influenced by German constitutional theory.48 Notwithstanding the elaboration of the 1978 Vienna Convention on Succession of States in respect of Treaties, there is no fully fledged codified international law approach that accommodates the sui generis nature of the EU. Indeed, the Commentary to the draft of the Vienna Convention highlights that ‘association of States having the character of intergovernmental organisations such as, for example, the United Nations’ or ‘hybrid unions [such as the EU] which may appear to have some analogy with a uniting of States but which do not result in a new State and do not therefore constitute a succession of States’ were outside the scope of its articles.49 Indeed, a fundamental element informing international law on the succession of states that is missing in the case of the EU is that of territorial sovereignty. This has raised doubts as to whether the functional succession doctrine in EU law can in fact be considered as a basis for
41 Case C-308/06, Intertanko and Others v Secretary of State for Transport ECLI:EU:C:2008:312, paras 48–49. ATAA (n 37) para 71. See this volume, ch 52. 42 O De Schutter, ‘Human Rights and the Rise of International Organisations: The Logic of Sliding Scales in the Law International Responsability’ in J Wouters and E Brems (eds), Accountability for Human Rights Violations by International Organisations (Intersentia 2010) 63. In addition to International Fruit 2 (n 6) and Nederlandse Spoorwegen (n 38), see also Joined Cases 3, 4 and 6–76, Kramer, ECLI:EU:C:1976:114. 43 Case C-188/07, Commune de Mesquer v Total France SA and Total International Ltd, ECLI:EU:C:2008:359, para 85. 44 Intertanko (n 41). 45 R Schütze, Foreign Affairs and the EU Constitution: Selected Essays (Cambridge University Press, 2014) 114. 46 International Fruit (n 7) para 13. 47 Opinion of AG Capotorti, Case 181/80, Procureur général près la Cour d’Appel de Pau and others v José ArbelaizEmazabel, ECLI:EU:C:1981:192, 2987. 48 Schütze (n 37) 463–64. 49 Especially Art 31: F Vallat, ‘First Report – On Succession of States in Respect of Treaties’ (1974) II Yearbook of the International Law Commission 162, 253.
28 Alessandro Petti and Joanne Scott succession under international law.50 Although it is increasingly accepted that ‘the concept of the fully sovereign state is outdated’, as underlined by Schermers, who advises against ‘black and white constructions’ of succession theories,51 the hybrid status of the EU in international law doctrine concerning succession poses numerous challenges for the EU. The Union may find itself in legal limbo where a partial functional succession has taken place in a certain policy domain52 but the non-exclusive nature of the EU competences in that area prevents the full operation of the functional succession doctrine in EU law. This is the case in relation to the European Convention on Human Rights (ECHR), where Pescatore had recognised the potential for succession.53 However, given that EU activities with human rights implications do not fall under EU exclusive competence, the Court’s strict criteria for functional succession are not fulfilled. This holds particularly true for activities relating to the EU Common and Foreign Security Policy (CFSP).54 It thus appears that the doctrine of functional succession, as developed by the Court, is ultimately a doctrine of EU law, with only minor genealogical connections to international law.55 This is not to deny that it entails significant consequences for the EU’s role as an international legal actor. Given the Court’s emphasis on the element of a full transfer of powers in justifying functional succession, this doctrine appears to be a product of the EU’s exceptionalism in international law. By contrast with the exceptionalism of other jurisdictions, EU exceptionalism is characterised by sovereignty sharing and a transfer of powers from the Member States to the EU.56 However, by predicating functional succession in EU law upon the strict requirement of the EU’s exclusive competence in the relevant domain, the Court has constrained even further the significance and operation of this exceptionalism. It may be argued that the functional succession doctrine is a manifestation of the EU’s Janus-faced approach towards international law. The EU is committed to the observance and
50 R Uerpmann-Wittzack, ‘The Constitutional Role of International Law’ in A von Bogdandy and J Bast (eds), Principles of European Constitutional Law (Hart Publishing, 2011) 149. 51 HG Schermers, ‘Succession of States and International Organizations’ (1975) 6 Netherlands Yearbook of International Law 103, 111. 52 Tomuschat (n 37) para 52 refers to Partielle Pflichtennachfolge. 53 P Pescatore, ‘La Cour de Justice Des Communautés Européennes et La Convention Européenne Des Droits de l’Homme’ in F Matscher and H Petzold (eds), Protecting Human Rights, the European Dimension: Studies in Honour of/Protection des droits de l’homme, la dimension européenne. Mélanges en l’honneur de Gérard J Wiarda (Carl Heymanns Verlag, 1988) 453. See also LI Gordillo, Interlocking Constitutions: Towards an Interordinal Theory of National, European and UN Law (Hart Publishing, 2012). 54 In Opinion 2/13, EU accession to the ECHR, ECLI:EU:C:2014:2454, para 253, for instance, the Court referred to the specificities of EU law in CFSP matters and asserted that the Court’s limited powers in that area ‘can only be explained by reference to EU law alone’. See RA Wessel, ‘Common Foreign, Security and Defence Policy’ in RA Wessel and J Lark (eds), EU External Relations Law: Text, Cases and Materials (Hart Publishing, 2020) 283. Similar problems may rise in the context of the potential accession of the EU to the Istanbul Convention on preventing and combating violence against women. Also in this case, the requirements of the functional succession doctrine in EU law are hardly met that in this subject area a ‘full transfer’ of powers from the Member States to the EU has not happened. This is demonstrated by two questions pending before the Court in Opinion 1/19.The first concerns the appropriateness of the legal basis for accession, the second whether unanimous agreement by the Member States to be bound by the Convention is necessary for the EU to accede pursuant to Art 218 TFEU (not all the Member States have ratified the Convention). 55 For a different approach, see Schroeder and Selmayr (n 37) 344, referring to a ‘Funktionsnachfolge der Gemeinschaft in die völkerrechtlichen Rechtspositionen der Mitgliedstaaten’. Although the authors relate functional succession to the transfer of competences, they qualify it as a purely international law obligation (eine rein völkerrechtliche Verpflichtung) and not as an obligation deriving from EU law. 56 For the EU exceptionalism under international law, see M Ličková, ‘European Exceptionalism in International Law’ (2008) 19 European Journal of International Law 463; A Bradford and EA Posner, ‘Universal Exceptionalism in International Law’ (2011) 52 Harvard International Law Journal 1.
International Agreements in the EU Legal Order 29 development of international law. Functional succession can be viewed both as having shaped the emergence of this commitment and as an expression of it. Nonetheless, the precise criteria that must be satisfied for functional succession are stringent and rarely fulfilled. Moreover, although Article 351(1) TFEU (then Article 234(1) EEC) seeks to ensure respect for international agreements entered into by the Member States before the entry into force of the Treaty of Rome, EU law and practice allow for the disconnection clauses to be included in international agreements. Such clauses seek to protect the autonomy of EU law by providing for the application of EU law between the EU Member States, as opposed to the provisions of an international agreement.57 B. Invocability The Court’s judgment in International Fruit concerning the role of the GATT in reviewing the validity of EU measures has been reiterated in subsequent cases.58 It has also been extended in that the same test has been applied when the GATT is relied upon to challenge the legality of a Union measure in a direct action for annulment as opposed to a preliminary ruling. This remains the case even when the challenge is brought by a Member State rather than an individual.59 Despite its judgment in International Fruit, the Court has recognised that there is some scope for judicial application of the GATT. Even before this judgment, the Court had been willing to use the GATT as an aid in interpreting Union acts.60 Going further, the Court has carved out exceptions to the principle of non-invocability. These narrow exceptions apply where the Union ‘intended to implement a particular obligation entered into within the framework of the GATT, or if the [Union] act [being challenged] refers to a specific provision of the GATT’.61 The Court has also accepted that the Commission can rely on the GATT in infringement proceedings against an EU Member State.62
57 M Cremona, ‘Disconnection Clauses in EC Law and Practice’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: the EU and its Member States in the World (Hart Publishing, 2010). 58 See, eg Case 9/73, Carl Schlüter v Hauptzollamt Lörrach, ECLI:EU:C:1973:110; SPI (n 17). The latter is discussed in ch 15 of this volume. Note, however, that in Case 112/80, Anton Dürbeck v Hauptzollamt Frankfurt am MainFlughafen, ECLI:EU:C:1981:94, para 46, the Court relied on (unreliable) information provided by the Commission in concluding that the challenged measures were not inconsistent with the GATT. Also in Nederlandse Spoorwegen (n 4), discussed in ch 5 of this volume, the Court concluded that the Union had not unilaterally increased a bound tariff and, by implication, had not breached the GATT: paras 13 and 19. For a full discussion of the case law, see M Mendez, The Legal Effect of EU Agreements (Oxford University Press, 2013) ch IV. 59 Case C-280/93, Germany v Council, ECLI:EU:C:1994:367. 60 Case 92/71, Interfood GmbH v Hauptzollamt Hamburg-Ericu, ECLI:EU:C:1972:30. Mendez (n 58) 244 notes that nine GATT cases involved the Court engaging in the practice of GATT-consistent interpretation of Community law. The Court formalised the doctrine of GATT-consistent interpretation in Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313. This doctrine continues to occupy an important place in relation to the WTO Agreement; indeed, Mendez points to the European Court ‘growing receptivity to WTO norms in interpreting EU and domestic measures’, Mendez (n 58) p 249. 61 Germany v Council (n 59) para 111. See also Case C-70/87, Fédération de l’industrie de l’huilerie de la CEE (Fediol) v Commission of the European Communities, ECLI:EU:C:1989:254; Case C-69/89, Nakajima All Precision Co Ltd v Council of the European Communities, ECLI:EU:C:1991:18. See this volume, ch 17. 62 Case C-61/94, Commission v Germany (n 60). This concerned The Arrangement Concerning Certain Dairy Products, which was an international treaty negotiated within the framework of the GATT. This has subsequently been replaced by the International Dairy Agreement, which is a plurilateral agreement included in Annex 4(c) of the WTO Agreement. See also Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792, which confirms this in relation to the WTO Agreement and, more specifically, the General Agreement on Trade in Services (GATS).
30 Alessandro Petti and Joanne Scott In keeping with the manner in which the first question referred to the Court in International Fruit was framed, the Court delivered a broad ruling, referring in its operative part to ‘a provision of international law’. However, as other chapters in this volume show, it has since become clear that the Court adopts a different approach when assessing the validity of a Union act in light of customary international law.63 The Court’s judgment in International Fruit is important not only in establishing the noninvocability of the GATT as a basis for judicial review, but also because it set the stage for the Court’s restrictive approach to the invocability of multilateral agreements more generally.64 This stands in contrast to the Court’s more permissive stance vis-à-vis bilateral association agreements or free trade agreements.65 Moreover, while the Court’s test for evaluating whether an international agreement can be invoked as a basis for judicial review has evolved over time,66 the Court still places weight on the question whether an agreement is capable of conferring rights (or freedoms) on individuals.67 The judgment in International Fruit was succinct and sometimes vague. While the Court looks to the agreement’s ‘spirit, general scheme and terms’, it does not elucidate the kind of factors that may be relevant, preferring to exemplify by reference to two features of the GATT. First, it notes that it ‘is based on the principle of negotiations undertaken on the basis of “reciprocal and mutually advantageous arrangements”’, without explaining the relevance of this.68 Second, as noted, the Court emphasised the flexibility inherent in the GATT. While it illustrated this flexibility by reference to particular provisions of the GATT, it did not seek to define this concept or to distil its essence in more abstract terms. The Court has been accused of overstating the degree of flexibility inherent in the GATT.69 Mendez rejects this, arguing that ‘the [Court] was largely on firm ground in what is unquestionably a superficial assessment of the GATT’.70 Informed by the scholarship of leading academics writing at the time of the judgment, as well as his own careful analysis of the GATT, he shows how a more systematic and detailed analysis by the Court would have served to bolster rather than undermine its conclusions. Mendez also sheds crucial light on the political economy of International Fruit. The case was decided at a time when the GATT had essentially become a dead letter in relation to trade in agricultural products.71 As brilliantly shown by Hudec,72 this was only partly due to the
63 On Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293, see this volume, ch 36. See also ch 59. 64 See this volume, chs 37 and 52. See more recently Joined Cases C-401 to C-403/12 P, Council v Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht, ECLI:EU:C:2015:4; Case C-363/12, Z, ECLI:EU:C:2014:159. For a discussion, see M Mendez, ‘The Application of International Law by the Court of Justice of the European Union’ in CA Bradley (ed), The Oxford Handbook of Comparative Foreign Relations Law (Oxford University Press, 2019) 601. 65 For a discussion, including contemporary case law, see de Witte (n 29). 66 See the discussion in this volume, ch 59. 67 Intertanko (n 41). For a recent example, see Z (n 64). 68 International Fruit (n 7) para 21. See this volume, ch 37. 69 See the discussion of the literature in Mendez (n 58) part 2.1.2.2. 70 ibid 182. 71 ibid 191. See also R Sharma, ‘Agriculture in the GATT: A[n] Historical Account’, s 4.3, www.fao.org/3/x7352e/ x7352e04.htm. 72 RD Hudec, ‘Does the Agreement on Agriculture Work? Agricultural Disputes After the Uruguay Round’ (International Agricultural Trade Research Consortium, 1998) Working Paper 14612.
International Agreements in the EU Legal Order 31 weaknesses inherent in specific rules,73 but was attributable largely to ‘the simple lack of political will to enforce any multilateral discipline at all’.74 The Advocate General demonstrated awareness of this.75 Unlike the Court, he considered it relevant to examine the circumstances in which the agreement had been applied or implemented by the contracting parties.76 In this regard, he noted that ‘practice has strangely widened the scope of this [agricultural] derogation’ in Article XI, particularly because the USA had been granted a waiver in 1955 which gave it ‘dispensation covering the greater part of its agricultural policy’.77 On the EU side, as Hudec observes, ‘The CAP quickly developed into a trade regime with little or no effective GATT discipline’,78 and ‘the [Union] had both the will and the power to accomplish [its] protectionist agriculture policy whatever its GATT legal status’.79 Awareness of this context can help to understand the Court’s judgment in International Fruit. While the Court could have helped to ‘legalise’ the GATT in relation to the Union, the ‘anti-legalism’ that the Union had successfully pushed for in relation to agriculture in the GATT would have persisted in relation to other contracting parties, including the USA.80 As Mendez notes, a different outcome would have led to a ‘one-sided resurrection of the rules’.81 This, in turn, would have placed the Court at the centre of shaping the future of the CAP, at a time when political reform efforts were acrimonious and largely unsuccessful.82 This discussion raises the spectre of reciprocity, a concept referred to in passing by the Court in International Fruit but which received full recognition in Portugal v Council when the Court assessed the invocability of the WTO agreements.83 In this later case, the Court stressed the importance of protecting the ‘scope for manoeuvre’ that the WTO’s Dispute Settlement Understanding (DSU) confers on the EU’s legislative and political branches, given that this is ‘enjoyed by their counterparts in the [Union]’s trading partners’.84 Significantly, the Court had earlier observed that some of the Union’s ‘most important commercial partners’ have not accepted that the WTO agreements are ‘among the rules applicable by their judicial organs when reviewing the legality of their rules of domestic law’.85
73 The two main exceptions relating to agriculture in the GATT are Arts XI.2(c)(i) on quantitative restrictions and Art XVI.3 on subsidies. 74 Hudec (n 72) 23. 75 It is not clear where the AG got this information as there is no mention of the US waiver in the dossier de procédure relating to this case. See the discussion in section VE below. 76 Opinion of AG Mayras, International Fruit (n 24) 1235, 1237 and 1238. 77 ibid 1239. 78 Hudec (n 72) 14. 79 ibid. 80 ibid 15. By anti-legalism, Hudec means that ‘few if any legal claims were brought forward’. He notes that the success of the EEC’s anti-legalism strategy was ‘due primarily to the political power of the EEC, aided by support from the United States’. 81 Mendez (n 58) 192. 82 For a discussion of the so-called ‘Mansholt Plan’, see NP Ludlow, ‘The Making of the CAP: Towards a Historical Analysis of the EU’s First Major Policy’ (2005) 14 Contemporary European History 347; CS Germond, ‘An Emerging Anti-reform Green Front? Farm Interest Groups Fighting the “Agriculture 1980” Project, 1968–1972’ (2015) 22 European Review of History 433. 83 Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574 See this volume, ch 37. The WTO Agreement includes the GATT 1994, which is the successor to the GATT 1947. 84 Portugal v Council (n 83) para 46. In relation to the DSU, the Court observed that ‘While it is true that the WTO agreements, as the Portuguese government observes, differ significantly from the provisions of GATT 1947, in particular by reason of the strengthening of the system of safeguards and the mechanism for resolving disputes, the system resulting from those agreements nevertheless accords considerable importance to negotiation between the parties’ (para 36). 85 ibid para 43.
32 Alessandro Petti and Joanne Scott C. The Value of the dossier de procédure In this section, we briefly highlight the importance of the dossier de procédure relating to the International Fruit case.86 This includes documents not previously published, including the full submissions of parties and observers in the case. Access to this dossier, made possible by the Historical Archives of the European Union, assisted our analysis in two main ways. First, the Court’s judgment suggests that the plaintiffs submitted few arguments to support the proposition that the contested measures were contrary to the GATT; they had simply noted that they are contrary to Article XI because ‘paragraph 2 of that article is not applicable in this case’.87 They likewise claimed that two of the contested measures were contrary to Article XIII GATT, although the compatibility of the measures with this article had not been raised by the referring national court. Had we not had access to the dossier, we might have assumed the plaintiffs’ arguments had been truncated in the Court’s summary of the observations submitted. However, it was clear from the written submission of the lawyer in International Fruit that they were presented in full.88 Not unreasonably, the Commission was terse in its response: [T]he applicant does not put forward any facts or arguments to explain its doubts as to the compatibility of the contested regulations with the GATT. The Commission had already pointed out in Joined Cases 41 to 44/70 that the argument of incompatibility with the GATT lacked any statement of reasons.89
This raises the question of why the plaintiffs did not present more convincing arguments as regards their substantive claim. This is an example of the way in which the dossier can stimulate new questions for research, including socio-legal research. As an aside, the proposition that the Union measures were contrary to Article XI appears to be well founded. The agricultural exception in Article XI(c)(i) was not applicable because the import restrictions were not accompanied by corresponding limitations on the quantities of like domestic products that could be marketed or produced. The second interesting observation emerging from the dossier concerns the Dutch Ministry of Foreign Affairs. It was already evident from the judgment that the Ministry had been quite emphatic in its observations to the Court, which were summarised in the judgment as follows: The Court has jurisdiction to give a ruling when, in such a case, the national court has referred to it the problem of the validity of the [Union] measure. If it were otherwise, the courts of the different Member States might deliver differing judgments on the validity or scope of [Union] law (emphasis added).90
However, the language of the Foreign Ministry is even stronger in its full written submission which is available in the dossier:91 ‘the courts in the different Member States would have to 86 Dossier de Procédure (n 1). This was made available to us in digital form by the Historical Archives of the European Union. It was available to us because more than 30 years had lapsed since the issuing of the Court’s judgment. The dossier comprises 378 pages. The authors of this chapter are both involved in a broader project which aims to shed light on the value of these dossiers for legal academics, historians, sociologists and archivists. The website is www.eui. eu/Research/HistoricalArchivesOfEU. 87 International Fruit summary of observations (n 21) 1225. 88 Dossier de Procédure (n 1) 33 ‘Memorandum (Written Submission) of International Fruit et al Lawyer’ (translated from the Dutch by Siemen van den Broecke). 89 ibid 52 (translated from the Dutch by Siemen van den Broecke). 90 International Fruit summary of observations (n 21) 1224. 91 Dossier de Procédure (n 1) 38 ‘Ministry of Foreign Affairs to the Court of Justice of the European Communities in Luxemburg. Remarks by the Dutch Government as meant in Article 20, par. 2 of the Statute of the Court of Justice of the European Community’ (translated by Siemen van den Brocke).
International Agreements in the EU Legal Order 33 reach final judgments without the assistance and uniformity of a preliminary ruling from your Court, which could lead to divergent rulings on the validity or meaning of [Union] law’ (emphasis added).92 Given the uncompromising nature of this claim that national courts would have to fill any jurisdictional void left by the Court, it is perhaps surprising that the Court did not seize the opportunity to clarify at this stage in the process of the constitutionalisation of the Union legal order that national courts do not enjoy jurisdiction to declare Union acts invalid.93 Again, this raises an interesting avenue of inquiry for future research, thereby highlighting the value of the historical archives for researchers in the field of EU law. D. Conclusion The foundational moment in International Fruit emerged when the Court established criteria for the invocability of international law that mirrored those it had earlier developed for assessing the direct effect of Union law. In keeping with the generality of the first question referred, the Court expounded broadly on the relationship between EU and international law.94 More specifically, in relation to the GATT, the Court excluded invocability by highlighting its flexible institutional framework, rooted in diplomatic practices and giving rise to what has been termed ‘a diplomat’s jurisprudence’.95 Thus, the Court made clear the differences between the GATT and the EU legal order. In the latter, diplomatic practices were already and increasingly embedded in a supranational setting with more rigid dispute resolution and robust enforcement mechanisms.96 Similar though expanded reasoning underpinned the Court’s later judgment when it drew similarly narrow boundaries for the invocability of the WTO agreements.97 It may be argued that the distinction between EU law and international law also permeates the development of the functional succession doctrine as the EU law requirements singled out by the Court are different from, and stricter than, the requirements for succession in general international law. Under EU law, the doctrine of functional succession depends on the division of competences between the EU and Member States, and is contingent on an international agreement covering only areas in which the EU has exclusive competence. This leaves open the question of the possible operation of the doctrine of succession under international law in the absence of EU law recognition.98 This question arises most evidently in relation to the United Nations99 and the ECHR.100 By laying down strict criteria for both functional succession and invocability in review proceedings, the Court paved the way for a certain insulation of the EU legal order from 92 ibid. 93 Indeed, it did not do so for another 15 years. Case 314/85, Foto-Frost v Hauptzollamt Lübeck-Ost, ECLI:EU:C:1987:452, para 15. 94 Mendez (n 58) 178–79. 95 RE Hudec, ‘The GATT Legal System: A Diplomat’s Jurisprudence’ (1970) 4 Journal of World Trade Law 615. 96 J Bátora, ‘Does the European Union Transform the Institution of Diplomacy?’ (2005) 12 Journal of European Public Policy 44. 97 Portugal v Council (n 83) para 36, which is resonant of International Fruit (n 7) para 21. 98 T Ahmed and I de Jesús Butler, ‘The European Union and Human Rights: An International Law Perspective’ (2006) 17 European Journal of International Law 771. 99 An attempt was made by the Court of First Instance in Case T-315/01, Kadi v Council and Commission, ECLI:EU:T:2005:332 and Case T-306/01, Yusuf v Council and Commission, ECLI:EU:T:2005:331. 100 R Uerpmann, ‘International Law as an Element of European Constitutional Law: International Supplementary Constitutions’ (2003) Jean Monnet Working Paper 9/03, 31–37.
34 Alessandro Petti and Joanne Scott international law. Recent jurisprudential developments show that GATT-like succession in EU law remains exceptional, as does the possibility of invoking a multilateral agreement to challenge the validity of an EU act. While there are features of the GATT, and related practice by contracting parties, that render the Court’s conclusion in International Fruit defensible, the subsequent accumulation of cases denying the invocability of multilateral agreements calls into question the EU’s practical commitment to the ‘strict observance’ of international law.101 V. ADDITIONAL READING Ehlermann, CD, ‘Application of GATT Rules in the European Community’ in M Hilf, FG Jacobs and EU Petersmann (eds), The European Community and GATT (Deventer, Kluwer, 1986). Eeckhout, P, ‘The Domestic Legal Status of the WTO Agreement: Interconnecting Legal Systems’ (1997) 34 CML Rev 11. Eeckhout, P, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011), especially ch 9. Everling, U, ‘The Law in the External Economic Relations of the European Community’ in M Hilf, FG Jacobs and EU Petersmann (eds), The European Community and GATT (Deventer, Kluwer, 1986). Pescatore, P, ‘Treaty-Making by the European Communities’ in FG Jacobs and S Roberts (eds), The Effects of Treaties in Domestic Law (London, Sweet & Maxwell, 1987). Petersmann, EU, ‘Application of GATT by the Court of Justice of the European Communities’ (1983) 20 CML Rev 397. Petersmann, EU, ‘International and European Foreign Trade Law: GATT Dispute Settlement Proceedings Against the EEC’ (1985) 22 CML Rev 441. Schermers, H, ‘Community Law and International Law’ (1975) 12 CML Rev 77. Wouters, J, Odermatt, J and Ramopoulos, T, ‘Worlds Apart? Comparing the Approaches of the European Court of Justice and the EU Legislature to International Law’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law: Constitutional Challenges (Oxford, Hart Publishing, 2014).
101 Art
3(5) TEU.
3 International Agreements as an Integral Part of EU Law: Haegeman RAMSES A WESSEL
Case 180/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41, delivered 30 April 1974. KEYWORDS International agreements – International law – Direct applicability – Direct effect – Mixed Agreements – Competence of the European Union – Council Decision.
I. INTRODUCTION
T
he title of this contribution reflects the sentence that has made the Haegeman case famous: ‘The provisions of the Agreement, from the coming into force thereof, form an integral part of Community law.’1 These days, after a revival of the debate on the EU’s ‘autonomy’2 that was fuelled in particular by the Kadi cases3 as well as by Opinion 2/134 and, more recently, Opinion 1/17,5 the question of the relationship between EU law and international law is still high on the agenda.6 It is believed that to make certain
1 Case 180/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41, para 5. In the original language, para 5 reads: ‘que les dispositions de l’accord forment partie intégrante, à partir de l’entrée en vigueur de celui-ci, de l’ordre juridique Communautaire’. 2 For some of the arguments, see T Molnár, ‘Revisiting the External Dimension of the Autonomy of EU Law: Is There Anything New under the Sun?’ (2016) 57 Hungarian Journal of Legal Studies 178, 179; C Contartese, ‘The Autonomy of the EU Legal Order in the CJEU’s External Relations Case-Law: From the “Essential” to the “Specific Characteristics” of the Union and Back Again’ (2017) 54 CML Rev 1627. 3 Joined Cases C-402/05 P and C-415/05 P, Kadi and Al Barakaat International Foundation v Council, ECLI:EU:C:2008:461. The notion of ‘autonomy’ was a central element in the discussion between the CJEU and the General Court in the Kadi saga when the latter argued: ‘the Court of Justice thus seems to have regarded the constitutional framework created by the EC Treaty as a wholly autonomous legal order, not subject to the higher rules of international law’; Case T-85/09, Kadi v Commission, ECLI:EU:T:2010:418, para 119. See this volume, ch 49. 4 Opinion 2/13, ECLI:EU:C:2014:2454. cf B De Witte, ‘The Relative Autonomy of the European Union’s Fundamental Rights Regime’ (2019) 88 Nordic Journal of International Law 1, 4. See this volume, ch 70. 5 Opinion 1/17, ECLI:EU:C:2019:341. For a good analysis, see M Fanou, ‘The CETA ICS and the Autonomy of the EU Legal Order in Opinion 1/17 – A Compass for the Future’ (2020) 22 Cambridge Yearbook of European Legal Studies 106. See this volume, ch 88. 6 See recently, eg V Moreno-Lax and P Gragl, ‘EU Law and Public International Law: Co-implication, Embeddedness and Interdependency’ (2016) 35 Yearbook of European Law 1; S Garben and I Govaere (eds), The Interface between International and EU Law (Oxford, Hart Publishing, 2019). For a plea for a continued dialogue between the two legal
36 Ramses A Wessel key principles of EU law (including primacy and direct effect) work, the EU needs to stress its autonomy vis-à-vis international law, in particular when deciding on the validity and the interpretation of its own rules.7 At the same time, as an international actor, there is a need for the EU to live up to the rules that make up the international legal order and to implement these rules whenever they bind the Union.8 In the beginning of the 1970s, the perhaps logical starting point was that the EU as a nonstate entity was not automatically bound by international law. This notion may first of all have followed from the famous case law in which the Court only a decade previously had argued ‘that the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights’ (emphasis added),9 and that ‘By contrast with ordinary international treaties, the EEC Treaty has created its own legal system’ (emphasis added).10 The separation between EU law and international law may also have been based on the dualism that many Member States were (and still are) familiar with: international law can only be part of a domestic legal order once it has been incorporated into that legal order. The EU, like states, has a choice regarding the status of international law in its own legal order. That sentiment was worded by Schermers eight years after Haegeman: When the Community participates in the international legal order it necessarily operates in a similar way as would a State. There is no other option. When the Community accepts international treaties, it will execute them in the same manner as States execute treaties. This means that it interprets its own obligations and that it may or may not grant to its citizens the rights to invoke those treaties in court.11
As we will see, this is indeed what the Court did. Nevertheless, with reference to Haegeman and subsequent case law, the legal order of the Union is often identified as ‘monist’ in its relation to public international law: international law that binds the Union is believed to be (automatically) valid within the Union’s legal order.12 Yet, the question is whether Haegeman is about the relationship between EU law and international law in that general fashion. As we will see, the question the Court had to answer was about the status in the EU’s legal order of provisions of international agreements to which the Union is a party and the argumentation of the Court is much more subtle than the line that made the case famous. While Haegeman is considered to be one of the classic and leading cases that would be reviewed in all journals and most probably even lead to specific workshops if it were to be delivered today, it is striking that there was far less academic attention paid to the judgment in 1974. It is difficult to find case notes or other specific analyses originating from that period. This may partly be explained by the general absence of an ‘external relations law community’ that would immediately turn #Haegeman into a trending topic on Twitter, but perhaps also
sub-disciplines, see RA Wessel, ‘Studying International and European Law: Confronting Perspectives and Combining Interests’ in Garben and Govaere (ibid) 73–97. 7 cf M Cremona, A Thies and RA Wessel (eds), The European Union and International Dispute Settlement (Oxford, Hart Publishing, 2017). 8 See Arts 3(5) and 21 TEU in particular. 9 Case 26/62, Van Gend en Loos v Nederlandse Administratie der Belastingen, ECLI:EU:C:1963:1. 10 Case 6/64, Costa v ENEL, ECLI:EU:C:1964:66. 11 HG Schermers, ‘The Direct Application of Treaties with Third States: Note Concerning the Polydor and Pabst Cases’ (1982) 19 CML Rev 563, 566. 12 cf various contributions to E Cannizzaro, P Palchetti and RA Wessel (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff Publishers, 2011).
International Agreements as an Integral Part of EU Law 37 by the fact that the impact of the judgment became apparent only later, and in the context of subsequent cases such as Demirel13 and, in particular, Kupferberg.14 II. FACTS
‘La société de personnes à responsabilité limitée R and V Haegeman’ was a wine-importing company based in Brussels. On 19 December 1971, it had already started a direct action against a refusal by the Commission to grant it an exemption from payment of a charge applied to wine imports from Greece into Belgium (Haegeman I).15 One of the arguments was that the charge was applied to contracts made before the entry into force of Regulation 816/70 ‘laying down additional provisions for the common organisation of the market in wine’.16 Haegeman, inter alia, referred to the ‘Athens Agreement’, which would also feature prominently in the second case. In Haegeman I, the Court dismissed the application. It held, inter alia, that the request for reimbursement of the disputed charge was a matter to be decided by the competent national authorities. This triggered Haegeman II, the case under review here. On 16 May 1972, Haegeman commenced proceedings against the Belgian State, in the person of the Minister for Economic Affairs, claiming reimbursement of the amount of countervailing charges paid for the import of Greek wines into the territory of the Belgium–Luxembourg Economic Union since 1 June 1970. They claimed that Regulation No 816/70 infringed Article 2 of Protocol No 14 mentioned in the final act of the Athens Agreement, and also Articles 37, 41 and 43 of that Agreement. The ‘Athens Agreement’ was in fact the 1961 Association Agreement between the European Community and (the then third state) Greece.17 Despite its title, it was a mixed agreement, which was signed on behalf of the Heads of State of the Community’s then six Member States18 and the Council of the European Economic Community (of the one part) and the King of Greece (of the other part). The Agreement thus followed a pattern that we are still familiar with in relation to mixed agreements: the EU and its Member States are presented as ‘one party’.19 The Tribunal de première instance of Brussels thus found itself confronted with the question whether Regulation No 816/70 was indeed infringing certain provisions of the Athens Agreement, as claimed by Haegeman. The Tribunal submitted four questions to the Court in Luxembourg to get this clarified. The arguments presented by Haegeman boil down to
13 Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400. See this volume, ch 16. cf I Cheyne, ‘Haegeman, Demirel and Their Progeny’ in A Dashwood and C Hillion, The General Law of EC External Relations (Cambridge, Cambridge University Press, 2000). 14 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362. See this volume, ch 14. 15 Case 96/71, R & V Haegeman v Commission of the European Communities, ECLI:EU:C:1972:88. 16 L 99. Regulation (EEC) No 816/70 of the Council of 28 April 1970 laying down additional provisions for the common organisation of the market in wine [1970] OJ 1–19 (DE, FR, IT, NL). No longer in force; date of end of validity: 1 April 1979. 17 L 26. Council Decision (63/106/EEC) on the conclusion of the Agreement establishing an Association between the European Economic Community and Greece [1963] OJ 293 (DE, FR, IT, NL). No longer in force; date of end of validity: 1 January 1981. 18 At the time of the Haegeman procedure, the Athens Agreement was still binding upon the original six Member States only as the new Member States that joined the Union on 1 January 1973 would become bound by virtue of an Additional Protocol that was in course of negotiation. 19 See further C Hillion and P Koutrakos (eds), Mixed Agreements in EU Law Revisited (Oxford, Hart Publishing, 2010); G Van der Loo and RA Wessel, ‘The Non-ratification of Mixed Agreements: Legal Consequences and Options’ (2017) 54 CML Rev 735.
38 Ramses A Wessel pointing out that the Athens Agreement does not allow for a differentiation between wines imported from Greece and those from Italy, Germany and France. As no charges apply to the latter wines, they should also not apply to wines imported from Greece. More generally, Haegeman argued that the new system established by Regulation No 816/70 should be read and interpreted in the context of the Athens Agreement. Parties to current cases before the Court, as well as the Court itself, will look at the procedural schedule with some envy. The preliminary question by the Belgian Court was registered at the Court of Justice on 7 November 1973. Haegeman, the Belgian State and the Commission presented their oral observations at the hearing on 12 March 1974. The Advocate General (AG) delivered his Opinion on 4 April 1974. The Court’s judgment was delivered on 30 April 1974, at 10:00 o’clock. Within six months, the entire procedure was concluded.20 III. THE COURT
The sentence that made Haegeman famous (‘The provisions of the Agreement … form an integral part of Community law’21) is in fact part of the Court’s deliberations on its jurisdiction and not of the substantive part of the judgment.22 The Court had to make that point to establish its jurisdiction as it could only give preliminary rulings concerning ‘the interpretation of acts of the institutions of the Community’ as Article 177 TEC (now Article 267 TFEU) provided.23 As the Athens Agreement was concluded by the Council, ‘This Agreement is therefore, in so far as concerns the Community, an act of one of the institutions of the Community’ (emphasis added).24 By using the Council Decision as a link, the Court opened the possibility of asking preliminary questions about the interpretation of international agreements: ‘Within the framework of this law, the Court accordingly has jurisdiction to give preliminary rulings concerning the interpretation of this Agreement.’25 At the beginning of the month of the judgment, on 2 April 1974, AG Warner26 had issued his Opinion. Much more clearly than these days, the Opinion of the AG was formulated as a letter to the judges (in this case, starting with ‘My Lords,’ and addressing them as ‘Your Lordships’ throughout the text). Also, the Opinion was annexed to the judgment. In relation to the main focus of this case note, it is important to note that the AG argued that the Court’s jurisdiction does not extend to rule on the interpretation of international agreements. We need to quote the respective (non-numbered) paragraph in full: In general, of course, as has been laid down in a number of Judgments of the Court, it is, in references under Article 177 of the EEC Treaty, for the national Court or Tribunal making the reference to be the judge of the relevance of the questions referred and this Court has no jurisdiction to enquire
20 The complete case file (257 pages, in French) is available from the Archives of the Court at the EUI in Florence. 21 Haegeman (n 1) para 5. 22 The judges in this case were: Lecourt (President), Donner, Sørensen, Monaco (Rapporteur), Mertens de Wilmars, Pescatore, Kutscher, Ó Dálaigh, and Mackenzie Stuart. 23 This was mentioned as point (b) in Art 177 TEC, which also referred to ‘(a) the interpretation of this Treaty’ and ‘(c) the interpretation of the statutes of bodies established by an act of the Council where those statutes so provide’. 24 Haegeman (n 1) paras 3 and 4. 25 ibid para 6. 26 Jean-Pierre Warner (1924–2005) served as the first British Advocate General (1973–81) at the Court after the UK’s accession. See G Butler and A Łazowski (eds), Shaping EU Law the British Way: UK Advocates General at the Court of Justice of the European Union (Oxford, Hart Publishing, 2022).
International Agreements as an Integral Part of EU Law 39 into their relevance. But this general principle is subject, I apprehend, to at least one exception, which is applicable here. This exception springs from the fact that the jurisdiction of the Court under Article 177 is to rule on the interpretation of the Treaty and on the validity and interpretation of acts of the Community Institutions. The Court has under Article 177 no direct jurisdiction to rule on the interpretation of such an instrument as the Agreement of Association with Greece: its jurisdiction to interpret that instrument arises only, I apprehend, where its interpretation is relevant to the question of the validity of an act of a Community Institution or to the question of the interpretation to be given to such an act. It follows in my opinion that, in the present case, the questions asked by the Tribunal de premiere instance of Brussels are admissible only in so far as they are related to the question of the validity and effect of Regulation No 816/70 and of the Community legislation implementing it.
So, in the eyes of the AG, interpretation of international agreements is allowed only where that interpretation is relevant to assess the validity of a legal act, such as, in this case, Regulation No 816/70 and possibly implementing legislation. Indeed, this is quite a different starting point than saying that international agreements are an integral part of EU law. For the Court, this statement by the AG may have formed a reason to clearly mention the Council Decision on the basis of which the international agreement was concluded. This then led the Court to conclude that ‘This Agreement is therefore … an act of one of the institutions of the Community’ (emphasis added).27 So, because the Agreement was adopted on the basis of a Council Decision, the Agreement itself can be seen as an act of the Council. There are two provisos to which we will return later: (i) ‘in so far as the Agreement concerns the Community’; and (ii) ‘within the meaning of subparagraph (b) of the first paragraph of Article 177’.28 In the remaining paragraphs of the judgment, the Court provides answers to the questions raised by the Belgian court. This substantive part falls outside the scope of the present contribution. Suffice it to say that it is doubtful whether the Haegeman team opened a bottle of their finest Greek wine on the evening of that Tuesday in late April 1974. IV. THE IMPORTANCE OF THE CASE
A. International Law Binding on the EU The main contribution of the case is that it settled the status of international agreements in the EU’s legal order. This ‘automatic treaty incorporation’ would imply that international agreements ‘could be interpreted and applied as if they were enacted as Community law’,29 and that ‘such Agreements are in principle capable of possessing [the] two central distinguishing attributes of EU law: direct effect and supremacy’.30 The question has been raised why the Court did not simply refer to Article 228(2) TEC (currently Article 216(2) TFEU)31 – which at the time already read that ‘Agreements concluded under these conditions [the procedure in paragraph 1] shall be binding on the institutions of the Community and on Member States’32 –
27 Haegeman (n 1) para 4. 28 ibid para 4. 29 Cheyne (n 13) 23. 30 See M Mendez, The Legal Effects of EU Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013) 63–64. 31 ibid 66–67. 32 The current text in Art 216(2) TFEU is very similar: ‘Agreements concluded by the Union are binding upon the institutions of the Union and on its Member States.’
40 Ramses A Wessel perhaps, and if needed, in combination with Article 164 TEC (currently Article 19 TEU).33 The answer probably is that the focus of this part of the case was on finding a way to deal with international agreements in the context of a preliminary procedure that happened to be linked to ‘acts of the institutions’ only. The Court indeed clearly limited the scope of its statement by adding the phrase ‘within the meaning of subparagraph (b) of the first paragraph of Article 177’. Furthermore, the AG had argued that interpretation of international agreements merely existed when this would be relevant to the validity or interpretation of an act of a Union institution. And, finally, the treaty provision that agreements are binding on the Union and its Member States could also be interpreted as a mere repetition of the pacta sunt servanda rule in international treaty law,34 and does not necessarily define the internal status of international agreements (in terms both of validity and of primacy and direct effect). By stating that international agreements are an integral part of Union law, the Court’s main intention may therefore have been to view them as acts of the institutions, allowing EU citizens and other market participants to have them play a role in assessing the legality of both EU and domestic measures. This is indeed quite a step,35 but one that almost seems to have been taken accidentally, in the context of a procedural issue. The presentation of an international agreement as an act of an institution rather than as an act of the Union is perhaps acceptable collateral damage. Yet, not all international agreements are an integral part of EU law. Obviously, it is important to establish whether (i) the Union is a party and (ii) it is really an international agreement. As to the first point, a little over a year earlier, in International Fruit Company,36 the Court had established that the EU is in principle bound by international law and that it ‘is obliged to examine whether [the] validity may be affected by reason of the fact that [measures adopted by the institutions] are contrary to a rule of international law’.37 Yet, as the Court pointed out, ‘Before the incompatibility of a Community measure with a provision of international law can affect the validity of that measure, the Community must first of all be bound by that provision’.38 It is somewhat peculiar that in Haegeman the Court does not at all refer back to this case and to these more general starting points. On the basis of subsequent case law, we now know that – even if the Union is a party to the agreement – the Court can examine the validity of an act of European Union law in the light of an international treaty only where the nature and the broad logic of the latter do not preclude this.39 And, where the nature and the broad logic of the treaty in question permit the validity of the act of European Union law to be reviewed in the light of the provisions of that treaty, it is also necessary that the provisions of that treaty which are relied upon for the purpose of examining the validity of the act of European Union law appear, as regards their content, to be unconditional and sufficiently precise.40 Whereas, in International Fruit Company, the Court had famously introduced 33 Art 164 TEC read: ‘The Court of Justice shall ensure that in the interpretation and application of this Treaty the law is observed.’ This sentence can still be found in the current Art 19 TEU. The Court did in fact refer to Art 164 TEC in its next case on international agreements, Case 87/75, Bresciani, ECLI:EU:C:1976:18 (see this volume, ch 6) and returned to this issue in more detail in Kupferberg (n 14). See this volume, ch 14. 34 Art 26 of the Vienna Convention on the Law of Treaties provides: ‘Every treaty in force is binding upon the parties to it and must be performed by them in good faith.’ 35 cf Mendez (n 30) 65: ‘It was in embryonic form the external relations counterpart of Van Gend en Loos …’ 36 Joined Cases 21–24/72, International Fruit Company and Others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 37 ibid para 6. 38 ibid para 7. 39 See also Joined Cases C-120/06 and C-121/06, FIAMM and Others v Council and Commission, ECLI:EU:C:2008:476, para 110. 40 As, for instance, repeated in Case C-344/04, R, ex parte IATA v Department for Transport, ECLI:EU:C:2006:10, para 39 and Case C-308/06, Intertanko and Others, ECLI:EU:C:2008:312, para 45. See this volume, ch 52. While this would generally rule out WTO agreements, in Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792, the Court
International Agreements as an Integral Part of EU Law 41 an examination of ‘the spirit, general scheme and terms’ of the agreement in question41 to establish whether it could be invoked by individuals, it did not use this test in Haegeman but merely focused on the status of the international agreement as an ‘act of the institutions’ to establish that the agreement was formally concluded on the basis of the applicable procedures. While the Court thus suddenly seemed less interested in ‘the spirit, general scheme and terms’ and generously seemed to welcome all international agreements as an integral part of Union law, later case law – starting with Bresciani42 – brought the International Fruit test back in and clarified that the mere adoption by the Union institutions of an international agreement would not be enough to establish direct applicability.43 Furthermore, in Kupferberg,44 the Court did not use the term ‘Community law’, but argued that international agreements are a part of the ‘Community legal system’, which put a comparison with legal acts of the institutions into perspective and pointed to a broader range of legal effects.45 The Haegeman test to establish whether the Union is bound by an international agreement nevertheless remains essential. While this may indeed be easy to establish on the basis of a Council act, International Fruit revealed that it is also possible for the Union to be bound once it has assumed, and thus transferred to it, the powers previously exercised by the Member States that fall within the international agreement in question. While this was the situation in relation to the GATT,46 it was, for instance, not the case for the Chicago Convention on air transport and the Court held that regarding this particular agreement the powers previously exercised by the Member States had not been assumed in their entirety by the European Union, and that the latter is thus not bound by it.47 This led to the conclusion that the provisions of that particular agreement could not be said to form an integral part of EU law. The second point concerns the question of the nature of the international agreement. Are informal arrangements which the Union or its institutions entered into also to be regarded as forming an integral part of EU law? There is a clear proliferation of these informal arrangements, which are generally characterised by the fact that they are not concluded on the basis of Articles 216/218 TFEU.48 These ‘soft law instruments’ in EU external relations may bear various labels, including Joint Communications, Joint Letters, Strategies, Arrangements, Progress Reports, Programmes or Memoranda of Understanding (MoUs). Several reasons are mentioned in the literature that account for the use of soft arrangements in EU external relations, such as the need to increase the efficiency of external action, to allow greater smoothness in negotiation and conclusion of the instrument, or to enhance the margin of discretion of the signatories in the fulfilment of commitments. In addition, non-binding agreements may be more suitable to the political sensitivity of the subject of the agreement or to its changing nature …49 underlined it jurisdiction to hear and determine complaints alleging infringements of WTO law (in that instance, the GATS), in the context of infringement proceedings. 41 International Fruit (n 36) para 20. 42 Bresciani (n 33). 43 cf Cheyne (n 13) 24. On the discussion at the time, see also G Bebr ‘Agreements Concluded by the Community and Their Possible Direct Effect’ (1983) 20 CML Rev 35; ELM Völker, ‘The Direct Effect of International Agreements in the Community’s Legal Order’ (1983) 1 Legal Issues of European Integration 131. 44 Kupferberg (n 14). 45 cf Cheyne (n 13) 26. 46 International Fruit (n 36). 47 Case C-366/10, Air Transport Association of America and Others, ECLI:EU:C:2011:864. See this volume, ch 59. This case also nicely summarises all criteria. 48 See more extensively RA Wessel, ‘Normative Transformations in EU External Relations: The Phenomenon of ‘Soft’ International Agreements’ (2020) 44 West European Politics 72. 49 PG Andrade, ‘The Distribution of Powers Between EU Institutions for Conducting External Affairs through Non-Binding Instruments’ (2016) 1 European Papers 115, 116.
42 Ramses A Wessel The claim that an arrangement is not meant to ‘create legal rights or obligations under international law’ does not always imply that it falls completely outside EU law.50 These arrangements may form the interpretative context for legal agreements and may even commit the Union through the development of customary law or as unilateral declarations. While arguing that they also form an ‘integral part of EU law’ might not always be easy, there are reasons not to overstate the difference between ‘hard’ and ‘soft’ agreements. In practice, the conclusion of political commitments does not differ too much from the conclusion of international agreements: in many cases, the Commission (or, in the case of the Common and Foreign Security Policy MoUs, the High Representative) will negotiate and sign the document where the actual conclusion is in the hands of the Council. Reasons not to formally call an instrument an ‘international agreement’ are often political and sometimes the procedure of Article 218 is simply followed.51 Further case law will have to clarify the status of informal arrangements in the EU legal order. B. A Hierarchy of Norms? Haegeman is often mentioned in debates on the relationship between international and EU law. Its most common function is to argue that international law is part of EU law. Indeed, it is the sentence in paragraph 5 on the ‘integral part’ that established the current VIP status of this judgment. While the judgment itself merely concerns the interpretation of an international agreement and is far less clear about its status in the EU legal order, let alone that it concerns international law in general, textbooks often use this sentence to explain the hierarchy between norms:52 1. The EU Treaties 2. International law binding upon the EU 3. Secondary EU law While the Court in International Fruit53 had related the validity of EU measures to their conformity with international law (see above) and later on frequently dealt with this question and, indeed, concluded that international law ranks between primary and secondary law,54 Haegeman as such was much more restrictive. First of all, it merely clarified that international agreements (or, in fact, the provisions of a particular agreement) were to be seen as belonging to EU law, at least for the purposes of the preliminary procedure. Secondly, it did thus merely address written law, leaving clarifications on customary law,55 on the status of secondary international law created in the framework of international agreements, such as Association Council decisions,56 or on decisions taken by other
50 See, eg Case C-660/13, Council v Commission, ECLI:EU:C:2016:616 (Swiss MoU). See this volume, ch 77. 51 Wessel (n 48). 52 See more extensively RA Wessel, ‘The EU and International Law’ in RA Wessel and J Larik (eds), EU External Relations Law: Cases and Materials (Oxford, Hart Publishing, 2020) ch 5. 53 International Fruit (n 36). See this volume, ch 2. 54 See, eg Case C-179/97, Spain v Commission, ECLI:EU:C:1999:109; Case C-162/96, Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293, para 45. See this volume, ch 36. 55 Racke (n 54) para 45; Case T-115/94, Opel Austria GmbH v Council, ECLI:EU:T:1997:3. See this volume, ch 35. See also Case C-84/95, Bosphorus Hava Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and Communications and Others, ECLI:EU:C:1996:312. See this volume, ch 33. 56 See, eg Case C-192/89, Sevince v Staatssecretaris van Justitie ECLI:EU:C:1990:322. See this volume, ch 19.
International Agreements as an Integral Part of EU Law 43 international organisations57 to later judgments. A conclusion that Haegeman clarified the status of international law in the Union’s legal order can therefore only be drawn in hindsight and only in combination with earlier and subsequent case law. Also, while the mentioned hierarchy may work quite well internally, it raises problems in relation to obligations which both the Member States and the EU may have vis-à-vis third states and international organisations under international law. When international agreements form an integral part of EU law and their provisions have to be in conformity with primary Union law, this may result in problems in living up to international obligations. In Kadi, the CJEU was challenged to reconcile UN Security Council obligations with the protection of fundamental rights as part of the general principles of law to be ensured by the Court.58 In this case, the Court held that the obligations imposed by an international agreement (in this case the UN Charter) could not have the effect of prejudicing the constitutional principles of the EU Treaty. Thus, it confirmed the hierarchy scheme presented above, but it could only do so by separating international obligations from internal implementation measures. C. A Distinction between the Union and its Member States In Haegeman, the Court stated that international agreements are to be seen as acts of the institutions ‘in so far as the Agreement concerns the Community’. This statement had to do with the fact that the international agreement in question was a mixed agreement. As we have seen, both the Community and its Member States were parties to the ‘Athens Agreement’. With our more extensive understanding of mixed agreements today,59 the statement by the Court also raises some questions. The idea that an international agreement can only be seen as an act of the institutions in so far as it concerns the Union was most certainly related to the division of competences, and was connected to the question whether the preliminary references procedure was applicable. While this may have been understandable looking at the Court’s line of argumentation, it stands in stark contrast to the claim that the (not ‘some’) provisions of international agreements are an integral part of Union law. What does this mean for mixed agreements? Did the Court aim to imply that parts of mixed agreements cannot be seen as acts of the institutions? With a view to the Council Decisions on the conclusion of mixed agreements, that would not make sense. Apart from listing provisions that can already provisionally be applied, those decisions typically make no distinction between areas falling under Union or Member State competences. Were this to be different, then an interpretation or a review by the Court of provisions clearly covered by Member State competences would be excluded; and that is not the case in practice. As briefly mentioned above, in Kupferberg,60 the Court used the ‘integral part’ argument in a more holistic manner by pointing to Member State obligations to allow the Union to
57 See, eg Case C-399/12, Germany v Council, EU:C:2014:289 (OIV). See this volume, ch 68. See also RA Wessel and S Blockmans, ‘The Legal Status and Influence of Decisions of International Organizations and Other Bodies in the European Union’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 223–48. 58 Kadi and Al Barakaat (n 3). See this volume, ch 49. 59 For a recent analysis, see M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Nijhoff, 2020); G Van der Loo and RA Wessel, ‘The Non-ratification of Mixed Agreements: Legal Consequences and Options’ (2017), 54 CML Rev 735. 60 Kupferberg (n 14). See this volume, ch 14.
44 Ramses A Wessel live up to its international obligations. Rather than trying to limit the agreement to whatever ‘concerns the Community’, it pointed to collective responsibilities: In ensuring respect for commitments arising from an agreement concluded by the Community institutions the Member States fulfil an obligation not only in relation to the non-member country concerned but also and above all in relation to the Community which has assumed responsibility for the due performance of the agreement. That is why the provisions of such an agreement, as the Court has already stated in its judgment of 30 April 1974 in Case 181/73 Haegeman [1974] ECR 449, form an integral part of the Community legal system.61
So, eight years after Haegeman, the Court took the phrase out of context and used it for a different purpose. In providing this ‘ex post justification for Haegeman’,62 the Court went beyond the pacta sunt servanda rule, and underlined the obligations Member States have in relation to agreements concluded by the Union.63 D. Conclusion The value of Haegeman is still visible today. The case has been referred to in subsequent judgments 35 times (including orders and Opinions of the Court) and in Opinions of the AG 52 times; and even today the most famous phrase is often repeated: ‘Since an international agreement concluded by the European Union is an integral part of EU law …’64 Yet, over the years, the conditions under which the Court originally made this statement faded out and this sentence has indeed started a life of its own.65 It is important though to keep the original context of the phrase in mind. In Haegeman, the Court needed to establish its jurisdiction and subsequent case law made clear that the justiciability of international agreements does not follow automatically. This does not at all affect the importance of the case. The very notion that international law that is binding on the European Union is part of the Unions legal system rightfully turned Haegeman into an integral part of EU external relations case law. V. ADDITIONAL READING Cannizzaro, E, Palchetti, P and Wessel, RA (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff Publishers, 2011). Cheyne, I, ‘Haegeman, Demirel and Their Progeny’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (Cambridge, Cambridge University Press, 2000). Garben, S and Govaere, I (eds), The Interface between International and EU Law (Oxford, Hart Publishing, 2019). Mendez, M, The Legal Effects of EU Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013).
61 Kupferberg (n 14) para 13. 62 Mendez (n 30) 67. 63 Something that was even then already reflected in Art 228(2) TEC (Art 216(2) TFEU). 64 As is the case in the most recent references in Case C-897/19, Russian Federation v IN, ECLI:EU:C:2020:262, para 49; Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792, para 69. 65 It is not uncommon for law to develop on the basis of a repetition of earlier statements to strengthen or even modify their content. See W Werner, Repetition and International Law (Cambridge, Cambridge University Press, 2022).
4 Common Commercial Policy and the Determination of Exclusivity: Opinion 1/75 (Local Cost Standard) MARISE CREMONA AND JAKA KUKAVICA Opinion 1/75, Draft understanding on a local cost standard, ECLI:EU:C:1975:145, delivered 11 November 1975. KEYWORDS External competence – Exclusive competence – CCP – Common Commercial Policy – Prior opinion procedure – Teleology – Export policy – Export credits.
I. INTRODUCTION
O
n 14 July 1975, the European Commission submitted a request for an Opinion of the Court on the compatibility of an ‘envisaged agreement’ with the EEC Treaty, in accordance with what was then the second subparagraph of Article 228(1) EEC (now, as amended, Article 218(11) TFEU).1 The agreement was a draft ‘Understanding’, negotiated within the OECD, on a local cost standard for export credit schemes. Opinion 1/75, handed down barely four months later in November 1975, represented a number of ‘firsts’: it was the first time that this prior compatibility (Opinion) procedure for international agreements had been used; it was the first case in which the Court assessed the scope of the Community’s treaty-making powers in the field of trade; and in this ruling, the Court first decided that the conclusion of international agreements in the field of trade policy (the Common Commercial Policy, CCP) was an exclusive Community competence. Indeed, for the first time, the Court clearly separated the issues of existence and exclusivity of external competence. However, the case is not only an important historical marker: several of its dicta are still regularly cited and the underlying rationale of Opinion 1/75 is still current, visible in contemporary debates on trade policy, on exclusivity and on the function of the Opinion procedure itself. 1 According to Art 228(1) EEC, second subparagraph, ‘The Council, the Commission or a Member State may obtain beforehand the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the provisions of this Treaty. Where the opinion of the Court of Justice is adverse, the agreement may enter into force only in accordance with Article 236.’ This procedure, with amendments, is now found in Art 218(11) TFEU.
46 Marise Cremona and Jaka Kukavica Although the importance of Opinion 1/75 has always been recognised, comparatively little was known of the background of the case until recently. The published report is limited to the Opinion itself, and the text of the Opinion is limited to the Court’s own reasoning. It does not, unlike subsequent Opinions,2 contain a summary of the arguments of the Commission or of other observations taken from the report of the juge rapporteur. While the report tells us that observations were received from the Council, Ireland, Italy, the Netherlands and the UK, it has been impossible to read the arguments they made. Since 2017, however, the archives of the Court, including the dossiers de procédure of cases decided between 1952 and 1982, have been available in the Historical Archives of the European Union in Florence.3 A study of the dossier de procédure of Opinion 1/754 gives us the text of the Commission’s Request for an Opinion, as well as the observations of the Council and Member States, and adds considerably to our understanding of the case, the arguments presented to the Court, and the context in which the Court shaped this first, landmark Opinion.5 Like the ERTA case and other cases of this early period,6 Opinion 1/75 captures a moment when the Community was starting to play an active role in international negotiations, including those which had been started by the Member States. In fact, the relationship between the Community’s participation in negotiations and the recognition of its external competence was an issue in both ERTA and Opinion 1/75, although with differing outcomes. This is not simply a matter of the recognition of competence internally, by and amongst the Community institutions and Member States. Opinion 1/75 marked an important step in the gradual acceptance by the international community of the EEC as an autonomous actor and treaty partner.7 II. FACTS
Article 112 of the EEC Treaty (now repealed) provided for the ‘progressive harmonisation’ of Member State export credit systems by the end of the transitional period,8 but by 1974 this had not been fully achieved. According to the Commission, ‘differences still persist[ed] between the export credit systems of the Member States’.9 Simultaneously work was proceeding
2 For discussion of the evolution of the Opinion procedure, see further S Adam, La procédure d’avis devant la Cour de justice de l’Union européennes (Bruylant, 2011); M Cremona, ‘Opinion: European Court of Justice (ECJ)’ Max Planck Encyclopedia of International Procedural Law (2018); G Butler, ‘Pre-ratification Judicial Review of International Agreements to Be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 61. 3 Dossiers can be consulted at archives.eui.eu/en/fonds/230050?item=CJUE. 4 Opinion 1/75 dossier de procédure, Historical Archives of the European Union, CJUE-2383. 5 There is no space here to discuss the contents of the dossier in detail; see further J Kukavica, ‘The Court of Justice in the Archives Project: Analysis of the Opinion of the Court of 11 November 1995 (Opinion 1/75)’ (2021) Academy of European Law Working Paper 2021/11; J Kukavica, ‘The Garden Grows Lusher: Completing the Narratives on Opinion 1/75’ (2021) 6 European Papers 621. 6 See, eg Case 22/70, Commission v Council, ECLI:EU:C:1975:145 (ERTA). See this volume, ch 1; Opinion 1/76, ECLI:EU:C:1977:63. See this volume, ch 9; Ruling 1/78 of 14 November 1978. See this volume, ch 10; Opinion 1/78, ECLI:EU:C:1979:224. See this volume, ch 11. 7 For more on ‘international personality’ and the ‘external actorness’ of the Community as manifested in Opinion 1/75, see P Pescatore, ‘External Relations in the Case-Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615, 639–42; R Holdgaard, External Relations Law of the European Community: Legal Reasoning and Legal Discourses (Alphen aan den Rijn, Kluwer Law International, 2008) 378, 442. 8 The transitional period ended on 31 December 1969. 9 Request for an Opinion submitted by the Commission of the European Communities to the Court of Justice pursuant to the second subparagraph of Art 228(1) of the EEC Treaty, JUR/73/75, 4 in Opinion 1/75 dossier de procédure (n 4).
Common Commercial Policy and the Determination of Exclusivity 47 within the OECD on a number of sectoral Understandings, as well as on the Understanding on a Local Cost Standard at issue in Opinion 1/75. This latter Understanding had been negotiated within the OECD’s Group on Export Credits and Credit Guarantees, and a report of that group in February 1974 recommended its adoption by way of a Resolution of the OECD Council. According to the Understanding, the signatories would agree to a common standard for financing ‘local costs’, ie costs incurred in the buyer’s state. The standard included both the percentage of local costs that could be covered by credit finance (no more than 100 per cent of the value of the goods or services exported) and the interest rate payable, together with exclusions and derogations. The original proposal to adopt an OECD standard was made by the Community and was based on norms contained in its own legislation, the final Understanding representing a compromise with alternative proposals from the USA. Although there appears to be some disagreement about the extent to which the Commission was involved in the negotiations,10 the possibility of EEC participation had clearly been discussed. The Chair of the Group on Export Credits and Credit Guarantees reported to the OECD Council that the text of the Understanding had been agreed by all delegations and that ‘As regards the Draft as a whole, there only remains to be clarified the form of the participation in the Understanding by the European Economic Community, whose decision on the subject is to be made very soon’.11 The European Commission submitted to the Council a Recommendation for a Council Decision on the Community’s position in relation to the Understanding.12 The Commission Recommendation was that the Understanding should be adopted by the EEC alone, on the basis of Article 113 EEC (now, after amendment, Article 207 TFEU),13 and that the Community position should be expressed by the Commission. According to the Commission Request for an Opinion, there was disagreement in the Council over the existence and the extent of Community competence to adopt the Understanding: while only one of the (then) nine Member States disputed Community competence, another two took the view that while the Community had competence this did not exclude participation by the Member States. In light of this disagreement, the Commission decided to request an Opinion from the Court under Article 228(1) EEC ‘In order that the Council might have information on the legal questions confronting it which would be necessary for it to resume useful discussion’.14 The Commission’s formal request to the Court was for ‘a prior Opinion on the compatibility with the Treaty of a draft Understanding on a Local Cost Standard drawn up by
10 See Commission Request (n 9), 9; Written Observations by the United Kingdom, 5 in Opinion 1/75 dossier de procedure (n 4). Jean Groux, the Agent of the Commission in the Opinion 1/75 proceedings, argued in one of his post hoc writings that the Community did not participate in the negotiations, contrary to the arguments he made for the Commission in the Request for an Opinion. 11 Opinion 1/75, ECLI:EU:C:1975:145, 1358. Indeed, Protocol No 1 to the OECD Convention provides that ‘representation in [the OECD] of the European Communities established by the Treaties of Paris and Rome of 18 April 1951 and 25 March 1957 shall be governed in accordance with the provisions on institutions contained in those Treaties’. Commission Request (n 9) 26. The UK argued in its observations that although EEC participation may have been foreseen, the participation by the Member States over many years of negotiations would have led to an expectation from other OECD members that EEC participation would not exclude that of the Member States. See Observations by the UK (n 10) 16. 12 Commission Recommendation for a Council Decision Concerning the Community’s position within the Organisation for Economic Cooperation and Development in the Matter of a Local Costs Standard, COM (1974) 2238, 18 December 1974. 13 Under Art 113 EEC the Community had competence to conclude agreements with third countries in the field of commercial policy, which explicitly included export policy; the equivalent current provision (much amended) is Art 207 TFEU. 14 Commission Request (n 9), 2.
48 Marise Cremona and Jaka Kukavica the O.E.C.D. … and more especially on the power of the Community to conclude this agreement’.15 Later in its Request, the Commission was more specific in framing the question of Community competence as concerning ‘in the first instance, whether the Community even has power to negotiate and conclude the proposed agreement and, should the reply to this question be in the affirmative, whether or not such power is exclusive’.16 III. THE COURT
The Court’s Opinion is divided into two main parts, dealing first with the admissibility of the Request and then with the issue of substance. Following the structure of the Commission’s Request, it subdivided the substantive issue into two: the existence of Community competence to conclude the Understanding, and whether that competence is exclusive. As the archival material reveals, both the Council and the UK raised questions in their observations relating to the scope of the prior Opinion procedure, which – it will be recalled – had not been used before, and the Court partially addressed these under the head of admissibility. In line with the wording of Article 228(1) EEC, which enabled the Court to determine ‘whether an agreement envisaged is compatible with the provisions of this Treaty’, the Court discussed three aspects of the procedure: (i) the interpretation of ‘agreement’; (ii) the interpretation of ‘envisaged’; and (iii) what is covered by ‘compatibility with the Treaty’. Guiding its interpretation of the provision was its view of the purpose and rationale of the procedure, something that was addressed in the observations of both the Council and the UK. While the Court essentially adopted their positions on the purpose of the procedure, it drew very different conclusions. The purpose of this ‘exceptional’ procedure, the Court held, is to ‘forestall complications which would result from legal disputes concerning the compatibility with the Treaty of international agreements binding upon the Community’, since a finding of incompatibility would ‘provoke, not only in a Community context but also in that of international relations, serious difficulties and might give rise to adverse consequences for all interested parties, including third countries’.17 From this perspective, it is the fact that an agreement is binding that is important, not its formal designation. The Court held that ‘agreement’ covers ‘Any undertaking entered into by entities subject to international law which has binding force, whatever its formal designation’, and thus covered the projected Understanding.18 The Court then held that the agreement was indeed ‘envisaged’: the procedure had not been invoked too early or too late. On the one hand, it was not necessary to wait, as had been argued by both the Council and the UK, for the Council (the institution that would formally conclude the agreement) to decide that the Community should participate.19 It was sufficient that the text had been agreed, and that the Commission had formally recommended Community participation. On the other hand, contrary to the arguments made by the UK, the fact that ‘discussions concerning the substance of the Understanding in question are now at an end’ was no barrier to asking for an Opinion. 15 ibid 1. 16 ibid 2. 17 Opinion 1/75 (n 11) 1360–61. 18 In this ruling, but without referring to the UK’s views, the Court disagreed with the UK, which had argued that the Understanding was not intended to be legally binding. See Observations by the UK (n 10) 9. 19 The Council argued that the Opinion procedure would not achieve its purpose if the Court were to give opinions on ‘mere projects’ instead of agreements that the Council actually intends to conclude. See Observations by the Council on the Request for an Opinion, 2–3 in Opinion 1/75 dossier de procedure (n 4).
Common Commercial Policy and the Determination of Exclusivity 49 In interpreting the concept of ‘compatibility with the Treaty’, the Court again started from its perception of the purpose of the procedure, that is, to forestall the difficulties that would be provoked by a finding of incompatibility of an internationally binding agreement. This requires that the Court should be able to assess any aspect of the agreement and the Community’s participation that might give rise to a (subsequent) legal challenge. Thus, the Court must be able to address all questions capable of submission for judicial consideration, either by the Court of Justice or possibly by national courts, in so far as such questions give rise to doubt either as to the substantive or formal validity of the agreement with regard to the Treaty.20
This included compatibility with rules determining the powers of the institutions and with the substantive rules, and thus may include questions of competence.21 In concluding that ‘compatibility’ encompasses Community competence, the Court impliedly rejected – but did not directly address – an argument made by both the Council and the UK in their observations. In their view, while the Opinion procedure could be used to address questions of Community competence, it did not give the Court jurisdiction to determine whether that competence is exclusive. That – they argued – would in effect be to rule on the competence of the Member States (whether they are entitled to conclude the agreement alongside the Community).22 The Court, in contrast, simply concluded that the Commission’s request was admissible, and went on to discuss the question of exclusivity without raising it as an admissibility issue. It thereby assumed that ‘Community competence’ included the nature of that competence. Turning to the first issue of substance, the Court held that the Understanding fell within the scope of the CCP, and thus the express treaty-making power granted by Article 113 EEC. It pointed to the fact that the Treaty envisaged internal Community rules on export credits (then Article 112 EEC) and to the mention of export policy in Article 113 EEC.23 Two aspects of the Court’s reasoning here stand out, from the perspective of the wider and longer-term significance of the case. First, the Court did not rely solely on these textual arguments but adopted a purposive approach to defining the concept of commercial policy, holding that it had ‘the same content whether it is applied in the context of the international action of a State or to that of the Community’.24 Second, the Court held that the Community’s external powers in the field of commercial policy do not depend on the prior exercise of its internal powers; the Community had the competence to agree to rules on export credits within the OECD, even though it had not yet adopted internal legislation on the matter.25 The second substantive issue concerned the exclusivity of Community power to conclude the Understanding. Against the arguments that its power was not exclusive, whether because no internal common rules for export credits had been adopted (and so the ERTA rationale for exclusivity did not apply),26 because export credits were not a core element of commercial policy27 or because export credit schemes are managed and financed by Member States,28 the 20 Opinion 1/75 (n 11) 1361. 21 ibid. 22 Observations by the Council (n 19) 4–5; Observations by the UK (n 10) paras 21–24. 23 The Court here silently rejected an argument which had been advanced in the literature, to the effect that export credits fall within the Community’s state aid policy, not the CCP. See further HH Maas, ‘The External Powers of the EEC With Regard to Commercial Policy, Comment on Opinion 1/75’ (1976) 13 CML Rev 379, 384, citing Ipsen. 24 Opinion 1/75 (n 11) 1362. 25 ibid 1363. 26 Observations by the UK (n 10) para 30. 27 ibid para 29. 28 ibid paras 33–34; Opinion 1/75 (n 11) 1364.
50 Marise Cremona and Jaka Kukavica Court accepted the Commission’s contention that the Community’s powers were exclusive. In doing so, it made it clear that the ERTA reasoning, based on the need to protect an existing Community acquis, did not apply to the CCP. Instead, the Court’s rationale for exclusivity was based upon a teleological understanding of the nature of the CCP, and had both an internal and an external dimension. From an external perspective, the Court relied on the need for an ‘effective defence’ of the common interests of the Community, which would be compromised if Member States were to pursue their own interests individually. From an internal perspective, unilateral Member State action would be incompatible with the ‘uniform principles’ envisaged by the Treaty to govern commercial policy so as to avoid the distortions of competition between Community traders operating in external markets. Thus, the Court formulated its reasoning on exclusivity with reference to the Community’s commercial policy generally, not only export credits, basing itself on fundamental principles, including mutual trust within the Community, and the need for unity to ensure defence of the common interest externally. The reasoning of the Court in Opinion 1/75 is typical of cases in this early period in being didactic rather than forensic. The Court did not engage directly with the arguments put forward, but presented its conclusions as if they were the only possible answer to the questions asked. Its reasoning was framed in structural and purposive terms, both in relation to the scope of the procedure and in relation to the CCP. As a result, the significance of the Opinion is not limited to the specific question at issue, but is a foundation for the development of the CCP and EU external policy more generally. IV. THE IMPORTANCE OF THE CASE
A. Defining the Scope and Function of the Prior Opinion Procedure Opinion 1/75 represented the first use of the prior opinion procedure, and as such the Court’s statements about the rationale and scope of the procedure are important, especially in the light of the difference of views revealed in the Commission’s Request, the observations of the Council and those of the Member States. Indeed, the statement of that rationale quoted above has been repeated in many subsequent cases and has become a standard ‘formula’.29 Thus, in subsequent cases, this rationale was used by the Court to support its conclusion that the prior Opinion procedure could be used in cases where there was a dispute as to legal basis, since conclusion on an incorrect legal basis may result in the decision concluding an international agreement being invalidated.30 It has also been used to justify the use of the Opinion procedure at an early stage, before the text of the agreement has been finalised.31 As expressed in Opinion 2/94, where a question of competence has to be decided, it is in the interests of the Community institutions and of the States concerned, including non-member countries, to have that question clarified from the outset of negotiations and even before the main points of the agreement are negotiated.32
29 See, eg Opinion 2/94, ECLI:EU:C:1996:140, paras 3–6. See this volume, ch 32; Opinion 1/13, ECLI:EU:C:2014:2303, paras 47–48. See this volume, ch 69; Opinion 2/13, ECLI:EU:C:2014:2454, paras 145–46. See this volume, ch 70; Opinion 1/15, ECLI:EU:C:2016:656, para 69. See this volume, ch 83. 30 See, eg Opinion 2/00, ECLI:EU:C:2001:664, paras 5–6. See this volume, ch 39. 31 Opinion 1/78 (n 6) paras 34–35; Opinion 2/94 (n 29) paras 3–10. 32 Opinion 2/94 (n 29) para 10.
Common Commercial Policy and the Determination of Exclusivity 51 At the other extreme, the rationale for the Opinion procedure expressed in Opinion 1/75, based on the need to forestall potential problems before international commitments are entered into, has also influenced the determination of when it is too late to request an Opinion. Once an agreement has been concluded, the ‘preventive intent’ of the procedure can no longer be achieved and the request becomes ‘devoid of purpose’.33 The Court’s willingness in Opinion 1/75 to accept that an agreement may be ‘envisaged’ on the basis of a Commission proposal, even though the Council had not yet taken any decision to conclude it, has also been reflected in subsequent practice. In Opinion 1/13, for example, the Court rejected a similar argument, holding that the procedure may be initiated where the agreement is ‘envisaged’ by one of the actors capable of requesting an Opinion under Article 218(11) TFEU (here, again, the Commission), and that it was not necessary for the Council to have demonstrated its intention to conclude the agreement.34 As Maas pointed out in an early comment on the case, although it might have been stretching a point to regard an agreement as ‘envisaged’ before any decision to that effect had been taken in the Council, the Court’s approach provided a way of resolving competence disputes for international agreements which does not exist for internal legislation.35 When it comes to the concept of ‘agreement’, the Court’s ruling in Opinion 1/75 has broader implications since this term applies to Article 218 TFEU as a whole, and thus defines when this general procedural provision should apply. The broad interpretation adopted in Opinion 1/75 has been used in other cases where the application of Article 218 TFEU was at issue.36 In this early case, therefore, the Court established the centrality of this fundamental procedural provision for EU external action, and its constitutional significance in determining the institutional balance of power. However, it is perhaps in its acceptance of the idea that the Opinion procedure may be used to determine Community competence and – even more – whether that competence is exclusive that Opinion 1/75 has been most influential. The argument that this procedure was not designed to determine the balance of competence, and that other procedures (institutional and judicial) were more appropriate, has from time to time been revived, but without success. The Court, in later cases, is more explicit in referring to ‘questions concerning the division between the Community and the Member States of competence to conclude a given agreement’,37 engaging more directly with the arguments put forward, but its conclusion is the same. And, indeed, establishing the boundaries of external competence has proved to be a dominant issue in subsequent Opinions: of the 22 Opinions handed down to date, as of the end of 2020,38 14 have concerned questions of competence, of which all except one39 involved determining whether or not competence was exclusive.40 The purpose of this non-contentious procedure in pre-empting legal and political problems, and the fact that it can be called upon to settle issues of competence, legal basis and participation at any time from a relatively early stage up to formal conclusion of an agreement, has, 33 Opinion 3/94, ECLI:EU:C:1995:436, paras 14–23. 34 Opinion 1/13 (n 29) paras 45–46. 35 Maas (n 23) 382. 36 See, eg Case C-327/91, France v Commission, ECLI:EU:C:1994:305, para 27 See this volume, ch 26; Joined Cases C-103/12 and C-165/12, European Parliament and Commission v Council, ECLI:EU:C:2014:2400, para 83. 37 See, eg Opinion 1/78 (n 6) para 31; Opinion 2/00 (n 30) para 3; Opinion 1/13 (n 29) para 35. 38 Two cases are pending at the time of writing: Opinion 1/19 and Opinion 1/20. 39 Opinion 2/94 (n 29). 40 The other dominant issue has been that of institutional compatibility (seven Opinions to date); substantive compatibility has been considered only rarely so far, although there are signs that this may change: see, eg Opinion 1/15 (n 29); Opinion 1/17, ECLI:EU:C:2019:341.
52 Marise Cremona and Jaka Kukavica since Opinion 1/75, enabled it to play an important role in establishing fundamental constitutional principles not limited to EU external relations.41 B. Defining the Scope of the Common Commercial Policy Opinion 1/75 also established an approach to defining the scope of the CCP which has been crucial not only in subsequent debates on the CCP, but also in establishing the EU as an international actor. Put simply, the Court rejected a task-based approach, which would define the CCP in terms of a specific list of activities. Instead, in holding that commercial policy has ‘the same content whether it is applied in the context of the international action of a State or to that of the Community’,42 it adopted a policy-based approach. This is not just a matter of giving the CCP an expansive interpretation by suggesting that Article 113 EEC did not establish a closed list.43 For the first time, the Court recognised that the Treaty granted the EEC policy-making powers in a specific field (the CCP) that are not tied to specific Treaty objectives.44 The CCP is a policy field in which the Community – and now the Union – may act to achieve objectives set by its own institutions. And by holding that the Community’s treatymaking power in the field of CCP did not depend on first adopting internal rules on the matter in question, the Court recognised the ability of its institutions to choose the appropriate level at which to act (Community or international) and the type of policy instrument (legislation or treaty) to use. Given that the textual references in the Treaty to export credits and export policy would have provided an answer to the question of competence (the real point of dispute being the question of exclusivity), the Court – despite starting with these provisions – deliberately chose to open up the question of the scope of the CCP. This move set the stage for a long-standing and still ongoing debate about the limits of that policy field (sharpened, of course, by its parallel finding of exclusivity) through litigation and at moments of Treaty amendment. It is only in recent case law that we have been offered general criteria by which to judge whether a measure falls within the CCP.45 In the background to this case, we can also see an emerging appreciation of the implications for Member States as the Community started to develop its own autonomous commercial policy and gained acceptance in international bodies such as the OECD. Community participation would mean a Community-level obligation on the Member States, derived from Article 228(2) EEC (now Article 216(2) TFEU) and, as some interveners recognised, this would
41 See further Cremona (n 2). 42 See n 24 above. 43 Thus paving the way for Opinion 1/78 (n 6). See this volume, ch 11. For an earlier judgment affirming that the Treaty provisions on the customs union and CCP need to be given a wide interpretation, see Case 8/73, Hauptzollamt Bremerhaven v Massey-Ferguson GmbH, ECLI:EU:C:1973:90, para 4. 44 The adoption of a CCP was itself listed as among the Community’s activities in Art 3(b) EEC, but apart from the references to ‘uniform principles’ in Art 113 EEC and to the progressive elimination of trade restrictions in Art 110 EEC, its objectives were not defined. 45 See, eg Case C-414/11, Daiichi Sankyo and Sanofi-Aventis Deutschland, ECLI:EU:C:2013:520, paras 50–52. See this volume, ch 64; Opinion 2/15, ECLI:EU:C:2017:376, paras 35–36. See this volume, ch 82. The formulation adopted here is derived from earlier case law on the relationship between trade and environmental policy (eg Opinion 2/00 (n 30) para 37. See this volume, ch 39; Case C-411/06, Commission v European Parliament and Council, ECLI:EU:C:2009:189, para 71, but has recently been applied to the CCP more generally. See further M Cremona, ‘Defining the Scope of the Common Commercial Policy’ in M Hahn and G van der Loo (eds), Law and Practice of the Common Commercial Policy: The First 10 years after the Treaty of Lisbon (Brill, 2020).
Common Commercial Policy and the Determination of Exclusivity 53 constrain Member States in their implementation of the agreement.46 Fulfilment of obligations under the agreement becomes a matter of Community as well as international law.47 Effectively, as the Court itself pointed out, the common rules that had not yet been adopted in the form of internal legislation may be created for the Community and its Member States as international norms.48 C. The Rationales for Exclusive Competence Opinion 1/75 is probably best known for its ruling that EEC competence in the field of commercial policy is exclusive. It is a ruling that has had immense implications for the future development of that policy. Although the exclusivity of Community competence over the CCP was by no means unanimously accepted by either the Member States or scholarship at the time,49 the Court’s reasoning has never been challenged and is now enshrined in Article 3(1) TFEU. The following year, the Court was to declare that as full responsibility for the CCP had been transferred to the Community, national commercial policy measures ‘are only permissible after the end of the transitional period by virtue of specific authorization by the Community’.50 The application of exclusivity to autonomous CCP measures as well as international agreements can indeed be derived from the breadth of the language used in Opinion 1/75,51 although some authors had argued that CCP exclusivity applied only to treaty-making.52 Again, the exclusivity of the CCP applied even in the absence of common rules regulating imports. A few years earlier, the Court had decided the ERTA case,53 and this judgment, explicitly or impliedly, hovers in the background of several of the submissions of the institutions and Member States.54 Given that the concept of exclusivity in external relations was in its infancy, it is not surprising that they were engaged in working out the implications of ERTA – in particular, whether exclusivity could be conceived in the absence of ‘common rules’ which need protection from unilateral Member State action. In deciding that exclusivity in the CCP did not depend on the prior adoption of common rules, and indeed that the common rules may derive from (exclusive) external action, the Court elaborated a rationale for exclusivity very different from pre-emption: the importance of external unity to defend the Community
46 Observations by the UK (n 10) 20–21. 47 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362, paras 11–13. See this volume, ch 14. 48 For a recognition of the tension that this may create between legislative and treaty-making procedures and institutional balance, see Daiichi Sankyo (n 45) para 59; Opinion 2/15 (n 45) paras 164–5. 49 For a discussion, see PJG Kapteyn, ‘The Common Commercial Policy of the European Economic Community: Delimitation of the Community’s Power and the European Court of Justice’s Opinion of November 11, 1975’ [1976] Texas International Law Journal 485, 492. 50 Case 41/76, Donckerwolke and Others v Procureur de la République and Others, ECLI:EU:C:1976:182, para 32. See this volume, ch 8. 51 See, eg the Court’s reference to action ‘in the Community sphere and in the international sphere’, Opinion 1/75 (n 11) 1364. 52 See, eg Sasse, cited by Kapteyn (n 49) 493. Some early commentators were not convinced that Opinion 1/75 had settled the question of exclusivity for all aspects of the CCP: see Kapteyn (n 49) 502. 53 ERTA (n 6). 54 The Commission, in its request, argued that ERTA did not apply to express treaty-making powers. See Commission Request (n 9) 22. The UK, on the other hand, cited ERTA in support of its argument that there could be no exclusivity until common rules had been adopted. See Observations by the UK (n 10) para 30. A similar position was taken by Italy in its observations. See Opinion 1/75 dossier de procédure (n 4) Observations of the Italian Government regarding the Request of the Commission for an Opinion, 2.
54 Marise Cremona and Jaka Kukavica interest and the need for uniform rules to avoid distortions within the common market.55 This is exclusivity which derives a priori from the very nature of the policy field rather than the specific character of internal legislation. As such, it applies to the whole of the CCP,56 and its scope has expanded with that of the CCP itself.57 Interestingly, as Schütze has pointed out (and as is now evidenced in Article 3(1) TFEU), this type of exclusivity has turned out to be rare.58 The Court’s reasoning on exclusivity also affirmed the prominent position of teleology in the interpretative arsenal of the Court. As already noted, the conclusion in the Opinion as to the exclusivity of Community competence was heavily predicated on a teleological exposition of the Treaty and of the policy field. Notably, however, the Court’s almost exclusive reliance on purposive interpretation was not triggered by the observations submitted by the Council or the Member States. Other than a brief mention by the Commission in its Request for an Opinion, no teleological arguments were advanced on the exclusivity of Community competence. Purposive reasoning was introduced by the Court itself, irrespective of the content of the submissions. Conversely, the Court ignored outright many practical policy arguments that were advanced by the UK in its observations, signalling their lesser relevance to the interpretation of the Treaty.59 In between these two approaches was the Court’s treatment of many textual arguments made by the UK, pertaining to the wording of Articles 113 and 114 EEC and Article 71 of the ECSC Treaty. These were not ignored by the Court, unlike most policy arguments, but were explicitly rejected in the Opinion. At the time that Opinion 1/75 was decided, the EEC was gradually assuming a role in international trade negotiations, and the implications of this transfer of competence for the Member States was being assessed in both practical and legal terms. In ERTA, the Court had accepted that since the relevant international negotiations had been taken almost to conclusion by the Member States, it would be disruptive at such a late stage to request that the Community should substitute the Member States; it thus accepted that the Member States could represent the Community notwithstanding exclusive competence. It is striking that this argument, though made, was given no weight in Opinion 1/75, the Court merely noting that the OECD was waiting to be informed about the form that Community participation would take. The transfer of commercial policy competence also carried implications for the Member States’ pre-existing international commitments, especially under the General Agreement on Tariffs and Trade (GATT) and other multilateral trade agreements. Opinion 1/75 falls between two cases, International Fruit and Nederlandse Spoorwegen, in which the operation in this context of what has become known as ‘functional succession’ was discussed, and helps to shed light on the development of that concept.60 In International Fruit, the Court emphasised that the Member States had transferred powers in the field covered by the GATT (and thus the CCP) to the Community, which had ‘assumed the functions inherent in the tariff and trade policy’, at least from the end of the transitional period.61 As Petti and Scott point out, the Court 55 On the incompleteness of the CCP at the time of Opinion 1/75, see Kapteyn (n 49) 487–92. 56 The Court rejected an argument that exclusivity may be limited to certain ‘core’ elements: see n 27 above. 57 Notwithstanding the introduction for a time following the Treaty of Nice amendments of the possibility of shared competence for certain aspects of the CCP. 58 R Schütze, Foreign Affairs and the EU Constitution: Selected Essays (Cambridge University Press, 2014) ch 6. 59 For a complete list of arguments made across all the submissions, and the Court’s response to each of them, see Kukavica, ‘Court of Justice in the Archives’ (n 5) 41. 60 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2; Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der invoerrechten en accijnzen, ECLI:EU:C:1975:154. See this volume, ch 5. 61 International Fruit (n 60) para 14.
Common Commercial Policy and the Determination of Exclusivity 55 was not explicit in this case that the Community had acquired exclusive competence over the CCP, but its reasoning on the transfer of powers might be seen as foreshadowing this aspect of Opinion 1/75. Then, following Opinion 1/75, the Court in Nederlandse Spoorwegen was more explicit that the Community had replaced the Member States in terms of GATT commitments, thereby consolidating the functional succession doctrine.62 Nederlandse Spoorwegen was decided a few days after Opinion 1/75, and is perhaps evidence of the Opinion’s initial impact. Certainly, it has subsequently been accepted that exclusive competence is a necessary prerequisite for functional succession.63 Opinion 1/75 is a key building block in the decade of seminal judgments on the external relations of the Community that started with ERTA. In Opinion 1/75, the Court articulated basic institutional and substantive principles that are still foundational today. It also, in its mode of reasoning, established the prior Opinion procedure as a significant mechanism in the development, over subsequent decades, of the constitutional framework of EU external relations. V. ADDITIONAL READING Bourgeois, JHJ, ‘The Common Commercial Policy – Scope and Nature of Powers’ in ELM Völker (ed), Protectionism and the European Community, 2nd edn (Deventer, Kluwer Law and Taxation Publishers, 1987) 7. Cremona, M, ‘The External Dimension of the Single Market: Building (on) the Foundations’ in C Barnard and J Scott (eds), The Law of the Single European Market: Unpacking the Premises (Oxford, Hart Publishing, 2002) 357–58. Eeckhout, P, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 14–18, 20–23, 30, 59, 74, 83, 195, 269–70, 288, 441. Ehlermann, C-D, ‘The Scope of Article 113 of the EEC Treaty’ in Etudes de droit des Communautés européennes: mélanges offerts à Pierre-Henri Teitgen (Paris, A Pedone, 1984) 147–48. Koutrakos, P, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 20–25, 30–35, 73, 137, 213, 230–31, 345. Raux, Jean, ‘Les accords externes de la CEE – L’avis de la Cour de justice des Communautés européennes au titre de l’article 228, paragraphe 1, deuxième alinéa du traité CEE (11 novembre 1975)’ [1976] Revue trimestrielle de droit européen 482. Van Vooren, B and Wessel, RA, EU External Relations Law: Text, Cases and Materials (Cambridge, Cambridge University Press, 2014) 108, 143, 306, 497.
62 Nederlandse 63 See,
Spoorwegen (n 60) para 16. eg Case C-308/06 Intertanko and others, ECLI:EU:C:2008:312, paras 48–49. See this volume, ch 52.
56
5 The EU Customs Union, International Agreements of EU Member States, and the Doctrine of Substitution: Nederlandse Spoorwegen GRAHAM BUTLER Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:154, delivered 19 November 1975. KEYWORDS Doctrine of substitution – Replacement of EU Member States – Customs Union – Common Customs Tariff – CCT – Common Commercial Policy – CCP – International Agreements of EU Member States – Competence of the Union.
I. INTRODUCTION
T
he Treaty of Rome meant that the competence of Member States to adopt external tariffs was to be dramatically altered. In time, it would eventually lead to Member States, who previously exercised control over external tariffs in line with their own respective international agreements and commitments, to eventually relinquish such powers to the Union, thereby facilitating the EU Customs Union. This, in turn, would raise questions about the external ability of the Union to represent its Member States regarding such customs matters in international fora. Could the Union substitute its Member States in such fora where the Union itself was not a party to an international agreement? In Nederlandse Spoorwegen,1 the Court followed on from its prior International Fruit judgment,2 but this time, more clearly and affirmatively elaborated on the doctrine of 1 Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:154. The case should not be confused with two other cases at the Court of the same name, also in the 1970s: Cases 36/73, NV Nederlandse Spoorwegen v Minister van Verkeer en Waterstaat, ECLI:EU:C:1973:130 and Case C-126/78, NV Nederlandse Spoorwegen v Staatssecretaris van Financiën, ECLI:EU:C:1979:150. 2 Joined Cases 21/72 to 24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2.
58 Graham Butler substitution in EU law. The doctrine of substitution confirmed that the Union could replace its Member States for the fulfilment of commitments through international agreements that its Member States are a party to. This was despite the EU not being a party to such international agreements itself. In effect, the doctrine of substitution therefore concocts a situation in the EU legal order as if the Union had itself concluded an international agreement but has not. In the words of Pescatore, Nederlandse Spoorwegen was one of only two historic cases of the Court’s external relations jurisprudence which brought forward ‘an articulate discussion on the question why and to what extent … international agreements … [of Member States] … are applicable in [Union] law’.3 International Fruit, a famous judgment on the (lack of) direct effect of the General Agreement on Tariffs and Trade (GATT),4 left some matters open. For example, it did not answer the question whether the doctrine of substitution only applied to areas where the Union had treaty-making competence. Nederlandse Spoorwegen confirmed that the Union had succeeded its Member States regarding not just the GATT, but also the 1950 Brussels Convention on Nomenclature for the Classification of Goods in Customs Tariffs (sometimes also called the Customs Cooperation Council Nomenclature, or the 1950 Nomenclature), ratified by all states who subsequently became EU Member States. Nederlandse Spoorwegen laid the foundations for if and how the Union could substitute its Member States externally, when powers are internally attributed within the Union. The doctrine of substitution is therefore an internal creation within the EU legal order for what is known in international law as the doctrine of succession. Furthermore, the case indirectly dealt with the uniformity of international agreements that are binding on the EU, and also reinforced the place of the Court itself in giving effect to uniformity through the preliminary reference procedure. II. FACTS
In 1968, the Union adopted a Regulation concerning anti-dumping matters.5 This, in turn, meant that the Union could adopt the Anti-dumping Code from the ‘Kennedy Round’ of the GATT. Consequently, customs tariffs imposed by individual EU Member States were removed and a Common Customs Tariff (CCT) was put into place,6 effectively establishing the EU Customs Union. This had consequential knock-on effects, namely, that EU Member States could no longer themselves implement Decisions of the Council regarding CCT. The Nederlandse Spoorwegen case was a referral under the preliminary reference procedure7 from the Dutch Tariefcommissie (Tariff Commission),8 concerning a dispute between the 3 P Pescatore, ‘External Relations in the Case-Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615, 635. 4 See W Phelan, Great Judgments of the European Court of Justice: Rethinking the Landmark Decisions of the Foundational Period (Cambridge University Press, 2019) ch 5. 5 Regulation (EEC) No 459/68 of the Council of 5 April 1968 on Protection against Dumping or the Granting of Bounties or Subsidies by Countries Which Are Not Members of the European Economic Community’ [1968] OJ L93/1. 6 Regulation (EEC) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff [1968] OJ L172/1. Note, this Regulation was repealed in 1987 by Council Regulation (EEC) No 2658/87 of 23 July 1987 on the Tariff and Statistical Nomenclature and on the Common Customs Tariff [1987] OJ L256/1. 7 Today, Art 267 TFEU. Then, Art 177 EC. 8 The Tariefcommisie is well known for its referral to the Court in Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, ECLI:EU:C:1963:1, where the Court established the doctrine of direct effect in EU law.
International Agreements of EU Member States and the Doctrine of Substitution 59 Douaneagent der Nederlandse Spoorwegen (Customs Agent of the Dutch Railways) and the Inspecteur der Invoerrechten en Accijnzen (Inspector of Customs and Excise). A good was being imported into the Netherlands from a third country9 – a xerographic duplicator (a photocopying machine) – which the Inspector of Customs and Excise stated was a camera under Heading 90.07 of Regulation 1/71.10 Being categorised under Heading 90.07 implicated that a 14 per cent tariff was to be levied upon the third country good. The imposition of the 14 per cent tariff was done by way of an ‘Additional Note’. Previously, xerographic duplicators would have come under an alternative section of the CCT and the applicable Regulation, namely, Heading 94.54 B, which would have entailed a lower tariff of 7.2 per cent. The Customs Agent of the Dutch Railways objected to the classification by the national customs authorities.11 Was a photocopier, for the purposes of the CCT, to be classified as a camera or as an office machine? The applicant was of the view that the Additional Note giving effect to the higher tariff level was in breach of Article II of the GATT. It thus sought to invoke provisions of the GATT to challenge the validity of the applicable Regulation. III. THE COURT
The Court was asked a number of questions. Firstly, was the insertion of an Additional Note by a Council Regulation permitted? Secondly, was it possible for the higher tariff to be charged by classifying it under a different section of CCT? Thirdly, did the Additional Note infringe the 1950 Nomenclature? For the purposes of EU external relations law, only the third question is of interest, given that it impinged upon the relationship of the EU to an international agreement of the Member States, and the powers of the Union regarding such matters. Accordingly, the question focused on whether the Union could substitute its Member States with regard to the workings of the Customs Cooperation Council within the 1950 Nomenclature. Both the Commission and the Council intervened in the proceedings. The parties to the dispute in the proceedings from the referring body did not, and nor did any Member State, despite them all being notified by the Registry on their rights of the Statute of the Court, submit observations.12 The Commission was of the view that the Member States, through consent, permitted the Union to assume the rights and obligations of the Member States as the representative of the Member States within the GATT, and thus it would be responsible for its implementation in the Union.13 The Commission supported its argument by noting the practical reality, in that it was the Union, and not the Member States, that were part of the ‘Kennedy Round’ negotiations within the GATT. Thus, it was clear the Commission believed the Union had substituted its Member States regarding the GATT, but also other associated issues related to the Customs Union, namely, the 1950 Nomenclature. In its intervention, the Council stated that, given customs duties were an exclusive competence of the Union, it is up
9 The case file at the Historical Archive reveals that the third country was Spain, which was not yet an EU Member State. Dossier de Procédure Original: Affaire 38/75. Fonds Code: CJUE-1691. Original Code: C2-25-038, 17. 10 Verordening (EEG) Nr 1/71 Van de Raad van 17 December 1970 Tot Wijziging van Verordening (EEG) Nr 950/68 Betreffende Het Gemeenschappelijk Douanetarief [1970] OJ L1/1. The Regulation is not available in English. 11 For further background, see D Lasok, The Customs Law of the European Economic Community, 2nd edn (Kluwer Law and Taxation Publishers, 1990) 210. 12 Dossier de Procédure Original (n 9). 13 Nederlandse Spoorwegen (n 1) 1443. See also ibid 52–70.
60 Graham Butler to the national authorities to apply the CCT, for which the Court was the only body to give a final ruling on. The Council did not dwell much on the substitution of the Union for its Member States regarding the 1950 Nomenclature.14 Advocate General (AG) Reischl stated that the setting of the CCT is within the exclusive competence of the Union, noting that the Union had the competence ‘to negotiate with third countries on the [CCT]’.15 However, in a less-than-clear fashion, much like the Court in International Fruit, AG Reischl believed that the Union had substituted its Member States. He stated that: ‘All nine Member States are contracting parties; since however the preparation and amendment of the nomenclature of the Common Customs Tariff falls within the exclusive competence of the Community, the Community has assumed the rights resulting from the convention and has accepted the obligations which flow therefrom’.16
This was underlined by the fact that the Union participated as an observer in the work of the 1950 Nomenclature. To begin with in its judgment, the Court said that the CCT had replaced national customs tariffs, and therefore, through the preliminary reference procedure in Article 267 TFEU, the legal effects of the different headings within the CCT came within the purview of the Court’s remit. Importantly, however, in line with the AG, the Court found that the Union had replaced its Member States regarding their commitment under the 1950 Nomenclature. The wording the Court used, however, in advancing the doctrine of substitution is important, for the Court was clearer here than it had been in International Fruit. The Court stated that ‘Just as, in the case of commitments arising from [the] GATT’,17 which served as an apparent nod to its prior judgment in International Fruit, but omitted reference to that prior judgment, the [Union] has replaced the Member States … [with] … the mandatory effect, in law, of these [GATT] commitments … [and that they] must be determined by reference to the relevant provisions in the [Union] legal system[,] and not to those which gave them their previous force under the national legal systems’ (emphasis added).18
Moving onto the issue of the 1950 Nomenclature, and whether the doctrine of substitution under the GATT applied beyond the GATT, the Court answered in the affirmative. It confidently stated that ‘the [Union] has replaced the Member States in commitments arising from the [1950 Nomenclature] … and is bound by the said commitments’.19 IV. THE IMPORTANCE OF THE CASE
The Court’s own Annual Report for 1975 was rather dismissive of the importance of the case. It said that Nederlandse Spoorwegen and other customs-related cases raised questions that were ‘of little legal interest but require the judges … to resolve highly technical and sometimes
14 ibid 72–85. 15 Opinion of AG Reischl, Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:144, 1457. 16 ibid 1458. 17 Nederlandse Spoorwegen (n 1) para 21. 18 ibid para 16. 19 ibid para 21.
International Agreements of EU Member States and the Doctrine of Substitution 61 rather abstruse problem[s]’.20 In hindsight, this was a rather unfair description by the Court of the case. Whilst the factual customs issue was indeed of little significance, other aspects of the case were momentous. In the Court’s later jurisprudence, it has rarely relied upon Nederlandse Spoorwegen explicitly. Instead, when questions are raised about Union action in international fora on foot of international agreements of EU Member States, the Court typically refers back to International Fruit only.21 Likewise, the importance of Nederlandse Spoorwegen is overlooked in EU law scholarship, which instead usually focuses on International Fruit, which is otherwise known for stating that the GATT does not have direct effect in the EU legal order. From the perspective of research and output on EU customs law, it is also omitted.22 All this may lead to one to believe that Nederlandse Spoorwegen is altogether unremarkable, but that is far from the truth. A. Distinction between Cases At first glance, one might believe that Nederlandse Spoorwegen has less to offer than International Fruit on the substitution by the Union of its Member States regarding international agreements of EU Member States, for it can be said the Court merely applied the logic of the doctrine of substitution regarding the GATT to the Customs Union. But the wording in International Fruit was extremely cautious regarding the apparent existence of a doctrine of substitution, casting doubt about its actual existence. In International Fruit, the Court used terminology that was short of calling a spade a spade. For example, it noted that the Union ‘has appeared as a partner in the tariff negotiations and as a party to the [GATT]’ (emphasis added),23 and that it ‘therefore appears … the [Union] has assumed the powers previously exercised by Member States in the area covered by the [GATT]’ (emphasis added).24 Such soft language did not leave parties with any level of certainty as to the legality of the doctrine of substitution, or if it was even a doctrine at all. This unsureness meant that a future judgment on the substituting of the Union for its Member States was inevitable. By contrast, the Court was less hesitant in Nederlandse Spoorwegen, and much more confident, affirmative and, most importantly, clear. It stated that ‘just as, in the case of commitments arising from [the] GATT, the [Union] has replaced the Member States in commitments arising from the [Nomenclature] Convention … and is bound by the said commitment’ (emphasis added).25 This was helpfully summarised in a subsequent case by the same AG as was in Nederlandse Spoorwegen, who noted the difference between the two cases: International Fruit dealt with the binding nature of the Union regarding the GATT where it had assumed the powers previously exercised by the Union, whereas in Nederlandse Spoorwegen the Union had replaced the
20 Synopsis of the Work of the Court of Justice of the European Communities in 1975 (Office for Official Publications of the European Communities, 1976) 15. 21 See, eg Case C-379/92, Criminal proceedings against Matteo Peralta, ECLI:EU:C:1994:296, para 16, with regard to the International Convention for the Prevention of Pollution from Ships (Marpol Convention). 22 It does not even get a mention in the leading materials of EU customs law: T Lyons, EU Customs Law (Oxford University Press, 2018); LW Gormley, EU Law of Free Movement of Goods and Customs Union (Oxford University Press, 2009). 23 International Fruit (n 2) para 17. 24 ibid para 18. 25 Nederlandse Spoorwegen (n 1) para 21.
62 Graham Butler powers of the Member States.26 After the Nederlandse Spoorwegen judgment and its assured words, however, the Court was inconsistent in its terminology. For example, it went from calling the doctrine of substitution nothing at all in International Fruit, given its hesitancy, to stating that the Union ‘replaced’ the Member States in Nederlandse Spoorwegen, before eventually using the term ‘substituted’ in both SIOT27 and SPI and SAMI28 some years later, which is the term utilised today. B. A Doctrine Internal to the EU Legal Order The doctrine has even been described as an ‘ingenious solution [that] cut the Gordian knot in the entangled relationship between the GATT, the Union and the Member States’.29 In both International Fruit and Nederlandse Spoorwegen, the doctrine was the EU’s own innovative way, sanctioned by the Court, of having a workable solution for the EU’s external relations to what is a normative constraint imposed on it by international law. Nederlandse Spoorwegen demonstrated an example of functional substitution. It is very much a phenomenon internal to the EU legal order, but with external acceptance of its existence, as the doctrine relies wholly on other parties to international agreements accepting that EU Member States can be substituted by the Union. Within the framework of international customs arrangements, this is not only accepted theoretically, but is practised in reality. Such actions have contributed to the culmination of the Union progressively assuming the powers of its Member States regarding external relations. This is particularly so regarding fiscal measures such as tariff policies and the movement of goods into the Union from third countries. The doctrine of substitution was to be affirmed in the absence of some typical characteristics of international law. It was clarified that no specific legal acts of the Union were necessary in order for the Union to have such external powers. There was to be no ratification or accession to such international agreements by the Union per se; such actions of the Member States themselves sufficed. The doctrine should be seen, as contended, as a ‘rule of [Union] law’,30 and actionable only in very specific circumstances.31 It is not a doctrine that is suited to many other international organisations. In this vein, it is important to recall that the GATT was not an international organisation in the usual sense of the word. Rather, it was a looser organisation that existed in ‘legal ambivalence’,32 which suited the Union’s own legal construct and
26 Opinion of AG Reischl, Case 266/81, Società Italiana per l’Oleodotto Transalpino (SIOT) v Ministero delle finanze, Ministero della marina mercantile, Circoscrizione doganale di Trieste and Ente autonomo del porto di Trieste, ECLI:EU:C:1982:427, 788–89. 27 ‘[T]he [Union] has been substituted for the Member States in relation to commitments under [the] GATT, as … confirmed by the Court of Justice in the judgments cited [International Fruit and Nederlandse Spoorwegen]’: Case 266/81, Società Italiana per l’Oleodotto Transalpino (SIOT) v Ministero delle finanze, Ministero della marina mercantile, Circoscrizione doganale di Trieste and Ente autonomo del porto di Trieste, ECLI:EU:C:1983:77, para 9. 28 Joined Cases 267/81, 268/81 and 269/81, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI) and SpA Michelin Italiana (SAMI), ECLI:EU:C:1983:78. See this volume, ch 15. 29 R Schütze, Foreign Affairs and the EU Constitution: Selected Essays (Cambridge University Press, 2014) 111. This was despite the author relying heavily on International Fruit alone, without so much as mentioning Nederlandse Spoorwegen, which is a clearer exertion of the doctrine. 30 I MacLeod, ID Hendry and S Hyett, The External Relations of the European Communities: A Manual of Law and Practice (Clarendon Press, 1996) 236. 31 For a fuller discussion, see M Cremona, ‘Member States as Trustees of the Union Interest: Participating in International Agreements on Behalf of the European Union’ in A Arnull et al (eds), A Constitutional Order of States? Essays in EU Law in Honour of Alan Dashwood (Hart Publishing, 2011) 446–49. 32 J Sack, ‘The European Community’s Membership of International Organizations’ (1995) 32 CML Rev 1227, 1237.
International Agreements of EU Member States and the Doctrine of Substitution 63 its limitations. After all, the EU never formally acceded to the GATT.33 Much later, with the establishment of the WTO and the EU becoming one of its founding members,34 the use of the doctrine of substitution was to be needed less regarding international trade matters. Outside of the realm of the Common Commercial Policy, examples of the Union substituting its Member States, and thereby taking on commitments from such international agreements, are rare. Nederlandse Spoorwegen remains one of the few cases of substitution that is expressly recognised in the case law of the Court.35 Customs unions between states are still an uncommon phenomenon in the world economy, despite their formation being permitted under international trade law. Given the existence of the principle of most favoured nation, a customs union can only be created if its ‘duties and other restrictive regulations of commerce … are eliminated with respect to substantially all the trade between the constituent territories’.36 The Court in Nederlandse Spoorwegen all but confirmed that the EU Customs Union met the threshold set down by the GATT.37 Coupled with that, whilst the EU is not a member of the modern World Customs Organization (WCO), it does have a status akin to membership,38 given the legal limitations of the WCO for other international organisations being members. This is what has been called ‘de facto membership’ of the EU.39 C. Substitution in EU Law and Not Succession in International Law It has been suggested that succession appeared to be the principle the Court was getting at in Nederlandse Spoorwegen, despite not using the term in the case.40 Substitution can be seen in EU law as a ‘process of succession’,41 but there is a need to mark a distinction between the two concepts, for they exist in different legal orders. From the perspective of international law, Nederlandse Spoorwegen has been recognised as ‘succession of the [Union] to its Member States in treaties relating to matters falling under … both [Union] [l]aw and international law’,42 but substitution and succession are fundamentally different concepts, for succession in international law is much more nuanced. The terminological usage of succession and substitution in international law and EU law has never fully been settled.43 In effect, the doctrine of substitution in the EU legal order has meant that the GATT and the 1950 Nomenclature
33 C-D Ehlermann, ‘Application of GATT Rules in the European Community’ in M Hilf, FG Jacobs and E-U Petersmann (eds), The European Community and GATT (Kluwer Law and Taxation Publishers, 1986) 132. 34 See T Perišin, ‘World Trade Organization (WTO): The EU’s Influential Role in Global Trade Policy’ in RA Wessel and J Odermatt (eds), Research Handbook on the EU’s Engagement with International Organisations (Edward Elgar, 2019). 35 A Rosas, ‘The Charter and Universal Human Rights Instruments’ in S Peers et al (eds), The EU Charter of Fundamental Rights: A Commentary (Hart Publishing, 2014) 1688. 36 Art XXIV(8) GATT 1947. 37 Nederlandse Spoorwegen (n 1) para 14. 38 See T Yamaoka, ‘The De Facto Accession of the European Communities to the World Customs Organization: Process and Significance’ (2013) 8 Global Trade and Customs Journal 92. For more on EU accession to the WCO, see F Hoffmeister, ‘Outsider or Frontrunner? Recent Developments under International and European Law on the Status of the European Union in International Organizations and Treaty Bodies’ (2007) 44 CML Rev 41, 43–44. 39 RA Wessel and J Odermatt, ‘The European Union’s Engagement with Other International Institutions: Emerging Questions of EU and International Law’ in Wessel and Odermatt (n 34) 14–15. 40 TC Hartley, The Foundations of European Union Law, 8th edn (Oxford University Press, 2014) 193. 41 GF Mancini, Democracy and Constitutionalism in the European Union: Collected Essays (Hart Publishing, 2000) 91. 42 E-U Petersmann, ‘Application of GATT by the Court of Justice of the European Communities’ (1983) 20 CML Rev 397, 399. 43 R Schütze, ‘The “Succession Doctrine” and the European Union’ in Arnull et al (n 31) 476.
64 Graham Butler was to be treated by all parties, in EU law, as if the international agreement was concluded by the Union. D. Beyond a Plain Reading of Treaty Provisions on International Agreements A textual read of Article 216(2) TFEU44 suggests that the Union is only active with regard to international agreements that it has concluded itself. Yet this would be a misreading. Both International Fruit and Nederlandse Spoorwegen have confirmed that Member States have sought to be bound by international agreements of EU Member States, as demonstrated by their actions of conferring applicable powers on the Union. Also of particular regard, therefore, is Article 351 TFEU.45 It states, inter alia, that: The rights and obligations arising from agreements concluded before … 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties.
Another textual read of Article 351 TFEU implies there can be no substitution of the Member States by the Union for pre-1958 agreements, given that it does not entail an automatic extension of Union powers. Yet that again would be misleading. As the Court subsequently noted in Burgoa, Article 351 TFEU would not be realised ‘if it did not imply a duty on the part of the institutions of the [Union] not to impede the performance of the obligations of Member States which stem from a prior agreement’.46 Yet, the exception to this is when the Union is bound by the Member States that have been substituted. The fact that Nederlandse Spoorwegen more clearly carved out this exception from Article 351 TFEU has been largely unrecognised.47 Intriguingly, however, contrary to the EU Treaties, the Euratom Treaty’s equivalent provision of Article 351 TFEU – Article 106 Euratom – explicitly provides for such substitution.48 E. Substitution beyond Exclusive Competence, and its Limits and Conditions At the time of Nederlandse Spoorwegen being decided, the issue of exclusive competence was only beginning to be dealt with,49 and was not yet an active question on the docket of the Court. Substitution of the Union for its Member States is not solely confined to areas where the Union has exclusive competence. Whilst the actual exercise of powers attributed to the 44 Previously Art 300(7) EC (Amsterdam), Art 228(7) EC (Maastricht) and Art 228(2) EEC (Rome). 45 Previously Art 307 EC (Amsterdam, Nice) and, again, Art 234 EEC (Rome). 46 Case 812/79, Attorney General v Juan C Burgoa, ECLI:EU:C:1980:231, para 9. See this volume, ch 12. 47 Exceptionally, K Lenaerts and E De Smijter, ‘The European Union as an Actor under International Law’ (1999) 19 Yearbook of European Law 95, 120. 48 Art 106 Euratom: ‘Member States which, before 1 January 1958 or, for acceding States, before the date of their accession, have concluded agreements with third states providing for cooperation in the field of nuclear energy shall be required to undertake jointly with the Commission the necessary negotiations with these third states in order to ensure that the rights and obligations arising out of such agreements shall as far as possible be assumed by the Community. Any new agreement ensuing from such negotiations shall require the consent of the Member State or States signatory to the agreements referred to above and the approval of the Council, which shall act by a qualified majority’ (emphasis added). 49 P Eeckhout, The European Internal Market and International Trade: A Legal Analysis (Clarendon Press, 1994). 438. Note: the Opinion of the Court in Opinion 1/75, ECLI:EU:C:1975:145, the first case elaborating on exclusive competence, was delivered just one week prior to its judgment in Nederlandse Spoorwegen. See this volume, ch 4.
International Agreements of EU Member States and the Doctrine of Substitution 65 Union is necessary,50 it has been pointed out that the doctrine of substitution may be applicable in areas where there is ‘joint responsibility’,51 such as shared competence. The fact that international agreements are entered into by Member States in what has been labelled as ‘collective commitments’52 is significant, but not determinative. Whilst Nederlandse Spoorwegen confirmed that the doctrine of substitution of the Member States by the Union in international fora was possible, it did not mean that it would always be so. For instance, in Commune de Mesquer, the Court held that if EU Member States were not all contracting parties to an international agreement, it cannot be said that the Union has substituted its Member States.53 Yet, even when all EU Member States are a contracting party to an international agreement, that is not enough. As held in Bogiatzi, simply because all EU Member States are parties to a convention (in Bogiatzi, the Warsaw Convention)54 does not mean that the Union has assumed power for such agreements, because EU secondary law does not cover all matters within that international agreement.55 If only some EU Member States are a party, it cannot bind the Union.56 In the modern age, therefore, two cumulative conditions need to be in place for the doctrine of substitution to be seen: firstly, all EU Member States must have acceded to an international agreement; and secondly, internal powers must be fully conferred upon the Union. Otherwise, the Union would not be able to fulfil its rights and obligations under an international agreement of its Member States. V. ADDITIONAL READING Barav, A, ‘The Division of External Relations Powers between the European Economic Community and the Member States in the Case-Law of the Court of Justice’ in C Timmermans and ELM Völker (eds), Division of Powers between the European Communities and Their Member States in the Field of External Relations (Deventer, Kluwer, 1981) 44–45. Cheyne, I, ‘International Agreements and the European Community Legal System’ (1994) 19 EL Rev 581. Holdgaard, R, External Relations Law of the European Community: Legal Reasoning and Legal Discourses (Alphen aan den Rijn, Kluwer Law International, 2008) 195–205. Koutrakos, P, EU International Relations Law (Oxford, Hart Publishing, 2006) 218–20. Lasok, D, The Trade and Customs Law of the European Union, 3rd edn (London, Kluwer Law International, 1998) 254–55. Lenaerts, K and Van Nuffel, P (R Bray and N Cambien, eds), European Union Law, 3rd edn (London, Sweet & Maxwell, 2011) 861–62. Oliver, P and Yataganas, X, ‘The Harmonised System of Customs Classification’ (1987) 7(1) Yearbook of European Law 113.
50 Lenaerts and De Smijter (n 47), 120. 51 P VerLoren van Themaat, ‘The Impact of the Case Law of the Court of Justice of the European Communities on the Economic World Order’ (1984) 82 Michigan Law Review 1422, 1430. 52 Pescatore (n 3) 635. 53 Case C-188/07, Commune de Mesquer v Total France SA and Total International Ltd, ECLI:EU:C:2008:359, para 85. 54 Unification of Certain Rules Relating to International Carriage by Air. 55 Case C-301/08, Irène Bogiatzi, married name Ventouras v Deutscher Luftpool and Others, ECLI:EU:C:2009:649, paras 29–33. Similarly, Case C-308/06, The Queen, on the application of International Association of Independent Tanker Owners (Intertanko) and Others v Secretary of State for Transport, ECLI:EU:C:2008:312, para 49. See this volume, ch 52. 56 For example, in Burgoa (n 46) para 9.
66 Graham Butler Petersmann, E-U, ‘Participation of the European Communities in the GATT: International Law and Community Law Aspects’ in D O’Keeffe and HG Schermers (eds), Mixed Agreements (Deventer, Kluwer Law and Taxation Publishers, 1983) 178–83. Usher, J, ‘Consequences of the Customs Union’ in N Emiliou and D O’Keeffe (eds), The European Union and World Trade Law: After the GATT Uruguay Round (Chichester, John Wiley and Sons, 1996) 113–14. VerLoren van Themaat, P, ‘The Impact of the Case Law of the Court of Justice of the European Communities on the Economic World Order’ (1984) 82 Michigan Law Review 1422. Völker, ELM and Steenbergen, J, Leading Cases and Materials on the External Relations Law of the EC (with Emphasis on the Common Commercial Policy) (Deventer, Kluwer Law and Taxation Publishers, 1985) 164–68. White, G, ‘Effects of International Treaties within the Community Order’ (1976) 1 EL Rev 402.
6 Establishing Direct Effect of Provisions in International Agreements: Bresciani TIMOTHY ROES Case 87/75, Conceria Daniele Bresciani v Amministrazione Italiana delle Finanze, ECLI:EU:C:1976:18, delivered 5 February 1976. KEYWORDS Direct effect – International agreements concluded by the Union – Mixed agreements – Reciprocity – Yaoundé Convention – Monism – Colonies – Countries and territories with special relations with Member States.
I. INTRODUCTION
I
n the early 1970s, the effect of international agreements in the EU legal order was still up in the air. Arguing that the Treaty was different from an ordinary international agreement, the Court had made bold statements of principle about the relationship between Union law and national legal orders.1 But would the EU legal order be as open towards international law as it demanded Member States to be towards Union law?2 What little case law existed sent mixed signals. Did international agreements need some form of incorporation in order to become part of Union law or not?3 Did their provisions need to be given direct effect before they could be invoked, even merely as a yardstick for legality, or had Haegeman and Nederlandse Spoorwegen abandoned that rigid stance?4 If not, would the 1 Case 26/62, Van Gend & Loos, ECLI:EU:C:1963:1, 12; Case 6/64, Costa v ENEL, ECLI:EU:C:1964:66, 593. 2 cf the Opinion of Advocate General Mayras in Cases 21–24/72, International Fruit Company, ECLI:EU:C:1972:89, 1233–34, which argued that it was ‘inconceivable’, with respect to the question of primacy of international agreements concluded by the Union, ‘to apply two different systems of reasoning according to whether it is a question of relations between the legal systems within the [Union] or relations governed by [Union] law and external international law’. By contrast, the Opinion of Advocate General Trabucchi in Case 87/75, Bresciani, ECLI:EU:C:1976:3, 148–49, did draw a principled distinction between, on the one hand, agreements ‘put into effect under a system of law other than that of the [Union], namely general international law’ and, on the other hand, Union law, ‘the essential nature of which clearly distinguishes the legal order of the [EU] from that of international law’. 3 Case 181/73, Haegeman, ECLI:EU:C:1974:41, para 5 suggested as much, but was not conclusive, as evidenced by the Opinion of Advocate General Trabucchi in Bresciani (n 2) 144. See this volume, ch 3. 4 Haegeman (n 3); Case 38/75, Nederlandse Spoorwegen, ECLI:EU:C:1975:154 See this volume, ch 5.
68 Timothy Roes conditions for direct effect indeed be stricter than for similarly worded provisions in Union law, as International Fruit seemed to suggest?5 By the time Bresciani was lodged, the Court had yet to come across an international agreement that was capable of being applied directly in the EU legal order. Against that background, Bresciani was an ideal case for the Court to clarify the law on this point. First, the Yaoundé Conventions were the polar opposite of the General Agreement on Tariffs and Trade (GATT), which the Court had repeatedly denied direct effect. Second, the relevant provisions in the international agreement did nothing more than refer explicitly to provisions in the EU Treaties of which the Court had confirmed in Van Gend en Loos and later case law that they possessed direct effect. It was therefore an excellent opportunity to clarify whether the mere fact that these provisions were part of an international agreement, instead of the EU Treaties, had an effect on the direct effect doctrine. II. FACTS
In 1969 and 1970, the Conceria Bresciani imported several consignments of raw cowhides into Italy from France and Senegal – the latter of which was a state associated with the Union by the Yaoundé Conventions. Upon importation, the Italian customs authorities levied a veterinary and public health inspection duty, which Bresciani paid. This flat-rate charge had existed for several decades, but had been increased a year earlier. It was presented by the Italian authorities as intended to compensate for the costs of the compulsory public health inspection of imported products of animal origin.6 Bresciani brought an action before a national court in Genoa seeking repayment of the duty. With respect to the imports from France, it argued that the duty violated Article 13(2) EEC (now Article 30 TFEU), which requires Member States progressively to abolish customs duties on imports and charges having equivalent effect during a transitional period. As far as the duty levied on imports from Senegal were concerned, Bresciani correspondingly claimed that it infringed Article 2(1) of the Yaoundé Conventions of 1963 or 1969, depending on the moment of importation. According to the 1963 version of that provision, goods originating in associated states shall, when imported into Member States, benefit from the progressive abolition of customs duties and charges having an equivalent effect to such duties, resulting between Member States under the provisions of Articles 12, 13, 14, 15 and 17 of the Treaty …
The Genoa court made a reference for a preliminary ruling to the Court, focused primarily on whether the pecuniary charge levied for the purposes of a compulsory public health inspection constituted a charge having an effect equivalent to customs duties under Article 13(2) EEC (now Article 30 TFEU). Yet, the referring court also asks the Court whether the notion of ‘charges having an effect equivalent to customs duties’ has the same meaning in Article 13(2) EEC (now Article 30 TFEU) and Article 2(1) of the two Yaoundé Conventions, and whether Article 2(1) of the 1963 Convention has ‘immediate effect’ and confers a right on individuals not to pay the charges at issue.
5 Opinion
6 Case
of Advocate General Trabucchi in International Fruit (n 2). See this volume, ch 2. 87/75, Bresciani, ECLI:EU:C:1976:18, paras 2–3.
Establishing Direct Effect of Provisions in International Agreements 69 III. THE COURT
The judgment of the Court first tackled the question whether the charges levied by Italy on the imports from France violate Article 13(2) EEC (now Article 30 TFEU). Referring to Marixmex,7 the Court held that they do: inspections in the general interest cannot be regarded as a service rendered to the importer, and so, if they are still allowed at the end of the transitional period, must be met by the general public (the public purse), which, as a whole, benefits from the free movement of goods between Member States.8 The Court then moved onto the goods imported from Senegal. Without really explaining why, the Court switched up the order of the questions in the order for reference. It simply announced that the first question to be considered is whether the Yaoundé Convention of 1963 ‘confers on those subject to [Union] law the right to rely on it in order to challenge the imposition of a national duty’. Echoing more or less the direct effect test from International Fruit, the judgment held that, to do so, ‘regard must be simultaneously paid to the spirit, the general scheme and the wording of the Convention and of the provision concerned’.9 In carrying out that analysis, the Court spent a considerable number of paragraphs discussing the purpose, context and nature of the Yaoundé Conventions. To start, the judgment explained that the 1963 Convention furthered the objective mentioned in Article 131 EEC (now Article 198 TFEU) and originally pursued by the Implementing Convention annexed to the EU Treaties: to promote the economic, social and cultural development of the (ex-)colonies of the founding Member States.10 It was only because these countries and territories became independent that the regime in the Implementing Convention was replicated in an international agreement, which the Court noted was mixed in nature and binding on both the Union and its Member States.11 The Court then turned to an analysis of the provisions of the Yaoundé Convention of 1963, from which it concluded that the Convention did not aim to ensure equality between the obligations assumed by the Union, on the one hand, and the other contracting states, on the other.12 This ‘imbalance’ was borne out by Articles 2(5), 3(2), second paragraph, and 61 of the Convention, which allowed the associated states to depart from the obligation to abolish charges having an equivalent effect if they consider themselves not yet able to offer the Union the same reciprocity.13 The Court concluded that the Yaoundé Convention had a ‘special nature’ in which the ‘imbalance between the obligations assumed by the [Union] towards the Associated States’ is inherent. Crucially but somewhat ambiguously, the Court then held that this imbalance – in other words, this lack of reciprocity – ‘does not prevent recognition by the [Union] that some of [the Convention’s] provisions have direct effect’.14 Finally, the Court briefly examined whether Article 2(1) of the Yaoundé Convention of 1963 specifically has direct effect, and held that it did. The fact that the abolition of charges having an equivalent effect must proceed automatically made the provisions sufficiently
7 Case
29/72, Marimex, ECLI:EU:C:1972:126. (n 6) para. 10. 9 ibid para 16. 10 ibid para 17. 11 ibid para 18. 12 ibid para 22. 13 ibid para 21. 14 ibid para 23. 8 Bresciani
70 Timothy Roes unconditional, though the Court did not expressly use that term.15 Moreover, the content of that obligation was sufficiently clear and precise: given that Article 2(1) expressly referred to Article 13 EEC (now Article 30 TFEU), the obligation that the [Union] undertook towards the associated states to abolish charges having equivalent effect was precisely the same obligation that, in the EU Treaties, the Member States assumed towards each other.16 This obligation was ‘specific’ and ‘not subject to any implied or express reservation’ on the part of the Union, and therefore it was capable of conferring the right to rely on it before the courts on those subject to Union law.17 On that basis, the judgment concluded that national courts must protect this right by disapplying the charges having an equivalent effect to customs duties.18 IV. THE IMPORTANCE OF THE CASE
Bresciani is the first case in which the Court accepted that the provisions of an international agreement concluded by the Union conferring rights on an individual had direct effect.19 It is also the first case in which an individual (successfully) invoked an international agreement to contest national (as opposed to Union) measures. In doing so, the judgment not only confirmed that direct effect was essential to the working of an international agreement in the EU legal order, but also established that the absence of substantive reciprocity in an international agreement was a boon to its capability of direct effect. Nonetheless, the fact that the judgment’s holding is closely linked to the special nature of the Yaoundé Convention has attenuated its use as a precedent. A. Direct Effect is a Precondition for Invoking International Agreements The very fact that the judgment examined whether Article 2(1) of the Yaoundé Convention had direct effect was important. The case law was equivocal as to whether an international agreement needed to have direct effect for the Court to be able to use it as a yardstick against which it could review the validity of Union measures, or even for the agreement to be able to have any effect in the EU legal order at all. In International Fruit and Schlüter, the Court had said that the validity of acts of the institutions could not be tested against a rule of international law ‘unless that rule is binding on the [Union] and capable of creating rights of which interested parties may avail themselves in a court of law’.20 But in Haegeman and
15 ibid para 24. This was only so for the Union. The associated states were allowed to prompt consultations on the conditions of application of Art 2. 16 While this aspect of the judgment is not discussed below, it is worth noting that Advocate General Trabucchi warned in his opinion that ‘it is not possible to read into [the provisions of the Yaoundé Convention at issue] all the implications which affect relationships within the common market and which are justified only on the basis of the process of integration which the EEC) Treaty has established between Member States’ (Opinion of Advocate General Trabucchi in Bresciani (n 2) 147). The Court would soon say as much in Case 270/80, Polydor, ECLI:EU:C:1982:43, para 15. See this volume, ch 13. 17 ibid para 25. 18 ibid para 26. 19 G Bebr, ‘Agreements Concluded by the Community and their Possible Direct Effect: From International Fruit Company to Kupferberg’ (1983) 20 CML Rev 35, 48. 20 Case 9/73, Schlüter, ECLI:EU:C:1973:110, para 27. See to the same effect Opinion of Advocate General Trabucchi in International Fruit (n 2) para. 8. See this volume, ch 2.
Establishing Direct Effect of Provisions in International Agreements 71 Nederlandse Spoorwegen, the Court did just that without stopping to consider whether the relevant rule conferred rights on individuals.21 Was this because the Court did not make a conceptual distinction between direct effect and direct applicability?22 If so, International Fruit and Haegeman were essentially concerned with the same question: whether the provisions of an international agreement were more than instructions directed at the legislator (who would have to implement them) and meant to be applied by the courts, too.23 But why, then, did only the former judgment enquire into the ‘spirit, general scheme and terms’ of the international agreement in order to determine whether the relevant rules contained therein were capable of creating rights for individuals?24 Was it perhaps because the GATT, the agreement at issue in that judgment, had not been formally adopted by the Union, unlike the association agreement at issue in Haegeman?25 Did it have to do with the fact that International Fruit was a direct action?26 Or did this additional requirement go to the self-executing character of the agreement and had it been implicit in Haegeman?27 Bresciani did not fully clear up this confusion,28 but it was seen as evidence that direct effect, that is, the capability of a norm to create rights for individuals of which they may avail themselves in court, was the prism through which to consider all questions concerning the working of international agreements in the EU legal order.29 While the judgment cursorily mentioned that the international agreement was binding on the Union,30 that was not enough. Unlike in Haegeman and Nederlandse Spoorwegen,31 the Court, prior to engaging in an interpretation of Article 2(1) of the Yaoundé Convention of 1963, insisted that it needed to consider whether this provision ‘confers on those subject to [Union] law the right to rely on it in order to challenge the imposition of a national duty’. While it is true that the national court had specifically asked the Court about this, the Court switched up the order of the questions and first dealt with the question of direct effect.32 That suggests that this was key either to the Court’s jurisdiction33 or to the international agreement’s ability (qua Union law) to require a national court to set aside national measures that are incompatible with it. Thus, Bresciani confirmed
21 Haegeman (n 3). See this volume, ch 3; Nederlandse Spoorwegen (n 4) paras 13–19. See this volume, ch 5. 22 Compare JA Winter, ‘Direct Applicability and Direct Effect: Two Distinct and Different Concepts in Community Law’ (1972) 9 CML Rev 425 with J Klabbers, ‘International Law in Community Law: The Law and Politics of Direct Effect’ (2001) 21 Yearbook of European Law 263, 272 et seq. 23 KM Meessen, ‘The Application of Rules of Public International Law within Community Law’ (1976) 13 CML Rev 485, 492. 24 Opinion of Advocate General Trabucchi in International Fruit (n 2) para 20. Meessen (n 23) 495; I Cheyne, ‘Haegeman, Demirel and their Progeny’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 20, 23. 25 Cheyne (n 24) 23–24; ELM Völker, ‘The Direct Effect of International Agreements in the Community’s Legal Order’ (1983) 10 Legal Issues of Economic Integration 131, 143. 26 M Waelbroeck, ‘Effect of GATT within the Legal Order of the EEC’ (1974) 8 Journal of World Trade 614, 622; I Cheyne, ‘International Agreements and the European Community Legal System’ (1994) 19 EL Rev 581, 590. 27 PJG Kapteyn, ‘The “Domestic” Law Effect of Rules of International Law within the European Community System of Law and the Question of the Self-Executing Character of GATT Rules’ (1974) The International Lawyer 8, 74, 76; Cheyne, ‘Haegeman, Demirel and their Progeny’ (n 24) 24. 28 See, many years later, Case C-308/06, Intertanko, ECLI:EU:C:2008:312, paras 64–65 and the observations by N Hachez, ‘Case C-308/06, International Association of Independent Tanker Owners and Others: The Requirement of Direct Effect in the Judicial Review of EU Law Against International Law’ (2008–09) 15(1) Columbia Journal of European Law 143, 156. See this volume, ch 52. 29 Bebr (n 19) 47; Klabbers (n 22) 275. 30 Bresciani (n 6) para 18. 31 See also Case 112/80, Dürbeck, ECLI:EU:C:1981:94. See Bebr (n 19) 47. 32 Bebr (n 19) 48. 33 Cheyne, ‘International Agreements’ (n 26) 590.
72 Timothy Roes that International Fruit was still good law, and extended it to the situation where an individual challenged the lawfulness of national measures. B. Factors Irrelevant to Direct Effect: Mixity and the Legal Instrument Concluding an International Agreement At the time, Bresciani was cited as authority on two points that now seem obvious: neither the fact that it was a mixed agreement nor that it had been concluded by way of a sui generis Decision, rather than as a Regulation,34 prevented it from having effect in the EU legal order. While Bresciani was not the first time that the Court treated an international agreement concluded jointly by the Union and its Member States as part of Union law, it was the first case in which it explicitly acknowledged this peculiarity.35 Moreover, the Court added that ‘by virtue of [Article 216(2) TFEU]’, such agreements bind both the Union and the Member States.36 It thus extended the application of that provision, which speaks of international agreements ‘concluded by the Union’, to agreements concluded jointly by the Union and its Member States.37 What it did not do, however, was ask whether the provisions of the mixed agreement that it was asked to interpret fell within the scope of Union competence.38 The judgment also established that the nature of the legal instrument by which the Council approved the agreement was irrelevant to whether the agreement had direct effect. The Yaoundé Convention had been concluded by way of a Decision of the Council.39 This was a so-called sui generis Decision (Beschluss, Besluit), because it did not fit the definition of a Decision mentioned in Article 189 EEC (now Article 288 TFEU) inasmuch as it was not addressed to the Member States. Concluding an international agreement by way of a decision went against the practice of using Regulations for this purpose.40 Regulations were, by definition, directly applicable and so were a way of coping with the uncertainty41 as to whether international agreements somehow needed to be incorporated in order fully to become law within the Union. As the Court accepted that the Yaoundé Convention could create provisions that applied directly in the EU legal order, notwithstanding the fact that it had been concluded by way of a Decision, it strengthened the notion that Haegeman had indeed endorsed a monist attitude towards international law.42 34 Decision of the Council of 5 December 1963 [1964] OJ 1430. 35 Bresciani (n 6) para. 18; P Pescatore, ‘External Relations in the Case-Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615, 634. 36 ibid. 37 This point would be confirmed in Case 104/81, Kupferberg, ECLI:EU:C:1982:362, para 11. See this volume, ch 14. 38 Bebr (n 19) 42. 39 Decision of the Council (n 34) 1430. 40 JHJ Bourgeois, ‘The Tokyo Round Agreements on Technical Barriers and on Government Procurement in International and EEC Perspective’ (1982) 19 CML Rev 6, 26. 41 See above n 3; R Kovar, ‘Les Accords Liant les Communautés Européennes et l’Ordre Juridique Communautaire: À Propos d’une Jurisprudence Récente de la Cour de Justice’ (1974) 17 Revue du Marché Commun et de l’Union européenne 345, 352; J Rideau, ‘Les Accords Internationaux dans la Jurisprudence de la Cour de Justice des Communautés Européennes’ (1990) 94 Revue General de Droit International Public 287, 311–12; K Lenaerts, ‘Droit international et monism de l’ordre juridique de l’Union’ [2010] Revue de la Faculté de droit de l’Université de Liège 499, 502. 42 P Pescatore, ‘L’application judiciaire des traités internationaux dans la Communauté européenne et dans ses États membres’ in P Manin et al (eds), Études de droit des Communautés européennes: Mélanges Pierre-Henri Teitgen (Paris, Pedone 1984) 355; Kovar (n 42) 353. See the Opinion of Advocate General Rozès in Case 270/80, Polydor, ECLI:EU:C:1981:286, 353, confirming that, when a regulation is used to conclude an agreement, that regulation’s function is ‘merely instrumental’ and alters neither the terms or the scope of the agreement.
Establishing Direct Effect of Provisions in International Agreements 73 C. Direct Effect Depends on the Nature of the International Agreement and Reciprocity is a Factor Most importantly, Bresciani introduced the notion of reciprocity as an element relevant in determining whether an international agreement is, in principle, capable of having direct effect. In doing so, the judgment brought home the point that direct effect depends not just on the wording of the provisions concerned and their place within the scheme of the agreement, but also on the nature of the international agreement as a whole. To start, the direct effect test that the Court applied in Bresciani exalted the nature of the international agreement as an element to be considered. To determine whether Article 2(1) of the Yaoundé Convention was capable of conferring rights on individuals, ‘regard [had to] be simultaneously paid to the spirit, the general scheme and the wording of the [agreement] and of the provisions concerned’.43 This formulation was slightly more precise than that in International Fruit – which the Court did not cite. It clarified that, in examining the ‘terms’ of an international agreement, one ought to consider the wording of both the specific provisions under consideration and of the agreement as a whole. As Kupferberg would later confirm,44 the direct effect test was thus two-pronged: the effect of the provisions of an agreement in EU law depended just as much on whether the agreement as a whole was capable of being directly applied as it did on whether the relevant provisions were sufficiently precise and unconditional to be judicially applicable.45 This point would be borne out by the rest of the judgment, which devoted significant attention to former point while giving only cursory treatment to the latter.46 When it comes to the nature of the agreement, reciprocity loomed large as a potential factor after the Court had mentioned the term in International Fruit and then again in Schlüter.47 These judgments had denied direct effect to the GATT because that agreement was ‘characteri[s]ed by the great flexibility of its provisions’. In the same breath, they had observed that this agreement was, according to its preamble, ‘based on the principle of negotiations undertaken on the basis of reciprocal and mutually advantageous arrangements’.48 The judgments had stopped short, however, of explaining why these characteristics prevented the GATT from having direct effect. Was it due to the flexibility of the GATT rules, which implied that they were not unconditional?49 Or did the reciprocal nature of the agreement play a part, too? Reciprocity comes into play at different stages of an international agreement’s life.50 There is the substantive reciprocity during the creation of a treaty, which denotes the ‘equivalence 43 Bresciani (n 6) para 16. 44 Kupferberg (n 37) paras 22–23. 45 Cheyne, ‘Haegeman, Demirel and their Progeny’ (n 24) 22. 46 For instance, the point made in note 16 was not dealt with by the judgment. It is interesting to note that the parties’ submissions to the Court paid little to no attention to the nature of the agreement, focusing their argumentation on the explicit, precise and unconditional nature of the provisions and on the equivalence between the notion of charges having equivalent effect in the Yaoundé Convention and the EEC Treaty. This much is clear from the report for the case file at the Historical Archive (Dossier de Procédure Original: Affaire 87/75. Fonds Code: CJUE-1743. Original Code: C2-25-090, 55, 81, 127, 128 and 130). 47 Schlüter (n 20) para 29. 48 Opinion of Advocate General Trabucchi in International Fruit (n 2) para 21. 49 As the Court would later hold in Case C-280/93, Germany v Council, ECLI:EU:C:1994:367, paras 106–10. See this volume, ch 27. 50 See also Klabbers (n 22) 278, who makes sense of the case law discussed here by distinguishing between substantive reciprocity, reciprocity in performance and reciprocity in access to courts. More generally on reciprocity, see G Wils, ‘The Concept of Reciprocity in EEC Law: An Exploration into these Realms’ (1991) 28 CML Rev 245.
74 Timothy Roes of the mutual advantages deriving from treaty performance’.51 But reciprocity also plays a role in the observance and enforcement of international law. An international agreement may seek to establish the aforementioned equivalence by ‘making the application of a treaty by another party the exact measure for one’s own performance’52 and general international law allows the other parties to invoke a breach of a treaty obligation as a ground for suspending its operation.53 The Court’s resistance against granting direct effect to provisions of the GATT – in International Fruit, and more articulately in later judgments54 – had to do with reciprocity in the observance and enforcement of that agreement. Not only was the GATT explicitly committed to creating and maintaining reciprocity between trading partners as per its p reamble,55 this reciprocity was also central to the way in which legal disputes over the content of World Trade Organization (WTO) law were solved, namely through negotiations. Thus, the Court reasoned that (i) the spirit of the GATT did not require it to allow individuals to invoke provisions of that agreement in court if the Union’s trading partners did not do the same56 and (ii) if it would do so, the Court would ‘deprive the legislative or executive organs of the [Union] of the scope for manoeuvre enjoyed by their counterparts in the [Union’s] trading partners’ in the aforementioned negotiations,57 because they would not be able credibly to threaten non-performance.58 Curiously, in Bresciani, the Court was concerned with substantive reciprocity.59 Advocate General Trabucchi was most explicit about this, clarifying at the outset that he was not suggesting that the decision to grant direct effect to the provisions of an agreement be made dependent on the extent to which, in practice, these provisions were observed by the third party concerned.60 Rather, when an international agreement ‘concern[ed] identical mutual obligations and [was], therefore, based strictly on the criterion of reciprocity’, this negatively affected ‘whether [it was], in principle, capable of creating directly applicable provisions’. Taking a cue from the Advocate General, the Court likewise focused on the ‘equality’ or ‘balance’ between the obligations assumed by the Union, on the one hand, and the associated states, on the other hand. Both the Advocate General and the Court agreed that the Yaoundé Convention lacked such substantive reciprocity.
51 B Simma, ‘Reciprocity’ in Max Planck Encyclopedia of Public International Law (Oxford University Press, 2008). 52 ibid. For example, Art 72(2)(a) of the Vienna Convention on Consular Relations. 53 See Art 60 of the Vienna Convention on the Law of Treaties. 54 See, eg Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574, paras 43–46. See this volume, ch 37; Case C-27/00 and C-122/00, Omega, ECLI:EU:C:2002:161, paras 89–92. 55 See the third paragraph of the preamble to the 1947 GATT, 55 UNTS 187: ‘… Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce’. 56 Portugal v Council (n 54) paras 43–45. The Court’s reasoning on this point has been criticized, see eg A von Bogdandy and J Bast, Principles of European Constitutional Law (Bloomsbury, 2009) ch 4; E Petersmann, ‘Application of GATT by the Court of Justice of the European Communities’ (1983) 20 CML Rev, 397, 427–28. 57 Portugal v Council (n 54) para 46. 58 Opinion of Advocate General Alber in Joined Cases C-27/00 and C-122/00, Omega, ECLI:EU:C:2001:470, points 92–93. Another way to put this is that, where an agreement allows for tit-for-tat style enforcement (such as Art 22.4 of the WTO Agreements), this is a good indication that direct effect is not required by the spirit of that agreement. 59 Klabbers (n 22) 278. 60 Opinion of Advocate General Trabucchi in Bresciani (n 2) 148–49. Admittedly, this is not exactly the same as saying that granting direct effect ought to be made dependent on whether a counterparty also grants direct effect. In fact, some commentators have maintained that, in international law, reciprocity in that sense was a criterion for direct effect. Arguing that this kind of reciprocity is not a sensible criterion for direct effect in the GATT context, see Petersmann (n 56) 427–28.
Establishing Direct Effect of Provisions in International Agreements 75 But though it appears tangential at first, the Court’s decision to focus on this other, more fundamental form of reciprocity is quite sensible. In the special case where an international agreement renounces such basic substantive equivalence, it stands to reason that derivative expressions of reciprocity concerning the observance and enforcement of the agreement do not apply either. As the presence of these forms of reciprocity had been an obstacle to direct effect in earlier cases, the total lack of reciprocity in the Yaoundé Convention of 1963 correspondingly ‘does not prevent [n’est pas un obstacle à] recognition by the [Union] that some of [the Convention’s] provisions have direct effect’.61 While, on a plain reading, this sentence gives the impression that the absence of reciprocity simply has no bearing on the question of direct effect, it takes on a richer meaning against the background of earlier GATT cases, where reciprocity had been the main obstacle. Unlike with the GATT,62 the Yaoundé Convention did not put the Court in a position where it felt that it had to make a political choice between the general Union interest and the interests of individual right holders. Much to the contrary:63 granting direct effect was favourable to the Union interest, because it would allow individuals to enforce their right cheaply to import goods from the (former) colonies into the Union. D. Direct Effect Stemming from the Special Nature of the International Agreement Importantly, in justifying the Yaoundé Convention’s capability of direct effect, this ‘imbalance in the obligations assumed by the contracting parties’ was not the sole factor, but worked alongside cognate language highlighting that this agreement was a prolongation of the association arrangements that had originally been established unilaterally by the EU Treaties.64 Per Article 131 EEC (now Article 198 TFEU), promoting the economic and social development of what at that time were still colonies of the founding six Member States was one of the stated objectives of the EU Treaties. To that end, an annex to the EU Treaties extended the benefits of the customs union and the common market to these ‘countries and territories which have special relations’ with the founding Member States while at the same time leaving them free to levy customs duties on imports. When the Implementing Convention annexed to the EU Treaties expired, several of the colonies had become independent, so the regime was replicated in an international agreement. Thus, the Yaoundé Convention was presented by the Court less like an ordinary international agreement and more like an extension of the EU Treaties. Being the legal successor to a treaty regime and (asymmetrically) extending an important part of Union law to third countries, this international agreement was of a ‘special nature’.65 Bresciani thus suggested that when a treaty’s objectives are this closely aligned with those of the EU Treaties, the Court was much more willing to accept that it is capable of creating rights for individuals.66 61 Bresciani (n 6) para 23. 62 S Gáspár-Szilágyi, ‘EU International Agreements through a US Lens: Different Methods of Interpretation, Tests and the Issue of “Rights”’ (2014) 39 EL Rev 601, 612. 63 In this sense, see HG Schermers, ‘The Direct Application of Treaties with Third States: Note Concerning the Polydor and Pabst Cases’ (1982) 19 CML Rev 565, 567. 64 Bresciani (n 6) paras 17–18. See also Case C-469/93, Chiquita Italia, ECLI:EU:C:1995:435, para 33. See in particular Arts 9–11 of the Implementing Convention, annexed to the 1957 Rome Treaty, according to which ‘the chapter of the Treaty regarding the abolition of quantitative restrictions between the Member States’ and ‘the customs regime in Articles 133 and 134 of the Treaty’ shall apply to trade between the Member States and the countries and territories mentioned in Annex IV to the Treaty. 65 Bresciani (n 6) para 23. 66 Gáspár-Szilágyi (n 62) 613. Conversely, see Polydor (n 16) para 18.
76 Timothy Roes The upshot was that Bresciani opened up a promising avenue towards direct effect for a limited category of international agreements, namely those that created a ‘special relationship’ between the Union and third states by unilaterally extending aspects of Union law to these countries. This was the case, for instance, for the Yaoundé Convention’s successor, the Lomé Convention, as the Court confirmed in Chiquita Italia.67 By contrast, Bresciani provided little guidance on the potential for direct effect in regular association or trade agreements.68 So, while Bresciani was symbolically important for being the first case in which an international agreement was recognised to create rights for individuals, both its reasoning and its holding were quite narrow. Closely connected as it was to the special nature of the Yaoundé Convention, the opening that Bresciani created was carefully circumscribed, thus clipping its wings as a precedent. V. ADDITIONAL READING Bebr, G, ‘Agreements Concluded by the Community and their Possible Direct Effect: From International Fruit Company to Kupferberg’ (1983) 20 CML Rev 35. Cheyne, I, ‘International Agreements and the European Community Legal System’ (1994) 19 EL Rev 581. Lenaerts, K, ‘Droit international et monism de l’ordre juridique de l’Union’ [2010] Revue de la Faculté de droit de l’Université de Liège 499. Meessen, KM, ‘The Application of Rules of Public International Law within Community Law’ (1976) 13 CML Rev 485. Völker, ELM, ‘The Direct Effect of International Agreements in the Community’s Legal Order’ (1983) 10(1) Legal Issues of Economic Integration 131.
67 Chiquita Italia (n 64) para 36. 68 See, eg Case 12/86, Demirel, ECLI:EU:C:1987:400. Pondering whether the trade agreements with the EFTA countries and Israel were likely to have direct effect in the wake of Bresciani, see JF Bellis, ‘International Trade and the Competition Law of the European Economic Community’ (1979) 16 CML Rev 647, 653.
7 Refining and Expanding Implied Powers of the Union: Kramer TOBIAS LOCK Joined Cases 3, 4, 6/76, Cornelis Kramer and Others, ECLI:EU:C:1976:114, delivered 14 July 1976. KEYWORDS Implied powers doctrine – Distinction between existence and nature of implied competence – EU competence outside the jurisdiction of the Member States – Exclusive EU competence over marine and biological resources of the sea – Negative and positive duties under the duty of sincere cooperation.
I. INTRODUCTION
T
he Kramer case confirmed, refined and expanded the implied powers doctrine formulated by the Court in ERTA five years earlier. Kramer therefore did numerous things. It confirmed the existence of the ERTA doctrine by applying it (again); it clarified ERTA by drawing the distinction between the existence of an implied power and its exclusive or shared nature; and it expanded the implied powers doctrine by holding that the scope of the EU’s competence was not limited to the precise subject matter of the existing internal rules, so that an implied power could even arise from internal rules empowering the Union to adopt substantive rules. Furthermore, Kramer contended that an implied power could extend to areas over which the Member States themselves had no jurisdiction under international law, but which – as states and ‘born’ subjects of international law – they could regulate in concert with other states by concluding international agreements. Kramer thereby heralded the extraterritorial reach of EU law. Kramer finally reiterated the seminal role of the duty of sincere cooperation in EU external relations, demonstrated how it constrains Member States’ room for manoeuvre in the external sphere and provided crucial impetus for the development of the Union’s Common Fisheries Policy (CFP), both internally and externally. II. FACTS
The preliminary references in Kramer originated in criminal proceedings brought against Dutch fishermen for violations of Dutch fishing rules. These rules specified both the quota for
78 Tobias Lock fishing plaice and sole in the North Sea, as well as the size of the trawlers that could be used to fish for them. The Dutch rules had been adopted to implement commitments entered into by the Netherlands under the North-East Atlantic Fisheries Convention of 1959 (NEAFC).1 The NEAFC was an international agreement concluded between seven of the EU’s then nine Member States (the two exceptions being Luxembourg and Italy), as well as a number of other states with fishing interests in the North-East Atlantic Ocean. The NEAFC created a Fisheries Commission which had the power to make binding recommendations, inter alia, on ‘the amount of the total catch and its allocation to contracting states’, as well as on the ‘regulation of the amount of fishing effort and its allocation for any period’. The defendants in the criminal proceedings before two district courts (Arrondissementsrechtsbanken) had been charged with fishing for sole in contravention to the rules implementing the Fisheries Commission’s recommendations. The defendants argued that the Dutch regulations were incompatible with EU law on the Common Agricultural Policy (CAP), which includes fisheries policy and the free movement of goods. Crucially, for the purposes of this chapter, the defendants also argued that the EU had an exclusive competence to conclude international agreements for maintaining fish stocks, so that the Netherlands had been pre-empted from concluding the NEAFC. The case therefore centred on the question whether the conclusion of the NEAFC by the Netherlands was compatible with EU law and – by extension – whether the national rules adopted to implement the NEAFC were applicable in this case and could be used as a basis for prosecuting the defendants. At the time of the judgment, the EU did not have an express external competence concerning the subject matter of the dispute. The EU’s internal competence on fisheries formed part of the CAP.2 However, it took the EU a number of years from its foundation to take its first steps towards formulating a CFP, which occurred with the adoption of Regulations 2141/70 and 2142/70,3 which were both of relevance in Kramer. Regulation 2141/70 envisaged the adoption of common rules for fishing in maritime waters, inter alia, in order to ‘encourage the rational use of the biological resources of the sea’, and Regulation 2142/70 provided the basis for the establishment of a common market in fisheries products, including a price system. Moreover, Article 102 of the 1972 Act of Accession – the treaty basis for the first enlargement of the EU that included Denmark, Ireland and the UK – provided that from the sixth year after accession at the latest, the Council ‘shall determine conditions for fishing with a view to ensuring protection of the fishing grounds and conservation of the biological resources of the sea’. At the time of the facts of the Kramer case, the Council had not yet adopted any further measures implementing Article 102 of the Act of Accession. Equally, no further measures under the two Regulations had been adopted. III. THE COURT
As far as the EU’s external competence to act in the area of fisheries was concerned, the Court’s judgment in Kramer addressed four distinct issues: the origin of the EU’s implied power; the 1 The NEAFC has been replaced by the 1980 Convention on Multilateral Cooperation in North-East Atlantic Fisheries, to which the EU is a party having replaced its Member States. 2 Art 38 EEC Treaty defined ‘agricultural products’ to include fisheries products. Additionally, Annex II of the EEC Treaty contained a list of products which – according to Art 38(3) EEC Treaty – were subject to the Common Agricultural Policy. This list is today found in Annex I to the TFEU, and includes ‘fish, crustaceans and molluscs’. 3 Regulation (EEC) No 2141/70 of the Council of 20 October 1970 laying down a common structural policy for the fishing industry [1970] OJ L236/1; Regulation (EEC) No 2142/70 of the Council of 20 October 1970 on the common organisation of the market in fishery products [1970] OJ L236/5.
Refining and Expanding Implied Powers of the Union 79 extent of that power; the exclusive character of that power and whether the Member States had lost their ability to conclude the NEAFC; and the role of the duty of sincere cooperation. In preparing the ground for its finding that the EU had an implied external power to conclude agreements on the conservation of the resources of the sea, the Court repeated, almost verbatim, parts of its ERTA judgment handed down five years earlier:4 it reiterated that the EU had legal personality and could thus conclude international agreements, and that the EU’s competence could not only flow from express conferment by the Treaty, but may also be implied.5 The Court continued to spell out the EU’s internal competence in the sphere of agriculture and fisheries, on which the two Regulations were based. The Court pointed to their aims of ‘encouraging rational use of the biological resources of the sea’ and allowing the EU ‘to adopt measures to safeguard the stocks of fish’, before reciting the obligation to draw up a fisheries policy contained in Article 102 of the Act of Accession. The Court went on as follows: It follows from these provisions taken as a whole that the [Union] has at its disposal, on the internal level, the power to take any measures for the conservation of the biological resources of the sea, measures which include the fixing of catch quotas and their allocation between the different Member States. It should be made clear that, although Article 5 of Regulation No 2141/70 is applicable only to a geographically limited fishing area, it none the less follows Article 102 of the Act of Accession, from Article 1 of the said regulation and moreover from the very nature of things that the rule-making authority of the [Union] ratione materiae also extends – in so far as the Member States have similar authority under public international law – to fishing on the high seas. The only way to ensure the conservation of the biological resources of the sea both effectively and equitably is through a system of rules binding on all the States concerned, including non-member countries. In these circumstances it follows from the very duties and powers which [Union] law has established and assigned to the institutions of the [Union] on the internal level that the [Union] has authority to enter into international commitments for the conservation of the resources of the sea.6
Unsurprisingly perhaps, the Court’s reasoning resembles that in ERTA, in that the Court applied the principle of parallelism (or complementarity):7 the implied external competence flows from the exercise of an internal competence. However, this dense paragraph goes further, in that it concludes that the extent of the EU’s competence is not limited to the precise subject matter of the two Regulations, but that by ‘the very nature of things’, it extends to fishing on the high seas, which is, of course, an area outside the sovereignty of the Member States, but which public international law entitles them – in concert with third countries – to regulate by way of international agreement.8 This point had been contested before the Court in Kramer, with the UK arguing that the ERTA doctrine did not apply if the subject matter of the internal rules and the agreement entered into with third countries are not identical. In a similar vein, Denmark had made the point that Article 102 of the Act of Accession and Regulation 1241/70 only related to the sea area that covers at most 12 nautical miles from the coast,9 whereas the NEAFC was mainly concerned with fishing on 4 Case 22/70, ERTA, ECLI:EU:C:1971:32; interestingly, while citing ERTA repeatedly when discussing the facts of the case, the ‘law’ part of the judgment contains no reference to ERTA. See this volume, ch 1. 5 Joined Cases 3, 4 and 6/76, Kramer, ECLI:EU:C:1976:114, paras 17–20 (corresponding to paras 13–16 of ERTA). 6 ibid paras 30–33. 7 An argument in favour of the term ‘principle of complementarity’ is made by A Dashwood and J Heliskoski, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 3, 12–13. 8 States had begun to regulate this by way of the 1958 Geneva Conventions on the Law of the Sea, which preceded the 1982 United Nations Convention on the Law of the Sea, to which the EU is party. 9 Under the 1964 London Fisheries Convention, which regulated fisheries between several European states, the coastal state had the exclusive right to fish and exclusive jurisdiction in matters of fisheries within a six-mile zone from
80 Tobias Lock the high seas.10 The Commission, by contrast, had pointed to Article 227 EEC Treaty (now Article 52 TEU), which simply listed the names of the Member States to which the Treaty applied. From the fact that the then Article 227 EEC did not expressly reference the territory of the Member States, the Commission concluded that in so far as the Member States have powers that can be used outside their territories – such as the power to conclude international agreements concerning fishing on the high seas – these powers ‘accrue to the [Union]’. The Opinion of Advocate General Trabucchi sheds more light on the effet utile reasoning behind the Court’s conclusion that the EU’s implied powers extended to international agreements concerning fishing on the high seas.11 He highlighted the functional relationship between internal powers and external powers by arguing that external powers, even though used to regulate activity in a geographical area which extends beyond that directly subject to the legislative authority of the [Union] [can] directly affect a sector, which, in the [Union], is already governed by common legislation and can, therefore, affect the functioning of the common machinery and rules laid down by the [Union] for this sphere of activity.
This same logic also led the Advocate General to conclude the exclusivity of the EU’s external competence in this field. The Court itself acknowledged this exclusivity only implicitly when highlighting the ‘transitional nature’ of the Member States’ powers to conclude the NEAFC at the time. The Court noted that the EU institutions had not exercised their internal powers under EU law and thus had not assumed the functions and obligations arising from the NEAFC, so the Member States had not lost their power to conclude the NEAFC and implement the obligations resulting from it for the time being. However, the Member States’ powers to take this step were of a transitional nature in that they would lose it as soon as internal EU measures had been adopted. According to Article 102 of the Act of Accession, such measures were due by 1 January 1979 at the latest. This conclusion is again owed to the logic inherent in the principle of parallelism, which is the basis for the Court’s implied powers doctrine. The Court argued that the Member States lose their competence to conclude international agreements in step with the EU exercising its parallel internal competence. Hence, at the time the matter in Kramer arose, the Netherlands had been competent to conclude the NEAFC, and the resulting implementing measures. The Court did not leave it there, however, but elaborated in obiter dictum on the consequences of the transitional nature of the Member States’ competence. Drawing on the duty of sincere cooperation spelled out in Article 4(3) TEU,12 the Court held that Member States participating in the NEAFC and in other similar agreements are now not only under a duty not to enter into any commitment within the framework of those conventions which could hinder the [Union] in carrying out the tasks entrusted to it by Article 102 of the Act of Accession, but also under a duty to proceed by common action within the Fisheries Commission.13
Hence, the Member States were placed under a twofold constraint here: not only were they prohibited from frustrating the EU’s own endeavours, but they also had to act in unison while the baseline of its territorial sea; it also had exclusive fishing rights within a zone of 12 nautical miles, but had to allow in vessels that had habitually fished there. 10 See the Member States’ arguments as paraphrased in the judgment. 11 Opinion of Advocate General Trabucchi, Joined Cases 3, 4 and 6/76, Kramer, ECLI:EU:C:1976:96. 12 The Court additionally referred to Art 116 EEC Treaty (since repealed), which spelled out a duty on Member States to proceed by common action in international organisations of an economic character. 13 Kramer (n 5) paras 44–45; this argument had been made in the Commission’s pleadings in this case.
Refining and Expanding Implied Powers of the Union 81 they were exercising this transitional competence. Interestingly, the Court’s conception of the duty of sincere cooperation in this scenario differs slightly from that of the Advocate General, who had proposed that the duty resulted in ‘a specific obligation on the States to reach prior agreement on a [Union] basis in order to avoid individual decisions in the international field which may impede the definition and execution of common action on the part of the [Union]’.14 IV. THE IMPORTANCE OF THE CASE
Even though Kramer is one of the foundational cases establishing the implied powers doctrine, it does not usually receive the same level of attention in academic treatises as ERTA or Opinion 1/76.15 This is understandable in so far as Kramer did not introduce a new doctrine, as the other two did with the principles of parallelism and necessity, respectively. Nevertheless, Kramer was an important stepping stone in the development of the implied powers doctrine and of external relations law more generally. It provided a refinement of the ERTA doctrine; established the EU’s exclusive external competence for the conservation of the biological resources of the sea, notably, the management of fish stocks; highlighted the importance of the duty of sincere cooperation; and foreshadowed the extraterritorial ambitions of Union law. A. Refinement of the ERTA Doctrine While breaking new ground by establishing implied powers as a legal basis for EU external action, the ERTA decision produced a number of new questions, some of which Kramer was able to clarify. The Court in Kramer could have seized the opportunity to render a narrow reading of ERTA, which some Member States had openly invited the Court to do.16 Yet the Court decided to strengthen the ERTA doctrine by making it clear that for implied powers to arise, there was no need for a complete overlap between the subject matter of the internal rules and that of the agreements envisaged. Indeed, there was not even a need for the adoption of substantive internal rules. After all, in Kramer, the EU institutions had merely been empowered to adopt substantive internal rules. Nonetheless, this empowerment sufficed for the implied external power to come into existence. In holding thus, the Court also sowed the seeds for the principle of necessity, which was the key innovation of Opinion 1/76 handed down less than a year later.17 The Court’s decision in Kramer therefore heralded the broad interpretation of the requirement for ‘common rules’ as spelled out by ERTA. Since Opinion 2/91, the Court has repeatedly considered it sufficient for the relevant area to be ‘covered to a large extent by [Union] rules’.18
14 Opinion of Advocate General Trabucchi, Kramer (n 11). 15 Opinion 1/76, Laying-up fund, ECLI:EU:C:1977:63. See this volume, ch 9. 16 See the arguments by the UK and Denmark paraphrased above. 17 Opinion 1/76 (n 15). 18 Opinion 2/91, ILO, ECLI:EU:C:1993:106, para 25. See this volume, ch 22. This has since been confirmed in numerous cases, eg Opinion 2/15, EU–Singapore Free Trade Agreement, ECLI:EU:C:2017:376, para 181 See this volume, ch 82; Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81, paras 120 and 126. See this volume, ch 46.
82 Tobias Lock Moreover, the Court could have distinguished ERTA and Kramer by pointing out that ERTA was not really a case concerned with implied powers, but express powers. After all, Article 3 of Regulation 543/69, which was at the centre of ERTA, expressly empowered the EU to enter into ‘negotiations with third countries which may prove necessary for the purpose of implementing this regulation’.19 Additionally, Article 75 EEC20 – the Treaty provision at stake in ERTA – gave the EU powers to adopt rules on international transport. Both of these links to external action were missing in Kramer. Neither Article 102 of the Act of Accession nor the two Regulations mentioned an external dimension expressly. Yet in Kramer, the Court chose not to confine ERTA to its facts and thus confirmed the existence of an implied powers doctrine in EU law. The Court’s reasoning in Kramer is much more explicitly imbued with the notion of effet utile than was the case in ERTA. ERTA had been based on the doctrine of pre-emption: once the Union has occupied the field substantively by way of internal legislation, it acquires a parallel exclusive external power.21 Kramer’s stronger reliance on the effet utile doctrine is evident from the passage quoted above, where the Court notes that the authority of the EU to enter into international commitments for the conservation of the resources of the sea follows from the fact that the only way to ensure this aim was by adopting rules binding on all the states concerned, including non-Member States.22 The Court in Kramer adopted a fairly broad-brush and not exactly forensic approach in this regard. The EU’s far-reaching competence – including fisheries on the high seas – resulted from nothing less than ‘the very nature of things’.23 This in itself is remarkable given the still uncertain status of the implied powers doctrine in EU law, for the consolidation of which one might have expected a little more argumentative effort. It is all the more remarkable given that the internal power over fisheries – from which the external power flowed – was itself not settled. As Koutrakos pointed out, the Court in Kramer had to first establish and teleologically interpret the former, to then establish and teleologically interpret the latter.24 The decision in Kramer showed that even in the field of external implied powers, there was a distinction between the existence of an external competence and its nature (exclusive or shared).25 ERTA had been particularly vague in this regard and appeared to conflate the two,26 so that Kramer was an important clarification.27 This distinction is now reflected in Article 216(2) TFEU – which attempts to codify the case law on the existence of implied external competence – and Article 3(2) TFEU – which does the same for the exclusive character of
19 Regulation (EEC) No 543/69 of the Council of 25 March 1969 on the harmonisation of certain social legislation relating to road transport [1969] OJ L77/49. 20 Since replaced with Art 91 TFEU. 21 On the twin foundations (pre-emption and effet utile) of implied powers, see M Cremona, ‘External Relations and the External Competence of the European Union: The Emergence of an Integrated Policy’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 217 (221). 22 A Ott, ‘EU External Competence’ in RA Wessel and J Larik (eds), EU External Relations Law, 2nd edn (Oxford, Hart Publishing, 2020) 61, 67; see also M Cremona, ‘EU External Competence – Rationales for Exclusivity’ in S Garben and I Govaere (eds), The Division of Competences between the EU and the Member States (Oxford, Hart Publishing, 2017) 133, 134. 23 Kramer (n 5) paras 30–33. 24 Panos Koutrakos, EU International Relations Law (2nd edn, Hart Publishing, 2015) 89. 25 Dashwood and Heliskoski (n 7) 9. 26 See, eg Koutrakos (n 24) 81–82. 27 At the time, however, not all members of the Court appeared to see it that way. When discussing implied powers extra-judicially, Judge Pescatore, for instance, argued that ‘there is no place in the system for the construction of ‘concurrent’ or ‘parallel’ powers’, Pierre Pescatore, ‘External Relations in the Case Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615, 624.
Refining and Expanding Implied Powers of the Union 83 that competence.28 While the distinction did not become relevant until much later,29 Kramer already sowed the seeds for these developments by teasing out the difference between the EU’s authority to enter into international commitments,30 ie the existence of a competence, and the question whether that authority had been exercised, ie the question whether Member States are (still) allowed to act. The facts in Kramer were of course somewhat unusual, in that there was a time lag between the power’s coming into existence and the EU’s exercise of that power. At first reading, therefore, one might be tempted to conclude that the conservation of the biological resources of the sea was an instance of a shared competence.31 Yet this was not so. Instead, it was a latent exclusive competence, which meant that the Member States were able to lawfully conclude and implement the NEAFC, but were at the same time severely confined in their freedom of manoeuvre by the duty of sincere cooperation. This became clear in subsequent infringement proceedings against the UK which had been prompted by the UK’s adoption of unilateral measures regulating fisheries in its waters after the expiry of the period laid down in Article 102 of the Act of Accession. Attempts by the Council to adopt EU measures had been thwarted by the UK’s veto.32 The Court gave short shrift to the UK’s argument that the Member States were still competent to adopt measures in the absence of internal EU legislation. It held in Commission v UK that since 1 January 1979 the ‘power to adopt, as part of the common fisheries policy, measures relating to the conservation of the resources of the sea has belonged fully and definitively to the Community’.33 There was one open question that the Court did not resolve, which related to whether the implied powers doctrine was confined to Union policies – of which there were only transport and agriculture (including fisheries) at the time – or whether the doctrine would apply regardless of whether the internal rules pertained to a formal ‘policy’ of the Union or not.34 B. Towards Exclusive Competence for the Conservation of the Biological Resources of the Sea The Kramer decision was an important step in the development of the fledgling CFP. Regulations 2141/70 and 2142/70 – on which the Court based the EU’s implied external competence in Kramer – constituted the first internal measures enacted with a view to adopting a CFP, which had formed a latent part of the CAP since the entry into force of the Treaty of Rome.35 The Regulations meant to create non-discriminatory access of all Member State
28 The Court confirmed this reading in Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), para 51. See this volume, ch 84. 29 See Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81, para 115; Opinion 1/13, Convention on the civil aspects of international child abduction, ECLI:EU:C:2014:2303, paras 67 et seq; COTIF I (n 28), paras 46 et seq. See this volume, chs 46 and 69. 30 Kramer (n 5) paras 30–33. 31 Cremona, for example, refers to it as a transitional concurrent competence, Cremona, ‘External Relations’ (n 21) 217, 245. 32 R Schütze, ‘Dual Federalism Constitutionalised: The Emergence of Exclusive Competences in the EC Legal Order’ (2007) 32 EL Rev 3, 13. 33 Case 804/79, Commission v United Kingdom, ECLI:EU:C:1981:93, para 17. 34 Koutrakos (n 24) 79–80. 35 The driving force behind the adoption of a CFP had been successive accessions by countries with big fishing fleets, A Bouquet, F Erlbacher and A-X-P Lewis, ‘Article 38 TFEU’ in M Kellerbauer, M Klamert and J Tomkin (eds), The EU Treaties and the EU Charter of Fundamental Rights (Oxford, Oxford University Press, 2019) para 27.
84 Tobias Lock vessels to each Member State’s fishing waters even though international law provided for their exclusive jurisdiction (with certain limitations) within a zone of 12 nautical miles.36 Coupled with a financial aid scheme and a common organisation of the market in fisheries products, these Regulations were thus designed to establish a CFP. At the time the Court handed down its judgment, the development of the CFP had experienced a first setback as the Act of Accession of 1972 – which resulted in the accession of three fishing nations37 – allowed Member States to deviate from the principle of non-discrimination until 31 December 1982. Consequently, it was not until 1983 that a CFP was properly put in place.38 The importance of the Kramer case in achieving this result should not be underestimated. It came at a time when the international law of the sea was fast developing. States were laying claims to their exclusive economic zone stretching 200 nautical miles from their coasts39 and the United Nations Convention on the Law of the Sea (UNCLOS) was being negotiated. By establishing the EU’s exclusive competence for the ‘conservation of marine biological resources under the common fisheries policy’ (as now codified in Article 3(1)(d) TFEU),40 the Court thus enabled the EU to devise a common strategy for the management of Member States’ fishing grounds, allowing it to react to current developments at the international level. The Council quickly cranked into gear and, a few months after Kramer, adopted a Resolution calling Member States to extend the limits of their fishing zones to 200 miles off their North Sea and North Atlantic coasts.41 The Resolution also envisaged the EU to conclude reciprocal access agreements with third countries. Moreover, the Kramer case resulted in the EU becoming a party to UNCLOS and to various regional fisheries organisations.42 Additionally, Kramer had an impact on the development of EU internal measures in the area of fisheries. The establishment of an internal EU competence meant that with the expiry of the transitional period laid down in Article 102 of the Act of Accession, the Member States could no longer adopt unilateral decisions without EU approval.43 As the Commission v UK proceedings (quoted in section IVA above) showed, the exclusivity of the EU’s powers meant that any attempts by Member States to veto a common policy in the Council would not result in the conservation of their own legislative powers, so that agreement of an EU-wide CFP was the only viable course of action open to the Member States. C. Duty of Sincere Cooperation The latent exclusivity of the EU’s external competence in Kramer meant that for a transitory period the Member States continued to have the power to assume commitments within the 36 See n 9. 37 The UK, Denmark, and Ireland; another big fishing nation – Norway – was meant to accede. 38 Council Regulation (EEC) No 170/83 of 25 January 1983 establishing a Community system for the conservation and management of fishery resources [1983] OJ L24/1. 39 This was recognised as reflecting customary international law by the ICJ starting with Case Concerning Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada/United States) [1984] ICJ Rep 294, para 94. 40 Note that not all external aspects of the Common Fisheries Policy are an exclusive competence of the EU, see M Vatsov, ‘Fishing Power Europe’ (PhD thesis, University of Edinburgh, 2020) 62. 41 Council Resolution of 3 November 1976 on certain external aspects of the creation of a 200-mile fishing zone in the Community with effect from 1 January 1977 [1981] OJ C105/1. 42 For a detailed account, see S Boelaert-Suominen, ‘The European Community, the European Court of Justice and the Law of the Sea’ (2008) 23 International Journal of Marine and Coastal Law 643, 682–84. 43 See Case 32/79, Commission v United Kingdom, ECLI:EU:C:1980:189; Case 804/79, Commission v United Kingdom (n 33).
Refining and Expanding Implied Powers of the Union 85 NEAFC. They were thus able to participate in the Fisheries Commission for the purpose of fixing fishing quotas and the like, and they continued to be internally competent to implement the Fisheries Commission’s recommendations. The Court, however, was very clear that in doing so they were under a duty of sincere cooperation flowing from Article 4(3) TEU. In this regard, Kramer followed in the footsteps of ERTA, where the Court had accepted that the Member States had acted ‘in the interest and on behalf of the [Union] in accordance with their obligations under’ Article 4(3) TEU when concluding the international agreement. This restriction on the Member States’ ability to act freely in policy areas where they (still) enjoyed external powers appears more pronounced in Kramer. The Court highlighted the transitional nature of the Member States’ authority and the fact that they were ‘now bound by [Union] obligations’. These obligations – which the Court would later call ‘special duties of action and abstention’44 – consisted in a positive duty to proceed by common action in the Fisheries Commission and in a negative duty not to enter into any commitment which could hinder the EU in carrying out its tasks under Article 102 of the Act of Accession.45 Hence, Member States were ‘trustees of the common interest’,46 which meant that they could only adopt interim conservation measures in order to avoid irreparable damage to the objectives of the common conservation policy, but not any other rules that do not pursue this aim.47 Together with ERTA, Kramer was thus a harbinger of the importance of the duty of sincere cooperation in the conduct of external relations.48 The positive obligations identified by the Court would become particularly relevant in cases where the Member States would act on behalf of the EU, notably as a member of international organisations that are only open to state parties.49 Member States’ negative obligations under the duty of sincere cooperation would also come into play in these instances, limiting Member States’ ability to start uncoordinated initiatives, which – under the rules of the organisation concerned – they would be entitled to do.50 Similar needs for coordination between Member States and EU institutions arise in the negotiation and implementation of mixed agreements. The duty may find expression in a positive duty to inform and consult,51 and also in a negative duty to abstain in order to preserve the ‘unity in the international representation of the Union and its Member States’.52 The negative obligations resulting from the duty raise difficulties in practice, however, as they presuppose that Member States are in a position to predict future EU measures. As Heliskoski notes, by contrast to the ERTA effect, which becomes operative as and when EU rules are adopted, the duty of sincere cooperation – as first expressed in Kramer – has an extended temporal scope.53 Hence, the Court found in Inland Waterways that Council authorisation for the Commission to negotiate an agreement marks the start of a concerted [Union] action at international level and requires, for that purpose, if not a duty of abstention on the part of the Member States, at the very least a duty of close cooperation between the latter and the [Union] institutions in order to facilitate the achievement of 44 Case 804/79, Commission v United Kingdom (n 33) para 28. 45 The terms ‘positive duty’ and ‘negative duty’ are borrowed from Koutrakos (n 24) 183. 46 Case 804/79, Commission v United Kingdom (n 33) para 30. 47 Case 63/83, Regina v Kent Kirk, ECLI:EU:C:1984:255, para 19. 48 P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 215. 49 See, eg Opinion 2/91 (n 18) paras 37–38. 50 See, eg Case C-45/07, Commission v Greece, ECLI:EU:C:2009:81, paras 25–26. 51 See, eg Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345, para 179. See this volume, ch 47. 52 Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS), para 76. See this volume, ch 58. 53 J Heliskoski, ‘The Obligation of Member States to Foresee, in the Conclusion and Application of their International Agreements, Eventual Future Measures of the European Union’ in A Arnull et al (eds), A Constitutional Order of States? (Oxford, Hart Publishing, 2011) 545, 557.
86 Tobias Lock the [Union] tasks and to ensure the coherence and consistency of the action and its international representation.54
Obviously the authorisation to negotiate does not necessarily imply success, so that Member States’ room for action is curtailed by the mere possibility of the conclusion of a Union agreement at some point in the future. At the same time, this restriction on the Member States’ room for manoeuvre is practically necessary and, given their membership of the Council, it is not unreasonable for them to be expected to sit still while the Commission negotiates according to its own instruction. D. Extraterritoriality and International Law Constraints By holding that the implied power to conserve the biological resources of the sea extended to the high seas, the Court paved the way for EU law – including EU international agreements – to apply in all fields where a Member State has jurisdiction under international law. The consequences of this became clearer in subsequent cases. First, the Court clarified in Commission v Ireland and Commission v Spain that the EU’s competence established in Kramer not only covered the external competence to conclude international agreements, but also internal and unilateral conservation measures.55 Secondly, the Court confirmed that the EU had the power to regulate the conduct of vessels flying the flag of an EU Member State on the high seas.56 As the case of Poulsen shows, there is a clear parallel between the EU’s regulatory power and the international jurisdiction of the Member States.57 In Poulsen, the Court held that the powers did not extend to vessels not flying an EU flag, even if they find themselves in the exclusive economic zone of the Member States or even in their territorial waters. This is because the international law of the sea grants them the freedom of navigation a right of innocent passage.58 Kramer can therefore be seen as marking one of the beginnings of EU law’s extraterritorial reach, which now forms a growing field of research.59 Obviously, Kramer and its progeny remained very much in tune with international law: the reach of EU law had the potential to cover the entire jurisdiction of the Member States – no more, no less. More recent developments, such as the absorption of EU standards beyond EU borders (the ‘Brussels effect’)60 or the territorial extension of EU law beyond the EU’s borders,61 demonstrate the global influence of EU law, of which fisheries is an early example.
54 Case C-266/03, Commission v Luxembourg, ECLI:EU:C:2005:341, para 60; Case C-433/03, Commission v Germany, ECLI:EU:C:2005:462, para 66. 55 Case 61/77, Commission v Ireland, ECLI:EU:C:1978:29, para 63; Case C-258/89, Commission v Spain, ECLI:EU:C:1991:322, paras 8–9. 56 Expressly reconfirmed in Case C-405/92, Mondiet, ECLI:EU:C:1993:906, para 15. 57 Case C-286/90, Anklagemyndigheden v Poulsen and Diva Navigation, ECLI:EU:C:1992:453 See this volume, ch 21. 58 ibid esp paras 14, 18 and 25; para 25 expressly refers to Arts 17–32 and 58(1) of the United Nations Convention on the Law of the Sea. 59 See, eg E Fahey, The Global Reach of EU Law (Abingdon, Routledge 2017); M Cremona and J Scott (eds), EU Law Beyond EU Borders (Oxford, Oxford University Press, 2019); E Fahey (ed), Framing Convergence with the Global Legal Order: The EU and the World (Oxford, Hart Publishing, 2020). 60 A Bradford, ‘The Brussels Effect’ (2012) 107 Northwestern University Law Review 1, 6 calls this the ‘de facto Brussels effect’. 61 J Scott, ‘Extraterritoriality and Territorial Extension in EU Law’ (2014) 82 American Journal of Comparative Law 67.
Refining and Expanding Implied Powers of the Union 87 V. ADDITIONAL READING Boelaert-Suominen, S, ‘The European Community, the European Court of Justice and the Law of the Sea’ (2008) 23 International Journal of Marine and Coastal Law 643. Cremona, M, ‘External Relations and the External Competence of the European Union: The Emergence of an Integrated Policy’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 217. Cremona, M, ‘EU External Competence – Rationales for Exclusivity’ in S Garben and I Govaere (eds), The Division of Competences Between the EU and the Member States (Oxford, Hart Publishing, 2017) 133. Dashwood, A and Heliskoski, J, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 3. Heliskoski, J, ‘The Obligation of Member States to Foresee, in the Conclusion and Application of their International Agreements, Eventual Future Measures of the European Union’ in A Arnull et al (eds), A Constitutional Order of States? (Oxford, Hart Publishing, 2011) 545. Ott, A, ‘EU External Competence’ in RA Wessel and J Larik (eds), EU External Relations Law, 2nd edn (Oxford, Hart Publishing, 2020) 61. Pescatore, P, ‘External Relations in the Case Law of the Court of Justice of the European Communities’ (1979) 16 CML Rev 615. Schütze, R, ‘Dual Federalism Constitutionalised: The Emergence of Exclusive Competences in the EC Legal Order’ (2007) 32 EL Rev 3.
88
8 Linking Internal and External Trade in a Perfect Customs Union: Donckerwolcke PIET EECKHOUT Case 41/76, Suzanne Criel née Donckerwolcke and Henri Schou v Procureur de la République au tribunal de grande instance de Lille and Director General of Customs, ECLI:EU:C:1976:182, delivered 15 December 1976. KEYWORDS Customs union – Common market – Internal market – Common commercial policy – Goods in free circulation – Declaration of origin – Penal sanctions – Brexit.
I. INTRODUCTION
T
he original EEC Treaty was clear about the extent to which the founding Member States sought to establish free trade between them, as permitted under Article XXIV of the General Agreement on Tariffs and Trade (GATT). They opted for a customs union over a mere free-trade area, and indicated that this should be a perfect customs union. Article 9(1) EEC (now Article 28(1) TFEU) stated that ‘The Community shall be based upon a customs union which shall cover all trade in goods’ (emphasis added). Article 9(2) EEC (now Article 28(2) TFEU) provided that the Treaty provisions on the free movement of goods ‘shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States’. Article 10(1) EEC (now Article 29 TFEU) stated that third country products were ‘considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties … have been levied in that Member State’. It was intended to be a perfect customs union because it covered all goods on the market (common, later internal), and did not make use of the limited, but significant scope for exceptions under Article XXIV GATT.1 The perfect customs union required not only a Common Customs Tariff (CCT) – duly established before the expiry of the original transitional period (1958–70) – but also the adoption of a full trade policy, the Common Commercial Policy (CCP). Indeed, the extension of the
1 Art
XXIV(8) GATT requires that customs unions and free-trade areas cover ‘substantially all the trade’.
90 Piet Eeckhout full free movement of goods between Member States to third country products ‘in free circulation’ meant that the Member States would be incapable of sustaining different trade policies towards the rest of the world. A Member State could not, on its own, limit the importation of bananas from Latin America,2 because those bananas could be imported into any other Member State and subsequently reach the market of the protective Member State by virtue of the free movement of goods. Trade would simply be deflected to the Member State with the most liberal import regime. It is not clear whether the drafters of the EEC Treaty fully grasped the trade policy requirements of this perfect customs union. When they defined the Common Commercial Policy, they merely spoke of that policy being ‘based on uniform principles’ (Article 113 EEC, now Article 207 TFEU). The Court, however, was always perceptive about the demands of the perfect customs union. In Opinion 1/75, it showed no hesitation to confirm that the Union’s commercial policy competences were exclusive, and not shared with the Member States.3 In Dassonville, the first bold judgment on the abolition of ‘measures having equivalent effect’ hindering free movement in the common market, the Court did not even mention that the Scotch whisky, the goods at issue, had been imported from a third country, as the UK was not yet a Member State at the time of the facts.4 It focused on movement between France and Belgium, and few readers of Dassonville are aware of the fact that the case involved a product ‘in free circulation’. The CCT was established before the end of the transitional period, but the CCP was left incomplete. Setting common customs duties was one thing; removing national import restrictions, of all kinds, or replacing them with a common policy proved to be a much more difficult goal to attain. It would take until the 1990s before this could be achieved, in the framework of the 1993 internal market programme. That the drafters of the EEC Treaty anticipated that trade policy divergences could survive the transitional period was also shown by the existence of Article 115 EEC.5 That provision accepted divergent trade policies, and conferred on the Commission the power to authorise national ‘protective measures’. The Commission issued such authorisations, which in effect meant that the customs union remained imperfect, for a couple of decades. It is against that background that the Donckerwolcke case gave the Court the opportunity to spell out the premises of the perfect customs union. II. FACTS
The case involved criminal proceedings, in France, against Belgian traders who had imported a number of consignments of textile products into France. The products’ movement was accompanied by the requisite EEC movement certificates in form DD1. However, the French authorities had also asked for the origin of the products to be declared, which the traders had indicated as the Belgo-Luxembourg Economic Union. A subsequent inquiry revealed that the products in fact originated from Syria and Lebanon, had been imported into Belgium, where customs duties had been paid, and were thence in free circulation. The Belgian traders were prosecuted for having made false declarations of origin, in breach of the French Customs
2 As was the case for the UK and France, up to 1993: see P Eeckhout, The European Internal Market and International Trade: A Legal Analysis (Oxford, Clarendon Press, 1994) 225–45. 3 Opinion 1/75, ECLI:EU:C:1975:145. See this volume, ch 4. 4 Case 8/74, Procureur du Roi v Benoît and Gustave Dassonville, EU:1974:82. 5 Art 115 EEC later became Art 134 EC at the Treaty of Amsterdam, and was abolished with the Treaty of Lisbon.
Linking Internal and External Trade in a Perfect Customs Union 91 Code. They were convicted by the Tribunal Correctionnel in Lille, which imposed suspended prison sentences; payment of the value of the goods; and a fine equal to twice their value. The defendants lodged appeals against their convictions before the Cour d’Appel in Douai. That court decided to refer two questions to the Court. The first inquired whether the requirement to declare the origin of products that were in free circulation amounted to a measure equivalent to a quantitative restriction under Article 30 EEC (now Article 34 TFEU). The second concerned Article 115 EEC, and its relationship to a requirement for an import authorisation for goods in free circulation, both before and after the expiry of the transitional period. Both France and the Commission made substantive submissions to the Court. France argued that the phrase ‘products coming from third countries’ in Article 9(2) EEC (now Article 28(2) TFEU) was not equivalent to the concept of the origin of those products. It defended the right of Member States to ask for the origin of goods in free circulation, in light of the continuing divergence in national trade policies. France also considered that the sanctions imposed could not, by their nature, be considered measures having equivalent effect. The Commission, by contrast, developed a more nuanced reasoning. It recognised that Member States could still impose customs formalities in intra-Union trade, for example, for statistical purposes. In the Commission’s view, a declaration of origin could not, however, go beyond what was needed to achieve those purposes without turning into a measure having equivalent effect. The Commission emphasised that no more than average diligence could be required of traders, and that mere errors in a declaration should not be subject to excessive penalties, such as those applying to smuggling. At the Court, the case was in the hands of two of the big names of early Union law: Advocate General (AG) Capotorti and Judge Pescatore. AG Capotorti agreed with the Commission.6 His Opinion is admirable in its conciseness, precision and perceptiveness. Perhaps its most interesting part concerns the interpretation of the concept of ‘measures having equivalent effect’. This transcends the customs union issues, but is nevertheless worth highlighting, because it is fundamental not only to the EU’s internal market, but to all attempts at regulating free trade between sovereigns. The AG’s approach is analysed in section IVC. III. THE COURT
The Court organised its analysis of the issues in the case by distinguishing between rules applying after the expiry of the transitional period (when some of the relevant trade took place) and those applying during that period (when other impugned transactions occurred). The former part of the judgment was more extensive, and clearly the most significant one for the further development of EU external relations law. This chapter therefore focuses on the post-transition rules. The Court’s judgment was clearly framed as a general account of how the perfect customs union was intended to work, and transcended the specific Donckerwolcke case. That general account was framed by the question whether a Member State may impose unilateral monitoring measures – in this case, a declaration of origin and import licences on products that are in free circulation but that are not yet subject to common provisions of the CCP. The Court first drew attention to the provisions of Articles 9 and 10 EEC (now Articles 28 and 29 TFEU), and concluded from them that products in free circulation are ‘definitively and
6 Opinion
of AG Capotorti in Case 41/76, Donckerwolcke, ECLI:EU:C:1976:159.
92 Piet Eeckhout wholly assimilated to products originating in Member States’.7 That meant that the prohibition in Article 30 EEC (now Article 34 TFEU) of measures having equivalent effect applied without distinction to all such products. That prohibition extended to the requirement of an import licence, or any similar procedure, even if it was a pure formality. This was also why the DD1 movement certificate did not indicate origin, and the authorisation which the certificate embodied must, of itself, and without the addition of any national law measure, guarantee free circulation. The Court then qualified those findings. The above rules were conditional on the establishment of the CCP. The assimilation of products in free circulation required the same conditions of importation, with regard to both customs and ‘commercial considerations’.8 The Court noted that the unified CCP was not achieved at the end of the transitional period for all products. The national differences in commercial policies were therefore capable of bringing about deflections of trade, or could cause economic difficulties. That is where Article 115 EEC had a role to play, for it allowed the Commission to authorise national protective measures also as regards goods in free circulation. But Article 115 EEC needed to be strictly interpreted and applied, as it constituted a derogation from Article 30 EEC (now Article 34 TFEU) and was an obstacle to the full establishment of the CCP. The Court subsequently turned to the application of the above rules. It did so by first spelling out a further rule, namely, that national commercial policy measures ‘are only permissible after the end of the transitional period by virtue of specific authorisation by the Community’.9 In that context, Member States were not prevented from requiring a declaration of origin, even in the case of goods in free circulation. Such knowledge of origin assisted both the Member State concerned and the Commission for the purpose of employing Article 115 EEC. However, the requirement to declare origin could involve no more than what the importer knew or may reasonably be expected to have known. The Member States could not penalise this in a disproportionate way: seizure of the products concerned, or a financial penalty based on their value, was incompatible with the EEC Treaty, in that both measures amounted to an obstacle to the free movement of goods. Any administrative or penal measure ‘which goes beyond what is strictly necessary for the purpose of enabling the importing Member State to obtain reasonably complete and accurate information on the movement of goods’ is a measure having equivalent effect. The requirement of an import licence was, a fortiori, not permitted. IV. THE IMPORTANCE OF THE CASE
Donckerwolcke is an underrated judgment. This is due to the technical nature of the issues and legal provisions involved, to the restrained reasoning and to the unspectacular outcome in the case at hand. The judgment is nevertheless seminal. It constituted an unequivocal affirmation of the perfect customs union, which has indeed become the very basis of the Community (Article 9(1) EEC, Article 28(1) TFEU) and therefore of the European Union. And it demanded the completion of the CCP. In addition, the Opinion of AG Capotorti led the way for the further development of the case law on measures having equivalent effect, and described all 7 Case 41/76, Suzanne Criel, née Donckerwolcke and Henri Schou v Procureur de la République au tribunal de grande instance de Lille and Director General of Customs, ECLI:EU:C:1976:182, para 17. 8 ibid para 25. 9 ibid para 32.
Linking Internal and External Trade in a Perfect Customs Union 93 the essential elements of any effective review of non-tariff barriers – or, in more contemporary terms, regulatory divergence. Those three dimensions of Donckerwolcke are explored further below, followed by a kind of back-to-the-future vignette focused on Brexit. A. A Perfect Customs Union The introduction to this chapter already referred to the fact that the drafters of the EEC Treaty intended to establish a perfect customs union: one extending to all trade in goods, and not just to ‘substantially all the trade’ (Article XXIV(8)(a) GATT) – the latter having been interpreted as a phrase which lends itself to imperfect customs unions (and, indeed, free-trade areas, for which Article XXIV GATT employs the same terms), which exclude whole sectors.10 Article 9 EEC (now Article 28 TFEU) was pretty clear about the perfect customs union. However, the provisions of the EEC Treaty on the CCP could have been read as pointing in a different, less perfect direction. Article 113 EEC (now Article 207 TFEU) spoke of a CCP ‘based on uniform principles’. That sounds less compelling than a straightforwardly ‘uniform common commercial policy’. The provisions of Article 111 EEC, since repealed, on the establishment of the CCP in the course of the transitional period also left room for the argument that full uniformity might not be achievable. And Article 115 EEC, also since repealed, provided a mechanism whereby the Commission could review and authorise divergent trade policies, and maintain exceptions to the principle of free circulation. It is remarkable how, in the way both the GATT and the EEC Treaty treated external tariffs and other trade policy measures, the latter appeared to take a back seat. Article XXIV GATT speaks of ‘duties and other restrictive regulations of commerce’. The provisions of the EEC Treaty on the customs union took pride of place in the establishment of the common market, whereas the provisions on a CCP were merely part of a series of economic policies. Yet tariffs are but one element of trade policy. Perhaps the GATT and EEC Treaty approaches can be explained by the fact that, in the 1940s and 1950s, non-tariff barriers hardly existed, because the regulatory state was in its infant shoes. Customs duties and quotas governed trade, and not much else. It is therefore remarkable that the Court unequivocally affirmed the imperative of a perfect customs union. Goods in free circulation are ‘definitively and wholly assimilated to products originating in Member States’ – no ifs, no buts. Third country products were entitled to free circulation in the EU’s internal market in absolutely the same way as EU products. The fact that the CCP was not yet uniform, and that in the textiles sector in the EEC, in particular, there was nowhere near a uniform trade policy at the time,11 was relegated to a state of exception, not rule. The Court tolerated the exception, but only just. Both the Commission and AG Capotorti were more accommodating to the fact that France sought to identify the origin of products for statistical and, ultimately, trade policy reasons. The Court only accepted this after having been at pains to point out that trade policy should have been uniform at the end of the transitional period; that national commercial policy measures require a specific authorisation; and that Article 115 EEC needed to be strictly interpreted and applied.
10 See T Cottier and M Foltea, ‘Constitutional Functions of the WTO and Regional Trade Agreements’ in L Bartels and F Ortino (eds), Regional Trade Agreements and the WTO Legal System (Oxford, Oxford University Press, 2006) 43, 47–49. 11 See CWA Timmermans, ‘Community Commercial Policy in Textiles: A Legal Imbroglio’ in ELM Völker (ed), Protectionism and the European Community, 2nd edn (Deventer, Kluwer, 1986) 159–83.
94 Piet Eeckhout Together with other case law on the free movement of goods in the 1970s and 1980s, the Donckerwolcke concept of a perfect customs union also pushed the idea of a market without internal frontiers. Once the CCP would be fully established, even a mere declaration of origin, for purely statistical purposes, was to become unlawful in intra-EU trade. In a world, including Europe, where the Schengen-type absence of any physical borders seemed unimaginable, the idea that the reasons for border checks could all be eliminated was revolutionary. The Court did not articulate it, but its reasoning patently pointed in this direction. B. The Completion of the Common Commercial Policy Together with Opinion 1/75, which articulated the EEC’s exclusive competence in trade matters, Donckerwolcke affirmed the clear imperative to complete the CCP. Without really being asked to rule on this, the Court established that, after the end of the transitional period, national commercial policy measures were only permissible if they benefited from a ‘specific authorisation’ by the Commission. This put the EEC in some measure of control over the continued divergences in trade policies in important sectors.12 The Member States remained, of course, in the driving seat through their presence in the Council, but at least the Commission could use this judgment as a tool to review these divergences and to push for a common policy. It may further be noted that the drive towards common policies also had a liberalising, antiprotectionist effect: in most cases, the only alternative to national import quotas, or other types of restrictions, that was politically achievable was liberalisation. EEC-wide quotas were harder to agree on, because the more free-trade-oriented Member States did not wish to return to protectionism. It would prove a hard slog and take another quarter of a century to establish a fully uniform CCP for trade in goods. The 1993 internal market programme was the catalyst, leading to uniform import regimes in sectors like textiles and clothing; cars (particularly from Japan); and bananas.13 It can only be imagined what might have otherwise been if the Court had been more accepting of trade policy divergences in Donckerwolcke and had not introduced the concept of a specific authorisation and the exceptional nature of Article 115 EEC. It is not clear at all that a purely political approach would have achieved a genuinely common CCP, given the different political opinions, in Europe, about concepts such as free trade, protection, neoliberalism, sovereignty and the like. The concept of a ‘specific authorisation’ of national commercial policies appeared more promising for moving to a unified commercial policy than it turned out to be. In subsequent case law, the Court accepted that the EEC could exclude the whole sector of petroleum from common export rules as seen in Bulk Oil,14 and could itself divide textiles and clothing quotas between the Member States rather than merely accepting the continuation of national quotas, as seen in Tezi.15 That case law was not without criticism.16 It gave the Member States more opportunity to resist the removal of national protections, though it is unclear whether hard
12 See Eeckhout (n 2) 176–79. 13 ibid ch 6. 14 Case 174/84, Bulk Oil (Zug) AG v Sun International Limited and Sun Oil Trading Company, ECLI:EU:C:1986:60. 15 Case 242/84, Tezi BV v Minister for Economic Affairs, ECLI:EU:C:1986:103; Case 59/84, Tezi v Commission, ECLI:EU:C:1986:102. 16 See Timmermans (n 11); see also RJPM van Dartel, ‘The EEC’s Commercial Policy Concerning Textiles’ in Völker (n 11) 121.
Linking Internal and External Trade in a Perfect Customs Union 95 political and economic realities would have allowed the EEC to move faster. Nevertheless, throughout its case law on specific authorisations of divergent national commercial policies, the Court has continued to declare that the divergences need to be temporary, and that the EU must continue to move towards a uniform commercial policy. The latter is, of course, a never-ending endeavour. The EU has a common policy on trade in services, but its World Trade Organization (WTO) or free trade agreement schedules of services commitments are anything but uniform. That is because in the services sector, most trade barriers are regulatory in nature, and Member States continue to have divergent regulatory systems for services. The EU is also aiming to establish a common policy in the field of foreign direct investment (FDI), but will no doubt need several decades to replace existing bilateral investment treaties.17 C. Aims-and-Effect and Proportionality As indicated above, AG Capotorti in Donckerwolcke opined, in general terms, on the concept of measures having equivalent effect. It is one of the most elegant and compelling accounts, and transcends EU law, in that it is relevant to the interpretation of any general provisions outlawing barriers to trade between states. In just a few paragraphs, the AG pointed out that the Dassonville formula should not be employed by focusing merely on the restrictive effects of an impugned measure, but that one should not underestimate the importance of the purpose of the measure, and the relationship between the restrictive effects and the purpose. That relationship must be proportionate, in that the restrictive effect of a measure must not be out of proportion to the purpose of the measure. The AG summed up his definition of a measure having equivalent effect in the following sentence: [N]ational measures which are liable to render intra-Community trade impossible or more difficult are, as a general rule, measures having an effect equivalent to quantitative restrictions contrary to the Treaty unless they were adopted for a purpose worthy of protection and which accords with the common interests of the Member States, in which case, however, the restrictive effect must be in proportion to the lawful object being pursued.18
This sentence prefigures the Cassis de Dijon concept of mandatory requirements,19 as an additional set of policy objectives which can justify restrictive measures. It also identifies the central role for the principle of proportionality. It is beyond the scope of this chapter to provide a fuller account of the relationship between effects and purpose (or aims and effect). Suffice it to say that this relationship also dominates the debate in WTO law about unlawful barriers to trade, even if the central provisions of the GATT are focused on discriminatory, rather than purely restrictive, measures.20 At any rate, the AG’s definition should be looked at in any reflection about this fundamental question of how to manage globalisation.
17 Regulation (EU) No 1219/2012 of the European Parliament and of the Council of 12 December 2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries, [2012] OJ L351/40. 18 Opinion of AG Capotorti (n 6) para 2. 19 Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon), ECLI:EU:C:1979:42. 20 See in particular R Hudec, ‘GATT/WTO Constraints on National Regulation: Requiem for an Aim and Effects Test’ (1998) 32 International Lawyer 619.
96 Piet Eeckhout D. A Brexit Vignette An annotation of Donckerwolcke at the time when the UK and the EU have gone their separate ways should not avoid the Brexit conundrums. The demands of the perfect customs union, which the Court spelled out, show how difficult – if not impossible – it is to achieve some of the Brexit objectives, particularly on the island of Ireland. The concept that Northern Ireland remains part of the UK’s customs territory but is also inside the EU’s customs union will be incredibly difficult to make work. Donckerwolcke shows how important it is for the EU to have a genuinely uniform customs and commercial policy, and therefore a hard external border. The scope for deflections of trade that worried France and led to the prosecution of Mrs Donckerwolcke and Mr Schou extends to the post-Brexit EU, and to trade between Northern Ireland and Ireland. If the UK’s divergent trade policy is to include Northern Ireland, then there must be a border of some kind to avoid breaches of the EU’s CCT and CCP. The concept of the Northern Ireland Protocol is to put that border in the Irish Sea, and to set up a system ensuring that no deflections of trade occur: products that are ‘at risk’ of entering the EU through Northern Ireland are subject to the EU’s external trade regime.21 It very much remains to be seen whether that system will prove workable, and whether Northern Ireland can remain in two different, and divergent, customs territories. V. ADDITIONAL READING Beseler, A, ‘Intra-Community Protection with Regard to Goods Imported into the EC: Article 115’ [1991] International Business Lawyer 1119. Eeckhout, P, The European Internal Market and International Trade: A Legal Analysis (Oxford, Clarendon Press, 1994). Hilf, M, ‘The Single European Act and 1992: Legal Implications for Third Countries’ [1990] European Journal of International Law 89. Hudec, R, ‘GATT/WTO Constraints on National Regulation: Requiem for an “Aim and Effects” Test’ (1998) 32 The International Lawyer 619. Kuijper, PJ, ‘The Influence of the Elimination of Physical Frontiers in the Community on Trade in Goods with Third States’ in M Hilf and C Tomuschat (eds), EG und Drittstaatsbeziehungen nach 1992 (Baden-Baden, Nomos, 1991) 51–68. Mattera, A, ‘L’achèvement du marché intérieur et ses implications sur les relations extérieures’ in P Demaret (ed), Relations extérieures de la Communauté européenne et marché intérieur: aspects juridiques et fonctionnels (Bruges, Story, 1988) 210–24. Timmermans, CW, ‘Community Commercial Policy in Textiles: A Legal Imbroglio’ in ELM Völker (ed), Protectionism and the European Community, 2nd edn (Deventer, Kluwer, 1986) 159–83. van Dartel, RJPM, ‘The EEC’s Commercial Policy Concerning Textiles’ in ELM Völker (ed), Protectionism and the European Community, 2nd edn (Deventer, Kluwer, 1986) 121–58. Vogelenzang, P, ‘Two Aspects of Article 115 EEC Treaty: Its Use to Buttress Community-Set Sub-quotas, and the Commission’s Monitoring System’ (1981) CML Rev 169–96.
21 See in particular Art 5 of the Protocol on Ireland/Northern Ireland to the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, [2020] OJ L29/7.
9 EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty: Opinion 1/76 (Laying Up Fund for Inland Waterway Vessels) ALLAN ROSAS Opinion 1/76, Draft agreement establishing a European laying-up fund for inland waterway vessels, ECLI:EU:C:1977:63, delivered 26 April 1977. KEYWORDS External competence of the Union – Exclusive and shared competence – Mixed agreements – Facultative mixity – Common transport policy – Inland navigation – Establishment of public international organism with the participation of the Union – Grant of powers of decision to the organism – Alteration of the structure of the Union and its decision-making procedure – Direct effect of measures adopted – Jurisdiction of international tribunal – Possible conflict of jurisdiction with the jurisdiction of the Court of Justice.
I. INTRODUCTION
A
s EU external relations case law got off the ground in the 1970s, the first and foremost issue to resolve was the question of competence. In its famous ERTA judgment, the Court ruled that the authority to conclude international agreements did not require an explicit provision to this effect, but could equally flow from other provisions of the EU Treaties and from measures adopted within the framework of those provisions (implicit competence).1 Moreover, if the Union had adopted common rules, the Member States no longer had the right to undertake international obligations affecting those rules (exclusive competence).2 This judgment inspired one of the three criteria for what has been called ‘supervening’ exclusivity,3 as formulated in Article 3(2) TFEU. 1 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA), para 16. See this volume, ch 1. 2 ibid para 17. 3 A Dashwood, ‘Mixity in the Era of the Treaty of Lisbon’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and Its Member States in the World (Oxford, Hart Publishing, 2010) 351, 356, 360.
98 Allan Rosas In Opinion 1/75,4 the Court recognised the existence of a priori exclusive competence5 in a particular area, in this case, the common commercial policy (CCP), now recognised in Article 3(1) TFEU. As to the broader question of Union competence, whether exclusive or not, the Court, in Kramer,6 after having established that the Union’s rule-making authority extended to the conservation of the biological resources of the sea,7 recognised that attaining that objective required international rules, binding also on third states. This external competence had not yet developed into an exclusive one, as the Union had not yet fully exercised its competence by adopting internal rules. The situation was about to change, at the very latest, at the end of a transitional period.8 In Opinion 1/76, delivered some nine months after Kramer, the competence question concerned a situation where no internal common rules had been adopted. There was only a draft agreement establishing a laying-up fund for inland waterway vessels (the Fund), providing for the participation, as contracting parties, of the then Community, Switzerland and six directly interested Member States, and a draft regulation on the future conclusion of an international agreement. As was the case with ERTA, the draft agreement fell within the field of transport policy, an area of shared competence9 bereft of rules from the EU Treaties providing explicitly for an external competence.10 Was there an external competence and, if so, was it of an exclusive nature, or could – or should – the agreement be concluded as a mixed agreement, involving the participation also of Member States as contracting parties?11 While an answer to these questions will be provided below, it should be noted that today’s Article 3(2) TFEU, as a criterion for supervening exclusivity, uses wording inspired by a dictum in Opinion 1/76, while the wording of one of the criteria for the existence of an external competence in Article 216(1) TFEU comes even closer to what the Court said in Opinion 1/76. On the other hand, in case law and actual practice, the ‘1/76’ criterion of Article 3(2) TFEU has played a marginal role, if any, as a distinct basis for a (supervening) exclusive competence. The question can therefore be framed in the following: does Opinion 1/76 constitute a ‘sleeping beauty’? The relevance of Opinion 1/76 does not stop here, however. At issue were also the structure of the organs of the Fund to be established by the international agreement and, more specifically, the respective roles of the Member States and the Union institutions in the management of the Fund, as well as the delegation of decision-making powers to the Fund organs, and the
4 Opinion 1/75, Local Cost Standard, ECLI:EU:C:1975:145. See this volume, ch 4. 5 Dashwood (n 3) 356. 6 Joined Cases 3, 4 and 6/76, Kramer and Others, ECLI:EU:C:1976:114. See this volume, ch 7. 7 ibid paras 30–33. 8 Now Art 3(1) TFEU refers to ‘the conservation of marine biological resources under the common fishery policy’ as one of the areas of a priori exclusive competence. 9 ‘Transport’ is now listed in Art 4(2) TFEU among the areas of shared competence. Art 207(5) TFEU makes it clear that the negotiation and conclusion of international agreements in the field of transport fall outside the common commercial policy. See also Opinion 2/15, Free Trade Agreement between the European Union and the Republic of Singapore, ECLI:EU:C:2017:376, paras 56–69, 77. See this volume, ch 82. 10 ‘The power of the Community to conclude such an agreement is not expressly laid down in the Treaty’, Opinion 1/76, Draft Agreement establishing a European laying-up fund for inland waterway vessels, ECLI:EU:C:1977:63, para 3. Today an explicit reference to international agreements is to be found in Art 207(5) TFEU (see n 9). 11 On mixity, see A Rosas, ‘The European Union and Mixed Agreements’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 200; J Heliskoski, Mixed Agreements as a Technique for Organizing the International Relations of the European Community and Its Member States (The Hague, Kluwer Law International, 2001); Hillion and Koutrakos (n 3); M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill Nijhoff, 2020).
EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty 99 organisation and powers of a body for the settlement of disputes – the Fund Tribunal.12 On these questions, there was little, if any, guidance to be sought from earlier case law.13 II. FACTS
In its request for an Opinion under what is now Article 218(11) TFEU), the Commission enquired whether the draft agreement was compatible with the EU Treaties. The draft agreement, including the statute of the fund, had been the subject of negotiations between the Commission, in accordance with a decision of the Council, and Switzerland, with the participation of the six Member States which were parties to one of two older conventions, one relating to the Rhine (the revised Mannheim Convention of 1968) and the other to the Moselle (the Luxembourg Convention of 1956). The Commission also submitted to the Court a draft regulation on the conclusion of the agreement on behalf of the Union.14 The objective of the agreement was to mitigate the disturbances arising from the surplus carrying capacity for goods in or linked to the Rhine and Moselle basins, by providing for compensation, through a fund, to carriers who voluntarily withdrew vessels from the market for a certain period. The Fund was to have two organs: a Supervisory Board, consisting of representatives from all Member States but one (Ireland), Switzerland and the Commission, with the latter chairing the Board but without a right to vote; and a Board of Management, consisting of members representing five EU Member States and Switzerland, with an unequal allocation of seats.15 Most of the decisions taken by these organs could be taken by simple majority or two-thirds majority. Decisions having general application were to be ‘directly applicable’ in all Member States and in Switzerland, while decisions imposing a pecuniary obligation on the owner or operator of a vessel, the agreement and the statute as such were to be ‘enforceable’ in all these states.16 Judicial control was to be ensured by a Fund Tribunal (the Tribunal) consisting of seven judges, one judge to be appointed by Switzerland and six judges by the other contracting parties, although, according to the draft regulation, the latter were to be nominated by the Court from among its own membership. The Tribunal was to have powers to deal with actions for annulment against decisions of the organs of the fund, actions for failure to fulfil an obligation against the EU Member States and Switzerland, and requests for preliminary rulings made by appellate courts of a Member State or Switzerland. Finally, the contracting states, which were also parties to the Mannheim or Luxembourg Convention, undertook, given Article 234(2) of the EEC Treaty (now Article 351 TFEU),17 to adopt amendments to the latter conventions, made necessary by the new agreement envisaged. 12 Opinion 1/76 (n 10) Summary of the observations submitted by the institutions and governments. 13 True, in Kramer (n 6) the point at issue was the participation of Member States in a regional fisheries commission and their duty to proceed by common action and to ensure the participation of the Union in the convention in question (see paras 42–45 of that judgment). However, that judgment did not go into the structure of that commission’s decision-making organs, or the question of the delegation of powers to them. 14 Opinion 1/76 (n 10) Statement of the question. 15 Four members each for Germany and the Netherlands, two members each for Belgium, France and Switzerland and one member for Luxembourg. The UK, while destined to become a contracting party, was not to be represented on the Board of Management. 16 See Arts 5, 39 and 46 of the draft agreement as described in Opinion 1/76 (n 10) Statement of the question. 17 According to this provision, the Member States are under an obligation to take all appropriate steps to eliminate incompatibilities between agreements they have concluded before their EU membership and Union law. See, eg A Rosas, ‘The Status in EU Law of International Agreements Concluded by EU Member States’ (2011) 34 Fordham International Law Journal 1304, 1321–24.
100 Allan Rosas III. THE COURT
The questions submitted by the Commission to the Court raised three principal problems.18 These were: the legal basis of the agreement; whether the Union had competence to conclude the agreement even if no internal rules had yet been adopted; and whether the participation of six Member States was legally permissible. The Commission proposed as a legal basis what is today Article 91 TFEU, which enables the adoption, inter alia, of ‘common rules applicable to international transport’. The Commission argued that it was not necessary to follow the two-stage procedure of the ERTA judgment (first the adoption of internal rules and only afterwards the conclusion of an agreement), and that an international agreement that also covered Switzerland was necessary here in order to make the system effective. While it was possible to envisage a bilateral agreement between the Union and Switzerland, the Council had preferred an agreement involving the Member States as parties to the Mannheim and Luxembourg Conventions, which could be justified by the need to ensure necessary amendments to those Conventions. The Council argued that before any internal rules had been adopted, the Member States were not prohibited from concluding, within the framework of common action, international agreements in the field of transport.19 The Court, after hearing all the Advocates General,20 largely agreed with the Commission. It observed, in particular, that it was ‘impossible fully’ to obtain the objectives sought without the involvement of Switzerland, which traditionally participated in navigation by the international waterways in question. Citing Kramer, the Court recalled that authority to enter into international commitments may flow implicitly from Treaty provisions. This included situations where there were internal powers for the purpose of attaining a specific objective, provided that the international commitments were ‘necessary for the attainment of that objective’.21 The Court went on to note a ‘special problem’ arising from the fact that the draft agreement provided for the participation of six Member States.22 Their participation had to be considered ‘as being solely’ for the limited purpose of amending the Mannheim and Luxembourg Conventions, and was not otherwise ‘necessary’. The draft agreement and statute were enforceable in all Member States, this legal effect resulting ‘exclusively’ from their conclusion by the Union. ‘In these circumstances’, the participation of the Member States was ‘not such as to encroach on the external powers of the [Union]’.23 The Court then took a closer look at the institutional arrangements in question, concluding that they went beyond the aforementioned objective of ensuring amendments to the Mannheim and Luxembourg Conventions, and were ‘incompatible with the requirements implied by the
18 Opinion 1/76 (n 10) Summary of the observations submitted by the institutions and the governments, A – The Commission. Some of the Commission’s observations were presented in an additional memorandum. 19 Opinion 1/76 (n 10) Summary of the observations submitted by the institutions and the governments, B – The Council. 20 There was no written opinion of an Advocate General, in accordance with Art 108(2) of the then Rules of Procedure of the Court. Instead, all Advocates General had to be heard if the Court was to deliver an Opinion on an international agreement envisaged. See also S Adam, La procedure d’avis devant la Cour de justice de l’Union européenne (Brussels, Bruylant, 2011) 391; G Butler, ‘Pre-ratification Judicial Review of International Agreements to be concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 76. The situation has changed with the Rules of Procedure of 2012: see Art 197 [2012] OJ L265. 21 Opinion 1/76 (n 10) paras 3–4. 22 ibid para 6. 23 ibid para 7.
EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty 101 very concepts of the [Union] and its common policy’. This was principally because of the considerable variations in the assignment of rights and duties in the decision-making system, sometimes to all Member States and Switzerland, sometimes all but one Member State (the exception being Ireland) and Switzerland, sometimes just the Union and Switzerland, and sometimes only five Member States. The part played by the Union institutions was ‘extremely limited’, while the ‘determinative functions’ in the operation of the Fund were performed by the states.24 These provisions ‘[called] into question the power of the institutions of the [Union] and, moreover, [altered] in a manner inconsistent with the Treaty the relationships between Member States’,25 taking into account that the then EEC Treaty referred to the field of transport as a ‘common policy’ which had been ‘expressly reserved’ to the activities of the Union, which should take ‘common action’.26 The second set of problems mentioned by the Commission concerned the delegation of powers to the organs of the Fund. While this situation was not new or was likely to raise problems of compatibility with the Treaty, the direct applicability of the decisions taken by such organs was a novelty. This new feature, ‘in accordance with the present development of public international law’, was not incompatible with the EU Treaties, and the Union was necessarily entitled to exercise its external powers under the same conditions as those governing the external powers of the Member States. The Commission did recognise, however, that there were limits to such a grant of powers, a ‘surrender’ of powers to international institutions being excluded, but argued that these limits had been respected here, as the Fund had been granted ‘powers of management’ only.27 The Council, by contrast, had doubts about the delegation of decision-making powers, especially if the decisions could be directly applicable. This was a question of EU constitutional law, and the answer was not necessarily the same as would apply to states. One possible interpretation was to consider that the tasks conferred on the Union had to be performed by its own institutions. The Danish government was also sceptical and underlined that, in any case, there were important limitations to a delegation of powers.28 The Court gave short shrift to the question of delegation of decision-making powers, however. After having formulated the problem as the question whether the Union institutions ‘may freely’ transfer to non-Union organs powers granted by the Treaty, and thus create for the Member States an obligation to apply directly rules of law which are not of Union origin,29 the Court, somewhat surprisingly, observed that it was not necessary to solve the problem ‘thus posed’. This was because the provisions of the draft statute defined and limited the powers of the organs of the Fund ‘so clearly and precisely’ that, in this case, they were only ‘executive powers’.30 As regards the third set of problems, the Commission recognised some problems of interpretation relating to the preliminary ruling procedure, and concerning the interpretation of the draft agreement and statute in particular. The question was how to reconcile the powers of the Court with those of the Fund Tribunal. More specifically, did the latter have exclusive jurisdiction, or did the jurisdiction overlap? The Commission signalled ‘certain doubts’ as to the exclusion of first instance courts from the right to submit preliminary ruling requests to the
24 ibid
paras 8–9. para 10. para 11. 27 ibid Summary of the observations submitted by the institutions and the governments, A – The Commission. 28 ibid B – The Council and C – The Government of Denmark. 29 ibid para 15. 30 ibid para 16. 25 ibid 26 ibid
102 Allan Rosas Fund Tribunal, while they could submit such requests to the Court.31 The Council essentially signalled the same problems. The UK government argued that the only satisfactory solution was to consider that the Fund Tribunal was to have exclusive jurisdiction over all matters for which it was made competent. The Court basically came down to accepting the proposed solution, without ruling on which interpretation was the right one. The Court did express the hope, though, that there would be ‘the smallest possibility of interpretations giving rise to conflicts of jurisdiction’. The participation of a third state could require special solutions with a view to guaranteeing the observance of the law ‘to an equal extent for all individuals’ and thus legal protection ‘adapted to meet the difficulties of the situation’. This acceptance, in principle, of the judicial system was, however, followed by a reservation relating to the proposed composition of the Fund Tribunal. To the extent that there was overlapping jurisdiction, it was not acceptable that six members of the Court would be required to sit on the Tribunal, as this might conflict with the principle of impartiality of judges and could in extreme situations make it impossible for the Court to assemble a quorum of judges able to rule on issues already considered by the Tribunal. Hence, the Tribunal could only be established on condition that judges of the Court were not called upon to serve on the Tribunal. IV. THE IMPORTANCE OF THE CASE
A. Issues of Competence On the very existence of an external competence, the Court in Opinion 1/76 specified more clearly than in Kramer32 that such a competence does not necessarily require the preceding adoption of internal legal acts, and may flow by implication from the provisions of the EU Treaties creating an internal power, whether concerning a common policy or not. As the Court did add, however, that there was an external power in so far as the participation of the Union in an international agreement was ‘necessary for the attainment of one of the objectives of the [Union]’, the question arose as to the interpretation of the word ‘necessary’. As the Court referred to Kramer in this context, it may be assumed that it had in mind what it had stated in that judgment, namely that the ‘only way’ to ensure the conservation of the biological resources of the sea ‘both effectively and equitably’ was to have rules binding also on third states. In Opinion 1/76, it observed that it had been ‘impossible fully’ to attain the objective pursued by means of an internal act only. These formulations suggest that what the Court had in mind was not necessity in the sense of indispensability,33 but that this requirement either came down to a policy choice or that, at any rate, the Council enjoyed a wide margin of discretion.34 In fact, in the context of Opinion 1/76, it would not have been outright impossible
31 Opinion 1/76 (n 10) Summary of the observations submitted by the institutions and the governments, A – The Commission. 32 ibid para 3. 33 A Dashwood, ‘The Attribution of External Relations Competence’ in Dashwood and Hillion (n 3) para 8.17. 34 Authors who seem to view Opinion 1/76 as recognising a parallelism between internal and external competence or at least recognise a wide margin of appreciation in the application of the requirement of necessity include M Hardy, ‘Opinion 1/76 of the Court of Justice: The Rhine Case and the Treaty-Making Powers of the Community’ (1977) 14 CML Rev 561, 568–69, 587–88; J Groux, ‘Le parallelisme des compétences internes et externes de la Communauté économique européenne’ (1978) 14 Cahiers de droit européen 3, 18–19, 23–25; C Philip, ‘À propos de l’avis 1/76 de la Cour de justice des Communautés européennes: Réflexions concernant le champ de la compétence externe de la
EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty 103 to proceed without the participation of Switzerland, or to involve Switzerland by other means than an international agreement; also, the amendments to the Mannheim and Luxembourg Conventions could have been secured by other means.35 This opening part of the Opinion refers to the existence of a competence without labelling it exclusive.36 Yet, the Court, in using quite strong language, went on to rule that the right of the six Member States to become contracting parties was only explained and justified by the need to ensure a harmonisation between the new agreement and the Mannheim and Luxembourg Conventions.37 Quite different views have been put forward in the legal literature as to whether the Court had in mind an exclusive competence or not.38 Subsequent case law was not consistent before Opinion 1/03, and the Court did not clearly and systematically distinguish between the existence of a Union competence, whether exclusive or not, and the nature of that competence.39 In Opinion 1/94, Opinion 2/92 and the Open Skies judgments, the Court interpreted Opinion 1/76 as a dictum on exclusivity, while at the same time making the requirement of necessity quite demanding.40 Opinion 2/91 departs from this approach, as the Court here referred to Opinion 1/76 (and the judgment in Kramer) as far as the existence of a competence is concerned, while the dicta on the criteria for an exclusive competence contained references to decisions such as ERTA and Opinion 1/75.41 Opinion 1/03 picked up on this distinction between the existence and the nature of a competence,42 but also took into account the fact that in Opinion 1/94 and the Open Skies judgments the Court cited Opinion 1/76 in the context of exclusivity.43 In one paragraph, the Court, with regard to the existence of a competence, cited Opinion 1/76 and Opinion 2/91 using the language of Opinion 1/76, while in the following paragraph the Court referred to Opinion 1/76 using the language of Opinion 1/94 and the Open Skies judgments, with their higher threshold of applicability. In Opinion 1/03, the Court
Communauté’ (1978) 21 Revue du Marché Commun 55, 57–58; R Kovar, ‘L’avis 1/76’ (1978) 105 Journal du droit international 939, 942–44; R Schütze, ‘Parallel External Powers of the European Community: From “Cubist” Perspectives towards “Naturalist” Constitutional Principles’ (2004) 23 Yearbook of European Law 225, 239; P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 82. cf A Dashwood and J Heliskoski, ‘The Classic Authorities Revisited’ in Dashwood and Hillion (n 3) 3, 12–13, who propose to refer to the external competence as ‘complementary’ to an internal competence. For an extensive discussion of different interpretations of Opinion 1/76 in this regard, see R Holdgaard, External Relations Law of the European Community (Alphen aan den Rijn, Wolters Kluwer, 2008) 56–68. 35 See also P Koutrakos, EU International Relations Law (Oxford, Hart Publishing, 2015) 92. 36 Eeckhout (n 34) 81; Koutrakos (n 35) 91. 37 Opinion 1/76 (n 10) para 7. See also above nn 22–23. 38 Authors tending to argue that Opinion 1/76 entails exclusivity include Philip (n 34) 57–58; Kovar (n 34) 944–46, 949; I MacLeod, ID Henry and S Hyett, The External Relations Law of the European Communities (Oxford, Oxford University Press, 1996) 60–61. Authors who are more sceptical or negative include Dashwood and Heliskoski (n 34) 13–14; Schütze (n 34) 250–59; Eeckhout (n 34) 81; Koutrakos (n 35) 91–93. 39 See in particular Koutrakos (n 35) 92, 109, 116. 40 Opinion 1/94, Competence of the Community to conclude international agreements concerning services and the protection of intellectual property, ECLI:EU:C:1994:384, paras 85–86. See this volume, ch 28; Opinion 2/92, Competence of the Community or one of its institutions to participate in the Third Revised Decision of the OECD on national treatment, ECLI:EU:C:1995:83, paras 29–32. See this volume, ch 29; Case C-467/98, Commission v Denmark, ECLI:EU:C:2002:625, paras 54–63 and six other infringement judgments of the same date. See this volume, ch 41. See also the Opinion of Advocate General Tizzano in Case C-433/03, Commission v Germany, ECLI:EU:C:2005:153, paras 72–80. 41 Opinion 2/91, ILO Convention concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, paras 7–9. See this volume, ch 22. 42 For the sake of full disclosure, it should be stated that the present author was the reporting judge (juge rapporteur) in Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81. 43 ibid paras 114–15. See this volume, ch 46.
104 Allan Rosas thus read two distinct elements into Opinion 1/76, competence as such and exclusivity, with different thresholds of applicability.44 This approach seems to have inspired Articles 3(2) and 216(1) TFEU. According to Article 3(2) TFEU, a shared competence may become exclusive when the conclusion of an international agreement ‘is necessary to enable the Union to exercise its internal competence’. In other words, without an international agreement, the exercise of an internal competence becomes ineffective, if not impossible (it may not be ‘effectively exercised’).45 Article 216(1) TFEU, again, provides that there is a competence when the conclusion of an international agreement ‘is necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties’. This language, which is clearly inspired by what the Court said in Opinion 1/76, resembles the language of Article 352(1) TFEU – the flexibility clause – authorising the Union to adopt measures ‘necessary’ to attain one of the objectives of the Treaty in situations where the Treaties have not elsewhere provided the necessary powers. This distinction between Article 3(2) TFEU and Article 216(1) TFEU has been recognised in Opinion 1/13 and in Germany v Council (COTIF I), where the Court confirmed that the latter provision concerns the existence of a competence, while the question of the nature of the competence is regulated in the former.46 The COTIF I judgment also recognised that Article 216(1) TFEU is broader in scope than Article 3(2) TFEU.47 The Opinion 1/76 formula, to cite COTIF I, ‘is now referred to in article 216(1) TFEU’.48 What is the relevance of the word ‘necessary’ in this formula? It should first of all be recalled that in Opinion 2/91, the Court, after having cited Opinion 1/76, did not, when determining that there was a competence, refer to a requirement of necessity, which seems to suggest a parallelism between internal and external competence.49 In COTIF, the Court, citing Article 216(1) TFEU, observed that it fell upon it to determine whether entering into the international commitments at issue was ‘necessary’.50 The Court then was satisfied by the fact that these commitments fell within a Union policy and added that that policy, in view of Article 91(1) TFEU, ‘also encompasses an external aspect’.51 What if the internal legal basis does not explicitly encompass an external element? It is suggested that the necessity criterion of Opinion 1/76, and hence of Article 216(1) TFEU, should in any case be seen primarily as a question of policy choice, in line with what seems to be the case for Article 352(1) TFEU.52 At most, following Advocate General Szpunar in COTIF I, the criterion would constitute a test for ensuring that the external action permits the achievement of an objective of the EU Treaties.53
44 Holdgaard (n 34) 66. 45 This is a quotation from para 115 of Opinion 1/03 (n 42). 46 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303, paras 67–69. See this volume, ch 69; Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), paras 45–52. See this volume, ch 84. 47 COTIF I (n 46), paras 48–51. 48 ibid para 45. See also Opinion 1/13 (n 46) para 67. 49 Opinion 2/91 (n 41) paras 7, 13–17. See also Koutrakos (n 35) 95, 97–98, 99–100. cf Dashwood and Heliskoski (n 3) 16. 50 COTIF I (n 46), para 53. 51 ibid paras 54–60, quotation para 60. 52 Case 8/73, Massey-Ferguson, ECLI:EU:C:1973:90, para 3. It is submitted here that the limits which the Court determined for the use of Art 352 TFEU in Opinion 2/94, Accession by the Community to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:1996:140 do not concern the necessity test in itself. Compare K Lenaerts and P Van Nuffel, European Union Law (London, Sweet & Maxwell, 2011) 122–23. 53 COTIF I (n 46), Opinion of Advocate General Szpunar, ECLI:EU:C:2017:296, paras 101–03.
EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty 105 This brings us finally to the ‘exclusivity leg’ of Opinion 1/76, as developed in Opinion 1/94, the Open Skies judgments and Article 3(2) TFEU. To start with the language of Article 3(2) TFEU, namely ‘necessary to enable the Union to exercise its internal competence’, it is clear that this wording cannot be read as a requirement of veritable impossibility. To require that it would be impossible, in a legal or technical sense, to exercise an internal competence without an international agreement would render the provision meaningless, as such a situation would almost never occur in practice. On the other hand, the threshold of application should be set higher as the necessity reference in Opinion 1/76 and Article 216(1) TFEU. In recent years, there has been a growing discussion on the legal limits to the use of so-called facultative mixity, taking into account the considerable legal and practical problems caused by mixity, including the particular problem of so-called incomplete mixity (participation of some, but not all, Member States).54 Some general principles, such as loyal cooperation and institutional balance, have been mentioned in this context.55 It is submitted that this discussion should be linked to Opinion 1/76.56 In the situation dealt with in that Opinion, it was decided, first, to exercise a Union competence in order to attain an objective of the EU Treaties, and second, that it would not make much sense to limit the rules to an internal legislative act. In that situation, the Court ruled out the participation of Member States, in the same vein as they would have been excluded from being ‘parties’ to an autonomous Union regulation. Should we not, following Eeckhout in particular,57 read this aspect of the Opinion, and Article 3(2) TFEU, as establishing a specific limit to mixity? After all, in Opinion 1/76, the Court observed that the participation of Member States in the agreement was ‘not necessary’ for the attainment of the objectives sought58 and, as will be elaborated in the following section of this chapter, had produced institutional results which hampered the achievement of a Union common policy. It would not be an exclusive competence which exists ab initio, as it would arise only after the Union has decided to exercise a shared competence and it would not make much sense to limit the action to an internal act. This interpretation would be more faithful to what the Court intended to say in Opinion 1/76, and would give some meaningful content to one of the three categories referred to in Article 3(2) TFEU, which should not be presumed to contain meaningless provisions. The beauty would rouse from her sleep. B. The Structure of Decision-Making Organs The negative stance taken by the Court on the participation of Member States may have been at least partly influenced by the serious institutional problems the Court would have seen in the structure of the decision-making system, and the Supervisory Board in particular. The Court
54 The problems relating to incomplete mixity are discussed in A Rosas, ‘Mixity Past, Present and Future: Some Observations’ in Chamon and Govaere (n 11) 17–18. 55 See in particular C Timmermans, ‘The Court of Justice and Mixed Agreements’ in Court of Justice of the European Union, The Court of Justice and the Construction of Europe: Analyses and Perspectives on Sixty Years of Case-Law (The Hague, TMC Asser Press, 2013) 663–66; M Chamon, ‘Constitutional Limits to the Political Choice for Mixity’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 137–65; M Chamon, ‘Existence or Exercise of EU Competence? From Supervening Exclusivity to Institutional Balance in Limiting Facultative Mixity’ in Chamon and Govaere (n 11) 112–34; L Prete, ‘The Constitutional Limits to the Choice of Mixity after EUSFTA, COTIF I, MPA Antarctic and COTIF II: Towards a More Constructive Discourse?’ (2020) 45 EL Rev 113. 56 Chamon, ‘Existence or Exercise of EU Competence?’ (n 55) 132. 57 Eeckhout (n 34) 81. Along the same lines, see Groux (n 34) 23–28, 31; Hardy (n 34), 597–99; Schütze (n 34) 265–70. 58 Opinion 1/76 (n 10) para 7.
106 Allan Rosas referred to the ‘various groupings’ of Member States taking part in decision-making, depending on the issue at hand, to the ‘extremely limited’ role accorded to Union institutions and to the ‘determinative functions’ in the operation of the Fund reserved for the Member States.59 The Court in fact noted that it was the participation of the Member States in the negotiations that had produced results extending beyond the objective of amending two older conventions so as to make them incompatible with ‘the requirements implied by the very concepts of the [Union] and its common policy’.60 This hybrid regime had been established even if it concerned a field which came within a common policy, which ‘Article 3 of the [EEC] Treaty has expressly reserved to “the activities of the Community”’. The proposed Statute constituted both ‘a surrender of the independence of action of the Community in its external relations’ and ‘a change in the internal constitution of the Community’,61 and was incompatible with the ‘requirements of unity and solidarity’. These dicta reinforce the impression that the Court really intended to take a negative stance on the creation of mixed regimes (in this case, incomplete mixity) in situations where the Union competence covered the whole agreement and Member States’ participation was thus not necessary. To the extent that the institutional solution described in Opinion 1/76 implied not only a bias in favour of Member States at the cost of the Union institutions but also an element of unequal participation of Member States in the Fund organs, the question arises as to the relevance of the principle of equality of Member States, now recognised in Article 4(2) TEU. The Opinion does not discuss the situation in those terms. While there is some case law on the differentiated treatment of Member States in internal legislative and regulatory contexts,62 there appears to be no case law other than Opinion 1/76 dealing directly with such problems in international organisations of which the EU is a member.63 C. Delegation of Powers to International Bodies While Opinion 1/76 was the first case where the Court was faced fairly and squarely with the question of the compatibility with EU primary law and the Union joining an international organisation possessing decision-making powers, Opinion 1/76 does not provide an exhaustive answer to all the legal problems such arrangements might entail. This is because the Court, after having formulated the question in a very broad manner, observed that it was ‘unnecessary’ to solve the problem ‘thus posed’, as the provisions of the proposed Statute defined and limited the powers granted to the organs of the Fund ‘so clearly and precisely that in this case they are only executive powers’.
59 ibid para 9. 60 ibid para 8. 61 ibid para 11. 62 K Lenaerts and P Van Nuffel, ‘Advanced Integration and the Principle of Equality of Member States within the European Union’ in C Kaddous and A Auer (eds), Les principes fondamentaux de la Constitution européenne (Bruxelles, Bruylant, 2006) 245, 248–49; L Serena Rossi, ‘The Principle of Equality among Member States of the European Union’ in L Serena Rossi and F Casolari (eds), The Principle of Equality in EU Law (Cham, Springer, 2017) 3, 23–25. 63 True, there is case law dealing with mixed agreements to which only some Member States are contracting parties, see, eg Joined Cases C-626/15 and C-659/15, Commission v Council, ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas). See this volume, ch 87, but the questions of unequal representation of Member States or of incomplete mixity do not seem to have been specifically addressed in this case law.
EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty 107 That said, in the first part of the Opinion dealing with issues of legal basis and competence, the Court observed that the Union is not only empowered to enter into contractual relations with third states, but also has the power, ‘while observing the provisions of the Treaty’, to cooperate with them in setting up an appropriate organism, the organs of which may be given ‘appropriate powers of decision’, including for the purpose of defining, ‘in a manner appropriate to the objectives pursued, the nature, elaboration, implementation and effects of the provisions to be adopted within such a framework’.64 These formulations are fairly open-ended, and do not define concrete limitations to such powers, apart from stating that they should be ‘appropriate’ and must observe the provisions of the EU Treaties. Moreover, while the Court defined the powers of the Fund organs as executive powers, it should be recalled that some of their decisions could be of general application, and directly applicable in all Member States and Switzerland. Despite the limited space devoted to this question, the Opinion thus paved the way for a fairly broad delegation of powers, including the power to take decisions that are directly applicable.65 Subsequently, the Union’s adherence to international organisations endowed with decision-making powers has become commonplace.66 Today, Article 218(7) and (9) TFEU refer to ‘a body’ set up by an agreement, and the latter provision provides that the Council may establish the positions to be adopted on the Union’s behalf in such a body, ‘when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement’ (in the latter case, the simplified procedure is not applicable). While there is case law relating to Article 218(9) TFEU in particular,67 it does not address the question of the constitutional limits to the delegation of powers to international bodies.68 D. The EU and International Dispute-Settlement Mechanisms Opinion 1/76 contains a somewhat more detailed discussion on one further element of the proposed institutional structure of the Fund, namely the composition and jurisdiction of the Fund Tribunal. While the Court declined to take a stance on two alternative interpretations of the proposed preliminary ruling system (eg, did the jurisdiction of the Tribunal replace or overlap with that of the Court?), it did, although apparently with some hesitation, accept the basic
64 Opinion 1/76 (n 10) para 5. See also B Martenczuk, ‘Decisions of Bodies Established by International Agreements and the Community Legal Order’ in V Kronenberger (ed), The European Union and the International Legal Order: Discord or Harmony? (The Hague, TMC Asser Press, 2001) 141, 146. 65 In Case C-192/89, Sevince, ECLI:EU:C:1990:322 (see also this volume, ch 19), the Court recognised the direct effect of certain provisions of decisions of the Association Council set up by association agreement between the EU and Turkey. The reference in the context of Opinion 1/76 to ‘direct applicability’ probably did not exclude the possibility of direct effect as well. On the distinction between the two concepts, see A Rosas and L Armati, EU Constitutional Law: An Introduction (Third Edition, Oxford, Hart Publishing, 2018) 72–80. 66 On the participation of the EU in international organisations in general, see eg R Frid, The Relations between the EC and International Organizations: Legal Theory and Practice (Deventer, Kluwer Law International, 1995); RA Wessel and J Odermatt, Research Handbook on the European Union and International Organizations (Cheltenham, Edward Elgar, 2019). 67 A Rosas, ‘Recent Case Law of the European Court of Justice Relating to Article 218 TFEU’ in J Czuczai and F Naert (eds), The EU as a Global Actor: Bridging Legal Theory and Practice – Liber Amicorum in Honour of Ricardo Gosalbo Bono (Leiden, Brill/Nijhoff, 2017) 365, 370–71; J Heliskoski, ‘The Procedural Law of International Agreements: A Thematic Journey through Article 218 TFEU’ (2020) 57 CML Rev 79, 86–90, 99–108. 68 It is assumed here that the case law relating to an internal delegation of powers, eg to Union agencies (see eg Case C-270/12, United Kingdom v Parliament and Council, ECLI:EU:C:2014:18 (ESMA)), does not apply to the question of delegation to external bodies.
108 Allan Rosas idea behind the proposed judicial system. Of particular relevance was the fact that the aim was to give individuals legal protection. It was, then, not feasible to ‘escape the consequences’ which inevitably followed from the participation of a third state while it was necessary to establish judicial remedies and legal procedures which guaranteed the observance of the law in the activities of the Fund.69 But taking into account the possibility that the jurisdiction of the two courts would overlap, it was not acceptable that six judges of the Tribunal would at the same time be judges of the Court, thus compromising their impartiality and, in some situations, preventing the Court from assembling a quorum of judges. The following conclusions can be drawn. First, the Union could, in principle, participate in the setting up of international third-party dispute settlement mechanisms to which both it and third states could be parties. Second, an argument in favour of the compatibility of such mechanisms with Union primary law was the need to ensure effective judicial protection for individuals. Third, such mechanisms should avoid involving judges of the Court. Fourth, the Court did not specify in detail where the limits are to the powers that the Union may grant to international dispute settlement mechanisms, from the point of view of the autonomy of the Union legal order in particular (the word ‘autonomy’ is not to be found in the text of the Opinion). The latter issue has, of course, been developed in a long string of case law, mainly in the form of Opinions, ranging from Opinion 1/91 (which also ruled out the participation of judges of the Court in an international court) to Opinion 1/92, Opinion 1/00, Opinion 1/09, Opinion 2/13 and Opinion 1/17.70 As most of these Opinions are analysed elsewhere in this book,71 suffice it to note here that Opinion 1/76 is important as the first confirmation of the possibilities of the Union to be bound by international dispute settlement mechanisms and as the first, albeit limited, formulation of the possible limitations to the modalities of such mechanisms that the Union legal order may entail. V. ADDITIONAL READING Chamon, M and Govaere, I, EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Brill Nijhoff, 2020) passim. Dashwood, A and Hillion, C, The General Law of EC External Relations (Sweet & Maxwell, 2000) 3–19, 179–220. Eeckhout, P, EU External Relations Law (Oxford Univeristy Press, 2011) 76–82, 102–05, 222. Groux, J, ‘Le parallelisme des compétences internes et externes de la Communauté économique européenne’ (1978) 14 Cahiers de droit européen 3. Hardy, M, ‘Opinion 1/76 of the Court of Justice: The Rhine Case and the Treaty-Making Powers of the Community’ (1977) 14 CML Rev 561. Hillion, C and Koutrakos, P, Mixed Agreements Revisited: The EU and Its Member States in the World (Hart Publishing 2010) passim. Holdgaard, R, External Relations Law of the European Community (Kluwer 2008) 56–68. Koutrakos, P, EU International Relations Law (Hart Publishing 2015) 91–95, 97–100, 109, 116.
69 Opinion 1/76 (n 10) para 21. 70 These Opinions, with the exception of Opinion 1/09, Creation of a unified patent litigation system, ECLI:EU:C:2011:123, are analysed elsewhere in this volume. 71 For a general survey of these Opinions, except Opinion 1/17, see A Rosas, ‘The EU and International Dispute Settlement’ (2017) 1 Europe and the World: A Law Journal 7, 12–18. See more generally M Cremona, A Thies and RA Wessel, The European Union and International Dispute Settlement (Oxford, Hart Publishing, 2017).
EU External Competence in the Absence of Internal Rules, and the Sleeping Beauty 109 Kovar, R, ‘L’avis 1/76’ (1978) 105 Journal du droit international 939. Philip, C, ‘À propos de l’avis 1/76 de la Cour de justice des Communautés européennes: Réflexions concernant le champ de la compétence externe de la Communauté’ (1978) 21 Revue du Marché Commun 55. Rosas, A, ‘The EU and International Dispute Settlement’ (2017) 1 Europe and the World: A Law Journal 7. Schütze, R, ‘Parallel External Powers of the European Community: From “Cubist” Perspectives towards “Naturalist” Constitutional Principles’ (2004) 23 Yearbook of European Law 225.
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10 The Birth of the Principle of Close Cooperation, Declaration of Competences, and the Ruling Procedure: Ruling 1/78 (Convention on Nuclear Protection) ANNA SÖDERSTEN Ruling 1/78, Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202, delivered 14 November 1978. KEYWORDS Duty of close association (duty of cooperation) – Declaration of competence – Division of competence between the Union and Member States, and compatibility with the Euratom Treaty – Clarifying/ broadening the Union’s competence – The Ruling procedure under the Euratom Treaty.
I. INTRODUCTION
R
1/78,1 handed down by the Court in 1978, concerned the question whether the participation of one or more Member States in the draft International Atomic Energy Agency (IAEA) Convention on Physical Protection of Nuclear Material, Facilities and Transports2 (hereinafter the draft Convention) was compatible with the provisions of the Euratom Treaty3 relating to the division of powers between the Community and the Member uling
1 Ruling 1/78, Ruling delivered pursuant to the third paragraph of Art 103 of the EAEC Treaty – Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202. 2 The Convention on the Physical Protection of Nuclear Material (CPPNM) Vienna, 26 October 1979, in force 8 February 1987, 1456 UNTS 101, TIAS 11080,18 ILM 1419 (1979). The Convention was signed by Euratom in 1980 (Council Decision of 9 June 1980 approving the conclusion by the Commission of the International Convention on the physical protection of nuclear material, [1980] OJ L149/41), ratified and acceded to in 1991, after all Member States had ratified it. When the Convention was adopted, it was named ‘Convention on the Physical Protection of Nuclear Material’. After the 2005 amendment came into force in May 2016, it was renamed ‘Convention on the Physical Protection of Nuclear Material and Nuclear Facilities’. 3 Treaty Establishing the European Atomic Energy Community, 25 March 1957, 298 UNTS 167.
112 Anna Södersten States, if the Euratom would not be a party to the Convention. The Court emphasised, for the first time, that there must be a close association between the EU institutions and the Member States in the process of negotiation, conclusion and fulfilment of the commitments assumed of a mixed agreement. Ruling 1/78 is therefore seen as the starting point of the case law on the duty of close cooperation. In the case, the Court also formulated its initial views on a declaration of competence, that the distribution of competence between the Community and Member States is an internal (or ‘domestic’) question. Finally, it is the first (and only) use of the Ruling procedure, which is the ‘parallel’ procedure to the Opinion procedure in Article 218(11) TFEU. The Ruling was delivered in the context of the Euratom Treaty, which was adopted in Rome in 1958 simultaneously with the European Economic Community Treaty (EEC Treaty).4 The Euratom Treaty is one of the founding treaties of the EU, and all EU Member States are also Member States of Euratom. Euratom shall promote nuclear research, facilitate investment, ensure the supply of ores and nuclear fuels, create a nuclear common market, make certain that nuclear materials are not diverted to purposes other than those for which they are intended (‘nuclear safeguards’), and establish uniform safety standards to protect the health of workers and of the general public. Further, Euratom has a clear international orientation: it is to establish relations with third states and international organisations, as well as foster progress in the peaceful uses of nuclear energy.5 It even contains a special chapter on external relations.6 II. FACTS
In 1977, the IAEA organised a meeting in Vienna to discuss the draft Convention. The Commission participated in the meeting as an observer, representing Euratom.7 The aim of the Convention was to deal with the risk of theft and misuse of nuclear materials put to civil uses. It obliged the states parties to undertake a series of measures related to the prevention, detection, and punishment of offences relating to nuclear material. The Commission and the Council disagreed on whether Euratom had to accede to the Convention in addition to the Member States. The Commission took the view that it was necessary for Euratom to be a party in addition to the Member States. The Council was of the view that the Member States had sufficient powers to ensure, by themselves, the implementation of the Convention. The disagreement revolved around Article 4 of the draft Convention. Under Article 4, parties must undertake not to import or export, or permit the import or export of, nuclear material, unless such material be subject to certain precautions during international transfer. According to the Commission, Article 4 impinged on areas in which Euratom had direct responsibility.8 If only some Member States were to adhere to the Convention, there was a possibility that those Member States would find themselves under an obligation to refuse authorisation to carry out certain transfers within the Community. This, 4 Treaty Establishing the European Economic Community, 25 March 1957, 298 UNTS 11. 5 Art 2 Euratom. Unlike the Treaty on the European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU), the Euratom Treaty has not been amended in substance; it looks the same as it did when it was signed by the Member States. 6 Euratom Treaty, ch 10. 7 See Art II(2) of the cooperation agreement concluded on 1 December 1975 between the European Atomic Energy Community and the International Atomic Energy Agency [1975] OJ L329/28. 8 Commission, ‘Convention on Physical Protection of Nuclear Material’ (Communication) COM (1977) 520 final.
The Birth of the Principle of Close Cooperation, Declaration of Competences 113 according to the Commission, would constitute a threat to the unity of the nuclear common market and the supply system. It was therefore necessary, in the Commission’s view, that all Member States adhered to the Convention. But the Member States could not enter into an undertaking to agree to transfer nuclear materials between Member States without impeding the application of the Euratom Treaty, in particular the basic principles relating to free movement and the supply system, which ensured equal access to sources. The Commission therefore invited the Member States to declare that they could not fulfil their commitments under the Convention, unless it would include a clause allowing the accession of Euratom. However, both France and the UK claimed their rights to set their own standards for the protection of nuclear materials.9 The question reached the Court through the government of Belgium, which relied on the procedure in Article 103 of the Euratom Treaty, the Ruling procedure, in order to clarify the legal position. The Ruling procedure is to ensure that the provisions of the Euratom Treaty are not frustrated by international agreements or contracts concluded by the Member States with third parties. In such situations, the Member States must wait to conclude a proposed arrangement until they have received comments from the Commission. If the Commission has objections, the Member States shall not conclude the proposed arrangement until they have satisfied these objections or complied with a ruling by the Court. Under the Ruling procedure, the Court shall adjudicate upon an application from a Member State on the compatibility of the proposed clauses with the provisions of the Euratom Treaty at any time after the Member State has received the comments of the Commission. Accordingly, Belgium communicated the draft Convention to the Commission and, after having obtained the Commission’s comments, Belgium filed an application to the Court. Belgium requested the Court to deliver a Ruling on a series of questions. The most central question concerned the compatibility of the draft Convention with the Euratom Treaty. Could Member States participate in the draft Convention, either jointly or severally, without Euratom being party to the draft Convention? The Court reformulated the questions, and asked whether the Member States’ participation in the Convention would conflict with provisions of the Euratom Treaty relating to division of powers in the event of Euratom not being able to participate in the Convention. The Court also examined whether Euratom had the necessary powers to ensure implementation of the Convention. III. THE COURT
Ruling 1/78 of the Court was divided into three parts. In the first part, the Court reviewed the content of the draft Convention. It further noted that the draft Convention made no provision for the participation of subjects of international law other than states, but that the Belgian government had submitted to the IAEA a draft amendment to make participation of international organisations possible.10 In the second part, the Court compared the provisions of the draft Convention with those of the Euratom Treaty. The Court first held that it was ‘undeniable that the draft convention “concerns” in various ways matters within the purview of the EAEC [Euratom] Treaty’, and 9 See O Pirotte, P Girerd, P Marsal, and S Morson (eds), Trente ans d’expérience Euratom: la naissance d’une Europe nucléaire (Brussels, Bruylant, 1988) 77–79. 10 At the meeting in Vienna in April 1978, Belgium introduced an amendment to the draft convention so as to replace the term ‘States Parties to the Convention’ by ‘Parties to the Convention’.
114 Anna Södersten thus according to the requirement of Article 103 of the Euratom Treaty. The Court then found that the field of application of the draft Convention and that of the Euratom Treaty coincide. Essentially, according to the Court, they concerned the same nuclear materials and facilities, they defined nuclear materials in the same way and the concept of nuclear facilities was the same. Materials and facilities for military purposes were excluded from the scope of both the Convention and the Euratom Treaty. Further, in the second part, the Court examined whether the provisions of the draft Convention may impede the application of the Euratom Treaty if Euratom was not a party to the Convention. Four chapters of the Euratom Treaty were of concern: chapter 6, on supplies; chapter 7, on safeguards; chapter 8, on property ownership; and chapter 9, on the nuclear common market. The Court found that Euratom had exclusive jurisdiction with regard to nuclear supplies,11 and a general responsibility for the functioning of the nuclear common market.12 According to the Court, it would not be possible to ‘define a supply policy’, or ‘to manage the nuclear common market properly’, if the Community could not enter as a party of the Convention. The Court then examined the provisions on safeguards (which were to make certain that nuclear materials are not diverted to purposes other than those for which they are intended).13 It pointed out that there was an ‘undeniable lack of certainty as to the scope’ of those provisions, but found that their meaning was ‘sufficiently comprehensive to include also measures of physical protection’.14 Therefore, ‘the exclusion of the Community from the draft convention would have the effect not only of hindering, in certain respects, the functioning of the safeguards … but it would also compromise the subsequent development of that system to its full scope’.15 The Court finally examined the provisions on ‘property ownership’ (which, inter alia, stated that so-called special fissile materials shall be the property of the Community).16 It explained that the system of ownership meant that ‘whatever the use to which nuclear materials are put, the Community remains the exclusive holder of the rights’.17 The Court concluded that ‘the Community has a well-founded title to participate in a Convention whose object is to reinforce the physical protection of materials of which it is the owner’.18 In the third and final part of Ruling 1/78, the Court deliberated on the division of competence between Euratom and the Member States. The Court first recognised that the measures to ensure the physical protection of nuclear materials concerned, in part, the jurisdiction of the Member States and, in part, that of the Community.19 It pointed out that it was quite clear that the provisions relating to criminal prosecution and extradition fell within the jurisdiction of the Member States. But the centre of gravity of the draft Convention, the Court explained, lay in the preventive measures and in the organisation of effective physical protection, and it was on this plane that the draft Convention concerned matters within the purview of the Euratom Treaty. 11 The Court held that the supply provisions ‘show the care taken in the Treaty to define in a precise and binding manner the exclusive right exercised by the Community in the field of nuclear supply in both internal and external relations’. Ruling 1/78 (n 1) para 14. 12 According to the Court, the provisions on the nuclear common market appeared to be ‘nothing other than the application in a highly specialised field, of the legal conceptions which form the basis of the structure of the general common market’. ibid para 15. 13 ibid paras 19–23. 14 ibid. 15 ibid para 23. 16 ibid paras 24–30. 17 ibid para 27. 18 ibid para 29. 19 ibid para 31.
The Birth of the Principle of Close Cooperation, Declaration of Competences 115 Within this final part of Ruling 1/78, the Court next explained that the system set up by the draft Convention ‘could only function in an effective manner, within the ambit of Community law, on condition that the Community itself is obliged to comply with it in its activities’.20 To the extent to which competence had been conferred to the Community under the Euratom Treaty, the Member States were no longer able, whether acting individually or collectively, to impose on the Community obligations.21 It was therefore necessary that the Community should assume the obligations itself. According to the Court, if the Member States concluded the Convention alone, even if it were a collective and concerted action, this would ‘detrimentally affect the powers conferred upon it by the [Euratom] Treaty’.22 Such a course of action would, according to the Court, ‘call in question its capacity for independent action’ in external relations. The Court said that Community must be able to participate through its own institutions in the drawing up and implementation of the draft Convention. The Member States were not to intervene in the exercise of those prerogatives because that right was conferred upon the institutions alone in accordance with the division of powers set out in Article 101 Euratom.23 In this regard, the Court explained that special emphasis should be placed on Article 192 Euratom, which read: [T]he Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the community. They shall facilitate the achievement of the Community’s tasks. They shall abstain from any measure which could jeopardize the attainment of the objectives of this treaty.
The Court then held that the draft Convention could be implemented as regards Euratom ‘only by means of a close association between the institutions of the Community and the Member States both in the process of negotiation and conclusion and in the fulfilment of the obligations entered into’ (emphasis added).24 The Court explained that this situation was foreseen by the Euratom Treaty, in that Article 102 Euratom provided for a special procedure to enter mixed agreements. The Court clarified: Where it appears that the subject-matter of an agreement or contract falls in part within the power and jurisdiction of the Community and in part within that of the Member States there are strong grounds for using the procedure envisaged by Article 102 of the Treaty whereby such obligations may be entered into by the Community in association with the Member States.25
The Court also explained in this third part of Ruling 1/78 that for the Euratom’s part, mixed agreements are to be concluded in accordance with the ordinary procedure laid down by Article 101 Euratom. The international agreements are to be negotiated by the Commission in accordance with the directives of the Council, and concluded by the Commission with the approval of the Council. According to Article 102 Euratom, mixed agreements are not to enter
20 ibid para 32. 21 ibid. 22 ibid para 33. 23 Art 101 Euratom provides that the Community may enter international agreements ‘within the limits of its powers and jurisdiction’. This formulation is sometimes referred to as establishing a parallelism between internal and external powers (‘in foro, ex foro’). See, eg P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2012) 241–43. Thus, Ruling 1/78 could be understood as a case on express external competences, but the Court did not clarify this. However, there are also other possible readings of the provision. Indeed, in a later case, the Court seems to indicate that the Euratom’s external competence is not as broad as it appears to be. See Opinion 1/94, WTO, ECLI:EU:C:1994:384, para 24. 24 Opinion 1/94 (n 23) para 34. 25 ibid.
116 Anna Södersten into force until the Commission has been notified by all the Member States concerned that those international agreements have become applicable in accordance with the provisions of their respective national laws. The Court then stated that ‘it is not necessary to set out and determine, as regards other parties to the convention, the division of powers in this respect between the Community and the Member States, particularly as it may change in the course of time’.26 It continued: ‘It is sufficient to state to the other contracting parties that the matter gives rise to a division of powers within the Community, it being understood that the exact nature of that division is a domestic question.’ The Court concluded its reasoning by turning to the issue of implementation, which, it explained, should be resolved on the basis of the same principles that govern the division of powers with regard to the negotiation and conclusion of the draft Convention. The Court also added that ‘once the Convention has entered into force, its application … entail[s] close cooperation between the institutions of the Community and the Member States’.27 It concluded by stating that here there is to be found once more the necessity for harmony between international action by the Community and the distribution of jurisdiction and powers within the Community which the Court of Justice had occasion to emphasize in its case law originating with the [ERTA judgment].28
IV. THE IMPORTANCE OF THE CASE
Ruling 1/78 was one of the first cases on the Euratom Treaty,29 and it is therefore of importance for the understanding of that Treaty per se. As explained elsewhere,30 it ‘widened’ the Euratom Treaty’s competence to cover the policy area of nuclear protection, and it also clarified and broadened the scope of some of the Treaty’s central chapters. The focus here, however, is on the importance of Ruling 1/78 for EU external relations law, which also includes the external relations of Euratom. Three points will be briefly discussed: the birth of the principle of duty of cooperation (section IVA); declaration of competence (section IVC); and the first use of the Ruling procedure (section IVC). A. The Birth of the Duty of Cooperation Ruling 1/78 is generally seen as the starting point of the case law on the duty of loyal cooperation in the context of mixed agreements,31 an important principle in EU external relations law. In Ruling 1/78, the Court explicitly emphasised, for the first time, that there must be a close
26 ibid para 35. 27 ibid para 36. 28 ibid. 29 Only Case 7/71, Commission v France, ECLI:EU:C:1971:121 preceded Ruling 1/78. There are roughly 30 cases on the Euratom Treaty, although it is difficult to decide what exactly counts as a case ‘on’ the Euratom Treaty, as sometimes an issue is only very briefly or incidentally addressed. 30 A Södersten, Euratom at the Crossroads (Cheltenham, Edward Elgar, 2018) 200–02, 217–22. 31 But see J Heliskoski, ‘The “Duty of Cooperation” between the European Community and its Member States within the World Trade Organization’ (1996) 7 Finnish Yearbook of International Law, who argues that Ruling 1/78 should not be seen as a precedent because the duty of cooperation in subsequent cases is wider in scope, and more imperative in its nature than was introduced in Ruling 1/78 (108–10).
The Birth of the Principle of Close Cooperation, Declaration of Competences 117 association between the EU institutions and the Member States in the process of negotiation and conclusion, and in the fulfilment of the obligations entered into.32 In coming to this conclusion, the Court relied on Article 192 Euratom Treaty, which provides the general principle of loyal cooperation, which is general to all areas of Euratom Treaty law. It was identical to former Article 5 EEC, and thus akin to the current Article 4(3) TEU. Also of some importance was Article 102 Euratom Treaty, the provision on mixed agreements.33 Such a provision was not foreseen in the original EEC Treaty, but only inserted by the Treaty of Nice.34 The very existence of this treaty article could thus have explained why the Court pronounced the duty of cooperation first within the framework of the Euratom Treaty, and not first within the framework of the EEC Treaty. As Eeckhout has pointed out, however, it appears to be of little relevance that the case concerned the Euratom Treaty and not the EEC Treaty.35 In a subsequent case, Opinion 2/91,36 the Court then ‘transferred’ the principle of duty of cooperation to the context of the EEC Treaty.37 The Court held that this duty of cooperation, to which attention was drawn in the context of the EAEC [Euratom], must also apply in the context of the EEC Treaty since it results from the requirement of unity in the international representation of the Community.38
Thus, in contrast to Ruling 1/78, the Court was silent on whether it relied on the general principle of loyal cooperation as provided for in the EEC Treaty, that is, former Article 5 EEC (now Article 4(3) TEU). The Court referred to the ‘requirement of unity’, but without explaining where this requirement came from. In subsequent cases, the Court repeated the link between the duty of cooperation and the requirement of unity, but without mentioning the general principle of loyal cooperation.39 The Court no longer explained, as it did in Opinion 2/91, that ‘the duty of cooperation … must also apply in the context of the EEC Treaty since it results from the requirement of unity in the international representation of the Community’ (emphasis added).40 It simply pronounced that the ‘obligation to cooperate flows from the requirement of unity in the international representation of the Community’ (emphasis added).41 Thus, whereas the Court now presents the requirement of unity as the basis of the duty, the reference 32 Ruling 1/78 (n 1) para 34. Already in Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA) (this volume, ch 1) and Joined Cases 3, 4 and 6/78, Kramer, ECLI:EU:C:1976:114 (this volume, ch 7) the Court suggested that there was a need for cooperation between the Community and the Member States, but this only became explicit in the context of Euratom in Ruling 1/78. 33 The provision is applied relatively often. Several agreements adopted under the auspices of the IAEA are mixed agreements, eg The Convention on Early Notification of a Nuclear Accident and the Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency (1986); the Convention on Nuclear Safety (1994); and the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management (1997). 34 Ex Art 133(6) EC (‘concluded jointly by the Community and the Member States’). Since the Treaty of Lisbon, the EU Treaties no longer mention mixed agreements explicitly, in contrast to Art 218 TFEU for ‘EU-only’ agreements. 35 Eeckhout (n 23) 242. 36 Opinion 2/91, ECLI:EU:C:1993:106. See this volume, ch 22. 37 A Barav, ‘The Divisions of External Relations Power between the European Economic Community and the Member States in the Case Law of the European Court of Justice’ in CWA Timmermans and ELM Völker, Division of Powers between the European Communities and their Member States in the Field of External Relations (Deventer, Kluwer, 1981) 19–64, 5.1. 38 Opinion 2/91 (n 36) para 36. 39 Opinion 1/94 (n 23) para 108. See this volume, ch 28; Case 25/94, Commission v Council, ECLI:EU:C:1996:114 (FAO), para 48. See this volume, ch 31; Opinion 2/00, ECLI:EU:C:2001:664, para 18. See this volume, ch 39; Case C-246/07 Commission v Sweden, ECLI:EU:C:2010:203 (PFOS), para 73. See this volume, ch 58; Opinion 1/08, ECLI:EU:C:2009:739, para 136. 40 Opinion 2/91 (n 36) para 36. 41 ibid.
118 Anna Södersten to the requirement of unity in Opinion 2/91 was, as Hillion pointed out, in fact only a means to apply the principle of duty of cooperation to the EEC context.42 Yet, as Hillion convincingly also argued, the duty of cooperation was still to be located to former Article 5 EEC (now Article 4(3) TEU), because the Court had not altered the nature and ultimate legal foundation of the principle.43 Hillion pointed out that the formulation ‘to which attention was drawn in the context of the EAEC [Euratom]’ in Opinion 2/91 suggested that the duty of cooperation was not specific to the Euratom Treaty. Rather, the formulation of the Court, ‘the requirement of unity in the international representation of the Community’, in Opinion 2/91 was just meant to point out that this was a principle that could transcend the boundaries of the (then) three Community Treaties – the European Coal and Steel Community (ECSC) Treaty, the EEC Treaty and the Euratom Treaty. Indeed, at the time of Ruling 1/78 (and Opinion 2/91), three separate Communities existed: the ECSC, the EEC and the Euratom.44 The ‘Merger Treaty’45 had merged the Community institutions, but the three Communities continued to exist separately.46 Even though they subsequently shared institutions, they were still formally separate, in that they were established by separate treaties, they had separate legal personalities, and their own set of objectives.47 In ECSC v Faillite Acciaierie, the Court articulated, for the first time, a need for cohesion and coherence between the three Communities.48 Thus, Opinion 2/91 could be seen as another such case where the need for coherence between the Communities was emphasised.49 The claim that the general duty of loyal cooperation in Article 5 EEC (now Article 4(3) TEU) was the root for the duty of cooperation in external relations was later confirmed in the Mox Plant case.50 In this case, the Court did not refer to the requirement of unity, but clarified 42 See C Hillion, ‘Mixity and Coherence in EU External Relations: The Significance of the Duty of Cooperation’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: the EU and Its Member States in the World (Oxford, Hart Publishing, 2010) 87–116. 43 ibid. For a discussion, see M Klamert, The Principle of Loyalty in EU Law (Oxford, Oxford University Press, 2014) 190–92. But see Heliskoski, who pointed out that the wording of the then Art 10 EC (later Art 5 EEC, now Art 4(3) TEU, in amended form) only seemed to impose obligations for Member States, but not for the institutions. And the principle of the duty of close cooperation presented by the Court was intended also to impose obligations for the institutions. J Heliskoski, Mixed Agreements as a Technique for Organizing the International Relations of the European Community and Its Member States (The Hague, Kluwer Law International, 2001) 64, note 154. 44 Treaty Establishing the European Coal and Steel Community, 18 April 1951, 261 UNTS 140. 45 Treaty Establishing a Single Council and a Single Commission of the European Communities [1967] OJ 152/2–17. 46 The question whether the three Communities formed a single legal order received some attention. See, eg A Bleckmann, ‘Die Einheit der Europäischen Gemeinschaftsrechtsordnung, Einheit oder Mehrheit der Europäischen Gemeinschaften’ (1978) 13 Europarecht 95. 47 For further discussion, see A Södersten, Euratom at the Crossroads (Cheltenham, Edward Elgar, 2018). 48 See Case C-221/88, ECSC v Faillite Acciaierie e ferriere Busseni SpA, ECLI:EU:C:1990:84, paras 10–17. The case concerned the Court’s jurisdiction to give preliminary rulings under the ECSC Treaty. Such jurisdiction to interpret the EU Treaties had been given to the Court in the EEC Treaty and the Euratom Treaty (Art 177 EEC and Art 150 Euratom, both now replaced by Art 267 TFEU), but there was no such explicit provision in the ECSC Treaty. The Court emphasised that with respect to the ECSC Treaty, the requirement of ensuring uniformity in the application of Community law was ‘equally cogent and equally obvious’, and that ‘it would be contrary to the objectives and the coherence of the Treaties’ if the Court would not have the power to ensure a uniform interpretation when it comes to the ECSC Treaty. 49 This is not the only time the Court has applied legal (constitutional) principles over the treaty boundaries. In Case C-115/08, Land Oberösterreich v ČEZ (Temelín), ECLI:EU:C:2009:660, the Court held that the principle of prohibition of discrimination on grounds of nationality, enshrined in Art 12 EC, also applies to the Euratom Treaty as ‘it would appear to be contrary to both the purpose and the consistency of the treaties to allow discrimination on grounds of nationality … to be tolerated within the scope of application of the EAEC Treaty’ (paras 87–90). 50 Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant). See this volume, ch 47. Note also Opinion of Advocate General Sharpston, Opinion 2/15, ECLI:EU:C:2016:992, para 569, who explains that the duty of close cooperation ‘flows from the requirement of unity in the international representation of the European Union, as well as from the principle of sincere cooperation expressed in Art 4(3) TEU’. See this volume, ch 82; Opinion of
The Birth of the Principle of Close Cooperation, Declaration of Competences 119 that ‘an obligation of close cooperation’ was derived from former Article 5 EEC.51 The case concerned both the EC Treaty and the Euratom Treaty, and this perhaps explains the Court’s need to clarify the foundation of the duty.52 In this regard, it is recalled that the Court had explained in Ruling 1/78 that the root of the duty of cooperation was found in Article 192 Euratom Treaty (that is, the general duty of loyal cooperation), so to say that the root was ‘unity’ would thus have been a deviation from its previous position. In cases subsequent to Ruling 1/78, the Court has continued to make explicit that the foundation for the duty of cooperation is in Article 4(3) TEU.53 It is thus generally conceived as a specific application, a subcategory, of the principle of loyal cooperation in Article 4(3) TEU. Nevertheless, Article 192 Euratom Treaty is still the locus of the duty in the context of the Euratom Treaty, because Article 4(3) TEU does not apply to Euratom.54 B. Declaration of Competences Ruling 1/78 is also one of the first cases on declarations of competences. Such declarations are often attached to mixed agreements where the EU participates alongside its Member States. They are used to avoid situations of uncertainty for third parties who want to know who is implementing an international agreement, who is to vote and who would be responsible for a possible breach of the international agreement.55 In other words, third parties want to know whom to address (the EU or the Member States) in cases of conflict on the interpretation or implementation. In a declaration of competence, the EU states the extent to which an international agreement is governed by EU competence.56 In Ruling 1/78, the Court took a strict view of what information needs to be included. It stated: It is not necessary to set out and determine, as regards other parties to the convention, the division of powers … between the Community and its Member States, particularly as it may change in the course of time. It is sufficient to state to the other contracting parties that the matter gives rise to a division of powers within the Community, it being understood that the exact nature of that division is a domestic question in which third parties have no need to intervene.57 Advocate General Poiares Maduro, Case C-246/07, Commission v Sweden, ECLI:EU:C:2009:589 (PFOS), para 37: ‘The unity of international representation of the Community and its Member States does not have an independent value; it is merely an expression of the duty of loyal cooperation under Art 10 EC.’ See this volume, ch 58. 51 ibid para 175. 52 In the Mox Plant case (n 50), which is an infringement procedure, the question was whether Ireland had breached EU law by bringing proceedings to an international Arbitral Tribunal under the UNCLOS. The UNCLOS was a mixed agreement under the EC Treaty but not under the Euratom Treaty. In the case, the Court emphasised that the Euratom Treaty contained corresponding provisions as well as acknowledged the existence of Euratom legislation. 53 See, eg C-620/16, Commission v Germany, ECLI:EU:C:2019:256, paras 92–93. For discussion, see C Hillion and M Chamon, ‘Facultative Mixity and Sincere Cooperation’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Nijhoff, 2020) 86–111. 54 Art 106a(1) Euratom states that only the following articles of TEU and TFEU shall apply to the Euratom Treaty: Art 7, Arts 13–19, Art 48(2)–(5), and Arts 49 and 50 of the TEU, and Art 15, Arts 223–36, Arts 237–44, Art 245, Arts 246–70, Arts 272, 273 and 274, Arts 277–81, Arts 285–304, Arts 310–20, Arts 322–25, and Arts 336, 342 and 344 of the TFEU. Conversely, the procedure under Art 103 Euratom Treaty does not extend to agreements under the TFEU. 55 P J Kuijper, Of ‘Mixity’ and ‘Double-Hatting’: EU External Relations Law Explained (Amsterdam, Amsterdam University Press, 2008). 56 AD Casteleiro, The International Responsibility of the European Union: From Competence to Normative Control (Cambridge, Cambridge University Press, 2016) 110–29; J Heliskoski, ‘EU Declarations of Competence and International Responsibility’ in M Evans and P Koutrakos (eds), International Responsibility: EU and International Perspectives (Oxford, Hart Publishing, 2013) 189–212. 57 Ruling 1/78 (n 1) para 35.
120 Anna Södersten Thus, the Court held that the distribution of competence between the Community and Member States is an internal (or ‘domestic’) question. The addition of the phrase ‘particularly as it may change in the course of time’ is a formulation that almost gives the impression that the Court is, first and foremost, caring about third parties. While it is true that the division of competences is dynamic, and that it may change over the years, third states continue to demand it because of course they were in no way bound by Ruling 1/78. Indeed, a formulation came to be included in the draft Convention requiring a declaration of competence from participating international organisations. Euratom submitted its declaration of competence at the time of accession in 1991.58 In subsequent cases, the Court started to revise this restrictive view, and started to hold that it was necessary to clarify the internal division of competences to third parties. Yet, it was not a complete deviation from the previous course in Ruling 1/78. For example, in the Nuclear Safety case, which was also a case under the Euratom Treaty, Advocate General (AG) Jacobs explained that the above-mentioned passage in Ruling 1/78 had to be placed in its context.59 The AG clarified that Ruling 1/78 was handed down at a time when the Convention on Nuclear Protection was still being drawn up, and the negotiating parties had not yet agreed on the clauses necessary to enable an international organisation to participate. He also explained that the Court’s statement in Ruling 1/78 must be read as a mere endorsement of the practice of the Communities of avoiding as far as possible at the negotiating stage the indication to third parties of the internal division of powers between the Community and its Member States.
He further added that [i]n view of the considerable legal and political difficulties of drafting declarations of competence that practice is indeed to be endorsed, since it allows the Communities and their Member States to focus on more important matters such as the substantive.60
AG Jacobs then explained that in the Nuclear Safety case this was ‘too late’; the signatories of the Convention in issue (the Nuclear Safety Convention) had already decided to require the Community to reveal the internal division of power.61 C. The First Use of the Ruling Procedure Ruling 1/78 constitutes the first (and, in fact, the only) time that the Ruling procedure in Article 103 Euratom Treaty has been used (or, to be precise, the only time it has reached the Court). The Ruling procedure is sometimes referred to as the ‘parallel’ Opinion procedure in Article 218(11) TFEU.62 Indeed, there are some important similarities between the Ruling 58 ‘Pursuant to Article 18(4) of the Convention, [EURATOM] would like to declare … (b) that Articles 7 to13 of the Convention are not applicable to the Community. Further, pursuant to Article 17 (3) of the Convention, [EURATOM] declare[s] that, since only States may be parties in cases before the International Court of Justice, the Community considers itself exclusively bound by the arbitration procedures provided for in Article 17(2).’ 59 Opinion of Advocate General Jacobs, Case C-29/99, Commission v Council, ECLI:EU:C:2001:680 (Nuclear Safety Convention), paras 107–15. 60 ibid para 113. 61 Koutrakos rightly points out that ‘it is one thing for the precise extent to which competences are shared not to be defined, and quite another for competences not to be declared at all’. P Koutrakos, ‘Case C-29/99 Commission v Council (re: Nuclear Safety Convention)’ (2004) 41 CML Rev 191, 200. 62 Art 218(11) TFEU reads: ‘A Member State, the European Parliament, the Council or the Commission may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the Treaties. Where the
The Birth of the Principle of Close Cooperation, Declaration of Competences 121 procedure and the Opinion procedure. They are both ex ante reviews on international agreements to ensure their compatibility with the EU Treaties; they are both embedded in the procedural rules for treaty-making, rather than provisions concerning the Court;63 and they both concern international agreements that have not yet been concluded. While the Opinion procedure refers to an ‘agreement envisaged’, the Ruling procedure refers to a ‘draft agreement’ respectively ‘proposed agreements’. The Ruling procedure also mentions ‘contracts’ (unlike the Opinion procedure, which only mentions international agreements), and specifies that it is a matter of agreements or contracts ‘With a third state, an international organisation or a national of a third state’. There are also some significant differences between the two procedures. Under the Opinion procedure, an application to the Court may come from a Member State, the European Parliament,64 the Council or the Commission. By contrast, under the Ruling procedure,65 an application may only come from a Member State. Further, the Ruling procedure only concerns agreements or contracts that are to be concluded by Member States with third parties. Thus, the Euratom Treaty does not, in contrast to the TFEU, provide for a possibility for the Council, the Commission or the European Parliament to request from the Court an Opinion on the compatibility of an envisaged international agreement with the Treaty.66 This means that there is no procedure for referral for ‘Community-only’ agreements, that is, international agreements where Euratom is a party but not the Member States are not (and thus, when it comes to mixed agreements, this request must come from a Member State).67 In this context, it should be pointed out that the Opinion procedure in Article 218(11) TFEU does not apply to Euratom. The Opinion procedure cannot be applied to an international agreement that is being negotiated under the Euratom Treaty.68
opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised.’ 63 See M Cremona, ‘The Opinion Procedure under Article 218(11) TFEU: Reflections in the Light of Opinion 1/17’ (2020) 4 Europe and the World: A Law Review; G Butler, ‘Pre-ratification Judicial Review of International Agreements to be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53–77. 64 The European Parliament’s ability to request an Opinion was introduced by the Nice Treaty in 2001. 65 Art 103 Euratom reads: ‘Member States shall communicate to the Commission draft agreements or contracts with a third state, an international organisation or a national of a third state to the extent that such agreements or contracts concern matters within the purview of this Treaty. If a draft agreement or contract contains clauses, which impede the application of this Treaty, the Commission shall, within one month of receipt of such communication, make its comments known to the State concerned. The State shall not conclude the proposed agreement or contract until it has satisfied the objections of the Commission or complied with a ruling by the Court of Justice of the European Union, adjudicating urgently upon an application from the State, on the compatibility of the proposed clauses with the provisions of this Treaty. An application may be made to the Court of Justice of the European Union at any time after the State has received the comments of the Commission.’ 66 In Case C-29/99, Commission v Council, ECLI:EU:C:2002:734 (Nuclear Safety Convention), the Commission had brought an action for partial annulment of a Council Decision that approved the accession to the Nuclear Safety Convention. The Commission claimed that the declaration of competence infringed Community law in that it did not refer to all the competences of Euratom in the fields covered by the Convention. The Council contended that the Commission was not really seeking a genuine annulment of part of the declaration but, instead, was seeking to obtain an opinion from the Court on the extent of Euratom’s competence in the context of its accession to the Nuclear Safety Convention. The Court rejected the Council’s argument, and noted ‘the fact that the Euratom Treaty does not provide that the Court may rule by way of an opinion on the compatibility with that Treaty of international agreements which the Community is planning to conclude does not preclude the Court from being asked to review the legality of an act approving a decision to accede to an international convention in an action for annulment under Article 146 of the Euratom Treaty’ (paras 52–55). On the relationship between an action for annulment and a request for an Opinion, see Opinion 2/00 (n 39) para 12. See this volume, ch 39. 67 See, eg A Södersten, Euratom at the Crossroads (Cheltenham, Elgar Edward, 2018) 123. 68 On which articles of TEU and TFEU shall apply to the Euratom Treaty, see above n 54.
122 Anna Södersten Another difference between the two procedures is that the Ruling procedure has an obligatory initial step, prior to the Court. The Member States shall turn to the Commission, who does some initial scrutiny. The Member States have a duty to communicate to the Commission draft agreements or contracts that concern matters within the purview of the Euratom Treaty. The Commission shall then make its comments known to the State concerned on whether a draft agreement or contract contains clauses that impede the application of the Euratom Treaty. At any time thereafter, an application may be made to the Court, which shall adjudicate urgently.69 The Member State concerned shall not conclude the proposed agreement or contract until it has satisfied the Commission’s objections or complied with a ruling by the Court. Compared to the current reading of the Opinion procedure, the consequence of an adverse ruling is somewhat less clear.70 The Opinion procedure and the Ruling procedure existed since the original Treaties of Rome. The first Opinion procedure was not requested for 17 years,71 and the first Ruling procedure was not requested for 20 years. But while the Opinion procedure has been used several times since then, Ruling 1/78 was the first and only time it has reached the Court. One of the explanations thereto might be that requests from Member States are generally unusual. They are unusual also when it comes to the Opinion procedure.72 As mentioned, Member States are the only actors who can request the Court to issue a Ruling. Another possible explanation for the lack of Ruling procedure cases is that the Commission procedure that is to be initiated prior to the Court works so well that there has never been a need for another Ruling.73 V. ADDITIONAL READING Eeckhout, P, EU External Relations Law (Oxford, Oxford University Press, 2012) 241–43. Hillion, C, ‘Mixity and Coherence in EU External Relations: The Significance of the Duty of Cooperation’ in Christophe Hillion and Panos Koutrakos (eds), Mixed Agreements Revisited: the EU and Its Member States in the World (Oxford, Hart Publishing, 2010) 87–116. Pirotte, O, Girerd, P, Marsal, P and Morson, S (eds), Trente ans d’expérience Euratom: la naissance d’une Europe nucléaire (Brussels, Bruylant, 1988) 77–87. Södersten, A, Euratom at the Crossroads (Cheltenham, Edward Elgar, 2018).
69 See also Art 202 in the Rules of Procedure of the Court of Justice [2012] OJ L265/1–42. 70 Article 218(11) TFEU (the Opinion procedure) states that where the Court’s Opinion is adverse on whether an agreement envisaged is compatible with the Treaties, the agreement may not enter into force unless it is amended or the Treaties are revised. By contrast, Art 103 states: ‘The State shall not conclude the proposed agreement or contract until it has satisfied the objections of the Commission or complied with a ruling by the Court of Justice.’ 71 The Opinion procedure in the EEC Treaty was used for the first time in 1975 in Opinion 1/75, ECLI:EU:C:1975:145. See this volume, ch 4. As Cremona has pointed out elsewhere, the Opinion procedure is rarely used compared with other judicial procedures. Cremona also points out that, curiously, three of four such requests come from Belgium (Ruling 1/78 included). Cremona (n 63). 72 ibid. 73 According to the Commission, ‘considerable experience has been gained in the application of Article 103’. This indicates that the procedure is often applied (but that it has only reached the Court once). Commission Recommendation of 4 April 2016 on the application of Art 103 of the Euratom Treaty, Brussels, C(2016) 1168 final.
11 Defining the Scope of the Treaty-Making Competence for the Formulation of the Common Commercial Policy: Opinion 1/78 (Natural Rubber) PER CRAMÉR Opinion 1/78, International Agreement on Natural Rubber, ECLI:EU:C:1979:224, delivered 4 October 1979. KEYWORDS Common Commercial Policy – International agreements – Commodity agreements – Scope of EU a priori exclusive treaty-making competence – Mixed agreements.
I. INTRODUCTION
O
1/78 (Natural Rubber) is an important building block in the process of defining the constitutional foundations for shaping the Common Commercial Policy (CCP). The starting point for this was the fact that the provisions on the CCP in the EEC Treaty were of a very general character. The CCP was perceived as an outflow of the establishment of a customs union between the Member States. This regional preferential area, according to Article 110 EEC (now Article 206 TFEU), should be developed in accordance with a foreseen successive multilateral liberalisation of the conditions for world trade, and contribute to this development. In order to develop the CCP, the Union was attributed with the power, after the expiration of the transitional period on 1 January 1970, to adopt decisions by qualified majority in the Council, pinion
particularly in regard to changes in tariffs rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalization, export policy and measures to protect trade such as those to be taken in the case of dumping or subsidies.
This non-exhaustive listing of unilateral and treaty-based measures expressed in Article 113 EEC (now Article 207 TFEU) was primarily modelled on the areas for multilateral cooperation that were defined by the General Agreement on Tariffs and Trade (GATT).
124 Per Cramér At the time of the expiration of the transitional period, at the end of 1969, it was clear that neither the character nor the scope of the competences attributed to the Union in Article 113 EEC (now Article 207 TFEU) was clearly determined by the wording in the Treaty. These two interrelated issues were developed in parallel, with a focus on the Union’s external treatymaking competence for executing the CCP. On the definition of the character of the treaty-making competence attributed to the Union by Article 113 EEC (now Article 207 TFEU), a first step was taken by the Court in its Opinion 1/75 (Local Cost Standard), where it found that this competence had an a priori exclusive character.1 The Court primarily prompted this finding by the threat to the Union interest posed by recognising concurrent powers of Member States within the sphere of the CCP.2 Furthermore, the Court underlined this position by unequivocally stating that it was of little importance that the financial burdens inherent in the execution of an envisaged international agreement were borne directly by the Member States.3 The issue of the scope of Article 113 EEC (now Article 207 TFEU) was first brought up in a general manner in the Court’s judgement in Case 8/73, Massey Ferguson. In its findings, the Court stated that the proper functioning of the customs union justified a wide interpretation of the powers that Article 113 EEC (now Article 207 TFEU) confers on the common institutions.4 A further step was taken by the Court in Opinion 1/75 where, after concluding that the Union competence under Article 113 EEC (now Article 207 TFEU) is of an a priori exclusive character, it compared the CCP with the trade policy of a sovereign state by affirming that ‘that concept having the same content whether it is applied in the context of the international action of a State or to that of the [Union]’.5 As Koutrakos has pointed to, this reference to a national commercial policy would imply that the potential scope of the CCP, in the view of the Court, was unlimited.6 A couple of years later, in connection with the dynamic development of international trade law that was spurred by the UN initiative to establish a New International Economic Order (NIEO),7 the Court was given the opportunity to make a more precise normative statement regarding the scope of treaty-making competence under Article 113 EEC (now Article 207 TFEU). This was in Opinion 1/78. II. FACTS
At its fourth meeting held in Nairobi in 1976, the UN Conference on Trade and Development (UNCTAD) adopted a resolution on an integrated programme for commodities. The resolution was meant to be an instrument for promoting the establishment of the NIEO, and opened the way for negotiations on international arrangements for the trade in 18 commodities with a special importance for the economy of developing countries, one of these commodities being natural rubber. The Nairobi Resolution constituted a part of the North–South Dialogue, which the Union and its Member States perceived as being of high importance, especially in the light of the Union’s special relationship with the former colonies of certain Member States.8
1 Opinion
1/75, Local Cost Standard, ECLI:EU:C:1975:145. See this volume, ch 4. 1364. 3 ibid. 4 Case 8/73, Hauptzollamt Bremerhaven v Massey Ferguson GmbH, ECLI:EU:C:1973:90, para 4. 5 Opinion 1/75 (n 1) 1362. 6 P Koutrakos, EU International Relations Law (Oxford, Hart Publishing, 2015) 31–32. 7 United Nations General Assembly document A/RES/S-6/3201 of 1 May 1974. 8 ACP–EEC Convention of Lomé (Lomé, 28 February 1975), [1976] OJ L25/3. 2 ibid
Defining the Scope of the Treaty-Making Competence for the Formulation of the CCP 125 In addition, the Union was one of the world’s major importers of natural rubber. Accordingly, it was an issue of high priority, for both the Union and its Members States, to actively participate in the development of a regulatory framework for the trade in this commodity.9 In early 1978, UNCTAD decided to open negotiations for the conclusion of an international agreement on natural rubber. Its core objective was to achieve balanced growth between the supply and demand for natural rubber, with a view to attaining stabilised price levels. The central instrument for attaining price stability was the setting up of a buffer stock, with the purpose of intervening in the market for natural rubber. Thus, compared to classical commercial agreements, this agreement would be a much more structured instrument with the objective of organising the world market for a specific commodity. Its objective was to regulate, rather than to liberalise, the conditions for international trade. As it was expected that negotiations would start on 13 November 1978, the Commission on 5 October 1978 sent a recommendation to the Council under Article 113 EEC (now Article 207 TFEU).10 This recommendation included a draft for a Council decision according to which the Union alone was competent to participate in the negotiations and conclusion of the envisaged agreement. The Commission based this view on the fact that ‘All the instruments of the Agreement directly and substantially affect the volume and conditions of international trade in natural rubber and will therefore fall within the Community’s competence on the basis of article 113 of the Treaty of Rome’. Moreover, the Commission drew the conclusion that ‘As a consequence, the financial implementation of the Agreement … shall be assumed by the Community itself through a direct contribution from the Community budget’.11 Without contesting the Union’s competence to participate in the negotiations and conclusion of the agreement, the Council took the view that the scope of the agreement exceeded the material scope of the competence attributed to the Union under Article 113 EEC (now Article 207 TFEU).12 On 17 October 1978, the Council approved a procedural decision prepared by the Committee of Permanent Representatives, according to which the Union and its Member States ‘must be represented in the negotiations on natural rubber by a Community delegation and by nine national delegations’.13 This decision by the Council implicitly rejected the recommendation presented by the Commission. As a consequence, the Commission, on 13 November 1978, in pursuance of Article 228(1) EEC (now Article 218(11) TFEU),14 asked the Court for an Opinion to clarify the divergence of views between the Commission and the Council.15 In its question to the Court, the Commission reaffirmed its position that the Union alone was empowered, under Article 113 EEC 9 Compare Commission, ‘Guidelines for a Community Position with a View to the Work of UNCTAD on Natural Rubber’ (Communication) COM (77) 616 Final, available in the Historical Archives of the European Union, Fonds Code CJUE 2387, 487. 10 Commission, ‘Recommendation for a Council Decision on the Negotiation of an International Agreement on Natural Rubber’ COM (78) 507 Final, available in the Historical Archives of the European Union, Fonds Code CJUE 2387, 563. 11 ibid 3. 12 See CE Note, ‘CAOUTCHOUC: probleme de la participation de la Communauté en tant que telle aux négociations et à l’accord sur ce produit’ S/1647/78 (PR.INT 78), available in the Historical Archives of the European Union, Fonds Code CJUE 2387, 601. 13 Note of the Council, 12 October 1978, S/1699/78 (PR. INT 84), Annex, ‘Modalités de participation à la Conférence soumises à l’approbration du Conseil’, available in the Historical Archives of the European Union, Fonds Code CJUE 2387, 408. 14 On the Opinion procedure, see G Butler, ‘Pre-ratification Judicial Review of International Agreements to be concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing 2018) 53. 15 Demande d’avis presentee a la Cour de Justice par la Commission des Communautes Européennes en application de l’article 228, para premier, Alinea 2, du Traite CEE, JUR (78) D/04106. English language version SJ/494/78- ENG, available in the Historical Archives of the European Union, Fonds Code CJUE 2387, 411.
126 Per Cramér (now Article 207 TFEU), to participate in the negotiations and the conclusion of the agreement. In its argumentation, the Commission underlined that the a priori exclusive character of the competence attributed to the Union had been explicitly confirmed previously by the Court, and that the Court in the same instance had found that the scope of the CCP should be given an extensive dynamic interpretation.16 Explicitly perceiving the Union as a state actor, it would, according to the Commission, be contrary to this approach to limit the Community, in the exercise of its overall responsibility in the field of commercial policy, to the employment of only classic measures of commercial policy some of which, like customs duties, lose their importance as they are gradually reduced in international negotiations, by refusing the Community the right to use, like other States, other instruments … which are necessary for the overall and consistent management of international trade.17
Moreover, the Commission also emphasised the link between the Union’s unified external identity in the field of commercial policy and the internal removal of barriers to trade, stressing the necessity of applying a wide conception of the CCP in order to secure the functioning of the internal market.18 Against this backdrop, the Commission took the principal position that one measure that specifically acts as an instrument regulating international trade, like the one at hand, is a measure of commercial policy.19 Regarding the envisaged agreement, the Commission underlined its purely commercial character in full correspondence with the objectives spelt out in Article 110 EEC (now Article 206 TFEU).20 The Commission concluded that since the essential objective of the envisaged agreement was to stabilise prices for natural rubber, it ‘appeared to be a characteristic measure for regulating external trade and thus an instrument of commercial policy’.21 Thereby, the Commission refuted the arguments for Member State participation in the negotiations and conclusion of the envisaged agreement. Finally, regarding the financial provisions of the agreement, the Commission stated that the question of competence precedes that of financing, the consequence being that the question of Union competence could not, in the view of the Commission, be made dependent on the choice of financial arrangements.22 In concurrence with its position regarding the distribution of competence, the Commission maintained that the obligation to pay the contribution to the buffer fund must be entered into by the Union.23 The Council,24 and the governments of the French Republic25 and the UK,26 submitted written observations to the Court. The Council, supported by France and the UK, was of 16 ibid 24–31. In order to underpin its argumentation, the Commission was explicitly referring to the Court’s findings in Case 8/73, Massey Ferguson (n 4), Opinion 1/75 (n 1) and Case 41/76, Suzanne Criel, née Donckerwolcke and Henri Schou v Procureur de la République au tribunal de grande instance de Lille and Director General of Customs. 17 ibid 26. 18 ibid 27. 19 ibid 27–28. 20 ibid 32. 21 Opinion 1/78, ECLI:EU:C:1979:224, para 38. 22 See above n 15, 34–35. Reflected by the Court above n 21, para 53. 23 ibid 37. 24 Observations présentées au titre de l’article 107 du règlement de procédure de la Cour de Justice au nom de Conseil des Communautés Européennes, 19 February 1979, available in the Historical Archives of the European Union, Fonds Code CJUE 2388, 19. 25 Observations du Gouvernment Français dans la demande d’avis 1/78: Accord international sur le caoutchouc, 21 February 1979, 5, available in the Historical Archives of the European Union, Fonds Code CJUE 2388, 273. 26 Written Observations by the United Kingdom, 20 February 1979, available in the Historical Archives of the European Union, Fonds Code CJUE 2388, 220.
Defining the Scope of the Treaty-Making Competence for the Formulation of the CCP 127 the view that the envisaged agreement was likely to exceed the scope of Article 113 EEC (now Article 207 TFEU), and that it therefore should be negotiated and concluded by both the Community and its Member States, ie as a mixed agreement. In its argumentation, the Council referred to the envisaged agreement’s general subject matter and objectives, as well as its specific arrangements and special provisions. Regarding the general subject matter and objectives of the agreement, the Council underlined that, while not rejecting the idea of a gradual evolution of the sphere of a priori exclusive competence under Article 113 EEC (now Article 207 TFEU),27 the scope of the CCP should be interpreted so as not to render meaningless other provisions of the Treaty – in particular, the Council pleaded, those dealing with general economic policy, including the supply of raw materials, for which the Council had only the power of coordination.28 Moreover, the Council argued that the agreement must be seen against the general political background of North–South relations between the industrialised world and the developing countries. As a consequence, the Council said, the envisaged agreement included non-reciprocal elements which were perceived as typical for development aid, giving the agreement inherent features that, according to the Council, fell outside the field of commercial policy.29 Regarding the issue of the agreement’s specific arrangements and special provisions, relating primarily to technological assistance, research programmes, the maintenance of fair conditions of labour in the rubber industry and consultations relating to national tax policies that might have an impact on the price of rubber, the Council, supported by France and the UK, unequivocally stated that these fell outside the sphere of the CCP. Rather, the Council said that they fell within the scope of Article 116 EEC (repealed subsequently by the Treaty of Maastricht) on common action by Member States within international organisations.30 With regard to the financial provisions of the envisaged agreement, the Council and the Member States that had submitted observations expressed the view that since financing by means of public funds had been presupposed during the negotiations, the finances of the Member States would be involved in the execution of the agreement. Accordingly, it could not be acceptable that such an undertaking was entered into without the participation of the Member States.31 Finally, it should be noted that the question from the Commission and the written observations filed with the Court demonstrated a principal difference concerning which criteria ought to be applied in determining if a specific proposed measure should be assessed as falling within the scope of the CCP. According to the view of the Council, the test should be whether the objective of the measure is to alter the volume or pattern of trade.32 The Commission argued that such a criterion was unsatisfactory, and that the correct yardstick ought to be whether the proposed measure does, in fact, regulate international trade.33 III. THE COURT
After reiterating and reviewing the functions of UNCTAD and the nature and objectives of the Nairobi Resolution, the Court went on to describe and discuss the character and objectives
27 Above
n 24, 17. 23. Reflected by the Court in n 21 above, para 39. n 24, 21–22; n 25, 5. Reflected by the Court above n 21, para 40. See also above n 26, 2–3. 30 Above n 24, 29–31; n 25, 6; n 26, 6–7, 9. Reflected by the Court above n 21, para 54. 31 Above n 24, 27–28; n 25, 5; n 26, 7–8. Reflected by the Court above n 21, para 53. 32 Above n 24, 15; n 25, 5; n 26, 5. Reflected by the Court above n 21, paras 38–39. 33 Above n 15, 27. 28 ibid
29 Above
128 Per Cramér of the foreseen agreement. In its reasoning, the Court accounted for the main features of the proposed agreement, noting the distinct nature of commodity agreements and their role in the development of international economic relations. Initially, the Court concluded that the Union’s right to participate in the envisaged agreement was not contested, and it determined that the disagreement was over whether the material substance of the agreement fell fully within the scope of the CCP or whether it fell partially within the competence of the Member States in a way that would justify the joint participation of Community and its Member States as a mixed agreement.34 Against this backdrop, the Court first went on to consider the general aspects concerning the subject matter and objectives of the envisaged agreement. A. The General Character of the Envisaged Agreement in Relation to the Scope of the CCP The Court avoided the principal difference in perception between the Commission and the Council regarding general criteria for defining measures falling within the sphere of the CCP. Instead, the Court applied a dynamic interpretative approach to the scope of Article 113 EEC (now Article 207 TFEU), with explicit references to the multilateral development of international trade regulation. The Court underlined the necessity of not arriving at an interpretation according to which the EEC Treaty would form a barrier for the Union to participate in the multilateral development of new instruments for international trade regulation, such as the commodity agreements.35 This consequentialist outlook would lead to a possibility that the Union would gradually become marginalised in multilateral settings. According to the Court, [i]t is therefore not possible to lay down, for Article 113 of the EEC Treaty, an interpretation the effect of which would be to restrict the common commercial policy to the use of instruments intended to have an effect only on the traditional aspects of external trade to the exclusion of more highly developed mechanisms such as appear in the agreement envisaged … [a] commercial policy understood in that sense would be destined to become nugatory in the course of time.36
Turning to the internal Union perspective, the Court explicitly underlined the potential negative effects on intra-Union trade if the scope of Article 113 EEC (now Article 207 TFEU) was given a restrictive interpretation. The Court stated that the enumeration in [A]rticle 113 of the subjects covered by commercial policy … must not, as such, close the door to the application in a Community context of any other process intended to regulate international trade. A restrictive interpretation of the concept of common commercial policy would risk causing disturbances in intra-Community trade.37
Based on these observations, the Court found that the envisaged agreement, considering its general aspects concerning its subject matter and objectives, fell within the scope of the competence attributed to the Union under Article 113 EEC (now Article 207 TFEU).
34 Above
n 21, paras 3, 37. para 43. 36 ibid para 44. 37 ibid para 45. 35 ibid
Defining the Scope of the Treaty-Making Competence for the Formulation of the CCP 129 B. The Issue of Specific Policy Areas Covered by the Envisaged Agreement Having concluded that the envisaged agreement in principle fell within the scope of Article 113 EEC (now Article 207 TFEU), the Court went on to analyse the specific provisions which, taken out of the context of the agreement, arguably would not fall within the scope of Article 113 EEC (now Article 207 TFEU). These provisions concerned areas such as technological assistance, research programmes, labour conditions in the industries concerned or tax policies which may have an effect on the price of rubber. The Court concluded that the provisions under consideration must be seen as closely connected with the overall objective of the envisaged agreement. Thus, they could not, according to the Court, modify the description of the agreement, ‘which must be assessed having regard to its essential objective rather than in terms of individual clauses of an altogether subsidiary or ancillary nature’.38 The negotiation and execution of these provisions must therefore follow the system applicable to the agreement considered as a whole. What is particularly noteworthy is that this finding by the Court meant that it expanded the scope of the Union’s a priori exclusive treaty-making competence to areas that were partly outside the scope of internal regulatory competence, if these areas were considered subsidiary or ancillary in relation to the central objectives of the envisaged agreement in question. C. The Provisions on Financing and the Demarcation Line to Mixity In the final step of its analysis, the Court focused on the issue of distribution between the Union and its Member States of the responsibility to contribute to the financing of the buffer stock to be set up under the agreement. Initially, the Court stated that a distinction should be made between the substantial nature of the specific areas covered by the draft agreement which were considered to be of a subsidiary or ancillary nature and the financial provisions. According to the Court, the latter occupied ‘a central position in the structure of the agreement and which, for that reason, raise a more fundamental difficulty as regards the demarcation between the powers of the Community and those of the Member States’.39 At the time, there was still uncertainty regarding the forms for financing the buffer stock. The Court therefore made a distinction between two different potential solutions: one in which the financial burdens envisaged would be borne by the Union budget and one in which the burden would be charged to the budgets of the Member States. The Court concluded that in the first potential solution there would be no problem regarding the exclusive powers of the Union to conclude the envisaged agreement in question.40 Regarding the latter potential solution, the Court arrived at a different conclusion. It said: ‘If … the financing is to be by the Member States that will imply … their participation in the agreement together with the Community. The exclusive competence of the Community could not be envisaged in such a case.’41 In its concluding remarks, the Court stated that the envisaged agreement, in spite of its special features that distinguish it from classical trade and tariff agreements, was covered
38 ibid
para 56. para 55. 40 ibid para 59. 41 ibid para 60. 39 ibid
130 Per Cramér in its entirety by the Union’s a priori exclusive competence established by Article 113 EEC (now Article 207 TFEU).42 However, the Court modified this finding by making the exclusivity of the Union’s treaty-making competence dependent on the distribution of financial responsibilities for the execution of the envisaged agreement. This line of argumentation constituted a deviation from the Court’s finding in Opinion 1/75, according to which it was of little importance that the obligations and financial burdens inherent in the execution of the agreement envisaged were borne directly by the Member States. IV. THE IMPORTANCE OF THE CASE
In 1978, almost 20 years after the conclusion of the Treaty of Rome, the general conception of the EU’s commercial policy had expanded far beyond the original GATT frame. As expressed by Pascal Lamy, a one-time European Commissioner for Trade, ‘The Treaty of Rome was written in 1957, the era when trade negotiations were almost exclusively about tariffs, where trade rounds could be launched on the sea-front in Torquay … and when the EU had six members’.43 As the scope of the multilateral development of international trade regulation expanded, pressure to expand the scope of the Union’s treaty-making competence for developing the CCP was building. The Court’s construction of the scope of the Union’s a priori exclusive external competence established by Article 113 EEC (now Article 207 TFEU) in Opinion 1/78 constitutes one stepping stone in answering this pressure. A. Clarifying the Dynamic Scope of the CCP The most important aspect of Opinion 1/78 is the elaboration of the expansion of the general scope of the competence attributed to the Union far beyond a narrow reading of the language of Article 113 EEC (now Article 207 TFEU). Building on its findings in Opinion 1/75, the principles for interpretation of the scope of the treaty-making competence established by the Court in the future would appear to be open-ended, with explicit reference to the successive development of new instruments for regulating international trade. The Court clearly strove to establish a situation where the Union, on the basis of exclusive treaty-making competence, would be able to actively participate in the multilateral process to develop new, more ambitious regulatory instruments. Against the backdrop of this general finding, the Court stated that if the essential objective of an envisaged agreement falls within the scope of the CCP, so also do specific provisions of a subsidiary or ancillary nature, even if these, assessed outside the context of the agreement, would clearly fall outside the sphere of the CCP. This finding has been frequently reconfirmed in later decisions by the Court. It has also been commonly observed in scholarly doctrine as well as in a multitude of comprehensive textbooks on European law.44 The impact of this central element of the Court’s findings in Opinion 1/78 has thereby been both reconfirmed and amplified.
42 ibid para 63. 43 P Lamy, Speech at the Confederation of British Industries, London, 6 July 2000, https://ec.europa.eu/commission/ presscorner/detail/en/SPEECH_00_258. 44 See, eg R Schütze, European Union Law (Cambridge, Cambridge University Press, 2015) 864–65.
Defining the Scope of the Treaty-Making Competence for the Formulation of the CCP 131 The most common scholarly conclusion when assessing the Court’s definition of the scope of the Union treaty-making competence under the CCP through Opinion 1/78 is that it drew the logical conclusion of, and nuanced its findings in, Opinion 1/75.45 A fundamental reservation could, however, be made relating to the stretching of the Union’s treaty-making competence beyond the sphere of internal regulatory competence in areas of a subsidiary or ancillary nature of an envisaged agreement that falls within the notion of the CCP.46 Thus, the findings by the Court in Opinion 1/78 brought the risk that the exercise of exclusive Union treaty-making competence could lead to factual internal legal harmonisation in areas which were outside the explicit scope of competence for internal harmonisation attributed to the Union’s institutions. B. Relativisation of the a Priori Exclusive Treaty-Making Competence under Article 113 EEC (Now Article 207 TFEU) While reconfirming and nuancing the principles for a dynamic expanded scope of the CCP under Article 113 EEC (now Article 207 TFEU), the Court’s conclusions in Opinion 1/78 also opened the way for the existence of a concurrent Member State competence in cases where an envisaged agreement, in principle, is covered by the Union’s a priori exclusive competence, but the financial burden for execution of this agreement is to be borne by the Member States. The effect of this is that, under such circumstances, the envisaged agreement can only be concluded as a mixed agreement with the participation of both the Union and its Member States. Thus, in Opinion 1/78, the Court did not uphold its unequivocal findings in Opinion 1/75 concerning the a priori exclusive character of the treaty-making competence attributed to the Community through Article 113 EEC (now Article 207 TFEU). It should, however, be underlined that the Court conditioned this modification in Opinion 1/78 by including a criterion of weight; that is, the financial provisions must occupy a central position in the structure of the envisaged agreement. This important aspect of Opinion 1/78 has been described as a ‘crack’ in the unequivocal principle of the Union’s a priori exclusive competence that the Court in Opinion 1/75 had stated was a necessary precondition for the functioning of the internal market.47 The Court’s finding has been criticised, on good grounds, both for being inconsistent with its previous position and also for a lack of logic stringency; instead of allowing finance to determine exclusivity, exclusivity ought to have determined finance.48 Nevertheless, it seems that this formal inconsistency in the argumentation by the Court was a necessary pragmatic modification that reflected the realities of the dynamics between the Union and its Member States at the time.49 It should be noted that this question resurfaced with a somewhat different outcome in Opinion 1/94 (WTO).50
45 See above n 6, 34. For a somewhat different view, see C Kaddous, ‘The Transformation of EU Common Commercial Policy’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 432. 46 JHH Weiler, ‘The External Legal Relations of Non-unitary Actors: Mixity and the Federal Principle’ in JHH Weiler (ed), The Constitution of Europe (Cambridge, Cambridge University Press, 1999) 180–81. 47 Above n 6, 22. 48 Above n 46, 173–74. 49 In autumn 1980, the International Natural Rubber Agreement was signed by the Community and its Member States, thus applying a mixed procedure. 1980 UNTS 19184. 50 Opinion 1/94, ECLI:EU:C:1994:384, para 20.
132 Per Cramér C. A Cursor for the Following Development of the Scope of the CCP Through Opinion 1/78, the Court created an authoritative ground to bolster arguments in support of a further expansion of the scope of the a priori exclusive treaty-making competence of the CCP, in tune with the multilateral development of international trade regulation. The findings of the Court can be seen as a prediction for a continued development of ever more elaborate and ambitious normative structures for regulating international economic relations in which the Community, and later the Union, has an ambition to be a relevant unified actor. Thus, the Court, through exercising its exclusive competence to construe European law, not only responded to the political need to maintain immediate relevance within the multilateral setting for trade policy and regulation, but also set a cursor for the future development. This development through judicial interpretation of the Treaty was put to a crucial test in the mid-1990s in connection with the negotiation and conclusion of the Marrakesh agreement on the establishment of the WTO.51 In the period following the establishment of WTO in the 1990s, the continued development of international trade law induced a process of explicit expansion of the scope of the CCP in primary law. The treaties of Amsterdam, Nice and Lisbon all expanded the scope of the CCP a priori exclusive treaty-making competence, and made the wording in Article 207 TFEU (former Article 113 EEC) increasingly more precise. In particular, the Treaty of Lisbon has introduced greater clarity regarding the competencies for developing a CCP of the EU. By expanding the explicit scope of the competence attributed to the Union for developing the CCP and making the wording more precise, the legitimate room for interpretation has shrunk, and it is thus necessary to ask to what extent the open-ended approach to the interpretation of the scope of the CCP, as established in Opinion 1/78, would be valid today. Simultaneously, the development of a new generation of comprehensive trade agreements with a wide scope has once again led to doubts concerning the sufficiency of the exclusive treatymaking competence within the area of the CCP that is explicitly attributed to the Union. This contemporary dynamic has been observed by Advocate General Sharpston in the proceedings of the Opinion 2/15, where she relates to, and comments on, the Court’s findings in Opinion 1/78 in relation to the context more than 30 years later.52 V. ADDITIONAL READING Kaddous, C, ‘The Transformation of EU Common Commercial Policy’ in P Eeckhout and M López-Escudero, The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 429. Usher, JA, ‘Elastic Boundaries of Exclusive Competence?’ (1980) 5 European Law Review 147. White, R, ‘Elastic Boundaries of Exclusive Competence? A Footnote’ (1980) 5 European Law Review 315.
51 ibid.
See this volume, ch 28. of Advocate General Sharpston, Opinion 2/15, ECLI:EU:C:2016:992, para 102. See this volume, ch 82.
52 Opinion
12 International Agreements Concluded by Member States Prior to their EU Accession: Burgoa PANOS KOUTRAKOS Case 812/79, Attorney General v Juan C Burgoa, ECLI:EU:C:1980:231, delivered 14 October 1980. KEYWORDS International agreements – Agreements of Member States prior to EU accession – Article 351 TFEU – scope – rights of non-Member States – duties of Member States – rights of third parties – duties of EU institutions – fisheries – conservation of sea resources – national legislation prescribing penalties for contravention of EU rules.
I. INTRODUCTION
T
he judgment in Burgoa1 was about conflict between parallel sets of rules. In particular, it was about the relationship between, on the one hand, international agreements that Member States conclude prior to their accession to the EU and, on the other hand, EU law. EU primary law has envisaged such conflicts since the establishment of the European Economic Community (EEC) and has sought to address them on the basis of a provision that has remained unchanged. This is what is now Article 351 TFEU, which reads as follows: The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties. To the extent that such agreements are not compatible with the Treaties, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude. In applying the agreements referred to in the first paragraph, Member States shall take into account the fact that the advantages accorded under the Treaties by each Member State form an integral part
1 Case
812/79, Attorney General v Juan C Burgoa, ECLI:EU:C:1980:231.
134 Panos Koutrakos of the establishment of the Union and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other Member States’.
The starting point for the above provisions is by no means original in its conception. After all, the first paragraph of Article 351 TFEU acknowledges the pacta sunt servanda principle, as enshrined in Article 26 of the Vienna Convention on the Law of Treaties,2 and the implications of which are set out in Article 30(4)(b) of the Vienna Convention.3 These principles constitute part of customary international law4 and, in the words of Advocate General Mischo, no-one has yet seriously defended the idea that, by creating a regional international organisation – and that is what the European Union certainly is under international law – States could, without recourse to any other procedure, release themselves from the obligation to fulfil earlier commitments to non-member countries.5
In other words, as Advocate General Capotorti put it in his Opinion in Burgoa, ‘even had [Article 351(1) TFEU] not been inserted in the Treaty, the pre-existing legal position of relations with non-member countries would have remained equally unaffected’.6 Viewed from the perspective of EU law, Article 351 TFEU, paragraph 1 has been viewed as an express exception to the principle of supremacy.7 The remaining provisions of Article 351 TFEU, however, and their interpretation in the assertive case law of the Court suggest that the first paragraph illustrates a pragmatic understanding of the interactions between international and EU law which is not tolerant of either permanent or fundamental deviations from the latter. As far as the former are concerned, and rather than accepting a clash between the obligations imposed on Member States by EU law and their prior international agreements in the long run, the second and third paragraphs of Article 351 TFEU provide for their adjustment so that EU law is ultimately complied with.8 As far as EU law is concerned, it is worth recalling the judgment in Kadi, where the Court held that Article 351 TFEU may in no circumstances permit any challenge to the principles that form part of the very foundations of the Community legal order, one of which is the protection of fundamental rights, including the review by the Community judicature of the lawfulness of Community measures as regards their consistency with those fundamental rights.9
II. FACTS
The case was referred to the Court through the preliminary reference procedure in Article 267 TFEU by a Circuit Court in Ireland. Mr Burgoa, the master of a vessel registered in Spain, was 2 Art 26 of the Vienna Convention reads as follows: ‘Every treaty in force is binding upon the parties to it and must be performed by them in good faith.’ 3 Art 30(4)(b) of the Vienna Convention reads as follows: ‘When the parties to the later treaty do not include all the parties to the earlier one: … (b) as between a State party to both treaties and a State party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations.’ 4 See Case C-264/09, Commission v Slovak Republic, ECLI:EU:C:2011:580, para 41. 5 Opinion of Advocate General Mischo, Joined Cases C-62/98 and C-84/98, Commission v Portugal, ECLI:EU:C:1999:509, para 57. 6 Opinion of Advocate General Capotorti, Case 812/79, Attorney General v Juan C Burgoa, ECLI:EU:C:1980:196, 2811. 7 R Schütze, European Constitutional Law, 2nd edn (Cambridge, Cambridge University Press, 2016) 122. 8 See P Koutrakos, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) ch 9. 9 Joined Cases C-402/05 P and C-415/05 P, Kadi and Al Barakaat International Foundations, ECLI:EU:C:2008:461, para 304. See this volume, ch 49.
International Agreements Concluded by Member States Prior to their EU Accession 135 prosecuted in criminal proceedings for violations of Irish fisheries legislation. He was accused of having fished and attempted to fish within Irish waters without authorisation by the Irish authorities, and of having nets on board the vessel of a size that was prohibited under Irish law. Ireland, along with the other Member States, had extended its Exclusive Economic Zone from 12 miles to 200 miles in 1977, and it was EU secondary legislation that had set out the fishing rights of Spanish fishing vessels in these waters, providing for both the authorisation and fishing net size requirements.10 Mr Burgoa argued that his right to fish where he was caught was protected under the London Fisheries Convention of 1964 (the London Convention). This was an agreement between all Member States of the then EEC and Spain (not yet an EC Member State), amongst other states which were third countries at the time. While it provided the coastal states with the right to establish a 12-mile fishing zone, and granted them exclusive fishing rights within the inner six miles of that zone, it also allowed vessels of other parties to fish in the outer six miles provided that they had been doing so habitually for a period of time specified in the Convention. Mr Burgoa argued that his was such a vessel. The question, therefore, arose as to whether the rights of Mr. Burgoa’s under the London Convention trumped the requirements imposed under secondary EU law pursuant to Article 351 TFEU. III. THE COURT
The judgment may be divided into two parts, construing the scope and implications of Article 351 TFEU, first paragraph and ruling on the specific relationship between the applicable rules, respectively. In relation to the former, the Court made the following four points. First, the scope of Article 351 TFEU is broad: it covers ‘any international agreement, irrespective of subject matter, that is capable of affecting the application of the Treaty’.11 Second, the judgment reaffirmed the purpose of Article 351 TFEU, first paragraph, which had been articulated in Commission v Italy:12 in accordance with international law, the application of EU law may not affect the duty of Member States to respect the rights of third countries under prior agreements and to perform their ensuing obligations. Third, the effectiveness of Article 351 TFEU entails a duty for the EU institutions not to impede the performance of the obligations of Member States flowing from prior agreements with third countries. This duty, however, is only directed towards the Member States; it does not entail any obligation for the EU towards the third countries in question. Fourth, the provision of Article 351 TFEU, first paragraph ‘cannot have the effect of altering the nature of the rights which may flow from such agreements’.13 This means that Article 351 TFEU, first paragraph ‘does not have the effect of conferring upon individuals who rely upon [such agreements] rights which the national courts of the Member States must uphold. Nor does it adversely affect the rights which individuals may derive from such [agreements]’.14 10 Council Regulation extending certain interim measures for the conservation and management of fishery resources applicable to vessels flying the flag of Spain 1376/78 [1978] OJ L167/9; this Regulation extended the rules originally set out in Council Regulation 373/77 [1977] OJ L53/1. 11 Above n 1, para 6. 12 Case 10/61, Commission of the European Economic Community v Italian Republic, ECLI:EU:C:1962:2. 13 Above n 1, para 10. 14 ibid.
136 Panos Koutrakos As far as the applicable rules at the time were concerned, the Court pointed out that both the authorisation and the size of fishing nets were provided for in the EU Regulations which were applicable at the time. These measures constituted an interim regime which had entered into force pending the conclusion of a fisheries agreement between the Union (then the Community) and Spain and which was intended to address the fisheries issues that had arisen from the extension by the Member States (and therefore Ireland) of their Exclusive Economic Zone from 12 to 200 nautical miles. The above agreement with Spain was intended to regulate all fisheries matters between Spain and Ireland, and the interim EU Regulations reflected its rules. Their objective, namely to ensure the conservation and management of fisheries resources, was also consistent with the Acts of Accession of Ireland, the UK and Denmark.15 The Court therefore concluded that there was nothing to challenge the validity of the interim regime set out in the Regulations applicable at the time. IV. THE IMPORTANCE OF THE CASE
The judgment in Burgoa is significant for the light it shed both on the function of Article 351 TFEU, first paragraph and its approach to the relationship between EU and international agreements concluded by Member States prior to their accession to the Union. It is a judgment of two halves: the first, setting out the main principles that emerge from Article 351 TFEU, first paragraph, is characterised by considerable economy in its delivery; the second is characterised by lack of clarity as to its reasoning. A. Rights of Individuals In declining to construe Article 351 TFEU, first paragraph as the source of rights that individuals may enforce before domestic courts,16 the judgment is consistent with the rationale of the provision. As EU primary law governs the position of Member States within the EU legal order and the relationship between domestic and EU law, Article 351 TFEU, first paragraph may not extend to legal relationships that are governed by prior international agreements concluded by Member States. As Advocate General Capotorti put it in his Opinion in Burgoa, it is necessary to stress strongly that the first paragraph of Article [351 TFEU] adds nothing to the original juridical standing of the rights and obligations flowing from earlier agreements between Member States and non-member countries and that such rights and obligations remain completely foreign to Community law.17 This point was brought home in the specific context of the case as the London Convention had never produced direct effect in Ireland. The fishing rights that the London Convention was intended to secure for Spanish fishermen were granted, instead, by autonomous orders by the Government of Ireland, with no reference to the Convention.18 If Article 351 TFEU, first paragraph changed this state of affairs, it would intrude in a legal sphere which was beyond its scope.
15 [1972] OJ L73/14, Art 102. 16 See also Case C-307/99, OGT Fruchthandelsgesellschaft mbH v Hauptzollamt Hamburg-St. Annen, ECLI:EU:C:2001:228, para 30. 17 Above n 6, 2811. 18 This was stated by the Attorney General of Ireland, according to the Report for the Hearing in the case file at the Historical Archive: Report for Hearing: R 812/79, 15.
International Agreements Concluded by Member States Prior to their EU Accession 137 There is also another layer to this aspect of Article 351 TFEU, first paragraph which is related to the main principle underpinning the direct effect of international agreements under EU law: while individuals had already been held to have the right to invoke the provisions of an international agreement before domestic courts,19 this right stems from the agreement itself. In particular, direct effect depends on whether, on the one hand, as a whole, the international agreement is capable of conferring enforceable rights and, on the other hand, its specific provision relied upon by an individual is sufficiently clear, precise and not subject to further implementing measures.20 In the subsequent judgment in Kupferberg, the Court held that it would determine whether the provision of an international agreement concluded by the Union was directly effective only if the Union institutions had not addressed this issue in the international agreement itself.21 In other words, it is on the basis of the international agreement itself that the enforceability of the rights of individuals is assessed under EU law. Given this emphasis on the spirit and wording of the international agreements concluded by the EU, it would be perverse for Article 351 TFEU to be interpreted as conferring a direct effect upon prior agreements concluded not by the Union, but by Member States. B. Duties of the EU Institutions The judgment in Burgoa contributes to the conceptual coherence of the principles underpinning Article 351 TFEU. Reconciling observance of the prior international obligations assumed by Member States with compliance with EU law cannot be a one-dimensional process. After all, and in addition to the burden it places on Member States, this provision also exercises pressure on the EU legal system, as it requires that the latter tolerates deviations from its rules where these clash with prior international commitments of Member States. Viewed from this angle, the reference to the duty of the EU institutions not to impede the performance of the obligations of Member States flowing from prior international treaties is as significant as it is obvious. In fact, it follows from the duty of sincere cooperation which is laid down in Article 4(3) TEU. While the precursor to this provision (Article 5 EEC) did not refer to the EEC institutions expressly, its scope was interpreted broadly enough to cover them too.22 The limited scope of the duty articulated in the judgment is also uncontroversial: the EU is not a party to the treaties that fall within the subject matter of Article 351 TFEU, and its institutions may not, therefore, be under any duty towards the parties to these treaties.23 The duty not to impede the performance of obligations assumed by Member States under their prior treaties may mean different things in different circumstances. In Burgoa, for instance, the Commission had negotiated a bilateral fisheries agreement with Spain (as well as other third countries) which addressed issues that had arisen in the light of the pre-existing London Convention. The Council had also adopted secondary legislation, the main tenets
19 Joined Cases 21–24/72, International Fruit Company NV and Others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 20 ibid para 4. On the direct effect of international agreements under EU law, see Koutrakos (n 8) ch 8; M Mendez, The Legal Effects of EU Agreements (Oxford, Oxford University Press, 2013). 21 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362, para 4 See this volume, ch 14. 22 See, eg, Case 30/81, Luxembourg v Parliament, ECLI:EU:C:1983:32, para 37. 23 See also Case C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864, para 61. See this volume, ch 59.
138 Panos Koutrakos of which reflected the content of the above bilateral agreement.24 Whilst there was no need to articulate it in such terms in the judgment, the EU institutions may do more than just not impede the performance by Member States of their prior international commitments – they may, in fact, act in order to address discrepancies that may arise between the latter commitments and EU law. This is illustrated by the work that the Commission may carry out in the context of pre-accession negotiations.25 C. The Relationship between Domestic, EU and International Law The judgment in Burgoa is about the interpretation of Article 351 TFEU, first paragraph. The obligation of Member States to remedy an incompatibility between their prior international commitments and EU law, imposed under Article 351 TFEU, second paragraph, was not an issue due to the specific legal context of the case: Irish legislation was based on EU secondary legislation. And while the consistency of the latter with the London Convention had not been the subject matter of the reference from the national court, the congruence between the national provisions that were challenged and the applicable EU Regulations made the Court examine the matter. Its conclusion, that there was no incompatibility between the interim EU measures and international law, and the reasoning that led to it are worth scrutinising further. The thrust of the judgment was about abrogation (even though the word does not appear in it). The emphasis is on the thread that underpinned the interim EU Regulations applicable at the time, and the fisheries agreement that the Community had negotiated with Spain (both provided for a licensing system). It was also on the thread that brought these measures together with not only the Act of Accession of Ireland, but also the London Agreement itself, given that one of their objectives was the conservation and management of fisheries resources. It was this contextual assessment that substantiated the conclusion that the EU rules applicable at the time, on which the disputed national legislation was based, were entirely consistent with the developing international law in the area. What emerges, therefore, is a theme of harmony between EU legislation, international law binding on Member States and international agreements that had yet to be concluded. This theme was backed up by the reference to the participation of Spanish authorities in the process that led to the measures set out in the EEC–Spain Fisheries Agreement, and reflected in the interim EU measures applicable at the time. In other words, the parties to the prior agreement (the London Convention) had agreed to a new set of rules, which were in the process of being formalised and in the meantime were reflected by interim arrangements enshrined in EU law. The London Convention was, therefore, no longer applicable. A striking feature of the above line of reasoning is the absence of clarity on a number of important issues. The judgment in Burgoa did not spell out that the London Convention was no longer applicable, nor did it expressly refer to abrogation. It also omitted to say that the analysis of the substantive relationship between the fisheries agreement with Spain negotiated by the Commission and the London Convention, which had been the alleged source of Mr. Burgoa’s rights, was cursory.26 There was no reference to the status of the EEC–Spain 24 Above n 9. 25 See, eg the Commission’s initiatives preparing for 2004 enlargement: Koutrakos (n 8) 342 et seq. 26 It was pointed out that the EEC–Spain Fisheries Agreement was intended to replace the London Convention as it aimed to address all aspects of fisheries between the parties: RR Churchill and NG Foster, ‘European Community Law
International Agreements Concluded by Member States Prior to their EU Accession 139 Fisheries Agreement, which, at the time Mr. Burgoa’s vessel was seized, had not even been initialled, let alone concluded, and which entered into force in 1981. Focusing on the latter issue, Klabbers has referred to the Burgoa judgment as ‘curious’.27 While it reached the same conclusion with the Advocate General, the judgment of the Court not only lacked the clarity of the analysis of the Advocate General, but also followed a different route. In his Opinion, the Advocate General had referred to the economic demands of developing countries which had given rise to the development of a general international rule in the 1970s that authorised coastal states to extend their exclusive fisheries zone from 12 to 200 miles. In his view, this rule was under rapid consolidation and had amounted to new customary international law. The extension by Member States of their Exclusive Economic Zone in 1977, the negotiation of bilateral fisheries agreements with third countries (including Spain) and the adoption of domestic interim fisheries regimes were all in compliance with this developing international law. This course of action had specific legal implications: ‘the [Union] set its own action in motion completely superseding the London Convention which proved to be no longer capable of providing a satisfactory body of rules for the new subject matter of the international law of the sea’.28 In other words, the London Convention was abrogated by the new rules of international law with which the EU and its Member States, including Ireland, had complied.29 The analysis of the Advocate General is as clear as it is bold. This may explain the abstract reasoning of the Court in its Burgoa judgment. On the one hand, the determination of the emergence of a new customary international law is a complex task that the Court would have been keen to avoid.30 And the reference to the Spanish cooperation in the negotiations of the bilateral fisheries agreement, notwithstanding the status of the London Convention, was not quite as clear as the Advocate General had suggested. Even the Commission argued that, while the London Convention had become obsolete, the negotiations with Spain did not suggest clearly that the latter had acquiesced in the termination of the Convention. It was for this reason that, according to the Commission, it would be undesirable for the Court to rule on this matter.31 On the other hand, the policy context of the dispute was also significant. The EU fisheries measures applicable at the time reflected a Union policy which was still emerging. The emphasis on the harmony between prior international law binding on Spain and the relevant EU rules enabled the Court to sanction the legality of the latter and not interfere with the development of a still nascent policy. The reluctance to rule expressly on abrogation in Burgoa emerges even stronger in subsequent case law. In Levy,32 the Court ruled on the relationship between Directive 76/207 on equal treatment between men and women,33 the 1948 Convention No 89 of the International Labour Organization (ILO) on night work for women in industry, and French legislation implementing the Convention and prohibiting women from carrying out night work. The judgment
and Prior Treaty Obligations of Member States: the Spanish Fishermen Cases’ (1987) 36 ICLQ 504, 507, who argue that, despite the absence of reasoning, the conclusion reached in Burgoa was sound and consistent with international law (510 et seq). 27 J Klabbers, Treaty Conflict and the European Union (Cambridge, Cambridge University Press, 2009) 148–49. 28 Above n 6, 2816–17. 29 ibid 2818. 30 See Klabbers (n 27) 127. 31 Report for Hearing: R 812/79 (n 18) 21. 32 Case C-158/91, Ministère public and Direction du travail et de l’emploi v Levy, ECLI:EU:C:1993:332. 33 [1976] OJ L39/40.
140 Panos Koutrakos referred to the principle of abrogation laid down in Article 59(1)(b) of the Vienna Convention on the Law of Treaties, and acknowledged the possibility of the prohibition on night work for women, laid down in the 1948 ILO Convention, having been superseded by subsequent international agreements, including the 1979 Convention for the Elimination of all Forms of Discrimination against Women as well as ILO instruments such as the 1990 Protocol on the 1948 ILO Convention, the 1990 ILO Convention No 171 on night work and the 1990 ILO Recommendation No 178 on night work. The Court, nonetheless, left it to the referring court to determine the matter. A narrow reading of the judgment in Levy may explain this approach in the light of the nature and limits of the preliminary reference procedure. After all, it is settled case law that it is for the referring national court to apply the interpretation of EU law to the facts of the case.34 The Court, however, has never been accused of consistency on this matter, and there is no shortage of examples in its case law where, either directly or indirectly, it has not shied away from applying EU law itself to the facts of the case.35 The judgment in Levy, having followed that in Burgoa, illustrates, instead, a reluctance to rule on the legal status of treaties concluded by Member States prior to their accession to the EU. The subsequent development of case law confirms this point: the emphasis has shifted towards the interpretation of Article 351 TFEU, second paragraph and the duties imposed on Member States as to how to deal with incompatibilities between their prior obligations under international agreements and EU law.36 This shift has been facilitated by a thread that brings the two paragraphs together, namely the broad interpretation of their scope. Before this issue is examined in the following section of this chapter, it is worth pointing out that, following from Levy, the role of national courts by no means diminishes in the context of Article 351 TFEU, second paragraph: it is left to national courts to determine the scope and nature of the obligations imposed upon a Member State by a pre-existing international agreement;37 and it is also for them to determine whether it might be possible to interpret such an international agreement in the light of EU law, hence preventing an incompatibility from arising.38 D. The Scope of Article 351 TFEU The broader the scope of Article 351 TFEU, the more significant the scope of Article 351 TFEU, second paragraph. After all, the application of the former provision triggers the duty that the latter provision imposes on Member States. Over the years, the scope of this duty ‘to take all appropriate steps to eliminate the incompatibilities established’ has been interpreted broadly, as it covers the interpretation of the international agreement by domestic courts,39 its
34 See Case 35/76, Simmenthal v Ministero delle Finanze, ECLI:EU:C:1976:180, para 4. 35 See, eg Case C-392/93, R v HM Treasury ex parte British Telecommunications plc, ECLI:EU:C:1996:131; Case C-470/93, Verein gegen Unwesen in Handel und Gewerbe Köln eV v Mars GmbH, ECLI:EU:C:1995:224. See the overview in M Broberg and N Fenger, Preliminary References to the European Court of Justice (Oxford, Oxford University Press, 2014) 428 et seq. 36 See also Klabbers (n 27) 149. 37 Case C-13/93, Office national de l’emploi v Minne, ECLI:EU:C:1994:39, para 18. 38 Case C-216/01, Budejovicku Budvar v Rudolf Ammersin GmbH, ECLI:EU:C:2003:618, para 169. 39 ibid.
International Agreements Concluded by Member States Prior to their EU Accession 141 adjustment through negotiation and, if that is not possible, termination.40 What is interesting, in the context of this chapter, is the scope of incompatibilities. In particular, does the mere possibility of incompatibility at some point in the future trigger the obligation of a Member State to engage in any of the above actions? This question was addressed in a series of enforcement actions that the Commission brought in the late 2000s challenging a series of bilateral investment treaties (BITs) concluded by these states prior to their accession to the Union41 as incompatible with the Treaty provisions on the movement of capital.42 The BITs concluded by the Member States protected the free movement of capital to and from the third states, consistent with the principle laid down in Article 63 TFEU. They also contained a ‘transfer clause’ which guaranteed for the investors of each party the free transfer, without undue delay and in freely convertible currency, of payments connected with an investment. The question was whether the transfer clause undermined the ability of the Union to impose restrictions on such movement. EU primary law enables the EU to impose such restrictions in three sets of circumstances: first, where they involve direct investment, including investment in real estate, establishment, the provision of financial services or the admission of securities to capital markets (Article 64(2) TFEU); second, where safeguard measures are strictly necessary in cases where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union (Article 66 TFEU); and third, where financial sanctions on third countries, individuals, groups or state entities are imposed in order to achieve foreign and security policy objectives or in order to prevent and combat terrorism (Article 75 TFEU for anti-terrorism objectives and Article 215 TFEU following a Common Foreign and Security Policy measure).43 The crucial question in these cases was this: are prior international agreements concluded by Member States incompatible with EU law in so far as they may undermine the effectiveness of measures that the EU has not adopted yet but might adopt in the future? The Grand Chamber of the Court answered this question in the affirmative: while the BITs that the Member States had concluded prior to their accession to the EU were consistent with the wording of Article 63 TFEU on movement of capital, their transfer clause would undermine the effectiveness of the EU primary rules.44 There was no provision in the agreement enabling Member States to comply with EU capital restrictions, and neither a renegotiation of the agreement nor suspension or denunciation would guarantee the effectiveness of the Union’s action restricting the movement of capital to or from a third country. 40 Case C-170/98, Commission v Belgium, ECLI: EU:C:1999:411, paras 42–43; Case C-62/98, Commission v Portugal, ECLI: EU:C:2000:358, paras 49–50; Case C-84/98, Commission v Portugal, ECLI:EU:C:2000:359, paras 58–59; Rudolf Ammersin (n 38) para 170; Case C-203/03, Commission v Austria, ECLI:EU:C:2005:76, para 61. 41 For example, Austria had concluded with China, Malaysia, Russia (originally with the Soviet Union), Korea, Turkey and Cape Verde. Sweden, moreover, had concluded with Vietnam, Argentina, the Ivory Coast, Hong Kong, Indonesia, China, Malaysia, Madagascar, Peru, Senegal, Sri Lanka, Tunisia, Serbia and Montenegro (originally with Yugoslavia) and Yemen. 42 See Case C-249/06, Commission v Sweden, ECLI:EU:C:2009:119; Case C-205/06, Commission v Austria, ECLI:EU:C:2009:118; Case C-118/07, Commission v Finland, ECLI:EU:C:2009:715. See this volume, ch 56. The Commission had also brought an action against Denmark. However, following the notification by the Danish government of a declaration to terminate the relevant agreements, this case was closed. 43 For an analysis of EU restrictive measures, see C Eckes, ‘The Law and Practice of EU Sanctions’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018). 44 Commission v Sweden (n 42) para 37; Commission v Austria (n 42) para 36; Case C-118/07, Commission v Finland (n 42) para 30.
142 Panos Koutrakos A parallel development, therefore, emerges: the scope of Article 351 TFEU, first paragraph is interpreted in Burgoa broadly enough to cover ‘any international agreement, irrespective of subject matter, that is capable of affecting the application of the Treaty’,45 hence giving rise to the duty laid down in Article 351 TFEU, second paragraph. This duty is also interpreted broadly, so that it covers a wide range of onerous actions intended to deal with incompatibilities that have not even arisen yet. This statement, however, must be qualified as far as the scope of Article 351 TFEU, second paragraph is concerned. Despite the alarm that the conclusion reached in the relevant case law raised,46 Article 351 TFEU, second paragraph is not of such wide purview as to cover any future incompatibility. The principle that the case law examined in this section introduced is confined to its specific legal and policy context. After all, the speed with which exceptional measures restricting capital movements are applied determines their effectiveness. Even a minor delay would render them devoid of substantial impact and would, therefore, defeat the purpose of their adoption by the Council.47 To apply the logic of effet utile to any measure which the Union may choose to apply at any time in the future in order to impose a requirement on Member States to renegotiate or denounce their prior treaties is to produce effects too onerous and drastic on the basis of a criterion too uncertain and indeterminate. Such an interpretation of Article 351 TFEU would be difficult to sustain. In fact, neither the tenor nor the wording of the case law examined in this section supports such a broad reading of Article 351 TFEU. They are confined to the exceptional measures envisaged under the specific TFEU provisions and the vital significance of their immediate application, and do not suggest that the effectiveness of measures provided for in primary law be assessed in abstracto, in order to ascertain whether incompatibility in the meaning of Article 351 TFEU, second paragraph arises. A temptation, therefore, to interpret the case law in the BITs cases in broad terms should be resisted.48 The gradual alignment of the scope of the first and second paragraphs of Article 351 TFEU must be viewed alongside a point made above, that is, the shift of emphasis in the case law from the former provision to the latter. While the Court is bound to deal with the disputes that are brought before it, engaging with the status and interpretation of international agreements concluded by the Member States is less enviable a task than defining the subject matter of the obligation that Article 351 TFEU, second paragraph imposes on national authorities. Besides, the broad scope of the latter provision reduces the significance of the analysis of Article 351 TFEU, first paragraph and renders the EU law duties of the Member States all the more relevant.
45 Above n 1, para 6. 46 In Commission v Finland (n 42), the Finnish government ‘dwells on the serious consequences liable to result from the position of the Commission, which would make it possible to establish a failure to fulfil obligations on the basis of the second paragraph of Article [351 TFEU] in any case in which an agreement, entered into with a third country either before the entry into force of the Treaty or prior to accession of the Member State concerned, applies in an area in which the Community has not yet exercised the powers available to it under the Treaty. Such an interpretation would confer on the second paragraph of Article 307 EC [now Article 351 TFEU] an unlimited scope which would be open to challenge from the perspective both of legal certainty and of the distribution of powers between the Community and the Member States, and would upset the balance created by the first and second paragraphs of Article [351 TFEU]’ (para 46). 47 See also Advocate General Maduro, who points out the ‘urgent and immediately enforceable character of sanctions adopted under Article 60(1) EC [now Articles 75 and 215 TFEU]’ as well as the limited temporal scope of the restrictions envisaged under ex Article [66 TFEU)’: para 52 of his Opinion in Case C-249/06, Commission v Sweden, ECLI:EU:C:2008:405 and C-205/06, Commission v Austria, ECLI:EU:C:2008:391. 48 For a detailed analysis of these judgments, see P Koutrakos, ‘Annotation on Case C-205/06, Commission v Austria, judgment of the Court (Grand Chamber) of 3 March 2009, not yet reported; Case C-249/06, Commission v Sweden, judgment of the Court (Grand Chamber) of 3 March 2009, not yet reported’ (2009) 46 CML Rev 2059.
International Agreements Concluded by Member States Prior to their EU Accession 143 V. ADDITIONAL READING Churchill, RR and Foster, NG, ‘European Community Law and Prior Treaty Obligations of Member States: the Spanish Fishermen Cases’ (1987) 36 ICLQ 504. Klabbers, J, Treaty Conflict and the European Union (Cambridge, Cambridge University Press, 2009) ch 6. Koutrakos, P, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) ch 6.
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13 The Purpose of International Agreements and their Direct Effect: Polydor JAN KLABBERS Case 270/80, Polydor Limited and RSO Records Inc and Harlequin Record Shops Limited and Simons Limited, ECLI:EU:C:1982:43, delivered 9 February 1982. KEYWORDS Direct effect, analogy – Interpretation – Quantitative restrictions – Free trade agreement, intellectual property – Copyright – the Bee Gees.
I. INTRODUCTION
T
he Polydor case is one in a string of (relatively) early cases in EU external relations law in which the Court tried to find its feet, balancing several imperatives.1 One of these was the protection of the autonomy of EU law, trying to ensure it would not be affected by international law (or member state law, for that matter).2 The Court has always been keen on emphasising the special nature of the European project, as a separate legal order apart from both domestic law and international law. This, in turn, has generated a separate general problem. Doctrinally, the effect of EU law in its Member States demands a monist approach. But this is difficult to reconcile with the imperative of protecting the EU legal order against international law. After all, it seems incoherent to be monist within the EU but insist on dualism when it comes to the outside world. And this, in turn, spilled over in a third general issue: some agreements to which the EU is a party nominally represent international law, but serve mostly to ‘export’ EU law to others. Here, then, the EU can generally afford to be monist, but might still feel that some provisions threaten the autonomy of the EU legal order. Such a situation arose in Polydor, and it is interesting to see how the Court navigated the various tensions identified. What complicated matters further was that Polydor involved not merely the physical 1 For general discussion, see J Klabbers, ‘The Reception of International Law in the EU Legal Order’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law. Volume I: The European Union Legal Order (Oxford, Oxford University Press, 2018) 1209–33. 2 For a recent exploration, see P Koutrakos, ‘The Autonomy of EU Law and International Investment Arbitration’ (2019) 88 Nordic Journal of International Law 41.
146 Jan Klabbers trade in goods (as when a tangible product crosses a border), but the protection of intellectual property concerning that border-crossing product. Economically as well as ideologically, intellectual property rights occupy a special place. II. FACTS
Harlequin and Simons, two record retailers, had imported from Portugal into the UK albums by the Bee Gees, therewith circumventing the copyrights held in the UK by Polydor and RSO, which violated the 1956 UK Copyright Act. Those albums themselves were lawfully made in Portugal by companies forming part of the same group as Polydor and RSO and under licence from RSO, and were thus lawfully available on the Portuguese market.3 The licences had been granted for a fee, and the fee had been determined on the assumption that the recordings would be sold in Portugal only, and would not be marketed in the UK as well. Disgruntled, Polydor and RSO went to court in the UK, trying to stop the import of those sound recordings. The High Court, in 1979, issued an injunction order (equivalent to an interim measure), ordering Harlequin and Simons to stop selling the records in question. Harlequin and Simons appealed to the Court of Appeal, relying on the 1972 Free Trade Agreement concluded between Portugal and the (then) EEC. This Agreement, in Article 14, abolished quantitative restrictions on trade in goods and measures of equivalent effect as of 1 January 1973, and held furthermore in Article 23 that such protective measures as could be necessary for the protection of public interests, including the protection of industrial and commercial property, should not constitute arbitrary discrimination or a disguised restriction on trade. These provisions, so Harlequin and Simons claimed, had to be considered as having direct effect in the EU legal order (and thus in the UK as well) and, moreover, were analogous to the relevant articles from the EEC Treaty itself (then Articles 30 and 36 EC, now Articles 34 and 36 TFEU). Within the EU, these provisions prevent the holders of an intellectual property right from relying on that right to restrain imports; as Articles 14 and 23 of the Free Trade Agreement embodied the same principles, the same result should obtain in relations involving the EEC and Portugal. The Court of Appeal thereupon refused to grant interim measures to Polydor and RSO, and instead asked the Court for a preliminary ruling. It asked four questions. First, it wanted to know whether the enforcement of their copyright by Polydor and RSO constituted a quantitative restriction within the meaning of Article 14 of the Free Trade Agreement. Second, if so, did the enforcement measure come within the scope of Article 23 of the same Agreement and amount to arbitrary discrimination or a disguised restriction on trade? Third, does Article 14(2) of the Agreement have direct effect in the EU legal order, in light of the act approving it (a Regulation of 19 December 1972)? And fourth, can an importer rely on Article 14 as a defence when sued for copyright violation? III. THE COURT
The Court started with a discussion of the referring Court of Appeal’s first two questions, perhaps in consequence of the way the questions were brought or perhaps for more functional
3 Portugal
was not then an EU Member State, having only subsequently acceded in 1986.
The Purpose of International Agreements and their Direct Effect 147 reasons, for, by doing so, it seemed to follow a particular path in order to arrive at a particular conclusion, rather than following a different path to perhaps a different conclusion. Taking the first two questions first boiled down, so the Court suggested, to determining whether the interpretation of the relevant provisions of EU law (then Articles 30 and 36 EC, now Articles 34 and 36 TFEU) should also be applied to the corresponding Articles 14 and 23 of the Free Trade Agreement. And this, in turn, would have to depend on an analysis of the respective provisions in light of the object and purpose of the Free Trade Agreement and in light of its wording.4 Having discussed the preamble of the Free Trade Agreement and some of its provisions, the Court recalled that, indeed, Articles 14(2) and 23 of the Free Trade Agreement are worded in terms ‘which in several respects are similar’ to those of corresponding Articles 30 and 36 EEC.5 However, the Court continued, this alone would be ‘not a sufficient reason’6 for interpreting them in the exact same way. After all, the case law on Articles 30 and 36 EEC must be understood against the EEC’s objectives and activities, establishing a common market and an approximation of the economic policies of the Member States. The same did not apply, so the Court held, to the Free Trade Agreement. Without spelling out what the object of the Free Trade Agreement would be, the Court merely observed that ‘it does not have the same purpose as the EEC Treaty’,7 and thus trade restrictions that could not be justifiable under the EEC Treaty could be justifiable under the Free Trade Agreement. The Court continued with a policy rationale, in highlighting that enforcement mechanisms available under the EEC Treaty were not available under the Free Trade Agreement, making the distinction between the two ‘all the more necessary’.8 The Court concluded that since the import restriction was justifiable, given the first sentence of Article 23 of the Free Trade Agreement (to protect industrial and commercial property), there was no need to answer the remaining questions, which enquired into the direct effect (vel non) of the provisions of the Free Trade Agreement. IV. THE IMPORTANCE OF THE CASE
A. The Reception of International Law in the EU Legal Order On this point, the Polydor case is mostly of importance as a transitional decision, noteworthy more for what the Court did not do than for what it actually said. After all, it did not explicitly pronounce on the direct effect or applicability of provisions of the Free Trade Agreement – it dodged that particular bullet. In fact, what the Court’s approach demonstrated, quite possibly inadvertently, is the intellectual poverty of thinking in terms of direct effect. The Court did not pronounce explicitly on the effect of Articles 14 and 23 of the Free Trade Agreement in the EU legal order, yet it allowed UK-based companies to rely on it, without any need for transposition or transformation. Harlequin and Simons were not allowed to rely on Article 23; but the case was decided by interpreting Article 23 in favour of Polydor and RSO. This can be explained, doctrinally, in one of two ways. First, the Court could have taken the pre-existing UK legal situation (ie its Copyright Act) as the starting point, assuming it 4 Case 270/80, Polydor Limited and RSO Records Inc and Harlequin Record Shops Limited and Simons Limited, ECLI:EU:C:1982:43, paras 7–8. 5 ibid para 14. 6 ibid para 15. 7 ibid para 18. 8 ibid para 20.
148 Jan Klabbers not to be affected by the conclusion of the Free Trade Agreement. In that case, however, there would have been no need to justify the decision in terms of Article 23. Alternatively, the Court could feel that Article 23 did affect the pre-existing legal situation, but did so by confirming or strengthening the position of the UK. This, however, would entail that the UK and UK-based companies could rely on Article 23, but Harlequin and Simons could not. This could explain the Court’s invocation of Article 23, but would otherwise be a curious way of deciding on the effect of a provision of an agreement in the EU legal order, and one without much further justification. In retrospect, it is clear that the Court was searching, and trying to come to terms with the effect of international law in its internal legal order, and was possibly a little unnerved by the grand coalition it was facing. No less than five of the (then) nine Member States intervened (including the three big ones: Germany, France and the UK), all supporting the position of Polydor and RSO, as did the Commission, so it was clear which way the wind was blowing. The UK in fact summed up the politics rather nicely: it emphasised that provisions similar to Articles 14 and 23 of the Free Trade Agreement could be found in all seven free trade agreements concluded with members of the European Free Trade Association (EFTA) and in all the agreements with Mediterranean countries, and similar terms could even be found in the General Agreement on Tariffs and Trade (GATT).9 The message was clear: allowing Harlequin and Simons to rely on the Free Trade Agreement would open the door for widespread undermining of domestic policy space within the Member States. B. A Model of Judicial Reasoning: The Order of Things? Perhaps the limited impact of Polydor is a good thing too, for the case is not a very impressive exercise in judicial reasoning, largely for two reasons, discussed in this paragraph and the next. The first of these, which has already been alluded to, is that, taken in isolation, it makes little sense to first address the question of analogous interpretation with the relevant provisions of the EEC Treaty and only then move on to the possible effects in the EU legal order. Perhaps the referring Court of Appeal was to blame, in that it referred the questions in this order; but then again, the Court has the liberty (and regularly uses it) to rephrase, reframe and reorder questions submitted to it. Moreover, by contrast to the Court, Advocate General (AG) Rozès had started her analysis with a discussion of direct effect.10 She ended up denying that Articles 14 and 23 of the Free Trade Agreement had direct effect, despite their wording and despite the fact that at issue was a deepening of trading relations between the EEC and Portugal. Indeed, the latter, so AG Rozès suggested, was actually the problem: granting direct effect to provisions of the Free Trade Agreement could ‘prejudge the outcome of negotiations in progress for Portugal’s accession to the EEC’.11 Needless to say, while such may be a prudent policy argument, it is hardly an argument of principle, so perhaps it is no surprise that the Court did not echo it. Still, it may be instructive to think through what could have happened had the Court approached the direct effect question first. If it had, it could have found that the Free Trade
9 The Court notes as much in its statement of facts and issues, but does not address it in its judgment. 10 The First Advocate General had initially assigned the case to Advocate General Mayras: see Case file A, 68, note of 12 December 1980. 11 Opinion of AG Rozès, Case 270/80, Polydor Limited and RSO Records Inc and Harlequin Record Shops Limited and Simons Limited, ECLI:EU:C:1981:286, 354.
The Purpose of International Agreements and their Direct Effect 149 Agreement would lack direct effect in the EU legal order, but it would have needed an argument to bolster that finding, and such an argument would not have been easy to find by applying the regular ‘direct effect’ test developed in other cases. After all, the wording of Articles 14(2) and 23 of the Free Trade Agreement was very precise and unconditional, and spoke directly to the individuals and companies, rather than to the parties to the Free Trade Agreement (in casu, the Community and Portugal). The general point of such agreements, moreover, as the Court had to acknowledge, was the liberalisation of trade in goods,12 a purpose highly suitable for application of the direct effect doctrine. Hence, no good argument would have been available to deny direct effect. As a result, the Court quickly addressed the analogy argument, holding that since the goals of the EEC Treaty are not identical to those of the Free Trade Agreement, the analogy with Articles 30 and 36 EEC runs into problems and cannot be applied. The argument had been elegantly formulated by the Commission, opining that the EEC Treaty involved a ‘fully organic relationship’,13 whereas the Free Trade Agreement did not. And since the analogy has no basis for application, Harlequin and Simons cannot rely on the Free Trade Agreement. C. A Model of Legal Reasoning: The Burden of Argument? The judgment is also awkward in other respects. Perhaps the main source of awkwardness relates to the negative framing of the argument. The Court, having observed that there is ‘in several respects’ a similarity between the wordings of the EEC Treaty and the Free Trade Agreement, rapidly reaches the conclusion that such similarity ‘is not a sufficient reason’14 for applying the analogy, but without providing any direct argument as to why the similarity of terms ‘is not a sufficient reason’; no explanation is forthcoming. It explains what the relevant case law does, and that the scope of that case law must be determined in light of the Union’s activities and objectives. It discusses how it has interpreted Articles 30 and 36 EEC, and then boldly states that the same considerations do not apply to the Free Trade Agreement. The Court even proceeded by suggesting that the main difference resided in the goals of the respective treaties. It acknowledged that the Free Trade Agreement envisaged the ‘unconditional abolition of certain restrictions on trade’;15 it does not have the same purpose as the EEC Treaty, for the latter ‘seeks to create a single market reproducing as closely as possible the conditions of a domestic market’.16 It followed that different interpretations of identically worded provisions are justified, a situation even bolstered by the relative lack of enforcement mechanisms under the Free Trade Agreement. The latter in particular is a bold move, for it does not seem too far-fetched to suppose that the enforcement gap would largely be closed by granting direct effect to the relevant provisions. Complaining that Article 14 cannot be enforced under the Free Trade Agreement itself loses a lot of its cogency upon realisation that enforcement by the Court through the medium of direct effect could have been a distinct possibility, and may even have been the initially intended outcome – until it was realised that the Member States were not too keen.
12 Polydor
(n 4) para 12. submissions, doc JUR(81) D/00658, para 2.3.2.3. 14 Polydor (n 4) para 15. 15 ibid 18. 16 ibid para 18. 13 Commission
150 Jan Klabbers Here it is perhaps relevant to note that the Free Trade Agreement was an EU-only agreement, concluded between the EU (the EEC, as it was then) and Portugal.17 The Member States were not formally parties to the Agreement, and may not have played a very prominent role during its negotiation. This is all the more plausible as negotiation was relatively routine: the Free Trade Agreement with Portugal effectively followed the pattern of agreements with other free trade agreements. What arguably distinguished the Portugal situation though was that of the circa 20 treaty partners (EFTA states and Mediterranean states) at the time, Portugal was the only one with which negotiations for full membership were under way. In this light, the fear formulated by AG Rozès that granting direct effect to provisions of the Free Trade Agreement might come to harm the accession negotiations becomes understandable. D. On Direct Effect As already alluded to, the Polydor decision does illustrate how unstable the entire edifice devoted to the reception of international law in other legal orders can be. It suggests that dualism and monism are not very useful analytical tools. A monist reading of Polydor, insisting on what the Germans so wonderfully refer to as the Völkerrechtsfreundlichkeit of EU law (its perceived openness towards international law), cannot possibly come to terms with the avoidance of direct effect in Polydor and the contrived distinction made between the goals of the EEC Treaty and those of the Free Trade Agreement. A dualist reading of the case, insisting that international law and EU law are distinct legal orders, by contrast, cannot come to terms with the legitimating effect of Article 23 of the Free Trade Agreement on Member State conduct, and cannot keep up with the subsequent case law as it relates to free trade agreements and association agreements. Then again, with hindsight, it also seems reasonably clear that the Court had few other theoretical tools available. Monism and dualism had been central and generally accepted doctrines since the turn of the century, initially propagated by highly respectable legal scholars such as Heinrich Triepel,18 and no lesser authority than Hans Kelsen.19 Both had been anchored in domestic constitutions, and the doctrine of direct effect had been given the stamp of approval by the Permanent Court of International Justice (PCIJ).20 Admittedly, there had been some rumblings in the literature about phenomena which did not neatly fit the dichotomy between domestic and international law (including novel ideas about transnational law since the 1950s21), and admittedly, the EU itself was a prime example of an entity defying easy categorisation, but it nonetheless remained the case that the Court had few alternative options available to it, other than to decide cases on the interplay between international law and EU law in terms of monism, dualism and direct effect.22 The instability of this entire theoretical assemblage is perhaps best borne out by the fairly wide diversity of opinions circulating on the putative direct effect of the provisions of the Free
17 The leading study of such agreements, paying scant attention to Polydor, is M Mendez, The Legal Effects of EU Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013). 18 See, eg H Triepel, Völkerrecht und Landesrecht (Leipzig, CL Hirschfeld, 1899). 19 H Kelsen, Principles of International Law (New York, Rinehart. 1952). 20 Jurisdiction of the Courts of Danzig [1928] Publ PCIJ, Series B, no 15. 21 See especially perhaps PC Jessup, Transnational Law (New Haven, Yale University Press, 1956). 22 But see J Klabbers and G Palombella (eds), The Challenge of Inter-legality (Cambridge, Cambridge University Press, 2019).
The Purpose of International Agreements and their Direct Effect 151 Trade Agreement. For while there was widespread agreement as to the conclusion (the provisions are devoid of direct effect), there was a wide-ranging variety as to why this would be so. As noted, AG Rozès mostly relied on the policy consideration that ongoing negotiations should not be affected. The Commission, by contrast, had expressly stated that Portugal’s being a candidate member state ‘cannot be relevant to the interpretation of the Portugal Agreement since the same interpretation must apply to all the other EFTA Agreements’.23 The Court itself did not confront the issue head-on – to the surprise of contemporary observers, given the flurry of activity on precisely that issue.24 Lord Templeman at the Court of Appeal actually suggested that the Free Trade Agreement had direct effect or, as he put it, ‘contains some provisions which confer powers on individuals’.25 Speaking plainly on the suggestion that the spirit of the Free Trade Agreement warranted a legally relevant distinction, he could only state that ‘I do not believe it for one moment’.26 The various governments sending their observations also tended to differ as far as their arguments were concerned. France held that the possible direct effect of Article 14 was undermined by the existence of ‘nombreuses clauses dérogatoires’ (numerous derogation clauses).27 Germany hardly bothered to provide an argument – it merely referred to the established criteria for direct effect in half a page, only to conclude that in light of those criteria Articles 14(2) and 23 of the Free Trade Agreement were ‘nicht unmittelbar anzuwenden’ (not to be applied directly).28 Denmark opined that the Free Trade Agreement was based on reciprocity, and this would be disregarded if the Court were to grant direct effect while the Portuguese courts did not. Whether this accurately reflected Portuguese law on the reception of international obligations remained unsaid, although Denmark did submit observations on the generally dualist approach to treaty provisions in the EFTA countries.29 The UK, while also invoking the text and spirit of the Free Trade Agreement, denied direct effect on the basis of the regulation approving the Free Trade Agreement as being an ‘absurd’ consequence since the Free Trade Agreement resembled a whole number of other agreements, and there were no guarantees of reciprocity as far as granting direct effect was concerned. In particular, it noted that ‘industry in such countries is given an advantage over, and at the expense of, Community industry’.30 The Netherlands, finally, never addressed direct effect, remaining content to sketch that the analogy to Articles 30 and 36 EEC was inappropriate. E. Intellectual Property Polydor has not left much of a trace concerning the protection of intellectual property, but it did confirm the pivotal relevance thereof to those tasked with maintaining a properly functioning market economy. It is conceivable (though cannot be proven) that if the case had involved a simple cross-border movement of a tangible product – say, a lightbulb – no government would have intervened, and not much of a problem would have been seen with granting direct effect to two treaty provisions that reflected principles similar to those informing the EU and in relation
23 Commission
submissions (n 13) para 2.3.2.5. Freeman, ‘Polydor v Harlequin: A Cautious Approach by the European Court’ (1982) 41 CLJ 219. 25 Polydor v Harlequin, Court of Appeal, judgment of 15 May 1980, 16 (available in case file, on file with the author). 26 ibid. 27 Case file A, 201. 28 Case file A, 219. 29 Case file A, 246. 30 Case file B, 18. 24 E
152 Jan Klabbers to a future Member State of the EU. In other words, the decisive factor may well have been that the case involved copyright protection rather than straightforward movement of goods. It is scarcely a coincidence that the memorial submitted by Polydor and RSO paid considerable attention to the copyright issue, and included a document emanating from the GATT justifying and explaining why copyright should be territorially enforced.31 The main justification, so it was claimed, is that copyright protection (necessarily coming with restrictions), even if contrary to free trade considerations, is ‘generally considered necessary to foster conditions in which the creation of copyright works, which contribute to the culture of a nations, will be encouraged’. The point is easily inflated of course, and was so perhaps in the Polydor case as well: the Bee Gees (the Gibb brothers) were born in the UK (on the Isle of Man) but emigrated to Australia at a young age, and are forever associated with Australian culture, rather than UK culture. Leaving this aside, the GATT document highlights two general matters with which copyright holders are typically concerned: the right to choose the best person to exploit or promote a work and equitable remuneration. In everyday terms: the copyright holder wants to control who gets a licence abroad, and would like a handsome amount of money as consideration. AG Rozès was swayed by the argument. In no uncertain terms, she emphasised that allowing the recordings to be sold in the UK in circumvention of the copyright protection ‘would completely undermine the basis of contracts granting exclusive licences of industrial or commercial property rights’, and she sympathised with Polydor: had it known this would happen with its licensed products, ‘it would certainly have required much greater consideration’.32 The Court itself was, wisely perhaps, less effusive, but eventually reached the same conclusion. What got lost in all this was the irony that the licensees in Portugal belonged to the same group of companies as did Polydor and RSO. F. Concluding Remarks Polydor has ultimately not made many waves: it is best seen as a case from a bygone era, throwing up some dust which quickly settled. It is typically discussed in these terms in studies of the EU’s external relations,33 and rarely mentioned, if at all, in studies on intellectual property protection and the EU.34 It is arguably more important for what is left unsaid: it shows how unstable the assemblage of monism, dualism and direct effect is;35 it is a model of not-verypersuasive legal reasoning; and it suggests the special relevance of intellectual property for the EU’s market edifice. Curiously perhaps, when Polydor is still referred to in the twenty-first century, it tends to be as authority for the proposition that different circumstances of otherwise similar provisions warrant different interpretations where that is necessary to reach similar levels of protection – Polydor reversed, one might say – and that seems oddly fitting.36
31 Case File A, 386–89. 32 Polydor (n 4), AG Rozès, 356. 33 See, eg P Koutrakos, EU External Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 271–75; PJ Kuijper et al, The Law of EU External Relations (Oxford, Oxford University Press, 2013) 930. 34 See, eg T Mylly, Intellectual Property and European Economic Constitutional Law (Vaajakoski, Gummerus, 2009). 35 For further theoretical reflection, see V Heiskanen, International Legal Topics (Helsinki, Finnish Lawyers’ Publishing Company, 1992) 1–199. 36 C Tobler, ‘Free Movement of Persons in the EU v in the EEA: Of Effect-Related Homogeneity and a Reversed Polydor Principle’ (2018) 3 European Papers 1429.
The Purpose of International Agreements and their Direct Effect 153 V. ADDITIONAL READING Klabbers, J, ‘The Reception of International Law in the EU Legal Order’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law. Volume I: The European Union Legal Order (Oxford, Oxford University Press, 2018) 1209–33. Koutrakos, P, EU External Relations Law, 2nd edn (Oxford, Hart Publishing, 2015). Mendez, M, The Legal Effects of EU Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013).
154
14 Status and Enforceability of EU International Agreements within the Domestic Legal Systems of the Member States: Kupferberg ELEFTHERIA NEFRAMI Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362, delivered 26 October 1982. KEYWORDS International agreements – Direct effect – Interpretative jurisdiction of the Court – Mixed agreements – Reciprocity – International responsibility – Loyal cooperation
I. INTRODUCTION
I
n Kupferberg, a provision of the Free Trade Agreement between the European Communities and the Portuguese Republic of 22 July 1972 (the EEC–Portugal Agreement), whereby the parties agreed to refrain from any measure or practice of an internal fiscal nature establishing discrimination between products of one contracting party and like products originating in the territory of the other contracting party, was held to be capable of conferring on individual traders rights which the courts must protect. The case is known as an international-law-friendly ruling, establishing the direct effect of an ordinary bilateral trade agreement.1 The question of direct effect of international agreements is part of the broader problem of their status within the domestic legal systems of the Member States. Elaborating on earlier decisions, the Court stated that international agreements made by the Community 1 In Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362, the Court used the concepts of direct applicability and direct effect interchangeably, while a distinction was established in scholarship. More precisely, direct applicability means that no validating national act is needed for EU law to have effects within the domestic legal orders; direct effect, on the other hand, refers to the ability of a norm to be invoked before a domestic court. See K Lenaerts, ‘Direct Applicability and Direct Effect of International Law in the EU Legal Order’ in I Govaere, P Van Elsuwege, E Lannon and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2014) 46; R Schütze, ‘Direct Effects and Indirect Effects of Union Law’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law (Oxford, Oxford University Press, 2018) 268.
156 Eleftheria Neframi form an integral part of the Community legal system. Kupferberg went further, establishing the primacy of EU international agreements vis-à-vis Member States’ law and the implementation of such agreements by the Member States’ courts, the discretion of which was limited by the interpretative competence of the Court to establish direct effect criteria. Moreover, Kupferberg linked the obligation of the Member States to comply with EU international agreements to the international responsibility assumed by the Union. Such interplay between EU and international law explains the importance of Kupferberg for the analysis of the status of mixed agreements in the EU legal order, although the Court did not address that question. II. FACTS
In 1976, a German spirits importer, the undertaking Christian Adalbert Kupferberg (Kupferberg), imported port wine from Portugal and was obliged by the Hauptzollamt Mainz (the Hauptzollamt) to pay a customs duty levied under the Branntweinmonopolgesetz of 8 April 1922 (the German Spirits Monopoly Law). Kupferberg objected that the amount of the customs duty imposed by the Hauptzollamt was greater than the amount of tax that would have been due for similar domestic spirit and sought judicial review of the Hauptzollamt’s decision before the Finanzgericht RheinlandPfalz (the Finance Court), invoking the first paragraph of Article 21 of the EEC–Portugal Agreement, which obliged the contracting parties to refrain from adopting discriminatory tax measures.2 The Finance Court reduced the amount of the customs duty to the equivalent of the relevant tax under the German Spirits Monopoly Law. The Hauptzollamt appealed that Finance Court decision to the Federal Finance Court, the Bundesfinanzhof, which addressed two questions to the Court through the preliminary reference procedure. The Bundesfinanzhof’s first question asked: (i) whether Article 21 had direct effect that gave individuals the right to invoke it; (ii) if so, whether Article 21’s prohibitions should be interpreted by analogy to the prohibition of discrimination arising from Article 95 EEC (now Article 110 TFEU); and (iii) whether Article 21 applied to the importation of port wines. The Bundesfinanzhof’s second question, posed only if the Court answered its first question in the affirmative, asked: (i) whether Article 21’s discrimination prohibition should be broadly interpreted to prohibit any hypothetical, potential discrimination; and (ii) if there are multiple domestic products to which the imported product could be considered similar, what tax rate should be imposed on the imported product to prevent discrimination. III. THE COURT
Although the parties and the Advocate General focused their reasoning on the questions of direct effect and the interpretation of discrimination, the Court started with an analysis of Article 228(2) EEC (now Article 216(2) TFEU), stating that the international agreements concluded by the Community (now Union) were binding on the institutions and on the 2 Art 21(1) of the EEC–Portugal Agreement read: ‘The Contracting Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Contracting Party and like products originating in the territory of the other Contracting Party.’
EU International Agreements within the Domestic Legal Systems 157 Member States. The most well-known quote from the Kupferberg decision was paragraph 13, where the Court found: In ensuring respect for commitments arising from an agreement concluded by the Community institutions the Member States fulfil an obligation not only in relation to the non-member country concerned but also and above all in relation to the Community which has assumed responsibility for the due performance of the agreement. That is why the provisions of such an agreement, as the Court has already stated in its judgment of 30 April 1974 in Case 181/73 Haegeman … form an integral part of the Community legal system.
Having thus established the Member States’ obligations vis-à-vis international agreements entered into by the Community, the Court responded, in turn, to the three parts of the Bundesfinanzhof’s first question. As to Article 21’s direct effect, the Court first examined the nature and structure of the EEC–Portugal Agreement. It considered that the arguments made by the Advocate General, the Commission and the Member States relating to the principle of reciprocity, the established institutional framework and the safeguard clauses that allow derogations were not sufficient to deny the direct effect of Article 21 of the EEC–Portugal Agreement. First, the Court held that the fact that the courts of the contracting parties did not take the same position as to the direct effect of an international agreement’s provisions did not reflect a lack of reciprocity in that agreement’s implementation.3 Moreover, it found that the fact that an international agreement established a specific institutional framework for consultation and negotiations (such as joint committees) was ‘not in itself sufficient to exclude all judicial application’ of such an agreement.4 Finally, it stated that the inclusion of safeguard clauses authorising derogations by the contracting parties in an international agreement could not deny the direct effect of the agreement’s provisions.5 The Court made clear that ‘neither the nature nor the structure of the agreement concluded with Portugal may prevent a trader from relying on the provisions of the said agreement before a court in the Community’.6 However, the Court held that the direct effect of Article 21 depended not only on the nature and structure of the agreement, but also on its object, purpose and context.7 Advocate General (AG) Rozès opined that the limited objectives and the flexibility of the EEC–Portugal Agreement could prevent the Court from recognising the direct effect of Article 21 because such direct effect should only be recognised with regard to association agreement provisions that established specific links. Nevertheless, the Court rejected that suggestion, and recognised that an ordinary international agreement could have direct effect, particularly given that its purpose was to create a system of free trade. Thus, the Court ruled that Article 21 was to be interpreted as imposing an unconditional discrimination prohibition in matters of taxation concerning products of like nature.8 Having determined that Article 21 had direct effect, the Court moved on to the second part of the Bundesfinanzhof’s first question, the interpretation of Article 21 in relation to Article 95 EEC (now Article 110 TFEU). Relying on its Polydor decision,9 and underscoring the EEC
3 Kupferberg
(n 1) para 18. para 20. para 21. 6 ibid para 22. 7 ibid para 23. 8 ibid paras 24–26. 9 Case 270/80, Polydor, ECLI:EU:C:1982:43. See this volume, ch 13. 4 ibid 5 ibid
158 Eleftheria Neframi Treaty’s and the EEC–Portugal Agreement’s different objectives, the Court held that Article 21 could not be interpreted by simple analogy to Article 95 EEC (now Article 110 TFEU).10 Finally, as to the third part of the Bundesfinanzhof’s first question – whether Article 21 applied to the importation of port wines – the Court determined that the protocols to the EEC–Portugal Agreement demonstrated that it did.11 The Court thus generally answered the Bundesfinanzhof’s first question in the affirmative, making it clear that Article 21 had direct effect and that it applied to port wines, meaning that Kupferberg could directly challenge the Hauptzollamt’s decision. The Court then took up the Bundesfinanzhof’s second question, related to the interpretation of Article 21’s discrimination prohibition. In the absence of adverse effects of the national measure upon the liberalisation of trade between the Community and Portugal, and in the absence of similar products in the German market that could have qualified for a tax reduction, the Court affirmed that the fact that such reduction does not apply to products originating in Portugal does not constitute a discrimination.12 Besides, the Court underlined its exclusive competence to interpret the concept of similarity and held that products that differ as regards their method of manufacture and characteristics could not be regarded as like products.13 IV. THE IMPORTANCE OF THE CASE
A. An Obligation of Member States to Comply with EU Agreements vis-à-vis the Third States The Court held that in ensuring respect for commitments arising from an international agreement concluded by the EU, the Member States fulfil an obligation in relation to the non-member country concerned.14 This did not mean, however, that an EU-only agreement established legal duties binding Member States towards third countries. In these situations, only mixed agreements create conventional links between the Member States and the third countries, while the EU’s international personality implies that the EU has the capacity to bind itself by concluding international agreements with non-Member States or international organisations.15 Nevertheless, it could be argued that Member States are not disinterested third parties as far as EU agreements are concerned, in the sense that states cannot create international organisations for the purpose of evading their international obligations.16 B. An Obligation of Member States, Above All, in Relation to the Union In Kupferberg, the main rationale for the Member States’ obligation to ensure respect for commitments arising from an EU international agreement was that Member States fulfil an obligation vis-à-vis the EU, in the sense that if they were to disregard the EU international
10 Kupferberg
(n 1) para 30. para 36. paras 40–42. 13 ibid paras 44–47. 14 ibid para 13. 15 Case C-327/91, France v Commission, ECLI:EU:C:1994:305, para 24. 16 P Koutrakos, EU External Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 211. 11 ibid 12 ibid
EU International Agreements within the Domestic Legal Systems 159 agreement, the Union would incur international responsibility.17 Compliance of the Member States with EU international agreements is to be ensured by the Commission via infringement proceedings, as established in the subsequent case law.18 The link between the Member States’ obligation to comply with EU international agreements and the international responsibility of the Union can be seen as the expression of the principle of loyal cooperation (Article 4(3) TEU) vis-à-vis the external action objectives of the Union.19 That could explain why Article 216(2) TFEU now refers to the binding effect of EU international agreements on the Member States, although the Member States’ obligation of compliance also stems from the binding effect on the institutions. In Kupferberg, the Court explained that the provisions of EU international agreements form an integral part of the EU legal order because the Member States fulfil an obligation in relation to the Union, which has assumed responsibility for the due performance of the agreement. Reading Haegeman in the light of Kupferberg,20 it could be argued that the integration of international agreements in the EU legal order is based on the principle of loyalty vis-à-vis international law, now expressed in Article 3(5) TEU. Indeed, Article 216(2) TFEU could be seen as the expression of the Union’s obligation to respect international law and of the Member States’ obligation of loyal cooperation (following Article 4(3) TEU) not to jeopardise the attainment of the Union’s external action objectives. The reading of Article 216(2) TFEU in the light of the principle of loyal cooperation with regard to the Union’s external action objective to comply with its international commitments may explain the status of mixed agreements in the EU legal order. C. An Obligation of Member States Determining the Status of Mixed Agreements in the EU Legal Order While Kupferberg concerned an EU-only agreement, in Demirel, the Court referred to paragraph 13 of Kupferberg in order to stress the duty of the Member States towards the Union to respect commitments assumed by the latter in the framework of the association agreement with Turkey, a mixed agreement.21 By doing so, the Court asserted its jurisdiction to interpret the mixed agreement regardless of the division of competences.22 The question was raised as to whether a mixed agreement was a source of EU obligations for the Member States also in relation to the provisions falling under the Member States’ competence.
17 A Rosas, ‘International Responsibility of the EU and the European Court of Justice’ in MD Evans and P Koutrakos (eds), The International Responsibility of the European Union. European and International Perspectives (Oxford, Hart Publishing, 2013) 152. 18 Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313, para 15. In Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792, concerning the General Agreement on Trade in Services (GATS), the Court held that ‘since the GATS is an international agreement concluded by the Union, it is for the Commission to ensure that the Member States comply with the international obligations that arise for the Union under that agreement, which, in particular, enables the Union to avoid incurring international liability in a situation in which there is a risk of a dispute being brought before the WTO’ (para 66). 19 Koutrakos, EU External Relations Law (n 16) 211. From an international law perspective, the responsibility of the Union because of an act of Member States is in line with the ILO Draft Articles on the Responsibility of International Organisations. See PJ Kuijper, ‘International Responsibility for EU Mixed Agreements’ in C Hillion and P Koutrakos (eds), Mixed Agreement Revisited: the EU and its Member States in the World (Oxford, Hart Publishing, 2010) 218. 20 See this volume, ch 3. 21 Case 12/86, Demirel, ECLI:EU:C:1987:400, para 11. See this volume, ch 16. 22 P Koutrakos, ‘Interpretation of Mixed Agreements’ in Hillion and Koutrakos (n 19) 116–37.
160 Eleftheria Neframi The ambiguity stemmed from the Court’s statement, in Demirel and the subsequent case law, that mixed agreements have the same status in the EU legal order as purely EU agreements, insofar as their provisions fall within the scope of EU competence.23 Moreover, it held that the Commission is competent to assess compliance with the requirements stemming from a mixed agreement, as far as it relates to an area covered in large measure by EU law.24 However, in Merck Genéricos, the Court affirmed its interpretative competence with regard to Article 33 of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, and held that the provisions of that mixed agreement formed an integral part of the legal order,25 without reference to the scope of EU competence. The link established in Kupferberg between the Member States’ obligation of compliance with an EU international agreement and the international responsibility of the Union could be used to clarify the status of mixed agreements. Indeed, in case of mixed agreements, the Union has assumed responsibility for the implementation of the agreement as a whole, and bears joint responsibility with the Member States.26 However, a distinction should be made between the implementation of and the compliance with a mixed agreement. On the one side, as implementation is a question of competence, the Member States’ obligation to implement EU international agreements concerns, by virtue of Article 216(2) TFEU, those provisions of a mixed agreement falling under the EU exclusive competence or the competence that the EU elected to exercise when it concluded the mixed agreement.27 That explains why the infringement decisions for non-compliance with a mixed agreement refer to the condition of provisions falling within the scope of EU competence, and why the Court does not assess the direct effect of provisions of a mixed agreement falling under the Member States’ competence (see section IVD below). On the other side, the fact that the Union and the Member States are jointly responsible implies that a mixed agreement, as a whole, is part of the EU legal order, and is a source of a compliance obligation for the Member States.28 Such obligation stems from the Member States’ obligation vis-à-vis the EU, as established in Kupferberg – an expression of the principle
23 Demirel (n 21) para 9; Case C-13/00, Commission v Ireland, ECLI:EU:C:2002:184 (Berne Convention) para 14; Case C-239/03, Commission v France, ECLI:EU:C:2004:598 (Etang de Berre) para 25; Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant) para 110. See this volume, ch 47. 24 Berne Convention (n 23) para 20. 25 Case C-431/05, Merck Genéricos – Produtos Farmacêuticos, ECLI:EU:C:2007:49, para 31. 26 The division of competences between the Union and the Member States in the framework of a mixed agreement is considered in scholarship and the case law as an internal matter, of no interest from the point of view of international law, in the sense that the Union and the Member States act together as a ‘combined’ treaty party, in which their respective powers are merged. See Ruling 1/78, Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202, para 35. See this volume, ch 10. Some mixed agreements include a clause requiring the Union and the Member States to submit a declaration of competences, in order to set out which party has responsibility for the implementation of the agreement. However, the agreement may state that the Union and the Member States bear joint responsibility where there is no information or mismatch between the content of the declaration and the actual division of competences. See C Flaesch-Mougin, ‘Déclarations de compétences et affirmation de l’identité de l’Union sur la scène internationale’ in Mélanges en l’honneur du Professeur Joël Molinier (Paris, Lextenso, 2012) 233–53; J Odermatt, ‘Facultative Mixity in the International Legal Order: Tolerating European Exceptionalism?’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon. The Law and Practice of Facultative Mixity (Leiden, Brill, 2020) 313–15; A Rosas, ‘Mixed Union – Mixed Agreements’ in M Koskenniemi (ed), International Law Aspects of the European Union (Deventer, Kluwer, 1998) 141–42. 27 See E Neframi, ‘Mixed Agreements as a Source of EU Law’ in E Cannizzaro, P Palchetti and R Wessel (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2012) 329. 28 P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 279–87.
EU International Agreements within the Domestic Legal Systems 161 of loyal cooperation not to jeopardise the Union’s objective of unity in international relations. As a mixed agreement is an integral part of the EU legal order, the interpretative jurisdiction of the Court is justified.29 As a result, the Member States’ obligation towards the Union to comply with an EU international agreement, as established in Kupferberg, is twofold: first, an obligation of implementation, as far as EU international agreements or the EU part of a mixed agreement are concerned, and the principle of loyal cooperation being absorbed by current Article 216(2) TFEU; and second, an obligation of compliance, which is an autonomous obligation of sincere cooperation (Article 4(3) TEU) as to the provisions of a mixed agreement outside the exercised EU competence.30 A question that the Court still needs to clarify is whether the principle of loyal cooperation entails the duty of a Member State to ensure compliance with the obligations stemming from an incomplete mixed agreement.31 D. The Interpretative Competence of the Court The Court justified in Kupferberg the centralisation of the direct effect question by reference to the argument of uniformity. The Court saw an opportunity to clarify that its interpretative jurisdiction did not depend on the question whether the application of the agreement was in practice the responsibility of the EU institutions or of the Member States.32 Moreover, it affirmed that the assessment of the direct effect of a provision of an international agreement was related to the application of the agreement.33 While the Court is competent to assess whether EU international agreements have direct effect, a distinction is made in the subsequent case law between interpretation and judicial application of mixed agreements in order to preserve the division of implementation competences.34 The fact that a mixed agreement has the status of an EU international agreement, regardless of the division of competences, justified the Court’s interpretative jurisdiction, but did not entail any transfer of competence to the Union. The Court distinguished between the interpretation of a mixed agreement (including the division of competences) and the assessment of its direct effect, the latter being a question of application. As a consequence, it asserted its competence to interpret a provision of a mixed agreement, even if that agreement applied to situations falling within the scope of both national and EU law. Yet, it held that the question of the direct effect of a provision applying to situations falling within the scope of national law should be answered by the national courts.35
29 Koutrakos, ‘Interpretation of Mixed Agreements’ (n 22) 128. 30 M Cremona, ‘Defending the Community Interest: The Duties of Cooperation and Compliance’ in M Cremona and B de Witte (eds), EU Foreign Relations Law, Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 151–52. 31 It has been advanced that in case of incomplete mixed agreements the Member States that have not ratified it have a duty to ensure that the Union complies with its international obligations and is bound by the secondary legislation implementing the agreement. L Granvik, ‘Incomplete Mixed Environmental Agreements’ in Koskenniemi (n 26) 268. 32 Kupferberg (n 1) para 14. 33 ibid para 17. 34 Neframi (n 27) 348. 35 Joined Cases C-300/98 and C-392/98, Dior and Others, ECLI:EU:C:2000:688, para 49; Merck Genéricos (n 25) para 33; Case C-240/09, Lesoochranárskezoskupenie, ECLI:EU:C:2011:125, para 32.
162 Eleftheria Neframi E. An International-Law-Friendly Interpretation as to the Direct Effect of an Ordinary Bilateral Trade Agreement Because of the need for uniform application of an EU international agreement across the Member States, only the Court can determine whether its conditions for direct effect have been met. That necessity confirms that the original, monistic starting point for the integration of international law within the EU legal order does not automatically entail direct effect of all EU international agreements.36 In Kupferberg, as noted above, the Court refuted the main arguments made by the AG, the Commission and the intervening Member States, and by doing so laid the groundwork for its subsequent, far-reaching case law concerning the direct effect of EU international agreements. The Court reiterated the two-step analysis it had established in International Fruit.37 It examined, first, the agreement as a whole, its nature and structure,38 determining its direct applicability,39 and second, the conditions that the invoked provision should fulfil in order to have direct effect, in the sense of the possibility for an individual to rely on it.40 This two-step analysis became well-established case law, although the Court may first examine the wording of the invoked provision and assess its direct effect, ‘regard being had to the purpose and nature of the agreement’.41 In Kupferberg, the Court distinguished between the nature and structure of the international agreement, as the first step of the analysis, and the purpose and object of the agreement as reference for the examination of the unconditional and precise character of the invoked provision, as the second step of the analysis. In Kupferberg, the Court examined the nature and structure of the EEC–Portugal Agreement, taking into account the arguments related to its lack of reciprocity, its safeguard clauses and the existence of an autonomous dispute settlement procedure. Most of the Member States’ arguments related to the division of powers between the legislative and the executive, on the one hand, and the judiciary on the other. Specifically, they underscored their view that judicial enforcement of an agreement would interfere with the consultation and negotiation procedures. The Court, however, concluded that the nature and structure of the EEC–Portugal Agreement allowed a trader to rely on the provisions thereof before a domestic court within the Community, even if Portugal’s courts did not. More precisely, the AG, the Commission and the intervening Member States all argued that the divergence in the approach of the contracting parties to the direct effect of the international agreement demonstrated a lack of reciprocity that should prevent recognition of the invoked provision’s direct effect, as that would put the Community at a disadvantage if Portugal’s courts were not to grant such legal protection too. Moreover, the AG opined that such a lack of reciprocity demonstrated the ‘discernible intention of the contracting parties’ to exclude direct effect.42 Dismissing both arguments, the Court found that the absence of a 36 R Wessel and J Larik, EU External Relations Law, 2nd edn (Oxford, Hart Publishing, 2020) 159. 37 Joined Cases 21–24/72, International Fruit Company NV and other v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 38 Kupferberg (n 1) paras 18–22. 39 As the Court used the concepts of direct applicability and direct effect interchangeably, the reference to direct applicability on the basis of the nature and structure of the EU international agreement should be understood in the sense of the ability of the agreement’s provisions to be invoked before the domestic courts. 40 Kupferberg (n 1) paras 23–27. 41 Demirel (n 21) para 14; Case C-97/05, Gattoussi, ECLI:EU:C:2006:780, para 25. See M Prek and S Lefèvre, ‘La dimension “subjective” de l’invocabilité des accords internationaux’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 231–55. 42 Opinion of AG Rozès, Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:137, 3674.
EU International Agreements within the Domestic Legal Systems 163 specific provision addressing the agreement’s direct effect actually implied that the contracting parties purposely left the power to give direct effect (or not) to the agreement’s provisions to the discretion of the contracting parties’ courts, without the divergence in their approaches being considered as a lack of reciprocity.43 In so doing, the Court addressed the policy argument related to the division of powers, given that it recognised the discretion of the Council and the Commission to exclude direct effect by inserting appropriate clauses in the agreement. The Kupferberg decision also raised a question as to the role flexibility plays in answering the direct effect question. Both the Danish and French governments, as well as the AG, stressed that the flexibility built into the EEC–Portugal Agreement obliged the Court to deny direct effect, pursuant to its earlier interpretation of GATT in International Fruit.44 AG Rozès stressed that the absence of dispute resolution provisions, beyond the political procedure of the Joint Committee, made the agreement too flexible to have direct effect. In Kupferberg, the Court seemed to abandon its prior flexibility analysis and thus did not consider the argument that the derogating clauses, which allowed the contracting parties to suspend the application of the agreement, excluded its direct effect. However, the wording of Kupferberg, such as its reference to the ‘mere fact’ that the contracting parties established a special constitutional framework45 and its emphasis that the existence of safeguard clauses was ‘not sufficient in itself to affect the direct applicability’,46 suggests that the Court wished to preserve its ability to make case-by-case assessments. Indeed, the international-law-friendly approach in Kupferberg was to be understood as a case-by-case analysis. In subsequent case law, the Court denied the direct effect of the WTO agreement and the WTO dispute settlement body decisions, based on reciprocity and flexibility arguments.47 It stressed, in its WTO judgments, the importance of diplomatic negotiations within the Dispute Settlement Understanding of the WTO, while a higher degree of integration was established via bilateral agreements. However, as the Court has also given direct effect to provisions of international agreements without an integrative objective,48 the difference between Kupferberg and the WTO case law might be explained by their structural differences.49 In Portugal v Council, the Court referred to Kupferberg in order to distinguish between bilateral agreements (eg the EEC–Portugal Agreement) that ‘introduce a certain asymmetry of obligations, or create special relations of integration with the Community’ and the WTO agreement, which was founded ‘on the principle of negotiations with a view to entering into reciprocal and mutually advantageous arrangements’.50 It followed that divergence in the contracting parties’ recognition of direct effect did not constitute a lack of reciprocity when implementing free trade agreements with asymmetric obligations; on the other hand, such divergence in relation to WTO agreements must be viewed as a lack of reciprocity, when the position of the contracting parties is symmetric and of a multilateral nature.51
43 Kupferberg (n 1) para 17. 44 International Fruit (n 37). See this volume, ch 2. 45 Kupferberg (n 1) para 20. 46 ibid para 21. 47 Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574, para 42. See this volume, ch 37; Case C-377/02, Van Parys, ECLI:EU:C:2005:121, para 53. See this volume, ch 43. 48 Case C-18/90, Kziber, ECLI:EU:C:1991:36, paras 15–23; Case C-265/03, Simutenkov, ECLI:EU:C:2005:213, paras 20–29. See this volume, ch 44. 49 C Tietje, ‘The Status of International Law in the European Legal Order: The Case of International Treaties and Non-Binding International Instruments’ in J Wouters, PA Nollkaemper and E de Wet (eds), The Europeanisation of International Law (The Hague, TMC Asser Press, 2008) 61. 50 Portugal v Council (n 47) para 42. 51 ibid paras 44–45.
164 Eleftheria Neframi Besides, in Kupferberg, the Court left the door open for a future application of the reciprocity argument when it stated that there must be, at any rate, bona fide performance of the international agreement, even if not necessarily through judicial application. That statement could be interpreted as entitling one contracting party to suspend its execution of its own obligations under the international agreement, and thus deny its direct effect, when faced with non-performance by the other contracting party.52 In Kupferberg, the Court thus seemed to acknowledge that reciprocity is a mechanism of compliance, in the sense that domestic integration of international law has the function of securing the implementation of international obligations by virtue of the means that each party chooses to execute its commitments, while in the WTO system reciprocity is rather part of the legal commitments, the content of which is determined in a process of continuous adjustment.53 As to the second step of the Court’s direct effect analysis – the question whether the invoked obligation was both unconditional and sufficiently precise – the Court found, based on the international agreement’s object and purpose,54 that Article 21’s similarity to the relevant provision of then-applicable Article 95 EEC (now Article 110 TFEU) did not imply that the two should have an analogous interpretation. The Court indicated that clarity and unconditionality necessarily depend on the wording of each provision of an international agreement and, when these provisions mirror EU law provisions, on the substantive interpretation of the latter. However, this no longer relates to the direct effect of the provision, but to its substantive interpretation. The reference to the object and purpose of the international agreement can be explained by the Court’s need to establish an autonomous interpretation of the principle of non-discrimination. With respect to the unconditional and precise nature of the obligation created by the invoked provision, the Commission in Kupferberg suggested that the Court should grant direct effect only to ‘hard core’ provisions of the EEC–Portugal Agreement – its provisions creating obligations to prohibit customs duties and quotas.55 Nevertheless, the Court found that the direct effect of the EEC–Portugal Agreement’s rule against fiscal discrimination was ‘dependent only on a finding that the products affected by a particular system of taxation are of like nature’, and thus concluded that the rule could produce direct effects throughout the Union.56 It should be noted that Kupferberg did not expand on the need for an obligation to be unconditional to have direct effect. In Demirel, the Court used a periphrasis in lieu of Kupferberg’s ‘unconditional and precise’ formulation: it referred to a ‘clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’.57 Some have questioned whether the Court’s Demirel formulation created a cumulative condition or simply explained the Court’s unconditionality criterion. While, in Dior, the Court referred to a provision that ‘contains a clear, precise and unconditional obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’,58
52 JH Bourgeois, ‘Effects of International Agreements in European Community Law: Are the Dice Cast?’ (1984) 82 Michigan Law Review 1266. 53 E Cannizzaro, ‘The Neo-Monism of the European Legal Order’ in Cannizzaro et al (n 27) 40–42. 54 Kupferberg (n 1) para 23. 55 Kupferberg (n 1) 3652. 56 Kupferberg (n 1) paras 24–26. 57 Demirel (n 21) para 14. 58 Dior (n 35) para 42.
EU International Agreements within the Domestic Legal Systems 165 in Sürül,59 as well as in more recent case law,60 the absence of any need for subsequent implementing measures completely replaces any reference to unconditionality. V. ADDITIONAL READING Bebr, G, ‘Agreements Concluded by the Community and their Possible Direct Effect: From International Fruit Company to Kupferberg’ (1983) 20 CML Rev 35. Bourgeois, JHJ, ‘Effects of International Agreements in European Community Law: Are the Dice Cast?’ (1984) 82 Michigan Law Review 1250. Lenaerts, K, ‘Direct Applicability and Direct Effect of International Law in the EU Legal Order’ in I Govaere, P Van Elsuwege, E Lannon and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2014) 45–64. Tietje, C, ‘The Status of International Law in the European Legal Order: The Case of International Treaties and Non-binding International Instruments’ in J Wouters, PA Nollkaemper and E de Wet (eds), The Europeanisation of International Law (The Hague, TMC Asser Press, 2008) 55–69.
59 Case 60 Case
C-262/96, Sürül, ECLI:EU:C:1999:228, para 60. C-372/06, Asda Stores, ECLI:EU:C:2007:787, para 82.
166
15 The EU’s Common Customs Tariff, Uniform Application of International Agreements, and the Demarcation between EU and Member State ‘Spheres of International Law’: SPI/SAMI DYLAN GERAETS Joined Cases 267–269/81, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI) and SpA Michelin Italiana (SAMI), ECLI:EU:C:1983:78, delivered 16 March 1983. KEYWORDS Doctrine of substitution – International agreements concluded by the Member States – Replacement of EU Member States – GATT – Common Customs Tariff – CCT – Tariff protocols concluded by the Community – Customs duties – Free movement of goods. I. INTRODUCTION
T
he General Agreement on Tariffs and Trade 1947 (GATT) was signed on 30 October 1947 and applied through a Protocol of Provisional Application as of 1 January 1948. Among the initial 23 contracting parties were several countries that would later become Member States of the European Economic Community (EEC) and its successors, the European Communities (EC) and the European Union (EU). These countries are Belgium, France, Luxembourg, Netherlands and UK. Italy acceded to the GATT by a Protocol signed in Annecy on 10 October 1949, after which GATT entered into force in Italy on 30 May 1950. The parallel emergence of the GATT and the EEC – through the entry into force of the Treaty of Rome on 1 January 1958 – was intended to take place in alignment. The EEC was to form a customs union that would be in full conformity with the provisions of the GATT, in particular Article XXIV thereof.1 After the signing of the Treaty of Rome in 1 See, eg R Abbott, ‘How Did the GATT Respond to the Birth of the European Community?’ (European Centre for International Political Economy (ECIPE) Blog, November 2019) https://ecipe.org/blog/gatt-respond-to-theeuropean-community/.
168 Dylan Geraets March 1957, the text was submitted to the GATT for examination.2 The fact that the Member States of the EEC were also contracting parties to the GATT raised questions about whether the EC could substitute its Member States in fora, such as the GATT, where the Member States previously held powers themselves. As discussed elsewhere, in Nederlandse Spoorwegen, the Court had already clearly and affirmatively elaborated on the doctrine of substitution in EU law, whereby the EC (Union) could replace the Member States for the fulfilment of international obligations that Member States themselves were party to.3 In SPI/SAMI, the Court went one step further, and confirmed that – where such substitution has taken place – it has jurisdiction to ensure that the agreement for which the commitments have been substituted is uniformly applied.4 II. FACTS
Tariff concessions granted to other contracting parties of the GATT are contained in a schedule of concessions, as per Article II of the GATT. Italy’s schedule was annexed to the GATT as Schedule XXVII. Under Article 1 of Italian Law No 330 of 15 June 1950 (the Italian Law), the licence duty on goods imported from abroad was abolished. Article 2, however, introduced a duty payable to the public treasury for administrative services, to be charged on goods imported from abroad at a rate of 0.5 per cent of their value. The dutiable value of the goods was to be determined according to the rules in force for the application of ad valorem customs duties.5 In December 1967, the European Commission adopted a timetable that determined that the 0.5 per cent charge should be abolished by 1 July 1968. Italy did not abolish the charge in time, and the Commission brought an action before the Court on 7 March 1970, after which the Court determined in Commission v Italian Republic that Italy had failed to fulfil its obligations. The duty was eventually abolished by Law No 447 of 24 June 1971, which provided for retroactive effect from 1 July 1968 for imports from other EEC Member States and, with effect from the entry into force of the law, for all non-EEC imports. Prior to the abolition, the Italian customs administration had levied significant amounts of duties from two companies (Petrolifera and Michelin), which requested the refund of the payments made, alleging that the 0.5 per cent charge was higher than Italy’s – and later the Community’s – bound duties under the GATT. After proceedings in first instance and on appeal, the customs administration – having been ordered to repay the duty for administrative services), lodged an appeal before the Italian Supreme Court of Cassation (Corte Suprema di Cassazione). The Italian customs administration argued that the obligation not to increase ordinary customs duties and other duties or charges of any kind imposed on or in connection with importation, as laid down in Article II:1(b) of GATT, could not apply to products which had not been included in the schedule of original concessions applicable to Italy (Schedule XXVII). In order words, the introduction in 1950 of a duty for administrative services could not 2 General Agreement on Tariffs and Trade, Contracting Parties, Twelfth Session – [17 October–30 November 1957], Committee on the Treaty Establishing the European Economic Community – Membership and Terms of Reference, W.12/14, 1 November 1957. 3 Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:154. See this volume, ch 5. 4 Joined Cases 267–269/81, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI) and SpA Michelin Italiana (SAMI), ECLI:EU:C:1983:78. 5 ibid 804.
Uniform Application of International Agreements 169 constitute an increase in taxation in relation to the customs binding which was the subject of the Tariff Protocol of 1962 containing the results of the Dillon Round, by which the schedules of the Member States which were parties to GATT were replaced by the single Community XL (EEC) Schedule. The companies, ie the defendants in cassation, argued that the introduction of the duty for administrative services violated Article II of the GATT, inter alia. III. THE COURT
The Italian Supreme Court of Cassation referred first to existing case law on the substitution of the Union for the Member States in relation to the fulfilment of the commitments under the GATT. In addition, it recalled the case law by the Court on the latter’s jurisdiction under Article 177 of the EEC Treaty (now Article 267 TFEU) to interpret the provisions of agreements binding the Community.6 The main question before the Court was whether the relevant provisions of the GATT were covered by the Court’s jurisdiction to give preliminary rulings. Moreover, the Italian Supreme Court of Cassation inquired as to the moment at which substitution took place, in particular in light of the fact that the Community had already negotiated tariff concessions and made tariff bindings prior to 1 July 1968, the date on which the Common Customs Tariff (CCT) was introduced. The Court had already found in cases such as International Fruit7 and Nederlandse Spoorwegen8 that the provisions of the GATT should receive uniform application throughout the Union. For obvious reasons, a difference in the interpretation and application of the provisions by which the Union is bound would both negatively affect the unity in the common commercial policy (CCP) and lead to distortions in intra-EU trade, to the extent that there would be differences in the application of agreements in force between the Union and third countries in different Member States. The Court determined that, in order to ensure such coherence and uniformity in interpretation and application of provisions of an international agreement, its jurisdiction must include a determination of the scope and effect of the rules of the GATT within the Community, and also of the effect of the tariff protocols concluded in the framework of the GATT.9 In this regard, it is immaterial ‘whether the national court is required to assess the validity of community measures or the compatibility of national legislative provisions with the commitments binding the Community’.10 Several problems arose as a result of the long time frame covered by the proceedings. Of prime importance was the fact that the Court had already determined, in International Fruit, that the substitution of the Union for the Member States took place with the introduction of the CCT on 1 July 1968.11 From that point onwards, the Union became fully competent in respect of the area covered by the GATT. Therefore, the Court found that, since 1 July 1968, the provisions of the GATT had been within the scope of its jurisdiction. For acts prior to that date, the interpretation of the GATT falls exclusively within the jurisdiction of the courts of 6 Now Art 267 TFEU, then Art 177 EEC Treaty. 7 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 8 Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1975:154. 9 SPI/SAMI (n 4) para 15. 10 ibid para 15. 11 International Fruit (n 7).
170 Dylan Geraets the Member States. As for the Tariff Protocols of 16 July 1962 and 30 June 1967, the Court found that these were acts of the institutions of the Community and hence fell within the scope of the first paragraph of Article 177 EEC (now Article 267 TFEU), and therefore within the jurisdiction to give preliminary rulings. Of lesser importance, the Court also reinforced the conclusion that the provisions of the GATT do not have direct effect in the sense that they are not capable of conferring on citizens of the Community rights that can be invoked before the national courts of Member States. IV. THE IMPORTANCE OF THE CASE
The case is not referenced in the Court’s Annual Report for 1983. Indeed, in comparison to other cases such as International Fruit and Nederlandse Spoorwegen, the significance of the case, at the time, may have been understood to be more limited.12 However, closer examination shows that in subsequent cases reference has often been made to SPI/SAMI, if only to reiterate that the function of the preliminary ruling procedure as provided for in Article 177 EEC (now Article 267 TFEU) is to ensure the uniform application of all provisions forming part of the Community legal order, also in respect of international agreements. Indeed, the case law of which SPI/SAMI is part was initially seen as controversial.13 In recent years, however, its importance appears to have waned.14 Indeed, as is noted elsewhere, the Court tends to refer back to International Fruit only in respect of cases dealing with external action of the Union in international fora.15 A. Distinction between Cases: Confirmation of the Inevitable? Advocate General (AG) Reischl emphasised that the case law of the Court, including International Fruit, confirmed that agreements concluded by the Community fell within the scope of Article 177 EEC (now Article 267 TFEU). In addition, according to AG Reischl, it was reasonable ‘to regard [the] GATT as binding the Community just as if it were an agreement concluded by the Community’, and therefore to regard its provisions as part of the legal order insofar as the Community had been substituted for the Member States.16 The Court did not go so far as to explicitly state that the GATT should be seen as an integral part of Community law, but this is the logical conclusion to be derived from its observations.17 Indeed, SPI/SAMI confirmed that Member States, in order to represent the Union interest and comply with their duty of sincere cooperation, must comply with international agreements as an obligation of Community law.18 In this regard, it seems that, as Bourgeois has observed, 12 Similarly, but in a different context, Haegeman was also not considered significant at the time, but has subsequently become a favourite of the Court to be relied upon: Case 181/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41. See this volume, ch 3. 13 F Snyder, ‘The Gatekeepers: The European Courts and WTO Law’ (2003) 40 CML Rev 313, 317. 14 The case is not referenced in any judgments or opinions rendered after 2001. 15 JO Berkey, ‘The European Court of Justice and Direct Effect for the GATT: A Question Worth Revisiting’ (1998) 9 European Journal of International Law 626, 630. 16 Opinion of Advocate General Reischl, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI) and SpA Michelin Italiana (SAMI), ECLI:EU:C:1982:428, 828. 17 KJ Kuilwijk, ‘The European Court of Justice and the GATT Dilemma: Public Interest versus Individual Rights?’ (thesis, European University Institute in Florence, 19 September 1995) 72. 18 M Cremona, ‘Member States as Trustees of the Community Interest: Participating in International Agreements on Behalf of the European Community’ (2009) EUI Working Papers, Law 2009/17, 10.
Uniform Application of International Agreements 171 once the Court had ruled that the EC had substituted the Member States in respect of their compliance with the obligations of the GATT, no other conclusion was indeed feasible.19 At the time, however, there was some concern that the transfer of competences from the Member States to the Community institutions would run ‘the risk of being considered a system which in practice allows the Member States to avoid or limit compliance with their international obligations’.20 In practice, those fears do not appear to have materialised, although the issue of who is responsible for violations of WTO obligations continues to play a role today.21 B. Temporal Limitation on the Requirement of Uniform Application SPI/SAMI is of importance as it confirmed that the obligations of Member States under international law as applicable prior to their membership of the Union can become binding on the Union at a later stage, and thereby become an integral part of Union law. However, the Court has made clear that the requirement of uniform application cannot extend to the period before an agreement, such as the GATT, becomes part of Union law. The Court held in this regard that, for the period prior to 1 July 1968, the interpretation remained a matter exclusively for the national courts of the Member States.22 C. The Importance of Uniform Application SPI/SAMI contributed significantly to clarifying the doctrine of the requirement of uniform application of rules of international law as initially developed in Haegeman,23 Kupferberg24 and Racke.25 As the Court confirmed, uniform application preserves the undistorted functioning of internal relations and, in addition, uniform application of international agreements strengthens external unity. In the words of Holdgaard, it ‘facilitates the Community’s general external aspiration to represent the Community area in a unitary way in international relations’.26 V. ADDITIONAL READING Abbott, R, ‘How Did the GATT Respond to the Birth of the European Community?’ (European Centre for International Political Economy (ECIPE) blog, November 2019).
19 J Bourgeois, ‘The European Court of Justice and the WTO: Problems and Challenges’ In J Weiler (ed), The EU, the WTO and the NAFTA – Towards a Common Law of International Trade (Oxford, Oxford University Press, 2000) 83–85. 20 C Mastellone, ‘139. Joined Cases 267–269/81, Amministrazione delle Finanze dello Stato v S.P.I. (Società Petrolifera Italiana_ s.p.a. (267/81) and Amministrazione delle Finanze dello Stato v S.A.M.I. (S.p.a. Michelin Italiana) (268–269/81). Preliminary ruling of 16 March 1983 requested by the Italian Corte di Cassazione (not yet reported)’ (1983) 20 CML Rev 568, 579. 21 See WTO Panel Report, European Union and its Member States – Certain Measures Relating to the Energy Sector, WT/DS476/R, para 7.379. 22 Kuilwijk (n 17) 72–73. 23 Haegeman (n 12). See this volume, ch 3. 24 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362, See this volume, ch 14. 25 Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293. See this volume, ch 36. 26 R Holdgaard, ‘Principles of Reception of International Law in Community Law’ (2006) 25 Yearbook of European Law 263, 273–80.
172 Dylan Geraets Berkey, JO, ‘The European Court of Justice and Direct Effect for the GATT: A Question Worth Revisiting’ (1998) 9 European Journal of International Law 626. Bourgeois, J, ‘The European Court of Justice and the WTO: Problems and Challenges’. In J Weiler (ed), The EU, the WTO and the NAFTA – Towards a Common Law of International Trade (Oxford, Oxford University Press, 2000) 83–85. Cremona, M, ‘Member States as Trustees of the Community Interest: Participating in International Agreements on Behalf of the European Community’ (2009) EUI Working Papers, Law 2009/17, 10. Holdgaard, R, ‘Principles of Reception of International Law in Community Law’ (2006) 25 Yearbook of European Law 263. Kuilwijk, KJ, ‘The European Court of Justice and the GATT Dilemma: Public Interest versus Individual Rights?’ (thesis submitted to the European University Institute in Florence, 19 September 1995) 72–73. Lee, P and Kennedy, B, ‘The Potential Direct Effect of GATT 1994 in European Community Law’ (1996) 30 Journal of World Trade 67. Mastellone, C, ‘139. Joined Cases 267–269/81, Amministrazione delle Finanze dello Stato v S.P.I. (Società Petrolifera Italiana_ s.p.a. (267/81) and Amministrazione delle Finanze dello Stato v S.A.M.I. (S.p.a. Michelin Italiana) (268–269/81). Preliminary ruling of 16 March 1983 requested by the Italian Corte di Cassazione (not yet reported)’ (1983) 20 CML Rev 568. Snyder, F, ‘The Gatekeepers: The European Courts and WTO Law’ (2003) 40 CML Rev 313.
16 Direct Effect of Association Agreements and the Meaning of ‘Association’: Demirel GUILLAUME VAN DER LOO Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400, delivered 30 September 1987. KEYWORDS Association Agreement – Direct effect – International Agreement – Mixed Agreement – Turkey.
I. INTRODUCTION
D
was the first case on the possible direct effect of a provision of the 1963 Association Agreement concluded between the European Economic Community (EEC) and Turkey (hereinafter the Association Agreement, or Agreement).1 This Agreement remains today not only the oldest association agreement in place, but also the oldest mixed agreement in force.2 Moreover, although the 2022 political climate between the EU and Turkey and the domestic political situation in the latter has put Turkey’s EU accession process in limbo, the Agreement remains a ‘genuine pre-accession agreement’.3 Indeed, the Agreement, which is still today the legal cornerstone of the EU’s bilateral political and economic relations with Turkey, explicitly aims to ‘facilitate the accession of Turkey to the Community at a later date’.4 emirel
1 Agreement establishing an Association between the European Economic Community and Turkey [1977] OJ L361/29. 2 The first mixed association agreement was the one signed in 1961 between the EEC and Greece [1963] OJ 293/63. 3 M Maresceau, ‘Turkey: A Candidate State Destined to Join the Union’ in N Niamh Shuibhne and LW Gormley (eds), From Single Market to Economic Union: Essays in Memory of John A. Usher (Oxford, Oxford University Press, 2012) 318. 4 Preamble of the Agreement (n 1). In addition, Art 28 of the Agreement states that ‘As soon as the operation of this Agreement has advanced far enough to justify envisaging full acceptance by Turkey of the obligations arising out of the Treaty establishing the Community, the Contracting Parties shall examine the possibility of the accession of Turkey to the Community’.
174 Guillaume Van der Loo Demirel deserves to be discussed in this ‘EU external relations case law hall of fame book’ for essentially two reasons. First, Demirel was the first case on the possible direct effect of the Agreement, and one of the first cases on direct effect of bilateral agreements concluded by the EEC. Although the Court rejected, in this case, the direct effect of the Agreement’s specific provisions on free movement of workers, it paved the way for a stream of cases before the Court on the interpretation of the 1963 Agreement, its Additional Protocol and the Decisions of the Association Council established by the Agreement. As a result, the Agreement is the bilateral agreement concluded by the EU with a third state that has been invoked most frequently before the Court, as demonstrated by the number of cases that are also the subject of analysis in other chapters of this book. Altogether, more than 60 cases concern the interpretation of the Agreement, mostly through preliminary rulings concerning Turkish nationals before national courts of the EU Member States. The second reason why the Demirel case is often cited in EU external relations literature is because the Court made an early and rare attempt to define the meaning of ‘association’ under Article 217 TFEU. According to the Court, an association agreement on the basis of Article 217 TFEU creates ‘special, privileged links with a non-member country’, allowing the third country concerned to ‘take part in the [Union] system’.5 Both key features of Demirel are analysed in this chapter. II. FACTS
Holding a visa valid until 9 June 1984, Ms Meryem Demirel, a Turkish national, entered the Federal Republic of Germany on 17 March 1983, together with her son, in order to join her husband (also of Turkish nationality), whom she had married on 24 August 1981. Her husband had entered Germany on 13 September 1979 and was the holder of a residence permit.6 Ms Demirel arrived holding a visa which was valid only for the purposes of a visit, and was not issued for family reunification. Despite the limit imposed on the term of residence, Ms Demirel did not return to Turkey on the ground that she was pregnant, and had no accommodation or financial resources available to her in Turkey. The competent authority (Stadt Schwäbisch-Gmünd) then issued an expulsion order against her, which she challenged before the national court (Verwaltungsgericht Stuttgart). Significantly, conditions for family reunification in the case of nationals of non-Member States who entered Germany for the purpose of family reunification were tightened in 1982 (and again in 1984) by amendments to a circular issued for the Land of Baden-Württemberg.7 These amendments raised the period during which a non-national was required to have resided continuously and lawfully in Germany from three to eight years. The husband of Ms Demirel did not fulfil that condition at the time of the events which led to the proceedings.8 Before rendering its judgment, the referring national court requested the Court to give a preliminary ruling on the effect of the rules concerning the freedom of movement for workers
5 Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400, para 9. 6 ibid. 7 As it was not possible to introduce restrictions on family reunification at federal level, the Länderen Baden-Württemberg and Bavaria took the initiatives themselves pursuant to the Ausländergesetz (Federal Law on Aliens): Opinion of Advocate General Darmon, Case 12/86, Demirel, ECLI:EU:C:1987:232. 8 G Nolte, ‘Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, Judgment of 30 September 1987’ (1988) 25 CML Rev 406.
Direct Effect of Association Agreements and the Meaning of ‘Association’ 175 included in the Association Agreement. The Agreement included, like several other association agreements concluded by the EU, non-discrimination and freedom of movement provisions with regard to workers legally employed in the territory of the other contracting party. Article 12 of the Association Agreement stated that the contracting parties ‘agree to be guided by Articles 48, 49 and 50 of the Treaty establishing the Community for the purpose of progressively securing freedom of movement of workers between them’. Article 36 of the Additional Protocol specified the stages by which free movement of workers between the Member States and Turkey was to be secured, and provided that the Association Council, established by the Association Agreement, ‘shall decide on the rules necessary to that end’. However, although the Association Council considerably improved the status of Turkish workers legally employed in Member States in several Joint Decisions, notably Decision 1/80,9 none of those Decisions covered the issue of family reunification. Aiming to know the effect of these aforementioned provisions, in particular their potential direct effect, the national court referred the following two questions to the Court: (1) Do Article 12 of the [Association Agreement] and Article 36 of the Additional Protocol thereto, in conjunction with Article 7 of the Association Agreement, already lay down a prohibition that under Community law is directly applicable in the Member States on the introduction of further restrictions on freedom of movement applicable to Turkish workers lawfully residing in a Member State in the form of a modification of an existing administrative practice? (2) Is the expression ‘freedom of movement’ on the Association Agreement to be understood as giving Turkish workers residing in a Member State the rights to bring children under the age of majority and spouses to live with them?
III. THE COURT
Before entering into an examination of direct effect, the Court first discussed the written observations made by Germany and the UK, which called into question the jurisdiction of the Court to interpret the provisions of the Association Agreement and the Protocol regarding the freedom of movement of workers. Both Member States challenged the application of the Court’s ruling in Haegeman10 to the situation at hand, as they argued that the Court’s interpretive jurisdiction with regard to mixed international agreements did not extend to provisions whereby Member States have entered into commitments in the exercise of their own powers (in this case, the Association Agreement’s provisions on freedom of movement of workers).11 It is in this context that the Court made its famous and often-cited ‘definition’ of an association agreement. The Court rejected the idea that the mixed character of an agreement would limit its jurisdiction. It did so by stressing that the agreement in question was an association agreement ‘creating special, privileged links with a non-member country which must, at least to a certain extent, take part in the Community system’.12 Moreover, the Court held that association agreements ‘must necessarily empower the Community to guarantee commitments
9 Decision
1/80 of the Association Council on the development of the Association, 19 September 1980. 180/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41. See this volume, ch 3. 11 Demirel (n 5) para 6. 12 ibid para 9. 10 Case
176 Guillaume Van der Loo towards non-Member countries in all fields covered by the Treaty’.13 In line with its reasoning in Kupferberg, the Court argued that through the agreement the Union had concluded with Turkey, Member States had to fulfil, within the EU legal order, an obligation in relation to the Union, which had assumed responsibility for the due performance of the Association Agreement.14 This reasoning implied that once Member States include elements in an international agreement concluded by the EU that fall within their competence (and thus make the agreement mixed), they necessarily have to accept the ‘Community implications’ of this action, such as the interpretive jurisdiction of the Court, even for those elements of an international agreement for which the mixed formula had been followed. The Court then examined whether Article 12 of the Association Agreement and Article 36 of the Additional Protocol constituted rules of Union law which are directly applicable in the internal legal order of the Member States. The Court first summarised its direct effect criteria, developed in its early case law in International Fruit,15 Pabst & Richarz16 and Kupferberg,17 stating that: A provision in an agreement concluded by the Community with non-member countries must be regarded as being directly applicable when, regard being had to its wording and the purpose and nature of the agreement itself, the provision contains a clear and precise obligation which is not, subject, in its implementation or effects, to the adoption of any subsequent measure.18
The Court observed that, in structure and content, the Agreement was characterised by the fact that, in general, it set out the aims of the association and laid down guidelines for the attainment of those aims ‘without itself establishing the detailed rules for doing so’.19 It recalled that the objective of progressively securing freedom of movement for workers between the Union and Turkey, as envisaged in Article 12 of the Association Agreement and Article 36 of the Additional Protocol, required further implementation by decisions of the Association Council. Although the Association Council had already adopted Decision 1/80, which prohibited restrictions on the conditions governing access to employment, no decisions were adopted in the sphere of family reunification. Therefore, the Court concluded that both Article 12 of the Agreement and Article 36 of the Additional Protocol ‘essentially serve to set out a programme and are not sufficiently precise and unconditional to be capable of governing directly the movement of workers’.20 Consequently, the Court did not address the second question. IV. THE IMPORTANCE OF THE CASE
A. Direct Effect of International Agreements Concluded by the EU In Demirel, the Court did not deviate from its ‘direct effect criteria’ developed in its early case law such as International Fruit Company, Pabst & Richarz and Kupferberg, but merely 13 ibid. 14 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362. See this volume, ch 14. 15 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 16 Case 17/81, Pabst & Richarz KG v Hauptzollamt Oldenburg, ECLI:EU:C:1982:129. 17 Kupferberg (n 14). 18 Demirel (n 5) para 14. 19 ibid para 16. 20 ibid para 23.
Direct Effect of Association Agreements and the Meaning of ‘Association’ 177 framed these more explicitly in a double-track approach. In order for a provision of an international agreement concluded by the EU to be granted direct effect, (i) the wording of the provision must be clear, precise and unconditional, while (ii) the ‘purpose and nature’ of the international agreement need to be examined.21 In subsequent judgements, the Court even referred to this two-step methodology as ‘settled case-law’.22 However, the Court’s case law before and after Demirel illustrates that it is mainly the first criterion that determines the potential direct effect of a provision of an international agreement, and not its ‘purpose and nature’ (with the Court’s reasoning in International Fruit with regard to the multilateral GATT/WTO Agreement as a notable exception).23 This has led former Advocate General (AG) Jacobs to speak of this reference as ‘a ritual refrain in which an agreement of almost any nature could be said nevertheless to be capable of having direct effect’.24 Indeed, in Demirel, too, the Court hardly analysed the purpose and nature of the EU–Turkey Association Agreement, leaving the door open for direct effect of other provisions of that Agreement. The Court did, however, discuss the purpose and the nature of the Agreement and its Protocol in later rulings. For example, when analysing, in Savas, the potential direct effect of Article 41(1) of the Additional Protocol, which provided for a standstill clause with regard to the freedom to provide services, the Court even referred explicitly to the pre-accession nature of the Agreement, as it concluded that the purpose of the Agreement was to establish an association designed to promote the development of trade and economic relations between the contracting parties, including, in the area of self-employment, the progressive abolition of restrictions on freedom of establishment, so as to improve the living conditions of the Turkish people and facilitate the accession of the Republic of Turkey to the Community at a later date.25
However, also in Savas, it was essentially the clear, precise and unconditional nature of the provision in question that led to its direct effect, and not the examination of the pre-accession ‘nature and purpose’ of the Agreement. Similarly, the Court also discussed, in other cases, the pre-accession nature of the defunct Europe Agreements (which were also association agreements) when examining the potential direct effect of their provisions. Also in those cases, the precise and unconditional wording of the provisions were essentially responsible for their direct effect.26 Moreover, in numerous cases after Demirel, the Court granted direct effect to provisions of association agreements without a pre-accession dimension, such as the Euro-Mediterranean association agreements concluded with the Southern Mediterranean countries,27 or less ambitious partnership and cooperation
21 In Kupferberg, the Court used the ‘structure and nature of the agreement’ instead of ‘the purpose and nature’: Kupferberg (n 14) para 22. See this volume, ch 14. 22 Case C-485/07, Raad van bestuur van het Uitvoeringsinstituut werknemersverzekeringen v H Akdas, ECLI:EU:C:2011:346. 23 International Fruit (n 15). See this volume, ch 2. 24 FG Jacobs, ‘Direct Effect and Interpretation of International Agreements in the Recent Case law of the European Court of Justice’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008), 32. 25 Case C-37/98, The Queen v Secretary of State for the Home Department, ex parte Abdulnasir Savas, ECLI:EU:C:2000:224, para 52. 26 See, eg Case C-162/00, Land Nordrhein-Westfalen v Beata Pokrzeptowicz-Meyer, ECLI:EU:C:2002:57; Case C-438/00, Deutscher Handballbund eV v Maros Kolpa, ECLI:EU:C:2003:255. On this point, see M Maresceau, ‘The Court of Justice and Bilateral Agreements’ in A Rosas, E Levits and Y Bot (eds), La Cour de Justice et la construction de l’Europe: analyses et perspectives de soixante ans de jurisprudence (The Hague, Asser InstituteSpringer, 2013) 693–717. 27 Case C-97/05, Mohamed Gattoussi v Stadt Rüsselsheim, ECLI:EU:C:2006:780.
178 Guillaume Van der Loo agreements, such as the former cooperation agreements with the Maghreb countries28 or the Partnership and Cooperation Agreement (PCA) concluded with Russia.29 B. Direct Effect of the Agreement As the Court did not exclude the direct effect of the Agreement in Demirel as a whole, it was no surprise that the Court had to examine, in numerous subsequent cases, the potential direct effect of other provisions of the Association Agreement and its Additional Protocol. More than a decade after Demirel, the Court in Savas granted direct effect to a standstill clause – Article 41(1) of the Additional Protocol – as it was, contrary to the provisions examined in Demirel, ‘clearly, precisely and unconditionally formulated and thus culpable of having direct effect’.30 In numerous subsequent cases, the Court followed a similar approach with regard to other standstill clauses included in the Additional Protocol covering the freedom to provide services or the freedom of establishment.31 The Sevince judgment broadened the scope of direct effect in relation to the Agreement, as in this case the Court confirmed direct effect of Article 6(1) of Decision No 1/80 of the Association Council regarding renewal of work permits and access to employment.32 The Court in Sevince found that provisions of a decision of the Association Council could have direct effect on the condition that these provisions were themselves clear and unconditional. This case did not only have an immense effect on the position of many Turkish workers and their families in the EU, as a large number fulfilled the criteria of Article 6(1) of Decision No 1/80, but it also led to a continuous stream of new requests for preliminary rulings, further confirming and refining the direct effect of Decision 1/8033 and Decision 3/8034 regarding the application of social security schemes. C. The End of Direct Effect of International Agreements? Since Demirel, a significant body of case law has been developed granting direct effect to provisions included in international agreements concluded by the EU (or decisions of joint bodies established by these agreements) that establish non-discrimination or standstill
28 Case C-19/90, Office national de l’emploi v Bahia Kziber, ECLI:EU:C:1991:36; Case C-416/96, Nour Eddline El-Yassini v Secretary of State for Home Department, ECLI:EU:C:1999:107. 29 Case C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura and Real Federación Española de Fútbol, ECLI:EU:C:2005:213. When analysing in Kziber, the direct effect of a non-discrimination provision in a cooperation agreement concluded with Morocco, the Court ruled that ‘[t]he fact that the Agreement is intended essentially to promote the economic development of Morocco and that it confines itself to instituting cooperation between the Parties without referring to Morocco’s association with or future accession to the Communities is not such as to prevent certain of its provisions from being directly applicable’. See Kziber (n 28); see also this volume, ch 44. 30 Abdulnasir Savas (n 25). 31 See, eg Case C-317/01, Eran Abatay and Others, ECLI:EU:C:2003:572; Case C-369/01 Nadi Sahin v Bundesanstalt für Arbeit, ECLI:EU:C:2003:572; Case C-16/05, The Queen, Veli Tum and Mehmet Dari v Secretary of State for the Home Department, ECLI:EU:C:2007:530. 32 Case C-192/89, SZ Sevince v Staatssecretaris van Justitie, ECLI:EU:C:1990:322. See this volume, ch 19. 33 See, eg Case C-237/91, Kazim Kus v Landeshauptstadt Wiesbaden, ECLI:EU:C:1992:527; Case C-355/93, Hayriye Eroglu v Land Baden-Württemberg, ECLI:EU:C:1994:369; Case C-171/95, Recep Tetik v Land Berlin, ECLI:EU:C:1997:31; Case C-462/08, Ümit Bekleyen v Land Berlin, ECLI:EU:C:2010:30. 34 See, eg Case C-373/08, Sakir Öztürk v Pensionsversicherungsanstalt der Arbeiter, ECLI:EU:C:2004:232. For an overview of this case law, see Maresceau, ‘Turkey’ (n 3).
Direct Effect of Association Agreements and the Meaning of ‘Association’ 179 commitments with regard to access to employment, working conditions, social security or family reunification of workers from third countries legally employed in the EU.35 However, this jurisprudence also raised concerns with Member States who often were responsible for the financial implications of these cases. Therefore, Member States increasingly aimed to avoid direct effect of such provisions. For example, after the Kziber judgment, in which the Court granted direct effect to the non-discrimination clause regarding social security in the cooperation agreement with Morocco,36 Member States insisted on carefully excluding direct effect of similar provisions in subsequent international agreements. As followed, the provisions on the coordination of social security of legally employed workers in the Europe Agreements and the PCAs with Russia and Ukraine were carefully worded to exclude direct effect by explicitly requiring the conclusion of separate agreements to guarantee the coordination of social security systems.37 In the Association Agreements recently concluded with Ukraine, Moldova and Georgia, which replaced the PCAs, these provisions on social security were even dropped altogether.38 Even more detrimental for direct effect of international agreements concluded by the EU is the recent practice of explicitly precluding direct effect of an entire international agreement.39 The EU has recently developed the practice of precluding direct effect in its association agreements, PCAs and stand-alone trade agreements by explicitly mentioning in the Council decisions approving these agreements, or in the main text of the agreement, that ‘the Agreement shall not be construed as conferring rights or imposing obligations which can be directly invoked before Union or Member State courts or tribunals’.40 This implies that even if recent framework agreements include provisions that are clearly, precisely and unconditionally formulated, their direct effect is explicitly prevented by the EU. This may lead to situations such as the EU–Ukraine Association Agreement, where the treatment of workers’ provision is identical to the one included in its predecessor (ie the EU–Ukraine PCA) or in the similar PCA with Russia, and which was granted direct effect by the Court,41 but now cannot have direct effect because of this recent practice.42 Although this seems to end direct effect of international agreements concluded by the EU, and the Court’s dynamic stream of case law on this, it was the Court itself that recognised – paradoxically, in its landmark Kupferberg case – that when negotiating an international agreement with a
35 Maresceau (n 26) 693–717. 36 Kziber (n 28). 37 On this point, see G Van der Loo, The EU–Ukraine Association Agreement and Deep and Comprehensive Free Trade Area: A New Legal Instrument for EU Integration Without Membership (Leiden, Brill, 2016) 76. 38 ibid. 39 A Semertzi, ‘The Preclusion of Direct Effect in the Recently Concluded EU Free Trade Agreements’ (2014) 51 CML Rev 1125. 40 See, eg Art 5 of Council Decision 2014/295 of 17 March 2014 on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part; Art 5 of the Council Decision (EU) 2018/104 of 20 November 2017 on the signing, on behalf of the Union, and provisional application of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part. For provisions precluding direct effect in the main text of a trade or association agreement, see for example Art 356 of the EU–Central America Association Agreement [2012] OJ L3. Art 30.6 of the EU–Canada Comprehensive Economic and Trade Agreement (CETA) states that ‘nothing in this Agreement shall be construed as conferring rights or imposing obligations on persons other than those created between the Parties under public international law, nor as permitting this Agreement to be directly invoked in the domestic legal systems of the Parties’ [2017] OJ L11. 41 Simutenkov (n 29). See this volume, ch 44. 42 For a more detailed discussion on this, see Van der Loo (n 37) 193.
180 Guillaume Van der Loo third state, the Community (now the Union) is ‘free to agree with that country what effect the provisions of the agreement are to have in the internal legal order of the contracting parties’.43 D. The Meaning of ‘Association’ under Article 217 TFEU Finally, the Court’s definition of ‘association’ under Article 217 TFEU in Demirel should be briefly discussed. Article 217 TFEU states that the EU ‘may conclude with one or more third countries or international organisations agreements establishing an association involving reciprocal rights and obligations, common action and special procedure’. This is a rather vague definition, as international agreements generally create reciprocal rights and obligations. Moreover, the reference to ‘common action and special procedure’ refers to the practice that association agreements establish joint institutions with a competence to adopt binding decisions. However, this is a feature that is not unique to association agreements, as nearly all recent cooperation or trade agreements provide for such joint institutions with binding decision-making power.44 In Demirel, the Court added that association agreements, on the basis of Article 217 TFEU, created ‘special, privileged links with a non-member country’, allowing the third state concerned to ‘take part in the [Union] system’.45 This indicates that association agreements establish a ‘privileged’ partnership, ie the most ambitious form of a bilateral relationship that the EU can offer. However, it is difficult to see how a third associated state could ‘take part in the Community Union] system’, as even in the most advanced formats of association agreements, such as those preparing for accession, associated candidate states do not really take part in the Union system, since these third states are never involved in the decision-making process at EU level. Moreover, not all association agreements have a pre-accession dimension, as the EU has concluded numerous association agreements with third states which are not eligible for EU membership or, more recently, even with a country that just had left the Union.46 It is true that several association agreements concluded by the EU have a specific ‘integration’ dimension, as they commit third states to take over a selection of the EU aquis (in a static or dynamic way) in order to integrate into a section of the EU internal market (eg the Association Agreements with Ukraine, Moldova and Georgia).47 However, such ‘integration agreements’ are not always association agreements, and could also take the form of specific sectoral agreements,48 or ‘mere’ partnership and cooperation agreements.49 43 Kupferberg (n 14) para 17. See this volume, ch 14. 44 On this issue, see P Van Elsuwege and G Van der Loo, ‘Legal Basis Litigation in Relation to International Agreements: Commission v Council (Enhanced Partnership and Cooperation Agreement with Kazakhstan)’ (2019) 56 CML Rev 1333. 45 Demirel (n 5) para 9. 46 Council Decision (EU) 2020/2252 of 29 December 2020 on the signing, on behalf of the Union, and on provisional application of the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, and of the Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland concerning security procedures for exchanging and protecting classified information. 47 On this point, see Van der Loo (n 37). 48 See, eg the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons [2009] OJ L353. 49 See, eg Comprehensive and enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part [2018] OJ L23.
Direct Effect of Association Agreements and the Meaning of ‘Association’ 181 The definition of ‘association’ in Article 217 TFEU, and in the Court’s Demirel judgment, was not explicit on the possible scope and depth of the privileged relation established by an association agreement. This has been mainly to the advantage of the EU, as it created a very flexible instrument allowing for a variety of ties with third states interested in a formal relationship with the EU.50 As stated by Walter Hallstein, former President of the Commission, ‘association can be anything between full membership minus 1% and a trade and co-operation agreement plus 1%’.51 V. ADDITIONAL READING Maresceau, M, ‘Turkey: A Candidate State Destined to Join the Union’ in NN Shuibhne and LW Gormley (eds), From Single Market to Economic Union. Essays in Honour of John A Usher (Oxford, Oxford University Press, 2012). Van Elsuwege, P and Chamon, M, ‘The Meaning of “Association” under EU Law. A Study on the Law and Practice of EU Association Agreements’ (February 2019) Research paper requested by the European Parliament’s Committee on Constitutional Affairs. Van der Loo, G, The EU–Ukraine Association Agreement and Deep and Comprehensive Free Trade Area: A New Legal Instrument for EU Integration Without Membership (Leiden, Brill, 2016).
50 P Van Elsuwege and M Chamon, ‘The Meaning of “Association” under EU Law: A Study on the Law and Practice of EU Association Agreements’ (February 2019) Research paper requested by the European Parliament’s Committee on Constitutional Affairs. 51 Cited in D Phinnemore, Association: Stepping-Stone or Alternative to EU Membership? (New York, Academic Press, 1999) 23.
182
17 Judicial Review of EU Measures in the Light of WTO Rules: Fediol and Nakajima TAMARA PERIŠIN AND ILEKTRA ANTONAKI* Case 70/87, Fédération de l’industrie de l’huilerie de la CEE (Fediol) v Commission of the European Communities, ECLI:EU:C:1989:254, delivered 22 June 1989; Case C-69/89, Nakajima All Precision Co Ltd v Council of the European Communities, ECLI:EU:C:1991:186, delivered 7 May 1991. KEYWORDS Direct effect – Indirect effect – WTO law – Access to EU courts – Judicial review – Common commercial policy.
I. INTRODUCTION
A
s early as in 1972, in International Fruit, the Court established the general rule that the General Agreement on Tariffs and Trade (GATT) did not produce direct effect, in the sense that it was not capable of conferring on citizens the rights which they could invoke before national courts and was not in principle among the rules in the light of which the Court was to review the legality of measures adopted by the EU institutions.1 The judgments in Fediol2 and Nakajima3 established two exceptions to the lack of direct effect of World Trade Organization (WTO) law. In particular, when individuals are entitled to request the Court to exercise its powers of review over the legality of an EU measure in the light of WTO rules, where the EU measure explicitly refers to the provisions of the WTO Agreements (Fediol), or where the EU measure is intended to implement a particular * All opinions expressed herein are personal to the authors. 1 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, para 27. See this volume, ch 2. See also subsequent case law: Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574, para 47 See this volume, ch 37; Joined Cases C-300/98 and C-392/98, Parfums Christian Dior SA v TUK Consultancy BV, ECLI:EU:C:2000:688, paras 41–45; Case C-377/02, Léon Van Parys NV v Belgisch Interventieen Restitutiebureau (BIRB), ECLI:EU:C:2005:121, para 39. See this volume, ch 43. 2 Case 70/87, Fédération de l’industrie de l’huilerie de la CEE (Fediol) v Commission of the European Communities, ECLI:EU:C:1989:254. 3 Case C-69/89, Nakajima All Precision Co Ltd v Council of the European Communities, ECLI:EU:C:1991:186.
184 Tamara Perišin and Ilektra Antonaki obligation assumed in the context of the WTO (Nakajima). In subsequent case law,4 the Court used these two exceptions in a combined form, which is broadly known as the ‘principle of implementation’,5 or the ‘mitigated form of direct effect’.6 II. FACTS
The factual background in Fediol relates to the complaints mechanism established under Regulation No 2641/84 (the ‘New Instrument of Commercial Policy’),7 which was the predecessor of the current Trade Barriers Regulation.8 Under this mechanism, EU producers were allowed to lodge a complaint with the Commission regarding illicit commercial practices, other than dumping and subsidies, attributable to third countries. The complaint procedure was divided into two stages: in the first stage, the Commission examined whether the complaint was sufficiently substantiated, and in the second stage, the Commission decided whether action needed to be taken in the interest of the EU and whether appropriate commercial policy measures needed to be adopted by the Council against the third country concerned. The EEC Seed Crushers’ and Oil Processors’ Federation (Fediol) had brought a complaint against Argentina concerning two alleged illicit commercial practices: (i) a scheme of differential charges on exports of soya products; and (ii) quantitative restrictions on the exportation of soya beans. According to Fediol, these practices caused serious damage to the European oil-processing industry and were contrary to Articles III, XI and XXIII of the GATT. However, the Commission rejected the complaint, arguing that, as regards the first practice, it was not contrary to any rule of international law, and as regards the second practice, the complaint was not supported by any evidence. On 6 March 1987, Fediol brought an action for annulment against the Commission’s decision rejecting Fediol’s complaint requesting the Commission to initiate a procedure to examine the aforementioned commercial practices of Argentina regarding the export of soya cake to the EU. The Commission challenged the admissibility of the claim on two grounds. First, it argued that the complainant was not permitted to make submissions directed against the contents of the Commission’s decision because its power to define the interests of the EU entailed not only the exercise of a broad discretion, but also the taking into account of political considerations which are not amenable to review by the Court.9 Second, the Commission argued that its interpretation of the term ‘illicit commercial practice’ in the light of rules of international law is subject to judicial review only in so far as the disregard or misapplication of those rules amounts to an infringement of the provisions of EU law which vest rights in individuals,
4 Case C-280/93, Germany v Council, ECLI:EU:C:1994:367, para 111; Portugal v Council (n 1) para 49. 5 P Eeckhout, External Relations of the European Union (Oxford, Oxford University Press, 2011) 357. 6 S Prechal, ‘Does Direct Effect Still Matter?’ (2000) 37 CML Rev 1047, 1052 referring to CWA Timmermans, ‘The EU and Public International Law’ (1999) 2 European Foreign Affairs Review 181, 190. 7 Council Regulation (EEC) No 2641/84 on the strengthening of the common commercial policy with regard in particular to protection against illicit commercial practices [1987] OJ L252/1. 8 Regulation (EU) 2015/1843 laying down Union procedures in the field of the common commercial policy in order to ensure the exercise of the Union’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization (codification) [2015] OJ L272/1, codifying the old Council Regulation (EC) No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization. 9 Fediol (n 2) para 14.
Judicial Review of EU Measures in the Light of WTO Rules 185 directly and specifically. However, according to the Commission, the GATT rules themselves were not sufficiently precise to give rise to rights on the part of individuals, and therefore the complainant could not be permitted to put forward submissions calling into question the interpretation of the GATT provisions by the Commission.10 In Nakajima, the applicant (a Japanese manufacturer of typewriters and printers) challenged a Council regulation imposing a definitive anti-dumping duty on imports of serial-impact dot-matrix printers originating in Japan. The anti-dumping procedure had been initiated by the Commission on the basis of Council Regulation (EEC) No 2176/84 (the former basic regulation).11 This procedure resulted in the adoption of Commission Regulation (EEC) No 1418/88, imposing a provisional anti-dumping duty on Nakajima of 12.3 per cent. Later, the Council adopted Regulation No 3651/88, imposing a definitive anti-dumping duty of 12 per cent pursuant to Regulation No 2423/88 (the new basic regulation).12 Nakajima brought an action for the annulment of Regulation No 3651/88 that imposed a definitive anti-dumping duty, challenging in an incidental manner, through a plea of illegality (Article 184 EEC, now Article 277 TFEU), the applicability of the new basic regulation as violating the GATT Anti-dumping Code. The Council took the view that, just like the GATT, the Anti-dumping Code did not confer on individuals rights which may be relied on before the Court, and that the provisions of that Code were not directly applicable within the EU. On this basis, the Council argued that Nakajima could not call into question the validity of the new basic regulation on the ground that it may be in breach of certain provisions of the Anti-dumping Code. III. THE COURT
In Fediol, the Court rejected the admissibility objection raised by the Commission, effectively introducing the first exception to the lack of direct effect of the GATT provisions. In particular, with respect to the first argument of inadmissibility, the Court found that the contested decision confined itself to the finding that the charging of differential rates of duty was not contrary to the GATT provisions.13 Therefore, the question whether or not the Commission’s assessment of the Union’s interests was amenable to judicial review was not at issue.14 With respect to the second argument of inadmissibility, the Court began its analysis by reiterating the settled case law, according to which the GATT provisions were not capable of conferring on citizens EU rights which they can invoke before the courts.15 In essence, it reaffirmed its position that WTO law was, in principle, not capable of producing direct effect. However, the Court did not stop there. In a surprising twist, it went on to establish an exception to this general rule. Since the GATT provisions formed part of the rules of international law to which Article 2(1) of Regulation No 2641/84 referred, individuals could, in proceedings before the Court, rely on these provisions in order to obtain a ruling on whether conduct
10 ibid para 18. 11 Council Regulation (EEC) No 2176/84 on protection against dumped or subsidized imports from countries not members of the European Economic Community [1984] OJ L201/1. 12 Council Regulation (EEC) No 2423/88 on protection against dumped or subsidized imports from countries not members of the European Economic Community [1988] OJ L209/1. 13 Fediol (n 2) para 15. 14 ibid para 16. 15 ibid para 19.
186 Tamara Perišin and Ilektra Antonaki criticised in a complaint lodged under Article 3 of Regulation No 2641/84 constituted an illicit commercial practice within the meaning of that regulation.16 In support of this conclusion, the Court explained that, while it is true that a particular feature of the GATT is the broad flexibility of its provisions, this does not prevent the Court from interpreting and applying them in a specific case in order to establish whether certain specific commercial practices should be considered incompatible with those provisions.17 Furthermore, in Fediol, the Court held that the fact that Article XXIII of the GATT provided for a special procedure for the settlement of disputes between contracting parties could not preclude its interpretation by the Court. In that respect, it reiterated the ruling in Kupferberg,18 according to which the mere fact that the contracting parties to a free trade agreement have established a special institutional framework for consultations and negotiations, inter se, is not in itself sufficient to exclude all judicial application of that agreement.19 Thus, the Court concluded that since Regulation No 2641/84 entitled the economic agents concerned to rely on the GATT provisions in the complaint, which they lodged with the Commission seeking to establish the illicit nature of the allegedly harmful commercial practices, those same economic agents were entitled to request the Court to exercise its powers of review over the legality of the Commission’s decision applying those provisions.20 In a similarly surprising twist, in Nakajima, the Court established the second exception to the lack of direct effect of the GATT and WTO provisions. In particular, the Court first observed that Nakajima was not relying on the direct effect of the pertinent provisions of the Anti-dumping Code. In making this plea of law, the applicant was in fact questioning, in an incidental manner through a plea of illegality (Article 184 EEC, now Article 277 TFEU), the applicability of the new basic regulation by invoking one of the grounds for review of legality referred to in an action for annulment (Article 173 EEC, now Article 263 TFEU), namely that of infringement of the EU Treaties, or of any rule of law relating to its application.21 Furthermore, the Court emphasised that the new basic regulation was adopted in accordance with existing international obligations, in particular, those arising from Article VI of the GATT and from the Anti-dumping Code.22 Therefore, since the new basic regulation was adopted in order to comply with the international obligations of the Union, the latter was under an obligation to ensure compliance with the GATT and its implementing measures.23 Under these circumstances, the Court held that it was necessary to examine whether the Council had gone beyond the legal framework laid down and whether, by adopting the disputed provision, it had acted in breach of the Anti-dumping Code.24 It should be noted that even though the Court established the two exceptions to the lack of direct effect of WTO law, thereby upholding the admissibility of the applicants’ claims, on the substance, in both cases the applications were dismissed. In Fediol, the Court rejected all the submissions of the applicant, arguing that the commercial practices at issue were incompatible with certain provisions of the GATT. In the same vein, in Nakajima, the Court rejected all pleas in law raised by the applicant and dismissed the action in its entirety.
16 ibid
para 19. para 20. 18 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362. See this volume, ch 14. 19 Fediol (n 2) para 21. 20 ibid para 22. 21 Nakajima (n 3) para 28. 22 ibid para 30. 23 ibid para 31. 24 ibid para 32. 17 ibid
Judicial Review of EU Measures in the Light of WTO Rules 187 IV. THE IMPORTANCE OF THE CASE
The importance of the Fediol and Nakajima judgments can be assessed from several perspectives. Most notable are the following two: first, the relationship between the EU and the WTO legal orders; and second, access to courts for individuals and effective judicial remedies. Each of these perspectives will be addressed in separate subsections. A. The Relationship between the EU and the WTO Legal Orders While the EU constitutes a ‘new legal order of international law’,25 as its law has direct effect regardless of whether the Member States have a monistic or dualistic understanding of the interplay between international and national law, the same is not true for the WTO. The idea that WTO law should have direct effect was rejected during the Uruguay round, and its dispute settlement adjudicators have never attempted to introduce such a concept.26 Thus, each Member State remains free to define the status of WTO law within its own legal order. When contemplating the kind of effect that WTO law ought to have in the EU legal order, it is relevant that none of the EU’s leading trading partners has granted WTO law direct effect. It could thus be argued that if the national courts of EU Member States were to enforce WTO law more than the domestic courts of these trading partners, this could result in a situation where the EU would risk being placed on an unequal footing in international trade relations with other WTO members.27 Still, this does not mean that the EU itself might not have an interest in giving more effect to WTO law. For example, if WTO law cannot be invoked before the European Court of Justice, then unsatisfied parties are pushed to seek remedies in other forums, including persuading their governments to initiate a WTO dispute.28 More broadly, the question of the legal effects and the direct enforceability of international agreements in the EU legal order has been one of the major legal topics in the field of EU external relations, and has generated a vast academic literature and a very rich case law. In principle, the Court acknowledges that international agreements can, under certain circumstances, have direct effect. The direct effect of international agreements stems from Article 216(2) TFEU, which stipulates that ‘Agreements concluded by the Union are binding upon the institutions of the Union and on its Member States’, and was recognised in the seminal Kupferberg case.29 However, with respect to WTO law, the Court has favoured an approach excluding the direct effect of WTO law in the EU legal order.30 In International Fruit, the Court ruled that, due to the great flexibility of its provisions, the possibilities of derogation and the power of unilateral withdrawal from its obligations, ‘Article XI of the General Agreement is not capable of conferring on citizens of the Community rights which they can invoke before the courts’.31
25 Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, ECLI:EU:C:1963:1. 26 US – Sections 301–310 of the Trade Act of 1974, Panel Decision, WT/DS152/R, para 7.72. 27 T Perišin, ‘EU Regulatory Policy and World Trade’ (2015) 11 European Constitutional Law Review 99, 118. 28 ibid. 29 Kupferberg (n 18) para 26. See this volume, ch 14. 30 PJ Kuijper and M Bronckers, ‘WTO Law in the European Court of Justice’ (2005) 42 CML Rev 1313, 1315. 31 International Fruit (n 1) para 27.
188 Tamara Perišin and Ilektra Antonaki Similarly, in Portugal v Commission32 and later in Omega Air,33 the Court held that, ‘having regard to their nature and structure, the WTO Agreements are not in principle among the rules in the light of which the Court is to review the legality of measures adopted by the Community institutions’. In the Air Transport Association of America (ATAA) case, WTO law was not even mentioned before the Court, despite the fact that the central issue was the compatibility of the Aviation Emissions Directive with international law.34 Some commentators welcome the case law precluding the direct effect of WTO law as reflecting the ‘international “coming of age” of the [Union], and a recognition of the fact that in some cases, it may not be justified to wave the magic wand of direct effect of international agreements without thinking of competing international obligations’.35 Interestingly, it has been remarked that the recent EU trade agreements explicitly preclude the direct effect of their provisions, restricting their operation to the sphere of traditional public international law and preventing economic integration through judicial decisions.36 Fediol and Nakajima introduce two exceptions to the lack of direct effect of WTO law, allowing individuals to request the Court to exercise its powers of review over the legality of an EU measure in the light of WTO rules where the EU measure explicitly refers to the provisions of the WTO Agreements or where the EU measure is intended to implement a particular obligation assumed in the context of the WTO. Looking closer at these two cases, the following observations can be made. Firstly, it has been argued that Fediol deals with the question whether the Commission has exceeded the broad discretion it has in economic matters regarding the interpretation of WTO law when dealing with a complaint introduced on the basis of the trade barriers regulation.37 Secondly, in Nakajima, the Court distinguished between, on the one hand, the direct effect stricto sensu of the provisions of an international trade agreement, in the sense of conferring individual rights which can be invoked before courts, and on the other hand, the possibility of reviewing the legality of an EU measure in the light of an international trade agreement.38 This seemed to depart from the ruling in International Fruit, in which the Court had underlined that the invalidity of an EU act could be assessed in the light of an international agreement only when the provisions of the latter were capable of conferring rights on citizens which they can invoke before the courts.39 The Nakajima exception was constructed narrowly in view of the specific circumstances of the case. Later, in Intertanko,40 the Court reiterated the International Fruit reasoning and applied it in a field of international law other than WTO law, ruling that the UN Convention on the Law of the Sea did not confer individual rights and could therefore not be invoked to review the legality of an EU measure.41 Furthermore, the Nakajima case has been interpreted as relying on the idea that the EU legislature, in adopting implementing legislation, can itself implicitly grant WTO law
32 Portugal v Council (n 1) para 47. 33 Joined Cases C-27/00 and C-122/00, Omega Air Ltd, ECLI:EU:C:2002:161, para 93. 34 Case C-366/10, Air Transport Association of America and Others, ECLI:EU:C:2011:864. See also Perišin (n 27) 109. See this volume, ch 59. 35 Kuijper and Bronckers (n 30) 1323. 36 A Semertzi, ‘The Preclusion of Direct Effect in the Recently Concluded EU Free Trade Agreements’ (2014) 51 CML Rev 1125, 1127. 37 Kuijper and Bronckers (n 30) 1324. 38 Nakajima (n 3) paras 28–29. 39 International Fruit (n 1) para 8. 40 Case C-308/06, Intertanko, ECLI:EU:C:2008:312, para 45. See this volume, ch 52. 41 ibid para 64.
Judicial Review of EU Measures in the Light of WTO Rules 189 direct effect.42 However, it has been argued that, in a dualistic system, the fact that international agreements are incorporated into national law through the adoption of implementing legislation does not mean that the legislature intends to confer direct effect on the incorporated agreements.43 The relationship between the EU and the WTO legal orders and the Court’s jurisdiction in respect of an allegation of an infringement of the General Agreement on Trade in Services (GATS) was analysed in the recent Commission v Hungary case44 regarding the Hungarian Law on Higher Education (widely known as ‘lex CEU’, due to the fact that it was broadly perceived as targeting the activity of the Central European University in Hungary). Hungary raised two objections regarding the jurisdiction of the Court to hear and determine the action for failure to fulfil obligations arising from the GATS, arguing that the area of higher education does not fall within the competence of the EU45 and that it is exclusively for the panels and the Appellate Body of the WTO established by the Dispute Settlement Body to assess whether the Hungarian legislation was compatible with the commitments undertaken by Hungary under the GATS.46 Advocate General (AG) Kokott focused on three points in order to establish the jurisdiction of the Court in respect of an allegation of an infringement of the GATS. First, she stated that the GATS is an integral part of EU law, an infringement of which can be the subject of infringement proceedings.47 Second, she underlined that the Union may be held liable by a third country for such an infringement before the WTO dispute settlement bodies.48 And third, she stressed that neither the specific character of the WTO dispute settlement procedure nor the special role played by the WTO dispute settlement bodies precludes the present infringement proceedings.49 It is the last point which is of interest for the purposes of the present chapter. In particular, in her legal assessment, AG Kokott pointed to the existence of two distinct lines of case law: one rejecting the judicial review of EU measures in the light of WTO law, and one accepting the judicial review of national measures in the light of WTO law.50 To be more precise, the Court has rejected the direct applicability of WTO law as a standard of review of EU acts in actions for the annulment of EU secondary law or in references for a preliminary ruling on the validity of EU acts. The reason for this restrictive approach is that the possibility of challenging an EU act on the basis of a WTO obligation could undermine the negotiating position of the EU, in the sense that it could deprive the EU of its power to negotiate a possible withdrawal of that act if the third country makes other commitments in return.51 However, the Court has accepted the judicial review of national measures in the light of WTO law. In particular, in Commission v Germany,52 it reviewed a national measure in the
42 Kuijper 43 ibid.
44 Case
and Bronckers (n 30) 1325.
C-66/18, Commission v Hungary, ECLI:EU:C:2020:792. para 59. 46 ibid paras 60–63. 47 Opinion of AG Kokott, Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:172, paras 40–47. 48 ibid paras 48–55. 49 ibid paras 56–68. 50 ibid paras 60–64. 51 ibid para 61. 52 Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313. 45 ibid
190 Tamara Perišin and Ilektra Antonaki light of the International Dairy Arrangement,53 an agreement concluded within the framework of the GATT 1947 (pre-WTO). In doing so, it relied on the famous Kupferberg ruling, according to which it is for the Court, within the framework of its jurisdiction over the interpretation of agreements concluded by the Community, to ensure their uniform application throughout its territory.54 The AG explained that the possibility of bringing infringement proceedings against a Member State does not run counter to the aims and the particular character of dispute settlement in the WTO for three reasons.55 First, such a possibility can ensure the effective enforcement of any negative ruling by the WTO dispute settlement bodies.56 Second, infringement proceedings may be regarded as an instrument which strengthens the negotiating position of the EU and increases its credibility, as the EU can show its negotiating partners that it is able, if necessary, to ensure internally that infringements of the WTO Agreement are effectively eliminated.57 And third, where the EU itself is convinced that a national measure is unlawful, it can manifest its decision to be responsible for compliance with the WTO Agreement by bringing infringement proceedings against the Member State concerned.58 In this regard, the AG cited the Fediol and Nakajima cases, and emphasised that these two exceptions should apply a fortiori to national measures.59 The Court, following the AG, rejected all the arguments relating to the lack of jurisdiction, underlining that not only does the particular context resulting from the existence of the WTO dispute settlement system have no bearing on the jurisdiction conferred on the Court under Article 258 TFEU in infringement proceedings cases, but the exercise of that jurisdiction is entirely consistent with the obligation of each WTO member to ensure observance of its obligations under the law of that organisation and to avoid international liability because of a wrongful act.60 The distinction between, on the one hand, judicial review of EU acts and, on the other hand, judicial review of national acts in the light of WTO law (or, more broadly, in the light of international agreements concluded by the EU) has attracted significant scholarly attention. Initially, this divergence was criticised as effectively introducing double standards in the enforcement of international agreements in the EU legal order.61 However, more recently, it has been argued that the existence of this ‘twin-track approach’ with respect to the enforcement of international agreements in the EU legal order can in fact be viewed as ‘bolstering the effectiveness of treaty law’ insofar as the Court has been generous in allowing litigants, including the Commission, to safeguard Member State action for compliance with international agreements concluded by the EU.62 This approach also reflects the broader trend in EU law suggesting a high degree of judicial scrutiny when assessing Member State action, but substantial judicial restraint when reviewing EU action.63
53 International Dairy Arrangement (adopted 12 April 1979, entered into force 1 January 1980) 1186 UNTS 54. 54 ibid 16, referring to Kupferberg (n 18) para 14. See this volume, ch 14. 55 Opinion of AG Kokott, Commission v Hungary (n 46) para 64. 56 ibid para 65. 57 ibid para 66. 58 ibid para 67. 59 ibid. 60 Commission v Hungary (n 44) para 86. 61 P Eeckhout, ‘Case C-61/94, Commission v Germany’ (1998) 35 CML Rev 557, 565. 62 M Mendez, ‘The Enforcement of EU Agreements: Bolstering the Effectiveness of Treaty Law’ (2010) 47 CML Rev 1719, 1720 and 1754. 63 ibid 1754.
Judicial Review of EU Measures in the Light of WTO Rules 191 B. Access to Courts for Individuals and Effective Judicial Remedies The direct enforceability of international agreements in the EU legal order is inextricably linked to access to courts and the protection of effective judicial remedies of private parties in enforcing rights and obligations deriving from international agreements in the EU legal order. In this respect, the principles stemming from Fediol and Nakajima could be regarded as reflecting the intention of the Court to facilitate access to justice for individuals seeking to enforce international agreements in the EU legal order. However, it has been argued that, despite their importance, the Fediol and Nakajima exceptions have rather limited application.64 In subsequent cases regarding WTO law, the Court seemed to favour the application of the principle of harmonious interpretation (indirect effect), according to which EU law should be interpreted in accordance with international agreements (including WTO law).65 The principle of harmonious interpretation has also been preferred outside the field of WTO law,66 with Racke67 being the only case in which the Court applied the Nakajima exception to international customary law.68 The application of the Nakajima type of exception outside the field of WTO law was one of the focal points in the Aarhus case69 concerning the procedural rights of environmental NGOs and the compatibility of Regulation No 1367/2006 (the Aarhus Regulation) with the Aarhus Convention on access to information, public participation in decision-making and access to justice in environmental matters. In particular, two Dutch environmental NGOs brought an action for annulment against the Commission’s decision rejecting their request to review internally, pursuant to Article 10(1) of the Aarhus Regulation, a previous Commission decision granting the Netherlands an extension of the deadline for attaining the annual limit values for nitrogen and a temporary exemption from the obligations laid down by Directive 2008/50/EC on ambient air quality and cleaner air for Europe. The General Court applied the Fediol and Nakajima types of exceptions to the Aarhus Convention, holding that where the Community has intended to implement a particular obligation assumed under an international agreement, or where the measure makes an express renvoi to particular provisions of that agreement, it is for the Court to review the legality of the measure in question in the light of the rules laid down in that agreement.70
The legal reasoning was based on two grounds: firstly, just as in Nakajima, the applicants were effectively raising a plea of illegality under Article 277 TFEU, contesting indirectly the compatibility of the Aarhus Regulation with the Aarhus Convention;71 and secondly, although 64 S Gáspár-Szilágyi, ‘The Relationship between EU Law and International Agreements: Restricting the Application of the Fediol and Nakajima Exceptions in Vereniging Milieudefensie’ (2015) 52 CML Rev 1059, 1077. 65 Commission v Germany (n 52) para 52 (regarding the International Dairy Agreement); Case C-53/96, Hermès International, ECLI:EU:C:1998:292, para 28 (regarding the Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh Agreement Annex 1C (adopted 15 April 1994, entered into force 1 January 1995) 1869 UNTS 299 (TRIPs Agreement)). Christian Dior (n 1) para 47 (regarding the TRIPs Agreement). 66 Case C-286/90, Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp, ECLI:EU:C:1992:453, para 9. See this volume, ch 21; Case C-341/95, Gianni Bettati v Safety Hi-Tech Srl, ECLI:EU:C:1998:353, para 20. 67 Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293, para 51. See this volume, ch 36. 68 Gáspár-Szilágyi (n 64) 1061. 69 Case T-396/09, Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht v Commission, ECLI:EU:T:2012:301. 70 ibid para 54. 71 ibid paras 55, 57.
192 Tamara Perišin and Ilektra Antonaki the Nakajima exception was originally developed in relation to the GATT and the WTO Agreements, it was later applied, in Racke, to international customary law.72 Since the Aarhus Regulation had been adopted in order to implement the EU’s international obligations under Article 9(3) of the Aarhus Convention,73 it was therefore decided that it was appropriate to assess its validity in the light of the Convention.74 However, the judgment of the General Court was appealed and overruled by the Court. The Court held that the Fediol and Nakajima exceptions could not apply in this case, as they were justified solely by the particularities of the agreements that led to their application.75 The Court explained that, contrary to Fediol, the provision in question of the Aarhus Regulation neither made direct reference to specific provisions of the Aarhus Convention nor conferred a right on individuals.76 Furthermore, contrary to Nakajima, in the case at hand, there was no question of the implementation of specific obligations, in so far as the contracting parties enjoyed a broad margin of discretion when implementing the specific obligations under the Aarhus Convention.77 Therefore, the Court concluded that in holding that Article 9(3) of the Aarhus Convention could be relied upon in order to assess the legality of Article 10(1) of the Aarhus Regulation, the General Court vitiated the judgment under appeal by an error of law.78 This judgment was criticised for imposing a high burden to prove the application of the Fediol and Nakajima exceptions and restricting them only to the specific areas of WTO law for which they were originally conceived.79 In general, ensuring the greater ‘vigilance of individuals’ over the observance of international legal norms by giving them the power to invoke such norms before courts when they seek to protect their own interest could be relevant in fields other than trade. Increasingly, it is not only traders, but also other types of individuals and organisations who are looking to invoke international law norms in judicial proceedings. Overall, it could be argued that taking account of WTO obligations and, more broadly, international obligations, even through the application of the principle of harmonious interpretation, is in line with the EU’s commitment to multilateralism and benefits both European citizens and companies, as well as those in third countries. And while perhaps the particularities of the WTO system might justify the preclusion of the direct effect of WTO law in the EU legal order and the somehow restrictive application of the Fediol and Nakajima exceptions, this might not hold true for other international agreements, especially those enshrining rights of civic participation. The EU’s commitment to multilateralism, international trade and international cooperation requires respect of its international obligations and the effective judicial protection of individual rights.
72 ibid para 56. 73 ibid para 58. 74 ibid para 59. 75 Joined Cases C-401/12 P to C-403/12 P, Council v Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht, ECLI:EU:C:2015:4, para 57. 76 ibid para 58. 77 ibid para 59. 78 ibid para 61. 79 Gáspár-Szilágyi (n 64) 1075. In the same vein, recent cases of the General Court (namely Case T-330/18, Carvalho v Parliament and Council, ECLI:EU:T:2019:324; Case T-125/18, Associazione Granosalus v Commission, ECLI:EU:T:2019:92; Case T-12/17, Mellifera v Commission, ECLI:EU:T:2018:616) have been perceived as restricting NGOs’ and stakeholders’ direct access to the Court in environmental public interest litigation. See GC Leonelli, ‘A Threefold Blow to Environmental Public Interest Litigation: The Urgent Need to Reform the Aarhus Regulation’ (2020) 45 EL Rev 324.
Judicial Review of EU Measures in the Light of WTO Rules 193 V. ADDITIONAL READING Bourgeois, JHJ, ‘The European Court of Justice and the WTO: Problems and Challenges’ in JHH Weiler (ed), The EU, the WTO and the NAFTA – Towards a Common Law of International Trade (Oxford, Oxford University Press, 2001). Cremona, M, ‘A Reticent Court? Policy Objectives and the Court of Justice’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law – Constitutional Challenges (Oxford, Hart Publishing, 2014). Eeckhout, P, EU External Relations Law (Oxford, Oxford University Press, 2011) 292–99. Egelund Olsen, B, Steinicke, M and Engsig Sørensen, K, ‘The EU and the WTO’ in B Egelund Olsen, M Steinicke and K Engsig Sørensen (eds), WTO Law: From a European Perspective (Alphen aan den Rijn, Kluwer International Law, 2012)). Mendez, M, ‘The Application of International Law by the Court of Justice of the European Union’ in CA Bradley (ed), The Oxford Handbook of Comparative Foreign Relations Law (Oxford, Oxford University Press, 2019). Peers, S, ‘Fundamental Right or Political Whim? WTO Law and the European Court of Justice’ in G de Búrca and J Scott (eds), The EU and the WTO: Legal and Constitutional Issues (Oxford, Hart Publishing, 2001).
194
18 The Integration of Decisions of Association Councils in EU Law: Greece v Commission (Special Aid to Turkey) FERNANDO CASTILLO DE LA TORRE* Case 30/88, Greece v Commission, ECLI:EU:C:1989:422 (Special Aid to Turkey), delivered on 14 November 1989. KEYWORDS Association – Association Council – Acts of international institutions – Integration in Union law – Budgetary powers of the Commission – Turkey – Implementation of international obligations – Financial aid
I. INTRODUCTION
T
he judgment in this case, Greece v Commission (Special Aid to Turkey), was of crucial importance at the time as it affirmed, for the first time, that acts adopted by bilateral bodies created by international agreements concluded by the Union formed an integral part of Union law. It also clarified that the treaty-making powers of the Council did not extend to decisions on how to implement international obligations in EU law. The measures which would be needed to implement such obligations would, according to the Court, be adopted in accordance with the ordinary rules on allocation of powers between the institutions. II. FACTS
Relations between the Union and Turkey were based at the time of the case (and still are) on the Association Agreement (1963), which entered into force on 1 December 1964,1 and on the * All opinions expressed herein are personal to the author. 1 Concluded by Council Decision 64/732/EEC of 23 December 1963 [1973] OJ C113/1. Other cases arising from the EU–Turkey Association Agreement include Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400. See this volume, ch 16; Case C-192/89, SZ Sevince v Staatssecretaris van Justitie,
196 Fernando Castillo de la Torre Additional Protocol of 23 November 1970, which entered into force on 1 January 1973.2 In the financial sphere, the parties had concluded three protocols. The one signed on 12 May 1977 had expired on 31 October 1981.3 Before that protocol even entered into force, the Turkish government requested, in October 1978, considerable financial assistance from the EEC. The Union position, which was to be adopted in the context of the association institutions, was defined by the Council by means of the written procedure on 16 May 1979. The relevant document stated that, pending the conclusion of the Fourth Financial Protocol, ‘la Communauté est prête à envisager, en faveur de la Turquie, une action spécifique, sous forme de dons, pour un montant de 75 million UCE (European units of account) en deux ans, destinée à financer des actions de coopération’.4 In the field of financial cooperation, the Union was prepared to begin negotiating a Fourth Financial Protocol. A ‘declaration of the Council concerning the internal implementation of Decision No 2/80 of the EEC–Turkey Association Council’ appeared in the minutes of the Council meeting of 30 June 1980. It read as follows: ‘As regards the procedure for the approval of projects, the Council agreed to apply the procedure followed for the implementation of the Financial Protocols concluded with the Mediterranean countries.’ That procedure provided that only financing projects submitted by the Commission and the European Investment Bank which had received unanimous approval within the ad hoc group could be considered to be adopted. The ad hoc procedure, which had been applicable since the beginning of 1979, was of a provisional nature, pending the entry into force of financial regulations concerning the application of the financial protocols with certain Mediterranean countries. On 19 September 1980, the Association Council took formal note of the Union’s offer to grant to Turkey exceptional aid amounting to 75 million ECU and laid down the conditions for carrying that offer into effect. In this regard, it decided that (2) For the submission of specific projects, Turkey shall approach the Commission directly which shall examine them in the light of the criteria indicated by the Community delegation to the Council Association for the use of the exceptional aid; (3) The Community shall inform Turkey of the response to its requests; (4) The Association Committee shall follow the implementation of the aid. For this purpose it shall meet at the request of one of the two parties (Decision No 2/80, unpublished).
However, in view of the political developments in Turkey, the Union decided, at the end of 1981, to freeze its relations with that country. The Fourth Protocol, initialled in June 1981, was not concluded. The special aid was suspended after 46 million ECU had been disbursed, with 29 million ECU therefore remaining to be committed. Due to internal developments in Turkey that allowed relations to be resumed, at the Council meeting on 17 February 1986 there was a broad consensus on the Commission’s proposal to normalise relations between the Union and Turkey in stages and, in particular, to resume financial cooperation by unfreezing the remainder of the special aid. The Commission proposed to the Council and Parliament as the budgetary authority a direct transfer between different
ECLI:EU:C:1990:322. See this volume, ch 19; Case C-228/06, Mehmet Soysal and Ibrahim Savatli v Bundesrepublik Deutschland, ECLI:EU:C:2009:101 and Case C-221/11, Leyla Ecem Demirkan v Bundesrepublik Deutschland, ECLI:EU:C:2013:583. See this volume, ch 54; Case C-137/12, European Commission v Council of the European Union, ECLI:EU:C:2013:675 (Conditional Access Convention). See this volume, ch 62. 2 Concluded by Council Regulation (EEC) No 2760/72 of 19 December 1972 [1977] OJ L361/60. 3 [1979] OJ L67/14. 4 Doc 6758/79 NT 13. Free translation: ‘the Community is ready to envisage, in favor of Turkey, a specific action, in the form of grants, for an amount of 75 million EUA (European units of account) over two years, intended to finance cooperation actions’.
The Integration of Decisions of Association Councils in EU Law 197 chapters of the budget, on the basis of the procedure laid down in Article 21(2) of the Financial Regulation of 21 December 1977.5 Since the Council had not adopted any formal decision, the transfer proposal was deemed to be approved pursuant to that provision. By a judgment of 27 September 1988 in Greece v Council,6 the Court dismissed an application for a declaration that the transfer was void. The Court considered that there was no error in law in considering that the aid could be considered ‘compulsory expenditure’ for the purpose of budgetary rules. It is interesting to note, for the case at hand, that, at paragraph 20 of that judgment, the Court ruled that: the fact that those negotiations resulted in Decision No 2/80 of the Association Council indicates that the Community’s offer ‘to grant Turkey exceptional aid totalling 75 million [ECU]’ was accepted by Turkey. By providing for cooperation with regard to ‘… the implementation of the … aid … made available to Turkey’, the Association Council placed that aid within the institutional framework of the Association.
Following the transfer, the Commission invited Turkey to submit projects which could be financed by new commitment appropriations as part of the special aid. Turkey submitted some suitable projects to the Commission. The Commission took the view that only it had the power to implement the budget. It also took the view that the ad hoc procedure for approving projects submitted to implement the financial protocols with the Mediterranean countries was no longer applicable since it had been replaced by Council Regulation (EEC) No 3973/86 of 22 December 1986 concerning the application of the protocols on financial and technical cooperation concluded between the Community and Algeria, Morocco, Tunisia, Egypt, Lebanon, Jordan, Syria, Malta and Cyprus.7 When that regulation was adopted, the Council and Commission declared that it could in no case constitute a precedent for the implementation of financial protocols other than those covered by the regulation and that the procedure for implementing these other protocols would be adopted having regard to the merits of each case. Yet, the Commission decided that it was appropriate to take advantage of the Member States’ experience in dealing with projects for granting aid to Turkey and that the most convenient way of doing that was to consult them as members of the ‘Article 6 Committee’ provided for in Regulation No 3973/86, although it did not take the view that the procedures of that committee were legally applicable to the matter in hand. Consequently, the Commission put three projects for assisting Turkey on the agenda of the Article 6 Committee. Despite objections from Greece that the procedure followed was illegal, the projects received favourable opinions from the Committee members. By Decisions of 17 November and 10 December 1987, the Commission approved the financing of those projects as special aid. On 27 January 1988, Greece brought an action for annulment against the decisions. In its first plea, the Greek government claimed that it was apparent from Article 2(1) of the Agreement on measures and procedures required for the implementation of the agreement establishing an association between the EEC and Turkey (64/737/EEC),8 a text agreed
5 [1977] OJ L356/1. 6 Case 204/86, Greece v Council, ECLI:EU:C:1988:450. 7 [1986] OJ L370/5. 8 An English version may be found in Collection of the Agreements Concluded by the European Communities, Vol 3, Bilateral Agreements EEC–Europe 1958–1975, 571. For the other versions, see [1964] OJ L217/3703. Art 2(1) of the Agreement provides that ‘Decisions and recommendations of the Council of Association on matters which … are within the province of the Community, shall be implemented by decision of the Council acting unanimously adopted after the Commission has been consulted’.
198 Fernando Castillo de la Torre by Member States’ representatives sitting in the Council (the Intergovernmental Agreement), in conjunction with Articles 7 and 22 of the EEC–Turkey Association Agreement, that the decisions of the Association Council were, for the purposes of their implementation, to be the subject of measures adopted by the Council acting unanimously after the Commission has been consulted. Since no such implementing measure was adopted in this case, the Commission had no legal basis for financing the projects in Turkey. As regards the Commission’s conduct in connection with the procedure for the adoption of the three contested decisions, the Greek government had advanced three additional pleas: infringement of essential procedural requirements, abuse of procedure and the Commission’s lack of powers. In essence, the Greek government alleged that the Commission followed an unlawful procedure for the approval of three financing projects in Turkey. Under the 1979 ad hoc procedure, the Commission should have secured the unanimous agreement of the Member States in order to obtain authorisation to commit funds as special aid. The Greek government emphasised, in addition, that Regulation No 3973/86 replaced the ad hoc procedure only in the case of the countries to which it applies, but that the procedure was still ‘provisionally’ in force for any other country which, like Turkey, did not come within the scope of the regulation and has not been the subject of a specific financial regulation whose adoption, moreover, is exclusively a matter for the Council. Interestingly, the Council did not intervene in this case. No Member State intervened in the case either. III. THE COURT
A. The Integration of Decision No 2/80 in EU Law and the Alleged Need for Transposition by the Council: The First Plea The Court first recalled that the provisions of an agreement concluded by the Council under Articles 228 and 238 EEC (now Articles 218 and 217 TFEU respectively), are an integral part of the Community legal system as from the entry into force of the agreement. For the attainment of the objectives laid down by the EEC–Turkey Association Agreement, and in the circumstances provided for by that agreement, Article 22 thereof confers a power of decision on the Association Council. With regard to Decision No 2/80, the Court has already held in its judgment in Case Greece v Council that, by providing for cooperation with regard to ‘the implementation of the aid … made available to Turkey’, the Association Council placed that aid within the institutional framework of the Association.9 The Court in Greece v Commission (Special Aid to Turkey) subsequently added that ‘since it is directly connected with the Association Agreement, Decision No 2/80 forms, from its entry into force, an integral part of the [Union] legal system’.10 On this basis, the Court examined the Greek government’s arguments, according to which the decisions of the Association Council must, in order to be implemented, be the subject of unanimous agreement within the Council. The Court found that, in this case, ‘Decision No 2/80 in fact laid down the conditions in which the special aid for Turkey was to be implemented’. It added that that Decision ‘determined the essential details of the aid, such as the
9 See
Greece v Council (n 6) para 20. 30/88, Greece v Commission, ECLI:EU:C:1989:422, para 13.
10 Case
The Integration of Decisions of Association Councils in EU Law 199 amount thereof and the procedures for the submission of projects by Turkey and for their consideration by the Commission’, and ‘stated that the implementation of the aid would be monitored by the Association Committee’. The wording of the provisions of Decision No 2/80 therefore ‘enabled them to be implemented without the prior adoption of supplementary measures’. Accordingly, Article 2 of the Intergovernmental Agreement did not have to be applied in any circumstance.11 B. The Legality of the Commission’s Procedure: Second, Third and Fourth Pleas As regards the Commission’s conduct in connection with the procedure for the adoption of the three contested decisions, the Greek government’s three pleas were examined together by both the Advocate General (AG) and the Court. The reasoning of the Court rejecting these arguments is so short – limited to two paragraphs – that in order to better understand it, it is indispensable to examine the Opinion of the AG, who, contrary to the Court, clearly agreed with the line of reasoning of the Greek government and proposed to annul the decisions. It is by comparing the two that it is possible to interpret the judgment. The AG had harsh words for the Commission’s position, which he considered ‘frankly indefensible’ and based on ‘a nebulous theory’ that, in his view, could not even dispose of the Greek government’s supposition that the real aim pursued was to avoid the risk of opposition by a Member State under procedural rules stipulated by an international agreement. For AG Tesauro, the intention of the Council, as expressed in two chronologically distinct periods, manifestly and unequivocally ran counter to the interpretation followed by the Commission. The first period falls in 1980. In his view, the Council declaration of 30 June 1980 was binding on the Commission, requiring it to comply with a specific pre-existing procedure introduced in 1978 by the members of the Council whose powers were based inter alia on Article 2 of the aforesaid Intergovernmental Agreement of 29 December 1964.12
That was clearly the ad hoc procedure, which was characterised by the fact that only the projects unanimously passed by the Ad Hoc Working Party established within the Council were accepted. The second point in time is 1985–86. At the time when the ad hoc procedure was replaced by a new procedure in relation to the financial protocols concluded with the Mediterranean countries, characterised by the introduction of a qualified majority vote in the Article 6 Committee established within the Commission, financial cooperation with Turkey was excluded from its scope. For AG Tesauro, statements of the Commission at the time meant that the previous ad hoc procedure remained applicable to Turkey as long as the Council did not decide otherwise.13 He considered that it was not permissible to apply by way of analogy a procedure expressly provided for by the protocols on financial cooperation with certain Mediterranean countries other than Turkey, since the precondition for resorting to a procedure by way of analogy – that is to say, the existence of a lacuna – was missing. He also did not accept the interpretation of the Council declaration in the sense that it contained a dynamic reference to the ad hoc procedure, but without incorporating that procedure formally. This would have meant that
11 ibid
para 16. of AG Tesauro in Case 30/88, Greece v Commission, ECLI:EU:C:1989:285, para 16. para 18.
12 Opinion 13 ibid
200 Fernando Castillo de la Torre any changes in the procedures applicable to Mediterranean countries would also apply to Turkey. The Council’s intention was clearly to exclude the applicability of those procedures to financial cooperation projects relating to Turkey.14 AG Tesauro rejected the Commission’s argument to the effect that any discussion concerning the legality of the procedure followed for the approval of the three specific projects was superfluous for the simple reason that, since they relate to the implementation of the budget within the meaning of Article 205 EC (now Article 317 TFEU), the Commission’s powers were exclusive. He considered that there were procedural reasons which prevented the Court from tackling such argument. The measures which foreshadow the procedures forming the subject matter of this dispute, namely the 1979 ad hoc procedure and the procedure introduced by Regulation No 3973/86, had not been challenged by the Commission in the prescribed manner.15 The AG continued that if the Court decided that it was not so precluded, he was of the view that the exclusive nature of the powers conferred on the Commission to implement the budget was not, in abstract terms, incompatible with certain rules and/or procedures for the approval of decisions involving expenditure that may already be covered by a broader item in the budget. This was all the more so in the form relevant to this case – that is to say, a Council measure which, even before entering an overall item of expenditure (ie special aid for Turkey) in the budget, makes the procedure for the approval of individual projects conditional on the assent of a body external to the Commission. In his view, that conclusion applied with particular force in a case such as this, in which the Council had exclusive power to conclude an association agreement. For him, ‘the Commission’s argument would lead, in circumstances such as those at issue, to the consequence that measures which in themselves fall within the exclusive powers of the Council (conclusion and implementation of association agreements) would, as from the time when an item of expenditure relating thereto is entered in the budget, fall within the exclusive power to implement the budget conferred on the Commission by Article 205’.
In his view, ‘such a shift in powers, ranging from the outer limit of the Council’s exclusive powers (which may be exercised even without a Commission proposal being required) to the outer limit of the Commission’ s exclusive powers relating to the budget (which may be exercised without any possibility of interference by the Council), is neither justified nor desirable’.16 The Court’s reasoning is limited to just two paragraphs of the judgment, which stand in very stark contrast with the Opinion of the AG. The Court first noted that paragraph 2 of Decision No 2/80 provides that ‘for the submission of specific projects, Turkey shall approach the Commission directly which shall examine them in the light of the criteria indicated by the Community delegation to the Association Council for the use of the exceptional aid’.17
For the Court, it was apparent from that provision that, on the basis of the criteria indicated by the [Union] delegation to the Association Council, the Commission alone has the power to lay down the detailed rules and arrangements for the use of the aid and for the approval of specific projects (emphasis added).
14 ibid
paras 19 and 21. paras 25–27. 16 ibid para 29. 17 Greece v Commission (n 10) para 22. 15 ibid
The Integration of Decisions of Association Councils in EU Law 201 The Court added that that power involves the possibility of using specific procedures for examining specific projects. The Commission may therefore seek, from both the Council and the Member States, any opinion necessary for the management of the aid, it may consult experts and it may have recourse to procedures laid down in similar fields (emphasis added).
The Court gave no weight to the declaration of the Council and did not explicitly explain why. The most plausible interpretation is that the Court simply accepted the argument that the contested decisions were part of the exclusive powers of the Commission to implement the budget. In this regard, the Court probably considered that a unilateral statement of the Council could not alter this legal situation. The Court gave no weight to the fact that the Commission had not challenged the declaration at the time. Whether this was because the Court considered that in any event such declaration was not binding on the Commission, and therefore did not constitute a challengeable act, is not clear from the judgment. Be that as it may, paragraph 22 is in contrast with the Opinion of the AG that the Council declaration had binding effect and that the power of the Council to conclude international agreements also includes the power to determine how to implement the agreement in EU law. The Court, implicitly but necessarily, rejects this point of view. In a way, its answer to the first plea, where it ruled that the Association Council decision was part of EU law, laid the ground for its reply to the other pleas. The Court had rejected the position that the Council had to intervene in the implementation of the Decision (by unanimity) and likely considered the 1980 Council declaration as being based on the wrong premise that the Council continued to be involved in the implementation. In other words, the declaration was seen as the specific reflection of the Intergovernmental Agreement,18 but insofar as the latter did not apply, the former should not apply either. Paragraph 23 of the judgment does not provide further guidance on these points of principle. The Court recalled that ‘the Commission consulted the members of the Article 6 Committee provided for in Regulation No 3973/86 so as to be able to take advantage of their experience in dealing with development projects in Mediterranean countries’. The Court uses here the same language as the Commission since it was not formally the Committee that was consulted, but only its ‘members’. Clearly, the Court considered that such consultation was not legally necessary. The simple fact that the Commission carried out this additional formality did not, however, affect the legality of the decisions. The Court concluded that there is nothing in the file to suggest that, in so doing, the Commission acted in a manner contrary to the provisions of Decision No 2/80, in particular by departing from the criteria indicated by the Community delegation to the Association Council for the use of the aid.
IV. THE IMPORTANCE OF THE CASE
A. The Integration and Effect of Acts Adopted by International Bodies in EU Law From a comparative point of view, theories on the status in domestic law of international instruments were relatively clear at the time of the judgment, certainly as regards obligations 18 Agreement on measures and procedures required for the implementation of the agreement establishing an association between the EEC and Turkey (64/737/EEC), see n 8 above.
202 Fernando Castillo de la Torre of the parties to treaties. But the situation was less clear as far as judicial enforcement of decisions of international organs, such as association councils, was concerned. There was no case law of the Court on that point. This was partly due to the variety of effects these instruments may display: from acts amending a treaty19 to simple recommendations, as well as decisions on the settlement of disputes. It had been generally admitted by many scholars at the time that those acts needed an act of ‘incorporation’ to become part of Union law.20 This judgment and the subsequent Sevince judgment made it clear that this perspective was incorrect. While in the former the Court said that ‘since it is directly connected with the Agreement, Decision 2/80 forms, from its entry into force, an integral part of the [Union] legal system’,21 in the latter the Court added ‘in the same way as the agreement itself’.22 This automatic integration into EU law has several consequences. Firstly, the decision is part of EU law and can be interpreted by EU courts.23 Secondly, in some cases the provisions may be precise enough to constitute the basis for action by the institutions or to grant rights to individuals. In the context of the first plea, the Court confirmed this point. In an earlier case, AG Mancini had already pointed out that ‘Article 2(1) of Agreement 64/737/EEC requires the transposition into [Union] law only of decisions which could not otherwise be applied’.24 Not every provision of a decision by an international body must be formally transposed. Indeed, the term ‘transposition’ used in certain first judgments is misleading. The notion of transposition evokes the need for an act of the institutions in order to transform the decision of the international body into EU law, but the integration of the international act is automatic. A different issue is whether certain provisions of the act can constitute the basis for action by the institutions or may even grant rights directly to individuals. Greece v Commission (Special Aid to Turkey) confirmed that the implementation of decisions of Association Councils would be subject to the normal allocation of powers among the institutions. Sevince would later address the issue of granting rights to individuals. Some doubts were cast at the time on the scope of the Greece v Commission (Special Aid to Turkey) and Sevince judgments. It was said that this case law would only apply to decisions taken after having got through the Union ‘filter’, that is to say, decisions taken by an international body where the relevant Union position in the body had been adopted pursuant to the ordinary internal EU procedures.25 The Commission, for example, submitted in the Shell case, just a few months later, that Greece v Commission and Sevince only concerned binding acts and, more concretely, acts having direct effect.26 It is true that certain systems make the incorporation in national law dependent upon the prior ‘self-executing’ character of the provision. In Union law, however, neither of those two judgments gave ground for such an assertion, and the Shell judgment contained the most explicit rejection of that view.27
19 For the effects of decisions which extended the application of the Yaundé Convention, see Case 48/74, Charmasson, ECLI:EU:C:1974:137; Case 87/75, Bresciani, ECLI:EU:C:1976:18,. See this volume, ch 6. 20 C Tomuschat, ‘Commentary on Articles 210 and 228’ in H von der Groeben, J Thiesing and CD Ehlermann (eds), Kommentar zum EWG Vertrag (Baden-Baden, Nomos, 1991) 5258–59, 5653, 5686; P Gilsdorf, ‘Commentary on Article 238’ in von der Groeben et al (ibid). 21 Greece v Commission (n 10) para 13. 22 Sevince (n 1) para 9. See this volume, ch 19. 23 ibid para 10. 24 Opinion of AG Mancini in Case 204/86, Greece v Council, ECLI:EU:C:1988:259. 25 Tomuschat (n 20) 5686; Gilsdorf thought the Court did not seem to have such a restrictive view: P Gilsdorf, ‘Die Rechtswirkungen der im Rahmen von gemeinschaftsabkommen erlassenen Organbeschlüsse’ [1991] EuZW 459. 26 Opinion of AG Van Gerven in Case C-188/91, Shell, ECLI:EU:C:1992:393, para 9. 27 Case C-188/91, Shell, ECLI:EU:C:1993:24, paras 14–19.
The Integration of Decisions of Association Councils in EU Law 203 In Greece v Commission, the crucial, and sole, condition for an act to be considered as part of Union law was the fact that there was a ‘direct connection’ with the agreement. B. The Allocation of Powers between Institutions in the Implementation of International Obligations Much of the debate between the parties was explained by the unclear legal regime that was applicable at the time to the preparation of those decisions by the Union28 and their implementation in the Union. The judgment also helped define the respective powers of the Commission and the Council when implementing external aid in the context of the budget. Without excluding that the powers of implementation of the budget could be subject to certain internal procedures, the Court rejected any attempt by the Council to influence those procedures by way of intergovernmental agreements or unilateral declarations. The EU Treaties provided for specific rules on the budget and the financial regulations, and the sensitive nature of certain items did not enable the Council to disregard those procedures. Generally, as regards implementation of the act in question, as we saw above, the literature tended to consider that some specific act of transposition was necessary, and such power was often associated with the powers of the Council in the area of external relations. That was the approach of the AG in this case. The impact of the judgment on this point is also historical. The Court denied the Council (which, interestingly, did not intervene in this case) the power it thought it had and considered that, for implementing the acts of international bodies, the normal rules of allocation of competences would apply. It goes without saying that, to the extent that implementation requires changes in the legislation, it will be up to the co-legislator to act (upon a proposal by the Commission). In certain cases, though, the nature of the implementing activity may fall directly into the realm of the Commission’s powers. In other cases, the provisions will simply have direct effect, and no further action may be needed. Unlike the AG, the Court did not see any need for change in the allocation of powers to implement the budget if the Commission were to act on the basis of Decision No 2/80. The Court completely ignored the Intergovernmental Agreement,29 and no later judgment has referred to that Agreement, which has become devoid of much relevance, in practice.
28 On this point, it is interesting to note that at the time there was no provision on the definition of position in bodies created by international agreements. Art 116 EEC was conceived as a basis for ‘common action by the Member States in international organisations of which the Community is not part’ (emphasis added) (Opinion 1/78, ECLI:EU:C:1979:224, para 50). The Treaty of Maastricht removed the contested provision from the treaty framework without replacing it. In the absence of an explicit legal basis for coordinating action taken within international organisations in relation to the legally binding decisions of those organisations, recourse was taken in particular to Art 113 EC (common commercial policy) and Art 228 EC (conclusion of international agreements) (J Sack, ‘The European Community’s Membership of International Organizations’ (1995) 32 CML Rev 1227, 1252; see also Opinion 1/78 (ibid) para 51; Opinion 2/92, ECLI:EU:C:1995:83, para 8, on Third Revised Decision by the Council of the OECD on National Treatment). The Treaty of Amsterdam finally provided for a procedure applicable ‘for the purpose of establishing the positions to be adopted on behalf of the Community in a body set up by an agreement under Article 310, when that body is called upon to adopt decisions having legal effects, with the exception of decisions supplementing or amending the institutional framework of the agreement’. The Treaty of Nice retained the wording of the contested provision but removed the limitation of its applicability to bodies set up by agreements under Art 310 EC. 29 See n 8 above.
204 Fernando Castillo de la Torre V. ADDITIONAL READING Gilsdorf, P, ‘Die Rechtswirkungen der im Rahmen von gemeinschaftsabkommen erlassenen Organbeschlüsse’ [1991] Europäische Zeitschrift für Wirtschaftsrecht 459. Sack, J, ‘The European Community’s Membership of International Organizations’ (1995) 32 CML Rev 1227. Vedder, CH, ‘Rechtswirkungen von Assoziationsratsbeschlüssen’ [1994] Europarecht 202.
19 The Legal Effects of Decisions of Autonomous Bodies Established under an International Agreement: Sevince NATHAN CAMBIEN* Case C-192/89, SZ Sevince v Staatssecretaris van Justitie, ECLI:EU:C:1990:322, delivered 20 September 1990. KEYWORDS EEC–Turkey Association Agreement – Decisions adopted by the Association Council – Preliminary rulings – Jurisdiction of the CJEU – Direct effect – Free movement of workers – Requirement of legal employment.
I. INTRODUCTION
T
he Sevince case is a landmark case in the context of the relations between the EU and Turkey, which have a long and complex history. In 1963, Turkey and the (then) EEC signed an Association Agreement (hereinafter the Association Agreement1), the aim of which was to promote a continuous and balanced strengthening of trade and economic relations between the parties and to improve the level of employment and the living conditions of the Turkish people. To that end, the Association Agreement provides for the progressive establishment of a customs union.2 The Council of Association (hereinafter the Association Council), made up of representatives from the EU and from Turkey, is tasked with laying down the rules for the implementation of the Association Agreement.3
* All opinions expressed herein are personal to the author. 1 Agreement establishing an Association between the European Economic Community and Turkey, signed at Ankara on 12 September 1963 by the Republic of Turkey, on the one hand, and by the Member States of the EEC and the Community, on the other hand, and concluded, approved and confirmed on behalf of the latter by Council Decision 64/732/EEC of 23 December 1963 [1973] OJ C113/1). For a general discussion, see S Peers, ‘Living in Sin: Legal Integration Under the EC–Turkey Customs Union’ (1996) 7 European Journal of International Law 411. 2 See Art 2 of the Association Agreement. 3 The most recent meeting of the Association Council took place in March 2019: www.consilium.europa.eu/en/ meetings/international-ministerial-meetings/2019/03/15/.
206 Nathan Cambien The dispute in Sevince revolved around the interpretation of two of the early decisions adopted by the Association Council. Decision No 2/764 was adopted in order to lay down detailed rules for the free movement of workers between Turkey and the EU Member States. Four years later, the Association Council adopted Decision No 1/80,5 which was intended to improve the arrangements laid down by Decision No 2/76 for workers and their family members. Importantly, both decisions contain a standstill clause – Article 7 of Decision No 2/76 and Article 13 of Decision No 1/80 – according to which the EU Member States and Turkey are precluded from introducing new restrictions regarding access to employment for workers and their family members legally resident and employed in their territory, unless these restrictions can be justified.6 While the Sevince judgment deals specifically with the effect and meaning of some of the provisions of these decisions, it will become clear in this chapter that its implications for EU external relations law are much wider in scope. II. FACTS
Mr Sevince, a Turkish national, got married to a fellow national residing in the Netherlands. On this ground, he obtained a residence permit in the Netherlands on 22 February 1979. However, on 11 September 1980, after their separation, the Dutch State Secretary of Justice refused an extension of his residence permit. Mr Sevince lodged an appeal against that decision before the Dutch Council of State. During the appeal proceedings, which had full suspensive effect, he obtained an employment certificate which remained valid until the Council of State dismissed his appeal on 12 June 1986. Following the judgment, Mr Sevince applied for a residence permit on the basis of Article 2(1)(b) of Decision No 2/76, according to which a Turkish worker who has been in legal employment for five years in a Member State is to enjoy free access in that Member State to any paid employment of his choice, and on the third indent of Article 6(1) of Decision No 1/80, which provides that a Turkish worker duly registered as belonging to the labour force of a Member State enjoys free access in that Member State to any paid employment of his choice after four years’ legal employment. His application was rejected by the Netherlands’ authorities. Mr Sevince challenged this rejection before the Dutch Council of State, which referred three questions to the Court for a preliminary ruling. III. THE COURT
By the first question, the Court was asked whether Decision Nos 2/76 and 1/80 could be the subject of a preliminary ruling for interpretation under Article 267 TFEU.7 The Court
4 Decision No 2/76 of the Association Council of 20 December 1976 on the implementation of Art 12 of the Association Agreement. 5 Decision No 1/80 of the Association Council of 19 September 1980 on the development of the Association. 6 For a recent example of a justified restriction, see Case C-70/18, Staatssecretaris van Justitie en Veiligheid v A and Others, ECLI:EU:C:2019:823, paras 44–69. 7 Previously Art 177 of the EEC Treaty.
The Legal Effects of Decisions of Autonomous Bodies under an International Agreement 207 answered that question in the affirmative. Referring to its earlier case law, the Court recalled that international agreements concluded by the Council, as well as decisions of an association council set up by such an agreement, form an integral part of the EU legal order as from their entry into force.8 Since it had jurisdiction to give preliminary rulings on the interpretation of an agreement, in so far as it is an act adopted by one of the EU institutions, the Court concluded that it also had jurisdiction to give such rulings on the decisions adopted by the authority established by the agreement and entrusted with its implementation. According to the Court, that finding was reinforced by the function of Article 267 TFEU, which is to ensure the uniform application throughout the Union of all provisions forming part of the Union legal system. By its second question, the referring court asked whether Articles 2(1)(b) and 7 of Decision No 2/76 and Articles 6(1) and 13 of Decision No 1/80 have direct effect. The Court considered that, in order to determine whether these provisions can have direct effect, the same conditions apply as those applicable to the provisions of the agreement itself, ie the provision must contain a clear and precise obligation which is not subject to the adoption of any subsequent measure. According to the Court, those conditions were satisfied. First, having regard to their terms, the provisions at stake upheld, in clear, precise and unconditional terms, the right of a Turkish worker, after a number of years’ legal employment in a Member State, to enjoy free access to any paid employment of his choice and contained an unequivocal standstill clause regarding the introduction of new restrictions on access to the employment. Second, this interpretation was confirmed by the purpose and nature of the decisions of the Association Council and of the Association Agreement to which they related. In that regard, the Court pointed out that the Association Agreement aims, inter alia, to progressively secure freedom of workers between the contracting parties. The fact that the relevant provisions of that agreement essentially set out a programme did not prevent the decisions of the Association Council that give effect to that programme from having direct effect. Third, that conclusion was not affected by the fact that the procedures for applying the rights conferred on Turkish workers are to be established under national rules, by the fact that Decision No’s 2/76 and 1/80 were not published or by the existence of safeguard clauses which enable the contracting parties to derogate from the provisions granting certain rights to Turkish workers. By its third question, the national court asked whether the expression ‘legal employment’ contained in Article 2(l)(b) of Decision No 2/76 and in Article 6(1) of Decision No 1/80 covers a situation where a Turkish worker is authorised to work during the suspension of a decision refusing him a right of residence against which he has appealed. The Court answered this question in the negative. It clarified, first of all, that even though the said provisions only govern the employment situation of the Turkish worker, by granting such a worker access to paid employment, they necessarily imply a right of residence for the person concerned. Next, it ruled that the legality of such employment presupposes a stable and secure situation as a member of the labour force. The authorisation to remain in the Member State pending the outcome of an appeal against the refusal of a residence permit could not therefore count as a legal residence for the purpose of the said provisions where that appeal had been dismissed.
8 See
this volume, ch 3.
208 Nathan Cambien IV. THE IMPORTANCE OF THE CASE
While Sevince is certainly not among the best-known judgments in the field of EU law,9 it has undoubtedly been of fundamental importance for the development of EU external relations law in the Court’s case law. That is true for multiple reasons. First of all, the Court’s unequivocal holding that it has jurisdiction to interpret provisions of decisions adopted by bodies established under an international agreement constitutes a vital building block allowing the Court to give shape to the rules in this field. Next, the recognition by the Court that such decisions can have direct effect is perhaps the most important contribution of Sevince to the constitutional underpinnings of EU external relations law. In this respect, the judgment can rightfully be considered a landmark judgment.10 Finally, the case is important because it brought to life the partnership between the EU and Turkey. Indeed, it has been said that the judgment laid the groundwork for the jurisprudence that developed Decision No 1/80 into the Magna Carta for Turkish migrant workers and their family members in the Union.11 A. The Court’s Jurisdiction to Interpret Decisions of an Association Council The Court’s ruling that it has jurisdiction to interpret decisions of an association council was far from self-evident at the time the judgment was rendered. That is neatly illustrated by the view defended by the German government, which intervened in the case, arguing that such decisions do not come within the scope of Article 267 TFEU since they are not measures adopted by a Union institution, in contrast to international agreements.12 A literal reading of Article 267 TFEU appeared to provide support for Germany’s view, since its provisions confer jurisdiction on the Court to interpret, inter alia, acts ‘of the institutions’ and it is clear that decisions of an association council do not qualify as such. Still, the Court’s affirmative answer to the first question was not a complete surprise, when considered against the background of a number of important judgments decided in the years leading up to Sevince. Indeed, on the one hand, the Court had already judged that international agreements concluded by the Union form an integral part of the EU legal system13 and that the same applies to the decisions of an association council, since they are directly connected with the agreement to which they give effect.14 On the other hand, the Court had held that the function of the preliminary ruling procedure is to ensure the uniform application of Union law.15 In the light of these previous lines of case law, the Court came to the logical conclusion that it had jurisdiction to give preliminary rulings on the interpretation of the decisions of the Association Council at stake.
9 This may be illustrated by the fact that the case is not mentioned in a standard textbook on EU law: D Chalmers, G Davies and G Monti, European Union Law: Text and Materials (Cambridge, Cambridge University Press, 2019). 10 See J Rinze, ‘The Role of the European Court of Justice as a Federal Constitutional Court’ (1993) 5 Public Law 434. 11 J Bast, ‘European Community and Union, Association Agreements’ in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law (Oxford, Oxford University Press, 2007). 12 Report for the Hearing I–3467. Case C-192/89, SZ Sevince v Staatssecretaris van Justitie, ECLI:EU:C:1990:322. 13 Case 12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400. See this volume, ch 16. 14 Case 30/88, Hellenic Republic v Commission of the European Communities, ECLI:EU:C:1989:422. See this volume, ch 18. 15 In that sense, see Joined Cases 267/81, 268/81, and 269/81, Amministrazione delle Finanze dello Stato v Società Petrolifera Italiana SpA (SPI) and SpA Michelin Italiana (SAMI), ECLI:EU:C:1983:78, para 15. See this volume, ch 15.
The Legal Effects of Decisions of Autonomous Bodies under an International Agreement 209 The Court’s answer to the first question raises a number of interesting points. First, by holding that decisions of an association council directly form part of the EU legal order, the Court rejected the validity of any lingering dualist EU practices with regard to such decisions.16 While the Court’s monist approach to international law, including decisions adopted by bodies set up by an international agreement, is well established, the precise implications of this approach with regard to different types of international acts remain a cause for debate.17 Crucially, one specific requirement for such decisions is that they must be directly connected with the underlying agreement. That means that an ultra vires decision could not become part of the Union legal order.18 Second, even after Sevince, the Court’s broad interpretation of its jurisdiction remained contentious. Interestingly, less than two years later, in Kus,19 the German government asked the Court to reverse Sevince and hold that it had no jurisdiction to interpret decisions of the Association Council – a rather bold move, given the Court’s traditional reluctance to explicitly overrule its own case law.20 Predictably, the Court rejected the request of the German government, by simply stating that nothing emerged from the observations submitted which might cause it to depart from what it held in that respect in Sevince.21 In later judgments, the Court, referring back to Sevince, systematically confirmed its view that the provisions of Decision No 1/80 form an integral part of EU law and are, therefore, covered by Article 267 TFEU.22 The same approach was also extended to other decisions of the Association Council.23 Third, when addressing the scope of its jurisdiction, the Court did not explicitly address the mixed nature of the Association Agreement and did not analyse whether the decisions of the Association Council came within the scope of the EU’s powers or those of the Member States.24 The underlying reason for this is probably that the Court had already decided that the provisions of the Association Agreement on movement of workers came within the EU’s competence. Still, it is remarkable that the Court did not explicitly mention this aspect,25 which has played such a crucial role in many landmark judgments in the field of EU external relations. 16 P Gilsdorf, ‘Les organes institués par des accords communautaires: effets juridiques de leurs décisions. Observations à propos notamment de l’arrêt de la Cour de justice des Communautés européennes dans l’affaire C-192/89’ [1992] Revue du Marché Commun 331–32. 17 See, eg W Weiß, ‘Delegation to Treaty Bodies in EU Agreements: Constitutional Constraints and Proposals for Strengthening the European Parliament’ (2018) 14 European Constitutional Law Review 532; RA Wessel and S Blockmans, ‘The Legal Status and Influence of Decisions of International Organizations and Other Bodies in the European Union’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 223–48. 18 B Martenczuk, ‘Decisions of Bodies Established by International Agreements and the Community Legal Order’ in V Kronenberger (ed), The European Union and the International Legal Order: Discord or Harmony? (The Hague, TMC Asser Press, 2001) 157. 19 Case C-237/91, Kazim Kus v Landeshauptstadt Wiesbaden, ECLI:EU:C:1992:527. 20 For a rare example, with regard to third country nationals, see Case C-127/08, Blaise Baheten Metock and Others v Minister for Justice, Equality and Law Reform, ECLI:EU:C:2008:449 (overruling Case C-109/01, Secretary of State for the Home Department v Hacene Akrich, ECLI:EU:C:2003:491). 21 Kazim Kus (n 19) para 9. AG Darmon in his Opinion dealt with the arguments of the German government in some detail. Opinion of AG Darmon, Case C-192/89, SZ Sevince v Staatssecretaris van Justitie, ECLI:EU:C:1990:205, paras 14–21. 22 See, eg Case C-451/11, Natthaya Dülger v Wetteraukreis, ECLI:EU:C:2012:504, para 33; Joined Cases C-7/10 and C-9/10, Staatssecretaris van Justitie v Tayfun Kahveci and Osman Inan, ECLI:EU:C:2012:180, para 23. 23 See the examples cited in n 36 below. 24 See P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011), 277. 25 See also JHH Weiler, ‘Thou Shalt Not Oppress a Stranger: On the Judicial Protection of the Human Rights of Non-EC Nationals – A Critique’ (1992) 3 European Journal of International Law 76.
210 Nathan Cambien Lastly, while it has been correctly noted that this first aspect of Sevince has been developed mostly in the case law with regard to decisions of the Association Council,26 it is certainly not limited to this field. The Court referred to its Sevince reasoning in later judgments in which it, again, adopted a broad interpretation of the scope of the preliminary rulings procedure. Accordingly, it held in Deutsche Shell that Article 267 TFEU also covered questions for the interpretation of non-binding recommendations by a joint committee set up under an international agreement.27 More recently, the Court ruled that it has jurisdiction to give a preliminary ruling concerning the interpretation of a harmonised standard, where references to that standard have been published in the ‘C’ series of the Official Journal of the European Union.28 B. The Direct Effect of Decisions of an Association Council Perhaps the most important aspect of the Sevince judgment lies in the Court’s answer to the second question. The Court clearly stated, for the first time, that in order to determine whether the provisions of the decision of an association council have direct effect, the same ‘classic’ conditions apply as those applicable to the provisions of the agreement itself. In Demirel,29 the Court had concluded that Article 12 of the Association Agreement and Article 36 of the Additional Protocol did not fulfil these conditions because they were intended essentially to set out a programme, leaving the adoption of detailed rules to implement this programme to the Association Council. In Sevince, the Court observed that Decision Nos 2/76 and 1/80 were adopted by the Association Council precisely in order to give effect to the programmes envisaged by these provisions. This different purpose and nature allowed the Court to conclude that the relevant provisions of these Decisions – which were also stated in clear, precise and unconditional terms – did have direct effect. In this connection, the Court explicitly rejected a number of arguments raised by the Dutch and German governments in order to support their view that the provisions at stake were lacking direct effect. Notably, the Court ruled that the fact that the provisions at stake provided for the adoption of implementing measures did not affect their direct effect. The Court’s ruling on this point in Sevince is perfectly coherent with its case law on direct effect. As Advocate General (AG) Darmon noted, the opposite view would erode the Court’s case law according to which provisions of directives – which by their very nature need implementing measures – can have direct effect.30 Furthermore, the Court ruled that the existence of safeguard clauses in the Association Agreement did not in itself take away the direct effect of its provisions, otherwise than in the specific situations which may give rise to their application. Interestingly, the existence of safeguard clauses is one of the elements the Court has referred to for denying direct effect to
26 J Mendes, ‘EU Law and Global Regulatory Regimes: Hollowing Out Procedural Standards?’ (2012) 10 International Journal of Constitutional Law 993. 27 Case C-188/91, Deutsche Shell v Hauptzollamt Hamburg-Harburg, ECLI:EU:C:1993:24, paras 17–18. The case concerned the 1987 Convention on a Common Transit Procedure concluded between the EFTA countries and the EEC. 28 Case C-613/14, James Elliott Construction, ECLI:EU:C:2016:821, paras 34–47. The case concerned Art 4 of Council Directive 89/106/EEC of 21 December 1988 on the approximation of laws, regulations and administrative provisions of the Member States relating to construction products (OJ 1989 L 40, p. 12). 29 Demirel (n 13). See this volume, ch 16. 30 Opinion of AG Darmon (n 21) paras 38–40.
The Legal Effects of Decisions of Autonomous Bodies under an International Agreement 211 the provisions of the GATT.31 However, as AG Darmon explained, those safeguard clauses are much more flexible in nature. The crucial element, therefore, seems to be that the safeguard clauses in the Association Agreement apply in exceptional circumstances only, ie in the case of disturbances on the employment market which seriously jeopardise the standard of living or the level of employment.32 This element, together with the different purpose and nature of the Association Agreement, explains why the Court came to the opposite conclusion in Sevince. In later case law, the Court confirmed that the existence of safeguard clauses in an international agreement does not in itself take away the direct effect of its provisions.33 The recognition in Sevince that some of the provisions of Decision Nos 2/76 and 1/80 have direct effect constitutes a fundamental building block in the development of the case law surrounding the Association Agreement, since it is precisely this aspect that enabled individuals to invoke and enforce the rights conferred on them by that agreement and by the decisions adopted by the Association Council. In the aftermath of Sevince, the Court confirmed the direct effect of several other provisions of Decision No 1/80 and ruled on their interpretation.34 Moreover, referring back to Sevince, it also recognised the direct effect of certain provisions of the Additional Protocol35 and of a number of other decisions of the EU–Turkey Association Council,36 although not for all of them.37 As such, the Sevince judgment has brought to life the decisions of the Association Council and has given rise to a large body of case law which has had a significant impact on the lives of Turkish workers and their family members.38 Following Sevince, the Court also recognised the direct effect of provisions of other agreements, such as the EEC–Morocco cooperation agreement,39 the cooperation agreement between the EEC and Algeria,40 the Euro-Mediterranean agreements with Tunisia and Lebanon41 or the partnership agreement with Russia.42 Here, again, the Sevince judgment is of capital importance not just in the context of the Association Agreement.
31 See, eg Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, para 26. See this volume, ch 2. See also the discussion in JO Berkey, ‘The European Court of Justice and Direct Effect for the GATT: A Question Worth Revisiting’ (1998) 9 European Journal of International Law 633–36. 32 See Art 6 of Decision No 2/76 and Art 12 of Decision No 1/80. 33 See, eg Case C-464/14, SECIL – Companhia Geral de Cal e Cimento SA v Fazenda Pública, ECLI:EU:C:2016:896, para 132 (on the association agreement with Lebanon). 34 See, eg Case C-502/04, Ergün Torun v Stadt Augsburg, ECLI:EU:C:2006:112, delivered 16 February 2006 (Art 7 of Decision No 1/80); Case C-374/03, Gaye Gürol v Bezirksregierung Köln, ECLI:EU:C:2005:435 (Art 9 of Decision No 1/80). 35 See, eg Case C-221/11, Leyla Ecem Demirkan v Bundesrepublik Deutschland, ECLI:EU:C:2013:583, para 38 and case law cited therein (Art 41(1) of the Additional Protocol). See this volume, ch 54. 36 See, eg Case C-262/96, Sürül, ECLI:EU:C:1999:228 (Article 3(1) of Decision 3/80); Case C-372/06, Asda Stores Ltd v Commissioners of Her Majesty’s Revenue and Customs, ECLI:EU:C:2007:787 (Art 47 of Decision 1/95). 37 See, eg Case C-277/94, Taflan-Met and Others, ECLI:EU:C:1996:315 (Arts 12 and 13 of Decision 3/80); Asda (n 36) (Arts 44, 45 and 46 of Decision 1/95). 38 M Mendez, ‘The Legal Effect of Community Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques’ (2010) 21 European Journal of International Law, 91. For an overview, see CZ Pirim, ‘A Neverending Story: The Free Movement of Turkish Workers within the European Union’ (2017) 44 Legal Issues of Economic Integration 49. 39 Case C-18/90, Office national de l’emploi v Kziber, ECLI:EU:C:1991:36. 40 Case C-103/94, Krid v Caisse nationale d’assurance vieillesse des travailleurs salariés, ECLI:EU:C:1995:97. 41 Case C-97/05, Gattoussi, ECLI:EU:C:2006:780; SECIL (n 33). 42 Case C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura and Real Federación Española de Fútbol, ECLI:EU:C:2005:213. See this volume, ch 44.
212 Nathan Cambien C. The Legal Employment Requirement A last important aspect of the Sevince judgment is the Court’s clarification of the expression ‘legal employment’, which plays a crucial role in the determination of the rights of Turkish workers in the EU. Indeed, both Decision No 2/76 and Decision No 1/80 provide for a right to free access to any paid employment of a Turkish worker’s choice in a Member State after a period of legal employment in that State. Crucially, the Court held that, while the provisions at stake only refer to the employment situation of the Turkish worker, they necessarily imply the existence of a right of residence. This reasoning, which became enshrined in later case law, makes perfect sense, since it is difficult to see how a Turkish worker could be employed in a Member State if he had no right of residence there. The same type of effet utile reasoning has been adopted more recently to recognise a right of residence for primary carers of an EU citizen,43 or for schoolkids of a (former) migrant worker.44 Following Sevince, the question as to what constitutes a right of residence that qualifies for a right to employment has given rise to a significant body of case law. In Sevince, the Court clarified that a provisional authorisation to stay in the Member State pending the outcome of judicial proceedings brought by a Turkish worker against a decision refusing him a right of residence did not in itself qualify. Building on this reasoning, the Court later ruled that this holds true regardless of whether the suspension of the refusal decision is an automatic consequence, by operation of law, of judicial proceedings or whether it is ordered with retroactive effect by a national court.45 Periods in which a Turkish national is employed under a residence permit which was issued to him only as a result of fraud which has led to his conviction do not qualify either.46 The Sevince interpretation has been criticised for being unnecessarily rigid, since it does not take into account humanitarian aspects surrounding the situation of the Turkish worker in the host Member State.47 It is true that, in accordance with this case law, only an undisputed right of residence will suffice in order to get access to paid employment in the host Member State, regardless of how well the Turkish worker is integrated in the society of the host Member State. However, the flipside of the coin is that once the right has been acquired – and this is possible on the basis of temporary residence authorisations48 – it becomes an unconditional autonomous right, which is not affected by limited periods of absence, eg due to a prison sentence,49 and can only be restricted where the Turkish worker constitutes a genuine and serious threat to public policy, public security or public health.50 Ultimately, the Court’s case law has achieved a balanced interpretation, promoting the free movement rights of Turkish workers in accordance with the aims of the Association Agreements, while providing for adequate safeguards to protect the interests of the Member States.
43 Case C-34/09, Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm), ECLI:EU:C:2011:124, paras 42–43. See K Hyltén-Cavallius, ‘Who Cares? Caregivers’ Derived Residence Rights from Children in EU Free Movement Law’ (2020) 57 CML Rev 414. 44 Case C-413/99, Baumbast and R v Secretary of State for the Home Department, ECLI:EU:C:2002:493, para 63; Case C-480/08, Maria Teixeira v London Borough of Lambeth and Secretary of State for the Home Department, ECLI:EU:C:2010:83, paras 35–36. 45 Kazim Kus (n 19) para 13. 46 Case C-37/98, The Queen v Secretary of State for the Home Department, ex parte Abdulnasir Savas, ECLI:EU:C:2000:224, para 61. 47 HG Schermers, ‘Case C-192/89, SZ Sevince v Staatssecretaris van Justitie’ (1991) 28 CML Rev 188. 48 Case C-188/00, Bülent Kurz, né Yüce v Land Baden-Württemberg, ECLI:EU:C:2002:694, paras 50–56. 49 Case C-138/13, Naime Dogan v Bundesrepublik Deutschland, ECLI:EU:C:2014:2066, paras 18–22. 50 Case C-337/07, Ibrahim Altun v Stadt Böblingen, ECLI:EU:C:2008:744, para 62.
The Legal Effects of Decisions of Autonomous Bodies under an International Agreement 213 V. ADDITIONAL READING Eeckhout, P, EU External Relations Law (Oxford, Oxford University Press, 2011) ch 9. Martenczuk, B, ‘Decisions of Bodies Established by International Agreements and the Community Legal Order’ in V Kronenberger (ed), The European Union and the International Legal Order: Discord or Harmony? (The Hague, TMC Asser Press, 2001) 141–63. Gilsdorf, P, ‘Les organes institués par des accords communautaires: effets juridiques de leurs décisions. Observations à propos notamment de l’arrêt de la Cour de justice des Communautés européennes dans l’affaire C-192/89’ [1992] Revue du Marché Commun 328. Pirim, CZ, ‘A Neverending Story: The Free Movement of Turkish Workers within the European Union’ (2017) 44 Legal Issues of Economic Integration 49.
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20 The Union’s Participation in Legally Binding International Third-Party Dispute Settlement: Opinion 1/91 (EEA I) and Opinion 1/92 (EEA II) ESA PAASIVIRTA Opinion 1/91, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1991:490, delivered 14 December 1991; Opinion 1/92, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1992:189, delivered 10 April 1992. KEYWORDS Interpretation of international agreements – Autonomy of the EU legal order – Exclusive jurisdiction of the Court – Homogeneity of the rules throughout the EEA – Binding effect of international decisions on the EU institutions – EU’s submission to international tribunals – Powers of the Court of Justice to provide interpretative rulings to courts of third countries.
I. INTRODUCTION
T
he importance of Opinion 1/91, and to lesser extent its follow-up in Opinion 1/92, concerns the compatibility with the EU Treaties of the Union’s participation in legally binding international third-party dispute settlement. The issue arose in connection with the plan to establish a common court (EEA Court) under the Agreement on the European Economic Area (EEA Agreement). In general, Opinion 1/91 continues to be an important legal authority of the key legal principles concerning the EU participation in international dispute settlement, even though the EEA Agreement, as such, is of limited practical significance following the accession of Finland, Sweden and Austria to the EU. In Opinion 1/91, the Court rejected the original draft, which contained provisions for a common EEA court, as incompatible with the then EEC Treaty. The negotiations were reopened, and the draft Agreement was rapidly readjusted by abandoning the provisions of
216 Esa Paasivirta the proposed EEA court. Opinion 1/92 followed after the Commission brought the renegotiated EEA Agreement back for a further Opinion. The Court then confirmed that the revised draft EEA Agreement was now compatible with the EU Treaties. Opinion 1/92 does not have additional value of its own as far as the development of legal doctrine is concerned, and will not be further discussed below. Following from the Opinions of the Court and renegotiations, a separate EFTA Court, consisting of judges from the EFTA states applying the EEA Agreement with more limited jurisdiction, was established. Consequently, the EEA Agreement now rests on two separate sets of judicial institutions: on the one side, the EFTA Court, with jurisdiction over the EFTA states applying the EEA Agreement, and against the actions by the EFTA Surveillance Authority brought by the EFTA states applying the EEA Agreement or legal or natural persons; and on the other side, the Court exercising its functions based on the EU Treaties, which include jurisdiction of the Court over international agreements, such as the EEA Agreement. II. FACTS
The EEA Agreement was signed on 2 May 1992, and entered into force on 1 January 1994. On the EU side, the Agreement constituted a mixed agreement, with participation of the EU itself, as well as its Member States. The EEA today covers a comprehensive free trade area, comprising the existing 27 EU Member States and three of the four EFTA states: Norway, Iceland and Lichtenstein. Separately, Switzerland is tied to the EU via numerous bilateral agreements. The EEA Agreement provides for binding rules on the free movement of goods, persons, services and capital, as well as competition rules, mirroring the corresponding EU rules. The ideas for the creation of the EEA go back to the late 1980s, against the background of relaunching the European integration by the Single European Act (in force 1 July 1987), with a view to completing the internal market by 1992, which would have important economic ramifications for the EFTA states. In January 1989, the Commission invited the then six EFTA states to consider a more comprehensive multilateral arrangement with the then Communities, to replace the more limited free trade agreements (FTAs) that the EFTA states individually had with the Communities. This led to the start of the negotiations on 20 June 1990, and the negotiations were sustained regardless of the fact that most EFTA states had applied for full membership of the then EEC by the end of 1992.1 Towards the end of the EEA negotiations, the Commission sought for an Opinion of the Court under what is Article 218(11) TFEU2 concerning the compatibility with primary law of the draft EEA agreement containing provisions for the creation of a joint and independent EEA court, with jurisdiction over disputes between the contracting parties, actions concerning the surveillance procedure regarding the EFTA states and in the field of competition. The proposed EEA court was designed to safeguard the homogeneity of the interpretation and application of EEA rules, based on provisions textually identical to the corresponding provision of Union law. In addition, the initial draft EEA Agreement established other mechanisms to secure homogeneity. The EEA court was proposed to be composed of judges from the
1 S Norberg and M Johansson ‘The History of the EEA Agreement and the First Twenty Years of Its Existence’ in C Baudenbacher (ed), The Handbook of EEA Law (Cham, Springer, 2016) 17 et seq. 2 On the Opinion procedure, see G Butler ‘Pre-ratification Judicial Review of International Agreements to be concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53–77.
The Union’s Participation in Legally Binding International Third-Party Dispute Settlement 217 Court and judges appointed by EFTA states. In addition, it contained, as it does today in its current version in Article 6, a provision providing that its provisions should be interpreted in conformity with the rulings of the Court on the corresponding provisions of EU Treaties and secondary law given prior to the date of signature of the Agreement. III. THE COURT
The Court started out by an extensive review of the principles of interpretation of international agreements generally, and those of the EU law, as well as considering certain fundamental principles of the then Community’s constitutional framework. In that context, it examined and highlighted the differences related to the aims and context of the draft EEA Agreement in comparison to EU law, stating that: The fact that the provisions of the agreement and the corresponding Community provisions are identically worded does not mean that they must necessarily be interpreted identically. An international treaty is to be interpreted not only on the basis of its wording, but also in the light of its objectives. Article 31 of the Vienna Convention of 23 May 1969 on the law of treaties stipulates in this respect that a treaty is to be interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose.3
The Court observed that the objectives of the EEA Agreement were concerned with the application of rules on free trade and competition in economic and commercial relations between the contracting parties, while the objectives of the Community go beyond that agreement. They had developed to form part of the EU legal order, aiming to achieve economic integration leading to the establishment of an internal market, and economic and monetary union, which in turn contributed to the progression towards European unity. Thus, free movement and competition, rather than being an end in themselves, were only means for attaining those objectives.4 The Court said that the proposed EEA was to rely on an international treaty which merely created rights and obligations between the contracting parties, but did not provide for a transfer of sovereign rights to international institutions. In contrast, the then EEC Treaty was the constitutional charter of a Community based on the rule of law, and what is now the EU Treaties established a new legal order for the benefit of which the states have ‘limited their sovereign rights, in ever wider fields’, and the subjects of which comprise not only Member States, but also their nationals. The essential characteristics of the EU legal order, in particular, were its primacy over the law of the Member States and the direct effect of many of its provisions.5 Consequently, according to the Court, the homogeneity of the rules of law throughout the proposed EEA under the draft EEA Agreement is not secured by the fact that the provisions of Union law, and those of the corresponding provisions of the EEA Agreement, are identical in their content or wording. Neither was the struggle to achieve homogeneity helped by other means, such as the provision stipulating interpretation in conformity with the case law of the Court on the corresponding provisions of Union law, since that mechanism was limited to the
3 Opinion 1/91, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1991:490, para 14. 4 ibid paras 15–18. 5 ibid paras 19–21.
218 Esa Paasivirta rulings of the Court given prior to the date of signature of the EEA Agreement. Also, as that case law may not extend to cases on direct effect and primacy,6 the Court said: It follows from the foregoing considerations that the divergences which exist between the aims and context of the agreement, on the one hand, and the aims and context of Community law, on the other, stand in the way of the achievement of the objective of homogeneity in the interpretation and application of the law in the EEA.7
Against that background, the Court said ‘It is in the light of the contradiction which has just been identified that it must be considered whether the proposed system of courts may undermine the autonomy of the Community legal order in pursuing its own particular objectives’.8 The Court pointed to two issues. It noted first that the proposed EEA court could be called to interpret the ‘Contracting Party expression’. However, given that the initial draft EEA Agreement involved not only the Community, but also the Member States (mixed agreement), the proposed EEA court would in fact have to rule on the respective competencies of the Community and the Member States as regards governed by the EEA Agreement.9 The Court said ‘It follows that the jurisdiction conferred on the EEA Court … is likely to affect the responsibilities defined in the Treaties and, hence, the autonomy of the Community legal order’, respect of which must be assured by the Court pursuant to what is now Article 19(1) TEU (ex-Article 164 EEC).10 The Court further said that [t]his exclusive jurisdiction of the Court of Justice is confirmed by Article 219 EEC [now Article 344 TFEU] under which the Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for in the Treaty.11
Consequently, to confer that jurisdiction on the proposed EEA court was considered incompatible with Union law.12 Secondly, the Court observed that international agreements concluded by the Community pursuant to the treaty-making procedure in Article 218 TFEU (ex-Article 228 EEC) were binding on the Union institutions and the Member States, and the provisions of such international agreements and the measures adopted by institutions set up by such agreements become an integral part of Community legal order.13 For the Court, where an international agreement provides for its own system of courts, the decisions on interpretations of the latter are binding on the EU institutions, including the Court, particularly in the context of internal preliminary rulings and infringement proceedings, insofar as that international agreement is an integral part of the EU legal order.14 Though this system of courts was, in principle, compatible with Union law, the Court pointed to a series of issues that would arise in this context. It noted that the EEA Agreement would take over an essential part of the rules, including secondary legislation, which govern economic and trading relations within the Union, and which constitute, for the most part, fundamental provisions of the EU legal order; and the international agreement had the effect
6 ibid
paras 22–28. para 29. 8 ibid para 30. 9 ibid para 34. 10 ibid para 35. 11 ibid para 35. 12 ibid para 36. 13 ibid para 37. 14 ibid paras 38–39. 7 ibid
The Union’s Participation in Legally Binding International Third-Party Dispute Settlement 219 of introducing into the EU legal order a large body of legal rules, which were juxtaposed to a corpus of identically worded Union rules.15 Furthermore, for the Court, the objective of the Agreement, to secure EEA-wide uniform interpretation and equality of competition, would necessarily cover both the provisions of the EEA Agreement and the corresponding provisions of the EU legal order.16 At the same time, according to the Court, the proposed EEA court, while under a duty to interpret the provisions of that agreement in the light of the relevant rulings of the Court, would be limited to rulings given prior to the date of signature of the EEA Agreement, but not after that date. Consequently, the objective of the EEA Agreement of ensuring homogeneity of the law throughout the EEA would determine not only the interpretation of the rules of the EEA Agreement itself, but also the interpretation of the corresponding rules of Union law.17 Consequently, the future interpretation of the EU rules on the free movement of goods, persons, services and capital, and on competition, the machinery of courts provided for in the EEA Agreement conflicted with Article 19(1) TEU (ex Article 164 EEC) and, more generally, with the very foundations of the Union. The Court then referred to the threat posed to the autonomy of the EU legal order by the proposed EEA court system set up by the EEA Agreement.18 In this connection, it was noted that the organic links between the proposed EEA court and the Court, especially the arrangement that judges of the Court would sit on the EEA court, would not reduce this threat, but would rather accentuate the problems, as those judges would have to interpret and apply the same provisions but using different methods and concepts to take into account the nature of each treaty and its particular objectives.19 IV. THE IMPORTANCE OF THE CASE
Opinion 1/91 focused on an assessment of the compatibility of a proposed EEA court with the then EEC Treaty. Given that modern international agreements often contain third-party dispute settlement procedures, Opinion 1/91 continues to maintain its relevance as regards the design and assessment dispute settlement arrangements in line with the EU Treaties as they stand today. The ‘lessons learned’ from Opinion 1/91 are of practical importance in two situations in particular. Firstly, it is relevant in the case of mixed agreements, where both the Union and the Member States are acting as ‘contracting parties’. This situation tends to raise, even quasi-automatically, potential issues of their respective competences. The message from Opinion 1/91 is that the question of the determination of those competences should not be left in the hands of an international court or tribunal, but kept within the jurisdiction of the Court alone. Secondly, the practical importance of Opinion 1/91 relates to those situations where the international agreement, negotiated by the EU, incorporates provisions of EU secondary legislation, especially when such incorporation is voluminous. Typically, this concerns bilateral international agreements with states within the wider European neighbourhood.
15 ibid
paras 41–42. para 43. 17 ibid paras 44–45. 18 ibid para 47. 19 ibid paras 48–52. 16 ibid
220 Esa Paasivirta In this situation, too, EU negotiators should be alert to keep the issues of interpretation of EU legislation within the jurisdiction of the Court. A. Submission of the EU to the Jurisdiction of International Tribunals It is useful first to recall that, while Opinion 1/91 and some of the related jurisprudence are often highlighted for their restrictions to the submission of the EU to the jurisdiction of international tribunals, this is only partly true, and in any event, the issues need to be seen in a broader perspective. In fact, the rules within the EU Treaties for the EU’s external relations are positive and encouraging for the EU’s international commitments. Article 3(5) TEU calls for ‘strict observance and the development of international law’, and in the same spirit Article 21(1) TEU sets out that ‘The Union’s action on the international scene … be guided by the principles which have inspired its own creation … and which it seeks to advance in the wider world: … rule of law … respect for international law’. In addition, the EU’s general capacity to adopt obligations under international agreements, including third-party dispute settlement provisions, is embedded in the notion of its legal personality established in Article 47 TFEU, which further confirms the compatibility of international dispute settlement and the system of the EU Treaties. As the Court stated in Opinion 1/91: An international agreement providing for such a system of courts is in principle compatible with Community law. The Community’s competence in the field of international relations and its capacity to conclude international agreements necessarily entails the power to submit to the decisions of a court which is created or designated by such an agreement as regards the interpretation and application of its provisions.20
Indeed, the same position has been consistently maintained implicitly or explicitly in other cases before and after,21 including, for instance, Opinion 2/13, which confirms that an international agreement providing for the creation of a court responsible for the interpretation of its provisions and whose decisions are binding on the institutions, including the Court of and this Justice, is not, in principle, incompatible with EU law.22
It should be added that the EU has participated, on a regular basis, in the WTO dispute settlement procedures without it becoming a problem, though this aspect was not subject to specific examination by the Court at the time of conclusion of the WTO Agreement.23 B. Principles of Interpretation: International Agreements versus EU Law The rejection of the initial EEA Agreement, with provisions on an EEA court, originated, according to the analysis of the Court, from the fundamental differences between the contexts and aims of international agreements generally and those of Community law, with the particular twist that the resulting differences in interpretation, of otherwise identically worded
20 ibid
para 40. 1/76, ECLI:EU:C:1977:63, para 5. See this volume, ch 9; Opinion 1/09, ECLI:EU:C:2011:123, para 74. 22 Opinion 2/13, ECLI:EU:C:2014:2454, para 182. See this volume, ch 70. 23 Opinion 1/94, ECLI:EU:C:1994:384. See this volume, ch 28. 21 Opinion
The Union’s Participation in Legally Binding International Third-Party Dispute Settlement 221 provisions, could ultimately be imposed in the internal EU legal order. Opinion 1/91 dealt with the issue of interpretation rather abstractly, on a kind of a priori basis, dealing with potential divergences of interpretation, rather than interpretation of a particular provision of the initial EEA Agreement. In this connection, the Court pointed to general principles, concepts and legal doctrines highlighting the special characteristics of Union law. The negotiators of the EEA Agreement were certainly caught off guard, as they were led by a more ‘pragmatist’ spirit, at least on the EFTA side.24 The ambition was to combine the substance of EEA-wide uniform market rules, based on the respective EU rules and principles, with an institutional overlay which was still compatible with a more traditional international law approach, and without taking over ‘supranational’ Community structures or legal doctrines. These latter aspects were important for the EFTA states. On the other hand, the Commission, and ultimately the Court, were driven by a more upright constitutional orientation and concerned with maintaining the Union’s fundamental principles. The potentially divergent interpretation of otherwise identical legal texts was therefore a central problem in Opinion 1/91. At the outset, the Court referred to Article 31 of the Vienna Convention on the Law of Treaties, containing the customary rules of interpretation – the ‘ordinary meaning’ of the terms of an international agreement in their context and in the light of its object and purpose.25 While the context, object and purpose are by no means unknown to the Court’s practice in other cases when interpreting differences in the Union’s bilateral agreements in comparison to similar terms in its internal law,26 these aspects were nevertheless particularly prominent in Opinion 1/91. This highlighting of differences in Opinion 1/91 has not unsurprisingly been considered by some legal commentators to be somewhat exaggerated.27 Yet, on reflection, it may have been the very fact that the EEA Agreement took such a comprehensive nature, covering almost the entire internal market, which led the Court to adopt its rather abstract approach highlighting the different contexts and aims that could potentially lead to different interpretations in spite of identical wordings. A hint of this could be read in the Court’s reasoning, where it referred to Van Gend en Loos case as precedent, and its oft-cited notion of EU law as a ‘new legal order’, but instead of noting the corresponding limitation of the sovereign rights of the Member States ‘within limited fields’, Opinion 1/91 referred to such limitation ‘in ever wider fields’, which is a telling detail in the otherwise close following of the wording of the precedent.28 In fact, later practice has also shown divergences of interpretation concerning the EEA Agreement, even in respect of quite central questions.29 Hence the Court’s emphasis on the different aims and context of the EEA Agreement dealing with free trade and competition between the contracting parties and the EU Treaties. It followed that not only was homogeneity of common EEA rules not secured, but, more ominously, the autonomy of the EU legal order was put at risk.
24 S Norberg and M Johansson, ‘The History of the EEA Agreement and the First Twenty Years of Its Existence’ in Baudenbacher (n 1) 29. 25 Opinion 1/91 (n 3) para 14. 26 Case C-312/91, Metalsa, ECLI:EU:C:1993:279, paras 11–12. 27 P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2012), 318. 28 Case 26/62, ECLI:EU:C:1963:1, cf. Opinion 1/91 (n 3) para 21. 29 T Bekkedal, ‘Understanding the Nature of the EEA Agreement: On the Direct Applicability of Regulations’ (2020) 57 CML Rev 773.
222 Esa Paasivirta C. The Autonomy of the Union Legal Order and the Exclusive Jurisdiction of the Court The risk to the autonomy of the EU legal order is seen to arise in certain situations where an international agreement establishes its own institutions, and in particular, where an international agreement provides for its own tribunal, capable of making decisions. The risk arises where such an international tribunal would effectively serve a role of making legally binding interpretation of internal EU law, which should not be submitted to any other dispute settlement than the Court alone pursuant to Article 344 TFEU. In Opinion 1/91, that risk was most visible in connection with the term ‘contracting parties’, bearing in mind that in the case of a mixed agreement, such as the EEA Agreement, it could mean either the Union or the Member States. Thus, the determination of the respective competences could not be left to the proposed EEA court. In addition, the autonomy risk was at stake as a result of the fact that the decisions of the proposed EEA court would be binding on the EU institutions in the particular circumstances where the internal Union law would involve, in substance, identical legal provisions, but where the uniformity of the EEA rules was not guaranteed, given the different aims and context of the EEA Agreement and the EU Treaties. Moreover, the participation of judges in the decisions of the proposed EEA court could prejudice their subsequent interpretations of internal Union law, given that they would use different methods of interpretation. The Court had expressed itself in earlier and later rulings on the principle of autonomy. This was first expressed in Opinion 1/76, where the establishment of an independent international tribunal was envisaged. The Court noted that the participation of the judges of the Court required to sit on a tribunal in the envisaged agreement involving a third country might prejudice their positions in subsequent cases in the Court.30 Later, the principle of autonomy was raised in Opinion 2/94, but the final decision was not reached, as there was lack information regarding the arrangements by which the Union envisaged submitting itself to the judicial control machinery established by the European Convention on Human Rights (ECHR).31 In Opinion 1/00, related to a proposed Agreement of a European Common Aviation Area (ECAA Agreement), the question of autonomy was addressed in great detail and, in the aftermath of Opinion 1/91, the negotiators followed particularly careful drafting of the proposed ECAA Agreement. In Opinion 1/00, the Court was able to conclude that, where the proposed agreement clearly separated the Union from the other contracting parties from an institutional point of view, and it did not affect either the exercise by the Union and its institutions of their powers, by changing the nature of those powers, or the interpretation of Union law, the autonomy of the EU legal order can be considered as secured. Following a detailed examination of the provisions of the ECAA Agreement, the Court concluded that the system of legal supervision that was set up was compatible with the EU primary law.32 The line adopted in Opinion 1/91 regarding the autonomy of the EU legal order and the exclusive jurisdiction of the Court has since been closely followed also in the context of multilateral agreements, for instance, in Mox Plant33 relating to the Law of the Sea Convention, originating from a dispute between two EU Member States, and Opinion 2/13 concerning the EU accession to the ECHR.34
30 Opinion
1/76 (n 21) para 22. See this volume, ch 9. 2/94, ECLI:EU:C:1996:140, para 20. See this volume, ch 32. 32 Opinion 1/00, ECLI:EU:C:2002:231, paras 6, 46. See this volume, ch 40. 33 Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant), para 123. See this volume, ch 47. 34 Opinion 2/13 (n 22) paras 180–84, 201. See this volume, ch 70. 31 Opinion
The Union’s Participation in Legally Binding International Third-Party Dispute Settlement 223 D. Powers to the Court in International Agreements to Provide Interpretative Rulings to Courts of Third Countries Protocol 34 of the EEA Agreement, which provides for a possibility of EFTA states to request interpretative rulings from the Court, was a side issue in Opinion 1/91, but this question has come up in subsequent international agreements in other contexts. In Opinion 1/91, the Court accepted, though there is no specific provision on the issue, that the international agreements the EU has with third countries may authorise the courts and tribunals of the latter to make references to the Court for interpretations of provisions in the international agreements, in view of their application in third countries concerned.35 However, the Court made it clear that it is unacceptable that, once this possibility is used, the answers which the Court provides to the courts and tribunals would be purely advisory and without any binding effects. Such a situation, in the Court’s view, would change the nature of the function of the Court as conceived by the EU Treaties, namely, that of a court whose decisions are binding. The Court even referred to a kind of ‘normative pollution’ risk, whereby allowance of non-binding advisory opinion to courts and tribunals of third countries could in fact undermine the legal value of the internal preliminary rulings system of the Union under Article 267 TFEU. Thus, Opinion 1/91 stressed that an international agreement of the EU with third countries should provide for the binding effect of the Court’s decisions, if this possibility is utilised.36 Opinion 1/91 was closely followed in Opinion 1/00, bringing about a single aviation area, with a large number of the rules of the ECAA Agreement being essentially rules of Union law, which raised similar questions in particular regarding resolution and the role of the Court. In Opinion 1/00, the Court held that the condition of keeping the essential character of its powers was satisfied, since the proposed agreement, providing for procedures for references for preliminary rulings and of the dispute resolution, containing broadly comparable safeguards as those in Opinion 1/91, did not call into question ‘the Court’s exclusive task of reviewing the legality of acts of the Community institutions’ or the powers that the agreement confers on the Court, since ‘the binding nature of the [Court’s] decisions is safeguarded’. In those circumstances, the provisions of the agreement were not considered such as to adversely affect the autonomy of the EU legal order.37 Moreover, the mechanisms for ensuring uniform interpretation of the ECAA Agreement and for resolving disputes were such as not having the effect of binding the Union and its institutions, in the exercise of their internal powers, to a particular interpretation of the rules of Union law incorporated in the proposed agreement.38 In this connection, it may be noted that international agreements of the EU, typically with partner states in the wider European region, incorporate large portions of EU law, including secondary legislation, and thereby give rise to questions of their interpretation. Therefore, the impact of Opinion 1/91 can also be seen in EU Treaty practice providing for ‘regulatory approximation’ in recent association agreements with neighbouring third countries, which incorporate large portions of EU law in the respective agreements. Therefore, the formulation
35 Opinion
1/91 (n 3) para 59. para 62–64. 37 Opinion 1/00 (n 32) paras 23–26. 38 ibid paras 45–46. 36 ibid
224 Esa Paasivirta of dispute settlement provisions of the EU–Ukraine Association Agreement,39 and similar Association Agreements with Moldova40 and Georgia,41 carry traces of Opinion 1/91 regarding the applicable panel procedures of the trade part of the agreement. Thus, aside from the panel procedure, Article 322 of the EU–Ukraine Association Agreement introduces a preliminary ruling system relating to provisions of regulatory approximation, such as those concerning technical barriers, sanitary and phytosanitary measures, public procurement and competition, which impose obligations defined by a reference to a provision of EU law. Hence, Article 322(2) of that international agreement reads: Where a dispute raises a question of interpretation of a provision of EU law referred to in paragraph 1, the arbitration panel shall not decide the question, but request the Court of Justice to a ruling on the question. In such cases, the deadline applying to the ruling of the arbitration panel shall be suspended until the Court of Justice has given its ruling. The ruling of the Court of Justice of the European Union shall be binding on the arbitration panel.42
The clause is clearly designed to safeguard the role of the Court in ensuring the interpretation and application of EU law provisions necessary in the trade part of the agreement, as it provides for market access to the EU’s internal market and needs to function in a uniform manner for both parties. V. ADDITIONAL READING Bast, J, ‘European Economic Area (EEA)’ in R Wolfrum, Max Planck Encyclopedia of International Law (Oxford, Oxford University Press, 2007). Bekkedal, T, ‘Understanding the Nature of the EEA Agreement: On the Direct Applicability of Regulations’ (2020) 57 CML Rev 773. Du Bois, P, ‘La négociation EEE vue par un historien’ in O Jacot-Guillarmod (ed), Accord EEE. Commentaires et réflexions (Zurich, Schulthess Poygraphischer Verlag, 1992) 13–22. Eeckhout, P, EU External Relations Law (Oxford, Oxford University Press, 2012) ch 8. Hillion, C and Wessel, RA, ‘The European Union and International Dispute Settlement: Mapping Principle and Conditions’ in M Cremona, A Thies and RA Wessel (eds), The European Union and International Dispute Settlement (Oxford, Hart Publishing, 2017) 7–30. Norberg, S and Johansson, M, ‘The History of the EEA Agreement and the First Twenty Years of Its Existence’ in C Baudenbacher (ed), The Handbook of EEA Law (Cham, Springer, 2016) 8–42.
39 Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part [2014] OJ L161/3. 40 Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part [2014] OJ L260/4. 41 Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part [2014] OJ L261/4. 42 Similar provisions are contained in Art 403(2) of the EU–Moldova Association Agreement and Art 267(2) of the EU–Georgia Association Agreement.
21 Setting the Multiple Functions of Customary International Law in the EU Legal Order: Poulsen CHARLOTTE BEAUCILLON Case C-286/90, Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp, ECLI:EU:C:1992:453, delivered 24 November 1992. KEYWORDS EU obligation to respect international law – Exercise of EU powers within the limits of customary international law – Maximum impact interpretation of EU law within the limits of customary international law – Customary international law as a complement to the lacunae in EU law – Consistent interpretation of EU law in light of customary international law – Validity of EU law in light of customary international law.
I. INTRODUCTION
T
he Poulsen case is a landmark in the evolution of EU external relations law, most notably with regard to the question of the EU’s observance of international customary law and its effect in the EU legal order. Thus, the Poulsen case is one of those cases which, in the various case law developments covered by this book, contribute to the clarification by the EU judiciary of the relationship between EU law and international law. In particular, the Poulsen case is essential for understanding how international customary law frames the exercise of its powers by the EU. The Poulsen case also paved the way for the recourse to customary international law in the event of the silence or lacunae of EU law. Finally, it grounded a protean line of jurisprudence on the effects of customary international law in the EU legal order. From a broader perspective, being the first time that the Court opined the principle according to which the Union ‘must respect international law in the exercise of its powers’, the Poulsen case is undisputedly the starting point from which the Court has shaped its jurisprudence on international law.1 1 See, eg Case C-402/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:461, para 223. See this volume, ch 49.
226 Charlotte Beaucillon With particular focus on customary international law, the Court confirmed and expanded its reasoning from the Poulsen case in subsequent case law, not only on the exercise of its powers by the EU and on the use of customary international law as a complement to EU law, but also as regards the indirect and direct applicability of rules of customary international law in the EU legal order. Hence, even after the affirmation in the TEU that ‘in its relations with the wider world, the Union shall … contribute … to the strict observance … of international law’,2 the Poulsen case has not lost its importance as it still constitutes the substance from which to understand the articulation of the EU and customary international law. After having recalled the main facts of the case (section II), this chapter analyses the levers of the judgment (section III) and assesses the importance of the Poulsen case against a sample of subsequent case law developments that have built on its seminal findings (section IV). II. FACTS
The facts of the Poulsen case are as follows. Mr Poulsen was a Danish national resident in Denmark. In 1989, he sold his fishing vessel, the Onkel Sam, to a company incorporated under Panamanian law, the Diva Navigation Corp. This company was owned by Mr Poulsen’s brother, who hired him back as the vessel’s skipper. The Onkel Sam kept her home port in Hirtshals, Denmark, and was manned by an all-Danish crew, paid in Denmark. Although the catch was unloaded outside the Union, in Poland, the owner of the Onkel Sam was also paid via a Danish company. In 1990, the Onkel Sam fished 22,332 kg of salmon on the high seas, in Region 1 of the North Atlantic Ocean, an area in which Article 6(1) of Regulation (EEC) No 4828/86 of 18 December 1986 prohibited all fishing for salmon (as well as its transport and retention on board) for the purpose of the conservation of fishery resources – a disposition aiming at implementing a multilateral convention on the conservation of salmon signed in 1982 by the Union. On the return journey from its high seas fishing area to its port of discharge in Poland, the Onkel Sam encountered problems with the fuel supply to its engine, which, together with extreme weather conditions, forced the vessel to return to its home port in Denmark to carry out the necessary repairs. The Danish authorities inspected the vessel and found the cargo of salmon. On the basis of Danish law providing that anyone who contravenes EU fisheries regulations will be fined, the cargo was confiscated and sold, and Mr Poulsen and Diva Navigation Corp were prosecuted by the Danish Public Prosecutor in the criminal courts for the violation of Union law.3 Faced with the question whether Article 6(1) of Regulation (EEC) No 4828/86 of 18 December 1986 was actually applicable to the case before it, the Kriminal-og Skifteret referred five questions to the Court for a preliminary ruling, which can be summarised and reformulated as follows: (i) Did the prohibition in Article 6(1) of the Regulation apply to any Union national, regardless of the nationality of the ship of which they form the crew? (ii) Did this prohibition apply to the Panamanian company which owns the ship once the cargo has been seized in EU territory? (iii) Can the registration of a ship in a non-Member State be opposed to the Union, and to the authorities of the Member States, where the facts 2 Art 3(5) TEU; see also Art 21 TEU. 3 Case C-286/90, Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp, ECLI:EU:C:1992:453, paras 3–6; see also Opinion of Advocate General Tesauro, Case C-286/90, Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp, ECLI:EU:C:1992:155, para 2.
Setting the Multiple Functions of Customary International Law in the EU Legal Order 227 of the case show a significant connection with a Member State? (iv) If so, did the prohibition on carrying and storing cargo apply to the ship if it is in the exclusive economic zone, in the territorial waters or in the internal waters of an EU Member State? (v) And if so, did EU law contain specific rules governing the scope of the prohibition in Article 6(1) of the Regulation in the situation where a ship has reached the port of a Member State as a result of a situation of distress?4 Schematically, both the Commission and the Danish government maintained in their observations that Article 6(1) of the Regulation was applicable to the present case – an interpretation which Mr Poulsen and the Diva Navigation Corp contested. III. THE COURT
The Poulsen judgment provided the first opportunity for the Court to affirm the guiding principles governing relations between the EU law and international customary law. Three points, systematising the main contribution of this decision to the contemporary law of EU external action, will be highlighted. First, the Court consecrated customary international law as the legal context in which the development of any Union action, and thus the exercise of any of its powers, must take place (section IIIA). Second, however, the Court conduced its interpretation of the Regulation in such a way as to ensure the maximum effect of Union law in the context of respect for customary international law (section IIIB). Third, it affirmed the possibility to have recourse to customary international law as a complement to Union law in the event of the latter’s silence (section IIIC). A. The Obligation to Respect Customary International Law in the Exercise of EU Powers First of all, the Court unequivocally affirmed the principle of respect by the Union for general international law, ie customary international law. More particularly, this principle applied to the interpretation of a Regulation, which must be carried out not only in the context of customary international law, but also in such a way as to be compatible with it. The contrast between the Court’s judgment, brief and synthetic, and the Opinion of Advocate General (AG) Tesauro, extensive and sometimes emphatic, is striking. In his Opinion, which is masterly, AG Tesauro offered a real lesson in the (customary) international law of the sea. The AG thus put his theoretical and jurisprudential knowledge (he had been a professor of international law before joining the Court in 1988) to the systematisation of what is today the law of the EU external relations. He provided a clear warning of what is at stake in the case and of the whimsical nature of some arguments developed before the Court on the basis of the specific nature of Union law. For example, in response to Denmark and the Commission, which contested the scope of the customary rule on the flags of ships and the powers of the flag state, AG Tesauro stated: That is a basic and irrefutable principle and it is frankly surprising that it has been called into question albeit with proper restraint, in these proceedings. It need hardly be added that the special nature of the [Union] regulation cannot change the scope of the problem.5
4 Poulsen 5 ibid
(n 3) para 7 of the judgment; para 3 of the Opinion of AG Tesauro. para 6 of the Opinion of AG Tesauro.
228 Charlotte Beaucillon Elsewhere, after dismissing a series of arguments and precedents inapplicable to the present case, albeit relating to activities at sea, he concluded, with regard to one last ill-chosen example: ‘As for the academic example of a bullet fired in one state that hits a man on the other side of the border, that example is so inappropriate that it does not merit comment.’6 The AG’s argumentation was unequivocal. The EU acts in the context of public international law, and must therefore respect it. To the AG’s consistent assertion that ‘First, compliance with the fundamental principles of international law is not of secondary importance’,7 the Court responded by stating a still central principle of the law of external relations: As a preliminary point, it must be observed, first, that the European [Union] must respect international law in the exercise of its powers and that, consequently, Article 6 (of the regulation) must be interpreted, and its scope limited, in the light of the relevant rules of international law of the sea.8
B. The Maximum Effect of EU Law within the Limits of Customary International Law In the Poulsen case, the Court stated in substance that the EU Regulation may in no way alter the content or implementation of the rules of customary international law relating to the nationality of ships or the powers of states over various maritime zones, as defined by the law of the sea. On the contrary, the Regulation in question can only govern the manner in which Member States exercise their territorial competences over the areas under their jurisdiction in accordance with international law. Immediately after the affirmation of the principle that the Union is bound by international law, the Court recapitulated all the relevant instruments which must be taken into account in the Poulsen case as they set out pertinent international customary law: the 1958 Geneva Conventions on the Territorial Sea and the Contiguous Zone, on the high seas, and the 1982 Montego Bay Convention on the Law of the Sea; it also refers to a series of decisions of the International Court of Justice (ICJ) in the Gulf of Maine case of 1984, the Libyan Continental Shelf case of 1985 and the Military and Paramilitary Activities in Nicaragua case of 1986.9 The Court referred to them first of all to affirm – as did AG Tesauro – the principle of the single nationality of the ship, which is that of the state whose flag it flies, and which prevents a Member State from considering a ship flying a third flag as a ship of Union nationality for the purpose of imposing on it compliance with EU legislation. This flag nationality remains enforceable, in accordance with customary international law, even if the entire crew and the owner of the vessel have the nationality of an EU Member State.10 Furthermore, the Court confirmed that, contrary to the Commission’s contention, there was no indication that the EU legislation in question applied in a personal capacity to crew members who are nationals of an EU Member State.11 The Court then referred to international customary law in order to affirm – again, like AG Tesauro – the principle of respect for the various state competences in the maritime
6 ibid para 8 of the Opinion of AG Tesauro. 7 ibid para 12 of the Opinion of AG Tesauro. 8 ibid para 9 of the judgment. 9 ibid para 10 of the judgment. 10 ibid para 12–16 of the judgment; for specific developments on flags of convenience, see para 9 of the Opinion of AG Tesauro. 11 ibid paras 17–20 of the judgment; para 8 of the Opinion of AG Tesauro.
Setting the Multiple Functions of Customary International Law in the EU Legal Order 229 zones, defined by the international law of the sea. Briefly, these rules cover, firstly, the high seas, governed by the principle of freedom of the seas, and the competence of the flag State; secondly, the exclusive economic zone, where the powers of the coastal state remain limited; and thirdly, the territorial sea, where the right of innocent passage makes it possible to link the competence of the coastal state with the presence of vessels flying a third flag in that zone.12 However, the Court then departed from AG Tesauro’s conclusions, considering that in internal waters and ports, EU Member States have full jurisdiction to require compliance with EU law – unlike the high seas, the exclusive economic zone and the territorial sea.13 While the AG concluded that the EU Regulation at issue was inapplicable, whatever the maritime area in question due to the lawfulness of Onkel Sam’s fishing activity on the high seas, the Court chose another key of interpretation, announced earlier in its reasoning. In fact, immediately after recapitulating the relevant instruments reflecting the international customary rules with which the Union’s action must comply, the Court, noting that the prohibition laid down by the Regulation which it is called upon to interpret derives from a multilateral convention for the conservation of salmon to which the Union is a party, announced that: ‘In the light of the aims of the prohibition laid down in Article 6(1)(b) of the Regulation, this provision must be interpreted so as to give it the greatest practical effect, within the limits of international law.’14 Although the Court was careful to ground its rationale both on the international (conventional) source of the prohibition laid down in the Regulation and on its specific subject matter related to the conservation of fishing resources, its reasoning is reminiscent of the principle of effet utile, also expressed in the adage ut res magis valeat quam pereat. This interpretation technique, with a view to giving maximum effect to Union law within the limits of customary international law, is the second central contribution of the Poulsen judgment. This translated into the affirmation of the principle, also of customary international law, according to which internal waters and ports are assimilated to the territory of the state, and therefore that the coastal state’s jurisdiction can be fully exercised there. In the Court’s view, this area is under the ‘unlimited jurisdiction’15 of the coastal state. A reference to history was put forward by AG Tesauro that is of interest here. During the Prohibition period (1920–33), non-US ships carrying alcohol sometimes needed to call at US ports. The attempt by the USA to impose compliance with prohibitionist legislation on such non-US ships whose cargo was not destined for the USA, but for third countries, provoked numerous diplomatic protests – including from Denmark – and led to the conclusion of international agreements recognising the right of foreign ships to hold such cargo if it was not intended to be unloaded in the USA.16 In adopting the opposite solution with regard to the Onkel Sam’s cargo of salmon, the Court pursued the aforementioned objective to interpret the Regulation in such a way as to maximise the scope of EU legislation on the conservation of fishery resources by giving full effect to the territorial jurisdiction of the coastal state over
12 ibid
paras 21–27 of the judgment; points 10–11 of the Opinion of AG Tesauro. paras 28–29 of the judgment; contra, point 12 of the Opinion of AG Tesauro. 14 ibid para 11 of the judgment. 15 ibid para 29 of the judgment. 16 ibid footnote 19 of the Opinion of AG Tesauro, referring to works by Rolando Quadri and Philip Jessup. 13 ibid
230 Charlotte Beaucillon its internal waters. Thus, the sword of Damocles hanging over foreign vessels is such as to induce them not to call at EU ports if they are not compliant with EU law.17 However, the Court did not seem to take an inordinate risk in the present case – it should be remembered that its judgment conditioned domestic criminal proceedings – in so far as the circumstances of the case, and more particularly the distress situation of the Onkel Sam, could be such as to exonerate Mr Poulsen and the Diva Navigation Corp from their liability. C. Customary International Law as a Complement to EU Law The Court left open the question whether the conditions under which the Onkel Sam was forced to return to its home port in Denmark may be such as to exonerate Mr Poulsen and the Diva Navigation Corp from their liability due to the violation of the Regulation. The Court considered that, since the state of distress at sea is not governed by Union law, and since the characterisation of distress is a matter for the material assessment of the facts of the case, it was for the Danish court to characterise the situation in the light of customary international law and to draw the necessary conclusions.18 In his Opinion, AG Tesauro recalled the state of customary international law in this area: the right of innocent passage, normally of continuous and rapid exercise, includes stopping and anchoring in cases of force majeure or distress.19 This did not, however, govern the potentially exonerating character of the distress situation from liability under the law of the coastal state. The AG then proposed the international law analogy of state responsibility, also of customary origin, which considered distress as a circumstance precluding the wrongfulness of an act attributable to a state (such as the violation of a maritime frontier by a military vessel),20 which was unquestionably not the case here. Nevertheless, this analogy raised the question whether the Onkel Sam and the crew intended to violate the Regulation at stake or, on the contrary, were forced to enter EU territory, a question which is obviously left to the national court’s assessment. IV. THE IMPORTANCE OF THE CASE
The Poulsen judgment is a central precedent in building the foundations of the EU’s external relations law. Indeed, it has served as a basis for the progressive development of the case law of the Court on customary international law, the scope of which covers a number of specific issues which will now be discussed in turn. The conception of customary international law as the legal context in which the competences of the EU must be exercised has been largely confirmed by the Court (section IVA), as has the use of customary international law as a complement to gaps or silence in Union law (section IVB). The Poulsen judgment also raised a series of questions on the indirect and direct applicability of customary international law within the EU legal order, which is further analysed (section IVC).
17 This legislative technique will be seen again later, in the field of environmental protection. See s IVC below and esp Case C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA) on greenhouse gas emissions. Its practical effect is to condition access to EU territory to the compliance with EU law. In the case at stake, Poulsen, it concerned the protection of marine resources. 18 Poulsen (n 3) para 39 of the judgment. 19 ibid para 13 of the Opinion of AG Tesauro. 20 ibid.
Setting the Multiple Functions of Customary International Law in the EU Legal Order 231 A. The Exercise of EU Powers in the Context of Customary International Law This central finding of the Poulsen case (see section IIIA above) has been consistently confirmed by the Court. In the Mondiet judgment of 1993, the Court again relied on the customary rules of the law of the sea, but this time to confirm the competence of the Union to adopt rules limiting the freedom of fishing on the high seas of EU nationals by analogy with the powers of coastal states to preserve the living resources of the high seas.21 In the Racke case of 1998, which related not to the law of the sea but to the law of treaties, the Court deduced from the principle of the Union’s compliance with international law that the rules of customary international law relating to the termination and suspension of treaty relations on account of a fundamental change of circumstances ‘are binding on the institutions of the [Union] and form part of the [EU] legal order’.22 Ten years later, the Court confirmed its approach in the Intertanko case, while refusing to consider the invoked provisions of the Marpol Convention, to which the Union was not a party, as rules of customary international law are binding on the Union.23 For the sake of completeness, and although this no longer concerns customary international law but treatybased law of the sea, it should be noted here that, in Intertanko, the Court also refused to recognise any direct effect to the Montego Bay Convention, which had meanwhile entered into force and to which the Union had become a party in 1998. Following the above-explained logic, the Court regularly resorts to international customary law in various fields, such as the international law of treaties, the rules on the competence and international responsibility of states and international organisations, and the law of immunities or human rights.24 B. Addressing Gaps in EU Law Through Customary International Law Another contribution of the Poulsen judgment (see section IIIC above) is to consider the use of customary international law to fill gaps in Union law where the latter remains silent. This approach was initiated in the Factortame II judgment of 1991, in which the Court held, with regard to the registration of ships, that, in the absence of specific Union rules, it is for the Member States to define such registration rules in accordance with international law.25 Similarly, with regard to the rules on the acquisition or withdrawal of nationality, the Court confirmed in the Micheletti judgment of 1992 that these fall within the competence of each EU Member State, in accordance with international law.26 It is important to note, however, that in both of the above-mentioned cases, the exercise of the powers conferred on the EU Member States by international law must be in accordance with Union law, which meant that
21 Case C-405/92, Etablissements Armand Mondiet SA v Armement Islais SARL, ECLI:EU:C:1993:906, paras 14–15. 22 Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293, paragraphs 46. See this volume, ch 36. 23 Case C-308/06, The Queen, on the application of International Association of Independent Tanker Owners (Intertanko) and Others v Secretary of State for Transport, ECLI:EU:C:2008:312, para 51. See this volume, ch 52. 24 For a detailed recapitulation list, see D Kornobis-Romanowska, ‘Effects of International Customary Law in the Legal Order of the European Union’ (2018) 8 Wroclaw Review of Law, Administration and Economics 415. 25 Case C-221/89, The Queen v Secretary of State for Transport, ex parte Factortame Ltd and others, ECLI:EU:C:1991:320 (Factortame II), para 17. 26 Case C-369/90, Mario Vicente Micheletti and others v Delegación del Gobierno en Cantabria, ECLI:EU:C:1992:295, para 10.
232 Charlotte Beaucillon the invocation by an EU Member State of powers conferred on it by customary international law may serve only to fill a gap in Union law, and not to alter the scope of a rule of Union law which would be binding on them.27 This, in turn, raises the last question triggered by the Poulsen case, on the place in and effects of customary international law on the EU legal order. C. The Validity of EU Law in the Light of Customary International Law The question of the validity of EU law in the light of customary international law is based on the premise that customary international law not only forms part of the EU legal order, but also takes precedence over secondary law, which must be compatible with it. This premise follows from a combined reading of the Poulsen and Racke judgments (see especially section IVA above). Compliance can be ensured in two ways: through the Court’s c onsistent interpretation of EU law in the light of customary international law and through the annulment of EU acts which would be found contrary to customary international law. The principle of interpreting Union law in conformity with customary international law in a way which also guarantees maximum effect of the rules of Union law is one of the major contributions of the Poulsen judgment (see section IIIB above). Today, this technique is used in a wide variety of cases, sometimes leading to unforeseen and innovative results. For instance, it strongly conditioned the interpretation of the territorial scope of some international agreements concluded by the Union with third countries, in light of the limits imposed by international customary law governing decolonisation and the conclusion of international agreements.28 Another original example can be taken from the case where recourse to international customary law was made necessary to appreciate the international status of a contested territory in the context of the implementation of EU consumer law governing the information of origin that must appear on some products.29 The annulment of EU acts due to their incompatibility with customary international law is more delicate because it is conditioned by the invocability of the latter in EU law. It is, however, possible in principle, as the Court stated in the Racke judgment. Relying on its findings in the Poulsen judgment, the Court in Racke considered not only that customary international law belongs to the EU legal order and thus binds the Union institutions, but also that an individual cannot be deprived of the possibility of challenging the validity of a Regulation under the rules of customary international law governing the termination and suspension of international agreements.30 However, the Racke decision adds several temperaments to the principle, some of which are worth recalling here. Hence, it limits the invocability of customary international law to those rules which it considers ‘fundamental’, such as, in the present case, pacta sunt servanda or rebus sic stantibus.31 Moreover, it sets out a legal test designed to take account of the imprecision of the rules set out, and reduces its control to manifest errors of assessment relating to the conditions of application of those rules.32 27 For a detailed discussion, see J Wouters and D Van Eeckhoutte, ‘Giving Effect to Customary International Law Through European Community Law’ (Institute for International Law, June 2002) Working Paper No 25, 15. 28 Case C-266/16, Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs, ECLI:EU:C:2018:118; Case C-104/16 P, Council v Front Polisario, ECLI:EU:C:2016:973. See this volume, ch 75. 29 Case C-363/18, Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954. See this volume, ch 89. 30 Racke (n 22) para 51. 31 ibid para 48. 32 ibid para 52.
Setting the Multiple Functions of Customary International Law in the EU Legal Order 233 Finally, the Air Transport Association of America (ATAA) case of 2011 offers a combination of the operation of these two techniques in the Court’s jurisprudence after the entry into force of the Treaty of Lisbon. Confirming the jurisprudential construction resulting from the combination of the Poulsen and Racke judgments, the Court identified three rules of customary international law which may be invoked to challenge the validity of Directive 2008/101 integrating aviation activities into the scheme for greenhouse gas emission allowance t rading: (i) each state has complete and exclusive sovereignty over its own airspace; (ii) no state may legitimately claim to subject any part of the high seas to its sovereignty; and (iii) the principle of freedom to fly over the high seas.33 The Court stated that the invocability of these rules depends on the twofold condition that they are liable to call into question the Union’s competence to adopt the contested act (referring in particular to the Mondiet judgment; see section IVA above) and that the act in question is liable to affect the rights which the person concerned derives from EU law.34 Lastly, the Court in ATAA pointed out that the assessment of the validity of the Directive in question is limited to a manifest error of appreciation.35 Referring then to the Poulsen judgment at the stage of examination of the validity of the Directive in the light of customary international law, the Court reaffirmed that the Union must exercise its powers in accordance with international law, so that the Directive must be interpreted in accordance with the relevant rules of international law of the sea and international air law. By analogy with the Poulsen case, the Court confirmed that EU legislation applies, ratione loci, to an aircraft which has landed at an aerodrome situated in the territory of the Union,36 and confirms the validity of the contested Directive. It flows from the current state of case law that, although international customary law can be invoked under restrictive conditions to challenge the legality of an EU act, the techniques that the Court has laid down in the Poulsen case with regard to the consistent but maximal interpretation of EU law in light of customary international law remain indisputably accurate, even 30 years after the Court’s judgment. V. ADDITIONAL READING Boelaert-Suominen, S, ‘The European Community, the European Court of Justice and the Law of the Sea’ (2008) 23 International Journal of Marine and Coastal Law 643. Delile, J-F, ‘Les effets de la coutume internationale dans l’ordre juridique de l’Union européenne’ (2017) 1 Cahiers de droit européen 159. Kornobis-Romanowska, D, ‘Effects of International Customary Law in the Legal Order of the European Union’ (2018) 8 Wroclaw Review of Law, Administration and Economics 405. Paasivirta, E, ‘The European Union and the United Nations Convention on the Law of the Sea’ (2015) 38 Fordham International Law Journal 1045. Lagondet, F, ‘L’abus de droit dans la jurisprudence communautaire’ (2003) 1 Journal de droit européen 8. Slot, PJ, ‘Case C-286/90, Anklagemyndigheden (Public Prosecutor) v PM Poulsen and Diva Navigation, Judgment of 4 November 1992’ (1994) 31 CML Rev 147. Wouters, J and Van Eeckhoutte, D, ‘Giving Effect to Customary International Law through European Community Law’ (June 2002) Institute for International Law, Working Paper No 25, 49.
33 ATAA
(n 17) paras 103–05. See this volume, ch 59. para 107. 35 ibid para 110. 36 ibid para 123–24. 34 ibid
234
22 ERTA, Mixity and the Duty of Cooperation in the Conclusion of International Agreements: Opinion 2/91 (ILO Convention) MIRKA KUISMA Opinion 2/91, International Labour Organization concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, delivered 19 March 1993. KEYWORDS Article 218(11) TFEU procedure – International agreements of the EU – Conclusion – Implied powers – Exclusive competence – ‘An area already covered to a large extent’ – Minimum requirements – Mixity – Duty of cooperation between the EU and its Member States in the context of mixed agreements – Unity in the international representation of the Union – International Labour Organization – Chemical safety at work.
I. INTRODUCTION
O
2/91 revolved around the demarcation of the scope and nature of the Union’s external powers as well as cooperation between the Union and its Member States on international fora. Decided over 20 years after ERTA was delivered,1 Opinion 2/91 marked an occasion for the Court to revert to a host of questions touched upon in that seminal ruling and subsequent post-ERTA case law. The doctrinal contribution of Opinion 2/91 is threefold. Firstly, Opinion 2/91 clarified the scope of the Opinion procedure under Article 218(11) TFEU. Secondly, Opinion 2/91 elaborated upon the ERTA doctrine on the exclusive nature of the Union’s implicit external competence on the basis of affectation of common rules. It has also served as a key source of principled justification for mixity in the conclusion of international agreements, ie the joint participation of both the Union and (some of) its Member States in the conclusion of an international
1 Case
pinion
22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1.
236 Mirka Kuisma agreement, a ‘hallmark’ of the Union’s external action.2 Thirdly, Opinion 2/91 laid down the premises of the duty of cooperation in the context of the Union’s mixed agreements. Despite its mixed reception, especially with regard to its application of the ERTA affectation test, the continuing import of Opinion 2/91 has since been confirmed by the Court both in pre- and post-Lisbon case law. II. FACTS
Opinion 2/91 pertained to the conclusion of Convention No 170 of the International Labour Organization (ILO) concerning safety in the use of chemicals at work (the ILO Convention), which was set to regulate the use of chemicals in economic activity, the classification, transport, labelling and marketing of chemical products, and employer obligations and worker rights pertaining to chemical safety. According to the ILO Constitution, the aim of the ILO is to advance working conditions and social justice, inter alia, through the adoption of conventions on minimum conditions of work. The conventions adopted in the realm of the organisation are concluded between its members; membership of the ILO, in turn, is open to states only.3 Awarding the Union (then Community) only an observer status, the rules of the ILO thus prevented it from acting in its own right. The circumstances had given rise to repeated disagreements between Union institutions and the Member States relating to the Union’s competence in matters pertaining to the ILO. A compromise had been reached on a Commission-led streamlining procedure to be followed in the adoption of ILO measures whose subject matter fell within the Union’s exclusive competence. A number of Member States, however, took the view that the ILO Convention at stake was not encompassed by exclusive Union competence and refused to coordinate their action on the Union level.4 It was in these circumstances that the Commission lodged with the Court a request for an Opinion under Article 228(1) of the EEC Treaty (now Article 218(11) TFEU). The Commission sought the Court’s views on ‘the compatibility with the EEC Treaty’ of the ILO Convention, and in particular on ‘the Community’s competence to conclude that Convention and the consequences which this would have for the Member States’.5 In addition to the Commission and the Council, nine Member State governments presented their observations in the case. The first issue in the proceedings arose with regard to the admissibility of the request for Opinion. According to some Member State governments, the fact that it was impossible for the Union to conclude the envisaged ILO Convention due to its mere observer status meant that at stake was not an international agreement ‘envisaged by the Community’, as referred to in Article 218(11) TFEU. As regards substance, the Commission took the view that the ILO Convention fell within an exclusive external competence of the Union on the basis of the ERTA doctrine. If it proved impossible for the Union to act in its own right, the Commission held that the Member States were under a duty to jointly promote the interests of the Union. 2 P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 212. 3 Arts 1(1), 1(2), 19(5), and 19(8) of the ILO Constitution. On the Union’s institutional and practical role within the ILO, see E Pichot and R Delarue, ‘International Labour Organization (ILO): A Dynamic and Result-Oriented Cooperation with the EU and its Member States’ in R Wessel and J Odermatt (eds), Research Handbook on the European Union and International Organizations (Cheltenham, Edgar Elgar, 2019) 101–20. 4 Request for Opinion in Opinion 2/91, ECR I-1064, 1066–68. 5 ibid 1064.
ERTA, Mixity and the Duty of Cooperation 237 The Council and most of the Member State governments involved denied the existence of exclusive Union competence and advocated that the ILO Convention should be concluded by the Union and the Member States jointly. Their key arguments can be summarised as follows. Firstly, the common rules adopted internally in the field coinciding with the scope of the ILO Convention did not fall within the framework of a common policy, as had been the case in ERTA. Secondly, the nature of both the ILO rules and Union measures adopted in the field as minimum requirements meant that the ILO Convention could not affect common rules in the sense envisaged in the ERTA ruling. Thirdly, the Union lacked competence altogether as regards, inter alia, the ILO Convention obligations relating to employer–worker consultations and the creation of a national policy on chemical safety at work, as well as its application to overseas countries and territories. Fourthly, the delimitations of the Union’s ability to act stemming from the framework of the ILO were taken to mean that the Union could not enjoy exclusive competence to conclude the ILO Convention. III. THE COURT
The Court rejected the plea of inadmissibility. It reaffirmed its previous reading according to which the Opinion procedure encompassed the question whether the Union had the requisite powers to conclude an international agreement.6 Admittedly, it was not for the Court to evaluate the Union’s factual capacity to act under the rules of international law; however, the Commission’s request for an Opinion was not concerned with such a question.7 The purpose of the Opinion procedure was not undermined by the circumstance that the Union was barred by the ILO rules from acting in its own right, for its eventual external competence could be exercised ‘through the medium of the Member States acting jointly in the Community’s interest’.8 The Court began the examination of the substance of the request by discussing the principles governing the Union’s external competences. The separateness of the questions pertaining to the existence and nature of the Union’s external powers emerges clearly from Opinion 2/91.9 First, the Court reaffirmed its previous findings in Opinion 1/76 and Kramer to the effect that the EU Treaties conferred the Union not only express external powers, but also implied external powers. They were derived from the Union’s internal powers10 and shaped according to what was ‘necessary for the attainment of’ the internal objectives attached to those powers.11 In contrast to Opinion 1/76, where the existence of implicit external powers was deemed indispensable to enable the Union to exercise its internal competence,12 in the 6 Opinion 2/91, International Labour Organization concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, para 3. 7 ibid para 4. 8 ibid para 5. See M Cremona, ‘Member States as Trustees of the Union Interest: Participating in International Agreements on Behalf of the European Union’ in A Arnull, C Barnard, M Dougan and E Spaventa (eds), A Constitutional Order of States? Essays in EU Law in Honour of Alan Dashwood (Oxford, Hart Publishing, 2011) 435–57. 9 See A Dashwood and J Heliskoski, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 15; Eeckhout (n 2) 83. 10 For discussion of parallelism in Opinion 2/91, see R Schütze, ‘Federalism and Foreign Affairs: Mixity as a (Inter) national Phenomenon’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and its Member States in the World (Oxford, Hart Publishing, 2010) 75. 11 Opinion 2/91 (n 6) para 7. 12 See Opinion 1/76, Draft Agreement on the establishment of a European Laying-up Fund for Inland Waterway Vessels, ECLI:EU:C:1977:63, paras 1–5. See this volume, ch 9.
238 Mirka Kuisma factual context of Opinion 2/91, ‘necessity’ could rather be understood in terms of facilitation of the attainment of the Union’s objectives.13 Turning to the nature of the Union’s external competence, the Court reaffirmed that where the Union had exercised an internal competence, its corresponding external powers could become exclusive in accordance with ‘the scope of the measures’ adopted, where the measures were ‘of such a kind as to deprive the Member States of an area of competence which they were able to exercise previously on a transitional basis’.14 Whilst the principle had been first introduced in ERTA with reference to rules implementing a common policy in accordance with the objectives of the EU Treaties,15 the Court now clarified that it was the link not to a common policy, but rather to the objectives of the EU Treaties that was key. In that sense, the pre-emptive effect resulted from the Member States’ commitment to refrain from any measure which could jeopardise the attainment of the Union’s objectives in accordance with the principle of sincere (loyal) cooperation under Article 5 EEC (now Article 4(3) TEU).16 Thus, it was ‘of little significance’ for the triggering of the ERTA effect whether the internal rules pursuing a Treaty objective fell within the framework of a common policy or not.17 Given that the question has since never been considered as a part of the evaluation of the exclusive nature of the Union’s external powers, the existence of a link to a common policy seems virtually immaterial for the application of the ERTA doctrine. Next, the Court recalled its previous findings according to which the negotiation and implementation of international agreements falling into ‘an area where competence is shared between the Community and Member States’ necessitated ‘joint action by the Community and Member States’.18 The reference to ‘shared’ competence could be taken to refer either to situations where the Union competence was of a shared nature or to situations where the action of both the Union and the Member States was necessary. In light of the inclusion of references to Kramer and Opinion 1/78 in this context, neither meaning can be ruled out. Whilst what was at stake in Kramer was an as yet unexercised exclusive Union competence which did not preclude Member State action on a transitional basis,19 Opinion 1/78 concerned an area where the Union lacked competence to act alone.20 In assessing the consequences of these general principles in the case of the ILO Convention, the Court continued by considering the question of the existence of external Union competence. It noted that the field covered by the ILO Convention fell within the scope of the social provisions of the EU Treaties which allowed the Union to support the Member States’ policies through the adoption of minimum requirements by means of directives, a competence that had, moreover, already been put to use. The Union thus enjoyed an implied external competence with regard to the ILO Convention.21 In order to determine the nature of the Union’s competence, the Court evaluated whether the provisions of the ILO Convention could affect the common rules adopted by the Union in
13 Dashwood and Heliskoski (n 9) 16; G de Baere, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008) 25–26. 14 Opinion 2/91 (n 6) para 9. 15 ERTA (n 1) para 17. 16 For discussion, see eg E Neframi, ‘The Duty of Loyalty: Rethinking Its Scope through Its Application in the Field of EU External Relations’ (2010) 47 CML Rev 323, 399–42. 17 Opinion 2/91 (n 6) paras 10–11. 18 ibid para 12. 19 Joined Cases 3, 4, and 6/76, Kramer, ECLI:EU:C:1976:114, paras 39–40. 20 Opinion 1/78, Natural Rubber, ECLI:EU:C:1979:224, para 60. 21 Opinion 2/91 (n 6) paras 15–17.
ERTA, Mixity and the Duty of Cooperation 239 the field. Here, the Court introduced two important new doctrines that elaborated upon the scope of ERTA-based exclusivity. Firstly, the Court held that where the relevant Union rules consisted of minimum harmonisation, no risk of affectation in the meaning of ERTA was at hand. This was because the ILO Convention, too, laid down minimum requirements. In case the Union’s standards were less stringent than those of the ILO Convention, the minimum harmonisation character of the Union rules nevertheless allowed the Member States to adhere to the more stringent standard. Conversely, were the Union to adopt more stringent standards, the full application of the Union rules would not be disturbed by the ILO Convention as the latter enabled its members to adopt more stringent measures.22 As a result, the Union’s competence was not exclusive. Secondly, as regards such aspects of the ILO Convention that coincided with Union rules that went beyond minimum harmonisation, the Court found that the Union’s competence was exclusive on the basis of the ERTA rule. This was the case with regard to the provisions on the classification, packaging and labelling of chemicals, which were held to coincide with the pre-existing directives harmonising the trading conditions of dangerous substances in the internal market.23 Although the Court accepted that the scope of the ILO Convention was wider than that of the existing Union rules,24 it held that the area with which the ILO Convention dealt was already covered to a large extent by [Union] rules progressively adopted since 1967 with a view of achieving an ever greater degree of harmonization and designed, on the one hand, to remove barriers to trade resulting from differences in legislation from one Member State to another …
This ongoing process of harmonisation meant that any international commitments in the same field would affect common rules, and Member State activity was therefore precluded.25 The lack of contradiction between the Union rules and the ILO Convention was not held to remove the risk of affectation.26 As regards the claims to the effect that the Union lacked competence altogether, the Member State governments were partially successful. On the one hand, the Court dismissed the Member States’ claims concerning Articles 3–5 of the ILO Convention that laid down the general principles relating to the implementation of the Convention. Without expressly utilising the word, the Court referred to the ancillary nature of the obligations:27 where the Union enjoyed external powers vis-à-vis the substance of an international agreement, it was also competent to ‘undertake commitments for putting those provisions into effect’.28 The Court did not, however, rely solely on the ancillary nature of the provisions to show that the Union enjoyed competence: it explained that, notwithstanding the Member States’ principled retention of powers in the affected field of social policy, the Union had also been granted supportive powers relating to social consultations and had the competence to lay down internal rules necessitating the grant of supervisory powers to national authorities.29 The double justification decreased the clarity of the Court’s argument, for it appears that the very ancillary nature of the provisions contained in Articles 3–5 of the ILO Convention would have sufficed to bring them into the scope of the Union’s competences with regard to the substantive provisions
22 ibid
para 18. para 22. 24 ibid para 24. 25 ibid paras 25–26. 26 ibid para 25. 27 cf Opinion 1/78 (n 20) para 56. 28 Opinion 2/91 (n 6) paras 28, 32, and 34. Previously, see Opinion 1/76 (n 12) para 5. 29 Opinion 2/91 (n 6) paras 31 and 34. 23 ibid
240 Mirka Kuisma of the ILO Convention.30 On the other hand, the Court accepted that the Union lacked the competence to conclude the ILO Convention on behalf of Overseas Countries and Territories (OCTs) insofar as it surpassed the scope of the association provisions in the EU Treaties. Thus, only the Member States responsible for the international relations of such OCTs enjoyed competence to conclude the ILO Convention in this regard.31 Finally, the Court commented on the joint action of the Union and the Member States in the negotiation and implementation of the ILO Convention. It drew analogously on Ruling 1/7832 to find that close cooperation between the Union institutions and the Member States was necessary where the Union and the Member States act concurrently on the international plane, so as to ensure the ‘unity in the international representation of the Community’.33 The fact that the Union was barred from exercising its competences directly in the context of the ILO Convention made close cooperation ‘all the more necessary’.34 It was for the Union institutions and the Member States to ‘take all the measures necessary so as best to ensure’ close cooperation in engagements with the ILO authority, as well as in the ratification and implementation of the ILO Convention.35 As a result, the Court concluded that the ILO Convention fell ‘within the joint competence of the Member States and the Community’.36 Given that the Court found both aspects that were covered by the exclusive competence of the Union, as well as aspects in regard to which the Union lacked competence altogether, the reference to ‘joint’ competence would be best understood as entailing a requirement that both the Union and the Member States participate in the conclusion of the ILO Convention, ie the conclusion of the ILO Convention as a mixed agreement was obligatory. IV. THE IMPORTANCE OF THE CASE
A key theme of the Court’s reasoning in Opinion 2/91 is the autonomy of Union law. This presents itself both in regard to the procedural aspects of the Opinion as well as in its elaboration of the ERTA doctrine. However, as the outcome of the Court’s evaluation was to allow the Member States to participate in the conclusion of the ILO Convention by the side of the Union, Opinion 2/91 also serves as a reminder of the limits of the argument drawn from the autonomy of Union law. A. Clarification of the Scope of the Opinion Procedure Opinion 2/91 clarified the scope of the Opinion procedure now laid down in Article 218(11) TFEU as regards the identity of the parties of an envisaged international agreement.37 30 For an example of the confusion created, see N Neuwahl, ‘Case Note: Opinion 2/91 of 19 March 1993 (Convention No 170 of the International Labour Organization Concerning Safety in the Use of Chemicals at Work)’ (1993) 30 CML Rev 1185, 1189. 31 Opinion 2/91 (n 6) para 35. 32 Ruling 1/78, Convention on the Physical Protection of Nuclear Materials, ECLI:EU:C:1978:202. See this volume, ch 10. 33 Opinion 2/91 (n 6) para 36. 34 ibid para 37. 35 ibid para 38. 36 ibid para 39. 37 For confirmation, see Opinion 1/13, Accession of Third States to the Hague Convention, ECLI:EU:C:2014:2303, paras 33 and 43–44. See this volume, ch 69.
ERTA, Mixity and the Duty of Cooperation 241 In rejecting the plea of admissibility raised by some Member State governments on the grounds that the Opinion procedure only applied to agreements envisaged between the Union and third parties, the Court has been seen to adopt a wide interpretation of the text of Article 228(1) EEC Treaty as it then was.38 Whilst the first paragraph of that Article referred to ‘agreements between the Community and third countries or international organisations’, its second paragraph simply referred to the possibility of obtaining an opinion ‘as to whether the agreement envisaged is compatible with the provisions of this Treaty’ (emphasis added).39 Read in its context as part of Article 228(1) of the EEC Treaty, the latter formulation could be taken to refer to agreements envisaged by the then Community. The formulation has since been amended and brought closer to the Court’s interpretation in Opinion 2/91, with Article 218(11) TFEU making reference to ‘an agreement envisaged’ (emphasis added). The broad reading of the scope is supported by the purpose of the Opinion procedure. In Opinion 1/75, the Court had held that the Opinion procedure aimed to ‘forestall complications which would result from legal disputes concerning the compatibility with the Treaty of international agreements binding upon the Community’.40 In its original context, this statement concerned commitments with a formal binding force upon the Union. However, the issue of compatibility with the EU Treaties, which, it was underlined, encompassed ‘in particular the question whether the Community has the power to enter into that agreement’,41 is equally relevant where it is an international commitment undertaken by the Member States that is at stake. There is a similar interest in preventing issues arising from the question whether unilateral Member State action has encroached upon the Union’s external powers. This logic finds analogous support in the similar procedure provided for under Article 103 of the Euratom Treaty, which expressly provides for the possibility of reviewing international commitments envisaged by the Member States for the compatibility with the Euratom Treaty prior to their conclusion. This internal viewpoint of Union law is apparent in Opinion 2/91. The Court emphasised that it can give an Opinion on questions within the realm of Union law irrespective of the rules of international law, which may affect the practical side of the conclusion of an international agreement. B. Elaboration of ERTA-Based Exclusivity The application of the ERTA doctrine in Opinion 2/91 clarified the division of external powers between the Union and Member States. The key contribution of Opinion 2/91 consisted of the introduction of the so-called ‘covered to a large extent’ doctrine as well as the minimum harmonisation rule, both of which provided additional guidance on the application of the affectation criterion in the ERTA test. The more contentious of the two was the ‘covered to a large extent’ doctrine. Whereas ERTA had been concerned with a situation where the international commitments envisaged fully coincided in scope with pre-existing Union rules, the ILO Convention covered a field where the Union’s internal harmonisation process was still ongoing. It is, however, crucial 38 See, eg Neuwahl (n 30) 1190–91. See also G Butler, ‘Pre-ratification Judicial Review of International Agreements To Be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53. 39 In the French original, ‘la conclusion d’accords entre la Communauté et un ou plusieurs États ou une organisation internationale’ and ‘la compatibilité de l’accord envisagé avec les dispositions du présent Traité’, respectively. 40 Opinion 1/75, Local Cost Standard, ECLI:EU:C:1975:145, 1360–61. See this volume, ch 4. 41 Opinion 2/91 (n 6) para 3.
242 Mirka Kuisma to note that the application of the ‘covered to a large extent’ rule in Opinion 2/91 cannot be reduced to a mere comparison between the scopes of Union rules and the ILO Convention. Instead, the relevant passage of Opinion 2/91 draws attention to the existence of an ongoing Union effort to harmonise the rules governing the handling of dangerous substances in the Union.42 Thus, Opinion 2/91 suggests that the triggering of ERTA-based exclusivity does not hinge upon the identity of the material scopes of Union and international regulation, but rather on the question whether the Union legislator’s autonomy would be disturbed. At the same time, Opinion 2/91 also introduced the rule according to which common rules laying down minimum harmonisation do not necessarily preclude external Member State action on the grounds of ERTA-based exclusivity where the international commitments envisaged also lay down minimum requirements. This provided an important clarification to the effect that Member States’ external action was not precluded every time the Union had used its powers internally or externally.43 Again, affectation of common rules does not merely hinge upon a comparison of scopes of regulation, but necessitates that the nature of the Union’s internal rules is also considered. Some disagreement has existed as to the fit between Opinion 2/91 and the surrounding case law applying the ERTA doctrine. As regards the ‘covered to a large extent’ rule, Opinion 2/91 has been viewed by some as applying a relaxed version of the affectation test that would subsequently be re-evaluated in Opinion 1/94 (WTO Agreements).44 As regards the minimum requirements rule, Opinion 2/91 was read by others as a restrictive turn in the Court’s attitude towards the exclusivity of the Union’s external competence.45 By contrast, it is suggested here that Opinion 2/91 should be seen as applying the affectation test developed in ERTA in light of the facts of the case at hand, therewith fitting into the wider ERTA case law without friction. In Opinion 2/91, ERTA-based exclusivity was conditioned by the existence of Union rules capable of being affected; but it was also deemed necessary that the Union legislator’s future room for manoeuvre in a field where the laying down of common rules has not yet been fully completed is not reduced by unilateral Member State action. The introduction within one single Opinion of such two viewpoints that superficially pull in opposite directions suggests that they both ultimately build on some common factor inherent in the affectation test. Upon one reading, at the bottom of this test is the need to safeguard the integrity or autonomy of the Union’s internal policy-making. Accordingly, Member States’ external action should be precluded to the extent necessary to ensure that the Union’s internal rulemaking is not undermined.46 Such thinking is also hinted at by the finding that ERTA-style
42 ibid para 25; see even Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81, para 120. See this volume, ch 46. 43 For the pre-Opinion 2/91 discussion, see eg N Emiliou, ‘Towards a Clearer Demarcation Line? The Division of External Relations Power Between the Community and Member States’ (1994) 19 EL Rev 76, 85–86. 44 Opinion 1/94, ECLI:EU:C:1994:384. See this volume, ch 28. For views suggesting a shift between Opinion 2/91 and Opinion 1/94, see Opinion of Advocate General (AG) Bot in Case C-66/13, Green Network, ECLI:EU:C:2014:156, paras 43–45; View of AG Jääskinen in Opinion 1/13, Accession of Third States to the Hague Convention, ECLI:EU:C:2014:2292, para 60; P Mengozzi, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention’ in M Poiares Maduro and L Azoulai (eds), The Past and Future of EU Law (Oxford, Hart Publishing, 2010) 213. For a contrary view suggesting continuity between the two Opinions, see Opinion of AG Wahl in Opinion 3/15, Marrakesh Treaty, ECLI:EU:C:2016:657, paras 130–35; Dashwood and Heliskoski (n 9); P Koutrakos, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 105–07. 45 See, eg PJ Kuijper, ‘Fifty Years of EC/EU External Relations: Continuity and the Dialogue between Judges and Member States as Constitutional Legislators’ (2008) 31 Fordham International Law Journal 1571, 1582–84. 46 See discussion and further references in M Chamon, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1101, 1107–09.
ERTA, Mixity and the Duty of Cooperation 243 affectation could be at hand even where there is no contradiction between the Union rules and the international commitment envisaged.47 Seen through the lens of autonomy, Opinion 2/91 makes sense both internally and vis-à-vis the surrounding case law. So much would be confirmed by the Court in Opinion 1/03 (Lugano Convention), where both Opinion 2/91 and Opinion 1/94 were portrayed as case-specific applications rather than reformulations of the ERTA doctrine.48 Although Opinion 2/91 can thus be fitted together with the surrounding case law, its application of the ERTA test has faced remarkable opposition. In the pre-Lisbon period, the Council and some Member State governments systematically suggested constructions of the ERTA doctrine that omitted the ‘covered to a large extent’ rule.49 Direct calls were made before the Court for the reconsideration of the doctrine by Member State governments who saw the preclusion of Member State action in fields only partially covered by common rules to breach the principle of conferral.50 Yet, the Court defended and reconfirmed the ‘covered to a large extent’ doctrine.51 The disagreement points to a difference between the Member States’ and the Court’s perception of the limits posed by the principle of conferral on the Union’s implied external powers and ERTA-based pre-emption. The resistance has even translated into institutional practices that conflicted with the Court’s case law. For example, after the Open Skies judgment and Opinion 1/03, which had found the Union’s competence to be exclusive in nature on the grounds of the ‘covered to a large extent’ rule, the Council adopted measures allowing the Member States to maintain their contested international commitments in spite of the Court’s finding that independent Member State action was pre-empted by common rules.52 The disagreement with Opinion 2/91 was carried over to the post-Lisbon era. As the language used in the codification of ERTA-based exclusivity in Article 3(2) TFEU drew solely on the Court’s original formulation in ERTA, the question was raised whether the developments in subsequent case law continued to be relevant post-Lisbon.53 Early post-Lisbon case law on the Union’s conclusion of international agreements thus centred around the question whether it had been the purpose of the Treaty Drafters to include the ‘covered to a large extent’ doctrine in the codification of ERTA.54 The Court’s case law thus far has confirmed that both the ‘covered to a large extent’ rule and the minimum requirements rule remain relevant in the post-Lisbon era.55 This can be seen as corroboration that the controversial doctrines developed in Opinion 2/91 flow directly from considerations intrinsic to the ERTA principle. 47 Opinion 2/91 (n 6) para 25. 48 Opinion 1/03 (n 42) paras 116–23. On Opinion 1/03, see this volume, ch 46. 49 See, eg Case C-467/98, Commission v Denmark, ECLI:EU:C:2002:625 (Open Skies), para 72. See this volume, ch 41. 50 Opinion 1/03 (n 42) paras 46–47. 51 ibid para 126. 52 M Cremona, ‘EU External Relations Law: Unity and Conferral of Powers’ in L Azoulai (ed), The Question of Competence in the European Union (Oxford, Oxford University Press, 2014) 74–77. 53 Suggesting that a systemic reading of Arts 2 and 3 TFEU contradicted the ‘covered to a large extent’ rule, see eg M Cremona, ‘Defining Competence in EU External Relations: Lessons from the Treaty Reform Process’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 61; Cremona (n 52) 72–73; A Dashwood, ‘Mixity in the Era of the Treaty of Lisbon’ in Hillion and Koutrakos (n 10) 361–62. 54 See, eg Case C-114/12, Commission v Council, ECLI:EU:C:2014:2151 (Neighbouring Rights Convention), para 52; Opinion 1/13 (n 37) para 63. For discussion, see eg T Verellen, ‘The ERTA Doctrine in the Post-Lisbon Era: Note under Judgment in Commission v Council (C-114/12) and Opinion 1/13’ (2015) 21 Columbia Journal of European Law 383. 55 For the ‘covered to a large extent’ doctrine, see eg Neighbouring Rights Convention (n 54) para 70; Opinion 1/13 (n 37) para 73. For the minimum requirements rule, see eg Opinion 3/15, Marrakesh Treaty, EU:C:2017:114, para 120. See this volume, ch 78.
244 Mirka Kuisma C. Sanctioning of Mixity Opinion 2/91 has been read as marking an ‘implicit sanctioning of mixity’.56 Previously, the Court had discussed the Member States’ participation in the conclusion of international agreements to which the Union was a party only in situations where a particular justification for mixity could be found.57 Against this background, Opinion 2/91 indeed seems to suggest that where the exclusive nature of Union competence is not necessitated, for example by a risk of affectation of common rules, it is left for the Member States themselves to decide if they wish to participate in the conclusion of an international agreement in their own right. In particular, pragmatic difficulty arising from a mixed procedure was not accepted as a reason to curb the Member States’ participation rights.58 It is, however, noteworthy that even Opinion 2/91 did not concern a situation where ‘pure’ shared competences were at stake. On the one part, the nature of some aspects of the ILO Convention was found to be such that the Union and Member States could both act without undermining each other’s efforts;59 on the other, it was found to contain aspects over which the Member States alone were competent. Therefore, it might be an exaggeration to read Opinion 2/91 as being intended to support the principled application of mixity and free Member State choice in all situations involving shared competences. The question becomes especially pertinent in situations where the Union has expressed its intent to conclude an international agreement which falls within the scope of an as yet unused shared competence. Although generally accepting of Member State participation, Opinion 2/91 did not provide conclusive guidance on whether the Member States may insist on their involvement in the conclusion of such an agreement.60 D. Duty of Cooperation and Unity in the International Representation of the Union Opinion 2/91 began the more sustained formulation of the duty of cooperation in the context of mixed agreements. A central principle of external relations law, the duty of cooperation requires the Union and its Member States to mutually assist each other in the attainment of their goals.61 However, Opinion 2/91 left the foundation of the duty of cooperation somewhat unclear. The Court had recourse to a principle developed in Ruling 1/78 in the context of the Euratom Treaty without expressly identifying its basis in the EC Treaty. Opinion 2/91 presents the 56 Koutrakos (n 44) 100. See even J Heliskoski, Mixed Agreements as a Technique for Organizing the International Relations of the European Community and its Member States (The Hague, Kluwer Law International, 2001) 41–42; Dashwood and Heliskoski (n 9) 17. 57 For discussion, see C Timmermans, ‘The Court of Justice and Mixed Agreements’ in A Rosas, E Levits and Y Bot (eds), The Court of Justice and the Construction of Europe: Analyses and Perspectives on Sixty Years of Case-Law (The Hague, TMC Asser Press, 2013) 663–64. 58 Opinion 2/91 (n 6) paras 19–20. 59 A comparable situation may arise eg in the field of development aid: Case C-316/91, Parliament v Council, ECLI:EU:C:1994:76 (European Development Fund). For discussion, see Heliskoski (n 56) 39–40; A Rosas, ‘Exclusive, Shared and National Competence in the Context of EU External Relations: Do Such Distinctions Matter?’ in I Govaere, E Lannon, P van Elsuwege and S Adam (eds), The European Union in the World: Essays in Honour of Professor Marc Maresceau (Leiden, Martinus Nijhoff, 2014) 19. 60 For discussion, see eg Heliskoski (n 56) 42–43. 61 Generally, see eg C Hillion, ‘Mixity and Coherence in EU External Relations: The Significance of the “Duty of Cooperation”’ in Hillion and Koutrakos (n 10); C Eckes, ‘Disciplining Member States: EU Loyalty in External Relations’ (2020) 22 Cambridge Yearbook of European Legal Studies 85.
ERTA, Mixity and the Duty of Cooperation 245 existence of a similar duty as identified in Ruling 1/78 in the Union context as a given, on the grounds that it ‘results from’ a ‘requirement of unity in the international representation of the Union’, a concept that had not hitherto appeared in the EU Treaties, or in previous case law.62 This language, subsequently developed into a standard formula,63 gives the impression that the duty of cooperation derives from a requirement of unity. However, the jurisprudential history and subsequent practice support that the duty in fact builds on the obligation of sincere cooperation under Article 4(3) TEU, read in light of the aims of the Union’s external action.64 Already in Ruling 1/78, the duty of cooperation was justified with reference to Article 192 of the Euratom Treaty, the equivalent of Article 4(3) TEU in the relevant context.65 Moreover, both the requirement of unity and the duty of cooperation have been attributed to the obligation of sincere cooperation in subsequent case law.66 The Member States, on the other hand, have refused to inscribe the duty of cooperation and the requirement of unity in the EU Treaties in their own right.67 Opinion 2/91 left the concrete implications of the duty of cooperation somewhat vague.68 The Court merely required that the Union and the Member States ‘take all the measures necessary so as best to ensure’ cooperation throughout the life cycle of the agreement and underlined that this was crucial in the circumstances of the ILO Convention in particular.69 Its reference to the Member States’ acting as ‘the medium’ for the Union’s external action appears not so much a requirement arising from the duty of cooperation as a factual circumstance in the context of the ILO Convention.70 As a result, the obligations drawn by the Member States from Opinion 2/91 have been seen as qualified. It has been suggested that only best efforts to ensure cooperation were required, and that no obligation existed as to the result.71 Under this reading, the duty of cooperation does not require the Member States to fulfil the Union’s agenda to the point of setting aside their own potentially conflicting interests, even in circumstances where the Union’s competence in the realm of an international organisation can only take place through its Member States. Perhaps as a result, Opinion 2/91 had little effect on the Member States’ comportment in practice: the ILO Convention remains unratified by most Member States to this day.72 It is unclear how this stands in relation to the implication of Opinion 2/91 that the Member States should, ‘if necessary’, allow the Union to exercise its powers by ‘acting jointly in the Community’s interest’.73 However, consequent case law has 62 For discussion of the original purpose of the unity requirement in Opinion 2/91, see Hillion (n 61) 90–91. See even Opinion of AG Szpunar in Case C-620/16, Commission v Germany, ECLI:EU:C:2019:3 (COTIF II), paras 91–95. See this volume, ch 84. 63 See, eg Opinion 1/94 (n 44) para 108; Case C-620/16, Commission v Germany, ECLI:EU:C:2019:256 (COTIF II), para 93. 64 For supporting views in legal scholarship, see eg Hillion (n 61) 92 (with references). 65 Ruling 1/78 (n 32) para 33. See this volume, ch 10. 66 See Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant), paras 174–75. See this volume, ch 47; Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS), paras 104–05. See this volume, ch 58; COTIF II (n 63) para 94. 67 See J Heliskoski, ‘Joint Competence of the European Community and its Member States and the dispute settlement practice of the World Trade Organization’ (1999) 2 Cambridge Yearbook of European Legal Studies 61, 65. 68 For general discussion of the content of the duty, see eg S Hyett, ‘The Duty of Co-operation: A Flexible Concept’ in Dashwood and Hillion (n 9). 69 Opinion 2/91 (n 6) para 38. This echoes the Court’s earlier findings in Kramer (n 19) paras 44–45. 70 Opinion 2/91 (n 6) para 37. 71 eg Hillion (n 61) 114. Supporting this interpretation of the duty of cooperation more generally, see M Cremona, ‘Defending the Community Interest: The Duties of Cooperation and Compliance’ in M Cremona and B de Witte (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 158–68. 72 eg Eeckhout (n 2) 225; G Van Der Loo and R Wessel, ‘The Non-ratification of Mixed Agreements: Legal Consequences and Solutions’ (2017) 54 CML Rev 735, 744. 73 Opinion 2/91 (n 6) para 5.
246 Mirka Kuisma made it clear that the duty of cooperation can give rise at least to tangible negative obligations for the Member States to refrain from action.74 V. ADDITIONAL READING de Baere, G, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008) chs 1, 2 and 7. Dashwood, A and Heliskoski, J, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 3–19. Eeckhout, P, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 82–87. Hillion, C, ‘Mixity and Coherence in EU External Relations: The Significance of the “Duty of Cooperation”’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and its Member States in the World (Oxford, Hart Publishing, 2010) 87–115. Koutrakos, P, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 93–101. Neuwahl, N, ‘Case Note: Opinion 2/91 of 19 March 1993 (Convention No 170 of the International Labour Organization Concerning Safety in the Use of Chemicals at Work)’ (1993) 30 CML Rev 1185.
74 For examples of the extent of the duty of cooperation in subsequent case law, see eg Opinion 1/94 (n 44) paras 106–10; Case C-25/94, Commission v Council, ECLI:EU:C:1996:114 (FAO). See this volume, ch 31; Joined Cases C-300/98 and C-392/98, Dior and others, ECLI:EU:C:2000:688, paras 36–37; Case C-45/07, Commission v Greece, ECLI:EU:C:2009:81 (IMO), para 25; PFOS (n 66). See this volume, ch 58; Case C-600/14, Germany v Commission (COTIF I), ECLI:EU:C:2017:935; COTIF II (n 63). On the two last-mentioned cases, see this volume, ch 84.
23 The Reviewability of Acts Adopted by the Member States Meeting within the Council: Parliament v Council and Commission (Bangladesh Aid) LUCA PANTALEO Joined Cases C-181/91 and C-248/91, European Parliament v Council of the European Communities and Commission of the European Communities, ECLI:EU:C:1993:271 (Bangladesh Aid), delivered 30 June 1993. KEYWORDS Action for annulment – Jurisdiction of the Court of Justice – Member States meeting within the Council – Judicial review – Rule of law – Hybrid acts – Powers of EU institutions – Division of competence – Humanitarian aid – EU development policy.
I. INTRODUCTION
W
hen Bangladesh Aid was handed down, the EU legal order had already been declared an autonomous legal order based on the rule of law,1 whose ultimate guardian, the Court was actively engaged in an extensive interpretation of its jurisdiction. Prior to Bangladesh Aid, the Court had already expanded its jurisdiction to review the validity of an EU measure by granting the Parliament the power – not granted by the original version of the EU Treaties – to bring an action for annulment under certain conditions.2 In addition, it had interpreted the list of acts subject to judicial review in an extensive manner so as to include any acts adopted by the institutions intended to have legal effects.3 There was,
1 This results from a combined reading of the Court’s findings in Costa v ENEL and Les Verts. See Case 6/64, Costa v ENEL, ECLI:EU:C:1964:66, 141; Case 294/83, Parti écologiste Les Verts v European Parliament, ECLI:EU:C:1986:166, 1339. 2 Case C-70/88, Parliament v Council, ECLI:EU:C:1991:373 (Chernobyl), 4529. 3 Case 22/70, Commission of the European Communities v Council of the European Communities, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1.
248 Luca Pantaleo however, one very special category of ‘hybrid’ acts on the reviewability of which the Court had not yet pronounced itself: namely, acts adopted by the Member States meeting in the framework of the Council that were not attributed to the Council as an EU institution, but to the Member States acting collectively. The practice of adopting this kind of act dates back to the very early days of the European integration process. It was developed under the European Coal and Steel Community (ECSC) Treaty ‘in those instances in which the Community lack power to act’.4 The ECSC Treaty even featured some sort of legal basis for it. For example, Article 69 ECSC mandated the Member States to act by common agreement to remove restrictions to the free movement of workers in the coal and steel industries without indicating the exact procedure to be followed. The adoption of hybrid acts was the solution the Member States found to this problem. The practice was then extended to the European Economic Community (EEC), whose Treaty did not include an explicit legal ground, but seemed to presuppose it implicitly.5 In addition, a recent post-Lisbon trend seems to be pointing to an increased recourse to this practice.6 Hybrid acts were – and still are – deeply intertwined with the EU legal order. Bangladesh Aid offered the Court the opportunity to declare that, despite this intense interconnection, they are formally placed outside such legal order, and are therefore not subject to the Court’s judicial review. The Court, however, made clear that the identification of the nature of an act could not be left to the Member States alone. The Court reserved to itself the power to assess whether an act characterised as one taken by the Member States meeting in the Council was, in reality, an EU legal act or not. The test to be used in order to make such assessment was developed in Bangladesh Aid. However, as the analysis that follows will demonstrate, the subsequent case law has not been consistently in line with the letter and the spirit of Bangladesh Aid, recalling that Bangladesh Aid is a case related to EU external relations law, but has attempted to be used for other matters. II. FACTS
In the night of 29–30 April 1991, Bangladesh was devastated by a cyclone. As a reaction to that event, the Commission made a grant of aid to Bangladesh of 10 million ECU, and made plans for an additional aid of 60 million ECU to be funded with resources from the Member States. The plan was put to the Member States, which first considered it during an informal meeting of the finance ministers held on 11 May 1991 and then examined it in a regular meeting of the Council (General Affairs) held in Brussels on 13 and 14 May 1991. The item did not appear on the formal agenda of the Council’s meeting, and the final decision to approve the plan was taken during a working lunch attended by the ministers and by a member of the Commission.7 4 G Bebr, ‘Acts of Representatives of the Governments of the Member States’ (1966) 14 Sociaal-Economische Wetgeving 529, 530. 5 ibid 532–33. Moreover, one should not forget that the EEC Treaty included the ancestor of what is now Art 352 TFEU (then Art 235 EEC), which laid down a flexibility clause that could serve similar purposes. See G Butler, ‘The EU Flexibility Clause is Dead, Long Live the EU Flexibility Clause’ in A Bakardjieva Engelbrekt and X Groussot (eds), The Future of Europe: Political and Legal Integration Beyond Brexit (Oxford, Hart Publishing, 2019). 6 See C Tovo, ‘Il Consiglio europeo in tempo di crisi: dall’involuzione istituzionale all’unità nella frammentazione’ (2017–18) 4/5 Quaderni di SIDIBlog 351, 353–59. 7 A detailed account of the background to the dispute is provided in the Opinion of Advocate General Jacobs, Joined Cases C-181/91 and C-248/91, European Parliament v Council of the European Communities and Commission of the European Communities, ECLI:EU:C:1992:520, 3699–700.
The Reviewability of Acts Adopted by the Member States Meeting within the Council 249 The approval of the plan was, however, announced in the press release that summarised the outcomes of the Council’s meeting. It was presented under the heading ‘Aid to Bangladesh – Council Conclusions’.8 The relevant text was quite short. Given its significance for the dispute, it seems appropriate to cite it in full: The Member States, meeting within the Council, decided, on the basis of a proposal from the Commission and within the framework of a Community action, to grant Bangladesh special aid of ECU 60 million. The amount will be apportioned among the Member States according to the GNP scale. The aid will be incorporated in the Community’s general action for Bangladesh. The aid will be supplied either directly by the Member States or via an account administered by the Commission. The Commission will see to overall co-ordination of the special aid of ECU 60 million.9
The European Parliament brought two separate actions for annulment on the basis of Article 173 EEC (now Article 263 TFEU), one against the Council’s decision to grant aid to Bangladesh and the other against the implementing budgetary acts taken by the Commission.10 Only the first action is relevant for the purposes of this chapter. The Parliament submitted that although the decision in question was presented in the press release as a decision of the Member States’ meeting in the Council, it was, in reality, in the Parliament’s view, a Council decision proper, with implications for the Union budget. As such, it should have been adopted in accordance with the budgetary procedure laid down in Article 203 EEC (now Article 314 TFEU). In order to demonstrate that the author of the decision was the Council and not the Member States acting collectively, the Parliament presented a number of arguments that can be summarised as follows. First, the plan was approved upon a proposal from the Commission in accordance with the legislative procedure applicable at that time pursuant to Article 149 EEC (since abolished). Second, the Commission was conferred implementing powers, which, according to Article 155(4) EEC (now abolished), only the Council – as opposed to the Member States – could do.11 Third, the decision employed concepts that were typically used in Community acts, such as the criterion to apportion the financial burden based on the GDP of each Member State.12 The Council raised an objection of inadmissibility, but also proffered arguments concerning the substance. As regards admissibility, the Council pointed out that the contested decision had been adopted by the Member States, rather than by the Council itself. For this reason, it fell outside the scope of Article 173 EEC (now Article 263 TFEU). Regarding the substance, two of the Council’s arguments are worthy of consideration. Firstly, the Council submitted that the Member States were not prevented from using Union concepts outside the EU legal
8 See 1487th Council meeting – Press Release 6004/91, 5. 9 ibid. 10 It is worth noting that Art 173 EEC, contrary to its contemporary equivalent found in Art 263 TFEU, did not include the Parliament among the list of so-called privileged applicants. The power of the Parliament to institute proceedings in the context of an action for annulment was at that time based on the case law of the Court of Justice, according to which this institution could only bring such action against the Council or the Commission in order to safeguard its prerogatives. 11 The provision in question read as follows: ‘In order to ensure the proper functioning and development of the common market, the Commission shall … exercise the powers conferred on it by the Council for the implementation of the rules laid down by the latter’ (emphasis added). 12 Joined Cases C-181/91 and C-248/91, European Parliament v Council of the European Communities and Commission of the European Communities, ECLI:EU:C:1993:271 (Bangladesh Aid), 3718–19.
250 Luca Pantaleo framework, nor were they prevented from entrusting the Commission with the coordination and management of an aid granted to a third country outside such framework. The Council seemed to base this claim on practical considerations, rather than on a specific legal ground.13 Secondly, the Council emphasised that the Union competence to grant humanitarian aid was not exclusive. Therefore, the Member States remained free to act alongside the Union on an individual or collective basis.14 III. THE COURT
The Court’s decision – which mainly followed the Opinion of the Advocate General – was largely focused on the (in)admissibility of the action. However, the admissibility was strongly intertwined with substantive considerations. The Court started off by stating that acts adopted by the representatives of the Member States acting as representatives of their governments were excluded from the scope of Article 173 EEC (now Article 263 TFEU) and hence were not subject to the Court’s review. At the same time, and as noted in the introduction, the Court had consistently followed a broad interpretation of such provision in its previous case law. In particular, the Court had already made clear that the meaning of the expression ‘acts of the Council and the Commission other than recommendations or opinions’ contained in Article 173 EEC had to be determined based on substantive considerations, rather than formal considerations. This approach is neatly summarised in one of the landmark findings of the ERTA ruling, according to which ‘An action for annulment must … be available in the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects’.15 The logical consequence of this approach was that the formal qualification of an act as a decision taken by the representative of the Member States was not enough, in and of itself, to remove the decision in question from the jurisdiction of the Court. Instead, it was necessary to look into the substance of the act challenged by the Parliament. More specifically, the Court stated that ‘it must still be determined whether, having regard to its content and all the circumstances in which it was adopted, the act in question is not in reality a decision of the Council’ (emphasis added).16 Immediately after this consideration, the Court ‘pointed out that the Community does not have exclusive competence in the field of humanitarian aid, and that consequently the Member States are not precluded from exercising their competence’.17 The juxtaposition of these two statements was by no means accidental, as shall be seen below. The Court continued to rebut the Parliament’s arguments one by one. In doing so, it formulated the following three main findings: (i) not all proposals from the Commission necessarily constituted proposals of a legislative nature; (ii) the EU Treaties did not prevent the Member States from entrusting the Commission with coordinating tasks in the context of an action
13 See the account provided by the Advocate General. In particular, the Council claimed that ‘the division of the aid on the basis of the Member States’ GNP provided a practical and easy solution’. As far as the role of the Commission was concerned, the Council justified it on the fact that the ‘Commission ha[d] undertaken similar operations in the past and ha[d] developed experience and expertise’. See Opinion of Advocate General Jacobs, Parliament v Council (n 7) 3702. 14 ibid 3703. 15 Commission v Council (n 3) 277. See this volume, ch 1. 16 Bangladesh Aid (n 12) 3718. 17 ibid.
The Reviewability of Acts Adopted by the Member States Meeting within the Council 251 taken outside the EU legal framework; and (iii) the Member States were not prevented from using concepts and criteria borrowed from the EU legal order when acting outside it.18 Based on these considerations, the Court found that ‘the contested act is not an act of the Council but an act taken by the Member States collectively’, and therefore declared the application inadmissible.19 IV. THE IMPORTANCE OF THE CASE
Bangladesh Aid must have appeared as a ruling of somewhat negligible importance to the scholarship at that time. There are only a few case notes devoted to it, compared to the deluge of scholarly comments that usually appear after landmark rulings.20 Moreover, the Court itself has not often referred to this judgment in its case law. However, things have changed radically in the post-Lisbon era. Bangladesh Aid has been relied upon in a list of recent high-profile cases that have triggered a lively debate among scholars, giving rise to renewed interest in the judgment. This list includes judgments commented on in this book, such as NF v European Council,21 as well as judgments not directly relevant to the law of EU external relations, such as Pringle22 and Representatives of the Governments of the Member States and Council v Sharpston.23 In short, Bangladesh Aid has imposed itself as the benchmark for assessing the authorship of an act – and hence its reviewability before the Court – where it is unclear whether it has been adopted by the Council or by the Member States acting within the Council. A. Assessing the Authorship of an Act: A Question of Intention and of Competence As seen above, the Court did not offer much guidance as to the criteria that have to be employed in order to attribute an act to the Council or to the Member States when meeting within the Council. It merely stated, in rather succinct terms and referring exclusively to the ERTA precedent, that regard had to be given to the ‘content and all the circumstances in which [the act] was adopted’. This statement contained essentially one criterion, which can be defined as ‘functional’ – to borrow from Advocate General Jacobs.24 Put differently, in order to determine the author of an act, one should look (i) at its substance (ie the content), as opposed to the formal qualification of an act, and (ii) at all other relevant circumstances. However, the judgment seemed to imply that an additional assessment had to be made other than the context in which the decision was taken. At this stage, it is useful to examine the lengthy (and sophisticated) reasoning of the Advocate General. First of all, Advocate General Jacobs started off from a more ambitious premise than the Court. By referring to the legendary finding of Les Verts, where the Court 18 ibid 3718–19. 19 ibid. 20 In particular, only two case notes of particular prominence were written: L Neville Brown, ‘Joined Cases C-181/91 and C-248/91, European Parliament v Council and Commission, Judgment of 30 June, [1993] ECR 1–3685’ (1994) 31 CML Rev 1347; V Constantinesco, ‘Cour de justice des Communautés européennes. – 30 juin 1993. – Affaires Jointes C-181/91 et C-248/91. Parlement européen c/ Conseil et Commission’ (1994) 121 Journal du droit international 467. 21 Case T-192/16, NF v European Council, ECLI:EU:C:2017:762. See this volume, ch 79. 22 Case C-370/12, Thomas Pringle v Government of Ireland and Others, ECLI:EU:C:2012:756. 23 Case C-423/20 P(R), Representatives of the Governments of the Member States v Eleanor Sharpston, CLI:EU:C:2020:705; Case C-424/20 P(R), Council of the European Union v Eleanor Sharpston, CLI:EU:C:2020:700. 24 See Opinion of Advocate General Jacobs, Parliament v Council (n 7) 3705.
252 Luca Pantaleo affirmed for the first time that ‘the European Economic Community is a Community based on the rule of law’,25 he declared that ‘this fundamental principle [ie the rule of law] would be violated if it were accepted that an act is not susceptible to judicial review solely on the basis that it has been characterized as an act of the Member States meeting in the Council’.26 He then referred to two issues that appeared particularly relevant. First and foremost, he emphasised the importance of ‘the intention of the author of the decision’, which, in his view, plainly demonstrated the willingness to adopt the act in question as an act of the Member States, and not of the Council.27 Secondly, being well aware that the intention of the Member States could not be decisive in itself, he analysed whether it was legally possible for the Member States to do what they did. As he put it, it was necessary to ascertain whether ‘the act could properly be adopted otherwise than by the Council’.28 In order to answer that question, Advocate General Jacobs looked at the division of competence in the relevant field. He observed that it was ‘common ground that in the field of humanitarian aid the competence of the Community is not exclusive but concurrent with that of the Member States’.29 In turn, this meant that ‘the Member States retain[ed] the power to act individually or collectively’.30 As we have seen, the Court has also emphasised the competence issue, although perhaps not as clearly as the Advocate General did. The central role played by competence will be reinforced – albeit indirectly – by a later judgment of the Court (see section IVB below). The logic behind the Advocate General’s reasoning was quite clear, and commendable. Since the Union was a system based on the rule of law, the range of acts not subject to judicial review had to be restricted to the greatest extent possible. Therefore, the assessment of when the Member States could validly – that is, had the power to – adopt decisions having an impact on the EU legal order despite being placed outside it had to be quite rigorous in order to ultimately serve the purpose of safeguarding the rule of law in the Union.31 Unfortunately, the Court was rather laconic on these issues. One can only agree with the author who noted that Bangladesh Aid is one of those cases that illustrate ‘how invaluable for understanding the Court’s often terse decisions are the [O]pinions of the Advocate General, especially when presented (as here) with full and lucid articulation of the competing arguments’.32 Combining the Court’s terse judgment and the Advocate General’s articulated Opinion, it can be said that Bangladesh Aid established a two-tier test for attributing the authorship of an act and assessing its reviewability. The first tier of the test was a subjective one. It concerned the author of the act – namely, the Member States – and aimed to assess whether both the intention to act outside the EU framework and the power to do so could be clearly established. The second tier was an objective one. It concerned the content of the decision in question as well as all other (factual and legal) circumstances. The approach developed in Bangladesh Aid concerning the assessment of the authorship of an act has not been followed consistently in subsequent cases. To begin with, the General
25 Les Verts (n 1) 1339. 26 See Opinion of Advocate General Jacobs, Parliament v Council (n 7) 3705. 27 ibid 3706. 28 ibid. 29 ibid. 30 ibid. 31 In this sense, it is worth noting that the Advocate General used the term ‘hybrid’ twice in order to describe the ambivalent nature of these acts – namely, acts taken outside the EU framework which are none the less deeply interconnected with it. ibid 3704 and 3707. It is also worth noting that the Court refrained from employing this language. 32 Brown (n 20) 1355.
The Reviewability of Acts Adopted by the Member States Meeting within the Council 253 Court seemed to depart from it in NF v European Council. It is true that the General Court made a reference of principle to the above-mentioned functional assessment.33 However, in reality, it failed to apply the first tier of the test developed in Bangladesh Aid, despite the many similarities between the two cases. Without going too much into the details of a judgment that is analysed in-depth in another chapter of this book,34 in NF v European Council, the contested measure – that is, the (in)famous EU–Turkey Statement – was not even clearly labelled as an act taken by the Member States acting outside the EU framework (see section IVC below). Rather, it was presented as ‘the result of a meeting between the “Members of the European Council” and their “Turkish counterpart”’.35 The intention of the Member States to act outside the EU legal order, which in Bangladesh Aid was ‘plain’, as the Advocate General put it, was, by contrast, at least doubtful in NF v European Council. It took the General Court in NF v European Council a rather lengthy analysis of the conduct of all institutional actors involved to establish such intention. In addition, the General Court entirely omitted to examine the competence divide in the relevant field, which conversely seemed to be at the very heart of both the Court’s and the Advocate General’s reasoning in Bangladesh Aid.36 Therefore, one may seriously wonder whether in NF v European Council the General Court has applied or misapplied the Bangladesh Aid precedent.37 Albeit not directly relevant to the law of EU external relations, it is worth noting that another dubious application of Bangladesh Aid took place in the recent Representatives of the Governments of the Member States and Council v Sharpston case. In that case, two orders of the Vice-President of the Court stated that the decision of the representatives of the Member States, on the basis of Article 253 TFEU, to replace an Advocate General before her term had expired was not reviewable based precisely on Bangladesh Aid.38 However, similarly to NF v European Council, the two orders of the Vice-President entirely lacked an assessment of the first tier of the test developed in Bangladesh Aid, that is to say, the analysis of whether the Member States had the power to adopt such an act.39
33 Case T-192/16, NF v European Council, ECLI:EU:T:2017:128, para 45, where the General Court held that in order for the act at stake in that case to be excluded from judicial review, it was ‘necessary to determine whether, having regard to its content and all the circumstances in which it was adopted, the measure in question is not in reality a decision of the European Council’ (emphasis added). As one can see, the Bangladesh Aid formula is reproduced word for word. 34 See this volume, ch 79. 35 NF v European Council (n 33) para 54. On this point, it is worth noting the (personal) view expressed by President Lenaerts in a recent essay, where he (very) indirectly and cautiously seemed to criticise the conclusion reached by the General Court. See K Lenaerts, ‘The Court of Justice of the European Union and the Refugee Crisis’ in K Lenaerts, JC Bonichot, H Kanninen, C Naômé and P Pohjankoski (eds), An Ever-Changing Union?: Perspectives on the Future of EU Law in Honour of Allan Rosas (Oxford, Hart Publishing 2020) 10. 36 This seems to also be the opinion of D O’Keeffe, ‘Community and Member State Competence in External Relations Agreements of the EU’ (1999) 36 European Foreign Affairs Review 7, 19 and 29. 37 Particularly critical of the General Court’s reliance on Bangladesh Aid is E Cannizzaro, ‘Denialism as the Supreme Expression of Realism. A Quick Comment on NF v European Council’ (2017) 2 European Papers 251, 254–55. See also A Popov, ‘Identification de l’auteur de l’acte attaqué et recevabilité du recours en annulation: le Tribunal de l’Union estime que la “déclaration UE-Turquie du 18 mars 2016” ne saurait faire l’objet d’un recours en annulation’ (2017) 17 Revue des affaires européennes 101, 104–05. 38 Case C-424/20 P(R), Council of the European Union v Eleanor Sharpston, ECLI:EU:C:2020:705, paras 25–28. 39 Which, in all likelihood, they had not. See the thoughtful considerations made by D Kochenov and G Butler, ‘The Independence and Lawful Composition of the Court of Justice of the European Union: Replacement of Advocate General Sharpston and the Battle for the Integrity of the Institution’ (2020) Jean Monnet Working Papers 2, 24–27. In any case, the differences between the two cases are such that one may wonder whether Bangladesh Aid could validly be relied upon as a precedent altogether.
254 Luca Pantaleo B. Reviewability of Acts with a Double Authorship A related question that was not put to the Court in Bangladesh Aid but that came to it in a later judgment is the reviewability of acts with a double authorship; that is, acts adopted by the Council and by the Member States meeting within the Council. The Court tackled this question in Commission v Council (Neighbouring rights),40 as well as in US Air Transport Agreement.41 The former case concerned a decision authorising the Commission to negotiate a Convention of the Council of Europe as regards matters falling within the Union’s competence, which at the same time mandated the Council’s Presidency to participate in the negotiations on behalf of the Member States for the parts of the Convention coming under their competence. The Commission challenged the validity of the decision claiming a breach of the Union’s exclusive competence based on Article 3(2) TFEU.42 The latter case concerned a decision on the signature and provisional application by the Union of an air transport agreement, as well as a decision taken simultaneously by the representatives of the governments of the Member States meeting within the Council on the provisional application of that same agreement by the Member States.43 In Commission v Council (Neighbouring rights), the Council and the supporting Member States did not raise a formal objection of inadmissibility yet invited the Court to decline its jurisdiction in view of the fact that the action was ‘partly directed against a decision adopted by the representatives of the Member States in their capacity as representatives of their governments, and not as members of the Council’.44 The Court declined the ‘invitation’, rather than its jurisdiction. It stated that since the Council was involved in the granting of both authorisations, the action was ‘admissible with regard to the contested decision as a whole’.45 The Court confirmed this finding in the judgment handed down a few months later in US Air Transport Agreement, this time in reaction to a formal plea of inadmissibility raised by the Council. By referring expressly to Commission v Council (Neighbouring rights), and in a rather concise way, the Court stated that the Council’s participation in both decisions was sufficient to attract the contested decision under its jurisdiction. In the light of Bangladesh Aid – to which the Court made express reference in both judgments – one may wonder what conclusion the Court would have reached had the decision in question been formally split in two separate acts. In such instance, would the decision taken by the representatives of the governments of the Member States meeting within the Council be excluded from the scope of Article 263 TFEU based on Bangladesh Aid? The answer to the above question seems to be in the negative. As seen above, the conclusion reached in Bangladesh Aid appeared to be grounded on the premise that by acting outside the EU framework, the Member States did not encroach upon the Union’s powers. In this sense, one should not forget the complementary nature of the EU and the Member States’ respective competence in the field of development aid,46 which was the one relevant in Bangladesh Aid. In Commission v Council (Neighbouring rights), the Court eventually upheld the Commission’s 40 Case C-114/12, European Commission v Council of the European Union, ECLI:EU:C:2014:2151. 41 Case C-28/12, European Commission v Council of the European Union, ECLI:EU:C:2015:282 (US Air Transport Agreement). 42 ibid paras 44–63. 43 For an in-depth analysis of this case, see this volume, ch 72. 44 ibid para 38. 45 ibid para 41. 46 Further on this point, see the thoughtful considerations of M Broberg, ‘EU Development Policy’ in RA Wessels and J Larik (eds), EU External Relations Law. Text, Cases and Materials (Oxford, Hart Publishing 2020) 257–61.
The Reviewability of Acts Adopted by the Member States Meeting within the Council 255 claim in favour of EU exclusivity in the subject matter covered by the Convention.47 This reinforces the idea that a decision of the Member States meeting within the Council, which impinges on EU competence, would not benefit from the exclusion from judicial review set out in Bangladesh Aid even if the decision in question is formally labelled as a decision of the representatives of the governments of the Member States meeting within the Council. In other words, if such a decision authorised the Member States to do something that is not legally possible for them to do – for example, because a given matter comes in an area of EU exclusive competence, as was the case in Commission v Council (Neighbouring rights) – Bangladesh Aid would not constitute a validly invokable defence. The question would be different if the Member States were not to formally take a (collective) separate decision meeting within the Council but instead acted on an informal and/or individual level outside the Council, as appears to be happening in the most recent practice developed in reaction to the two judgments mentioned in this section.48 In such a case, it seems reasonable to assume that any encroachments of EU powers committed by the Member States – even if informally and perhaps in an uncoordinated manner – would constitute infringements of EU law, and possibly trigger the relevant remedies offered by the EU legal order. C. Some Terminological Issues When the proceedings in Bangladesh Aid were instituted, hybrid acts like the ones discussed in this chapter were most commonly referred to as ‘decisions of the Representatives of the Governments of the Member States meeting in Council’. This hardly concise expression dated back to the early practice reported above (see section I above). The slightly different terminology used in the text of the press release challenged by the Parliament in Bangladesh Aid did not escape Advocate General Jacobs. He duly referred to past practice, but noted that no distinction appeared to be intended.49 The Court explicitly agreed with the Advocate General,50 and that expression became the standard one in the years to come. This state of affairs lasted until a new terminological issue emerged in NF v European Council. The measure at stake in this judgment referred generally to ‘Members of the European Council’. Furthermore, it stated that ‘it was “the EU and [the Republic of] Turkey” which agreed on the additional action points’.51 The European Council explained that these expressions in the press release were used in a journalistic, rather than a technical, sense, and pointed to other factual circumstances in order to demonstrate that the authors of the EU–Turkey Statement were in reality the Member States. The General Court agreed with the European Council after a detailed examination of those factual circumstances.52 The use of standard expressions solidified in the practice of EU institutions and somewhat validated by the Court in its case law should be taken as an indication that at least the intention of the author is clear. It also contributes to the transparency of the decision-making process. Instead, an ambivalent choice of words like the one examined in NF v European Council may
47 Case
C-114/12, Commission v Council (n 40) paras 64–103. this volume, ch 72. 49 Opinion of Advocate General Jacobs, Parliament v Council (n 7) 3704. 50 Bangladesh Aid (n 12) 3717. 51 NF v European Council (n 33) para 54. 52 ibid paras 57–72. 48 See
256 Luca Pantaleo give rise to ambiguities and require additional scrutiny from the Court. In the light of the importance of the ultimate issue at stake – that is, the judicial review of an act in a system based on the rule of law – one would expect the Member States and the EU institutions to be more accurate when it comes to terminological aspects. D. The Use of EU Institutions by the Member States Outside the EU Framework In Bangladesh Aid, the Court was confronted for the first time with the legality of a decision of the Member States to involve EU institutions in an action undertaken outside the EU legal framework. There was already some meaningful practice prior to Bangladesh Aid. The Council pointed to several examples, such as the administration by the Commission of the European Development Fund.53 Advocate General Jacobs found these examples persuasive and concluded that ‘even if one accepted the suggestion that the Commission could not act outside the Community framework, the consequence might be that the Commission’s intervention was unlawful rather than that the contested decision was a Community act’.54 The Court endorsed this practice. It found that nothing in the EU Treaties prevented ‘the Member States from entrusting the Commission with the task of coordinating a collective action undertaken by them on the basis of an act of their representatives meeting in the Council’.55 This finding was later confirmed by the Court in a different context in Pringle. In this later judgment, however, a qualification was added. The Court clarified that the power to confer additional tasks on EU institutions is subject to the condition ‘that those tasks do not alter the essential character of the powers conferred on those institutions by the EU … Treaties’.56 A coherent consequence of this finding was that the Commission’s proposal did not constitute a proposal in the legislative sense of the expression, contrary to what the Parliament maintained.57 It is only logical that if the Commission can be assigned (coordinating) tasks not foreseen in the EU Treaties, it can also make proposals to the Member States to carry out such tasks. The General Court coherently followed the Court’s indication on this point in NF v European Council.58 V. ADDITIONAL READING Bebr, G, ‘Acts of Representatives of the Governments of the Member States’ (1966) 14 Sociaal-Economische Wetgeving 529. Broberg, M, ‘EU Development Policy’ in RA Wessel and J Larik (eds), EU External Relations Law. Text, Cases and Materials (Oxford, Hart Publishing, 2020) 257–61. 53 Which has itself given rise to inter-institutional litigation, in particular in Case C-316/91, European Parliament v Council of the European Union, ECLI:EU:C:1994:76, 625. See this volume, ch 24. 54 Opinion of Advocate General Jacobs, Parliament v Council (n 7) 3707. 55 Bangladesh Aid (n 12) 3719. 56 Pringle (n 22) para 158. In fairness, Advocate General Jacobs had already included this qualification in his Opinion rendered in Bangladesh Aid. In particular, he stated that the Commission could carry out additional tasks ‘provided of course that it does so in a way which is compatible with its duties under the Community Treaties’. See Opinion of Advocate General Jacobs, Parliament v Council (n 7) 3707. On the practice of using the EU institutions outside the Union legal framework, see the thoughtful analysis of S Peers, ‘Towards a New Form of EU Law?: The Use of EU Institutions outside the EU Legal Framework’ (2013) 9 European Constitutional Law Review 1, 37. 57 Bangladesh Aid (n 12) 3718. 58 NF v European Council (n 33) para 52.
The Reviewability of Acts Adopted by the Member States Meeting within the Council 257 Cannizzaro, E, ‘Denialism as the Supreme Expression of Realism. A Quick Comment on NF v European Council’ (2017) 2 European Papers 251. Constantinesco, V, ‘Cour de justice des Communautés européennes – 30 juin 1993 – Affaires Jointes C-181/91 et C-248/91. Parlement européen c/ Conseil et Commission’ (1994) 121 Journal du droit international 467. Lenaerts, K, ‘The Court of Justice of the European Union and the Refugee Crisis’ in K Lenaerts, JC Bonichot, H Kanninen, C Naômé and P Pohjankoski (eds), An Ever-Changing Union?: Perspectives on the Future of EU Law in Honour of Allan Rosas (Oxford, Hart Publishing 2020) 3–19. Neville Brown, L, ‘Joined Cases C-181/91 and C-248/91, European Parliament v Council and Commission, Judgment of 30 June, [1993] ECR 1–3685’ (1994) 31 CML Rev 1347. O’Keeffe, D, ‘Community and Member State Competence in External Relations Agreements of the EU’ (1999) 36 European Foreign Affairs Review 18. Popov, A, ‘Identification de l’auteur de l’acte attaqué et recevabilité du recours en annulation: le Tribunal de l’Union estime que la « déclaration UE–Turquie du 18 mars 2016 » ne saurait faire l’objet d’un recours en annulation’ (2017) 1 Revue des affaires européennes 102.
258
24 Legality of the European Development Fund and the European Parliament’s Prerogatives: Parliament v Council (European Development Fund) SANDRA BARTELT* Case C-316/91, European Parliament v Council of the European Union, ECLI:EU:C:1994:76, delivered 2 March 1994 (European Development Fund). KEYWORDS Action for annulment – European Development Fund – Fourth ACP–EEC Convention (Lomé IV) – Measures against which actions may be brought – Institutional prerogatives of the European Parliament – Competences of the Member States and of the EU in development policy – Financial assistance.
I. INTRODUCTION
E
Parliament v Council of the European Union (European Development Fund) dealt with the question whether the European Development Fund (EDF) should form part of the general budget of the Union. In this case, the European Parliament challenged an act of the Council on the ground that, by adopting it on the wrong legal basis, the Council had infringed the Parliament’s prerogatives. The Court clarified the legal nature of the EDF and that EU institutions can be associated with the procedural components. Since the Parliament contested the EDF’s Financial Regulation as adopted by the Council on the basis of the Internal Agreement, which itself was adopted by the representatives of Member States meeting within the Council, the question arose whether this measure by the Council was a measure that could be challenged at all. It further had to be clarified whether the Parliament’s prerogatives had been infringed. The Court also ruled on the nature of the competence in the EU’s development cooperation policy, which is not exclusive, and it emphasised that the Member States are accordingly entitled to enter into commitments themselves vis-à-vis nonMember States, either collectively or individually, or even jointly with the Union. uropean
* All opinions expressed herein are personal to the author.
260 Sandra Bartelt II. FACTS
The Fourth Convention between, on the one hand, the Community and the Member States and, on the other hand, 68 African, Caribbean and Pacific Ocean States (the ACP states) was signed at Lomé on 15 December 1989, and its amendment signed in Mauritius on 4 November 1995.1 It was approved on behalf of the European Economic Community (EEC) and the European Coal and Steel Community (ECSC) by a Decision of the Council and the Commission of 25 February 1991.2 On the EU side, the Lomé Conventions were concluded as association agreements on the basis of Article 238 EC (now Article 217 TFEU). According to Article 1 of the Fourth Convention, its fundamental objective was to provide for cooperation between the Union and the ACP states in order to promote and expedite the economic, cultural and social development of the ACP states. Article 1 also states that the contracting parties seek to create, with a view to a more just and balanced international economic order, a model for relations between developed and developing states. Title III (Articles 220–327) of Part Three of the Convention was entitled ‘Development Finance Cooperation’. The ultimate objectives of that cooperation was to promote the long-term social, cultural and economic development of the ACP states and to help raise the standard of living of their peoples through the provision of adequate financial resources and appropriate technical assistance.3 While the Fourth Lomé Convention covered for the first time a period of 10 years, the financial assistance attributed to that cooperation covered a period of five years and figured in a Protocol to the Lomé Convention.4 Most of that sum was to be allocated to the ACP states in the form of grants. The Financial Assistance Protocol in the Fourth Lomé Convention reflected the agreement on the financial cooperation reached between Member States. On 16 July 1990, the representatives of the governments of the Member States meeting within the Council notably adopted an Internal Agreement on the financing and administration of Community aid under the Fourth Lomé Convention (the Internal Agreement).5 Its Article 1 established the Seventh EDF by the Member States. Article 1 also specified the contribution of each Member State to the Seventh EDF. Its Article 32 provided that the Internal Agreement was to be implemented by a Financial Regulation, which was to be adopted by the Council, acting by the qualified majority laid down in Article 21(4) of the Internal Agreement, on the basis of a Commission draft, after an opinion has been delivered by the European Investment Bank (EIB) on the provisions of concern to it and by the Court of Auditors established under Article 206 EC (now Article 285 TFEU). Pursuant to Article 32 of the Internal Agreement, the Commission submitted a draft Financial Regulation to the Council in June 19906 and modifications to that draft in October 1990.7 By a letter of 26 October 1990, the Council requested the Parliament’s opinion on the Commission’s modified draft.8 The Parliament contested the legal basis on which the
1 [1995] OJ L327/32. 2 Decision 91/400/ECSC, EEC, [1991] OJ L229/1. 3 Art 220a) and b) of the Fourth Lomé Convention. 4 The amount was set at ECU 12,000 million. 5 [1991] OJ L229/288. 6 COM (90) 243 final, [1990] OJ C165/8. 7 COM (90) 446 final, [1990] OJ C267/14. 8 Opinion of the Advocate General (AG) Jacobs, Case C-316/91, European Parliament v Council of the European Union, ECLI:EU:C:1993:872 (European Development Fund), para 7.
Legality of the European Development Fund and the European Parliament’s Prerogatives 261 Commission’s draft was submitted by resolution of 14 December 1990.9 It took the view that the proposed Financial Regulation should be adopted on the basis of Article 209 EC (now Article 322 TFEU) and that it should take the form of a regulation within the meaning of Article 189 EC (now Article 322 TFEU). It called on the Commission to act accordingly. By a resolution of 14 May 1991,10 the Parliament rejected the Commission’s draft on the ground that it infringed the provisions of the EU Treaties, in particular Articles 199 and 209 EC (now Articles 310 and 322 TFEU), and requested the Commission to submit a new draft taking into account the general Financial Regulation. The Council did not follow the Parliament’s opinion. Instead, it adopted the contested act on the basis of the Internal Agreement. In its action for annulment before the Court, the Parliament claimed that the contested act was adopted on the wrong legal basis. It argued that the expenditure concerning the development assistance provided for by the Fourth Lomé Convention was Union expenditure. The measure ought therefore to have been adopted pursuant to Article 209 EC (now Article 322 TFEU),11 which reads as follows: The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors, shall: (a) make Financial Regulations specifying in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts …
The Parliament argued that according to Article 199 EC (now Article 310 TFEU), which laid down the principle of unity of the Union budget, all items of revenue and expenditure of the Union must be shown in the budget.12 It claimed that an exception to that principle may be introduced only by the EU legislature acting within the limits of its powers. It could not be introduced validly by the Internal Agreement. The Council, as supported by the Spanish government, contested the admissibility of the action and submitted that the contested Financial Regulation was not an act which may be contested under Article 173 EC (now Article 263 TFEU); although it was an act of the Council, it was an act adopted not pursuant to the provisions of the EU Treaties, but pursuant to the power conferred on the Council by a provision of the Internal Agreement. Moreover, the Council pleaded that the Parliament may not plead that its prerogatives were infringed since it had been consulted.13 The European Commission did not intervene, although it has the long-standing position that it would be more efficient to integrate the EDF into the general budget of the Union. III. THE COURT
In its findings, the Court addressed first the issue of admissibility. With respect to the question whether the contested act by the Council was a measure that could be challenged, as it had been adopted not on the basis of the EU Treaties, but on the basis of the Internal
9 [1991] OJ C19/588. 10 [1991] OJ C158/28. 11 Opinion of AG Jacobs, Case C-316/91, European Parliament v Council of the European Union ECLI:EU:C:1993:872 (European Development Fund), para 9. 12 ibid para 10. 13 ibid paras 20–22.
262 Sandra Bartelt Agreement, the Court underlined that an action for annulment must be available in the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects.14 The Court continued that it therefore followed that an action by the Parliament against an act of an institution intended to have legal effects was admissible, irrespective of whether the act was adopted by the institution pursuant to provisions of the EU Treaties.15 Moreover, the Court rejected the argument that the Parliament could not claim that its prerogatives had been infringed as it had been consulted, albeit on an optional basis. In this respect, the Court repeated its settled case law that the EU Treaties set up a system for the distribution of powers among the different Union institutions, assigning to each institution its own role in the institutional structure of the Union with the accomplishment of tasks entrusted to the Union, and that it was for the Court to protect that institutional balance by ensuring the full application of provisions of the EU Treaties concerning the distribution of powers.16 In the case at hand, therefore, the action was admissible if the Parliament indicated in an appropriate manner the substance of the prerogative to be safeguarded and how that prerogative was allegedly infringed. In this respect, the Court clarified that the right to be consulted in accordance with a provision of the EU Treaties is a prerogative of the Parliament; and it is one of the measures allowing it to play an actual part in the legislative process.17 As a consequence, adopting an act on a legal basis which does not provide for such consultation is liable to infringe that prerogative, even if there has been an optional consultation.18 Accordingly, the Court declared the action to be admissible. Concerning the substance, the Court examined the question whether the reference to the ‘Community’s financial assistance’ in Article 231 of the Fourth Lomé Convention constituted Union expenditure, which had to be shown in the Union’s budget and which accordingly would be subject to Article 209 EC (now Article 322 TFEU). In order to answer this question, the Court first clarified the distribution of powers between the Union and its Member States in the field of development cooperation. It held that the Union’s competence in this field was not exclusive, and it emphasised that the Member States are accordingly entitled to enter into commitments themselves vis-à-vis non-Member States either collectively or individually, or even jointly with the Union.19 On this basis, the Court then interpreted the Fourth Lomé Convention in order to identify the parties which have entered into commitments. Drawing from its preamble and Article 1, the Court found that the Convention was concluded by the Union and its Member States of the one part and the ACP states of the other part, and that, in those circumstances, the Union and its Member States were jointly liable to the ACP states for the fulfilment of every obligation arising from the commitments undertaken, including those relating to financial assistance.20 Specifically, Article 231 of the Fourth Lomé Convention, as well as Article 1 of its Financial Protocol, used the term ‘the Community’s financial assistance’. However, the Court noted that
14 Case C-316/91, European Parliament v Council of the European Union, ECLI:EU:C:1994:76 (European Development Fund), para 8. 15 ibid para 9. 16 ibid paras 11–12. 17 ibid paras 16, 17. 18 ibid para 16. 19 ibid para 26. 20 ibid para 29.
Legality of the European Development Fund and the European Parliament’s Prerogatives 263 it was actually meant as referring ‘both to the [Union] and its Member States’.21 It followed that the obligation to grant ‘the Community’s financial assistance’ fell on the Union and its Member States considered together.22 The Court then recalled that, in view of the non-exclusive nature of the Union’s competence in the field of development assistance, the competence to implement the Community’s financial assistance as referred to in Article 231 of the Fourth Lomé Convention and Article 1 of its Financial Protocol was shared by the Union and its Member States, and that it was for them to choose the source and methods of financing.23 It acknowledged that the Member States had made this choice by the adoption of the Internal Agreement on the financing and administration of Community aid under the Fourth ACP–EEC Convention, which established the EDF as per its Article 1.24 It is also on the basis of its Article 32 that the contested Financial Regulation was adopted by the Council. Consequently, that expenditure was not [Union] expenditure, which had to be entered into the Union’s budget and to which Article 209 EC (now Article 322 TFEU) would apply.25 The Court also noted that other Union institutions were associated with the implementation of the Fourth Lomé Convention, the management of which the Commission was responsible for, pursuant to its Article 10. Article 33 provided that the discharge of the financial management of the EDF was to be given to the Commission by the Parliament, on the recommendation of the Council. In this context, the Court rejected the Parliament’s argument that, as it seemed from the external appearance, the decision-making process and the content, it was very closely related to Union acts. The Court rather stressed that no provision of the EU Treaties prevented Member States from using, outside its framework, procedural steps drawing on the rules applicable to Union expenditure and from associating Union institutions with the procedure thus set up.26 The Court concluded that the contested Financial Regulation did not have to be concluded on the basis of Article 209 EC (now Article 322 TFEU) and that, as a consequence, no prerogative of the Parliament had been infringed.27 The application was therefore dismissed as unfounded. IV. THE IMPORTANCE OF THE CASE
A. The Nature of the Union’s Development Cooperation Policy In European Development Fund, the Court first clarified that the Union’s policy in the field of development cooperation is not exclusive and that Member States were accordingly entitled to enter into commitments themselves vis-à-vis non-Member States either collectively or individually, or even jointly with the Union.28 The Court thereby implicitly clarified that the principle
21 ibid para 30. 22 ibid para 33. 23 ibid para 35. 24 ibid paras 36, 37. 25 ibid para 39. 26 ibid para 41; Joined Cases C-181/91 and C-248/91, Parliament v Council and Commission, ECLI:EU:C:1993:271 (Bangladesh Aid), para 22. See this volume, ch 23. 27 ibid para 42. 28 ibid para 26.
264 Sandra Bartelt of pre-emption did not apply in the field of development cooperation. This was subsequently confirmed by the Court in ECOWAS,29 where the Court recalled that the competence in the field of development cooperation was not exclusive and that, therefore, the Member States were not precluded from exercising their competence.30 This has been clearly spelled out in the Treaty of Lisbon. Article 4(4) TFEU provides that ‘In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs’. The respective provisions in Title III of Part Five TFEU concerning the cooperation with third countries and humanitarian aid (Articles 208–14 TFEU) add that the Union’s measures and those of the Member States shall complement and reinforce each other.31 It follows from these provisions that the Union is competent to conduct its own development cooperation policy. However, it is equally obvious that the Union’s policy neither replaces nor encroaches on the Member States’ own policies in these areas. It is for that reason that the Union’s competences in this field are classified as ‘parallel competences’ in demarcation to the so-called ‘concurrent’ or ‘shared competences’ which are listed in a non-exhaustive manner in Article 4(2) TFEU. By contrast to the areas of shared competence, the principle of pre-emption which is set out in Article 2(2) TFEU32 does not apply to the field of parallel competences. One reason for treating the EU’s development policy differently from policy areas under shared competence is that the Member States’ own policies are financed from their own budgets and not from the general budget of the Union. As a result, more financing in total will be available for these policy areas, which results in a more intensive policy (‘more for more’).33 In European Development Fund, the intervening Spanish government also rightly pointed out that the rationale of the Union’s development policy required a reinforced duty of coordination. Indeed, the special nature of parallel competences imposes a reinforced obligation to coordinate upon the Union and its Member States. For development policy, such a duty to coordinate is set out in Article 210 TFEU, which aims to promote the complementarity and efficiency of the action of the Union and its Member States. For the field of development cooperation, this Article is to be considered as a specific expression of the duty of sincere cooperation pursuant to Article 4(3) TEU. B. The Extra-budgetary Status of the European Development Fund The judgment in European Development Fund moreover has the merit to clarify the nature of the EDF and whether it can be lawfully set up as an extra-budgetary fund. In this vein, it should be recalled that the dispute which gave rise to these proceedings was not a new one. The financial provisions of the four Lomé Conventions (as well as of the Yaoundé Conventions, which preceded them) were implemented by means of a European Development Fund.34 29 Case C-91/05, Commission v Council, ECLI:EU:C:2008:288 (ECOWAS). See this volume, ch 51. 30 ibid para 61. 31 Art 208(1), first sentence TFEU for development cooperation. 32 Art 2(2) TFEU provides as follows: ‘… The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.’ 33 Opinion of AG Kokott, Case C-13/07, Commission v Council, ECLI:EU:C:2009:190 (WTO-Accession of Vietnam), para 70. 34 See Internal Agreement on the financing and administration of Community aid under the Fourth Lomé Convention, cited above n 5.
Legality of the European Development Fund and the European Parliament’s Prerogatives 265 The original version of the EU Treaties did not contain any development component, but provided for a special status of ‘association’ of the overseas countries and territories (OCTs) that still belonged to some of the Member States at that time.35 The cooperation with the OCTs was underpinned by an intergovernmental fund of the Member States, outside the general budget of the Union, which covered a multiannual period. This gave rise to the European Development Fund as early as in 1957, which still existed until its eleventh edition covering the period from 2014 to 2020,36 with its inclusion into the general budget of the Union being decided by the European Council for the Multiannual Financial Framework (MFF) from 2021 to 2027.37 Such a fund was set up for each convention by an internal agreement concluded between the Representatives of the Member States meeting within the Council. Unlike other developing countries, the ACP states thus benefited from an indicative amount under the terms of Internal Agreements establishing the respective EDF, which was dedicated purely to them. The ACP institutions as established by the Georgetown Agreement were involved in the programming of the EDF in a partnership approach.38 However, these special procedures made the implementation of the EDF more cumbersome. The Parliament requested the inclusion of the EDF in the budget for the first time in 1973.39 It has since repeated that request several times. The Commission also advocated for the inclusion of the EDF in the budget.40 In the past, the Member States, however, consistently rejected the idea of incorporating the EDF into the general budget of the Union. In the negotiations leading to the conclusion of the Treaty of Maastricht, the Commission proposed an amendment to Article 199 EC (now Article 310 TFEU), according to which Article 199 EC would state that all items of revenue and expenditure, including those relating to the EDF, must be shown in the Union budget. That amendment was not adopted. On the contrary, the Final Act accompanying the Treaty of Maastricht included a declaration on the EDF, which read as follows: ‘The Conference agrees that the European Development Fund will continue to be financed by national contributions in accordance with the current provisions.’41 The Treaty of Maastricht moreover introduced the special status of the Union’s cooperation with the ACP states in its Article G (138), with reference to Article 131w(3) EC, which read: ‘the provisions of this Article shall not affect cooperation with the African, Caribbean and Pacific countries in the framework of the ACP-EC Convention’. In this way, it was intended to safeguard the extra-budgetary status of the EDF.42 In the preparations leading to the Treaty of Lisbon, the working group on external relations of the European Convention recommended the ‘budgetisation’ of the EDF, which was finally reflected in the fact that Article 131w(3) EC in the version of the Treaty of Maastricht (see above) – which had become Article 179(3) EC in the version of the Treaty of Nice43 – was not transposed into the provisions on development
35 See Arts 131 and 132 of the EC. 36 Internal Agreement between the Representatives of the Governments of the Member States of the European Union, meeting within the Council, on the financing of European Union aid under the multiannual financial framework for the period 2014 to 2020, in accordance with the ACP-EU Partnership Agreement and on the allocation of financial assistance for the OCTs to which Part Four of the EC Treaty applies, [2013] OJ L210/1. 37 See more details below. 38 For instance, the intra-ACP programming is done between Commission services and the ACP Secretariat, subject to approval by the ACP Committee of Ambassadors, see Art 13 of Annex IV to the Cotonou Agreement. 39 See Parliament Resolution of 14 February 1973, [1973] OJ C14/25. 40 Commission, ‘Towards the Full Integration of Co-operation with ACP Countries in the EU Budget’ (Communication) COM (2003) 590 final. 41 Declaration No 12, Final Act to the Treaty of Maastricht, [1992] OJ C191/95. 42 See consolidated version in [1992] OJ C224/1. 43 See consolidated version in [2002] OJ C325/1.
266 Sandra Bartelt cooperation of the Treaty of Lisbon.44 Although the deletion of Article 179(3) EC certainly facilitated the budgetisation of the EDF as no treaty modification would be required, it did not imply that its maintenance would be unlawful.45 In its proposal for the legal regime governing the Eleventh EDF, covering the period from 2014 to 2020,46 the Commission stated in the accompanying communication that the EDF shall be maintained until the expiry of the Cotonou Agreement, which ran until 2020, thus coinciding with the expiry of the MFF of 2014–20.47 Obviously, the ACP Group was in favour of keeping the status quo. For them, the EDF was the guarantee of a financial allocation dedicated solely to the cooperation with ACP states. If the EDF was to be included in the budget, this would no longer be the case. Under the general budget of the Union, there are no amounts dedicated to specific groups of countries, but to basic legislative acts in line with the Financial Regulation.48 In the field of development cooperation, the main budgetary financing instrument was Regulation (EU) No 233/2014 establishing a financing instrument for development cooperation for the period 2014–20.49 In its proposal for the new MFF for the 2021–27 period, the Commission included the budgetisation of the EDF.50 As a consequence, it included the geographic cooperation with the ACP states in its proposal for a Regulation establishing the Neighbourhood, Development and International Cooperation Instrument.51 In its conclusions of 21 June 2020, the European Council accepted the budgetisation of the EDF, stating that the expenditure for sub-Saharan Africa, the Caribbean and the Pacific currently financed through the current EDF will be integrated into Heading 6 (Neighbourhood and the World).52 The budgetisation of the EDF into the EU budget is as a landmark achievement in that 63 years after its establishment, the EU managed to incorporate the EDF into the regular Union’s budget. This will overcome the dichotomy between the programmes under the general budget and the EDF when it comes to the African continent and thereby facilitates a continental approach in the EU’s strategy towards Africa.53 C. The Association of Union Institutions to Processes Set Up Outside the Treaties A further interesting element of the judgment is that the Court picked up a finding that had just emerged from the Bangladesh Aid case54 and developed it further. The Court had made that 44 B Martenzuk, ‘The Constitution for Europe and the External Relations of the European Union’ in S Van Thiel, K De Gucht and R Lewis (eds), Understanding the New European Constitutional Treaty (Brussels, VUB Press, 2005) 281. 45 S Bartelt, ‘ACP–EU Development Cooperation at a Crossroads? One Year after the Second Revision of the Cotonou Agreement’ (2012) 17 European Foreign Affairs Review 21. 46 Commission proposal for a Council Decision on the position to be adopted by the EU within the ACP–EU Council of Ministers concerning the multiannual financial framework for the period 2014 to 2020 of the ACP–EU Partnership Agreement, COM (2011) 836 final. 47 Commission, ‘Preparation of the Multiannual Financial Framework Regarding the Financing of EU Cooperation for African, Caribbean and Pacific States and Overseas Countries and Territories for the 2014–2020 Period’ (Communication) COM (2011) 837 final, 2. 48 See Art 49 of the Financial Regulation, Regulation No 1605/2002, [2002] OJ L248/1. 49 [2014] OJ L77/44. 50 Commission, ‘Modern Budget for a Union that Protects, Empowers and Defends The Multiannual Financial Framework for 2021–2027’ (Communication) COM (2018) 321 final. 51 COM (2018) 460 final; also adopted as Regulation (EU) 2021/947 of the European Parliament and of the Council establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, [2021] OJ L209/1. 52 See Conclusions of the European Council of 17, 18, 19, 20, and 21 July 2020, para 118. 53 Bartelt (n 45) 21f. 54 See Parliament v Council and Commission (n 26). See this volume, ch 23.
Legality of the European Development Fund and the European Parliament’s Prerogatives 267 judgment nine months prior to its European Development Fund judgment. The underlying question was not similar, but it was comparable. In Bangladesh Aid, Member States meeting within the Council had adopted a decision to grant special aid to Bangladesh. While this aid was not to be entered into the general budget, it was to be administered by the Commission on a special account. The question at stake was whether the act adopted by the representatives meeting within the Council could be considered as an EU act, as claimed by the Parliament. The Court rejected the argument of the Parliament that Member States had made use of the concept of GNP for allocating the financial obligations, which was a Union concept, by stating that ‘nothing in the Treaty precludes the Member States from making use outside the Community context of criteria taken from the budgetary provisions for allocating the financial obligations resulting from decisions taken by their representatives’.55 While the Court in Bangladesh Aid limited itself to a budgetary concept that could also be used outside the Union framework, it took this conclusion one step further in European Development Fund by stating that – again, outside the Union framework – Member States could use procedural steps drawing on the rules applicable to Union expenditure and could also associate Union institutions with the procedure thus set up.56 In this way, Union institutions could participate in an intergovernmental fund established outside the legal framework of the EU Treaties. In the following years, the Court further developed its case law in this respect, with a special focus on the prerogatives of the Court itself.57 Later on, the Court applied this case law to the question of the legality of the participation of the Union institutions in the European Stability Mechanism (ESM) in Pringle.58 Also in this case law, the Court first considered the nature of the Union’s competence and held that it was not exclusive.59 On this basis, and in line with its previous case law, the Court recalled that Union institutions could be associated with processes set up outside the EU Treaties, and it added an important qualifier, notably that they could only be entrusted with tasks ‘provided that those tasks do not alter the essential character of the powers conferred on those institutions by the [TEU] and [TFEU]’.60 Contrary to the beginnings of its case law in European Development Fund and the Bangladesh Aid cases, the Court therefore subsequently put strict limits on the exercise of their powers in an intergovernmental context. However, if the Court was to examine the same question again, but under the premises of the Pringle case law, it would most probably come to the same conclusion, as the Union institutions were associated with processes for the management of an intergovernmental fund that had the same objectives as the Union’s development policy and thus reinforced this policy in line with the rationale of its parallel competence ‘more for more’. In conclusion, it can be said that the European Development Fund case has not lost its relevance when it comes to the nature of the Union’s development policy or with respect to the budgetisation of the EDF that was finally achieved for the new MFF from 2021 to 2027 – or when it comes to the involvement of the Union institutions in intergovernmental processes set up outside the EU Treaties.
55 ibid para 22. 56 ibid para 41. 57 See Opinion 1/92, ECLI:EU:C:1992:189, paras 32 and 41. See this volume, ch 20; Opinion 1/09, ECLI:EU:C:2011:123, para 75. 58 See Case C-370/12, Thomas Pringle v Government of Ireland and Others, ECLI:EU:C:2012:756. 59 ibid para 60. 60 ibid para 158.
268 Sandra Bartelt V. ADDITIONAL READING Bartelt, S ‘ACP–EU Development Cooperation at a Crossroads? One Year after the Second Revision of the Cotonou Agreement’ (2012) 17 European Foreign Affairs Review 1. Bartelt, S and Dann, P (eds), ‘The Law of EU Development Cooperation’ [2008] Europarecht Beiheft 2.
25 Unrecognised ‘States’ and EU Law: Anastasiou I ALINA TRYFONIDOU Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:1994:277 (Anastasiou I), delivered 5 July 1994. KEYWORDS Common Commercial Policy – Free movement of goods – EC–Cyprus Association Agreement – Cyprus – Turkey – Occupied territories – Unrecognised ‘states’ and EU law – Non-recognition of movement and phytosanitary certificates originating from the part of Cyprus to the north of the United Nations Buffer Zone.
I. INTRODUCTION
A
I is the first in a trilogy of cases in the so-called ‘Anastasiou saga’,1 in which the Court was called for the first time to rule on issues relating to the Cyprus problem.2 Although, at first glance, the subject matter of the case might appear to have been of a purely technical nature, concerning the trade relations between the EU and (at the time) a third country, in reality, it concerned a convoluted and sensitive political matter that involved the non-recognition of a self-proclaimed entity by the EU and its Member States.3 It does not nastasiou
1 The ‘Anastasiou saga’ is comprised of the following three cases: Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:1994:277 (Anastasiou I); Case C-219/98, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:2000:360 (Anastasiou II); Case C-140/02, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:2003:520 (Anastasiou III). The Court was, again, confronted with issues which emerged as a result of the Cyprus problem in Case C-420/07, Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams, ECLI:EU:C:2009:271. For an analysis of the Anastasiou saga, see S Laulhé Shaelou, ‘The European Court of Justice and the Anastasiou Saga: Principles of Europeanisation through Economic Governance’ (2007) 18 European Business Law Review 619; N Skoutaris, ‘The Application of the acquis communautaire in the Areas not under the Effective Control of the Republic of Cyprus: The Green Line Regulation’ (2008) 45 CML Rev 727, 740–43. 2 For literature on the Cyprus problem, see, inter alia, T Diez (ed), The EU and the Cyprus Conflict (Manchester, Manchester University Press, 2002); MW Bartlett, Cyprus, The United Nations, and the Quest for Unity (Ely, Melrose Books, 2007); J Ker-Lindsay, The Cyprus Problem: What Everyone Needs to Know (Oxford, Oxford University Press, 2011). 3 There have been other cases before the Court dealing with recognition of state, disputed and occupied territories, and declarations of secession. See this volume, chs 55, 57, 75 and 89.
270 Alina Tryfonidou come as a surprise, therefore, that – as will be argued in this chapter – the Court in this case appears overly cautious to ensure that, whilst it provides an answer regarding the technical matter that was at issue on the facts of the case, it does so without becoming involved in the potential political dimension of this trade dispute.4 After all, as noted, this approach ‘is fully consistent with the case-law in other areas of trade policy with significant foreign policy overtones, namely economic sanctions against third countries and exports of dual-use goods’.5 Before proceeding to analyse the case under examination, it is important to provide a brief explanation of the historical background to the case. The Republic of Cyprus was established in 1960 as a bicommunal, sovereign state, made up of the Greek Cypriot and Turkish Cypriot communities of the island. Since 2004, it has been an EU Member State.6 The island has had a troubled history since ancient times, mostly because of its important geographical location at the crossroads of three continents and, most recently, because of the discovery of a significant amount of hydrocarbons in its exclusive economic zone. The territory of the Republic of Cyprus comprises the whole of the island of Cyprus, apart from the British sovereign base areas.7 However, as a result of the 1974 Turkish invasion, there is, to this day, a de facto division of the island into north and south, and there is a UN Buffer Zone (the Green Line) across the island. The areas north of the UN Buffer Zone, which constitute 37 per cent of the territory of the island and where the majority of the Turkish Cypriot population now live, are, since 1974, outside the effective control of the Republic of Cyprus. The latter only exercises full jurisdiction in the areas which are south of the Green Line, where the majority of the Greek Cypriot population have lived since 1974. In 1983, the Turkish Cypriot community in the north of the island unilaterally proclaimed itself an independent ‘state’ under the name Turkish Republic of Northern Cyprus (‘TRNC’). The UN Security Council pronounced the declaration of secession to be ‘legally invalid’ and called for its withdrawal,8 whilst it called on ‘all States not to recognise the purported state of the “Turkish Republic of Northern Cyprus” set up by secessionist acts’ and called upon them ‘not to facilitate or in any way assist the aforesaid secessionist entity’.9 The EU institutions followed the non-recognition policy adopted by the UN and, by declarations of 16 and 17 November 1983, the European Parliament, the Commission and the foreign ministers of the EU Member States, within the framework of European Political Cooperation (EPC),10 rejected the unilateral declaration of secession and expressed their continued support for the legal Government of the Republic of Cyprus.11 Accordingly, with the exception of Turkey, to this day, no member of the United Nations has recognised the ‘TRNC’ as a sovereign state, and the only legitimate, internationally recognised, state on the island of Cyprus is the Republic of Cyprus.
4 P Koutrakos, ‘Legal Issues of EC–Cyprus Trade Relations’ (2003) 52 ICLQ 489, 492. 5 ibid 493. 6 For more on Cyprus’s accession to the EU, see, inter alia, C Stefanou (ed), Cyprus and the EU: The Road to Accession (Abingdon, Routledge, 2018). 7 For more on the status of the SBAs in, respectively, international and EU law, see K Chrysostomides, The Republic of Cyprus: A Study in International Law (Leiden, Martinus Nijhoff, 2000); S Laulhé Shaelou, ‘The Principle of Territorial Exclusion in the EU: SBAs in Cyprus – A Special Case of Sui Generis Territories in the EU’ in D Kochenov (ed), EU Law of the Overseas: Outermost Regions, Associated Overseas Countries and Territories, Territories Sui Generis (Alphen aan den Rijn, Kluwer, 2011). 8 UN Security Council Resolution 541 (1983) of 18 November 1983, para 2. 9 UN Security Council Resolution 550 (1984) of 11 May 1984, para 3. 10 Later to become the EU’s Common Foreign and Security Policy (CFSP). 11 EC Bulletin 11 (1983) 2.2.34, 2.4.1 and 2.4.2. For more on the reaction of the EU institutions to the proclamation of the TRNC, see C Tsardanidis, ‘The EC–Cyprus Association Agreement: Ten Years of a Troubled Relationship, 1973–1983’ (1984) 22 Journal of Common Market Studies 351, 369–70.
Unrecognised ‘States’ and EU Law 271 As will be explained in more detail below, the Anastasiou I case involved the question whether the importation into the UK of agricultural products from the part of Cyprus to the north of the Green Line which were not accompanied by the requisite certificates issued by the authorities of the Republic of Cyprus was contrary to EU law. Although in Anastasiou I it was the first time that the Court provided an answer to this question, it was not the first time that it had been confronted with it. As explained by Advocate General Gulmann in his Opinion in this case, in 1989, Guy Legras, the then Director General of DG VI (Agriculture) of the European Commission, sent a letter to the Permanent Representatives of the Member States in Brussels seeking to clarify the Commission’s position on the matter, by stating that EU Member States should accept phytosanitary certificates for goods originating from Cyprus only if they were issued by the Republic of Cyprus.12 The lawfulness of that letter formed the subject matter of a judicial review action, which was nonetheless dismissed by the Court on the ground that the letter did not constitute a ‘decision’ within the meaning of Article 263 TFEU (then Article 173 EEC).13 It should, nonetheless, be noted that the Legras approach did not represent the Commission’s position on the matter since, when the Commission subsequently intervened in the Anastasiou I case, its views were the opposite to those expressed in the Legras letter. This demonstrates that the Commission’s stance on the question of import certificates with regard to goods imported from the part of Cyprus north of the UN Buffer Zone had not always been uniform.14 It therefore fell on the Court to clarify the EU’s position on the matter, and the aim of the Anastasiou I case was exactly this. II. FACTS
The facts of the Anastasiou I case took place in the 1990s, when the Republic of Cyprus was not yet an EU Member State. At the time, trade in citrus fruit and potatoes between the Republic of Cyprus and the EU was not governed by the free movement of goods provisions of the EU Treaties but, rather, by the EC–Cyprus Association Agreement15 (hereinafter the Association Agreement) and the protocols attached thereto, as amended or replaced. Under the Association Agreement, which had as its aim the progressive elimination of obstacles to trade between the EU and the Republic of Cyprus, citrus fruit and potatoes originating from Cyprus benefited from preferential tariffs when imported into the EU. Under Article 7 of the Association Agreement, the rules of origin to be applied were those set forth in the 1977 Protocol, which was annexed to the Additional Protocol to the Association Agreement.16 According to Article 6(1) of the 1977 Protocol, in order for products to qualify for the preferential arrangements under the Association Agreement, evidence of the originating status of the products should be provided in the form of a movement certificate called EUR.1. 12 Opinion of Advocate General Gulmann, Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte S. P.SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:1994:159, para 20. 13 Case C-50/90, Sunzest (Europe BV and Sunzest (Netherlands) BV v Commission, ECLI:EU:C:1991:253. 14 S Talmon, ‘The Cyprus Question before the European Court of Justice’ (2001) 12 European Journal of International Law 727, 732; Laulhé Shaelou, ‘The European Court of Justice’ (n 1) 627. 15 Agreement of 19 December 1972 establishing an Association between the European Economic Community and the Republic of Cyprus, annexed to Council Regulation 1246/73 of 14 May 1973 on the conclusion of an Agreement establishing an Association between the European Economic Community and the Republic of Cyprus, [1973] OJ L133/1. For more on the Agreement, see Tsardanidis (n 11). 16 As explained by Cremona, ‘rules of origin’ are ‘the essential foundation for any free or preferential trade regime’ as ‘They are necessary in order to determine the terms under which imported goods are entitled to market access’: M Cremona, ‘Annotation of Anastasiou I’ (1996) 33 CML Rev 125.
272 Alina Tryfonidou Articles 7(1) and 8(1) of the 1977 Protocol specified that the movement certificate was to be issued by the customs authorities of the Republic of Cyprus. In addition to the movement certificate, according to Article 12 of Directive 77/93,17 citrus fruit and potatoes should be accompanied by a phytosanitary certificate upon importation into an EU Member State, which should have been issued by the exporting state. In 1991, producers and exporters of citrus fruit established in the Republic of Cyprus and the national marketing board for potatoes in the Republic of Cyprus (ie the applicants) wrote to the UK Minister of Agriculture, Fisheries and Food (ie the respondent) seeking confirmation that the competent UK authorities would no longer allow the importation of citrus products or potatoes produced in Cyprus into the UK if not accompanied by the appropriate movement and phytosanitary certificates issued by the authorities of the Republic of Cyprus. By two letters, the minister responded that the UK did not accept documentation referring to the ‘TRNC’ and that it permitted the entry of citrus products and potatoes from Cyprus in accordance with the relevant EU legislation. However, as is obvious from the order for reference sent to the Court from the national court, the UK allowed the importation of citrus products or potatoes produced on the island of Cyprus which were accompanied by the necessary documentation but which was not, however, issued by the authorities of the Republic of Cyprus. Following the above exchange, the applicants brought a case to the High Court of Justice, Queen’s Bench Division, for judicial review of the respondent’s decision contained in the above letters and of the UK’s practice of allowing imports into the UK without the necessary documentation issued by the competent authorities of the Republic of Cyprus. Since the dispute involved the interpretation of EU law, the national court hearing the case decided to stay the proceedings and to refer five questions to the Court for a preliminary ruling under Article 267 TFEU. These questions were summarised by the Court as follows: [W]hether the Association Agreement and Directive 77/93 should be interpreted as precluding acceptance by the national authorities of a Member State, when citrus fruit or potatoes are imported from the northern part of Cyprus, of movement and phytosanitary certificates issued by authorities other than the competent authorities of the Republic of Cyprus, or conversely, as requiring acceptance of such certificates, and whether the answer would be different if certain circumstances connected with the special situation of the island of Cyprus were taken as established.18
III. THE COURT
In its judgment, delivered in July 1994, the Court followed the Opinion of the Advocate General and held that the Association Agreement and Directive 77/93 must be interpreted as precluding acceptance by the national authorities of a Member State, when citrus fruit and potatoes are imported from the areas of Cyprus north of the Green Line, of movement and phytosanitary certificates issued by authorities other than the competent authorities of the Republic of Cyprus.
17 Council Directive 77/93/EEC of 21 December 1976 on protective measures against the introduction into the Member States of organisms harmful to plants or plant products, [1977] OJ L26/20 (repealed and replaced by Directive 2000/29 on protective measures against the introduction into the Community of organisms harmful to plants or plant products and against the spread within the Community, [2000] OJ L169/1). 18 Anastasiou I (n 1) para 15.
Unrecognised ‘States’ and EU Law 273 As regards the interpretation of the Association Agreement, the Court noted that: While the de facto partition of the territory of Cyprus, as a result of the intervention of the Turkish armed forces in 1974, into a zone where the authorities of the Republic of Cyprus continue fully to exercise their powers and a zone where they cannot in fact do so raises problems that are difficult to resolve in connection with the application of the Association Agreement to the whole of Cyprus, that does not warrant a departure from the clear, precise and unconditional provisions of the 1977 Protocol on the origin of products and administrative cooperation.19
The Court explained that the system in place, whereby movement certificates are regarded as evidence of the origin of products, is founded on the principle of mutual reliance and cooperation between the competent authorities of the exporting state and those of the importing state,20 and thus cannot function properly unless the procedures for administrative cooperation are strictly complied with.21 However, such cooperation is not possible with the authorities of an entity such as the ‘TRNC’, which is recognised neither by the EU nor by the Member States,22 thus the acceptance of movement certificates not issued by the Republic of Cyprus, which is the only recognised Cypriot state, ‘would constitute, in the absence of any possibility of checks or cooperation, a denial of the very object and purpose of the system established by the 1977 Protocol’.23 In response, in particular, to the argument regarding Article 5 of the Association Agreement, which prohibits discrimination between nationals or companies of Cyprus, the Court stressed that that provision ‘cannot lead to a departure from the fundamental rules of that Agreement which determine its operation in the manner intended by the contracting parties’24 and cannot in any event confer on the Community the right to interfere in the internal affairs of Cyprus. The problems resulting from the de facto partition of the island must be resolved exclusively by the Republic of Cyprus, which alone is internationally recognised.25
Finally, the Court pointed out the absence of a uniform approach on the part of the Member States, whereby some Member States accepted certificates issued by authorities other than those of the Republic of Cyprus and others did not,26 and stressed that ‘the relevant rules of the 1977 Protocol must be interpreted strictly, in order to ensure uniform application of the Association Agreement in all the Member States’.27 With regard to phytosanitary certificates, the Court noted that the common system of protection against the introduction of harmful organisms in products imported from non-member countries, laid down in Directive 77/93, is based essentially on a system of checks carried out by experts lawfully empowered for that purpose by the Government of the exporting State and guaranteed by the issue of the appropriate phytosanitary certificate. The conditions governing acceptance of those certificates as a uniform means of proof must consequently be absolutely identical in all the Member States.28
19 ibid
para 37. para 38. 21 ibid para 40. 22 ibid. 23 ibid para 41. 24 ibid para 44. 25 ibid para 47. 26 ibid para 52. 27 ibid para 54. 28 ibid para 61. 20 ibid
274 Alina Tryfonidou The Court then explained that any difficulty or doubt concerning a certificate must be brought to the attention of the authorities of the exporting State by the importing Member State. That cooperation, which is necessary in order to achieve the objectives of the directive, cannot be established with authorities who are not recognised either by the Community or by its Member States. It would be impossible for an importing State to address enquiries to the departments or officials of an entity which is not recognised, for instance concerning contaminated products or certificates that are incorrect or have been interfered with. Clearly only the authorities of the Republic of Cyprus are in a position to take action following complaints connected with the contamination of plant products exported from Cyprus.29
The Court finally underlined that [t]he special situation of Cyprus, which is the result of its de facto partition … is not such as to alter, with regard to exports of products from its northern part, the conclusions reached on the interpretation of the provisions concerning movement and phytosanitary certificates.30
IV. THE IMPORTANCE OF THE CASE
A. The Court’s Desire to Avoid Becoming Embroiled in Political Issues In its judgment in Anastasiou I, the Court was clearly driven by a strong desire not to become embroiled in the political situation in Cyprus. For this purpose, and in line with the Opinion of Advocate General Gulmann, the Court was reluctant to depart from the literal interpretation of the Association Agreement and of Directive 77/93, hence the latter instruments ‘were interpreted strictly and applied almost mechanically’.31 In its judgment, the Court concentrated on trade issues,32 which fall within the EU’s competence, and chose to deliver a ruling which strictly separates legal from political considerations – an approach which was followed in the subsequent cases in the Anastasiou saga, as well as in the Apostolides case,33 all of which also related to the Cyprus problem.34 As observed: It is interesting that an institution which has often been reproached for engaging in a creative construction of [EU] law should be so keen to be as faithful as possible to the wording of the rules which it has been asked to interpret.35
The same author nonetheless explains that the Court’s detached approach is understandable, as ‘To have responded to the reference in another way would have been tantamount to dealing with a box which Pandora herself would be loath to open’.36
29 ibid para 63. 30 ibid para 66. 31 Editorial, ‘Who Wants to Be a Pandora? The Court of Justice and the Cyprus Problem’ (2009) 34 EL Rev 345, 346. 32 S Laulhé Shaelou, The EU and Cyprus: Principles and Strategies of Full Integration (Leiden, Martinus Nijhoff, 2009) 36. 33 Apostolides v Orams (n 1). See this volume, ch 55. 34 ibid. 35 Editorial (n 31) 346. 36 ibid.
Unrecognised ‘States’ and EU Law 275 The central political issue that dared not speak its name throughout the proceedings was the potential recognition of the ‘TRNC’. As noted by another commentator, in the period before the Association Agreement was concluded, Turkey tried to use the negotiations as a political tool with the aim of the Turkish-Cypriot community obtaining an advantageous political status. Thus, Turkey asked, although without success, for a kind of direct communication to be established between the Turkish-Cypriots and the European Community. Turkey considered that if channels of direct communication and information were set up between the Turkish-Cypriots and the [EU], then it would appear that the [EU] was considering the Turkish-Cypriot community as a separate administration with its own legal basis.37
The desire on the part of Turkey and the Turkish Cypriots to achieve recognition for the Turkish Cypriot community as a separate administration became even stronger following the self-proclamation of the ‘TRNC’, which, it was hoped, would be recognised as a second sovereign state on the island of Cyprus. Nonetheless, since direct recognition of the ‘TRNC’ was unlikely, as this would amount to a breach of international law in view of the UN Security Council Resolutions mentioned above, the most that they could aspire to was indirect recognition through the initiation of direct diplomatic and other relationships between the ‘authorities’ of the ‘TRNC’ and the EU and its Member States. To achieve this – as is obvious from the case under consideration – Turkey and the Turkish Cypriot community mostly relied on an economic (and thus non-controversial) argument (the need to be allowed to pursue direct trade with EU Member States without the involvement of the authorities of the Republic of Cyprus), which was presented as part of a broader effort to terminate the economic isolation of the Turkish Cypriot community in the north of the island. On the other hand, the Republic of Cyprus has always sought to ensure that there would be no (direct or indirect) international recognition of the ‘TRNC’, and, in line with this, it has always objected to any efforts to allow direct trade between the areas of the island situated north of the UN Buffer Zone and EU Member States without its involvement. Without a doubt, the Court wished to ensure that the Association Agreement would benefit both the Turkish Cypriot and the Greek Cypriot communities of the island; after all, this was required by the non-discrimination principle enshrined in Article 5 of the Association Agreement. At the same time, it did not wish to interpret the Association Agreement (and Directive 77/93) in a way which could be perceived as affording any kind of recognition to the ‘TRNC’. For this reason, it read the above instruments as prohibiting direct trade between the areas of Cyprus north of the Green Line and EU Member States, in view of the fact that ‘a different outcome of the case could hardly have been imaginable’,38 given that it would have led, effectively, to (indirect) recognition of the ‘TRNC’. Despite the fact that the case involved cardinal principles of international law, such as the duty of non-recognition of self-proclaimed occupied territories, the Court chose to ignore the broader international legal framework of the dispute and did not engage with the question of the EU’s obligation of non-recognition of the acts of the occupying authorities under international law.39 In particular, it avoided responding to the argument of the Greek government that acceptance of certificates from the
37 Tsardanidis (n 11) 355. 38 C Vedder and H-P Folz, ‘A Survey of Principal Decisions of the European Court of Justice Pertaining to International Law in 1994’ (1996) European Journal of International Law 112, 122. Cremona has similarly noted that ‘the decision was expected if cautious’: Cremona (n 16) 135. 39 E Kassoti, ‘Between Sollen and Sein: The CJEU’s Reliance on International Law in the Interpretation of Economic Agreements Concerning Occupied Territories’ (2020) 33 Leiden Journal of International Law 371, 372–73.
276 Alina Tryfonidou part of Cyprus north of the Green Line would amount to a violation of a number of UN Security Council Resolutions that condemn the Turkish invasion and continued occupation of part of the island and urge all members of the international community not to recognise the self-proclaimed ‘TRNC’.40 It should be noted that some commentators have argued that the ruling in Anastasiou I, in effect, prohibited direct trade between the north part of Cyprus and the EU, and thus had a detrimental impact on the population of the unrecognised entity (ie the ‘TRNC’) as it amounted to an economic sanction against the unrecognised ‘state’.41 Nonetheless, as rightly noted, ‘The Court’s judgment did not impose an embargo on exports from the northern part of Cyprus (as it has been widely contended) but an exclusion from the preferential treatment under the [EU–]Cyprus Association Agreement’.42 In other words, as will be seen in the next section, goods originating from the part of Cyprus north of the UN Buffer Zone could still be imported into EU Member States after Anastasiou I; however, if they were not traded as goods originating from the Republic of Cyprus (accompanied by the necessary documents issued by the authorities of the Republic of Cyprus), they would not be able to benefit from the lower tariffs provided by the Association Agreement. B. The Aftermath of the Case: Anastasiou II and Anastasiou III Following the ruling in Anastasiou I, the traders of citrus fruit originating in the part of Cyprus north of the Green Line found an alternative way for their goods to reach the EU internal market without having to obtain phytosanitary certificates from the authorities of the Republic of Cyprus. The fruit (which carried phytosanitary certificates issued by officials of the ‘TRNC’) was shipped to Turkey, where it would stay in the Turkish port of Mersin for less than 24 hours. There, Turkish officials would inspect the cargo on board the ship and issue a Turkish phytosanitary certificate before it would then be imported into the UK. This practice – which amounted to indirect trade between the areas in the north of the EU Buffer Zone and the EU – led to Anastasiou II and Anastasiou III.43 In Anastasiou II, the Court was asked whether EU law permitted a Member State to import into its territory fruit originating in a third country (ie Cyprus) but with the required certificates that accompanied that fruit being issued by the authorities of another third country (ie Turkey), from which the fruit was transported to the EU, and not by the authorities of the (third) country of origin of the fruit (ie Cyprus). The Court answered this in the affirmative, noting, however, that three conditions should be fulfilled: (i) the fruit must have been imported into the territory of the country where checks had taken place before being exported from there to the EU; (ii) the fruit should remain in that country for such time and under such conditions as to enable the proper checks to be completed; and (iii) it should not be subject to special requirements that could only be satisfied in its place of origin. Anastasiou III concerned situations where fruit was subject to special requirements that could only be satisfied in their place of origin. In such situations, the Court held, where there is a special requirement that the packaging of the fruit is to bear an appropriate origin mark, the requirement can only be fulfilled in the country of origin of the plants concerned and must
40 Koutrakos
(n 4) 492; Cremona (n 16) 134. eg Talmon (n 14). 42 N Emiliou, ‘Cypriot Import Certificates; Some Hot Potatoes’ (1995) 20 EL Rev 202, 210 fn 20. 43 Anastasiou II (n 1); Anastasiou III (n 1). 41 See,
Unrecognised ‘States’ and EU Law 277 be validly affixed to the packaging of the fruit by the competent authorities of the country of origin, which, in the case of Cyprus, are only the authorities of the Republic of Cyprus. This demonstrates that, although the Court ruled in Anastasiou I that direct trade between the areas north of the UN Buffer Zone and the EU could not take place, following Anastasiou II, indirect trade through a(nother) third country was allowed, provided that certain conditions were satisfied. As explained, the Court adopted the correct approach in Anastasiou II, as otherwise there would be two undesired implications: First of all, the [Court] could have been perceived as imposing indirect economic sanctions on member states for the non-enforcement of Anastasiou I. Secondly, such an approach would have raised further obstacles to the development of the economy of northern Cyprus, thereby impairing the chance of any positive progress towards a solution of the Cyprus problem in view of accession.44
Accordingly, through the Anastasiou saga, the Court made it clear that although there could not be direct trade between the areas of Cyprus north of the Green Line and the EU, there could be indirect trade through a third country, provided that certain conditions were satisfied. In any event, with the accession of Cyprus to the EU in 2004, trade in goods between Cyprus and the other EU Member States became subject to the EU Treaties’ rules on the free movement of goods.45 However, although the whole of Cyprus acceded, since the island was still de facto partitioned, Protocol 10 that was annexed to the 2003 Accession Treaty46 suspended the application of the EU acquis to those areas of the island where the Government of the Republic of Cyprus does not exercise effective control. However, as explained, given the situation of economic isolation of the Turkish Cypriot community and the failure to reach a comprehensive settlement following the rejection of the UN-sponsored Annan plan for the reunification of the island in 2004,47 the EU was determined to set the rules in order to regularise trade between the two parties in the conflict and between northern Cyprus and other EU Member States via the [Green] [L]ine, without recognising any other authority on the island apart from the Cypriot legitimate government.48
This was achieved with the Green Line Regulation,49 which allows goods originating in the areas north of the UN Buffer Zone to cross the Green Line and enter the EU internal market via the Republic of Cyprus. There was also an attempt to introduce legislation which would allow direct trade between the areas north of the Green Line and EU Member States,50 but the proposal remains in a state of legal limbo. This means that, to this day, if traders wish to benefit from the EU free movement provisions and export their goods originating in the areas north of the UN Buffer Zone to EU Member States without being subjected to any tariff barriers or quantitative or other restrictions, they can only do so via the Republic of Cyprus, in accordance with the Green Line Regulation. 44 Laulhé Shaelou, ‘The European Court of Justice’ (n 1) 633. 45 Now found in Title II of Part Three of the TFEU. 46 Treaty of Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, [2003] OJ L236. 47 For more on the Annan plan, see A Varnava and H Faustmann, Reunifying Cyprus: The Annan Plan and Beyond (London, IB Tauris, 2011). 48 Skoutaris (n 1) 743. 49 Commission Regulation 1480/2004 laying down specific rules concerning goods arriving from the areas not under the effective control of the Government of Cyprus in the areas in which the Government exercises effective control, [2004] OJ L272/3. 50 Proposal for a Council Regulation on special conditions for trade with those areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control, 2004/0148 (ACC).
278 Alina Tryfonidou V. ADDITIONAL READING Cremona, M, ‘Annotation of Anastasiou I’ (1996) 33 CML Rev 125. Editorial, ‘Who Wants To Be a Pandora? The Court of Justice and the Cyprus Problem’ (2009) 34 EL Rev 345. Emiliou, N, ‘Cypriot Import Certificates; Some Hot Potatoes’ (1995) 20 EL Rev 202. Hoffmeister F, Legal Aspects of the Cyprus Problem: Annan Plan and EU Accession (Leiden, Brill, 2006). Koutrakos, P, ‘Legal Issues of EC–Cyprus Trade Relations’ (2003) 52 ICLQ 489. Laulhé Shaelou, S, ‘The European Court of Justice and the Anastasiou Saga: Principles of Europeanisation through Economic Governance’ (2007) 18 European Business Law Review 619. Skoutaris, N, ‘The Application of the acquis communautaire in the Areas Not under the Effective Control of the Republic of Cyprus: The Green Line Regulation’ (2008) 45 CML Rev 727. Talmon, S, ‘The Cyprus Question before the European Court of Justice’ (2001) 12 European Journal of International Law 727.
26 No General Treaty-Making Power of the Commission to Conclude International Administrative Agreements: France v Commission I ANDREA OTT Case C-327/91, French Republic v Commission of the European Communities, ECLI:EU:C: 1994:305, delivered 9 August 1994 (France v Commission I). KEYWORDS European Commission – international administrative agreements – Competition law – ERTA – External representation – Delegated treaty-making – MoU.
I. INTRODUCTION
T
his case is often referred to as France v Commission I,1 and is seen in close relation with the France v Commission II 10 years later.2 However, in contrast to the second case, which concerns soft law guidelines on transparency in the Common Commercial Policy (CCP) agreed with the USA,3 the first case annulled a binding international agreement with the USA on the application of competition rules between the two entities. Nevertheless, in common, both cases address the limits of the Commission’s power to externally represent the European Union through bilateral instruments, leading to another dispute post-Lisbon in the Swiss MoU case.4 The France v Commission I case inspired a subsequent treaty change in the EU’s treatymaking procedure. The predecessor norms of Article 218 TFEU included a reference in 1 Case C-327/91, France v Commission, ECLI:EU:C:1994:305 (France v Commission I). 2 Case C-233/02, France v Commission, ECLI:EU:C:2004:173 (France v Commission II). See this volume, ch 42. See, eg A Ott, ‘Informalization of EU Bilateral Instruments: Categorization, Contestation and Challenges’ (2020) 39 Yearbook of European Law 569; M Chamon and V Desmedts, ‘Constitutional Limits to the EU Agencies’ External Relations’ in HCH Hofmann, E Vos and M Chamon (eds), The External Dimension of EU Agencies and Bodies (Cheltenham, Edgar Elgar Publishing, 2019) 12. 3 France v Commission II (n 2). 4 Case C-660/13, Council v Commission, ECLI:EU:C:2016:616 (Swiss MoU). See this volume, ch 77.
280 Andrea Ott paragraph 2 to ‘subject to the powers vested in the Commission in this field’, which was finally deleted with the reforms brought by the Treaty of Lisbon. This judgment remains a clear defeat of the Commission to ‘borrow’ the ERTA doctrine establishing implied treaty-making powers of the Commission. However, it does not deny, in its laconic reasoning, the constitutional practice of the Commission’s delegated treaty-making. Based on a mandate deriving from primary law or deriving from EU secondary law and delegated by the treaty-making institutions, the Commission remains in charge of concluding binding international agreements on behalf of the Union. II. FACTS
On 23 September 1991, the Commission and the USA signed an international agreement on the application of their respective competition laws. The purpose of the international agreement was to promote the cooperation and coordination between the parties, and to mitigate the extraterritorial application of competition rules. This cooperation is based on several nonbinding recommendations of the Organization for Economic Cooperation and Development (OECD) (especially the ones from 1979 and 1986), which encourage its members to cooperate bilaterally on anti-trust issues in light of the lack of worldwide harmonisation or coordination of competition rules.5 The international agreement was negotiated by the Commission with the ambition of ‘drawing up … a legally binding document rather than a nonbinding recommendation’ with the USA.6 A draft agreement was forwarded to the national authorities of the Member States responsible for competition matters, accompanied by the Commission’s explanatory note that the draft agreement constituted an administrative agreement. The Vice-President of the Commission responsible for competition signed the agreement on behalf of the Commission. This agreement was not published in the Official Journal, but was forwarded from the Directorate-General for Competition to the Member States by letter on 7 October 1991. The French Republic, supported by the Dutch and Spanish governments, challenged the agreement on 16 December 1991 under the annulment procedure, relying on several pleas: firstly, that the Commission was not competent to conclude such an agreement; secondly, that no statement of reasons for the agreement was provided; thirdly, that the principle of legal certainty was breached; and fourthly, that the Union’s competition rules were breached. The Commission first challenged the admissibility of the claim by arguing that it was the decision to conclude the agreement that had to be challenged, not the agreement itself. The Commission defended the conclusion of the international agreement with the argument that it was categorised as an administrative agreement, and that the administrative powers in competition law were vested on the Commission, in line with the then wording of Article 228(2) EC (‘2. Subject to the powers vested in the Commission in this field’, now deleted). According to the Commission, these general powers were vested in the Commission not only through express conferral, but also through the institutions’ practice. In addition, the Commission
5 See further AS Papadopoulos, The International Dimension of EU Competition Law and Policy (Cambridge, Cambridge University Press, 2010) 64. 6 On this, see the Explanatory note on the draft agreement between the Government of the United States and the Commission of the European Communities, cited in the Opinion of Advocate General (AG) Tesauro, Case C-327/91, French Republic v Commission of the European Communities, ECLI:EU:C:1993:941 (France v Commission I).
No General Treaty-Making Power of the Commission 281 referred to the wording of Article 101 of the Euratom Treaty, according to which the ‘agreements or contracts whose implementation does not require action by the Council … shall be negotiated and concluded solely by the Commission’. Finally, the Commission referred to its unchallenged practice of concluding agreements on diplomatic missions’ privileges and immunities,7 but mostly in the form of bilateral acts under various names: In its pleadings, the Commission had referred in particular to 25 instances of bilateral cooperation with non-member countries, all of which were subsequent to 1974. However, only the contested Agreement was formally designated as an agreement. On other occasions, the designation has varied: exchange of letters (18), memorandum of understanding (two), administrative understanding (three), agreed minute (one). No fewer than eight of those agreements were concluded with the United States, some directly with the Government, others with specific departments. exchange of letters, memoranda of understanding, administrative understandings and agreed minutes.8
III. THE COURT
The Court touched briefly upon the admissibility with reference to the ERTA test.9 Since the ERTA case, it was decisive for the admissibility involving a privileged applicant that all m easures adopted by the institutions can be challenged when producing legal effect. Substantially, the Court only discussed the first plea and concluded that the Commission lacked treaty-making power to conclude the competition agreement. The Court assessed, albeit somewhat briefly, that the parties intended the international agreement to produce legal effect, that it forms an international legally binding bilateral act of the Union and that it could incur liability of the Union at the international level. This argument was based on the definition of an international agreement under Article 2(1)(a)(i) of the Vienna Convention of 21 March 1986 on the Law of Treaties between States and International Organizations or between International Organizations. Having established that the Commission concluded a binding international agreement, the Court analysed the question whether the treaty-making norm in EU primary law provided the Commission with such a power. Notably, the Court left unaddressed whether Article 7 of the Protocol on the Privileges and Immunities10 or the former Article 229 EC (now Article 220 TFEU) provided the Commission with such a mandate. The Court denied, through a linguistic comparison of the wording of the French, German, Danish, Dutch and English versions of the former Article 228(2) EEC (‘subject to the powers vested in the Commission in this field …’), that the Commission possessed any inherent treaty-making power. The Court decisively based its argument on
7 Prior to the Treaty of Lisbon, these establishment agreements were concluded by the Commission for the Commission delegation abroad. One of the few that are publicly available is the one agreed between Malta and the Communities in 1990, prior to the Maltese accession in 2004. Post-Lisbon, these delegations in third countries became those of the Union, not just of the Commission. 8 Opinion of Advocate General Tesauro, France v Commission I (n 6) fn 27, para 28. For the pre-Lisbon practice, see Arrangement in the form of an exchange of letters between the EEC and the International Council for the Exploration of the Sea, [1987] OJ L149/14; Exchange of letters between the WHO and the Commission of the EC concerning the consolidation and intensification of cooperation, [2001] OJ C1/7. 9 This description was used in the Opinion of AG Bobek, Case C-16/16 P, Belgium v Commission, ECLI:EU:C: 2017:959. 10 Now Art 6 of the Protocol No 7 on the Privileges and Immunities. According to this provision, the Commission concludes agreements with third countries to recognise laissez-passers as valid travel documents for EU staff, [2012] OJ C326/266.
282 Andrea Ott the sole treaty-making power of the Council at the time, and averred that each institution can only act within the limits conferred upon it by the Treaty (institutional balance). The judges also denied the Commission’s argument of an acquired treaty-making power with the argument that ‘a mere practice cannot override the provisions of the Treaty’. The Court explained that the treaty-making power under the TFEU was not analogous to Article 101 of the Euratom Treaty,11 and that the internal power allocation could not alter the allocation of powers externally but was, instead, determined by the treaty-making procedure established in primary law. The Court, therefore, proceeded to declare the international agreement void.12 As a result of this judgment, the Union had to conclude an international agreement with the USA in 1995 with the same content, applied retroactively, but with the Council as the treaty-making institution.13 IV. THE IMPORTANCE OF THE CASE
This case is the first judgment addressing the characteristics and limits of the Commission’s external representation tasks. This judgment was complemented by the France v Commission II case on a non-binding arrangement with the USA 10 years later,14 and two cases post-Lisbon: Swiss MoU15 and ITLOS.16 If seen through today’s lens, it appears to be a straightforward case characterised by laconic legal reasoning: the institutional balance represented in the conclusion of international agreements denies the Commission an inherent or implied power to conclude international agreements. The internal executive power does not mirror the external executive power. However, at the time of the international agreement’s conclusion, the idea of the Commission defending a power to conclude international agreements of an administrative or executive nature was not that far-fetched. The predecessor norm of Article 218 TFEU – Article 300 TEC – referred to ‘subject to the powers vested in the Commission’, the Commission’s practice of organising relations with international organisations remains unchallenged (Article 220 TFEU) and the Commission is supported by the literature as having a power to conclude international agreements.17 The judgment in France v Commission I, ironically, paved the way for the current and long-standing practice of international administrative agreements concluded by the Commission with international organisations and third countries, but based on the attribution of a concrete mandate, as explained below in section IVC.
11 According to Art 101 Euratom, international agreements in this area shall not only be negotiated but also concluded by the Commission with the approval of the Council. 12 France v Commission I (n 1) operative part. 13 Agreement between the US government and the EC and including an exchange of interpretative letters, [1995] OJ L95/47; Decision by the Council and the Commission concerning the conclusion, [1995] OJ L95/45. 14 France v Commission II (n 2). See this volume, ch 42. 15 Swiss MoU (n 4). See this volume, ch 77. 16 Case C-73/14, Council v Commission, ECLI:EU:C:2015:663 (ITLOS). See this volume, ch 74. 17 See as an example Exchange of letters between the Commission of the European Communities and the Office international des epizooties, [2004] OJ C215/4. See further S Bartelt and A Ott, `Die Verwaltungszusammenarbeit der Europäischen Kommission mit Drittstaaten und Internationalen Organisationen: Kategorisierung und rechtliche Einordnung’ in JP Terhechte (ed), Internationale Dimensionen des europäischen Verwaltungsrechts – Europarecht Beiheft 1/2016 (Baden-Baden, Nomos, 2016) 146, with further references; I Macleod, ID Hendry and S Hyett, The External Relations of the European Communities (Oxford, Oxford University Press, 1996) 95–96.
No General Treaty-Making Power of the Commission 283 A. An International Law Argument Rejected: The ‘Subsequent Practice’ of the European Commission The case touched upon, albeit indirectly, the difficult question of how EU external relations law relates to international law, as well as international treaty rules. The EU’s ‘output’ in external actions falls under international law, and international customary rules apply to EU international agreements. At the same time, EU external relations law is part of the EU’s constitutional set-up as a supranational legal order that cannot be guided only by international law. Instead, the EU legal norms form a lex specialis, especially concerning interinstitutional relations. These findings are supported by the Court’s very brief analysis of whether this competition agreement was an international agreement according to international treaty interpretation rules. The intention of both sides to be bound was decisive, as was the intention of the parties to establish binding rules under international law.18 An international organisation’s capacity to conclude treaties, then, is governed by the internal rules of that organisation (Article 6 of the 1986 Vienna Convention). The Court only picked out the international rules needed when interpreting the international agreement, without rigidly following the international treaty interpretation rules. The Court also clearly denied applying Article 31, paragraph 3(b) of the Vienna Convention on the Law of Treaties 1969 in relation to the norms of the EU, and therefore not taking any subsequent practice into account.19 The practice of the Commission concluding international agreements is no inherent power deviating from the classical treaty-making procedure. The Court instead referred to a constitutional argument previously only used in regard to the choice of the legal basis: a mere practice cannot override the provisions of the EU Treaty.20 Even if the Commission can demonstrate that it has engaged in binding or non-binding international agreements or arrangements with third countries, this practice cannot be considered. Instead, the assessment is based strictly on primary law provisions. B. A Supranational Argument Denied: No Analogy to the Euratom Treaty and the ERTA Case Law The Court denied the analogy with the treaty-making powers the Commission derives from Article 101 of the Euratom Treaty. This norm foresees an exceptional treaty-making power for the Commission to conclude international agreements covered in the Euratom Treaty.
18 It also does not mention at all whether the other side should have been aware that the Commission was not competent to sign this agreement on behalf of the Union. Under the 1986 Vienna Convention (Art 46(2)), international agreements violating an internal competence of fundamental importance and in case of a manifest violation can affect the validity of this international agreement. This internal competence condition, which is narrowly interpreted, would not, however, be given. In this regard, see also A Aust, Modern Treaty Law and Practice, 3rd edn (Cambridge, Cambridge University Press, 2013) 274. 19 On this, see PJ Kuijper, ‘The Court and the Tribunal of the EC and the Vienna Convention on the Law of Treaties 1969’ [1998] Legal Issues of Economic Integration 1; PJ Kuijper, ‘The European Court and the Law of Treaties: The Continuing Story’ in E Cannizzaro (ed), The Law of Treaties beyond the Vienna Convention 256 (Cambridge, Cambridge University Press, 2011); J Odermatt, ‘The Use of International Treaty Law by the Court of Justice of the European Union’ [2015] Cambridge Yearbook of European Legal Studies 121. 20 Case 68/86, United Kingdom v Council, ECLI:EU:C:1988:85, para 24; Case C-685/17, Commission v Council, ECLI:EU:C:2017:803, para 42. See also J Wouters, C Ryngaert, T Ruys and G De Baere, International Law: A European Perspective (Oxford, Hart Publishing 2019) 102.
284 Andrea Ott The Court stressed the differences between the two treaties – EEC and Euratom – negotiated on the same day. Furthermore, applying the ERTA findings by analogy to the treaty-making power with the argument that the Commission has the internal powers in the field of competition was strongly rejected by the Court. Since ERTA, the Court has accepted a broad reading of the competences based on the parallelism between internal and external competences, which has synchronised the Community external action with the other two supranational treaties – Euratom and the former European Coal and Steel Community (ECSC).21 The Court ruled out the same reading for the treaty-making procedure. In his Opinion, the Advocate General went so far as to state that the Commission has no broad executive function, and concluded that international agreements would not be among them. Instead, the power to conclude an international agreement is held by the Council, while the EU Treaties very exceptionally and expressly confer upon the Commission treaty-making powers.22 C. The Deathblow to Commission Administrative Agreements? Unexpectedly, the judgment was not the deathblow to international administrative agreements concluded by the Commission. On the contrary, the international cooperation between executives, and under the involvement of the Commission, developed in two directions after France v Commission I. Firstly, the Commission concludes international agreements outside the classical treaty-making procedure, but this practice has been put on a more secure legal footing. Concrete mandates to conclude an international agreement are provided to the Commission in EU primary law, and more frequently in international agreement provisions and secondary rules.23 These mandates are in line with Article 218 TFEU because they either derive, exceptionally, from EU primary law, or, in most cases, are delegated from the treaty-making institutions (the Council and the European Parliament) in EU secondary law.24 The resulting agreements do not involve establishing political relations, but maintaining or managing existing relations, involving technical details or modifications of existing agreements or financial agreements with third countries.25 The other recognisable direction is that these international cooperations in competition matters have become non-binding memoranda of understanding (MoUs), concluded between the competition authorities. All OECD members conclude the ‘agency-to-agency’ MoUs on competition cooperation and enforcement of competition rules. On the EU side, only the successor agreement to this international agreement on competition with the USA, and other international agreements on competition matters concluded with Canada, Japan and
21 A Ott, ‘EU Competence’ in RA Wessel and J Larik (eds), EU External Relations Law (Oxford, Hart Publishing, 2020) 67. 22 Opinion of Advocate General Tesauro, France v Commission I (n 6) para 33. See also R Schütze, Foreign Affairs and the EU Constitution (Cambridge, Cambridge University Press, 2014) 394. 23 With one exception concerning the so-called establishment agreements concluded by the EU and a third country to secure for the EU delegation the same diplomatic rights and immunities provided as to states under the Vienna Convention. The EEAS Council Decision refers to establishment arrangements. 24 See further A Ott, ‘The EU Commission’s Administrative Agreements: “Delegated Treaty-Making” in between Delegated and Implementing Rule-Making’ in E Tauschinsky and W Weiss (eds), Legislative Choice between Delegated and Implementing Acts (Cheltenham, Edgar Elgar, 2018) 200–32. 25 Ott (n 24).
No General Treaty-Making Power of the Commission 285 South Korea, are international agreements concluded by the Council (as the treaty-making institution at the time). Other arrangements are agreed by the Directorate-General for Competition and the responsible competition authorities of third countries as MoUs.26 Within the text of the MoUs, such as in the case with South Africa or Russia, the Directorate-General for Competition carefully laid out that the MoU is not to be considered an international agreement, and does not establish any rights or obligations.27 These MoUs are soft law acts. However, the way they are formulated is not comparable with the classical MoUs concluded by the Commission explicitly on behalf of the EU.28 They are only concluded by the Directorate-General for Competition and appear to be more comparable to so-called ‘administrative arrangements’, as politically non-binding cooperations between administrative authorities.29 Consequently, these MoUs on competition matters are not intended to be an act of external representation on behalf of the Union, as the other MoUs that the Commission conclude clearly indicate.30 Comparing the text and rules of these MoUs in competition law with the binding international agreement with the USA on competition matters, however, the content is basically the same. They still all include commitments on cooperation, avoidance of conflicts and the convening of regular meetings, which are also relevant for the EU competition policy and the EU as a whole.31 These agreements and arrangements are consequently built on ‘shifting sands’.32 They can change their names or legal form, and the Commission concludes legal nonbinding (soft law) acts in place of international agreements, but their content and phrasing remain similar, confirming that the borders between binding and non-binding international acts are blurred. What France v Commission I did not address was whether Article 229 TEC (now Article 220 TFEU) constitutes a power to conclude binding international agreements on administrative matters with international organisations. Comparing the wording of the pre-Lisbon Article 229 TEC with the post-Lisbon successor Article 220 TFEU, the novel norm added a further actor – the High Representative – but is also more carefully worded.33 Pre-Lisbon, this article reads more as providing the Commission with its own right to maintain relationships with international organisations. Yet post-Lisbon, it is stipulated that
26 See the comprehensive overview at the website of the DG Competition, https://ec.europa.eu/competition/international/bilateral/index.html. 27 For instance, https://ec.europa.eu/competition/international/bilateral/mou_south_africa.pdf; https://ec.europa. eu/competition/international/bilateral/mou_russia_en.pdf. 28 So, for instance, the MoU concluded by the Commission on behalf of the EU with the Republic of Panama on International Cooperation and Development (‘The proposed Memorandum of Understanding does not, nor is it intended to, create any binding or legal obligations on either side under domestic or international law’). And within the MoU: ‘This Memorandum of Understanding is to be implemented according to the legal framework applicable to each Side. It does not constitute an agreement binding under international law nor is it intended to create binding legal rights or obligations for either Side’: C(2018) 3184/F1 – EN (annex). 29 This is, however, correctly reflected in the administrative arrangement agreed with Mexico in 2018, https:// ec.europa.eu/competition/international/bilateral/mexico_mou_2018_en.pdf. 30 See, eg the MoU concluded by the Commission but on behalf of the European Union with the Eastern Republic of Uruguay on international cooperation, Commission decision of 10 June 2015, C(2015) 3819 final. 31 So, for instance, the MoU with the Competition Commission of South Africa, https://ec.europa.eu/competition/ international/bilateral/mou_south_africa.pdf. 32 This expression was used by Pieter Jan Kuijper to describe the ‘world of non-binding agreements’: PJ Kuijper, ‘Recent Tendencies in the Separation of Powers in EU Foreign Relations: An Essay’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 221. 33 Art 220(2) TFEU: ‘The High Representative of the Union for Foreign Affairs and Security Policy and the Commission shall be instructed to implement this Article.’
286 Andrea Ott the Commission is ‘instructed to implement’.34 This current wording appears to require a concrete mandate by the treaty-making institutions. Nevertheless, the revised wording might also be inconclusive, because this norm is differently worded in, for instance, the German, French and Dutch language versions.35 These language versions emphasise, in contrast to the English version, that the Commission and the High Representative have the responsibility to implement this norm. The majority in the literature pre- and post-Lisbon still assume that Article 220 TFEU gives the Commission a mandate to conclude binding international agreements with international organisations on the management of the respective relations.36 In any event, the Commission is not allowed to overstep the management of relations to enter into political relations and founding agreements setting up international organisations that are concluded based on Article 218 TFEU. In practice, the Commission has been reluctant to use Article 220 TFEU as a basis for action; either it is dealing with a binding international agreement whose mandate derives from a concrete mandate set down in EU secondary law or it concludes MoUs or Joint Statements which indicate that they are non-binding under internal and international law.37 For the latter, the Commission will refer to Article 17 TEU in the adopting act.38 Article 17 TEU refers to the power of the Commission to conduct the external representation on behalf of the Union, with the exception of the EU Common and Foreign Security Policy and other exceptions foreseen in primary law. International agreements on administrative matters did not disappear into the twilight zone of international law as the Commission argued in France v Commission I by pointing to its administrative authority ‘outside the ambit of international law’.39 It was either an international agreement because the Commission was installed with treaty-making power by primary law (Article 6 of the Protocol (No 7) on the privileges and immunities of the European Union) or by delegated force. According to international treaty rules, both contracting parties want to be bound and act under international law. These are international agreements of an administrative nature because the financial and technical details they regulate do not require the
34 Former Art 302 TEC: ‘It shall be for the Commission to ensure the maintenance of all appropriate relations with the organs of the United Nations and of its specialised agencies. The Commission shall also maintain such relations as are appropriate with all international organisations.’ 35 German version: ‘Die Durchführung dieses Artikels obliegt … der Kommission’) (free translation in English: ‘The Commission is responsible for the implementation’); Dutch version: ‘De hoge vertegenwoordiger van de Unie voor buitenlandse zaken en veiligheidsbeleid en de Commissie zijn belast met de uitvoering van het bepaalde in dit artikel’ (free translation in English: ‘is responsible’); French version: ‘sont chargés de la mise en oeuvre du present article’ (Free translation in English: responsible for). 36 JP Jacqué, ‘La participation de la Communauté Économique européenne aux organisations international universelles’ [1975] Annuaire français de droit internationales universelles 924, 929; C Flaesch-Mougin, ‘Les relations avec les organisations internationales et la participation à celles-ci’ in Commentaire J Mégret, Le Droit de la CE et de l’Union européenne, vol 12, Relations extérieures (Brussels, Editions de l’Université de Bruxelles, 2005) 348; K Schmalenbach, ‘AEUV Art 220, para 19’ in C Calliess and M Ruffert (eds), EUV/AEUV, Kommentar, 5th edn (Munich, Beck, 2016); CH Tiedje, ‘Art 220 AEUV, paras 14–17’ in E Grabitz, M Hilf and M Nettesheim (eds), Das Recht der Europäischen Union, 56. Ergänzungslieferung (Munich, Beck, 2015). However, against binding but accepting non-binding measures, see Macleod et al (n 17) 94–96. 37 See, eg Commission Decision of 9 July 2018 on the signature of a MoU between the European Commission and the Ministry of Ecology and Environment of the People’s Republic of China, to enhance cooperation on emissions trading, C(2018) 4131 final; Commission Decision on the signature on behalf of the European Union of the White House Arctic Science Ministerial Joint Statement of Ministers, C(2016) 5801/1. 38 See, eg the Commission Decision of 19 September 2016 on the signature of the Joint Way Forward on migration issues with Afghanistan, C(2016) 6023 final. 39 On this argument, see a representative of the Commission before the House of Lords Select Committee, quoted by J Kingston, ‘External Relations of the European Community – External Capacity versus Internal Competence’ [1995] ICLQ 662 fn 23.
No General Treaty-Making Power of the Commission 287 treaty-making institutions’ approval. In addition, the delegating mandate defined the framework of who can conclude international agreements regarding the subject and conditions. If one of the criteria for an international agreement is not fulfilled, it can be either a soft law measure on behalf of the Union (in the form of MoUs or Joint Statements) or a soft law measure on behalf of the Commission’s administration (administrative arrangements). These bilateral acts remain international law measures – especially the political MoUs – but are international soft law and the Court addressed their EU legality in the later France v Commission II case.40 D. Implications for Other Administrative Actors Another legitimate question is what implications the judgment holds for other administrative actors who act globally. As well as the Commission, the High Representative, the European External Action Service (EEAS) and certain EU agencies (eg Europol or Frontex) or the European Central Bank (ECB) engage in international action. As explained above, the treaty-making capacity rests with the Council and Parliament. Other EU actors can only act internationally on behalf of the Union and commit the EU with binding instruments when installed with limited treaty-making functions under EU primary law, or a treaty-making power is delegated to them by EU secondary law. As specified above, practice demonstrates that the secondary law delegation by the Council and the Parliament has to include the definition that an agreement can be concluded with a third country or international organisation and must specify the conditions of conclusion and its subject. These conditions framing the delegation are required by the institutional balance principle (Article 13(2) TFEU) and delegation of powers principle.41 The Council and European Parliament are even more reluctant to delegate treaty-making powers to other administrative actors. Instead, these actors, primarily EU agencies, take refuge in the twilight of international soft law or, at least, send contradicting signals with their bilateral acts and practice. Post-Lisbon, Europol transformed from an independent body installed with an international legal personality to an EU agency. This change was marked by the fact that Europol cannot conclude any more international agreements itself, but concludes ‘working arrangements with international partners’.42 Working arrangements – so non-binding tools under international law – are also highlighted in the revised Frontex Regulation.43 And contradicting signals regarding legal effect are visible in the EEAS practice. The EEAS Regulation foresees that the High Representative concludes establishment arrangements with host countries, international organisations or third countries.44 These establishment agreements, or arrangements, allow third countries to grant Union delegations the same privileges and immunities as states in its diplomatic relations and, therefore, the same rights as agreed under the
40 France v Commission II (n 2). On bilateral soft law measures, see generally O Schachter, ‘The Twilight Existence of Nonbinding International Agreements’ [1977] American Journal of International Law 296. 41 See Ott (n 24) 202–09, with further references. 42 Art 23 Europol Regulation. 43 Art 73 Frontex Regulation. Reg (EU) 2019/1896 of the European Parliament and of the Council of 13 November 2019 on the European Border and Coast Guard and repealing Regulations (EU) No 1052/2013 and (EU) 2016/1624. This soft law cooperation is limited to the extent required for the fulfilment of Frontex’s tasks and the Agency shall comply with Union law, including norms and standards which form part of the Union acquis, including where cooperation with third countries takes place on the territory of those third countries. 44 Art 5(6) EEAS Regulation.
288 Andrea Ott Vienna Convention on Diplomatic Relations (VCDR) 1961. From the wording arrangement, it can be concluded that the EEAS Regulation does not delegate treaty-making powers to the High Representative. The literature argues that, instead, it could be perceived as a unilateral concession by the host state.45 However, post-Lisbon, in an establishment a greement concluded between the EU and South Sudan, the word ‘agreement’ is explicitly used, and in the interpretation of its framework and content, everything points in the direction that the intention by both parties is to conclude an international agreement.46 V. ADDITIONAL READING Bartelt, S, and Ott, A, ‘Die Verwaltungszusammenarbeit der Europäischen Kommission mit Drittstaaten und Internationalen Organisationen: Kategorisierung und rechtliche Einordnung’ in JP Terhechte (ed), Internationale Dimensionen des europäischen Verwaltungsrechts, Europarecht Beiheft 1/2016, 143–72. Hummer, W, Enge und Weite der ‘Treaty making power’ der Kommission der EG nach dem EWG-Vertrag, Gedächtnisschrift für Eberhard Grabitz (Munich, Beck, 1995) 195–226. Kingston, J, ‘External Relations of the European Community – External Capacity versus Internal Competence’ [1995] International and Comparative Law Quarterly 659. Ott, A, ‘The EU Commission’s Administrative Agreements: “Delegated Treaty-Making” in between Delegated and Implementing Rule-Making’ in E Tauschinsky and W Weiss (eds), Legislative Choice between Delegated and Implementing Acts (Cheltenham, Edgar Elgar, 2018) 200–32. Ott, A, ‘Informalization of EU Bilateral instruments: Categorization, Contestation and Challenges’ [2020] Yearbook of European Law 569.
45 In this regard, see Macleod et al (n 17) 95. 46 Agreements between the European Union, Euratom and the Government of the Republic of South Sudan on the establishment and the privileges and immunities of the delegation of the European Union in the Republic of South Sudan, 9 December 2011. Art 6 of the Agreement states that it applies provisionally until South Sudan notifies that the internal procedure necessary for its approval has been completed.
27 Consistent Interpretation and Continuous Dialogue between the EU and the WTO: Germany v Council (Bananas) JOSEPH A McMAHON Case C-280/93, Federal Republic of Germany v Council of the European Union, ECLI:EU:C: 1994:367 (Bananas), delivered 5 October 1994. KEYWORDS Acts of the institutions – Procedure for adoption – Statement of reasons – Consultation of Parliament – Agriculture – Objectives of the Common Agricultural Policy – Priority over competition rules – Import regime – International Agreement – Fourth ACP–EEC Lomé Convention – General Agreement on Tariffs and Trade – Association of the overseas countries and territories.
I. INTRODUCTION
G
ermany claimed, in an action brought against the Council, that the trading arrangements of Regulation 404/93 establishing a common organisation of the market in bananas were contrary, inter alia, to the General Agreement on Tariffs and Trade (GATT). Although the claim was rejected by the Court of Justice of the European Union (the Court) in line with its jurisprudence denying the direct effect of the GATT in the EU legal order, the new dispute mechanism established in the World Trade Organization (WTO) ruled in 1997 that the Regulation constituted a breach of GATT provisions; these WTO disputes were finally resolved in 2012. By this time, the approach taken by the Court had transformed from one denying the direct effect of the GATT to one espousing continuous dialogue and consistent interpretation between the Court and the panels and the Appellate Body of the WTO. II. FACTS
A Protocol annexed to the Implementing Convention referred to in Article 136 EEC (now Article 203 TFEU) relating to the Association of Overseas Countries and Territories (OCTs)
290 Joseph A McMahon allowed a special duty-free scheme applicable to the importation of bananas into the Federal Republic of Germany.1 These imports were subject to an annual quota, determined on the basis of quantities imported in 1956, which could be increased if it was not sufficient to cover demand in the German market (and the OCTs were not in a position to meet that demand). The Implementing Convention was set to expire within five years, and whilst the Association of OCTs was transformed into the first Yaoundé Convention, the Protocol continued to apply, despite it providing that the quota would be progressively reduced as the common market was established. Over time, the first Yaoundé Convention with the Associated African States and Madagascar was transformed into the Lomé Convention. Article 168 of the Fourth Lomé Convention provided: 1. Products originating in the ACP States shall be imported into the Community free of customs duties and charges having equivalent effect. 2. (a) Products originating in the ACP States: • listed in Annex II to the Treaty where they come under a common organization of the market within the meaning of Article 40 of the Treaty, or • subject, on import into the Community, to specific rules introduced as a result of the implementation of the common agricultural policy shall be imported into the Community, notwithstanding the general arrangements applied in respect of third countries, in accordance with the following provisions: (i) those products shall be imported free of customs duties for which Community provisions in force at the time of import do not provide, apart from customs duties, for the application of any measure relating to their import; (ii) for products other than those referred to in point (i), the Community shall take the necessary measures to ensure more favourable treatment than that granted to third countries benefiting from the most-favoured-nation clause for the same products …2
Further details on the special treatment to be accorded African, Caribbean and Pacific (ACP) bananas were recorded in Protocol 5 to the Fourth Lomé Convention. However, a Joint Declaration relating to Protocol 5 stated that it did not prevent the Community from establishing common rules for bananas, in full consultation with the ACP, as long as no ACP State, traditional supplier to the Community, is placed as regards access to, and advantages in, the Community, in a less favourable situation than in the past or at present.
Before the common organisation of the market in bananas was established, consumption of bananas was covered by three sources: bananas produced within the Union (for example in the Canary Islands of Spain, and several French overseas departments); bananas produced in states which had signed the Lomé Convention (certain African and Caribbean countries); and bananas from Central and South America (third country bananas). Special treatment for Union ACP bananas compensated for the fact that their production costs were higher than those for Latin American bananas. The common organisation was established by Council Regulation (EEC) 404/93, the Preamble of which noted:3
1 Imports of bananas from non-preferred sources was subject to an import duty of 20% ad valorem under the General Agreement on Tariffs and Trade (GATT). 2 [1991] OJ L229/1. 3 [1993] OJ L47/1.
Consistent Interpretation and Continuous Dialogue between the EU and the WTO 291 Whereas there currently exist within the Member States of the Community producing bananas national market organizations which seek to ensure that producers can dispose of their products on the national market and receive an income in line with the costs of production; whereas these national market organizations impose quantitative restrictions which hamper achievement of a single market for bananas; whereas some of the Member States which do not produce bananas provide p referential outlets for bananas from the ACP States while others have liberal importation rules, which even in one case include a privileged tariff situation; whereas these different arrangements prevent the free movement of bananas within the Community and implementation of common arrangements for trade with third countries; whereas, for the purposes of achievement of the single market, a balanced and flexible common organization of the market for the banana sector must replace the various national arrangements …
Title IV of the Regulation established the trade rules, and these provided for the continued import of ACP bananas, free of customs duties, with an Annex to the Regulation setting the quantity of imports from traditional ACP suppliers at 857,700 tonnes. Imports would be subject to an import licence, in principle, granted at the request of any concerned party. Article 18 established a tariff quota of two million tonnes for imports of third country bananas and non-traditional ACP bananas, with both being subject to a levy.4 Within the quota, imports of third country bananas were subject to a levy of 100 ECU, whilst imports of non-traditional ACP bananas were subject to zero duty within the quota. The levy was 750 ECU for non-traditional ACP bananas and 850 ECU for third country bananas. Article 19 of the Regulation set out detailed arrangements for the allocation of the tariff quota between operators, with 66.5 per cent being allocated to operators who marketed third country and/or non-traditional ACP bananas and 30 per cent allocated to operators who marketed Union and/or traditional ACP bananas.5 Article 21(2) discontinued the tariff quota laid down in the 1957 Protocol. Germany, supported by Belgium and the Netherlands, contested Title IV of Regulation 404/93, alleging a breach of essential procedural requirements, substantive rules and fundamental principles of EU law, the Lomé Convention, the GATT and the Banana Protocol.6 III. THE COURT
On the issue of a breach of essential procedural requirements, Germany argued that the procedure under which the Regulation was adopted was irregular, as its text diverged from the initial Commission proposal. With a new proposal being formally adopted by the Commission, Germany argued that its statement of reasons were defective, as it referred only to the original proposal; and, given the changes in the Commission proposal, the European Parliament should
4 Provision was made, in Arts 16 and 18, for an increase in the tariff quotas on the basis of Commission forecasts. 5 The remaining 3.5% was allocated according to Art 19(1)(c) of the Regulation to ‘operators established in the Community who started marketing bananas other than Community and/or traditional ACP bananas from 1992’. See also Commission Regulation 1442/93 laying down detailed rules for the application of the arrangements for importing bananas into the Community, [1993] OJ L142/6. 6 Belgium and the Netherlands intervened to support Germany, whereas the Council was supported by the Commission, France, Greece, Italy, Portugal, Spain and the UK. At around the same time, references were made for preliminary rulings in Case C-389/93, Duerbeck, ECLI:EU:C:1995:174, Case C-465/93, Atlanta, ECLI:EU:C:1995:369 and Case C-466/93, Atlanta, ECLI:EU:C:1995:370.
292 Joseph A McMahon have been consulted again.7 The Council rejected these arguments.8 The Court, likewise, rejected the argument, noting that, for example, ‘The fact that that amended proposal was not in writing is of no consequence’, which highlighted the flexibility in the legislative process.9 Germany’s arguments on breach of substantive rules of Union law centred on the provisions of the EU Treaties on the Common Agricultural Policy (CAP), including, for example, that the Regulation was inconsistent with the objectives of that policy, and that it exceeded the scope of Articles 39, 42 and 43 EC (now Articles 39, 42 and 43 TFEU). On the CAP’s objectives, Germany pointed to the imbalance between supply and demand, and the considerable rise in banana prices, especially on the German market, as evidence that the Regulation was contrary to Article 39 EC (now Article 39 TFEU).10 Relying on a considerable history of jurisprudence, the Court rejected this argument, pointing, for example, to the broad discretion enjoyed by the institutions in matters concerning the CAP.11 As for exceeding the scope of the relevant provisions of the EU Treaties, the German argument was that the Regulation was a development policy for the ACP and, as such, should have been based on Article 235 EC and Article 238 EC (now Article 352 TFEU and Article 217 TFEU).12 Once again relying on a considerable history of jurisprudence, this a rgument was dismissed by the Court, which noted that Article 43 EC (now Article 43 TFEU) was the appropriate legal base for any legislation concerning agricultural products, and that even where that legislation is directed both to objectives of agricultural policy and to other objectives pursued on the basis of other Treaty provisions, the existence of those provisions cannot be relied on as a ground for restricting the field of application of Article 43 of the Treaty.13
It is worth noting here that the Court, unlike Advocate General (AG) Gulmann, did not reference the Commission proposal for a Council Regulation on the introduction of a system of aid for ACP banana producers, similar to that established by Regulation 404/93 for Union producers, which had as its legal basis Article 113 EC (now Article 207 TFEU).14 Further arguments advanced by Germany were also rejected. These included a breach of the principle of undistorted competition, a breach of the principle of non-discrimination and a breach of general principles of law (rights to property, freedom to pursue a trade and proportionality).15 Turning to the external relations aspect of the judgment, Germany argued that there had been a breach of Article 168 of the Lomé Convention which exempted all ACP imports from customs duties, and that this provision could not be used to afford differential treatment to traditional and non-traditional imports of ACP bananas. The Court rejected this argument,
7 Case C-280/93, Germany v Council, ECLI:EU:C:1994:367 (Bananas), paras 28–30. 8 ibid para 31. 9 ibid para 36. In paras 38–42, the Court also dismissed the argument that the European Parliament needed to be consulted again citing its decisions in Case C-65/90, Parliament v Council, ECLI:EU:C:1992:325 (para 16) and Joined Cases C-13/92 to C-16/92, Driessen v Minister van Verkeer en Waterstaat, ECLI:EU:C:1993:828 (para 23). 10 ibid para 46. See, on this point, Opinion of Advocate General Gulmann, Case C-280/93, Germany v Council, ECLI:EU:C:1994:235, para 99. 11 ibid para 47. The Court cited here Joined Cases C-267/88 to C-285/88, Wuidart, ECLI:EU:C:1990:79. 12 ibid para 53. 13 ibid para 54. The Court cited here Case 68/86, United Kingdom v Council, ECLI:EU:C:1988:85. See also para 117 of the Opinion of Advocate General Gulmann, above n 10. 14 See COM (92) 465, [1992] OJ C344/9. 15 Above n 7, paras 58–98.
Consistent Interpretation and Continuous Dialogue between the EU and the WTO 293 pointing to the Declaration, which noted that ‘the Community’s only obligation is to maintain the advantages, with respect to access of ACP bananas to the Community market, which the ACP States had before the Lomé Convention’.16 In his Opinion, AG Gulmann agreed with the view put forward by the Council that a tariff quota is different from a general duty and that Protocol 5 entitled the Union to make a distinction between traditional and non-traditional bananas.17 As for the other Protocol at issue in these proceedings – the 1957 Banana Protocol – Germany argued that as it was an integral part of the EU Treaties, any amendment should have been done using Article 236 EC (now Article 48 TFEU). Whilst acknowledging it as an integral part of the EU Treaties, the Court considered that if the argument were accepted, it would be impossible to establish a common organisation of the market in accordance with Article 43(2) EC (now Article 43(2) and (3) TFEU).18 So, the Protocol did not have the effect of derogating from this basic provision of the EU Treaties; the Court also noted that it was a transitional measure, with reductions in the quota being made as the common market was established.19 On this point, it should be noted that the third subparagraph of paragraph 4 of the Protocol specifically refers to the abolition of the quota as a measure ‘to be taken by the Council, acting by a qualified majority on a proposal from the Commission’. It could therefore be argued that the Protocol itself contained rules to be followed for the abolition of the quota. Although AG Gulmann discussed the Protocol in greater depth than the Court, he reached the same conclusion.20 Germany also argued that, irrespective of the issue of direct effect, compliance with GATT rules was a condition for the lawfulness of Union acts, and that the Regulation infringed certain GATT provisions.21 In response, the Council argued that the GATT could only be relied on in those special cases in which Community provisions were adopted to implement GATT obligations.22 Whilst recognising that certain GATT provisions have the effect of binding the Union, in answering this question, the Court had to consider the spirit, general scheme and terms of the GATT, and these considerations precluded it from taking provisions of GATT into account when assessing the lawfulness of a Regulation.23 Thus, the situation was no different from that of an individual seeking to use the GATT to challenge the lawfulness of an EU legal act. The Court concluded: In the absence of such an obligation following from GATT itself, it is only if the Community intended to implement a particular obligation entered into within the framework of GATT, or if the Community act expressly refers to specific provisions of GATT, that the Court can review the lawfulness of the Community act in question from the point of view of the GATT rules.24
16 ibid para 101. 17 Above n 10, paras 118–24. 18 Above n 7, para 117. 19 ibid para 115. The Court noted that the derogation from the rule of unanimity in para 4 of the Protocol, which Germany argued did not permit the abolition of the Protocol, would allow the Council, acting by a qualified majority, on a proposal from the Commission to amend or abolish the quota. 20 Above n 10, paras 152–64. 21 Above n 7, para 103. 22 ibid para 104. 23 ibid para 109. 24 ibid para 111. To support this conclusion, the Court cited Case 70/87, Fediol v Commission, ECLI:EU:C:1989:254 and Case C-69/89, Nakajima v Council, ECLI:EU:C:1991:186. See this volume, ch 17.
294 Joseph A McMahon IV. THE IMPORTANCE OF THE CASE
A. The Bananas Disputes at the WTO The Court’s judgment was delivered in June 1993. Also delivered in June 1993 was the ruling of the GATT Panel established to rule on a complaint by Colombia, Costa Rica, Guatemala, Nicaragua and Venezuela on import measures maintained on fresh bananas by individual EU Member States.25 Dealing with the situation prevailing before the introduction of the common organisation of the market in bananas, the complainants alleged that the measures maintained by these Member States were inconsistent with a number of GATT provisions. The Panel agreed that they were inconsistent with Article I GATT (general most-favourednation treatment), Article XI.1 GATT (general elimination of quantitative restrictions) and Article XXIV GATT (Customs Unions and Free Trade Areas).26 The defences advanced by the EU, Article XI.2(c)(i)27 and Article XXIV GATT, were deemed to be inapplicable. The nature of dispute settlement under the GATT allowed the ruling to be ignored, as the EU continued to move towards the common organisation of the market in bananas. Nonetheless, the GATT Panel ruling represented an early warning of the problems that it would face, as it entered into force in the wake of the Court’s decision. In fact, as the Council adopted the regulation, the five complainants in the initial GATT complaint again requested consultations with the EU and, on the failure of these consultations, they requested the establishment of another GATT Panel, which issued its report in February 1994.28 This second GATT Panel found that the new regime suffered from the same inconsistencies with the GATT that the previous regime had (ie Articles I and XXIV GATT), and added inconsistency with Articles II and III GATT. The inconsistency with Article II arose from the change in the ad valorem rate that would apply both within and outside the tariff quotas established for third country suppliers.29 The rules for the operation of the licensing system for bananas established by the common organisation was, for the second GATT Panel, contrary to Article III.4 GATT, as it discriminated against non-EU banana distributors.30 These inconsistencies were not excused by either Article XXIV GATT or Article XX(h) – the exception allowing for measures undertaken under an international commodity agreement.31 Although published, the weaknesses of the GATT dispute settlement system allowed the EU to veto its adoption, but with the imminent signing of the Marrakesh Agreement founding the WTO, the rules on dispute settlement were about to change.
25 DS32/R, https://docs.wto.org/gattdocs/q/GG/DS/32R.PDF, paras 364–72 (Arts I and XXIV and Part IV GATT) and paras 326–58 (Art XI). The Panel focused their findings on the regimes in France, Italy, Portugal, Spain and the UK, and rejected the EU argument that the regimes in Belgium, Denmark, Ireland, Luxembourg and the Netherlands should not be considered. 26 ibid paras 359–63. The Panel exercised judicial economy with respect to claims under Art II GATT (Schedules of Concessions), Art VIII GATT (Fees and Formalities connected with Import), Art XIII GATT (Non-discriminatory Administration of Quantitative Restrictions) and Part IV GATT. 27 This provides: ‘(c) Import restrictions on any agricultural or fisheries product, imported in any form, necessary to the enforcement of governmental measures which operate: (i) to restrict the quantities of the like domestic product permitted to be marketed or produced, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted …’ 28 DS38/R, https://docs.wto.org/gattdocs/q/GG/DS/38R.PDF. 29 ibid paras 132–36. 30 ibid paras 143–48. 31 ibid paras 156–64 (Art XXIV and Part IV) and 165 and 166 (Art XX(h)).
Consistent Interpretation and Continuous Dialogue between the EU and the WTO 295 In recognition of the increased vulnerability of the banana regime to challenge before the WTO, the EU entered into negotiations with the original complainants (excluding Guatemala), leading to the conclusion of the Framework Agreement on Bananas, which would increase the quota for third country and non-traditional ACP bananas.32 In exchange for this improvement, which was incorporated into the EU’s Schedule of Commitments (part of the Final Act of the Uruguay Round), the four states agreed to suspend their complaint, but it was clear that Guatemala would continue to complain, especially given continuing problems with Article XIII GATT – the non-discriminatory application of quantitative restrictions. It was not surprising, therefore, that, in February 1996, Guatemala, along with Ecuador, Honduras, Mexico and the USA, requested consultations under the new Dispute Settlement Understanding (DSU), arguing that the common organisation of the market in bananas, as amended by the Framework Agreement on Bananas, was inconsistent with the GATT (Articles I, II, III, X, XI and XIII), the Agreement on Import Licensing Procedures (Articles 1 and 3), the Agreement on Agriculture, the General Agreement on Trade in Services (Articles II, IV, XVI and XVII) and the Agreement on Trade-Related Investment Measures (Articles 2 and 5).33 Altogether, this was a much more significant challenge to the regime. It was no surprise that this third Panel concluded that the discriminatory tariff preference for ACP bananas was inconsistent with Article I:1 GATT but was excused by the Lomé Waiver,34 and that the inconsistencies with Article II GATT were remedied by the EU’s Uruguay Round Schedule.35 Equally, it was not surprising that the Panel found that the separate import regimes for traditional ACP imports and non-traditional imports from both the ACP and third countries were contrary to Article XIII GATT.36 Further inconsistencies were found with respect to the import-licensing regime.37 Although the EU appealed this Panel ruling, the Appellate Body upheld it, so the EU was required to bring its banana regime into line with WTO law.38 The EU attempted to do so through Regulations 1637/98 and 2361/98,39 and it asked for a Panel ruling that the new regime was now compliant with WTO law, but the Panel was unable to confirm this.40 Six years after the initial complaint, it was still not resolved, and would not be finally resolved until 2012, when the parties notified the Dispute Settlement Body that there was
32 See Regulation 3224/94 ([1994] OJ L337/72) laying down transitional measures for the implementation of the Framework Agreement on Bananas concluded as part of the Uruguay Round of multilateral trade negotiations. Under Art 1(1), the tariff quotas established by Art 18 of Regulation 404/93 were divided up into specific quotas for Costa Rica, Colombia, Nicaragua and Venezuela. The Regulation also reallocated the quotas for non-traditional ACP suppliers. See also Annex XV of Council Regulation 3290/94 ([1994] OJ L349/105) on the adjustments and transitional arrangements required in the agriculture sector in order to implement the agreements concluded during the Uruguay Round of multilateral trade negotiations, which amends Art 18 of Regulation 404/93. 33 WT/DS27/1. 34 WT/DS27/R/USA, para 7.136. Four separate reports were issued by the Panel. For convenience, reference is made to the report issued as a result of this complaint. 35 ibid para 7.141. 36 ibid para 7.82 (WTO, 1997a, 7.82). It should be noted that in the light of the EU’s obligation under the Lomé Convention, it was acceptable under Art XIII.1, excused by the Lomé waiver, to allocate ACP tariff quota shares on the basis of pre-1991 best-ever exports, but such shares that exceeded these amounts were not (para 7.110). 37 ibid paras 7.341, 7.353 and 7.368, finding inconsistencies with Art XVII and II GATT. 38 WT/DS27/AB/R, para 257. See also WT/DS27/15 – Arbitration under Art 21(3)(c) DSU under which the Arbitrator set 1 January 1999 as the end of the reasonable period of time to comply with the reports of the Appellate Body and the Panel. 39 Respectively, [1998] OJ L210/28 and 293/332. 40 See WT/DS27/RW/EEC. See also WT/DS27/RW/ECU Ecuadorian request for the re-establishment of the WTO Panel to determine the legality of the EU’s changes to the banana regime.
296 Joseph A McMahon a mutually agreed solution.41 In the intervening period, the USA received authorisation to suspend concessions (or other obligations) against the EU.42 Similar authorisation was also granted to Ecuador (this was granted unusually under the GATT, the General Agreement on Trade in Services and the Agreement on Trade-Related Aspects of Intellectual Property Rights).43 The Doha Ministerial Conference in 2001 resulted in the EU’s obligations under Article XIII.1 and XIII.2 GATT being waived until 31 December 2005 with respect to the separate tariff quota of 750,000 tonnes for ACP bananas.44 Paragraph 2 of the waiver allowed for consultations with those members ‘with respect to any difficulty or matter that may arise as a result’ of the ACP bananas tariff rate quota or ‘where a member considers that any benefit accruing to it under the GATT 1994 may be or is being impaired unduly as a result’ of its implementation. Consultations were requested by Honduras, Nicaragua and Panama in November 2005, and the following November, Ecuador requested consultations which eventually led to the establishment of a Panel to determine whether the EU had brought the banana regime into line with its WTO obligations.45 Unsurprisingly, the compliance panel concluded that the EU had failed in this regard.46 Following the Appellate Body reports in these proceedings, which largely upheld the key findings of the Compliance Panel, negotiations with Latin American suppliers led to the conclusion of the Geneva Agreement on Trade in Bananas, which provided for a new EU tariff schedule on bananas. The dispute was thus finally resolved.47 B. WTO Disputes before the Court This extended discussion of the bananas dispute(s) at the GATT and the WTO confirms that the EU regime, as created by Regulation 404/93, was clearly contrary to the rules of the GATT. Yet the Court declared that these rules did not have direct effect. Everling has noted: It may also well be that the provisions of GATT, as the Court has always decided, are not sufficiently clear and unconditional. But that question has nothing to do with the legality of Community acts with regard to international law.48
The argument here is that, for the Court, the admissibility of the German argument turned on their interpretation of the GATT, rather than Article 173 EC (now Article 263 TFEU); the
41 WT/DS27/98. In addition to WT/DS27, the following disputes about the EU banana regimes were also resolved: DS105 (a complaint by Panama), DS158 (a complaint by Guatemala, Honduras, Mexico, Panama and the USA), DS361 (a complaint by Colombia) and DS364 (a complaint by Panama). 42 WT/DS27/ARB. The retaliation authorised was to the value of US$191.4 million, as opposed to the US request to suspend concessions to the value of US$520 million. 43 WT/DS27/ARB/ECU. The retaliation authorised was to the value of US$201.6 million, as opposed to the Ecuadorian request to suspend concessions to the value of US$450 million. 44 WT/MIN(01)/16 (14 November 2001) European Communities – transitional regime for the EC autonomous tariff rate quotas on imports of bananas. 45 At issue here was Regulation 1964/2005, [2005] OJ L316/1. 46 WT/DS27RW2/ECU. It concluded, for example, that the preference granted to the ACP was inconsistent with Art I:1 GATT, which was not excused by the Doha waiver since 1 January 2006, and that there were inconsistencies with Art XIII GATT. See also the compliance panel report established at the request of the USA, WT/DS27/ RW/USA. The findings of the Panels were largely upheld by the Appellate Body: see WT/DS27/AB/RW2/ECU and WT/DS27/AB/RW/USA. 47 See WT/L/784 for details of the Geneva Agreement. 48 U Everling, ‘Will Europe Slip on Bananas? The Bananas Judgment of the Court of Justice and National Courts’ (1996) 33 CML Rev 401, 421–22.
Consistent Interpretation and Continuous Dialogue between the EU and the WTO 297 latter is there to guard their rights and ensure the legality of the acts of the EU institutions. The conclusion offered by Everling is that if the GATT is part of the EU legal order, then legislation that infringes its provisions is illegal, and Article 173 EC (now Article 263 TFEU) is a mechanism for the Member States to object to such legislation, especially as they are also members of the GATT (and now the WTO).49 The failure of the Court to deliver an Opinion on the substantive arguments on the legality of the Framework Agreement on Bananas advanced by Germany (supported by Belgium and the Netherlands) in Opinion 3/94 illustrated an equal lack of respect for the purposes of Article 173 EC.50 A subsequent attempt by Germany contesting the Framework Agreement of Bananas was dismissed using the reasoning from Germany v Council (Bananas), the case at hand.51 As if to confirm that the approach taken by the Court to the direct effect of the GATT has been as in International Fruit,52 political support for this position is offered in the final recital of Council Decision 94/800 on the conclusion of the Uruguay Round negotiations, which noted that ‘by its nature, the Agreement establishing the World Trade Organization, including the Annexes thereto, is not susceptible to being directly invoked in Community or Member State courts’.53 In their Explanatory Memorandum to this Decision, the Commission justified this position by pointing out that major trading partners were denying direct effect to these agreements: ‘Without an express stipulation of such exclusion in the Community instrument of adoption, a major imbalance would arise in the actual management of the obligations of the Community and other countries.’54 This political argument gained legal recognition in Portugal v Council when the Court acknowledged the lack of reciprocity as the real reason why the GATT (and the WTO) does not have legal effect.55 However, in reaching this conclusion, the Court equated the new WTO dispute settlement process with the old GATT process even though there is considerably less room for members to ignore adverse rulings.56 The Court would go on to hold that the dispute settlement recommendations of the Panel and the Appellate Body do not have direct effect.57 The somewhat negative picture created by the Court’s jurisprudence is modified when one considers the more recent approach it has taken, characterised by Bronckers as a ‘muted dialogue’ between the Court and the WTO Dispute Settlement Mechanism (DSM).58 Such an
49 See, eg Opinion 1/94 [1994], ECLI:EU:C:1994:384. See this volume, ch 28. 50 Above n 48, 428. See also Opinion 3/94, ECLI:EU:C:1995:436, where the Court rejected the request as ‘devoid of purpose’. 51 See Case C-122/95, Germany v Council, ECLI:EU:C:1998:94. 52 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 53 [1994] OJ L366/1. An exception to this exists when the EU intended to implement a WTO obligation and in this instance the EU courts can review the legality of that measure in light of the WTO rules. See, eg Fediol (n 24) [1989] ECR 1781; Nakajima (n 24); Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574. See this volume, ch 37. See also P Lee and B Kennedy, ‘The Potential Direct Effect of GATT 1994 in European Community Law’ (1996) 30 Journal of World Trade 67. 54 COM (94) 143, 5a. 55 See also Case 104/81, Kupferberg, ECLI:EU:C:1982:362. See this volume, ch 14. For additional comment, see, eg P Eeckhout, ‘Judicial Enforcement of WTO Law in the European Union – Some Further Reflections’ (2002) 5 Journal of International Economic Law 91. 56 See, eg JP Trachtman, ‘Bananas, Direct Effect and Compliance’ (1999) 10 European Journal of International Law 655; A Tancredi, ‘EC Practice in the WTO: How Wide is the ‘Scope for Manoeuvre?’ (2004) 15 European Journal of International Law 933. 57 See Joined Cases C-120/06 P and C-121/06 P, FIAMM, ECLI:EU:C:2008:476. See also Case T-19/01, Chiquita, ECLI:EU:T:2005:31; Case C-377/02, Van Parys, ECLI:EU:C:2005:121. See this volume, ch 43. 58 M Bronckers, ‘From “Direct Effect” to “Muted Dialogue”: Recent Development in the European Courts’ Case Law on the WTO and Beyond’ (2008) 11 Journal of International Economic Law 885.
298 Joseph A McMahon approach is evidenced in FTS International BV, which deals with the customs classification of frozen boneless chicken cuts, in which the Court appeared to rely on the rulings of the Appellate Body and the Panel in disputes brought against the EU by Brazil and Thailand.59 EU law is thus brought into line with WTO obligations through the principle of consistent interpretation, which represents an alternative, albeit a less effective one, to the principle of direct effect.60 It represents a truer appreciation of the WTO’s DSM than that offered in Portugal v Council, whilst emphasising the role of the EU courts in resolving interpretative conflicts between EU legislation and WTO law. In retrospect, Germany v Council (Bananas) represents the beginning of the end of discussions about the direct effect of the GATT. The introduction of a stronger dispute settlement mechanism in the WTO and the jurisprudence which emerged (and continues to emerge) from it is an acknowledgement of the strength of that jurisprudence, which has led over time to the principle of consistent interpretation. It is to be regretted that the Court in Germany v Council (Bananas) focused on the direct effect of the GATT, rather than the proper interpretation of Article 173 EC (now Article 263 TFEU) in its assessment of the legality of Regulation 404/93. The multiple rulings of the panels and the Appellate Body in EC-Bananas III confirmed that the Regulation (and its amendments over time) was contrary to WTO law, and it is to be regretted that it took so long for the EU to acknowledge this.61 Equally, it is to be regretted that it took so long for the Court to move beyond the sterile debate on the direct effect of WTO law to recognise the need to ensure consistency between EU law and WTO law. The principle of consistent interpretation ensures that the Court remains the gatekeeper when it comes to assessing the impact of international law in the EU legal order. V. ADDITIONAL READING Alter, KJ and Meunier, S, ‘Nested and Overlapping Regimes in the Transatlantic Banana Trade Dispute’ (2006) 13 Journal of European Public Policy 362. Ghazaryan, N, ‘Who Are the “Gatekeepers”?: In Continuation of the Debate on the Direct Applicability and the Direct Effect of EU International Agreements’ (2018) 37 Yearbook of European Law 27. Trachtman, JP, ‘Bananas, Direct Effect and Compliance’ (1999) 10 European Journal of International Law 655. Young, A, ‘Where’s the Demand? Explaining the EU’s Surprisingly Constructive Response to Adverse WTO Rulings’ (2019) 41 Journal of European Integration 9. Zang, MQ, ‘Shall We Talk? Judicial Communication between the CJEU and WTO Dispute Settlement’ (2017) 28 European Journal of International Law 273.
59 Case C-310/06, F.T.S. International BV v Belastingdienst – Douane West, ECLI:EU:C:2007:456. The WTO disputes are WT/DS269/AB/R (Brazil) and WT/DS286/AB/R (Thailand). 60 See Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313, para 52. See also F Snyder, ‘The Gatekeepers: The European Courts and WTO Law’ (2003) 40 CML Rev 313; A Antoniadis, ‘The European Union and WTO Law: A Nexus of Reactive, Coactive, and Proactive Approaches’ (2007) 6 World Trade Review 45. 61 Above n 34.
28 A Setback in a Never-Ending Expansion to External Competence? Opinion 1/94 (WTO) ENZO CANNIZZARO Opinion 1/94, Competence of the Community to conclude international agreements concerning services and the protection of intellectual property, ECLI:EU:C:1994:384, delivered 15 November 1994. KEYWORDS Common Commercial Policy – External relations – WTO – Implied powers – agreements on services – Intellectual property rights.
I. INTRODUCTION
O
1/94 is a landmark case in the development of the system of EU external relations. It can be considered as a legal hub, in which many doctrines can be seen. In spite of its highly technical character, or perhaps because of it, the impact of Opinion 1/94 can be hardly overestimated. It definitively decoupled the Common Commercial Policy (CCP) from its original notion that was strictly related to the trade of goods; it clarified the limits to the doctrine of the implied concurrent competence of the EU; and it creatively combined implied powers and express limitations thereto, with a view to enhancing the capacity of the EU as an actor on the international stage, while, at the same time, preserving the external prerogatives of the Member States. Retrospectively, Opinion 1/94 fuelled the expansionist tendency of the system of the EU’s external power, but also set its limits. It is a paradigmatic example of the perpetual search of the appropriate balance between the need to assert the autonomy and self-containedness of the Union’s external power, necessary to plainly attain its objectives and values, on the one hand; and the enduring sovereign powers of the Member States, strenuously defended as a symbol of statehood, on the other hand. pinion
300 Enzo Cannizzaro II. FACTS
Opinion 1/94 originates from the diverging views of the Commission and the Member States as to the entity entitled to conclude the international agreement establishing the World Trade Organization (WTO) and the other agreements composing the new legal framework for international trade. The entire process, from the ministerial declaration of Punta del Este of September 1986 to the negotiations within the Uruguay round and the Final Act signed in Marrakesh in March 1994, was marked by tensions concerning the question of competence. On the basis of a political arrangement, the Commission was assigned as the sole negotiator, probably by virtue of the advantages to presenting the EU component parts as a single unit. In the end, however, the Final Act was signed by both the EU and the Member States, thus plainly exhibiting their distinct existence to the other parties. The view of the Commission was that ‘the Final Act … and the agreements annexed thereto fall exclusively within the competence of the European Community’. A few days before the signing of the Final Act, the Commission requested the Court to assess (or, in fact, confirm) the exclusive competence of the EU to conclude the WTO agreement and the agreements annexed thereto. III. THE COURT
A. The Questions Asked and the Preliminary Objections The Opinion broadly followed the order of the questions asked by the Commission, whose convoluted phraseology did not contribute to the clarity of the answers.1 Following judicial best practice, the Court distilled the issues which constituted the centre of gravity of the case, namely, whether the Union possessed the exclusive competence to conclude the new General Agreement on Tariffs and Trade (GATT 94), the General Agreement on Trade in Services (GATS) and the trade-related intellectual property rights (TRIPs), whether under the express exclusive competence established by Article 113 EC (now Article 207 TFEU), under the implied exclusive competence, based on the ERTA doctrine,2 or under implied concurrent competence in the necessity to attain the objectives of the EU Treaties, from Opinion 1/76.3 Before assessing the substance of the case, the Court dealt with some preliminary objections to its admissibility. Portugal objected, on the basis of the precedent of Opinion 1/78,4 that the financial contribution imposed by Article VII(4) of the WTO agreement to the Member States as original parties to the new organisation automatically entailed their competence to conclude the agreement and the annexes thereto. The Court dismissed the objection on the basis of a difference between the two situations at hand. The holding in Opinion 1/78 concerned a financial contribution aimed at setting up a mechanism to stabilise the price of natural rubber, which constituted the main purpose of the agreement. In its view, the financial
1 Opinion 1/94, Competence of the Community to conclude international agreements concerning services and the protection of intellectual property, ECLI:EU:C:1994:384, point 6. In point 15, the Court identified the gist of the request: ‘the fundamental issue is whether or not the Community has exclusive competence to conclude the WTO Agreement and its annexes’. 2 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 3 Opinion 1/76, ECLI:EU:C:1977:63. See this volume, ch 9. 4 Opinion 1/78, ECLI:EU:C:1979:224.
A Setback in a Never-Ending Expansion to External Competence? 301 contribution envisaged by Article VII(4) of the WTO agreement did not have a central role in the context of the agreement, as is merely aimed to finance the operative budget of the WTO. The Court concluded that the financial contributions, having an instrumental role only, did not entail the participation of the Member States in the agreement.5 The difference between the two situations is obvious, yet this difference cannot set aside the discrepancy between the quality of the Member States as parties to the WTO agreement, established by its Article XI, and their lack of competence to conclude it. Once Member States are unconditionally accepted as parties to an international agreement under international law, this legal capacity under international law cannot be annulled by the EU’s Court, the judgments of which bear internal relevance only. Also, it cannot be easily accepted that the exclusive nature of the competence of the EU to conclude commercial agreements changes if the Member States agree to bear the financial burden necessary to implement them: by so doing, they would acquire a competence that they do not possess under the Treaties. B. Agreements on Trade in Goods (GATT) The Court then moved to assess whether the Union had the exclusive competence to conclude agreements on trade in goods, including the new GATT 94. In light of the previous case law, in particular International Fruit, where the Court found that the Union, by virtue of its exclusive competence in the CCP, had succeeded to the rights and obligations possessed by the Member States by virtue of the GATT,6 the positive answer for the GATT 94 was obvious.7 However, the Council and some Member States argued that the conclusion of other agreements which, despite regulating the exchange of good or services, fell, by their subject matter, within the scope of other EU policies, should include in their legal basis a reference to the corresponding provisions in the EU Treaties. To reject these contentions, the Court used a purely functional argument. In particular, the competence to conclude the agreement on agricultural products, that on sanitary and phytosanitary measures and that on technical barriers to trade was exclusively assigned to the realm of the CCP, despite the implementation of those agreements entailed, to varying degrees, the enactment of common rules on the basis of other provisions of the EU Treaties.8 C. Trade in Services (GATS) The dilemma between a functional approach and a subject matter-based approach played a central role in the determination of the competence to conclude agreements on trade in services, namely, the GATS. The tension between these two approaches in areas not included in the traditional conception of commercial policy also acquired a symbolic relevance in the 5 In para 55 of Opinion 1/78, the Court stated: ‘the Court feels that a distinction should be made in this respect between the specific clauses referred to by the Council and the financial provisions which occupy a central position in the structure of the agreement and which, for that reason, raise a more fundamental difficulty as regards the demarcation between the powers of the Community and those of the member States’. See this volume, ch 11. 6 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, para 18. See this volume, ch 2. 7 Opinion 1/94 (n 1) para 22. 8 Regarding the agreement on agricultural product, the Court said in point 29 that ‘the fact that the commitments entered into under that Agreement require internal measures to be adopted on the basis of Article 43 of the Treaty does not prevent the international commitments themselves from being entered into pursuant to Article 113 alone’.
302 Enzo Cannizzaro dispute between the supporters and detractors of the CCP having an ever-larger scope. It dominated the debate which both preceded and followed Opinion 1/94, and stood the test of the time. The Court found that trade in services fell within the scope of the CCP. It started by noting that the previous case law on the scope of the CCP did not make a distinction between goods and service.9 The Court went on to say that the difference between goods and services did not emerge in Opinion 1/78, in which it famously adopted an evolutionary interpretation of the notion of commerce:10 an interpretation which likely inspired the analogous holding of the International Court of Justice.11 This line of argument led to the conclusion that, albeit only in principle, the ‘open nature’ of the CCP pleads for the inclusion of services in its scope.12 The use of the phrase ‘in principle’ opened the second phase of the reasoning. The Court assessed whether the obligations flowing from the GATS intersected other competences of the Union, or of the Member States, with a consequent limitation of the ‘extent to which trade in services can be included within [the CCP]’.13 The Court found that, among the various modalities of providing services, only one could plainly fall within the scope of CCP, namely the supply of services not involving any movement of persons. This modality materialises when the service is provided with cross-border modalities, which would not require the supplier or the consumer to move across the borders of their respective states. All the other modalities entailing cross-border movement, whether by the supplier or by the consumer, be it occasional or crystallising in a commercial presence, would interfere with the competence to control the external cross-border movement of persons. Without specifying whether that competence pertained to the Union or to the Member States, the Court concluded that ‘the existence in the Treaty of specific chapters on the free movement of natural and legal persons shows that those matters do not fall within the common commercial policy’.14 This substantive limit to the functional scope of the CCP was upheld by the Court with regard to transport services. Even there, the existence of a specific substantive competence was regarded as a limit to the overall absorption of transport services in the CCP. Less fraught with controversial issues was the argument used to reject the submission of the Commission that the exclusive competence of the Union to conclude the agreement on trade in services flowed from the competence possessed by the Union in the internal sphere. The Court highlighted the rationale of the ERTA doctrine, where the implied external powers were conceived of as a tool to recast the harmony between the internal and external dimensions of the EU action, which could be disrupted if the Member States could use their external competence to assume obligations whose implementation could affect internal rules.15 On the basis of this assumption, the mere existence of internal rules adopted by the Union to regulate intra-Union provision of services would not, in principle, generate implied competence to regulate the exchange of services between the Unions and third states. The Court stated that a different conclusion would have been drawn if the Union had used its internal competence to regulate the treatment accorded to nationals of third states.16 9 Opinion 1/94 (n 1) para 38. 10 ibid para 39. 11 Judgment of 13 July 2009, Navigational and Related Rights, Costa Rica v Nicaragua, para 63 ff. 12 Opinion 1/94 (n 1) para 41. 13 ibid para 42. 14 ibid para 46. 15 ‘The Member States … only lose their right to assume obligations with non-member countries as and when common rules which could be affected by those obligations come into being’, Opinion 1/94 (n 1) para 77. 16 ibid paras 90–98.
A Setback in a Never-Ending Expansion to External Competence? 303 Based on a restrictive interpretation of its previous case law, the Court rejected the request of the Commission to ground the power to conclude the agreements on trade in services on the basis of its reasoning put forth in Opinion 1/76. In response to the Commission’s submission that the concurring power to conclude international agreements throughout the full range of the Union’s competence, even in the absence of common rules, is merely prompted by a link between this conclusion and the attainment of one of the objectives of the Union, the Court replied with a logical argument. In Opinion 1/76, from which the doctrine stemmed, international agreements were regarded as the indispensable tools to attain the objectives of the Union, in the sense that they could not be efficiently attained by internal acts.17 In the view of the Court, the regulation of trade in services between the Union and third states was not indispensable to create an internal market of services. D. Trade-Related Intellectual Property Rights (TRIPs) An analogous conceptual itinerary was followed by the Court to allocate the competence to conclude TRIPs. The Court rejected the argument made by the Commission according to which TRIPs fell within the scope of the CCP by virtue of its close connection with international trade. What the Commission meant by that connection was probably one of instrumentality, whereby the protection of the intellectual property constituted an essential instrument to ensure the fairness of the trade in goods or in services. While accepting the existence of that link, the Court declined to see it as an element pertaining to international trade only. In the words of the Court, it rather pertained to internal trade ‘just as much as, if not more than, international trade’.18 Suggestive as it may be, this argument misses the mark. The fact that the protection of intellectual property rights equally affects internal and international trade does not detract from its instrumental nature to ensure the fairness of the trade. If its regulation is internal, it only attains this objective with regard to internal trade; if its regulation is international, it attains a larger objective, concerning both internal and international trade. From the premise accepted by the Court, the consequence logically followed that the TRIPs fell only minimally within the scope of the CCP. More specifically, only its provisions enforcing intellectual property rights at the border crossing points fell therein. This assessment was mainly based on the existence of EU rules imposing analogous controls at the borders between Member States.19 Only apparently, however, this argument preluded to the application of the ERTA doctrine. In the logic offered by the Court, the existence of an internal regulation based on Article 113 EC (now Article 207 TFEU) in conjunction with Article 235 EC (now Article 352 TFEU) was regarded as the evidentiary element needed to conclude that the provisions of the TRIPs designed to enforce intellectual property rights at the external borders of the Union could also be based on the same provisions of the EU Treaties.
17 As a matter of principle, the Court held in Opinion 1/94 that the doctrine can be applied ‘where internal powers can only be effectively exercised at the same time as external powers’, ibid para 89. On that basis, the Court concluded, two points ahead, that ‘the attainment of freedom of establishment and freedom to provide services for nationals of the Member States is not inextricably linked to the treatment to be afforded in the Community to nationals of nonmember countries or in non-member countries to nationals of Member States of the Community’. 18 ibid para 57. 19 See the Council Regulation (EEC) No 3842/86 of 1 December 1986 laying down measures to prohibit the release for free circulation of counterfeit goods.
304 Enzo Cannizzaro To exclude the remaining part of the TRIPs provisions from the scope of the CCP, the Court used a constitutional argument. In its view, the conferment to the Union of the power to conclude international agreements in this field could circumvent the decision-making procedures established for internal legislation on intellectual property rights and, in this way, could affect the institutional balance. Finally, in a concise paragraph, the Court ruled out the qualification of the TRIPs as an indispensable tool to attain the objective of harmonisation of intellectual property rights in intra-Community relations.20 Along the same logic employed for the trade in services, the Court postulated the coexistence of two distinct dimensions of the rules protecting intellectual property rights: one concerning internal trade and the other concerning international trade, each one developing fully independently from, and only occasionally intersecting with, each other. Even more concise was the analysis of the possible application of the ERTA doctrine. While admitting that the EU possessed, in principle, the competence to harmonise the protection of intellectual property rights, and that existing harmonising rules could be affected by the conclusion of international agreements aimed at imposing global harmonisation in that area, the Court also found that, apart from the regulation on counterfeit goods, the harmonisation of these rights was only partial and limited to internal rules approximating the trademark laws of the Member States.21 The inevitable conclusion was that both the GATS and the TRIPs had to be concluded in the form of a mixed agreement, namely by the Union and its Member States. IV. THE IMPORTANCE OF THE CASE
Opinion 1/94 represented a watershed in the development of the system of the EU’s external relations. From a legal viewpoint, it determined a balanced approach between a number of conflicting claims: the need to ensure a complete safety net aimed at safeguarding internal legislation from international obligations of the Member States; the opposing need to ensure the autonomy of the internal legislation vis-à-vis the parallel international regulation on the same subject matter; and the need to safeguard the internal decision-making procedure – in particular, the prerogatives of the Parliament – from the external and more intergovernmental decision-making procedures. These objectives, however, were pursued through a reasoning that was not entirely coherent, and which had to be adjusted by subsequent case law. Three aspects deserve further attention: the relationship between the CCP and other substantive policies; the limit to the functional approach of the ERTA doctrine with regard to internal harmonisation; and the capacity of a non-exercised internal competence to generate implied external competence. A brief discussion on the legacy of Opinion 1/94 of each of these issues will conclude. A. The Relationship between the CCP and Other Substantive Policies The strenuous resistance of the Member States to the process of expansion of the scope of the CCP in the proceedings did not stop it. In the aftermath of Opinion 1/94, the CCP carried on
20 Opinion 21 ibid
1/94 (n 1) para 100. paras 103–04.
A Setback in a Never-Ending Expansion to External Competence? 305 its triumphal march, as condensed into the revised Article 207 TFEU at the time of the Treaty of Lisbon and, beyond that, as evidenced by Opinion 2/15.22 Yet, the problem of the relations of the CCP with other EU policies and with the competences of the Member States remained largely unsettled. To deal with this issue, the Court in Opinion 1/94 seemingly relied on two tests. The allocation of competence among competing EU policies was determined by the classic centre of gravity test. The Court found that the agreements on trade in agricultural products and on the application of sanitary and phytosanitary measures fell, by virtue of their objectives, contents and effect, within the CCP. The same conclusion was reached as the Agreement on Technical Barriers to Trade, although, admittedly, it skimmed over the competence of the Member States.23 The Court must have regarded this as an ancillary side effect of an international agreement objectively aimed at facilitating the international trade in goods. A different method was applied to the GATS. Although admitting that this instrument was essentially designed to regulate international trade and therefore, by its very nature, had to be included in the CCP, the Court nonetheless excluded a vast part of the GATS from the scope of Article 113 EC (now Article 207 TFEU). The reason adduced was that the modalities of provision of services entailing a cross-border movement of persons pertain to distinct subject matters under the EU Treaties. However, no attempt, however feeble, was made to assess the centre of gravity of the GATS, or the ancillary nature of its provisions falling within these other subject matters. In a few succinct passages, the Court referred to ERTA and to Opinion 1/76 with a view to demonstrating that transport services had been treated, for the purposes of external competence, as falling within the competence to regulate transport. These references are not convincing. It is apparent that both these cases dealt with international agreements whose main scope and effect was precisely the regulation of transport, and not the regulation of international trade of the goods to be transported. It can be reasonably assumed that the diversion of GATS from the CCP was due to the need to preserve the competence of the Member States in politically sensitive matters. In other terms, the Court must have felt that the time was not ripe to apply the centre of gravity doctrine in matters where particular policy interests of the Member States were sought to be retained within their competence. This concern ultimately inspired Article 207(6) TFEU at the Treaty of Lisbon, which read that ‘The exercise of the competences conferred by this Article in the field of the common commercial policy shall not affect the delimitation of competences between the Union and the Member States’. B. The Limit to the Functional Approach of the ERTA Doctrine with Regard to Internal Harmonisation The second major contribution of Opinion 1/94 concerned the dynamics of implied competence, concerning, in particular, the troubled relationship between internal common rules and external agreements. Addressing the GATS as well as the TRIPs, the Court pointed out that the mere existence of parallel regulations, internal and international, does not necessarily trigger 22 See specifically points 141–66. 23 Some Member States objected that the competence of the Union was prevented ‘by reason of the optional nature of certain Community directives in that area, and because complete harmonization has not been achieved and is not envisaged in that field’, Opinion 1/94 (n 1) para 32.
306 Enzo Cannizzaro the existence of the implied EU competence to conclude international agreements. In other words, the ERTA doctrine would not apply where the international and the EU legal regimes proceed along parallel normative trajectories, not crossing each other. This would be the case with regard to the creation and regulation of the internal market. The fact that the EU Treaties established an internal market for services did not necessarily extend the competence of the EU to conclude international agreements with third states on services, beyond the scope of the CCP. The reasons lay in the fact that, according to the Court, the internal market for services only concerned the freedom to provide services of operators established within the Union, and that such a freedom would not necessarily be affected by international agreements on services provided by operators established in third states. Thus, the doctrine of parallelism stemming from ERTA only applies in a situation of false parallelism, where international obligations of the Member States would affect common rules or somehow alter their scope. Conversely, the Court found that the ERTA ruling does not apply to international obligations of Member States that can coexist side by side with analogous or even identical obligations imposed on the internal sphere without interfering with each other. Paradoxically, a ‘pure doctrine’ of parallelism would not fall within the scope of the ERTA doctrine. In spite of some analogy, this situation is quite different from the classic ERTA situation, whereby Member States are gradually deprived of their power to conclude international agreements in relation to the increasing density of internal harmonisation. In the situation at hand in Opinion 1/94, implied competence existed independently of the enactment of common rules, being generated as an indirect consequence of the market freedoms established by the EU Treaties. In a nutshell, whereas the ERTA doctrine is grounded on the assumption that implied competence is generated by positive harmonisation, in Opinion 1/94 the Court declined to develop it to the point of admitting that the internal rules creating the internal market had impliedly conferred to the Union the competence to conclude international agreements across the full range of situations falling within it. C. The Capacity of a Non-exercised Internal Competence to Generate Implied External Competence Opinion 1/94 significantly resized the scope of Opinion 1/76, namely the field of the external competence implicitly flowing from the mere conferment of a concurrent competence, independent from its exercise. At that time, and still today, the idea that the competences conferred by the EU Treaties could bestow upon the Union the competence to act indifferently in the internal as well as the external sphere was a major source of concern amongst Member States. It would have considerably enlarged the scope of the competence of the Union, and impinged on the sphere of external competence of the Member States. In Opinion 1/76, the Court grounded the doctrine of the EU’s concurrent external competence on the notion of necessity.24 It remains unclear, however, whether this notion referred to the link between an action and the broad objectives assigned to the Union by the EU Treaties
24 This implied competence is assuredly concurrent. It is only after its exercise that it becomes exclusive. A different view was expressed in the Opinion of AG Sharpston, Opinion 2/15, ECLI:EU:C:2016:992 (EU–Singapore FTA): ‘Although the Court did not state in that Opinion that the ensuing EU competence was exclusive, the Court has clearly interpreted Opinion 1/76 in that sense in subsequent case-law’, para 25. See this volume, ch 82.
A Setback in a Never-Ending Expansion to External Competence? 307 or, rather, to the link between an action and the attainment of its specific objectives. In the first perspective, the vagueness of the objectives stated by the EU Treaties, and the multifarious forms and intensity of their implementation, would make the notion of necessity more akin to that of appropriateness. Conversely, in the second, the requirement of necessity concerning a specific action to be taken for the attainment of the specific objectives assigned to it echoes the notion of conditio sine qua non, for which the term ‘indispensability’ appears more appropriate. The submission of the Commission fitted well with the first notion of necessity. It would mean that the GATS was necessary to preserve the internal coherence of the internal market; in addition, the global approach to the trade in services, mirrored in the GATS, entailed, in the view of the Commission, a coordinated action of the Union on the internal, as well as on the external level. Arguably, the exercise of external Union competence to join the GATS was appropriate and necessary to pursue these purposes. However, a different course was taken by the Court, which tailored the notion of necessity to the specific facts of Opinion 1/76. In that situation, because the Rhine was used as a waterway not only by Member States, but also by non-Member States,25 the use of an internal regulation was inappropriate to attain its specific purpose, namely, to eliminate short-term overcapacity in the fluvial transport sector. To attain that specific purpose, an international compact involving all the states entitled to use that waterway was indispensable. Looking through that prism, the Court in Opinion 1/94 found that the conclusion of the GATS clearly fell outside the scope of the doctrine formulated in Opinion 1/76. For the Court, in no way did the establishment and the function of the internal market for services require the participation of third states. This strict conception of indispensability had the effect of confining the Opinion 1/76 doctrine to a marginal role in the system of external relations.26 As remarked by the Court in Opinion 1/94, it could be of some avail in particular situations whereby the internal and external dimensions of a certain policy are ‘inextricably linked’. Moreover, such a strict requirement simply proves that an international agreement is needed, but it cannot assign the competence to conclude it to the Union. If an international agreement falls within the realm of the concurrent competences, the indispensability of an international agreement should not, by itself, divert the power to conclude it away from the Member States. Not surprisingly, in more recent case law, that doctrine has been sparely invoked, and even less applied. D. The Legacy of Opinion 1/94 The legacy of Opinion 1/94 concerns the scope of the CCP, which the Court extended to cover, albeit only in principle, trade in services and in intellectual property rights. This principled declaration was implemented by the subsequent revisions of the EU Treaties. The Treaty of Amsterdam included in Article 133 EC (now Article 207 TFEU) a provision which conferred to the Council the power to extend the scope of that policy to international agreements on services and intellectual property.27 This process was further developed by the Treaty of
25 See this volume, ch 9. 26 However, see this volume, ch 9. 27 ‘The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may extend the application of paragraphs 1 to 4 to international negotiations and agreements on services and intellectual property insofar as they are not covered by these paragraphs.’
308 Enzo Cannizzaro Nice, which assigned that competence to the EU, albeit shared with Member States, and was definitively accomplished by the Treaty of Lisbon, which definitely incorporated services and intellectual property in the CCP, thus opening new scenarios to the objectives to be pursued by the Union. Could the Court of Opinion 1/94 have been more audacious and directly proclaim that, by virtue of this enlargement, the EU had the exclusive power to conclude agreements on services and on the trade-related aspects of intellectual property? After all, it broke a terrain which, in a few years, would have become common ground also for the most recalcitrant Member States. However, it is one thing to make a declaration of principle on the scope of the CCP and quite another thing to accept that international agreements could step into matters which, at that time, were exclusively assigned to the Member States. The idea that the attractive force of the CCP was less intense when it concerned matters falling within the competence of the Member States is not easily overcome and remains the main argument supporting mixity. Regarding implied exclusive external competence, Opinion 1/94 is less innovative than it may appear at first sight. The Court rejected the idea of an exclusive competence of the Union in situations of ‘pure’ parallelism, featuring the coexistence of internal rules and international agreements on the same subject matter whose scope does not overlap.28 By so doing, the Court set a limit to the process of expansion of the ERTA doctrine, which, however, did not stand the test of time.29 Only a few years later, it was overcome by the global approach suggested by Advocate General Tizzano,30 adopted by the Court in the Open Skies judgments, as well as by the doctrine of the ‘full’ effectiveness of Union’s law approach adopted in Opinion 1/03.31 As to the implied concurrent external competence, the innovative impact of Opinion 1/94 was rather regressive. By imposing a strict control of necessity between the single international action and the objectives pursued by it, the Court moulded this competence on the factual situation, which prompted Opinion 1/76.32 Although still declaring that necessity must be assessed against the backdrop of objectives of the EU Treaties, Opinion 1/94 downplayed the potential implicitness in this holding by pointing out that it refers only to a situation where
28 See above, para 4.2. 29 See Joined Cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, Commission v United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany, ECLI:EU:C:2002:624, ECLI:EU:C:2002:625, ECLI:EU:C:2002:626, ECLI:EU:C:2002:627, ECLI:EU:C:2002:628, ECLI:EU:C:2002:629, ECLI:EU:C:2002:630, ECLI:EU:C:2002:631 (Open Skies). See this volume, ch 41. 30 See Opinion of Advocate General (AG) Tizzano in Open Skies, ECLI:EU:C:2002:63, paras 71–74. An attempt to settle that tension was made by AG Tizzano, whereby, ‘agreements which concern aspects which are contiguous, so to speak, to those governed by the common rules, or agreements which, while they concern a matter which is to a large extent covered by common rules, relate however to aspects not (or not yet) regulated by those rules. In such instances, clearly, the question whether or not the agreement “affects” the common rules must be assessed in the light of the particular circumstances of each case’, para 75. See further, Opinion of AG Tizzano, para 77. 31 Opinion 1/03, ECLI:EU:C:2006:81, para 128. In that case, the Court used the paradoxical argument that the mere presence of a disconnection clause could isolate the scope of the two legal regimes. In Opinion 1/03, far from excluding a conflict between the agreement and the regulation, such a clause, on the contrary, provides an indication of the existence of a conflict (paras 130 and 154). See M Cremona, ‘Disconnection Clauses in EU Law and Practice’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited (Oxford, Hart Publishing, 2010) 160. See also this volume, ch 46. 32 A particularly broad scope of that doctrine was assigned in the Opinion of AG Kokott, Case C-137/12, Commission v Council, ECLI:EU:C:2013:441 (Conditional Access Convention), para 44: ‘the Union can also have external competence in connection with certain of its internal policies, including where this is necessary to achieve one of the objectives set out in the Treaties, such as, here, establishing and ensuring the functioning of the internal market within the meaning of Article 26(1) TFEU’. See this volume, ch 61.
A Setback in a Never-Ending Expansion to External Competence? 309 neither internal rules nor concerted action by the Member States could attain the objectives, which could be attained by an envisaged agreement of the EU.33 By so doing, it virtually confined the doctrine to exceptional situations, if not even to inoperativeness. The reasons are due, again, to the need to preserve to the greatest possible extent the external powers of the Member States in the absence of previous EU action. V. ADDITIONAL READING Bourgeois, JHJ, ‘The EC in the WTO and Advisory Opinion 1/94: An Echternach Procession?’ (1995) 32 CML Rev 763. Eeckhout, P, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 87–100. Emiliou, N, ‘The Death of Exclusive Competence?’ (1996) 21 EL Rev 294. Hilf, M, ‘The ECJ’s Opinion 1/94 on the WTO – No Surprise, but Wise?’ (1995) 6 European Journal of International Law 245. Larik, J, ‘Common Commercial Policy’ in RA Wessel and J Larik (eds), EU External Relations Law (Oxford, Hart Publishing, 2020) 209. Neuwahl, N, ‘The WTO Opinion and Implied External Powers of the Community: A Hidden Agenda?’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 139–51. Pescatore, P, ‘Opinion 1/94 on “Conclusion” of the WTO Agreement: Is There an Escape from a Programmed Disaster?’ (1999) 36 CML Rev 387.
33 See Opinion 1/94 (n 1) para 79; Open Skies (n 28), in particular Commission v Austria, ECLI:EU:C:2002:630, para 68.
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29 The Scope of the Union’s Exclusive External Competences and the Verification of Competence: Opinion 2/92 (OECD) DANIEL SARMIENTO Opinion 2/92, Third Revised Decision of the OECD on national treatment, ECLI:EU:C:1995:83, delivered 24 March 1995. KEYWORDS Exclusive competence – Implied competence – Legal base – Mixed agreements – Internal market – Common Commercial Policy – Admissibility – Opinion procedure – OECD – National Treatment Clause – Foreign-controlled undertakings established in the internal market – Opinion 1/94.
I. INTRODUCTION
O
2/92 is a confirmatory decision following the major decision of the Court on the Common Commercial Policy (CCP) and the Union’s implied external competences in Opinion 1/94. In Opinion 2/92, the Court made use of its recently inaugurated case law, as crafted in Opinion 1/94, which, compared to prior rulings delivered from the 1970s onwards, introduced significant limitations on the scope for manoeuvre of external Union action. As such, Opinion 2/92 does not introduce particularly novel issues previously absent in the case law, but, rather, provides confirmation of several points that had been either conformed with or hinted at in the past by the Court. This confirmatory role of Opinion 2/92 applies to substantive issues on competence, as well as to procedural points concerning the Opinion procedure in Article 218(11) TFEU – in particular, the broad interpretation developed by the Court as to its jurisdiction under said procedure. Opinion 2/92 confirmed a trend in seeing the Opinion procedure become a verification mechanism of the Union’s competence, rather than simply remaining a tool to confirm the compatibility of an envisaged agreement with the EU Treaties. pinion
312 Daniel Sarmiento II. FACTS
On 4 September 1992, Belgium brought a request for an Opinion of the Court pursuant to Article 218(11) TFEU,1 inquiring as to whether the Third Revised Decision on international treatment (hereinafter, the Third Decision) of the Council of the Organization for Economic Cooperation and Development (OECD) was compatible with the EU Treaties. The Third Decision, adopted by the Council of the OECD in December 1991, was an initiative designed to facilitate international investment among OECD member countries. Among its provisions, it included an obligation to provide national treatment to undertakings controlled by nationals of an OECD member country when such undertakings operate on the territory of another OECD member country. The origins of the Third Decision can be found in the OECD’s Code of Liberalisation of Capital Movements and in the Code of Liberalisation of Current Invisible Operations of 1961.2 Both instruments introduced binding measures concerning initial foreign direct investment, the right of establishment and the restrictions imposed on non-resident investors. The two Codes led to the adoption of the ‘Strengthened National Treatment Instrument’, on the treatment of established foreign-controlled undertakings.3 This instrument was made up of two parts: first, the Revised Section on National Treatment in the Declaration of 21 June 1976 on International Investment and Multinational Enterprises (the Revised Declaration), and second, the decisions annexed thereto, which included the Third Decision, adopted in 1991. The Revised Declaration was not a binding legal act. Among its contents, the OECD member countries expressed their willingness to accord to undertakings already established in their territory and controlled by nationals of another OECD member country treatment that was no less favourable than that accorded in like situations to domestic undertakings, subject to exceptions or derogations. Although the Revised Declaration was not a binding instrument, the decisions annexed to it, which included the Third Decision, were legally effective and bound all OECD member countries which did not abstain when the decisions were enacted. The Third Decision introduced a procedural tool, according to which the OECD member countries shall notify the OECD of all measures constituting exceptions to national treatment within 60 days of their adoption. Following notification, the OECD was to periodically examine, in principle at least every three years, the exceptions notified to it, with the aim of assisting OECD member countries to withdraw their exceptions. An Annex to the Third Decision listed the exceptions to national treatment notified by OECD member countries. The binding national treatment rule was not included in the Third Decision, but instead appeared in Article II.1 of the Revised Declaration.
1 At the time, the second subparagraph of Art 228(1) EEC Treaty, incorporated in substance in Art 228(6) of the EC Treaty, in force at the time at which the Opinion was delivered. 2 On the Code of Liberalisation of Capital Movements, still operative to date, see Forty Years’ Experience with the OECD Code of Liberalisation of Capital Movements (OECD Publications Service, 2002). The OECD Code of Liberalisation of Current Invisible Operations is still in force today, updated at OECD (2020), OECD Code of Liberalisation of Current Invisible Operations, www.oecd.org/investment/codes.htm. 3 The National Treatment instrument addresses the treatment of foreign-controlled enterprises after establishment and consists of two elements: a declaration of principle, which forms part of the Declaration on International Investment and Multinational Enterprises, and a procedural OECD Council Decision, which obliges adhering countries to notify their exceptions to National Treatment, and establishes follow-up procedures to deal with such exceptions in the OECD. The National Treatment instrument differs from the Code of Liberalisation of Capital Movements, which seeks, amongst other things, a non-discriminatory right of establishment of foreign-controlled enterprises.
The Scope of the Union’s Exclusive External Competences 313 Shortly before the enactment of the Third Decision by the Council of the OECD, the Commission sent a communication to the Council concerning the outcome of the negotiations within the OECD leading to the Third Decision. The Commission proposed to the Council a decision endorsing the Third Decision, and invited it to complete internal procedures, based on (as they were then) Articles 57 and 113 EEC (now Articles 53 and 207 TFEU). The Council consulted the Parliament under the cooperation procedure of the time, and the latter passed a resolution expressing a favourable view on the terms of the Third Decision. The concerns on competence outreach by the EEC fermented among the Member States were finally materialised in a request for an Opinion of the Court brought by Belgium on 4 September 1992, referring the following three questions: was the dual legal basis (Articles 57 and 113) [now Articles 53 and 207 TFEU] proposed by the Commission for the Council decision on the Community’s participation in the Third Decision justified? If not, what would be the correct legal basis? Does the Community’s competence to participate in the Third Decision exclude participation by the Member States, or is ‘mixed’ participation justified? III. THE COURT
Opinion 2/92 can be divided into three segments: (i) procedural issues; (ii) the scope of the CCP; and (iii) the scope of the EU’s implied external competence. In contrast with other rulings of the Court in the field of external relations, Opinion 2/92 was a straightforward text that tackled these three matters with blunt assertiveness, probably as a result of the Court having addressed most of the issues only recently in Opinion 1/94.4 On procedure, the Court clarified some matters that had already been dealt with in past case law, but which Member States nonetheless insisted on bringing forward in the context of the Opinion procedure. Most Member States challenged the Court’s jurisdiction to rule on the compatibility of an agreement not yet formally signed by the then Community, a matter that the Court had resolved since Opinion 1/75 by asserting its own jurisdiction as long as the agreement is cognisable, a feature that applied to the Third Decision.5 More interestingly, the Court had to deal with an objection as to whether the Opinion procedure was the proper locus in which to settle a dispute on EU competence and the choice of legal base. In a line of argument reiterated by Member States in prior Opinion procedures, they objected to the use of the Opinion procedure for settling these interpretative doubts which could be brought through an action of annulment, or even through preliminary references on validity. This argument was doomed from the start, inasmuch as the Court had repeatedly stated that the Opinion procedure was an appropriate course to settle matters of competence between the EU and its Members States.6 On the substantive issues raised by Belgium, the Court dealt with the queries in a two-step reasoning, first, ruling on whether the Third Decision came under an explicit competence such as the CCP, and second, scrutinising whether the Third Decision came under an implicit competence resulting from the internal market provisions of the EU Treaties. The Court’s answer to both queries was partly negative.
4 Opinion 1/94, ECLI:EU:C:1994:384. See this volume, ch 28. 5 Opinion 1/75, ECLI:EU:C:1975:145. See this volume, ch 4. 6 See Opinion 1/75 (n 5) 1360; Opinion 1/78, ECLI:EU:C:1979:224, para 30. See this volume, ch 11; Opinion 2/91, ECLI:EU:C:1993:106, para 3. See this volume, ch 22.
314 Daniel Sarmiento On the point of explicit competence and the CCP, the Court looked at the national treatment clause in the Third Decision, and stated that participation of foreign-controlled undertakings in the economic life of EU Member States is a matter subject to the CCP, and therefore subject to exclusive competence of the EU.7 However, the Court was also careful to point out that ‘so far as the participation of foreign-controlled undertakings in intraCommunity trade is concerned, such trade is governed by the Community’s internal market rules and not by the rules of its common commercial policy’.8 As a result, the Court concluded that, in terms of an explicit competence, the Third Decision was only partly covered by the Union’s CCP competence. When it came to what the Court described as ‘the participation of foreign-controlled undertakings in intra-Community trade’, the Third Decision fell outside the scope of the CCP. In the Court’s own words, ‘the national treatment rule relates only partially to international trade with non-member countries: it affects internal trade to the same extent as international trade, if not more so’.9 On the point of implied competence, the Court relied heavily on its recently delivered Opinion 1/94, a landmark ruling on the scope of the Union’s implied external powers in the field of trade prior to the reforms of the Treaty of Lisbon. Although Opinion 1/94 confirmed its long-standing principles on implied external powers as settled in ERTA,10 Opinion 1/7611 and Kramer,12 it also reminded the Commission that it was willing to take a strict approach when defining the scope of specific subject matters falling within or outside EU competence. That was the case at the time of trade in the field of services and the trade aspects of intellectual property, which, despite being covered by World Trade Organization (WTO) provisions, the Court considered were not integrally falling under the categories of implied powers developed in the case law at the time. The same rationale applied to the Third Decision. According to the Court, although the Union had adopted measures that could have served as a basis for an exclusive (implied) external competence, such measures ‘do not cover all the fields of activity to which the Third Decision relates’. In other words, the scope of the Third Decision was so broad that it exceeded the subject matters already provided in Union legislation. As a result, and using a similar approach to the one in Opinion 1/94, the Court did not deny the Union’s competence to participate in the Third Decision, but it precluded it from entering it in its entirety, thus paving the way for Member State participation. IV. THE IMPORTANCE OF THE CASE
A. An ‘Agreement Envisaged’ Opinion 2/92 dealt with some procedural objections raised by the Member States that merit due consideration. Although these objections were already directly or indirectly addressed by the Court in previous decisions in Article 218(11) TFEU proceedings, Opinion 2/92 brought them to light in a particular way.
7 Opinion
2/92, ECLI:EU:C:1995:83, para 24. para 25. 9 ibid para 26. 10 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 11 Opinion 1/76, ECLI:EU:C:1977:63. See this volume, ch 9. 12 Joined Cases 3, 4, 6/76, Cornelis Kramer and Others, ECLI:EU:C:1976:114. See this volume, ch 7. 8 ibid
The Scope of the Union’s Exclusive External Competences 315 First, the question whether the Third Decision was an ‘agreement envisaged’ in the course of Article 218 TFEU proceedings raises a specific peculiarity, inasmuch as the national treatment rule under scrutiny was nowhere to be found in the Third Decision, which only dealt with procedural aspects on notification by member countries. In other words, the Third Decision governed the procedure that OECD member countries should go through to inform OECD bodies of domestic restrictions to national treatment rules. The substantive provision at stake, providing for a prohibition of domestic provisions denying foreign-controlled undertakings equivalent national treatment, was not present in the Third Decision, but was in a non-binding instrument: the Revised Declaration. The Court did not show any restraint in recognising that the genuine subject of its review was not the Third Decision but the non-binding Revised Declaration, in particular Article II.1, which contained the national treatment rule. When scrutinising the substance of the case, the Court stated that ‘in view of the purely procedural nature of that Decision, the Court’s examination must focus on the substantive rule to which it relates, namely the national treatment rule set out in Article II.1 of the Revised Declaration’.13 As was thus clear from a constant case law of the Court, the notion of an ‘agreement envisaged’ has been a broad and flexible concept that requires a very pragmatic understanding in order to ensure the effectiveness of Article 218 TFEU.14 The Court has not felt constrained by formalistic objections regarding the nature of the agreement being brought to its attention. Although it would seem that Article 218 TFEU requires that an agreement is to be a binding instrument and that it must be brought prior to the Union’s consent, and following at least a minimally cognisable agreed drafting with all the signatories, the truth is that the Court is willing to provide its views on a wide range of agreements, understood in a very broad sense. That was the case for Opinion 2/92, in which the real subject matter concerned the Union’s competence regarding national treatment rules in investment-related international agreements. But such rules were provided in non-binding international instruments. The Third Decision did not introduce in a binding way a national treatment clause; rather, it simply ‘proceduralised’ it by introducing certain obligations of notification on OECD member countries. However, this link between the procedural Third Decision and the non-binding Revised Decision was sufficient for the Court to plumb the depths of the national treatment clause. B. Union Competence and an Agreement’s Compatibility with EU Law Second, Opinion 2/92 confirmed a line of reasoning that had been settled by then, but on which the Member States insisted in the course of Opinion procedures. This objection was closely linked to the very nature of Article 218 TFEU and the effectiveness of the Opinion procedure. According to several Member States, the fact that the issues being raised in Opinion 2/92 dealt with the matter of Union competence, and not the material compatibility between an agreement and the EU Treaties, was sufficient to preclude Article 218 TFEU proceedings and instead force Member States to bring their concerns by way of an action of annulment pursuant to
13 Opinion 2/92 (n 7) para 20. 14 See, inter alia, Opinion 1/75 (n 5) 1359–60; Opinion 1/08, ECLI:EU:C:2009:739, paras 96–105; Opinion 1/09, ECLI:EU:C:2011:123, para 47. In this respect, see K Lenaerts, I Maselis, and K Gutman, EU Procedural Law (Oxford, Oxford University Press, 2014) 553–54.
316 Daniel Sarmiento Article 263 TFEU. The Member States were hinting at the fact that Article 218 TFEU was being instrumentalised to the detriment of a direct action, in which the parties have more safeguards and guarantees in the course of the procedure, as well as diverse rounds of submissions to properly reply to arguments and defend their ground. The Court was reluctant to follow this approach and sided with its prior precedents, this time in a more vocal way. This line of reasoning was fully correct, and it upheld the integrity of the Opinion procedure, which aims at preventing the very disturbing effects of an ex post issue of illegality affecting an international commitment. Whether such an issue concerns the substantive provisions of the agreement or the competence of the Union is irrelevant in terms of the impact to the Union’s reputation and standing in the international fore. What matters in the course of an Opinion procedure is that all doubts as to the legality of the Union’s involvement in an international agreement are clarified prior to the Union giving its consent.15 The procedural preferences and convenience of the Member States, favouring direct actions to the detriment of a consultative procedure, are secondary in the view of the Court. C. The Differences between the Opinion Procedure and Direct Actions Third, Opinion 2/92 confirmed an issue that was implicitly recognised, but definitely discarded in the ruling: the ability of institutions or Member States to invoke preliminary objections on the grounds of (currently) Article 151 of the Rules of Procedure (RoP). This procedural tool serves the parties in direct actions when, inter alia, issues of admissibility or jurisdiction are raised, and could lead the Court to refrain from ruling on the matter.16 The participating Member States in Opinion 2/92 raised concerns of admissibility as previously described, but argued that the Court could bring the proceedings to an end by way of Article 151 RoP, thus bringing the procedure to an end. The Court, however, was rightly unimpressed, although its reasoning was not very impressive either. Opinion 2/92 simply stated that Article 151 RoP ‘clearly does not apply to the procedure for an opinion’.17 That clarity of thought might have been obvious to the sitting judges, but for the external reader, it would have been helpful to receive at least some basic reasoning as to such clarity. It can be assumed that the Court conceives Article 151 RoP as part of the rationale in a direct action, in which several rounds of submissions are raised among the parties in contradictory fashion, thus prolonging procedures and consuming valuable resources of both parties and court. In this context, Article 151 RoP allowed the Court to cut the proceedings short if they are devoid of basic admissibility or jurisdictional requirements. That is not the usual dynamic in an Opinion procedure, in which Member States and institutions have a single round of submissions and allow the Court to rule on the queries raised in a rather efficient way.
15 See P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 268–72; J Heliskoski, ‘The Procedural Law of International Agreements: A Thematic Journey through Article 218 TFEU’ (2020) 57 CML Rev 80; G Butler, ‘Pre-ratification Judicial Review of International Agreements to Be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53. 16 On the purpose and scope of this procedure, see Lenaerts et al (n 14) 840 and 841. 17 Opinion 2/92 (n 7) para 11.
The Scope of the Union’s Exclusive External Competences 317 D. An Overall Change of Direction in the Case Law Opinion 2/92 has never been viewed in isolation, but in conjunction with Opinion 1/94, the landmark decision of the Court on the General Agreement on Trade in Services (GATS) and trade-related intellectual property rights (TRIPs) following the creation of the WTO. To understand Opinion 2/92, it is necessary to grasp what the Court was attempting to do in Opinion 1/94, an exercise that must be viewed in the context of the time, shortly after the entry into force of the Treaty of Maastricht. By the time Belgium brought the Third Decision to the Court’s consideration on September of 1992, the Union was undergoing seismic changes following the fall of the Berlin Wall and the collapse of the Soviet Union, and on the eve of German reunification. Optimism pervaded in the Western international community, where the triumph of capitalism over socialism paved the way to an acceleration of globalisation and international trade. The EU lived through its own period of enthusiasm, with the enactment of the Treaty of Maastricht and the creation of a common currency, European citizenship and the expansion of democracy in its internal decision-making procedures as signs of the times.18 In the international sphere, the establishment of the WTO was yet another confirmation of a new dawn in global relations. All these events took a negative turn at the end of 1992 and in 1993, when the ratification process of the Treaty of Maastricht stalled following a negative referendum in Denmark and a surprisingly close success in a French referendum. The German Constitutional Court provided additional reasons for concern when delivering the Mastricht Urteil,19 a scathing warning call to European optimism that raised serious doubts as to the Union’s ambitions, particularly in creating a European political Union based on a European demos. It is in this context, in the sobering months following the Maastricht Urteil, that the Court delivered several rulings that surprised, even stunned, case law observers. For the first time, the Court backtracked in its seminal doctrine on free movement of goods, and in the case of Keck and Mithouard it partly overruled its Dassonville case law, excluding non-discriminatory ‘certain selling arrangements’ in an attempt to moderate the expansive scope of free movement rules when confronting indistinctly applicable national rules to goods.20 In Opinion 2/94, the Court was to reverse the Commission’s attempts to have the Communities accede to the European Convention of Human Rights due to a lack of competence.21 This strict approach towards competence was further reinforced by the ruling in United Kingdom v Council, in which the Court quashed the rules on Sunday rest in the Working Time Directive on the grounds of lack of a legal base.22 In the field of external relations, Opinion 1/94 constituted a reversal in the Court’s traditional expansive approach towards implied external competence. Overall, the Court was taking a conservative turn on the matter of EU competence, likely feeling the pressure of concerns being voiced by governments, courts and an ever-growing social unease with the direction of
18 See JHH Weiler, The Constitution of Europe. Do the New Clothes Have an Emperor? and Other Essays on European Integration (Cambridge, Cambridge University Press, 1999). 19 BVerfG, 89, 155 (1993). English translation in [1994] Common Market Law Reports 57. On the contents and longterm impact of this ruling, see J Baquero Cruz, ‘The Legacy of the Maastricht-Urteil and the Pluralist Movement’, RSCAS 2007/13. 20 Joined Cases C-267/91 and C-268/91, Keck and Mithouard, ECLI:EU:C:1993:905. 21 Opinion 2/94, ECLI:EU:C:1996:140. See this volume, ch 32. 22 Case C-94/94, United Kingdom v Council, ECLI:EU:C:1996:431, para 37.
318 Daniel Sarmiento the European project. Seen in this light, the fact that Opinion 2/92 takes a restrictive approach to the Union’s implicit external competence is no major surprise.23 The rationale underlying Opinion 2/92 comes directly from the Court’s stance in Opinion 1/94, delivered only a few months before, in which it introduced an important nuance in the prior ERTA case law on implied external relations.24 In fact, the Court delayed the handling of Opinion 2/92 in an attempt to invest all its efforts on the (major) case being raised in Opinion 1/94, thus signalling that the Third Decision deserved to wait until a principled position on the establishment of the WTO was settled first. Scholarly interpretation of Opinion 1/94 is almost unanimous in pointing at an excessively restrictive departure from past practice in the field of external competence.25 To simplify a very complex array of criticism,26 the Court’s decision to introduce a micro rather than a macro approach to an international agreement’s content in order to determine the Union’s implicit external competence (and thus exclusive competence) was considered an unjustified departure from the ERTA rationale, as applied and developed in further rulings, particularly in Opinion 1/7627 and Opinion 2/91.28 By introducing an analytical approach requiring detailed scrutiny of an international agreement’s provisions, followed by another detailed scrutiny of EU common rules and their ‘affection’ by potential Member State action, the Court curtailed the Commission’s goal of drawing a broad and expansive limit over the Member State’s unilateral international ambitions.29 If the GATS and TRIPs were considered to lack a full correlating internal Union competence (at least at the time of Opinion 1/94), the same would hold true of the Third Decision in Opinion 2/92. The logic of the Court’s reasoning in Opinion 2/92 flows directly from the GATS and TRIPs analysis: whilst it is obvious that third country involvement in undertakings incorporated in the internal market constitutes a matter for which the Union has been granted competence, that is not the case of control of Union undertakings within the internal market. The fact that free movement provisions exist in the EU Treaties is not sufficient in itself to confer on the Union an implicit external competence to enter into an international agreement as reflected in the Third Decision. As a result, the Court was admitting that international agreements could be subject to partly implicit external competence, leaving other parts to Member State competence. Opinion 2/92, following the rationale of Opinion 1/94, paved the way to the expansion of mixity in external relations and the vertical distribution of powers among the Union and the Member States. The criticisms of this approach are abundant and not lacking in force. The reasoning of the Court is also questionable and contradictory at times. The main criticism targeted the Court’s
23 The Court’s more ‘circumspect’ approach towards EU external competence in the years following the Treaty of Maastricht, and the relevance of the political and social context, are also highlighted by PJ Kuijper, ‘Fifty Years of EU/EU External Relations: Continuity and the Dialogue between Judges and Member States as Constitutional Legislators’ (2007) 6 Fordham International Law Journal 1593. 24 ERTA (n 10). 25 For a critical analysis that surveys the also critical doctrinal reaction to Opinion 1/94, see P Pescatore, ‘Opinion 1/94 on “Conclusion” of the WTO Agreement: Is There an Escape from a Programmed Disaster?’ (1999) 36 CML Rev 387. 26 For full analysis, see this volume, ch 28. 27 Opinion 1/76 (n 11). 28 Opinion 2/91 (n 6). 29 In PJ Kuijper’s words, ‘Opinions 2/92 and 1/94 heralded a further restrictive interpretation of both trade policy powers and the ERTA doctrine. They put an end to any illusion that might have been harbored to the effect that Opinion 1/78 implied that the ECJ would go for an automatically expanding concept of the common commercial policy in line with the evolution of the concept in international relations generally. That was not to be’: Kuijper (n 23).
The Scope of the Union’s Exclusive External Competences 319 unwillingness (although not entirely new) to draw a clear distinction between the existence and the nature of the competence at stake. This matter created considerable confusion as a result of the Court’s assertion that internal and external action should be ‘inextricably linked’ in order for exclusive implied external competence to arise in the absence of any prior exercise of internal powers.30 This test would only be satisfied when it was impossible to achieve a Union objective by exercising the internal power alone. This assertion caused a considerable doctrinal stir, inasmuch as scholars could not agree on whether the strict ‘necessity test’ or the ‘inextricable linkage test’ referred only to the nature of the powers (exclusivity), or whether it was a condition for implied competence to exist.31 Other analysts have tried to provide a more constructive reading of Opinion 2/92 by arguing that the Court may have been attempting to address a specific situation: one in which the Union wishes to further, on the external front, internal policy goals, the optimal use of which presupposes an external complement but which could nonetheless arguably have been sufficiently attained with internal rules only. In such situations, the Union would acquire non-exclusive external competence.32 This result would reflect a balancing of competing interests between the Union and its Member States, although it would open a broad array of complex practical arrangements that the practice of mixed agreements has confirmed in more recent years. E. Post-Lisbon Expansiveness However, the evolution of the case law has partly sidelined the restrictive approach underlying Opinion 1/94 and its derivate progeny (Opinion 2/92). It is true that the Treaty of Lisbon codified the Court’s case law on external competence in a way that did not impress commentators, justifying some concerns as to a potential restrictive turn enshrined in the EU Treaties. One was even of the contributions of Opinion 1/94 was explicitly included in Articles 3(2) and 216(1) TFEU, signalling that the restrictive case law of the early 1990s was now officially part of the written constitutional acquis. However, the Court’s interpretation of the rules from the Treaty of Lisbon on external competence has quieted those concerns, as convincingly argued.33 In a strand of rulings starting with Opinion 1/0334 and confirmed in Opinion 2/15,35 the Court has confirmed the fundamentals of the ERTA doctrine and discarded any concerns as to the ‘restrictive codification’ that the EU Treaties may now reflect. The Court has recovered a broad approach towards Union competence by focusing on a more expansive understanding of the content of an international agreement and pointing more generally at
30 This criticism is thoroughly explained with force by R Holdgaard, ‘The European Community’s Implied External Competence after the Open Skies Cases’ (2003) 8 European Foreign Affairs Review 372, 373. 31 A Dashwood and J Heliskoski, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000); A Dashwood, ‘The Attribution of External Relations Powers’ in Dashwood and Hillion (ibid) 16; J Bourgeois, ‘The EC in the WTO and Advisory Opinion 1/94: An Echternach Procession’ (1995) 32 CML Rev; N Emiliou, ‘The Death of Exclusive Competence?’ (1996) 21 EL Rev 307. 32 G De Baere, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008) 53 and 54. 33 M Chamon, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1136. 34 Opinion 1/03, ECLI:EU:C:2006:81. See this volume, ch 46. 35 Opinion 2/15, ECLI:EU:C:2017:376. See this volume, ch 82.
320 Daniel Sarmiento potential obstacles rather than the specific degree of Union legislation at a specific moment in time – an approach that, if applied retrospectively to Opinion 2/92, may have delivered a very different ruling. But irrespective of the fact that time has healed some of the restrictions introduced by Opinion 2/92, the truth is that the Court’s conservative turn of the 1990s still weighs heavily, and it is undisputedly a part of the case law. The extent to which Opinion 2/92 is only a decorative remnant of times past or is still a cogent break on the Union’s attempts to perform expansive attempts of external action is open to discussion. The Court’s zigzagging in the field of external competence is not the result of a lack of vision, but an attempt to reach reasonable and balanced solutions when dealing with new cases whilst attempting to preserve the consistency of the case law. It is undeniable that the Court is very much concerned about Union competence creep, and Opinion 2/92 reflects that sensibility. As a litmus test of how far the Court is willing to appease Member State concerns, Opinion 2/92 may have more of a future than what some currently expect. V. ADDITIONAL READING Bourgeois, J, ‘External Relations Powers of the European Community’ [1998] Fordham International Law Journal 22. Chamon, M, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ [2018] CML Rev 55. Flory, T and Martin, F-P, ‘Remarques à propos des avis 1/94 et 2/92 de la Cour de justice des Communautés européennes au regard de l’évolution de la notion de politique commerciale commune’ [1996] Cahiers de droit européen. Holdgaard, R, ‘The European Community’s Implied External Competence after the Open Skies Cases’ [2003] European Foreign Affairs Review 8.
30 Unilateral Measures of Member States Affecting the Internal Market and the Law/Politics Divide in External Relations: Commission v Greece (FYROM) HENRI DE WAELE Case C-120/94 and Case C-120/94 R, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:1994:275 and ECLI:EU:C:1996:116 (Former Yugoslav Republic of Macedonia), delivered 29 June 1994 and 19 March 1996. KEYWORDS Trade embargo – Common Commercial Policy – Public security exceptions – competences of Member States – Scope of judicial review – Political question.
I. INTRODUCTION
T
he dispute between the European Commission and Greece, revolving around the Greek policy towards the Former Yugoslav Republic of Macedonia (FYROM), is extraordinary compared to the average type of case before the Court. Perhaps it would be most appropriate to refer to it as an ‘affair’, given that it lasted several years and came to consist of three prime components: an order of the Court in 1994, an Opinion of the Advocate General (AG) in 1995 and an order of the President of the Court in 1996 – but no judgment. In combination, these judicial deliveries place an issue in the spotlight that has been labelled as essentially theological: how should Article 347 TFEU be understood,1 and to what extent
1 Art 347 TFEU: ‘Member States shall consult each other with a view to taking together the steps needed to prevent the functioning of the internal market being affected by measures which a Member State may be called upon to take in the event of serious internal disturbances affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.’
322 Henri de Waele may lawyers engage in analyses which seem to call for principal extra-legal assessments? Unfortunately, the Commission decided to discontinue the proceedings, so that the aforementioned questions remain formally unanswered to this very day. The present contribution nevertheless highlights the enduring relevance of this curious litigation, as well as its potential meaning for similar (contemporary and future) disputes. II. FACTS
To the minds of some scholars, the whole matter underlying this case pertained to ‘a purely political problem’.2 As is recalled, the first half of the 1990s saw the rapid disintegration of the Socialist Federal Republic of Yugoslavia, with Slovenia and Croatia being the first to declare their independence in June 1991. Hot on their heels, just a few months later, was the entity known as FYROM.3 While a handful of EU countries proceeded to recognise FYROM as a state at the end of 1993 and accession to the UN was realised in the same year, the government of Greece instigated a trade embargo, effective from 16 February 1994 onwards. Greece therewith closed its borders for all imports of goods from FYROM, withdrew its consular representation from Skopje and prohibited all exports of goods, except for those deemed vital for humanitarian purposes. The prime motive lay in the rejection of the use of the name ‘Macedonia’ by its neighbour and of other Hellenic symbols, for fear of territorial claims to the eponymous Greek region that lay directly across its borders.4 In contrast to the prevailing sentiments in Western Europe, it deserves underlining that the acts of cultural appropriation were actually more real than imagined, including, but not limited to, the flaunting of the ‘Sun of Vergina’ emblem on FYROM’s flag and banknotes.5 Apart from the immediate termination of such practices, Greece insisted on at least adding a qualifier to the country’s name. FYROM found this unacceptable, resolutely clinging to its constitutional identity, the ‘Republic of Macedonia’. In April 1994, the Commission decided to commence infringement proceedings against the Hellenic Republic, requesting by way of an interim measure that the Court order a suspension of the Greek boycott. III. THE COURT
In June 1994, the said request for interim measures was denied. Though the arguments put forward by the Commission did appear pertinent and serious enough to establish a prima facie case (fumus boni juris), any alleged harm suffered by a third country was deemed insufficient to assume the existence of a distortion with a genuine impact on the internal market.6
2 C Stefanou and H Xanthaki, ‘Article 224 of the Treaty of Rome and the Repercussions of Case C-120/94’ (1995) 3 Web Journal of Current Legal Issues 1, 2. 3 For the broader context, see eg P Radan, The Break-up of Yugoslavia and International Law (London, Routledge, 2002). 4 SD Murphy, ‘Democratic Legitimacy and the Recognition of States and Governments’ in GH Fox and BR Roth (eds), Democratic Governance and International Law (Cambridge, Cambridge University Press, 2000) 154. 5 NK Martis, The Falsification of Macedonian History (Athens, Euroekdotiki, 1992); D Mircev, ‘Engineering the Foreign Policy of a New Independent State: The Case of Macedonia’ in J Pettifer (ed), The New Macedonian Question (Basingstoke, Palgrave Macmillan, 1992) 202. 6 Case C-120/94 R, Commission v Hellenic Republic, ECLI:EU:C:1994:275.
Unilateral Measures of Member States Affecting the Internal Market 323 Next, in April 1995, AG Jacobs delivered his Opinion wherein he addressed the justification advanced by Greece – an invocation of Article 224 EC (currently Article 347 TFEU) that allows Member States to deviate from EU law in the event of serious internal disturbances affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.
To the mind of AG Jacobs, the scope and intensity of the judicial review that could be performed here were severely limited due to the nature of the issues raised. The only assessment that could be carried out, in his eyes, was whether the reliance on what is now Article 347 TFEU involved manifest errors or an abuse of power. Thereby, he contended that the perspective of the Member State concerned might well be regarded as decisive.7 AG Jacobs’s eventual suggestion was that the Greek conduct should not be seen as wholly unreasonable, considering that FYROM had usurped some of Greece’s cultural patrimony and did appear to maintain long-term designs on a part of its territory.8 In spite of these stimulating reflections, on 20 March 1996, the dispute culminated in an order whereby the case was removed from the Court’s register. Its then President, Rodríguez Iglesias, attached crucial weight to the fact that the Commission had opted to drop the case, pursuant to the understanding reached by Greece and FYROM in September 1995 that led to a retraction of the unilateral measures imposed.9 Greece emphasised its desire to obtain a Court ruling nonetheless, so that clarity would arise on the existence of a breach of EU law, also demanding that the Commission be condemned to pay the costs.10 On the second front, the Greeks achieved a complete success, in line with what is now Article 141 of the Rules of Procedure.11 The Court, however, declined to rule on the merits, pointing to Articles 147 and 148 of that same document and the amicable settlement reached.12 IV. THE IMPORTANCE OF THE CASE
Notwithstanding its unfinished state, there are two salient aspects to the Commission v Greece (FYROM) affair that have continued to resonate in la doctrine, and which could still resurface in subsequent judgments. First of all, it provides valuable clues on the ambit and application of Article 347 TFEU, as will be further discussed below in section IVA. Secondly, the judicial approach here has given an inkling of and sparked a lively discussion with regard to the possible existence of a ‘political question’ doctrine, as demonstrated in section IVB. Obviously, since we are dealing with an Unvollendete, one must take heed not to draw overly firm conclusions from it.
7 Opinion of AG Jacobs, Case C-120/94, Commission v Hellenic Republic, ECLI:EU:C:1995:109, paras 63–64. 8 On the aside, one should conversely not misunderstand Art 108 of the Greek constitution, which merely underscores that the government is bound to extend educational, social and professional support to emigrant citizens. cf P Pescatore, ‘Die Mazedonienfrage – ein judizielles Desaster’ (26/27 August 1995) 197 Neue Zürcher Zeitung 17. 9 Greece and the Former Yugoslav Republic of Macedonia – Interim Agreement, UNTS 1995, 32193. Greece recognised FYROM that same year. 10 Case C-120/94, Commission v Hellenic Republic, ECLI:EU:C:1996:116, paras 6, 7 and 9. 11 ibid paras 14–17. 12 ibid paras 10–13.
324 Henri de Waele A. The Outer Limits of Article 347 TFEU: When Is an Infringement (Not) an Infringement? Comparable to the legal state of play in the mid-1990s, with the Union caught in-between its Maastricht and Amsterdam incarnations, the FYROM affair also found itself at an intersection. The national ability to impose sanctions had already increasingly been overtaken by supranational competences, especially in the realm of trade, where the exclusivity of the Common Commercial Policy (CCP) loomed large. The dust did not settle entirely though.13 Within the sphere of European Political Cooperation (EPC), the predecessor of the Common Foreign and Security Policy (CFSP), the principal desire for alignment had translated into a substantive measure of uniformity. In the 1980s, the default strategy consisted of the adoption of a sanctioning EPC decision, followed by a Council Regulation premised on Article 133 of the EC Treaty. In practice, prior to the introduction of a separate legal basis for the latter, Member States did (pretend to) retain autonomous manoeuvring space. Particularly illustrative was the refusal of Italy, Denmark and Ireland to implement the Union’s embargo against Argentina on the eve of the Falklands war.14 Soon after the advent of the Treaty of Maastricht, in the academic literature the view prevailed that restrictive measures were henceforth to be taken by the Union alone – albeit that the CCP competence was flanked by a counterpart in the second pillar, and that the array of CFSP instruments often figured as precursors.15 At the same time, alongside the public security derogations inserted in specific CCP instruments, Article 224 EC (later Article 297 EC) was believed to denote a key exception to this rule.16 The Union of course gradually evolved further, and by now, despite the modifications by the Treaty of Lisbon to Article 40 TEU, the CFSP hardly provides a licence for impinging on the CCP.17 Yet Article 347 TFEU is still present in the Treaties, with all previous attempts of those who sought to excise it from the Union’s primary law or to introduce procedural changes foundering.18 In earlier jurisprudence, the Court proclaimed that the clause was meant for ‘wholly exceptional situation[s]’ and did ‘not lend [it]self to a wide interpretation’.19 Yet, when do these arise? Article 347 TFEU makes reference to serious internal disturbances affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.
13 See, eg P Sturma, ‘La participation de la Communauté européenne à des “sanctions” internationales’ [1993] Revue du Marché commun et de l’Union européenne 250. 14 See, eg W Meng, ‘Die Kompetenz der EWG zur Verhängung von Wirtschaftssanktionen gegen Drittländer’ (1982) 42 Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 780, 802. 15 For case law confirmation, see eg Case C-124/95, The Queen, ex parte Centro-Com Srl v HM Treasury and Bank of England, ECLI:EU:C:1997:8. 16 See, eg P Gilsdorf, ‘Artikel 224’ in H von der Groeben, J Thiesing and C-D Ehlermann (eds), Kommentar zum EWG Vertrag, 4th edn (Baden-Baden, Nomos, 1991) vol IV, 5604–20. 17 Compare Case C-244/17, Commission v Council (Kazakhstan), ECLI:EU:C:2018:662. See this volume, ch 86; Case C-91/05, Commission v Council (ECOWAS), ECLI:EU:C:2008:288. See this volume, ch 51. 18 W Hummer, ‘Das griechische embargo’ in O Due, M Lutter and J Schwarze (eds), Festschrift für Ulrich Everling (Baden-Baden, Nomos, 1995) 520–21. 19 See, eg Case 222/84, Marguerite Johnston v Chief Constable of the Royal Ulster Constabulary, ECLI:EU:C:1986:206, paras 26 and 27.
Unilateral Measures of Member States Affecting the Internal Market 325 So, when a Member State invokes the provision elsewhere in order to justify the actions it took, regardless of whether these were directed against a third country or not, the conduct is abusive and illegal per se. Due to the lack of a ruling on the merits in FYROM, it cannot be ascertained whether the decision of the Greeks to ‘withdraw their gifts’ amounted to such a prima facie infringement. Rather, the denial of the request for interim measures may encapsulate a suggestion to the contrary. Arguably, what mattered most to the Commission was not so much a material interpretation of Article 347 TFEU as a straightforward ‘yes or no’ answer to the question whether or not the Greek conduct fell afoul of the Union’s exclusive competence under the CCP. Contemporary shenanigans by Greece or another Member State, similar to those in the 1990s, may well trigger a response in the negative. For the EU, it is even more important now than it was before to undertake a collective assessment of the relevant context and to discuss the desirability of unilateral (non-)intervention both within and without the CFSP framework. Moreover, a Member State that mindlessly moves ahead would likely be condemned for at least violating Article 347 TFEU’s explicit requirement of prior consultation. Alas, in its final pronouncement in the FYROM affair, the Court neglected even to do that, so we cannot know for sure whether Greece acted erroneously by only somewhat casually notifying its EU partners in advance.20 All the same, the litigation delivers no conclusive proof either for denying the provision every characteristic of a ‘reserve of sovereignty’.21 B. Plain and Incidental Reticence or Principal Judicial Recoiling? In the 1990s, the CFSP formed a ‘total exclusion zone’ for the Court. It was not until the path-breaking ECOWAS ruling a decade later, with Kadi thereafter, that cracks in the glass emerged.22 One of the central motives for keeping the Court at bay was the politicised nature of foreign policy.23 As said, however, the FYROM affair did not lie squarely in this domain, straddling the boundaries between the erstwhile EU and EC treaties in an atypical manner compared to subsequent disputes on sanctions and legal bases. Even in the case’s discontinued state, it proves instructive nevertheless for demarcation purposes. Authoritative commentators agree that the affair came close to establishing a political question doctrine.24 Of course, Article 347 TFEU being at the focus of the attention, the Court enjoyed a greater foothold to speak out ab initio than in a pure ‘second pillar’ context, yet this provision is replete with terms that judges are bound to struggle with. AG Jacobs
20 Annotators took opposing views: see inter alia the affirmation in Hummer (n 18) 539–40 and the denial in Stefanou and Xanthaki (n 2) 9. 21 cf P Koutrakos, ‘Is Article 297 EC a “Reserve of Sovereignty”?’ (2000) 37 CML Rev 1339, 1362. 22 On which, see this volume, chs 49 and 51. 23 For further discussion, see eg M-G Garbagnati Ketvel, ‘The Jurisdiction of the European Court of Justice in Respect of the Common Foreign and Security Policy’ (2006) 55 ICLQ 77, 79–80; G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy: Competence and Institutions in External Relations (Oxford, Hart Publishing, 2019) 151–53. 24 P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 544; G de Baere, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008) 196.
326 Henri de Waele asserted that it contains a paucity of criteria magistrates may fruitfully employ when determining the existence of a serious international tension or threat of war. He approvingly cited a British peer who identified a kindred ‘judicial no-man’s land’.25 This closely resembles the approach of the US Supreme Court in a string of sensitive dossiers which resulted in refusals to render a substantive judgment. It also reflects the traditionally reluctant stance of the French judiciary towards actes de gouvernement.26 In the case at hand, the Commission called upon the Court, albeit indirectly, to decide whether an ongoing dialogue and exercising of restraint would have been more conducive to resolving the disagreement between FYROM and Greece than the unilateral adoption of countermeasures by the latter. The Commission’s venture underestimated or ignored how much such issues are located on the fringes of the CFSP, even on the outskirts of public international law – in academia perhaps better to be assessed by conflict studies scholars. Indeed, juridical instruments or benchmarks for analysing this kind of issue simply do not exist.27 In the same vein, the Court could not possibly have ordained the conclusion of a (prefiguration of the) Prespa Agreement – the 2017 Treaty which ultimately brought a close to the conflict, whereby the renaming of FYROM to ‘North Macedonia’ turned out to be the most viable compromise. Tellingly, up until then, Greece persisted in blocking the country’s admission to NATO, in spite of a 2011 ruling of the International Court of Justice.28 The Roman maxim ubi iudicia deficiunt incipit bellum could be understood here to mean that when a violent clash is imminent, courts should not expect or feign that they are able to avert it. As AG Jacobs opined, any abuses of Article 347 TFEU may well be evaluated. It is therefore no self-judging clause that leaves Member States to their own devious devices.29 The monitoring and enforcement system of Article 348 TFEU demonstrates as much, leading to a special empowerment of the Commission and Court, departing from the classic infraction procedure. It remains doubtful, however, whether successful cases are easily brought and won thereunder; again, the order denying provisional measures forms the proverbial writing on the wall. Besides, even if only legal arguments can be taken into consideration – assuming that they were credible – the Court can hardly escape touching on the explosive issue of national sovereignty in its appreciation of the deployment of this specific security exception.30 On average, the Court appears happier to sidestep such issues altogether, discarding the application whenever possible, as evident, for example, in the order in NF v European Council, a modern descendant from the case discussed here.31 Arguably, then, while the FYROM affair never made much headway in the literature, the Court’s manoeuvring set the tone for future moments of judicial recoiling. It may for that reason be said to possess an enduring relevance, offering an emblematic example of the divide between law and politics in the Union’s external relations.
25 Opinion of AG Jacobs, Commission v Hellenic Republic (n 7) para 50. 26 See, eg G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 45 Legal Issues of Economic Integration 329–54. 27 Opinion of AG Jacobs, Commission v Hellenic Republic (n 7) para 59. 28 Application of the Interim Accord of 13 September 1995 (The Former Yugoslav Republic of Macedonia v Greece) [2011] ICJ Reports 644. 29 Generally and more extensively on this, see S Schill and R Briese, ‘Self-judging Clauses in International Dispute Settlement’ (2009) 13 Max Planck Yearbook of United Nations Law 61. 30 Stefanou and Xanthaki (n 2) 2. 31 Case T-192/16, NF v European Council, ECLI:EU:T:2017:128. See this volume, ch 79.
Unilateral Measures of Member States Affecting the Internal Market 327 V. ADDITIONAL READING Fornasier, R, ‘Quelques réflexions sur les sanctions internationals en droit communautaire’ [1996] Revue du Maché commun et de l’Union européenne 670. Koutrakos, P, ‘The Notion of Necessity in the Law of the European Union’ in IF Dekker and E Hey (eds), Netherlands Yearbook of International Law (The Hague, TMC Asser Press, 2010) 193–218. Stefanou, C and Xanthaki, H, A Legal and Political Interpretation of Articles 224 and 225 of the Treaty of Rome: The Former Yugoslav Republic of Macedonia Cases (Aldershot, Ashgate, 1997).
328
31 EU Membership in International Organisations and the Joint Exercise of Membership Rights: Commission v Council (FAO) RITA GUERREIRO TEIXEIRA AND JAN WOUTERS Case C-25/94, Commission of the European Communities v Council of the European Union, ECLI:EU:C:1996:114 (FAO), delivered 19 March 1996. KEYWORDS EU membership in international organisations – Joint membership – Right to vote – Obligation to cooperate – Legal effect of interinstitutional agreements – FAO – Fisheries agreement – Member States – Community – Shared competence – Exclusive competence – Coreper – Council – Commission – Conservation and management of biological resources on the high seas.
I. INTRODUCTION
W
hereas the EU is a member of a variety of international organisations, including, since November 1991, the Food and Agriculture Organization of the United Nations (FAO), no explicit legal framework for this participation can be found in the EU Treaties. The issue is rendered complex by the fact that the EU often shares membership in international organisations with its Member States, a scenario that requires a joint exercise of participation and voting rights, and creates a potential for conflict between the Member States and the EU institutions. When confronted with a dispute over the competence to vote on the adoption of a FAO agreement, the Court was forced to resort to the general principles governing external action of the then Community to determine whether a Council decision that had granted the right to vote to Member States was compliant with EU law.1 In doing so, it clarified important aspects of the obligation of sincere cooperation and the requirement of unity in the EU’s (the then 1 See Case C-25/94, Commission of the European Communities v Council of the European Union, ECLI:EU:C:1996:114 (FAO).
330 Rita Guerreiro Teixeira and Jan Wouters Community’s) international representation. Moreover, in FAO, the Court delivered important findings on the relationship between the Committee of Permanent Representatives (Coreper) and the Council, and on the legal value of interinstitutional arrangements on the exercise of shared competences. Since the Court delivered its judgment in FAO, the relations of the EU with other international organisations has developed further as a result of the expansion of EU competences in external relations and the EU’s attempts to assert an increasingly active role as a global actor – particularly since the Treaty of Lisbon.2 However, attempts to join an organisation as a full member have often been met with resistance by Member States, who are reluctant to abandon their membership in favour of the Union. Resistance is also occasionally seen in international organisations themselves, who typically only accept states as their members.3 The result of these dynamics is that the EU has, so far, become a member of only a limited number of international organisations, and typically in a context of mixed membership. In this context, the principle of sincere cooperation retains its central role in governing the external action of the EU and, in particular, its participation in international organisations. As a result, the judgment in FAO retains much of its relevance today. II. FACTS
The predecessor to the EU was admitted as a member organisation of the FAO on 26 November 1991, alongside its Member States, following years of negotiations and a constitutional amendment.4 Henceforth, membership rights were to be exercised on an alternative basis between the EU and its Member States, depending on the distribution of competences within the Community. Upon accession, the Community submitted a declaration of competence, indicating that it had exclusive competence, inter alia, on measures aimed at protecting fishing grounds and conserving the biological resources of the sea. In order to avoid disputes over the allocation of competences and the exercise of membership rights, Rule XLI(2) and (3) of the General Rules of the FAO provides that, before every meeting of the FAO, the member organisation or its member states are required to indicate their internal division of competences and which of them will exercise the right to vote in respect of each agenda item. When the Union votes, it exercises a number of votes equal to the number of its Member States entitled to vote on that matter.5 In cases where an agenda item covers both matters within the competence of the Union and matters within the competence of the Member States, both can participate in 2 See, inter alia, R Wessel and J Odermatt, ‘The European Union’s Engagement with Other International Institutions: Emerging Questions of EU and International Law’ in R Wessel and J Odermatt (eds), Research Handbook on the European Union and International Organizations (Cheltenham, Edward Elgar, 2019) 2, 6; J Wouters, J Odermatt and T Ramopoulos, ‘The EU in the World of International Organizations: Diplomatic Aspirations, Legal Hurdles and Political Realities’ in M Smith, S Keukeleire and S Vanhoonacker (eds), The Diplomatic System of the European Union. Evolution, Change and Challenges (London, Routledge, 2015) 94–111. 3 P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 223; J Wouters and AL Chané, ‘Brussels Meets Westphalia: The European Union and the United Nations’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing 2016) 299–323. 4 Art II of the 1945 Constitution of the Food and Agriculture Organization of the United Nations (FAO Constitution) was modified to allow admission of regional economic integration organisations as member organisations. For an overview of the accession negotiations, see R Frid, The Relations between the EC and International Organizations – Legal Theory and Practice (Deventer, Kluwer Law International, 1995) ch 5; with attention for later practice, see also AL Chané and J Wouters, ‘The European Union in United Nations Economic Governance Fora’ (2017) 8 European Yearbook of International Economic Law 541, 549–52. 5 Art II(10), FAO Constitution.
EU Membership in International Organisations 331 the discussion, but only the intervention of the party exercising the right to vote is taken into consideration in reaching decisions. To govern the internal coordination within the Union, the Commission and the Council adopted an arrangement regarding preparation for FAO meetings, statements and voting. According to section 2 of that arrangement, the Commission would speak and vote for the Community where an agenda item dealt with matters of exclusive competence, whereas Member States would speak and vote in matters of national competence. When agenda items concerned matters of shared competence, a common position would be achieved by consensus. In that case, the Commission would express the common position when the thrust of the issue lay in an area within the exclusive competence of the Union and would vote accordingly, while the presidency (ie the Member State holding the rotating six-monthly presidency of the Council) would express the common position in all other cases, and Member States would vote. If the Commission and Member States could not reach an agreement, the matter would be referred to Coreper, in accordance with section 1.12 of the arrangement. An occasion to test these procedures presented itself in 1993, when an ‘Agreement on the Flagging of Vessels Fishing on the High Seas to Promote Compliance with Internationally Agreed Conservation and Management Measures’ (the Agreement) was being negotiated within FAO. The Commission and the Member States agreed that the shared competence formula would be used in the adoption of the Agreement, as registration of vessels lay within the Member States’ competences, but disagreed over which of them should exercise the right to vote. On 16 March 1993, Coreper decided that the Member States should vote in the upcoming FAO Council meeting in June. As the result of negotiations, a new draft of the Agreement was approved which removed the clauses relating to registration and flagging, and introduced a system of authorisation of fishing on the high seas by the flag state, with a view to ensuring respect for international conservation and management rules. On 21 October 1993, the question was again referred to Coreper on the exercise of the right to vote in the next FAO meeting, which would adopt the Agreement. Coreper considered that the indication to be sent to the FAO should state ‘shared competence – Member State vote’. The Commission subsequently asked the Fisheries Council of 22 November 1993 to declare that the new draft of the Agreement – subsequently titled the ‘Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas’ – was essentially a matter of exclusive competence, and that the Commission should vote. The Council rejected this declaration and confirmed the Coreper’s decision. The text of the Agreement was eventually adopted by the FAO Conference on 24 November 1993, with the Member States voting in favour. III. THE COURT
The Commission brought an action under Article 173 EC (currently Article 263 TFEU) for annulment of the decision of the Fisheries Council giving the Member States the right to vote in the FAO for the adoption of the Agreement. The Council raised an objection as to the admissibility of the case, submitting that the question of the right to vote had been settled definitively by Coreper on 21 October 1993 and that, in this respect, the Council had not adopted a formal decision. Forced to pronounce itself on the powers of Coreper, the Court noted that it was clear from Article 151(1) EC (currently Article 240(1) TFEU) that it was not an institution of the Union, but merely an auxiliary body of the Council. Accordingly, Coreper
332 Rita Guerreiro Teixeira and Jan Wouters did not have the power to take decisions – a power that, instead, was conferred under the EU Treaties to the Council.6 As to the legal value of the Council decision, the Court found that it was an act within the meaning of Article 173 EC (currently Article 263 TFEU), and that it had legal effects in several regards, namely in conferring the right to vote to the Member States and, consequently, preventing the Commission from presenting the common position and having any effective say in the deliberations. Moreover, it gave other states and the FAO the impression that the thrust of the Agreement fell within the competence of the Member States. As such, the objection of inadmissibility was dismissed.7 Turning to the substance of the dispute, the Court annulled the decision of the Fisheries Council based on a three-step reasoning. First, it recalled that the Union had exclusive competence to enter into international commitments for the conservation of the resources of the sea, a question its previous case law had already settled.8 Second, it found that the essential object of the later draft of the Agreement, submitted for adoption by the Conference of the FAO in November 1993, was in compliance with international conservation and management measures by fishing vessels on the high seas. Provisions falling within the competence of Member States did not occupy a prominent position in the instrument.9 Third, it emphasised the obligation of the Union and Member States to cooperate and determined that the interinstitutional arrangement between the Council and the Commission was a binding commitment and represented the fulfilment of that obligation.10 The necessary conclusion of the Court followed that, in conferring on the Member States the right to vote for the adoption of the Agreement, the Council decision had breached section 2.3 of the interinstitutional arrangement, which it was required to observe, and therefore it was annulled.11 IV. THE IMPORTANCE OF THE CASE
The exercise of external competence by the EU is not limited to concluding international agreements, and it includes the possibility to join international organisations whose purpose and functions fall within its competence, even if this possibility is not expressly mentioned in the EU Treaties.12 As early as 1976, the Court clarified that then Community competences in external action included the power to create a new international organisation and, implicitly, to be a member of such an organisation.13 This was reiterated in Opinion 1/94, in the context of the participation by the then Community in the establishment of the World Trade Organization (WTO).14
6 FAO (n 1) paras 24–28. 7 ibid paras 32–37. 8 ibid paras 41–42. Joined Cases 3, 4 and 6/76, Cornelis Kramer and Others, ECLI:EU:C:1976:114, para 33. See this volume, ch 7. 9 FAO (n 1) para 45. 10 ibid para 48–49. 11 ibid para 50. 12 Eeckhout (n 3) 222; RA Wessel, ‘The Legal Framework for the Participation of the European Union in International Institutions’ (2011) 33 Journal of European Integration 621, 624–25. 13 Opinion 1/76, ECLI:EU:C:1977:63, para 5. See this volume, ch 9. 14 Opinion 1/94, ECLI:EU:C:1994:384. See this volume, ch 28. J Sack, ‘The European Community’s Membership of International Organizations’ [1995] CML Rev 1227, 1229.
EU Membership in International Organisations 333 The same clarity cannot be found in relation to the legal regime governing the effective participation of the EU in the international organisations of which it is a member. The divided exercise of participation and voting rights, in consequence of Member States retaining their membership status even after the EU joins an organisation, raises a series of difficult questions. Furthermore, the issue is particularly complex due to the prevalence of shared competence in the field of external relations.15 In the absence of a provision of the EU Treaties that could provide a coherent legal regime, they have been addressed by different arrangements, made on a case-by-case basis, and remain the subject of debate in legal doctrine.16 How are voting rights allocated between the EU and Member States? Will both Member States and the EU be allowed to participate in the discussions? How is internal coordination to be achieved? If coordination is required, who will present the common position? Who will bear responsibility for the commitments entered into within the organisation? An analysis of FAO offers important insights into some of these questions. Firstly, due to the challenge of admissibility raised by the Council, the Court had the opportunity to pronounce itself on the division of competences between Coreper and the Council (section IVA). Secondly, it had an opportunity to clarify important aspects of the alternative exercise of membership rights and the duty of cooperation (section IVB). Finally, the annulment by the Court of the Council decision conferring the power to vote to the Member States on the adoption of the Agreement should also be analysed from the point of view of the FAO and its members, inquiring whether any legal effects were produced in relation to them (section IVC). A. Relation between Coreper and the Council, and the Effects of the Council’s Decision In finding that the case was admissible, the Court both upheld the division of internal competences within the Union and enforced a broad interpretation of the possibility of judicial review under Article 173 of the EC Treaty. First, the Court rejected the argument put forward by the Council that a Coreper decision could have legal effects. It relied on Article 151(1) EC (now Article 240(1) TFEU), although vague in its terms, which made clear that Coreper is not an institution of the Union, but merely an auxiliary body of the Council, charged with preparing and implementing its work.17 As such, as Advocate General (AG) Jacobs explained, Coreper ‘has no formal decision-making powers of its own, even if in practice it is Coreper which adopts the text of a measure which is then rubber-stamped by the Council’.18 In addition, the Court clarified that the Council cannot delegate its power to take decisions to Coreper, as the Council’s argumentation seemed to sustain. Accordingly, the Council decision of 22 November 1993 could not simply be regarded as a confirmation of a previous Coreper decision. With this statement, the Court ensured respect for the division of powers prescribed in the EU Treaties, while also guaranteeing that the EU acts enjoy a minimum
15 Eeckhout (n 3) 223; Sack (n 14) 1233. 16 See, eg Wessel and Odermatt (n 2) 10–12; Eeckhout (n 3) 223; C Timmermans, ‘Organising Joint Participation of EC and Member States’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 239. 17 R Schütze, European Constitutional Law, 2nd edn (Cambridge, Cambridge University Press, 2016) 177. 18 Opinion of Advocate General (AG) Jacobs, Case C-25/94, Commission of the European Communities v Council of the European Union, ECLI:EU:C:1995:350 (FAO), para 47; FAO (n 1) para 26.
334 Rita Guerreiro Teixeira and Jan Wouters of democratic legitimation through the intervention of the Council.19 Second, the Court emphasised that the Council decision produced several legal effects and, as such, fell within the meaning of Article 173 EC (currently Article 263 TFEU). This was in line with the ERTA case law, according to which the term ‘act’ was to be construed broadly so as to ensure that judicial review was available for all acts adopted by the institutions intended to have legal effects.20 The AG had reached a different conclusion, and considered that the application was inadmissible because the Council decision giving the right to vote to the Member States did not have any adverse effects on the Commission, nor did it change the result of negotiations within the FAO, since both parties had agreed on the common position to be adopted in that forum. However, the Court noted, and rightly so, that such decision had deprived the Commission from effectively participating in the decision-making process of the FAO. The Court noted that the common position could not possibly cover all issues that could arise in negotiations of an international agreement and that only the party that was exercising the right to vote would have an effective say in the deliberations that would determine the final text.21 Therefore, according to the Court, the Council decision prevented the Commission from exercising its external powers. B. Joint Membership in International Organisations and the Duty of Cooperation The duty of cooperation has been developed in the Court’s case law as one of the overarching legal principles governing the external action of the EU, particularly in cases where competence is shared by the EU and the Member States.22 This duty was first asserted in Ruling 1/78, a Euratom Treaty case, where the Court found that the implementation of a mixed agreement required close association between the Euratom Community and its Members States, both in the process of negotiation and conclusion, and in the fulfilment of the obligations entered into.23 In FAO, the Court had the chance to detail the content of this duty in the context of participation in the decision-making procedures of an international organisation. The duty of cooperation, which finds its basis in the EU Treaties in Article 4(3) TEU (at the time of FAO, it was Article 5 EC),24 is directly linked with the ‘requirement of unity in the international representation of the Community’.25 This duty requires that the institutions and Member States take all necessary steps to ensure the best cooperation possible in their external relations.26 The need for coordination becomes even more acute in cases of 19 B Rudolf, ‘Commission of the European Communities v Council of the European Union. Case C-25/94. Court of Justice of the European Communities, March 19, 1996’ (1997) 91 American Journal of International Law 349, 352. 20 Case 22/70, Commission of the European Communities v Council of the European Communities, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 21 FAO (n 1) para 34. 22 Schütze (n 17) 293; Eeckhout (n 3) 241; Wessel (n 2) 428. 23 Ruling 1/78, Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202, paras, 34, 36. See this volume, ch 10. 24 Eeckhout (n 3) 255; Timmermans (n 16) 241. Case C-459/03, Commission of the European Communities v Ireland, ECLI:EU:C:2006:345, para 174. 25 Opinion 2/91, ECLI:EU:C:1993:106, para 36 See this volume, ch 22. Opinion 1/94 (n 14) para 108. FAO (n 1) para 48. 26 Opinion 2/91 (n 25) para 38; FAO (n 1) para 48. On the duty of cooperation and its underpinnings in the case law of the Court, see J Wouters, A-L Chané, J Odermatt and T Ramopoulos, ‘Improving the EU’s Status in the UN and the UN System: An Objective Without a Strategy?’ in C Kaddous (ed), The European Union in International Organisations and Global Governance: Recent Developments (Oxford, Hart Publishing, 2015) 48–49.
EU Membership in International Organisations 335 joint membership, in which EU action can easily be undermined by countervailing action of Member States.27 In the FAO judgment, the Court clarified that the interinstitutional arrangement concluded between the Commission and the Council represented the fulfilment of the duty of sincere cooperation within the joint participation in the FAO, and that the terms of that arrangement were binding commitments, both on the Member States and on the institutions.28 Consequently, the Court found that, in giving the Member States the right to vote for the adoption of the Agreement, the Council had acted in breach of section 2.3 of the arrangement. This was the first time the Court annulled a decision based on the violation of an interinstitutional agreement.29 Prior to the decision in FAO, the legal status of this type of interinstitutional arrangement was unclear, and a subject of discussion in the legal literature.30 A novel aspect of the FAO judgment was that the arrangement in question concerned cooperation not only between EU institutions, but also between EU institutions and Member States. Notably, the Court considered the arrangement to be binding, even though the Member States did not formally agree with it, appearing to accept that the Council could represent them in this instance.31 Therefore, the lesson from FAO for future cases of shared membership in international organisations was that the conclusion of an interinstitutional arrangement was an appropriate way to deal with division of representation and voting rights, since this would be binding as an implementation of the duty of sincere cooperation.32 A different question to be considered was whether the specific system of alternative participation established by the General Rules of the FAO and the interinstitutional arrangement under analysis could constitute an appropriate model for the joint exercise of membership in other international organisations. While this was outside the scope of the Court’s analysis, different commentators have discussed it in the aftermath of the FAO judgment, and several deficiencies and practical challenges of this approach have been pointed out.33 The first difficulty of this arrangement is that it requires the prior identification of the essential object of each instrument negotiated within the organisation, which can be a challenging task as instruments often cover an array of issues, partially falling within exclusive EU competence, shared competence and Member State competence. In FAO, the Court was able to easily identify the thrust of the Agreement as falling within the EU’s exclusive competence on the conservation of marine biological resources because the provisions on flagging, which were present in a previous draft, had been dropped in the negotiations.34 One must wonder how the Court would have decided if those provisions had still been part of the Agreement, as registration of vessels is a competence of the Member States. Furthermore, given the complex division of competences between the EU and its Member States, and the internal tensions created by the reluctance of those Member States to abandon their front-row position in international organisations, a system in which competence 27 Timmermans (n 16) 241. 28 FAO (n 1), para 49. cf J Monar, ‘Interinstitutional Agreements: The Phenomenon and Its New Dynamics after Maastricht’ [1994] CML Rev 693, 700. 29 Y Gautier, ‘Cour de Justice Des Communautés Européennes. – 19 Mars 1996. – Commission c/ Conseil – Affaire C-25/94. – Recueil, I, 1498’ (1997) 2 Journal du droit international 512, 516. 30 Timmermans (n 16) 243; Gautier (n 29) 515; Sack (n 14) 1253; Monar (n 28) 695–703. 31 Eeckhout (n 3) 246; Timmermans (n 16) 243–44. 32 Eeckhout (n 3) 246. 33 For an exhaustive analysis of the merits and challenges of this arrangement conducted four years after the EU was admitted to the FAO, see Sack (n 14) 1243–47. 34 cf FAO (n 1), para 45.
336 Rita Guerreiro Teixeira and Jan Wouters needs to be allocated on a case-by-case basis, with a decision needed concerning each item on the agenda of a meeting, is, as Eeckhout put it, the ‘ideal recipe for malfunctioning’.35 Such a system can, in fact, constitute an obstacle to the efficient participation of the EU in the FAO, ultimately affecting the relevance of that participation, as well as discouraging future EU membership in other international organisations.36 In this line of thought, Sack has argued that the FAO experience has demonstrated that it is not worth the EU joining an international organisation except where it has exclusive competence.37 However, EU membership in international organisations remains an important vehicle for the effective exercise of the external competences of the Union (even where those are shared competences) and several reasons advocate in its favour – such as enhancing transparency and clarity on the division of competences, increasing the international visibility of the EU and its influence on developments at the international level, and directly binding the EU to certain international standards.38 Finally, the interinstitutional arrangement for participation in the FAO has been called out for falling short of respecting the duty of sincere cooperation when it establishes that, in case where a common position between the EU and the Member States cannot be reached, the Member States shall exercise the right to speak and vote in respect of that agenda item. Timmermans sustains that, in case coordination fails, neither the EU nor the Member States should be able to participate in the work of the organisation, as that could undermine the EU’s external action.39 Since 1991, the EU has joined other international organisations40 in which its Member States also participate, and it is likely to continue to do so in the future as a means to effectively exercise its competences on external action. However, 25 years after the FAO judgment, there is still no centralised guidance on how membership rights are to be exercised in cases of joint membership, and it remains for the EU institutions and the Member States to agree on the solution for each particular case. C. Effects of the Annulment Decision for FAO and Third States While the FAO judgment settled the debate on the internal competence to adopt the Agreement and on the relations between the EU and the Member States, it is relevant to consider whether 35 Eeckhout (n 3) 228. 36 Wessel (n 2) 269; Timmermans (n 16) 243; Frid (n 4) 262. Sack points to the ‘totally disproportionate amount of administrative work’ required to produce statements ahead of some 50 FAO meetings every year and to the possibility that this system allows Member States to easily hold up decision-making or bring it to a total standstill, undermining the Community’s membership: Sack (n 14) 1245, 1255. 37 Sack (n 14) 1246. 38 See Wessel and Odermatt, ‘The European Union’s Engagement’ (n 2) 6–9; I Govaere, J Capiau and A Vermeersch, ‘In-between Seats: The Participation of the European Union in International Organizations’ (2004) 9 European Foreign Affairs Review 155, 171–82. 39 Timmermans (n 16) paras 15-04, 15-05. According to the author, ‘the principle should be either joint action or no action’. Sack had proposed the same solution, but as a way of putting more pressure on Member States to reach an agreement on a common position and not stall the negotiations: Sack (n 14) 1255. See also Frid (n 4) 258, regretting that there is no legal obligation for Member States to reach a common position. 40 In the context of its FAO membership, the Community joined the Codex Alimentarius Commission in 2003, a joint bodied established by the FAO and the World Health Organization. It is also an original member of the WTO (1995), a member of the European Bank for Reconstruction and Development (1991) and a member of the Hague Conference on Private International Law (2007). For a list of all organisations of which the EU is a member, see HG Schermers and N Blokker, International Institutional Law: Unity within Diversity, 6th edn (Leiden, Brill/Nijhoff, 2018) 79.
EU Membership in International Organisations 337 it also had effects that reached further than the EU legal order, and affected the relation with other subjects of international law, namely with the FAO and its members.41 This was not the case, since the validity of the adoption of the Agreement was unaffected by the judgment of the Court, and the FAO and its members could not, in any case, rely on the fact that the EU Member States had voted on its adoption to assume that they would be primarily responsible for the implementation of the obligation contained therein. In annulling the decision of the Fisheries Council, the Court determined that the Member States lacked the competence to adopt the Agreement since, in accordance with the EU’s internal legal order, such competence lay with the Commission. However, this lack of powers does not affect the validity of the decision taken in the sphere of international law. Third states entered into the negotiations of the Agreement within the FAO in good faith and believed that the EU Member States’ representatives had full powers to sign it, based on the indication transmitted by the Commission in advance of the meeting. It would violate the principle of good faith if the Member States or the EU could avoid the legal obligations entered into by claiming that the former did not have competence to adopt the Agreement.42 It is a well-established principle in international law that questions of competence are internal matters and, as a rule, cannot be invoked internationally to evade legal obligations.43 It is noteworthy that the Court appeared to suggest that the fact that the right to vote was exercised by Member States would have indicated that these had competence ‘to implement the Agreement and to conclude subsequent agreements on the same questions’, producing effects in the relations between the EU and the FAO, and between the EU and third states.44 However, this finding is misleading, and neither the vote by the Member States nor the determination by the Court that such vote took place in breach of EU law can be relied on by third parties, as pointed out by AG Jacobs.45 A clear indication that the subject matter of the Agreement fell under shared competences had already been transmitted by the Commission to the FAO before the meeting at which the draft was adopted, as required by the General Rules of the FAO. As indicated above, these rules created a system in which the competence of the EU or the Member States must be indicated for each topic on the agenda before each meeting, preventing reliance on past actions in determining the division of membership rights. Concerning the implementation of the Agreement, the Court had already noted that, in this context, the EU and its Member States should act in accordance with their division of powers.46 The Union typically indicates, when it is ratifying a mixed agreement, the matters fall within its powers. Additionally, while complex questions persist concerning the distribution of international responsibility for the breach of obligations, it is generally agreed that the rule is one of joint responsibility between the EU and Member States in the case 41 The Court itself discussed whether the Council’s decision of 22 November 1993 had legal effects beyond the relations between the Community, its Member States and institutions: FAO (n 1) para 37. cf N Burrows, ‘COREPER, Competence and Conservation’ (1997) 22 EL Rev 64, 67. 42 ibid. 43 In this respect, cf Art 46 of the 1969 Vienna Convention on the Law Treaties, codifying the rule according to which a state cannot invoke a violation of a provision of its internal law regarding competence as invalidating its consent to be bound by a treaty unless that violation was manifest and concerned a rule of its internal law of fundamental importance; see also Yearbook of the International Law Commission (1966) vol II, UN Doc A/CN.4/SER.A/1966/Add.l, 421–22. A similar rule is contained in the Art 27(2) of the 1986 Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations, according to which ‘An international organization party to a treaty may not invoke the rules of the organisation as justification for its failure to perform the treaty’. 44 FAO (n 1) para 36. 45 Opinion of AG Jacobs, FAO (n 18) para 58. cf Rudolf (n 19) 353. 46 Ruling 1/78 (n 23). See this volume, ch 10. Timmermans (n 16) para 15.06.
338 Rita Guerreiro Teixeira and Jan Wouters of mixed agreements.47 Accordingly, the legal effects of the FAO judgment were limited to the relations between EU institutions and between these and the Member States, and did not affect the Union’s relations with the international organisation and its other members. The difficulties underlying the method of alternative exercise of participation and voting rights in the FAO have continued to provide challenges throughout the years. Regardless, the EU has remained an important actor within the FAO decision-making processes, and its (still exceptional) status as a member organisation has offered many opportunities for taking stock of developments in, and proposing improvements to, the legal regime and cooperation model governing the participation of the EU in international organisations.48 V. ADDITIONAL READING Eeckhout, P, EU External Relations Law (Oxford, Oxford University Press, 2011) ch 7. Burrows, N, ‘COREPER, Competence and Conservation’ (1997) 22 EL Rev 64. Chané, A-L and Wouters, J, ‘The European Union in United Nations Economic Governance Fora’ (2017) 8 European Yearbook of International Economic Law 541. Gautier, Y, ‘Cour de Justice Des Communautés Européennes. – 19 Mars 1996 – Commission c/ Conseil – Affaire C-25/94 – Recueil, I, 1498’ (1997) 2 Journal du droit international 512. Govaere, I, Capiau, J and Vermeersch, A, ‘In-between Seats: The Participation of the European Union in International Organizations’ (2004) 9 European Foreign Affairs Review 155. Rudolf, B, ‘Commission of the European Communities v Council of the European Union. Case C-25/94. Court of Justice of the European Communities, March 19, 1996’ (1997) 91 American Journal of International Law 349. Timmermans, C, ‘Organising Joint Participation of E. C. and Member States’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000). Timmermans, C, ‘Zaak C-25/94 Commissie vs Raad, ondersteund door het Verenigd Koninkrijk (FAO)’ (1997) 6 Sociaal-economische wetgeving 242. Sack, J, ‘The European Community’s Membership of International Organizations’ (1995) 32 CML Rev 1227. van der Meulen, B and Wernaart, B, ‘Food and Agriculture Organization (FAO) and Codex Alimentarius Commission’ in R Wessel and J Odermatt (eds), Research Handbook on the European Union and International Organizations (Cheltenham, Edward Elgar, 2019). Wessel, RA, ‘The Legal Framework for the Participation of the European Union in International Institutions’ (2011) 33 Journal of European Integration 621. Wessel, RA and Odermatt, J, ‘The European Union’s Engagement with Other International Institutions’ in R Wessel and J Odermatt (eds), Research Handbook on the European Union and International Organizations (Cheltenham, Edward Elgar, 2019). Wouters, J, Chané, A-L, Odermatt, J and Ramopoulos, T, ‘Improving the EU’s Status in the UN and the UN System: an Objective Without a Strategy?’ in C Kaddous (ed), The European Union in International Organisations and Global Governance: Recent Developments (Oxford, Hart Publishing, 2015) 45–74.
47 Eeckhout (n 3) 262; G Gaja, ‘The European Community’s Rights and Obligations under Mixed Agreements’ in D O’Keeffe and HG Schermers (eds), Mixed Agreements (Deventer, Kluwer Law and Taxation Publishers, 1983) 135; C Tomuschat, ‘The International Responsibility of the European Union’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (Deventer, Kluwer Law International, 2002) 185. 48 For an analysis of the first years of EU membership, see Frid (n 4); Sack (n 14). See also a recent study on EU participation in FAO and the Codex Alimentarius Commission and the impact of food security and food safety recommendation of the FAO in EU legislation: B van der Meulen and B Wernaart, ‘Food and Agriculture Organization (FAO) and Codex Alimentarius Commission’ in Wessel and Odermatt, Research Handbook (n 2). Generally, see Eeckhout (n 3) 222–41.
EU Membership in International Organisations 339 Wouters, J, Odermatt, J and Ramopoulos, T, ‘The EU in the World of International Organizations: Diplomatic Aspirations, Legal Hurdles and Political Realities’ in M Smith, S Keukeleire and S Vanhoonacker (eds), The Diplomatic System of the European Union. Evolution, Change and Challenges (London, Routledge, 2015) 94–111. Wouters, J and Chané, A-L, ‘Brussels Meets Westphalia: The European Union and the United Nations’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 299–323.
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32 The First Attempt at EU Accession to the ECHR: Opinion 2/94 STIAN ØBY JOHANSEN Opinion 2/94, Accession by the Community to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:1996:140, delivered 28 March 1996. KEYWORDS EU accession to the ECHR – Competences – Implied powers – Flexibility clause – Opinion procedure – Admissibility – Fundamental rights.
I. INTRODUCTION
I
n the historical development of fundamental rights in the European Union, Opinion 2/94 is a familiar milestone.1 Following the development of fundamental rights as general principles of Union law, beginning in the late 1960s, accession to the European Convention on Human Rights (ECHR) was seen by many as the logical next step. However, the Court saw it otherwise, finding that the Union did not have the competence to accede. It took a decade before the Member States filled this competence gap, by conferring upon the Union the explicit competence to accede to the ECHR in the Treaty of Lisbon.2 In retrospect, it is tempting to view Opinion 2/94 as a relic of legal history. It decided a narrow and now obsolete issue of competence, and thus delayed the Union’s accession to the ECHR, but is of no further importance. However, while the main contribution of Opinion 2/94 was the clarification of the (lack of) competence to accede to the ECHR, it has also had broader implications. From the perspective of general EU law, it is an important precedent for the admissibility of requests for an Opinion, as well as a demonstration of the limits of
1 Opinion 2/94, EU Accession to the ECHR (I), ECLI:EU:C:1996:140. The Opinion of the Court is prefaced by a separate introduction summarising the request for an Opinion, the procedure, the history of fundamental rights in Community law, and the arguments of the parties on the admissibility and merits of the case. In the following, this chapter will refer to the latter as ‘Introduction to Opinion 2/94’, and the Opinion of the Court as simply ‘Opinion 2/94’. 2 Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community (adopted 17 December 2007, in force 1 December 2009), [2007] OJ C306/1; TEU, Art 6(2).
342 Stian Øby Johansen the ‘flexibility clause’ (Article 352 TFEU). With regard to the (troubled) relationship between the Union and human rights, Opinion 2/94 was a turning point in the process of constitutionalising fundamental rights within the Union, and a foreshadowing of what was to come in Opinion 2/13.3 Moreover, Opinion 2/94 is so far the only case tackling the difficult issue of whether international organisations have implied powers in the human rights field. II. FACTS
The request for an Opinion was lodged by the Council on 26 April 1994,4 and was phrased in straightforward terms as follows: ‘Would the accession of the European Community to the [ECHR] be compatible with the Treaty establishing the European Community?’5 At the time the question was submitted, the Council had yet to take a decision on the opening of negotiations. Indeed, the Council submitted that no such decision could be taken before the Court had ‘considered whether the envisaged accession is compatible with the Treaty’.6 Although the process towards the Union’s accession to the ECHR was at a preliminary stage, it had been contemplated for more than a decade. After first rejecting the need for accession in 1976,7 the Commission in 1979 reached the conclusion that ‘the best way of replying to the need to reinforce protection of fundamental rights at Community level’ was to accede to the ECHR.8 The creation of a Union catalogue of fundamental rights as part of the EU Treaties was considered a longer-term project.9 After some discussion of ECHR accession in both the Parliament and the Council, without substantial progress, the Commission again proposed accession in 1990.10 This time, the Commission explicitly requested to be authorised to negotiate the details of accession, and proposed negotiation directives.11 It then took more than three years before the Council requested an Opinion of the Court pursuant to what is today Article 218(11) TFEU. Since no formal decision to open accession negotiations had been made by the Council, several Member States challenged the admissibility of the request for an Opinion. Ireland and the UK were particularly adamant that the request was inadmissible. Denmark, Finland and Sweden also considered the question premature, but appeared willing to accept that the Court could deliver an Opinion on the general issue of whether the Union had the competence to accede to the ECHR before the negotiations commenced. Then, once the negotiations had concluded, a second request for an Opinion would allow the Court to rule on the legal and technical details of the final accession agreement.12 3 See this volume, ch 70. 4 Opinion 2/94 is one of only three cases where the request for an Opinion has been made by the Council. See K Lenaerts, I Maselis and K Gutman, EU Procedural Law (Oxford, Oxford University Press, 2015) 555 fn 26. 5 Introduction to Opinion 2/94 (n 1) ‘I – The request for an Opinion’, para 1. 6 ibid para 2. 7 ‘The Protection of Fundamental Rights in the European Community’ (4 February 1976) COM (76) 37, Bulletin of the European Communities Supplement 5/76, para 28, http://aei.pitt.edu/5377/1/5377.pdf. 8 Commission of the European Communities, ‘Accession of the Communities to the European Convention on Human Rights – Commission Memorandum’ (2 May 1979) COM (79) 210 final, Bulletin of the European Communities Supplement 2/79, Introduction and para 7, http://aei.pitt.edu/6356/4/6356.pdf. 9 ibid Introduction and para 17. 10 ‘Commission Communication on Community Accession to the European Convention on Human Rights and Fundamental Freedoms and Some of Its Protocols’ (19 November 1990) SEC (90) 2087 final, http://aei.pitt. edu/3680/1/3680.pdf. 11 ibid para 6 and Annex I. 12 Introduction to Opinion 2/94 (n 1) ‘IV – Admissibility of the request for an Opinion’, para 1.
The First Attempt at EU Accession to the ECHR: Opinion 2/94 343 On the other hand, the Commission, the Parliament, Belgium, France, Germany, Italy and Portugal argued that the request for an Opinion was admissible. They relied heavily on the text of Article 228(6) EC (now Article 218(11) TFEU)), which defined the object of an Opinion procedure as an ‘agreement envisaged’. They emphasised that the Court had interpreted this concept broadly in Opinion 1/78,13 and found that it was in the interest of all Member States concerned by an envisaged agreement that the question of competences be settled when negotiations were commenced. Italy, in particular, stressed that even if the Court considered it premature to assess the compatibility of ECHR accession with the specific rules of the EU Treaties, it ‘could not decline to give an Opinion’ on the Union’s general competence to accede to the ECHR.14 The Member States were also split when it came to the merits of the question of competences and legal basis, though along slightly different lines. On this point, Austria took the most radical position in favour of accession. It argued that, since the exercise of all the Union’s powers involved the respect for fundamental rights, it constituted a horizontal competence that was mirrored externally.15 Austria also joined the Commission, the Parliament, Belgium, Denmark, Finland, Germany, Greece, Italy and Sweden in arguing that, in any case, the so-called ‘flexibility clause’ in Article 235 EC (now Article 352(1) TFEU) was a suitable legal basis, in the absence of a specific provision authorising accession to human rights treaties. In support of this approach, they alleged that the protection of fundamental rights was a Union objective, and that accession was necessary to protect individuals against violations of the ECHR by the Union institutions, as well as to avoid divergent interpretations between the Court and the European Court of Human Rights (ECtHR). Finally, the Parliament contended that it considered ECHR accession to fall under the second subparagraph of Article 228(3) EC (now Article 218(6)(a) TFEU), so that its assent was required for the conclusion of an accession agreement.16 Against this, France, Portugal, Spain, Ireland and the UK submitted that the Union lacked competence to accede to the ECHR. They asserted that neither the TEU nor the EC Treaty contained any provision providing the Union specific competences in the human rights field. Moreover, they dismissed the applicability of the flexibility clause, since respect for fundamental rights was not among the objectives of the Union explicitly set out in Articles 2 and 3 EC (replaced, in substance, by Article 3 TEU and Articles 3–6 TFEU).17 The third and final issue at play was the compatibility of ECHR accession with the Court’s monopoly to interpret Union law, laid down in Articles 164 and 219 EC (now Article 19(1) TEU and Article 344 TFEU). The Commission, the Parliament, Austria, Belgium, Denmark, Germany, Finland, Italy and Sweden argued that accession would not be contrary to those provisions, since the ECHR laid down ‘classic international-law control machinery’, and that the ECtHR would not rule on the division of competences between the Union and its Member States. Nor could accession be contrary to the autonomy of the EU legal order, they argued, since the control machinery under the ECHR had not been considered contrary to the constitutions of the Member States. Opinion 1/91 and Opinion 1/9218 were extensively discussed by
13 Opinion 1/78, Natural Rubber, ECLI:EU:C:1979:224. See this volume, ch 11. 14 Introduction to Opinion 2/94 (n 1) ‘IV – Admissibility of the request for an Opinion’, para 2. 15 ibid ‘V – The legal basis of the envisaged accession’, para 1. 16 ibid para 2. 17 ibid para 3. 18 Opinion 1/91 EEA Agreement (I), ECLI:EU:C:1991:490; Opinion 1/92 EEA Agreement (II), ECLI:EU:C:1992:189. See this volume, ch 20.
344 Stian Øby Johansen this group of parties. The recurring theme among them was that the EEA agreement constituted a special risk to the Union’s legal autonomy, since EEA law was a carbon copy of Union law. By contrast, the ECtHR would, post-accession, merely be empowered to interpret and apply the ECHR vis-à-vis the Union.19 France, Portugal, Spain, Ireland and the UK disagreed. In their view, accession to the ECHR called into question the autonomy of the EU legal order and the Court’s monopoly of jurisdiction, as defined in Opinion 1/91 and Opinion 1/92. Led by Spain, the crux of their argument was that the ECtHR would not simply interpret the ECHR, but also ‘examine the legality of Community law in light [thereof]’ – which, in turn, would have an impact on the case law of the Court. They also worried that the Court would essentially surrender, within the scope of the ECHR, its ultimate authority to interpret Union law to the ECtHR. Portugal in particular argued that it would be difficult to establish mechanisms to resolve questions of the division of competence between the Union and its Member States. Portugal also alleged that, to determine whether local remedies had been exhausted, the ECtHR ‘could even rule on the jurisdiction of the Court’.20 III. THE COURT
The Opinion of the Court in Opinion 2/94 opened with its assessment of the admissibility of the request for an Opinion, finding that only the issue of competence to accede is admissible (section IIIA). Consequently, this is the only question the Court then dealt with on the merits (section IIIB). A. Admissibility After presenting the wording of Article 228(6) EC (now Article 218(11) TFEU), the Court swiftly emphasised that the purpose of the provision was ‘to forestall complications which would result from legal disputes concerning the compatibility with the Treaty of international agreements binding upon the Community’.21 In support of this teleological argument, the Court referenced Opinion 3/94, which was handed down after the oral hearing in Opinion 2/94 had concluded.22 Echoing Opinion 3/94, the Court elaborated the point further, emphasising that a later finding that a binding agreement is incompatible with the EU Treaties would cause ‘serious difficulties’ for all interested parties – within and outside the Union.23 Then, tackling the issue of the lack of ‘firm information regarding the terms of the [accession] agreement’ head on, the Court held that the purposes of the request had to be distinguished.24 Like the institutions and all the Member States, the Court concluded that Union accession to the ECHR raised two main issues: (i) the competence of the Union to
19 Introduction to Opinion 2/94 (n 1) ‘VI – Compatibility of accession with Articles 164 and 219 of the Treaty’, para 1. 20 ibid para 2. 21 Opinion 2/94 (n 1) para 3. 22 Opinion 3/94, Framework Agreement on Bananas, ECLI:EU:C:1995:436. 23 ibid para 17; Opinion 2/94 (n 1) para 4. 24 Opinion 2/94 (n 1) para 8.
The First Attempt at EU Accession to the ECHR: Opinion 2/94 345 conclude an accession agreement; and (ii) the compatibility of such an agreement with the provisions of the EU Treaties – in particular, those relating to the Court’s jurisdiction.25 In discussing the admissibility of the competence issue, the Court leaned heavily on Opinion 1/78, in which it had held that it is in the interest of the institutions, Member States and other envisaged parties to the agreement that the question of competence be clarified ‘from the outset of negotiations and even before the main points of the agreement are negotiated’.26 According to the Court, the ‘only condition’ laid down in Opinion 1/78 was that the purpose of the envisaged agreement is known.27 The Court found this condition to be fulfilled when it came to the envisaged ECHR accession agreement. Regardless of how the Union’s accession would be arranged for, ‘the general purpose and subject-matter of the Convention and the institutional significance of such accession for the Community [were] perfectly well known’.28 That the Council had yet to formally decide to open negotiations did not render the request inadmissible, as the Council may have legitimate concerns about the extent of its powers before taking such a decision.29 Finally, the Court added that to ensure the effectiveness (effet utile) of Article 228(6) EC (now Article 218(11) TFEU), it must be possible to request an Opinion even before negotiations have formally begun.30 For those reasons, the Court found the question of competence to be admissible. With regard to the issue of compatibility, the Court came to the opposite conclusion. It stated that, in order to answer that question, the Court had to have sufficiently detailed information about how the Union would be subject to the ‘judicial control machinery’ established by the ECHR.31 In the pleadings and during the oral hearings, the Court was not given any detailed information on the potential technical arrangements that would be laid down in the accession agreement. Rather, it was merely provided with vague (and partially conflicting) thoughts and wishes.32 Consequently, the Court held that it was not in a position to give an Opinion on the compatibility of ECHR accession with the provisions of the EU Treaties.33 B. Merits: The Lack of Competence to Accede to the ECHR The Court needed only 14 succinct paragraphs to present its reasons why the Union lacked the competence to accede to the ECHR. The initial paragraphs were devoted to reiterating the principle of conferred powers, which had to be respected in both the internal and international action of the Union.34 That said, the Court added that those conferred powers do not necessarily have to be expressly spelled out in the provisions of the EU Treaties, ‘but may also be implied from them’.35 Such implied powers may include the competence to enter into 25 ibid para 9. 26 ibid para 19; Opinion 1/78 (n 13) para 35. 27 Opinion 2/94 (n 1) para 11. 28 ibid para 12. 29 ibid paras 13–15. 30 ibid para 16. 31 ibid para 20. 32 ibid para 21; Introduction to Opinion 2/94 (n 1) ‘VI – Compatibility of accession with Articles 164 and 219 of the Treaty’. 33 Opinion 2/94 (n 1) para 22. 34 ibid paras 23–24. 35 ibid para 25.
346 Stian Øby Johansen international agreements, notably, when the Community institutions already have internal powers to attain a specific objective.36 Not finding further reasoning necessary, the Court jumped straight to its two single-sentence conclusions that ‘[n]o Treaty provision confers on the Community institutions any general power to enact rules on human rights or to conclude international conventions in this field’ and that such powers could not be implied either.37 The Court then turned to the remaining question: whether accession could be based on the flexibility clause in Article 235 EC (now Article 352(1) TFEU). In doing so, the Court first emphasised the connection between the flexibility clause and the objectives of the Union: powers can only be created using this provision if they are necessary to attain an objective specified by the EU Treaties.38 Then it turned to explaining the status of fundamental rights in Union law, ostensibly to determine whether they constituted such an objective.39 It emphasised that the ‘importance of respect for human rights’ had been emphasised in various declarations by the Member States and the institutions, in the preamble to the Single European Act and in some of the articles of the TEU.40 Referring to its earlier judgment in ERT v DEP, the Court stated that it was ‘well settled’ that fundamental rights were part of the general principles of Community law, and that the ECHR had ‘special significance’ as a source in this regard.41 It also added that respect for human rights was ‘a condition of the lawfulness of Community acts’.42 Accession to the ECHR would therefore, in the Court’s view, ‘entail a substantial change’ in the EU system of human rights protection, because the Union would be subjected to a ‘distinct institutional system’ and because the provisions of the ECHR would be integrated into the EU legal order. Since this change would have fundamental institutional implications for both the Union and its Member States, the Court considered it to be of ‘constitutional significance’.43 Consequently, accession would go beyond the scope of Article 235 EC (now Article 352(1) TFEU), and thus ‘could be brought about only by way of Treaty amendment’.44 The Court therefore ultimately concluded that, ‘as Community law now stands, the Community has no competence to accede to the [ECHR]’.45 IV. THE IMPORTANCE OF THE CASE
In Opinion 2/94, the Court gave a rather brief, narrow and decisive reply to the question it had been asked. On its face, its main importance is its (negative) conclusion, which firmly shut the door to ECHR accession until the EU Treaties were revised (section IVA). However, as alluded to in the introduction, the legacy of Opinion 2/94 is greater. As explained in the following, it is a key precedent for the admissibility of requests for an Opinion of the Court prior to the commencement of negotiations (section IVB). It was also a key turning point in the history of EU fundamental rights protection (section IVC). Moreover, the pleadings of the parties 36 ibid para 26. 37 ibid paras 27–28. 38 ibid para 30. 39 Though the Court in the end neither confirmed nor denied that fundamental rights were a Union objective, see J Kokott, F Hoffmeister and JH Bello, ‘Case Note: Opinion 2/94’ (1996) 90 American Journal of International Law 664, 667. 40 Opinion 2/94 (n 1) para 32. 41 ibid para 33; Case C-260/89, ERT v DEP, ECLI:EU:C:1991:254, para 41. 42 Opinion 2/94 (n 1) para 34. 43 ibid para 35. 44 ibid para 35. 45 ibid para 36.
The First Attempt at EU Accession to the ECHR: Opinion 2/94 347 foreshadowed many of the central issues that arose almost 20 years later, in connection with Opinion 2/1346 (section IVD). Finally, Opinion 2/94 remains relevant for international organisations law generally, due to its unique discussion of implied powers in the human rights field (section IVE). A. No Competence to Accede to the ECHR without Treaty Amendment The Court’s unequivocal conclusion that the Union did not have competence to accede to the ECHR effectively halted the embryonic accession process. Although the EU Treaties were amended twice in the years immediately following Opinion 2/94, no competence to accede was conferred upon the Union. The Treaty Establishing a Constitution for Europe constituted the first attempt to confer upon the Union the competence to accede to the ECHR.47 But it was when the Treaty of Lisbon entered into force in 2009 that the competence hurdle identified by the Court in Opinion 2/94 was finally overcome. Since then, Article 6(2) TEU has stated that the Union ‘shall accede’ to the ECHR. Today, notwithstanding Opinion 2/13, the Union thus has both the competence and a duty to accede. B. Admissibility Criteria for Opinion Requests Opinion 2/94 is also a key decision defining the admissibility criteria for requests for an Opinion, and in this connection it is referred to in at least four later Opinions of the Court. One of them used Opinion 2/94 as the only precedent for the admissibility of a request for an Opinion when a Commission proposal to enter into an agreement has been submitted to the Council, insofar the request concerns competences.48 The three others used Opinion 2/94 to establish the test for the admissibility of questions concerning the compatibility of an envisaged agreement with the EU Treaties, namely, that the Court must have ‘sufficient information’ on the actual content of that agreement.49 It is particularly worth noting that later case law adopted the distinction drawn up in Opinion 2/94 between competences and compatibility.50 By developing this crucial dichotomy, Opinion 2/94 constituted an innovative step in the clarification of the admissibility criteria for Opinion requests. C. Importance for the Development of Fundamental Rights within EU Law As long ago as the 1970s, the Court held that fundamental rights were among the general principles of Union law, and that Union measures inconsistent with fundamental rights were 46 Opinion 2/13, EU Accession to the ECHR (II), ECLI:EU:C:2014:2454. See this volume, ch 70. 47 Treaty establishing a Constitution for Europe (adopted 29 October 2004, not in force), [2004] OJ C310/1, Art I-9(2). 48 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303, para 46. See this volume, ch 69. 49 Opinion 2/94 (n 1) para 20; Opinion 2/00, Cartagena Protocol, ECLI:EU:C:2001:664, para 6 See this volume, ch 39; Opinion 1/09, Unified Patent Court, ECLI:EU:C:2011:123, para 49; Opinion 2/13 (n 46) para 147. See this volume, ch 70. 50 This dichotomy is also used in the literature: see eg Lenaerts et al (n 4) 557–58.
348 Stian Øby Johansen invalid.51 Opinion 2/94 thus did not break new legal ground with regard to the status of fundamental rights or the importance of the ECHR. However, its succinct summary of these matters was often referenced in later cases.52 Opinion 2/94 is more interesting when viewed from a historical perspective. That is because it shifted the focus to what had up to that point been the Commission’s second priority: the development of a written Union catalogue of fundamental rights. Opinion 2/94 also made it clear that such a catalogue of fundamental rights could not be enacted as binding secondary law through the use of the flexibility clause.53 As predicted by the editors of the European Law Review at the time, Opinion 2/94 thus extended the shelf life of the general principles of law considerably.54 Following Opinion 2/94, there was a ‘constitutional coming-of-age of human rights within the EU legal and constitutional framework’ (emphasis added).55 Just over a year after Opinion 2/94, the Treaty of Amsterdam established the ‘suspension of rights’ procedure and enshrined the so-called Copenhagen Criteria in the EU Treaties.56 Not long thereafter, the Charter of Fundamental Rights was drafted, and was then proclaimed in 2000.57 With the entry into force of the Treaty of Lisbon in 2009, the Charter became a legally binding part of EU primary law.58 D. Importance for Subsequent Attempts to Accede to the ECHR The entry into force of the Treaty of Lisbon was also the starting point for a renewed attempt at EU accession to the ECHR. The Commission’s negotiation directives were drafted, and subsequently approved, by the Council in June 2010.59 The drafting of an accession agreement then commenced the following month.60 The negotiations were protracted, partly due to the lack of a common position of the EU Member States on certain issues, and it was not until 2013 that the parties finally agreed on a Draft Accession Agreement.61
51 See, eg Case 4/73, Nold v Commission, ECLI:EU:C:1974:51, para 13; Case 11/70, Internationale Handelsgesellschaft, ECLI:EU:C:1970:114, para 4. 52 Opinion 2/94 has, particularly in combination with Case C-299/95, Kremzow, ECLI:EU:C:1997:254, been presented in a long list of cases as authority for the proposition that it ‘is settled case-law that fundamental rights form an integral part of the general principles of law whose observance the Community judicature ensures [and that the] ECHR has special significance in that respect’. 53 Kokott, et al (n 39) 668–69. 54 ‘Community Accession to the European Convention on Human Rights’ (1996) 21 EL Rev 185, 186. 55 G de Búrca, ‘The Evolution of EU Human Rights Law’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 3rd edn (Oxford, Oxford University Press, 2021) 491. 56 Treaty of Amsterdam (adopted 2 October 1997, in force 1 May 1999), [1997] OJ C340/1; TEU, Art 7; TEU, Art 49 cf Art 2. 57 G de Búrca, ‘The Drafting of the EU Charter of Fundamental Rights’ (2001) 26 EL Rev 126. 58 See Art 6(1) TEU. 59 Unpublished Council Decision authorising the Commission to negotiate the Accession Agreement of the European Union to the ECHR (3 June 2010). A partially declassified version of the draft decision is available as Council Doc 10602/10. 60 ‘1st Working Meeting of the CDDH Informal Working Group on the Accession of the European Union to the European Convention on Human Rights (CDDH-UE) with the European Commission’ (7 July 2010), CoE Doc CDDH-UE(2010)05. 61 Annex to CDDH 47+1 Ad Hoc Negotiation Group, ‘Final Report to the CDDH’ (5 April 2013) CoE Doc 47+1(2013)008. For overviews over the negotiation process, see eg A Drzemczewski, ‘EU Accession to the ECHR: The Negotiation Process’ in V Kosta, N Skoutaris and VP Tzevelekos (eds), The EU Accession to the ECHR (Oxford, Hart Publishing 2014); T Meinich, ‘EU Accession to the European Convention on Human Rights – Challenges in the Negotiations’ (2020) 24 International Journal of Human Rights 993.
The First Attempt at EU Accession to the ECHR: Opinion 2/94 349 However, in 2014, the Court rejected it in Opinion 2/13 as being incompatible with the EU Treaties.62 The links between the two Opinions on accession to the ECHR – Opinion 2/94 and Opinion 2/13 – deserve to be highlighted. Since the competence issue was resolved by Article 6(2) TEU, the Court’s reason for rejecting the Draft Accession Agreement in Opinion 2/13 was its incompatibility with the EU Treaties. In this connection, it is remarkable how well the arguments of the parties from Opinion 2/94 line up with the objections of the Court nearly two decades later. In Opinion 2/13, it was essentially the arguments submitted in connection with Opinion 2/94 by France, Portugal, Spain, Ireland and the UK that won the day. Interestingly, though, the views of those very Member States had shifted in the time between the two Opinions. In their submissions related to Opinion 2/13, all of them argued that the Draft Accession Agreement was compatible with the EU Treaties.63 At the time of writing, renewed negotiations on EU accession to the ECHR have gone on for over a year. Progress appears to be slow, with further negotiation meetings planned through July 2022. If and when a renegotiated Draft Accession Agreement is ready, the Court will likely be asked to give a third Opinion. The key arguments pro et contra the compatibility with the EU Treaties of such a renegotiated agreement will likely echo, again, those voiced by the parties in connection with Opinion 2/94. E. Importance for the Doctrine of Implied Powers At its core, Opinion 2/94 is a case about (the limits of) implied powers. Indeed, the flexibility clause in Article 235 EC (now Article 352(1) TFEU) is considered an example of an ‘explicit implied powers provision’.64 This makes Opinion 2/94 of interest to the broader field of international organisations law. From this perspective, Opinion 2/94 may be read as suggesting that international organisations do not have implied powers in the field of human rights.65 However, given the specific nature of the flexibility clause – in particular the link between powers and objectives that is emphasised in Opinion 2/94 – it is uncertain whether the Court’s reasoning is relevant for the doctrine of implied powers applicable to international organisations generally.66 Yet Opinion 2/94 remains the only judicial decision that has directly addressed this difficult implied powers issue, which is likely to arise for other organisations in the future, given the increasing attention paid to their human rights accountability.67
62 Opinion 2/13 (n 46). See this volume, ch 70. 63 Opinion 2/13 (n 46) para 109. 64 HG Schermers and NM Blokker, International Institutional Law: Unity within Diversity, 6th edn (Leiden, Brill/ Nijhoff, 2018) 200. 65 SØ Johansen, The Human Rights Accountability Mechanisms of International Organizations (Cambridge, Cambridge University Press, 2020) 186 fn 94. 66 See also G Verdirame, The UN and Human Rights: Who Guards the Guardians? (Cambridge, Cambridge University Press, 2011) 76–82; J Klabbers, An Introduction to International Organizations Law, 3rd edn (Cambridge, Cambridge University Press, 2015) 62. 67 See generally, and among others, Johansen (n 65); C Ferstman, International Organizations and the Fight for Accountability: The Remedies and Reparations Gap (Oxford, Oxford University Press, 2017); P Schmitt, Access to Justice and International Organizations: The Case of Individual Victims of Human Rights Violations (Cheltenham, Edward Elgar 2017).
350 Stian Øby Johansen V. ADDITIONAL READING Allott, P, ‘Fundamental Rights in the EU’ (1996) 55 CLJ 409. Beaumont, P, ‘The European Community Cannot Accede to the European Convention on Human Rights’ (1997) 1 Edinburgh Law Review 235. Bernaerts, I, ‘Case Note: Opinion 2/94’ (1996) 2 Columbia Journal of European Law 372. Burrows, N, ‘Question of Community Accession to the European Convention Determined’ (1997) 22 EL Rev 58. Gaja, G, ‘Case Note: Opinion 2/94’ (1996) 33 CML Rev 973. Kokott, J, Hoffmeister, F and Bello, JH, ‘Case Note: Opinion 2/94’ (1996) 90 American Journal of International Law 664. O’Leary, S, ‘Accession by the European Community to the European Convention on Human Rights – the Opinion of the ECJ’ (1996) 21 European Human Rights Law Review 362. Toth, AG, ‘The European Union and Human Rights: The Way Forward’ (1997) 34 CML Rev 491. Tridimas, T, The General Principles of EC Law (Oxford, Oxford University Press, 1999) 241–43.
33 Enforcement of International Sanctions within the EU Legal Order: Bosphorus AINDRIAS Ó CAOIMH Case C-84/95, Bosphorus Hava Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and Communications and others, ECLI:EU:C:1996:312, delivered 30 July 1996. KEYWORDS International sanctions – United Nations Security Council – Council Regulations – Fundamental rights – Compliance – International law – Implementation.
I. INTRODUCTION
T
he Bosphorus case, decided by the Court on 30 July 1996, is of central importance underlying the obligations of EU Member States in the enforcement of international sanctions that are underpinned by EU law. It concerned the interpretation by the Court of Council Regulations enforcing UN Security Council (UNSC) sanctions and the assessment of the proportionality of the measures sought to be enforced by EU law, regarding, in particular, the measures’ compliance with fundamental rights. The case represents the first occasion where the Court interpreted a Council Regulation implementing UN sanctions approved by the UNSC. II. FACTS
At issue in these proceedings, which came to the Court on a reference for a preliminary ruling pursuant to Article 267 TFEU (ex-Article 177 EEC) by the Supreme Court of Ireland, was the interpretation of the provisions of Article 8 of Regulation 990/93 of 26 April 1993, which was adopted by the Council in enforcement of UNSC Regulations in the circumstances of the ongoing war engulfing the former Yugoslavia, and in particular, Bosnia-Herzegovina. The Irish court sought an interpretation of Article 8 which provided, inter alia as follows: All vessels, freight vehicles, rolling stock and aircraft in which a majority or controlling interest is held by a person or undertaking in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro) shall be impounded by the competent authorities of the Member States.
352 Aindrias Ó Caoimh The plaintiff, hereinafter referred to as Bosphorus Airways, was a Turkish company which operated principally as an air charterer and travel organiser. It leased its only two aircraft. The judgment of the Court indicates that Bosphorus Airways leased two aircraft for a period of four years from the Yugoslav national airline JAT in 1992. The lease agreement was for the aircraft only, and did not include cabin or flight crew – what might be described as a form of a ‘dry lease’ in the aviation industry. Accordingly, Bosphorus Airways had complete control of the day-to-day management of the aircraft. It was accepted by the parties to the dispute that the private lease agreement between the Turkish company and the Yugoslav company was entered into in good faith, and was not intended to circumvent the sanctions against the Federal Republic of Yugoslavia which were the subject of UNSC Resolutions and implemented in the European Union by Regulation 990/93. The rent due under the private lease agreement was paid into blocked accounts, and was not paid to JAT. The aircraft were used by Bosphorus Airways for flights between Turkey and the EU and Switzerland. Bosphorus Airways contracted with a company in Dublin, Ireland, for the maintenance of its aircraft. On 16 April 1993, one of the two aircraft was flown by Bosphorus Airways to Dublin for an overhaul and maintenance. The service was completed on 28 May 1993, and when the aircraft was about to depart it was impounded on the direction of the respondent minister pursuant to Article 8 of the Council Regulation. The Government of Ireland was therefore of the view that it fell within the terms of Council Regulation (EEC) 990/93 of 26 April 1993 concerning trade between the EEC and the Federal Republic of Yugoslavia (Serbia and Montenegro), whereby the Council sought to give effect to the strengthening of the embargo on that state decided in Resolution 820 (1993) adopted by the UNSC on 17 April 1993. Thereafter, Bosphorus Airways applied to the High Court in Dublin for judicial review of the directions of the minister that the aircraft be impounded. On 21 June 1994, the High Court acceded to this application, and quashed the minister’s direction in the belief that Article 8 did not extend to the aircraft in question. The minister appealed this decision to the Supreme Court, which, in recognition of the fact that the case depended upon the correct interpretation of Article 8 of the Council Regulation,1 referred the interpretation to the Court through the preliminary reference procedure. The question referred to the Court was as follows: Is Article 8 of Regulation 990/93/EEC to be construed as applying to an aircraft which is owned by an undertaking the majority or controlling interest in which is held by an undertaking in the Federal Republic of Yugoslavia (Serbia and Montenegro) where such aircraft has been leased by the owner for a term of four years from the 22nd April 1992 to an undertaking the majority or controlling interest in which is not held by a person or undertaking in or operating from the said Federal Republic of Yugoslavia (Serbia and Montenegro)?
The Supreme Court did not raise the issue of the validity of the provisions of the Council Regulation, and the Court was accordingly limited to the issue of interpretation of Article 8 of the Council Regulation.
1 Noting the obligation contained in EU primary law that is today located in Art 267 TFEU, third paragraph: ‘Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court’, into which the Supreme Court of Ireland falls.
Enforcement of International Sanctions within the EU Legal Order 353 III. THE COURT
A. Opinion of the Advocate General Advocate General (AG) Jacobs was assigned to the case, which was heard by the Court (comprising nine members). An oral hearing was held on the 27 March 1996 at which the parties, together with the representatives of the Danish and Austrian governments, as well as the European Commission, were heard. By this stage, the Council Regulation had been suspended with effect from 27 February 1996. Moreover, the UNSC itself had suspended the sanctions. The AG delivered his Opinion on 30 April 1996, which set out the background to the case in a very clear manner, including the legal background, which referred to various UNSC Resolutions adopted under Chapter VII of the UN Charter, which were binding on the UN members,2 including all EU Member States. These UNSC Resolutions resulted in the implementation of UN sanctions by the adoption, at EU level, of Council Regulations,3 and ultimately the Council Regulation that was the subject matter of these proceedings before the Court, which was adopted pursuant to Article 113 of the Treaty (today Article 207 TFEU). As indicated by the AG, the preamble to the Regulation referred to the situation in the former Yugoslavia, particularly in Bosnia-Herzegovina, the role played by the Federal Republic of Yugoslavia (Serbia and Montenegro) and the various UNSC Resolutions. AG Jacobs referred to the implementing measures in the Member States of the Council Regulation, as well as to a summary of the facts in the main proceedings, referred to in the order for reference. The facts as summarised by him referred to the leasing of two aircraft by Bosphorus Airways – the fact that the transaction between that company and JAT was entirely bona fide; that it was in no way seeking to break the UN sanctions; and that JAT had no interest, direct or indirect, in Bosphorus Airways, or in the management, supervision or direction of its business. AG Jacobs referred to the impounding of the aircraft in Dublin by the minister, as well as the judicial review proceedings in the Member State. This, as above, led to the initial quashing (a form of annulment) on 21 June 1994 by order of the High Court of the minister’s direction to impound the aircraft on the grounds that the aircraft in question was not an aircraft to which Article 8 of the Regulation applied.4 The High Court took the view that the aircraft in question was not one in which a majority or controlling interest was held by a person or undertaking in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro). The AG indicated that contrary to the view of Bosphorus Airways that the minister’s direction was unlawful, the view expressed by the other four parties before the Court was that the decision was ‘clearly suggested by a reading of Article 8 of the Regulation’ and that the wording left little room for doubt.5 While the Irish High Court judge had taken a narrow view of the term ‘a majority or controlling interest … held by a person or undertaking in or operated from the Federal Republic of Yugoslavia (Serbia and Montenegro)’, the AG considered that the term ‘interest’ was very broad, thus including JAT, which remained the exclusive owner of the aircraft. AG Jacobs took the view that while the term ‘interest’ was rather vague, most of
2 Resolution 713 (1991), Resolution 757 (1992), Resolution 787 (1992) and Resolution 820 (1993). 3 Council Regulation (EEC) No 1432/92, Council Regulation (EEC) No 2655/92, Council Regulation (EEC) 2656/92 and Council Regulation (EEC) No 1432/92. 4 The Advocate General referred to the Irish High Court decision reported at [1994] 2 ILRM 551. 5 Opinion of Advocate General Jacobs, Case C-84/95, Bosphorus Hava Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and Communications and others, ECLI:EU:C:1996:179, para 31.
354 Aindrias Ó Caoimh the other language versions of the Regulation refer to the notion of property instead of interest, which, in his view, ‘obviously covers JAT’s ownership of the aircraft’. He expressed the view that the control over the aircraft during the term of the lease was irrelevant, as it did not arise where there was a majority or controlling interest. AG Jacobs addressed not only the words of the provision, but also, in accordance with the Court’s case law,6 the context in which it occurs, and the object of the rules of which it forms part. That context he saw was the UNSC Resolutions. It was not necessary to decide if they are binding on the Union.7 AG Jacobs referred to the reasoning of the Irish High Court that sought to distinguish the necessary interest, on the one hand, from an operational control of the property, on the other hand. The Irish High Court took the view that the ‘interest’ referred to in Article 8 is essentially the interest in possession, or the right to enjoy control or regulate the use of the asset, rather than the income derived from it. The AG did not subscribe to this reasoning, which he described as narrow, finding that such reasoning was not compelling. Nor did he share the approach of the Irish High Court judge, who viewed the Regulation as a measure that merely strengthened the trade embargo existing at the time. The AG opined that a narrow view could not be justified by the language of the UNSC Resolutions. Later in his Opinion, the AG addressed the principles of legal certainty, proportionality and respect for fundamental rights relied upon by Bosphorus Airways. In view of the fact that the AG considered the text of the Regulation to be clear, he did not consider that the principle of legal certainty applied, and he therefore considered the principles of proportionality and respect for human rights, which he addressed together. AG Jacobs addressed the respect for human rights in light of the general principles of Union law, taking into account the constitutional traditions of the Member States and of international agreements, in particular the European Convention on Human Rights (ECHR), which had then most recently been addressed in Opinion 2/94.8 The AG emphasised that respect for fundamental rights is a condition of the lawfulness of EU legal acts, and had to be respected by the Member States in the implementation of Union law. Notwithstanding the fact that ECHR was not formally binding on the Union, he indicated that for practical purposes, it could be regarded as part of Union law. Bosphorus Airways relied upon the right to property,9 and submitted that its rights had been violated by the interpretation of Article 8 adopted by the minister. The AG addressed the case law of the European Court of Human Rights (ECtHR). He recognised, in accordance with that case law, that a balance had to be struck between the right to property, on the one hand, and any control of the use of property in accordance with the general interest, on the other hand. He referred to the case law of the ECtHR whereby it identified its function as determining whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.10 Having addressed two other decisions of the ECtHR in which it applied a proportionality test,11 the
6 Case C-83/94, Leifer and Others, ECLI:EU:C:1995:329, para 22 of the judgment, following Case 292/82, Merck v Hauptzolllamt Hamburg-Jonas, ECLI:EU:C:1983:335, para 12 and Case 337/82, St Nikolaus Brennerei v Hauptzollamt Krefeld, ECLI:EU:C:1984:69, para 10. 7 The European Communities and now the European Union were never parties to the United Nations, and were not eligible to be a member of the United Nations. However, each of the Member States of the Union is a party to the United Nations. 8 Opinion 2/94, EU Accession to the ECHR, ECLI:EU:C:1996:140. See this volume, ch 32. 9 The right to property is defined in Art 1 of the First Protocol to the European Convention on Human Rights. 10 Sporrong and Löhnroth v Sweden, App nos 7151/75 and 7152/75, Judgment of 23 September 1982. 11 AGOSI v UK, Judgment of 24 October 1986; Air Canada v United Kingdom, judgment of 5 May 1995.
Enforcement of International Sanctions within the EU Legal Order 355 AG then addressed a precedent of the Court in which a similar approach was applied.12 He assessed the right to property in recognition that the right may be restricted, provided that the restrictions correspond to the general interest and do not constitute a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed.13 Applying a similar approach to the case at hand, the AG indicated that the principle of proportionality was an essential part of the test to be applied when reviewing the alleged violation of the right to property. He further stated that there was a strong public interest in enforcing embargo measures decided by the UNSC. While the sanctions affected property rights, including those of innocent economic operators, in the particular circumstances of the case, the AG expressed the view that the sanction measures did justify the contested decision, and he did not consider the principle of proportionality to be infringed in view of the importance of the public interest involved. Moreover, in the words of the test applied by the ECtHR in its case law, the measure did not strike an unfair balance between the demands of the general interest and the requirements of the protection of fundamental rights. In addition, in applying the approach of the Court with regard to analysing the proportionality of the measure in the context of the restriction of the applicant’s right to property in the light of the aims of general interest which the Regulation sought to achieve,14 he opined that the contested decision did not infringe fundamental rights. In addressing the principle of proportionality separately, he was of the view that the general interest is plainly of exceptional importance. He proposed that the question posed by the referring national court, the Supreme Court of Ireland, should be answered in the affirmative, ie that Article 8 of Council Regulation No 990/93 must be interpreted as applying to an aircraft the majority or controlling interest in which is held by an undertaking in the Federal Republic of Yugoslavia (Serbia and Montenegro) even where that aircraft has been leased by the owner for a term of four years to an undertaking which is not an undertaking in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro).15
B. The Court In its judgment of 30 July 1996, the Court followed the AG. It reiterated its case law relating to interpretation of a provision of Union law in looking at its wording, context and aims.16 On the wording of Article 8 of the Regulation, it took a similar approach to AG Jacobs. It then addressed the context and aims of the Regulation and indicated briefly the context of the UN Security Council Resolutions that had been referred to by the AG. In examining the aims of the Regulation, it referred to paragraph 24 of Resolution 820 (1993) of the UN Security Council, using the word ‘interest’, and concluded that it could not exclude ownership as a determining criterion for impounding. Referring to its use in a paragraph using the word
12 Case C-280/93, Germany v Council, ECLI:EU:C:1994:367 (Bananas). See this volume, ch 27. 13 In addition, he referred at para 61 to Case 44/79, Hauer v Land Rheinland-Pfalz, ECLI:EU:C:1979:290, where the Court analysed the right to property drawing inspiration from Art 1 of the First Protocol to the ECHR, and from the constitutional rules and practices of the Member States. 14 This involved an application of the Court’s approach in Hauer (ibid) together with its approach to fundamental rights in Case 5/88, Wachauf, ECLI:EU:C:1989:321. 15 Opinion of Advocate General Jacobs, Bosphorus (n 5) para 70. 16 The application of this approach to an instrument implementing a UN Security Council resolution is question by I Canor, ‘“Can Two Walk Together, Except They Be Agreed?” The Relationship between International Law and European Law: The Incorporation of United Nations Sanctions against Yugoslavia into European Community Law through the perspective of the European Court of Justice’ [1998] CML Rev 137.
356 Aindrias Ó Caoimh ‘majority’, the Court indicated that this clearly implies the concept of ownership. The Court recognised the aim of the sanctions to put pressure on the Federal Republic of Yugoslavia (Serbia and Montenegro), and indicated that the use of the day-to-day operation and control, rather than ownership, was the decisive criterion for applying the measures prescribed by Article 8 of the Regulation, which would jeopardise the effectiveness of the strengthening of the sanctions. In examining the fundamental property rights of Bosphorus Airways, the Court examined the proportionality of the measure, and referred to its own case law, as had the AG. The Court expressly referred to the third, fourth and seventh recitals in the preamble to the Regulation, referring to ‘the prolonged direct and indirect activities of the Federal Republic of Yugoslavia (Serbia and Montenegro) in, and with regard to, the Republic of Bosnia-Herzegovina are the main cause for the dramatic developments in the Republic of Bosnia-Herzegovina’, ‘a continuation of these activities will lead to further unacceptable loss of human life and material damage and to a further breach of international peace and security in the region’ and ‘the Bosnian Serb party has hitherto not accepted, in full, the peace plan of the International Conference on the Former Yugoslavia in spite of appeals thereto by the Security Council’, respectively. The Court indicated that, in light of those circumstances, the aim pursued by the sanctions assumed special importance, which was, in particular in terms of the Regulation, and more particularly the eighth recital in the preamble thereto, to dissuade the Federal Republic of Yugoslavia from ‘further violating the integrity and security of the Republic of Bosnia-Herzegovina and to induce the Bosnian Serb party to cooperate in the restoration of peace in this Republic’. This led the Court to conclude: As compared with an objective of general interest so fundamental for the international community, which consists in putting an end to the state of war in the region and to the massive violations of human rights and humanitarian international law in the Republic of Bosnia-Herzegovina, the impounding of the aircraft in question, which is owned by an undertaking based in or operating from the Federal Republic of Yugoslavia, cannot be regarded as inappropriate or disproportionate.
This led the Court to answer the question referred to the effect that Article 8 applied to the aircraft in question of Bosphorus Airways. IV. THE IMPORTANCE OF THE CASE
The Court’s judgment is relatively brief and follows the approach of the AG, whose analysis was much deeper in regard to the UN sanctions and the factual background to the case. While the Court was interpreting the provision of Article 8 of the Council Regulation and not purporting to interpret the UN Resolution, the Court did refer to the wording of that Resolution in its examination of the meaning to be given to Article 8. Commentaries on Bosphorus are mainly addressed to the human rights dimension and a vast literature exists in this regard. As the focus of this chapter is EU external relations law rather than human rights, it will not refer to these articles. A. Status of UNSC Resolutions and Opinions of the Sanctions Committee One aspect of the case which was not expressly referred to in the judgment is that the then Communities (now the European Union) was not and is not a member of the United Nations,
Enforcement of International Sanctions within the EU Legal Order 357 and accordingly, was not bound by the resolutions of the UN Security Council, which were, on the other hand, binding on the Member States, all of which were members of the United Nations. It has been observed that, in Bosphorus, neither the Court nor the AG made an active attempt to clarify the legal status of UN Security Council Resolutions, nor the opinions of the Sanctions Committee. It was observed that while the Court has competence to interpret international agreements to which the Union was a party, ‘nowhere is it given jurisdiction to interpret Resolutions of the United Nations Security Council’.17 In Bosphorus, when the Court interpreted the Council Regulation, it referred to the Security Council Resolution and in particular to paragraph 24 of Resolution 820 (1993),18 which provided that ‘all States shall impound all vessels, freight vehicles, rolling stock and aircraft in their territories in which a majority or controlling interest is held by a person or undertaking in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro)’, and then stated: Thus, the wording of Paragraph 24 of Resolution 820 (1993) confirms that the first paragraph of Article 8 of Regulation No 990/93 ‘… that it is not necessary for that person or undertaking also to have actual control of the aircraft’. The word ‘interest’ in Paragraph 24 cannot, on any view, exclude ownership as a determining criterion for impounding. Moreover, that word is used in that paragraph in conjunction with the word ‘majority’ which clearly implies the concept of ownership.19
It has further been observed that the only body recognised in international law as having the power to review the operation of the sanctions regime is the Sanctions Committee established by the Security Council and, in international law, there is no judicial review of Resolutions of the Security Council.20
However, it must be recognised that the AG referred extensively to the Sanctions Committee established by Resolution 724 (1991) in his Opinion,21 and noted the opinion of the Committee communicated to the government minister in the Member State in support of the impounding of the aircraft in question. The AG indicated that ‘due regard’ should be paid to the opinion of the Committee and noted that it was composed of representatives of the states that are members of the Security Council, adding that their views must carry considerable weight.22 AG Jacobs noted that on the issue in question – the impounding of the aircraft – the opinion of the Sanctions Committee was not binding, whereas, in other respects, Sanctions Committee opinions are binding.23 For this reason, the AG did not consider it necessary to rely on the opinion of the Sanctions Committee to resolve the case before the Court. B. Bosphorus as Precedent The judgment of the Court has not been without criticism. The conclusion of the Court has been criticised and, moreover, the Court’s interpretative methodology has been questioned.24
17 See
N Burrows, ‘Caught in the Cross-Fire’ (1997) 22 EL Rev 170. para 14 of its judgment. 19 See para 15 of its judgment. 20 Burrows (n 17) 172. 21 See in particular paras 11, 24, 25 and 46. 22 See para 46 of his Opinion. 23 See para 46 of his Opinion and para 15 of Resolution 820 (1993). 24 See Canor (n 16). 18 See
358 Aindrias Ó Caoimh This expressed view has been shared by others,25 but not subsequently by the ECtHR.26 However, contrary views have been expressed by other authors. Elsewhere, others have warned that affording protection to the right of Bosphorus Airways to property would have caused the entire sanction regime to fail, because it would have opened up a flood of litigation and acknowledged that the impounding of the aircraft contributed little to the sanction regime in place.27 Yet, the aircraft nevertheless had to be impounded because the sanctions could only be effective through their aggregate effect. Furthermore, the judgment has been referred to as having ‘stringent interpretation’,28 in reference to the interpretation of EU implementation regulations of Security Council Resolutions. The judgment or Opinion in Bosphorus has been cited in numerous judgments of the Court and Opinions of AGs. The matters referred to have varied, and many are related to the aspects of human rights, including property rights. With regard to the approach to interpretation referred to in paragraph 11 of the judgment, it is relevant to note that the approach was cited and followed in a number of subsequent cases, including Möllendorf and Möllendorf-Niehuus29 in the field of external relations. In conclusion, it can be seen that this case is important not only in regard to the approach of the Court with a view to balancing respect for human rights with the general interest, but also with regard to the approach to interpretation of Council Regulations enforcing UN sanctions and Resolutions of the Security Council. The case was a delicate one in the context of the human rights dimension following Opinion 2/94 of 28 March 199630 and the ongoing relationship with the European Court of Human Rights, and also with regard to the enforcement of UNSC sanctions in circumstances where there was no challenge to their validity or that of the Council Regulation enforcing them. Subsequent cases where the validity of enforcement measures was at issue enabled the Court to go further. V. ADDITIONAL READING Burrows, N, ‘Caught in the Cross-Fire’ (1997) 22 EL Rev 170. Canor, I, ‘“Can Two Walk Together, Except They Be Agreed?” The Relationship between International Law and European Law: The Incorporation of United Nations Sanctions against Yugoslavia into European Community Law through the Perspective of the European Court of Justice’ (1998) 35 CML Rev 137. Drewniak, E, ‘Bosphorus Case: The Balancing of Property Rights in the European Community and the Public Interest in Ending the War in Bosnia’ (1996) 20 Fordham International Law Journal 1007.
25 See, eg E Drewniak, ‘The Bosphorus Case: The Balancing of Property Rights in the European Community and the Public Interest in ending the war in Bosnia’ (1997) 20 Fordham International Law Journal 1007. 26 Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v Ireland, App no 45036/98, 30 June 2005. 27 P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 515. 28 PJ Kuijper, ‘“It Shall Contribute to … the Strict Observance and Development of International Law …” The Role of the Court of Justice’ in Court of Justice of the European Union, The Court of Justice and the Construction of Europe: Analysis and Perspectives on Sixty Years of Case Law (The Hague, TMC Asser Press, 2012). 29 Case C-117/06, Möllendorf and Mölendorf-Niehuus, ECLI:EU:C:2007:596, para 54. 30 Opinion 2/94 (n 8). See this volume, ch 32.
34 Scope of EU Development Policy: Portugal v Council (India Cooperation Agreement) MORTEN BROBERG Case C-268/94, Portuguese Republic v Council of the European Union, ECLI:EU:C:1996:461 (India Cooperation Agreement), delivered 3 December 1996. KEYWORDS Scope of EU development policy – Human rights and democracy clause in international agreement – International agreements of the EU – Concurrent competences – Legal basis – The EU’s flexibility clause.
I. INTRODUCTION
W
hen the Treaty of Rome entered into force in 1958, and until the entry into force of the Treaty of Maastricht in 1993, the EU’s development cooperation policy was characterised by a weak constitutional basis.1 Thus, at treaty-level, development cooperation sometimes appeared to form part of other EU policies, whereas at other times it seemed to compete with those other policies. With the entry into force of the Treaty of Maastricht, a specific title on development cooperation was introduced in the EC Treaty.2 This arguably constitutes the most important change at constitutional level in the field of EU development cooperation policy since the creation of the EU. The period following the 1993 introduction of a specific constitutional basis for the Union’s development cooperation policy witnessed a number of conflicts over the precise delimitation of this policy vis-à-vis other policies. Prior to the Treaty of Maastricht’s introduction of a completely new title on development, the Union had, in particular, adopted development policy measures on the basis of Article 235 EC (equivalent to Article 352 TFEU)3 for funding programmes or on the basis of Articles 113 1 Apart from where quotations are provided, as a rule, this chapter does not distinguish between European Economic Community, European Community and European Union, but instead simply uses the term ‘European Union’. 2 Title XX of the EC Treaty, entitled ‘Development cooperation’. 3 For ease of reading, in this chapter references are made to the numbering of the EC Treaty as it stood following the Amsterdam Treaty renumbering (which came into force in 1999). Moreover, the first time a reference is made, the post-Lisbon Treaty equivalent is provided in brackets.
360 Morten Broberg EC (equivalent to Article 207 TFEU) and 235 EC together for agreements with third states. Article 352 TFEU, also known as the ‘flexibility clause’,4 enables the adoption of measures in situations where action by the Union is ‘necessary, within the framework of the policies defined in the Treaties, to attain one of the objectives set out in the Treaties’, but where the EU Treaties do not provide the necessary powers to do so. By contrast, the title on development cooperation introduced by the Treaty of Maastricht provided a dedicated constitutional basis for the Union’s development cooperation policy which was expressly vested in the Union treatymaking competence in the field.5 Moreover, whereas the flexibility clause required unanimity amongst the members of the Council, adopting measures on the basis of the development cooperation title only required a qualified majority.6 During the period from the inception of the EU – not long after World War II had come to an end –until the entry into force of the Treaty of Maastricht in 1993, and the consequent introduction of a specific title on development cooperation, there were tensions between, on the one hand, the Union’s Common Commercial Policy (CCP) and, on the other hand, the Union’s development cooperation policy – with the former proving to be the stronger of the two.7 The Treaty of Maastricht’s introduction of a specific development cooperation title created a pressing need to clarify how the Court would interpret and delimit the new definition of EU development cooperation policy. The first clarification the Court gave was in the so-called India Cooperation Agreement case. II. FACTS
In 1994, the Council adopted Decision 94/578, approving on behalf of the European Union ‘the Cooperation Agreement between the European Community and the Republic of India on Partnership and Development’.8 This was the very first cooperation agreement on development to be adopted under the EC Treaty’s then new dedicated title on development cooperation. The Council’s Decision was jointly based on the Treaty provisions on the CCP (Article 113 EC; equivalent to Article 207 TFEU) and on development cooperation (Article 181 EC; equivalent to Article 211 TFEU), and was adopted by a qualified majority vote following consultation with the European Parliament.
4 See G Butler, ‘The EU Flexibility Clause is Dead, Long Live the EU Flexibility Clause’ in A Bakardjieva Engelbrekt and X Groussot (eds), The Future of Europe: Political and Legal Integration Beyond Brexit (Oxford, Hart Publishing, 2019) 63–95. 5 The provision giving the European Union treaty-making competence in the field of development cooperation was Art 181 EC (equivalent to Art 211 TFEU). The provision reads as follows: ‘Within their respective spheres of competence, the Community and the Member States shall cooperate with third countries and with the competent international organizations. The arrangements for Community cooperation may be the subject of agreements between the Community and the third parties concerned, which shall be negotiated and concluded in accordance with Article 300.’ The provision goes on to state: ‘The previous paragraph shall be without prejudice to Member States’ competence to negotiate in international bodies and to conclude international agreements.’ In a declaration to the Maastricht Treaty, the signatories observed: ‘The Conference considers that the provisions of … Article [181 EC] do not affect the principles resulting from the judgment handed down by the Court … in the [ERTA] case.’ 6 See Art 179 EC (equivalent to Art 209 TFEU), which in turn referred to Art 251 EC (equivalent to Art 294 TFEU). 7 M Broberg and R Holdgaard, ‘EU External Action in the Field of Development Cooperation Policy – The Impact of the Lisbon Treaty’ (Stockholm, Swedish Institute for European Policy Studies, 2014) SIEPS 2014:6, 10–20. 8 Council Decision 94/578/EC of 18 July 1994 concerning the conclusion of the Cooperation Agreement between the European Community and the Republic of India on Partnership and Development, [1994] OJ L223/23.
Scope of EU Development Policy 361 However, Portugal disagreed as to the legal basis for the Council Decision. The Portuguese government therefore instituted annulment proceedings before the Court. In its pleadings, Portugal argued that the Council Decision and Cooperation Agreement covered fields that went well beyond development cooperation, and that it should therefore also have been based on the flexibility clause in Article 235 EC. To support its views, Portugal pointed out that the Cooperation Agreement in Article 1(1) laid down that ‘Respect for human rights and democratic principles is the basis for the cooperation between the Contracting Parties and for the provisions of this Agreement, and it constitutes an essential element of the Agreement’. Portugal also pointed out that the Cooperation Agreement covered areas that went beyond development cooperation, namely energy, tourism and culture, drug abuse control and protection of intellectual property. As seen in section I above, if the Decision had included the flexibility clause as its legal basis – as Portugal asserted that it should have – the Council would only be able to adopt the Decision by unanimity. In other words, if Portugal had been successful in its legal challenge, all Member States – including Portugal – would have a right of veto in the Council against the adoption of decisions such as the one concerning the India Cooperation Agreement.9 III. THE COURT
The Court first considered the Portuguese argument that the inclusion of a clause requiring respect for human rights and democratic principles (the ‘human rights clause’) in the Agreement required recourse to the flexibility clause. In this regard, and as a preliminary point, the Court observed that it had consistently held that the use of the flexibility clause as the legal basis for a measure is justified only where no other provision of the EU Treaties gives the Union institutions the necessary power to adopt the measure in question.10 The Court also recalled that the choice of the legal basis for a measure must be based on objective factors which are amenable to judicial review; in particular, the aim and content of the measure.11 The Court went on to observe that Article 177 EC (equivalent to Article 208 TFEU), the first provision in the new title XX, explicitly required the Union ‘to take account of the objective of respect for human rights when it adopts measures in the field of development cooperation’.12 The Court ruled that the ‘mere fact’ that respect for human rights and democratic principles had been made ‘an essential element’ of the India Cooperation Agreement did not justify a finding that the human rights clause went beyond the objective stated in Article 177(2) EC.13 9 It is not fully clear why Portugal decided to challenge the decision. According to Steve Peers, Portugal ‘simply objected to the prospect of the Community agreeing a future treaty with ASEAN (the Association of South-East Asian Nations) by majority vote, given Portugal’s fierce criticism of Indonesian human rights abuses in East Timor, a former Portuguese colony’: S Peers, ‘Case C-268/94, Portugal v Council (development policy), [1996] ECR 1–6177 (Full Court)’ (1998) 35 CML Rev 539, 541. However, according to Noreen Burrows, ‘The subtext to [the] challenge was presumably the fear on the part of Portugal that development aid monies might be diverted from the cohesion funds to support third world development coupled with a fear of increased competition that such agreements might entail in trade in sensitive products’: N Burrows, ‘Development Cooperation Defined’ (1997) 22 EL Rev 594, 596. 10 Case C-268/94, Portuguese Republic v Council of the European Union, ECLI:EU:C:1996:461 (India Cooperation Agreement), para 21. 11 ibid para 22. 12 ibid para 23. 13 ibid para 24. The Advocate General observed at point 28 that the reference to ‘an essential element’ had been ‘designed to allow the Community to exercise the right to terminate the Agreement, in accordance with Article 60 of the Vienna Convention, where the non-member State has failed to respect human rights within its own legal system’.
362 Morten Broberg It also rejected the other Portuguese arguments that inclusion of the human rights clause in the Agreement required recourse to the flexibility clause. Consequently, the Court ruled that, so far as the human rights clause was concerned, the Council Decision could be validly based on Article 181 EC (equivalent to Article 211 TFEU). The Court thereupon turned to consider the Portuguese claims that the scope of some of the Agreement’s provisions concerning specific cooperation matters was such as to render the Council Decision’s legal basis inadequate. However, also in this respect, the Court did not rule in favour of Portugal. Rather, it found that, in order to qualify as a development cooperation agreement for the purpose of Article 181 EC, an agreement would have to pursue the objectives referred to in Article 177 EC, namely, ‘the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them, the smooth and gradual integration of the developing countries into the world economy, the campaign against poverty in the developing countries’, as well as ‘the general objective of developing and consolidating democracy and the rule of law, and to that of respecting human rights and fundamental freedoms’. These are broad objectives, the Court observed, in the sense that it must be possible for the measures required for their pursuit to concern a variety of specific matters – in particular, in the case of an agreement establishing the framework of such cooperation.14 That being so, the Court went on to observe that to require a development cooperation agreement concluded between the European Union and a third country to be based on another provision as well as on the development cooperation legal basis in the EU Treaties and, possibly, also to be concluded by the Member States whenever it touches on a specific matter would in practice amount to rendering devoid of substance the competence and procedure prescribed in Article 181 EC.15 Based on this finding, the Court ruled that the fact that a development cooperation agreement contains clauses concerning various specific matters cannot alter the characterization of the agreement, which must be determined having regard to its essential object and not in terms of individual clauses, provided that those clauses do not impose such extensive obligations concerning the specific matters referred to that those obligations in fact constitute objectives distinct from those of development cooperation.16
Following a careful examination of the objective and content of each of the provisions challenged by the Portuguese government, the Court concluded that the Agreement’s clauses on energy, tourism, culture, drug abuse and intellectual property could be upheld – and refused to annul the Council Decision. IV. THE IMPORTANCE OF THE CASE
The Court’s ruling in the India Cooperation Agreement case constitutes a cornerstone in the Union’s development cooperation policy. In what follows, it will first be seen how the ruling In other words, in the view of the Advocate General, the inclusion of the terms ‘essential element’ could not be construed to mean that the Agreement’s principal objective was to promote democracy and human rights, but merely had been included to allow the European Union to ‘sanction’ the other contracting party (in casu India) if this other party were to infringe human rights and democratic principles. 14 ibid para 37. 15 ibid para 38. 16 ibid para 39. J Kokott and F Hoffmeister, ‘Portuguese Republic v Council, Case C-268/94, 1996 ECR I-6177. Court of Justice of the European Communities, December 3, 1996 (1998) 92 American Journal of International Law 292, 294 found the Court’s interpretation of the then new title on development cooperation policy to be ‘liberal’.
Scope of EU Development Policy 363 meant that development cooperation was made a full-blown Union policy in its own right. Next, the ruling’s impact upon the division of competence between the European Union and its Member States in the field of development cooperation will be examined. Finally, the ruling’s impact upon the European Union’s use of human rights clauses in its international agreements is considered. A. Development Policy is Given its Own Raison d’être Prior to its India Cooperation Agreement ruling, in the cases of Opinion 1/78 (Natural Rubber)17 and First GSP, the Court had treated development cooperation policy as a component of, and thus subordinate to, the CCP.18 By contrast, in the India Cooperation Agreement case, development cooperation policy was treated as a multifaceted new policy encompassing a broad range of areas that would normally be considered to constitute separate policies.19 In this way, the ruling in the India Cooperation Agreement case arguably signalled that the Court had taken seriously that development cooperation policy had been given its own chapter and power-conferring provisions with the Treaty of Maastricht, and was therefore now entitled to its own ‘space’ and raison d’être. As explained in section II above, the contested Council Decision had been based on the provision on CCP, as well as on the provision on development cooperation. Nevertheless, the Court only made reference to the latter when finding the Decision to be lawful – thereby indicating that, possibly, the Decision could have been adopted solely on the basis of the Union’s competence in the field of development cooperation policy. Inevitably in light of the Treaty of Maastricht’s introduction of a new title on development cooperation, with the India Cooperation Agreement case, the classic dilemma in the Court’s case law on choice of legal basis was imported into the new and independent policy field of development cooperation. On the one hand, the Union legislator had to be careful not to stretch too far the requirement that a specific legal basis would have to be included, merely because a legal measure encompasses a field covered by that measure. This was particularly so in a situation where, as in the India Cooperation Agreement, this area was merely incidental to the overall objective of the measure (in this case, incidental to development cooperation). On the other hand, the Union legislator also had to respect the principle of conferral, and could not stretch a multifaceted competence provision (such as that on development cooperation) so far that it would twist specific decision-making procedures and would empty the EU Treaties’ specific power-conferring provisions of substance. Essentially, in the India Cooperation Agreement case, the Court confirmed that the Treaty of Maastricht entailed a methodological shift in the legal definition of the Union’s development cooperation policy. As has been explained above, a consequence of the Court’s broad interpretation of development cooperation policy with regard to competence in the India Cooperation Agreement
17 Opinion 1/78, Natural Rubber, ECLI:EU:C:1979:224. See this volume, ch 11. 18 Case 45/86, Commission v Council (First GSP), ECLI:EU:C:1987:163. 19 That development cooperation is difficult to demarcate vis-à-vis other policy areas has also been reflected in the Court of Justice’s rulings in the ECOWAS case (Case C-91/05, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2008:288; see this volume, ch 51) and in the Philippines PCA case (Case C-377/12, European Commission v Council of the European Union, ECLI:EU:C:2014:1903; see this volume, ch 67). In the latter case, the Court not only confirmed its finding in the India Cooperation Agreement ruling that the Union’s development cooperation competence is multifaceted, but went on to also accept that this competence can be used for relatively deep forms of cooperation in this broad range of policy areas.
364 Morten Broberg case was that Member States were deprived of the possibility of individually vetoing this kind of measure. This potentially boosted effectiveness of the European Union’s possibilities of legislating in the field of development cooperation. B. Concurrent Competences in the Field of Development Cooperation Prior to the entry into force of the Treaty of Maastricht, the Court, in the rulings of Bangladesh Aid20 and European Development Fund,21 had implicitly held that Member States and the European Union held concurrent competences. The Treaty of Maastricht’s new dedicated title on development cooperation codified this by laying down that the Union’s policy in the sphere of development cooperation ‘shall be complementary to the policies pursued by the Member States’.22 In the India Cooperation Agreement case, Portugal argued that this necessarily meant that the Union’s competence in the field of development cooperation was subordinate to that of the individual Member States. In his Opinion, Advocate General (AG) La Pergola explicitly disagreed with Portugal’s assertion. Rather, he found that the development cooperation policies of the Union and of the Member States were ‘independent of one another and [did] not permit any order of precedence, even in purely functional terms, to be established between them’.23 By contrast, the Court was much more cautious in its ruling. Essentially, it confined itself to observing that, within the field of development cooperation, the Union did not have exclusive competence – but without taking a stance on whether one was subordinate to the other. Nevertheless, with the India Cooperation Agreement ruling, the Court made it clear that the Treaty of Maastricht’s complementarity obligation established a type of shared competence, where the principle of pre-emption did not apply.24 C. Human Rights Clause With the end of the Cold War in 1990, the Union was allowed much more room to pursue a foreign policy of its own.25 The Union seized this opportunity to focus specifically on the promotion of what it termed ‘European values’, not least pursuing this objective as part of its
20 Joined Cases C-181/91 and C-248/91, European Parliament v Council of the European Communities and Commission of the European Communities, ECLI:EU:C:1993:271. See this volume, ch 23. 21 Case C-316/91, European Parliament v Council of the European Union, ECLI:EU:C:1994:76 (European Development Fund). See this volume, ch 24. 22 Art 177 EC. 23 Opinion of AG La Pergola, Case C-268/94, Portuguese Republic v Council of the European Union, ECLI:EU:C:1996:207 (India Cooperation Agreement), para 16. Perhaps the Advocate General’s viewpoint, indirectly, finds support in subsequent rulings such as PFOS (Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2010:203; see this volume, ch 58), where the Court made it clear that the Member States must duly observe the general principle of loyal cooperation in areas of shared competence. In the sphere of development cooperation, this might be thought to include an obligation to ensure external unity and effectiveness of Member State development policies vis-à-vis the Union’s development policy. 24 See Broberg and Holdgaard (n 7) 24. On the reasons behind this delimitation of competence, see M Cremona, ‘External Relations and External Competence of the European Union: The Emergence of an Integrated Policy’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 252–53. 25 G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 17–38.
Scope of EU Development Policy 365 development cooperation policy.26 This was, for example, reflected in a 1991 European Council Resolution on human rights, democracy and development, which provided as follows: The Community and its Member States will explicitly introduce the consideration of human rights as an element of their relations with developing countries; human rights clauses will be inserted in future cooperation agreements.27
The Union also decided to qualify the human rights clauses as ‘an essential element’ of the agreement which they formed part of, thereby drawing inspiration from Article 60(1) and (3) of the Vienna Convention on the Law of Treaties,28 which provides that ‘the violation of a provision essential to the accomplishment of the object or purpose’ of an international agreement or treaty constitutes a material breach of that agreement/treaty and that ‘A material breach of a bilateral treaty by one of the parties entitles the other to invoke the breach as a ground for terminating the treaty or suspending its operation in whole or in part’. In other words, the 1991 European Council Resolution obliged the Union to introduce human rights clauses in cooperation agreements with the developing countries. And in order to provide the Union with some efficient sanctioning powers vis-à-vis the other contracting party (ie vis-à-vis the developing country or countries) if the latter should breach the human rights clause, the Union would insist that such clauses were explicitly characterised as ‘essential elements’.29 As seen above in section II, in the India Cooperation Agreement case, one of Portugal’s key arguments was that making respect for human rights and democratic principles an essential element of the Agreement meant, firstly, that human rights compliance could not be considered to be merely an incidental aspect of the Agreement, and secondly, that the promotion of human rights and democratic principles could not be based on the Union’s development cooperation policy competence (Article 181 EC). In his Opinion, AG La Pergola had not merely proposed that the Court should rule against Portugal, but went as far as to (somewhat obiter) suggest that the inclusion of a human rights clause in the cooperation agreement with India constituted a condition of legality.30 Whilst also ruling against Portugal, the Court did not go quite as far as its Advocate General on this specific point. It nevertheless observed that the EC Treaty’s new title on development cooperation required the European Union ‘to take account of the objective of respect for human rights when it adopts measures in the field of development cooperation’,31 and that the Union’s ‘development cooperation policy must be adapted to the requirement of respect for [human rights and democratic principles]’ (emphasis added).32 The Court also observed that the use of 26 See M Broberg, ‘From Colonial Power to Human Rights Promotor: On the Legal Regulation of the European Union’s Relations with the Developing Countries’ (2013) 26 Cambridge Review of International Affairs 675. 27 European Council Resolution of 28 November 1991 on Human Rights, Democracy and Development (1991), para 10, http://archive.idea.int/lome/bgr_docs/resolution.html. 28 Vienna Convention on the Law of Treaties, 23 May 1969, 1155 UNTS 331. Entered into force on 27 January 1980. 29 The European Union today insists on the inclusion of human rights clauses in agreements with all third states – and thus not only in agreements with developing countries (see ‘Common Approach on the Use of Political Clauses’ 10491/1/09, REV 1 EXT 2, Brussels, 25 April 2013). Moreover, formally speaking, the human rights clause is reciprocal so that it binds all parties to the agreement. 30 AG La Pergola, in point 29 of his Opinion, found that it would be the absence rather than the inclusion of a human rights clause in the Agreement that would lead to the Agreement being illegal: ‘If that is properly taken into account, the democracy clause must indeed be deemed necessary if development cooperation policy is to be lawfully pursued. I might venture to add that it would be the failure to adopt a clause of that type that would compromise the legality of Community action, because compliance with the specific wording of Article [177 EC] would no longer be guaranteed.’ 31 See para 23 of the Court’s judgment. 32 ibid para 24. Peers (n 9) 550 observes that the Court’s finding that the Treaty requires the European Union, as part of its development policy, to ‘take account’ of the objective of furthering human rights when adopting measures in the field of development cooperation, that development policy ‘must be adapted’ to this request, and ‘that such adaptation
366 Morten Broberg the term ‘essential element’ merely demonstrated ‘the importance to be attached to respect for human rights and democratic principles, so that, amongst other things, development cooperation policy must be adapted to the requirement of respect for those rights and principles’.33 In other words, with its ruling in the India Cooperation Agreement case, the Court in practice offered the Union a free hand to include human rights clauses in international agreements with developing countries based on the then new Treaty title on development cooperation.34 Whereas the ruling in the India Cooperation Agreement case clearly signalled that the promotion of European values had come to play an important role in the Union’s development cooperation policy, there were still limits, as has been reflected in the Court’s subsequent ruling in the Philippines Border Management case.35 There, the Court ruled that it is not possible to render any development cooperation measure valid merely by claiming that an overall objective of the contested measure was to promote democracy and respect for human rights. V. ADDITIONAL READING Bartels, L, Human Rights Conditionality in the EU’s International Agreements (Oxford, Oxford University Press, 2005) 178–80. Broberg, M, ‘EU Development Policy’ in RA Wessel and J Larik (eds), EU External Relations Law: Text, Cases and Materials, 2nd edn (Oxford, Hart Publishing, 2020) 247–82, 264–65. Broberg, M, ‘From Colonial Power to Human Rights Promotor: On the Legal Regulation of the European Union’s Relations with the Developing Countries’ (2013) 26 Cambridge Review of International Affairs 675. Broberg, M and Holdgaard, R, ‘EU External Action in the Field of Development Cooperation Policy – The Impact of the Lisbon Treaty’ (Stockholm, Swedish Institute for European Policy Studies, 2014) SIEPS 2014:6. Burrows, N, ‘Development Cooperation Defined’ (1997) 22 EL Rev 594. Kokott, J and Hoffmeister, F, ‘Portuguese Republic v Council, Case C-268/94, 1996 ECR I-6177. Court of Justice of the European Communities, December 3, 1996’ (1998) 92 American Journal of International Law 292. Peers, S, ‘Case C-268/94, Portugal v Council (development policy), [1996] ECR 1–6177 (Full Court)’ (1998) 35 CML Rev 539. Peers, S, ‘Fragmentation or Evasion in the Community’s Development Policy?: The Impact of Portugal v Council’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000).
means that development policy is thus “necessarily … subordinate” to the human rights objective’ was little more than ‘legal alchemy’, where an objective to which EU policy was contributing was made a rule which that policy had to obey. 33 For criticism, see L Bartels, Human Rights Conditionality in the EU’s International Agreements (Oxford, Oxford University Press, 2005) 178–80; Peers (n 9) 550. 34 On 29 May 1995, ie prior to the ruling in the India Cooperation Agreement case, the Council had ‘approved a suspension mechanism to be included in Community agreements with non-member countries to enable the Community to react immediately in the event of violation of essential aspects of those agreements, particularly human rights’, see the Council Conclusions of 29 May 1995, EU Bulletin No 5/1995, point 1.2.3 (1995), http://bookshop. europa.eu/en/bulletin-of-the-european-union.-5-1995-pbCMAA95005/. See also Commission, ‘On the Inclusion of Respect for Democratic Principles and Human Rights in Agreements between the Community and Third Countries’ (Communication), COM (1995) 216 final. 35 Case C-403/05, European Parliament v Commission of the European Communities, ECLI:EU:C:2007:624. See this volume, ch 50.
35 Legal Certainty and Customary International Law: Opel Austria MARCUS KLAMERT Case T-115/94, Opel Austria GmbH v Council of the European Union, ECLI:EU:T:1997:3, delivered 22 January 1997. KEYWORDS Good faith – Customary international law – Legitimate expectations – Legal certainty – European Economic Area – Transformation – General principles – Pacta sunt servanda – Autonomy – Action for annulment – Interim obligation – Vienna Convention on the Law of Treaties.
I. INTRODUCTION
F
rom a national perspective, it might be tempting to find that the main reason for the fame of the Opel Austria case was that it was the first ‘Austrian’ case brought before the European Courts.1 At the time the application for annulment was lodged on 21 March 1994, Austria had not yet become a Member State of the Union. Decades later, this is of only historic interest. What is notable, however, is that Opel Austria is one of only seven cases in this book heard by what is now the General Court (then the Court of First Instance, CFI), and one of only two that have not been appealed to the Court.2 It counts among the most important stand-alone judgments ever handed down by the General Court in the whole of Union law, and is without doubt the most famous such case in EU external relations law. II. FACTS
Opel Austria GmbH, formerly General Motors Austria GmbH, was a limited liability company incorporated under the laws of Austria and a wholly owned subsidiary of General Motors 1 See P Fischer, Annotation to ‘Case T-115/94, Opel Austria GmbH v Council, Judgment of 22 January 1997, [1997] ECR II-39 P’ (1998) 35 CML Rev 765, 765. 2 The other case being Case T-228/02, Organisation des Modjahedines du peuple d’Iran v Council of the European Union, ECLI:EU:T:2006:384 (OMPI). See this volume, ch 48.
368 Marcus Klamert Corporation. In 1991, Austria intended granting it state aid for investment to expand the manufacture of gearboxes, camshafts and cylinder heads at the applicant’s facilities in Vienna. At that time, Austria only had a free trade agreement (FTA) with the Union.3 It briefly joined the European Economic Area (EEA) as an European Free Trade Association member in 1994, before acceding to the Union on 1 January 1995. In July 1993, after some toing and froing, the Commission adopted a proposal for a Regulation withdrawing tariff concessions in accordance with Article 23(2) and Article 27(3)(a) of the FTA between the Union and Austria, providing for a 4.9 per cent duty for F-15 car gearboxes produced by General Motors Austria and exported by them to the Union. The Commission argued that the aid contemplated by Austria was not justified under the FTA or under Union law. On 13 December 1993, the Union, as the last contracting party, approved the EEA Agreement and deposited the instruments of approval for establishing the EEA, which Austria was going to be a part of.4 The EEA Agreement entered into force on 1 January 1994. Article 10 of the EEA Agreement prohibited customs duties on imports and any charges having equivalent effect. Between 13 December 1993 and 1 January 1994, communications took place between Austria and the Commission on the compatibility of the pertinent aid with the Union’s internal rules regarding state aid on environment protection, research and development, and training. On 20 December 1993, however, the Council adopted Council Regulation (EC) No 3697/93.5 The issue of the Official Journal in which the Regulation was published was dated 31 December 1993. This Official Journal, however, was not made available to the public in all the official languages of the Community until 11 January 1994, making this date the actual date of entry into force of the Regulation. Moreover, the Council sent the Regulation to the Publications Office on 3 or 4 January 1994, but instructed it to publish it in the Official Journal for 1993.6 In its action for annulment, Opel Austria claimed, among others, that the EEA Agreement was part of the factual and legal situation existing at the time when the Regulation was adopted and that, by adopting that Regulation a few days before the EEA Agreement entered into force, the Council infringed the principle of public international law according to which, pending the entry into force of an international agreement, the signatories to an international agreement may not adopt measures which would defeat its object and purpose. III. THE COURT
Of the 10 pleas Opel Austria had raised in support of its claim for annulment, the CFI dealt firstly with the alleged infringement of Articles 10, 26, and 62 of the EEA Agreement and secondly with the alleged infringement of the obligation under public international law not to defeat the object and purpose of a treaty before its entry into force. The CFI started out by holding, first, that the principle of good faith is a rule of customary international law whose 3 Council Regulation (EEC) No 2836/72 of 19 December 1972 concluding an Agreement between the European Economic Community and the Republic of Austria and adopting provisions for [its] implementation, [1972] OJ 3. 4 [1994] OJ L1/606. 5 Council Regulation (EC) No 3697/93 of 20 December 1993 withdrawing tariff concessions in accordance with Arts 23(2) and 27(3)(a) of the Free Trade Agreement between the Community and Austria (General Motors Austria), [1993] OJ L343/1. 6 These facts were established by the Court of First Instance through some veritable detective work it appears. See Case T-115/94, Opel Austria GmbH v Council of the European Union, ECLI:EU:T:1997:3, paras 126–29.
Legal Certainty and Customary International Law 369 existence is recognised by the International Court of Justice (ICJ),7 codified by Article 18 of the first Vienna Convention on the Law of Treaties (VCLT) 1969, and is therefore binding on the Union.8 It continued: Secondly, the principle of good faith is the corollary in public international law of the principle of protection of legitimate expectations which, according to the case law, forms part of the Community legal order (see Case 112/77 Töpfer v Commission [1978] ECR 1019, paragraph 19). Any economic operator to whom an institution has given justified hopes may rely on the principle of protection of legitimate expectations (see, inter alia, Joined Cases T-466/93, T-469/93, T-473/93, T-474/93 and T-477/93 O’Dwyer and Others v Council [1995] ECR II-2071, paragraph 48).9
The case law quoted by the CFI concerned the ‘unpredictability’ of changes to secondary law, which did not qualify as creating legitimate expectations in these cases. By contrast, the CFI held in Opel Austria that: where the Communities have deposited their instruments of approval of an international agreement and the date of entry into force of that agreement is known, traders may rely on the principle of protection of legitimate expectations in order to challenge the adoption by the institutions, during the period preceding the entry into force of that agreement, of any measure contrary to the provisions of that agreement which will have direct effect on them after it has entered into force.10
That ‘twist’ was the basis for assessing the legality of the Regulation (EC) No 3697/93 in the light of the provisions of the EEA Agreement.11 This was despite the fact that it was not a violation of the EEA Agreement itself that was at issue, because that Agreement had not entered into force at the time when the Regulation was adopted. The CFI affirmed that the EEA Agreement was applicable to the pertinent products with effect from its entry into force.12 It found that Article 10 of the EEA Agreement was capable of having direct effect13 and that reintroducing a duty of 4.9 per cent infringed that Article when interpreted in conformity with the relevant rulings of the Court and the CFI under the principle of homogeneity.14 This led the CFI, under the test quoted above, to conclude that, ‘by adopting the contested regulation in the period preceding the entry into force of the EEA Agreement after the Communities had deposited their instruments of approval, the Council infringed the applicant’s legitimate expectations’.15 The Court did not stop there, however. It continued, recalling that the principle of legal certainty requires that every measure of the institutions having legal effects must be clear and precise and must be brought to the notice of the person concerned in such a way that he can ascertain exactly the time at which the measure comes into being and starts to have legal effects.16
7 The CFI referred to the judgment of 25 May 1926, German interests in Polish Upper Silesia, CPJI, Series A, No 7, 30 and 39. 8 Opel Austria (n 6) paras 90–91. 9 ibid para 93. 10 ibid para 94. 11 ibid para 95. 12 ibid paras 96–99. 13 ibid paras 100–02. This was the first time that provisions of the EEA Agreement were awarded direct effect. See Fischer (n 1) 781. 14 Opel Austria (n 6) paras 103–22. See Art 6 of the EEA Agreement. The fact, also recognised by the Court in Opinion 1/91, EEA I, ECLI:EU:C:1991:49, that there were major differences between the EC Treaty and the EEA Agreement could not detract from the finding in this specific case. See Opel Austria (n 6) paras 106–09. 15 Opel Austria (n 6) para 123. 16 ibid para 124.
370 Marcus Klamert That requirement would have to be observed ‘all the more strictly in the case of a measure liable to have financial consequences in order that those concerned may know precisely the extent of the obligations which it imposes on them’.17 This principle of legal certainty was held to be infringed by the Council by adopting the Regulation on 20 December 1993 when it knew with certainty that the EEA Agreement would enter into force on 1 January 1994, knowingly creating a situation in which from January 1994 ‘two contradictory rules of law would co-exist, namely the contested regulation, which is directly applicable in the national legal systems and re-establishes a 4.9% import duty on F-15 gearboxes produced by the applicant’.18 Finally, the CFI charged the Council with another count of infringement of the principle of legal certainty for deliberately backdating the issue of the Official Journal in which the Regulation was published.19 Therefore, on these grounds, Council Regulation (EC) No 3697/93 was annulled in its entirety. IV. THE IMPORTANCE OF THE CASE
Opel Austria has had a fairly uneven reception considering both case law and doctrine. While it has been cited in a number of opinions by Advocates General, the Court itself has not once invoked it in its judgments. By contrast, the CFI has referred to elements of Opel Austria in more than 30 cases.20 One of the longest-lasting impressions Opel Austria seems to have had on the case law of the CFI is as authority that, in the context of an application for annulment, the legality of the contested measure must be assessed on the basis of the elements of fact and of law existing at the time when the measure was adopted.21 This, however, is not the reason why Opel Austria is included in this book, or why countless publications refer to it next to the Racke judgment of 1998 by the Court, also discussed in this book.22 Opel Austria is, for the purposes of EU external relations law, one of three early cases that touched on the relationship between customary international law and what is now European Union law.23 Below are discussed the two different emanations of the principle of legal certainty contained in the judgment, before some remarks are made on the integration of principles of public international law in EU law. A. The General Principle of Legal Certainty In Opel Austria, the CFI held that the deliberate backdating of the issue of the Official Journal in which the Regulation had been published, with the effect that the Regulation entered into force before its publication, had infringed the principle of legal certainty. This was one of the 17 ibid para 124. 18 ibid para 125. 19 ibid paras 126–32. 20 Joined Cases T-186/97 et al, Kaufring et al, ECLI:EU:T:2001:133, para 237 invoked Opel Austria in ruling that Art 7 of the Turkey Association Agreement expresses the pacta sunt servanda principle and the principle of good faith. On the need for homogeneity between EU law and the EEA Agreement, see also Case T-527/14, Rosenich, ECLI:EU:T:2017:487, paras 56–58. 21 See Opel Austria (n 6) para 87; Case T-437/05, Brink’s Security Luxembourg, ECLI:EU:T:2009:318, para 42; Case T-290/94, Kaysersberg, ECLI:EU:T:1997:186, para 140. 22 Case C-162/96, Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293. See this volume, ch 36. 23 The third case beside Opel Austria and Racke was Case C-286/90, Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp, ECLI:EU:C:1992:453. See this volume, ch 21.
Legal Certainty and Customary International Law 371 two grounds on which the Regulation was annulled, beside the infringement of the principle of protection of legitimate expectations discussed below. Opel Austria did not introduce this variant of the principle of legal certainty to Union law. The Court has held on numerous occasions that the principle of legal certainty precludes, in general, a Union measure from taking effect from a point in time before its publication, adding that it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.24 In the older Racke judgment of 1979, the Court had already held that a measure adopted by the public authorities cannot be enforced against individuals before they have the opportunity to make themselves acquainted with it through its proper publication in the Official Journal.25 What was remarkable about Opel Austria, factually, was showing the lengths to which the Council went to make sure that the Regulation entered into force before the EEA Agreement. B. The Protection of Legitimate Expectations What is thus more noteworthy in Opel Austria when it comes to the principle of legal certainty is the tenet that the approval of an international agreement, and the knowledge that it would enter into force at a certain time in the future, would impose obligations of abstention on the party concerned. It does not appear to be a standard application of the principles of legal certainty or legitimate expectations in EU law and has, as far as can be seen, only been repeated twice by the CFI, and it has not been picked up by the Court at all.26 This duty of abstention has been discussed as a rare application of the so-called interim obligation under Article 18 VCLT.27 This is the reason why Opel Austria became a standard reference in public international law textbooks.28 It has, however, remained disputed whether what the CFI did could really be squared with the common understanding of the interim obligation under international law.29 It has also been questioned whether pacta sunt servanda30 or the estoppel principle,31 being other emanations of the principle of good faith, or good faith more generally32 would not have been a more fitting argument here. In any case, the principle
24 Opinion of AG Sharpston in Case C-345/06, Heinrich, ECLI:EU:C:2008:212, para 81, with further references in fn 55. 25 Case C-98/78, A Racke v Hauptzollamt Mainz, ECLI:EU:C:1979:14, para 15. 26 Case T-231/04, Greece v Commission, ECLI:EU:T:2007:9 (Project Abuja), paras 85–87; Case T-468/08, Tisza Erőmű, ECLI:EU:T:2014:235, para 321. Case T-231/04 was appealed to the Court (Case C-203/07 P, ECLI:EU:C:2008:606), which only referred to good faith in passing at para 64 as ‘an additional basis’. 27 In Opel Austria (n 6) para 92 and in Project Abuja (n 26), the CFI called Art 18 a codification of the principle of good faith. Incredulous, O Dörr, ‘Article 18’ in O Dörr and K Schmalenbach (eds), Vienna Convention on the Law of Treaties (Berlin, Springer, 2012) para 4. See also Fischer (n 1) 779. 28 See J Klabbers, International Law, 2nd edn (Cambridge, Cambridge University Press, 2013) 47–48. 29 On the question of its direct effect, see PJ Kuijper, ‘Customary International Law, Decisions of International Organisations and Other Techniques for Ensuring Respect for International Legal Rules in European Community Law’ in J Wouters, PA Nollkaemper and E de Wet (eds), The Europeanisation of International Law: The Status of International Law in the EU and its Member States (The Hague, TMC Asser Press, 2008) 87, 94. On the beginning of the obligation, see J Klabbers, ‘Restraints on the Treaty-Making Powers of Member States deriving from EU Law: Towards a Framework for Analysis’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (The Hague, Kluwer Law, 2002) 151, 171. 30 See Fischer (n 1) 780. 31 Opinion by AG Mazák in Case C-203/07 P, Greece v Commission, ECLI:EU:C:2008:270 (Project Abuja), para 81. 32 See J Odermatt, ‘The International Court of Justice and the Court of Justice of the European Union: Between Fragmentation and Universality of International Law’ in A Skordas (ed), Research Handbook on the International Court of Justice (Cheltenham, Edward Elgar, forthcoming), 24–26.
372 Marcus Klamert of legitimate expectations is not the ‘corollary’ of the principle of good faith under customary international law.33 Yet, since the CFI purported to invalidate the Regulation based not on a principle of public international law, but on Union law, it is apposite to ponder whether there is anything analogous to this ‘second limb’ of legal certainty within EU law whereby measures by one Union actor would create duties of abstention for the same actor. There is case law according to which the rights of Union institutions to withdraw measures they have just adopted, but that are tainted by illegality, are restricted by the need to fulfil the legitimate expectations of a beneficiary of such measure, ‘who has been led to rely on the lawfulness thereof’.34 This, however, clearly is not fully comparable to the situation in Opel Austria. The finding in Opel Austria has been compared to the abstention duties imposed on Member States resulting from Union Directives after their entry into force and before the end of the transposition period.35 This, however, disregards that with Directives there is a clear and specific obligation provided in Article 288 TFEU (in conjunction with Article 4(3) TEU) on fulfilling their aims which exists from their entry into force, with the time for transposition only being a sort of ‘grace period’.36 Rather, what we see in EU law are various duties of abstention as a result of certain preparatory, ‘pre-legislative’ actions by Union organs based on Article 4(3) TEU.37 These, however, are imposed on the Member States, as is the general thrust of loyalty in EU law, and not on the Union organ that set them. One constellation that comes to mind is with mixed agreements, when the Union has concluded an agreement under Article 218 TFEU but the agreement has not yet entered into force because one or more Member States have not finalised their process of ratification.38 But even in this situation, it would be decisive that the agreement had been approved by the Union, making any action of the Union to undermine it afterwards seem rather far-fetched. C. (Customary) International Law and EU Law As mentioned, Opel Austria was among three cases that set the stage for understanding the relationship between customary international law, an important part of public international law, on the one hand and what is now European Union law on the other hand. According to the CFI in Opel Austria, ‘the principle of good faith is a rule of customary international
33 See the comment by AG Mazák in his Opinion in Project Abuja (n 31) fn 25: ‘I believe the use of the word “counterpart” is more appropriate in this connection because it is more neutral than the word “corollary” … Indeed, to my mind, the term “corollary” necessarily implies that the Community law principle of protection of legitimate expectations precedes, in time and importance, the international law principle of good faith.’ See also Fischer (n 1) 778–79. 34 Case C-90/95 P, Henri de Compte v European Parliament, ECLI:EU:C:1997:198, para 35. See also Case 120/86, Mulder, ECLI:EU:C:1988:213, para 24. 35 Case C-129/96, Inter-Environnement Wallonie, EU:C:1997:628. See Opinion of AG Maduro, Case C-422/05, Commission v Belgium, ECLI:EU:C:2007:62, para 39: ‘That approach, which is based on ‘good faith’ is not so very different from the relevant provision of international law.’ See also Klabbers (n 29) 151, 171. 36 See A Aust, ‘Pacta Sunt Servanda’ in Max Planck Encyclopedia of Public International Law (Oxford, Oxford University Press, 2013) paras 5 and 8. 37 M Klamert, ‘Article 4 TEU’ in M Kellerbauer, M Klamert and J Tomkin (eds), The EU Treaties and the Charter of Fundamental Rights – A Commentary (Oxford, Oxford University Press, 2019) paras 68–69. 38 For a constellation where a Member State would ‘change its mind’ between signature and ratification, see M Klamert, The Principle of Loyalty in EU Law (Oxford, Oxford University Press, 2014) 202–03. See also M Klamert and J Öberg, ‘Foreseeability and Anticipation as Constraints on Member State Action under Mixed Agreements’ in N Levrat et al (eds), The EU and Its Member States’ Joint Participation in International Agreements (Oxford, Hart Publishing, 2022).
Legal Certainty and Customary International Law 373 law whose existence is recognized by the International Court of Justice and is therefore binding on the Community’.39 It has been argued that it would be ‘self-evident’ that a rule of customary international law were binding on a subject of international law, like the Union.40 However, the lex posterior principle was given up with Costa v ENEL, and the principle of retaliation/reciprocity, the ‘self-help’ mechanism, was deemed to be excluded by the existence of the infringement proceeding.41 It is thus not entirely self-evident that a certain principle of international law would apply tel quel within EU law. What is more, at stake in Opel Austria was not any form of application, such as interpreting EU law in light of customary international law, such as in Poulsen42 or Intertanko,43 but allowing the latter as a standard of legality for secondary law.44 Racke, also analysed in this book, also concerned the suspension of trade concessions granted by an international agreement through an act of secondary law. The Court held that the validity of such regulation could be challenged based on rules of customary international law, albeit subject to several qualifications.45 AG Jacobs had opined in the Racke case that the case law of the Court and the CFI has not given rise to any clear criteria for the determination of whether and to what extent a principle of customary international law can serve as a benchmark against which the validity of EU legislation can be reviewed.46 This was still found valid long after Racke by AG Kokott in her Opinion in Air Transport Association of American (ATAA).47 In Western Sahara, the Court made principled statements on the relevance of international law, but again did not invalidate secondary law on grounds of customary international law.48 It is submitted that the approach to integrating customary internal law into the EU legal order corresponds with the claims of autonomy of the EU and EU law made by the Court since the beginning of its case law.49 EU law is different from public international law in many ways, and this difference is also reflected in the way customary international law is applied within the EU.50 The sibling international law principles of direct effect and primacy were transformed by the Court into a quintessentially ‘European’ permutation.51 Functions that are fulfilled by good faith and pacta sunt servanda in international law were adopted by and at the same time
39 Opel Austria (n 6) para 90; Case C-366/10, Air Transport Association of America and Others, ECLI:EU:C:2011:864, para 101. 40 J Wouters and D Van Eeckhoutte, ‘Giving Effect to Customary International Law through European Community Law’ in JM Prinssen and A Schrauwen (eds), Direct Effect: Rethinking a Classic of EC Law Doctrine (Groningen, Europa Law, 2002) 183, 210. 41 Case 6/64, Costa v ENEL, ECLI:EU:C:1964:66; Joined Cases 90–91/63, Commission v Belgium and Luxemburg (Dairy Products), ECLI:EU:C:1964:80. 42 Poulsen (n 23). See this volume, ch 21. 43 See Case C-308/06, The Queen, on the application of International Association of Independent Tanker Owners (Intertanko) and Others v Secretary of State for Transport, ECLI:EU:C:2008:312, para 52. See this volume, ch 52. 44 This is stressed in the Opinion of AG Jacobs in Case C-162/96, Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1997:582, para 76. 45 Racke (n 22). See this volume, ch 36. 46 Opinion of AG Jacobs in Racke (n 44) para 76. 47 Opinion of AG Kokott in Case C-366/10, Air Transport Association of America and Other, ECLI:EU:C:2011:637, para 109. 48 Case C-266/16, Western Sahara, ECLI:EU:C:2018:118, para 47. See this volume, ch 75. 49 See M Klamert, ‘The Autonomy of the EU (and of EU Law): Through the Kaleidoscope’ [2017] EL Rev 815. 50 Critical, J Odermatt, ‘The Use of International Treaty Law by the Court of Justice of the European Union’ (2015) 17 Cambridge Yearbook of European Legal Studies 121. For a slightly different perspective, see Wouters and Van Eeckhoutte (n 40) 183, who compare the method in Opel Austria with the case law of the Court on fundamental rights, arguing that the fundamental rights enshrined in the European Convention on Human Rights can also be qualified as rules of regional, ie European, customary international law. 51 See B de Witte, ‘Direct Effect, Supremacy, and the Nature of the Legal Order’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 323.
374 Marcus Klamert transformed into the more forceful EU law principle of loyalty.52 Thus, in cases without any connection to public international law, the Court has occasionally referred to good faith as the expression of a duty of cooperation, especially involving the implementation of Union secondary law.53 Whereas it is good faith that in international law prohibits an interpretation that would make a provision ineffective,54 this role is filled by the effet utile principle in Union law. However, effet utile in EU law often rather specifically seeks to realise not just any effect, but the maximum effect of a certain provision.55 With this variant of effet utile, the Court has shown a willingness ‘to sidestep the presumptive rule of interpretation typical in international law, that treaties must be interpreted in a manner that minimizes encroachment on state sovereignty’.56 Thus, it arguably makes some sense to ‘channel’57 a principle of customary international law of such a broad application and meaning as is the case with good faith through ‘autonomous’ principles of EU law fine-tuned to the distinct purposes they should fulfil in the EU legal order. However, it is doubtful whether Opel Austria is a good example for such a ‘transformation approach’.58 It is proposed that the reason why the CFI argued the way it did in Opel Austria was that, as has been shown above, there was no EU law principle or rule at hand that could have rationalised finding an infringement in that specific constellation. Had the CFI claimed that its novel understanding of the principle of legitimate expectations would derive from customary international law, this would at least have provided a ‘transformation’ rationale, as ill-fitting as it would have been in view of the common view on the interim obligation as mentioned above. The CFI instead falsely claimed to rely on case law by the Court and the CFI, invoking international law as no more than a prop for its EU law argument for invalidating the pertinent Regulation. The fact that a (at that time) non-Member State was concerned is likely to have played a role as well. It is thus no big surprise that this aspect of Opel Austria has not lived on in subsequent case law and why also in the literature it has merely served to underpin rather general claims of the relevance of customary international law within EU law. V. ADDITIONAL READING Fischer, P. ‘Annotation to “Case T-115/94, Opel Austria GmbH v Council, Judgment of 22 January 1997, [1997] ECR II-39 P”’ (1998) 35 CML Rev 765. 52 Opinion by AG Mazák in Project Abuja (n 31) fn 33. See also V Constantinesco, ‘L’article CEE de la bonne foi à la loyauté communautaire’ in F Capotorti et al (eds), Du Droit International au droit de l’intégration: Liber Amicorum Pierre Pescatore (Baden-Baden, Nomos, 1987) 97. 53 See, eg Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574, paras 59–68. See this volume, ch 37. See also C Eckes, EU Powers under External Pressure (Oxford, Oxford University Press, 2018) 45; G de Baere and T Roes, ‘EU Loyalty As Good Faith’ (2015) 64 International & Comparative Law Quarterly 829. 54 M Fitzmaurice, ‘The Practical Working of the Law of Treaties’ in M Evans (ed), International Law, 3rd edn (Oxford, Oxford University Press, 2010) 181, 188. On good faith and treaty interpretation, see further K Schmalenbach, ‘Capacity of States to Conclude Treaties’ in Dörr and Schmalenbach (n 27) 108–09. 55 M Klamert, ‘Loyalty and Solidarity as General Principles’ in K Ziegler, P Neuvonen and V Moreno-Lax (eds), Research Handbook on General Principles of EU Law (Cheltenham, Edward Elgar, 2022). See also M Potacs and C Mayer, ‘Effet utile as a Method of Interpretation’ in L Tichý, M Potacs and T Dumbrovský (eds), Effet utile (Prague, Charles University, 2014) 17. 56 JHH Weiler, ‘The Transformation of Europe’ (1991) 100 Yale Law Journal 2403, 2416. 57 See P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 387. 58 See J Wouters, D Coppens and D Geraets, ‘The Influence of General Principles of Law’ in SE Gaines, B Egelund Olsen and K Engsig Sørensen (eds), Liberalising Trade in the EU and the WTO: A Legal Comparison (Cambridge, Cambridge University Press, 2012) 43, 60.
Legal Certainty and Customary International Law 375 Klabbers, J, ‘Restraints on the Treaty-Making Powers of Member States Deriving from EU Law: Towards a Framework for Analysis’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (The Hague, Kluwer Law, 2002) 151. Klabbers, J ‘The Reception of International Law in the EU Legal Order’ in R Schütze and T Tridimas (eds), Oxford Principles of the European Union. Volume I: The European Union Legal Order (Oxford, Oxford University Press, 2018) 1208. Kuijper, PJ, ‘Customary International Law, Decisions of International Organisations and Other Techniques for Ensuring Respect for International Legal Rules in European Community Law’ in J Wouters, PA Nollkaemper and E de Wet (eds), The Europeanisation of International Law: The Status of International Law in the EU and Its Member States (The Hague, TMC Asser Press, 2008) 87. Wouters, J and Van Eeckhoutte, D, ‘Giving Effect to Customary International Law through European Community Law’ in JM Prinssen and A Schrauwen (eds), Direct Effect: Rethinking a Classic of EC Law Doctrine (Groningen, Europa Law, 2002) 183.
376
36 Invoking Customary International Law before the Court: Racke JED ODERMATT Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293, delivered 16 June 1998. KEYWORDS Clausula rebus sic stantibus – Socialist Federal Republic of Yugoslavia – Cooperation Agreement – Customary international law – Manifest error of assessment – Direct effect – Good faith – 1969 Vienna Convention on the Law of Treaties – Suspension of international agreements.
I. INTRODUCTION
S
ince Racke was decided in 1998, it has had an impact in two main ways. First, Racke sets out the conditions in EU law for when an individual can challenge the validity of an EU act in the light of customary international law. Second, Racke has contributed to the development of international law, in particular on the application of the clausa rebus sic stantibus – the conditions under which a party may invoke a ‘fundamental change of circumstances’ to withdraw from or terminate a treaty. Given the facts of the case, and the particular context of the hostilities in the former Yugoslavia, one might have expected Racke to have an influence in cases related to EU foreign policy or EU sanctions. Yet the lasting impact of Racke has been in cases where individuals seek to invoke public international law to challenge the validity of EU acts, and in developing the approach of the Court to customary international law. II. FACTS
In the 1960s, the predecessor to the European Union and the Socialist Federal Republic of Yugoslavia (SFR Yugoslavia) began to place their relations on a more institutionalised footing. In 1967, the parties signed a ‘Declaration on the relations between SFR Yugoslavia and the [EU]’, and in 1968, SFR Yugoslavia established a permanent mission to the EEC in Brussels. In 1978, they began negotiations on a Cooperation Agreement (the Agreement), which was
378 Jed Odermatt signed on 2 April 1980 in Belgrade and entered into force in 1983. The Agreement sought to go further than governing trade and economic relations.1 Article 1 set out the objective: ‘to promote overall cooperation between the Contracting Parties with a view to contributing to the economic and social development of the Socialist Federal Republic of Yugoslavia and helping to strengthen relations between the Parties’.2 The outbreak of hostilities in SFR Yugoslavia presented a serious foreign policy challenge for the Union. Some Member States supported the principle of self-determination, and recognised the new republics of Slovenia and Croatia in 1991, whereas others supported the territorial integrity of SFR Yugoslavia. In November 1991, the Council and the Member States adopted a Decision suspending the Agreement.3 The preamble of that Decision referred to UN Security Council Resolution 713 (1991), which imposed an arms embargo on SFR Yugoslavia. On 11 November 1991, the Council adopted a Regulation suspending the trade concessions under the Cooperation Agreement.4 The preamble of the Regulation explains that the hostilities in SFR Yugoslavia, and the subsequent impact on economic and trade relations, ‘constitute a radical change in the conditions’ under which the Agreement and its Protocols were concluded. Article 60 of the Agreement set out that either party could denounce the Agreement by notifying the other party, and the Agreement would then cease to apply after six months.5 The Agreement did not include provisions for the suspension of the agreement. The Agreement granted tariff concessions for certain agricultural products, including tobacco, wine and cherries. Racke, a German company, had imported wine into Germany from the Kosovo region. The Hauptzollamt Mainz (Principal Customs Office, Mainz) requested that Racke pay customs duty on the wine at the third country rate, since it did not enjoy preferential treatment under the Cooperation Agreement. A dispute arose between Racke and Hauptzollamt Mainz regarding the payment of the customs debt, and Racke challenged the decision before the Finanzgericht (Finance Court) Rheinland-Pfalz. It overturned the decision of the Hauptzollamt Mainz regarding wines imported before 15 November 1991, but not with respect to imports after that date, since the concessions granted under the Agreement had been suspended. Racke appealed the decision to the Bundesfinanzhof (Federal Finance Court), arguing that the unilateral suspension of trade concessions did not fulfil the conditions set out in Article 62(1) of the 1969 Vienna Convention on the Law of Treaties (VCLT), which sets out the
1 According to the European Commission, ‘The Cooperation Agreement, which is in a class of its own, was concluded for an indeterminate period and contains provisions concerning trade, financial aid and cooperation in the areas of industry, science and technology, energy, agriculture, transport, the environment and tourism’: Commission, EEC-Yugoslavia Cooperation Council, MEMO/90/64, 17 December 1990, https://ec.europa.eu/commission/ presscorner/detail/en/MEMO_90_64. 2 Art 1 of the Cooperation agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia, Agreement between the Member States of the European Coal and Steel Community and the European Coal and Steel Community, of the one part, and the Socialist Federal Republic of Yugoslavia, of the other part. Approved by Council Regulation (EEC) No 314/83 of 24 January 1983 on the conclusion of the Cooperation Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia [1983] OJ L41/1. 3 Decision 91/586/ECSC (EEC) of the Council and the Representatives of the Governments of the Member States, meeting within the Council of 11 November 1991 suspending the application of the Agreements between the European Community, its Member States and the Socialist Federal Republic of Yugoslavia, Official Journal of the European Communities [1991] OJ L315/47. 4 Regulation (EEC) No 3300/91 suspending the trade concessions provided for by the Cooperation Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia [1991] OJ L315/1. 5 Art 60 Cooperation Agreement (n 2): ‘Either Contracting Party may denounce this Agreement by notifying the other Contracting Party. This Agreement shall cease to apply six months after the date of such notification.’ See Council Decision 91/602/EEC denouncing the Cooperation Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia [1991] OJ L325/23.
Invoking Customary International Law before the Court 379 conditions under which a party to a treaty may invoke ‘fundamental change of circumstances’ to terminate or withdraw from a treaty. According to the Union, the dissolution of Yugoslavia and the outbreak of hostilities amounted to a ‘fundamental change of circumstances’ regarding the consent of the parties to the Agreement. Racke argued that the outbreak of hostilities did not amount to such a radical change, as it did not alter the extent of the parties’ obligations under the Agreement. The Bundesfinanzhof referred two questions to the Court under Article 267 TFEU. The first related to the validity of the EC Regulation suspending the Cooperation Agreement. The second related to the consequences that would flow from a finding that the Regulation was invalid. III. THE COURT
The European Commission argued that the preliminary reference procedure in Article 267 TFEU could not be used to develop an argument based solely on international law. The Court found that its jurisdiction extends to all grounds capable of invalidating EU acts, and thus includes challenges by way of the preliminary reference procedure with respect to international law. The Council argued that the Court should distinguish between the Council Decision deciding to suspend the agreement and the Regulation that suspended the trade concessions. The Council argued that even if the Council Decision did not comply with customary international law, this would not necessarily have an effect on the internal validity of the Regulation. The Court examined whether an individual could challenge the validity of the Regulation. It recalled that an agreement between the Union and a third country is an act of the institutions, and thus part of Union law. The Court examined whether Article 22(4) of the Agreement was capable of conferring rights to preferential customs treatment directly upon individuals. It recalled its case law on the direct applicability of international agreements, including Demirel.6 An agreement may be directly applicable when ‘the provision contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’.7 The Court examined Article 22(4) of the Agreement and found that it included clear and precise wording, and did not leave the Union any discretion in implementing those obligations. This was also supported by the overall purpose and nature of the Agreement. The Agreement was thus capable of being relied upon by individuals. The Court was also faced with a question as to whether an individual could invoke rules of customary international law. The Commission argued that the relevant rules of international law did not constitute part of the EU legal order, and thus could not be relied upon to contest the Regulation. Referring to Poulsen,8 the Court found that the Union ‘must respect international law in the exercise of its powers’, including customary international law binding on the Union. Rules of customary international law concerning the termination and the suspension of treaty relations constituted rules binding on the Union institutions, and were thus part of the EU legal order. The Court then turned to the question whether an individual can challenge the validity of the contested regulation, based on rules of customary international law. The Court analysed
6 Case C-162/96, Racke v Hauptzollamt Mainz, ECLI:EU:C:1998:293, para 31, citing Case 12/86, Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400. See this volume, ch 16. 7 Racke (n 6) para 31. 8 Case C-286/90, Anklagemindigheden v Poulsen and Diva Navigation, ECLI:EU:C:1992:453, cited in Racke (n 6) para 45. See this volume, ch 21.
380 Jed Odermatt whether the contested regulation could be justified, based on the fundamental change of circumstances principle. It was the Union that was initially relying on this principle in support of the Regulation. The Court considered whether Article 62 VCLT represented a rule of customary international law. The Union was not a party to the 1969 VCLT, and therefore the rules in the VCLT would only apply to the extent that they represent customary international law. The Court found that this was the case, citing the International Court of Justice (ICJ) in support.9 Rules concerning the termination of treaty relations due to a fundamental change of circumstances formed part of customary international law, and were thus binding upon the Union institutions.10 When an individual seeks to rely on customary international law, the Court will focus on whether the Union institutions made a ‘manifest errors of assessment concerning the conditions applying those rules’.11 The Court justifies this approach by referring to the imprecision and complexity of the rules of customary international law being invoked. According to Article 62(1) VCLT, a fundamental change of circumstances may not be invoked unless two conditions are satisfied: (i) the existence of those circumstances must have constituted an essential basis of the consent of the parties to be bound by the treaty; and (ii) that change must have had the effect of radically transforming the extent of the obligations still to be performed under the treaty. The Court cites the Gabčíkovo-Nagymaros Project case of the ICJ in support of the idea that ‘the stability of treaty relations requires that the plea of fundamental change of circumstances be applied only in exceptional cases’.12 The rule is an exception to the principle of pacta sunt servanda (agreements must be kept). The Agreement, in particular its preamble and Article 1, showed that the overall objective of the Agreement was to promote economic, financial and trade cooperation between the parties. It was an ‘essential condition’ for realising the object that there would be institutions capable of implementing the Agreement. This satisfied the first condition. Regarding the second condition, the Court focused on whether the Council made a ‘manifest error of assessment’ in applying those rules. The preamble of the contested regulation gives reasons for suspending the Agreement, including ‘hostilities and their consequences on economic and trade relations’. The Court found that the Council had made no manifest error when coming to its decision. The Court also briefly discussed the rules relating to the procedures for notification when suspending a treaty, which are set out in Article 65 VCLT. The Court noted that the Union and the Member States made joint statements that they would adopt restrictive measures against parties that did not observe the 4 October 1991 ceasefire. Yet the Court found that Article 65 VCLT did not form part of customary international law in any event. Even if the Union had not satisfied the formal notification requirements, this would not have affected the validity of the Regulation. The Court found that there was no factor that would affect the validity of the EC Regulation suspending the Agreement. IV. THE IMPORTANCE OF THE CASE
The lasting impact of Racke has been in developing the relationship between Union law and customary international law. 9 International Court of Justice, Fisheries Jurisdiction Case (United Kingdom of Great Britain and Northern Ireland v Iceland) (Jurisdiction of the Court) [1973] ICJ Rep 3, cited in Racke (n 6) para 24. 10 Racke (n 6) para 46. 11 ibid para 52. 12 International Court of Justice, Case concerning the Gabčíkovo-Nagymaros Project (Hungary/Slovakia) (Judgment) [1997] ICJ Rep 7, cited in Racke (n 6) para 50.
Invoking Customary International Law before the Court 381 A. Identification of Customary International Law First, Racke demonstrates how the Court identifies the existence of customary international law. The Court relied on Gabčíkovo-Nagymaros13 to support its conclusion that the principle enshrined in Article 62 VCLT is an important customary law principle.14 While the Court focuses on the text of VCLT, the Court only applies those rules insofar as they represent customary international law. As for Articles 65–67 VCLT, the ICJ held that ‘if not codifying customary law, [Articles 65–67] at least generally reflect customary international law and contain certain procedural principles which are based on an obligation to act in good faith’.15 The Court’s finding that the procedural obligations did not reflect customary international law was important, since it meant that the EU could suspend the Agreement without the prior notification required from the VCLT. The Court could have looked at the practice of EU Member States that suggests these obligations do have customary law status.16 However, when determining whether a certain principle has the status of customary international law, the Court usually relies on the ICJ rather than conducting its own assessment.17 B. Conditions under Which Individuals Can Invoke Customary International Law Racke is influential in determining the conditions under which an individual can invoke customary international law when challenging a Union act. When litigants seek to rely on international law, the Court distinguishes between obligations in an international agreement and obligations arising from customary international law. The Court bases its different approach to customary international law on its lack of ‘precision’: [B]ecause of the complexity of the rules [of customary international law] in question and the imprecision of some of the concepts to which they refer, judicial review must necessarily, and in particular in the context of a preliminary reference for an assessment of validity, be limited to the question whether, by adopting the suspending regulation, the Council made manifest errors of assessment concerning the conditions for applying those rules.18
This assumption has been challenged both in academic commentary and in some Opinions of Advocates General.19 It is true that the principles invoked in this case are far from precise, yet this does not mean that all rules of customary international law are necessarily complex. Some rules are found in treaties or codification instruments, such as the International Law Commission (ILC) Draft Articles of Responsibility for Internationally Wrongful Acts.20 Whether a particular rule is ‘imprecise’ depends on the content of that 13 ibid. 14 Racke (n 6) para 50. 15 Gabčíkovo-Nagymaros Project (n 12) para 109. 16 See the discussion in H Krieger, ‘Article 65’ in O Dörr and K Schmalenbach (eds), Vienna Convention on the Law of Treaties: A Commentary, 2nd edn (Berlin, Springer, 2018), 1214. 17 See J Odermatt, ‘The International Court of Justice and the Court of Justice of the European Union: Between Fragmentation and Universality of International Law’ in A Skordas (ed), Research Handbook on the International Court of Justice (Cheltenham, Edward Elgar, forthcoming). 18 Racke (n 6) para 52. 19 See J Wouters and D van Eeckhoutte, ‘Enforcement of Customary International Law through European Community Law’ in JM Prinssen and A Schrauwen (eds), Direct Effect: Rethinking a Classic of EC Legal Doctrine (Groningen, Europa Law Publishing, 2002) 223–25. 20 The Court referred to these Draft Articles as indicative of customary international law in Case C-63/09, Walz v Clickair SA, ECLI:EU:C:2010:251, para 27.
382 Jed Odermatt rule, not on the type of source. In Western Sahara Campaign UK21 and Air Transport Association of America (ATAA),22 the Advocates General argued in favour of adopting a unified approach to treaties and custom in this regard. Yet in cases where individuals have sought to invoke customary international law before the Court, the ‘manifest error’ test continues to be applied. In ATAA,23 in which the applicants sought to invoke customary international law to challenge an EU Directive, the Court and Advocate General (AG) disagreed on whether Racke was relevant. In Racke, the Court stressed that the claimant was incidentally challenging the validity of a Community regulation under those rules in order to rely upon rights which it derives directly from an agreement of the Community with a non-member country. This case does not therefore concern the direct effect of those rules (emphasis added).24
AG Kokott distinguished Racke on that basis.25 In Racke, it was the Community, by way of the contested regulation, that was seeking to invoke customary international law.26 However, in ATAA, the Court relied on Racke to support its finding that judicial review must be limited to whether the EU institutions made ‘manifest errors of assessment’ when applying principles of customary international law.27 It narrowed the invocability of customary international law to those situations where the EU institutions are relying on customary international law.28 The ‘manifest error’ standard stems from the Opinion of AG Jacobs in Racke: [A]lthough I do not wholly exclude the possibility that under certain circumstances individuals could base a Community law claim on rules of customary international law of treaties, I take the view that that should be exceptional in the light of the overall purpose and nature of such rules. I will thus suggest that only manifest violations of the law of treaties can give rise to a ruling of invalidity.29
Given the highly sensitive and political nature of the decision to suspend the Agreement, the AG likely sought to limit the possibility of judicial review of such a decision in this case. The ‘manifest error’ standard was developed in a context that was very different to that of ATAA and other cases. There appears to be no good reason to subject individuals to more stringent conditions when relying on customary international law.30 Yet the ‘manifest error’ test continues to be applied in relation to customary international law.
21 See Opinion of Advocate General (AG) Wathelet, Case C-266/16, Western Sahara Campaign UK, ECLI:EU:C:2018:1, para 95. See this volume, ch 75. 22 Opinion of AG Kokott, C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA), paras 108–17. 23 C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA). See this volume, ch 59. 24 Racke (n 6) para 47. 25 Opinion of AG Kokott in ATAA (n 22) fn 104. 26 Klabbers argues that both the AG and the Court came to the ‘erroneous conclusion that it had been the individual concerned who invoked the rebus sic stantibus rule. Rather, it was the Council who relied on rebus sic stantibus, in order to justify the suspension of the Co-operation Agreement’: J Klabbers, ‘Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, judgment of 16 June 1998, nyr’ [1999] CML Rev 183. 27 ATAA (n 23) para 110. 28 Wouters and van Eeckhoute (n 19) 203 argued that ‘it seems as if the invocability of a rule of customary international law to review the legality of a Community act is furthermore restricted to the situation in which this Community act is, in fact, an implementation of the invoked rule of customary international law’. 29 Opinion of AG Jacobs, Case C-162/96, Racke v Hauptzollamt Mainz, ECLI:EU:C:1997:582, para 71. 30 Opinion of AG Kokott in ATAA (n 22) paras 111–12.
Invoking Customary International Law before the Court 383 C. Rebus sic stantibus Racke is one of the very few instances in international practice where a court has applied the clausa rebus sic stantibus (fundamental change of circumstances) doctrine. There has been relatively little judicial or other practice in which Article 62 VCLT has been applied successfully. At first sight, it may appear that the outbreak of hostilities would constitute the very type of change of circumstances envisaged by Article 62 VCLT. On the other hand, treaty relations would be unstable if the outbreak of war or unrest in a country were sufficient to allow a third state to terminate a treaty unilaterally.31 The issue of ‘Effects of armed conflicts on treaties’ is a complex topic in public international law, one that has been considered by the ILC.32 As one of the few instances where Article 62 VCLT has been applied, Racke contributes to the sparse practice in this area.33 It is important to recall the context in which the EU suspended the agreement. The Union’s position is understandable, given that it was acting during an emergency situation and reacting to an unfolding international crisis. Kokott and Hoffmeister argued that the Council’s suspension of the agreement was justified by a ‘modern’ understanding of the rebus sic stantibus principle: ‘An essential change would occur if performance of an obligation resulted in illicit assistance to an internationally wrongful act.’34 The Union’s suspension of the international agreement was not only a reaction to the outbreak of hostilities, but also a reaction to acts of aggression and violations of the UN Charter. The Court also dealt with the procedural requirements set out in Article 65 VCLT. While the Court did not accept that those provisions represent customary international law, it did find that the procedural principles are based on ‘an obligation to act in good faith’.35 Racke has been relied upon to support the general obligation of ‘good faith’ in international law36 and the principle of pacta sunt servanda.37 This chapter does not focus on the principle of good faith. It should be noted, however, how the Court has recently relied on Racke, and the principle of good faith, in a novel way when interpreting international agreements. In Front Polisario, the Court examined whether the EU had intended to apply an agreement between the EU and Morocco to the territory of Western Sahara.38 The Court reasoned that the EU could not have intended to do so, since this ‘would necessarily have entailed conceding that the Union intended to implement those agreements in a manner incompatible with the principles of self-determination and of the relative effect of treaties’.39 Such a finding, the Court reasons, would be incompatible with the principle that treaty obligations are performed in good faith.
31 ‘Taken to the extreme, it amounts to saying that treaties cease to be in force upon any outbreak of hostilities, a statement not easily reconcilable with what many hold to be prevailing customary law’: Klabbers (n 26) 186. 32 See International Law Commission, Draft articles on the effects of armed conflicts on treaties 2011 (A/66/10, para 100), Art 3: ‘The existence of an armed conflict does not ipso facto terminate or suspend the operation of treaties: (a) as between States parties to the conflict; (b) as between a State party to the conflict and a State that is not.’ 33 Klabbers notes that ‘the Racke case is the first decision ever in which a court upholds rebus sic stantibus in a concrete set of circumstances’: Klabbers (n 26) 179. Elias notes that Racke ‘is a notable exception to the general trend according to which the plea of fundamental change of circumstances has rarely been applied by international courts and tribunals’: O Elias, ‘General International Law in the European Court of Justice: From Hypothesis to Reality’ (2000) 313 Netherlands Yearbook of International Law 17, 21. 34 J Kokott and F Hoffmeister, ‘A Racke GmbH & Co v Hauptzollamt Mainz. Case C-162/96’ (1999) 93 American Journal of International Law 208. 35 Gabčíkovo-Nagymaros Project (n 12) para 109. 36 See Opinion of AG Sharpston, Opinion 2/15, ECLI:EU:C:2016:992, para 381. See this volume, ch 82. 37 Opinion of AG Kokott, Case C-422/14, Christian Pujante Rivera, ECLI:EU:C:2015:544, para 55. 38 Case C-104/16 P, Front Polisario, ECLI:EU:C:2016:973, paras 123–24. See this volume, ch 75. 39 ibid para 123.
384 Jed Odermatt In this instance, the principle of ‘good faith’ is applied to support an interpretation that the EU institutions comply with public international law. D. Racke in EU Law The impact of Racke on EU law can be seen through the way it has been cited in later judgments. Racke is often cited in support of the general rule that the EU is to respect international law in the exercise of its powers.40 It is also used to support the finding that international law is part of the EU legal order, and that ‘EU law must be interpreted in the light of the relevant rules of international law’.41 It is also often referred to when the Court deals with customary international law, and to support the proposition that ‘rules which constitute an expression of customary international law are binding, as such, upon the EU institutions and form part of the EU legal order’.42 While Racke is most often referred to when dealing with customary international law, it is also mentioned in relation to international agreements, in support of the rule that ‘international agreements concluded by the European Union pursuant to the provisions of the Treaties constitute, as far as the Union is concerned, acts of the institutions of the European Union’.43 Racke has been cited to support the concept that a cooperation agreement can give rise to obligations that apply to individuals.44 The Court refers to Racke when examining the conditions under which an international agreement is sufficiently precise and unconditional to allow direct effect. Although Racke dealt with the clausa rebus sic stantibus, this principle has not been dealt with in depth in later cases. In Commission v Finland,45 AG Sharpston refers to Article 62 VCLT, but only when discussing whether EU Member States could rely on clausula rebus sic stantibus to terminate certain Bilateral Investment Treaties in case they are incompatible with EU law. In Wightman, a case dealing with whether the UK could unilaterally withdraw notice of its intention to leave the Union, AG Campos Sánchez-Bordona referred to Racke to support the finding that Article 68 VCLT represents a ‘progressive development’ of the law, rather than a codification of customary law. Although Racke dealt with Article 65 VCLT, the AG reasoned that ‘the same assessment may be extrapolated to Article 68 [VCLT]’.46
40 Cited in Case C-308/06, Intertanko and Others, ECLI:EU:C:2008:312, para 51 See this volume, ch 52; Case C-415/05 P, Al Barakaat International Foundation v Council and Commission, ECLI:EU:C:2008:461, para 291; Opinion of AG Mengozzi, Case C-285/12, Diakité, ECLI:EU:C:2013:500, para 23; Opinion of AG Jääskinen, Case C-107/09 P, Spain v Government of Gibraltar and United Kingdom, ECLI:EU:C:2011:215, para 69. 41 See Case C-179/13, Evans, ECLI:EU:C:2015:12, para 35. 42 Cited in Case C-641/18, LG and Others v Rina SpA and Ente Registro Italiano Navale, ECLI:EU:C:2020:349, para 54. See Opinion of AG Wahl, Case C-179/13, Evans, ECLI:EU:C:2014:2015, para 52; Opinion of AG Poiares Maduro, Case C-135/08, Rottmann, ECLI:EU:C:2009:588, para 29. 43 Case C-266/16, Western Sahara Campaign UK, ECLI:EU:C:2018:118, para 45. 44 Racke is cited in cases dealing with the direct effect of agreements, such as Case C-265/03, Simutenkov, ECLI:EU:C:2005:213, para 28 (Communities–Russia Partnership Agreement). See this volume, ch 44; Case C-300/98, Dior, ECLI:EU:C:2000:688, para 42 (TRIPs); Case C-416/96, Eddline El-Yassini, ECLI_EU:C:1999:107 (EEC–Morocco Cooperation Agreement), para 25; Case C-262/96, Sürül, ECLI:EU:C:1999:228, (EEC–Turkey Association Agreement) para 60. 45 Opinion of AG Sharpston, Case C-118/07, Commission v Finland, ECLI:EU:C:2009:525, para 41. See this volume, ch 56. 46 Opinion of AG Campos Sánchez-Bordona, Case C-621/18, Wightman, ECLI:EU:C:2018:978, para 74.
Invoking Customary International Law before the Court 385 E. Outside the EU Legal Order Given that Racke is one of the few instances of rebus sic stantibus being applied, one might expect that it has had influence outside the EU legal order. It has been cited to support the argument that the procedural obligations in Article 65 VCLT do not constitute customary international law.47 Yet there are few instances of Racke being cited by other international courts or dispute settlement bodies. Commenting on Racke in 1998, Klabbers predicted that ‘While it may serve to justify the Council’s acts in casu, its application, given the circumstances of the case, was bound to be contrived, and this, of course, will seriously limit its precedential value’.48 This prediction appears to have been made out in international practice. This may be due to the specialised function of the Court, and the narrow legal and factual circumstances in which the rule was applied. Since the UK decided to withdraw from the EU, some commentators referred to Article 62 VCLT, and Racke, as a method by which the UK could escape certain treaty obligations. One creative but unrealistic argument was that the Brexit referendum could constitute a ‘fundamental change of circumstances’, allowing the UK to withdraw from the Union without invoking Article 50 TEU.49 Some argued that a ‘fundamental change of circumstances’ could be invoked to allow the UK to exit unilaterally the EU–UK Withdrawal Agreement and its Protocol on Northern Ireland.50 These arguments that Article 62 VCLT might be a Brexit ‘escape clause’ show little awareness of its exceptional nature, or the difficulties of applying Article 62 VCLT in practice.51 While Racke dealt with the issue of sanctions and the outbreak of hostilities, it has had little impact on later cases on these issues. Our analysis of judgments where Racke was cited shows that it has not been used in the Court’s judgments in sanctions cases.52 One reason may be that the EU Treaties now include provisions for the suspension of agreements.53 Moreover, some agreements concluded by the Union now include provisions that allow for suspension in cases where there have been violations of fundamental human rights. The lasting impact of Racke, therefore, has been more on the application of customary international law in the EU legal order. Yet those rules were developed in a highly specific context, one where the EU institutions were responding to an unfolding emergency. The effect of applying Racke in later cases has been to narrow the circumstances under which individuals can rely on customary international law. 47 Panel Report, Korea – Measures Affecting Government Procurement, WT/DS163/R, 1 May 2000, fn 769: ‘Article 65 on the specific procedure for invoking invalidity of a treaty does not seem to belong to the provisions of the Vienna Convention which have become customary international law.’ 48 Klabbers (n 26) 189. 49 F Vibert and G Beck, ‘The Seven Days of Brexit: How a Leave Government Could Bypass Article 50’ (British Politics and Policy at LSE, 16 June 2016) https://blogs.lse.ac.uk/politicsandpolicy/the-seven-days-of-brexit/. 50 See House of Commons Library Research Briefing, ‘Could the Withdrawal Agreement Be Terminated under International Law?’ (19 March 2019) https://commonslibrary.parliament.uk/research-briefings/cbp-8463/; G Verdirame, ‘The UK’s Legal Right to Leave the Backstop Is Stronger than You’d Think’ The Spectator (2019) www. spectator.co.uk/article/the-uk-s-legal-right-to-leave-the-backstop-is-stronger-than-you-d-think. 51 Sands points out that ‘The argument that [Article 62 VCLT] could be invoked if negotiations broke down and the backstop pertained indefinitely is hopeless. It is not even arguable’: P Sands, ‘Geoffrey Cox Has No Grounds to Change His Mind on the Northern Ireland Backstop’ The Guardian (2019) www.theguardian.com/commentisfree/2019/ mar/18/geoffrey-cox-northern-ireland-backstop. 52 Racke was not referred to, for instance, in Case C-120/94, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:1994:275 (FYROM) or similar cases. See this volume, ch 30. 53 See Art 218(9) TFEU. See also, eg Council Decision of 2 September 2011 partially suspending the application of the Cooperation Agreement between the European Economic Community and the Syrian Arab Republic [2011] OJ L228/100.
386 Jed Odermatt V. ADDITIONAL READING Croquet, NAJ, ‘The Import of International Customary Law into the EU Legal Order: The Adequacy of a Direct Effect Analysis’ [2013] Cambridge Yearbook of European Legal Studies 47. Gianelli, A, ‘International Law within the EU Customary International Law in the European Union’ in E Cannizzaro, P Palchetti and RA Wessel (eds), International Law as Law of the European Union (Brill, 2011). Kokott, J and Hoffmeister, F, ‘A Racke GmbH & Co v Hauptzollamt Mainz. Case C-162/96’ (1999) 93 American Journal of International Law 205. Kuijper, P-J, ‘From Dyestuffs to Kosovo Wine: From Avoidance to Acceptance by the Community Courts of Customary International Law as Limit to Community Action’ in IF Dekker and HHG Post (eds), On the Foundations and Sources of International Law: Essays in Memory of Herman Meijers (TMC Asser Press, 2003) 151–71. Kuijper, P-J, ‘Customary International Law, Decisions of International Organisations and Other Techniques for Ensuring Respect for International Legal Rules in European Community Law’ in J Wouters, A Nollkaemper and E de Wet (eds), The Europeanisation of International Law: The Status of International Law in the EU and its Member States (TMC Asser Press, 2008). Klabbers, J, ‘Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, judgment of 16 June 1998, nyr’ (1999) 36 CML Rev 179. Konstadinides, T, ‘When in Europe: Customary International Law and EU Competence in the Sphere of External Action’ (2012) 13 German Law Journal 1177. Odermatt, J, International Law and the European Union (Cambridge University Press, 2021) ch 2. Wouters, J and Van Eeckhoutte, D, ‘Enforcement of Customary International Law through European Community Law’ in J Prinssen and A Schrauwen (eds), Direct Effect: Rethinking a Classic of EC Legal Doctrine (Europa Law Publishing, 2002).
37 The Effect of WTO Law in the EU Legal Order: Portugal v Council HOLGER P HESTERMEYER Case C-149/96, Portuguese Republic v Council of the European Union, ECLI:EU:C:1999:574, delivered 23 November 1999. KEYWORDS WTO Agreement – GATT – Agreement on Textiles and Clothing – Validity of EU measure with regard to international law – Direct effect.
I. INTRODUCTION AND THE CASE LAW BEFORE PORTUGAL V COUNCIL
P
Council is the leading case on the status of the law of the World Trade Organization (WTO) in the EU legal order. It largely confirmed the previous case law of the Court with regard to the General Agreement on Tariffs and Trade (GATT), the world trade law regime before the creation of the World Trade Organization (WTO). The Court held that the WTO Agreement is ‘not in principle among the rules in the light of which the Court is to review the legality of measures adopted by the Community institutions’.1 This holding at first sight sits uneasily with the status of treaties in EU law, as international agreements concluded by the Union are not only ‘an integral part of [EU] law’,2 binding on the institutions of the Union and its Member States (Article 216(2) TFEU), thereby making the EU, in principle, a monist system,3 but such international agreements also enjoy primacy over secondary Union legislation.4 This would seem to imply that the Court can assess the ortugal v
1 Case C-149/96, Portuguese Republic v Council of the European Union, ECLI:EU:C:1999:574, para 47. The provisions of WTO law can be referred to as the ‘WTO Agreement’, the ‘WTO Agreements’ or the ‘Marrakesh Agreement’. These terms are interchangeable. The various agreements constituting WTO law are annexes to the WTO Agreement. For greater clarity, the article will, as a rule, use the term European Union to denote the EU and its previous incarnations, even though this is, of course, anachronistic. As to trade law, WTO law will be used for the law of the WTO whereas world trade law can refer to both the law of the GATT and the WTO. 2 Case 181/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41, para 5. See this volume, ch 3. 3 Some regard the EU as more of a mixed system, but see Art 216(2) TFEU as a provision that transposes treaty law, or regard decisions approving a treaty as transposition – and thereby reach the same result. See S Vöneky and B Beylage-Haarmann, ‘Art 216 AEUV’ in E Grabitz, M Hilf and M Netteshheim, Das Recht der Europäischen Union: AEUV/EUV AEUV (Munich, CH Beck, 2016) para 27. 4 Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313, para 52.
388 Holger P Hestermeyer validity of Union measures in light of international agreements. However, that is not the case with regard to WTO law. The Court tackled the question whether it has jurisdiction to assess the validity of Union measures with regard to world trade law for the first time in International Fruit,5 a preliminary reference that the Court decided in 1972. At the time, world trade law was governed by the predecessor to the WTO, the GATT (often referred to as GATT 1947 to distinguish it from the GATT as it applies today as part of the WTO Agreement, the GATT 1994).6 The Court held that it can rule on the invalidity of Union measures in light of international law under two conditions: the provision of international law must be binding on the Union, and the provision must be capable of conferring rights on citizens of the Union which they can invoke before the courts, ie it must have direct effect. Even though the Union had not acceded to the GATT, the Court considered the GATT to fulfil the first condition to the extent the Union had assumed the powers of Member States in the area governed by the GATT. However, the Court held that in light of its spirit, general scheme and terms, the GATT does not produce direct effect, as it is ‘characterised by the great flexibility of its provisions, in particular those conferring the possibility of derogation, the measures to be taken when confronted with exceptional difficulties and the settlement of conflicts between the contracting parties’, as well as the principle of negotiations on the basis of reciprocal arrangements. Having refused to grant the GATT any direct effect overall, the Court did not have to inquire whether the concrete provision was clear, precise, unconditional and did not require further implementation, so that it could produce direct effect.7 One might be tempted to argue that the Court imposed the requirement of direct effect in International Fruit because the case reached the Court via a preliminary reference, but in Germany v Council,8 the Court made it clear that direct effect is also required for provisions of international law to serve as a yardstick for legality of an EU act in annulment actions brought by Member States.9 With regard to world trade law, these decisions thus made the European Union more dualist than monist.10 There are, however, two instances in which the Court decided to review the legality of a Union measure in light of world trade law under the GATT: cases in which an EU act refers to world trade law (the so-called Fediol exception);11 and (though the precise extent and even existence of the exception has been questioned) where the Union intended to implement a GATT obligation (the Nakajima exception).12 Additionally, the Court can review whether a Member State has complied with obligations under WTO law in an action for failure to fulfil obligations under Article 258 TFEU, as these obligations are part of EU law because the Union is a member of the WTO.13
5 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See for the following ibid paras 18, 20–21. See this volume, ch 2. Note that, for ease of reading, the EEC, EC and the Communities are referred to as the EU or Union at times, even though this is technically incorrect. 6 55 UNTS 187 (1950). 7 Opinion of Advocate General (AG) Tesauro, Case C-53/96, Hermès International v FHT Marketing Choice, ECLI:EU:C:1997:53, para 27; see PJ Kuijper and M Bronckers, ‘WTO Law in the European Court of Justice’ (2005) 42 CML Rev 1313, 1318. 8 Case C-280/93, Germany v Council, ECLI:EU:C:1994:367. 9 See the Opinion of AG Saggio in Case C-149/96, Portuguese Republic v Council of the European Union, ECLI:EU:C:1999:92, paras 16–17. 10 Kuijper and Bronckers (n 7) 1315. 11 Case 70/87, Fediol v Commission, ECLI:EU:C:1989:254. See this volume, ch 17. 12 Case C-69/89, Nakajima v Council, ECLI:EU:C:1991:186. See this volume, ch 17. 13 A third instance was established after Portugal v Council, and will be discussed below. See Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792, paras 68 ff.
The Effect of WTO Law in the EU Legal Order 389 On 1 January 1995, the Marrakesh Agreement Establishing the WTO (the WTO Agreement)14 entered into force, providing for a thorough overhaul of the world trade regime.15 The WTO Agreement is a significant (and lengthy) treaty that, through its annexes, incorporates not only the old GATT in an updated form as the GATT 1994, but also – amongst others – agreements on services (General Agreement on Trade in Services), intellectual property (the Agreement on Trade-Related Aspects of Intellectual Property Rights) and the settlement of disputes (Dispute Settlement Understanding, DSU). The European Community signed the WTO Agreement as a mixed agreement, as authorised by Council Decision 94/800/EC of 22 December 1994.16 The last recital of that Decision provides that the WTO Agreement by its nature ‘is not susceptible to being directly invoked in Community or Member State courts’. Whether this was indeed so was the subject of much debate, as the overhaul of the world trade regime changed the spirit, general scheme and terms of world trade law, and significantly reduced the flexibility of provisions that characterised the GATT. Some also argued that granting the WTO Agreement direct effect seemed in line with the Court’s case law after International Fruit with regard to other international treaties, where the Court seemed far more ready to assume direct effect, as illustrated by Kupferberg.17 Portugal v Council resolved the issue. Despite the changes brought by the WTO Agreement, the Court confirmed the lack of direct effect of world trade law in the EU legal order, though its reasoning differs from that in International Fruit. II. FACTS
After World War II, global negotiations to reduce barriers to trade have taken place in so-called ‘trade rounds’. The last trade round under the GATT, the so-called ‘Uruguay Round’, began in 1986 and ultimately resulted in the adoption of the WTO Agreement. As part of the market access negotiations of the Uruguay Round, the European Community negotiated memoranda of understanding with Pakistan and India containing market access concessions with regard to textile products by the Community and Pakistan or India respectively. The memoranda were signed in October and December 1994, and approved by Council Decision 96/386/EC18 against the votes of Portugal, Greece and Spain. Portugal sought the annulment of Council Decision 96/386/EC before the Court, arguing that the Council Decision breached both general principles of Union law and WTO law. Only the latter aspect of the case is of interest for the purposes of this chapter.19 In that regard, 14 Marrakesh Agreement establishing the World Trade Organization, 1867 UNTS 3 (1995). 15 J Jackson, ‘History of the General Agreement on Tariffs and Trade’ in R Wolfrum, PT Stoll and HP Hestermeyer, WTO – Trade in Goods (Leiden, Martinus Nijhoff, 2011) paras 2 ff. 16 Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986–1994), [1994] OJ L336/1. 17 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362. See this volume, ch 14. In fact, the GATT was the only agreement at the time for which the Court had carved out this position. P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 343. 18 Council Decision of 26 February 1996 concerning the conclusion of Memoranda of Understanding between the European Community and the Islamic Republic of Pakistan and between the European Community and the Republic of India on arrangements in the area of market access for textile products, [1996] OJ L153/47. 19 Portugal had alleged breaches of the following principles of Union law: publication of Union legislation, transparency, cooperation in good faith in relations between the Union and the Member States, legitimate expectations, non-retroactivity of legal rules, economic and social cohesion, and equality between economic operators. The Court found the allegations of breaches of fundamental principles of Union law unfounded.
390 Holger P Hestermeyer Portugal claimed that the Decision violated provisions of three of the WTO agreements: the GATT, the Agreement on Textiles and Clothing (ATC) and the Agreement on Import Licensing Procedures. III. THE COURT
With regard to its invocation of WTO law, Portugal needed to overcome the barrier imposed by International Fruit. There, the Court had held that it could not review the legality of Union measures under the GATT as that agreement lacks direct effect. Portugal raised two arguments in support of its position that – in contrast to the GATT in the past – it could rely on WTO law. Firstly, and of lesser importance for the purposes of this chapter, Portugal invoked the Nakajima exception, arguing that the Decision it attacked implemented the ATC. The goal of that agreement was to resubmit the textile sector to the rules of the GATT as quantitative restrictions of textile imports were not only rampant under the GATT 1947, but indeed legalised under the so-called ‘Multifibre Arrangement’.20 Far more significantly, however, Portugal also argued that the WTO Agreement differed radically from the GATT, in particular with regard to dispute settlement, and it invited the Court to reconsider its stance in (and since) International Fruit. The Council, supported by France and the Commission, argued that the WTO Agreement did not justify a departure from the old case law. Advocate General (AG) Saggio proposed to admit Portugal’s appeal to WTO law.21 The AG not only pointed to the changed nature of WTO law compared to the GATT 1947; for him, the Court had erred when it required direct effect in the first place, as international agreements can serve as a criterion of legality for Union measures ‘by virtue of [their] clear, precise and unconditional terms’, whether they are directly applicable or not.22 The Court, however, refused to follow its AG and held that it could not review the legality of Union measures in light of the WTO Agreement. The Court followed a two-step analysis. First of all, it is up to the parties themselves to determine in an international agreement what effect that agreement is to have in the domestic legal systems. Only where the agreement does not settle the question does it fall to be decided by the courts, like any question of interpretation. Applying that approach, the Court found that while the WTO Agreement does differ from the GATT, in particular in strengthening the provisions on safeguards and the dispute settlement mechanism, it nevertheless accorded considerable importance to negotiations. The Court illustrated this point by referring to the consequences of dispute settlement: while the goal of dispute settlement under Article 3(7) of the DSU is the withdrawal of WTO-inconsistent measures, compensation may be granted on an interim basis. Full implementation of the ruling in the dispute settlement system might remain the preferred outcome under Article 22(1) of the DSU, but if the WTO member concerned continues to fail to implement the ruling, it has to enter into negotiations with the complainant with a view to finding mutually acceptable compensation (Article 22(2) of the DSU). If a judicial organ of that member was to invalidate the domestic rule that breaches WTO law, it would deprive the legislative or executive organ of the possibility of entering into such a negotiated arrangement under Article 22 of the DSU even on a temporary basis. The Court concluded that the WTO
20 Arrangement
Regarding International Trade in Textiles, 20 December 1973, GATT instruments No 135. for the Advocate General, Portugal’s claim failed on its merits. of AG Saggio in Portugal v Council (n 9) para 18.
21 However, 22 Opinion
The Effect of WTO Law in the EU Legal Order 391 Agreement, interpreted in the light of its subject matter and purpose, does not dictate how it is to be applied in the legal order of the members. In a second step, the Court addressed the application of the WTO agreements in the EU legal order. Here, the Court distinguished the WTO Agreement from agreements such as those it had to interpret in Kupferberg.23 In that regard, the Court advanced three arguments: firstly, the WTO Agreement is based on the principle of negotiations with a view to ‘entering into reciprocal and mutually advantageous arrangements’, and is thus different from the asymmetrical bilateral agreements creating special relations of integration of a third country with the Union. Secondly, the courts of some of the most important commercial partners of the Union do not include WTO law among the rules applicable when reviewing the legality of their domestic law. The Court conceded that in Kupferberg it had dismissed the significance of such a lack of reciprocity in the implementation of an agreement for a finding of direct effect. This – according to the Court – was justified by the nature of the agreement at stake in that case. By contrast, the WTO Agreement is based on ‘reciprocal and mutually advantageous agreements’, and a lack of reciprocity in its implementation may lead to a non-uniform application of WTO law. Thirdly, the Court pointed out that if it undertook the task of enforcing compliance of Union law with WTO law, it would deprive the legislative and executive branches of a flexibility that their counterparts in other WTO members possess. The Court concluded that, according to the nature and structure of the WTO Agreement, the Agreement is in principle not amongst those in the light of which it reviews the legality of Union measures. Only then, almost as an afterthought, and only to confirm its result, did the Court point to the final recital in the preamble to Council Decision 94/800/EC, which stated that the WTO Agreement by its nature cannot be directly invoked in Community or Member State courts. Finally, the Court reconfirmed the Fediol and Nakajima exceptions, but as it did not consider the measure at issue to fall under either of them, the Portuguese claim under WTO law failed. The Court therefore ultimately dismissed the Portuguese application. IV. THE IMPORTANCE OF THE CASE
Portugal v Council has been both much discussed and criticised (section IVA). Its enduring legacy consists, primarily, in denying what has come to be referred to as ‘direct effect’ of WTO law by the Court (section IVB). This does not mean, however, that WTO law does not exercise an effect on and in the EU legal order (section IVC). More broadly, the reasoning in Portugal v Council remains essential when considering whether a provision of international law can be relied on to argue the invalidity of an EU measure (section IVD). A. Criticism of the Judgment The judgment has encountered a lot of criticism, but it has also found defenders and has, indeed, survived over the years. Criticism has targeted, firstly, the link between direct effect and capacity to review EU law in the light of WTO law – a link the Court continued to make in the case even though it did not explicitly refer to ‘direct effect’.24 Secondly, some critics disliked
23 Kupferberg 24 Eeckhout
(n 17). (n 17) 349.
392 Holger P Hestermeyer the Court’s evaluation of WTO law that led it to confirm its position in International Fruit. Thirdly, the Court’s reciprocity analysis has been attacked. Finally, with regard to the practical consequences, it should be pointed out that the lack of direct effect deprives those affected by breaches of WTO law of enforcement options.25 As to direct effect, critics have sided with AG Saggio and pointed out that it is unclear why an international agreement needs to produce direct effect for it to serve as a yardstick for the validity of EU measures, particularly where it is Member States invoking WTO law rather than individuals. Direct effect, after all, tells us when an individual may rely on a provision, and its absence does not eliminate the binding character of the rule.26 AG Maduro attributed the confusion to the fact that the direct effect of international agreements differs from that of EU law, and proposed to use a different terminology.27 It seems doubtful, however, that a different terminology would resolve the issue, and indeed the criticism targets the dogmatic reasoning of the Court rather than its terminology.28 With regard to the characterisation of the WTO as opposed to the GATT 1947, there is broad agreement that the WTO Agreement has led to a significant legalisation of world trade law compared to the GATT 1947.29 The flexibilities decried by the Court in International Fruit have been reduced, and additional agreements, such as the Agreement on Safeguards, have led to more specific, clearer legal obligations. The changes of the dispute settlement system are particularly significant. Under the GATT 1947, disputes were settled by ad hoc panels, and both the establishment of a panel and the adoption of its report required ‘positive consensus’ of all contracting parties in the GATT Council, the political body of the GATT. The respondent in a dispute could thus block the adoption of a report.30 As a consequence, the system was characterised by more than a dash of diplomacy in dispute settlement.31 With the advent of the WTO Agreement, the consensus rule was reversed, ie a panel is established and its report adopted automatically unless WTO members (including the complainant) reject this by consensus (‘negative consensus’) in the competent political body, the Dispute Settlement Body. Members also added a standing Appellate Body to the dispute settlement process to hear appeals on the law.32 The Court did not consider these changes to be sufficient to change its approach towards world trade law as Article 22(2) of the DSU opens the door to mutually agreed compensation rather than full implementation of a panel report. Critics have pointed out that this fails to recognise that WTO members have an obligation to comply with
25 GM Berrisch and HG Kamann, ‘WTO-Recht im Gemeinschaftsrecht – (k)eine Kehrtwende des EuGH’ (2000) 89 Europäisches Wirtschafts- und Steuerrecht 89, 94–95. 26 GA Zonnekeyn, ‘The Status of WTO Law in the EC Legal Order: The Final Curtain?’ (2000) 34 Journal of World Trade 111, 120. P Egli and J Kokott, ‘Portuguese Republic v Council of the European Union’ (2000) 94 American Journal of International Law 740, 744. 27 Opinion of AG Maduro, Joined Cases C-120/06 P and C-121/06 P, FIAMM and others v Council and Commission, ECLI:EU:C:2008:98, paras 22 ff. In agreement on the terminological issue, see Opinion of AG Cruz Villalón, Case C-414/11, Daiichi Sankyo v DEMO, ECLI:EU:C:2013:49, para 84. See this volume, ch 64. But see Opinion of AG Alber, Case C-94/02 P, Biret and Cie v Council, ECLI:EU:C:2003:292, paras 47 ff. 28 See K Schmalenbach, ‘Art 216 AEUV’ in C Calliess and M Ruffert, EUV/AEUV, 5th edn (Munich, CH Beck, 2016), paras 31–32. 29 Jackson (n 15) paras 2 ff. 30 WTO, A Handbook on the WTO Dispute Settlement System, 2nd edn (Cambridge, Cambridge University Press, 2017) 326 ff. 31 RE Hudec, ‘The GATT Legal System: A Diplomat’s Jurisprudence’ (1970) 4 Journal of World Trade 615. 32 The dispute settlement process is described in depth by P van den Bossche and W Zdouc, The Law and Policy of the World Trade Organization, 4th edn (Cambridge, Cambridge University Press, 2017) 164 ff.
The Effect of WTO Law in the EU Legal Order 393 a panel report.33 To what extent this criticism convinces is doubtful, as the Court’s reasoning arguably does not focus on the doctrinal identification of the obligation of WTO members, but rather on whether WTO law has direct effect.34 The reality of the DSU permits some leeway for the executive and legislative branches that would be eliminated if the Court were to recognise the direct effect of WTO law. Recent developments in the WTO seem to give credence to the Court’s understanding of the ultimately still negotiation-based nature of the WTO. The USA has repeatedly criticised the Appellate Body for acting too much like a court and has ended up blocking appointments of members to the Appellate Body, leading to the demise of the institution. At present, the reality of WTO dispute settlement is that a member that has lost its case at the panel stage can appeal the report of the panel, preventing it from becoming binding, but there will be no ruling on the appeal because the Appellate Body is non-functional. To some extent – and despite a successful EU and Canadian initiative to create an arbitration-based appeal mechanism – the system has reverted to the old GATT system.35 Thirdly, the Court’s description of the reciprocal nature of WTO law and its attempt to distinguish the WTO Agreement from agreements such as the one at issue in Kupferberg have attracted criticism. Some have argued that the WTO is not quite as ‘reciprocal’ as the Court argues, but is in fact a rule-based system.36 Others have pointed out that the Court in Kupferberg explicitly rejected the notion that reciprocity in the area of direct effect was necessary to establish the direct effect of an agreement.37 But the judgment has also found favour with some commentators who instead attacked Kupferberg for unrealistically downplaying the significance of reciprocity.38 A lack of reciprocity would lead to unequal treatment of economic actors.39 Ultimately, in its acceptance that the legislative and executive branches have an important role to play in the implementation of rulings in WTO dispute settlement, Portugal v Council can be seen as a more realistic assessment of the reality of international law than Kupferberg.40 With regard to the practical impact of Portugal v Council, it should be pointed out that the Court’s decision deprives those relying on WTO law of enforcement options where obligations of that legal order are breached. In 2020, however, the Court clarified in Commission v Hungary that the Commission can enforce compliance of Member States with WTO law via the infringement procedure.41 It stands to reason that it would make sense for Member States to benefit from a similar option vis-à-vis the EU.
33 Berrisch and Kamann (n 25) 93. See also P Mengozzi, ‘La Cour de justice et l’applicabilité des règles de l’OMC en droit communautaire à la lumière de l’affaire Portugal c Conseil’ [2000] Revue du droit de l’Union européenne 509, 520. 34 P Eeckhout, ‘Portugal v Council Case’ in R Wolfrum (ed), Max Planck Encyclopedia of International Law (Oxford, Oxford University Press, 2007). 35 H Hestermeyer, ‘Saving Appeals in WTO Dispute Settlement: The Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU’ (EULaw Live, 2 April 2020). 36 Zonnekeyn (n 26) 121; Egli and Kokott (n 26) 743. 37 Kuijper and Bronckers (n 7) 1318. 38 ibid 1319. 39 A von Bogdandy, ‘Legal Effects of World Trade Organization Decisions within European Union Law: A Contribution to the Theory of Legal Acts of International Organizations and the Action for Damages under Article 288(2) EC’ (2005) 39 Journal of World Trade 45, 53. 40 Kuijper and Bronckers (n 7) 1322. 41 Case C-66/18, Commission v Hungary (n 13).
394 Holger P Hestermeyer B. The Lack of Direct Effect of WTO Law The Court’s decision to not endow WTO law with direct effect remains valid today. The Court continues to refuse to review the legality of an EU measure with regard to WTO law, but still recognises the Fediol and Nakajima exceptions in this regard, even though the precise scope of the Nakajima exception is so unclear that its very existence is questioned.42 The Court is of the view that the same principle applies even where the yardstick is not just a provision of WTO law, but a ruling of the Dispute Settlement Body.43 But it is not just the appeal to WTO law in challenges of the validity of EU measures that fails for lack of direct effect: similarly, claims for compensation founded on non-contractual liability for unlawful conduct of EU institutions cannot be based on violations of WTO law.44 However, the Court held in 2020 that actions by the Commission under Article 258 TFEU against Member States for failure to fulfil their obligations under the WTO Agreement as part of EU law are possible.45 C. The Indirect Effect of WTO Law While WTO law in principle cannot be invoked directly before the Court (with the exception of infringement actions against Member States to enforce compliance with WTO law), it nevertheless has an important indirect effect on EU law. The effect is twofold. First of all, the EU, as a subject of international law and a WTO member, is bound by WTO law, and is therefore under an obligation to comply with the obligations imposed by it. This is true both for obligations under the WTO Agreement and for those under dispute settlement under the DSU. Countless measures attest to the impact of the EU’s participation in the WTO. But beyond these rather obvious effects stemming from the international law plane, the Court has conceded that WTO law has an important additional indirect effect on EU law. That is, to the extent that is possible, secondary EU law has to be interpreted consistently with WTO law.46 Some commentators have correctly pointed out that at times such an interpretation in conformity with WTO law can lead to results that are not that different from those that would be obtained through direct effect.47 D. Direct Effect of International Agreements The Court has come to formulate its analysis of direct effect of treaty provisions in three steps: (i) the EU must be bound by the treaty; (ii) the nature and the broad logic of the treaty do not preclude its direct effect; and (iii) the provisions relied upon are themselves unconditional
42 Kuijper and Bronckers (n 7) 1324 ff. 43 Case C-104/97, P Atlanta v Commission and Council, ECLI:EU:C:1999:498, paras 19–20; Case C-94/02, Biret and Cie v Council, ECLI:EU:C:2003:518, para 77; Case C-377/02, Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau, ECLI:EU:C:2005:121, para 54. See this volume, ch 43. 44 Joined Cases C-120/06 P and C-121/06 P, FIAMM and others v Council and Commission, ECLI:EU:C:2008:476. See overall K Lenaerts and P Van Nuffel, European Union Law, 3rd edn (London, Sweet & Maxwell, 2011) 868 ff; U Haltern, Europarecht. Band II, 3rd edn (Tübingen, Mohr Siebeck, 2017) 236 ff. 45 Commission v Hungary (n 13). 46 Commission v Germany (n 4) para 52; Case C-53/96, Hermès International v FHT Marketing Choice, ECLI:EU:C:1998:292, para 28; Case C-89/99, Schieving-Nijstad vof v Robert Groeneveld, ECLI:EU:2001:438, para 35. 47 Kuijper and Bronckers (n 7) 1329.
The Effect of WTO Law in the EU Legal Order 395 and sufficiently precise as to their content.48 For a long time, world trade law was an outlier in that the GATT 1947 and later the WTO Agreement were the only agreements that failed the second step of the test.49 However, in Intertanko, the Court ruled that the United Nations Convention on the Law of the Sea does not establish rules intended to apply directly either.50 Similarly, the Court has established a lack of direct effect for the Kyoto Protocol.51 As the latter case shows, the Court’s argument in Portugal v Council regarding the possibility of parties reaching negotiated outcomes continues to be relevant in the Court’s evaluation. What is more, Portugal v Council subjected the question whether a treaty is generally capable of direct effect to a two-step analysis, deferring in the first step to the determination regarding direct effect by the parties in the treaty itself. That first step was rarely relevant at the time, as few treaties undertook such a determination. However, it has gained increasing relevance in recent years as, since 2008, the EU has begun to exclude the direct effect explicitly in some of its agreements.52 V. ADDITIONAL READING Berrisch, MG and Kamann, H-G, ‘WTO-Recht im Gemeinschaftsrecht: (k)eine Kehrtwende des EuGH’ [2000] Europäisches Wirtschafts- und Steuerrecht 89. Cannizzaro, E, ‘Accordi confliggenti nel diritto comunitario?’ [2000] Rivista di diritto internazionale 154. Díez-Hochleitner, J and Espósito, C, ‘La falta de eficacia directa de los Acuerdos OMC. A propósito de la sentencia del Tribunal de Justicia de 23 de noviembre de 1999 en el asunto C-149/96, Portugal c. Consejo’ (2000) No 6 Gaceta Jurídica de la UE y de la Competencia 10. Eeckhout, P, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011). Eeckhout, P, ‘Portugal v Council Case’ in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law (Oxford, Oxford University Press, 2007). Egli, P and Kokott, J, ‘Portuguese Republic v Council of the European Union’ (2000) 94 American Journal of International Law 740. Kuijper, PJ and Bronckers, M ‘WTO Law in the European Court of Justice’ (2005) 42 CML Rev 1313. Lenaerts, K and Van Nuffel, P, European Union Law, 3rd edn (London, Sweet & Maxwell, 2011) 868–73. Mengozzi, P, ‘La Cour de justice et l’applicabilité des règles de l’OMC en droit communautaire à la lumière de l’affaire Portugal c Conseil’ [2000] Revue du droit de l’Union européenne 509. Semertzi, A, ‘The Preclusion of Direct Effect in the Recently Concluded EU Free Trade Agreements’ (2014) 51 CML Rev 1125.
48 Case C-366/10, Air Transport Association of America v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA), paras 52–54. 49 Eeckhout (n 17) 343. 50 Case C-308/06, The Queen on the application of International Association of Independent Tanker Owners (Intertanko) v Secretary of State for Transport, ECLI:EU:C:2008:312, para 64. See this volume, ch 52. 51 ATAA (n 48) para 78. See this volume, ch 59. 52 See, eg Art 16.16 of the EU–Singapore Free Trade Agreement, [2019] OJ L294/3; A Semertzi, ‘The Preclusion of Direct Effect in the Recently Concluded EU Free Trade Agreements’ (2014) 51 CML Rev 1125.
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38 The Member States’ Duty to Denounce Anterior Treaties: Commission v Portugal (Maritime Policies) HANNES LENK Case C-62/98, Commission of the European Communities v Portuguese Republic, ECLI:EU:C:2000:358, delivered 4 July 2000; Case C-84/98, Commission of the European Communities v Portuguese Republic, ECLI:EU:C:2000:359, delivered 4 July 2000. KEYWORDS Anterior treaties – Article 351 TFEU – Maritime policy – Treaty conflicts – Denunciation – Member State agreements – Pacta sunt servanda – Primacy of EU law.
I. INTRODUCTION
N
orm conflicts are inevitable in a complex, multilayered and polycentric legal ordering such as the EU. A typical scenario of norm conflict arises where a Member State’s performance of anterior treaties – international agreements that were concluded by Member States with third countries before accession – is incompatible with EU law. The principle of pacta sunt servanda, a bedrock of international treaty law, requires Member States to perform their international commitments, or otherwise incur international responsibility.1 The primacy of EU law, by contrast, dictates that EU law prevails over conflicting domestic norms, including obligations arising out of anterior treaties.2 Member States are furthermore prevented from invoking their EU accession as a justification for non-performance of an
1 Vienna Convention on the Law of Treaties 1969, Art 26; for a discussion, see MN Shaw, International Law, 8th edn (Cambridge, Cambridge University Press, 2017) 685; O Dörr and K Schmalenbach, Vienna Convention on the Law of Treaties: A Commentary, 2nd edn (Berlin, Springer, 2018) 465–92. 2 P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 395; K Lenaerts and E de Smijter, ‘The European Union as an Actor under International Law’ (1999) 19 Yearbook of European Law 95, 114; e contrario, excluding the relationship between the Treaties and international agreements from the scope of the principle of primacy, see P Manzini, ‘The Priority of Pre-existing Treaties of EC Member States within the Framework of International Law’ (2001) 12 European Journal of International Law 781, 789.
398 Hannes Lenk anterior treaty, because the EU Treaties are res inter alios acta (‘a treaty concluded between others’) and cannot diminish the rights of, or impose obligations on, third parties.3 The EU Treaties are not insensitive to this predicament. The relevant principles of international law find expression in what is now Article 351 TFEU, first paragraph. Accordingly, the rights and obligations arising out of anterior treaties ‘shall not be affected by’ the EU Treaties. The provision accepts that EU accession cannot absolve Member States of their international obligations vis-à-vis third parties.4 Indeed, the provision goes beyond res inter alios acta, in that it establishes a hierarchy between anterior treaties and the EU Treaties to the effect that in a situation of conflict, anterior treaties will prevail.5 Article 351 TFEU, first paragraph, however, constitutes an exception to the primacy of EU law and must, as any exception in EU law, be interpreted restrictively.6 Article 351 TFEU, second paragraph therefore requires Member States to take ‘all appropriate steps’ to eliminate incompatibilities. The Commission v Portugal (Maritime Policies) cases7 were vital to the understanding of the scope of the Member States’ obligations under Article 351 TFEU, second paragraph at a time when a rich body of jurisprudence on Article 351 TFEU, first paragraph had already started to emerge8 and provided fertile ground for subsequent developments in jurisprudence.9 However, this chapter argues that the legacy of Commission v Portugal (Maritime Policies) cases is fundamentally misunderstood. Whereas they have become well-established authorities to the effect that denunciation of anterior treaties comes within the scope of the procedural obligation under Article 351 TFEU, second paragraph, this aspect was, in fact, the weakest point of reasoning of the Court. Their true constitutional relevance lies with the external dimension of the Common EU Maritime Transport Policy and the relationship between the first and second paragraphs of Article 351 TFEU. II. FACTS
In the decade prior to accession, Portugal had entered into a number of international agreements governing maritime trade with various African states as well as the (then) Federal Republic of Yugoslavia (FRY). These so-called cargo-sharing agreements effectively divided the market in carriage of goods by sea along national lines, reserving carriage between the ports of the contracting parties to vessels flying their flag and shipping companies owned by their 3 J Klabbers, Treaty Conflict and the European Union (Cambridge, Cambridge University Press, 2008) 117; on the international law principle more generally, see, eg PCIJ, Certain German Interests in Polish Upper Silesia, Judgment on Merits of 25 May 1926, PCIJ Series A, No 7, 29; ICJ, Territorial and Maritime Dispute (Nicaragua v Colombia), Judgment of 19 November 2012, [2012] ICJ Rep 624, para 227; for a discussion, see, eg C Focarelli, International Law (Cheltenham, Edward Elgar, 2019) 160–61 and 163. 4 Case 10/61, Commission v Italy, ECLI:EU:C:1962:2. 5 R Schütze, ‘The “Succession Doctrine” and the European Union’ in R Schütze, Foreign Affairs and the EU Constitution: Selected Essays (Cambridge, Cambridge University Press, 2014) 104; C Kaddous, ‘Effects of International Agreements in the EU Legal Order’ in M Cremona and B de Witte (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 298. 6 Schütze (n 5) 105. 7 Case C-62/98, Commission v Portugal, ECLI:EU:C:2000:358; Case C-84/98, Commission v Portugal, ECLI:EU:C:2000:359. 8 eg Commission v Italy (n 4); Case C-812/79, Attorney General v Juan C Burgoa, ECLI:EU:C:1980:231. See this volume, ch 12. 9 eg Case C-216/01, Budejovický Budvar, národní podnik v Rudolf Ammersin GmbH, ECLI:EU:C:2003:618; Case C-203/03, Commission v Austria, ECLI:EU:C:2005:76; Case C-205/06, Commission v Republic of Austria, ECLI:EU:C:2009:118; C-249/06, Commission v Sweden, ECLI:EU:C:2009:119; Case C-118/07, Commission v Finland, ECLI:EU:C:2009:715. See this volume, ch 56.
The Member States’ Duty to Denounce Anterior Treaties 399 nationals, excluding operators from other Member States.10 When Portugal acceded to the EU in 1985, these cargo-sharing schemes were becoming increasingly untenable in light of the EU’s open-market approach. It was not until a year later, however, that Regulation 4055/8611 (the Regulation) extended the free movement of services to maritime transport between Member States and between Member States and third countries. Articles 3 and 4 of the Regulation required that existing cargo-sharing agreements had to be ‘phased out or adjusted’ within six years. Having raised the issue of incompatibility between the existing cargo-sharing agreements and the Regulation with the Portuguese authorities already in 1990, the Commission sent formal notices to Portugal in 1994 and 1995,12 followed by reasoned Opinions in 1995 and 1997, respectively.13 Notably, Portugal did not contest that the cargo-sharing agreements were incompatible with the Regulation, but raised Article 351 TFEU, first paragraph in its defence, claiming that the Regulation cannot affect their commitments under the anterior cargo-sharing agreements.14 Portugal’s diplomatic efforts with the Republic of Senegal, the Republic of Cape Verde and the Republic of Sao Tomé and Príncipe appeared overall to be fruitful. The civil war in Angola and the breakup of the FRY that caused political turmoil across its succession states, however, complicated any potential renegotiation.15 The Portuguese government also insisted that the cargo-sharing schemes were no longer implemented in practice.16 In 1998, unsatisfied with these explanations, the Commission lodged actions against Portugal in both instances. The actions brought against Portugal under (what is now) Article 258 TFEU concerned Portugal’s failure to comply with its obligation under the Regulation to provide ‘fair, free and non-discriminatory access by [Union] nationals to cargo shares due to Portugal’.17 III. THE COURT
A. Opinion of the Advocate General Although the Commission v Portugal cases were not procedurally joined, the underlying facts and the arguments presented by both parties displayed sufficient similarity for Advocate General (AG) Mischo to present his view in a single opinion.18 Having laid out the positions of both parties, the AG summarily observed that Article 4 of the Regulation imposed a strict obligation on Member States to phase out or adjust existing cargo-sharing arrangements. Failing to do so required their termination.19 In light of Portugal’s defence, AG Mischo then turned his attention to an examination of Article 351 TFEU, refuting, in passing, Portugal’s contention that the Commission ought to have considered the provision of its own motion.20
10 Case C-62/98, Commission v Portugal (n 7) para 9; Case C-84/98, Commission v Portugal (n 7) para 11. 11 Council Regulation (EEC) 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries [1986] OJ L378/1 (hereinafter the Regulation). 12 Case C-84/98, Commission v Portugal (n 7) para 14; Case C-62/98, Commission v Portugal (n 7) para 12. 13 Case C-84/98, Commission v Portugal (n 7) para 16; Case C-62/98, Commission v Portugal (n 7) para 14. 14 Case C-62/98, Commission v Portugal (n 7) para 21; Case C-84/98, Commission v Portugal (n 7) para 26. 15 Case C-62/98, Commission v Portugal (n 7) para 31; Case C-84/98, Commission v Portugal(n 7) para 36. 16 Case C-62/98, Commission v Portugal (n 7) para 29; Case C-84/98, Commission v Portugal (n 7) para 34. 17 Case C-62/98, Commission v Portugal (n 7) para 1; Case C-84/98, Commission v Portugal (n 7) para 1. 18 Opinion of AG Mischo, Joined Cases C-62/98 and C-84/98, Commission v Portugal, ECLI:EU:C:1999:509. 19 ibid paras 52 and 53. 20 ibid paras 54–56.
400 Hannes Lenk The AG commenced by noting the declaratory nature of Article 351 TFEU, first paragraph, which pays testament to the fact that EU membership cannot relieve Member States from their commitments vis-à-vis third countries under anterior treaties. AG Mischo nevertheless warned that to construe this as an exception to the principle of primacy of EU law would be a mistake.21 Member States have committed themselves to ensure that their pre-accession international obligations will not obstruct the uniform application of EU law. It is against this backdrop, AG Mischo observed, that the second paragraph of Article 351 TFEU must be read.22 Accordingly, Article 351 TFEU, second paragraph spelt out an obligation to achieve a particular result, which was to eliminate incompatibilities between anterior treaties and EU law, by unilateral termination if necessary, but always within the bounds of permissible actions under international treaty law.23 For a Member State to invoke Article 351 TFEU, first paragraph in defence of its noncompliance with obligations under EU law, the anterior treaty must impose genuine obligations on the Member State vis-à-vis the third country. Rights acquired by the Member State under the anterior treaty are not protected and must be waived in as far as they are incompatible with EU law. For the AG, this was a direct result of the primacy of EU law.24 Indeed, Portugal had already ceased to apply the cargo-sharing arrangement – de facto allowing other Member States free, fair and non-discriminatory access to its share under the agreements with Angola and FRY, as AG Mischo noted. On the contrary, Article 3 of the Regulation prescribed a specific result, which was the removal of cargo-sharing arrangements that could not be achieved through a simple waiver of the entitlement to exercise rights acquired under the agreements.25 Even though Article 3 of the Regulation did not explicitly refer to denunciation as one of the appropriate steps, the AG concluded that having failed with their diplomatic efforts within the time limit prescribed by the Regulation, Portugal had no other option than unilateral termination.26 Portugal’s inability to reach agreements with Angola and the succession states of the FRY was, in this respect, attributable not to civil war or political turmoil, but to the inefficient use of the time available to the Portuguese government.27 Consequently, an obligation to denounce an anterior treaty did not presuppose full diplomatic breakdown,28 but may arise where, after a reasonable period of time has elapsed, diplomatic steps have proven unsuccessful.29 B. Judgment of the Court In spite of issuing two separate judgments, the reasoning presented in the Commission v Portugal (Maritime Policies) cases is largely identical. The Court commenced its reasoning by swiftly recalling prior case law on the Member States’ obligation under Articles 3 and 4 of the Regulation to denounce existing cargo-sharing agreements.30 Noting that the Portuguese 21 ibid para 57. 22 ibid para 58. 23 ibid para 61. 24 ibid para 64. 25 ibid para 86. 26 ibid para 90. 27 ibid paras 72–77. 28 ibid. 29 ibid para 69. 30 Case C-170/98, Commission v Belgium, ECLI:EU:C:1999:411; Joined Cases C-171, 201 and 202/98, Commission v Belgium and Luxembourg, ECLI:EU:C:1999:412; Joined Cases C-176/97 and 177/97, Commission v Belgium and Luxembourg, ECLI:EU:C:1998:285.
The Member States’ Duty to Denounce Anterior Treaties 401 government neither contested that it was under an obligation to adjust its agreements with Angola and the FRY nor that it had failed to achieve that result, the Court set out three aspects of Portugal’s defence.31 The first two aspects were dealt with expeditiously. In response to Portugal’s objection that the Commission’s actions were premature given the advanced stage of negotiations, the Court merely observed that it is for the Commission alone to decide on the initiate proceedings under Article 258 TFEU.32 Likewise, the contention that a difficult political situation in a third country could serve as a justification for Portugal’s continuing failure to fulfil its obligations under the Regulation was briskly swept aside.33 The Court then turned its attention to the third and central question of the case – the scope and meaning of Portugal’s obligation to take ‘all appropriate steps’ to eliminate incompatibilities between its anterior treaties and EU law in accordance with Article 351 TFEU, second paragraph. However, observing that the cargo-sharing agreements under consideration both included denunciation clauses, the Court concluded that the unilateral termination of the international agreements did not encroach upon the rights of either Angola or the FRY succession states. On that basis, the Court concluded that ‘the obligations to which the Portuguese Republic is subject by virtue of Articles 3 and 4 of [the Regulation] are not affected by the principle laid down in [Article 351(1) TFEU]’.34 As a consequence, Portugal’s obligation to denounce its cargo-sharing agreements arose directly out of the Regulation.35 The Court could have stopped its analysis here, but decided instead to complement its conclusions with some observations on Article 351 TFEU, second paragraph. In particular, the Court clarified that an obligation on the Member State to denounce anterior treaties cannot be excluded outright from the scope of that provision.36 Such an obligation, according to the Court, does not interfere with a Member State’s foreign policy interests because the provision already strikes a balance between such interests and the Member State’s duty to align their international commitments with EU law.37 IV. THE IMPORTANCE OF THE CASE
The Commission v Portugal (Maritime Policies) cases are well remembered for their contribution to the development of Article 351 TFEU, second paragraph. At its core, however, they were about the common policy on maritime transport – the backbone of a ‘genuine single market based on the four fundamental freedoms’.38 While the current EU Treaties and the extensive body of EU regulations in this field unmistakably reflect the relevance of the transport sector for EU economic integration, the state of affairs looked rather different in the mid-1980s. The development of a common transport policy was, of course, already envisaged in the Treaty of Rome. Yet, removed from the provisions of the EU Treaties on the internal market, the
31 Note that in Case C-84/98, Commission v Portugal (n 7), the defence raised, unsuccessfully, a procedural argument relating to the specific circumstances of the breakup of the FRY, see paras 42–44. 32 Case C-62/98, Commission v Portugal (n 7) para 37; Case C-84/98, Commission v Portugal (n 7) para 46. 33 Case C-62/98, Commission v Portugal (n 7) para 39; Case C-84/98, Commission v Portugal (n 7) para 48. 34 Case C-62/98, Commission v Portugal (n 7) para 56; Case C-84/98, Commission v Portugal (n 7) para 47. 35 Case C-62/98, Commission v Portugal (n 7) paras 57 and 61; Case C-84/98, Commission v Portugal (n 7) paras 48 and 52. 36 Case C-62/98, Commission v Portugal (n 7) para 58; Case C-84/98, Commission v Portugal (n 7) para 49. 37 Case C-62/98, Commission v Portugal (n 7) para 59; Case C-84/98, Commission v Portugal (n 7) para 50. 38 R Coleman and H Jessen, ‘General Introduction: The Regulatory Framework for Maritime Transport in the European Union’ in R Coleman and H Jessen (eds), EU Maritime Transport Law (Baden-Baden, Nomos, 2016) 7.
402 Hannes Lenk application of inter alia the free movement of services to maritime transport remains today – as then – to be developed subject to the idiosyncrasies of the common transport policy set out in Article 90 TFEU. Situating the Commission v Portugal (Maritime Polices) cases in their historical context, this section will first discuss their substantive contribution to the field of maritime transport, before taking a closer look at the cases’ legacy with respect to Article 351 TFEU. A. The External Dimension of the Common EU Maritime Transport Policy In order to grasp the full relevance of the Commission v Portugal (Maritime Policies) cases, it is helpful to briefly recall the particular historical context at the time. Up until the mid-1970s, Member States resisted the formation of a common policy around maritime transport and preferred to pursue their diplomatic interests individually through a complex and fragmented network of bilateral and regional shipping agreements.39 With the gradual expansion of the internal market, however, and the accession of the states of Ireland, Denmark and the UK in 1972, a political appetite for the liberalisation of maritime transport finally started to emerge.40 It was, nonetheless, the Court that paved the path towards an integrated common policy on maritime transport. In its French Seamen case,41 the Court finally integrated maritime transport policy formally within the general scheme of the EU Treaties,42 prompting an eager Commission to develop the external dimension of this newly uncovered policy area in line with the overall free market ideology that was reflected in the Treaty of Rome.43 A decade later, the Court declared that the Council had infringed the EU Treaties by failing to take the requisite legislative actions to establish the common transport policy within the transitional period,44 incidentally providing legislative impetus that led to the adoption of the 1986 legislative package, which included the Regulation.45 It is the context of political stalemate that paints the background to the Commission v Portugal (Maritime Policies) cases. Finding that the obligation to unilaterally terminate pre-existing cargo-sharing arrangements arose directly out of Article 3 of the Regulation46 signalled that these arrangements blatantly undermined the Commission’s efforts to define the external dimension of the Common EU Maritime Transport Policy based on free market principles.47 In relying on Commission v Belgium,48 the Court confirmed its established position that denunciation of cargo-sharing agreements came, in principle, within the purview
39 Coleman and Jessen (n 38) 8. 40 VJG Power, ‘The Historical Evolution of European Union Shipping Law’ (2014) 38 Tulane Maritime Law Journal 313, 320; for the view of a contemporary commentator, see AE Bredimas, ‘The Common Shipping Policy of the EEC’ (1981) 18 CML Rev 9, 10. 41 Case 167/73, Commission v France, ECLI:EU:C:1974:35. 42 ibid paras 24, 25 and 31; see, eg Bredimas (n 40) 14–17; Power (n 40) 321–23. 43 See, eg Commissioner Richard Burke, ‘Toward a Shipping Policy for the EEC’, speech delivered at the Seatrade Seminar, Brussels, 11 September 1978 (full transcript on file with the author). 44 Case 13/83 EP v Council [1985] ECLI:EU:C:1985:220, paras 66–68; for a discussion of the case and its relevance for the Common Shipping Policy, see R Greaves, ‘EC Maritime Transport Policy and Regulation’ (1992) 3 Duke Journal of Comparative & International Law 119, 124–25. 45 Power (n 40) 330–32; Coleman and Jessen (n 38) 10; for a survey of the 1986 legislative package, see, eg Greaves (n 44) 130–36. 46 Case C-62/98, Commission v Portugal (n 7) paras 57 and 61; Case C-84/98, Commission v Portugal (n 7) paras 48 and 52. 47 Power (n 40) 331. 48 Commission v Belgium (n 30).
The Member States’ Duty to Denounce Anterior Treaties 403 of Article 3 of the Regulation.49 It is in this respect that the Commission v Portugal cases lend much-needed support to the nascent maritime transport policy. The Court also took the opportunity to elaborate on the application of the six-year time limit imposed upon Member States under Article 3 of the Regulation. In particular, the Court confirmed that Member States are prevented from invoking external political circumstances as a justificatory ground for delay or impossibility of a diplomatic solution.50 Indeed, nearly eight years had passed from the time the Commission first brought this issue to the attention of the Portuguese authorities to the initiation of the legal actions, five of which were after the prescribed time limit had elapsed on 1 January 1993. Whereas AG Mischo elaborates in some detail on the (in)efficient use of time available to the Portuguese government,51 the brevity of the judgment makes it impossible to precisely assert the weight that the Court has given in its deliberations to the excessive delay. Nevertheless, the Commission v Portugal (Maritime Policies) cases suggested that the Court favours a strict application of the time limit prescribed in the Regulation.52 Lastly, the duty to terminate the international agreements, in spite of its de facto nonapplication, compares well with the position adopted in the French Seamen case, where the Court required an explicit adjustment of the French Code du Travail Maritime,53 even though the contested provision was not applied by the authorities.54 An appeal to clarity over pragmatism. B. Article 351 TFEU, Second Paragraph: The Other Legacy of Commission v Portugal (Maritime Policies) With the Commission v Portugal (Maritime Policies) judgments, the Court developed the scope of Article 351 TFEU, second paragraph in a direction that ‘gave some teeth to the procedural obligation’ it entails.55 Indeed, recognising denunciation of an anterior treaty as one of the ‘appropriate steps’ under Article 351 TFEU, second paragraph entrenched the two judgments firmly in jurisprudence and scholarship on anterior treaties. AG Lenz and AG Tesauro had already made similar suggestions in earlier cases,56 but it was not until its Commission v Portugal (Maritime Policies) judgments that the Court expressed its view on this issue.57 It is less frequently acknowledged, however, that this legacy is based on views that the Court offered in passing obiter dictum. The Court acknowledges as much: ‘the obligation incumbent on the Portuguese Republic is based not on [Article 351 TFEU,] but on the provision of Regulation No 4055/86’.58 49 ibid para 42. 50 C Hillion, ‘Case C-62/98, Commission of the European Communities v Portugal, and Case C-84/98, Commission of the European Communities v Portugal’ (2001) 38 CML Rev 1269, 1277. 51 Joined Cases C-62/98 and C-84/98 Commission v Portugal, AG Mischo (n 18) paras 72–78. 52 eg Case C-62/98, Commission v Portugal (n 7) paras 33, 39 and 52; in both cases renegotiation was still a feasible option, see Hillion (n 50) 1277. 53 Commission v France (n 41) para 47. 54 Opinion of AG Reischl, Case 167/73, Commission v France, ECLI:EU:C:1974:19, 377. 55 Schütze (n 5) 107. 56 Joined Cases 209/84 to 213/84, Criminal proceedings against Lucas Asjes and others, ECLI:EU:C:1985:360, Opinion of AG Lenz, p 1453; Opinion of AG Tesauro, Case C-345/89, Criminal proceedings against Alfred Stoeckel, ECLI:EU:C:1991:29, para 11; Opinion of AG Tesauro, Case C-158/91, Criminal proceedings against Jean-Claude Levy, ECLI:EU:C:1992:411, para 6; for a discussion, see Eeckhout (n 2) 427–28 and 431. 57 Klabbers (n 3) 136; Manzini (n 2) 782. 58 Case C-84/98, Commission v Portugal (n 7) para 57.
404 Hannes Lenk More importantly, the cases offer insight into the relationship between the first and second paragraphs of Article 351 TFEU, but this aspect is rarely discussed in scholarship. AG Mischo and the Court both concluded that Article 351 TFEU, first paragraph is not applicable on consideration of the facts. The AG alluded in his reasoning to the meaning of ‘rights and obligations’. Article 351 TFEU, first paragraph thus protects the rights of third countries by allowing Member States to fulfil their obligations under anterior treaties.59 The dispute essentially concerned access to Portugal’s entitlement to cargo shares. A Member State cannot, however, raise Article 351 TFEU, first paragraph to justify violations of EU law due to the exercise of rights it has acquired under an anterior treaty.60 The Court, instead, observed that there did not in fact exist a conflict between the anterior treaty and the Regulation, because exercising the denunciation clause would allow Portugal to fulfil its obligations under the Regulation without violating its agreements. Devoid of conflict, Article 351 TFEU, first paragraph was not applicable.61 Regarding the substance of the procedural obligation that Article 351 TFEU, second paragraph imposes, the AG embraced a reading that required Member States to waive the entitlement to exercise rights under an anterior treaty insofar as these are incompatible with EU law.62 The second paragraph of Article 351 TFEU thus gives effect to the principle of primacy of EU law, which dictates that EU law prevails in the case of conflict.63 The Court adopted a more stringent approach, embracing the notion that Article 351 TFEU, second paragraph establishes an obligation of result that demands clarity,64 implicitly rejecting the informality of a de facto waiver of rights.65 Central to both approaches was, nonetheless, the proposition that the procedural obligations underlying Article 351 TFEU, second paragraph – be that a waiver of rights or a duty to denounce the anterior agreement – arise also with respect to anterior treaties that fall outside the scope ratio materiae of Article 351 TFEU, first paragraph. The Member States are, in other words, primarily under an obligation to remove incompatibilities between anterior treaties and EU law, and may only raise Article 351 TFEU until the anterior treaty is either renegotiated or denounced. Although Article 351 TFEU, first paragraph in principle envisages that the performance of an anterior treaty may take precedence over EU law,66 the Commission v Portugal (Maritime Policies) cases assured that conflicts of obligations are ultimately resolved in favour of EU law.67 It is this relationship between the two paragraphs of Article 351 TFEU that forms the true legacy of the Commission v Portugal (Maritime Policies) cases. C. Article 351 TFEU, Second Paragraph and International Treaty Law As much as Article 351 TFEU embraced principles of public international law, it is here that the Commission v Portugal (Maritime Policies) cases end in a conundrum. Article 56 of the 59 M Cremona, ‘Defending the Community Interest: The Duties of Cooperation and Compliance’ in M Cremona and B de Witte (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 125, 132. 60 Commission v Italy (n 4) paras 10–11; see, eg Eeckhout (n 2) 424–25; Schütze (n 5) 105. 61 eg Case C-62/98, Commission v Portugal (n 7) para 46. 62 Opinion of AG Mischo in Joined Cases C-62/98 and C-84/98, Commission v Portugal (n 18) paras 64 and 81. 63 ibid para 64. 64 eg Case C-62/98, Commission v Portugal (n 7) para 49. 65 Subsequent case law seemed to follow this approach. See, eg Case C-471/98, Commission v Belgium, ECLI:EU:C:2002:628, para 143; Cremona also suggests that ‘the obligation to take “all appropriate steps” is stronger than a “best efforts” obligation’: Cremona (n 59) 133; for an opinion to the contrary, see Hillion (n 50) 1280. 66 Schütze (n 5) 106. 67 Cremona (n 59) 134.
The Member States’ Duty to Denounce Anterior Treaties 405 Vienna Convention on the Law of Treaties 1969 (VCLT) sets out that unless the international agreement makes specific stipulations, a right to unilateral termination of an international agreement exists under international law only if ‘the parties intended to admit the possibility of denunciation or withdrawal’ or ‘a right of denunciation or withdrawal may be implied by the nature of the treaty’. Manzini is, therefore, correct in pointing out that the obligation to denounce an anterior treaty under Article 351 TFEU, second paragraph must be limited to agreements that either include a denunciation clause or fulfil the requirements of Article 56 VCLT. Requiring Member States to denounce international agreements without a right of unilateral termination in international law would inevitably incur international responsibility on the part of the Member State and undermine the raison d’être of Article 351 TFEU, first paragraph.68 The Court in the Commission v Portugal (Maritime Policies) cases, however, arrived at the curious conclusion that the existence of a denunciation clause in the anterior treaty eliminates what would otherwise present a conflict between the anterior treaty and EU law.69 The Court therefore imposed upon Portugal a duty of treaty-conform application of its cargo-sharing agreements, effectively giving prevalence to the application of EU law over the anterior treaty. As a consequence, Portugal’s obligation to denounce the cargo-sharing agreements emanates directly from the Regulation.70 Taking this line of reasoning to its logical conclusion, it would exclude anterior treaties with denunciation clauses entirely from the substantive scope of application of Article 351 TFEU and effectively deprive Member States of any meaningful discretion over the management of their anterior treaties. This raises the question whether the Court would have decided differently had the international agreements not provided for a denunciation clause. As Article 351 TFEU gives expression to a broader principle of international law, the argument that the obligations arising out of its second paragraph ought to pay deference to international law too is rather compelling. The Court, however, addressed this point only with respect to the specific conflict provision in the Regulation, where it qualified the obligation to denounce cargo-sharing agreements ‘in so far [as] the denunciation of such an agreement is possible under international law’.71 It is unfortunate that the Court failed to address the link between Article 351 TFEU, second paragraph and international treaty law on denunciation in more detail, in spite of AG Mischo’s analytical discussion.72 Presented in this light, the Court’s reasoning in the Commission v Portugal (Maritime Policies) cases is inconsistent. The clear obligation to denounce anterior treaties that could not be adjusted by diplomatic means – the declaration that brought the two judgments to prominence – did not appear to apply to international agreements that already provided for the possibility of unilateral termination. At the same time, it could not have required the denunciation of anterior treaties for which there was no right of unilateral termination in international treaty law, effectively limiting the scope of application of Article 351 TFEU, first paragraph to Article 56 VCLT. Fortunately, subsequent cases corrected this conceptual flaw by clarifying that denunciation is required only insofar as it is compatible with international law.73 The exercise of denunciation clauses is thus merely one of the means available to Member States in complying with its obligations under Article 351 TFEU, second paragraph.74
68 Manzini
(n 2) 789–90. Case C-84/98, Commission v Portugal (n 7) paras 55–56. Case C-62/98, Commission v Portugal (n 7) paras 46–48. 71 ibid para 34. 72 Opinion of AG Mischo in Joined Cases C-62/98 and C-84/98, Commission v Portugal (n 18) paras 61 and 68. 73 Commission v Austria (n 9) paras 62–64; see also Klabbers (n 3) 139. 74 Budvar (n 9) para 169. 69 eg 70 eg
406 Hannes Lenk D. Conclusion The Commission v Portugal (Maritime Policies) cases confirmed the already long-standing assumption that Member States may have to denounce an anterior treaty in order to fulfil their obligations under Article 351 TFEU, second paragraph. Even though the Court’s remarks on this point were immaterial to their outcome, it guaranteed the two cases an eternal place in scholarship and subsequent jurisprudence on anterior treaties. Their relevance for the strengthening of the nascent Common EU Maritime Transport Policy has attracted much less attention. This may be explained by the rapidly declining relevance of cargo-sharing agreements. In fact, the two judgments marked the last time any such arrangement was ever litigated under the Regulation. Less obvious perhaps are the reasons for the shortage of criticism of the Court’s incoherent approach towards the relationship between Article 351 TFEU, second paragraph and international treaty law, and the lack of inquiry into the relationship between the first and second paragraphs of Article 351 TFEU, on which the Commission v Portugal (Maritime Policies) cases offer valuable insight. Subsequent cases straightened out the uncertainties left by the Court without putting a dent in its reputation as an authority in EU external relations law. The Court must have felt compelled to address the interpretation of Article 351 TFEU, second paragraph, presumably to offer much-needed clarity on this issue ahead of the Central and Eastern European enlargement in 2004, which explains the general nature of the Court’s remarks.75 It is regrettable, however, that the Commission v Portugal (Maritime Policies) cases are primarily remembered for their (somewhat undeserved) legacy as a stepping stone for future developments in the case law on anterior treaties, rather than their own constitutional relevance. V. ADDITIONAL READING Hillion, C, ‘Case C-62/98 Commission of the European Communities v Portugal, and Case C-84/98 Commission of the European Communities v Portugal’ (2001) 38 CML Rev 1269, 1277 Kaddous, C, ‘Effects of International Agreements in the EU Legal Order’ in M Cremona and B de Witte (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 292–312. Klabbers, J, Treaty Conflict and the European Union (Cambridge, Cambridge University Press, 2008) ch 6.
75 Hillion
(n 50) 1282.
39 The Relationship between the Common Commercial Policy and Other External Competences of the EU: Opinion 2/00 (Cartagena Protocol) KOEN LENAERTS AND STANISLAS ADAM* Opinion 2/00, Cartagena Protocol on Biosafety, ECLI:EU:C:2001:664, delivered 6 December 2001. KEYWORDS Procedure for an opinion of the Court – Scope – International agreements of the EU – Legal basis – Environmental protection – Common commercial policy – Protection measures concerning transboundary movements of living modified organisms (LMOs) – Measures having repercussions on trade – Duty of close cooperation between the EU and its Member States in the context of mixed agreements.
I. INTRODUCTION
I
n Opinion 2/00, the Court emphasised for the first time the constitutional significance of the legal basis of an EU act, inasmuch as it relates to the existence and scope of EU competence and on the procedure to be followed for adopting that act. Since proceeding on an incorrect legal basis is liable to invalidate the act concluding an international agreement on behalf of the EU, the Court confirmed that this issue can be addressed in the context of the preventive procedure for an Opinion now set out in Article 218(11) TFEU.1 Opinion 2/00 is also a landmark decision on the scope of the common commercial policy (CCP), for which the EU has exclusive competence, and its relationship with the competence that the EU shares
* All opinions expressed herein are personal to the authors. 1 Formerly, Art 300(6) EC. On the Opinion procedure, see S Adam, La procédure d’avis devant la Cour de justice de l’Union européenne (Brussels, Bruylant, 2011); G Butler, ‘Pre-ratification Judicial Review of International Agreements to be concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53.
408 Koen Lenaerts and Stanislas Adam with its Member States in the field of environmental protection. Although it did not abandon its broad conception of the CCP, which covers acts regulating trade even if they pursue non-commercial objectives, the Court distinguished such acts from others that are essentially intended to protect the environment even if they have repercussions on trade. Through that distinction, which remains relevant in the post-Lisbon era, the Court preserved the effet utile of Treaty provisions conferring upon the EU competence in environmental matters. II. FACTS
On 5 June 1992, during the Earth Summit, which took place in Rio de Janeiro under the auspices of the United Nations, the EU and its Member States signed the Convention on Biological Diversity.2 According to that Convention, the parties were to consider the need for and modalities of a protocol setting out appropriate procedures, including, in particular, advance informed agreement, in the field of the safe transfer, handling and use of any living modified organism [LMO] resulting from biotechnology that may have adverse effect on the conservation and sustainable use of biological diversity.3
On that basis, the parties adopted the Cartagena Protocol on Biosafety on 29 January 2000, which was signed on behalf of the Community and the Member States on 24 May 2000. Its purpose was to ensure that development, handling, transport, use, transfer and release of any LMO would be undertaken in a manner that prevents or reduces the risks to biological diversity, also taking into account risks to human health.4 The Cartagena Protocol set up various procedures to that end, including the advance informed agreement (AIA) procedure and the procedure for living modified organisms intended for direct use as food or feed, or for processing. The AIA procedure applies to the first intentional transboundary movement of an LMO for intentional introduction into the environment of the party of import. It aims to ensure that the party of import is notified about the proposed import, receives full information about the LMO and its intended use, and has an opportunity to assess the risks associated with that LMO and decide whether or not to allow the import.5 The Commission and the Council disagreed on the correct substantive legal basis for signing and concluding the Protocol.6 The Commission had proposed to adopt the decision authorising signature on the basis of provisions concerning both the CCP7 and environmental protection.8 The Council nevertheless adopted that decision on the substantive legal basis of environmental protection only.9 That had a clear impact on competence because, subject to the 2 Approved on behalf of the EEC by Council Decision 93/626/EEC of 25 October 1993 [1993] OJ L309/1. 3 Art 19(3) of the Convention. 4 Art 2(2) of the Protocol. 5 Information retrieved from the website of the Biosafety Clearing-House (BCH). The BCH was set up by Art 20 of the Protocol to facilitate the exchange of information on LMOs and assist the parties to better comply with their obligations under the Protocol. See www.bch.cbd.int/help/topics/en/The_Advance_Informed_Agreement_procedure. html. 6 Conversely, the procedural legal basis in Art 300 EC (now Art 218 TFEU) was not in dispute. 7 Art 133 EC (now Art 207 TFEU). 8 Art 174(4) EC (now Art 191(4) TFEU). According to that provision, the Union may in particular, within the sphere of its competences, cooperate with third countries in environmental matters through the conclusion of international agreements. 9 The Council opted for Art 175(1) TFEU (now Art 192 TFEU), which stated that the Council, acting under the then co-decision procedure, was to decide what action had ‘to be taken by the Community in order to achieve the objectives referred to in Article 174’.
The Relationship between the CCP and Other External Competences 409 ERTA doctrine of affectation,10 environmental protection is a competence that the Community (now the Union) shares with its Member States, whereas the CCP is an exclusive competence of the EU.11 It is true that, even following the legal basis proposed by the Commission, the Protocol could be signed and concluded as a mixed agreement since it included an area of shared competence. However, that choice was such as to have consequences at the level of implementation of the Protocol.12 That prompted the Commission to seek an Opinion of the Court prior to the conclusion of the Protocol. First, the Commission asked whether it was right in its proposal of a dual legal basis. Second, it sought confirmation that the powers retained by the Member States in matters of environmental protection covered by the Protocol were ‘residual’ in relation to the preponderant competence held by the Community to enter into the international commitments under that Protocol. The Commission referred in that context to difficulties usually associated with implementation and management of mixed agreements. An answer from the Court to this question would increase legal certainty for the management of the Protocol, in particular for the exercise of voting rights. The Council, together with the Spanish and French governments, challenged the admissibility of the request. In particular, they claimed that the request, by focusing on the legal basis of the concluding decision, did not raise an issue of compatibility of the Protocol with the Treaty or on vertical division of competence.13 Although an inappropriate legal basis may constitute a procedural defect leading up to the invalidity of the concluding decision, that could not have been the case in Opinion 2/00 as the position of both the Commission and the Council on legal basis would make no difference concerning the European Parliament’s prerogatives on that conclusion.14 The Council added that the Commission could have obtained the guidance that it sought by lodging annulment proceedings against the decision to sign the Protocol.15 On the substance, the Commission took the view that the Protocol essentially fell within the Community’s exclusive competence under the CCP. It referred to the broad conception of that policy in the case law, covering provisions regulating trade even if those provisions pursue objectives which were not primarily commercial, such as protection of the environment or of human health.16 However, some aspects of the Protocol, such as the provisions on the
10 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA), para 22. See this volume, ch 1. 11 Art 3(1)(e) TFEU. 12 According to Art 34 of the Convention on Biological Diversity, such conclusion by the Community together with the Member States created an obligation on their part to ‘decide on their respective responsibilities for the performance of their obligations under th[at] Convention or [the] Protocol’ and to clarify those responsibilities in a declaration of competence. 13 An issue of ‘compatibility’ under the procedure for an Opinion may depend not only on substantive rules, but also on rules relating to the powers, procedure or organisation of the institutions of the Community and the division of competences between the Community and its Member States. To that effect, see Opinion 1/75, OECD Understanding on a Local Cost Standard, ECLI:EU:C:1975:145, ECR 1360–61. See this volume, ch 4; Opinion 1/94, Agreements annexed to the WTO Agreement, ECLI:EU:C:1994:384, para 9. See this volume, ch 28. 14 Before the entry into force of the Treaty of Lisbon, the first subparagraph of Art 300(3) EC provided for a derogatory regime concerning trade agreements, for which even consultation of the Parliament was not compulsory. In contrast, agreements in the field of environment protection had to be concluded with the Parliament’s consent or even assent. As mentioned above, however, even the Commission accepted that environmental protection should form part of the legal basis. 15 It is settled case law that a decision authorising the signature of an international agreement on behalf of the EU is a challengeable act within the meaning of Art 263 TFEU. See, eg the judgments of Case C-377/12, Commission v Council, ECLI:EU:C:2014:1903 (Partnership and Cooperation agreement with the Philippines) (see this volume, ch 67) and Case C-28/12, Commission v Council, ECLI:EU:C:2015:282 (US Air Transport Agreement), para 15. See this volume, ch 72. 16 The Commission referred in particular to Opinion 1/78, International Agreement on Natural Rubber, ECLI:EU:C:1979:224, para 45 (see this volume, ch 11) and Case C-62/88, Greece v Council, ECLI:EU:C:1990:153
410 Koen Lenaerts and Stanislas Adam application of safety conditions to the development, transport, use, transfer and release of any LMOs outside international trade, and those concerning unintentional transboundary movements of LMOs, related instead to the Community’s competence in environmental matters. Since those aspects were not purely ancillary, Article 174(4) EC (now Article 191(4) TFEU) also had to be included in the legal basis. The Parliament essentially supported the Commission’s position. By contrast, the Council and the Member States’ governments, having submitted observations argued that the Protocol, considering its aim and content, concerned environmental protection only, and that the legal basis of the concluding decision should therefore not include the CCP. At most, the trade aspects of the Protocol would be ancillary to the provisions concerning environmental protection. The Protocol, which is founded on the precautionary principle, would not seek to regulate trade in LMOs, but to provide for measures ensuring the conservation and sustainable use of biological diversity, which is a specific objective of environmental policy. In particular, the AIA procedure was designed to prevent or control transboundary movements of LMOs for reasons linked to environmental protection, but not to define the characteristics that LMOs must have in order freely to enter the Community or to set up restrictions on international trade and the lowering of customs barriers. Moreover, difficulties related to mixity, to which the Commission referred, concern the management and application of agreements, and did not therefore justify extending the Community’s competences beyond those resulting from the Treaties. III. THE COURT
Addressing first the issue of admissibility, the Court emphasised that the choice of legal basis has constitutional significance. Since the Union has conferred powers only, the choice of an inappropriate legal basis is liable to invalidate the act concluding the international agreement, especially where the international agreement does not confer on the Union sufficient competence to ratify the agreement in its entirety, or where the appropriate legal basis for the concluding decision lays down a legislative procedure different from that which has in fact been followed. The procedure for an Opinion now laid down in Article 218(11) TFEU aims to forestall complications which such invalidation is liable to create, in particular by leaving unaffected the international commitments of the Union at issue. As it was conceivable on an initial analysis that the Protocol fell within the scope of the CCP, the answer to the first question touched on both the very existence of an exclusive competence of the Community to conclude it and the procedure to do so.17 That question was therefore admissible. Moreover, the Court rejected the argument that the request for an Opinion would be inadmissible because
(hereinafter the Chernobyl agricultural imports judgment). That judgment concerned annulment proceedings against a Council regulation restricting import within the Union of agricultural products originating in third countries following the nuclear accident in Chernobyl. The restriction consisted in a ban on imports of certain agricultural products exceeding the maximum permitted levels of radioactive contamination. By its first plea, Greece argued in particular that the regulation was erroneously based on the Community’s competence in the CCP, as it was concerned exclusively with protection of the health of the general public in the Member States. The Court rejected that argument, on the basis that the regulation’s aim and content indicated that it was specifically intended to regulate trade between the Community and third countries. The regulation was therefore correctly based on the Community’s competence in the CCP, even if the maximum permitted levels of radioactive contamination were fixed in response to a concern to protect public health (paras 17–20). 17 Opinion 2/00, Cartagena Protocol on Biosafety, ECLI:EU:C:2001:664, para 9.
The Relationship between the CCP and Other External Competences 411 the Commission failed to challenge the decision to sign the Protocol. Signature entails ‘fundamentally distinct legal obligations’ from conclusion of an international agreement, the second measure being in no way a confirmation of the first. The fact that certain questions may be dealt with by means of other remedies, in particular by lodging an action for annulment, does not preclude the Court from being asked for an Opinion.18 Equally important for the scope of the procedure for an Opinion was the Court’s rejection that the second question was inadmissible. That question was asked on the premise that the Protocol would be concluded as a mixed agreement. However, even assuming that that would be the case, the extent of competences of the Community and of the Member States could not have ‘any bearing on the very competence of the Community to conclude the Protocol or, more generally, on the Protocol’s substantive or procedural validity in the light of the Treaty’.19 That extent admittedly determines the respective responsibilities of the Community and its Member States for the performance of obligations under the Protocol, which explains the requirement of a declaration of competence set out in Article 34 of the Convention at issue.20 However, that issue is not capable of calling into question the validity of the concluding decision and therefore cannot be addressed in an Opinion of the Court. That procedure ‘is not intended to solve difficulties associated with implementation of an envisaged agreement which falls within shared [competences]’.21 The Court insisted nevertheless that, in the case of mixed agreements, close cooperation between the Member States and the Community institutions is required both in the process of negotiation and conclusion and in the fulfilment of the commitments entered into in order to ensure unity in the international representation of the Community.22 Concerning the substance of the case, the Court first recalled that the choice of legal basis must be based on objective factors amenable to judicial review, including the aim and content of the measure. If the latter pursues a twofold purpose, or has a twofold component, and if one is identifiable as the main or predominant purpose or component whereas the other is merely incidental, the measure must be founded on a single legal basis, namely that required by the main or predominant purpose or component. However, if the measure simultaneously pursues several objectives, which are inseparably linked without one being secondary and indirect in relation to the other, the measure may be founded on the corresponding legal bases.23 Applying those principles to the Protocol, the Court first emphasised the importance of the Convention on Biological Diversity as part of its context within the meaning of Article 31 of the Vienna Convention on the Law of Treaties. The Convention on Biological Diversity aims to preserve biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilisation of genetic resources, and thus falls within the field of environmental protection. The Protocol, which makes numerous references to the Convention, also pursues an environmental objective, highlighted by the precautionary principle, ie ensuring an adequate level of environmental protection in the field of the safe transfer, handling and use of LMOs.24 That objective was, moreover, reflected in the content of the
18 ibid paras 11 and 12. See already, to that effect, Opinion 2/92, Third Revised Decision of the OECD on National Treatment, ECLI:EU:C:1995:83, para 14. See this volume, ch 29. 19 Opinion 2/00 (n 17) para 15. 20 ibid para 16. See above n 12. 21 Opinion 2/00 (n 17). 22 ibid para 18. 23 ibid paras 22 and 23. On the origins of that scenario of a complex legal basis, see Case C-300/89, Commission v Council, ECLI:EU:C:1991:244 (Titanium Dioxide), paras 13 and 17. 24 Opinion 2/00 (n 17) paras 29 and 30.
412 Koen Lenaerts and Stanislas Adam Protocol, in particular the requirement in Article 2(2) that parties should prevent or reduce the risks to biological diversity in the development, handling, transport, use, transfer and release of any LMO and the various control procedures set up in Articles 7–13 of the Protocol. That is particularly true of the AIA procedure, which is a typical instrument of environmental policy.25 The context, aim and content of the Protocol thus indicated that the latter’s main purpose or component is to protect biological diversity against the harmful effects that could result from activities related to LMOs, in particular from their transboundary movement.26 The Court then examined the Commission’s arguments based on earlier case law defining the CCP broadly. The Commission maintained that that broad definition was fully in line with the WTO agreement and its annexes, which integrated non-commercial considerations. The Court observed that the protection measures in the Protocol indeed focused on transboundary movements of LMOs and that numerous provisions in it related specifically to those movements. However, even assuming that the measures under the Protocol would predominantly concern trade in LMOs, the Protocol’s context, aim and content indicated that it was an instrument intended essentially to improve biosafety and not to promote, facilitate or govern trade.27 In particular, ‘transboundary’ movements – unlike imports of agricultural products in the Chernobyl agricultural imports judgment – were not limited to movements for commercial purposes, but covered movements for non-commercial purposes, such as charity or scientific research, or movements serving the public interest. The Court added that the mere fact that provisions of an international agreement are liable to have repercussions on trade does not suffice to consider that it falls within the CCP. Otherwise, the specific provisions of the Treaties on environmental protection would become largely nugatory.28 Insofar as the Commission referred to practical difficulties related to the implementation of mixed agreements, the Court explained that they were not relevant for identifying the correct legal basis of the concluding decision.29 That decision therefore had to be based on a single legal basis, specifically related to environmental protection. Furthermore, the Protocol did not merely establish arrangements for cooperation regarding environmental protection, within the meaning of Article 174(4) EC (now Article 191(4) TFEU), but also laid down precise rules on control procedures relating to transboundary movements, risk assessment and management, handling, transport, packaging and identification of LMOs. As a result, the legal basis for concluding it was Article 175(1) EC (now Article 192(1) TFEU).30 That is what the Council did, on behalf of the Community, a few months after the Opinion was delivered.31 The Court ended its reasoning by observing that the harmonisation achieved at Community level in the Protocol’s field of application covered at that time only a very small part of that field and that, consequently, the Community did not enjoy exclusive external competence to conclude it on the basis of the ‘affectation’ doctrine introduced in ERTA. The Community and its Member States therefore shared competence to conclude the Protocol.32
25 ibid para 33. The Court referred here to Case C-187/93, Parliament v Council, ECLI:EU:C:1994:265, paras 23, 25 and 26, on prior notification and authorisation concerning shipments of waste between Member States. 26 Opinion 2/00 (n 17) para 34. 27 ibid para 37. 28 ibid para 40. 29 ibid para 41. 30 ibid paras 43 and 44. 31 Decision 2002/628/EC, [2002] OJ L201/48. 32 ibid paras 46 and 47. On that aspect of the Opinion, see Y Gautier, ‘Chronique de jurisprudence du Tribunal et de la Cour de justice des Communautés européennes’ (2002) 2 Journal du Droit International 534.
The Relationship between the CCP and Other External Competences 413 IV. THE IMPORTANCE OF THE CASE
A. Scope of the Procedure for an Opinion Opinion 2/00 clarified first the preventive function of the procedure for an Opinion now set out in Article 218(11) TFEU, the aim of which is to ‘forestall complications which would result from legal disputes concerning the compatibility with the Treaty of international agreements binding upon the [Union]’.33 Put another way by Butler, it is the ‘equivalent of a constitutional check’.34 Firstly, that function justifies that the Court addresses in such procedure the legal basis of the decision to conclude the envisaged international agreement. That issue has ‘constitutional significance’ because the Union’s competence to enter into international commitments is conditional upon the existence of a legal basis in the EU Treaties and, if that condition is satisfied, that basis may have an impact on the distribution of external competences between the EU and its Member States, and on the procedure for adopting the concluding decision. Against that background, the Court held that proceeding on an incorrect legal basis was liable to invalidate the concluding decision and thus create complications, which the procedure for an Opinion under Article 218(11) TFEU specifically aims to forestall. It is true that the position of the Commission in its request (dual legal basis), if endorsed by the Court, would have had no bearing on either Member States’ participation in the Protocol or the procedure for adopting the concluding decision. However, as Dashwood has observed, including Article 207 TFEU (by then Article 133 EC) in the legal basis would have meant that Member States lacked any competence with respect to some aspects of the Protocol, and was thus liable to call into question the validity of the concluding decision.35 The Court confirmed that ‘constitutional significance’ of the legal basis on numerous occasions.36 That expression was, for example, used in CITES37 in order to conclude that mention of the legal basis in an EU act is compulsory for the institution adopting it as it forms part of the duty to state reasons. Secondly, the Court also protected that preventive function when it held that failing by the Commission to challenge the decision authorising signature of the Protocol, although it was based exclusively on the Union’s environmental protection competence, did not preclude that institution from obtaining an Opinion of the Court on that Protocol. Signature and conclusion entail very different legal effects under EU law and under international law. ‘Conclusion’ expresses the Union’s final consent to be bound by the agreement. A concluded agreement is therefore no longer ‘envisaged’ within the meaning of Article 218(11) TFEU.38 From that moment, an Opinion of the Court could no longer achieve the preventive purpose of that procedure.39 Conversely, as the Court had already decided in Opinion 1/94 and confirmed 33 See Opinion 3/94, Framework Agreement on Bananas, ECLI:EU:C:1995:436, para 16; Opinion 2/94, Accession of the Community to the ECHR, ECLI:EU:C:1996:140, para 3. See this volume, ch 32; Opinion 1/15, EU–Canada PNR Agreement, ECLI:EU:C:2017:592, para 69. See this volume, ch 83. 34 G Butler, ‘Pre-ratification Judicial Review of International Agreements to Be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 59. 35 A Dashwood, ‘Opinion 2/00, Cartagena Protocol on Biosafety, 6 December 2001, nyr’ (2002) 2 CML Rev 366. 36 See, eg Opinion 1/08, Agreements modifying the Schedules of Specific Commitments under the GATS, ECLI:EU:C:2009:739, para 110. See also the judgments of Case C-687/15, Commission v Council, ECLI:EU:C:2017:803 (WRC-15), paras 49–52 and Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), paras 80–82. See this volume, ch 84. 37 Case C-370/07, Commission v Council, ECLI:EU:C:2009:590 (CITES), paras 38 and 47–49. 38 Opinion 1/94 (n 13) para 12; Opinion 3/94 (n 33) para 14. 39 Opinion 3/94 (n 33) para 19.
414 Koen Lenaerts and Stanislas Adam in Opinion 1/17,40 signature of the agreement, although it creates a duty in international law not to defeat its object and purpose,41 does not amount to a consent to be bound. Therefore, it creates no obstacle to an examination of the compatibility of the envisaged agreement with the EU Treaties. Thirdly, the Court decided that the procedure for an Opinion does not aim to resolve difficulties concerning implementation and management of an envisaged international agreement and thus refused to determine the extent of the respective competences of the Union and its Member States under the Protocol. Disputes may admittedly arise on whether a given action implementing a mixed agreement falls within the competences of the Union or the Member States, or both of them, and, in the last case, whether the Member States are (still) entitled to act without undermining the unity in the international representation of the EU.42 However, such issues are not liable to have any bearing on the validity of the concluding decision and are therefore unfit for a preventive examination of compatibility in a procedure based on Article 218(11) TFEU. That procedure is not designed to provide general guidance to the political institutions of the EU and to the Member States on the management of mixed agreements.43 In that sense, Opinion 2/00 confirmed the Court’s willingness to preserve the judicial nature of its mission when it decides on a request for an opinion, which was already apparent in Opinion 2/94.44 B. Scope of the CCP and Its Relationship with Other EU Competences The Commission’s request for an Opinion resulted in particular from the ‘proliferation of agreements imposing restrictions on international trade in response to non-commercial concerns’.45 That institution feared that the evolution would further undermine the Union’s exclusive competence under the CCP, following the strict approach on services and intellectual property in Opinion 1/9446 and Opinion 2/92.47 For the Commission, the relevance of its request thus went far beyond the Protocol at issue, which it admitted could48 be concluded as a mixed agreement anyway.
40 Opinion 1/17, ECLI:EU:C:2019:341, para 105. See this volume, ch 88. 41 See Art 18(a) of the Vienna Convention on the Law of Treaties (1969). 42 See, eg judgments of Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203, para 73 (see this volume, ch 58) and Case C-620/16, Commission v Germany, ECLI:EU:C:2019:256 (COTIF II), para 93. See this volume, ch 84. 43 That gave rise to critical comments. See C Maubernard, ‘L’“intensit é modulable” des compétences externes de la Communauté européenne et de ses Etats membres’ (2003) 39 Revue Trimestrielle de Droit Européen 243. 44 Above n 33. In that Opinion, the Court refused to offer guidance to the political institutions of the Union on which concrete legal solutions would ensure that accession of the Community to the ECHR is compatible with the Treaties, considering that ‘no negotiations had been commenced nor had the precise terms of the agreement for [such] accession … been determined when the request for an Opinion was lodged’ and when it was delivered (paras 7 and 19–22). On that analogy between Opinion 1/94 and Opinion 2/00, see S Adam, La procédure d’avis devant la Cour de justice de l’Union européenne (Brussels, Bruylant, 2011) 252–55. 45 Opinion 2/00 (n 17) summary of the Commission’s arguments. On that evolution in international practice, see also M Rhinard and M Kaeding, ‘The International Bargaining Power of the European Union in “Mixed” Competence Negotiations: The Case of the 2000 Cartagena Protocol on Biosafety’ (2006) 5 Journal of Common Market Studies 1024. 46 Above n 13. 47 Above n 18. 48 It must be observed that, since Opinion 2/00 has been delivered, the Court made clear that the mere fact that international action of the European Union falls within a competence shared between it and the Member States does not preclude the possibility of the required majority being obtained within the Council for the European Union to exercise that external competence alone. See Joined Cases C-626/15 and C-659/16, Commission v Council,
The Relationship between the CCP and Other External Competences 415 In support of its position, the Commission referred to cases in which it was decided that the fact that a measure ‘intended specifically to regulate international trade’ pursues objectives that are not primarily commercial (environmental protection, sustainable development, public health, etc) does not remove it from the scope of the CCP.49 It argued, in essence, that the focus should be on the effects – which it qualified as ‘significant’ – of the various control procedures set up by the Protocol (in particular the AIA procedure) on trade of LMOs between the Community and third states. The Court did not accept that approach essentially based on effects. Many provisions in the Protocol concern control of transboundary movements of LMOs, including between the Community (now the Union) and third states, and are therefore liable to have repercussions on trade of those LMOs.50 However, the ‘centre of gravity’ test, introduced in Opinion 1/78,51 requires examining whether the act, in the light of its overall context, aim and content, is essentially intended to promote, facilitate or govern trade. It is clear from that part of Opinion 2/00 that the CCP takes no priority over other areas of EU competence.52 Thus, an EU act falls within the scope of that policy only if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade in the products concerned.53 Applying that test to the Protocol, the Court concluded that the latter was ‘intended essentially to improve biosafety’ and thus related to environmental protection instead of the CCP. That resulted in particular from the Protocol’s objectives, but also from the fact that none of the control procedures which it set up applied specifically to transboundary movements of a commercial nature. The Court emphasised that this approach was necessary to protect the effet utile of Treaty provisions conferring upon the Community (now the Union) a competence on environmental protection.54 Opinion 2/00 paved the way for a series of cases clarifying the relationship between the CCP and environmental protection policy. In the Waste transfer case,55 the Commission sought annulment of a regulation governing shipment of waste within the Community and imported into or exported from it on the ground that the act was not based on both environmental protection and the CCP. The Court observed in the first place that the contested regulation did not refer to the pursuit of objectives falling within the CCP.56 Concerning its content, the Court made a parallel between the AIA procedure established by the Cartagena Protocol and the prior written notification and consent procedure in the waste transfer regulation, and described both of them as ‘typical instrument(s) of environmental policy’.57 Like the AIA procedure for LMOs, the prior written notification and consent procedure applied to all shipments of waste, whether of a commercial nature or not. The mere fact that the procedure was liable to affect shipments of waste between the Community and third countries did not suffice ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas), para 126 (see this volume, ch 87), referring to para 68 of COTIF I (n 36) (see this volume, ch 84) and para 244 of Opinion 2/15, EU–Singapore Free Trade Agreement, ECLI:EU:C:2017:376. See this volume, ch 82. 49 See the case law cited above (n 16). 50 Under the AIA procedure, one of those repercussions can be a ban on import where the state of import considers that the transboundary movement of the LMO at issue creates a risk for biological diversity. See Arts 8 and 10(3)(b) of the Protocol. 51 Above n 16, para 56. 52 Dashwood (n 35) 367. 53 Case C-347/03, Regione autonoma Friuli-Venezia Giulia and ERSA, ECLI:EU:C:2005:285, para 75 and case law cited therein. 54 Opinion 2/00 (n 17) para 40. 55 Case C-411/06, Commission v Parliament and Council (Waste transfer), ECLI:EU:C:2009:518. 56 ibid para 54. 57 ibid para 59.
416 Koen Lenaerts and Stanislas Adam to bring it within the scope of the CCP. Indeed, that procedure was only intended to protect against risks to human health and the environment arising from such shipments, and not to promote, facilitate or govern commercial movements of waste.58 Therefore, the waste transfer regulation fell principally under environmental protection policy.59 In two other cases, the Court distinguished the Cartagena Protocol from measures pursuing an objective of environmental protection but intended specifically to govern trade between the Community/Union and third states. In the first case, Energy Star,60 the Commission challenged the validity of the Council decision concluding the Agreement between the United States of America and the Community on the coordination of energy-efficient labelling programmes for office equipment. That agreement essentially contained a common set of energy-efficiency specifications and a common logo to be used by the parties for establishing consistent targets for manufacturers, thus maximising the effect of their individual efforts on the supply of and demand for such products.61 The concluding decision was based on environmental protection only. The Commission argued that it should have been based, instead, on the CCP. The Court observed that coordination of energy-efficient labelling programmes for office equipment was a commercial policy measure, inasmuch as it enabled manufacturers of one party to refer to just one standard as regards labelling and to comply with just one registration procedure with a single management entity in order to sell equipment bearing the Energy Star logo on the European and American markets. However, that coordination was intended to stimulate the supply of and demand for energy-efficient office equipment, and thus also pursued an objective of environmental protection. Weighing both components, the Court concluded that the agreement was predominantly intended to regulate the trade of office equipment, essentially because its effects on the environment were indirect and distant, and because it did not contain new energy-efficiency requirements.62 That judgment thus plainly confirmed that Opinion 2/00 did not overrule Opinion 1/78 or the Chernobyl agricultural imports judgment.63 The second case concerned annulment proceedings against the decision approving the Rotterdam Convention on the prior informed consent (PIC) procedure for certain hazardous chemicals and pesticides in international trade.64 That decision had Article 175(1) EC (now Article 192(1) TFEU) as its sole substantive legal basis. The Court observed that protection of human health and the environment was the most important concern in the mind of the signatories of the Convention. However, implementation of the PIC Procedure under the Rotterdam Convention is governed by provisions directly regulating trade in the products that it covers.65 Unlike the control procedures in the Cartagena Protocol or the waste transfer regulation, the PIC Procedure set up by the Rotterdam Convention applies specifically to certain hazardous chemicals and pesticides in international trade. As the Court put it, trading in LMOs was merely one of the aspects governed by the Cartagena Protocol, whereas,
58 ibid para 69. 59 ibid para 70. 60 Case C-281/01, Commission v Council, ECLI:EU:C:2002:761 (Energy Star). 61 Art 1(1). 62 Energy Star (n 60) paras 41 and 42. 63 See above n 16. 64 Case C-94/03, Commission v Council, ECLI:EU:C:2006:2 (Rotterdam Convention I). See this volume, ch 45. A parallel case, decided on the same date, concerned annulment proceedings against the regulation implementing the Rotterdam Convention: Case C-178/03, Commission v Parliament and Council, ECLI:EU:C:2006:4. 65 Rotterdam Convention I (n 64) para 44.
The Relationship between the CCP and Other External Competences 417 within the scheme of the Rotterdam Convention, trading of certain hazardous products constituted the element upon which application of the PIC Procedure was conditional.66 Consequently, the trade component of that convention was not merely incidental to the objective of environmental protection, which it pursued. Applying the Titanium Dioxide formula,67 the Court considered that those components were indissociably linked, and that neither of them could be regarded as secondary or indirect as compared with the other. The decision approving the Rotterdam Convention therefore ought to have been based on both the CCP and the environmental protection policy.68 The Treaty of Lisbon has extended the CCP to all types of trade in services except in the field of transport, to the commercial aspects of intellectual property and to foreign direct investment.69 However, that constitutional reform does not undermine the relevance of Opinion 2/00 in distinguishing the scope of the CCP from other areas of EU competence. The Court therefore confirmed in the post-Lisbon era that an EU act comes within the ambit of that policy only if it relates specifically to trade in that it is essentially intended to promote, facilitate or govern such trade and has direct and immediate effects on it.70 For example, Opinion 3/15 concerned competence to conclude the Marrakesh Treaty to facilitate access to published works for persons who are blind, visually impaired or otherwise print disabled.71 The Commission argued that the agreement contained copyright limitations and exceptions for the benefit of those persons and thus specifically concerned ‘commercial aspects of intellectual property’ that now form part of the CCP pursuant to Article 207(1) TFEU.72 The Court observed in particular that the preamble of the Marrakesh Treaty referred to circulation and cross-border exchange of accessible format copies of published works. However, nothing in that treaty indicated that circulation and exchanges should be of a commercial nature: the objective was to improve in general access of beneficiary persons to accessible format copies.73 Concerning the content of the Marrakesh Treaty, its rules governing export and import of accessible format copies related to international trade in such copies.74 However, the Court considered that those rules could not be distinguished from the overall purpose of that treaty as they were not specifically intended to promote, facilitate or govern international trade in accessible format copies, but rather to improve the position of beneficiary persons by facilitating such persons’ access to accessible format copies reproduced in other contracting parties.75 Expressly referring to Opinion 2/00, the Court therefore concluded that the mere fact that the scheme introduced by the international agreement might apply to commercially exploited works and that it might, in that event, indirectly affect international trade in such works was insufficient to bring it within the ambit of the CCP.76 That said, Article 207 TFEU differs from the regime previously in force under the EC Treaty insofar as it provides that ‘the [CCP] shall be conducted in the context of the principles and
66 ibid para 45. 67 See above n 23. 68 Rotterdam Convention I (n 64) para 51. 69 Art 207(1) and (5) TFEU. 70 See judgments of Case C-414/11, Daiichi Sankyo and Sanofi-Aventis Deutschland, ECLI:EU:C:2013:520, para 51 (see this volume, ch 64) and Case C-137/12, Commission v Council, ECLI:EU:C:2013:675 (Conditional Access Services), para 57. See this volume, ch 61. See also Opinion 2/15 (n 48) para 36. 71 Opinion 3/15, Marrakesh Treaty on access to published works, ECLI:EU:C:2017:114. See this volume, ch 78. 72 ibid para 27. 73 ibid para 67. 74 ibid para 87. 75 ibid para 89. 76 ibid para 100.
418 Koen Lenaerts and Stanislas Adam objectives of the Union’s external action’.77 That implies in particular that the CCP should ‘help develop international measures to preserve and improve the quality of the environment and the sustainable management of global natural resources, in order to ensure sustainable development’.78 In Opinion 2/15, which concerned competence to conclude the EU–Singapore Free Trade Agreement, the Court inferred from that evolution that the objective of sustainable development ‘forms an integral part’ of the CCP.79 However, that did not lead to a different test than that applied in Opinion 2/00 and the subsequent cases mentioned above: a measure aimed to foster sustainable development falls within the CCP only if it relates specifically to trade because it is essentially intended to promote, facilitate or govern trade, and has direct and immediate effects on it. The Court observed that, through the chapter of the EU–Singapore FTA on sustainable development, the parties to it intended to ensure that trade between them takes place in compliance with the obligations stemming from the international agreements concerning social protection of workers and environmental protection to which they are party.80 Concerning that chapter’s content, the Court observed that it does not relate to the scope of the international agreements to which it refers, nor to the competences of the EU or the Member States relating to those agreements. Moreover, it displays a specific link with trade between those parties by ensuring that that trade complies with those agreements and that no measure adopted under them is applied so as to create arbitrary or unjustifiable discrimination or a disguised restriction on trade, and is such as to have direct and immediate effects on that trade.81 That chapter of the FTA therefore fell in its entirety within the scope of the CCP. Lastly, the Commission referred in Opinion 2/00 to practical difficulties related to the exercise of shared competence, as it had already done in the procedure for an Opinion 1/94.82 In its view, avoidance of such difficulties should prompt the Court to interpret as widely as possible the scope of the Union’s exclusive competence under the CCP. Thus, although environmental protection should also form part of the legal basis of the concluding decision, the Commission emphasised that the Community had exclusive competence on ‘most of the matters’ governed by the Protocol.83 The Court rejected that argument. Such practical difficulties are irrelevant when determining the appropriate legal basis of an EU act. That is in line with the principle of conferral, now contained in Article 5(2) TEU, from which it follows that the mere prospect of difficulties in the management of a mixed agreement is not such as to justify conferring on the EU more competences than those conferred upon it by the Treaties. In Opinion 1/08, the Court extended that conclusion to difficulties or delays which may result from the joint participation of the Union and its Member States in the conclusion of an international agreement.84 V. ADDITIONAL READING Adam, S, La procédure d’avis devant la Cour de justice de l’Union européenne (Brussels, Bruylant, 2011).
77 Art 207(1), second sentence, TFEU. See also Art 205 TFEU. 78 Art 21(2)(f) TEU. 79 Opinion 2/15 (n 47) para 147. See this volume, ch 82. 80 ibid para 152. 81 ibid paras 155–57. 82 Opinion 1/94 (n 13) para 106. 83 The Member States would retain concurring powers only to the extent that the Protocol did ‘not affect trade in LMOs between the Community and non-member countries’. 84 Opinion 1/08 (n 36) para 127.
The Relationship between the CCP and Other External Competences 419 Butler, G, ‘Pre-ratification Judicial Review of International Agreements to Be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53. Maubernard, C, ‘L’“intensité modulable” des compétences externes de la Communauté européenne et de ses Etats membres’ (2003) 39 Revue Trimestrielle de Droit Européen 229. Dashwood, A, ‘Opinion 2/00, Cartagena Protocol on Biosafety, 6 December 2001, nyr’ (2002) 39 CML Rev 353. Gautier, Y, ‘Chronique de jurisprudence du Tribunal et de la Cour de justice des Communautés européennes’ (2002) 2 Journal du Droit International 531. Rhinard, M and Kaeding, M, ‘The International Bargaining Power of the European Union in “Mixed” Competence Negotiations: The Case of the 2000 Cartagena Protocol on Biosafety’ (2006) 5 Journal of Common Market Studies 1024.
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40 Autonomy of the EU Legal Order and International Agreements Extending the Acquis: Opinion 1/00 (European Common Aviation Area) CÉCILE RAPOPORT Opinion 1/00, Proposed agreement between the European Community and non-Member States on the establishment of a European Common Aviation Area, ECLI:EU:C:2002:231, delivered 18 April 2002. KEYWORDS Autonomy of EU Legal order – Extension of the acquis – European Common Aviation Area – Uniform interpretation of the rules – Preliminary referrals by internal courts of third states – Legality review – Alteration of the essential character of the powers of the EU.
I. INTRODUCTION
O
1/00 is one of the cases of the Court which concern the preservation of the autonomy of the EU legal order in relations with the conclusion of an envisaged international agreement. It comes after Opinion 1/91 and Opinion 1/92 on the European Economic Area Agreement (EEA Agreement),1 and raises similar issues. In Opinion 1/00, the Court validated a draft multilateral agreement organising the extension of part of the acquis of the European Union (then the European Community) to third countries, and the procedural and institutional mechanisms it created to secure the effectiveness of the agreement, as well as the uniform application of its provisions. The Court confirmed that the draft agreement did not affect the autonomy of the EU legal order because of the guarantees it provided. It took into account the ‘lessons learnt’ from Opinion 1/91 and Opinion 1/92, although adjusting them to the specific features of the agreement submitted. pinion
1 Opinion 1/91, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1991:490; Opinion 1/92, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, ECLI:EU:C:1992:189. See this volume, ch 20.
422 Cécile Rapoport For a long time after its delivery, Opinion 1/00 went unnoticed because there were few cases of its application to new scenarios. However, it is now gaining interest because of the recent increase in international agreements extending the EU acquis to third countries, some of which are emblematic, such as the EU–UK Withdrawal Agreement.2 It has also experiencing renewed interest since the publication of Opinion 1/17,3 which brought back to the fore the issue of the autonomy of the EU legal order in the context of increasing judicialisation of the settlement of international disputes, and ‘crystallized it around the concept of constitutional framework’.4 II. FACTS
Opinion 1/00 concerned an agreement establishing a European Common Aviation Area (ECAA) between the then European Community, Iceland, Norway and 10 Central and Eastern European countries,5 the latter 10 being, at the time, involved in an accession process to the EU.6 The ECAA was aimed at creating a single area in the field of air transportation ‘based on free market access, freedom of establishment, equal conditions of competition and common rules – including in the safety and environment areas’.7 To create this area, the agreement extended the relevant EC acquis to third states. A list of EC secondary law annexed to the agreement would thus become international law applicable between the 13 contracting parties. Within the EC, the applicable law remained EC law with the legal effects of EC law. The ECAA sought for the effectiveness of the extended acquis through the uniform interpretation of rules, judicial cooperation and an international dispute settlement mechanism in the hands of a mixed committee composed of representatives of each party, deciding unanimously. It presents similarities with the EEA Agreement, except that the EEA was structured on ‘twin pillars’, ie the EC and the European Free Trade Association (EFTA), administered by specific dedicated institutions for Iceland, Norway and Liechtenstein, which were already members of the EFTA. By contrast, the ECAA was to be founded on a single pillar. Since there were no such institutional links between the third states involved, it was not realistic to create a specific court and a surveillance authority in charge of reviewing the application of the extended acquis in the non-EC parts of the ECAA, as had been established for the EEA. Conversely, it was decided that whenever EC institutions and authorities were competent according to EC law, this competence was to be extended throughout the ECAA for the purpose 2 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community [2019] OJ C144 I/1. 3 Opinion 1/17, Comprehensive Economic and Trade Agreement between Canada, of the one part, and the European Union and its Member States, of the other part, ECLI:EU:C:2019:341. See this volume, ch 88. 4 K Lenaerts, ‘Le cadre constitutionnel de l’Union et l’autonomie fonctionnelle de son ordre juridique’ in D Petrlík, M Bobek and JM Passer (eds), Évolution des rapports entre les ordres juridiques de l’Union européenne international et nationaux (Brussels, Bruylant, 2020) 292 (own translation). 5 Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic and Slovenia. 6 Most of them accessed the EU before the signature of the agreement. A revised and simplified version of the agreement was thus signed in 2006 between the EC and its Member States, Albania, Former Yugoslav Republic of Macedonia (FYROM), Bosnia and Herzegovina, Bulgaria, Croatia, Iceland, Montenegro, Norway, Romania, Serbia and the United Nations Interim Administration Mission in Kosovo. 7 As mentioned in Art 1 of the envisaged agreement, now in force. See Multilateral Agreement between the European Community and its Member States, the Republic of Albania, Bosnia and Herzegovina, the Republic of Bulgaria, the Republic of Croatia, the former Yugoslav Republic of Macedonia, the Republic of Iceland, the Republic of Montenegro, the Kingdom of Norway, Romania, the Republic of Serbia and the United Nations Interim Administration Mission in Kosovo on the Establishment of a European Common Aviation Area (ECAA) [2006] OJ L285/3.
Autonomy of the EU Legal Order and International Agreements Extending the Acquis 423 of applying the corresponding provisions referred to in the envisaged agreement. Although it considered the agreement compatible with the Treaties, the Commission nonetheless requested an Opinion of the Court through Article 300(6) EC (now Article 218(11) TFEU) ‘to avoid any lack of certainty and in deference to the role of the Court’.8 The request focused on the autonomy issue. Whether the agreement should be a mixed agreement or an ‘EC-only’ agreement was not discussed before the Court, although the institutions apparently disagreed on the issue. Indeed, in the end, the ECAA was concluded as a mixed agreement,9 and not as an EU-only agreement as recommended by the Commission.10 III. THE COURT
The Court had to verify whether the envisaged agreement include[d] adequate measures, at least comparable to those laid down by the EEA Agreement, to guarantee that neither the endeavour to assure uniform interpretation of those rules nor the new institutional links established by the ECAA Agreement between the Community and the States Parties affect the autonomy of the Community legal order.11
The preservation of autonomy therefore required two checks. The Court first checked that ‘the essential character of the powers of the Community and its institutions … remain[ed] unaltered’.12 As far as the powers of the Community were concerned, the Court observed that the agreement would not affect the allocation of powers between the EC and its Members States, since the Member States would not be contracting parties. The lack of mixity also preserved the Member States from infringing Article 292 EC (now Article 344 TFEU), for they would not be tempted to settle their disputes using the mechanism provided by the agreement instead of seizing the Court.13 As far as the institutions were concerned, the fact that the agreement extended the powers of some of the EC institutions did not affect the powers they were conferred with by the EC Treaty. The Court recalled that ‘an international agreement … may affect the powers of the Community institutions, without, however, being regarded as incompatible’.14 What matters is that the agreement ‘does not alter the essential character of the powers conferred on the Community institutions by the Treaty’.15 In a nutshell, this meant that the nature of the powers of the EU institutions should not be modified, for it would potentially alter the institutional balance established by the Treaty, and would end up in its implicit revision without using the appropriate procedure. On the contrary, if the nature of the powers and the effects of the acts of the institutions remained unaltered, the Court had no objection to the extension of the territorial scope of their application. This is precisely what the Court verified. 8 See the Court’s summary of the written observations submitted by the Community institutions and the Governments of the Member States, IV of Opinion 1/00, Proposed agreement between the European Community and non-Member States on the establishment of a European Common Aviation Area, ECLI:EU:C:2002:231. 9 Council Decision (EU) 2018/145 on the conclusion, on behalf of the Union, of the Multilateral Agreement (…) on the establishment of a European Common Aviation Area (ECAA) [2018] OJ L26/1. 10 Proposal for a Council Decision on the signature and provisional application of the Multilateral Agreement (…) on the Establishment of a European Common Aviation Area (ECAA), COM (2006) 113 final. 11 See Opinion 1/00 (n 8) para 11. 12 ibid para 12. 13 This issue has since then been settled by the Court in Mox Plant: Case C-459/03, Commission of the European Communities v Ireland, ECLI:EU:C:2006:345. See this volume, ch 47. 14 See Opinion 1/00 (n 8) para 20. 15 ibid.
424 Cécile Rapoport The Court then checked that the procedures for ensuring uniform interpretation of the rules of the ECAA Agreement and for resolving disputes [would] not have the effect of binding the Community and its institutions, in the exercises of their internal powers, to a particular interpretation of the rules of Community law referred to in that agreement.16
First, the Court underlined that the envisaged agreement preserved the essential characteristics of EC law. Secondly, the Court focused on the references for a preliminary ruling provided for in Article 23(2) and Protocol IV to the ECAA Agreement. As it had already stated in Opinion 1/91,17 the Court saw no incompatibility of such a mechanism with the EC Treaty so long as its answers to the preliminary rulings were binding on the referring courts. Third, the Court examined whether the case law of the Court would be adequately taken into account by the contracting parties when it came to the interpretation of provisions of the ECAA Agreement which were identical in substance to provisions of Union law. Lastly, the Court examined the dispute settlement mechanisms established by the envisaged agreement which conferred a key role upon the Joint Committee. The fact that, when settling a dispute, its decision ‘shall not affect the case-law of the Court’18 was satisfactory – especially considering that the unanimity rule shall apply within the Joint Committee and that, should it fail in solving the dispute, the parties could agree on a referral to the Court ‘whose decision [would] be “final and binding”’.19 If there was a risk that the dispute remained unsolved, or that the solution only bound the parties involved in the dispute, this would not affect the way EC law would apply within the EC legal order, nor would it ‘oblige the Community’s representatives on the Joint Committee to apply rules that conflict with Community law’.20 In the end, the Court found no incompatibility of the envisaged agreement with the EU Treaty. The autonomy of the EC legal order was preserved, and the essential characteristics of the EC and its institutions remained unaltered. Opinion 1/00 can be seen in many ways as an application of the outcome reached with the ‘EEA Opinions’, taking into account the specific characteristics and needs of agreements extending the acquis when addressing the issue of autonomy. IV. THE IMPORTANCE OF THE CASE
A. A Specific Category of Agreement: Extending the Acquis Opinion 1/00 sheds light on what can be identified as a specific category of EU external agreement, ie the agreements extending the acquis, sometimes described as ‘integration agreements’.21 When Opinion 1/00 was delivered, the agreement establishing the EEA was the only agreement of this kind, and the ECAA Agreement was about to become the second 16 See Opinion 1/00 (n 8) para 13. 17 Opinion 1/91 (n 1) paras 59 and 61–65. 18 ibid para 44. 19 ibid. 20 ibid. 21 M Maresceau, ‘Les accords d’intégration dans les relations de proximité de l’Union européenne’ in C Blumann (ed), Les frontières de l’Union européenne (Brussels, Bruylant, 2013) 153: ‘the integration agreements with the neighbours all organise, in one way or another, the incorporation of part of the Union acquis as such into their internal legal order, which, combined with a more or less structured alignment, tends to achieve partial integration in certain areas or policies of the Union’ (own translation).
Autonomy of the EU Legal Order and International Agreements Extending the Acquis 425 one. Although such international agreements remain quite rare even today, Opinion 1/00 drew guiding principles for the conclusion of more of them. Apart from ECAA, two other sectoral multilateral agreements – the Energy Community Treaty22 and the Treaty Establishing the Transport Community (TCT)23 – have been concluded since Opinion 1/00. As for bilateral agreements, the EU–UK Withdrawal Agreement has to be mentioned, even though this agreement was not so much about extending the acquis as about maintaining its uniform application, at least during the transition period. An EU–Switzerland ‘institutional agreement’24 had also been negotiated in order to provide for a common institutional and procedural framework overseeing several bilateral agreements some of which are extending the EU acquis to Switzerland.25 The specificity of this category of agreements lies in the fact that their functioning implies that third states comply with provisions that are identical in substance to EU law but are different in their nature for they have the characteristics of international law. The purpose of such agreements is to provide for rules which are common to the EU and its contracting parties. They are applied and interpreted uniformly in each of the legal orders involved. Because external legal orders – whether international or domestic – may interpret the extended EC law, such agreements potentially constitute a serious threat to the autonomy of the EC legal order. Its preservation thus requires their content to provide for specific safeguards. The particularity of these agreements lies in the challenges they pose for the preservation of the autonomy of the EU legal order. Indeed, they are designed with the aim of creating a substantive law uniformly applicable to a territorial area comprising the EU and third countries. This homogeneity of the applicable law is intended to level the competitive playing field between economic operators acting within this area. For this reason, the effectiveness of their proper implementation is crucial and explains the presence in the agreements of procedures that contribute to achieving uniformity in the application and interpretation of common standards among the components of the legal area established. These mechanisms take the form of rules of interpretation, jurisdictional collaboration mechanisms or direct invocability of the provisions of the agreement before the domestic courts of each legal system involved. Nevertheless, as the Court pointed out in Opinion 1/91, the very identity of the rules can never perfectly guarantee the uniformity of their application and interpretation within the new normative space that has been established, since it does not constitute an integrated legal order. Indeed, the applicable rules always retain the characteristics of Union law in the EU part of the normative area, whereas they present the characteristics of international law in the other parts of the area. The interpretation of the provisions within the Union is done in the light of the system and purposes specific to the project of European integration, according to the methods of interpretation of Union law established by the Court. By contrast, it is done according to the methods of interpretation of the international law of treaties, and
22 This agreement establishes a different institutional and procedural framework for the extension of the acquis which is not inspired by the EEA Agreement. However, the interpretation rules of provision identical in substance with EU law remains similar. The institutions of the Energy Community shall interpret those provisions ‘in conformity with the case law of the Court of Justice or the Court of First Instance of the European Communities’. See Art 94 of the Energy Community Treaty [2006] OJ L198/18. 23 This agreement is quite similar regarding its institutional and procedural framework as the ECAA Agreement. See the Treaty establishing the Transport Community [2019] OJ L71/3. 24 See the draft version of the agreement: www.dfae.admin.ch/dam/dea/fr/documents/abkommen/Acccord-instProjet-de-texte_fr.pdf. 25 Switzerland decided not to sign the agreement in the end.
426 Cécile Rapoport in particular, the provisions of the 1969 Vienna Convention on the Law of Treaties between the Union and the other contracting parties. The differences in the methods of interpretation thus necessarily give rise to a risk of irreducible divergences of interpretation, which the various international agreements attempt to reduce. They cannot, however, do so at the cost of infringing the autonomy of the legal order. From this point of view, autonomy constitutes a final frontier that cannot be crossed in the quest for effectiveness. Opinion 1/00 is interesting in this respect in that it distinguishes between what falls within the need to preserve autonomy and what may be useful for the effectiveness of the agreement. In this respect, the Court relied on the notion of ‘essential character’ to draw the autonomy redlines. B. The ‘Essential Character’ Criteria: Drawing the Autonomy Redlines As the Court recalled, preserving the autonomy of the EU legal order is about preventing an agreement from ‘undermin[ing] the foundations of the Community and hence the Treaty itself’.26 In that sense, the autonomy principle is sometimes described as a ‘structural’ or ‘systemic’ principle.27 In Opinion 1/00, the Court pointed out that an agreement concluded on the basis of Article 300 EC (now Article 218 TFEU) cannot validly ‘affect the powers of the Community and its institutions, or the canons of interpretation of Community law, to such extent as to alter their essential character’.28 In a nutshell, an international agreement of the EU, which constitutes secondary law, cannot modify primary law. In order to determine where to draw the line between what is and what is not compatible with the autonomy principle, the Court relied on the criterion of the non-alteration of the ‘essential character’. This criterion presents a triple dimension corresponding to three facets of autonomy – structural, institutional and material – which all need to be preserved for they are intertwined.29 The structural dimension of the autonomy can be described as the non-alteration of the distribution of competences between the EU and its Member States and of the structure of the Union. This aspect was not much of an issue in Opinion 1/00, for the envisaged agreement was, at the time, envisaged as an EU-only agreement. Thus, there was no chance that the conclusion of such an international agreement would have any consequence on the distribution of competences between the EU and its Member States. This issue has, however, been debated later in important Opinions concerning mixed agreements, in particular Opinion 1/09,30 Opinion 2/1331 and Opinion 1/17.32 Applied to the institutional dimension of autonomy, the criterion consists in the preservation of the essential characters of the powers of the EU institutions. An international agreement can alter the powers of the institutions to some extent, so long as it refrains from ‘changing the nature of those powers’.33 Following that reasoning, an international agreement which would only change the territorial scope of the exercise of the powers of the institutions
26 See Opinion 1/00 (n 8) para 5. 27 M Cremona (eds), Structural Principles of EU External Relations Law (Oxford, Hart Publishing, 2018). 28 See Opinion 1/00 (n 8) para 5. 29 For instance, the exclusive competence of the Court for interpreting EU law is one of its essential character (institutional dimension) and the condition for the substance of EU law not to be altered. 30 Opinion 1/09, European and Community Patents Court, ECLI:EU:C:2011:123. 31 Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:2014:2454 See this volume, ch 70. 32 See Opinion 1/17 (n 3) fn 4. 33 ibid para 6.
Autonomy of the EU Legal Order and International Agreements Extending the Acquis 427 should not be considered as changing their nature. Hence, in Opinion 1/00, the Court interpreted the nature of the powers in a broad way. This notion also included the nature of the acts adopted by the institutions which have to produce the same legal effects as in the EU legal order. Doing that, the Court in Opinion 1/00 designed the legal conditions and regime for the extraterritorial powers of the institutions,34 which in turn directly result from the search of an effective and uniform application of an agreement that also extends the substance of the acquis to third states. Finally, applied to the material dimension of autonomy, the ‘essential character’ criteria can be understood as the need to preserve ‘the canons of interpretation of Community law’,35 ie the interpretation of EU law within the EU order, from alterations coming from external interpretations of any sort. This last dimension of autonomy implies the monopoly of interpretation of the Court.36 C. The Institutional Dimension of Autonomy: Allowing the Extraterritorial Powers of the EU Institutions The condition for extraterritorial powers compatible with the EU Treaties lies in the perfect symmetry with the powers exercised within the EU legal order, including in their judicial review by the Court. As for the Commission, the Court pointed out that the provisions of the draft agreement ‘are directly inspired by the provisions of the Treaty defining its responsibilities in the field of competition with regard to the Member States’. The Court remained the only competent court to review the legality of the acts of the European Commission when acting in this extraterritorial context, ie within the non-EU parts of the ECAA. The judicial remedies established by the EU Treaties remained applicable. The ECAA Agreement also recognised the possibility that disputes between contracting parties may be brought before the Court in a similar framework as the one established by Article 273 TFEU (then Article 239 EC). The ECAA Agreement also allowed the Court to deliver preliminary rulings on questions of interpretation or validity where a decision on the question is necessary, following a referral from national courts or tribunals from the state parties when they have chosen to apply such a mechanism. However, in such a case, its decision has to be compulsory. Opinion 1/00 did not precisely indicate who would be bound by its answer, which is regrettable, even though this external referral mechanism has never been used by contracting parties involved in such agreements. This is unfortunate, given that the international agreements that have been concluded since then remain unclear on that specific issue. As for its Annex IV, the ECAA Agreement, which was concluded after Opinion 1/00, indicates that ‘further to the preliminary ruling, a court or tribunal of a Contracting Party shall apply the interpretation ruled by the Court of Justice’ (emphasis added).37 This means, at the very least, that the tribunal referring to the Court is bound by its decision. Whether other courts are also to be bound by the interpretation remains uncertain due to differences between linguistic versions. The English linguistic version of Annex IV of the ECAA Agreement appears ambiguous on that point. Other linguistic versions38 specifically refer to ‘the’ referring court or tribunal of ‘the’ contracting party.
34 See
below s IVC. Opinion 1/00 (n 8) para 5. 36 See below s IVD. 37 See Annex IV of ECAA Agreement (n 7); Annex IV of Transport Community Treaty. 38 Such as Dutch, German, Spanish, French and Portuguese. 35 See
428 Cécile Rapoport Some refer to ‘the courts of the contracting parties’.39 Moreover, if one read the provision in light of the general interpretation provisions established by the agreements and validated by Opinion 1/00, the interpretation by the Court in such circumstances would be subsequent to the signature of the agreement. The legal regime of subsequent interpretation by the Court is provided for in the agreement. The contracting parties do not have to apply them so long as it has not been decided explicitly by the Joint Committee which is empowered to establish the common uniform interpretation of provisions of the agreement. However, if neither the contracting parties nor the Joint Committee are obliged to enforce them, they shall not affect such interpretation. The Court’s posterior interpretation does not produce any extraterritorial res interpretata effect, but their existence is directly opposable to the Joint Committee and, indirectly,40 to the EU contracting parties. Whether national courts or tribunals from Member States should be bound by the interpretation of the Court in that specific context is, however, undoubtful. The judgments of the Court have the res interpretata effect in Member States, and the fact that the preliminary ruling concerns an interpretation requested by a third state should not change this. Preserving the institutional dimension of the autonomy of EU legal order implies the nonalteration of the essential character of the powers of the EU institutions. This requirement remains necessary even when such powers are used, by virtue of an international agreement, outside the EU legal order, ie within those of EU’s contracting parties. The Court gave, with Opinion 1/00, and after Opinion 1/76,41 another supplementary clarification42 of what constitutes an essential character of the powers of EU institutions. In Opinion 1/17,43 the Court developed new aspects of this notion. By asserting, then, the need to preserve the ‘functioning of the institutions in accordance with the constitutional framework of the EU’,44 the Court also sought to preserve the effectiveness of their powers when they act within the EU legal order.45 D. The Material Dimension of Autonomy: Preserving the EC/EU Legal Order from External Interpretations of EC/EU Law Preserving the autonomy of the EU legal order also implies that the substance of EU law is preserved within the EU legal order. This substantial dimension of autonomy can be defined as the requirement that the substance of EU law within the EU is only determined by EU institutions and its interpretation by the Court in accordance with the constitutional framework set by the EU Treaties. Under no circumstances should the meaning (and thus the interpretation) of EU law be determined outside the EU, nor should it take precedence over the interpretation in force within the EU. 39 See, eg the Italian version of the text which stipulates: ‘gli organi giurisdizionali’. 40 The opposability occurs only once the Joint Committee has become aware that diverging interpretations coexist within the common area. 41 Opinion 1/76, Draft Agreement establishing a European laying-up fund for inland waterway vessels, ECLI:EU:C:1977:63. See this volume, ch 9. 42 In Opinion 1/76, the Court suggested that the powers of the EU institution may not be transferred to a noncommunity organism unless when they remain they are defined and limited so clearly and precisely that they are only executive powers. See paras 15 and 16. 43 See Opinion 1/17 (n 3) paras 137–61. 44 ibid para 119. 45 On this issue, see C Rapoport, ‘Balancing on a Tightrope: Opinion 1/17 and the ECJ’s Narrow and Tortuous Path for Compatibility of the EU’s Investment Court System (ICS)’ (2020) 6 CML Rev 1725.
Autonomy of the EU Legal Order and International Agreements Extending the Acquis 429 This substantial dimension of autonomy has, on several occasions, brought the Court to reject the compatibility of envisaged agreements submitting the EU to the jurisdiction of international courts and tribunals, although it admitted that, ‘in principle’, such a submission is compatible with the EU Treaties.46 Where an international agreement confers jurisdiction to interpret or settle disputes on an international diplomatic or judicial body, the provisions of the Union’s international agreements may be interpreted in the international legal order, but also in the internal legal order of each contracting party. This being established, the consequences for the autonomy of EU legal order nevertheless depend on several parameters: the nature of the dispute settlement mechanism47 empowered to interpret the provisions of the agreement; whether the provisions interpreted are identical in substance with EU law (or ‘raise question of EU law’48) or not; and how these first two parameters are being combined. What is interesting in Opinion 1/00 is that, although formulated about an international agreement extending the acquis, the need to ‘guarantee that the Community will not, in its relations with Members states or Community nationals, be bound by an interpretation which is at variances with Community case-law’ was actually beyond this specific type of international agreement. However, how it will affect the writing of the provisions of future envisaged agreements will depend on the parameters identified. Thus, the requirement identified by the Court in Opinion 1/00 as a way of guaranteeing the autonomy of the EU order will not be transposable mutatis mutandis to each and every EU international agreement, and will have to be adjusted on different occasions. Four combinations can be distinguished so far in EU practice. The first type of international agreement, addressed by the Court in Opinion 1/00, combined an extension of the acquis with a diplomatic dispute settlement mechanism. In the case where the dispute settlement body is of a diplomatic nature, as in the ECAA and EEA, a Joint Committee established by the agreement, composed of representatives of all the parties and responsible for implementing the agreement, is entrusted with interpreting the provisions of the agreement (including those which are identical in substance to EU law). This organ acts unanimously or by common agreement, which means that the agreement cannot, in theory, be interpreted in a manner that is not in conformity with the law of the Union. This is because of the presence in the decision-making body of representatives of the Union, who are bound to respect the EU Treaties and therefore obliged to defend a position in conformity with them. This procedural guarantee is, moreover, coupled, when an international agreement is intended to extend the acquis of the Union into the legal order of the partner, with specific obligations for the interpretation of provisions that are identical in substance to EU law. Those shall always be interpreted ‘in conformity with the case-law of the Court’,49 that is, prior to the signature of the agreement. The Joint Committee is also bound to settle the disputes with interpretations that never ‘affect the case-law of the Court’.50 In the end, while it would be binding for the EU
46 See Opinion 1/91 (n 1) para 40. 47 When the agreement does not set up any dispute settlement mechanism, each contracting party remains autonomous in its interpretation of the agreement. Differences of interpretation generate international negotiations if necessary, which then lead to the adoption of appropriate unilateral or negotiated measures, or even, where appropriate, the suspension or termination of the agreement. Nevertheless, everything takes place in the international order according to the rules of international law and without direct interference and constraint on the internal law of the contracting parties. 48 As in Art 174 of the withdrawal agreement. 49 Opinion 1/00 (n 8) para 39. 50 ibid para 44.
430 Cécile Rapoport and its institutions, a decision of the Joint Committee cannot bind the EU with an interpretation that diverges from the Court’s own. Altogether, these safeguards appeared sufficient for the Court to refuse to require ‘means of legal redress for cases in which the Joint Committee fails to reach a decision’.51 The second situation relates to international agreements which extend the acquis and also provide for a judicial dispute settlement mechanism, in the form of arbitration or an international court. In such a situation, the preservation of the autonomy presumably requires supplementary guarantees. Indeed, the EU is to be bound by a decision it cannot veto. There is a risk that the judicial body will interpret differently the provisions which are identical in substance with EU law, even if interpretation rules are enclosed in the agreement. It must be recalled that, at the time, Opinion 1/92 had validated the compatibility of an arbitral mechanism,52 only because it was not applicable to the provisions extending the acquis.53 In the presence of a judicial dispute settlement mechanism, the non-alteration of EU law requires that the judicial body be bound by the Court’s interpretation of EU law. Whenever it has doubts on how to interpret the agreement in line with the case law of the Court, it should thus be able to refer to the Court. Such a preliminary rulings mechanism between an international arbitral body and the Court has been inserted in the EU–UK Withdrawal Agreement,54 and in the envisaged EU–Switzerland institutional agreement.55 Since the Court has never been specifically asked about the compatibility of such a mechanism, one can only presume it would consider it sufficient. The third type of agreement, which is tending to grow in number, provides for an arbitral dispute settlement mechanism, but does not aim to extend the EU acquis in substance. This includes recent free trade agreements (FTAs) like the EU–Canada Comprehensive Economic Trade Agreement. For such international agreements, as stated by the Court in Opinion 1/17 regarding the Investment Court System established to settle investor–state disputes, there can be no need for a reference for a preliminary ruling to the Court. It is for the EU to decide how the investment arbitral ruling will be enforced, provided that it has no direct nor self-executing effect within the EU legal order. Provisions specifying that internal courts or tribunals of the EU and its Member States are not bound by the arbitral award constitute an additional guarantee. All in all, what matters for the autonomy to be preserved is that the Court remains the only one allowed to give the definitive interpretation of EU law within the EU legal order. One last type of agreements are bilateral FTAs, which organise the approximation with EU law of the national law of the EU’s partner. Such an example is the EU–Ukraine Association Agreement.56 A difference with other FTAs is that the partner can benefit from greater access to the EU market once it has achieved approximation of its law and regulations with the relevant EU acquis. Although the partner is guided in its approximation with objectives, a calendar and a monitoring system provided by the agreement, strictly speaking the provisions of the agreement do not extend the acquis. It is left to the partner to decide to adopt national laws with a content that is similar or equivalent to EU law in order to obtain better access to the EU market
51 ibid para 41. 52 This arbitral mechanism is provided for by the EEA agreement to settle disputes concerning the scope or duration of safeguard measures or the proportionality of rebalancing measures when the Joint Committee has failed to resolve it within a period of three months. 53 See Opinion 1/92 (n 1) para 36. 54 Art 174 of the EU–UK Withdrawal Agreement. 55 See Art 10, § 3 of the draft ‘institutional agreement’ (n 24). 56 Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, [2014] OJ L161/1.
Autonomy of the EU Legal Order and International Agreements Extending the Acquis 431 than it already benefits from by virtue of the agreement. Such agreements also provide for a dispute settlement mechanism in the form of an arbitration panel. In case of a bilateral dispute concerning the interpretation or application of a provision relating to regulatory approximation or imposing an obligation defined by reference to a provision of EU law, the arbitration panel is required to refer the question of interpretation to the Court and to wait for its ruling, which will be binding.57 Regarding the bilateral dispute settlement mechanism covering the other aspects of the agreement, the dispute settlement remains of a diplomatic nature, and does not imply any referral to the Court. Although the Court has never had the opportunity to rule on the autonomy issue regarding this type of international agreement, it should be noted that guarantees are established that the EU ‘will not in its relations with Member States or [EU] nationals, be bound by an interpretation which is at variance with [EU] case-law’.58 Thus, the preservation of the autonomy of the EU legal order appears to be secure. V. ADDITIONAL READING Castillo de la Torre, F, ‘Opinion 1/00, Proposed Agreement on the Establishment of a European Common Aviation Area, 18 April 2002, nyr’ (2002) 39 CML Rev 1373. Contartese, C, ‘The Autonomy of the EU Legal Order in the ECJ’s External Relations Case Law: From the “Essential” to the “Specific Characteristics” of the Union and Back Again’ (2017) 54 CML Rev 1627. Rapoport, C, ‘Le rôle de la Cour de justice dans les accords externes exportant l’acquis de l’Union européenne: typologie du champ des possibles’ in E Bribosia, N Joncheray, A Navasartian and A Weyembergh (eds), L’Europe au Kaleidoscope. Liber amicorum Marianne Dony (Brussels, Ed Université Libre de Bruxelles, 2019) 389–407.
57 See 58 See
Art 322 of the EU–Ukraine Association Agreement. Opinion 1/00 (n 8) para 40.
432
41 Clarification of Exclusive Implied External Competence of the Union: Open Skies WYBE TH DOUMA Cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, Commission v United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany, ECLI:EU:C:2002:624, ECLI:EU:C:2002:625, ECLI:EU:C:2002:626, ECLI:EU:C:2002:627, ECLI:EU:C:2002:628, ECLI:EU:C:2002:629, ECLI:EU:C:2002:630, ECLI:EU:C:2002:631 (Open Skies), delivered 5 November 2002. KEYWORDS International agreements of EU Member States – Implied powers – Common rules affected by international obligations – Exclusive competence of the Union – Air transport – Failure of Member States to fulfil their obligations – Secondary legislation governing internal air market – Loyalty – Substantial ownership and effective control.
I. INTRODUCTION
A
s is often the case in the field of EU external relations law, the Open Skies judgments1 dealt with the question whether the Union had an exclusive competence to negotiate and conclude an international agreement. In the infringement proceedings against eight Member States that had concluded new bilateral air transport agreements with the USA in the mid-1990s, the Court found that Union law had been violated. At the same time, the judgments made clear that the Union also could not conclude an air transport agreement with the USA on its own. In line with the ERTA judgment,2 the Court found that the Union was
1 Cases C-467/98, Commission v Denmark, ECLI:EU:C:2002:625; C-468/98, Sweden, ECLI:EU:C:2002:626; C-469/98, Finland, ECLI:EU:C:2002:627; C-471/98, Belgium, ECLI:EU:C:2002:628; C-472/98, Luxembourg, ECLI:EU:C:2002:629; C-475/98, Austria, ECLI:EU:C:2002:630; and C-476/98, Germany, ECLI:EU:C:2002:631. Case C-466/98, Commission v United Kingdom, ECLI:EU:C:2002:624 did not concern an Open Skies-type of agreement. The Commission’s action against the UK only concerned the compatibility with the Treaty provision regarding the freedom of establishment (Art 52 EC, now, after amendment, Art 49 TFEU) of its 1977 agreement with the USA. The latter case is not discussed any further here. 2 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1.
434 Wybe Th Douma only exclusively competent in areas on which internal rules existed that would be affected or distorted if Member States were to conclude agreements with third states. The ERTA case had dealt with road transport, a topic falling under the rules of the transport title of the EU Treaties. By contrast, air transport did not fall under these rules. Instead, it was left up to the discretion of the Council whether and to what extent appropriate provisions were to be adopted. This allowed the Member States to guard their prerogatives regarding air travel, and to keep their bilateral agreements with third countries in place. Whilst resisting requests from the Commission for a mandate to negotiate an air traffic agreement with the USA, the Council did agree with the adoption of several packages of internal rules on various aspects of air transport between 1987 and 1992. The third package of internal rules turned out to be decisive in the Open Skies cases, where the implied external competence of the Union was concerned. The Open Skies judgments provided the Court with an opportunity to set out under which circumstances such external powers could become exclusive for the Union. Comparing them to the ERTA principle, the Open Skies judgments were analysed as expressing ‘a restrictive application’,3 a more ‘rigid attitude’4 and a ‘rather static and restrictive approach’ to establish whether an exclusive competence regarding (elements of) an international agreement existed for the Union.5 One author concluded that the Court introduced an ‘odd rigidity’ in the treatment of exclusivity in the sense of Opinion 1/76 on the one hand, and a new flexibility where the ERTA principle was concerned on the other hand.6 Another found that the Court ‘dramatically reaffirmed’ the ERTA principles in its Open Skies judgments.7 These and other characterisations of the Open Skies judgments will be examined in the light of the ERTA judgment and several other Court decisions, notably Opinion 1/03 on the Lugano Convention. II. FACTS
Traditionally, international air transport has been regulated through bilateral agreements. Several states in Europe that would later become members of the Communities concluded bilateral air transport agreements with the USA towards the end of World War II, or shortly thereafter. In the course of the 1980s, the then Community aimed at setting up a liberalised European Single Aviation Market following liberalisation of this transport area in the USA. To this end, so-called ‘packages’ were adopted. The first, adopted in December 1987, and the second, adopted in July 1990, started to relax the rules governing fares and capacities. The third package, adopted in June 1992, removed the remaining commercial restrictions for European airlines operating within the Union, thus setting up the ‘European Single Aviation
3 PJ Slot and J Dutheil de la Rochère (2003) 40 CML Rev 697, 707. 4 P Mengozzi, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 278–79. 5 N Lavranos, ‘Opinion 1/03, Lugano Convention’ (2006) 43 CML Rev 1087, 1095. 6 R Holdgaard, ‘The European Community’s Implied External Competence after the Open Skies Cases’ (2003) 8 European Foreign Affairs Review 365, 367 and 388. 7 R Post, ‘Constructing the European Polity: ERTA and the Open Skies Judgments’ in MP Maduro and L Azoulai, The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010).
Clarification of Exclusive Implied External Competence of the Union 435 Market’.8 While the internal legal regime regarding air transport was taking shape, the Commission started eyeing the relationship with third countries in this policy area. Notably, it took the position that the existing bilateral agreements between EU Member States and the USA would need to be replaced by a single international agreement between the Union and the USA. In February 1990, the Commission submitted a first request for a mandate to negotiate such an agreement,9 followed by a second, slightly amended request in October 1992.10 The proposals were based on Article 113 EEC (now Article 207 TFEU) on the Common Commercial Policy, conveniently a legal basis offering exclusive competences to the Union. The Council opposed, underlining that the provision of the EU Treaties on air transport11 formed the correct legal basis for any such initiative. From Opinion 1/94, it followed that the Court agreed with the Council: commercial aviation agreements were to be based on the transport provision of the EU Treaties, not on Article 113 EEC (now Article 207 TFEU).12 Furthermore, the Council stressed that Member States retained their full powers in relations with third countries, except on matters where the Council had adopted harmonising rules.13 In 1995, the Commission submitted another request for a mandate. This time around, the Council agreed to the negotiation of an agreement with the USA pertaining to a specific, limited set of matters. Around the same time, a dozen EU Member States were negotiating new so-called ‘open skies’ agreements with the USA. The Commission informed the Member States that such agreements would affect internal Union legislation. Therefore, it was up to the Union to carry out such negotiations.14 When some of the Member States nevertheless concluded protocols to their existing agreements with the USA, liberalising air transport considerably, the Commission opened infringement proceedings against those Member States. Principally, the Commission claimed that they failed to fulfil their obligations under the EU Treaties, and in particular the then Article 5 EC (now Article 4(3) TEU) and Article 52 EC (now, after amendment, Article 49 TFEU), and also under secondary law. Since all of the infringement procedures were basically the same, the case against Belgium will be used to illustrate the importance of the case. The Commission maintained that Community competence arose, first, from the necessity to enter into international commitments necessary for the attainment of an objective for which the Community has an internal competence, within the meaning of Opinion 1/76,15 and, second, from the fact that the disputed commitments affect the rules 8 Notably Council Regulations (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers, [1992] OJ L240/1; No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes, [1992] OJ L240/8; No 2409/92 on fares and rates for air services, [1992] OJ L240/15; No 2299/89 of 24 July 1989 on a code of conduct for computerised reservation systems, [1989] OJ L220/1. 9 Commission, ‘Proposal for a Council Decision on a Consultation and Authorisation Procedure for Agreements Concerning Commercial Aviation Relations between Member States and Third Countries’, COM (90) 17 final. 10 COM (92) 434 final. The Commission set out that from the Treaty and the case law of the Court it follows that the Community in any case has exclusive competence for concluding bilateral air services agreements dealing in particular with market access, capacity, tariffs and related matters. It also announced that, so far, it had refrained from starting infringement proceedings in order to allow for open discussions on the development of a commonly agreed approach to the aviation relations with third countries. However, in case no progress can be made in this area by the end of 1992, the institution ‘will be obliged to take up its responsibilities without further delay’ (COM (92) 434 final, points 50 and 52). In the case of Belgium, it took until 2 June 1995 for the Commission to send a letter of formal notice (Open Skies (Belgium) (n 1) para 33). 11 Art 100(2) TFEU (ex-Art 84(2) EEC). 12 Opinion 1/94, WTO, ECLI:EU:C:1994:384, 48. See this volume, ch 28. 13 Council conclusions (Transport) of 15 March 1993, 4. Quoted by the Court in Case C-476/98, Commission v Germany, ECLI:EU:C:2002:631, para 18. 14 Letter of 17 November 1994. 15 Opinion 1/76, ECLI:EU:C:1977:63. See this volume, ch 9.
436 Wybe Th Douma adopted by the Community in the field of air transport within the meaning of the ERTA judgment. As for the necessity argument, the Commission urged the Court to find that exclusive external competence existed on the basis of abstract legal norms. It contended that the internal and external markets could not be separated.16 Even in the absence of Union provisions in the areas concerned, where the conclusion of an international agreement was necessary in order to attain objectives of the EU Treaties and these could not be attained by introducing autonomous common rules, the Union should be granted exclusive competence. Belgium asserted, inter alia, that achievement of freedom of establishment and freedom to provide services for nationals of the Member States was not inextricably linked to the treatment to be accorded in the Union to the nationals of non-Member States, or in non-Member States to the nationals of the Member States. It added that the Council had yet to settle the question whether an international agreement of the EU entailed significant advantages as compared with the existing system of bilateral relations, and therefore had not considered the exercise of that external competence to be necessary.17 Where the ERTA principle was concerned, the Commission claimed that the third package formed a complete set of common rules that bar Member States from entering into commitments affecting those rules by exchanging traffic rights and opening up access for third country carriers to the intra-EU market. Should the Court decide that the set was not complete, and the Union not exclusively competent to enter into the disputed commitments in their entirety, it should find that Belgium likewise had no competence and, therefore, in no way could individually enter into those commitments.18 Belgium notably pointed out that the third package did not regulate air transport services from the Union to third countries, or vice versa.19 III. THE COURT
A. No Exclusive External Competence within the Meaning of Opinion 1/76 The Court started off explaining that Article 94(2) EC (now Article 100 TFEU) could be used by the Council as a legal basis for conferring on the Union the power to conclude an international agreement in the field of air transport. However, the provision could not be regarded as in itself establishing external competence of the Union in that field.20 As was explained in Opinion 1/94,21 such a competence only arose when the conclusion of an international agreement was necessary in order to attain objectives of the EU Treaties that could not be attained by establishing autonomous rules.22 For the Court, such a situation did not arise here. Notably, it stated that the aim of the EU Treaties regarding air transport could be achieved by establishing autonomous Union rules that would mitigate any discrimination or distortions of competition through ‘open skies’ agreements concluded by Member States with the USA.23 In this respect, the Court noted that the internal market in air transport was achieved in 1992
16 Open
Skies (Belgium) (n 1) para 57. paras 63 and 64. 18 ibid para 81. 19 ibid para 84. 20 ibid para 66. 21 ibid para 89. 22 ibid para 68. 23 ibid para 70. 17 ibid
Clarification of Exclusive Implied External Competence of the Union 437 with the adoption of the third package, without the need for an agreement with the USA, at least in the eyes of the Council. Only subsequently, in 1996, was the Commission granted a (restricted) mandate to negotiate an air transport agreement with the USA. In a 1996 joint declaration with the Commission, it was set out that the system of bilateral agreements with the USA would be maintained until the conclusion of a new agreement binding the Union. While the measures adopted by the Council contained several provisions concerning nationals of non-Member States, their relatively limited character precluded inferring from them that the freedom to provide air transport services for Union nationals was inextricably linked to the treatment of nationals of non-Member States, or of nationals of Member States in non-Member States.24 Hence, air transport did not encompass a situation in which internal competence could effectively be exercised only at the same time as external competence.25 Because the Union thus lacked exclusive external competence within the meaning of Opinion 1/76 to conclude an agreement with the USA on air transport, Belgium (and other Member States subject to the same proceedings in different cases) did not infringe such competence. B. Exclusive Competence in the Sense of the ERTA Judgment The Court noted that the ERTA judgment encompassed the recognition of an exclusive external competence in consequence of the adoption of internal measures aimed at implementing a ‘common policy’. Article 3(e) EEC (now Article 4(e) TFEU) referred to the implementation of such a common policy in the area of transport. But while the provisions of the title on transport applied to road and inland waterway transport,26 as Article 84(1) EC (now Article 100(1) TFEU) set out, the same did not hold true for air transport27 because of Article 84(2) EEC (now Article 100(2) TFEU). The Court thus announced that it was necessary to investigate whether the adoption of internal measures not aimed at implementing a ‘common policy’ could also bring about an exclusive external competence. It declared that the attainment of the objective of common rules would be jeopardised if Member States were free to enter into international commitments affecting those rules. Since the Union would thus be prevented from fulfilling its task in the defence of the common interest, the Court concluded that the ERTA findings also apply where common rules were adopted on the basis of Article 84(2) EC (now Article 100(2) TFEU).28 So, while it had previously focused on common policy areas, the Court, in the Open Skies judgments, applied the ERTA principle to any common rules, irrespective of whether or not they were part of a ‘common policy’. That hurdle being taken, the Court then set out to investigate under what circumstances the scope of common rules may be affected or distorted by the international commitments at issue. It first recalled its previous judgments in which it had set out that this exclusive competence can be acquired where the international commitments fall within the scope of the common rules29 and in an area that is already largely covered by such rules.30 While those judgments opened the 24 ibid para 72. 25 ibid para 73. 26 As well as to transport by rail and by inland waterway. 27 As well as for sea transport. 28 Open Skies (Belgium) (n 1) paras 92 and 93. 29 ERTA (n 2) para 30. 30 Opinion 2/91, Convention No 170 of the International Labour Organization concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, para 25. See this volume, ch 22.
438 Wybe Th Douma door widely to the assumption of the existence of an exclusive competence for the Community, the Court continued by referring to Opinion 1/94, which partially closed the door again31 by finding that only if the Union included in its internal legislative acts provisions relating to the treatment of nationals of non-Member States would it acquire exclusive external competence in the spheres covered by those acts.32 The same applied, the Court recalled, where the Union had achieved complete harmonisation in a given area, because the common rules thus adopted could be affected within the meaning of the ERTA judgment if the Member States retained freedom to negotiate with non-Member States.33 Applying these criteria, the Court found that Regulation No 2409/92 prohibited air carriers of non-Member States which operate in the Union from introducing new products or fares lower than the ones existing for identical products. Hence, since the entry into force of those provisions, Member States were no longer entitled to enter on their own into international commitments concerning the fares and rates to be charged by carriers of non-Member States on intra-Union routes. In this area, the Union had acquired exclusive competence.34 The same held true for Regulation No 2299/89, which also applied to nationals of non-Member States, where they were offered for use and/or used in a so-called computerised reservation system (CRS) on Union territory. The regulation meant that the Union acquired exclusive competence to contract with non-Member States on obligations relating to CRSs offered for use or used in its territory.35 As a result, Belgium (and other Member States subject to the same proceedings in different case) was found to have violated Union law in these areas. IV. THE IMPORTANCE OF THE CASE
A. Implication for Actual Practice Traditionally, transatlantic air transport relations were governed by bilateral agreements between the USA and individual EU Member States. This fragmented approach formed an obstacle to the completion of a genuine internal market, and offered the USA the chance to divide and rule. By clarifying the sharing out of the external competences between the EU and its Member States, and certain issues concerning freedom of establishment, the Open Skies judgments provided a boost to the liberalisation of air transport in Europe. What is more, the Court managed to make all parties feel like they won, when in fact they had lost.36 The judgments made it clear that the Member States were not allowed to conclude Open Skies agreements on their own, because of certain aspects of these agreements (namely, computerised reservation systems and prices) being covered by internal rules and affected by the bilateral agreements. Hence, an Open Skies agreement would need to be concluded between the Union, its Member States and the USA. When the 2002 judgments made this clear,
31 As noted, Mengozzi (n 4) 278–79 labels the stance taken by the Court in Opinion 1/94 as strongly restrictive and as a more rigid approach than in ERTA and Opinion 2/91, with the Open Skies judgment confirming this rigid attitude. 32 Open Skies (Belgium) (n 1) para 96. Opinion 1/94 (n 12) para 95. See this volume, ch 28. 33 Open Skies (Belgium) (n 1) para 97. Opinion 1/94 (n 12) para 96. 34 Open Skies (Belgium) (n 1) paras 111–13. 35 ibid paras 115–16. 36 According to D Dombey and K Done, ‘EU Throws Doubt on “Open Skies” Deals’ Financial Times (London, 6 November 2002), the Commission, the UK and the USA all claimed their positions had been confirmed, at least partially.
Clarification of Exclusive Implied External Competence of the Union 439 the first Air Transport Agreement with the USA was agreed upon in 2007.37 This agreement was signed in April 2007, and has been applied provisionally since 30 March 2008. Further negotiations between the EU and the USA were launched in 2008. They resulted in the signature of a second-stage agreement in 2010.38 It built on the first agreement, and covered additional investment and market access opportunities. It also strengthened the framework for cooperation in regulatory areas such as safety, security, social aspects and the environment. The fact that the Union was at the table meant that the USA could no longer divide and rule, which must have strengthened the negotiation position on the European side of the Atlantic. Besides stimulating cooperation between the Member States and the Commission on concluding a new agreement with the USA, the Open Skies judgments also provided the basis for the adoption of Regulation No 847/2004 on the negotiation and implementation of air service agreements between Member States and third countries.39 It allowed Member States to conclude new air traffic agreements or amend existing ones, provided they met certain conditions and follow specific procedures. Notably, such bilateral agreements were not to harm the object and purpose of the Union’s common transport policy.40 B. Implications from a Constitutional Perspective Did the Open Skies judgments restrict the acquisition of exclusive external competences when compared to the ERTA case?41 While Advocate General (AG) Tizzano had invited the Court to take a stand on various aspects of both ERTA and Opinion 1/76 exclusivity, elsewhere, it has been suggested that the Court mainly referred to its older case law without further clarifications or statement of principle, possibly to avoid precedents.42 It does seem possible, however, to discern some answers and draw some further conclusions as to the meaning of the Open Skies judgments in EU external relations law. In ERTA, it was set out that the authority to enter into international agreements not only arises from an express conferment by the EU Treaties, but may equally flow from other provisions, and from measures adopted by the EU institutions.43 That decision did not follow the advice of AG Dutheillet de Lamothe,44 who in ERTA had warned that the acceptance of implied external powers would form ‘a discretionary construction of the law’ and ‘a judicial interpretation far exceeding the bounds which the Court has hitherto set regarding its power to interpret the Treaty’.45 By choosing to support further European integration through
37 Decision of the Council and the Representatives of the Governments of the Member States of the European Union, meeting within the Council of 25 April 2007 on the signature and provisional application of the Air Transport Agreement between the European Community and its Member States, on the one hand, and the United States of America, on the other hand [2007] OJ L134/1. 38 Protocol to amend the Air Transport Agreement between the United States of America and the European Community and its Member States, [2010] OJ L223/3. 39 [2004] OJ L157/7. 40 Art 4, para 3 TEU; Art 4, para 3 Regulation (EG) No 847/2004. 41 As the authors quoted at the end of s I of this chapter suggested. 42 Holdgaard (n 6) 389. The same author concludes that the Court in the Open Skies cases ‘did shed some light on the division of competences between the Community and the Member States’ (393). 43 ERTA (n 2) para 16. 44 Opinion of AG Dutheillet de Lamothe in Case 22/70, Commission v Council, ECLI:EU:C:1971:23 (ERTA). He added that the US Supreme Court supplements the powers of the federal bodies in relation to those of the confederated states (293). Doing so would be something a constitutional court could decide upon, whereas treaties between independent states should be interpreted more restrictively. 45 ibid 289.
440 Wybe Th Douma its purposive interpretation, the Court followed an activist approach.46 It reasoned that each time the Union adopts common policy provisions laying down common rules (‘whatever form these may take’), the Member States no longer have the right to undertake obligations with third countries which affect those rules or alter their scope.47 It added that as and when such common rules come into being, the external competence of the Union becomes exclusive,48 and explained that this was necessary in order to guarantee the unity of the common market and the uniform application of Union law.49 While the Court in ERTA accepted that implied external competences existed, it did not arrive at setting out more precise conditions under the circumstances of that case.50 The ERTA case thus seemingly opened the door widely to acquire exclusive powers, leaving it to later cases to explain when exactly Member States’ obligations with third countries affect or alter the scope of internal Union rules. Whilst the Open Skies judgments did formulate more precise conditions, for some, it meant that the door was partially closed again. However, the Open Skies judgments can also be regarded as encompassing a mere precision of the circumstances under which internal rules can be affected by an international agreement. The Court itself would later describe its findings on exclusivity in the Open Skies and other cases as ‘only examples, formulated in the light of the particular contexts with which the Court was concerned’.51 It added that any competence, especially where it is exclusive and not expressly conferred by the Treaty, must have its basis in conclusions drawn from a specific analysis of the relationship between the agreement envisaged and the Community law in force and from which it is clear that the conclusion of such an agreement is capable of affecting the Community rules.52
From the point of view of balancing the principle of conferral with the Union’s interest in safeguarding the unity of the internal market and the uniform application of EU law, this made sense. The Court thus balanced the Member States’ loyalty obligation with the post-Maastricht case law embedding the external powers in the EU constitutional framework. This conciliation between the two strands of the Court’s external competences jurisprudence became more discernible in Opinion 1/03.53 There, it emphasised that any competence not expressly conferred by the EU Treaties must have its basis in conclusions drawn from a specific and detailed analysis of the relationship between the agreement envisaged and the Union law in force. That implied not only a quantitative analysis, but also taking account of the nature and content of Union rules. Only in that manner could it be established whether an agreement could undermine the uniform and consistent application of the internal rules and the proper functioning of the system they establish. What is more, the Court emphasised that not only
46 P Eeckhout, ‘Bold Constitutionalism and Beyond’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 286. 47 ERTA (n 2) paras 17 and 22. 48 ibid para 18. 49 ibid para 31. 50 The Commission had failed to make formal use of its right to submit proposals open to it under Arts 75 and 116 of the Treaty. The Court thus assumed that the Member States acted in the interest and on behalf of the Community, in line with the loyalty principle of Art 5 of the Treaty. Hence, the Council did not violate Arts 75 and 228 of the Treaty. 51 Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81, para 121. 52 ibid para 124. 53 C Hillion, ‘ERTA, ECHR and Open Skies: Laying the Grounds of the EU System of External Relations’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 297.
Clarification of Exclusive Implied External Competence of the Union 441 current rules, but also future ones, where these are foreseeable, would need to be taken into account.54 In sum, the Open Skies judgments meant that Member States were no longer allowed to conclude their own agreements in the area of air transport with third states like the USA. At the same time, they did not provide the Union with an exclusive competence to conclude such agreements. Instead, since the Member States remained the ones to decide on various aspects of such agreements, they had to be concluded as mixed agreements. In that sense, the bold step taken by the Court in ERTA as refined through the Open Skies judgments did not outmanoeuvre the Member States, but forced them to cooperate, and in that manner stand united against the outside world. This certainly brought about advantages for both the European Union and its Member States. V. ADDITIONAL READING Eeckhout, P, ‘Bold Constitutionalism and Beyond’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 285–92. Heffernan, L and McAuliffe, C, ‘External Relations in the Air Transport Sector: The Court of Justice and the Open Skies Agreements’ [2003] EL Rev 601. Hillion, C, ‘A Look Back at the Open Skies Judgments’ in M Bulterman et al (eds), Views of European Law from the Mountain. Liber Amicorum Piet Jan Slot (Alphen aan den Rijn, Kluwer Law International, 2009) 257–65. Hillion, C, ‘ERTA, ECHR and Open Skies: Laying the Grounds of the EU System of External Relations’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 293–304. Holdgaard, R, ‘The European Community’s Implied External Competence after the Open Skies Cases’ (2003) 8 European Foreign Affairs Review 365. Mengozzi, P, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 213–17. Post, R, ‘Constructing the European Polity: ERTA and the Open Skies Judgments’ in MP Maduro and L Azoulai, The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 305–22. Slot, PJ and Dutheil de la Rochère, J (2003) 40 CML Rev 697.
54 Opinion
1/03 (n 51) para 126.
442
42 Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements: France v Commission II PAULA GARCÍA ANDRADE Case C-233/02, French Republic v Commission of the European Communities, ECLI:EU:C: 2004:173 (France v Commission II), delivered 23 March 2004. KEYWORDS Non-legally binding agreements – International soft law – Procedure of conclusion of international agreements – Institutional balance – Division of powers among EU institutions – Annulment action – Act having ‘legal effects’.
I. INTRODUCTION
I
n France v Commission II,1 the Court was asked to address the conceptualisation of international soft law and the EU principles and limitations resulting from them that apply when the Union resorts to non-legally binding instruments in its relations with third countries and other international organisations, instead of concluding international agreements. Although the Court did not sufficiently clarify the precise scope and use of these instruments in EU external relations, this judgment emphasised the need to respect the principles of division of powers and institutional balance, irrespective of the nature of the instrument. It therefore laid the foundations for future case law which came to concretise the division of powers among EU institutions, mainly between the Council and the Commission, for the adoption of non-legally binding agreements.2 1 Case C-233/02, France v Commission, ECLI:EU:C:2004:173. Throughout this chapter, it will refer to this case as France v Commission II, in order to avoid confusion with Case C-327/91, France v Commission, ECLI:EU:C:1994:305, which will thus be referred to as France v Commission I. See this volume, ch 26. 2 The terms ‘non-legally binding’ agreements or instruments will be used to refer to acts, which may take the form of memoranda of understanding, joint declarations, gentlemen’s agreements, political agreements or arrangements, by which subjects of international law engage in mutual relationships without assuming commitments having binding force under international law. The fact that these non-conventional concerted acts do not create legal obligations does not mean they lack legal nature or other legal effects: see, among others, P Daillier, M Forteau and A Pellet,
444 Paula García Andrade The constitutional dimension of this judgment and subsequent jurisprudence appears especially salient, taking into account that a certain degree of uncertainty on this division of powers still arises from EU primary law. The judgment in France v Commission II is also relevant for the issues the Court left unaddressed, such as the question whether non-legally binding instruments can be considered ‘reviewable acts’ under the annulment action. However, by agreeing to examine the substance of the case, this judgment inscribes itself into the case law of the Court which accepts that the condition for an act to have ‘legal effects’ is broader than ‘binding effects’. II. FACTS
In May 1998, the EU and the USA adopted a Joint Statement on a Transatlantic Economic Partnership (TEP) aimed at removing barriers restricting trade and investment, including regulatory barriers to trade in goods and services, and at identifying, through a future plan, areas for common action. The Joint Statement specified that it could not be interpreted as a negotiating mandate for the EU. In November of that year, a joint Action Plan was adopted, with the approval, for the EU part, of the Council, which also authorised the European Commission to undertake negotiations for the conclusion of bilateral agreements with the USA, including on technical barriers to trade.3 The Action Plan stated that the partners were to ‘identify and implement jointly defined general government principles/guidelines for effective regulatory cooperation’.4 Within this framework, the Commission and their homologues in the US government started discussions on the guidelines in July 1999. It was repeatedly asserted by the Commission during those negotiations that they were not to bind internationally the then European Community (EC) and the USA. The Guidelines on Regulatory Cooperation and Transparency were finalised between the negotiators in February 2002, but with the resulting document not being signed nor published in the Official Journal.5 In April 2002, the Commission sent a memorandum, for information, to the committee established under Article 133 EC (now Article 207 TFEU), annexing the text of the Guidelines and clarifying that these, as they stated themselves, were to be applied on a voluntary basis and that they did not constitute an international agreement.6 The Guidelines were structured in different sections, specified the objectives of cooperation, the field of application and the competent authorities which intended to apply them, and stipulated the procedural aspects regarding their implementation and further development. In June 2002, France brought an annulment action against the Commission, asking the Court to annul the decision whereby the EU institution concluded with the USA the Guidelines on Regulatory Cooperation and Transparency.7 The Commission challenged the admissibility
Droit International Public (Paris, LGDJ, 2009) 429–31; O Schachter, ‘Non-conventional Concerted Acts’ in M Bedjaoudi (ed), International Law: Achievements and Prospects (Paris, UNESCO/Dordrecht, Martinus Nijhoff, 1991) 265–69. 3 General Affairs Council meeting of 9 November 1998, press release no 12560/98, I. 4 ibid Annex VIII. 5 Text available at https://ustr.gov/archive/World_Regions/Europe_Middle_East/Europe/US_EU_Regulatory_ Cooperation/TEP_Guidelines_on_Regulatory_Cooperation_Transparency_Implementation_Roadmap.html. 6 ‘This document sets forth the Guidelines which regulators of the U.S. Federal Government and the services of the European Commission intend to apply on a voluntary basis as broadly as possible’ (point 7 of the Guidelines). 7 Action brought on 21 June 2002 by French Republic against Commission of the European Communities (Case C-233/02), Application, [2002] OJ C180/18.
Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements 445 of the application for annulment by raising two objections. Firstly, it held it had never agreed as an institution to be bound by the Guidelines. As they were ‘merely an administrative arrangement agreed at the services level’,8 there was not an EC measure that could be annulled. Secondly, the Commission maintained that even if the Guidelines were to be considered binding on it, the act did not fulfil the requirements of a ‘reviewable act’ under the annulment action, as it did not produce legal effects.9 On the substance, the first plea in law presented by France was built on the lack of competence of the Commission to conclude the Guidelines which were actually a binding international agreement, whose conclusion corresponded to the Council under Article 300 EC (now Article 218 TFEU). On the qualification of the instrument as an international agreement, France contended that the Guidelines were sufficiently detailed to reflect a commitment with binding force, entered into by subjects of international law, and that, in classifying its nature, the content of the agreement should prevail over the subjective intention of its authors. By contrast, the Commission pled, supported by the UK,10 that the intention of the parties, the decisive criterion in international law for this purpose, clearly showed the Guidelines were not a legally binding agreement. This intention was explicit both in the text of the instrument and deduced from its terms (‘“should” and “will” rather than “shall”’), and emerged from the Guidelines’ structure too, as the lack of final clauses on signature, entry into force, amendment, termination or dispute settlement showed. They also argued that the context of the adoption of the Guidelines militated in favour of their non-legally binding nature too, since the Joint Statement and the Action Plan on the TEP did not appear as a framework for the adoption of binding instruments and because the Guidelines were never notified to the US Congress for ratification. As the Commission interpreted that prior case law of the Court only denied to this institution the competence to conclude international agreements,11 and the Guidelines, deprived of legally binding force, could not be qualified as such, it could be inferred that the Commission had the power to adopt this instrument with its US counterparts. France’s second plea lay in the restrictions the Guidelines imposed on the Commission’s exclusive right of initiative within the legislative process by requiring prior consultation and exchange of information with the authorities of a third country. In the claimant’s view, this had consequences for the whole legislative process, since the Commission’s proposals affected the Council’s freedom of action, as it was only able to reject those proposals by unanimity. The Commission and the UK argued that the power of initiative included the possibility to consult and gather any necessary information in advance of submitting a proposal, and that was what the Guidelines foresaw. III. THE COURT
In its judgment, the Court directly examined the substance of the claim, after affirming that there was no need to rule on the objections to admissibility raised by the Commission since the annulment action was to be nonetheless rejected on substantive grounds. By contrast, Advocate General (AG) Alber had recommended that the Court dismiss the action as inadmissible.
8 France
v Commission II (n 1) para 4. seems however difficult to argue that ‘binding effect’ is not comprised under ‘legal effects’. 10 See Opinion of AG Alber, Case C-233/02, France v Commission II, ECLI:EU:C:2003:503, paras 40–41. 11 France v Commission I (n 1). See this volume, ch 26. 9 It
446 Paula García Andrade In his view, the annulment action is exclusively open, according to Article 230 EC (now Article 263 TFEU), to measures producing binding legal effects. AG Alber first accepted that the College of Commissioners had expressly approved the Guidelines and that there was therefore a Commission’s decision.12 Then, with the aim of analysing its binding effects, AG Alber discarded the arguments on the lack of signature, as it is not the only accepted expression of will,13 and on the lack of liability or dispute settlement provisions, as general principles of international law on international responsibility would nonetheless apply.14 AG Alber did, however, accept the argument on the use of ‘should’ and ‘will’ in the text as signs of non-legally binding obligations and, most importantly, the express statement contained in the Guidelines on their voluntary application. The wording of the objectives, as well as the context in which the instrument was adopted – a political dialogue between both partners – also suggested that it was just ‘the expression of purely voluntary coordination for the purpose of subsequent decisions’.15 The Court started by asserting that France was not claiming that the adoption of a nonlegally binding agreement must come under the exclusive realm of the Council, just that the Council should have been the institution concluding the Guidelines because they constituted a binding international agreement.16 The Court simply clarified that its judgment could not be read as confirming a conferral on the Commission to conclude non-legally binding instruments. On the contrary, the division of powers and the institutional balance established by the EU Treaties in the Common Commercial Policy had to be taken into account and be duly respected when adopting instruments of this nature.17 Then the Court acknowledged that both the Joint Statement and the Action Plan on the TEP were approved by the Council, and that the Article 133 EC Committee was also regularly informed of the progress of the negotiations.18 Thus, it seemed to be implicitly accepting that the Council’s approval of the commitments that led to the Guidelines’ adoption had an impact on the latter as well. After these clarifications, the Court stated that, as the Commission argued, ‘the intention of the parties must in principle be the decisive criterion for the purpose of determining whether or not the Guidelines are binding’,19 and that this intention was clearly expressed in the text of the Guidelines.20 By asserting that the Commission and the USA intended to apply the instrument on a voluntary basis, it was clear that they had no intention of entering into legally binding commitments, as the history of negotiations also confirmed,21 and without thus being necessary to interpret the meaning of the verbal terms used in the text. The Court concluded that the Guidelines were not a binding international agreement and thus did not fall under the scope of Article 300 EC (now Article 218 TFEU), which could not therefore be infringed. The Court rejected the second plea as unfounded too. Since the Guidelines were devoid of binding effects, they could not impose obligations on the Commission as to how to carry out its right of legislative initiative. In addition, the Court confirmed that this right of
12 Opinion of AG Alber in France v Commission II (n 10) para 49. 13 According to Art 11 of the Vienna Convention on the Law of Treaties (VCLT), signature, exchange of instruments, ratification, acceptance, approval and accession are all valid ways of expressing consent. 14 Opinion of AG Alber in France v Commission II (n 10) paras 53–54. 15 Following the terms used by the Court in Case C-58/84, Netherlands v Council, ECLI:EU:C:1996:171, para 27. 16 France v Commission II (n 1) para 39. 17 ibid para 40. 18 ibid para 41. 19 ibid para 42. 20 ibid para 43. 21 ibid para 44.
Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements 447 initiative included the possibility to engage in prior consultation and gathering of relevant information, so that providing for such a possibility in the Guidelines could not weaken the Commission’s power.22 IV. THE IMPORTANCE OF THE CASE
At a time when recourse to international soft law instruments for governing international relations is constantly increasing, the importance of the judgment delivered in France v Commission II is particularly noteworthy. In this case, the Court addressed the distinction between international agreements and non-legally binding instruments, and specified the decisive criteria to analyse when undertaking that differentiation (section IVA). Most importantly, the Court emphasised the need to respect the delimitation of powers among EU institutions and the principle of institutional balance when adopting these international soft law instruments. The concrete distribution of powers among EU institutions to adopt non-legally binding agreements, particularly those the Commission enjoys in the making of EU external action, was not completely clarified, but at least paved the way for subsequent case law on that question (section IVB). The importance of the case also lies in the questions the Court did not address, such as the admissibility of annulment actions against non-legally binding instruments (section IVC). A. Distinction between International Agreements and Non-legally Binding Instruments The judgment in France v Commission II first contributes to set the demarcation lines between international agreements and non-legally binding instruments, a particularly relevant input in light of the increasing use of informal measures as a way to govern the external relations of the EU with the wider world.23 In Opinion 1/75, the Court had clarified the concept of ‘international agreement’ used in the provision of the EU Treaties regulating the procedure of conclusion of this source of international law by referring to ‘any undertaking entered into by entities subject to international law which has binding force, whatever its formal designation’.24 Following the not very formalistic character of the international law of treaties, the Court provided, at that time, a material defining criterion in the sense that an international agreement must contain ‘a “standard”, that is to say a rule of conduct, covering a specific field, determined by precise provisions, which is binding upon the participants’.25 In the prior France v Commission I, the parameter used by the Court was the definition provided in the Vienna Convention of 1986 on the Law of Treaties between States and International Organisations or between International
22 ibid paras 50–51. AG Alber also highlighted that the Commission could consult governments of third countries when preparing legislative proposals, and even that this would be particularly desirable in trade policy. The Commission would be exercising rather than restricting its right of initiative: Opinion of AG Alber in France v Commission II (n 10) para 62. 23 See A Ott, ‘Informalization of EU Bilateral Instruments: Categorization, Contestation, and Challenges’ (2020) 39 Yearbook of European Law 569. 24 Opinion 1/75, ECLI:EU:C:1975:145, 1360. See this volume, ch 4. 25 ibid.
448 Paula García Andrade Organisations.26 In France v Commission II, the Court undertook the operation of determining, on the basis of the substance and not the name of the instrument, whether the Guidelines were to be qualified as an international agreement or a non-legally binding agreement. The intention of the parties, as opposed to the content of the act, was highlighted as the decisive criterion for differentiating ‘hard’ from ‘soft’ rules in international law.27 In the absence, however, of an explicit will of the parties, the normative content, the drafting of provisions and final clauses, the category of signatories, the procedure to formalise the agreement, its official publication or the inclusion of implementation, monitoring and dispute settlement mechanisms constitute additional signs which allow the nature of the undertakings to be assessed.28 If any doubt persists, a presumption of treaty should apply, considering it is the ordinary way of cooperation between subjects of international law.29 The Court, however, discarded the evaluation of these additional factors, and exclusively relied on the subjective intention of the signatories, as explicit in the text of the instrument and recalled throughout the negotiation process. On the nature of the instrument, it is important to note that AG Alber, in his Opinion, rejected the idea of the Guidelines having the status of an administrative agreement.30 As AG Tesauro had already developed in France v Commission I, agreements of this kind would be ‘arrangements brought into being by specific administrative entities with a view to establishing forms of cooperation with the authorities of other States having similar powers’,31 and thus limited to technical or administrative matters instead of comprising political commitments. These arrangements, not binding under international law, are only concluded on behalf of the institution and not the EU,32 and thus could be arguably signed by the Commission on the basis of the principle of administrative autonomy.33 It is doubtful, however, in this author’s view, that the Guidelines could be qualified as an administrative arrangement, since, even though the issues addressed were rather technical, their objectives appeared to present a political character too, and it could be argued that the administration services of both parties were the competent authorities to implement the Guidelines, but not the parties to the instrument. Furthermore, as the Guidelines were not binding, they could not be classified as a simplified international agreement or ‘executive agreement’ either. In any case, contrary to the constitutional practice of states, such as the US government, the
26 A treaty is defined as an ‘international agreement governed by international law and concluded in written form: (i) between one or more States and one or more international organisations; or (ii) between international organisations, whether that agreement is embodied in a single instrument or in two or more related instruments and whatever its particular designation’ (Art 2.1(1) VCLT-IO). On this concept, see also Opinion 1/13, ECLI:EU:C:2014:2303, para 37. See this volume, ch 69. 27 France v Commission II (n 1) para 42. See P Weil, ‘Vers une normativité relative en droit international?’ (1982) 1 Revue générale de droit international public 8. 28 See A Remiro Brotóns, ‘De los tratados a los acuerdos no normativos’ in Ministerio de Asuntos Exteriores, La celebración de tratados internacionales por España: problemas actuales (1990). See the Commission’s indications on careful drafting of non-legally binding instruments in its Vademecum on the External Action of the European Union, SEC (2011) 881, 43–44. 29 JA Pastor Ridruejo, ‘Le droit international à la veille du vingt et unième siècle: norms, faits et valeurs’ (1998) 274 Collected Courses of the Hague Academy of International Law 51. 30 Opinion of AG Alber in France v Commission II (n 10) paras 64–66. 31 Opinion of AG Tesauro, Case C-327/91, France v Commission I, ECLI:EU:C:1993:941, para 22. 32 Ott (n 23) 10. 33 See Art 335 TFEU, in fine; M Gatti and P Manzini, ‘External Representation of the European Union in the Conclusion of International Agreements’ (2012) 49 CML Rev 1732.
Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements 449 Commission cannot be equated to an executive power in this regard,34 as it lacks the general power to conclude simplified international agreements, save in very exceptional circumstances in which the institution receives the authorisation to bind the EU internationally.35 B. Demarcation of Powers Among EU Institutions to Adopt Non-legally Binding Agreements In France v Commission I, the Court had agreed on the lack of competence of the Commission to conclude an international agreement on behalf of the EU,36 but had not clarified whether this institution enjoyed any power to adopt informal commitments. In France v Commission II, the case directly involving the adoption of a non-legally binding instrument, the Court confirmed that such measures are not covered by the provision of the EU Treaties governing the procedure to conclude international agreements, the then Article 300 EC (now Article 218 TFEU).37 Primary law does not specifically resolve the applicable decision-making procedure in any other provision,38 and the Court did not clarify either who was empowered to adopt these international soft law measures on behalf of the EU. The Court cannot, however, be criticised for inaction, as it was constrained by the claimant’s plea.39 Since France only raised an infringement of Article 300 EC (now Article 218 TFEU), conferring on the Council the power to conclude what it was, in its view, a binding international agreement, the Court was not able to assess other arguments of Treaty violation as an ex parte ground for annulment. The Court nevertheless took the occasion to illuminate this issue by acknowledging that the non-legally binding character of the agreement was not in itself sufficient to confer a power of conclusion on the Commission, nor did it allow the avoidance of respect for the division of powers and the institutional balance established in the EU Treaties. This was the most important contribution of the case. General structural principles of EU law, and more particularly of EU external relations law, also apply when the EU decides to resort to instruments devoid of legally binding force in the making of its external action. This includes, as the Court explicitly stated, the division of competences and the institutional balance enshrined in the EU Treaties – two essential constitutional safeguards to respect in the development
34 Opinion of AG Alber in France v Commission II (n 10) para 66. 35 See Art 218(7) TFEU, Art 220 TFEU and Art 6 of Protocol No 7 on the Privileges and Immunities of the European Union. The Commission also receives delegated treaty-making powers under secondary law. See A Ott, ‘The EU Commission’s Administrative Agreements: “Delegated Treaty-Making” in between Delegated and Implementing Rule Making’ in E Tauschinsky and W Weiß (eds), The Legislative Choice between Delegated and Implementing Acts in EU Law (Cheltenham, Edward Elgar, 2018) 200–32. 36 France v Commission I (n 1) para 37. See this volume, ch 26. It also made clear that the Commission lacks an autonomous and general treaty-making power except in the exceptional circumstances indicated above, the initial clause of former Art 300 EC being subsequently supressed in Art 218 TFEU. 37 On this provision, see France v Commission I (n 1) para 28; Case C-425/13, Commission v Council, ECLI:EU:C:2015:483 (Australia ETS), para 62. See this volume, ch 73. Gatti and Manzini (n 33) 1733 argue that Art 218 TFEU cannot apply to the conclusion of non-binding instruments, since it would run counter to the principle of conferral and because the procedure and conditions referred to in that provision seem incompatible with those less burdensome which political commitments need. 38 Opinions and recommendations are the only soft law instrument to which reference can be found in EU primary law, in Arts 288 and 292 TFEU. 39 France v Commission II (n 1) para 39.
450 Paula García Andrade of an increasingly ‘informalised’ external activity.40 However, the impact of the judgment is certainly wider: if division of powers and institutional balance are applicable to the adoption of non-legally binding instruments, the rest of the structural principles of EU external relations law, such as conferral,41 loyal cooperation and rule of law,42 apply too. Although the Court did not concretely settle the lines of demarcation on the conclusion powers between the Commission and the Council, it did assert that institutional balance arising from the EU Treaties applied to the adoption of international soft law instruments and therefore avoided making these acts ‘immune from scrutiny’.43 This, in turn, paved the way for subsequent case law. In particular, an opportunity arrived in the Swiss MoU case44 that was delivered in a context in which the Commission would continue and even strengthen the practice to sign non-legally binding instruments on behalf of the EU by taking advantage, on the one hand, of the uncertainty left by the Court in France v Commission II45 and, on the other hand, of an extensive interpretation of Article 17 TEU which confers on the Commission the external representation of the Union.46 Indeed, the reforms brought by the Treaty of Lisbon reflected the notion of institutional balance that the Court had been fleshing out in its case law,47 in which the France v Commission II case inscribes itself,48 and also added the set of provisions defining the general powers of the institutions, whose unclarity, particularly on the division of powers in external action, led to a new wave of inter-institutional litigation that the Swiss MoU case exemplifies.49 Whilst analysed in another chapter in this book,50 it is relevant to highlight here how in this case the Court infers, from institutional balance and the general provisions settling
40 In this sense, see RA Wessel, ‘Normative Transformations in EU External Relations: The Phenomenon of “Soft” International Agreements’ (2021) 44 West European Politics 72; C Hillion, ‘Conferral, Cooperation and Balance in the Institutional Framework of EU External Action’ in M Cremona (ed), Structural Principles of EU External Relations Law (Oxford, Hart Publishing, 2018) 166; Ott (n 23) 19. 41 See M Chamon and V Demedts, ‘The Commission’s Back on the Leash: No Autonomy to Sign Non-binding Agreements on Behalf of the EU: Council v Commission’ (2017) 54 CML Rev 258; P García Andrade, ‘EU External Competences in the Field of Migration: How to Act Externally When Thinking Internally’ (2018) 55 CML Rev 157, 192–97. 42 When avoiding formal treaties, the risk of contradicting EU principles cannot be prevented in advance because of the non-applicability of the opinion procedure in Art 218(11) TFEU, whilst their lack of direct effect also prevents individuals from enforcing their rights: Wessel (n 40) 84–85. 43 M Chamon, ‘The Institutional Balance, an Ill-Fated Principle of EU Law?’ (2015) 21 European Public Law 371, who also explains the gap-filling function of the principle of institutional balance in this case. 44 Case C-660/13, Council v Commission, ECLI:EU:C:2016:616 (Swiss MoU). See this volume, ch 7. 45 On the Commission’s practice of concluding non-binding instruments on behalf of the EU, see Ott (n 23). See also her work for the institutional practice reflecting the judicial inputs of the Swiss MoU case and thus the obtaining of previous Council approval or endorsement (n 23, 20). 46 On how the external representation of the EU has been rationalised and reinforced by the Treaty of Lisbon, see Gatti and Manzini (n 33). 47 Hillion (n 40) 127. See the current Art 13(2) TEU and the Court’s representative pronouncement in Case 70/88, Parliament v Council, ECLI:EU:C:1990:217 (Chernobyl), paras 21–23 and 25–26. See also JP Jacqué, ‘The Principle of Institutional Balance’ (2004) 41 CML Rev 383; Chamon (n 43). 48 For Chamon and Demedts (n 41) 254, the Court, in Swiss MoU (n 44), completes the France v Commission cases and confirms again the limited autonomous role of the Commission in EU’s external relations. 49 See P Koutrakos, ‘Institutional Balance and Sincere Cooperation in Treaty-Making under EU Law’ (2019) 68 ICLQ 1; P Van Elsuwege, ‘The Potential for Inter-institutional Conflicts before the Court of Justice: Impact of the Lisbon Treaty’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law. Constitutional Challenges (Oxford, Hart Publishing, 2014) 115–36. 50 See this volume, ch 7.
Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements 451 the corresponding competences of each institution,51 that the power of external representation enjoyed by the Commission under Article 17 TEU does not include the right to sign a nonbinding agreement.52 That decision, by which the EU’s external action is made, belongs to the Council, which holds the policy-making responsibilities according to Article 16 TEU.53 Importantly, according to the Swiss MoU judgment and the Opinion of the AG, even if the agreement resulting from the negotiations conducted by the Commission replicated the negotiating mandate given by the Council, it is still up to the latter to verify the content and form of the agreement, and to decide whether its signature continues to respond to the EU’s interests.54 That judgment suggests, nonetheless, that if the Council were to give its prior consent, the Commission could thus be authorised to sign a non-legally binding instrument.55 To this effect, the Court, in France v Commission II, would have been implicitly sketching this solution already by underlining the context in which the Guidelines were adopted, and thus emphasising the Council’s prior approval of the TEP and its Action Plan, as well as the regular information provided to the trade policy committee.56 Nevertheless, inferring the Council’s consent in this way would not, in this author’s view, fulfil the above-mentioned conditions the Court will require in the Swiss MoU case.57 In spite of some nuances or inconsistencies, this line of case law, focused on institutional and procedural aspects of international rule-making, constitutes, as argued by Koutrakos,58 a sign of maturity for EU external relations law, as it illustrates more emphasis on the mechanics of what the EU does in the world, rather than in EU’s external competences. Quite strikingly, however, the European Parliament has not stepped into these legal disputes, so the Court has not had the occasion to pronounce on its role within the decision-making of international soft law instruments.59 From the assertion in France v Commission II that institutional balance shall be respected irrespective of the nature of the instrument,60 a power of political monitoring
51 Swiss MoU (n 44) paras 32–34. On their importance for the Court’s interpretation of the principle of institutional balance, see Hillion (n 40). 52 Swiss MoU (n 44) para 38. This is quite contrary to the Commission’s perception in its Vademecum (n 28) 44, in favour of its competence to sign political agreements and only needing the Council’s endorsement for soft law documents containing ‘new concrete political commitments or establish(ing) important new policy orientations’ (original emphasis). 53 Swiss MoU (n 44) para 40. The Council will precisely rely on France v Commission II (n 1) in support of its plea (para 23). 54 Swiss MoU (n 44) 43; Opinion of AG Sharpston, Case C-660/13, Council v Commission, ECLI:EU:C:2015:787 (Swiss MoU), para 62, para 113. Submissions made by the EU before an international judicial body are, however, considered to belong to the Commission’s power of external representation and not to infringe Art 16 TEU, as they are not aimed at formulating policy-making choices: Case C-73/14, Council v Commission, ECLI:EU:C:2015:663 (ITLOS), paras 71–76. See this volume, ch 74. 55 Koutrakos (n 49) 12. 56 France v Commission II (n 1) para 41. For Ott (n 23) 20, the Commission’s action was considered legal because the Council approved the negotiations beforehand and was regularly informed. Referring to the special circumstances of the case and those constant contacts during the negotiations, see PJ Kuijper, ‘The Case Law of the Court of Justice of the EU and the Allocation of External Relations Powers. Whither the Traditional Role of the Executive in EU Foreign Relations?’ in Cremona and Thies (n 49) 109–10. 57 In the latter, too, some kind of previous authorisation by the Council seems to be contemplated (Swiss MoU (n 44) para 37), inconsistent with the central reasoning of the judgment, that the assessment of Union’s interest is to be made both at the start and end of negotiations: Chamon and Demedts (n 41) 254. 58 Koutrakos (n 49) 3. 59 On the European Parliament’s role in treaty-making procedure, see Case C-658/11, Parliament v Council, ECLI:EU:C:2014 (Mauritius); Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66. 60 Which allows us to argue, as Wessel does, that the transformation from international treaties to soft law arrangements ‘may affect the norm, but not always the procedure’: Wessel (n 40) 78.
452 Paula García Andrade derived from Article 14 TEU can be easily defended, in this author’s view, in the adoption of non-legally binding instruments.61 It would even be possible to infer a right to be informed during the procedure in light of the principle of democracy underpinning the attribution foreseen in Article 218(10) TFEU for international agreements.62 The democratic control over the EU’s external action that the European Parliament should exercise may precisely constitute one of the arguments justifying limitations to the use of international soft law measures, instead of international agreements. Indeed, these instruments should only be legally accepted if the basic requirements of the EU constitutional framework in general and the institutional principles of Article 13(2) TEU in particular are respected.63 C. Non-legally Binding Instruments as Reviewable Acts under the Annulment Action One of the most important ‘absences’ in the judgment of the Court in France v Commission II relates, in this author’s view, to the admissibility of the annulment action. The Court affirmed there was no need to rule on the objections to admissibility raised by the Commission as the action was to be nonetheless dismissed on the substance. More precisely, the position of the Court regarding the fulfilment by non-legally binding measures of the requirements imposed by the concept of ‘reviewable act’ under Article 263 TFEU does not appear to have been harmonious or consistent over the years, since two positions can be traced in its argumentations regarding the notion of an act having ‘legal effects’. On the one hand, the Court has argued that legal effects are to be equated to binding effects, and thus that an annulment action against a non-legally binding act is to be declared inadmissible. Firstly, in ERTA, in which the Court for the first time stated that challengeable acts under this action are ‘all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects’,64 the need for an extensive interpretation of the scope of the annulment action focused just on the category of the act and not on its effects, as importance was given to the fact that the proceedings in ERTA were ‘binding on both the institutions and the Member States’.65 From Grimaldi, it can be inferred that, in contrast to preliminary references, only binding acts can be subject to annulment actions.66 The Opinion of AG Alber in the present case, France v Commission II, also takes this restrictive position.67 More recently, in the Australia ETS case, the Court also referred to binding effects of the decision containing negotiating directives which the Council was seeking ‘to impose upon’ the Commission.68 61 For further analysis, see P García Andrade, ‘The Role of the European Parliament in the Adoption of Non-legally Binding Agreements with Third Countries’ in J Santos Vara and S Sánchez Rodríguez-Tabernero (eds), The Democratisation of EU International Relations through EU Law (London, Routledge, 2018) 115–31. See also T Verellen, ‘On Conferral, Institutional Balance and Non-binding International Agreements: The Swiss MoU Case’ (2016) 1 European Papers – European Forum 1225. 62 See Mauritius (n 59); Tanzania (n 59); García Andrade (n 61). 63 Hillion (n 40) 166. Respect for institutional balance also means that the European Council is not competent to conclude international binding or non-legally binding agreements. The case on the EU–Turkey Statement on migration would have been a perfect occasion to remind it, but the ECJ preferred to consider this instrument as a commitment collectively agreed by the Member States. See this volume, ch 79. 64 The so-called ‘ERTA test’ found in Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA), para 42 (see this volume, ch 1) and inserted by the Maastricht Treaty in former Art 173 EEC. 65 ERTA (n 64) para 53. 66 Case 322/88, Grimaldi, ECLI:EU:C:1989:646, para 8. 67 Opinion of AG Alber in France v Commission II (n 10) paras 45 and 67. 68 Case C-425/13, Commission v Council, ECLI:EU:C:2015:483 (Australia ETS), para 29.
Respect for Institutional Balance in the Adoption of Non-legally Binding Agreements 453 In other cases, however, a certain opening towards a wider notion of legal effects can be perceived. In the OIV case, for instance, the Court assumed that the recommendations at issue were not binding under international law, but they were ‘capable of influencing the content of legislation adopted by the EU by reason of their incorporation into EU law’.69 Applying this broad concept of ‘legal effects’ to both Article 218(9) TFEU – the provision at issue in this case, which also uses these terms – and Article 263 TFEU is required by a consistent interpretation of EU primary law. The reply of the Court in France v Commission II is an implicit example of this extensive position. The Court did not elaborate on whether the Guidelines with the USA fulfilled the requirement of being an act having legal effects, since it decided to dismiss the action on the substance. Albeit irregular, that dismissal on substantive grounds is a sign in favour of considering that the decision to sign a non-legally binding instrument has legal effects. Materially, the argument of the Court regarding the soft nature of the Guidelines could be used both to argue against admissibility on the ground that the instrument lacked ‘legal (binding) effects’ and to dismiss the action on the substance because the Guidelines were not an international agreement, and thus what is now Article 218 TFEU had not been infringed. Opting for arguing on the substance means the Court implicitly accepted that ‘legal effects’ in Article 263 TFEU is wider than binding effects. Years later, in the Swiss MoU case, the Court did not even raise the issue of admissibility, and annulled the Commission’s decision on the signature of a non-binding agreement on substantive reasons, once again implicitly confirming its extensive interpretation on the requirement of legal effects. The best characterisation of the notion of ‘legal effects’ appears, in this author’s view, in the Swiss MoU case within the Opinion of AG Sharpston, who suggested considering the character of the contested act, together with the plea made.70 Thus, if a lack of competence or a violation of institutional balance is put forward, the fact that one institution acts when EU primary law confers the power to do so to another institution means the act has legal effects. Put another way, such an action would be usurping the powers of another institution, and is thus a matter having legal effect and should be addressed by the Court.71 Irrespective of the effects soft law may have in international law,72 its legal effects in EU law are sufficient to make an annulment action under Article 263 TFEU admissible. In the future, a positive and consistent stance of the Court on the admissibility of a control of legality over non-legally binding instruments is needed. It acquires special importance in ensuring that international soft law measures do not affect the principles the Court itself recalls to respect in France v Commission II,73 which constitutes, in sum, its most important contribution. That resort to international soft law in EU external relations does not allow the Union to ignore the division of powers and the institutional balance established in the EU Treaties, and, more generally, the rest of the rules and principles that constitute the constitutional framework of EU external action.
69 Case C-399/12, Germany v Council, ECLI:EU:C:2014:2258 (OIV), para 63. See this volume, ch 68. 70 See the analysis of the Opinion of the AG in P García Andrade, ‘The Distribution of Powers between EU Institutions for Conducting External Affairs through Non-binding Instruments’ (2016) 1 European Papers 115. 71 Opinion of AG Sharpston in Swiss MoU (n 54) para 62. In dealing with admissibility in ERTA, the Court already emphasised the fact that the Council’s proceedings impacted on EC powers (para 52). For a different position, cf Case T-721/14, Belgium v Commission, ECLI:EU:T:2015:829, paras 49–52 and the appeal before the Court, Case C-16/16 P, ECLI:EU:C:2018:79, para 28. 72 Opinion of AG Sharpston in Swiss MoU (n 54) para 70. See Daillier et al (n 2) 430. 73 Wessel (n 40) 80.
454 Paula García Andrade V. ADDITIONAL READING Chamon, M, ‘The Institutional Balance, an Ill-Fated Principle of EU Law?’ (2015) 21(2) European Public Law 371. Chamon, M and Demedts, V, ‘The Commission’s Back on the Leash: No Autonomy to Sign Non-binding Agreements on Behalf of the EU: Council v Commission’ (2017) 54 CML Rev 245. García Andrade, P, ‘EU External Competences in the Field of Migration: How to Act Externally When Thinking Internally’ (2018) 55 CML Rev 157. García Andrade, P, ‘The Role of the European Parliament in the Adoption of Non-legally Binding Agreements with Third Countries’ in J Santos Vara and S Sánchez Rodríguez-Tabernero (eds), The Democratisation of EU International Relations through EU Law (London, Routledge, 2018) 115–31. Gatti, M and Manzini, P, ‘External Representation of the European Union in the Conclusion of International Agreements’ (2012) 49 CML Rev 1703. Koutrakos, P, ‘Institutional Balance and Sincere Cooperation in Treaty-Making under EU Law’ (2019) 68 ICLQ 1. Kuijper, PJ, ‘The Case Law of the Court of Justice of the EU and the Allocation of External Relations Powers. Whither the Traditional Role of the Executive in EU Foreign Relations?’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law. Constitutional Challenges (Oxford, Hart Publishing, 2014) 95–114. Ott, A, ‘Informalization of EU Bilateral Instruments: Categorization, Contestation, and Challenges’ (2020) 39 Yearbook of European Law 569. Ott, A, ‘The EU Commission’s Administrative Agreements: “Delegated Treaty-Making” in between Delegated and Implementing Rule Making’ in E Tauschinsky and W Weiß (eds), The Legislative Choice between Delegated and Implementing Acts in EU Law (Cheltenham, Edward Elgar, 2018) 200–32. Van Elsuwege, P, ‘The Potential for Inter-institutional Conflicts before the Court of Justice: Impact of the Lisbon Treaty’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law. Constitutional Challenges (Oxford, Hart Publishing, 2014) 115–36. Wessel, R, ‘Normative Transformations in EU External Relations: The Phenomenon of “Soft” International Agreements’ (2021) 44 West European Politics 72.
43 The Effect of WTO Dispute Settlement Body Decisions in EU Law: Van Parys KARSTEN ENGSIG SØRENSEN Case C-377/02, Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB), ECLI:EU:C:2005:121, delivered 1 March 2005. KEYWORDS Recommendations and decisions of the WTO dispute settlement body – Direct and indirect effect – Annulment of secondary acts – Imports of bananas – GATT 1994.
I. INTRODUCTION
A
fter having decided in a string of cases handed down in the 1980s and 1990s that the World Trade Organization (WTO) agreements normally will not have direct effect in the EU legal order, the Court in Van Parys had to rule on the effect in EU law of decisions made by the WTO dispute settlement body (DSB). The Court held that such decisions will not have direct effect. Consequently, individuals cannot rely on such decisions to set aside secondary Union law, nor did the decision in the specific case have indirect effect under the Nakajima or Fediol exceptions. II. FACTS
With Regulation (EEC) 404/93, the Council adopted a new common organisation of the market in bananas. The Regulation allowed for favourable treatment of traditional ACP bananas, ie bananas from African, Caribbean and Pacific States. In a report handed down on 9 September 1997, the Appellate Body of the DSB found that certain features of the system set up in Regulation (EEC) 404/93 infringed the General Agreement on Tariffs and Trade (GATT) 1994, Articles I(1) and XIII.1 Following this, the Council changed Regulation 404/93 to comply
1 See Report WT/DS27/AB/R, European Communities – Regime for the Importation, Sale and Distribution of Bananas. The DSB adopted the report by decision of 25 December 1997.
456 Karsten Engsig Sørensen with the DSB decision. The Regulation was amended by Regulation (EC) 1637/98, which entered into force on 1 January 1999, the date set by the DSB as the latest date for compliance with the DSB decision. The new system that entered into force on 1 January 1999 still made a distinction between the importation of bananas from different countries and, on the request of Ecuador, a new panel was appointed. This new panel decided that the new regime adopted by the Union was still infringing GATT 1994.2 After this, the Union revised their rules once again to comply with the decision. For several decades, the Belgian company Van Parys NV had imported bananas into the Union from, primarily, Ecuador. In December 1998 and again several times in 1999, the company applied to the Belgisch Interventie- en Restitutiebureau (BIRB) for import licences for different amounts of bananas. In all cases, it had to accept a reduction in the amount for which a licence was granted, triggered by the fact that the import was from a non-ACP country. The company brought actions against BIRB challenging these decisions, and asked for a licence to import the full amounts applied for based on the argument that any reduction was based on EU Regulations3 that violated WTO law. The Belgian court decided to refer four questions to the Court, asking: first, whether the Regulations infringed GATT 1994; second, whether the regulations infringed the most-favoured nation principle found in the Framework Agreement with the members of the Cartagena Agreement that includes Ecuador; third, whether the Regulation infringed the principles of the protection of legitimate expectations and of good faith in international public law since the Commission did not fulfil its obligations under GATT 1994; and fourth, whether the Commission had exceeded the authority given to it by adopting measures on tariff quotas under the EU regime for bananas which infringed the Union’s obligations under WTO law. III. THE COURT
The Court chose to rephrase the first, third and fourth questions so that the referring court essentially asked the Court to assess the validity of Regulations 404/93, 2362/09, 2806/98, 102/99 and 608/99 in the light of Articles I and XIII of GATT 1994.4 For the Court to do this, it was necessary first to answer the question whether WTO agreements give Union nationals the right to rely on these agreements in challenging the validity of EU legislation where the DSB has held that EU legislation is incompatible with such rules. The Court pointed to its settled case law, according to which the WTO agreements are not, in principle, among the rules in the light of which the Court is to review the legality of measures adopted by the Union institutions, referring, inter alia, to the judgment in Portugal v Council5 and the two exceptions formulated in Fediol and Nakajima.6 The Court did not find that there was any reason to allow for direct effect in Van Parys. The fact that the EU, after the decision taken by the DSB, took steps to comply with WTO law
2 Report WT/DS27/RW/ECU, European Communities – Regime for the Importation, Sale and Distribution of Bananas (12 April 1999). 3 The reductions were regulated in different regulations implementing the regime for import of bananas, more specifically Regulation 2806/98, Regulation 102/99 and Regulation 608/1999. 4 Case C-377/02, Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB), ECLI:EU:C:2005:121, para 37. 5 Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574. See this volume, ch 37. 6 See Case 70/87, Fediol v Commission, ECLI:EU:C:1989:254; Case C-69/89, Nakajima v Council, ECLI:EU:C: 1991:186. See this volume, ch 17.
The Effect of WTO Dispute Settlement Body Decisions in EU Law 457 did not indicate that the Union intended to assume a particular obligation in the context of the WTO that would allow direct effect.7 The Court then went on to explain why this was the case. First, it pointed out that even when a decision is taken by the DSB, there is still room for negotiations in the WTO dispute settlement system between the parties involved in the dispute. To emphasise this, the Court analysed different aspects of the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter the Understanding).8 According to Article 3(7) of the Understanding, the main purpose of the dispute settlement system is to secure the withdrawal of the measures that are inconsistent with the WTO rules. However, if this is not practicable immediately, there are interim measures that may be adopted, such as the granting of compensation, the application of concessions or the enforcement of other obligations. If it is not possible for a WTO member to comply with a decision within a reasonable period of time, it follows from Article 22(2) of the Understanding that the WTO member should enter into negotiations with any party having invoked the dispute procedure with the view to agreeing on compensation. If there is no agreement within 20 days after expiry of the reasonable period, the complainant may request authorisation from the DSB to suspend the application of concessions or other obligations under the WTO Agreement in relation to the member in breach of the decision. However, the dispute stays on the agenda of the DSB until it is resolved either by removing the measure inconsistent with WTO law or the parties having reached a mutually satisfactory solution. If the parties disagree on whether a decision has been complied with, the issue may be decided through recourse to the dispute settlement system, just as happened in Van Parys. Based on this analysis of the Understanding, the Court found that requiring courts to refrain from applying laws which are inconsistent with WTO law would deprive the legislative and executive organs of a WTO member ‘of reaching a negotiated settlement, even on a temporary basis’.9 To further illustrate this point, the Court explained how, in the case at hand, the Union had ended up negotiating a solution with Ecuador and the USA after Ecuador had first asked for a procedure according to Article 21(5) of the Understanding and the USA, pursuant to Article 22(2) of the Understanding, was authorised to suspend concessions. According to the Court, such an outcome could be compromised if courts in the EU were entitled to review the lawfulness of the measures the EU adopted in the light of the WTO rules. Therefore, the Court concluded that Regulation 1647/98 and the regulations adopted to apply it ‘cannot be interpreted as measures intended to ensure the enforcement within the Union of a particular obligation assumed in the context of the WTO. Neither do those measures expressly refer to specific provisions of the WTO agreements.’10 As a second point, the Court referred to the fact, as it had already pointed out in Portugal v Council, that accepting that the courts in the EU have direct responsibility to ensure that Union law complies with WTO rules would deprive the EU legislature and administrative bodies of the discretion that other WTO members have. Some of the most important commercial partners of the Union have decided that the WTO agreements are not among the rules that their courts may use to review the legality of their domestic law. If the Court were to admit direct or indirect effect of WTO law, there would be a lack of reciprocity that ‘would risk introducing an anomaly in the application of the WTO rules’.11 Based on all this, the Court concluded that
7 Van
Parys (n 4) para 41. Understanding is an annex to the WTO agreement, www.wto.org/english/tratop_e/dispu_e/dsu_e.htm. 9 Van Parys (n 4) para 48. 10 ibid para 52. 11 ibid para 53. 8 This
458 Karsten Engsig Sørensen an economic operator, such as the Belgian company, cannot plead before national courts that EU legislation is incompatible with WTO law, even if the DSB has decided that there is such an incompatibility. The second question raised by the referring court addressed the question whether the EU regulations in question infringed the framework agreement the EU had with the South American states. Since the framework agreement only restated the requirement of the mostfavoured-nation treatment laid down by GATT 1994, Article I, and was only added to the agreement because the South American states were not WTO members at the time, the Court found that the principle in the framework agreement had the same scope and nature as GATT 1994. Consequently, for the reasons given, for not allowing Van Parys NV to rely on WTO law, the company could not rely on the international agreement.12 IV. THE IMPORTANCE OF THE CASE
The Court had avoided ruling on the effect of WTO DSB decisions in EU law for some time prior to handing down Van Parys. In 1999, it avoided the issue in the Atlanta case,13 and again in 2003 in the Biret case.14 In the meantime, the General Court (the then Court of First Instance) rejected that DSB decisions can be invoked by private parties, first in three cases handed down in 199915 and subsequently in the Chiquita case,16 which was decided less than a month before the judgment in Van Parys. Given that the Court had relatively consistently denied that WTO law had direct effect in EU law, the result in Van Parys should not have come as a surprise. Nevertheless, it did, as several Advocates General and scholars had made a strong case in favour of DSB decisions having direct or indirect effect.17 Furthermore, the denial of direct and indirect effect had some additional consequences that proved controversial. These aspects are highlighted below, after which the wider implication of the judgment is addressed. A. Denying Direct Effect of DSB Decisions In his Opinion in Van Parys,18 Advocate General (AG) Tizzano argued that DSB decisions should have direct effect, and that the EU acts, as a consequence, should be invalidated. After recalling that the Court had dismissed the direct effect of WTO agreements in earlier judgments, the AG analysed the DSB system and established that the panel and Appellate Body
12 ibid para 58. 13 Case C-104/97 P, Atlanta, ECLI:EU:C:1999:498. 14 Case C-93/02 P, Biret, ECLI:EU:C:2003:517. 15 Case T-18/99, Cordis, ECLI:EU:T:2001:95; Case T-30/99, Bocchi Food Trade, ECLI:EU:T:2001:96; Case T-52/99, T Port, ECLI:EU:T:2001:97. 16 Case T-19/01, Chiquita, ECLI:EU:T:2005:31. 17 The case was annotated by, inter alia, the following authors, A Antoniadis, ‘The Chiquita and Van Parys Judgments: Rules, Exceptions and the Law’ (2005) 32 Legal Issues of Economic Integration, 460; A Biondi and K Harmer, ‘2005 in Luxembourg: Recent Developments in the Case Law of the Community Courts’ (2007) 13 European Public Law 33; N Lavranos, ‘The Chiquita and Van Parys Judgments: An Exception to the Rule of Law’ (2005) 32 Legal Issues of Economic Integration 449. 18 See Opinion of Advocate General Tizzano, Case C-377/02, Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB), ECLI:EU:C:2004:725.
The Effect of WTO Dispute Settlement Body Decisions in EU Law 459 reports adopted were binding on the parties. There may be a period of time to comply with the decision (compliance should be immediately – or within a reasonable time accepted by the DSB or mutually agreed), but once that time is up, the decision must have direct effect. The AG accepted that there may be further disputes about the adequacy of measures taken by a WTO member to comply, and consequently additional disputes, but the DSB continues to keep the implementation of the decision under surveillance. After the reasonable period expired, the AG considered that there may be compensation and countermeasures available for the parties in the dispute, but that these would only be temporary measures. Therefore, AG Tizzano agreed with AG Alber, who, in his Opinion in the Biret case, considered that ‘there is no alternative but to implement the recommendations or rulings of the DSB’ and that they ‘cannot be circumvented by negotiation between the parties’.19 In his Opinion in Biret, AG Alber also argued that allowing DSB decisions to have direct effect would not weaken the Union’s trading position, and would also support the principle of legality.20 The Court in Van Parys disagreed with these Opinions. At first, it seemed that the Court was addressing the question whether DSB decisions might, on their own, qualify for having direct effect. The underlying rationale would be that even though an international agreement lacks the ability to have direct effect, the decision taken by a DSB interpreting that agreement may be more clear, precise and final than the agreement itself.21 The Court pointed out that even after the time frame given for implementation elapses, there is still ample room for negotiations. Given that the DSB dispute had established an infringement of WTO law, there was pressure to remedy this, but this may be done in different ways and within different time frames. The development in the banana dispute after the Court’s decision in Van Parys seems to confirm this. The dispute only came to its conclusion in December 2009, when the Union reached an agreement with the other WTO members and the dispute was finally removed from the register of the DSB.22 Consequently, negotiation continued for a very long time, and the end result was hardly foreseeable when the DSB decision was made.23 However, on closer reading, it appears that the Court in Van Parys did not engage in an elaborate evaluation whether or not the DSB decision had direct effect. Instead, the Court seems to rely on the fact that since the WTO Agreement does not have direct effect, it automatically means that decisions taken by an institution to enforce such an agreement does not have direct effect.24 But if the test is as simple as this, why did the Court go through the trouble of
19 ibid para 57, referring to the Opinion of AG Alber, Case C-93/02 P, Biret, ECLI:EU:C:2003:291, para 81. 20 Opinion of AG Alber in Biret (n 19) paras 87 and 96. 21 See also P Eeckhout, ‘The Domestic Legal Status of the WTO Agreement: Interconnecting Legal Systems’ (1997) 34 CML Rev 11, 53–55. 22 The agreement is called the Geneva Agreement, which was signed on 31 May 2010 and approved by Council Decision 2011/194/EU, [2011] OJ L88/66. 23 The Court also made the point in Case C-306/13, LVP NV, ECLI:EU:C:2014:2465, para 54 that ‘the regime which the European Union has obtained through the Geneva Agreement … reflects the need to allow the institutions of the European Union a degree of latitude in the negotiations that led to that agreement’. 24 This must be inferred from para 39 of the judgment, although here the Court does not make that clear link between the effect of the WTO agreements and the DSB decision. However, it did that more clearly in Joined Cases C-120/06 P and C-121/06 P, FIAMM, ECLI:EU:C:2008:476, paras 127–34. Curiously, in para 130, the Court also points out that the features that make the WTO rules lack direct effect are also features that are part of the DSB. This could indicate that a separate evaluation of the rules governing DSB is necessary. However, the Court seems to have later abandoned this approach and made it clear that the lack of effect of the agreement dictates the lack of direct effect of DSB decisions. See Case C-207/17, Rotho Blaas Srl, ECLI:EU:C:2018:840, para 46. In doing so, the Court seems to have changed the position compared to what was said in Biret and by the General Court in Chiquita. See the analysis by FD Cianni and R Antonini, ‘DSB Decisions and Direct Effect of WTO Law: Should the EC Courts be More Flexible when the Flexibility of the WTO System has Come to an End?’ (2006) 40 Journal of World Trade, 777.
460 Karsten Engsig Sørensen pointing out that the Understanding relied on negotiations? Since it has long been established that the WTO Agreement does not have direct effect, the conclusion that the DSB decision does not have that either seems to be a given, since therefore there was no need to examine the Understanding. The answer to this seems to be that the Court was not addressing the question whether the DSB decision had direct effect but, rather, the question whether the decision had indirect effect. Looking back at the judgment in Portugal v Council, the Court did take into account that the DSB constituted a stronger dispute mechanism than the one provided under the previous system, GATT 1947.25 And this makes sense.26 If the nature of an international agreement should be evaluated, including how much room is left for negotiation, it will be necessary to take into account the dispute settlement system. Even though an international agreement may seem to give much space to negotiations, this option may be undercut if there is a dispute settlement mechanism that can at any time be used to end negotiations. At the same time, a seemingly strict international agreement may prove to have a dispute settlement system that is all about negotiating. The conclusion that DSB decisions have no direct effect in the EU legal order has been confirmed by the Court many times since.27 B. Denying Indirect Effect of DSB Decisions Even if the DSB decisions do not have direct effect, it could be that they have indirect effect under the Nakajima or Fediol exceptions. This possibility is also acknowledged by the Court,28 which stated in the following paragraph that by adopting the act, the Union ‘did not intend to assume a particular obligation in the context of the WTO, capable of justifying an exception to the impossibility to rely on WTO rules’.29 The Court then examined the Understanding and concluded that the regulation at issue in the proceedings ‘cannot be interpreted as measures intended to ensure the enforcement within the Community legal order of a particular obligation assumed in the context of the WTO’. Thus, the Court did not apply the Nakajima exception. It continued, ‘Neither do these measures expressly refer to specific provisions of the WTO agreements’.30 Therefore, the Court also rejected the Fediol exception, and consequently denied the indirect effect of the DSB decision. AG Tizzano had suggested that when the EU regulations were adopted in 1998, the intention was to comply with the DSB decision handed down the previous year. The adopted regulation was to apply from 1 January 1999 – the precise date on which the period that the DSB had granted the Union to comply with the 1997 decision expired. There were also indications in the recital of the regulation that the intention was to meet the international commitment that the Union had under WTO law.31 Therefore, the AG concluded that the Nakajima exception applied in this case.32 25 See, eg para 36 of the judgment. 26 However, many scholars disagree, and argue that the Court should have made an individual assessment of the effect of DSB decisions. See, eg P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 378–81. 27 See, eg Joined Cases C-319/10 and C-320/10, X and X BV, ECLI:EU:C:2011:720, para 37; Joined Cases C-659/13 and C-34/14, C & J Clark International Ltd, ECLI:EU:C:2016:74, para 96. 28 Van Parys (n 4) para 40. 29 ibid para 41. 30 ibid para 52, last sentence. 31 See Recital 2 of Regulation 1637/98. 32 See the Opinion of AG Tizzano in Van Parys (n 18) paras 98–104.
The Effect of WTO Dispute Settlement Body Decisions in EU Law 461 Based on its analysis of the Understanding, the Court – controversially33 – reached a different conclusion. Since the Understanding allowed for negotiations and temporary measures even after the period for implementation had expired, the fact that the EU adopted a regulation should only be seen as a step towards reaching a final negotiated solution to the dispute. Apparently, it was never given that the regulations adopted in 1998 would be the solution that implemented the DSB decision.34 In this light, all measures taken prior to the final agreement to end the dispute would likely not trigger indirect effect under the Nakajima exception.35 Nor was the fact that the regulation referred to WTO law sufficient to fulfil the conditions under the Fediol doctrine, since this required a reference to specific provisions of the WTO Agreement. The fact that the reference could be read as a reference to comply with DSB decisions according to the Understanding36 was also insufficient. Furthermore, the Court later established that it would not be sufficient to refer to the fact that an act is adopted in the context of negotiations made under Article XXVIII of the GATT 1994: for the Court, there must be a reference to a specific obligation found in the WTO Agreements.37 In conclusion, there is no indirect effect of DSB decisions, even if EU legislation is adopted as a reaction to a decision, unless it is clear that the legislation is intended to comply with specific obligations under the WTO Agreement. C. Other Effects of DSB Decisions Just like the WTO agreements, DSB decisions are still part of EU law, and thus are binding on the EU and its Member States. Therefore, DSB decisions are likely to produce other effects, even if they cannot be invoked to set aside secondary EU law. Soon after Van Parys, the question arose whether the Union could be held responsible for the damages it had caused by not complying with a DSB decision. The question was put before the Court in the FIAMM case, where EU exporters sought compensation for the increased customs duties that the USA had levied on their products because the DSB, according to Article 22 of the Understanding, had authorised the USA to impose these duties on the Union, following its failure to comply with the 1997 decision.38 The non-contractual liability of EU institutions for unlawful conduct does not require that the institutions have failed to comply with a norm that has direct effect.39 Nevertheless, the Court decided in FIAMM that it would not be possible to claim such damages. The Court saw no reason to draw a distinction between an action seeking to annul Union law and an action for damages. To be successful, both types of claim would require that the Union had acted unlawfully, and consequently in both claims the effect would be that the Union institutions had to ratify this illegality. Consequently, according to the Court,40 allowing
33 See N Lavranos, ‘The Communitarization of WTO Dispute Settlement Reports: An Exception to the Rule of Law’ (2005) 10 European Foreign Affairs Review, 313, 329; Eeckhout (n 26) 364. 34 The result in Van Parys has been confirmed in several cases since. See, eg Rotho Blaas (n 24) para 52. 35 See also A Tancredi, ‘On the Absence of Direct Effect of the WTO Dispute Settlement Body’s Decisions in the EU Legal Order’ in E Cannizzaro, P Palchetti and RA Wessel (eds), Studies in EU External Relations: International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2011) 259. 36 In various ways, the Understanding indicates that decisions are binding: see Opinion of AG Tizzano in Van Parys (n 18) paras 46–55. 37 See LVP NV (n 23) para 59. 38 FIAMM (n 24). 39 However, it requires that the institutions infringe a rule that confers rights to individuals. 40 For a different view, see A Steinbach, ‘EC Liability for Non-compliance with Decisions of the WTO DSB: The Lack of Judicial Protection Persists’ (2009) 5 Journal of World Trade 1047, 1056.
462 Karsten Engsig Sørensen for damages would force the institutions to change EU law, and thus harm their possibility to negotiate a solution.41 FIAMM may indicate that direct effect is a requirement for allowing damages for compensation in cases where international agreements are infringed.42 Such an interpretation would, however, be a deviation from other cases on damages.43 It would have fitted better with previous case law if damages were denied based on other arguments, in particular, that the breach of EU law was not sufficiently serious. But even if a DSB decision cannot be used to annul secondary law or form the basis for a claim for damages from EU institutions, it may have other effects. The duty of consistent interpretation requires that EU law should be interpreted in accordance with the decision. This has been confirmed several times by the General Court.44 This effect will not harm the negotiation position of the Union since consistent interpretation will only be possible where the wording of EU law allows it. Furthermore, a DSB decision may have effect in the Member States. Thus, the Court has confirmed that the Commission can enforce the principle of primacy of Union law to the effect that national law is set aside when it infringes WTO law.45 Consequently, it must also be possible for the Commission to enforce a DSB decision to set aside national law.46 This does not harm the negotiation position of the Union, as the Union may still adopt whatever legislation it finds prudent. In fact, it may jeopardise the Union’s position in the WTO if it could do nothing to prevent Member States from infringing WTO law. It may also be argued that it should be possible for economic operators to claim compensation for damages from a Member State that has acted in (gross) violation of a DSB decision. The liability of Member States does not require direct effect, so, given that the normal conditions for damages are fulfilled, this should be possible. Again, this is not likely to harm the negotiation position of the EU. D. The Wider Effect of Van Parys The Van Parys judgment was considered by many as another blow to WTO law and to the rule of law. It can be construed as a failure of the Court to acknowledge the status of a fairly sophisticated international tribunal such as the DSB, since the Court effectively allows the Union to adopt legislation that disregards decisions of the DSB. But later cases seem to soften the blow by pointing out that it is the fact that the WTO Agreements lack direct effect that automatically confers DSB decisions with the same status. The Court has also acknowledged that the DSB is the prime interpreter of WTO law and, in this area, even has precedence over the Court.47 41 See FIAMM (n 24), in particular paras 120–24. 42 Thus, in para 108, the Court stresses that the special nature of international agreements must be taken into account when evaluating their effects. 43 See also convincingly Steinbach (n 40) 1058. 44 See Case T-192/08, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, EU:T:2011:619, para 36; Case T-633/11, Guangdong Kito Ceramics Co Ltd, EU:T:2014:271, para 39; Case T-67/14, Viraj Profiles Ltd, EU:T:2017:481, para 89. 45 See Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792. Whether this extends to decisions which concern rules that fall outside EU competence is debatable, see AD Casteleiro, ‘The Effect of IDS Decisions in EU Law’ in M Cremona, A Thies and RA Wessel (eds), The European Union and International Dispute Settlement (Oxford, Hart Publishing, 2017) 206–07. 46 As the DSB decisions lack direct effect, business cannot invoke a decision to challenge national law. Even though this would not necessarily harm the negotiation position of the Union, the fact that DSB decisions lack direct effect in relation to invalidating Union law must have the same consequence in relation to challenges of national law. 47 See Central European University (n 45) paras 91–92.
The Effect of WTO Dispute Settlement Body Decisions in EU Law 463 Van Parys is likely also to have repercussions for decisions taken by other international dispute settlement bodies, as it establishes the principle that when an international agreement does not have direct effect, decisions taken by bodies that apply such agreements will not have direct effect either. If the international agreement makes it clear that it does not have direct effect – as is often the case with FTAs entered into by the EU48 – this will also decide the effect of the decision from a dispute settlement body, no matter how strict and unconditional the rules governing the body are. V. ADDITIONAL READING Casteleiro, AD, ‘The Effect of IDS Decisions in EU Law’ in M Cremona, A Thies and RA Wessel (eds), The European Union and International Dispute Settlement (Oxford, Hart Publishing, 2017) 191–211. Tancredi, A, ‘On the Absence of Direct Effect of the WTO Dispute Settlement Body’s Decisions in the EU Legal Order’ in E Cannizzaro, P Palchetti and RA Wessel (eds), Studies in EU External Relations: International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2011) 249–68.
48 See
Casteleiro (n 45) 200–01.
464
44 Direct Effect of the EU–Russia Partnership and Cooperation Agreement, Non-discrimination and the Beautiful Game: Simutenkov ADAM ŁAZOWSKI C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura and Real Federación Española de Fútbol, ECLI:EU:C:2005:213, delivered 12 April 2005. KEYWORDS Partnership and Cooperation Agreement – Multilingualism – Mistakes in translation – Equal authenticity of EU official languages – Direct effect – Direct applicability – Individuals’ rights – Non-discrimination – Sport – European Neighbourhood Policy – Association agreements.
I. INTRODUCTION
H
ow to proceed when an EU legal act is a victim of the ‘lost in translation’ syndrome? When solving the linguistic dilemmas, which principles should apply? Is the EU–Russia Partnership and Cooperation Agreement (PCA) capable of producing direct effect?1 If so, could the plaintiff rely on Article 23(1) EU–Russia PCA, which prohibits discrimination on grounds of nationality? These were the issues that the Court had been called to deal with in the case of Simutenkov.2 The reaction of the academic commentariat to this judgment was rather muted and, prima facie, one should not be blamed for treating it merely as a footnote case.3 With this in mind, the aim of the present chapter is to demonstrate that Mr Simutenkov, and his litigation
1 Agreement on partnership and cooperation establishing a partnership between the European Communities and their Member States and the Russian Federation, [1997] OJ L327/3 (hereinafter EU–Russia PCA). 2 Case C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura and Real Federación Española de Fútbol, ECLI:EU:C:2005:213. 3 See, however, C Hillion, ‘Case C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura, Real Federación Española de Fùtbol, [2005] ECR I–2579’ (2008) 45 CML Rev 815.
466 Adam Łazowski with the Spanish football league as well as the Spanish Ministry of Education and Culture, deserves a closer look. This is for several reasons. Firstly, this case is a good example of challenges posed by multilingualism, which is at the heart of the EU legal order. Secondly, the judgment produces further evidence, if such were needed, of the importance of Advocates General at the Court. Thirdly, this case established that the EU–Russia PCA is capable of producing direct effect. This is as far as the microscope at hand would take us. However, a telescope may also prove useful to see the big picture. As argued in this chapter, the effects of this judgment go beyond Mr Simutenkov. In particular, two points merit attention in this respect. Simutenkov – at least potentially – opened the doors for direct effect of other PCAs, which were concluded by the then European Community with selected newly independent countries established on the ashes of the Soviet Union.4 Furthermore, the conclusion reached by the Court makes the decision of the Council to deprive their successors with Ukraine, Georgia and Moldova of direct effect quite indefensible.5 All of the issues mentioned above are addressed in turn. II. FACTS
The factual background of the Simutenkov case was straightforward. Mr Simutenkov, a Russian football player, was employed by Deportivo Tenerife on the basis of a work contract. He held both a residence card and a work permit, thus the legality of his stay in Spain was unquestionable. Mr Simutenkov was permitted to play professionally under a licence for non-EU/EEA players, which had been issued by the Spanish Football Federation. Consequently, he fell under the system of quotas for non-EU/EEA players. Depending on the season, only two or a maximum of three non-EU/EEA players were allowed to participate in football matches per team. In order to circumvent this restriction, Mr Simutenkov made a formal application to obtain a licence for EU/EEA players. He constructed his argument on Article 23(1) EU–Russia PCA, which prohibits discrimination at the workplace on
4 Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and Ukraine, of the other part, [1998] OJ L49/3; Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Moldova, of the other part, [1998] OJ L181/3; Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Georgia, of the other part, [1999] OJ L205/3; Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Armenia, of the other part, [1999] OJ L239/3; Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Kazakhstan, of the other part, [1999] OJ L196/3; Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part, [1999] OJ L246/3; Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Member States, of the one part, and the Kyrgyz Republic, of the other part, [1999] OJ L196/48; Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Member States, of the one part, and the Republic of Uzbekistan, of the other part, [1999] OJ L229/3; Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Member States, of the one part, and the Republic of Tajikistan, of the other part, [2009] OJ L350/3. See further, inter alia, C Hillion, ‘Partnership and Cooperation Agreements between the EU and the NIS of the ex-Soviet Union’ (1998) 3 EFA Rev 399. 5 Association Agreement between the European Union and the European Atomic Energy Community and its Member States, of the one part, and Ukraine, of the other part, [2014] OJ L161/3 (hereinafter EU–Ukraine AA); Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part, [2014] OJ L261/4 (hereinafter EU–Georgia AA); Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part, [2014] OJ L260/4 (hereinafter EU–Moldova AA).
Direct Effect of the EU–Russia Partnership and Cooperation Agreement 467 grounds of nationality. Since the Spanish Football Association did not entertain his request, Mr Simutenkov challenged the legality of its decision in the Spanish courts. The Audiencia Nacional, one of the courts dealing with his case, opted to send a reference for preliminary ruling and asked the Court a single question, whether Article 23(1) EU–Russia PCA precluded the application of rules established by the Spanish Football Association vis-à-vis football players who are Russian citizens. III. THE COURT
A. Opinion of Advocate General Stix-Hackl Advocate General (AG) Stix-Hackl presented her Opinion on 11 January 2005.6 Her advice to the Court was that Article 23(1) EU–Russia PCA was directly effective, and thus precluded the contested rules of the Spanish Football Association. The Opinion merits a closer look as the AG attended to a linguistic controversy caused by an inconsistency between different language versions of the EU–Russia PCA. It should be emphasised that the matter in question was not touched upon at all by the Court. Arguably, as alluded to in the introduction, this example serves as yet another example of how useful the Advocates General are for the work of the Court and the wider legal community at large. Furthermore, it proves that, as the present author argued in an earlier contribution to the debate, the Advocates General in Grand Chamber cases sometimes offer assistance which has a touch of substitution.7 This theme will be returned to in the analysis that follows in section IV. However, as a starting point, it is fitting to look in more depth at the substance of the Opinion of AG Stix-Hackl. As a starting point, the AG reached for the microscope and focused on the literal interpretation of Article 23(1) EU–Russia PCA. If one were to apply the Van Gend en Loos test for direct effect to the provision in question, the only doubt that would emerge would be in relation to the link to national laws of the Member States.8 However, as the Opinion of AG Stix-Hackl proved, there is more than meets the eye. This, prima facie, unequivocal prohibition of discrimination had, in fact, two faces. At the time of its signing – that is, in 1994 – there were nine official languages of the European Union. As noted by the AG, six language versions of the EU–Russia PCA contained a strict prohibition of discrimination, while three others, including the Spanish version, comprised variations of the best endeavours clauses.9 This was of fundamental importance, as the latter would struggle to meet the criteria for the direct effect: clarity, unambiguousness, and unconditionality. Bearing in mind that all official languages of the European Union are equally authentic, AG Stix-Hackl presented a number of options. To begin with, she considered and ab initio excluded the possibility of drawing a common denominator, which would have been the best endeavours obligation. As an alternative, she suggested that the Court could determine the
6 Opinion of AG Stix-Hackl, Case C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura and Real Federación Española de Fútbol, ECLI:EU:C:2005:6. 7 A Łazowski, ‘Advocates General and Grand Chamber Cases: Assistance with the Touch of Substitution’ (2011–12) 14 Cambridge Yearbook of European Studies 635. 8 For a detailed account, see W Phelan, Great Judgments of the European Court of Justice: Rethinking the Landmark Decisions of the Foundational Period (Cambridge, Cambridge University Press, 2019) 31–57. 9 As noted by AG Stix-Hackl in Simutenkov (n 6), the Spanish version provided that the Community and its Member States ‘shall watch that …’, the Dutch version said that they ‘shall take care that …’, while the Greek version regulated that ‘the Community and its Member States shall use every endeavour …’ See para 15.
468 Adam Łazowski clearest text and, by the same token, exclude versions which clearly contain language errors or are not typical. Another solution, based on the jurisprudence of the Court, would have been to opt for the standard that mathematically prevails. Had this been opted for, it would have pulled the line towards a strict prohibition of discrimination. AG Stix-Hackl was not persuaded by that option either, and suggested a fourth way forward: focusing on the intention of the negotiators and the objectives that the provision in question was tailored to serve. In order to uncover all pertinent details, it proved necessary to reach to the travaux préparatoires. This exercise led to the conclusion that the intention of the parties, including the Russian delegation, was to have a strict prohibition of discrimination. Article 23(1) EU–Russia PCA was clear, precise and unconditional, and thus capable of producing direct effect. The reference to national laws of the Member States in the opening paragraph made, according to the AG, no difference whatsoever. The same applied to Article 27 EU–Russia PCA, which empowered the EU–Russia Cooperation Council to adopt recommendations for the implementation of Article 23 EU–Russia PCA.10 The question remained, however, whether the EU–Russia PCA, as such, was destined to be directly effective in the legal orders of the Member States. AG Stix-Hackl argued that this was the case even though the EU–Russia PCA, just like the other agreements belonging to this family of EU Treaties with its neighbours, has much more modest objectives than, for instance, Europe Agreements dating back to the same period.11 Partnership and Cooperation Agreements are neither destined to be vehicles for EU accession nor frameworks for the establishment of free trade areas. B. Judgment of the Court The Grand Chamber of the Court delivered its judgment on 12 April 2005. Both Mr Simutenkov and the European Commission pleaded that Article 23(1) EU–Russia PCA was directly effective. In opposition, the Spanish Football Association and the Spanish government argued that the explicit reference to national laws, conditions, and procedures laid down therein precluded direct effect. Furthermore, the Spanish government claimed that the licences for football players could not be qualified as working conditions, but as administrative permits allowing participation in sports events. Thus, they would altogether escape the prohibition of discrimination laid down in Article 23(1) EU–Russia PCA. The Court attended straightaway to the direct effect of Article 23(1) EU–Russia PCA. Had it not been for AG Stix-Hackl, the inconsistencies between the different language versions of the EU–Russia PCA would have been known to only a few. The Grand Chamber considered the issue as a fait accompli and, without acknowledgement of the matter at hand, proceeded on the assumption that the provision in question prohibited discrimination in a strict fashion. Since the EU–Russia PCA did not regulate whether it was capable of producing direct effect or not, the Court seized the opportunity.12 The Court reached the conclusion that Article 23(1) EU–Russia PCA laid down, ‘in clear, precise and unconditional terms’, a
10 ibid paras 45–48. 11 See further A Ott and K Inglis (eds), Handbook on European Enlargement: A Commentary on the Enlargement Process (The Hague, TMC Asser Press, 2002). 12 Simutenkov (n 2) para 20.
Direct Effect of the EU–Russia Partnership and Cooperation Agreement 469 prohibition of discrimination as regards the conditions of employment, remuneration and dismissal.13 Consequently, the provision in question could be relied on by individuals in national courts, which – in turn – would have the obligation to disapply any discriminatory provisions laid down in domestic law. Bearing in mind that Mr Simutenkov submitted his action against the Spanish Football Association, as well as the Spanish Ministry of Education and Culture, one can draw the conclusion that provisions of the EU–Russia PCA are capable of producing both vertical and horizontal direct effect. The Court dismissed arguments suggesting that direct effect was precluded by the opening words of Article 23(1) EU–Russia PCA making an explicit reference to the domestic laws of the Member States. To rule otherwise, in the words of the Court, ‘would have the effect of rendering that provision meaningless and thus depriving it of any practical effect’.14 The Court followed AG Stix-Hackl in concluding that the powers given to the Cooperation Council to adopt non-binding measures to facilitate the application of the prohibition of discrimination do not have an impact on the capacity of Article 23(1) EU–Russia PCA to produce direct effect. Interestingly, it was only at that stage that the Court attended to the nature of the EU–Russia PCA, and whether it permitted direct effect. The conclusion was in the affirmative. In terms of the scope of the prohibition, the Court drew parallels to its previous jurisprudence in the Bosman15 and Kolpak16 cases. While the former judgment was firmly anchored in EU primary law, the latter was based on the EU–Slovakia Europe Agreement.17 Its Article 38 prohibited discrimination on grounds of nationality at the workplace, which was similarly worded to Article 23(1) EU–Russia PCA. The rules limiting the number of athletes eligible to play were – in both cases – considered to be working conditions and discriminatory, with no objective justifications at hand. The Court applied that dictum, mutatis mutandis, to the case in question.18 IV. THE IMPORTANCE OF THE CASE
The judgment in Simutenkov is worth looking at for a number of reasons and, as alluded to in the introduction, its importance goes beyond the realm of the EU relations with Russia. In order to do it justice, the analysis that follows is organised in the following way. First, the challenges posed by multilingualism of the EU legal order will be addressed (section IVA). This will pave the way for the assessment of direct effect of the EU–Russia PCA (section IVB). Finally, in section IVC, the focus will be on the big picture, in particular how the shift in paradigm when it comes to direct effect of international agreements sits uncomfortably with years of jurisprudence of the Court, including Simutenkov.
13 ibid para 23. 14 ibid para 24. 15 Case C-415/93, Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman, Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v Jean-Marc Bosman, ECLI:EU:C:1995:463. 16 Case C-438/00, Deutscher Handballbund eV v Maros Kolpak, ECLI:EU:C:2003:255. 17 Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Slovak Republic, of the other part, [1994] OJ L359/2. 18 Simutenkov (n 2) paras 30–40.
470 Adam Łazowski A. Challenges of the Multilingual Legal Order Simutenkov encapsulates quite well the challenges posed for the law drafters by the multilingual character of the EU.19 While the EU institutions have a tight regime in place for law drafting and translation of the EU acquis, poorly formulated provisions or even mistakes and inconsistencies will inevitably slip through the net.20 Some of the technical mistakes in translation are eventually spotted and ironed out qua corrigenda.21 At the same time, cases of constructive ambiguity are not unheard of. Be that as it may, the negotiators and law drafters may purposely dilute the text in order to reach a compromise, opening the door for adoption and subsequent entry into force of an EU legal act. As is well known, the EU operates in 24 official languages, in which the legal acts are published in the Official Journal of the EU. They are all equally authentic. As per Article 55 TEU (and Article 358 TFEU), this principle applies to the EU Founding Treaties,22 while the rules on equal authenticity of different language versions of EU secondary legislation are laid down in two Regulations 1/58, applicable to the EU23 and to Euratom.24 Not surprisingly, when the different language versions are not in sync, in many instances litigation will follow. As argued by Bobek, EU law envisages three principles that apply should divergence between the language versions emerge. Firstly, one language version should not be read in isolation. Secondly, ‘majoritisation’ is prohibited. Thirdly, and most instructively, the legal act should be read in context.25 The latter is firmly anchored in the jurisprudence of the Court, which ruled that ‘Where there is divergence between the various language versions of a Community text, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part’.26 This may require venturing into other language versions, legislative history, including travaux préparatoires, and other sources. Ultimately, the fruits of linguistic sloppiness or political convenience become burdens on the shoulders of national judges, who are expected to engage in a comparative analysis of different language versions of a given EU legal act. While this desideratum clearly has merits, it also shows a degree of naivety to believe that all judges have adequate linguistic skills, combined with the stamina and time to indulge in such exercises. Not surprisingly, every now and then the Court becomes the ultimate arbiter, tasked with the determination of what the law actually says. It may be seized to do so
19 See further, inter alia, G Van Calster, ‘The EU’s Tower of Babel – The Interpretation by the Court of Justice of Equally Authentic Texts. Drafted in more than one Official Language’ (1997) 17 Yearbook of European Law 363; M Bobek, ‘The Multilingualism of the European Union Law in the National Courts: Beyond the Textbooks’ in AL Kjaer and S Adamo (eds), Linguistic Diversity and European Democracy (Aldershot, Ashgate, 2011) 123. 20 For examples, see, inter alia, TC Hartley, ‘Five Forms of Uncertainty in European Community Law’ (1996) CLJ 265. 21 See further M Bobek, ‘Corrigenda in the Official Journal of the European Union: Community Law as quicksand’ (2009) 34 EL Rev 950. 22 See I Burr, ‘Article 55 [Languages and Deposit of the Treaty]’ in H-J Blanke and S Mangiameli (eds), The Treaty on European Union (TEU): A Commentary (Berlin, Springer, 2013) 1461. 23 Council Regulation No 1 determining the languages to be used by the European Economic Community, [1958] OJ 17/385. 24 Council Regulation No 1 determining the languages to be used by the European Atomic Energy Community, [1958] OJ 174/01. 25 M Bobek, ‘The New European Judges and the Limits of the Possible’ in A Łazowski (ed), The Application of EU Law in the New Member States: Brave New World (The Hague, TMC Asser Press, 2010) 127, 128. 26 Case C-63/06, UAB Profisa v Muitinės departamentas prie Lietuvos Respublikos finansų ministerijos, ECLI:EU:C:2007:233.
Direct Effect of the EU–Russia Partnership and Cooperation Agreement 471 either qua the preliminary ruling procedure or the infringement modi operandi (respectively, Article 267 TFEU and Articles 258–60 TFEU). With this in mind, the reader should not be surprised that Simutenkov was neither the first nor the last time that the Court was invited to attend to linguistic discrepancies between different language versions of EU legal acts.27 In the case at hand, the potential consequences of the linguistic dissonance were of paramount importance for Mr Simutenkov, as well as thousands of Russian citizens legally employed in the EU Member States. To put it simply, if the correct reading of Article 23 EU–Russia PCA were to be a strict prohibition of discrimination on grounds of nationality, the provision in question would meet the test for direct effect. If, in the alternative, it provided for a best endeavours obligation, it would fall short of being precise, unambiguous and unconditional. As already noted, AG Stix-Hackl supplied the Grand Chamber with robust advice on the available options. Quite disappointingly, the Court decided to skirt around the issue and proceeded as if the problem did not exist at all.28 This may come as a surprise, bearing in mind that the issue was not of marginal importance, not to mention that linguistic ambiguities are regularly attended to by the Court. It is even more disappointing when one takes into account that Grand Chamber judgments are considered the crème de la crème of jurisprudence. Paradoxically, both AG Stix-Hackl and the Grand Chamber have further contributed to the terminological dissonance by using interchangeably the notions of direct applicability and direct effect.29 All in all, the conclusion to be drawn from Simutenkov is that whenever faced with inconsistencies between different language versions of the EU–Russia PCA, the version in the language of Shakespeare should prevail. Interestingly, the Spanish, Dutch, and Greek versions of the EU–Russia PCA have still not been corrected. B. Direct Effect of the EU–Russia PCA Simutenkov joins the pantheon of judgments of the Court on direct effect of international agreements. In many respects, it fits in perfectly in the long line of jurisprudence based on various categories of international treaties concluded by the EU with third countries. The Court has gone a long way from the early judgments in International Fruit,30 Haegeman,31 and Kupferberg,32 and the WTO saga.33 All have been well documented in the academic literature
27 See inter alia, Case 29/69, Erich Stauder v City of Ulm – Sozialamt, ECLI:EU:C:1969:57; Case 30/77, Regina v Pierre Bouchereau, ECLI:EU:C:1977:172; Case 100/84, Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland, ECLI:EU:C:1985:155; Joined Cases C-261/08 and C-348/08, María Julia Zurita García and Aurelio Choque Cabrera v Delegado del Gobierno en la Región de Murcia, ECLI:EU:C:2009:648. 28 For criticism see Hillion, ‘Case C-265/03’ (n 3) 823–24. 29 For further on the distinction, see JA Winter, ‘Direct Applicability and Direct Effect: Two Distinct and Different Concepts in Community Law’ (1972) 9 CML Rev 425; K Lenaerts, ‘Direct Applicability and Direct Effect of International Law in the EU Legal Order’ in I Govaere, E Lannon, P Van Elsuwege, and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2013) 45. 30 Joined Cases 21–24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 31 Case 181/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41. See this volume, ch 3. 32 Case 104/81, Hauptzollamt Mainz v CA Kupferberg & Cie KG aA, ECLI:EU:C:1982:362. See this volume, ch 14. 33 For an overview, see P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 343–50; P Koutrakos, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 280–307.
472 Adam Łazowski and need no rehearsing in this chapter.34 The novelty of the commented judgment lies in the fact that it was the first ever decision based on one of the PCAs concluded with one of the former Soviet Union countries. It definitely shows a more adventurous side of the Court, which opted to extend this fundamental tenet of EU law to an agreement with a relatively modest raison d’être behind it. Before proceeding with a comment on the decision of the Court, it is fitting to take a look at the PCAs and their genesis. The history of this family of international agreements goes back to the early 1990s, when the political events in Central and Eastern Europe led to the emergence of newly independent states and a reorientation of the region’s foreign policies. Having suffered the harsh reality of the Soviet Union, or its sphere of influence, many of the new states made a dramatic turn to the West. This forced the then European Communities, and the emerging European Union, to design – pretty much on the hoof – a new policy towards the East. While the closest neighbours on the other side of the Elba River were offered associations or Europe Agreements aimed at the creation of free trade areas, many of the former Soviet Union states were treated in a less generous fashion (or simply did not ask for more). As already noted, the PCAs aim at a closer relationship, yet they fall short of associations and free trade areas.35 This includes the EU–Russia PCA, which was at the heart of the dispute at hand.36 With this in mind, the general question that the Court was faced with was whether the EU–Russia PCA, owing to its less ambitious objectives, could produce direct effect at all. This, logically, would have been the starting point for the Court, and, accordingly, it has been the case in many earlier judgments. Alas, in Simutenkov the Court opted to proceed in a different fashion by commencing immediately with application of the direct effect test to Article 23 EU–Russia PCA.37 Having established that the test was met, the Court reached for the telescope to conclude that the EU–Russia PCA as such was capable of producing direct effect. Both conclusions reached by the Court have far-reaching consequences. Firstly, the judgment at hand contributed to considerable strengthening of rights of Russian nationals who are legally employed in one of the EU Member States. With Article 23 EU–Russia PCA, they have been equipped with the directly enforceable prohibition of discrimination at the workplace. As argued by Hillion, this is likely to cover direct and indirect discrimination.38 Secondly, the
34 For a comprehensive assessment, see M Mendez, The Legal Effects of EU Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013); N Ghazaryan, ‘Who Are the “Gatekeepers”?: In Continuation of the Debate on the Direct Applicability and the Direct Effect of EU International Agreements’ (2018) 37 Yearbook of European Law 27; J Klabbers, ‘International Law in Community Law: The Law and Politics of Direct Effect’ (2001) 21 Yearbook of European Law 263; F Martines, ‘Direct Effect of International Agreements of the European Union’ [2014] European Journal of International Law 129; Eeckhout (n 33) 331–95; Koutrakos (n 33) 257–80; FG Jacobs, ‘Direct Effect and Interpretation of International Agreements in the Recent Case Law of the European Court of Justice’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 13. In relation to EU–Turkey framework, see also E Sharpston, ‘Different but (Almost) Equal – The Development of Free Movement Rights under EU Association, Co-operation and Accession Agreements’ in M Hoskins and W Robinson (eds), A True European: Essays for Judge David Edward (Oxford, Hart Publishing, 2003) 233. 35 See further, inter alia, Hillion, ‘Partnership and Cooperation Agreements’ (n 4) 399; M Marescau and E Montaguti, ‘The Relations between the European Union and Central and Eastern Europe: A Legal Appraisal’ (1995) 32 CML Rev 1327. 36 For a detailed appraisal, see C Hillion, ‘Russian Federation (Including Kaliningrad)’ in S Blockmans and A Łazowski (eds), The European Union and Its Neighbours: A Legal Appraisal of the EU’s Policies of Stabilisation, Partnership and Integration (The Hague, TMC Asser Press, 2006) 463. 37 For criticism, see C Kaddous, ‘Effects of International Agreements in the EU Legal Order’ in M Cremona and B de Witte (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 291, 304. 38 Hillion, ‘Case C-265/03’ (n 3) 827.
Direct Effect of the EU–Russia Partnership and Cooperation Agreement 473 provision in question is vertically and horizontally directly effective, which means that it can be invoked against private employers. This, no doubt, has given it additional thrust and, by the same token, increased its scope of radiation. Thirdly, it has considerable consequences in the realms of professional sport. In short, it constitutes an external relations alter ego of the well-known Bosman case.39 Following Simutenkov, the quotas for non-EU players permitted on the pitch may not apply to Russian citizens.40 Fourthly, the fact that the EU–Russia PCA is capable of producing direct effect means that all the remaining PCAs that are in force would – in all likelihood – benefit from the same advantage. It is notable, though, that the equivalents of Article 23 EU–Russia PCA in all other PCAs were formulated along the lines of the best endeavours clauses, making their direct effect quite unlikely.41 Simutenkov, as well as other judgments of that era on direct effect of international agreements, have had considerable implications for the Member States, as the jurisprudence has often dealt with direct effect of provisions guaranteeing non-discrimination, including access to social assistance. It may well be that the pruning of non-discrimination clauses in the next generations of agreements with non-EU states, as well as the explicit exclusion of direct effect, is rooted in the jurisprudence of the Court, including the Simutenkov case. This is further analysed below. C. Two Steps Forward, One Step Back: Upgrade and Downgrade of the EU Relations with the Eastern Partnership Avant-Garde In the course of the past decade, the EU switched gear in its relations with some of the neighbouring countries. Following the creation of the European Neighbourhood Policy (ENP), and its regional dimension, the Eastern Partnership, the time was apt to upgrade the modest legal framework created by the PCAs. With this in mind, the EU embarked on lengthy negotiations of deep and comprehensive free trade agreements with Ukraine, Moldova, Georgia, and Armenia.42 It led to the conclusion of Association Agreements with the first three countries.43 This was against a precarious political backdrop of Russian pressure and territorial excursions of forces sponsored by the Kremlin.44
39 Bosman (n 15). See further M Ilešič, ‘The Development of the Law and the Practice in the post-Bosman Era’ in MP Maduro and L Azoulai, The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, Hart Publishing, 2010) 477; S Weatherill, ‘Bosman Changed Everything: The Rise of EC Sports Law’ in Maduro and Azoulai (ibid) 480; S Van den Bogaert, ‘Bosman: The Genesis of European Sports Law’ in Maduro and Azoulai (ibid) 488; G Infantino and PC Mavroidis, ‘Inherit the Wind: A Comment on the Bosman Jurisprudence’ in Maduro and Azoulai (ibid) 498. 40 The same rules apply to Turkish players as per Case C-152/08, Real Sociedad de Fútbol SAD, Nihat Kahveci v Consejo Superior de Deportes, Real Federación Española de Fútbol, ECLI:EU:C:2008:450. Furthermore, as already mentioned, before Slovakia joined the EU, they had also applied to Slovakian players. See Kolpak (n 16). 41 Art 24 EU–Ukraine PCA, Art 23 EU–Moldova PCA, Art 20 EU–Georgia PCA, Art 20 EU-Armenia PCA, Art 19 EU-Kazakhstan PCA, Art 20 EU-Azerbaijan PCA, Art 19 EU-Kyrgyzstan PCA, Art 19 EU-Uzbekistan PCA, Art 17 EU-Tajikistan PCA. 42 The negotiations with Russia stalled in the mid-2000s, and eventually froze. Thus the EU–Russia PCA remains the core of the bilateral legal framework. See further, inter alia, P Van Elsuwege, ‘The Legal Framework of EU–Russia Relations: Quo Vadis?’ in Govaere et al (n 29) 441. 43 For a detailed account, see G Van Der Loo, The EU–Ukraine Association Agreement and Deep and Comprehensive Free Trade Area: A New Legal Instrument for EU Integration Without Membership (Leiden, Brill, 2016) 100–64. 44 The latter could not be sustained by the authorities in Yerevan, who opted for accession to the Eurasian Economic Union and a much less ambitious trade agreement with the EU (Comprehensive and enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part, [2018] OJ L23/4).
474 Adam Łazowski Analysis of the Agreements with Ukraine, Moldova, and Georgia leads to interesting conclusions. On the one hand, all three can be easily considered as upgrades to the PCAs. Firstly, they were concluded, inter alia, on the basis of Article 217 TFEU, which means that the three countries are now formally associated with the EU. Secondly, they provide for the creation of deep and comprehensive free trade areas, encompassing partial market access. Although, officially, none of the three countries have an EU membership perspective, the preambles to the Association Agreements leave no doubt as to the European credentials of Ukraine, Moldova, and Georgia. Formally, there is nothing stopping the three Association Agreements from following the path of the European Agreements, which incrementally were turned into the pre-accession vehicles.45 With all the above in mind, one would have expected that in terms of the enforcement, the Association Agreements with the ENP avant-garde would have followed the path set by the EU–Russia PCA, the Europe Agreements, the EuroMed Agreements, and the EU–Turkey framework. Disappointingly, nothing is further from the truth. Not only is their direct effect explicitly precluded, but also only EU–Ukraine Association Agreement contains a prohibition of discrimination at the workplace on grounds of nationality.46 Equivalents cannot be found in either the EU–Moldova or the EU–Georgia Association Agreement. It remains to be seen if, for instance, the doctrine of indirect effect could still be available.47 Thus, what, on the one hand, is an upgrade of the bilateral frameworks is at the same time a considerable downgrade. While two steps have been taken forward, one has been taken back. It sits uncomfortably with Simutenkov, as well as with other jurisprudence on direct effect of association or partnership agreements. This seems to be a new paradigm in the making, whereby the role of gatekeeper, which thus far has been played by the Court, now has been taken hostage by the European Commission and/or the Council.48 While this practice is understandable in relation to classic free trade agreements with countries in different corners of the planet,49 it is not fit for purpose for relations with the EU’s closest neighbours. The new paradigm dilutes the well-established case law and replaces it with practice that is hard to reconcile with years of jurisprudence coming from the Court. The EU–UK TCA, which also generally precludes direct effect, is yet another step towards making an anomaly a new normal.50 All of this creates the environment of double standards applicable to the EU neighbouring countries. While, for instance, Russian, Turkish, Moroccan or Tunisian citizens/companies may rely directly on the respective agreements with the EU, the citizens/companies coming from the UK (a former Member State!), Ukraine, Moldova, and Georgia cannot do so. As for Mr Simutenkov, one thing is certain. He joined the exclusive club of football players who are more likely to be known to EU lawyers than to sports afficionados. Neither Mr Bosman nor Mr Simutenkov will be remembered as great football heroes. However, their legal adventures are well recorded in EU law and academic commentaries.
45 See K Inglis, ‘The Europe Agreements Compared in the Light of Their Pre-accession Reorientation’ (2000) 37 CML Rev 1173. 46 Art 17 EU–Ukraine Association Agreement provides for a strict prohibition of discrimination, which – taking into account the Simutenkov case – would qualify for direct effect if the application of this doctrine were not explicitly excluded. 47 As suggested in Ghazaryan (n 34) 63. 48 The author borrowed this term from Ghazaryan (n 34) 28. 49 See, inter alia, A Semertzi, ‘The Preclusion of Direct Effect in the Recently Concluded EU Free Trade Agreements’ [2014] CML Rev 1125. 50 Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, [2021] OJ L149/10.
Direct Effect of the EU–Russia Partnership and Cooperation Agreement 475 V. ADDITIONAL READING Hillion, C, ‘Case C-265/03, Igor Simutenkov v Ministerio de Educación y Cultura, Real Federación Española de Fùtbol, [2005] ECR I–2579’ (2008) 45 CML Rev 815. Jacobs, FG ‘Direct Effect and Interpretation of International Agreements in the Recent Case Law of the European Court of Justice’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations. Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 13. Ghazaryan, Narine ‘Who Are the “Gatekeepers”?: In Continuation of the Debate on the Direct Applicability and the Direct Effect of EU International Agreements’ (2018) 37 Yearbook of European Law 27. Zipperle, N, EU International Agreements. An Analysis of Direct Effect and Judicial Review Pre-and Post-Lisbon (Berlin, Springer, 2017).
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45 The Indissociable Link between Environmental Policy and the Common Commercial Policy: Commission v Council (Rotterdam Convention I) GEERT DE BAERE* Case C-94/03, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2006:2 (Rotterdam Convention I), delivered 10 January 2006. KEYWORDS Rotterdam Convention on the Prior Informed Consent Procedure for certain hazardous chemicals and pesticides in international trade – Council Decision approving EU accession – Prior Informed Consent Procedure – Choice of legal basis – Articles 133 and 175 TEC – Common commercial policy – EU policy on the environment.
I. INTRODUCTION
I
n January 2006, the Court1 rendered two judgments in related cases regarding the Rotterdam Convention on the Prior Informed Consent (PIC) Procedure for certain hazardous chemicals and pesticides in international trade (the Rotterdam Convention, the Convention).2 In Rotterdam Convention I,3 the Court annulled the decision approving the Rotterdam Convention on behalf of the then Community,4 while in Rotterdam * All opinions expressed herein are personal to the author. 1 Under Art 19(1) TEU, first subparagraph, the institution of the Court encompasses the Court of Justice, the General Court and specialised courts. 2 Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, Rotterdam, 10 September 1998, 2244 UNTS 337. The Rotterdam Convention was signed by the then European Community on 11 September 1998 and approved by the Council on 19 December 2002. On the EU’s role in the negotiation of the Rotterdam Convention, see T Delreux, The EU as International Environmental Negotiator (Farnham, Ashgate, 2011) 93–101. 3 Case C-94/03, Commission v Council, ECLI:EU:C:2006:2 (Rotterdam Convention I). 4 Council Decision 2003/106/EC of 19 December 2002 concerning the approval, on behalf of the European Community, of the Rotterdam Convention on the Prior Informed Consent Procedure for certain hazardous chemicals and pesticides in international trade, [2003] OJ L63/27.
478 Geert De Baere Convention II,5 it annulled a Regulation implementing the Convention.6 In both cases, the annulment was based on the grounds that the acts ought not to have been adopted with Article 175 EC (Article 192 TFEU), on environmental policy, as the sole legal basis,7 but rather, on the dual legal basis of Article 175 EC (Article 192 TFEU) and Article 133 EC (Article 207 TFEU), concerning the common commercial policy (CCP).8 The Court’s judgments in the Rotterdam Convention cases are situated within the context of a line of case law on the trade–environment nexus,9 and provided important indications on when EU acts can legitimately be considered as pertaining to both policies and, more broadly, the circumstances under which legal bases containing diverging decision-making procedures can be combined. What follows provides a commentary on the Rotterdam Convention I judgment, while referring to the Rotterdam Convention II judgment whenever appropriate. II. FACTS
The Rotterdam Convention concerns toxic chemicals, and its objective is promoting shared responsibility and cooperation among parties in the international trade of certain hazardous chemicals in order to protect human health and the environment. Parties are obliged to contribute to the environmentally sound use of these chemicals through an exchange of information on the characteristics of the chemicals, as well as by establishing a national decision-making process on their import and export, and by the dissemination of these decisions to parties.10 To achieve these objectives, the Convention contains two key mechanisms.11 First, the PIC Procedure requires all parties to decide whether they allow the import of the chemicals enlisted in Annex III, which should be respected by exporting parties.12 A separate notification procedure exists regarding chemicals banned or severely restricted by a party but not listed in Annex III.13 Second, the Information Exchange mechanism provides for exchanging information between parties regarding numerous potentially toxic chemicals. When banning or severely restricting a certain chemical, parties are to notify the Secretariat of the Rotterdam Convention.14
5 Case C-178/03, Commission v Parliament and Council, ECLI:EU:C:2006:4 (Rotterdam Convention II). 6 Regulation (EC) No 304/2003 of the European Parliament and of the Council of 28 January 2003 concerning the export and import of dangerous chemicals, [2003] OJ L63/1. 7 Art 175 EC required qualified majority voting (QMV) in the Council, and provided for the European Parliament to be fully involved through the co-decision procedure. 8 Art 133 EC provided for QMV in the Council with (at most) optional consultation of the European Parliament. In Rotterdam Convention I (n 3) the joint legal basis also needed to include the relevant provisions of Art 300 EC (Art 218 TFEU), but that was not disputed between the parties. 9 Regarding the border area between environment and the conservation of marine biological resources under the common fisheries policy, see also judgment of 20 November 2018, Joined Cases C-626/15 and C-659/16, Commission v Council (Antarctic MPAs), ECLI:EU:C:2018:925. See this volume, ch 87. 10 Art 1 Rotterdam Convention. 11 See further P-M Dupuy and JE Viñuales, International Environmental Law, 2nd edn (Cambridge, Cambridge University Press, 2018) 270–73; P Sands and J Peel, Principles of International Environmental Law, 4th edn (Cambridge, Cambridge University Press, 2018) 587–89. 12 Arts 10 and 11 Rotterdam Convention. 13 Art 12 Rotterdam Convention. Sands and Peel (n 11) 697, describing this as a ‘second-generation’ and ‘bifurcated’ PIC Procedure. 14 Art 14 Rotterdam Convention.
The Indissociable Link between Environmental Policy and the CCP 479 The Rotterdam Convention contains an article providing for accession of regional economic integration organisations (a REIO clause).15 Any such organisation becoming a party to the Convention without any of its member states being a party is to be bound by all Convention obligations. However, if one or more of the members of the organisation in question is a party to the Convention, the organisation and its members are to decide on their respective responsibilities for performing their obligations under the Convention. In such cases, the organisation and the members are not entitled to exercise rights under the Convention concurrently.16 In its instrument of ratification, acceptance, approval or accession, a REIO is to declare the extent of its competence in respect of matters governed by the Convention,17 which the Community duly did.18 Following signature on 11 September 1998 in Rotterdam (the Netherlands), the Commission submitted a proposal for a Council decision approving the Convention19 and indicating, pursuant to Article 25(3) of the Convention, the extent of the Community’s competence in respect of the matters governed by the Convention. The proposal was based on Article 133 EC (Article 207 TFEU), in conjunction with the first sentence of the first subparagraph of Article 300(2) EC and the first subparagraph of Article 300(3) EC (Article 218(5) and (8) TFEU and Article 218(6) TFEU). After Parliament had been consulted pursuant to the first subparagraph of Article 300(3) EC (Article 218(6) TFEU), the Council unanimously decided not to accept the proposal, and to adopt the decision after replacing Article 133 EC (Article 207 TFEU) by Article 175(1) EC (Article 192(1) TFEU). In response, the Commission considered the act concluding the Convention as unlawful and brought the present action. III. THE COURT
The Court first recalled that the choice of the legal basis for an EU measure, including one adopted with a view to conclusion of an international agreement, must be based on objective factors amenable to judicial review, including, in particular, the aim and content of the measure. If the measure pursues a twofold purpose or has a twofold component, and if one of those is identifiable as the main or predominant purpose or component whereas the other is merely incidental, the act must be based on a single legal basis, namely that required by the main or predominant purpose or component. However, exceptionally, if the act simultaneously pursues a number of objectives or has several indissociably linked components without one being secondary and indirect in relation to the other, it will have to be founded on the various corresponding legal bases.20
15 Art 25 Rotterdam Convention. See further G De Baere, ‘EU Status in Other International Organizations’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law, Vol 1: The European Union Legal Order (Oxford, Oxford University Press, 2018) 241. 16 Art 25(2) Rotterdam Convention. 17 Art 25(3) Rotterdam Convention. 18 See the Declaration by the European Community in accordance with Art 25(3) of the Rotterdam Convention, annexed to Council Decision 2006/730/EC of 25 September 2006 on the conclusion, on behalf of the European Community, of the Rotterdam Convention on the Prior Informed Consent Procedure for certain hazardous chemicals and pesticides in international trade, [2006] OJ L299/23. 19 [2002] OJ C126/274. 20 Rotterdam Convention I (n 3) paras 34–36; see also Case C-244/17, Commission v Council, ECLI:EU:C:2018:662 (Kazakhstan), paras 36–37. See this volume, ch 86; Opinion 1/15, EU–Canada PNR, ECLI:EU:C:2017:592, paras 76–77 See this volume, ch 83; Opinion 1/19, Istanbul Convention, ECLI:EU:C:2021:832, paras 284–85.
480 Geert De Baere After examining both the aims pursued by the Convention and its contents, the Court held that it includes two indissociably linked components, neither of which is secondary or indirect as compared with the other, one falling within the scope of the CCP and the other within that of protection of human health and the environment. In particular, the Court held that it could ‘not be denied that the protection of human health and the environment was the most important concern in the mind of the signatories of the Convention’.21 The Court referred to a number of provisions of the Convention, in particular to Article 5, establishing a procedure for the exchange of information concerning actions taken in order to ban or severely restrict the use of a chemical product on the territory of a party, and Article 12, imposing an obligation to send an export notification to the importing party where a banned or severely restricted chemical is exported and calling on the importing party to acknowledge receipt of that notification. The Court further referred to the fact that the importance of the environmental and health components in the scheme of the Convention was also ‘apparent in the international spheres in which the Convention was discussed or negotiated’ (citing in particular the United Nations Environment Programme (UNEP) and the Food and Agriculture Organisation of the United Nations (FAO), and also the January 1992 Rio de Janeiro Conference and the 2002 Johannesburg Summit).22 On the other hand, the Court emphasised that this did not imply that the ‘commercial component of the Convention is purely incidental’.23 It found evidence of the presence of rules governing trade in hazardous chemicals and having direct and immediate effects on such trade, inter alia, in Article 1 of the Convention. The Court also referred to the PIC Procedure, which, although it is in fact a typical instrument of environmental policy, is implemented under the Convention by provisions that directly regulate the trade in the products that it covers. It held it to be clear from the title of the Convention and from Article 5(6) – in conjunction with Annex II(c)(iv) – that the Convention applies only to certain hazardous chemicals and pesticides traded internationally, which is also an essential precondition for the listing of such products in Annex III and for the applicability of the PIC Procedure. Such an explicit link between trade and the environment was, according to the Court, lacking in the Cartagena Protocol on Biosafety to the Convention on Biological Diversity24 examined in Opinion 2/00.25 The Court therefore held that Decision 2003/106/EC approving the Rotterdam Convention on behalf of the then Community ought to have been based on the two corresponding legal bases, namely Article 133 EC (Article 207 TFEU) and Article 175(1) EC (Article 192(1) TFEU), in conjunction with the relevant provisions of Article 300 TEC (Article 218 TFEU).26 It also recalled27 paragraphs 17–21 of the Titanium Dioxide judgment,28 according to which recourse to a dual legal basis is not possible where the procedures laid down for each legal basis are
21 Rotterdam Convention I (n 3) para 37. 22 ibid paras 38–41. 23 ibid para 42. 24 Cartagena Protocol on Biosafety to the Convention on Biological Diversity (adopted 29 January 2000, entered into force 11 September 2003) 2226 UNTS 208. 25 Opinion 2/00, Cartagena Protocol, ECLI:EU:C:2001:664. On which see this volume, ch 39. On the EU’s role in the negotiation of the Cartagena Protocol, see Delreux (n 2) 101–12. See Rotterdam Convention I (n 3) paras 43–50. 26 Rotterdam Convention I (n 3) para 51. 27 ibid para 52. 28 Case C-300/89, Commission v Council, ECLI:EU:C:1991:244 (Titanium Dioxide).
The Indissociable Link between Environmental Policy and the CCP 481 incompatible with each other,29 or where the use of two legal bases is liable to undermine the rights of the Parliament.30 However, the Court concluded that no such consequence followed from recourse to both Article 133 EC (Article 207 TFEU) and Article 175(1) EC (Article 192(1) TFEU). It observed, first, that recourse to both those Articles was not precluded because of the incompatibility of the respective procedures. It specified that additional recourse to Article 133 EC (Article 207 TFEU) could not have any impact on applicable voting rules within the Council, since the latter provision provided in principle, in the same way as Article 175(1) EC (Article 192(1) TFEU), for recourse to QMV. Secondly, recourse to Article 133 EC (Article 207 TFEU) jointly with Article 175(1) EC (Article 192(1) TFEU) was likewise not liable to undermine the Parliament’s rights because, although the first-mentioned article, in conjunction with the first subparagraph of Article 300(3) EC, did not provide for its consultation prior to the conclusion of a CCP agreement, the second article did lead to such a result.31 The Court added that, by basing the decision approving the Convention on the dual legal basis of Article 133 EC (Article 207 TFEU) and Article 175(1) EC (Article 192(1) TFEU), the EU was also giving indications to the other parties both regarding the extent of Union competence in relation to the Convention, falling both within the CCP and within environmental policy, and regarding the division of competences between the Union and its Member States – which must also be taken into account at the implementation stage.32 The Court therefore annulled Decision 2003/106 inasmuch as it was based solely on Article 175(1) EC (Article 192(1) TFEU) as the substantive legal basis.33 IV. THE IMPORTANCE OF THE CASE
A. The Trade–Environment Nexus The prominence of the trade–environment nexus is highlighted in a number of international instruments, such as Article XX GATT, Principle 12 of the Rio Declaration34 and, indeed, the first recital in the preamble of the World Trade Organization (WTO) Agreement. EU primary law provides for the CCP to be conducted having regard to the principles and objectives of EU external action,35 including the development of ‘international measures to preserve and improve the quality of the environment and the sustainable management of global natural resources, in order to ensure sustainable development’.36 Furthermore, Article 11 TFEU provides that environmental protection requirements ‘must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development’. That implies an obligation not only to
29 See also Opinion 1/15 (n20), para 78; Opinion 1/19 (n 20) para 288. 30 See also judgment of 19 July 2012, Case C-130/10, Parliament v Council, ECLI:EU:C:2012:472 (Smart Sanctions), para 36. See G De Baere, ‘From “Don’t Mention the Titanium Dioxide Judgment” to “I Mentioned It Once, But I Think I Got Away with It All Right”: Reflections on the Choice of Legal Basis in EU External Relations after the Legal Basis for Restrictive Measures Judgment’ (2012–13) 15 Cambridge Yearbook of European Legal Studies 537. 31 Rotterdam Convention I (n 3) paras 53–54. 32 ibid para 55. 33 ibid para 56. 34 Rio Declaration on Environment and Development (16 June 1992) (1992) 31 ILM 874 (Rio Declaration). 35 Art 205 TFEU and Art 207(1) TFEU, final sentence. 36 Art 21(2)(f) TEU. See also Art 3(5) TEU.
482 Geert De Baere mainstream environmental protection and sustainable development in its policies, but also to ensure consistency between environmental policy and other policies.37 In addition, Article 37 of the Charter of Fundamental Rights provides that a ‘high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the Union and ensured in accordance with the principle of sustainable development’.38 In more general terms, ‘by default’ all EU policy is to a certain extent also environmental policy.39 Furthermore, as Advocate General (AG) Sharpston has pointed out, significant disparities in environmental standards may distort competition and trade; low standards in one market may result in competitive advantages for domestic undertakings and hence attract foreign investment, to the disadvantage of markets where standards are higher. Conversely, environmental protection standards may be manipulated to achieve protectionist goals.40 That is also why the promotion of sustainable development is among the objectives set out in the preamble to the WTO Agreement.41 It is therefore no surprise that since an environmental policy legal basis was introduced into the EU Treaties by the Single European Act,42 issues of choice of legal basis between environment and trade have arisen. In addition, in contrast to the shared nature of environmental policy pursuant to Article 4(2)(e) TFEU, the CCP is an exclusive competence, as per Article 3(1)(e) TFEU. Given the increasing overlaps between the two policy areas and the obvious stakes involved in choosing between a shared competence and an exclusive competence, the Court has had to adjudicate on a series of disputes over the choice between an environmental policy or CCP legal basis. As the following will demonstrate, the Court’s standard centre of gravity test to determine the legal basis of a particular measure has not always led to predictable results,43 and the Rotterdam Convention cases provide rather clear illustrations of this. B. The Choice between Environmental Policy and CCP Legal Bases The Court first addressed the choice between environmental policy and the CCP in the first Chernobyl case, in which Greece challenged the legal basis of an import measure taken in the wake of the 1986 nuclear disaster.44 There, the Court sketched out a fairly comprehensive approach to the possibility of taking measures under the CCP that are broadly inspired by environmental concerns. The concerns that moved the Court were probably quite accurately expressed in the Opinion of AG Darmon in the case: In order to avoid any change in patterns of trade and any distortion of competition in dealings with non-member countries, the Community must be able, under the common commercial policy, to adopt 37 M Cremona, ‘Coherence and EU External Environmental Policy’ in E Morgera (ed), The External Environmental Policy of the European Union: EU and International Law Perspectives (Cambridge, Cambridge University Press, 2012) 36. 38 On the rather confusing usage of the concept of ‘sustainable development’ in Art 37 of the Charter of Fundamental Rights and in EU law more generally, see E Morgera and G Marín Durán, ‘Environmental Protection’ in S Peers, T Hervey, J Kenner and A Ward (eds), The EU Charter of Fundamental Rights: A Commentary (London, Hart Publishing, 2014) 994–95. 39 G Van Calster and L Reins, EU Environmental Law (Cheltenham, Edward Elgar, 2017) 57. 40 Opinion of Advocate General (AG) Sharpston in Opinion 2/15, EU–Singapore FTA, ECLI:EU:C:2016:992, para 478. See this volume, ch 82. 41 ibid para 478. 42 Title VII of the Single European Act. 43 Cremona (n 37) 22. 44 Judgment of 29 March 1990, Case C-62/88, Greece v Council, ECLI:EU:C:1990:153 (Chernobyl I).
The Indissociable Link between Environmental Policy and the CCP 483 uniform rules regarding the conditions under which products from non-member countries may be imported into its territory. Those conditions may include in particular compliance with maximum permitted levels of radioactivity without the measure in question thereby being of a different nature or not capable of adoption under Article 113 [of the EEC Treaty (Article 207 TFEU)].45
The measure at issue in the first Chernobyl case was therefore to be situated within the sphere of trade policy. The factual and legal constellation was different regarding the Cartagena Protocol.46 Contrary to the Commission’s view that the Protocol was essentially a trade measure, the Court held in Opinion 2/00 that an examination of its context, aim and content revealed that its main purpose or component is the protection of biological diversity against the harmful effects that could result from activities involving dealing with living modified organisms (LMOs), in particular from their transboundary movement. Regarding the context, the Court recalled that the Protocol was drawn up pursuant to Decision II/5 of the Conference of the Parties to the Convention, and that it was not in dispute that the Convention is an instrument falling within the field of environmental protection, resulting as it does from the United Nations Conference on Environment and Development, held in Rio de Janeiro in June 1992.47 As regards its purpose, the Court held it to be ‘clear beyond doubt’ from Article 1 of the Cartagena Protocol, which refers to Principle 15 of the Rio Declaration, that it pursues an environmental objective, which was highlighted by mention of the precautionary principle,48 and confirmed by its title and preamble.49 Finally, the Court in Opinion 2/00 held that the Protocol’s content clearly reflected its environmental aim, referring, inter alia, to the ‘advance informed agreement procedure’ as ‘a typical instrument of environmental policy’.50 Therefore, the Protocol had to be founded on a single legal basis, specific to environmental policy.51 Building on Opinion 2/00, the Court held in the Basel Convention case that, like the PIC Procedure established by the Cartagena Protocol, the prior written notification and consent procedure provided for by the contested regulation implementing the Basel Convention could be described as ‘a typical instrument of environmental policy’.52 The Court recalled that a broad interpretation of the concept of CCP is not such as to call into question the finding that the contested regulation was an instrument falling principally under environmental protection policy, and that an EU act may fall within that area even when the measures provided for by it are liable to affect trade.53 The Court therefore concluded in Basel Convention that the only appropriate legal basis for the contested act was Article 175 EC (Article 192 TFEU). Nevertheless, the Rotterdam Convention judgments indicated, first, that the Court was willing to contemplate that trade and environment were inextricably linked within a single
45 Opinion of AG Darmon, Case C-62/88, Greece v Council, ECLI:EU:C:1990:68 (Chernobyl I), para 32. 46 Above n 24. 47 Opinion 2/00 (n 25) paras 26–27. 48 Referred to in Art 174(2) TEC (Art 191(2) TFEU). 49 Opinion 2/00 (n 25), paras 29–30. 50 ibid paras 31–33. 51 ibid para 44. See also judgment of 12 December 2002, Case C-281/01, Commission v Council, ECLI:EU:C:2002:761 (Energy Star Agreement). 52 Case C-411/06, Commission v Parliament and Council, ECLI:EU:C:2009:518 (Basel Convention), para 59. The Convention on the control of transboundary movements of hazardous wastes and their disposal of 22 March 1989, 1673 UNTS 57 (the Basel Convention) was signed at Basel on 22 March 1989 and approved on behalf of the Community by Council Decision 93/98/EEC of 1 February 1993, [1993] OJ L39/1. 53 ibid para 69–70.
484 Geert De Baere measure, and that a joint legal basis was required. Second, it was also willing to accept a rather broad reading of its Titanium Dioxide case law on the combination of potentially procedurally incompatible legal bases,54 in order to make measures with a dual legal basis in environment and the CCP possible. Both aspects will be briefly examined in turn. C. Dual Legal Bases in Trade and Environment First, the Court’s conclusion that the Rotterdam Convention includes two indissociably linked components, neither of which is secondary or indirect as compared with the other, one within the CCP and the other within protection of human health and the environment, would have been difficult to predict on the basis of Opinion 2/00. As AG Kokott pointed out, while the Rotterdam Convention does contain numerous references to trade, the environmental references are at least as substantial. Specifically with respect to the PIC Procedure, the contrast the Commission draws (and the Court accepts) with the Cartagena Protocol at issue in Opinion 2/00 is not entirely convincing. International trade in certain chemicals classified as hazardous in Annex III to the Convention is, as the AG put it, merely the ‘external point of reference’ of the PIC Procedure, the real subject matter of the Convention being the exchange of information by parties on their import practices (Article 10(7) and (10) of the Convention) combined with the onward transmission of the information to economic operators concerned (Article 11(1)(a) of the Convention). Hence, the PIC Procedure is intended above all to prevent a party from being confronted with the import of hazardous chemicals without first having had an opportunity to take the necessary steps for the protection of the environment and human health.55 The conclusion that, apart from indirect effects on trade, ‘the Convention essentially has no commercial policy rules as its subject-matter’56 therefore seems sound, and is confirmed by the international environmental framework in which the Convention fits.57 Indeed, its preamble explicitly recalls the pertinent provisions of the Rio Declaration and chapter 19 of Agenda 2158 on ‘Environmentally sound management of toxic chemicals, including prevention of illegal international traffic in toxic and dangerous products’,59 and acknowledges the work undertaken by UNEP and FAO,60 which initiated the negotiation of the Convention. Moreover, Article 19(3) of the Convention provides for the secretariat functions to be ‘performed jointly by the Executive Director of UNEP and the Director-General of FAO’. The environmental component of the Rotterdam Convention hence seems to be preponderant. In the Basel Convention judgment, the Court made an effort to clarify its approach in the Rotterdam Convention I case and to distinguish the former from the latter. It recalled that it had ‘inferred from a detailed analysis of the Rotterdam Convention’ that it also aimed to promote shared responsibility and cooperative efforts in the international trade of certain
54 Titanium Dioxide (n 28), paras 17–21. See further De Baere (n 30). 55 Opinion of AG Kokott, Case C-94/03, Commission v Council, ECLI:EU:C:2005:308 (Rotterdam Convention I), paras 34–38. 56 ibid para 39. 57 Opinion of AG Kokott in Rotterdam Convention I (n 55) para 44. 58 https://sustainabledevelopment.un.org/content/documents/Agenda21.pdf. 59 2nd recital in the preamble to the Rotterdam Convention. 60 3rd recital in the preamble to the Rotterdam Convention.
The Indissociable Link between Environmental Policy and the CCP 485 hazardous chemicals, and that it was through the adoption of measures of a commercial nature, relating to trade in certain hazardous chemicals or pesticides, that the parties to that convention sought to attain the objective of protecting human health and the environment, which explained its conclusion that the commercial components of that convention could not be regarded as merely incidental to the objective of environmental protection pursued thereby, and that the two components falling within the scope of the CCP and the protection of human health and the environment are indissociably linked.61 While the Court is correct in saying that the situation regarding the Rotterdam Convention differs from the one in the Basel Convention, that does not quite explain why that distinction is substantial enough to justify a very different conclusion as regards the respective scopes of the CCP and environmental policy. Second, with respect to the combination of potentially procedurally incompatible legal bases, the Court concluded that, in the Rotterdam Convention I case, no such procedural incompatibility followed from recourse to both Article 133 EC (Article 207 TFEU) and Article 175(1) EC (Article 192(1) TFEU). It specified, first, that the Convention did not fall within the category of agreements that, under Article 133(5) EC (repealed), required unanimity within the Council, so that additional recourse to Article 133 EC (Article 207 TFEU) could not have any impact on the voting rules applicable within the Council, since the latter provision provided in principle, in the same way as Article 175(1) EC (Article 192(1) TFEU), for QMV. Second, recourse to the joint legal basis of Article 133 (Article 207 TFEU) and Article 175(1) EC (Article 192(1) TFEU) was likewise not liable to undermine the Parliament’s rights because, although the former, read in conjunction with the first subparagraph of Article 300(3) EC (Article 218(6) TFEU), did not provide for consultation of that institution prior to the conclusion of a CCP agreement, the latter did lead to such a result.62 This essentially followed the Opinion of AG Kokott, who had pointed out that, while the Parliament was generally only informed unofficially of agreements in the field of the CCP, without it having any formal right under the pre-Treaty of Lisbon arrangements to participate, under the first subparagraph of Article 300(3) EC (Article 218(6) TFEU), it had to be compulsorily consulted before the conclusion of environmental policy agreements. However, AG Kokott argued, on the other hand, that nothing stopped the Council from also consulting the Parliament optionally in the case of CCP agreements.63 While this seems to be an entirely reasonable reading of the applicable constitutional rules, it does imply opting for the procedure that maximises the involvement of Parliament. However, the AG took the view that annulment of the decision approving the Convention would be possible only if the alleged error in the choice of the legal basis were more than a purely formal error. In this case, the procedural rights of the Parliament had been observed, given that it was consulted in accordance with the first subparagraph of Article 300(3) EC (Article 218(6) TFEU) and that Article 133 EC (Article 207 TFEU) could not have given the Parliament any additional rights, nor were there any specific indications that the absence of Article 133 EC (Article 207 TFEU) had weakened the Commission’s role as negotiator. There was therefore no need to annul the contested decision.64 Nevertheless, the Court did not follow the AG in that respect.
61 Basel
Convention (n 52), para 75. Convention I (n 3) paras 53–54. 63 Opinion of AG Kokott in Rotterdam Convention I (n 55) para 52. 64 ibid paras 53–57. 62 Rotterdam
486 Geert De Baere With respect to the role of Parliament, it is worth noting that the Court also decided in favour of the procedure maximising the Parliament’s input in the Rotterdam Convention II judgment, but the ‘levelling-up’ in favour of the Parliament was more striking and, arguably, controversial.65 D. The Indication of the Legal Basis as a Signal to Third Parties In Rotterdam Convention I, the Court ended its analysis in support of annulment by adding that, by basing the decision approving the Convention on the dual legal basis of Article 133 EC (Article 207 TFEU) and Article 175(1) EC (Article 192(1) TFEU), the EU was giving indications to the other parties both with regard to the extent of Union competence in relation to the Convention and with regard to the division of competences between the Union and its Member States, which must also be taken into account when implementing the agreement at EU level.66 That statement is intriguing on a number of levels. First, it seems to contradict the Court’s holding in Ruling 1/78 according to which it is not necessary to set out and determine, as regards other parties to the convention, the division of powers in this respect between the Community and the Member States, particularly as it may change in the course of time. It is sufficient to state to the other contracting parties that the matter gives rise to a division of powers within the Community, it being understood that the exact nature of that division is a domestic question in which third parties have no need to intervene.67
That position appears to be sound from the perspectives both of EU law and of public international law more generally. Indeed, Article 27 of the Vienna Convention on the Law of Treaties of 23 May 1969 (VCLT),68 which codifies customary international law, provides that a party may not invoke its internal law as justification for its failure to perform a treaty. That is without prejudice to Article 46(1) VCLT, which provides that a party may not invoke the fact that its consent to be bound by a treaty has been expressed in violation of its internal law regarding competence to conclude treaties as invalidating its consent unless that violation was manifest and concerned a rule of fundamental importance.69 It is therefore not obvious at all how the division of competences between the Union and its Member States could be directly relevant for the other parties to the Rotterdam Convention.70 Second, to suppose that other parties are aware of the fact that the internal EU decision approving accession to the Convention is based on this or that legal basis, let alone that they can derive anything much at all from that fact as regards the division of competence between the EU and its Member States, seems a stretch. Indeed, the instrument specifically intended
65 See Opinion of AG Kokott, Case C-178/03, Commission v Parliament and Council, ECLI:EU:C:2005:312 (Rotterdam Convention II), para 60. See also the Opinion of AG Poiares Maduro, Case C-411/06, Commission v Parliament and Council, ECLI:EU:C:2009:189 (Basel Convention), para 6. Compare the reflections on the subject of the permissibility of dual legal bases in the Opinion of AG Geelhoed, Case C-491/01, British American Tobacco (Investments) and Imperial Tobacco, ECLI:EU:C:2002:476, paras 167–82. See further De Baere (n 30) 537–62. 66 Rotterdam Convention I (n 3) para 55. See also Opinion 1/19 (n 20) para 262. 67 Ruling 1/78, Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202, para 35. See this volume, ch 10. 68 United Nations Treaty Series, vol 1155, p 331. 69 A manifest violation is defined in Art 46(2). For more on the role of internal law in international law, see J Wouters, C Ryngaert, T Ruys and G De Baere, International Law: A European Perspective (Oxford, Hart Publishing, 2018) 174–77. 70 In that sense, see Opinion of AG Hogan, Opinion 1/19, ECLI:EU:C:2021:198, para 75.
The Indissociable Link between Environmental Policy and the CCP 487 for that purpose is the declaration of competence required by Article 25(3) of the Convention, and such declarations are notoriously Delphic in and of themselves. To suppose that, beyond the declaration of competence, other parties would examine the legal basis of the internal EU decision approving an international agreement to which the Union is a party is perhaps overly optimistic. Third, as the Court clarified in later case law, rather than signalling anything to other parties, the indication of the legal basis of an EU act is of particular significance in preserving the prerogatives of the EU institutions concerned by the procedure for the adoption of a measure. It is also liable to have an effect on the powers of these institutions, and on their respective roles in the procedure for the adoption of the contested act. In the same way, it is necessary in order to determine the voting procedure within the Council. And perhaps most importantly, it is essential in the light of the obligation to state reasons that stems from Article 296 TFEU, which is justified in particular by the need for the Court to be able to exercise its power of judicial review, and must apply to all EU acts that produce legal effects.71 Fourth and finally, if the ‘signalling function’ to other parties is indeed as important as the Court indicates, does that imply that it should also be taken into account as one of the ‘objective factors amenable to judicial review’ on which the choice of the legal basis must be based according to settled case law? E. Concluding Thoughts The Rotterdam Convention I judgment discussed here, and the Rotterdam Convention cases more generally, illustrate how the result of the centre of gravity test to determine the appropriate legal basis of an EU act is sometimes difficult to predict, in particular in the interface between trade and the environment. On the one hand, that may simply be the effect of the tendency of the Court – for better or worse – to prioritise solving the case before it, and overly carefully setting out principles that could be used to predict the outcome of future cases. On the other hand, it is arguable that the area of overlap between environmental policy and the CCP is particularly prone to such an incremental case-by-case approach. In the Rotterdam Convention cases, the Court showed that it was willing to sanction a dual environment and CCP legal basis. By contrast, the Basel Convention case demonstrates that the Court remains of the view that such dual legal bases should be the exception rather than the rule.72 That appears to be underscored by more recent case law, both regarding the combination of legal bases more generally and specifically as regards the nexus between trade and sustainable development. At a more general level, in Opinion 1/19,73 the Court, building on a holding in Opinion 1/08,74 recalled that, regarding an international agreement pursuing several purposes or having several components, it is necessary to verify whether the provisions of that agreement pursuing an objective or constituting a component of that agreement are a necessary adjunct to ensure the effectiveness of the provisions of those agreements pursuing other purposes or constituting other components or whether they are ‘extremely limited in scope’. In each of those cases,
71 By analogy, see Case 687/15, Commission v Council, ECLI:EU:C:2017:803 (WRC-15), paras 50–52. 72 Basel Convention (n 52). 73 Opinion 1/19 (n 20) paras 286–87. 74 Opinion 1/08, Agreements modifying the Schedules of Specific Commitments under the GATS, ECLI:EU:C: 2009:739, para 166.
488 Geert De Baere according to the Court, the existence of that objective or component does not justify it being specifically reflected in the substantive legal basis of the decision to sign or conclude that agreement on behalf of the EU. As regards the criteria in respect of which the incidental nature of a purpose or component of an act may be determined, the Court held these to include the number of provisions devoted to it, in comparison with the act’s provisions as a whole, and the nature and scope of those provisions. That in principle appears to limit the scope of when recourse to a dual legal basis is necessary and appropriate. More specifically regarding the environment and the CCP, Opinion 2/15 has significantly reinforced the nexus between trade and sustainable development under EU law. The Court recalled that as regards the CCP, the TFEU differs appreciably from the TEC, in that it includes new aspects of contemporary international trade. In particular, Article 207(1) TFEU provides that the CCP is to be conducted ‘in the context of the principles and objectives of the Union’s external action’, which, as stated in Article 21(2)(f) TEU, relate inter alia to ‘sustainable development linked to preservation and improvement of the quality of the environment and the sustainable management of global natural resources’.75 In addition, the Court pointed out that the obligation on the EU to integrate those objectives and principles into the conduct of its CCP is apparent from the second sentence of Article 207(1) TFEU in conjunction with Article 21(3) TEU and Article 205 TFEU, taking into account Articles 9 and 11 TFEU, as well as Article 3(5) TEU.76 Crucially, the Court held that it followed that the objective of sustainable development will henceforth form an integral part of the CCP.77 It added that it would, moreover, not be coherent to hold that the provisions liberalising trade between the EU and a third state fall within the CCP and that those which are designed to ensure that the requirements of sustainable development are met when that liberalisation of trade takes place fall outside it, and repeated that the conduct of trade in accordance with the objective of sustainable development forms an integral part of the CCP.78 That has now left no doubt that the CCP legal basis is sufficiently broad in scope to support free trade agreements that contain substantive environmental obligations. V. ADDITIONAL READING Adam, S, ‘Cour de justice, 10 janvier 2006, Commission c/ Conseil, Aff. C–94/03, Rec. 1–1; Commission c/ Parlement et Conseil, Aff. C–178/03, Rec. 1–107’ (2006) 15 Revue des affaires européennes – Law & European Affairs 127. Koutrakos, P, ‘Case C-94/03, Commission v Council; Case C-178/03, Commission v Parliament and Council’ (2007) 44 CML Rev 171. Langlet, D, ‘Dual Legal Basis for Adoption and Implementation of the Rotterdam Convention’ (2006) 18 Journal of Environmental Law 495. Schaffrin, D, ‘Dual Legal Bases in EC Environmental Law Revisited: Note on the Judgments of the European Court of Justice in the Cases C–94/03 (Commission of the European Communities v Council of the European Union) and C–178/03 (Commission of the European Communities v European Parliament and Council of the European Union)’ (2006) 15 Review of European Community and International Environmental Law 339.
75 Opinion
2/15, EU–Singapore Free Trade Agreement, ECLI:EU:C:2017:376, paras 141–42. paras 143–46. 77 ibid para 147. 78 ibid para 163. 76 ibid
46 Lowering the Threshold for Finding Implied Powers: Opinion 1/03 (Lugano Convention) MERIJN CHAMON Opinion 1/03, Competence of the Community to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, ECLI:EU:C:2006:81, delivered 7 February 2006. KEYWORDS ERTA – Obstacle pre-emption – Private international law – Disconnection clause – Article 3(2) TFEU – Implied exclusive powers – Area largely covered.
I. INTRODUCTION
I
n Opinion 1/03, the Court was seized under (current) Article 218(11) TFEU to rule on the nature of the EU’s competence to conclude the Lugano Convention. The Opinion’s importance lies in its contribution to the development and consolidation of the ERTA doctrine, and for the Court’s pedagogical exposé on that doctrine. Four elements that underline the importance of Opinion 1/03 merit pointing out in this regard: firstly, in its Opinion, the Court applied the ERTA doctrine1 for the first time to the atypical field of private international law. Secondly, Opinion 1/03 is widely viewed as a return to a more EU-friendly application of the ERTA doctrine, in line with the original case, following the restrictive application of the doctrine in Opinion 1/942 and the Open Skies cases.3 Thirdly, Opinion 1/03 was handed down at a key moment in time. While the Masters of the Treaties had themselves codified the ERTA doctrine in primary law in the Treaty establishing a Constitution for Europe, that Treaty’s ratification process was in limbo, and its fate uncertain at the time the Opinion was rendered.
1 See Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 2 See Opinion 1/94, Competence of the Community to conclude international agreements concerning services and the protection of intellectual property, ECLI:EU:C:1994:384. See this volume, ch 28. 3 See Joined Cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, Commission v United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany, ECLI:EU:C:2002:624 to ECLI:EU:C:2002:631. See this volume, ch 41.
490 Merijn Chamon While the Member States’ collective reading of ERTA was therefore clear, the Court was not bound by the provision that is now Article 3(2) TFEU.4 As a result, the Court had the option of applying the future primary law test or continuing the development of its own judge-made test. Finally, and with the benefit of hindsight, the Court, in its post-Lisbon application of the ERTA doctrine, has clearly followed the path carved out by Opinion 1/03, rather than confining itself more restrictively to an application of Article 3(2) TFEU. Practitioners and scholars that wish to understand the current Article 3(2) TFEU jurisprudence cannot therefore ignore the Court’s pre-Lisbon decision in Opinion 1/03. II. FACTS
In 1968, the six members of the European Economic Community (EEC) concluded the Brussels Convention on the reciprocal recognition and enforcement of judgments pursuant to the then Article 220 EEC (later Article 293 EC and subsequently repealed by the Treaty of Lisbon).5 Under this provision, ‘the Member States could, in so far as necessary, negotiate between themselves in order to ensure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and of arbitration awards’. Given the success of the Brussels Convention, the EEC Member States and the members of the European Free Trade Association (EFTA) concluded the Lugano Convention in 1988,6 effectively extending the scope of the Brussels Convention to the EFTA states. In 1997, the Council initiated a modernisation of both the Brussels and Lugano Conventions. Under the Treaty of Maastricht, this cooperation could be pursued either under the new Article K.3(2)(c) TEU, which allowed the Council to draw up conventions to be concluded between the Member States, or pursuant to the old Article 220 EEC, with the Commission proposing to rely on the new legal basis.7 By the time the work on the modernisation of the Conventions was finalised, the entry into force of the Treaty of Amsterdam was imminent, which moved the relevant EU competence from the third pillar to the first. The Commission thus retracted its proposal for a modernised Brussels Convention, and instead proposed the adoption of the Brussels Regulation pursuant to Articles 61(c) and 65 EC (replacing Article K.3(2)(c) TEU).8 Evidently, the same solution could not be relied upon for the modernised Lugano Convention since the latter is not an agreement exclusively between the Member States inter se. The question thus arose whether the new Lugano Convention fully came under the EU’s exclusive
4 Current Art 3(2) TFEU is identical to Art I-13(2) of the Constitutional Treaty. That Article was almost identical to Art 12 of the Draft Constitutional Treaty, which provided for an exclusive competence where the international agreement ‘affects an internal Union act’ rather than where it ‘may affect common rules or alter their scope’. 5 See 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, [1972] OJ L299/32. A Protocol concerning the interpretation of the Convention by the Court of Justice of the European Communities was signed in 1971. 6 See 1988 Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, [1988] OJ L319/9. 7 See Commission Proposal for a Council act establishing the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters in the Member States of the European Union, [1998] OJ C33/20. 8 See Commission Proposal for a Council Regulation (EC) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [1999] OJ C376E/1.
Lowering the Threshold for Finding Implied Powers 491 competence (given the adoption of the Brussels Regulation)9 or whether the Convention was (also) covered by shared competences, making it possible for the Lugano Convention to be concluded as a mixed agreement. This question was held in abeyance at the negotiation phase, since the Council’s Decision authorising the Commission to negotiate on the Lugano Convention explicitly stated that it did so without prejudice to the competence question.10 III. THE COURT
The admissibility of the Council’s request was not disputed. Indeed, already in Opinion 2/00, the Court had confirmed that under Article 218(11) TFEU questions relating to the repartition of competences between the EU and the Member States could be referred to it.11 As a result, after recalling that jurisprudence,12 the Court could swiftly move to the substance of the request. In the first 20 paragraphs of its Opinion,13 the Court, in true pedagogical fashion, summarised its jurisprudence on EU implied external competences spanning some 35 years. In a second part, the Court applied the framework to the case at hand. A. Recapitulating the Legal Framework Governing Implied External Competences Even today, the paragraphs containing the Court’s pedagogical exposé could be copied and pasted almost verbatim into any textbook on EU external relations law. First, the Court recalls that external competence may be explicit or implied. In the latter case, competence may result from secondary legislation (ERTA) or out of necessity for the attainment of the EU’s competences (Opinion 1/76).14 Subsequently, the Court stresses that external competence may be shared or exclusive. It thus clearly distinguishes the existence of competence from the nature of competence. As regards implied exclusive competences, the Court highlights that they may arise under different possible scenarios: when internal competence may be exercised only simultaneously with external competence (Opinion 1/76);15 and when international commitments would affect internal secondary legislation (ERTA).16 Recognising that any exclusive competence for concluding the revised Lugano Convention could only result from the ERTA doctrine,17 the Court proceeds by identifying the key elements of that doctrine.
9 See Council Regulation No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [2001] OJ L12/1. The Regulation was recast in 2012, see Regulation No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [2012] OJ L351/1. 10 See Council of the European Union, Doc 12426/02. Naturally, the Commission in its recommendation for a Council Decision authorising the negotiation had argued that the Community held exclusive competences. See Commission, SEC (2002) 298 final (on file with the author). 11 Opinion 2/00, Cartagena Protocol, ECLI:EU:C:2001:664, para 19. See this volume, ch 39. On the admissibility requirements of the opinion procedure in general, see S Adam, La procédure d’avis devant la Cour de justice de l’Union européenne (Brussels, Bruylant, 2011). 12 Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81, 112. 13 ibid paras 114–33. 14 ibid para 114. 15 ibid para 115. For a discussion of Opinion 1/76, see this volume, ch 9. 16 ibid para 116. 17 ibid para. 117.
492 Merijn Chamon It recalls that while the ERTA doctrine originally referred to common rules being affected, those rules could also fall outside the EU’s common policies. This is the case in particular when harmonising measures have been adopted (Opinion 2/91),18 and as a result of the Member States’ obligation, pursuant to the principle of sincere cooperation, to facilitate the attainment of the EU’s objectives.19 Commenting on the ‘restrictive turn’ in its decisions in Opinion 1/94 and the Open Skies cases, the Court recognised that, in those cases, it had indeed identified three situations in which an ERTA effect arises,20 but stressed that these were merely examples, and did not form an exhaustive list.21 According to the Court, those three situations were examples of situations where an ERTA effect would necessarily arise, since it was clear that the unity of the internal market and the uniform application of EU law would be threatened.22 Of course, there could be situations where the latter are threatened in a less obvious manner. The Court also recalled the situations in which it had not found an ERTA effect, eg in cases of minimum harmonisation (Opinion 2/91) and where there would (only) be distortions in the flow of services that did not result from legal incompatibilities (Open Skies).23 In this way, it set the ground for the key paragraphs of Opinion 1/03 in which it defined the methodology for finding an ERTA effect: [S]ince the Union only enjoys conferred powers any implied exclusive competence must have its basis in conclusions drawn from a specific analysis of the relationship between the agreement envisaged and the [Union] law in force and from which it is clear that the conclusion of such an agreement is capable of affecting the [Union] rules.24
In terms of comparing the areas covered, the Court noted that sometimes, from a simple comparison, an ERTA effect can already be excluded.25 However, an ERTA effect is not only triggered when the two areas coincide perfectly. As the Court recalled, the area concerned may also be largely covered by EU rules. To test that requirement, the assessment must be based not only on the scope of the [EU] rules in question[,] but also on their nature and content. It is also necessary to take into account not only the current state of [Union] law in the area in question but also its future development, insofar as that is foreseeable at the time of that analysis.26
18 ibid para 118. For a discussion of Opinion 2/91, see this volume, ch 22. 19 ibid para 119. 20 The Court was not explicit on what ‘those three situations’ were, which has resulted in some confusion. The three situations were those recalled by Denmark in its Open Skies case, ie ‘first, complete Community harmonisation in the sector concerned; second, the adoption of Community rules on the status of persons and companies originating in non-member countries or, third, the adoption of Community rules conferring on the Community institutions competence to conclude treaties with non-member countries’. See Case C-467/98, Commission v Denmark, ECLI:EU:C:2002:625, para 73. See also A Rosas, ‘EU External Relations: Exclusive Competence Revisited’ (2015) 38 Fordham International Law Journal 1073, 1084–85; JA Bischoff, ‘Besprechung des Gutachtens 1/03 des EuGH’ (2006) 17 Europäische Zeitschrift für Wirtschaftsrecht 295, 298; M Chamon, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1101, 1116–17. Identifying different situations, see, inter alia, P Eeckhout, ‘Exclusive External Competences: Constructing the EU as an International Actor’ in A Rosas, E Livits and Y Bots (eds), The Court of Justice and the Construction of Europe: Analyses and Perspectives on Sixty Years of Case-Law (The Hague, TMC Asser Press, 2013) 613, 631–32; H Hofmann, G Rowe and A Türk, Administrative Law and Policy of the European Union (Oxford, Oxford University Press, 2011) 123. 21 Opinion 1/03 (n 12) para 121. 22 ibid para 122. 23 ibid para 123. 24 ibid para 124. 25 ibid para 125. 26 ibid para 126.
Lowering the Threshold for Finding Implied Powers 493 The Court concluded these key paragraphs by linking the methodology for finding an ERTA effect with a clear statement of the purpose of the doctrine. Thus, shared external competences will turn into exclusive competences in order ‘to ensure a uniform and consistent application of the [Union] rules and the proper functioning of the system which they establish in order to preserve the full effectiveness of [Union] law’.27 Recalling that an ERTA effect does not depend on a contradiction between the international agreement and common EU rules,28 the Court remarked that the existence of a disconnection clause in an international agreement does not prevent a finding of an ERTA effect. After all, a disconnection clause only affects the scope of the rules in question, not their nature and content. In addition, the fact that there was a (perceived) need to include a disconnection clause in an agreement in itself constitutes an indication that the agreement could affect the common EU rules in place.29 Finally, the Court remarked that in the assessment of a possible ERTA effect, the legal basis of the common rules was irrelevant. While the legal basis is determined by the main aim and content of the internal measure,30 an ERTA effect depends on whether specific provisions (even ancillary ones) of that internal measure are affected.31 B. Application to the Case at Hand In the second part of the Opinion, the Court applies the above framework to the revised Lugano Convention. Regarding the Lugano Convention’s rules on jurisdiction, the Court finds that typically in international private law these need to be as comprehensive as possible in order to be effective.32 As a result and logically, the revised Lugano Convention would overlap with the Brussels Regulation.33 The Brussels Regulation aims to establish a unified and coherent system of rules on jurisdiction,34 which applies to any dispute with an international element (not just an intra-EU cross-border element) and for which the defendant is domiciled in a Member State,35 as does the revised Lugano Convention.36 According to the Court, this in itself already showed that the Lugano Convention was capable of affecting the Brussels Regulation, while at the same time remarking that this conclusion needed to be corroborated by assessing the Lugano Convention itself.37 While most of the Member States submitting observations had argued that there was no ERTA effect since the new Lugano Convention was effectively the result of a copy-and-paste exercise from the Brussels Regulation, the Court observed that ‘that factor alone cannot demonstrate the absence of such an effect’.38 After all, the Lugano Convention de facto treated
27 ibid para 128. 28 ibid para 129. 29 ibid para 130. 30 This in accordance with the Court’s well-established case law on this issue. See, inter alia, Opinion 2/00 (n 11) para 22. 31 Opinion 1/03 (n 12) para 131. 32 ibid para 141. 33 ibid para 142. 34 ibid para 151. 35 ibid paras 143–50. 36 ibid para 151. 37 ibid para 151. 38 ibid para 153.
494 Merijn Chamon the EFTA states as EU Member States, whereas they were non-Member States if the Brussels Regulation would be applied to them. In disputes involving EFTA residents, this may result in different outcomes depending on whether the rules on jurisdiction of the Lugano Convention or the Brussels Regulation would be applied.39 Turning to the revised Lugano Convention’s disconnection clause, which a lot of the Member States submitting observations had invoked to demonstrate the absence of an ERTA effect, the Court noted that ‘On the contrary, such a clause may provide an indication that that agreement may affect the [Union] rules’.40 On top of this, the Court noted that the revised Lugano Convention would contain exceptions to the disconnection clause, meaning the latter would not ensure the full application of the Brussels Regulation between the EU Member States inter se.41 The revised Lugano Convention’s rules on jurisdiction thus came under the EU’s exclusive competence by virtue of the ERTA doctrine.42 IV. THE IMPORTANCE OF THE CASE
As noted in the introduction, Opinion 1/03 is an important opinion because of its clarification to the ERTA doctrine in terms of its general applicability and flexibility, and because of the opinion’s timing and precedential value. In what follows, four specific questions raised by the ERTA doctrine will be discussed in light of these four points of importance. A. The Scope and Nature of the ERTA Doctrine In Opinion 1/03, the Court made clear that its ERTA doctrine is a general doctrine in EU external relations law. Picking up on Opinion 2/91, the Court also applied it without adaptation to an agreement in the atypical area of private international law (ie an agreement not laying down substantive rules). Not only does the Court clarify that the doctrine’s potential scope is general, it equally clarifies the same for the doctrine’s actual applicability, despite most Member States wanting the Court to confirm that an ERTA effect is only produced in three very specific situations.43 To clarify which situations will give rise to an ERTA effect, the Court identified more clearly than in its prior jurisprudence that the purpose or telos of the ERTA doctrine is ‘to ensure a uniform and consistent application of the [Union] rules and the proper functioning of the system which they establish in order to preserve the full effectiveness of [Union] law’.44 This also sheds light on the nature of the ERTA doctrine. Although the Court has not been explicit on this in Opinion 1/03 or in its subsequent jurisprudence, it may still be inferred that
39 The Court refers explicitly to the rules on exclusive jurisdiction and prorogation of jurisdiction contained in Arts 22 and 23 of the original Brussels Regulation (current Arts 24 and 25; see above n 9). 40 Opinion 1/03 (n 12) para 154. 41 ibid paras 156–57. 42 Given the link between the rules on recognition and enforcement of judgment and the rules on jurisdiction, the Court further held that the exclusive competence of the EU extended over the entire Convention. See Opinion 1/03 (n 12) paras 168–70. 43 See above n 20. 44 Opinion 1/03 (n 12) para 128.
Lowering the Threshold for Finding Implied Powers 495 the ERTA effect boils down to pre-emption, as is also recognised by most commentators.45 More specifically, and since there need not be a contradiction between the common rules and the envisaged agreement for an ERTA effect to arise, the doctrine goes beyond mere rule pre-emption. At the same time, it is not sufficient to show that the EU has adopted rules in the area concerned for it to acquire an implied exclusive competence, since it needs to be shown that those common rules are or can be affected. As a result, ERTA cannot be equated with field pre-emption either. In light of the ERTA doctrine’s telos as defined in Opinion 1/03, it then becomes clear that we are looking at obstacle pre-emption: Member States are prevented from concluding agreements if these would frustrate the uniform and consistent application of EU law or the proper functioning of the legal framework established by that EU law. This is more than a mere academic point: ERTA constituting a form of obstacle preemption requires the Court to engage in an abstract assessment of whether the objectives of EU common rules are jeopardised. This means that the ERTA test is far from clear or precise, and leaves the Court ample room to find in favour or against implied exclusive competence in any given case. This flexibility is also clear from the Court’s post-Lisbon jurisprudence, and resides in at least three aspects: since the focus is on the objectives of common rules, the Court must (i) define the nature of these common rules (see section IVB) and (ii) identify the objectives pursued, as well as having to (iii) determine whether these are jeopardised should an agreement be concluded by the Member States rather than the Union. On this last point, it should be noted that the Court, in its post-Lisbon jurisprudence, consistently refers to a risk of common rules being affected, rather than common rules actually being affected, which effectively lowers the threshold for finding an ERTA effect. That explicit reference to risk was absent in the Court’s pre-Lisbon jurisprudence, but the idea was arguably already there. After all, the Court observed that the simple overlap between the Brussels Regulation and the revised Convention meant the latter was capable of affecting the former.46 B. The Issue of Complete Harmonisation As noted above, the suggestion that ERTA amounts to a form of obstacle pre-emption explains why it is important to verify the nature of the common rules. If the latter amount to complete harmonisation, any overlap by the international agreement automatically risks jeopardising the attainment of the objectives of the common rules. But when is harmonisation complete? In Opinion 1/03, the Court effectively finds that the Brussels Regulation results in complete harmonisation through a bold interpretation of one of the key provisions.47 Several Member 45 See the authors cited in fn 11 in M Chamon, ‘Existence or Exercise of EU Competence? From Supervening Exclusivity to Institutional Balance in Limiting Facultative Mixity’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon – The Law and Practice of Facultative Mixity (Leiden, Martinus Nijhoff/Brill, 2020) 112, 114. 46 Opinion 1/03 (n 12) para 151. 47 This in itself is the subject of debate, however. Mengozzi, for instance, argues that the Court found exclusive competence because the Brussels Regulation included provisions relating to the treatment of nationals of non-member countries. See P Mengozzi, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention’ in M Poiares Maduro and L Azoulai (eds), The Past and Future of EU Law (Oxford, Hart Publishing, 2010) 213, 217. Neframi noted that the Court indirectly rejected the idea that exhaustive harmonisation was at issue, since it recalled its findings in Opinion 2/91 on minimum harmonisation. See E Neframi, ‘Avis 1/03’ (2006) Revue trimestrielle de droit européen 113, 123. It should be noted, however, that the Court did so in the first (pedagogical) part of its Opinion, not in the second part, in which it applies the ERTA doctrine on the revised Lugano Convention.
496 Merijn Chamon States had invoked Article 4(1) of the Regulation, which provides that ‘If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Articles 22 and 23, be determined by the law of that Member State’, to argue that in disputes involving defendants not domiciled in an EU Member State (such as disputes governed by the Lugano Convention), Member States remained competent, so the EU could not have exclusive jurisdiction.48 While this was a plausible interpretation of Article 4(1) of the Regulation, it was not followed by the Court. Instead, it found that the EU legislature had granted (but had not left) a certain leeway to the Member States, and that this ‘form[ed] part of the system implemented by that regulation’.49 In addition, it noted that the EU legislature had defined the only relevant criterion for the Member States to determine jurisdiction, ie domicile.50 This is an interpretative technique that the Court would later also apply in its post-Lisbon jurisprudence, notably in its Opinion 3/15 (Marrakesh Treaty) and in Neighbouring Rights.51 C. The ‘Area Largely Covered’ Criterion In Opinion 1/03, the Court recapitulates and summarises its methodology for testing an ERTA effect (see section IVD). An important part thereof is the ‘area largely covered’ criterion, which entails that it is not necessary for the areas covered by the international agreement and the Union legislation to coincide fully. A key question here is ‘not necessary for what?’ But this is an issue that will be returned to later in this section. First, it should be noted that this requirement was introduced by the Court in its earlier Opinion 2/91, but that the UK had explicitly asked the Court to reconsider this criterion.52 As is clear from the summary of the first part of the Court’s opinion (see section IIIA), the Court did not pick up on this invitation. Following the entry into force of the Treaty of Lisbon, the UK (and other Member States) invited the Court again to reconsider. This time, they pointed to the codification of the ERTA doctrine in Article 3(2) TFEU, which does not refer to ‘international agreements in an area (at least) largely covered by common rules’. Without much explanation, the Court rejected this reading of Article 3(2) TFEU, finding that that provision must ‘be interpreted in the light of the Court’s explanation with regard to them in the judgment in ERTA and in the case law developed as from that judgment’.53 The ‘area largely covered’ criterion thus remains good law also following the entry into force of the Treaty of Lisbon. This leaves the question as to the criterion’s purpose, ie for what is it sufficient that the common rules largely cover the area governed by the international agreement? The Court was not clear on this in Opinion 1/03, and further clarification has continued to elude us also in the post-Lisbon era. The criterion has been understood by some as a test for finding
48 Opinion 1/03 (n 12) paras 64–66. 49 ibid para 148. 50 ibid para 149. 51 Case C-114/12, Commission v Council, ECLI:EU:C:2014:2151 (Neighbouring Rights), paras 91–92; Opinion 3/15, Marrakesh Treaty, ECLI:EU:C:2017:114, para 119. See this volume, ch 78. 52 Opinion 1/03 (n 12) para 47. 53 Neighbouring Rights (n 51) para 67. Several Advocates General were more explicit on why the reading advanced by the UK and other Member States could not be accepted. For the most elaborate refutation, see View of AG Jääskinen in Opinion 1/13, The Hague Convention, ECLI:EU:C:2014:2292, paras 68–70. See this volume, ch 69.
Lowering the Threshold for Finding Implied Powers 497 an ERTA effect itself,54 and this has (evidently) also been advanced by both the Commission and Parliament before the Court.55 Differently, Verellen notes that the initial function of the criterion was to create a (rebuttable) presumption that EU rules are affected.56 Verellen also notes, however, that the Court, in its post-Lisbon standardised formula (see section IVD), has instrumentalised the ‘area largely covered’ criterion to test the more fundamental requirement of the consistent application and proper functioning of EU rules,57 ie what has been identified here as the telos of the ERTA doctrine (see section IVA). From that perspective, to show an ERTA effect, one would therefore need to test whether the ‘area largely covered’ criterion is met. This is not the view taken here. After all, the ‘area largely covered’ criterion itself is not part of this standardised formula (see section IVD), but it is still referred to in cases such as Green Network, Opinion 1/13 and Opinion 3/15. In those cases, the Court simply seems to caution in general terms that an ERTA effect may well exist, even if the areas covered by the international agreement and those covered by the Union rules do not coincide fully.58 To say the least, however, the ‘area largely covered’ criterion remains murky, and this not even taking into account that the Court relies on similar phraseology to determine whether it has jurisdiction to interpret provisions of a mixed agreement.59 The view advanced here, then, is that, as far as the ERTA doctrine goes, the ‘area largely covered’ criterion should be distinguished from and logically follows that of the actual ERTA test.60 The function of the ‘area largely covered’ criterion therefore is not to test an ERTA effect, but to determine the scope of the exclusive competence found and to determine whether the EU is exclusively competent for the whole of the agreement. As Castillo de la Torre notes, an ERTA effect may well be found, but if the common rules do not cover the relevant area to a large extent, the EU only has exclusive competence over part of the agreement,61 opening the door to a mixed agreement. That the Court then sometimes reverses this logical order (performing the area largely covered test before the actual ERTA test) may be explained by the fact that in the typical ERTA cases coming before the Court, the Commission does not simply claim an exclusive EU competence, but an exclusive EU competence for the
54 C Nowak and MS Masuhr, ‘“EU Only”: Die ausschließlichen impliziten Außenkompetenzen der Europäischen Union’ (2015) 50 Europarecht 189, 201–03; F Le Bot, ‘Précisions sur les compétences externes implicites après le Traité de Lisbonne’ [2014] Revue des Affaires Européennes 633, 638–40. Similarly, AG Tanchev has advanced that Art 3(2) TFEU ‘requires, for the purposes of establishing exclusive competence of the Union, that the relevant area is “an area already largely covered by the EU rules”’. See Opinion of AG Tanchev, Case C-265/19, Recorded Artists Actors Performers Ltd, ECLI:EU:C:2020:512, para 138. 55 Neighbouring Rights (n 51) para 44. 56 T Verellen, ‘The ERTA Doctrine in the Post-Lisbon Era: Note under Judgment in Commission v Council (C-114/12) and Opinion 1/13’ (2015) 21 Columbia Journal of European Law 383, 406–08. See also F Castillo de la Torre, ‘The Court of Justice and External Competences after Lisbon: Some Reflections on the Latest Case Law’ in P Eeckhout and M López Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 129, 165. 57 Verellen (n 56) 406–08. 58 Case C-66/13, Green Network, ECLI:EU:C:2014:2399, paras 30–31; Neighbouring Rights (n 51) para 70; Opinion 1/13, The Hague Convention, ECLI:EU:C:2014:2303, paras 72–73; Opinion 3/15 (n 51) paras 106–07. 59 See, eg Case C-240/09, Lesoochranárske zoskupenie VLK, ECLI:EU:C:2011:125, paras 33–36. Proposing to apply the ‘area largely covered’ test to determine the Court’s jurisdiction over provisions of a mixed agreement in light of the application of the ‘area largely covered’ criterion under the ERTA doctrine, see Opinion of AG Tanchev, Case C-265/19, Recorded Artists Actors Performers Ltd, ECLI:EU:C:2020:512, para 137. 60 See also Dony, who refers to ‘une démarche en deux temps’ (a two-step approach): M Dony, ‘Retour sur les compétences externes implicites de l’Union’ (2018) 54 Cahiers de droit européen 109, 157. Contra, see Castillo de la Torre (n 56) 165. 61 Castillo de la Torre (n 56) 162.
498 Merijn Chamon whole of the agreement. In such cases, the ERTA test and the ‘area largely covered’ criterion must be cumulatively met, meaning that the order in which they are assessed becomes less important.62 D. The Standardised Formulation In the first, pedagogical, part of Opinion 1/03, the Court tries to capture the methodology for assessing an ERTA effect in paragraphs 124–27. The general terms employed by the Court in these paragraphs conclude a development clarifying that, in principle, any and all EU secondary law potentially lends itself to producing an ERTA effect, even in atypical areas such private international law. Furthermore, in the Court’s post-Lisbon jurisprudence, these paragraphs have been crystallised into the following succinct summary: [A]ny competence, especially where it is exclusive, must have its basis in conclusions drawn from a comprehensive and detailed analysis of the relationship between the envisaged international agreement and the EU law in force. That analysis must take into account the areas covered by the EU rules and by the provisions of the agreement envisaged, their foreseeable future development and the nature and content of those rules and those provisions, in order to determine whether the agreement is capable of undermining the uniform and consistent application of the EU rules and the proper functioning of the system which they establish.63
The Court has reproduced this test almost verbatim in Opinion 1/13, Green Network and Opinion 3/15, and partially so in Neighbouring Rights. However, it disappeared from the Court’s reasoning in Opinion 2/15 and Antarctic MPA.64 It remains to be seen whether it will resurface again in the Commission v Council (IMO) case.65 The novel criterion introduced in Opinion 1/03 that account should also be taken of the future development of EU law is thus also carried over in the application of the post-Lisbon standard, which is based on Article 3(2) TFEU. As noted elsewhere,66 it also merits pointing out that the requirement to look into the ‘scope, nature and content’ of the common rules originally formed part of the ‘area largely covered’ criterion in the Court’s pre-Lisbon jurisprudence. Dissociating it from that criterion and integrating it in the general test for finding an ERTA effect, then, is a welcome development that merits further confirmation in future decisions. V. ADDITIONAL READING Bischoff, JA, ‘Besprechung des Gutachtens 1/03 des EuGH’ (2006) 17(10) Europäische Zeitschrift für Wirtschaftsrecht 295. Chamon, M, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1101.
62 S Adam, M Chamon, F Gremmelprez, Z Gulczynska and P Van Elsuwege, ‘Chronique de jurisprudence de l’Union – Les relations extérieures (1er janvier 2017–31 décembre 2019)’ (2020) 56 Cahiers de droit européen 1, 338. 63 Green Network (n 58) para 33; Neighbouring Rights (n 51) para 74; Opinion 1/13 (n 58) para 74; Opinion 3/15 (n 51) para 108. 64 On these cases, see the chapters by Kaddous (this volume, ch 82) and Naert (this volume, ch 87) respectively. 65 See Case C-161/20, Commission v Council (IMO), pending. 66 Chamon (n 20) 1131.
Lowering the Threshold for Finding Implied Powers 499 Dony, M, ‘Retour sur les compétences externes implicites de l’Union’ (2018) 54 Cahiers de droit européen 109. McLean, D, ‘ECJ Advisory Opinion 1/03’ in F Pocar (ed), The External Competence of the European Union and Private International Law (Padova, CEDAM, 2007) 20–38. Mengozzi, P, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention’ in M Poiares Maduro and L Azoulai (eds), The Past and Future of EU Law (Oxford, Hart Publishing, 2010) 213–17. Neframi, E, ‘Avis 1/03’ [2006] Revue trimestrielle de droit européen 113. Rosas, A, ‘EU External Relations: Exclusive Competence Revisited’ (2015) 38 Fordham International Law Journal 1073.
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47 The Exclusive Jurisdiction of the Court and International Courts: Commission v Ireland (Mox Plant) ANDRÉS DELGADO CASTELEIRO Case C-459/03, Commission of the European Communities v Ireland, ECLI:EU:C:2006:345 (Mox Plant), delivered 30 May 2006. KEYWORDS Autonomy of the EU legal order – Scope of exclusive jurisdiction of the CJEU – Undertaking not to submit a dispute relating to the interpretation or application of the treaties to a method of settlement other than those provided for by them – Possibility for Member States to use alternative dispute resolution – Union law and United Nations Convention on the Law of the Sea (UNCLOS) – Union law before other international courts and tribunals – Mixed agreements – Duty of loyal cooperation.
I. INTRODUCTION
T
he exclusive jurisdiction of the Court entails that Member States are precluded from submitting a dispute relating to the interpretation or application of the EU Treaties to a method of dispute, other than those provided for by them (Article 344 TFEU). However, when it came to mixed agreements, prior to Mox Plant, the exact scope of the Court’s jurisdiction was not clear. Did the preclusion to submit disputes on interpretation and application of the EU Treaties also apply to mixed agreements, and to what extent? In the Mox Plant case, Ireland faced an infringement action brought by the Commission over the Member State’s decision to institute proceedings against another Member State, the UK, under the United Nations Convention on the Law of the Sea (UNCLOS) and, accordingly, the International Tribunal for the Law of the Sea (ITLOS).1 This was the first and only infringement proceeding brought by the Commission against a Member State for a breach of the exclusive jurisdiction of the Court. The interpretation of Article 344
1 United
Nations Convention on the Law of the Sea (Montego Bay Convention) [1998] OJ L179/3.
502 Andrés Delgado Casteleiro TFEU entailed delimiting the scope of the Court’s jurisdiction vis-à-vis mixed agreements; establishing the limits of the exclusive nature of its jurisdiction; and establishing the limits that the duty of loyal cooperation imposes upon Member States when these might want to bring a dispute in a mixed agreement. Moreover, the Mox Plant case can also be seen as the beginning of a revival of cases on the autonomy of the EU legal order that started in the 2000s and included cases like Kadi,2 Achmea,3 Opinion 1/09,4 Opinion 2/135 and Opinion 1/17.6 Though the Mox Plant case can be framed as one more case in the Court’s jurisprudence on its problematic relationship with international law,7 most of the defining features of how the Court has interpreted the autonomous nature of the EU legal order derive from it. II. FACTS
Although the Commission formally instituted infringement proceedings under Article 258 TFEU in 2003, the Mox Plant case can be traced back to 1992, when British Nuclear Fuel applied for an authorisation to build a nuclear site (Europe’s largest) in Sellafield, which is in the UK, but on the coast of the Irish Sea. Mixed oxide fuel (MOX) is used as fuel for a specific type of nuclear reactor, of which there was none in the UK. Thus, the MOX produced at Sellafield would be destined mainly for commercial purposes only and would be exported via the sea. Between 1994 and 2001, Ireland participated in the authorisation proceedings in the UK, questioning the environmental and economic analysis of building the nuclear site, and requested more information on those two issues. However, Ireland remained unconvinced of the UK’s environmental assessment of the site. Thus, it instituted proceedings in three different international courts. First, it requested the constitution of an arbitral tribunal pursuant to the Convention for the Protection of the Marine Environment of the North-East Atlantic, 1992 (the OSPAR Convention).8 In 2003, the OSPAR Convention arbitral tribunal dismissed Ireland’s claim. Second, Ireland requested provisional measures from ITLOS. ITLOS recognised its prima facie jurisdiction and prescribed interim measures.9 Third, it instituted proceedings under Annex XVII of UNCLOS asking the arbitral tribunal to resolve ‘the dispute concerning the MOX Plant, international movement of radioactive materials and the protection of the environment in the Irish Sea’.10 In all these proceedings, Ireland invoked, in its different submissions, various pieces of EU law.
2 Joined Cases C-402/05 P and C-415/05 P, Yassin Abdullah Kadi, Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:461. See this volume, ch 49. 3 Case C-284/16, Slovak Republic v Achmea BV, ECLI:EU:C:2018:158. See this volume, ch 85. 4 Opinion 1/09, ECLI:EU:C:2011:123. 5 Opinion 2/13, ECLI:EU:C:2014:2454. See this volume, ch 70. 6 Opinion 1/17, ECLI:EU:C:2019:341. See this volume, ch 88. 7 B De Witte, ‘A Selfish Court? The Court of Justice and the Design of International Dispute Settlement beyond the European Union’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014). 8 Convention for the protection of the marine environment of the north-east Atlantic, [1998] OJ L104/2. 9 Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant), para 34. 10 Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, [1985] OJ L175/40; Council Directive 90/313/EEC of 7 June 1990 on the freedom of access to information on the environment, [1990] OJ L158/56; Council Directive 2006/117/Euratom of 20 November 2006 on the supervision and control of shipments of radioactive waste and spent fuel, [2006] OJ L337/21.
The Exclusive Jurisdiction of the Court and International Courts 503 In May 2003, the Commission sent a letter of formal notice to Ireland over its decision to lodge these complaints. In June of the same year, the UNCLOS arbitral tribunal decided to suspend the proceedings until December 2003 and asked to be more extensively informed as to the implications of EU law in the dispute. In October 2003, the Commission brought an infringement action under Article 258 TFEU against Ireland seeking that the Court should declare that, by instituting dispute settlement proceedings against the UK under the UNCLOS concerning the nuclear site located at Sellafield, Ireland had failed to fulfil its obligations under Article 4(3) TEU, Article 344 TFEU and Articles 192 and 193 Euratom. In November 2004, the UNCLOS arbitral tribunal, upon request from Ireland, suspended hearings until the Court delivered its judgment on the Mox Plant case. III. THE COURT
Before moving to the analysis of the Mox Plant judgment, it is interesting to note that for a Grand Chamber judgment, besides Ireland and logically the UK, only one other Member State asked to intervene – Sweden – and that the Commission was the only EU institution engaged in the proceedings. Also, it is noteworthy that this is a rare occasion in which the UK and the Commission were on the same side of a case in the Court. The Commission’s action revolved around three main questions. First, whether Article 344 TFEU was infringed by Ireland when it brought a case in an international court against another Member State. Second, whether Ireland had also violated Article 344 TFEU and Article 193 Euratom by submitting a dispute to an international court which required the interpretation and application of EU law. Third, the Commission argued that Ireland breached the duty of sincere (loyal) cooperation enshrined in Article 4(3) TEU11 by instituting proceedings under the UNCLOS on the basis of provisions falling within Union competence and by not informing and consulting the Commission beforehand.12 Advocate General (AG) Maduro sided with the Commission on the three pleas. After confirming that the Court’s jurisdiction extended to those provisions in mixed agreements which fall within the scope of Union competence,13 AG Maduro examined the UNCLOS, the concluding decision and the declaration attached to it and concluded that ‘the provisions of Unclos [sic] relating to the protection of the marine environment, the Community exercised both its exclusive and its non-exclusive external competence in the area of environmental protection when it acceded to Unclos [sic]’.14 Thus, Ireland had ‘invoked provisions of Unclos [sic] that have become part of Community law, and hence subject to the Court’s jurisdiction’.15 On Ireland’s reliance on EU law before the arbitral tribunal, for AG Maduro, the incompatibility with Article 344 TFEU was clear as Ireland requested the arbitral tribunal to hold that the UK has breached obligations under Unclos [sic] which, on Ireland’s own interpretation of Unclos [sic], coincide with obligations under Community law. To that effect, Ireland invites the Tribunal to give an interpretation of the UK’s obligations under EC and Euratom law.16
11 Then
Art 10 EC. Plant (n 9) para 158. 13 Opinion of AG Maduro, Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:42 (Mox Plant), para 21. 14 ibid para 26. 15 ibid para 37. 16 ibid para 51. 12 Mox
504 Andrés Delgado Casteleiro On the breach of the duty of cooperation by Ireland, by not informing and consulting the Commission before bringing a case in an international court provided for in a mixed agreement, the AG agreed with the Commission and argued that ‘duty of cooperation may in certain situations entail an obligation for Member States to consult with the Commission in order to avoid the risk of infringing Community rules or obstructing Community policies’.17 The Court, like the AG, sided with the Commission on all three pleas. The Court considered that its jurisdiction stemmed from the existence of EU competence over the protection of the marine environment, rather than from the nature of said competence.18 Given that the declaration of competence confirmed ‘that a transfer of areas of shared competence, in particular in regard to the prevention of marine pollution, took place within the framework of the Convention’,19 the provisions relied on by Ireland in the different international disputes were rules that form part of the EU legal order.20 Having found that the Court had jurisdiction over the UNCLOS provisions on marine protection, the Court also found that Ireland’s invocation of EU law in the UNCLOS proceedings breached Article 344 TFEU. According to the Court, relying on EU law before an international court posed ‘a manifest risk that the jurisdictional order laid down in the Treaties and, consequently, the autonomy of the [Union] legal system may be adversely affected’.21 For the Court, it was immaterial whether the interpretation and application of EU law was done as renvoi or with views of facilitating the interpretation of UNCLOS.22 Inasmuch as there was a risk that EU law would be applied or interpreted by another international court, the autonomy of the EU legal order was compromised. Finally, on the third plea concerning Ireland’s breach duty of cooperation, after clarifying that Article 344 TFEU was ‘a specific expression of Member States’ more general duty of loyalty resulting from [Article 4(3) TEU]’,23 the Court focused on whether Ireland also breached the duty of cooperation by not informing and consulting the Commission prior to bringing proceedings to the UNCLOS arbitral tribunal. For the Court, ‘the Member States and the Community institutions have an obligation of close cooperation in fulfilling the commitments undertaken by them under joint competence when they conclude a mixed agreement’.24 That obligation of close cooperation was especially important in mixed agreements like UNCLOS, where the obligations enshrined therein related to an area (the protection and preservation of the marine environment) in which ‘the respective areas of competence of the Union and the Member States are liable to be closely interrelated’.25 Thus, the Court concluded that the obligation of close cooperation within the framework of a mixed agreement involved, on the part of Ireland, a duty to inform and consult the competent Community institutions prior to instituting dispute-settlement proceedings concerning the MOX plant within the framework of the Convention.26
17 ibid
para 57. para 93. 19 ibid para 105. 20 ibid para 121. 21 ibid para 154. 22 ibid para 156. 23 ibid para 169. 24 ibid para 175. 25 ibid para 176. 26 ibid. 18 ibid
The Exclusive Jurisdiction of the Court and International Courts 505 IV. THE IMPORTANCE OF THE CASE
The importance of the Mox Plant case can be assessed from two perspectives: from what it meant at the moment it was decided and from what it has meant since. From the first perspective, this case is the only infringement proceeding brought against a Member State under Article 344 TFEU. In fact, it is the first one of the three litigious cases relating to Article 344 TFEU ever brought to the Court.27 From the second perspective, the Mox Plant case resumed the discussions on the autonomy of the EU legal order vis-à-vis international law and the scope of the duty of sincere (loyal) cooperation. A. The Jurisdiction of the Court under Mixed Agreements Even though the Court’s exclusive jurisdiction is the most significant feature of the Mox Plant case, the Court’s approach to the scope of its jurisdiction is almost as important. In Mox Plant, the Court further clarified the scope of its jurisdiction in relation to enforcement actions against Member States over mixed agreements. The Court’s approach to its jurisdiction to interpret and apply mixed agreements has been characterised by a competence-based reasoning.28 Yet, the exact limit of where the Court’s jurisdiction lay in relation to the division of competences was far from clear. For instance, in Demirel, the Court acknowledged that its jurisdiction did not cover provisions whereby Member States have entered into commitments in the exercise of their own powers.29 Yet, would the Court have jurisdiction over those provisions where both the EU and its Member States have powers, but neither have exercised them? Both Heliskoski30 and Neframi31 read Demirel as meaning that the Court could only exercise its jurisdiction on the provisions of a mixed agreement which fell within the EU’s exclusive competence since these were the only competences exercised by the EU when concluding a mixed agreement. For other authors, like Lock, the Court had not really settled the issue, meaning that the contours of its jurisdiction remained unclear.32 The Mox Plant case, along with the Berne Convention case33 and the Ètang de Berre case,34 put to rest the question whether, when concluding mixed agreements, the Court’s jurisdiction remained limited to the provisions of mixed agreements that fell within EU exclusive competence. For the Court, ‘mixed agreements concluded have the same status in the Union legal order as purely Union agreements, insofar as the provisions fall within the scope of Union competence’.35 Moreover, the Court established a link between the scope of Union competence and the scope of Union law,36 by which, if there was EU legislation in the 27 The other two cases being Case C-131/03 P, RJ Reynolds Tobacco Holdings, Inc and Others v Commission of the European Communities, ECLI:EU:C:2006:541 on the Commission’s decision to bring proceedings before a court of a non-Member State; and Achmea (n 3). See this volume, ch 85. 28 P Koutrakos, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 239. 29 Case 12/86, Demirel, ECLI:EU:C:1987:400, para 8. See this volume, ch 16. 30 J Heliskoski, Mixed Agreements as a Technique for Organizing the International Relations of the European Community and Its Member States (Deventer, Kluwer Law International, 2001) 46. 31 E Neframi, ‘Mixed Agreements as a Source of European Union Law’ in E Cannizazaro, P Palcehtti and RA Wessel (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2012) 326. 32 T Lock, The European Court of Justice and International Courts (Oxford, Oxford University Press, 2015) 101. 33 Case C-13/00, Commission v Ireland, ECLI:EU:C:2002:184 (Basel Convention). 34 Case C-239/03, Commission v France, ECLI:EU:C:2004:598 (Ètang de Berre). 35 Mox Plant (n 9) para 84. 36 M Cremona, ‘Defending the Community Interest: The Duties of Cooperation and Compliance’ in M Cremona and B De Witte (eds), EU Foreign Relations Law Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 147.
506 Andrés Delgado Casteleiro field covered by the mixed agreement, the Court would have jurisdiction.37 Thus, the question as to whether a provision of a mixed agreement fell within EU competence would relate to its existence, rather than to its exclusive or shared nature.38 Thus, it would be enough to show that the field covered by UNCLOS, and more specifically the field of marine protection, was also covered in large measure by EU law, regardless of whether some kind of ERTA effect39 had taken place for the Court to claim it had jurisdiction. However, when moving on to its examination of how the Court’s jurisdiction would work in Mox Plant, the Court reverted back to the issue of the exercise of EU competence, rather than focusing on whether there was EU legislation on the issue. Yet, that passage of the judgment,40 which has been characterised as convoluted and unnecessary,41 arrives finally to the realisation that ‘a finding that there has been a transfer to the Community of areas of shared competence is contingent on the existence of Community rules within the areas covered by the Convention provisions in issue’.42 Put otherwise, the scope of Union competence and the scope of Union law rely on the existence of Union rules, rather than on the examination of whether and what kind of competence was exercised when concluding the agreement. Whilst, for some authors, the Court delimited its jurisdiction in very broad terms in Mox Plant,43 more recent cases, such as the Central European University case,44 seem to have broadened the Court’s jurisdiction even more. In Mox Plant, the existence of EU law covering the issue was necessary for the Court to claim jurisdiction. By contrast, in the Central European University case, the existence of an EU exclusive external competence over the agreement in question (GATS – General Agreement on Trade in Services) was sufficient for the Court to claim its jurisdiction over Hungary’s schedules of commitments regarding higher education, an area where there was no EU legislation.45 B. The Exclusive Nature of the Court’s Jurisdiction, the Autonomy of the EU Legal Order and International Courts The way the Court framed its exclusive jurisdiction in Mox Plant was the most contentious and relevant part of the judgment. How the Court articulated the autonomous nature of the EU legal order vis-à-vis international law has been characterised as ‘falling squarely on the oldest, and most conservative trajectory of European thinking about the role of international law and its relations with national law’,46 hegemonic and further evidence of the Court’s selfishness.47 Whilst these criticisms contain a certain degree of truth, it is necessary to consider, first, what was the rationale underpinning the Court’s exclusive jurisdiction, and second, how the Court articulated the principle of the autonomy of the EU legal order in Mox Plant. 37 Commission v Ireland (Berne Convention) (n 33) para 16; Commission v France (Ètang de Berre) (n 34) paras 29–30. 38 Mox Plant (n 9) para 93. 39 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 40 ibid para 94. 41 Koutrakos (n 28) 189. 42 Mox Plant (n 9) para 108. 43 P Koutrakos, ‘Interpretation of Mixed Agreements’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and Its Member States in the World (Oxford, Hart Publishing, 2010) 189; Neframi (n 31) 329. 44 Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792. 45 ibid para 73. 46 M Koskenniemi, ‘Constitutionalism, Managerialism and the Ethos of Legal Education’ (2007) 1 European Journal of Legal Studies 1. 47 De Witte (n 7) 41.
The Exclusive Jurisdiction of the Court and International Courts 507 What is the rationale underpinning Article 344 TFEU? On the one hand, Article 344 TFEU, as a specific manifestation of the principle of autonomy of the EU legal order, aims to protect the uniformity and unity of the EU legal order.48 The unity of the EU legal order and its autonomous character go hand in hand.49 The unity of the EU legal order would operate (externally) by asserting its independence from international law, and (internally) by ensuring the uniform application of its rules.50 Were an UNCLOS arbitral tribunal to advance an interpretation of EU law, binding only on the Member States involved in the dispute, that was different from that advanced by the Court, the uniformity and unity of EU law would be compromised. On the other hand, Article 344 TFEU protects Member States from the consequences that the absence of unity in the EU legal order would carry. Two contradictory interpretations of EU law, binding on a Member State, one by virtue of international law and the other by virtue of EU law, would put that Member State in the rather difficult situation of having to choose between complying with EU law or international law. Thus, in Mox Plant, by submitting EU law to an UNCLOS arbitral tribunal to apply and interpret, Ireland was potentially not only undermining the uniform application of EU law, but also having two contradictory obligations binding on the UK and itself. From this perspective, it is clear that the actions of Ireland had the potential of impinging upon the exclusive jurisdiction of the Court and undermining the autonomy of the EU legal order. However, the Court’s reasoning seemed to imply that Article 344 TFEU, and the autonomy of the EU legal order, could be violated in two different scenarios. The first scenario was the one at stake in Mox Plant, where two EU Member States were using another dispute resolution venue, outside of the EU legal order, to solve an issue of EU law. The second scenario that the Court alluded to was one where EU law could indirectly be interpreted by an international tribunal and thus become ‘a manifest risk that the jurisdictional order laid down in the Treaties and, consequently, the autonomy of the Union legal system may be adversely affected’.51 This broad understanding of when the autonomy of the EU legal order might be affected by an international court not only sparked a debate on the extent to which Member States could continue to bring cases to international courts,52 but also on whether any international dispute settlement might be a violation of the autonomy of the EU legal order.53 Moreover, though EU international practice does not give clues as to the exact extent of the Court’s exclusive jurisdiction in relation to other international courts,54 it was nevertheless clear, even before Opinion 2/13, Achmea and Opinion 1/17, that the manifest risk to the autonomy of the
48 C Contartese, ‘The Autonomy of the EU Legal Order in the ECJ’s External Relations Case Law: From the “Essential” to the “Specific Characteristics” of the Union and Back Again’ (2017) 54 CML Rev 1627, 1640. 49 A Delgado Casteleiro, ‘Loyalty in External Relations Law: The Fabric of Competence, Autonomy and Institutional Balance’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 390. 50 JW Van Rossem, ‘The Autonomy of EU Law: More Is Less?’ in RA Wessel and S Blockmans (eds), Between Autonomy and Dependence: The EU Legal Order under the Influence of International Organisations (The Hague, TMC Asser Press/Berlin, Springer, 2013) 19. 51 Mox Plant (n 9) para 154. 52 I Govaere, ‘Beware of the Trojan Horse: Dispute Settlement in (Mixed) Agreements and the Autonomy of the EU Legal Order’ in Hillion and Koutrakos (n 43) 206; Lock (n 31) 136. 53 P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 240; C Hillion and RA Wessel, ‘The European Union and Dispute Settlement: Mapping Principles and Conditions’ in M Cremona, A Thies and RA Wessel (eds), The European Union and Dispute Settlement (Oxford, Hart Publishing, 2017) 27. 54 A Thies, ‘European Union Member States and State–State Arbitration: What’s Left?’ in Cremona et al (n 52) 142.
508 Andrés Delgado Casteleiro EU legal order should be read in broad terms. For instance, disputes between a Member State and a third country involving EU law would seem to violate the autonomy of the EU legal order. The Commission gave some hints in that regard when, in 2009, Belgium initiated proceedings in the International Court of Justice (ICJ) against Switzerland,55 in respect of a dispute concerning the interpretation and application of the Lugano Convention.56 In 2011, Belgium sent a letter to the ICJ where it informed that the Court, ‘in concert with the Commission of the European Union, considers that it can discontinue the proceedings instituted [by Belgium] against Switzerland’.57 The exact scope of the principle of the autonomy of the EU legal order vis-à-vis international courts was first posed in Mox Plant, and it would gain even more prominence when the Court rejected the idea of a European Patent Court in Opinion 1/0958 and the draft agreement on the accession of the EU to the ECHR in Opinion 2/13,59 and further established that intra-EU bilateral investment treaties (BITs) between two EU Member States violate Article 344 TFEU.60 It looked as if no international dispute settlement would be able to pass the compatibility test laid down in Mox Plant. However, in Opinion 1/17,61 the Court showed that insofar as EU law was explicitly excluded from the applicable law of the international court, the autonomy of the EU legal order would be preserved. C. The Duty of Loyal Cooperation The relevance of Mox Plant in relation to the duty of cooperation was twofold. On the one hand, the case identified the duty of cooperation as the underlying principle behind Article 344 TFEU. On the other hand, the Court identified self-standing obligations derived from the duty that bound the Member States in mixed agreements. On the first issue, with Article 344 TFEU being a specific manifestation of the duty of loyalty, Mox Plant developed a side of the duty of loyalty that remained underdeveloped until that time, ie the duty of cooperation as rule of conflict,62 which safeguards the autonomy of the EU legal order. This idea of the duty of cooperation as a mechanism for dealing with normative conflicts was present in the Opinion of AG Maduro in Mox Plant, in the BITs cases,63 and in Kadi64 AG Maduro conceptualised both Article 344 TFEU and Article 351 TFEU as specific
55 ICJ, ‘Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (Belgium v Switzerland)’, Application instituting proceedings filed in the Registry of the Court on 21 December 2009, www.icj-cij.org/public/ files/case-related/145/15763.pdf. 56 Lugano Convention of 16 September 1988 on jurisdiction and the enforcement of judgments in civil and commercial matters. 57 ICJ, ‘Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (Belgium v Switzerland)’, Order of 5 April 2011. 58 Opinion 1/09 (n 4). 59 ‘The fact that Member States or the EU are able to submit an application to the ECtHR is liable in itself to undermine the objective of Article 344 TFEU and, moreover, goes against the very nature of EU law’: Opinion 2/13 (n 5) para 212. See this volume, ch 70. 60 Slovak Republic v Achmea BV, ECLI:EU:C:2018:158 See this volume, ch 85. 61 Opinion 1/17 (n 6). See this volume, ch 88. 62 M Klamert, The Principle of Loyalty in EU Law (Oxford, Oxford University Press, 2013) 15. 63 Case C-205/06, Commission v Austria, ECLI:EU:C:2007:783 (BIT); Case C-249/06, Commission v Sweden, ECLI:EU:C:2009:119 (BIT). 64 Above n 2.
The Exclusive Jurisdiction of the Court and International Courts 509 manifestations of the duty of loyal cooperation,65 designed to deal with normative conflicts in the relations between EU law and international law. Moreover, AG Maduro understood that ‘the duty requires Member States to exercise their powers and responsibilities in an international organisation … in a manner that is compatible with the conditions set by the primary rules and the general principles of [Union] law’.66 These two specific manifestations of the duty of cooperation (Article 344 TFEU and Article 351 TFEU) show how the duty of cooperation can function as a conflict rule to be applied in the relationship between EU law and international law, regardless of the competence involved. Moreover, this view of the duty of cooperation as rule of conflict, designed to protect the autonomy of the EU legal order, would fit with the view that a disconnection clause attached to UNCLOS would have avoided the case to be brought to the UNCLOS arbitral tribunal.67 Mox Plant, along with other cases like Inland Waterways,68 IMO69 and PFOS,70 challenged the traditional view of the duty as a source of independent obligations. Prior to these cases, the duty of cooperation was understood as ‘a statement of principle and political intent, only providing the backdrop for the enforceable provisions stated further in the Treaty’.71 In Mox Plant, the Court understood that, besides breaching Article 344 TFEU, Ireland was also in breach of the duty of cooperation in the form of a duty to inform and consult the Commission within the mixed agreement before starting proceedings against another Member State. However, it is far from clear how this obligation to inform and consult would work in practice and whether it would be another way of defining a duty of abstention. In PFOS, for instance, the duty of loyal cooperation morphed from an obligation to inform and consult to a duty to abstain from acting, even if the EU has not adopted a common position within a mixed agreement in a matter falling within shared competence.72 Thus, it still remains to be seen when a Member State can comply with the duty by only informing and consulting. V. ADDITIONAL READING Cremona, M, ‘Defending the Community Interest: The Duties of Cooperation and Compliance’ in M Cremona and B De Witte (eds), EU Foreign Relations Law Constitutional Fundamentals (Oxford, Hart Publishing, 2008). Delgado Casteleiro, A, ‘Loyalty in External Relations Law: The Fabric of Competence, Autonomy and Institutional Balance’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018). 65 Opinion of AG Maduro, Case C-205/06, Commission v Austria, ECLI:EU:C:2008:391 (BIT), para 33. See this volume, ch 56. 66 Opinion of AG Maduro, Joined Cases C-402/05 P and C-415/05 P, Yassin Abdullah Kadi, Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:11, para 32. See this volume, ch 49. 67 M Cremona, ‘Disconnection Clauses in EU Law and Practice’ in Hillion and Koutrakos (n 43) 179. 68 Case C-266/03, Commission v Luxembourg, ECLI:EU:C:2005:341 (Inland Waterways); Case C-433/03, Commission v Germany, ECLI:EU:C:2005:462 (Inland Waterways). 69 Case C-45/07, Commission v Greece, ECLI:EU:C:2009:81 (IMO). See this volume, ch 53. 70 Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS). See this volume, ch 58. 71 Klamert (n 62) 234. 72 A Delgado Casteleiro and J Larik, ‘The Duty to Remain Silent: Limitless Loyalty in EU External Relations?’ (2011) 36 EL Rev 524.
510 Andrés Delgado Casteleiro Govaere, I, ‘Beware of the Trojan Horse: Dispute Settlement in (Mixed) Agreements and the Autonomy of the EU Legal Order’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and its Member States in the World (Oxford, Hart Publishing, 2010). Koutrakos, P, ‘Interpretation of Mixed Agreements’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and its Member States in the World (Oxford, Hart Publishing, 2010). Van Rossem, JW, ‘The Autonomy of EU Law: More Is Less?’ in RA Wessel and S Blockmans (eds), Between Autonomy and Dependence: The EU Legal Order under the Influence of International Organisations (The Hague, TMC Asser Press/Springer, 2013).
48 Judicial Protection in Autonomous Restrictive Measures Involving Composite Administrative Procedures: OMPI TREVOR REDMOND* Case T-228/02, Organisation des Modjahedines du peuple d’Iran v Council of the European Union, ECLI:EU:T:2006:384 (OMPI), delivered 12 December 2006. KEYWORDS Autonomous restrictive measures – Counterterrorism measures – Composite administrative procedure – Common Position 931 – Council Regulation 2580/2001 – Court jurisdiction in respect of CFSP matters – Fundamental rights – Essential procedural requirements – Right to a fair hearing – Obligation to state reasons – Right to effective judicial protection – Intensity of judicial review.
I. INTRODUCTION
I
n late 2006, the Court of First Instance (CFI; now the General Court)1 came to consider an action for annulment by the Organisation des Modjahedines du peuple d’Iran (OMPI) against a Council Decision to add it to a list of entities whose funds were to be frozen. The CFI so acted against the backdrop of earlier case law in which applicants had been unsuccessful in challenging Union measures adopted to implement sanctions imposed by the United Nations Security Council.2 Distinguishing ‘autonomous’ EU restrictive measures from the implementation of UN sanctions at EU level, the CFI delivered a landmark judgment in which a Union measure, imposing an asset freeze on an entity, was annulled for the very first time. In doing so, it chose to apply judicial review standards to autonomous EU restrictive measures that had, at that point, been excluded when implementing UN sanctions. The CFI set out the manner in which the right to a fair hearing, the obligation to provide sufficient reasons and
* All opinions expressed herein are personal to the author. 1 As of 1 December 2009 with the Treaty of Lisbon, renamed the General Court of the European Union. 2 Case T-306/01 Ahmed Ali Yusuf and Al Barakat International Foundation v Council ELCI:EU:T:2005:331; Case T-315/01, Kadi v Council, ECLI:EU:T:2005:332; Case T-253/02, Ayadi v Council, ECLI:EU:T:2006:200; Case T-49/04, Hassan v Council, ECLI:EU:T:2006:201.
512 Trevor Redmond the right to effective judicial protection were to apply in the context of an autonomous sanctions regime targeting terrorists and terrorist groups. The CFI also highlighted how a certain balance would need to be struck between the legitimate security and international relations concerns of the Union and the Member States on the one hand and the rights of individuals on the other hand. The judgment of the CFI, which was not appealed, established the standard and intensity of judicial review to be applied to autonomous EU sanctions listings, prompting significant changes to the manner in which the Council were to decide upon future listings. Presumably reflecting a degree of acceptance of at least some of the criticisms within the judgment, by the end of June 2007 a complete review of the relevant list had been carried out, improved procedures introduced in light of the judgment, and a new working party established to examine proposals for listings and de-listings and to prepare for the Council’s regular review of the list.3 II. FACTS
In Resolution 1373 (2001), the United Nations Security Council (UNSC) decided that all states were to prevent and suppress the financing of terrorist acts by, inter alia, freezing without delay funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts. In contrast to Resolution 1373, which mandated states to maintain their own list of terrorists and terrorist entities whose assets were to be frozen, other UNSC resolutions established lists that were drawn up at UN level, leaving states no discretion but to implement the measures in respect of each of the persons and entities listed. For example, UNSC Resolution 1267 (1999) established a list of persons or entities connected to the Taliban. This was implemented at Union level by way of a list that precisely mirrored any changes to the UN list. In order to implement Resolution 1373, the Council adopted Common Position 2001/931/ CFSP on the application of specific measures to combat terrorism (CP 931).4 CP 931 applied to persons, groups and entities involved in terrorist acts and listed in the Annex. In turn, the Annex was drawn up on the basis of precise information or material in the relevant file which indicated that a decision had been taken by a competent authority in respect of the persons, groups and entities concerned. Here, a competent authority meant a judicial authority or, where judicial authorities had no competence in the area, an equivalent competent authority in that area. The decision of a competent authority might concern the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act based on serious and credible evidence or clues, or condemnation for such deeds. The Annex was to be reviewed at regular intervals, and at least once every six months, to ensure that there were grounds for keeping persons or entities on the list. As a decision on whether to include a person or entity in the Annex was taken by the Council, the regime established by CP 931 was an example of ‘autonomous’ EU restrictive measures. Because the decision of the Council was to be based, in turn, on an earlier decision of a national competent authority, the regime that applied was by means of a composite administrative procedure.
3 Council of the European Union, ‘Terrorist List – Adoption of New Consolidated List’ (Brussels, 29 June 2007) 11309/07 (Presse 158). 4 [2001] OJ L344/93.
Judicial Protection in Autonomous Restrictive Measures 513 In order to implement CP 931 at Union level, Council Regulation (EC) No 2580/2001 was adopted at the same time.5 It provided that all funds belonging to a natural or legal person, group or entity included in the list referred to in its Article 2(3) were to be frozen, and that no funds or financial services were to be made available to them. The Council subsequently established, reviewed and amended the list in accordance with the provisions of CP 931. On 2 May 2002, the Council adopted a Common Position amending CP 931,6 together with a Council Decision implementing Regulation 2580/2001, both of which added OMPI to the list.7 A series of subsequent amending Common Positions and Council Decisions maintained OMPI on the relevant lists. By an application lodged on 26 July 2002, OMPI sought the annulment of the relevant Common Positions and Council Decisions, in so far as they concerned it, as well as a declaration that those Common Positions and Council Decisions were inapplicable in respect of it, together with an order that the Council pay €1 by way of damages for the harm suffered.8 The UK intervened in support of the Council. III. THE COURT
Since the entry into force of the Treaty of Lisbon on 1 December 2009, the Court has jurisdiction, pursuant to Article 275 TFEU, to review the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Title V, Chapter 2 of the TEU.9 At the time of the judgment in OMPI, however, the then Article 46 TEU, as amended by the Treaty of Amsterdam, did not confer any jurisdiction in respect of Title V of the TEU (Common Foreign and Security Policy, CFSP), while, with respect to Title VI of the TEU (Justice and Home Affairs, JHA), it excluded common positions from the Court’s jurisdiction. OMPI argued that the need to avoid an absence of an effective legal remedy ought to act as a basis on which to confer the necessary jurisdiction on the Court, since otherwise ‘a lawless zone would be created’.10 The CFI, however, followed its existing case law in rejecting this argument.11 It reiterated that, with respect to Titles V and VI of the TEU, the then Article 46 TEU established a limited system of judicial review, with certain areas being outside the scope of that review and certain legal remedies not being available.12 Moreover, given that implementing Community and/or national acts were required in order for the Common Position to be effective, the CFI was not satisfied that OMPI had no effective – albeit indirect – legal remedy. The only basis, then, on which the Court would have jurisdiction to hear an action for annulment in respect of the Common Position would have been on the basis that its adoption
5 [2001] OJ L344/70. 6 Common Position 2002/340/CFSP, updating Common Position 2001/931, [2002] OJ L116/75. 7 Council Decision 2002/334/EC of 2 May 2002 implementing Art 2(3) of Regulation (EC) No 2580/2001 and repealing Decision 2001/927, [2002] OJ L116/33. 8 The Court of First Instance agreed to OMPI’s request that its action be considered, on the date on which the oral procedure was closed, to seek annulment of the applicable Common Position and Council Decision that had repealed and replaced those that were in force on the date on which the application was lodged. 9 See Case C-72/15, Rosneft Oil Company v Her Majesty’s Treasury, ECLI:EU:C:2017:236. See this volume, ch 81. 10 Case T-228/02, Organisation des Modjahedines du peuple d’Iran v Council, ECLI:EU:T:2006:384 (OMPI), para 39. 11 Case T-338/02, Segi v Council, ECLI:EU:T:2004:171; Case T-299/04, Selmani v Council and Commission, ECLI:EU:T:2005:404. 12 OMPI (n 10) para 55.
514 Trevor Redmond had infringed upon the Union’s competences, pursuant to the then Article 47 TEU (now Article 40 TEU). To the extent to which the applicant had made such an argument, the CFI found it to be manifestly unfounded. Rather than infringing the Union’s competences, the adoption of a Common Position prior to a Council Decision was viewed as demonstrating compliance with them.13 Although a 2002 European Parliament resolution on the matter had ‘deplored’ the choice of a third pillar legal basis for the definition of the list of terrorist organisations, thereby ‘evading the jurisdiction of the Court of Justice’,14 the CFI saw this criticism as concerning a political choice.15 The Court did not regard it as calling into question the lawfulness of the legal basis chosen, or the observance of Community competences. For some commentators, this amounted to a mistaken failure to subject the delineation of powers between the pillars, in the context of the adoption of sanctions against individuals, to proper judicial scrutiny.16 Turning to the question whether the right to a fair hearing was, in principle, applicable to the matter at hand, the CFI held that as the contested decision imposed an individual economic and financial sanction on OMPI in the form of a freezing of its funds, the decision adversely affected its interests, and so the right to a fair hearing did apply. Contrary to the argument put forward by the Council, the legislative nature of the non-CFSP Council Regulation 2580/2001 was not such as to render the right to a fair hearing inapplicable. In the view of the CFI, the non-CFSP Regulation was not of an exclusively legislative nature in that, although of general application, it was nevertheless of direct and individual concern to OMPI, to whom it referred by name as being included in the list of entities whose funds were to be frozen.17 As discussed in greater detail below, the CFI was satisfied that OMPI had a right to a fair hearing, to a statement of reasons and to an effective judicial remedy in respect of the decision to add it to the list of entities whose assets were to be frozen. Before the initial decision to list OMPI was taken by the Council, OMPI had heard that it was soon to be listed and had written to the Council in order to set out its case. On the basis of this, it was argued by the Council that it had, in fact, heard the views of OMPI prior to its listing. Given that OMPI had not been provided with any specific evidence as to the justification for the listing, the CFI rejected this argument. The Court observed that neither the initial decision to list nor any subsequent decisions to maintain the listing mentioned the ‘specific information’ or ‘material in the file’ showing that a decision had been taken by a competent national authority justifying the freezing of OMPI’s assets.18 Although the UK’s statement of intervention referred to a decision of its Home Secretary19 in such a way as to suggest that it was a decision of a national competent authority on which the listing was based, the position of OMPI was that it did not in fact know which competent authority had adopted the national decision in respect of it. Nor did OMPI have the specific information that had formed the basis for that decision. In its judgment, the CFI pointedly referred to the inability of the Council and the UK to give a ‘coherent answer’ to the question of what national decision formed the basis for
13 ibid para 58. 14 European Parliament resolution on the Council’s decision of 27 December 2001 on measures to combat terrorism of 7 February 2002, P5_TA(2002)0055. 15 OMPI (n 10) para 58. 16 C Eckes, ‘Case T-228/02, Organisation des Modjahedines du Peuple d’Iran v Council and UK (OMPI), Judgment of the Court of First Instance (Second Chamber) of 12 December 2006’ (2007) 44 CML Rev 1117, 1121–25. 17 OMPI (n 10) para 98. 18 ibid para 161. 19 The equivalent of an Interior Minister or Minister for Justice in other EU Member States.
Judicial Protection in Autonomous Restrictive Measures 515 the decision to list OMPI.20 Whereas the Council had maintained that it was the decision of the British Home Secretary, as confirmed by the UK’s Proscribed Organisations Appeal Commission (POAC), the UK claimed that other decisions of competent authorities of other Member States had also formed the basis for the decision. As a result, the CFI concluded that the Council’s decision to list OMPI had been adopted pursuant to a procedure that had failed to observe the right to a fair hearing. Regarding the obligation to state reasons, it was held by the CFI that both the initial decision, and all subsequent decisions to maintain the listing, merely stated within a recital that it was ‘desirable’ to adopt an up-to-date list of the persons, groups and entities to which Regulation 2580/2001 was to apply.21 As there was no statement of the actual and specific grounds justifying the decision to list OMPI, a sufficient statement of reasons had not been provided such as to fulfil the obligation. Concerning the right to effective judicial protection, the CFI found that at no time before bringing its action had OMPI been notified of the evidence adduced against it. Furthermore, the CFI concluded that neither the parties’ written pleadings nor the file material produced before it enabled the CFI to conduct judicial review of any evidence. In particular, even after the oral hearing, the CFI was not in a position to definitively determine the national decision on which the contested Council Decision was based.22 As a result, the CFI was unable to review the lawfulness of the decision. This, together with the failure to provide a sufficient statement of reasons and to respect OMPI’s right to a fair hearing, led to the annulment of the Council Decision in so far as it concerned OMPI. Finally, on the claim for damages, as no matters of fact or law had been put forward in support of the claim, it was deemed inadmissible for want of ‘even the most basic detail’ and for the failure of any attempt to remedy that defect in OMPI’s reply.23 IV. THE IMPORTANCE OF THE CASE
In retrospect, the immediate reaction to the judgment in OMPI appears more muted than one might expect. This may partly be explained by the CFI’s unwillingness to exercise its jurisdiction with respect to CP 931 in order to assess whether it had infringed upon the Union’s competences. While the CFI annulled in part the Council Decision that implemented the nonCFSP Regulation, it left the Common Position untouched. For one author, for example, the annulment of part of a Council Decision implementing the non-CFSP Council Regulation, while not exercising jurisdiction in respect to a Common Position adopted on the basis of the same information and procedure, undermined the legitimacy of the CFSP.24 In order to avoid this, it would have been necessary for the CFI to ‘have been even more courageous’ by providing ‘full judicial review of anti-terrorist lists, irrespective of the pillar they are adopted in’.25 Following changes to the exercise of judicial control over CFSP restrictive measures (sanctions) introduced by the Treaty of Lisbon, the outstanding significance of OMPI lies in the framework it established for the application of fair procedures to EU decision-making when 20 OMPI (n 10) para 171. 21 ibid para 164. 22 ibid para 166. 23 ibid para 180. Note, it was only in 2020 that the Court of Justice of the European Union, contrary to the General Court, held that non-contractual liability and actions for damages can be found within the CFSP. Case C-134/19 P, Bank Refah Kargaran v Council of the European Union, ECLI:EU:C:2020:793. See this volume, ch 91. 24 Eckes (n 16) 1129. 25 ibid.
516 Trevor Redmond imposing autonomous restrictive measures, and particularly those based on a composite administrative procedure. Before considering these important approaches to the review of autonomous sanctions listings, it must be acknowledged that the legacy of the judgment was considerably enhanced by two further cases involving OMPI. After the oral hearing, but before judgment was delivered, the Council adopted another Decision which included OMPI on the list. Following this OMPI judgment in December 2006, the following month, January 2007, the Council wrote to OMPI informing it that, in its view, the reasons for including the applicant in the list at issue were still valid and that it therefore intended to maintain it on the list. A statement of reasons was enclosed, together with an invitation to submit observations within a month. Further decisions maintained the listing. In November 2007, the conclusion of the British Home Secretary, in a decision to refuse to lift OMPI’s proscription, that OMPI was still an organisation concerned in terrorism was described by the UK’s POAC as ‘perverse’. In PMOI I, the CFI annulled a Council Decision of December 2007 maintaining the listing.26 The CFI there highlighted that, in the statement of reasons provided, it was merely noted that the British Home Secretary had sought to bring an appeal to the POAC’s decision. As a result, the statement of reasons was found to be ‘obviously insufficient to provide legal justification for continuing to freeze’ OMPI’s funds, as it failed to ‘make it possible to grasp how far the Council actually took into account the POAC’s decision, as it was required to do’.27 Notwithstanding that the British Home Secretary was unsuccessful in appealing the POAC decision, the Council maintained the listing of OMPI, relying instead on a judicial inquiry opened by a French prosecutor. In a judgment that was, exceedingly rarely, delivered the day after the oral hearing, the CFI once again annulled the listing.28 In PMOI II, it was found that the information contained in the decision – statement of reasons, letter of notification – and the Council’s answers to questions posed by the Court all failed to meet the requisite standard, namely to establish that the evidence relied on was factually accurate, reliable and consistent, contained all the relevant information to be taken into account in order to assess the situation and was capable of substantiating the conclusions drawn from it.29 The CFI stated that it failed to understand how certain national security information was capable of being shared with the members of the Council, but was said to be unable to be provided to the Court without breaching French confidentiality laws. Indeed, the Court considered that the Council was not entitled to base its decision on information or material in the file communicated by a Member State if that Member State was unwilling to authorise its communication to the Court tasked with reviewing the decision’s lawfulness.30 On appeal, the CFI’s judgment was upheld in a decision of the Grand Chamber.31 A. Establishing the Applicability of the Right to a Fair Hearing in the Context of Implementing Regulation 2580/2001 The greatest significance of the OMPI judgment lay in the fact that it established the standard and intensity of judicial review to be applied to autonomous EU restrictive measures.
26 Case
T-256/07, People’s Mojahedin Organization of Iran v Council, ECLI:EU:T:2008:461 (PMOI I). paras 177–78. 28 Case T-284/08, People’s Mojahedin Organization of Iran v Council, ECLI:EU:T:2008:550 (PMOI II). 29 ibid paras 55–56. 30 ibid paras 72–73. 31 Case C-27/09 P, France v People’s Mojahedin Organization of Iran, ECLI:EU:C:2011:853. 27 ibid
Judicial Protection in Autonomous Restrictive Measures 517 It will be recalled that, in addition to Resolution 1373 calling upon states to freeze the funds of those whom they identified as participating in terrorist acts, the UNSC had earlier adopted Resolution 1267. Pursuant to this resolution, a subsidiary body of the UNSC published a list of persons and entities whose funds states were obliged to freeze. In the 2005 cases of Yusuf and Kadi32 and the 2006 cases of Hassan and Ayadi,33 the CFI had regard to Articles 25 and 103 of the UN Charter – on the primacy of certain obligations arising from UN membership – in holding that, in giving effect to UN sanctions listings under Resolution 1267, the Union institutions acted under circumscribed powers, with the result that they had no autonomous discretion. Consequently, the CFI found that it lacked the jurisdiction to review indirectly the lawfulness of decisions of the UNSC according to the standard of protection of fundamental rights as recognised by the EU legal order. In principle, the UNSC’s decision to list an individual fell outside the ambit of the CFI’s jurisdiction. The one exception to this was the CFI’s ability to check, indirectly, the lawfulness of a decision of the UNSC in light of jus cogens principles of public international law.34 In contrast to the finding in Yusuf and Kadi, at the hearing in OMPI, the Council accepted that while Regulation 2580/2001 was adopted under circumscribed powers in order to give effect to Resolution 1373, its Decision implementing the Regulation by listing certain persons and entities was not. Rather, in the view of the Council, such implementing decisions fell ‘with the ambit of the exercise of the broad discretion it has in the area of CFSP’.35 This distinction lay at the heart of the CFI’s contrasting approach when called upon to review autonomous EU sanctions, as opposed to the implementation of listings by the UN. Since the composition of the list for the purpose of Regulation 2580/2001 involved ‘the exercise of the Community’s own powers, entailing a discretionary appreciation by the Community’, the Council was in principle bound to observe the right to a fair hearing in doing so.36 The same was true of the right to effective judicial protection.37 This difference in treatment, depending on whether it was the UN or EU that had decided upon a listing, has been described as ‘hardly satisfactory’.38 Indeed, it was a distinction that would turn out to be short lived, given the landmark judgment of the Court in Kadi, in which these two streams of jurisprudence were brought into much greater alignment.39 While the fundamental importance of Kadi has largely outshone the CFI’s judgment in OMPI, and is cited by the Court with far greater regularity, a proper understanding of Kadi undoubtedly requires an awareness of the debt it owes to the detailed reasoning in OMPI.
32 Yusuf (n 2) para 265; Kadi (n 2) para 214. See this volume, ch 49. 33 Hassan (n 2) paras 92–93; Ayadi (n 2) paras 116–17. 34 In the context of the sanctions regime established by Resolution 1267, the CFI did not consider the limitations on a listed person’s right to be heard to be contrary to a principle of jus cogens. See P Eeckhout, ‘EC Law and UN Security Council Resolutions – In Search of the Right Fit’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 104, 114–18. 35 OMPI (n 10) para 103. 36 ibid para 107. 37 Regarding the right to effective judicial protection, the CFI made clear that it was for the Court to ensure that the legal conditions for applying Art 2(3) of Regulation No 2580/2001 and Art 1(4) or 1(6) of CP 931 were fulfilled. Accordingly, a judicial review extended to: (i) an assessment of the facts and circumstances relied on as justifying a listing decision, together with the evidence and information on which that assessment was based; (ii) ensuring that the right to a fair hearing was observed and that the requirement of a statement of reasons was satisfied; and (iii) where applicable, ensuring that any overriding considerations relied on exceptionally by the Council in disregarding those rights were well founded. ibid para 154. 38 Cian C Murphy, EU Counter-Terrorism Law (Oxford, Hart Publishing, 2015) 131. 39 Joined Cases C-402/05 P and C-415/05 P, Kadi v Council, ECLI:EU:C:2008:461. See this volume, ch 49.
518 Trevor Redmond B. Clarifying the Application of the Right to a Fair Hearing In OMPI, the CFI adopted a characterisation of the listing procedure as taking place at two distinct levels. In doing so, it provided important clarification as to the manner in which the right to a fair hearing was to apply in the context of composite administrative procedures. First, a decision was taken by a competent national authority either condemning terrorist acts or instigating investigations or prosecutions in relation to such acts, based on serious and credible evidence or clues. Secondly, on the basis of precise information or material in the file indicating that such a decision has been made at national level, the Council decided to include a person or entity on the list of those to be subject to sanctions. Once the Council takes this ‘initial decision’, following a periodic review, ‘subsequent decisions’ can be taken to maintain the listing. Whereas the initial Council decision required prior verification that there was a relevant national decision, a subsequent Council decision required verification of the ‘consequences of that decision at the national level’.40 Pointing to the duty of sincere cooperation that applied between the Member States and the Union institutions, which had a particular potency in the area of JHA, the CFI observed that the dual procedural aspect of CP 931 and Regulation 2580/2001 embodied a specific form of cooperation in the context of combating terrorism. In this regard, the right to a fair hearing arose in the first instance during the process which led to the decision of a national competent authority. It was necessary that any person liable to be affected by such a decision be placed in a position to effectively make known his or her view on the matters on which the decision was to be based. Reflecting the cooperative nature of the process, however, the right to a fair hearing at the subsequent Union level had a ‘relatively limited purpose’.41 At this second stage, the right to a fair hearing would be satisfied once an opportunity was provided to make known his or her views ‘on the legal conditions of application of the Community measure in question’.42 In the case of an initial decision, this would concern whether or not there was specific information or material in the file that showed that a relevant decision had been taken by a competent national authority. In the case of a subsequent decision, this would concern the justification for being maintained on the list. Accordingly, at the Union level, there would usually be no need to afford an opportunity to express a view on the appropriateness or well-foundedness of the national decision, the correctness of the conduct in reaching that decision or the extent to which fundamental rights were respected. In the words of the CFI, the principle of sincere cooperation placed the Council under an obligation to defer as far as possible to the assessment conducted by the competent national authority, at least where it is a judicial authority, both in respect of the issue of whether there are ‘serious and credible evidence or clues’ on which its decision is based and in respect of recognition of potential restrictions on access to that evidence or clues.43
On the other hand, should the Council rely on any new information or evidence that had not been considered by the competent national authority in reaching its decision, it was in principle to be notified to the person involved and subject to a hearing at the Community level.44
40 OMPI (n 10) para 117. 41 ibid para 126. 42 ibid para 120. 43 ibid para 124. See G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 278–80. 44 ibid para 125.
Judicial Protection in Autonomous Restrictive Measures 519 The nature of the new information that can be relied upon in order to justify subsequent decisions to maintain a listing has more recently been addressed by the Court of Justice in LTTE and Hamas.45 The degree to which the duty of sincere cooperation amongst Member States creates a distinction between reliance upon a decision of a Member State’s competent authority in order to justify a listing and the situation where a decision of a competent authority of a third country is relied upon was considered in a 2014 judgment, again concerning the LTTE.46 Whilst the Council was entitled to rely on such decisions, it was necessary to carefully verify that the relevant legislation of that State ensures protection of the rights of defence and a right to effective judicial protection equivalent to that guaranteed at EU level. In addition, there cannot be evidence showing that the third state in practice fails to apply that legislation.47
There, the Council was held to have erred in placing reliance on a decision of an Indian competent authority when the grounds failed to contain ‘any evidence to suggest that the Council carried out such a thorough verification of the extent to which the rights of defence and the right to effective judicial protection were safeguarded under the Indian legislation’.48 A similar approach has been taken in respect of misappropriation regimes, where reliance is placed on the investigative or prosecutorial decisions of a third state.49 Following its judgment in Yusuf,50 the CFI in OMPI placed a significant limitation on the right to a fair hearing in the context of any initial decision to list an individual or entity. As it was necessary in the public interest for an initial decision to freeze funds to be applied with immediate effect and with an element of surprise, it was not appropriate that it be subject to any prior notification. Rather, the basis for the listing was to be notified ‘in so far as reasonably possible, either concomitantly with or as soon as possible after the adoption of the initial decision’.51 In contrast, as the element of surprise was not a factor in any subsequent decision to maintain a listing, prior notification and the possibility of a hearing were both required. The CFI acknowledged in Yusuf that a further significant limitation on the right to a fair hearing could arise in the context of deciding upon sanctions listings aimed at combating terrorism. It was possible that overriding security or international relations concerns of the Member States, or of the Union, might preclude the disclosure of information or evidence that had formed the basis for a listing decision. The CFI went so far as to accept that, in particular circumstances, the limitation involved might preclude not only the disclosure of evidence forming the basis for a national decision to investigate or prosecute, or the grounds for such a decision, but also the authority which took it or even the state involved.52
45 Case C-599/14 P, Council v Liberation Tigers of Tamil Eelam (LTTE), ECLI:EU:C:2017:583, paras 57–81; Case C-79/15 P, Council v Hamas, ECLI:EU:C:2017:584, paras 35–54. 46 Joined Cases T-208/11 and T-508/11, Liberation Tigers of Tamil Eelam (LTTE) v Council, ECLI:EU:T:2014:885. See also Case T-400/10 RENV, Hamas v Council, ECLI:EU:T:2018:966, paras 237–53; Case T-643/16, Gamaa Islamya Égypte v Council, ECLI:EU:T:2019:238, paras 79–104. 47 ibid para 139. 48 ibid para 141. 49 Case C-530/17 P, Azarov v Council, ECLI:EU:C:2018:1031; Joined Cases C-72/19 P and C-145/19 P, Thabet v Council, ECLI:EU:C:2020:992. 50 Yusuf (n 2). 51 OMPI (n 10) para 129. 52 ibid para 136.
520 Trevor Redmond C. Clarifying the Application of the Obligation to State Reasons Given the composite nature of the listing procedure, as outlined above, the CFI observed in OMPI that a statement of reasons was all the more important in circumstances where a person or entity had not been heard before an initial decision. Indeed, this would constitute the ‘sole safeguard’ enabling effective use to be made of available legal remedies to challenge the lawfulness of the decision.53 The CFI rejected the Council’s claim that a sufficient statement of reasons could contain a ‘general, stereotypical formulation’ modelled on the listing criteria identified in CP 931 and Regulation 2580/2001.54 Rather, the Council was required to state ‘the matters of fact and law which constitute the legal basis of its decision and the considerations which led it to adopt the decision’, thereby indicating ‘the actual and specific reasons why the Council considers that the relevant rules are applicable to the party concerned’.55 As the autonomous decision to list a specific person or entity was not an exercise of circumscribed powers, the statement of reasons was required to go beyond the statutory conditions set down in Regulation 2580/2001 and provide reasons why, in the exercise of its discretion, the Council considered that a listing was necessary. In terms of a subsequent decision, it was necessary to state the actual and specific reasons why, following re-examination, the Council considered a continued freezing of the funds to be justified. The application of this approach to the statement of reasons was quickly mirrored in Sison v Council56 and KONGRA-GEL v Council,57 and can be found in more recent case law such as PKK v Council58 and Gamaa Islamya Égypte v Council.59 The particular nature of sanctions measures, however, led the CFI to place two significant limitations on the obligation to state reasons. First, the Court’s reasoning as regards the security and international relations concerns of a Member State, or the Union, in the context of the right to be heard was held to apply mutatis mutandis to restrictions that may appropriately be placed on the obligation to state reasons. In addition, it was considered that detailed publication of the factual basis for a decision might not only prejudice security and international relations concerns, but could also cause serious reputational damage to the person or entity concerned, thereby jeopardising their legitimate interests. Exceptionally, therefore, only the operative part of the decision and general statement of reasons … need be in the version of the decision to freeze funds published in the Official Journal, it being understood that the actual, specific statement of reasons for that decision must be formalised and brought to the knowledge of the parties concerned by any other appropriate means.’60
While noting that it was not necessary to rule on the matter, the CFI referred approvingly to case law of the European Court of Human Rights in which the view had been expressed that, even though national security concerns may necessitate the use of confidential information, this did not render national authorities free from any form of judicial review. Presciently, the CFI highlighted that consideration may be required to be given to the question of how an applicant and/or its lawyers might be provided with information and evidence alleged to be
53 ibid
para 140. para 143. 55 ibid. 56 Case T-47/03, Sison v Council, ECLI:EU:T:2007:07. 57 Case T-253/04, KONGRA-GEL v Council, ECLI:EU:T:2008:88. 58 Case T-316/14, PKK v Council, ECLI:EU:T:2018:788. 59 Gamaa Islamya Égypte (n 46). 60 OMPI (n 10) para 147. 54 ibid
Judicial Protection in Autonomous Restrictive Measures 521 confidential. This might include, it suggested, a procedure whereby information or evidence might be provided only to the CFI in accordance with a procedure that would ‘safeguard the public interests at issue whilst affording the party concerned a sufficient degree of judicial protection’.61 This was eventually brought about in 2015 with the introduction of a new Article 105 in the Rules of Procedure of the General Court.62 Article 105 establishes a framework for the treatment of confidential information or material pertaining to the security of the Union or its Member States or to the conduct of their international relations, and certain exceptions to the adversarial principle that may arise as a result.63 In particular, Article 105(8) provides that where the General Court considers that information or material which has not been communicated to the other party, in accordance with procedures provided for, is essential, it may, by way of derogation from Article 64 of the Rules of Procedure, and ‘confining itself to what is strictly necessary’, base its judgment on such information or material. When assessing that information or material, the General Court is required to take account of the fact that a party has not been able to make known their views on it. Within six months of the OMPI judgment, a number of improvements were made to the listing and de-listing procedures relating to CP 931.64 In particular, a statement of reasons was to be provided for each listing, and the person or entity concerned informed of the possibility to submit a request, together with supporting documentation, that the decision be reconsidered. Where there was no known address to which to send a letter of notification, a notice was to be included in the ‘C’ series of the Official Journal. New procedures were also agreed concerning the handling of proposals for listing and of requests for de-listing, and the review of the list. A new Council Working Party on the implementation of CP 931 was established, replacing the informal consultation mechanism amongst Member States that had previously operated. Its mandate included examining and evaluating information with a view to listing and de-listing persons or entities, assessing whether the information meets the criteria for listing, and making recommendations for listings and de-listings to be reflected in the necessary legal instruments.65 In 2016, the mandate of this Working Party was extended to include other EU terrorist-related sanctions, prompting it to be renamed the Working Party on restrictive measures to combat terrorism (COMET).66 V. ADDITIONAL READING Almqvist, J, ‘A Human Rights Critique of European Judicial Review: Counter-terrorism Sanctions’ (2008) 57 International and Comparative Law Quarterly 303. Chachko, E, ‘Foreign Affairs in Court: Lessons from CJEU Targeted Sanctions Jurisprudence’ (2019) 44 Yale Journal of International Law 1.
61 ibid para 158. 62 [2015] OJ L105/1. See I Cameron, ‘European Union Law Restraints on Intelligence Activities’ (2020) 33 International Journal of Intelligence and Counter Intelligence 452, 460–61; G Sullivan, The Law of the List. UN Counterterrorism Sanctions and the Politics of Global Security Law (Cambridge, Cambridge University Press, 2020) 262–81; C Eckes, ‘The Law and Practice of EU Sanctions’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018) 206, 214. 63 See also Decision (EU) 2016/2387 of the General Court of 14 September 2016 concerning the security rules applicable to information or material produced in accordance with Art 105(1) or (2) of the Rules of Procedure, [2016] OJ L355/18. 64 Council of the European Union (n 3). 65 See Council document ST 10826/1/07 Rev 1, 28 June 2007. 66 See Council document ST 14612/1/16 Rev 1, 23 November 2016.
522 Trevor Redmond Della Cananea, G, ‘Return to the Due Process of Law: The European Union and the Fight against Terrorism’ (2007) 32 EL Rev 896. Eckes, C, ‘Case T-228/02, Organisation des Modjahedines du Peuple d’Iran v Council and UK (OMPI), Judgment of the Court of First Instance (Second Chamber) of 12 December 2006’ (2007) 44 CML Rev 1117. Eckes, C, ‘EU Counter-terrorist Sanctions against Individuals: Problems and Perils’ (2012) 17 European Foreign Affairs Review 113. Mendes, J and Eckes, C, ‘The Right to Be Heard in Composite Administrative Procedures: Lost in between Protection?’ (2011) 36 EL Rev 651. Nanopoulos, E, ‘The Fight against Terrorism, Fundamental Rights and the EU Courts: The Unsolved Conundrum’ (2012) 14 Cambridge Yearbook of European Legal Studies 269. Tridimas, T and Gutierrez-Fons, JA, ‘EU Law, International Law and Economic Sanctions against Terrorism: The Judiciary in Distress?’ (2009) 32 Fordham International Law Journal 660.
49 The Autonomy of EU Law vis-à-vis International Law: Kadi I and Kadi II CHRISTINA ECKES Case T-315/01, Yassin Abdullah Kadi v Council of the European Union and Commission of the European Communities, ECLI:EU:T:2005:332, delivered 21 September 2005; Case C-402/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:461, delivered 3 September 2008; Case T-85/09, Yassin Abdullah Kadi v European Commission, ECLI:EU:T:2010:418, delivered 30 September 2010; Case C-584/10, European Commission and Others v Yassin Abdullah Kadi, ECLI:EU:C:2013:518, delivered 18 July 2013. KEYWORDS Autonomy – Sanctions – Restrictive measures – United Nations – Chapter 7 obligation – Right of access to justice – Right to property – Fundamental rights – Dualism – Protectionism – Counter-terrorism – UN Security Council – Security Council Resolutions – Pluralism.
I. INTRODUCTION
T
he first Kadi case in 2005, delivered by the General Court,1 resulted in a situation in which individuals targeted by counter-terrorist sanctions adopted by the United Nations Security Council (UNSC) remained subject to directly applicable EU measures without full access to justice. Their bank accounts were frozen. They could no longer travel to or from the EU. In 2008, the Court annulled on appeal large parts of that decision (Kadi I appeal).2 The Court held that all EU measures, including those giving effect to UNSC resolutions, had to comply with the EU Treaties and the general principles of EU law, including the rights of access to justice and property.3 In Kadi II, both the General Court and, on appeal, the Court confirmed this position.
1 In 2005, the General Court was called the Court of First Instance (CFI). 2 Joined Cases C-402/05 and C-415/05, Yassin Abdullah and Al Barakaat International Foundation v Council and Commission, ECLI:EU:C:2008:461 (Kadi I appeal). 3 ibid paras 283–85, 335, 355.
524 Christina Eckes In the Kadi I appeal, Advocate General (AG) Maduro referred to the EU legal order as a ‘municipal legal order’4 and argued that the Court must ‘first and foremost … preserve the constitutional framework of the [EU] Treat[ies]’.5 At the same time, he famously stated that ‘This does not mean … that the [Union]’s legal order and the international legal order pass by each other like ships in the night’.6 Kadi brought a central dilemma of the EU as a non-state actor to the fore: how can the EU legal order protect both its autonomy and the fundamental rights of those affected by its actions while, at the same time, adhering to its own international law origin? Because of the particular set of facts, the Kadi saga exposed tensions between several fundamental constitutional characteristics of EU law in an unprecedented, pressing manner: the autonomy of the EU legal order, its openness to international law and its required ability to protect fundamental rights. The Kadi cases became a bone of contention between legal scholars with an international law perspective and those with an EU law perspective. The former, from the perspective of international and national law, and the protection of fundamental rights, accused the Court of fostering parochialism and undermining the functioning of the international security system.7 The latter emphasised the central and crucial need of the EU to be able to protect its legal order as distinct from international law.8 This chapter will introduce these fundamental issues and controversies, and offer a reflection on the impact of the Kadi cases on the self-conception of the EU, its relationship with international law. II. FACTS
UNSC counter-terrorist sanctions against private individuals suspected of supporting terrorism remain a very peculiar type of measure. The highest political organ of the most inclusive international organisation, charged with no less than preserving international peace and security, identifies individuals that do not hold public office as terrorist suspects and orders nearly all states in the world to freeze their assets and limit their travel. It remains highly exceptional that an institution dealing with high international politics reaches in such a direct manner into the legal sphere of individualised private persons. In the Kadi cases, an international businessman of Saudi Arabian citizenship, Mr Kadi, found all of his financial funds within the EU frozen at a day’s notice, first by Regulation 467/2001,9 then by Regulation 881/2002 (contested in Kadi I).10 The freezing was ordered 4 Opinion of AG Maduro, Joined Cases C-402/05 and C-415/05, Yassin Abdullah and Al Barakaat International Foundation v Council and Commission, ECLI:EU:C:2008:11 (Kadi I appeal), paras 21–22. 5 ibid Opinion of AG Maduro, para 24. 6 ibid Opinion of AG Maduro, para 22. 7 J Klabbers, Treaty Conflict and the European Union (Cambridge, Cambridge University Press, 2009) 219, criticising the Court for acting like an ‘ostrich’; G de Búrca, ‘The European Court of Justice and the International Legal Order after Kadi’ (2010) 51 Harvard International Law Journal 1, criticising the Court for expressing important parts of its reasoning in chauvinist and parochial tones. 8 C Eckes, ‘Protecting Supremacy from External Influences: A Precondition for a European Constitutional Legal Order?’ (2012) 18 European Law Journal 230. 9 Council Regulation 467/2001/EC of 6 March 2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan, and repealing Regulation 337/2000/EC, [2001] OJ L67/1. 10 Council Regulation 881/2002/EC of 27 May 2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation 467/2001/EC, [2002] OJ L139/9.
The Autonomy of EU Law vis-à-vis International Law 525 without any limitation of time or quantity and, above all, the Regulation did not provide any means for those sanctioned to prove that they were innocent of any wrongdoing. Mr Kadi asserted that he had never been involved in terrorism, nor financially supported terrorism in any form. Mr Kadi was sanctioned as a consequence of the UN sanctions regime in the fight against terrorism. Following the attacks on the US embassies in Nairobi and Dar-e-Salaam in 1998, the UNSC had, in a series of resolutions,11 requested the Taliban regime in Afghanistan to extradite Usama bin Laden to close all terrorist training camps and to cease providing sanctuary for terrorists on its territory. After the Taliban ignored all requests for cooperation, the UNSC unanimously approved Resolution 1267,12 reinforcing those requests and calling, amongst other things, upon all states to freeze all financial and economic resources either directly belonging to the Taliban or from which they might benefit in any way. The resolution further established a Sanctions Committee,13 whose composition is identical to that of the Security Council. The Committee was tasked to manage and monitor the implementation of the sanctions imposed by Resolution 1267. One year later, Resolution 1333 was adopted as a response to the Taliban’s continuous failure to respond to the demands of the Security Council.14 This resolution also ordered the immediate freezing of funds and financial resources belonging to or of any benefit to the Taliban, and instructed the Sanctions Committee to maintain an updated list of individuals and entities designated as associated with Usama bin Laden. On 19 October 2001, the Sanctions Committee included Mr Kadi’s name and city of origin on its list.15 Taking the view that action by the Union was necessary to comply with the Security Council resolutions adopted in the fight against terrorism, the Council adopted a series of legal instruments,16 including on 27 May 2002 Common Position 2002/402/CFSP and Regulation 881/2002. Both instruments contain an annex listing Mr Kadi’s name and further details identifying him. Mr Kadi brought an action for annulment of the Regulation,17 arguing that the Council acted ultra vires in adopting the sanctions, and that the measures further infringed Article 249 EC (now Article 288 TFEU) and breached his fundamental rights.18 III. THE COURT
The General Court held in 2005 (Kadi I) that the contested regulation, because it gave effect to a UNSC resolution, enjoyed immunity from jurisdiction, save with regard to its compatibility
11 UN Security Council documents S/RES/1189 (13 August 1998), S/RES/1193 (28 August 1998) and S/RES/1214 (8 December 1998). 12 UN Security Council document S/RES/1267 (15 October 1999). 13 Now called Security Council Committee pursuant to Resolutions 1267 (1999), 1989 (2011) and 2253 (2015) concerning Islamic State in Iraq and the Levant (Da’esh), Al-Qaida and associated individuals, groups, undertakings and entities. 14 UN Security Council document S/RES/1333 (19 December 2000). 15 However, seven days earlier (12 October 2001), the Office of the Coordinator for Counterterrorism of the US Government designated Mr Kadi as a new person on the Comprehensive List of Terrorists and Groups Identified Under Executive Order 13224 (the President Executive Order on Terrorist Financing of 23 September 2001). One cannot avoid the impression that the listing took place on the initiative of the USA. 16 For an overview of the instruments and actions brought against them, see I Tappeiner, ‘The Fight against Terrorism: The Lists and the Gaps’ (2005) 1 Utrecht Law Review 97. 17 Initially against Regulation 467/2001, then redirected to Regulation No 881/2002, repealing the former. 18 In particular, their right to a fair hearing, their right to respect for property and their right to effective judicial review.
526 Christina Eckes with jus cogens. As a result, the General Court upheld the sanctions against Mr Kadi because it could not establish a breach of the bare requirements of jus cogens. On appeal, the Court came to a diametrically opposed position on the point of jurisdiction. It explained that a review of whether the implementation measures adopted by the EU are compatible with EU fundamental rights standards did not legally challenge the validity of the UN listings that lie at their origin, nor ‘entail any challenge to the primacy’ of the underlying UNSC resolution.19 The Court consequently reviewed the measures and found that the applicant’s fundamental rights were infringed.20 It annulled the sanctions with regard to Mr Kadi, but maintained the effects of the annulled measure. The Court may not have ruled directly on the legality of the UNSC resolution. However, it is hard to deny that the Kadi cases challenged the legitimacy of the UN sanctioning practice. The Court found that ‘the rights of the defence, in particular the right to be heard, and the right to effective judicial review of those rights, were patently not respected’ (emphasis added).21 The evidence allegedly justifying the sanctions against Mr Kadi was withheld both from the appellants themselves and from the EU courts; and the Court could ‘do no other than find that it is not able to undertake the review of the lawfulness of the contested regulation’.22 Subsequently, the Council adopted a new set of sanctions targeting the same individuals following a different procedure aimed at better safeguarding Mr Kadi’s rights. Mr Kadi challenged the new sanctions before the General Court, which annulled them in 2010 (Kadi II), in a ruling that is exceptional in its critical tone towards the Court.23 The annulment was confirmed by the Court in 2013 (Kadi II appeal).24 IV. THE IMPORTANCE OF THE CASE
The importance of the Kadi cases can hardly be overstated. This is also reflected in the exceptional academic attention that Kadi I in particular received.25 In Kadi I, both the General Court and the Court had to address the relationship between the EU legal order and international law in a head-on manner that raised many and different concerns with regard to the protection of fundamental rights and the existence and functioning of the EU. A. The Attitude of the Court to International Law: When is the EU Too Autonomous? The relationship between the ‘[EU] legal order’ and the ‘international legal order under the [UN]’26 is the issue on which the General Court and the Court disagreed most essentially.
19 Kadi I appeal (n 2) para 288. 20 ibid para 370. 21 ibid para 334. 22 ibid para 351. 23 Case T-85/09, Yassin Abdullah Kadi v Commission, ECLI:EU:T:2010:418 (Kadi II). For a discussion of the ruling, see C Eckes, ‘Controlling the Most Dangerous Branch from Afar: Multi-layered Counter-terrorist Policies and the European Judiciary’ (2011) 2 European Journal of Risk Regulation 505. 24 Case C-584/10, European Commission and Others v Yassin Abdullah Kadi, ECLI:EU:C:2013:518 (Kadi II appeal). 25 See below for a selection. 26 Kadi I appeal (n 2) para 249.
The Autonomy of EU Law vis-à-vis International Law 527 The General Court found that Union acts implementing obligations under the UN Charter fell as a matter of principle outside of the scope of its jurisdiction. It took what could be characterised as a monist perspective, and conferred on UNSC resolutions a supra-constitutional status within the EU legal order, capable of justifying departure from primary European law, including the general principles. As a result, it argued in Kadi I that the hierarchical status of UNSC Resolutions (at least those adopted under Chapter VII) excluded the review of the domestic measures within the light of primary European law and general principles of EU law. The Court, by contrast, took a dualist perspective and proposed in Kadi I to rank the UN Charter, including obligations under its Chapter VII (if they were binding on the Union), the same way as any other international agreements. They ‘would occupy’ a rank between primary and secondary EU law.27 Moreover, the Court granted a special status to the ‘very foundations’ of the EU legal order as expressed in Article 6(1) TEU, based on their content and not on the status of their author.28 Six years later, in Opinion 2/13 on the EU’s accession to the European Convention on Human Rights (ECHR), the Court confirmed its position that it is not willing to compromise the autonomy of the EU legal order.29 However, there is one core difference between the Kadi cases and Opinion 2/13, namely what they mean for fundamental rights protection. In the former cases, the EU infringed fundamental rights by giving effect to an international legal obligation of the Member States, and the Court stepped in and upheld those rights. In the latter case, the Court made it all but impossible for the EU to submit to a widely recognised external mechanism of fundamental rights protection (the ECHR). At the same time, Opinion 2/13 directly flows from and further develops the autonomy conception as the Court had set it out in the Kadi I appeal, arguably based on earlier cases.30 The Court considers autonomy to be an essential feature of the EU legal order in its self-conception as a domestic legal order. Arguably, autonomy is both the result of and the precondition for this domestic conception of the EU legal order. It is also essential for the particular EU law characteristics of primacy and direct effect. The term ‘essential’ is used consciously in this context.31 The point is that in the absence of an essential element, namely EU law’s claim to autonomy, EU law would no longer function in the way that it does now. If EU law were directly dependent in its validity and interpretation on national and international law, the Court would no longer be in the position to filter and determine the precise effects of national and international law within the EU legal order. As a consequence, EU law would no longer enjoy the same effectiveness vis-à-vis national law. By definition, this is a thesis that excludes the opposite claim, that is that the very nature of EU law would not change in the absence of a contested but in and of itself logically valid claim of autonomy. Arguing that the formal autonomy claim of the Court is essential also entails that it cannot be compromised in face of other considerations. This is the position of the Court, most visibly in Kadi and Opinion 2/13. However, this does not take away from the fact that the EU is legally committed to comply with and give effect to international law.32 Usually, the EU courts resolve tensions between
27 ibid para 305. See also C Eckes, ‘International Sanctions against Individuals: A Test Case for the Resilience of the European Union’s Constitutional Foundations’ (2009) 15 European Public Law 351, 366–67. 28 Kadi I appeal (n 2) paras 303–04. 29 Opinion 2/13, re EU Accession to the ECHR, ECLI:EU:C:2014:2454. See this volume, ch 70. 30 See, eg Opinion 1/91, EEA, ECLI:EU:C:1991:490. See this volume, ch 20. 31 C Eckes, ‘The Autonomy of the EU Legal Order’ (2020) 4 Europe and the World: A Law Review 1. 32 See notably Art 3(5) TEU.
528 Christina Eckes Union law and international law by interpreting the former in the light of the latter (consistent interpretation), so avoiding open conflict between the two.33 In the Kadi cases, this was not possible. The peculiar set of facts excluded consistent interpretation. Member States’ obligations under the UN Charter were so specific (freeze specific assets of individuals singled out) that the possibility of consistent interpretation did not exist.34 The Court had to choose either to allow the Union to give effect to these very specific obligations, even if they breached fundamental rights (as the General Court did), or to annul the measures and put Member States in a situation where they fail to comply with their obligations under the UN Charter. The Court’s choice for the latter triggered, as mentioned above, quite some criticism, and was portrayed as undermining the UN system for protecting international peace and security. Arguably, the discussion of whether the Court’s conception of the autonomy of the EU legal order threatens the EU’s ability to pursue a leading role in promoting the international rule of law and multilateralism for international relations has continued since Kadi. In particular, Opinion 2/13 and Opinion 1/17 have shed new light on and raised new concerns about the EU’s relationship with international law.35 B. Protecting Fundamental Rights from External Interference: Autonomy as a Shield with Reflective Effects Mr Kadi powerfully argued that [s]o long as the law of the [UN] offers no adequate protection for those whose claim that their fundamental rights have been infringed, there must be a review of the measures adopted by the Community in order to give effect to resolutions of the Security Council.36
The Court agreed, and construed in the Kadi I appeal a fundamental element of the ‘Union of law’, namely the protection of constitutional guarantees under EU law from interference from the outside.37 It confirmed that no international law obligations, not even UNSC resolutions under Chapter VII, can justify blatant fundamental rights violations within the EU legal order. The Kadi I appeal may therefore be seen as the beginning of the Court’s autonomy conception as protecting the Union’s core substantive values. In particular, in Kadi, the protection of fundamental rights and judicial protection became closely intertwined with the autonomy of the EU legal order. The autonomy of the EU legal order from international law is understood for the first time in Kadi as a necessary precondition for the Union to be in a position to ensure that individuals enjoy in practice the constitutional guarantees under EU law. Only by declaring the EU legal order autonomous could the Court submit the actions of the EU institutions to fundamental rights review. The Court pursues this understanding and line of reasoning
33 See, eg Case C-310/06, FTS International, ECLI:EU:C:2007:456; M Bronckers, ‘From “Direct Effect” to “Muted Dialogue”: Recent Developments in the European Courts’ Case-Law on the WTO and Beyond’ [2008] Journal of International Economic Law 885. 34 C Eckes, EU Counter-terrorist Policies and Fundamental Rights: The Case of Individual Sanctions (Oxford, Oxford University Press, 2009) 247 et seq. 35 Opinion 2/13 (n 29); Opinion 1/17, ECLI:EU:C:2019:341. See this volume, ch 88. 36 Kadi I appeal (n 2) para 256. 37 ibid paras 285, 316.
The Autonomy of EU Law vis-à-vis International Law 529 further in its more recent rulings on the protection of the rule of law. In particular, the developments in Poland38 are characterised as a threat to the Union of law.39 However, the Court arguably went further than protecting Mr Kadi’s fundamental rights: it examined and commented in detail on the UN listing procedure.40 The Court’s conception of autonomy as a normative shield hence also has reflective effects carrying beyond the EU legal order. The Court considered the UNSC’s actions in light of generally accepted rights of the defence of individuals and strongly criticised the UN procedure. This could either be read as potentially undermining the work of the UNSC or as a legitimacy check that led to or at least strengthened demands for reform of a peculiar procedure, in which perhaps the highest political body in the world directly singles out and sanctions individual persons. Even 11 years after the Kadi I appeal, it is not easy to demonstrate that the Court’s pushback harmed the UN peace and security system or the EU’s credibility within that system. What can be shown is that, in 2009, the UN established the office of an Ombudsperson to offer those sanctioned at least some possibility of being heard and having their case examined.41 Many considered this as related to the Court’s pushback and the difficulties of the Member States after Kadi I to give effect to the UN counter-terrorist sanctions. C. Within the EU Legal Order: Primacy Over Pluralism? While asserting the role of a single international actor, the Union remains internally and externally a complex and compound structure in which numerous actors participate and struggle for visibility. Power is shared between the EU institutions and the Member States, who are sometimes subordinated to each other and sometimes act as equals, but who ultimately have different, and (to a certain extent) independent, legal foundations and practical preferences.42 Frictions between the different European actors seldom surface with the same clarity as in cases concerning individual sanctions. Individual sanctions combine two factors that have led to the outburst of usually well-contained normative frictions. First, the particular combination of international, European and national rules with overlapping personal, material and territorial scope is unique. Individual sanctions are exceptional in that nearly identical rules that directly restrict the rights of specific individuals are adopted at all three levels. The ‘so long as’ terminology used by Mr Kadi43 raised a parallel to the position of national constitutional courts vis-à-vis the primacy of EU law. The ‘so long as’ doctrine as originally developed by the German Federal Constitutional Court (GFCC)44 could be crudely summarised
38 On the independence of the judiciary in Poland, see Case C-619/18, Commission v Poland, ECLI:EU:C:2019:531; Joined Cases C-585/18, C-624/18 and C-625/18, AK and Others v Sąd Najwyższy, ECLI:EU:C:2019:982; Joined Cases C-558/18 and C-563/18, Miasto Łowicz, ECLI:EU:C:2019:775. 39 See fundamentally U Everling, ‘Das Maastricht-Urteil des Bundesverfassungsgerichts und seine Bedeutung für die Entwicklung der Europäischen Union’ (1994) 17(3) Integration 165: ‘Die Gemeinschaft ist Rechtsgemeinschaft; nur als solche kann sie bestehen.’ 40 See in particular Kadi I appeal (n 2) paras 323–25. 41 See www.un.org/securitycouncil/ombudsperson. The office was established by UNSC 1904 (2009). 42 C Eckes, ‘Disciplining Member States: EU Loyalty in External Relations’ (2020) 22 Cambridge Yearbook of European Legal Studies 85. 43 Kadi I appeal (n 2) para 256. 44 GFCC, BVerfGE 37, 271 of 29 May 1974 (Solange I). BVerfGE 73, 339 of Decision of 22 October 1986, 2 BvR 197/83 (Solange II).
530 Christina Eckes as follows: so long as the Court sufficiently protects fundamental rights, the GFCC will not step in to review EU law and rulings of the Court. Since the GFCC’s early judgments that coined this phrase, the GFCC has continuously confirmed this line and even explicitly agreed to exercise jurisdiction in response to an alleged individual infringement, rather than only a structural lowering of the fundamental rights protection offered by the Court.45 The ‘so long as’ parallel between Kadi and the case law of the GFCC has been used to support diametrically opposed conclusions. On the one hand, it can be argued that if the Court had failed to protect fundamental rights from external interference, as it did in Kadi, this would have led national constitutional and supreme courts to challenge the primacy of European law in order to ensure an acceptable fundamental rights protection within their own legal order. National courts, and in particular the GFCC, are an autonomous judicial force within the EU that the Court needs to reckon with. The Court does not have hierarchical jurisdiction over their actions and cannot repeal their rulings. It must ensure their cooperation through other means. It is also fair to say that the pressure by national courts on the Court has again intensified in the years following the Kadi I appeal.46 On the other hand, the Court’s ‘so long as’ logic vis-à-vis international law has been criticised for being seemingly contradictory. The Court demands in its settled case law that national courts accept the primacy of EU law and so stifles pluralism, while at the same time refusing to defer to ‘supreme’ obligations under the UN Charter.47 This was feared to give national courts an (additional) argument to reject the primacy of EU law. Indeed, the GFCC referred in its Treaty of Lisbon decision to the Kadi I appeal and argued that the Court took a view ‘similar’ to its own by placing ‘the assertion of its own identity as the legal community above the commitment that is otherwise respected’.48 Despite certain communalities, good arguments speak, in my view, in favour of distinguishing the Court’s position in the Kadi I appeal, denying a UNSC resolution effects within the EU legal order based on the GFCC’s ‘so long as’ logic. Both courts are concerned with the effects of legal norms originating external to their own legal order. However, while the Union is committed to being a Union of law, offering review by an independent judiciary in the light of widely recognised fundamental rights, the UNSC sanction practices result in a blatant disregard of the most basic fundamental rights of individualised persons. They directly deprive individuals of their rights without offering, even after the introduction of the Ombudsperson, basic procedural rights or review by an independent judge who is in a position to annul the measures in question. The Court hence reasonably took in the Kadi I appeal the position of the GFCC in its first ‘so long as’ decision, when the GFCC still structurally reviewed EU law because at the time the EU did not yet offer an adequate (judicial) protection of fundamental rights. This is now different. Therefore, the GFCC’s use of the Kadi I appeal to justify reviewing EU law seems unconvincing.
45 GFCC, decision of 15 December 2015, 2 BvR 2735/14, www.bundesverfassungsgericht.de. The facts were similar to the decision in Case C-399/11, Melloni, ECLI:EU:C:2013:107 at the Court. 46 Czech Republic (CCCR), Slovakian pension Case (Pl. ÚS 5/12), holding Landtová C-399/09 ultra vires; Danish Supreme Court (DSC), Ajos Case, No 15/2014 of 6 December 2016, holding Dansk Industri C-441/14 ultra vires; GFCC, OMT-judgement, of 21 June 2016; GFCC, PSPP case of 5 May 2020. 47 Supreme because of Art 103 UN Charter. 48 GFCC, BVerfGE 123, 267 of 30 June 2009 (Lisbon Treaty decision) para 340.
The Autonomy of EU Law vis-à-vis International Law 531 D. Normalising the Common Foreign and Security Policy or Law Ever-Expanding? Foreign policy is traditionally the realm of (executive) politics rather than law. The political nature of foreign policy decisions is preserved either by formally limiting the jurisdiction of courts49 or by judicial self-restraint. This is often referred to as the ‘political question doctrine’.50 One core issue in Kadi I was whether the EU Court had jurisdiction to review the EU’s sanctions measures. The Council, the Commission and the UK contended that EU sanctions giving effect to UN lists of terrorist suspects do not lend themselves to judicial review.51 AG Maduro, in his Opinion in the Kadi I appeal, opined that it is ‘untenable’ that ‘even the most humble degree of judicial interference would be inappropriate’.52 He argued that despite the high importance of maintaining international peace and security, it is ‘the duty of the courts to assess the lawfulness of measures that may conflict with other interests that are equally important’ (such as human rights).53 The Court agreed. The contested measures in Kadi were EU regulations rather than CFSP decisions. However, the listings in these EU regulations were identical to the listings in CFSP decisions that formed pursuant to ex-Article 301 TEC (now Article 215 TFEU), the basis for the adoption of the former. By reviewing specific listings in EU regulations that are identical to those in CFSP decisions, the Kadi cases have also indirectly contributed to expanding judicial review into CFSP and so normalising this policy area.54 In general, individual sanctions were the trigger for introducing a specific exception to the exceptional exclusion of CFSP from the Court’s jurisdiction. Since the entry into force of the Treaty of Lisbon, Article 275 TFEU, second paragraph establishes the jurisdiction of the Court over individual sanctions adopted in CFSP decisions. In October 2020, the Court has continued to normalise the CFSP in the context of individual sanctions by accepting jurisdiction for actions for damages for wrongful listings.55 Generally, the assertion by the Court of jurisdiction over matters of foreign policy in general and individual sanctions in particular forms part of a broader trend towards the judicialisation and legalisation that we can witness all around. On the one hand, this trend contributes to protecting fundamental rights and avoiding arbitrariness. On the other hand, it may result in an overreach of law into the terrain of pure politics that may undermine the former’s relevance and ability in framing politics. However, individual sanctions single out identified persons as terrorist suspects. Such specific measures cannot benefit from a limitation of judicial review over general foreign policy.
49 Art 275(1) TFEU. 50 See T Franck, Political Questions/Judicial Answers (Princeton, Princeton University Press, 1992); G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 45 Legal Issues of Economic Integration 329. 51 See Kadi I appeal (n 2) Opinion of AG Maduro (n 4) para 33. 52 ibid Opinion of AG Maduro (n 4) para 34. 53 ibid Opinion of AG Maduro (n 4) para 34. 54 On the normalisation of CFSP more broadly, see C Eckes, ‘Common Foreign and Security Policy: The Consequences of the Court’s Extended Jurisdiction’ (2016) 22 European Law Journal 492; R Wessel and J Larik (eds), EU External Relations Law: Text, Cases and Materials, 2nd edn (Oxford, Hart Publishing, 2020) ch 9. 55 Case C-134/19, Bank Refah Kargaran v Council, ECLI:EU:C:2020:793; C Eckes, ‘Constitutionalising the EU Foreign and Security Policy: The ECJ Accepts Jurisdiction over Claims for Damages under the Common Foreign and Security Policy (CFSP)’ (VerfBlog, 18 October 2020) www.verfassungsblog.de/constitutionalising-the-eu-foreign-andsecurity-policy/. See this volume, ch 91.
532 Christina Eckes V. ADDITIONAL READING Besson, S, ‘European Legal Pluralism after Kadi’ (2009) 5 European Constitutional Law Review 237. Cannizzaro, E, ‘Security Council Resolutions and EC Fundamental Rights: Some Remarks on the ECJ Decision in the Kadi Case’ (2009) 28 Yearbook of European Law 593. Curtin, D and Eckes, C, ‘The Kadi Case: Mapping the Boundaries between the Executive and the Judiciary in Europe’ (2008) 5 International Organizations Law Review 365. D’Aspremont, J and Dopagne, F, ‘Kadi: The ECJ’s Reminder of the Elementary Divide between Legal Orders’ (2008) 5 International Organizations Law Review 371. De Búrca, G, ‘The European Court of Justice and the International Legal Order After Kadi’ (2010) 51 Harvard International Law Journal 1. Eckes, C, ‘Judicial Review of European Anti-terrorism Measures – The Yusuf and Kadi Judgments of the Court of First Instance’ (2008) 14 European Law Journal 74. Eckes, C, EU Counter-terrorist Policies and Fundamental Rights: The Case of Individual Sanctions (Oxford, Oxford University Press, 2009). Eckes, C, ‘International Sanctions Against Individuals: A Test Case for the Resilience of the European Union’s Constitutional Foundations’ (2009) 15 European Public Law Journal 351. Eckes, C, ‘Controlling the Most Dangerous Branch from Afar: Multi-layered Counter-terrorist Policies and the European Judiciary’ (2011) 2 European Journal of Risk Regulation 505. Eckes, C, ‘EU Counter-terrorist Sanctions against Individuals: Problems and Perils’ (2012) 17 European Foreign Affairs Review 113. Eckes, C, ‘Protecting Supremacy from External Influences: A Precondition for a European Constitutional Legal Order?’ (2012) 18 European Law Journal 230. Eckes, C, ‘Individuals in a Pluralist World: The Implications of Counterterrorist Sanctions’ (2013) 2 Global Constitutionalism 218. Eckes, C, ‘EU Restrictive Measures against Natural and Legal Persons: From Counterterrorist to Third Country Sanctions’ (2014) 51 CML Rev 869. Kokott, J and Sobotta, C, ‘The Kadi Case – Constitutional Core Values and International Law – Finding the Balance?’ (2012) 23 The European Journal of International Law 1015. Scheinin, M, ‘Is the ECJ Ruling in Kadi Incompatible with International Law?’ (2009) 28 Yearbook of European Law 637. Türküler Isiksel, N, ‘Fundamental Rights in the EU after Kadi and Al Barakaat’ (2010) 16 European Law Journal 551. Wessel, RA, ‘The Kadi Case: Towards a More Substantive Hierarchy in International Law?’ (2008) 5 International Organisations Law Review 323. Ziegler, KS, ‘Strengthening the Rule of Law, but Fragmenting International Law: The Kadi Decision of the ECJ from the Perspective of Human Rights’ (2009) 9 Human Rights Law Review 288.
50 Laying the Foundation for a Broad Scope of EU Development Cooperation Policy and its Delimitation with Other EU External Competence: Parliament v Commission (Philippines Border Management) TINA VAN DEN SANDEN* Case C-403/05, European Parliament v Commission of the European Communities, ECLI:EU:C: 2007:624 (Philippines Border Management), delivered 23 October 2007. KEYWORDS Development cooperation policy – Commission decision approving a project relating to border security in the Philippines – Decision adopted on the basis of Regulation (EEC) No 443/92 – Commission’s implementing powers – Scope of EU development cooperation policy – Fight against terrorism and international crime.
I. INTRODUCTION
I
n Philippines Border Management, the Court had to assess whether the Commission had overstepped its competence when approving a project to assist the government of the Philippines in managing border security. While this may seem to be a very specific case, the Philippines Border Management case constitutes a significant step in the case law on the scope of EU development cooperation policy and its relationship with and delimitation from other areas of EU external action. In Philippines Border Management, the Court lays the fundamentals for a broad scope of EU development cooperation policy, which, in turn, defines the limits of this competence vis-à-vis other external competence.
* The information and views set out in this contribution are those of the author and do not necessarily reflect the official opinion of the European Commission.
534 Tina Van den Sanden II. FACTS
In November 2004, the Commission was preparing the adoption of a Commission Decision – the contested decision – which approved a project relating to the security of the borders of the Philippines, in implementation of Council Regulation 443/92 on financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America.1 As is still the case today, the EU’s cooperation with developing countries is based on the conclusion of international agreements with developing countries,2 which set out the framework and principles for cooperation between the EU and a partner country or region, and, on the other hand, the implementation of this policy and cooperation on the basis of financing instruments.3 Regulation 443/92 was such a financing instrument, which funded assistance to and cooperation with developing countries in Asia and Latin America. Pursuant to the Commission’s competences to manage programmes and implement the budget as laid down in Article 17 TEU, the Commission plays a key role in the implementation of the EU’s development cooperation policy by adopting decisions on the programming and implementation of development funds. It is a decision on the latter that was the subject of this dispute. In line with similar Commission Decisions of this kind,4 the contested decision was concise and technical, containing two articles which approved the Philippines Border Management project, set the maximum Union contribution to the project, and indicated the relevant budget line. The project itself was further detailed in the descriptive annex to the Commission Decision, also in line with other decisions of this kind. The annex clarified that the project was aimed at assisting the Philippines authorities to achieve the following results: (i) promotion of best international border management standards; (ii) sharing of intelligence information; (iii) prevention of the circulation of false identity documents; and (iv) capacity building of border management staff by providing training activities. As such, the overall objective of the project was to assist the Philippines in the implementation of UN Security Council Resolution 1373(2001) of 28 September 20015 in the fight against terrorism and international crime.6 The European Parliament challenged the Commission Decision, seeking its annulment by arguing that the Commission exceeded the implementing powers conferred upon it by Regulation 443/92, in implementation of which the Commission took that decision. The Parliament argued that the reasons for adopting the decision on the approval of the Philippines
1 Council Regulation (EEC) No 443/92 of 25 February 1992 on financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America, [1992] OJ L52/1, as amended by Council Regulation (EC) No 807/2003 of 14 April 2003 adapting to Decision 1999/468/EC the provision relating to Committees which assist the Commission in the exercise of its implementing powers laid down in Council instruments adopted in accordance with the consultation procedure, [2003] OJ L122/36. 2 In that respect, Art 209(2) lays down the Union’s express competence to conclude international agreements. This competence is ‘without prejudice to Member States’ competence to negotiate in international bodies and to conclude agreements’, reflecting the parallel or non-pre-emptive nature of the Union’s development cooperation policy competence (Art 4(4) TFEU). 3 As currently laid down in Art 209(1) TFEU. 4 The decisions are ‘financing decisions’, which lay down the budgetary commitment and at the same time constitute the annual or multiannual work programme (Art 110 Regulation 2018/1046 of 18 July 2018 on the financial rules applicable to the general budget of the Union, [2018] OJ L193/1). 5 United Nations Security Council, Resolution 1373 (2001), adopted by the Security Council at its 4385th meeting, 28 September 2001, S/RES/1373 (2001). 6 This is in line with the EU’s role in assisting third countries in implementing their obligation under the UNSC Resolution 1373, as laid down in the General Affairs Council’s conclusions of 22 July 2002. Indeed, pursuant to Art 208(2), the Union and the Member States shall comply with the commitments and take account of the objectives they have approved in the context of the UN and other competent international organisations.
Laying the Foundation for a Broad Scope of EU Development Cooperation Policy 535 Border Management project were clearly linked to the fight against terrorism and international crime. This, in the Parliament’s view, went beyond the scope of Regulation 443/92, and could not be included in its scope by way of a broad interpretation, as this would have presupposed an amendment of the wording of the regulation. The Commission, on the other hand, argued that the lack of an express reference to the fight against terrorism and international crime could not lead to the illegality and annulment of the decision. The Commission claimed that the decision’s specific purpose was to promote, by assisting in border management, the strengthening of the institutions, which was expressly provided for by Articles 5 and 6 of Regulation 443/92. In this respect, the Commission also referred to the general framework and evolution of development policy over the years, in which the strengthening of institutions became a horizontal and integral aspect, while the Treaty legal basis in Articles 177 EC and 181a EC Treaty (now Articles 208 and 212 TFEU) demonstrated that assistance could be provided in fields not expressly referred to. Interestingly, the Commission referred to the decommissioning of light weapons as an example of such a field.7 Moreover, the Commission argued that the objective of the project was not limited to the fight against terrorism, but also included combating drugs and human trafficking. As such, the project would have a positive impact on internal security, creating conditions to enable economic development and investment, an area of cooperation which was expressly provided for in Articles 7 and 8 of Regulation 443/92. III. THE COURT
The Court started its reasoning by reiterating the general principle of conferral, which determines that the institutions may act only within the limits of the powers conferred upon them, and that, in the specific context of implementing powers granted to it, the Commission is authorised to adopt all the measures which are necessary or appropriate for the implementation of the basic act, provided that they are not contrary to it. Applied to the specific case at hand, the Council granted the Commission, pursuant to Article 15 of Regulation 443/92, the power to administer the financial and technical assistance of and economic cooperation with the Asian and Latin American developing countries. The contested decision, which, according to the Court, pursued the aim of supporting the Philippines to enhance the security and management of its borders in accordance with UNSC Resolution 1373, was adopted under the implementing power granted to the Commission in Regulation 443/92. Therefore, the Court assessed whether the objective pursued by the contested Commission Decision relating to the fight against terrorism and international crime came within the scope of Regulation 443/92. Interestingly, the Court started its analysis in this respect by referring to the evolution in the Union’s development cooperation framework that had taken place since the adoption of Regulation 443/92. First, the Court mentioned the development cooperation objectives as laid down in the Treaty in (then) Articles 177–81 EC Treaty (now Articles 208–11 TFEU) to determine that these Articles referred not only to the sustainable economic and social development of developing countries, their smooth and gradual integration into the world economy and the campaign against poverty, but also to the development and consolidation of democracy and the rule of law, as well as to respect for human rights and fundamental freedoms, whilst
7 See
Case C-91/05, Commission v Council, ECLI:EU:C:2008:288 (ECOWAS). See this volume, ch 51.
536 Tina Van den Sanden complying fully with their commitments in the context of the UN and other international organisations. Second, the Court referred to the European Consensus on Development,8 the main policy document on EU development cooperation, to indicate that there can be no sustainable development and eradication of poverty without peace and security, and that the pursuit of the objectives of the EU’s new development policy necessarily proceeded via the promotion of democracy and respect for human rights. Third, as a result, the Court indicated that the legislature decided to strengthen the development policy framework also at the level of secondary legislation by adopting Regulation 1905/2006,9 which repealed Regulation 443/92. The Court further referred explicitly to Regulation 1717/2006 establishing an Instrument for Stability,10 which was part of the same generation of financing instruments for external action as Regulation 1905/2006 under the 2007–13 budget of the EU, which covered the prevention of state fragility and empowered the Commission to administer technical and financial assistance in the field of strengthening the capacity of authorities involved in the fight against terrorism and organised crime. Nevertheless, as already indicated by the Court at the start of its reasoning, the contested Commission Decision was adopted under the Commission’s competences pursuant to Regulation 443/92, and this Regulation did not contain a reference to the fight against t errorism and international crime. The Court also pointed out that the Commission’s proposal from 200211 to add, amongst other things, the fight against terrorism to the scope of Regulation 443/92 had failed. In that regard, the Court also dismissed the Commission’s arguments that the contested decision fell within the scope of Regulation 443/92 on the basis of its contribution to the strengthening of the capacities of the Philippines’ institutions, the internal stability and security of the Philippines, and the economic development of the Philippines. Hence, the Court concluded that the contested decision pursued an objective concerning the fight against terrorism and internal crime which fell outside the framework of the development cooperation policy pursued by Regulation 443/92 and, as a result, the Commission exceeded the implementing powers conferred upon it by Article 15 of that Regulation. IV. THE IMPORTANCE OF THE CASE
In Philippines Border Management, it would have been difficult for the Court to reach a different conclusion than that the Commission had overstepped its competences in implementing Regulation 443/92. Although the case was rendered in 2007, the Commission’s decision on the approval of the Philippines Border Management project was taken in implementation of Regulation 443/92, which constituted a financial instrument of the older generation and which still had a limited scope. While cooperation with African, Caribbean and Pacific (ACP)
8 Joint declaration by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission on the development policy of the European Union entitled ‘The European Consensus’, [2006] OJ C46/1. See also the new European Consensus on Development: Joint statement by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission, The New European Consensus on Development: Our World, Our Dignity, Our Future, [2017] OJ C210/1. 9 Regulation 1905/2006 of 18 December 2006 establishing a financing instrument for development cooperation, [2006] OJ L378/41. 10 Regulation 1717/2006 of 15 November 2006 establishing an Instrument for Stability, [2006] OJ L327/1. 11 Proposal for a Regulation of the European Parliament and of the Council concerning Community cooperation with Asian and Latin American countries and amending Council Regulation (EC) No 2258/96, COM (2002) 340 final.
Laying the Foundation for a Broad Scope of EU Development Cooperation Policy 537 developing countries12 dates back to the Treaty of Rome,13 it is only from the 1970s onwards that the EU’s cooperation with non-ACP developing countries started to take shape.14 In that regard, Regulation 443/92 was only the second financing instrument for non-ACP states15 and was still based on the EU’s flexibility clause contained in Article 352 TFEU. It was only with the Treaty of Maastricht that an express legal basis on development cooperation policy was inserted into the EU Treaties.16 Still, the importance of the Philippines Border Management case follows from the fact that the Court goes into the broader scope of EU development cooperation policy, as it had developed since the adoption of Regulation 443/92, and as was in place at the time of the judgment. As such, the Court lays the fundamentals for its subsequent case law on the broad scope of EU development cooperation policy, which also governs the relationship and delimitation between development cooperation policy and other areas of EU external action. A. The Broad Objectives and Scope of EU Development Cooperation Policy When analysing the case law that defines the scope of EU development cooperation policy, it becomes clear that in this subsequent case law the Court supports the broad definition of EU development cooperation policy on elements that it already referred to in the Philippines Border Management case. First, the Court referred to the broad formulation of the objectives of the EU Treaties on EU development cooperation policy,17 which have always been essential in the Court’s case law to define the scope of this competence. In the Portugal v Council case, the Court established its two-pronged test to define the scope of EU development cooperation policy. First, in order to qualify as a development cooperation agreement, the agreement must pursue the development cooperation objectives, which are broad enough that measures required for their pursuit can concern a variety of specific matters. A development cooperation agreement can therefore contain clauses concerning various specific matters without altering the characterisation of the agreement. Second, the characterisation of the agreement has to be determined having regard to its essential object and not in terms of individual clauses, provided that these did not impose such extensive obligations concerning the specific matters referred to that those obligations in
12 Cooperation with the ACP developing countries was developed under the subsequent partnership agreements and was mainly funded by the European Development Funds (EDFs), which are extra-budgetary funds that are financed by direct contributions from the Member States and are set up by an agreement between the Member States, the Internal Agreement (see Case C-316/91, Parliament v Council, ECLI:EU:C:1994:76 (European Development Fund) See this volume, ch 24. For the period 2014–20, the 11th EDF was in force, set up by the Internal Agreement between the Representatives of the Governments of the Member States of the European Union, meeting within the Council, on the financing of European Union aid under the multiannual financial framework for the period 2014 to 2020, in accordance with the ACP–EU Partnership Agreement, and on the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the Treaty on the Functioning of the European Union applies, [2013] OJ L210/1. 13 See E Grilli, The European Community and the Developing Countries (Cambridge, Cambridge University Press, 1993). 14 Commission Memorandum on a Community policy for development co-operation, 27 July 1971, SEC (71) 2700, 4. 15 The first being Council Regulation 442/81 of 17 February 1981 on financial and technical aid to non-associated developing countries, [1981] OJ L48/8. 16 Arts 130u–130y EC Treaty, later renumbered as Arts 177–81 EC Treaty. 17 Case C-403/05, European Parliament v Commission of the European Communities, ECLI:EU:C:2007:624 (Philippines Border Management) para 56.
538 Tina Van den Sanden fact constitute objectives distinct from those of development cooperation.18 The first criterion of this test directly relates to the development cooperation policy objectives and, in its formulation, the Court confirmed the wide ambit of these objectives by deciding that they could encompass a broad range of elements from other areas. In ECOWAS, the Court further clarified that the objectives of development cooperation policy should not be limited to measures directly related to the campaign against poverty, but should also cover broader economic and social development objectives.19 The Court recalled and confirmed its two-pronged test developed in Portugal v Council in the Philippines PCA case20 and, as such, confirmed the broad objectives of EU development cooperation policy and the broad scope of the development cooperation competence in the post-Lisbon era.21 With this, the Court also confirmed that the Treaty of Lisbon’s reformulation of the objectives of EU development cooperation policy did not limit the objectives of that policy.22 Second, the Court mentioned the successor of Regulation 443/92 – Regulation 1905/2006 establishing a financing instrument for development cooperation (the Development Cooperation Instrument, DCI I)23 – and Regulation 1717/2006 establishing an Instrument for Stability,24 which, as financing instruments of a newer generation, embodied the broader notion of EU development cooperation.25 While Regulation 443/92 contained no references to the fight against terrorism and international crime, the Court pointed out that the Instrument for Stability did empower the Commission to administer assistance in the area of capacity building of authorities involved in the fight against terrorism and organised crime (see also section IVB below).26 The DCI I, in turn, contained several references to border management and capacity building, and policy reform in this area.27 In the Philippines PCA case, the Court also referred to DCI I to support its broad definition of the development cooperation competence and its objectives.28 Third, linked to the previous element, the Court referred to the broad policy notion of EU development cooperation policy as laid down in the European Consensus on Development.29
18 Case C-268/94, Portuguese Republic v Council of the European Union, ECLI:EU:C:1996:461, paras 37–39. See this volume, ch 34. 19 ECOWAS (n 7) para 67. See this volume, ch 51. 20 Case C-377/12, European Commission v Council of the European Union, ECLI:EU:C:2014:1903 (Philippines PCA), paras 38–39. See this volume, ch 67. 21 See also M Broberg and R Holdgaard, ‘Demarcating the Union’s Development Cooperation Policy after Lisbon: Commission v Council (Philippines PCFA)’ (2015) 2 CML Rev 562. 22 On the contrary, in Philippines PCA, the Court referred to the evolution in EU development cooperation policy, which corresponded to an increase in the objectives of development cooperation and in the matters concerned by it: Philippines PCA (n 20) para 42. With the Treaty of Lisbon, current Art 208(1) TFEU identifies the reduction and, in the long term, the eradication of poverty as the primary objective of EU development cooperation. This article therefore no longer includes the other objectives, as laid down earlier in Arts 177–81 EC Treaty. It nevertheless also emphasises that development cooperation has to be conducted within the framework of the principles and objectives of the Union’s external action. This is the result of the introduction of the common external action objectives, laid down in Art 21(2) TEU, and the transfer of certain specific Treaty objectives to this provision. On this issue, see M Cremona, ‘A Reticent Court? Policy Objectives and the Court of Justice’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014) 15–32. 23 Regulation 1905/2006 (n 9). 24 Regulation 1717/2006 (n 10). 25 Philippines Border Management (n 17) para 58. 26 Art 4(1)(a) Regulation 1717/2006 (n 10). 27 Arts 5(2)(h), Art 8(c) and Art 16(2)(c) Regulation 1905/2006 (n 9). 28 Philippines PCA (n 20) para 43. 29 Philippines Border Management (n 17) para 57.
Laying the Foundation for a Broad Scope of EU Development Cooperation Policy 539 The European Consensus on Development30 is the primary policy document on EU development cooperation policy. It defines the EU development cooperation policy, and its primary objective of poverty eradication, in a broad sense as a multidimensional concept, which reflects a broader understanding of poverty eradication which possibly encompasses different areas of EU action.31 In Philippines PCA, the Court referred not only to DCI I, but also to the broad notion of development cooperation and poverty eradication as a multifaceted concept, as formulated in the European Consensus.32 In ECOWAS, as it did in Philippines Border Management and referring back to this case, the Court referred to the well-known premise governing the development–security nexus, as also laid down in the European Consensus, that there can be no sustainable development and eradication of poverty without peace and security, and that the pursuit of the objectives of development policy necessarily proceed via the promotion of democracy and respect for human rights (see also below).33 These cases demonstrate the Court’s use of non-legally binding policy documents on Union development cooperation (as well as secondary EU law) as an interpretative tool to support the wide scope of EU development cooperation policy and the choice and scope of the legal basis.34 It should be emphasised that the Court used these policy instruments to support its choice of legal basis, instead of vice versa, that it defined primary law competences by using secondary hard and soft law, which arguably would be in contradiction with the hierarchy of norms.35 Indeed, as indicated by Advocate General (AG) Mengozzi in Philippines PCA, the constitutional significance of the choice of legal basis calls for ‘a certain vigilance’.36 In that regard, it is important to return to the second step in the Court’s two-pronged test to define the scope of EU development cooperation policy, as referred to above, ie in order to fall under the development cooperation competence, individual provisions not only have to contribute to the pursuit of the development cooperation objectives, but must not contain obligations so extensive that they may be considered to constitute objectives distinct from those of development cooperation that are neither secondary nor indirect.37 In Philippines PCA, the Court further defined this step to indicate that these provisions cannot determine in concrete terms the manner in which the cooperation will be implemented.38 In order to determine whether this second aspect of the test is fulfilled, the Court therefore used a content-based criterion. Combined with the first aspect, which relates to the objectives of development cooperation policy, the Court applies a balanced centre of gravity test to determine the scope of EU development cooperation.39 This test is also essential in delimitating development cooperation policy from other, strongly related areas of EU external action, such as the Common Foreign and Security Policy (CFSP) in particular. 30 Currently laid down in the European Consensus (n 8). 31 ibid points 11–12. 32 Philippines PCA (n 20) para 42. 33 ECOWAS (n 7) para 66. The Court also referred to the European Council strategy to combat illicit accumulation and trafficking of small arms and light weapons and the Council resolution on small arms in order to further support its findings (para 69). 34 See also B Van Vooren, ‘The Small Arms Judgment in an Age of Constitutional Turmoil’ (2009) 2 Foreign Affairs Review 235; Cremona (n 22), 19; Broberg and Holdgaard (n 21) 562–63. 35 G De Baere and T Van den Sanden, ‘Interinstitutional Gravity and Pirates of the Parliament on Stranger Tides: The Continued Constitutional Significance of the Choice of Legal Basis in Post-Lisbon External Action’ (2016) 1 European Constitutional Law Review, 95; M Broberg and R Holdgaard, ‘EU Development Cooperation Post-Lisbon: Main Constitutional Challenges’ (2015) 3 EL Rev 353. 36 Opinion of AG Mengozzi, Case C-377/12, European Commission v Council of the European Union, ECLI:EU:C:2014:29 (Philippines PCA), para 43. 37 Portuguese Republic (n 18) para 39. 38 Philippines PCA (n 20) para 56. 39 See further De Baere and Van den Sanden (n 35) 96–97, 103–08.
540 Tina Van den Sanden B. Relationship and Delimitation between Development Cooperation Policy and Other Areas of EU External Action In Philippines Border Management, the Parliament had argued that the Commission had exceeded its implementing powers by approving a project that aimed to assist the government of the Philippines in enhancing border security and management, with the overall objective to assist the Philippines in the implementation of UNSC Resolution 1373 (2001) in the fight against terrorism and international crime. While Regulation 443/92 did not cover assistance in the area of border management or the fight against terrorism, as indicated by the Court, financing instruments of a later generation would enable the provision of development cooperation and financial assistance in these areas. Under the EU budget 2014–20, the DCI II foresees supporting border management in the context of the security and development nexus, and in view of fighting organised crime and various forms of trafficking.40 The Instrument contributing to Stability and Peace (IcSP), to whose predecessor the Court referred in Philippines Border Management, covers capacity building in the fight against terrorism in particular.41 With the introduction in its 2017 amendment of capacity building of military actors in support of development and security for development,42 this instrument is further essential in the management of the development–security nexus. The new, broad Neighbourhood, Development and International Cooperation Instrument under the EU budget (2021–27) integrates the DCI II and the IcSP into an overarching financing instrument, which includes assistance in the area of border management and in addressing global and transregional threats and emerging threats, such as terrorism.43 The fight against international terrorism and the scope of the related legal bases were also the subject of Smart Sanctions,44 a case which is also crucial in the case law on the delimitation of the CFSP from the non-CFSP. In the Smart Sanctions case,45 in a ‘preliminary observations’ section, the Court returned to the traditional principles of the case law on choice of legal basis to conclude that a combination of Articles 75 and 215 TFEU was impossible because of procedural incompatibilities.46 Also, in Tanzania Agreement,47 the Court used the centre of gravity test to conclude that the agreement fell predominantly within the CFSP. On the development–security nexus in particular, pre-Lisbon, the Court’s assessment of the delimitation between development and CFSP in ECOWAS also reflected a centre of gravity
40 Regulation 233/2014 of 11 March 2014 establishing a financing instrument for development cooperation for the period 2014–2020, [2014] OJ L77/44. 41 Regulation 230/2014 of 11 March 2014 establishing an instrument contributing to stability and peace, [2014] OJ L77/1. 42 Regulation 2017/2306 of 12 December 2017 amending Regulation (EU) No 230/2014 establishing an instrument contributing to stability and peace, [2017] OJ L335/6. 43 Regulation 2021/947 (EU) of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument-Global Europe, amending and repealing Decision No 466/2014/EU and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, Euratom) No 408/2009 ([2021] OJ L209/01). 44 Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:472 (Smart Sanctions). See this volume, ch 60. 45 For a detailed analysis of this case law, see G De Baere, ‘From “Don’t Mention the Titanium Dioxide Judgment” to “I Mentioned It Once, but I Think I Got Away with It All Right’: Reflections on the Choice of Legal Basis in EU External Relations after the Legal Basis for Restrictive Measures Judgment’ (2013) 15 Cambridge Yearbook of European Legal Studies 537. 46 Smart Sanctions (n 44) paras 42–46. 47 Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435, paras 43–44, confirming ECOWAS (n 7) and the case law referred therein. See this volume, ch 66.
Laying the Foundation for a Broad Scope of EU Development Cooperation Policy 541 test, but this test was mainly based on the specific features of the delimitation between CFSP and non-CFSP in the pre-Lisbon era.48 In order to determine whether the measure could have been adopted on the basis of development cooperation policy, and therefore infringed former Article 47 EC Treaty (now Article 40 TEU), the Court referred to the broad formulation of the development cooperation Treaty objectives, as put forward in Portugal v Council and Philippines Border Management (see also above).49 Post-Lisbon, in Commission v Council (Kazakhstan), the Court confirmed the application of the centre of gravity test50 and the specific test on the scope of EU development cooperation policy51 to delimitate development cooperation policy and the CFSP.52 In Kazakhstan, the Court concluded that the CFSP elements included in the Partnership and Cooperation Agreement (PCA) between the EU and Kazakhstan could not be regarded as distinct components of the agreement but that they were, on the contrary, incidental to that agreement’s two main components, constituted by development cooperation and the common commercial policy.53 The Court recently further confirmed this case law in Commission v Council (Armenia).54 With its reference to and application of the Philippines PCA test in Kazakhstan and Armenia in delimitating the CFSP and development cooperation policy, the Court confirmed the broad scope of EU development cooperation policy and international agreements in this area, as developed in Portugal v Council, Philippines Border Management, ECOWAS and Philippines PCA. As such, the more recent case law on both the scope of EU development cooperation policy and its delimitation with other EU external competences echoes the Philippines Border Management case. V. ADDITIONAL READING Blockmans, S and Koutrakos, P, Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018), 560. Broberg, M and Holdgaard, R, ‘EU Development Cooperation Post-Lisbon: Main Constitutional Challenges’ (2015) 3 EL Rev 349. De Baere, G and Van den Sanden, T, ‘Interinstitutional Gravity and Pirates of the Parliament on Stranger Tides: The Continued Constitutional Significance of the Choice of Legal Basis in Post-Lisbon External Action’ (2016) 12 European Constitutional Law Review 85. Van den Sanden, T, EU Development Cooperation Policy: Between Constitutional Strictures and Policy Objectives (Cheltenham, Edward Elgar, forthcoming).
48 This judgment was rendered pre-Lisbon and was based on the delimitation clause laid down in former Art 47 TEU, which gave priority to the non-CFSP over the CFSP. Currently, by contrast, Art 40 TEU establishes a mutual non-affectation clause. The Court’s reasoning is therefore not as such transposable to the post-Lisbon legal framework. See further: De Baere and Van den Sanden (n 35) 103–05. 49 ECOWAS (n 7) 63–70. 50 Case C-244/17, European Commission v Council of the European Union, ECLI:EU:C:2018:662 (Kazakhstan), para 38. See this volume, ch 86. 51 ibid para 45. 52 For a detailed analysis of this case and the effect on the EU’s Treaty practice, see P Van Elsuwege and G Van der Loo, ‘Legal Basis Litigation in Relation to International Agreements: Commission v Council (Enhanced Partnership and Cooperation Agreement with Kazakhstan)’ [2019] CML Rev 1333. 53 Kazakhstan (n 50) paras 43–47. In para 45, the Court explicitly confirms the application of the second step in the Philippines PCA test. 54 Case C-180/20, European Commission v Council of the European Union, ECLI:EU:C:2021:658 (Armenia).
542
51 The Pre-Lisbon Machinery for the Delimitation of the CFSP: Commission v Council (ECOWAS) RASS HOLDGAARD AND GUSTAV KROHN SCHALDEMOSE* Case C-91/05, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2008:288 (ECOWAS), delivered 30 May 2008. KEYWORDS Action for annulment – Jurisdiction of the Court – Article 47 TEU (now Article 40 TEU) – Choice of legal basis – Distinction between Common Foreign and Security Policy (CFSP) and development cooperation policy – Competence – Combating the proliferation of small arms and light weapons.
I. INTRODUCTION
I
n ECOWAS,1 the Court sharply cut a Gordian Knot in the pre-Lisbon relationship between the European Community (EC) and the Common Foreign and Security Policy (CFSP) pillar.2 The seminal Grand Chamber judgment made clear that, before the Treaty of Lisbon, former Article 47 TEU3 (now Article 40 TEU) provided a solution to
* All opinions expressed herein are personal to the authors. 1 Case C-91/05, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2008:288 (ECOWAS), also known as Small Arms and Light Weapons, the Small Arms case, or simply the SALW case. 2 Prior to the entry into force of the Treaty of Lisbon on 1 December 2009, the EU was based on a three-pillar structure introduced by the Treaty of Maastricht, which entered into force on 1 November 1993. The three pillars were: the European Communities under the EC Treaty (first pillar), the Common Foreign and Security Policy (CFSP) under Title V of the TEU (second pillar) and Cooperation in the Field of Justice and Home Affairs (JHA) under Title VI of the TEU (third pillar). 3 The article reads: ‘Subject to the provisions amending the Treaty establishing the European Economic Community with a view to establishing the European Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community, and these final provisions [Title VIII of the TEU], nothing in this Treaty shall affect the Treaties establishing the European Community or the subsequent Treaties and Acts modifying or supplementing them.’
544 Rass Holdgaard and Gustav Krohn Schaldemose the delimitation of borders between the CFSP and the EC external competences by giving precedence to the EC and excluding recourse to a dual legal basis4 across the EC and CFSP pillars. Specifically, the Court found that by using a CFSP decision of the EU supporting the Economic Community of West African States (ECOWAS) in the combat against the proliferation of small arms and light weapons, the Council had impinged upon EC competence in the field of development cooperation, thus violating Article 47 TEU. It did so by employing a rather broad notion of development cooperation policy that was unexpected for some, including the Advocate General (AG), and unconvincing in the hindsight view of others. In this way, the Court bolstered the ‘Community method’ and thus its own jurisdiction in the development of EU external action. ECOWAS was the first time that the Court ruled on Article 47 TEU in relation to the delimitation between the first (EC) and second (CFSP) pillars, as other boundary-policing cases leading up to ECOWAS were all between the first and third (Justice and Home Affairs, JHA5) pillars.6 It was also the last time. Not long after the judgment was delivered on 30 May 2008, the Treaty of Lisbon entered into force on 1 December 2009. This treaty amendment entailed the depillarisation and other significant changes to the constitutional relationship between the CFSP and the other external competences (which are now all provided explicitly for in the TFEU). In particular, the former Article 47 TEU has been replaced by the current Article 40 TEU, which has substituted the old priority of the EC competence with an equal protection of the CFSP and the TFEU competences. As Dashwood has elaborated, the difference is that Article 40 TEU no longer ‘provides a means of cutting the Gordian Knot’ in the relationship between the CFSP and other external competences – as confirmed in subsequent case law.7 The value of ECOWAS as a practically important precedence has therefore largely disappeared with the Treaty of Lisbon. Nonetheless, the case remains an historical landmark decision on CFSP matters and development cooperation policy. It is an important reminder of the EU legal order’s concentric circles and its historical structural legal bias towards its Community core. Moreover, ECOWAS is part of the EU legal order’s heritage and continues to serve as guidance for and framer of future cases on the scope of development cooperation policy and, more broadly, on interinstitutional disputes over legal bases.8 EU external relations law has, to a large extent, evolved through these turf wars, which, as the Court has pointed out, have ‘constitutional significance’.9 This battle becomes all the more important in the relationship between other Union policies and the CFSP, which is (still) marked by particularity in the EU legal order.
4 Also denoted ‘multiple legal basis’ or ‘joint legal basis’. 5 Title VI TEU. 6 See Case C-170/96, Commission v Council, ECLI:EU:C:1998:219 (Airport Transit Visa); Case C-176/03, Commission v Council, ECLI:EU:C:2005:542 (Environmental Penalities), paras 51 and 53; Case C-440/05, Commission v Council, ECLI:EU:C:2007:625 (Ship-source pollution). See further, eg R van Ooik, ‘Cross-Pillar Litigation before the ECJ: Demarcation of Community and Union Competences’ (2008) 4 European Constitutional Law Review 399. 7 A Dashwood, ‘The Continuing Bipolarity of EU External Action’ in I Govaere, E Lannon, P Van Elsuwege and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2013) 12. For an account of subsequent case law, see s IVB below. 8 Similarly, G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 110. For an example, see Opinion of AG Kokott, Case C-244/17, Commission v Council, ECLI:EU:C:2018:364 (Kazakhstan), paras 60 and 78. See this volume, ch 86. 9 Opinion 2/00, Cartagena Protocol on Biosafety, ECLI:EU:C:2001:664, para 5. See this volume, ch 39.
The Pre-Lisbon Machinery for the Delimitation of the CFSP 545 II. FACTS
The case concerned CFSP measures providing technical and financial assistance for stopping arm trade in West Africa. On 12 July 2002, the Council adopted a Joint Action10 on combating the accumulation and spread of small arms and light weapons,11 based on Article 14 TEU – one of the provisions of Title V of the TEU on the CFSP. To implement that Joint Action, on 2 December 2004, the Council adopted a Decision12 to provide financial and technical assistance to ECOWAS in the framework of the Moratorium on Small Arms and Light Weapons. The Decision was adopted exclusively on a CFSP legal basis.13 The Commission challenged the Council’s choice of legal basis. When the draft of the Decision was discussed in November 2004, the Commission, which had not protested at the time the Joint Action was adopted in 2002, now took the position that this Joint Action should not have been adopted under the CFSP. Rather, it fell under the EC’s development cooperation policy. More specifically, the Commission argued, combating the proliferation of small arms and light weapons had become an integral part of development policy as evidenced by the Cotonou Agreement.14 This agreement, in Article 11 (‘Peace-building policies, conflict prevention and resolution’), specifically mentioned the fight against the accumulation of small arms and light weapons as a relevant activity. All this implied, according to the Commission, an infringement of (then) Article 47 TEU, which stipulates that nothing in the TEU shall affect the EC Treaty (later TFEU). Taking the view that the Decision had been adopted on an incorrect legal basis, and that the then Article 47 TEU had thus been infringed, the Commission, supported by the Parliament, requested the Court to annul the Decision and to declare the Joint Action illegal, and hence inapplicable. As a defendant, the Council was supported by six Member States, namely Denmark, France, the Netherlands, Spain, Sweden and the UK. While there was no objection to the Court’s jurisdiction to review the action as such, the Council and the Spanish and UK governments nonetheless challenged the admissibility of the plea that the Joint Action was illegal. In particular, they contested the Court’s jurisdiction to rule on the legality of a measure falling within the CFSP. Moreover, they submitted that a privileged applicant, such as the Commission, was barred from pleading the illegality of an act that it could have sought annulled directly by an action under (then) Article 230 EC (now Article 263 TFEU) (within a period of two months and on the ground that it should have been based on an EC competence). Since the Commission had not done so, it was too late to raise the plea of illegality of the Joint Action in the context of the action for annulment of the implementing Decision. On the substance, the Council and all six intervening Member States took the view that there was no infringement of (then) Article 47 TEU, since the campaign against the 10 Joint Actions (as well as Common Positions) were abolished with the Treaty of Lisbon. 11 Council Joint Action 2002/589/CFSP of 12 July 2002 on the European Union’s contribution to combating the destabilising accumulation and spread of small arms and light weapons and repealing Joint Action 1999/34/CFSP, [2002] OJ L191/1. 12 Council Decision 2004/833/CFSP of 2 December 2004 implementing Joint Action 2002/589/CFSP with a view to a European Union contribution to ECOWAS in the framework of the Moratorium on Small Arms and Light Weapons, [2004] OJ L359/65. 13 As its legal basis, the Decision referred to said Joint Action in conjunction with Art 23(2) TEU. 14 Partnership Agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, Signed in Cotonou on 23 June, [2000] OJ L317/3. Approved on behalf of the Community by Council Decision 2003/159/EC of 19 December 2002, [2003] OJ L65/27. It entered into force on 1 April 2003.
546 Rass Holdgaard and Gustav Krohn Schaldemose proliferation of small arms and light weapons was correctly based on a CFSP legal basis, as it only incidentally related to development cooperation policy. With regard to the interpretation of the then Article 47 TEU, the Council submitted that the provision aimed to maintain the balance of powers established by the EU Treaties and could not be interpreted as aiming to protect the EC competences to the detriment of the CFSP. In contrast to the Commission, the Council stated that the then Article 47 TEU did not create a ‘fixed boundary’15 between the EC and the CFSP competences. Instead, the Council said, it was necessary to take into account the nature of the competences conferred upon the EC in the sector concerned, specifically the complementary character of EC competence in the field of development cooperation. The UK further submitted that the then Article 47 TEU could only be infringed when two conditions were met. First, the Community must be competent to adopt a measure having the same purpose and content. Second, the measure must encroach on EC competences, which is only the case if the Union decision prevents or limits the exercise of that EC competence, thus creating a pre-emptive effect on EC competence. Such a pre-emptive effect is never possible in areas of concurrent competences, like development cooperation.16 III. THE COURT
Initially, addressing the issue of admissibility, the Court considered whether it had jurisdiction to rule on the dispute between the Commission and the Council revolving around a CFSP measure – and concluded in the affirmative. Although the contested measures (the underlying Joint Action and the implementing Decision) were based on CFSP provisions for which the Court had no jurisdiction, the Court emphasised that it follows from (then) Article 46(f) TEU17 that it did have jurisdiction to rule on matters concerning (then) Article 47 TEU. It was thus the task of the Court to ensure that acts which, according to the Council, fall within the scope of Title V of the TEU on the CFSP and which, by their nature, are capable of having legal effects do not encroach on competences conferred by the EC Treaty (now TFEU). In short, the Court found that it had jurisdiction to rule on the annulment action concerning an alleged infringement of the then Article 47 TEU. Contrary to the Council and the Spanish and UK governments, the Court found that this jurisdiction also covered the plea of illegality of the Joint Action. The Council and the two Member States’ other argument, that the Commission as a privileged applicant was barred from raising a plea of illegality that could have been raised earlier in accordance with Article 230 EC (now Article 263 TFEU), had been explicitly brushed away by AG Mengozzi.18 The Court, on the other hand, did not address that argument explicitly, but seemed to dismiss it too, though more implicitly.19 On the substance, the Court’s reasoning can be split into three consecutive steps: first, the Court essentially interpreted the then Article 47 TEU as a hierarchical conflict rule in favour of the EC Treaty (now TFEU). In this manner, if the provisions of a measure adopted under the CFSP 15 ECOWAS (n 1) para 36 (the Commission’s view) cf para 43 (the Council’s view). 16 On the UK’s use of ‘concurrent competence’, see J Heliskoski, ‘Small Arms and Light Weapons within the Union’s Pillar Structure: An Analysis of Article 47 of the EU Treaty’ (2008) 33 EL Rev 898, 906. 17 Today, there are three articles in both the TEU and the TFEU which concern the role of the Court: Art 24(1) TEU, Art 40 TEU and Art 275 TEU. 18 See Opinion of AG Mengozzi, Case C-91/05, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2007:528 (ECOWAS), paras 36–54. 19 On this point, see further s IVA below.
The Pre-Lisbon Machinery for the Delimitation of the CFSP 547 on account of both their aim and their content have as their main purpose the implementation of a policy conferred by the EC Treaty on the Community, and if they could properly have been adopted on the basis of the EC Treaty, the Court must find that those provisions infringe Article 47 EU.20
The reasoning turned on the then Article 47 TEU’s expression ‘nothing in this Treaty shall affect the [EC] Treaty’, read together with the then Articles 2 and 3 TEU, which provided that the Union shall aim to maintain and build on the acquis communautaire and on previous case law concerning the demarcation between first (EC) and third (JHA) pillar competence.21 Accordingly, the Court noted that an infringement of the then Article 47 TEU arose from the fact that a measure having legal effects adopted by the Union on the basis of the TEU could have been adopted on the basis of the EC Treaty (now TFEU). On that basis, and dismissing the arguments of the Council and the UK, and thus following the AG,22 the Court opined that the nature of EC competence is irrelevant in determining whether EC competence has been encroached upon. Instead, this question relates to the attribution and, thus, the very existence of that competence.23 Second, the Court examined the demarcation of the areas of development cooperation policy and the CFSP, respectively. To begin with, the Court pointed out the former’s broad objectives and stated that development cooperation policy (then Articles 177–81 EC, now Articles 208–11 TFEU) concerns not only the economic and social development of developing countries and the campaign against poverty, but also the development and consolidation of democracy and the rule of law, as well as respect for human rights and fundamental freedoms.24 Yet, if a measure was to fall within the development cooperation policy, it must contribute to the pursuit of that policy’s economic and social development objectives.25 In that context, and relying on a number of policy documents (notably the 2006 ‘European Consensus’26 text), the Court stated that certain measures aiming to combat the proliferation of small arms and light weapons can contribute to the elimination or reduction of obstacles to the economic and social development of those countries. However, a concrete measure aiming to combat such proliferation may be adopted under EC development cooperation policy ‘only if that measure, by virtue both of its aim and its content, falls within the scope of the competences conferred by the EC Treaty on the Community in that field’.27 The Court then recalled its traditional ‘centre of gravity’ case law,28 whereby a measure having a twofold aim or twofold component must be based on a single legal basis required by the main aim or component. If a measure simultaneously has a number of objectives or components without one being incidental to the other, the measure will have to be founded,
20 ECOWAS (n 1) para 60. The phrase ‘hierarchic conflict rule’ was coined by B van Vooren, ‘EU–EC External Competences after the Small Arms Judgment’ (2009) 14 European Foreign Affairs Review 7, 13. 21 ECOWAS (n 1) paras 59–60, with reference to Environmental Penalties (n 6) paras 51 and 53; Ship-source pollution (n 6) paras 69–74. 22 For the AG’s detailed analysis, see Opinion AG Mengozzi in ECOWAS (n 18) paras 96–127. 23 ECOWAS (n 1) para 61, with reference to Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant), para 93. See this volume, ch 47. 24 ECOWAS (n 1) paras 65–66, with reference to Case C-403/05, Parliament v Commission, ECLI:EU:C:2007:624 (Philippines Border Management), paras 56–57. See this volume, ch 50. 25 ECOWAS (n 1) para 67, with reference to Case C-268/94, Portugal v Council (India Cooperation Agreement), ECLI:EU:C:1996:461, paras 44, 60, 63 and 73. See this volume, ch 34. 26 Joint Statement by the Council and the representatives of the governments of the Member States meeting within the Council, the Parliament and the Commission on the European Union Development Policy, [2006] OJ C46/1. 27 ECOWAS (n 1) para 72. 28 ibid para 30 with reference to, eg Case C-94/03, Commission v Council, ECLI:EU:C:2006:2 (Rotterdam Convention I), para 35; and with regard to the application of Art 47 EU, Environmental Penalties (n 6) paras 51–53; Ship-source pollution (n 6) paras 71–73. See for a detailed analysis of the Rotterdam Convention I case, see this volume, ch 45.
548 Rass Holdgaard and Gustav Krohn Schaldemose exceptionally, on various corresponding legal bases. Such a solution was, however, by virtue of the then Article 47 TEU, impossible in cross-pillar cases. In effect: Since Article 47 EU precludes the Union from adopting, on the basis of the EU Treaty, a measure which could properly be adopted on the basis of the EC Treaty, the Union cannot have recourse to a legal basis falling within the CFSP in order to adopt provisions which also fall within a competence conferred by the EC Treaty on the Community.29
In a third and final step, the Court established the aim of the contested Decision, and then its content. Here, the Court was navigating between completely divergent views: the view of the Commission and the Parliament stating that the decision concerned development cooperation, and the view of the Council, the supporting Member States and the AG stating that the Decision related at least principally to security and peace. The Court chose its own path. In the end, it found that the Decision ‘contained two components, neither of which can be considered to be incidental to the other, one falling within Community development cooperation policy and the other within the CFSP’.30 In reaching that conclusion, the Court first opined that the fact the contested decision implemented a joint action – a CFSP measure – was not decisive, as it followed from that Joint Action that it could be implemented both by the Union under the CFSP and by the Community. Instead, an examination of the contested Decision was decisive. Concerning the Decision’s aim, the Court found (in contrast to the AG)31 that in comparison with its objectives of peace and security, the Decision’s concern to eliminate or reduce obstacles to the development in West Africa was not purely incidental. The content of the Decision, on the other hand, was not decisive, since a decision to make funds available and to give technical assistance to a group of developing countries in order to draft a convention was capable of falling both under the development cooperation policy and under the CSFP.32 In the Court’s assessment, the Decision hence simultaneously concerned the CFSP and EC competence on the development cooperation policy. Given that the then Article 47 TEU precluded the use of dual legal basis and gave priority to the EC Treaty (now TFEU), the Court concluded that the Council had infringed the then Article 47 TEU by adopting the contested Decision on a CFSP legal basis and therefore annulled the Decision. Since the Court annulled the Decision because of its own defects, it did not find it necessary to examine the plea of illegality of the Joint Action. IV. THE IMPORTANCE OF THE CASE
Whilst ECOWAS has only been cited to a limited extent in subsequent case law by the Court itself,33 the judgment has been dealt with rather extensively by academia,34 where it is generally 29 ECOWAS (n 1) para 77. 30 ibid para 108. 31 The AG found, in his centre of gravity assessment, that the objective of improving social and economic conditions in West African populations ‘appeared rather remote, indirect and secondary by comparison with that of preserving the regional security of the Member States of ECOWAS’. In this regard, see, Opinion of AG Mengozzi, ECOWAS (n 18) paras 204–06 and 213. 32 The Court stated in ECOWAS (n 1) para 104 that ‘it is only in light of the aims that they pursue that a financial contribution can be regarded as falling within the scope of the CFSP or of Community development policy’. 33 See Case T-262/10, Microban International and Microban (Europe) v Commission, ECLI:EU:T:2011:623, para 43; Case C-402/05 P, Kadi and Al Barakaat International Foundation v Council and Commission, ECLI:EU:C:2008:461, para 292; Case C-301/06, Ireland v Parliament and Council, ECLI:EU:C:2009:68, paras 76–77; Case C-155/07, Parliament v Council, ECLI:EU:C:2008:605, paras 34–36; Case C-370/12, Pringle, ECLI:EU:C:2012:756, para 68; and Case C-377/12, Commission v Council, ECLI:EU:C:2014:1903 (Philippines PCA), para 44. See this volume, ch 67. 34 See, eg Butler (n 8) 108–11; A Dashwood, ‘Article 47 TEU and the Relationship between First and Second Pillar Competences’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features
The Pre-Lisbon Machinery for the Delimitation of the CFSP 549 considered as an important landmark decision. Indeed, ECOWAS is important for (at least) the following reasons. Firstly, the judgment clarified some issues pertaining to the admissibility of CFSP matters before the Court (section IVA). Secondly and most importantly, it is the first and only case in which the Court has ruled on the now defunct Article 47 TEU in relation to the delimitation between the first (EC) and second (CFSP) pillars (section IVB). Thirdly, ECOWAS is another brick in the road towards the Court’s widening of the scope of the Union’s development cooperation policy competence (section IVC). A. The Court’s Jurisdiction on CFSP Matters ECOWAS was the first and only occasion for the Court to review the legality of a CFSP measure in order to decide whether it had been adopted in violation of the then Article 47 TEU.35 To be sure, the Court had previously reviewed measures on the basis of that provision, but only in relation to acts adopted pursuant to the third (JHA) pillar.36 Although the Court’s jurisdiction to review the CFSP-related action as such was not challenged, the Court used the opportunity to confirm its competence and task under the then Article 47 TEU; that is, in short, to ensure that the then Article 47 TEU was complied with. In this context, the Court referred to the terminology from its previous Article 47 case law,37 that it is its ‘task … to ensure acts which, according to the Council, fall within the scope of Title V (TEU)’.38 However, in ECOWAS, the Court added a new condition for its jurisdiction over such acts, in that they, ‘by their nature, are capable of having legal effects’.39 It is the Court’s task to ensure that such acts do not encroach upon the powers conferred by the EC Treaty (now TFEU) on the Community. The Court thus seemingly introduced an additional element (‘which by their nature, are capable of having legal effects’) in the application of its then Article 47 TEU jurisdiction. One may wonder about the reasons behind and the potential implications of this new element, especially in view of the Court’s silence as regards the meaning of the phrase. The phrase has been used again in just one subsequent case, and in that case, too, the Court remained silent as to its meaning.40 The meaning behind the phrase thus remains a moot point.41 Be that as it may, this short-lived phrase is not used in the case law on Article 40 TEU,42 which replaced Article 47 TEU with the implementation of the Treaty
of a Changing Landscape (Cambridge, Cambridge University Press, 2008); Dashwood (n 7); P Van Elsuwege, ‘EU External Action after the Collapse of the Pillar Structure: In Search of a New Balance between Delimitation and Consistency’ (2010) 47 CML Rev 987; Heliskoski (n 16); C Hillion and R Wessel, ‘Competence Distribution in EU External Relations after ECOWAS: Clarification or Continued Fuzziness?’ (2009) 46 CML Rev 551; van Ooik (n 6); van Vooren (n 20); B van Vooren, ‘The Small Arms Judgment in an Age of Constitutional Turmoil’ (2009) 14 European Foreign Affairs Review 231. 35 On the Court’s jurisdiction in the field of the CFSP, see generally Butler (n 8) 145–222; C Hillion and R Wessel, ‘The Good, the Bad, and the Ugly: Three Levels of Judicial Control over the CFSP’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018) 65–88. 36 See cases cited above at n 6. 37 ibid. 38 ECOWAS (n 1) para 33. 39 ibid. 40 Ireland v Parliament and Council (n 33) para 77. 41 For a detailed discussion of that point, see Hillion and Wessel (n 34) 564–65. 42 See most recently Case C-72/15, Rosneft, ECLI:EU:C:2017:236, para 85: ‘As regards acts adopted on the basis of provision relating to the CFSP, it is the task of the Court to ensure, in particular, under the first clause of the second paragraph of Article 275 TFEU and under Article 40 TEU, that the implementation of that policy does not impinge upon the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union’s competences under the FEU Treaty.’ See this volume, ch 81.
550 Rass Holdgaard and Gustav Krohn Schaldemose of Lisbon and substituted the old priority of the EC competence with an equal footing of the CFSP and TFEU competences (see further in section IVB).43 While there was no objection to the Court’s jurisdiction regarding the Decision in the context of an annulment action brought under (then) Article 230 EC (now Article 263 TFEU), there was opposition to its competence to review the legality of the Joint Action through the procedure set out in (then) Article 241 EC (and now Article 277 TFEU). Although the Court decided not to examine the plea of illegality, given its annulment of the contested decision, the Court nevertheless confirmed its jurisdiction under Article 230 EC ‘to consider the pleas invoked in accordance with Article 241 in so far they allege an infringement of Article 47 EU’ (emphasis added).44 Similarly, the Court pointed out more generally that ‘the provisions of the EC Treaty concerning the powers of the Court and the exercise of those powers are applicable to Article 47 TEU’ (emphasis added).45 Though perhaps not as clear (or as extensively dealt with as by the AG46), the Court nonetheless, at least implicitly, seemed to make two important points. First, the Court thereby suggested – as opposed to the view of the Council and the Spanish and UK governments – that privileged applicants are not barred from pleading the illegality of an act, the annulment of which could have been sought directly by an action under Article 230 EC (now Article 263 TFEU).47 Secondly and more generally, it seems that the Court also implied that all judicial procedures spelled out in the EC Treaty (now TFEU), and not only that of Article 230 EC (now Article 263 TFEU), could be used to ensure that the then Article 47 EU was complied with. Given that this reading of the judgment is correct, ECOWAS here made a clarification that had ramifications, such as a possibility to use then Article 234 EC (now Article 267 TFEU) on the preliminary reference procedure to challenge the validity of a CFSP measure in the context of national proceedings in a Member State48 – something now confirmed by the Rosneft judgment in the post-Lisbon era.49 B. The then Article 47 TEU and the Relationship between the EC and CFSP Competences The main contribution of ECOWAS to the development of EU external relations law is its findings on the then Article 47 TEU and the relationship between the EC and the CFSP competences. The judgment in ECOWAS continued a line of pre-Lisbon cases in which the Court upheld actions brought against acts of the Council on the ground that they violated the then
43 With the Treaty of Lisbon, there are now three articles in both the TEU and TFEU which stipulate the role of the Court in relation to CFSP matters: Art 24(1) TEU, Art 40 TEU and Art 275 TEU. In short, these provisions exclude the Court from jurisdiction in the CFSP domain, except in two situations: firstly, the Treaty of Lisbon has given the Court jurisdiction to review the legality of CFSP decisions imposing restrictive measures against natural or legal persons; and secondly, the Court is entitled to guard the frontier of the CFSP and TFEU competence in accordance with Art 40 TEU. 44 ECOWAS (n 1) para 34. 45 ibid para 31. 46 See Opinion of AG Mengozzi in ECOWAS (n 18) paras 34–72. 47 To that effect, see Case T-190/12, Tomana and Others v Council and Commission, ECLI:EU:T:2015:222, para 86, which was appealed but not on that specific point; cf Case C-330/15 P, Tomana and Others v Council and Commission, ECLI:EU:C:2016:601; see also Case C-442/04, Spain v Council, ECLI:EU:C:2008:276, para 22; Hillion and Wessel (n 34) 569; Heliskoski (n 16) 904. But see van Oiik (n 6) 405, who seemingly takes the view that the Court left this question unsolved. 48 See also Hillion and Wessel (n 34) 570; van Oiik (n 6) 405–06. 49 Rosneft (n 42).
The Pre-Lisbon Machinery for the Delimitation of the CFSP 551 Article 47 TEU;50 cases that thus bolstered the ‘Community method’. However, the case stands out as the first and only case on Article 47 TEU concerning the delimitation of the EC and CSFP pillars. On that matter, ECOWAS certainly is the constitutional milestone. ECOWAS made clear that, before the Treaty of Lisbon, the then Article 47 TEU gave priority to the EC over the CFSP. In doing so, the Court transposed its EC-related case law on the choice of legal basis, essentially based on a centre of gravity test, to the EC/CFSP interface. On that basis, the Court found the Decision to be a genuine cross-pillar measure as it pursued a twofold intrinsically linked aim:51 on the one hand, the CFSP aim of preserving peace and security, and, on the other hand, the aim of contributing to the social and economic development of West Africa. Ordinarily in the centre of gravity reasoning, when several EC legal bases were relevant, the solution would be to base the measure on all of those. However, the Court found that the then Article 47 TEU, as a matter of principle, precluded such a multiple legal basis solution across the EC and CFSP pillars. As recalled, the Court’s reasoning turned on an interpretation of the then Article 47 TEU, read (for the first time explicitly52) in the light of the common provisions in Articles 2 and 3 TEU as a hierarchical conflict rule in favour of the EC Treaty. Thus, if provisions in a measure adopted under the CFSP competence, on account of both their aim and their content, have as their main purpose the implementation of a policy conferred by the EC Treaty on the Community, and if they could properly have been adopted on the basis of the EC Treaty, the Court must find that those provisions infringe Article 47 EU (emphasis added).53
By inserting the proviso of ‘main purpose’, the Court importantly qualified the Commission’s strict reading of the then Article 47 TEU that whenever a measure could properly have been adopted under the EC competence it should be. The Court thus seemed to implicitly recognise the possibility to adopt CFSP measures that incidentally also relate to the EC Treaty (now TFEU).54 It follows from the Court’s reasoning that the superiority of the EC competence played out precisely in a situation like ECOWAS, where the ‘main purpose’ was twofold. A dual legal basis was excluded, and the EC competences would take precedence over the CFSP, regardless of their nature (exclusive, shared or concurrent). Accordingly, the Court seemingly found that, as a matter of principle, the then Article 47 TEU simply excluded the use of such a dual legal basis. The Court provided no further elaboration on this central point. In particular, the Court seemingly assumed a dual legal basis was excluded per se because of the hierarchy between the CFSP and the EC prescribed in the then Article 47 TEU. Thus, the Court did not follow the approach suggested by AG Mengozzi, who – with reference to the established Titanium Dioxide case law – rejected55 recourse to dual 50 See cases cited above at n 6. But see, the subsequent Ireland v Parliament and Council (n 33). In that pre-Lisbon case concerning the EC/JHA interface, the Court dismissed a claim brought by Ireland that the Data Rentention Directive (Directive 2006/24/EC) should have had a JHA-legal basis and thus violated Art 47 TEU. 51 Dashwood has noted that the judgment may have been avoided if the objectives of CFSP matters and the development cooperation had not been made simultaneously; see Dashwood (n 34) 99. 52 As noted by Hillion and Wessel (n 34) 573. 53 ECOWAS (n 1) para 60. 54 For that reason, some argue that the Court introduced a ‘de minimis rule’ in the application of Art 47 and moved away from the fixed boundary approach argued by the Commission; see Hillion and Wessel (n 34) 576. 55 Case C-300/89, Commission v Council, ECLI:EU:C:1991:244 (Titanium Dioxide), paras 17–21, as reaffirmed in, eg Case C-178/03, Commission v Parliament and Council, ECLI:EU:C:2006:4, paras 42–43. Most recently, and postLisbon, paras 17–21 of the Titanium Dioxide judgment was explicitly cited by the Court in Case C-130/10, Parliament v Council, ECLI:EU:C:2012:472 (Smart Sanctions), paras 45–46. See this volume, ch 60. See further G De Baere, ‘From “Don’t Mention the Titanium Dioxide Judgment” to “I Mentioned It Once, but I Think I Got Away with It All
552 Rass Holdgaard and Gustav Krohn Schaldemose legal basis because of the incompatibility of the decision-making procedures under the TEU and the EC Treaty, respectively.56 Conclusively, the Court in ECOWAS interpreted the then Article 47 TEU to be a one-way protection of the EC competence and, as a matter of principle, excluded the use of a cross-pillar dual legal basis. It has been argued that this interpretation of the then Article 47 TEU was not unproblematic in light of the duty of consistency. The Court itself highlighted that this duty was enshrined in the then Article 3(2) TEU57 and concretised in the contested CFSP measures,58 whilst at the same time annulling the Decision in light of Article 47 TEU but leaving the Joint Action as it were. Arguably, this is not the best starting point to avoid inconsistencies, unless, of course – as the Court must have assumed – higher constitutional principles of hierarchy overruled such considerations. Understandably, the Court has been criticised on this point for trying to ‘have the cake and eat it too’.59 In any event, the judgment was given just before the entry into force of the Treaty of Lisbon, which significantly changed the legal relationship between the CFSP and the TFEU external competences. Most importantly, the former Article 47 TEU has been replaced by current Article 40 TEU, according to which the ‘implementation of [CFSP] shall not affect the application of the procedures and the extent of the powers laid down by the [TFEU]’ and, ‘similarly’, the TFEU shall not affect the CFSP.60 Thus, Article 40 TEU has substituted the old priority of the EC competence with an equal protection of the CFSP and the TFEU competences. Hence, the provision has rightly been coined a ‘mutual non-contamination clause’.61 Article 40 TEU is not the only substantial modification. The Treaty of Lisbon has removed the former Articles 1–3 TEU, which, together with former Article 47 TEU, established the EC’s precedence over the CFSP, as the Court held in ECOWAS. The current Article 1(3) TEU now grants the TEU and TFEU equal legal value, and, according to current Article 47 TEU, the Union has a single legal personality. Moreover, the objectives of the Union’s external action, which can be pursued with TFEU and CFSP measures, are now all contained into Article 21(1) TEU (and referred to in Article 23 TEU).62
Right’: Reflections on the Choice of Legal Basis in EU External Relations after the Legal Basis for Restrictive Measures Judgment’ (2013) 15 Cambridge Yearbook of European Legal Studies 537. 56 See, eg Van Elsuwege (n 34) 1006. But see Hillion and Wessel (n 34) 585, who state that the Court seems to imply that it is because of incompatible procedures. However, such a reading is not supported by the words of the judgment that hinges on Art 47 TEU: ‘However, under Article 47 EU, such a solution [of dual legal basis] is impossible with regard to a measure which pursues a number of objectives or which has several components falling’ (para 76; emphasis added). 57 Notably, Art 3(2), inter alia, reads: ‘[the] union shall ensure consistency of its external relations, security, economic, and development policies’. 58 ECOWAS (n 1) para 87, with reference to, in particular, Art 9 of the Joint Decision and Art 4 of the Decision. 59 Van Vooren (n 20) 24. See also Heliskoski (n 16) 909. 60 Art 40 TEU reads: ‘The implementation of the common foreign and security policy shall not affect the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union competences referred to in Articles 3 to 6 of the Treaty on the Functioning of the European Union. Similarly, the implementation of the policies listed in those Articles shall not affect the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union competences under this Chapter.’ The orthodox view is that the first and second paragraphs of Art 40 TEU have been formulated symmetrically since the Treaty of Lisbon, see Opinion of AG Kokott in Kazakhstan (n 8) para 50. See also Butler (n 8) 62; Heliskoski (n 16) 911; M Cremona, ‘The Position of CFSP/CSDP in the EU’s Constitutional Architecture’ in Blockmans and Koutrakos (n 35) 12–13. However, it has been argued that Art 40 TEU is not symmetrical but rather asymmetrical. For this view, see L Lonardo, ‘Commission v Council (Kazakhstan): The Subject-Matter Question in EU External Relations Law, or the Asymmetry of Article 40 TEU’ (2020) 3 EL Rev 427. 61 Coined by Van Elsuwege (n 34) 1002. 62 Integration of CFSP into EU legal order, see Cremona (n 60).
The Pre-Lisbon Machinery for the Delimitation of the CFSP 553 At the same time, however, the Treaty of Lisbon has maintained some of the CFSP’s particularity as compared to the other external competences (now all) found in the TFEU: the CFSP is ‘subject to specific rules and procedures’,63 it is constitutionally placed apart from other competences,64 and Article 40 TEU itself is a marker of this particularity by its mutual protection of the CFSP and TFEU, respectively.65 As a consequence of these constitutional changes, the Court has dealt with the CFSP/non-CSFP interface differently post-Lisbon. ECOWAS thus quickly ceased to be the reference case on that issue. In that regard, ECOWAS has retired to legal history, though it is still a significant milestone in the development of EU external relations law – a signpost on the long road to achieving more unity in a multi-pillar and increasingly multifaceted EU external relations universe. After the entry into force of the Treaty of Lisbon, the Court has dealt with the delimitation of the CFSP in a series of interinstitutional disputes, notably (and chronologically) Smart Sanctions,66 Mauritius,67 Tanzania68 and Kazakhstan.69 These cases show that the legal basis test is, essentially, not distinct when the CFSP is involved. The Court now uses its normal centre of gravity test, including the Titanium Dioxide doctrine, and Article 40 TEU simply confirms that the Court has jurisdiction to decide on CFSP legal basis questions.70 Accordingly, the Court holds that the choice of legal basis should follow the aim and content of the measure rather than being determined by the CFSP specific procedure. As put by the Court itself, ‘it is not procedures that define the legal basis of a measure but the legal basis of a measure that determines the procedures to be followed in adopting that measure’.71 The Court maintains a ‘predominant purpose or component’ approach which favours a single legal basis where possible. As for the recourse to multiple legal bases, it is recalled that this possibility was ruled out as a matter of principle in ECOWAS. Now, a number of examples of international agreements with joint CFSP and non-CFSP legal bases exist,72 and the Court73 implicitly, and some AGs explicitly,74 acknowledge that such a recourse to multiple 63 Art 24 TEU. 64 The provisions on the CFSP in Ch 2 of Title V of the TEU are placed distant from the rest of external competences all found in the TFEU, notably in Ch V of the TFEU. Art 2(4) TFEU on the CFSP competence underlines this by merely containing a cross-reference to the specific provisions on CFSP in TEU. Art 2(4) TFEU, read together with Art 40 TEU’s proviso that the CFSP competence is distinct from ‘the Union competences referred in Articles 3 to 6 of the [TEU]’, expressly excludes the CFSP competence from the three main categories of exclusive, shared and supporting competence. 65 On the particularities, see, eg Dashwood (n 7). 66 Smart Sanctions (n 55). 67 Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025. See this volume, ch 66. 68 Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435. 69 Case C-244/17, Commission v Council, ECLI:EU:C:2018:662 (Kazakhstan). See this volume, ch 86. 70 The Court adopts the same approach in direct or indirect actions brought by individuals for the annulment of restrictive measures, such as Rosneft (n 42) para 86; Case T-290/17, Stavitsky, ECLI:EU:T:2019:37, para 64 ff. See also Cremona (n 60) 12 and 20. Conversely, it has been argued that the Court in Kazakhstan added a CFSP-specific limp to the normal centre of gravity test based on the aim and content of the measure: namely, the ‘content’ of the measure is ascertained through its legal effects. For this view, see also Lonardo (n 60). 71 Smart Sanctions (n 55) para 80. 72 See, eg Council Decision 2016/2079/EU of 29 September 2016 on the signing, on behalf of the European Union, and provisional application of the Partnership Agreement on Relations and Cooperation between the European Union and its Member States, of the one part, and New Zealand, of the other part, [2016] OJ L321/1. For more examples, see Cremona (n) 60, 12 fn 57. 73 In Kazakhstan (n 69), where the Court applied the predominant purpose or component test without indicating that the possibility of multiple legal basis should be excluded in principle. 74 See Opinion of AG Bot in Case C-658/11, Parliament v Council, ECLI:EU:C:2014:41 (Mauritius), para 39, in which the AG envisaged the possibility of multiple legal bases, but in the end found it unnecessary in that case. To the same effect, see the Opinion of AG Kokott in Case C-263/14, Parliament v Council, ECLI:EU:C:2015:729 (Tanzania), paras 52–53; Opinion of AG Kokott in Kazakhstan (n 8) para 63.
554 Rass Holdgaard and Gustav Krohn Schaldemose legal bases is now possible. In these ways, the replacement of the previous Article 47 TEU with (now) Article 40 TEU and the adjacent adjustments made to the EU’s legal framework, which entailed that the hierarchy between the Community pillar and the CFSP pillar post-Lisbon is removed, have ‘normalised’ legal basis questions involving CFSP components.75 C. Scope of Development Cooperation Policy Finally, it is worth noting that ECOWAS remains part of the legal heritage that contributes to the broad conceptualisation of the EU’s development cooperation policy.76 The Union’s explicit and independent external competences in the field of development cooperation policy came – together with the CFSP – with the Treaty of Maastricht.77 The landmark case on the definition of the scope of this new competence was the India Cooperation Agreement case.78 ECOWAS came after, and clearly confirmed the broad scope and effects of this new external competence – even if only concurrent in nature. ECOWAS confirmed, more specifically, that development cooperation policy also covers cooperation in the field of development, consolidation of the rules of law, and respect for human rights and fundamental freedoms. This is clear also from the wording of the new provisions on development cooperation policy inserted with the Maastricht Treaty and thus not very surprising. As a novelty in ECOWAS, the Court (in paragraphs 66 et seq) added that the European Consensus (a soft law instrument) confirmed that there can be no sustainable development and eradication of poverty without peace and security, and that the pursuit of the objectives of the Community’s new development policy necessarily proceeds via the promotion of democracy and respect for human rights and peace and security. In subsequent paragraphs, the Court referred to other Union instruments pointing in the same direction. Thus, in ECOWAS, the Court justified the link between the Union’s development cooperation policy and combating the proliferation of small arms and light weapons through soft law documents emanating from Union institutions and the European Council. This method of examining whether the scope of a legal basis in the EU Treaties can cover a specific legal act was new and has been criticised for not respecting the hierarchy of norms.79 However, the Court’s reference to Union policy documents should not be seen as a way of broadening the scope of a power-conferring provision of the EU Treaties at odds with the hierarchy of legal norms. Rather, the Court appears to use these policy documents as a practical way of substantiating the contribution of the contested Decision to the Union’s broad development cooperation policy.80 This approach by the Court has been refined and further developed in subsequent cases, notably in the Philippines PCA case.81 This and other constitutional dilemmas arising from the Court’s adjudication on the scope of
75 RA Wessel, ‘Legality in EU Common Foreign and Security Policy: The Choice of the Appropriate Legal Basis’ in C Kilpatrick and J Scott (eds), Contemporary Challenges to EU Legality (Oxford, Oxford University Press, forthcoming). 76 See above n 8. 77 See generally, M Broberg and R Holdgaard, ‘EU External Action in the Field of Development Cooperation Policy – The Impact of the Lisbon Treaty’ (Stockholm, Swedish Institute for European Policy Studies, 2014) SIEPS 2014:6, ch 2. 78 India Cooperation Agreement (n 25). See this volume, ch 34. 79 See Heliskoski (n 16) 909–08. Similarly critical, Dashwood (n 34) 98–99. See also Hillion and Wessel (n 34) 560. 80 M Broberg and R Holdgaard, ‘Demarcating the Union’s Development Cooperation Policy after Lisbon: Commission v Council (Philippines PCFA)’ (2005) 52 CML Rev 547, 562–63. 81 Philippines PCFA (n 33) paras 49–50. See this volume, ch 86.
The Pre-Lisbon Machinery for the Delimitation of the CFSP 555 broad power-conferring provisions of the EU Treaties covering multifaceted Union policies, such as the Union’s development cooperation policy, are discussed in other chapters of this book. V. ADDITIONAL READING Butler, G, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019). Dashwood, A, ‘The Continuing Bipolarity of EU External Action’ in I Govaere, E Lannon, P Van Elsuwege and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2013) 1–16. Heliskoski, J, ‘Small Arms and Light Weapons within the Union’s Pillar Structure: An Analysis of Article 47 of the EU Treaty’ (2008) 33 EL Rev 898. Hillion, C and Wessel, R, ‘Competence Distribution in EU External Relations after ECOWAS: Clarification or Continued Fuzziness?’ (2009) 46 CML Rev 551. Van Vooren, B, ‘EU–EC External Competences after the Small Arms Judgment’ (2009) 14 European Foreign Affairs Review 7.
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52 The Legal Effects of the MARPOL Convention and the UN Convention on the Law of the Sea: Intertanko MARIO MENDEZ Case C-308/06, The Queen, on the application of International Association of Independent Tanker Owners (Intertanko) and Others v Secretary of State for Transport, ECLI:EU:C:2008:312, delivered 3 June 2008. KEYWORDS MARPOL Convention – UN Convention on the Law of the Sea (UNCLOS) – International law – International Agreements of EU Member States – International Agreements of the EU – Validity of EU legislation.
I. INTRODUCTION
T
he legal effects of international law within the EU legal order has been a central topic in EU external relations case law and scholarship since at least the early 1970s, when the seminal rulings in International Fruit and Haegeman were handed down.1 Prior to 2008, the Court was commonly perceived as having created a generous construct for the reception of international law in the EU legal order.2 What was frequently viewed as a blot on this prima facie international law-friendly landscape was the unwillingness, in principle, to allow the General Agreement on Tariffs and Trade (GATT) and later the World Trade Organization (WTO) to be used in order to review the legality of EU action, even when litigants in the WTO era were equipped with decisions from the new Dispute Settlement
1 Joined Cases 21–24/72, International Fruit Company, ECLI:EU:C:1972:115. See this volume, ch 2 and Case 180/73, Haegeman, ECLI:EU:C:1974:41. See this volume, ch 3. 2 See, eg the first editions of two pioneering books on EU external relations law: P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2004); P Koutrakos, EU International Relations Law (Oxford, Hart Publishing, 2006).
558 Mario Mendez Body that demonstrated non-compliance.3 On the other hand, as the Court was at pains to emphasise, the WTO Agreements could be seen as rather atypical and its dispute settlement system as indeed giving the EU ‘scope for manoeuvre’ that was, in practice, enjoyed by its major trading partners.4 And while the reticence vis-à-vis the WTO manifested itself in several cases, there were contemporaneously delivered rulings like Biotech, which appeared to expressly decouple legality review from the need for an international agreement of the EU to surmount a direct effect and individual rights conferral hurdle, and IATA, where an EU Regulation was reviewed in light of the EU-concluded Montreal Convention without any mention of direct effect and individual rights.5 This is where the Intertanko case enters the frame. The Court was faced with what legal effects a Member State agreement and an international agreement concluded by EU could have. In particular, it had the opportunity to revisit both its ‘functional succession doctrine’ from Nederlandse Spoorwegen,6 whereby the EU could succeed to treaty obligations assumed by its Member States, and the test, as well as its application, for reviewing the validity of EU legislation in light of EU international agreements. In finding that the EU had essentially not functionally succeeded to the International Convention for the Prevention of Pollution from Ships (MARPOL), and that the nature and broad logic of the United Nations Convention on the Law of the Sea (UNCLOS) also precluded it from being used to review EU legislation, the Grand Chamber handed down a judgment that was soon used, along with several other recent judgments at the time, to suggest a growing judicial closure towards international law.7 II. FACTS
The EU adopted the Ship-source pollution Directive (2005/35/EC) in response to the sinking of the Prestige oil tanker near Spain’s north-western coast that caused a major environmental disaster. The first article of the directive expressly identified its purpose as incorporating international standards for ship-source pollution into EU law and ensuring that persons responsible for discharges are subject to adequate penalties ‘in order to improve maritime safety and to enhance protection of the marine environment from pollution by ships’. The relevant ‘international standards’ were mainly outlined in MARPOL, to which the directive made numerous references, including in the case of its preamble to its rules being ignored on a daily basis by ships sailing in EU waters, and to ‘the international regime’ not providing sufficient dissuasive effects to discourage substandard practices.
3 On seminal GATT era case law, see ch 2 in this volume on International Fruit (n 1); ch 27 in this volume on Case C-280/93, Germany v Council, ECLI:EU:C:1994:367 (Bananas). On seminal WTO era case law, see ch 37 in this volume on Case C-149/96, Portuguese Republic v Council of the European Union, ECLI:EU:C:1999:574; ch 43 in this volume on Case C-377/02, Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB), ECLI:EU:C:2005:121. 4 For a detailed discussion, see M Mendez, The Legal Effects of EU Agreements (Oxford, Oxford University Press, 2013) ch IV. 5 See respectively Case C-377/98, Netherlands v Parliament and Council, ECLI:EU:C:2001:523; Case C-344/04, IATA and ELFAA, ECLI:EU:C:2006:10. 6 Also known as the doctrine of substitution. See this volume, ch 5. 7 See, eg K Ziegler, ‘International Law and EU Law: Between Asymmetric Constitutionalisation and Fragmentation’ in A Orakhelashvili (ed), Research Handbook on the Theory and History of International Law (Cheltenham, Edward Elgar, 2011) 268; see also the chapters by Cannizzaro, Eckes, Klabbers, and Wessel in E Cannizzaro, P Palchetti, and R Wessel (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2012).
The Legal Effects of the MARPOL Convention and the UNCLOS 559 Several organisations that represented large proportions of the maritime shipping industry challenged the directive in judicial review proceedings before the High Court in the UK. They argued that it provided a stricter standard of liability – serious negligence for accidental discharges in the territorial seas of the Member States – than permitted by MARPOL, of which it was accordingly in breach, and that this also breached the right of innocent passage in UNCLOS. Concerning accidental discharges in international straits, exclusive economic zones and the high seas, they argued MARPOL and UNCLOS were also breached by providing for liability of persons not referred to in MARPOL. Accordingly, the High Court referred a number of questions requiring the Court to determine whether the directive breached MARPOL and UNCLOS.8 III. THE COURT
The Grand Chamber began its answer to the referred questions by underscoring that EU institutions are bound by international agreements of the EU under Article 216(2) TFEU and that they have primacy over secondary EU legislation. A twin-pronged test for reviewing EU legislation vis-à-vis international rules was then outlined: firstly, that the EU must be bound by the relevant international rules, the requirement first articulated in International Fruit; and secondly, that the nature and broad logic of an international agreement does not preclude review, and that its provisions are unconditional and sufficiently precise. MARPOL failed to meet the first requirement, while UNCLOS failed to meet the second. In relation to MARPOL, it was first underscored that the EU was not a party to it, and that it did not appear that the EU had assumed under the EU Treaties the powers previously exercised by the Member States in the field to which MARPOL applied, nor consequently that its provisions had the effect of binding the EU. In the absence of a full transfer of the powers previously exercised by the Member States to the EU, the Court held that the EU cannot be bound by its rules simply because all the Member States are parties to MARPOL. As the EU was not bound, the mere fact that the directive incorporated certain MARPOL rules was not sufficient for the Court to have to use it to review the directive’s legality. Nor did it appear to the Court that the relevant provisions of MARPOL were the expression of customary international law, so this route to review was also foreclosed. However, the fact that MARPOL bound the Member States was, the Court concluded, liable to have consequences for the interpretation of UNCLOS and EU legislation falling within MARPOL’s field of application. And in view of the customary international law principle of good faith, and Article 4(3) TEU, it was incumbent upon the Court to interpret such EU legislation ‘taking account of’ MARPOL. In relation to UNCLOS, the Court first underscored that it bound the EU and that its provisions formed an integral part of EU law, before proceeding to conclude that its nature and broad logic prevented it from being used to assess the validity of EU measures. The Court had looked to the aim, preamble and terms of UNCLOS, and highlighted that for the marine areas in which it laid down legal regimes, UNCLOS sought to strike a fair balance between the interests of states as coastal states and the interests of states as flag states. However, it did not in principle grant independent rights and freedoms to individuals. According to the Court,
8 An additional question not addressed in this chapter, as it is not directly related to EU external relations, concerned whether the directive in question infringed the principle of legal certainty.
560 Mario Mendez individuals can enjoy the freedom of navigation only if they established a close connection between their ship and a state which grants its nationality to the ship and becomes the ship’s flag state, a connection formed under that state’s domestic law. It was conceded that some UNCLOS provisions appeared to attach rights to ships. It did not, however, follow that those rights were thereby conferred on the individuals linked to those ships, such as their owners. Nor did the Court consider doubt to be cast on its analysis by the fact that Part XI of UNCLOS involved natural and legal persons in the exploration, use and exploitation of the seabed and ocean floor, since the case at issue did not concern those provisions. It was accordingly held that UNCLOS did not establish rules intended to apply directly and immediately to individuals and to confer upon them rights or freedoms capable of being relied upon against states. IV. THE IMPORTANCE OF THE CASE
The importance of the case lies in its contribution to the legal effects deployed by Member State agreements and international agreements concluded by the EU. It has led to a growing sense that the Court has not been as open to international law as it could have been, not least given this ruling emerged during ratification of the Treaty of Lisbon, with its new references in Article 21 TEU and Article 3(5) TEU to the Union respecting international law and contributing to its strict observance and development.9 A. Functional Succession and Taking Member State Agreements into Account The functional succession doctrine was born in 1972, when the Court ruled that the EU was bound by the GATT, which predated the EEC’s creation and to which it was not a party, unlike all its Member States, insofar as it had assumed the powers previously exercised by the Member States in areas governed by the GATT.10 Application of this doctrine to MARPOL was rejected in Peralta in 1994, when the Court underscored that the EU did not appear to have assumed the powers previously exercised by the Member States in the field to which MARPOL applied.11 In reiterating this conclusion, Intertanko does not innovate. However, it had been well over a decade since that judgment, and additional legislative output in the area of marine pollution, not least the Ship-source pollution Directive itself, along with all Member States having since acceded to MARPOL,12 might have been thought to give grounds for an alternative conclusion. The Court acknowledged that all Member States were indeed parties to MARPOL,13 but this did not mean that the EU was bound by its rules ‘in the absence of a full transfer of the powers previously exercised by the Member States’ (emphasis added), an allusion seemingly to it being an area of exclusive competence. This need for ‘a full transfer of the powers’
9 For a recent discussion, see M Mendez, ‘The Application of International Law by the Court of Justice of the European Union’ in C Bradley (ed), The Oxford Handbook on Comparative Foreign Relations Law (Oxford, Oxford University Press, 2019). 10 International Fruit (n 1). 11 Case C-379/92, Peralta, ECLI:EU:C:1994:296. 12 Opinion of Advocate General Lenz, Case C-379/92, Peralta, ECLI:EU:C:1994:191, unlike the Court itself, highlighted that neither Ireland nor Luxembourg had acceded. 13 A prerequisite for functional succession articulated some weeks later: Case C-188/07, Commune de Mesquer, ECLI:EU:C:2008:359, para 85.
The Legal Effects of the MARPOL Convention and the UNCLOS 561 was reiterated a year later in Bogiatzi, when the Court rejected succession to the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air,14 and nearly identical language (‘transferred … all the powers’) relying upon Intertanko was later used when the Grand Chamber in Air Transport Association of America rejected a functional succession to the Chicago Convention on International Civil Aviation.15 A full transfer-of-powers requirement is an extremely demanding threshold that few international agreements to which all Member States are parties would ever be able to meet, even if the EU legislates in areas that the international agreement covers. Unsurprisingly, this requirement has come in for criticism.16 Indeed, as Eeckhout highlighted, the broader the coverage of an international agreement, ‘the less likely it will be that literally all powers have been transferred to the EU, in the sense that there is EU legislation on all the matters covered by the [international agreement]’.17 International law itself is essentially silent on the issue of international organisations succeeding to the treaty obligations of their member states, and the Court has thus been left with something of a blank canvas in this respect.18 There was certainly, therefore, scope for a less rigid approach to functional succession, or potentially even accepting the EU being bound by specific treaty obligations of all the Member States in areas where corresponding powers have been transferred to the EU, even if in other areas covered by the relevant international agreement no such transfer had occurred.19 Whilst the Court was unwilling to innovate in the aforementioned way to help reconcile international obligations of the Member States with EU law, it did innovate in a manner that served that same objective by holding that despite the EU not being bound by MARPOL, it was nonetheless to be taken into account when interpreting EU legislation within its field of application. A sitting judge in Intertanko suggested extrajudicially that this does not amount to a requirement of consistent interpretation in the strict sense, while recognising that it may, in concrete situations, be difficult to distinguish from consistent interpretation sensu stricto.20 Others have nonetheless referred to it as consistent interpretation.21 In relation to international agreements concluded by the EU, the consistent interpretation principle was first articulated in the International Dairy Arrangement case and grounded in their primacy over EU secondary law.22 Of course, this foundation does not work for international agreements that are held not to bind the EU, and may well account for both the novel phrasing in Intertanko and potentially laxer interpretative demands. An alternative
14 Case C-301/08, Bogiatzi, ECLI:EU:C:2009:649, para 33. 15 Case C-366/10, Air Transport Association of America (ATAA), ECLI:EU:C:2011:864, para 63. See this volume, ch 59. 16 See, eg P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 398–400; J Wouters, J Odermatt and T Ramopoulos, ‘Worlds Apart? Comparing the Approaches of the European Court of Justice and the EU Legislature to International Law’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014) 249, 255–61; Ziegler (n 7) 288–90. 17 Eeckhout (n 16) 400. 18 See, eg R Schütze, Foreign Affairs and the EU Constitution (Cambridge, Cambridge University Press, 2014) ch 3; Wouters et al (n 16) 259. 19 By analogy, see Wouters et al (n 16) 261. 20 A Rosas, ‘The Status in EU Law of International Agreements Concluded by EU Member States’ (2011) 34 Fordham International Law Journal 1304, 1341. Kuijper also underscored that ‘the formula … is weaker than … “conforming interpretation”’: PJ Kuijper, ‘International Responsibility for EU Mixed Agreements’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited (Oxford, Hart Publishing, 2010) 208, 221. 21 See, eg Koutrakos, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) 217–18; Eeckhout (n 16) 400; Wouters et al (n 16) 266. 22 Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313 (International Dairy Arrangement), para 52.
562 Mario Mendez anchor was thus necessary, and the Court had recourse to the Article 4(3) TEU duty of sincere cooperation. This made sense, given that the duty also applies to the EU institutions, and clearly the EU should be seeking to ensure that treaty obligations incumbent upon all its Member States are not needlessly compromised.23 It is not at all clear, however, quite how this interpretative innovation relates to the customary principle of good faith in which the Court sought to anchor it. And the Opinion of the Advocate General (AG), which alluded to this interpretative requirement and it being grounded in a principle of cooperation between EU institutions and Member States that efforts be made to avoid conflicts, made no express mention of an international law anchor. Nor was it expressly linked to the specific legislation at issue, which, as well as citing MARPOL on a number of occasions, also extracted relevant MARPOL provisions in an annex; indeed, in its Article 9, headed ‘Compliance with international law’, it instructed that ‘Member States shall apply the provisions of this Directive … in accordance with applicable international law’. Having outlined this interpretative innovation, there was strangely no sign of it actually being applied in the Intertanko case itself. And when rejecting functional succession to the Warsaw and Chicago Conventions, the Court also made no mention of it, despite the AG on both occasions having engaged with it.24 One might, then, have wondered whether it was being confined specifically to MARPOL, but it was then reiterated in more general terms, albeit being found inapplicable as the protocol to MARPOL at issue was one to which not all Member States were parties.25 Most recently, this interpretative requirement was reiterated with respect to MARPOL in another case involving the Ship-source pollution Directive and UNCLOS.26 In sum, while the interpretative innovation in Intertanko was understandably praised as a means to avoid conflict between EU law and international law binding on Member States,27 no evidence was seen of its application in Intertanko, and although the language in Manzi certainly suggests it is not confined to MARPOL, the Court has only since reiterated it specifically in relation to MARPOL without it being clear that it had any effect on the relevant directive. The absence of a discernible impact hitherto should not, however, detract from the potential value of this interpretation tool, given the rigidity of the functional succession doctrine and the effect of the EU’s consistent interpretation doctrine in other contexts. One might also see in it a message to the EU legislature that its legislative output should strive to take into account Member State agreements, as well as a message to national courts to not simply ignore tensions between EU legislation and such international agreements. B. Review in Light of Binding International Agreements: The Test and its Application A minor point to begin with is that the Court essentially endorsed the formulation of the test for review vis-à-vis an international agreement binding the EU that was more tentatively 23 See similarly Eeckhout (n 16) 400. 24 See respectively Bogiatzi (n 14); ATAA (n 15). 25 Case C-537/11, Manzi v Capitaneria di Porto di Genova, ECLI:EU:C:2014:19. More recently, an international agreement to which neither the EU nor all of its Member States were party ‘must be taken into account’, since it was considered part of the relevant rules for interpreting UNCLOS: Case C-15/17, Bosphoros Queen Shipping v Rajavartiolaitos, ECLI:EU:C:2018:557, para 47. 26 Bosphoros Queen Shipping (n 25). 27 Koutrakos (n 21) 218.
The Legal Effects of the MARPOL Convention and the UNCLOS 563 articulated in the then recent IATA ruling.28 The test was that the nature and broad logic of an international agreement does not preclude review, and that the provisions appear, as regards their content, to be unconditional and sufficiently precise.29 This Intertanko formulation has since become the standard formulation.30 In Intertanko, the Court innovated by holding that the nature and broad logic of UNCLOS precluded it from being used to examine the validity of EU legislation and also, albeit often overlooked, in how it actually deployed this prong of its test. On the first innovation, the Court held for the first time that a multilateral agreement concluded by the EU, other than the WTO Agreements (and the GATT Agreements, which the EU itself had not concluded), was simply not capable of being directly used to challenge EU-level action.31 This was a thinly reasoned, and unexpected, conclusion to reach for this wide-ranging treaty,32 containing some 320 articles and nine annexes, and that had long been dubbed a ‘constitution for the oceans’ or ‘constitution of the sea’. Indeed, the AG, for whom review vis-à-vis UNCLOS was in principle permissible, expressly referred to the submission that UNCLOS had failed to meet this hurdle as ‘surprising … [in] view of the Court’s previous case-law’. Admittedly the AG then drew particular attention to the Poulsen ruling, where the Court drew on the then not yet in force UNCLOS as an expression of customary international law,33 while highlighting the incongruity that would result if individuals could now not rely on it after its entry into force. AG Kokott could well, however, also have highlighted the IATA case from the preceding year, in which the Grand Chamber simply asserted, without any actual analysis, that neither the nature nor the broad logic of the EU-concluded Montreal Convention precluded it from being among the rules in light of which the legality of EU acts were reviewed. The language of individual rights and direct effect was wholly absent from that case, which was cited in an article co-authored by Lenaerts, a member of the IATA Grand Chamber formation, in support of the proposition that whether an international agreement confers individual rights is not an issue when reviewing the legality of EU acts.34 This brings us to the second innovation from Intertanko, concerning the way the nature and broad logic test was actually applied. It appeared to amount to resurrecting a conferral of individual rights hurdle, first outlined in International Fruit, but from which the Court had clearly moved away in line with its approach to internal EU law, and reading it back into the assessment of whether the nature and broad logic of the international agreement precludes review.35 Clearly, it will ordinarily be the case that international agreements can be interpreted as not, to use the Court’s language, establishing ‘rules intended to apply directly and immediately to individuals and to confer upon them rights and freedoms capable of being relied upon
28 IATA (n 5) para 39. 29 For Cremona, these conditions are essentially the criteria for direct effect: M Cremona, ‘External Relations and External Competence of the European Union: The Emergence of an Integrated Policy’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 217, 242. 30 Reiterated by the Grand Chamber in Joined Cases C-404/12 P and C-405/12 P, Council and Commission v Stichting Natuur en Milieu and Pesticide Action Network Europe, ECLI:EU:C:2015:5, para 46. See this volume, ch 71. 31 Subject to a different conclusion being reached in relation to Part XI of UNCLOS. 32 See, eg H Ringbom, The EU Maritime Policy and International Law (Leiden, Martinus Nijhoff, 2008), who suggested UNCLOS would satisfy this step of the direct effect test. 33 Case C-286/90, Poulsen and Diva Navigation, ECLI:EU:C:1992:453. See this volume, ch 21. 34 See K Lenaerts and T Corthaut, ‘Of Birds and Hedges: The Role of Primacy in Invoking Norms of EU Law’ (2006) 31 EL Rev 287, 299. 35 For a detailed discussion, see Mendez (n 4) 270–81 and 306 et seq.
564 Mario Mendez against States’. The significance of Intertanko in this respect was not only that UNCLOS did not satisfy the review hurdle, as if that was not significant enough, but, rather, that recourse to an individual rights focus would result in few international agreements surmounting the reviewability test, thus signalling a retreat from the seemingly receptive judicially constructed edifice for enforcing agreements by which the EU was bound. In respect of that receptive edifice, the IATA ruling was mentioned above, as was the Biotech case in the introduction, but one could also highlight the EDF judgment in 2004 concerning the Athens Protocol to the Convention for the Protection of the Mediterranean Sea against Pollution. This international agreement of the EU – the Athens Protocol – was held to be directly effective without the language of individual rights making any appearance.36 It was, however, a conclusion reached in a case where it was Member State action, not EU-level action, that was being challenged, and it was accordingly tempting to think that the Intertanko line on UNCLOS was shaped by this, for to have accepted this very broad multilateral international agreement as a review criterion would open the gateway to all manner of future cases challenging EU legislative action. By contrast, the Court’s long-standing generous approach to the EU’s primarily bilateral trade, cooperation, association and partnership agreements concerned international agreement which ‘rarely, if at all, contain norms that the EU is uncomfortable with or that would require it to change its legislation; instead they radiate EU law outwards’.37 Moreover, while individual rights also did not rear their head in IATA, and in Biotech there was an express decoupling of legality review from the need for an EU Agreement to surmount a direct effect and individual rights conferral hurdle, in both those cases the EU legislation emerged unscathed from review. In Intertanko, it was far more difficult to see how an UNCLOS-compatible interpretation could be offered if it had surmounted the review hurdle,38 though the AG creatively sought to achieve precisely this goal. Prior to Intertanko, Eeckhout had called for greater recourse to a rights-based analysis, but this was not with a view to the Court becoming restrictive in its direct effect analysis of international agreements.39 And while he welcomed the use of a rights-based approach in Intertanko, he also criticised the formalistic reasoning deployed in concluding that UNCLOS did not satisfy the test.40 The Council had argued that UNCLOS did not confer individual rights, and also invoked the logic used against review of EU measures in light of WTO Agreements, such as an absence of reciprocity – other national courts avoiding interpreting UNCLOS – and that it had dispute settlement procedures conferring a degree of flexibility. The Court was silent on this issue, and the temptation should be resisted to see Intertanko as applying the principles underlying its WTO case law,41 not least as the WTO-related reasoning was more cogent,
36 C-213/03, Pêcheurs de l’étang de Berre v EDF, ECLI:EU:C:2004:464. See further J Klabbers, ‘The Status and Effects of International Norms’ in T Tridimas and R Schütze (eds), Oxford Principles of European Union Law, Volume 1: The European Union Legal Order (Oxford, Oxford University Press, 2018) 1208, 1224–25. 37 Klabbers (n 36) 1217. More recently, the EU’s political institutions have sought to exclude the direct effect of bilateral trade agreements: see F Casolari, ‘The Acknowledgment of the Direct Effect of EU International Agreements: Does Legal Equality Still Matter?’ in LS Rossi and F Casolari (eds), The Principle of Equality in EU Law (Cham, Springer, 2017) 83. 38 The organisations challenging the directive invoked the view of the former President of the International Tribunal for the Law of the Sea, the judicial body established under UNCLOS, that it clearly hampered the right of innocent passage. See E Denza, ‘A Note on Intertanko’ (2008) 33 EL Rev 870, 877. 39 Eeckhout (n 2) 312–14. 40 Eeckhout (n 16) 382–83. 41 See, eg M Bronckers, ‘From “Direct Effect” to “Muted Dialogue”: Recent Developments in the European Courts’ Case Law on the WTO and Beyond’ (2008) 11 Journal of International Economic Law 885, 886. Others have rightly emphasised the clear distinction with the WTO line of reasoning: eg Cannizzaro (n 7) 48–49; Cremona (n 29) 242.
The Legal Effects of the MARPOL Convention and the UNCLOS 565 grounded as it was primarily in the WTO’s Dispute Settlement Understanding and not in the absence of individual rights. It was suggested that the Intertanko judgment did not appear to a priori exclude actions by the Member States and the EU institutions.42 However, the seminal earlier judgment in Bananas, in which a Member State challenge to EU legislation based on the GATT met the same fate as those brought by private parties relying on the GATT,43 suggests that a Member State challenge based on UNCLOS would also be rejected.44 In contrast, the prior Mox Plant judgment asserting jurisdiction to assess Member State compliance with UNCLOS,45 along with successful infringement proceedings against Member States for non-compliance with GATT and WTO Agreements,46 indicates that centralised EU enforcement of UNCLOS vis-à-vis Member States remains possible. Two final points are worth noting. Firstly, since Intertanko, no additional international agreement has failed to meet the nature and broad logic prong of the review test due to it not being intended to confer individual rights.47 Secondly, the outcome in Intertanko was in line with the submissions of the Council and Parliament, and although the Commission did not seek to insulate EU law from UNCLOS review, thus doing less damage to the EU’s international law-friendly image, the Commission unsurprisingly supported the validity of the directive. It should not be overlooked that international law was being invoked to challenge the more demanding environmental standards that the EU passed in response to environmental disasters in European waters. This was not intended to justify immunising EU action from direct review vis-à-vis UNCLOS, but it is important context. V. ADDITIONAL READING Cannizzaro, E, Palchetti, P and Wessel, RA (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2012). Denza, E, ‘A Note on Intertanko’ (2008) 33 EL Rev 870. Eeckhout, P, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011). Klabbers, J, ‘The Status and Effects of International Norms’ in T Tridimas and R Schütze (eds), Oxford Principles of European Union Law, Volume 1: The European Union Legal Order (Oxford, Oxford University Press, 2018). Koutrakos, P, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015). Mendez, M, The Legal Effects of EU Agreements (Oxford, Oxford University Press, 2013). Wouters, J, Odermatt, J and Ramopoulos, T, ‘Worlds Apart? Comparing the Approaches of the European Court of Justice and the EU Legislature to International Law’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014).
42 S Boelaert-Suominen, ‘The European Community, the European Court of Justice and the Law of the Sea’ (2008) 23 International Journal of Marine and Coastal Law 643, 709. 43 Bananas (n 3). 44 Unless it involved Part XI of UNCLOS, which may still be an open question. 45 Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant), para 121. See this volume, ch 47. 46 See respectively International Dairy Arrangement (n 22); Case C-66/18, Commission v Hungary, ECLI:EU:C:2020:792. 47 The two instances since where EU agreements failed to satisfy the review test were not based on an absence of individual rights: first, the Kyoto Protocol in ATAA (n 16); and second, and unsurprisingly so, given the subject matter, the UN Convention on the Rights of Persons with Disabilities in Case C-363/12, Z, ECLI:EU:C:2014:159, on which see G de Baere, ‘Shall I Be Mother? The Prohibition on Sex Discrimination, the UN Disability Convention, and the Right to Surrogacy Leave under EU Law’ (2015) 74 CLJ 44.
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53 Implied External Exclusivity and the Duty of Loyal Cooperation in International Organisations: Commission v Greece (International Maritime Organisation) THOMAS RAMOPOULOS* Case C-45/07, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:2009:81 (International Maritime Organisation), delivered 12 February 2009. KEYWORDS Exclusive external competence – Participation in international organisations – Unilateral Member State position in international organisations – Duty of loyal cooperation – Principle of reciprocity – Inter-institutional agreements – Transport policy.
I. INTRODUCTION
T
he EU (the Union) is often prevented from participating fully in the work of some international organisations because these are only open to states. This is despite the EU’s competence, often exclusive, in matters addressed by those international organisations. In such situations, the question has come up regarding the potential impact of this on the capacity of the EU to exercise its competence on the international plane. What is more, clarity has been sought as to the effects of this on the freedom of Member States that are members of these international organisations to act there. The International Maritime Organisation (IMO) case arose in such a context. The IMO is a UN specialised agency that establishes regulatory acts in the area of shipping. All EU Member States are members of the organisation, but not the EU itself because the IMO is open only to states. The work of the IMO, in principle, falls under shared competences of the Union, but in the case at hand, the affected competence was of an exclusive nature due to a
* All opinions expressed herein are personal to the author and do not necessarily reflect the official opinion of the European Commission.
568 Thomas Ramopoulos prior adoption of common rules within the Union. Thus, the Court answered the above questions with regard to exclusive Union competences. II. FACTS
Regulation (EC) No 725/2004 of 31 March 2004 on enhancing ship and port facility security integrated within the then EU legal order, the maritime security regime agreed by the IMO in December 2002.1 The new regime amended the 1974 International Convention for the Safety of Life at Sea (the SOLAS Convention), and the International Ship and Port Facility Security Code (the ISPS Code). As a member of the IMO, Greece submitted a proposal on 18 March 2005 to the IMO Maritime Safety Committee regarding monitoring the compliance of ships and port facilities with the requirements of Chapter XI-2 of the Annex to the SOLAS Convention and the ISPS Code. In particular, it asked the committee to examine the creation of checklists or other appropriate tools to assist the contracting parties of the SOLAS Convention in monitoring compliance with these requirements. Previously, Greece had attempted to have this proposal discussed at the meeting of 14 March 2005 of the Marsec (Maritime Safety) Committee, a comitology committee established by Article 11 of Regulation No 725/2004. The Commission, as the chair of the Marsec Committee, refused to introduce this on the agenda. Instead, the Commission initiated a procedure to adopt a Union (then Community) position for the 80th session of the IMO Maritime Safety Committee meeting in May 2005. In doing so, on 27 April 2005, the Commission submitted a working document to the Council2 that was eventually adopted by the Council Shipping Working Party in early May 2005. In parallel, the Commission repeatedly requested Greece to withdraw its own proposal submitted to the IMO already on 18 March 2005. The Commission’s request was not acceded to. Subsequently, in accordance with the procedure in then Article 226 EC (now Article 258 TFEU), the Commission launched infringement proceedings, asking the Court for a declaration that by submitting its proposal of 18 March 2005 to the IMO Maritime Safety Committee, Greece was in breach of its obligations under Article 10 EC (now Article 4(3) TEU), Article 71 EC (now Article 91 TFEU) and Article 80(2) EC (now Article 100(2) TFEU, respectively). The Commission relied on the ERTA judgment,3 arguing that Regulation (EC) No 725/2004 had covered the area in question, turning it into exclusive external Union competence. In addition, the duty of loyal cooperation obliged Member States to ‘abstain from any measure which could jeopardise the attainment of the objectives of th[e] Treaty’,4 including that of the establishment of a common transport policy. Thus, it is for the Union only to adopt positions in this area in the IMO. Member States could present national positions in the IMO independently, only if expressly authorised by the Union.
1 [2004] OJ L129/6. 2 Commission Staff Working Document for the Council Shipping Working Party, ‘IMO – European Community position to be adopted by the Council on maritime security issues for the 80th session of the Maritime Safety Committee (MSC 80) meeting in London from 11 to 20 May 2005’, 27 April 2005, SEC (2005) 586. 3 Case 22/70, Communities v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 4 ibid para 21.
Implied External Exclusivity and Loyal Cooperation in International Organisations 569 Greece countered that it had complied with its duty of loyal cooperation, in that it had submitted its proposal to the Marsec Committee for discussion, allowing, ultimately, for a Union position to emerge at the meeting of that Committee on 14 March 2005. It was actually the Commission, the argument went, that had violated the duty of loyal cooperation, by not including the proposal on the agenda of the meeting of the Marsec Committee, preventing it from being discussed. In addition, Greece argued that the ERTA judgment only prohibited Member States from entering into international commitments in areas where the Union has exclusive external competence. In the case at hand, Greece had only acted in the context of its participation in the IMO, which, in its view, was its right and obligation stemming from its membership in the IMO, and was not tantamount to undertaking international commitments. In any case, Greece claimed that its proposal did not lead to the adoption of new rules in the IMO. Thus, according to Greece, ERTA did not apply, and Greece had not violated exclusive Union competence. Moreover, by submitting its proposal in the case at hand, where no Union position could be established, Greece considered that it had actually complied with a ‘gentleman’s agreement’, adopted by the Council of the European Union in 1993, and further safeguarded the Union interest. In accordance with the gentleman’s agreement, in the absence of a prior Union position, Greece understood that Member States were allowed to submit proposals to the IMO, either collectively or individually. What is more, an obligation to abstain from acting in the IMO under such circumstances would restrict Greece’s status as a member of the IMO and would be to the detriment of the Union interest. For Greece, with the Union not being a member itself, the Union was unable to defend its interest in the face of proposals from third countries that were members of the IMO. Greece further suggested that Article 9(1) of Regulation No 725/2004 conferred exclusive responsibility on the Member States to implement it. In making its proposal to the IMO, whose wording and content were allegedly consistent with the spirit of the aforementioned Regulation, Greece was of the view it acted in accordance with Article 9(1). Lastly, at the oral hearing, Greece relied on then Article 307(1) EC (now Article 351 TFEU), arguing that since its membership of the IMO predated that of the Union, its obligations under the former could not be affected by those under the latter. The UK intervened, supporting Greece with three arguments. First, it attempted to delimit the scope of exclusive Union competence in this area to that of Regulation No 725/2004 and Directive 2005/65/EC of 26 October 2005 on enhancing port security. Secondly, it argued that the duty of loyal cooperation did not require Member States to facilitate the accession of the Union to international organisations, especially in cases where the statute of the international organisation does not allow for the accession of another international organisation, such as the EU. Lastly, the UK argued that the duty of loyal cooperation obliged the Commission to have submitted Greece’s proposal to the Marsec Committee for discussion. III. THE COURT
The Court examined the arguments of the parties and, following the Opinion of Advocate General (AG) Bot, held that by submitting its proposal to the IMO, Greece had infringed the exclusive external competence of the Union in the area of maritime security, within the transport policy, and had further not complied with the duty of loyal cooperation.
570 Thomas Ramopoulos As regards the applicability of the ERTA judgment, the Court’s reasoning was rather short, but the Opinion of AG Bot offers some insights into the reflection process that led to the judgment. The AG revisited the then existing corpus of case law that implemented and further developed the ERTA doctrine, and applied it to the case at hand.5 He considered that Regulation 75/2004 established common rules in the area of maritime security under the Union’s transport policy. He then pointed out that the proposal by Greece, initiating a procedure that could lead to the adoption of rules by the IMO, could, ‘as an indirect result’, affect EU law. Thus, for AG Bot, Member States could no longer act externally ‘either by undertaking new contractual obligations or indeed by proposing amendments or additions to the existing rules’.6 The Court also found that Regulation 725/2004 had established common rules. Therefore, Member States were prevented from assuming international commitments that might affect or alter the scope of the common rules established by that Regulation. The Court then turned to the contested question whether, by submitting its proposal to the IMO, Greece had indeed assumed an international commitment within the meaning of the ERTA judgment, which carried a risk of affectation or alteration of those rules. It held that Greece had ‘initiate[d] a procedure which could lead to the adoption by the IMO of new rules’7 in an area covered by Regulation 725/2004, thereby affecting it. None of Greece’s arguments put this conclusion into question. First, as regards the Commission’s alleged breach of the duty of loyal cooperation when it refused to put Greece’s proposal on the agenda of the Marsec Committee, the Court noted that the Commission ‘could have endeavoured to submit that proposal to [that] Committee and allowed a debate on the subject’.8 Be that as it may, failure to do so did not justify encroachment by Member States on exclusive external competence of the Union. Even if the Commission had not complied with the duty of loyal cooperation, Greece could not rely on this to ‘unilaterally adopt, on its own authority, corrective or protective measures designed to obviate [that] breach’.9 Secondly, the Court was not impressed by the reference to the gentleman’s agreement, which proved to be a unilateral act of the Council. Turning first to the content of this ‘agreement’, the Court found that it had not had the scope alleged by Greece. In essence, the ‘agreement’ simply reflected the fact that Member States can adopt positions within the IMO in areas of Union exclusive external competence, so long as these positions have been previously coordinated within the Union. No such coordination had occurred in the case at hand. Making a more general pronouncement on the effects of such ‘gentleman’s agreements’ – be they unilateral or interinstitutional – the Court was adamant that they cannot affect the division of powers between the Union and its Member States, as this is determined by the EU Treaties.10 Thirdly, the Court rejected the argument that the lack of membership of the Union in an international organisation limited the pre-emptive effect of its exclusive external competence. 5 Opinion of AG Bot, Case C-45/07, Commission v Hellenic Republic, ECLI:EU:C:2008:642 (IMO), paras 24–29, and case law cited. 6 ibid para 37. 7 Case C-45/07, Commission v Hellenic Republic, ECLI:EU:C:2009:81 (IMO), para 21. 8 It is noted that the AG had opined in this regard that the Commission had complied with its duty of sincere cooperation as Greece seemed to wish to discuss this issue in the Marsec Committee simply to inform other Member States of its national proposal to the IMO. Instead and in parallel, the Commission followed the appropriate internal procedure for the adoption of a Union position to be submitted to the IMO. 9 The Court referred by analogy to Case C-5/94, Hedley Lomas, ECLI:EU:C:1996:205, para 20, and case law cited therein, where it had held that a breach of Union law by a Member State did not justify another Member State taking unilateral action derogating from Union law in order to address it. 10 IMO (n 7) paras 28–29.
Implied External Exclusivity and Loyal Cooperation in International Organisations 571 For the Court, Member States were not free to act unilaterally in the international organisation, assuming international obligations that may affect EU law. In fact, in accordance with the Court’s reasoning in Opinion 2/91,11 the external competence of the Union can be exercised by its Member States acting jointly as its agents. Fourthly, the Court summarily dismissed Greece’s argument alleging a Member State’s competence on the basis of Article 9(1) of Regulation 725/2004. The implementation responsibilities entrusted to Member States by Article 9(1) do not entail any external competence. As the AG stated in more detail, Article 9(1) is nothing more than a reflection of the ‘decentralised implementation’ of Union law by means of ‘the administrative machinery of the Member States’.12 Lastly, the Court rejected Greece’s argument on the basis of the then Article 307(1) EC (now Article 351 TFEU) as the conditions for the application of that Article were not fulfilled. For the Court, Article 307(1) EC applied only when there was an incompatibility of legal obligations of a Member State stemming from an international agreement it had concluded prior to its accession to the EU and from EU law. Greece had argued that in submitting a proposal to the IMO, it had complied with EU law; thus, there was no incompatibility of obligations. In any event, the Court noted that Greece had not proven that there was a legal obligation under the IMO to submit its proposal. IV. THE IMPORTANCE OF THE CASE
The IMO case was yet another brick in the robust wall of the effects of external exclusivity built by the Court over the span of 50 years. It was also of significance because of the pronouncement of the Court on the nature and effects of the duty of loyal cooperation in cases of external exclusivity. Its legal significance and practical relevance can be gleaned – among others – by the recurrence of its underlying facts in the external action of the Union and its Member States. More often than not, only the latter can be members of international organisations whose work affects Union competences. The main contribution of the IMO case was that it upheld the effects of external exclusivity beyond the conclusion of international agreements. Participation in the work of an international organisation, that falls under exclusive Union competence, regardless of whether the Union can become a member thereof, is also covered. Thereby, this case extended the initial scope of the ERTA doctrine.13 Had the Court adopted a restrictive interpretation of the ERTA doctrine by differentiating between these two scenarios, it would have poked a significant hole in the autonomous nature of the Union’s legal order. A. Scope of Application of the ERTA Doctrine The ERTA doctrine of implied powers was promulgated in the context of the negotiation and conclusion of an international agreement. If the Union has exclusive external competence
11 Opinion 2/91, ILO Convention concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, para 5. See this volume, ch 22. 12 Opinion of AG Bot in IMO (n 5) para 49. 13 M Cremona, ‘Extending the Reach of the AETR Principle: Comment on Commission v Greece (C-45/07)’ (2009) 34 EL Rev 754.
572 Thomas Ramopoulos in an area, Member States can no longer enter into international agreements in that area. Subsequent cases applied and further developed this doctrine, leading to its inclusion in Article 3(2) TFEU.14 The IMO case tested the applicability of this doctrine, and ultimately the effects of external exclusivity, in the constellation of the work of an international organisation, of which the Union is not a member. Can Member States adopt unilateral positions within that organisation, even in areas of exclusive Union competence? Does the reply to this question change if these positions are non-binding or if they do not lead by necessity to a binding measure of the international organisation? How, if at all, is the freedom of Member States to act in the international organisation affected by the existence of exclusive Union competence? Having first found that the internal EU rules in question had turned the area of maritime security under the transport policy into exclusive Union competence, the Court showed no reluctance in applying the ERTA doctrine in this situation as well. The fact that Greece’s proposal was non-binding did not bring it outside the scope of the ERTA doctrine. Nor was it relevant that the proposal might not have led to the adoption of new rules, which were anyway not binding on the Union as a matter of public international law. What mattered was the risk of affectation of EU law as a result of the unilateral position adopted by Greece. A commentary on the case at the time identified instances in the ERTA judgment that could be seen as containing the elements for this interpretation of the ERTA doctrine that went beyond the conclusion of international agreements.15 First, the commentary pointed out that the Court defined the scope of external exclusivity to cover both the assumption and the carrying out of obligations on the international plane. Thus, not only the act of undertaking a commitment was covered, but also the subsequent implementation at the international level. Secondly, the Court had also relied on the duty of loyal cooperation that imposed a negative obligation on Member States ‘to abstain from any measure which might jeopardise the attainment of the objectives of the Treaty’. This obligation is generally applicable referring to ‘any measure’, and not just the conclusion of an international agreement.16 The above is not affected by the lack of membership of the Union in an international organisation for legal or political reasons.17 Already in 1993, the Court had answered how the Union can act in such a scenario. Opinion 2/91 pertained to the participation in the work of the International Labour Organisation (ILO) – in particular, the conclusion of ILO Conventions – another international organisation of which the EU was not a member. The ILO Convention in question came under both exclusive and shared competences. The Court had found that in such cases, the Union can exercise its own competence in international organisations ‘through the medium of the Member States acting jointly in the Community’s interest’.18 The reasoning of the Court is not surprising, seen in the light of the pre-emption logic of the risk of affectation test.19 It is necessary that implied or supervening external exclusivity
14 J Wouters et al, The Law of EU External Relations: Cases, Materials, and Commentary on the EU as an International Legal Actor, 3rd edn (Oxford, Oxford University Press, 2021) 1–23. 15 Cremona, ‘Extending the reach of the AETR principle’ (n 13) 762–63. 16 ibid 762. 17 For a concise description of these reasons and detailed analyses of the involvement of the EU in the work of numerous international organisations, see RA Wessel and J Odermatt (eds), Research Handbook on the European Union and International Organizations (Cheltenham, Edward Elgar, 2019). 18 Opinion 2/91 (n 11) para 5. See this volume, ch 22. 19 M Cremona, ‘EU External Competence – Rationales for Exclusivity’ in S Garben and I Govaere (eds), The Division of Competences between the EU and the Member States (Oxford, Hart Publishing, 2017) 134 and 145.
Implied External Exclusivity and Loyal Cooperation in International Organisations 573 applies beyond the conclusion of international agreements if it is to achieve its ultimate goal, which is to safeguard the autonomy of the Union’s legal order. If the net of external exclusivity is not cast wide, Member States might risk affecting or altering the scope of EU law through unilateral actions on the international scene. This risk would be even more pronounced in international organisations, of which the Union is not a member. Arguably, this would put into question the constitutional characteristics of the Union’s legal order. Member States exercised their powers within the Council when adopting common rules that made the Union exclusively competent in an area.20 Unless the common rules are amended or repealed by the same procedure determined by the EU Treaties, from that point on, only the Union is able to engage internationally in that area. And if that is not possible for formal reasons, it can act through its Member States. Thus, in cases of supervening external exclusivity, the constitutional characteristics of the Union’s legal order require Member States to abstain from acting in international organisations, except as trustees or agents of the Union.21 This IMO case was, however, not the last occasion where the effects of supervening exclusivity on the freedom of Member States to act in international organisations, of which the Union was not a member, was tested. The entry into force of the Treaty of Lisbon was seen, apparently, as an opportunity to test the continued applicability of pre-Lisbon case law. The OIV case was an action for annulment brought by Germany against a decision on a Union position to be presented by its Member States in the International Organization for Wine and Vine (OIV), since the Union is not a member of that organisation.22 Germany argued – among others – that the Union could only adopt positions under Article 218(9) TFEU if it is a member of an international organisation. In an attempt to distance this case from IMO, Germany also argued that the issues in question fell under shared competence. The Court held instead that the Union could adopt a position even though it was not a member of the OIV and used the language of supervening exclusivity, stating that the case concerned ‘an area which is regulated for the most part by the EU legislature in the exercise of its competence’.23 Having brought the OIV case squarely within its IMO case law, it reiterated that this position was to be presented by Member States that are members of the OIV.24 Yet again in Opinion 1/13, the Court distinguished between the impossibility of the Union to conclude an international agreement for formal reasons and the effects of its exclusive external competence on the freedom of autonomous action by the Member States. In that case, the Union was prevented from acceding to the 1980 Hague Convention, as only states could accede to the Convention in accordance with its Article 38. Still, the competence of the Union may be exercised ‘through the intermediary of the Member States acting in the EU’s interest’.25
20 In this regard, see Opinion of AG Bot in IMO (n 5) para 37: ‘Having made the choice, when adopting that regulation, to establish common rules at Community level, the Member States cannot be given the possibility of altering their scope, even indirectly, unless such a step represents the intention of the Community.’ 21 M Cremona, ‘Member States as Trustees of the Union Interest: Participating in International Agreements on Behalf of the European Union’ in A Arnull, C Barnard, M Dougan and E Spaventa (eds), A Constitutional Order of States? Essays in EU Law in Honour of Alan Dashwood (Oxford, Hart Publishing, 2011) 435–58. 22 For a full analysis of that judgment, see this volume, ch 68. 23 Case C-399/12, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:2014:2258 (OIV), para 51. See also M Cremona, ‘EU External Competence–Rationales for Exclusivity’ in S Garben and I Govaere (eds), The Division of Competences between the EU and the Member States (Oxford, Hart Publishing, 2017) 146 and 148. 24 OIV (n 22) para 52. 25 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303, para 44. See this volume, ch 69. See further F Erlbacher, ‘Recent Case Law on External Competences of the European Union: How Member States Can Embrace Their Own Treaty’ (2017) 2 CLEER Papers 13.
574 Thomas Ramopoulos However, autonomous external action by Member States in areas of exclusive Union competence is possible if the Union grants Member States specific authorisation to do so or ‘for the implementation of Union acts’, as per Article 2(1) TFEU.26 A ‘gentleman’s agreement’, be it unilateral or even interinstitutional, does not constitute authorisation under the first exception of Article 2(1) TFEU.27 Although the Court in IMO did not go into detail in this regard, authorisation should in principle be granted following the decision-making rules provided for in the applicable legal bases for the exercise of the exclusive competence.28 In accordance with standing case law of the Court, such rules are not at the discretion of Union institutions.29 Besides, it is necessary to indicate the legal basis of an act that produces legal effects in order to safeguard the prerogatives of the Union institutions.30 In particular, not opting for a formal Union act would risk breaching the exclusive right of initiative of the Commission, as well as the rights of the European Parliament to participate in the adoption of the act. It would also not comply with the obligation to state reasons, which is necessary for the Court to be able to exercise its power of judicial review.31 When acting under such authorisation, Member States have to stay within its limits and comply with any conditions set out therein. Commonly, these conditions entail an obligation to keep the Commission informed and to consult it.32 Lastly, the conferral of the power to implement Union acts is the most common implementation method in a decentralised legal order. It is provided in Article 291(1) TFEU. It also stems from the second subparagraph of Article 4(3) TEU, which requires that Member States, in accordance with the principle of sincere cooperation, ‘take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union’.33 It should not be confused with a conferral of competences allowing Member States to assume independent international obligations potentially affecting or altering Union law. That would fall under the first exception in Article 2(1) TFEU. Instead, it should be interpreted narrowly, allowing for mere implementation acts. Following the aforementioned judgments after the entry into force of the Treaty of Lisbon, despite the occasional disagreements between institutions, the wide scope of application of the ERTA doctrine, beyond the conclusion of international agreements to their implementation,
26 Art 2(1) TFEU. On the first exception, see also Case 41/76, Donckerwolcke, ECLI:EU:C:1976:182, para 32. See this volume, ch 8; Case C-83/94, Leifer, ECLI:EU:C:1995:329, para 12; Case 174/84, Bulk Oil, ECLI:EU:C:1986:60, paras 31 and 56. It is noted that in Bulk Oil, the Court further required Member States that acted in an area of exclusive Union competence to keep the Commission informed and seek its approval on the concerned measures. See also Erlbacher (n 25) 21. 27 This scenario must be distinguished from that of interinstitutional arrangements in areas of shared competence, which aim to simply put flesh on the duty of loyal cooperation, such as in the case of FAO, and in that of the gentleman’s agreement referred to in the Inland Waterways case against Luxembourg. Case C-25/94, Commission v Council, ECLI:EU:C:1996:114 (FAO) (this volume, ch 31); Case C-266/03, Commission v Luxemburg, ECLI:EU:C:2005:341. No interinstitutional arrangement can purport to reattribute competences. 28 Cremona, ‘Extending the Reach of the AETR Principle’ (n 13) 764. In addition, Art 2(1) TFEU should also be added to the legal bases of an act granting an authorisation in accordance with it. 29 Case C-687/15, Commission v Council, ECLI:EU:C:2017:803 (WRC-15), para 41, and case law cited therein. 30 ibid para 50, and case law cited therein. 31 ibid para 52, and case law cited therein. 32 See, eg Decision (EU) 2020/853 of the European Parliament and of the Council of 18 June 2020 empowering Germany to amend its bilateral road transport agreement with Switzerland with a view to authorising cabotage operations in the course of the provision of international road passenger transport services by coach and bus in the border regions between the two countries, [2020] OJ L198/44; see also Cremona, ‘Member States as Trustees of the Union Interest’ (n 21). 33 See JC Piris, The Lisbon Treaty: A Legal and Political Analysis (Cambridge, Cambridge University Press, 2010) 97.
Implied External Exclusivity and Loyal Cooperation in International Organisations 575 has become common ground. The ERTA doctrine applies regardless of the capacity of the Union itself to participate in international organisations or to accede to international agreements. B. Duty of Loyal Cooperation in Exclusive External Competences The IMO judgment also forms part of the slow build-up of the Court’s case law on the nature and effects of the duty of loyal cooperation in the external action of the Union and its Member States.34 It should be recalled that, already in ERTA, the Court had addressed the pre-emptive effect of external exclusivity, together with the requirements of the duty of loyal cooperation. In doing so, however, it did not distinguish the relation between these two. With the IMO judgment, the Court provided clarifications as to the nature and exact effects of the duty of loyal cooperation in areas of exclusive external competence. The Court initially developed this duty in order to manage the conclusion and implementation of mixed agreements, as well as mixed participation of the Union, and all or some of its Member States in international organisations.35 Confronted with the fact that only Member States can be members in many international organisations that come within Union and Member State competences, the Court applied this principle in those cases as well.36 In those judgments, the Court held that the duty of loyal cooperation stemmed from the requirement of unity of external representation of the Union.37 Until the 2000s, judgments on the duty of loyal cooperation in external action did not explain, in detail, the nature of the duty on the Member States and the Union, nor did they identify the point in time when the duty started applying. As to the question of the nature of the duty, they did not specify whether and under what conditions it entailed an obligation of result or a ‘best efforts’ obligation. With regard to shared competences, that changed with the Inland Waterways judgments and the PFOS judgment – the latter being delivered after the IMO judgment.38 In the Inland Waterways judgments, the Court held that the duty of loyal cooperation is ‘of general application and does not depend either on whether the Community competence concerned is exclusive or on any right of the Member States to enter into obligations towards non-member countries’.39 It also considered that the adoption of a Council decision authorising the Commission to negotiate a multilateral agreement on
34 See, eg C Hillion, ‘Mixity and Coherence in EU External Relations: The Significance of the Duty of Cooperation’ [2009] CLEER Working Papers 2; P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 241–55; A Delgado Casteleiro and J Larik, ‘The Duty to Remain Silent: Limitless Loyalty in EU External Relations?’ (2011) 36 EL Rev 524; P Van Elsuwege, ‘The Duty of Sincere Cooperation and its Implications for Autonomous Member State Action in the Field of External Relations’ in M Varju (ed), Between Compliance and Particularism: Member State Interests and European Union Law (Cham, Springer, 2019) 283–98. 35 Ruling 1/78, Ruling delivered pursuant to the third paragraph of Art 103 of the EAEC Treaty – Draft Convention of the International Atomic Energy Agency on the Physical Protection of Nuclear Materials, Facilities and Transports, ECLI:EU:C:1978:202. See this volume, ch 10. Opinion 1/94, ECLI:EU:C:1994:384. See this volume, ch 28. FAO (n 27). See this volume, ch 31. 36 Opinion 2/91 (n 10). See this volume, ch 22. 37 ibid para 36. 38 Case C-266/03, Commission v Luxemburg, ECLI:EU:C:2005:341 and Case C-433/03, Commission v Germany, ECLI:EU:C:2005:462 (called together Inland Waterways cases); Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS). See this volume, ch 58. 39 Commission v Luxemburg (n 37) para 58; Commission v Germany (n 38) para 64. This was also repeated in PFOS (n 38) para 71. See this volume, ch 58.
576 Thomas Ramopoulos behalf of the Union ‘marks the start of a concerted [Union] action’ entailing an obligation on Member States, if not to abstain from acting, at the very least to cooperate closely with Union institutions.40 Thus, at the moment the IMO judgment was delivered, the nature of the obligations stemming from the duty of loyal cooperation, in cases of shared competence, seemed to be that of ‘best efforts’, while the point of departure was that of the adoption of a Council act constituting a concerted Union action.41 In IMO, the Court did not look for a point of departure in the sense of a previous action for the application of the duty of loyal cooperation. The exclusive nature of the Union competence was enough to pre-empt Member State autonomous action and to activate the duty of loyal cooperation. In cases of external exclusivity, the duty of loyal cooperation entails an obligation of result in that it requires Member States to follow the decision-making procedures of the Union in order for the latter to adopt a position whilst it prevents Member States from acting externally in an autonomous fashion. Mere efforts by Member States, like in the IMO case, to consult within the Union before acting autonomously in an international organisation are not sufficient. The duty, in such instances, is absolute in nature, leaving Member States, in case of an impossibility, to adopt a Union position, with the obligation to refrain from acting internationally.42 These effects of the duty of loyal cooperation, with regard to both the positive and the negative obligations they impose on Member States, are consistent with the effects of exclusivity. Ultimately, they aim to safeguard the Union’s internal and external autonomy as a constitutional order. This conclusion on the nature and effects of the duty of loyalty is not affected by a possible prior breach of the duty of loyal cooperation by the Commission – or any other institution for that matter. This flows from the fact that the Union’s legal order is not based on the principle of reciprocity, as found in public international law. The Court reiterated this in COTIF II, where Germany was found to be in violation of the duty of loyal cooperation by having voted against a Union position in an international organisation.43 It has been argued that, although logical, this finding was not entirely satisfactory in the relationship between institutions and Member States in light of the allegedly limited means at the disposal of Member States to defend against such a breach.44 Without denying the value of this observation, the conclusion of the Court in IMO and recently in COTIF II is indeed justified in light of the nature of the Union’s legal order and, in particular, the aim and content of the principle of sincere cooperation in Article 4(3) TEU. As to the nature of the EU legal order, it is recalled that the Union is founded on the EU Treaties that are unlike ordinary international treaties, [having] established a new legal order … for the benefit of which the Member States thereof have limited their sovereign rights, in ever wider fields, and the subjects of which comprise not only those States but also their nationals.45
40 Commission v Luxemburg (n 38) paras 59–60; Commission v Germany (n 38) paras 65–66. 41 In PFOS (n 38), the Court brought the point of departure for the application of the duty of loyal cooperation in shared competences even earlier, to the start of a ‘concerted common strategy’, while it arguably gave it characteristics that brought it closer to an obligation of result. See also G De Baere, ‘“O, where is faith? O, where is loyalty?” Some Thoughts on the Duty of Loyal Cooperation and the Union’s External Environmental Competences in the Light of the PFOS Case’ (2011) 36 EL Rev 405. Eeckhout (n 34) 253. 42 Van Elsuwege (n 33) 289. Delgado Casteleiro and Larik (n 34) 535–36. 43 Case C-620/16, Commission v Germany, ECLI:EU:C:2019:256 (COTIF II), paras 88 and 99. See this volume, ch 84. 44 Cremona, ‘Extending the Reach of the AETR Principle’ (n 13) 765–66. 45 See Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:2014:2454, para 157, and case law cited therein. See this volume, ch 70.
Implied External Exclusivity and Loyal Cooperation in International Organisations 577 It is in accordance with the rules of this constitutional order that its subjects are to pursue their rights. What is more, the principle of sincere cooperation imposes obligations on the Union and the Member States that all boil down to acting with the aim of attaining the objectives of the Union. If failure by a Union institution to comply with these obligations released Member States from their own obligations, the result would be to the further detriment of the attainment of the Union’s objectives. V. ADDITIONAL READING Cremona, M, ‘Extending the Reach of the AETR Principle: Comment on Commission v Greece (C-45/07)’ (2009) 34 EL Rev 754. Cremona, M, ‘Member States as Trustees of the Union Interest: Participating in International Agreements on Behalf of the European Union’ in A Arnull, C Barnard, M Dougan and E Spaventa (eds), A Constitutional Order of States? Essays in EU Law in Honour of Alan Dashwood (Oxford, Hart Publishing, 2011) 435–58. Delgado Casteleiro, A and Larik, J, ‘The Duty to Remain Silent: Limitless Loyalty in EU External Relations?’ (2011) 36 EL Rev 524. Klamert, M, The Principle of Loyalty in EU Law (Oxford, Oxford University Press, 2011) 183–207. Larik, J, ‘Pars Pro Toto: The Member States’ Obligations of Sincere Cooperation, Solidarity and Unity’ in M Cremona (ed), Structural Principle in EU External Relations Law (Oxford, Hart Publishing, 2018) 175–99. Neframi, E, ‘The Duty of Loyalty: Rethinking its Scope through its Application in the Field of EU External Relation’ (2010) 47 CML Rev 323. Van Elsuwege, P, ‘The Duty of Sincere Cooperation and its Implications for Autonomous Member State Action in the Field of External Relations’ in M Varju (ed), Between Compliance and Particularism: Member State Interests and European Union Law (Cham, Springer, 2019) 283–98.
578
54 Visa Requirements for Turkish Citizens: Soysal & Savatli and Demirkan BRUNO DE WITTE* Case C-228/06, Mehmet Soysal and Ibrahim Savatli v Bundesrepublik Deutschland, ECLI:EU:C:2009:101, delivered 19 February 2009; Case C-221/11, Leyla Ecem Demirkan v Bundesrepublik Deutschland, ECLI:EU:C:2013:583, delivered 24 September 2013. KEYWORDS Turkey–EU association – Agreement – Additional Protocol of 1970 – Standstill clause – Direct effect – Provision of services – Reception of services – EU free movement law – Object and purpose of external agreements – EU immigration law – German immigration law – Visa requirement.
I. INTRODUCTION
S
& Savatli and Demirkan deal with the rights granted to Turkish citizens under the EU–Turkey Association Agreement (Agreement, 1963)1 and its later additions. This set of legal instruments has been a fertile source of litigation before the Court. In a large body of case law, extending over decades, the Court affirmed the direct effect of rights granted to Turkish citizens under the Additional Protocol (1970) to the Agreement, and under implementing Decisions of the EU–Turkey Association Council dating from 1976 and 1980.2 oysal
* The author wishes to thank Daniel Thym for providing inspiration and useful references for this chapter. 1 Agreement establishing an Association between the European Economic Community and Turkey of 12 September 1963, [1977] OJ L361/29. 2 The first of those ‘direct effect’ judgments was Case C-192/89, Sevince v Staatssecretaris van Justitie, ECLI:EU:C:1990:322. See this volume, ch 19. Also, Case C-12/86, Meryem Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400. See this volume, ch 16. In Demirel, direct effect was denied to the Agreement itself. For an overview of the case law on the EU–Turkey association instruments, see A Wiesbrock, ‘Political Reluctance and Judicial Activism in the Area of Free Movement of Persons: The Court as the Motor of EU–Turkey Relations?’ (2013) 19 European Law Journal 422; D Martin, ‘The Privileged Treatment of Turkish Nationals’ in E Guild and P Minderhout (eds), The First Decade of EU Migration and Asylum Law (Leiden, Martinus Nijhoff, 2012) 75; K Groenendijk, ‘The Court of Justice and the Development of EEC–Turkey Association Law’ in D Thym and M Zoeteweg-Turhan (eds), Rights of Third-Country Nationals under EU Association Agreements – Degrees of Free Movement and Citizenship (Leiden, Brill/Nijhoff, 2015) 39.
580 Bruno De Witte The Court thus ‘created’ (to the initial surprise of the Member States) an enforceable right to equal treatment for Turkish citizens in employment and social security, and the case law has also precluded a host of national measures that contravened the standstill provisions included in those documents. One of the main objectives of the EU’s association with Turkey was the progressive achievement of free movement of workers, freedom of establishment and freedom to provide services between the EU and Turkey. While waiting for the adoption of the measures needed to achieve those objectives, the parties agreed to insert a standstill clause to prevent making things ‘worse’ in the meantime. No new restrictions could be imposed on free movement while waiting for the liberalisation of movement of persons and trade in services. Similar standstill clauses have been used in other economic cooperation agreements and, most famously, in the Treaty on the European Economic Community (EEC), where they were applied during the transition phase before achieving full free movement. In Van Gend en Loos, the Court famously affirmed the direct effect of one of the standstill provisions of the EEC Treaty. This meant that individuals and firms could rely on that provision to oppose new restrictions on trade introduced by one of the Member States after the entry into force of the EEC Treaty. Indeed, the Court stated, in relation to the standstill provision of the then Article 12 EEC (now Article 30 TFEU), that ‘the very nature of this prohibition makes it ideally adapted to produce direct effects in the legal relationship between Member States and their subjects’.3 The standstill provisions in the EU–Turkey association have had a much longer life than the ones inserted in the EEC Treaty. In the absence of any meaningful progress in achieving free movement of workers, establishment and services ever since 1980,4 the standstill provisions have become a permanent fixture of EU–Turkey association law and a never-ending source of rights for Turkish nationals. The two cases, Soysal & Savatli and Demirkan, hang together closely. In Soysal & Savatli, the question addressed by the Court was whether Turkish firms providing services to the EU could invoke the standstill provision of the Additional Protocol to oppose new travel restrictions (namely, a restrictive visa regime) that affected the provision of the services. Since the Court gave a positive answer to that question, a follow-up question, raised in Demirkan, was whether Turkish persons generally could oppose new travel restrictions imposed by EU Member States on the ground that they are potential recipients of services in the EU. The relevant legal norm in both cases was Article 41(1) of the Additional Protocol.5 The article as a whole reads as follows: 1. 2.
The contracting parties shall refrain from introducing between themselves any new restrictions on the freedom of establishment and the freedom to provide services. The Council of Association shall … determine the timetable and rules for the progressive abolition by the contracting parties, between themselves, of restrictions on freedom of establishment and on freedom to provide services.
The Council of Association shall, when determining such timetable and rules for the various classes of activity, take into account corresponding measures already adopted by the Community in these fields and also the special economic and social circumstances of Turkey. Priority shall be given to activities making a particular contribution to the development of production and trade.
3 Case 26/62, Van Gend en Loos v Administratie der Belastingen, ECLI:EU:C:1963:1. 4 In contrast with the stagnation on these matters, the trade in goods between the EU and Turkey was boosted by means of the customs union agreed in Decision 1/95 of the EC–Turkey Association Council, [1996] OJ L35/1. 5 [1977] OJ L361/60. The Additional Protocol was signed in 1970, but entered into force only in 1973.
Visa Requirements for Turkish Citizens 581 The Court had started by recognising the direct effect of a similar standstill provision in Decisions 2/76 and 1/80 of the Association Council, dealing with restrictions of the access to employment by Turkish workers.6 In 2000, the Court extended this line of case law to Article 41(1) of the Additional Protocol in the Savas case, concerning the freedom of establishment. That did not help the applicant, Mr Savas, who was an irregular Turkish resident in the UK threatened with deportation. The Court held that Article 41 of the Additional Protocol did not confer a right of establishment (and a corresponding right of residence), but only protection against national rules rendering the exercise of the right of establishment more difficult once it existed. The Court stated that a Turkish national’s first admission to the territory of a Member State is governed exclusively by that Member State’s own domestic law, and the person concerned may claim certain rights under Community law in relation to holding employment or exercising self-employed activity, and, correlatively, in relation to residence, only in so far as his position in the Member State concerned is regular.7
Soon after, in the Abatay & Sahin judgment of 2003,8 the Court applied its Savas ruling on the direct effect of Article 41(1) of the Additional Protocol to the provision of services. This raised different issues, since the applicants in Abatay & Sahin did not claim a right of residence in an EU Member State, but only the facilitation of their travel to the EU. The applicants in those cases were Turkish lorry drivers, living in Turkey and employed by a Turkish company that operated road transport services between Turkey and Germany with lorries registered in Germany. In October 1996, Germany had introduced new legislation requiring a German work permit for this group of lorry drivers, and in practice, such a work permit was often refused. Relying on earlier case law relating to the free movement of services within the EU, the Court found that this work permit requirement was indeed a restriction of the provision of services, and, if the restriction was genuinely new (which was for the national court to ascertain), it was contrary to the standstill clause of Article 41(1) of the Additional Protocol. Because of this jurisprudence, and of the general willingness of national courts to make preliminary references to the Court on issues concerning the EU–Turkey association, lawyers in Member States such as Germany, the Netherlands and Denmark felt increasingly confident to challenge national immigration measures on behalf of their Turkish clients. The Soysal & Savatli and Demirkan cases fit within this legal mobilisation strategy and took it one step further by challenging visa requirements for Turkish nationals, which were (and still are) a major burden on travel between Turkey and the European Union. II. FACTS
The applicants in the Soysal & Savatli case were (like in the Abatay and Sahin case mentioned above) two Turkish lorry drivers, resident in Turkey and working for a Turkish transport company. They had often been issued an entry visa into Germany for the purpose of providing transport services, but in 2001 they were refused new visas, apparently because they were, in fact, driving lorries belonging to a German company and were thus ‘posted’ by their employer
6 This happened as far back as in 1990, in the Sevince case (n 2). 7 Case C-37/98, The Queen v Secretary of State for the Home Department, ex parte Abdulnasir Savas, ECLI:EU:C:2000:224, para 65. 8 Joined Cases C-317/01 and C-369/01, Eran Abatay and Nadi Sahin v Bundesanstalt fur Arbeit, ECLI:EU:C:2003:572.
582 Bruno De Witte to Germany. They challenged the refusal before German administrative courts by invoking the standstill provision of Article 41(1) of the Additional Protocol. Since visa requirements were imposed by Germany on Turkish nationals only since 1980, they were, according to the applicants, a ‘new’ restriction on the provision of services imposed after the year of entry into force of the Additional Protocol, namely 1973. The Higher Administrative Court of Berlin-Brandenburg made a preliminary reference asking the Court whether the German law requiring entry visas from Turkish lorry drivers was in breach of the Additional Protocol to the EU–Turkey Association Agreement. The applicant in Demirkan, unlike in Soysal & Savatli, was not an economically active Turkish national, but a 14-year old, at the time of the facts, called Leyla Ecem Demirkan. She lived in Turkey and had applied for a visa in order to visit her stepfather living in Germany. The visa was refused, and that refusal was challenged before the German administrative courts. The Higher Administrative Court of Berlin-Brandenburg, the same court as in Soysal & Savatli, made a preliminary reference. The applicant’s lawyer in Demirkan was the same as in Soysal & Savatli, namely Rolf Gutmann, who had written about the rights of Turkish nationals under the Agreement.9 The question raised in Demirkan was whether the Soysal & Savatli precedent meant that the German visa requirement for Turkish nationals should be lifted, not only for actual providers of services (such as the lorry drivers in Soysal & Savatli), but also for potential receivers of services, such as Demirkan. The implications of the Court’s answer for German immigration law (and that of other EU Member States) were more massive than in Soysal & Savatli, which may explain why, unlike Soysal & Savatli, the Demirkan case was decided by the Grand Chamber of the Court, and why nine Member State governments intervened in the case. III. THE COURT
The Court in Soysal & Savatali started by reaffirming, with reference to its earlier Savas judgment, the direct effect of Article 41(1) of the Additional Protocol, so that it could be invoked before national courts to preclude the application of incompatible norms of national law.10 The fact that the service was provided, legally speaking, by the employer of the lorry drivers did not prevent the drivers from invoking Article 41(1) of the Additional Protocol, given that their work was indispensable for the service to be provided.11 The substantive rule, set out in the subsequent paragraph, was that the standstill clause prohibits generally the introduction of any new measures having the object or effect of making the exercise by a Turkish national of those economic freedoms … subject to stricter conditions than those which applied to him at the time when the Additional Protocol entered into force with regard to the Member State concerned (emphasis added).12
As the visa requirement for Turkish nationals was introduced only in 1980, it was held to be a new restriction of the provision of services. Indeed, obtaining a visa constitutes an administrative and financial burden, and can be denied (as happened in this case);13 it therefore has the 9 R Gutmann, Die Assoziationsfreizügigkeit türkischer Staatsangehöriger: Ihre Entdeckung und ihr Inhalt (Nomos, 1999). 10 Case C-228/06, Mehmet Soysal and Ibrahim Savatli v Bundesrepublik Deutschland, ECLI:EU:C:2009:101, para 45. 11 ibid para 46. 12 ibid para 47. 13 ibid para 55.
Visa Requirements for Turkish Citizens 583 effect (even if possibly not the object) of restricting the provision of services, which conflicted with the standstill obligation contained in the Additional Protocol. One complicating factor was that, in the meantime, the German visa requirement had become ‘Europeanised’ by the EU Visa Regulation of 2001, which listed Turkey as one of the third countries whose nationals required a visa to enter the Schengen territory. The Court brushed that argument aside by recalling the primacy of international agreements concluded by the Union over provisions of secondary EU law.14 The implication (not spelled out by the judgment) was that the Visa Regulation had, henceforth, to be read as not applying to Turkish nationals who provide services – unless the ‘receiving’ EU Member State already had a visa requirement for Turkish nationals prior to 1 January 1973. The operational part of the judgment left no doubt whatsoever to the referring national court as to the solution of the dispute. The Court said that Article 41(1) of the Additional Protocol … is to be interpreted as meaning that it precludes the introduction, as from the entry into force of that protocol, of a requirement that Turkish nationals such as the appellants in the main proceedings must have a visa to enter the territory of a Member State in order to provide services there on behalf of an undertaking established in Turkey, since, on that date, such a visa was not required.
In the Demirkan judgment, the Court started by rehearsing its case law on the intra-EU provision of services, recalling that it had indeed held in the Luisi and Carbone case decided in 198415 that the freedom to provide services granted directly effective rights not only to service providers, but also to service recipients. This implied that EU citizens were entitled to travel to other EU Member States in order to receive services there.16 In Bickel and Franz,17 the Court had specified that this covered all EU citizens who ‘just’ visit another EU Member State if they are likely to receive services during that visit. If that case law were to be extended to Turkish nationals under the Additional Protocol, a person such as Demirkan could have invoked the standstill clause, as she wanted to visit her stepfather in Germany and was likely to receive services during her visit. The Court did repeat the formula used in the previous cases, according to which ‘the principles enshrined in the provisions of the [EC] Treaty relating to freedom to provide services must be extended, as far as possible, to Turkish nationals’ (emphasis added),18 but then decided that such an extension was not ‘possible’ this time. It stated that the interpretations given to provisions of EU internal market law could not ‘automatically’ be applied, by analogy, to the interpretation of similarly worded provisions of an international agreement of the EU.19 This was the so-called Polydor principle, which the Court had originally coined in a case dealing with a free trade agreement with Portugal (then a non-Member State),20 but had, so far, never applied to the EU–Turkey association instruments. The Court developed this idea by stating that, before transposing the interpretation of a norm from the internal to the external domain, one needed to compare the objectives and context of the international agreement with those of the EU Treaties.21 Relying on a recent
14 ibid
para 59.
15 Joined Cases 286/82 and 26/83, Graziana Luisi and Giuseppe Carbone v Ministero del Tesoro, ECLI:EU:C:1984:35. 16 Case
C-221/11, Leyla Ecem Demirkan v Bundesrepublik Deutschland, ECLI:EU:C:2013:583, para 35. C-274/96, Criminal proceedings against Horst Otto Bickel and Ulrich Franz, ECLI:EU:C:1998:563. 18 Demirkan (n 16) para 43. 19 ibid para 44. 20 Case 270/80, Polydor and others v Harlequin and others, ECLI:EU:C:1982:43. See this volume, ch 13. 21 Demirkan (n 16) para 47. 17 Case
584 Bruno De Witte judgment in Ziebell (another Turkish case, but not dealing with the standstill clause),22 it found a ‘fundamental difference’ in Demirkan, in that the EU–Turkey association ‘pursues a solely economic purpose’,23 and therefore it is only where the activity in question is the corollary of the exercise of an economic activity that the standstill clause may relate to the conditions of entry and residence of Turkish nationals within the territory of the Member States.24
As an additional argument, the Court noted that its Luisi and Carbone judgment was dated from 1984, and that, before that time, it was not obvious that receivers of services derived rights from the EC Treaty, and certainly the parties to the Additional Protocol (which was agreed in 1970) would never have envisaged this. The Court concluded, in the operational part of the judgment, that the notion of freedom to provide services in Article 41(1) of the Additional Protocol ‘must be interpreted as not encompassing freedom for Turkish nationals who are the recipients of services to visit a Member State in order to obtain services’. Germany was thus not bound by Article 41(1) of the Additional Protocol in this case and could impose new visa requirements on Turkish nationals seeking to enter the country (unless they were entering Germany in order to provide a service, as in Soysal & Savatli). IV. THE IMPORTANCE OF THE CASES
A. The Place of the Two Cases in the EU–Turkey Association Regime The Agreement of 1963 was a skeleton agreement. It was meant to be fleshed out by later decisions of the Association Council set up under it. The task of that Association Council was stated to be ‘the implementation and progressive development of the Association’. That progressive development was envisaged to be based on the model of the EEC’s common market, which was being put in place in the same period of time. Specifically concerning services, Article 14 of the Agreement provided that ‘The contracting parties agree to be guided by Articles 55, 56 and 58 to 65 of the Treaty establishing the Community for the purpose of abolishing restrictions on freedom to provide services between them’. An acceleration of the development of the association happened in 1970, through the adoption of an Additional Protocol complementing the Agreement. The Additional Protocol reiterated the commitment to reduce existing restrictions to trade, provision of services and free movement of persons, but it also, importantly, added the standstill provision in its Article 41(1). This standstill clause, inspired by existing practice under international trade law and Community law at the time and later completed by a similar one applying to Turkish workers under Decision 1/80 of the Association Council, acquired a practical importance far beyond the expectations of its authors. One reason for this was that the progressive achievement of free movement between EU and Turkey became politically stuck, thus extending the shelf life of the standstill provisions for much longer than planned. The other reason was the active role of the Court in strengthening the role of the standstill clause by affirming its direct effect and giving it a broad scope of application.
22 Case
C-371/08, Nural Ziebell v Land Baden-Württemberg, ECLI:EU:C:2011:809. (n 16) para 50. para 55.
23 Demirkan 24 ibid
Visa Requirements for Turkish Citizens 585 This happened at a time, from the mid-1970s onwards, when a number of Member States in western Europe reconsidered their ‘guest worker’ policies and sought to make migration from Turkey (and elsewhere) more difficult. The standstill provisions of the Additional Protocol and Decision 1/80 affected the immigration policies of Member States in a major way and led to a special, more favourable regime under EU law for Turkish nationals compared to other third country nationals. The political tension caused by these developments led the Court to reconsider, in part, its earlier jurisprudence. Soysal & Savatli and Demirkan are situated at the intersection between the objective of liberalising trade and free movement between the EU and Turkey and the objective of allowing Member States to keep control of their migration policies, in particular concerning the ‘first entry’ of third country nationals, including Turkish nationals. Whereas Soysal & Savatli was still inspired by the free movement logic, the Grand Chamber in Demirkan was more sensitive to the migration policy implications and took an approach that was less favourable to Turkish nationals. More generally, the shift between the two cases represents a different perception, by the Court, of how the EU–Turkey cases should fit within the EU’s overall constitutional framework.25 B. The Free Movement Logic In determining the direct effect of international agreements of the EU and of decisions by their implementing bodies, the general formula used by the Court is the following: [A] provision in an agreement concluded by the European Union with a non-member country must be regarded as directly applicable when, regard being had to its wording and to the purpose and nature of the agreement, the provision contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure.26
Two elements of this formula are noteworthy as they subject the direct effect of international agreements to a different, and somewhat stricter, standard than in the case of ‘internal’ EU law (regulations or directives). There is a condition attached to the ‘purpose and nature’ of the agreement as a whole (irrespective of the wording of its single provisions), and, in relation to the single provisions, the Court attaches great importance on whether they require the adoption of implementing (‘subsequent’) measures. This general formula covers a judicial practice which varies widely, depending on the type of international agreement, ranging from the generous recognition of the direct effect of (mostly) bilateral association agreements to the rejection of the direct effect of some important multilateral treaties, such as the WTO agreements.27 The Court’s approach towards the EU–Turkey association instrument was mixed. The Agreement itself was considered not to have direct effect as its substantive provisions were very programmatic and clearly required further implementation by the parties.28 In contrast, the
25 On this point, see D Thym, ‘Constitutional Foundations of the Judgments on the EEC–Turkey Association Agreement’ in Thym and Zoeteweg-Turhan (n 2) 13. 26 Case C-240/09, Lesoochranarske zoskupenie, ECLI:EU:C:2011:125, para 44; Case C-464/14, SECIL, ECLI:EU:C:2016:896, para 96. 27 M Mendez, The Legal Effects of EU Agreements: Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013). 28 See, eg the Savas judgment (n 7) paras 41–45.
586 Bruno De Witte Court chose to affirm the direct effect of the standstill clauses (and also the equal treatment provisions) contained in the other instruments of EU–Turkey association law. In doing so, it was guided by the clear and unconditional wording of those provisions and their similarity with the standstill provisions contained in the original EEC Treaty, and it considered that the object and purpose of the association did not stand in the way of ‘transposing’ this direct effect from ‘internal’ to ‘external’ EU law. The parallelism with internal free movement law did not stop at recognising the direct effect of the standstill provisions. The Court also extended it to a transposition of the notion of ‘restriction’, which was given a similarly broad scope in Soysal & Savatli as it was in internal free movement law. It was not altogether evident that visa legislation should be considered a measure restricting the freedom to provide services, but the Court chose to adopt a broad definition of prohibited restrictions. C. The Migration Policy Logic In Soysal & Savatli, by recognising the direct effect of an old standstill provision dating from 1970, the Court precluded the application of the ‘Schengen’ visa requirement to Turkish service providers entering Germany, thereby disrupting a major piece of the Union’s harmonised immigration control regime. This affected a central piece of national immigration law that could have seemed unconnected with the economic cooperation content of the Agreement and its ancillary instruments. As a result of the Soysal & Savatli judgment, Germany and a few other countries modified their immigration rules and practice to accommodate the Court’s judgment, but they did so in a quite restrictive manner.29 The European Commission, from its side, published a set of guidelines for the Member States on how they should accommodate the Soysal & Savatli judgment in their application of the Schengen visa regulation.30 While the Court kept declaring, in other cases, what it had affirmed in Savas, namely that the Member States are solely competent to regulate the initial admission to their territory, and the first access to employment, of Turkish nationals, that affirmation was no longer true after Soysal & Savatli.31 The Demirkan case made the Court reconsider the importance of the migration policy context. Whereas the Soysal & Savatli judgment had led to a limited exemption from the visa requirement for Turkish service providers operating in Member States, the Demirkan case could potentially lead to a general cancellation of the visa requirement for all Turkish nationals. This happened at a time when Member States, as a policy matter, sought to limit migration from third countries, including Turkey (and considered the visa requirement a useful filtering mechanism for that purpose), and when the EU’s institutions wanted to use the prospect of visa liberalisation as a negotiation tool in their difficult relations with Turkey. In particular, at that time, the EU used visa liberalisation as a quid pro quo in the negotiations for a readmission agreement with Turkey.
29 For a description of the policy changes resulting from Soysal & Savatli (n 10), see K Groenendijk and E Guild, Visa Policy of Member States and the EU towards Turkish Nationals after Soysal (March 2010) Economic Development Foundation Publications No 232, 24–30. 30 Note from the Commission, ‘Guidelines on the Movement across the External Borders of Member States Applying the Schengen Acquis of Turkish Nationals in Order to Provide Services in a Member State’ (7 May 2009). The Commission explained that ‘the need for this clarification has arisen from the ruling of the Court of Justice of 19 February 2009 in Case C-228/06, Soysal’. The note is reproduced in Groenendijk and Guild (n 29) Annex G. 31 This point is further elaborated in the case comment by S Peers, ‘EC Immigration Law and EC Association Agreements: Fragmentation or Integration?’ (2009) 34 EL Rev 628, 635–37.
Visa Requirements for Turkish Citizens 587 The Court thus found itself, in Demirkan, under considerable pressure (not least from the many Member States intervening in the case) to refrain from undermining the EU’s and Germany’s immigration policies. The Court decided to change the dynamics of its earlier case law, but without overruling it entirely. The legal ploy to do so was to emphasise that the ‘object and purpose’ of the EU–Turkey association instruments was, after all, quite distinct from that of EU internal market law, so that an extension of free movement rights to the recipients of services was not covered by Article 41(1) of the Additional Protocol. The reasoning on this point was not very convincing, but can be easily explained by the policy implications of the judgment. It was aptly described as ‘politically unavoidable and yet legally embarrassing’.32 Similar dynamics were at play in United Kingdom v Council (EEC–Turkey),33 distinguishing the EU’s international agreement on social security matters with Turkey from those with European Economic Area (EEA) states34 and Switzerland.35 As a result of Demirkan, there was no need for further visa liberalisation, and that topic remained on the agenda of EU–Turkey relations. Since 2013, a ‘Visa Liberalisation Dialogue’ with Turkey has been ongoing, but it has not yet led to tangible results. In the latest version of the EU’s Visa Regulation, Turkey is still on the list of countries whose nationals are required to possess a visa when crossing the EU’s external borders.36 D. Later Case Law on the Standstill Clauses After Demirkan, some major further developments of the standstill obligations happened in the context of family reunification. In Dogan, a German measure requiring third country nationals to pass a German language test in their country of origin before being allowed to reunite with their spouses in Germany was held to be in conflict with the standstill clause of Article 41(1) of the Additional Protocol, in the part dealing with freedom of establishment. The Court held that ‘the decision of a Turkish national to establish himself in a Member State in order to exercise there a stable economic activity could be negatively affected where the legislation of that Member State makes family reunification difficult or impossible’.37 In Genc, a Grand Chamber judgment,38 the Court stuck to its guns and declared that a new national law in Denmark making family unification more difficult could not apply to Turkish workers living in Denmark because of the standstill clause in Article 13 of Decision 1/80. In A, the Court dealt with another national law in Denmark which made family reunification with a spouse conditional on the overall attachment of both spouses to Denmark being greater than the overall attachment to a third country. The Court considered that this
32 V Hatzopoulos, ‘Turkish Service Recipients under the EU–Turkey Association Agreement: Demirkan’ (2014) 51 CML Rev 647, 653. 33 Case C-81/13, United Kingdom v Council, ECLI:EU:C:2014:2449 (EEC–Turkey). See this volume, ch 62. 34 Case C-431/11, United Kingdom v Council, ECLI:EU:C:2013:589 (EEA) See this volume, ch 65. 35 Case C-656/11, United Kingdom v Council, ECLI:EU:C:2014:97 (Swiss Confederation). 36 Annex 1 of Regulation 2018/1806 of the European Parliament and of the Council of 14 November 2018 listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement, [2018] OJ L303/39. 37 Case C-138/13, Naime Dogan v Bundesrepublik Deutschland, ECLI:EU:C:2014:2066, para 35. 38 Case C-561/14, Caner Genc v Integrationsministeriet, ECLI:EU:C:2016:247. See the case comment by N Idriz, ‘Family Reunification under the Standstill Clauses of EU–Turkey Association Law: Genc’ (2017) 54 CML Rev 263.
588 Bruno De Witte law, in its application to Turkish nationals residing in Denmark, was again an unjustified new restriction of the rights of Turkish workers under Article 13 of Decision 1/80.39 Alongside these judgments of the Court, national courts in the Netherlands decided, without the need for a preliminary reference, that compulsory language courses and tests imposed on Turkish nationals contravened the standstill clauses.40 As a result, the Dutch government exempted Turkish nationals from integration exams and tests, both pre- and post-entry to the territory. Interestingly, this case law impinges on a central area of national immigration law, namely, the conditions of entry and residence in the Member States, a matter which the Court, in Savas, had considered to be within the exclusive control of the states. This further expansion of the scope of the ‘restrictions’ was accompanied by the emergence of a ‘rule of reason’, whereby restrictions may be justified by an overriding reason in the public interest. Whereas the standstill clause used to be a categorical rule (if a new restriction was made, it was incompatible with the standstill clause), it thus became a prima facie rule (new restrictions were, in principle, not allowed, except if they are sufficiently justified by the public interest).41 The Court borrowed this approach from its internal free movement cases, although there it had never applied to standstill clauses. The overriding reasons exception made a first timid appearance in the Demir case, decided little more than a month after Demirkan.42 The new test was fully articulated in Genc.43 Like in its ‘internal’ case law, the Court readily accepts the existence of a public interest inspiring the restriction (in Genc and in A, it was the interest of achieving the successful integration of migrants into society in Denmark), but is rather strict when examining the proportionality of the measure (in Genc and in A, the Court declared it disproportional and therefore unjustified). The Court thus later applied this new test to all cases in which the standstill clauses of EU–Turkey association law were invoked.44 Despite the restrictive turn in Demirkan, the Court’s case law on the standstill provisions in the EU–Turkey instruments remains an important constraint on EU and national immigration policies, and is criticised by some authors as an ‘undesirable cementing of legislative powers of EU member states to adjust their immigration and social legislation to new challenges’.45 V. ADDITIONAL READING Hatzopoulos, V, ‘Turkish Service Recipients under the EU–Turkey Association Agreement: Demirkan’ (2014) 51 CML Rev 647. Peers, S, ‘EC Immigration Law and EC Association Agreements: Fragmentation or Integration?’ (2009) 34 EL Rev 628. Thym, D and Zoeteweg-Turhan, M (eds), Rights of Third-Country Nationals under EU Association Agreements – Degrees of Free Movement and Citizenship (Leiden, Brill/Martinus Nijhoff, 2015). 39 Case C-89/18, A v Udlaendinge- og Integrationsministeriet, ECLI:EU:C:2019:580. See the case comment by S Ganty, ‘Le silence n’est pas (toujours) d’or’ [2019] Revue des affaires européennes 401. 40 N Tezcan Idriz, ‘Dutch Courts Safeguarding Rights under the EEC–Turkey Association Law’ (2001) 13 European Journal of Migration and Law 219. Judgment of 16 August 2011 of the Centrale Raad van Beroep (a supreme administrative court). 41 See Idriz (n 38) 272–76. 42 Case C-225/12, C Demir v Staatssecretaris van Justitie, ECLI:EU:C:2013:725, paras 40–41. 43 Genc judgment (n 38) paras 54–67. 44 See, eg Case C-70/18, Staatssecretaris van Justitie en Veiligheid v A, B, P, ECLI:EU:C:2019:823, finding that a Dutch law collecting the biometric data of Turkish nationals when they apply for a residence permit is a ‘new restriction’ falling within the scope of the standstill provision in Decision 1/80 of the Association Council, but that it is justified by the objective of preventing and combating identity and document fraud. 45 K Hailbronner, ‘The Stand Still Clauses in the EU–Turkey Association Agreement and their Impact upon Immigration Law in the EU Member States’ in Thym and Zoeteweg-Turhan (n 2) 186, 200.
55 The Application of EU Law in an Unrecognised Entity: Apostolides v Orams NIKOS SKOUTARIS Case C-420/07, Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams, ECLI:EU:C:2009:271, delivered 28 April 2009. KEYWORDS Cyprus – Protocol No 10 – Suspension of the acquis – Territorial differentiation – Fundamental rights – Lawfare – State recognition – Recognition of judgments.
I. INTRODUCTION
‘T
he Cyprus issue entails a conflict between 50,000 Turkish soldiers in the North and 50,000 Greek-Cypriot lawyers in the South’.1 Despite its exaggerating manner, this common joke among students of the Cyprus dispute accurately depicts the transition of the conflict from warfare to ‘lawfare’. Undoubtedly, the Cyprus issue has been one of the most judicialised disputes in the world.2 In this book, for example, there are two chapters on cases that have arisen from the Cyprus dispute. Unlike Anastasiou I,3 which concerned preferential access of Turkish-Cypriot products to the EU internal market before the accession of Cyprus to the EU, the facts of Apostolides v Orams4 took place after Cyprus became a Member State. The importance of the case lies precisely in the fact that it highlighted the limits of the territorial suspension of EU law in northern Cyprus – an area over which the Government of the Republic of Cyprus does not exercise effective control (section IVA). However, in order to better understand Apostolides v Orams, the broader context of the case law from international courts in Europe that have been adjudicating aspects of the conflict needs to be 1 Interview with a high-rank UN official (on file with the author). 2 See, eg K Özersay and A Gürel, ‘The Cyprus Problem at the European Court of Human Rights’ in T Diez and N Tocci (eds), Cyprus: A Conflict at the Crossroads (Manchester, Manchester University Press, 2009) 273. 3 Case C-432/92, Regina v Minister of Agriculture, Fisheries and Food, ex parte S.P. Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:1994:277 See this volume, ch 25. 4 Case C-420/07, Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams, ECLI:EU:C:2009:271 (hereafter Grand Chamber judgment in Apostolides v Orams).
590 Nikos Skoutaris understood (section IVB). In a way, the case serves as a useful reminder of the fact that, despite the expectations that parties often have in regard to an international dispute, decisions of the Court and other courts on issues that arise from such mega-conflicts5 can only offer incremental solutions (section IVC). II. FACTS
The Republic of Cyprus gained its independence from the UK by virtue of three treaties, namely the Treaty of Guarantee, the Treaty of Alliance and the Treaty of Establishment, and a national constitution, all of which came into operation the same day – 16 August 1960.6 This international legal framework set out a complicated power-sharing arrangement between the Greek-Cypriot and the Turkish-Cypriot communities on the island guaranteed by the UK, Greece and Turkey. This sophisticated institutional regime was short-lived: it collapsed just four years later.7 The territorial division of the two communities was consolidated and took its current form, however, in 1974. A coup against the Greek-Cypriot President of the Republic, orchestrated by the military regime in Greece, led to the military intervention by the other guarantor state: Turkey. Since then, the two communities have lived in two ethnically homogeneous states sharing a de facto border: the internationally recognised Republic of Cyprus (RoC) and the internationally unrecognised Turkish Republic of Northern Cyprus (TRNC). During the more than 50 subsequent years of territorial and political segregation, the two communities and the three guarantor states have been negotiating to achieve a comprehensive settlement of the Cyprus issue on the basis of a bizonal, bicommunal federation, with political equality between the two ethno-religious groups. The closest they came to a solution was in April 2004, when the two communities were asked to approve the UN-sponsored plan for the Comprehensive Settlement of the Cyprus Problem – commonly known as the Annan Plan – in simultaneous referendums.8 The Turkish Cypriots endorsed it while the Greek Cypriots heavily rejected it. Still, a week later, on 1 May 2004, the RoC became an EU Member State. The terms of the Republic’s accession are described, inter alia, in Protocol No 10 on Cyprus of the Act of Accession 2003.9 According to Article 1(1) of this Protocol, the application of EU law is suspended in northern Cyprus – an area where RoC’s internationally recognised government does not exercise effective control. One of the consequences of the territorial division of the island in the aftermath of the 1974 intervention was that thousands of Cypriots had to abandon their properties as they
5 See, eg Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2010:91. See this volume, ch 57; Case T-512/12, Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) v Council of the European Union, ECLI:EU:T:2015:953; Case C-104/16 P, Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario), ECLI:EU:C:2016:973; Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs, ECLI:EU:C:2018:118. See this volume, ch 75; Case C-363/18, Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954. See this volume, ch 89; Case C-457/18, Republic of Slovenia v Republic of Croatia, ECLI:EU:C:2020:65. See this volume, ch 90. 6 See generally www.kypros.org/Constitution/English/. 7 See generally N Skoutaris, The Cyprus Issue: The Four Freedoms in a Member State under Siege (Oxford, Hart Publishing, 2011) ch 2. 8 www.hri.org/docs/annan/Annan_Plan_April2004.pdf. 9 Protocol No 10 on Cyprus of the Act of Accession 2003 [2003] OJ L236/955.
The Application of EU Law in an Unrecognised Entity 591 had to flee. Although many displaced Greek Cypriots claim ownership of the land they were forced to vacate, the Turkish-Cypriot authorities ‘nationalised’ those abandoned properties.10 One of those Greek Cypriots was Mr Apostolides, who used to live in northern Cyprus, where his family owned land. In 2002, Mr. and Mrs. Orams, British citizens, purchased a plot of land from a Turkish-Cypriot private vendor, who was the registered owner under the relevant TRNC law. Mr Apostolides claimed ownership over part of that land. In order to protect his ownership rights over the land, Mr. Apostolides instituted proceedings in the District Court of Nicosia against Mr. and Mrs. Orams on 26 October 2004. On 9 November 2004, the District Court issued its judgment in default of appearance, according to which the Orams had to demolish the newly built villa, the pool and the fencing, and had to give Mr. Apostolides possession of the land, as well as paying damages. On 15 November 2004, the Orams applied to the District Court to have the judgment set aside. The Nicosia District Court, following the case law of the European Court of Human Rights (ECtHR) in Loizidou,11 held that Mr Apostolides had not lost his right to the land. In that sense, the conduct of Mr and Mrs Orams towards the property amounted to trespass. Thus, Mr. and Mrs. Orams’s application for setting aside the judgment was dismissed. The Orams appealed against that judgment to the Supreme Court of Cyprus, which, by its decision on 21 December 2006, rejected the appeal.12 In accordance with the procedure laid down in Regulation 44/2001,13 on 21 October 2005, it was ordered that the judgments be registered and be declared enforceable in the UK. Mr. and Mrs. Orams challenged that order under Article 43 of Regulation No 44/2001, asking the High Court of Justice (England and Wales) to set it aside. In its decision, the Queen’s Bench division of the High Court focused on whether the decision of the Cypriot court could be declared enforceable in the UK in accordance with Regulation 44/2001. The British court firstly affirmed that the order was in full compliance with the procedure of the Regulation. In particular, it pointed to Article 22(1), according to which it is the courts of the Member State where the property is situated that have exclusive jurisdiction in proceedings that have as their object rights, in rem, in immoveable property. However, it still held that the EU acquis, and therefore Regulation 44/2001, were of no effect in relation to matters which relate to northern Cyprus. The reason for that was the fact that the EU acquis was suspended in northern Cyprus. As a result, Mr. Apostolides could not rely on the Regulation to enforce the Cypriot judgments that he had obtained. As Mr Apostolides ‘could not rely on the acquis against his own [g]overnment in connection with his human rights arising from matters relating to the area controlled by the TRNC, he cannot rely on the acquis against’ the Orams to enforce his judgments against them.14 Unsurprisingly, Mr. Apostolides challenged the decision of the High Court before the Court of Appeal. Given the important legal questions that the case was posing for the EU legal order, the Court of Appeal referred the matter to the Court. On 18 December 2008, Advocate General (AG) Kokott delivered her Opinion.15 Four months later, the Court delivered its judgment.
10 See Art 159 of the TRNC Constitution. 11 Titina Loizidou v Turkey (Merits and Just Satisfaction), Application No 15318/89 (judgment 18 December 1996), ECHR Reports 1996-VI – see s IVB of this chapter. 12 Supreme Court of Cyprus, Orams v Apostolides (Case No 121/2005) (judgment 21 December 2006). 13 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and enforcement of judgments in civil and commercial matters [2001] OJ L12/1. 14 Orams v Apostolides [2006] EWHC 2226 (QB), para 30. 15 Opinion of AG Kokott, Case C-420/07, Meletis Apostolides v David Charles Orams and Linda Elizabeth Orams, ECLI:EU:C:2008:749 (hereafter Opinion of the AG in Apostolides v Orams).
592 Nikos Skoutaris III. THE COURT
The first question referred to the Court was whether the suspension of the application of the EU acquis in northern Cyprus ‘precludes the recognition and enforcement under Regulation 44/2001 of a judgment relating to claims to the ownership of land situated in that area’.16 AG Kokott started by distinguishing the territorial scope of the Regulation from the ‘reference area of proceedings or judgments in respect of which the regulation lays down provisions’.17 Under the then Article 299 EC (now Article 52 TEU),18 the territorial scope of the Regulation ‘corresponds to the territory of the Member States with the exception of certain regions specified in that provision’.19 Therefore, it applied in the UK and, subject to Protocol No 10, in the RoC.20 On the other hand, the reference area of the Regulation was broader, in the sense that it ‘also applies to proceedings which include a non-member-country element’.21 The dispute before the Court of Appeal did not involve the recognition and enforcement of a judgment of a court of a Member State in northern Cyprus, nor did it entail the recognition and enforcement of a judgment of a court situated in northern Cyprus.22 In fact, as the Grand Chamber noted, the relevant ‘judgments concern land situated in the northern area’,23 but ‘were given by a court sitting in the Government-controlled area’.24 Therefore, the restriction of the territorial scope of the Regulation does not affect the case.25 In sum, the Court agreed with the Opinion of AG Kokott26 that the suspension of the application of the acquis in northern Cyprus ‘does not preclude the application of Regulation 44/2001 to a judgment which is given by a Cypriot court sitting in the Government-controlled area, but concerns land situated in the northern area’.27 The second question that the Court of Appeal referred to the Court was whether the fact that the judgment was given by a national court situated in the government-controlled areas concerning land situated in northern Cyprus could be regarded as an infringement of the rule of jurisdiction laid down in Article 22(1) of Regulation 44/2001.28 Unsurprisingly, the Orams argued that Article 22(1) must be interpreted restrictively, to the effect that national courts of the RoC should not have jurisdiction for actions in connection with rights over land in northern Cyprus.29 Interestingly enough, the Court noted that it is common ground that the land is situated in the territory of the Republic of Cyprus and that, therefore, the rule of jurisdiction laid down in Article 22(1) of Regulation 44/2001 has been observed. The fact that the land is situated in the northern area may possibly have an effect on the domestic jurisdiction of the Cypriot courts, but cannot have any effect for the purposes of that regulation.30
16 ibid 17 ibid
para 24. para 25.
18 Furthermore, 19 Opinion 20 ibid. 21 ibid
the territorial scope of the Treaties is specified in Art 355 TFEU. of the AG in Apostolides v Orams (n 15) para 26.
para 27. para 31. 23 Grand Chamber judgment in Apostolides v Orams (n 4) para 38. 24 ibid para 37. 25 Opinion of the AG in Apostolides v Orams (n 15) para 32. 26 ibid para 53. 27 Grand Chamber judgment in Apostolides v Orams (n 4) para 39. 28 ibid para 47. 29 Opinion of the AG in Apostolides v Orams (n 15) para 83. 30 Grand Chamber judgment in Apostolides v Orams (n 4) para 51. 22 ibid
The Application of EU Law in an Unrecognised Entity 593 Therefore, with regard to the second question, the Court also followed the Opinion of AG Kokott,31 holding that Article 35(1) does not entitle a national court of a Member State to refuse the recognition and enforcement of a judgment given by the courts of the RoC concerning land situated in northern Cyprus, an area over which RoC’s internationally recognised government does not exercise effective control.32 The third question that the Court of Appeal referred to the Court concerned the public policy proviso in Article 34(1) of the Regulation. It asked whether the recognition and enforcement of a judgment must be refused on the basis of the proviso that a judgment cannot be enforced, as a practical matter, in the Member State where the judgment was given, as that government did not exercise effective control over the area to which the judgment related.33 The Court noted that according to its settled case law, the public policy proviso should be interpreted as restrictively as possible in order to allow for the free movement of judgments within the Union.34 In fact, the Court clarified that recourse to the public-policy clause … can be envisaged only where recognition or enforcement of the judgment given in another Member State would be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought inasmuch as it would infringe a fundamental principle.35
However, in the order for reference to the Court, the Court of Appeal did not refer to any fundamental principle within the UK legal order that the recognition or enforcement of the judgments in question would be liable to infringe.36 Thus, in the absence of a fundamental principle in the UK legal order which would be infringed by the recognition or enforcement of the Cypriot judgments, the Court rejected that argument as well.37 According to the Court, ‘the fact that claimants might encounter difficulties in having judgments enforced in the northern area cannot deprive them of their enforceability’.38 IV. THE IMPORTANCE OF THE CASE
A. The Territorial Suspension of the Acquis The unprecedented situation (for an EU Member State) of not controlling part of its territory is acknowledged in Protocol No 10 of the Act of Accession 2003. In the absence of a comprehensive settlement of the Cyprus dispute, in 2003, the EU Member States and Cyprus considered that it was necessary to provide for the suspension of the application of the acquis in northern Cyprus, a suspension which would be lifted in the event of a solution.39 What the Apostolides v Orams judgment did was, after the accession of Cyprus to the EU, to provide for the first authoritative description of the limits of that territorial suspension of the EU acquis.
31 Opinion of the AG in Apostolides v Orams (n 15) para 89. 32 Grand Chamber judgment in Apostolides v Orams (n 4) para 52. 33 ibid para 53. 34 ibid para 55. See also H Meidanis, ‘The Brussels I Regulation and the Cyprus Problem before the Court of Justice: Comment on Apostolides v Orams’ (2009) 34 EL Rev 963, 970. 35 ibid para 59. 36 Grand Chamber judgment in Apostolides v Orams (n 4) para 61. 37 ibid para 62. 38 ibid para 70. 39 Art 1(1) of Protocol No 10.
594 Nikos Skoutaris As AG Kokott rightly pointed out, the acquis ‘is to be suspended in that area and not in relation to that area’.40 This reading of the provision was in accordance with the settled case law of the Court,41 according to which provisions in an Act of Accession which permit exceptions to or derogations from rules laid down by the Treaty must be interpreted restrictively with reference to the Treaty provisions in question and must be limited to what is absolutely necessary42
and clearly sets a limit to the suspension. This finding was upheld by the Court,43 which also pointed out that ‘Protocol No 10 constitutes a transitional derogation based on the exceptional situation in Cyprus’.44 More importantly, the Court stressed the need to interpret the suspension provided by Protocol No 10 as restrictively as possible and to limit any exceptions and/or derogations to what is absolutely necessary.45 In Apostolides v Orams, this meant that the suspension of the acquis could not ‘be interpreted as meaning that it precludes the application of Regulation 44/2001 to the judgments concerned given by the Cypriot court’.46 The main scope of Article 1 was to limit the responsibilities and liability of the RoC as a Member State under EU law. Although Cyprus joined the Union with its entire territory, its government could not guarantee effective implementation of the EU law in TRNC.47 In fact, according to the ECtHR,48 Turkey exercised effective control in those areas. This is why the suspension had to be understood as limiting ‘any unrealisable obligations for the Republic of Cyprus in relation to northern Cyprus which bring it into conflict with Community law’.49 The territorial nature of the suspension meant that Greek-Cypriot and Turkish-Cypriot citizens of the bicommunal RoC should be able to enjoy – even while being in TRNC – the rights attached to Union citizenship that were not linked to the territory as such.50 If the Court had followed the ratio decidendi of the High Court of Justice (England and Wales), then the suspension of the acquis – instead of limiting the responsibilities and the liability of Cyprus as a Member State under EU law for actions and omissions of the breakaway TRNC state – would pose a threat for the effective protection of the fundamental rights of Union citizens. In particular, the suspension of the acquis would have meant that the violation of Mr. Apostolides’s property rights could not have been remedied. In that sense, Article 1(1) of Protocol No 10 would have created a gap in the EU’s system of human rights protection. Such a lacuna would sit rather uncomfortably with the commitment of the EU in Article 6 TEU to respect fundamental rights, as guaranteed by the EU’s Charter, and additionally, rights derived by the European Convention on Human Rights (ECHR). If the Court had held that northern Cyprus should not be the subject of EU law for any purpose, and as such the application of Regulation 44/2001 should be denied on the ground of the suspension of the acquis, that would have opened the possibility of the judicial review of the Act of Accession 2003 by the ECtHR. Mutatis mutandis, this is what occurred in Matthews 40 Opinion of the AG in Apostolides v Orams (n 15) para 34. 41 Case 231/78, Commission v United Kingdom, ECLI:EU:C:1979:101, para 13; Joined Cases 194/85 and 241/85, Commission v Greece, ECLI:EU:C:1988:95, paras 19–21; Case C-3/87, Agegate, ECLI:EU:C:1989:650, para 39; Case C-233/97, KappAhl, ECLI:EU:C:1998:585, para 18. 42 Opinion of the AG in Apostolides v Orams (n 15) para 35. 43 Grand Chamber judgment in Apostolides v Orams (n 4) paras 33 and 35. 44 ibid para 34. 45 ibid para 35. 46 ibid para 36. 47 Opinion of the AG in Apostolides v Orams (n 15) paras 40–41. 48 See Cyprus v Turkey, Application No 25781/94 (judgment 10 May 2001) ECHR Reports 2001-IV, para 77. 49 Opinion of the AG in Apostolides v Orams (n 15) para 42. 50 M Uebe, ‘Cyprus in the European Union’ (2003) 46 German Yearbook of International Law 375, 384.
The Application of EU Law in an Unrecognised Entity 595 v UK.51 According to the ECtHR’s decision in that case, ‘the Convention does not exclude the transfer of competences to international organisations provided that Convention rights continue to be “secured” and thus, Member States’ responsibility … continues even after such a transfer’. In such a scenario, the RoC, together with all the other contracting parties to the Act of Accession, could have been held responsible for those human rights violations that had taken place because of the suspension of the acquis in northern Cyprus. For all those reasons, it is important that the Court declared that the purpose of Protocol No 10 was to prevent the RoC from being found in breach of EU law by reason of matters occurring in northern Cyprus and beyond its control. B. The Relationship with the Case Law of the European Court of Human Rights Being one of the numerous cases that have arisen from the Cyprus dispute and have been decided by courts in Europe, the judgment in Apostolides v Orams should be seen within that broader context. The first judicial decision with significant political repercussions in this saga was Loizidou v Turkey.52 In this groundbreaking judgment, the ECtHR held that the Turkish army exercises ‘effective overall control over that part of the island’, and that such control entails Turkey’s responsibility for the policies and actions of the internationally unrecognised TRNC.53 Hence, the denial of access to and the subsequent loss of control of the property that Ms Loizidou had suffered were imputable to Turkey.54 The decision was enthusiastically received by the Greek-Cypriot community, and especially by the displaced persons who had lost access to their properties because of the territorial division on the island. As a result, over the period of the following 10 years, the ECtHR was flooded with over 1400 cases related to the property dimension of the conflict. To respond to the paralysis that this volume of case law created, the ECtHR held that Turkey should introduce a remedy that genuinely secures ‘effective redress for the Convention violations identified in the instant judgment in relation to the present applicant as well as in respect of all similar applications pending before the Court’.55 Following that judgment, Turkey and the internationally unrecognised TRNC established an ‘Immoveable Property Commission’ in accordance with the guidance of the ECtHR. The latter welcomed the steps taken by Turkey ‘in an effort to provide redress for the violations of the applicant’s Convention rights as well in respect of all similar applications pending before it’.56 Taking the cue from what was, at the time, a recent ECtHR judgment, the Commission made an interesting argument before the Court in Apostolides v Orams. The Commission expressed doubts as to whether the Orams–Apostolides dispute was a civil and commercial matter within the meaning of Article 1(1) of Regulation 44/2001.57 Although it was a dispute between private parties, the Commission sustained that it should have been placed in the wider
51 Matthews v United Kingdom (Merits), Application No 24833/94 (judgment 18 February 1999) ECHR Reports 1999-I. 52 Loizidou v Turkey (n 11). 53 ibid para 56. 54 ibid para 57. 55 ECtHR, Xenides-Arestis v Turkey (Merits and Just Satisfaction), Application No 46347/99 (judgment 22 December 2005) [unreported], para 39. 56 ECtHR, Case of Xenides-Arestis v Turkey (Just Satisfaction), Application No 46347/99 (judgment 7 December 2006) [2007] 44 EHRR SE13, para 37. 57 ibid para 40; Opinion of the AG in Apostolides v Orams (n 15) para 54.
596 Nikos Skoutaris context of the Cyprus conflict.58 Therefore, the claim should have been brought in front of the TRNC ‘Immovable Property Commission’ before reaching the Court, if at all.59 The Court adopted a purely legal, if not overly legalistic, approach in order to reply to this argument. The Court pointed out that ‘it was self-evident that the Orams–Apostolides dispute was a civil one, since the lawsuit was not against a State but against individuals, and no jure imperii action was involved’.60 The response of AG Kokott, however, was more elaborate. The AG pointed out that Mr Apostolides did not make any claim against a government authority, but a civil claim for restitution of land and further claims connected with loss of enjoyment of land against the Orams.61 To her, ‘Those claims do not alter in nature as a result of the possibility that Mr Apostolides may have alternative or additional claims under public law outstanding against the TRNC authorities’.62 More importantly, AG Kokott noted that although the ECtHR took a positive view of the compatibility of the TRNC compensation regime, they explicitly ‘rejected the argument that the applicant was obliged to bring the matter of compensation before the Immovable Property Commission, and instead itself awarded her compensation’.63 It is almost impossible to criticise the reasoning of the Opinion of AG Kokott and the approach of the judgment of the Court on legal grounds. Still, a year later, the ECtHR announced their decision in Demopoulos v Turkey.64 There, the Grand Chamber of the ECtHR made clear that the Immovable Property Commission established by Turkey and the TRNC was an adequate and effective remedy to address all the property disputes arising out of the Cyprus conflict until there was a comprehensive settlement of the problem. One can only wonder whether the decision in Demopoulos v Turkey somehow questions the stance and the approach of the Court not to openly acknowledge the existence of the Immovable Property Commission route, as the Commission suggested. The fact is that if the Court had risked speculating on the outcome of Demopoulos a year before the ECtHR had decided it, there would have been a clear danger of being arbitrary and injudicious. Indeed, it is impossible to second-guess what would have been the outcome of Apostolides v Orams if the decision in Demopoulos had been delivered before the Court’s judgment. Still, it can definitely be argued that if there is a case in the future with similar facts, the Court will have to seriously consider the fact that the ECtHR has held that the TRNC Immovable Property Commission provides opportunities for redress under the current status quo. Until that moment, the judgments in Demopoulos v Turkey from the ECtHR and Apostolides v Orams from the Court will sit uncomfortably together. C. Lawfare and Settlement It is quite common for the parties in a conflict to use every forum as an arena for their political battle – a platform for seeking international and local endorsement of their political
58 Opinion of the AG in Apostolides v Orams (n 15) para 55. 59 ibid para 56. 60 Meidanis (n 34) 973, citing Grand Chamber judgment in Apostolides v Orams (n 4) paras 40–46. 61 Opinion of the AG in Apostolides v Orams (n 15) para 60. 62 ibid para 61. 63 ibid para 68. 64 ECtHR, Joined Cases Takis Demopoulos and Others, Evoula Chrysostomi, Demetrios Lordos and Ariana Lordou Anastasiadou, Eleni Kanari-Eliadou and Others, Sofia (Pitsa) Thoma Kilara Sotiriou and Nina Thoma Kilara Moushoutta, Yiannis Stylas, Evdokia Charalambou Onoufriou and Others and Irini (Rena) Chrisostomou v Turkey,
The Application of EU Law in an Unrecognised Entity 597 arguments. In that sense, it is far from surprising that the judgment of the Court in Apostolides v Orams created euphoria on the Greek-Cypriot side. Such euphoria was counterbalanced by the decision of the ECtHR in Demopoulos a year later. The fact that the ECtHR recognised the Immovable Property Commission as a lawful and appropriate forum for the redress of the violations of property rights was considered a major setback for the Greek-Cypriot community. If one steps back from this virtual scoreboard, the inherent limitations of the judiciary when it comes to the resolution of such mega-conflicts must be realised. Since the ECtHR judgment in Loizidou, different aspects of the Cyprus issue have been adjudicated by different courts in Europe for more than 30 years. The decisions of the courts have been both hailed and scourged by the ethno-religious communities, their political elites, academics and commentators. Yet it is very difficult to appreciate their precise political impact. AG Kokott thoughtfully admitted as much. ‘It is … by no means clear whether recognition of the judgment in the present context would be beneficial or detrimental to solving the Cyprus problem.’65 This is not to suggest that this case law has no impact. The Court in Apostolides v Orams seemed aware of the political and legal consequences of an adverse judgment, as the one of the English High Court, that would not have protected the property rights of Greek Cypriots in the TRNC effectively. Such a judgment would have questioned the viability of the special post-2004 legal status that northern Cyprus enjoys within the Union’s legal order. Suddenly, the suspension of the acquis would have posed impediments to the effective protection of the fundamental rights of Union citizens. Moreover, a decision that would have upheld the property rights of the Orams would have made the quest for the creation of a restitution mechanism in a future reunified Cyprus infinitely more complicated. The reason for that, apart from the rights of the dispossessed Cypriot owners and the current users of their properties that have to be balanced in such a future mechanism, is that such a judgment would have created a third category of lawful claimants: the bona fide purchasers of Greek-Cypriot property in the TRNC. The Court’s decision put an end to that prospect. What neither the Court nor the ECtHR could achieve was the holistic resolution of the property dimension of the Cyprus issue. All such judicial decisions create a labyrinthine legal regime that has allowed for incremental changes. As in any other international problem, it is only a comprehensive political settlement that can provide the appropriate framework for the effective protection of the fundamental rights and freedoms of all EU citizens in northern Cyprus. In other words, such judgments have shown both parties in the conflict that time is not on their side, and a rapid political settlement is by far the best solution to resolve property disputes. In this context, it should be understood that the current status quo, which has caused the suspension of the acquis, has to be considered as a temporary solution. V. ADDITIONAL READING De Baere, G, ‘Case C-420/07, Meletis Apostolides v David Charles Orams, Linda Elizabeth Orams, Judgment of the Grand Chamber of 28 April 2009, [2009] ECR I-3571’ (2010) 47 CML Rev 1123. Koutrakos, P, ‘Who Wants To Be Pandora? The Court of Justice and the Cyprus Problem’ (2009) 34 EL Rev 345.
Application Nos 46113/99, 3843/02, 13751/02, 13466/03, 10200/04, 14163/04, 19993/04, 21819/04 (Grand Chamber decision as to the admissibility 1 March 2010). 65 Opinion of the AG in Apostolides v Orams (n 15) para 111.
598 Nikos Skoutaris Laulhé Shaelou, S, The EU and Cyprus: Principles and Strategies of Full Integration (Leiden, Brill/Martinus Nijhoff, 2010). Meidanis, H, ‘The Brussels I Regulation and the Cyprus Problem before the Court of Justice: Comment on Apostolides v Orams’ (2009) 34 EL Rev 963. Skoutaris, N, The Cyprus Issue: The Four Freedoms in a Member State under Siege (Oxford, Hart Publishing, 2011).
56 Potential Incompatibility of International Agreements Concluded by Member States before Accession: Commission v Austria, Commission v Sweden and Commission v Finland LUIGI LONARDO Case C-205/06, Commission of the European Communities v Republic of Austria, ECLI:EU:C:2009:118 and Case C-249/06, Commission of the European Communities v Kingdom of Sweden, ECLI:EU:C:2009:119, delivered 3 March 2009; Case C-118/07, Commission of the European Communities v Republic of Finland, ECLI:EU:C:2009:715, delivered 19 November 2009. KEYWORDS Free movement of capital – Investment – Bilateral investment treaties – Pre-accession international agreements – Article 351 TFEU (307 TEC) – Effectiveness – Autonomy – Sincere cooperation.
I. INTRODUCTION
T
he three cases to which this chapter is dedicated present, in essence, the same legal issue revolving around the interpretation of Article 351 TFEU (then, Article 307 EC):1 is a Member State in breach of EU law if it has in place a pre-accession international agreement that is only potentially, but not actually, incompatible with EU law? The Court answered in the affirmative, even though the incompatibility would have become actual only if the Council were to adopt, in the future, certain measures as the EU Treaties authorised it to. The facts of the cases limited the legal issue to circumstances where international agreements in question were concluded before the Member State accessed to the European Union. The judgments also specified that the potential incompatibility was to be assessed not with EU law as a whole, but only with rules on free movement of capital. Provisions on free movement
1 Barring
amendments made necessary by the changes of names, the two articles are identical.
600 Luigi Lonardo of capital in fact conferred on the Union specific powers to adopt (future) acts with which the international agreements would have been incompatible. The cases present an important constitutional pronouncement on the incompatibility of Member States’ international agreements, the relationship between EU law and international law and, ultimately, the autonomy of EU law. The judgments have consequences reaching well into the post-Lisbon context, especially as far as the complicated regime of Member States’ pre-accession Bilateral Investment Treaties (BITs) are concerned. II. FACTS
All three cases originated from infringement actions. Commission v Austria and Commission v Sweden were decided on the same day, and were considered jointly by Advocate General (AG) Poiares Maduro. Commission v Finland, allocated to AG Sharpston, was decided eight months later. A fourth action had been brought against Denmark, but the case was closed following Denmark’s termination of the contended international agreements.2 Austria, Sweden and Finland had each concluded several bilateral agreements, before joining the Union on 1 January 1995. Those agreements contained, with minor variations among the cases, a so-called ‘transfer clause’, which guaranteed investors of either party the free transfer, without undue delay, of capital connected with their investment. A significant difference, however, was present in the case of most of Finland’s agreements, since these guaranteed the protection of investments but only ‘within the limits authorised by the laws of the Contracting Party’.3 Article 56 EC (now Article 63 TFEU) prohibited any restrictions on free movement of capital between the Member States and between Member States and third countries, as well as any restrictions on payments between Member States and to and from third countries. Article 57(2) TEC (now Article 64(2) TFEU), however, allowed for the Union to adopt restrictions on free movement of capital.4 That provision authorised the Council to adopt, by unanimity, measures on the movement of capital to or from third countries involving direct investment. Similarly, Article 59 TEC (now, in similar terms, Article 66 TFEU) allowed the Council to ‘enact safeguard measures to address difficulties with economic and monetary union’. Article 60(1) TEC (now Article 75 TFEU5) also allowed the Council to adopt measures restricting free movement of capital as a part of urgent measures deemed necessary, in the context of Common Foreign and Security Policy (CFSP), ‘to reduce, in part or completely, economic relations with one or more third countries’ (Article 301 EC, now Article 215 TFEU). At the time of the litigation, none of these measures had been adopted by the Council.6 2 P Koutrakos, ‘Case C-205/06, Commission v Austria, judgment of the Court (Grand Chamber) of 3 March 2009, not yet reported; Case C-249/06, Commission v Sweden, judgment of the Court (Grand Chamber) of 3 March 2009, not yet reported’ (2009) 46 CML Rev 2059. 3 Case C-118/07, Commission of the European Communities v Republic of Finland, ECLI:EU:C:2009:715, para 5. This was also the only element on which AG Sharpston concentrated her Opinion. 4 Member States were also allowed to do so. 5 Note, however, that Art 75 TFEU does not refer explicitly to Common Foreign and Security Policy, unlike its predecessor. It refers instead to Art 67 TFEU, Area of Freedom Security and Justice, on which see Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:472 (Smart Sanctions). See this volume, ch 60. 6 With the exceptions of restrictive measures under CFSP, which, however, had ‘not targeted any of those third countries [with which Austria and Sweden had agreements] in a meaningful way’. Opinion of Advocate General (AG) Poiares Maduro, Case C-205/06, Commission of the European Communities v Republic of Austria, ECLI:EU:C:2008:391, para 11; Opinion of AG Poiares Maduro, Case C-249/06 Commission of the European Communities v Kingdom of Sweden ECLI:EU:C:2008:391, para 11.
Potential Incompatibility of International Agreements Concluded before Accession 601 Even though the measures that could be adopted by the Council were ‘a step back in Community law’ (as Article 57(2) TEC stated), and even though the Member States in the cases provided for the free movement of capital, thus pursuing the objective of the EU Treaties, the Commission took the view that they had breached Union law. Article 307 EC (now Article 351 TFEU), at the relevant paragraphs, established that the EU Treaties shall not affect [t]he rights and obligations arising from agreements concluded … before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of this Treaty.
However, the Article went on to provide that [t]o the extent that such agreements are not compatible with this Treaty, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude.
In accordance with the procedure, the Commission notified the Member States in question (Finland on 7 May 2004, Austria and Sweden on 12 May 2004) that ‘their bilateral agreements with third countries would conflict with the introduction by the [Union] of the restrictions provided for’ in the aforementioned provisions of EU primary law.7 The three Member States denied the existence of the incompatibility. In its reasoned opinions (16 March 2005 to Finland, 21 March 2005 to Austria and Sweden), the Commission gave those Member States a deadline to comply with the obligation to remove incompatibilities. In essence, the Commission took the view that the breach derived from the fact that said Member States had not taken all possible steps to eliminate the potential incompatibilities. In other words, even though the Council had not adopted measures to restrict free flow of capital, the Commission was of the opinion that the mere potential incompatibility was a breach of Union law. Since none of the Member States removed the clauses at issue from the bilateral agreements, the Commission brought three separate actions for infringement against Austria, Sweden and Finland. III. THE COURT
The Commission’s infringement proceedings lay in the fact that the absence, in the agreements at issue, of any provision expressly reserving for the possibility for the Member States of applying measures which might have been adopted by the Council, was liable to make it more difficult for that Member State to comply with its Union obligations.8 The Member States essentially replied that the incompatibility was merely hypothetical, given that there were no measures adopted by the Council.9 As such, it could not form the object of an infringement proceeding.10 AG Poiares Maduro took the view that a finding that Austria and Sweden could not legislate, even when the Union had not done so, would have been a step too far, as it would amount to transforming a competence shared between the EU and its Member States into an EU
7 Opinion
of AG Poiares Maduro in Commission v Austria (n 6) para 13. C-205/06, Commission of the European Communities v Republic of Austria, ECLI:EU:C:2009:118, para 16. 9 ibid para 19. 10 ibid para 20. 8 Case
602 Luigi Lonardo exclusive competence.11 However, the AG was also of the view that the international agreements in question were capable of jeopardising the effectiveness of future EU legislation.12 He based this conclusion by considering the duty, for Member States, to refrain from frustrating the objective of a directive before the deadline for its implementation has expired. That duty, grounded in the principle of sincere cooperation, he argued, could be equally applicable to pre-accession international agreements of the Member States.13 The Court reached the same conclusion on the substance, but through a different reasoning. In two nearly identical judgments (Commission v Austria and Commission v Sweden), the Court recalled that the purpose of Article 351 TFEU, first paragraph, whereby pre-accession international agreements are not affected by the EU Treaties, was to safeguard the duty of the Member State concerned to respect the rights of third countries under a pre-accession international agreement and to perform its obligations thereunder.14 Article 351 TFEU, second paragraph, instead, obliged the Member States to take all appropriate steps to eliminate incompatibilities with Union law which have been established in pre-accession international agreements.15 Finally, the Court considered that the provisions of the TFEU recalled above enabled the Union to restrict free movement of capital. It was with a view to safeguarding the effectiveness of the provisions enabling a restriction on the free movement of capital that the Court justified its reasoning. The Court held that, for the freedom to be effective, the measures would have to be applied immediately ‘with regard to the States to which they relate, which may include some of the States which have signed one of the agreements at issue with [the Member States involved in these cases]’.16 The Court found that neither the agreements themselves nor another mechanism under international law, such as suspension or denunciation, allowed for an immediate application of the measures the Council might adopt. It therefore concluded that the Member States at issues breached Union law, in so far as they failed to take appropriate steps in order to eliminate the incompatibilities, with Union law, of pre-accession international agreements. The Court also added that the judgments delivered were not limited to the defendant in those cases, and that ‘the Member States must assist each other with a view to eliminating the incompatibilities established and must adopt, where appropriate, a common attitude’. It recalled that the Commission was tasked with taking steps to that aim (by Article 17(1) TEU, formerly Article 211 TEC).17 In her Opinion in Commission v Finland, AG Sharpston focused on the only difference between the case at hand and the two previous ones: namely, the fact that some of Finland’s international agreements permitted the Member State to restrict investments as far as it was ‘authorised by the laws of the Contracting Party’. Similar to what AG Poiares Maduro had argued, AG Sharpston took the view that Finland’s agreements were liable to jeopardise the attainment of Union’s objectives, notwithstanding that authorising clause.18 In Commission v Finland, the Court distinguished between two kinds of international agreements. Firstly, for one of Finland’s agreements, in which there was no special provision
11 Opinion of AG Poiares Maduro in Commission v Austria (n 6) para 28. 12 ibid para 40. 13 ibid para 38. 14 Commission v Austria (n 8) para 33; Commission of the European Communities v Kingdom of Sweden, ECLI:EU:C:2009:119, para 34. 15 Commission v Austria (n 8) para 34; Commission v Sweden (n 14) para 35. 16 Commission v Austria (n 8) para 36; Commission v Sweden (n 14) para 36. 17 Commission v Austria (n 8) para 44, Commission v Sweden (n 14) para 44. 18 Opinion of AG Sharpston, Case C-118/07, Commission v Finland, ECLI:EU:C:2009:525, para 32.
Potential Incompatibility of International Agreements Concluded before Accession 603 limiting the protection of investments to what was ‘authorised by the laws of the Contracting Party’, the Court essentially repeated the judgments in Commission v Austria and Commission v Sweden. It thus restated the incompatibility with EU law, even in the absence of Union measures. It also recalled the duty, spelt out in Article 351 TFEU, second paragraph, for Member States to assist each other and adopt a common attitude, with the help of the Commission. Secondly, the Court also considered the other agreements concluded by Finland. The Commission took the view that the stipulation ‘authorised by the laws of the Contracting Party’ referred to the laws at the time of the conclusions of the international agreements. The clause, therefore, did not allow Finland to comply with restrictive measures that the Union might adopt.19 Finland disagreed with the temporal scope of the provision. It was the Member States’ submission that if the Council were to adopt measures, those would become part of Finnish law within the meaning of the clause.20 The Court had recourse to international law to interpret the bilateral agreements. Article 31 of the Vienna Convention on the Law of Treaties stipulates that ‘a treaty must be interpreted in good faith, in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose’.21 That article, felt to reflect customary international law, yielded the result that the objective of the agreements made it ‘to say the least, debatable’22 that subsequent measures, ie those taken after the entry into force of the agreements, could lawfully limit free movement of capital. The Court thus concluded that the interpretation of the limiting provision in Finland’s bilateral agreements was too uncertain to ensure the compatibility of the agreements with Article 351 TFEU. Finland also raised an important policy objection to the Commission’s submissions. It maintained that the interpretation that a potential violation is sufficient to trigger Article 351 TFEU would make it possible to establish a failure to fulfil obligations [under Article 351 TFEU for any pre-accession international agreement which] applies in an area in which the [Union] has not yet exercised the powers available to it under the Treaty.
This, Finland submitted, would be liable to upset the principle of ‘legal certainty and of the distribution of powers between the [Union] and the Member States’.23 The Commission, instead, submitted that its claim was limited to the powers of the Council, precisely identified in the EU Treaties, of restricting free movement of capital (and not, in general, to any area where the Union might exercise its competence). The Court found that the judgment against Finland would not confer an unduly wide scope on Article 351 TFEU. This was the case because the judgment appeared to be limited to the incompatibility with the exercise of the powers conferred on the Council in relation to the movement of capital.24 In all three cases, the Court declared that, by not having taken appropriate steps to eliminate incompatibilities with the EU Treaties, the Member States had failed to fulfil their obligations under Article 351 TFEU.
19 Commission v Finland (n 3) para 36. 20 ibid para 37. 21 Vienna Conventions of 23 May 1969 on the Law of Treaties and of 21 March 1986 on the Law of Treaties between States and International Organisations or between International Organisations. 22 Commission v Finland (n 3) para 41. 23 ibid para 46. 24 ibid para 49.
604 Luigi Lonardo IV. THE IMPORTANCE OF THE CASE
A. The Scope of Article 351 TFEU The entry into force of the Lisbon Treaty did not change in any meaningful way the text of Article 351 TFEU. The reflections on the three cases can therefore be transposed to the state of EU law post-Lisbon. The scope of the judgments under analysis is limited in two important respects. First, the source of Member States’ incompatible obligation was an agreement entered into before joining the EU (or before the Treaty of Rome came into force).25 On other occasions, the Court also specified that Article 351 TFEU catches only agreements in which a third country is a party, in other words, Article 351 TFEU cannot be invoked for agreements between Member States, including the agreements concluded before one party had become a Member State.26 Second, the incompatibility only arises with respect to the specific powers conferred by the Treaties upon the EU with regard to free movement of capital. As AG Poiares Maduro’s reasoning and the Court’s judgment clarify, therefore, the cases did not introduce such a broad understanding of pre-emption entailing that Member States would be under a duty not to legislate in areas of EU competence, even when the Union has not yet exercised that competence. The decisions, in other words, avoided the transformation of all areas of EU competence into exclusive competence as far as the compatibility of pre-accession agreements by Member States with third countries was concerned. Even though the Court was cautious in trying to limit the scope of the case, the judgment made an important pronouncement on the extent of the obligation under Article 351 TFEU. The Court read into that Article a muscular duty imposing on Member States to cooperate and facilitate EU action even when such EU action had not materialised itself. This had been expressed already in Burgoa, where the Court held that Article 351 TFEU is ‘of general scope and it applies to any international agreement, irrespective of subject-matter, which is capable of affecting the application of the Treaty’ (emphasis added).27 The rationale of the duty thus imposed on Member States (and of its momentous consequences) was justified in the light of the principle of effectiveness, but Advocates General Maduro and Sharpston, as well as other commentators, have also correctly recalled its origins in the principle of sincere cooperation.28 As far as effectiveness is concerned, the Court appeared to adopt a functional understanding of the Council’s powers to restrict free movement of capital under the TFEU, whereby a difficulty in the implementation was considered tantamount to rendering the existence of those powers useless. The Court decided to declare the agreements incompatible even when, as in the case of Finland, they contained a clause that could be reasonably understood as allowing EU law to limit free movement of capital. The Court’s choice was predicated on the respect of Member States’ international commitments. In some agreements, it was also stated that ‘each Contracting Party is required to act in accordance with international law’,29 and the Court 25 For agreements Member States may wish to conclude after joining the EU other rules on pre-emption apply (now codified in Art 3(2) TEU). 26 Opinion of AG Wathelet, Case C-284/16, Achmea, ECLI:EU:C:2017:699, para 46, and case law cited therein. See this volume, ch 85. 27 Case 812/79, Burgoa, ECLI:EU:C:1980:231, para 6. See this volume, ch 12. The same sentence is quoted in the Opinion of AG Sharpston, Case C-118/07, Commission v Finland, ECLI:EU:C:2009:525, para 27. 28 Koutakos (n 2) 2060: ‘even if Art [351 TFEU] did not exist, its ratio would be read into the duty of cooperation by the [Union]’s judges’. 29 Commission v Finland (n 3) para 41.
Potential Incompatibility of International Agreements Concluded before Accession 605 used this formulation to justify the impossibility to rely on the Member States’ claim that it was too uncertain an interpretation of those provisions. Such reliance, the Court assumed, might have been contrary to international law. In such a situation, EU law could not be sufficiently protected, lest Member States risk breaching international law. It is likely that it was only an expediency argument, convenient in those circumstances, because the Court does not always adopt this line of reasoning. There are landmark cases in which it subordinated the Member States’ international legal obligations to a duty to comply with EU law, as the following examples show.30 The Court had held that if the renegotiation of an incompatible pre-accession international agreement was impossible for a Member State, Article 351 TFEU imposed a duty on that Member State to denounce the agreement.31 Moreover, in Kadi,32 the Court maintained that Member States’ obligations under international law33 should give way to their obligations under EU law. In Slovenia v Croatia,34 the Court considered that not all Member States’ breaches of international law are relevant for the purposes of EU law, and this is so even if they result in a violation of EU law. The balancing between protecting third countries’ interests and the effective functioning of the EC is, in the cases under analysis, overwhelmingly in favour of the latter. As far as the principle of sincere cooperation, now enshrined in Article 4(3) TEU, is concerned, it entails a more general principle of loyalty, which operates both in the horizontal dimension (among Member States) and in the vertical one (between Member States and EU institutions),35 and includes not only a prohibition to act in bad faith or contrary to EU rules, but also a positive obligation to take all appropriate measures to ensure the effective application of EU law (see also the discussion in the next section on the post-Lisbon normative context).36 The cases discussed in this chapter are an instance of the vertical and positive dimensions of the duty of sincere cooperation. AGs Maduro and Sharpston referred explicitly to the principle of loyal cooperation (now Article 4(3) TFEU) as basis for the decision, whereas this did not flow explicitly into the final judgments. A duty to cooperate was, in fact, read by the Court itself in the text of Article 351 TFEU, second paragraph. B. The Autonomy of EU Law The importance of the constitutional pronouncement on the scope of Article 351 TFEU was highlighted by commentators at the time.37 The extensive scope of Article 351 TFEU, second paragraph, as interpreted by the Court in these cases, may be perceived as a tool for protecting the autonomy of EU law from international law.
30 See also N Lavranos, ’Protecting European Law from International Law’ (2010) 15 European Foreign Affairs Review 265. 31 Case C-170/98, Commission v Belgium, ECLI:EU:C:1999:411 (Maritime Transport Agreement with Zaire), paras 49 ff. 32 Joined Cases C-402/05 P and C-415/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities, ECLI:EU:C:2008:461. See this volume, ch 49. 33 Art 103 UN Charter: ‘In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.’ 34 Case C-457/18, Republic of Slovenia v Republic of Croatia, ECLI:EU:C:2020:65. See this volume, ch 90. 35 M Klamert, The Principle of Loyalty in EU Law (Oxford, Oxford University Press, 2014) 22. 36 JP Jacqué, Droit institutionnel de l’Union Européenne, 6th edn (Paris, Dalloz, 2010) 578. 37 See further Lavranos (n 29).
606 Luigi Lonardo This is a plausible reading of the judgments. The result of the Court’s interpretation is, as mentioned, the resolution of a conflict between international and EU law in favour of the latter. In Lavranos’s understanding of the cases, both the first Kadi judgment and the three cases under analysis in this chapter display the Court’s attitude aimed at preserving ‘the very foundations of the [Union] legal order’,38 following the line of reasoning on the EU constituting a new legal order. This is a tradition of shaping EU law ‘in a negative fashion’,39 as distinct from international law. It has milestones in Opinion 1/76, on the establishment of a laying-up fund, involving a tribunal of Court judges;40 Opinion 1/91, where, in the relevant part, the Court found that the envisaged European Economic Area agreement could not determine the interpretation of EU law;41 and Opinion 2/13, where the Court held that the European Court of Human Rights could not bind EU institutions to a given interpretation of EU law, since the interpretative monopoly must rest with the Court, lest the autonomy of the EU legal order be adversely affected.42 C. The Persistent Issue of Member States’ Bilateral Agreements On the subject matter of the dispute, namely the free movement of capital and investment, the bilateral international agreements of Member States posed and continue to pose a test to the consistency, effectiveness and even autonomy of EU law. Before the 2004 enlargement, the Commission took steps to negotiate with the future Member States and the USA in order to prevent future incompatibilities between those countries’ BITs and EU law. This ‘innovative exercise of mediation’43 clearly showed the preoccupation of the Commission with ensuring the consistency and effectiveness of EU law. Despite the inclusion of foreign direct investment in the Common Commercial Policy (ie EU exclusive competence),44 the post-Lisbon EU’s investment policy is a composite picture. It is not only contained in EU agreements – sometimes split into separate agreements covering trade (exclusive competence) and investment protection agreements (shared competence)45 – but also into the so-called ‘grandfathering’ Regulation,46 which entered into force in 2013, detailing rules for the application of the hundreds of agreements between individual Member States and third countries. In a nutshell, the ‘grandfathering’ seeks to clarify the legal status of the pre-accession BITs signed by Member States: it sets out a mechanism (Articles 2–6) for
38 Kadi (n 31) para 282. 39 K Lenaerts and JA Gutierrez Fons, ‘A Constitutional Perspective’ in R Schutze and T Tridimas, Oxford Principles of EU Law (Oxford, Oxford University Press, 2018) 103, 105. 40 Opinion 1/76, Agreement on the establishment of a European Laying-up Fund for Inland Waterway Vessels, ECLI:EU:C:1977:63 See this volume, ch 9. 41 Opinion 1/91, ECLI:EU:C:1991:490 para 45; see also Opinion 1/92, ECLI:EU:C:1992:189. See this volume, ch 20. 42 See also C Contarese, ‘The Autonomy of the EU Legal Order in the ECJ’s External Relations Case Law: From the “Essential” to the “Specific Characteristics” of the Union and Back Again’ (2017) 54 CML Rev 1627. 43 Koutrakos (n 2) 2075. 44 But see Opinion 2/15, Free Trade Agreement with Singapore, ECLI:EU:C:2017:376. See this volume, ch 82. 45 Such is the case of the Agreement with Singapore and with Vietnam. Council Decision (EU) 2018/1599 of 15 October 2018 on the signing, on behalf of the European Union, of the Free Trade Agreement between the European Union and the Republic of Singapore, [2018] OJ L267/1; Decision (EU) 2019/1121 on the signing, on behalf of the EU, of the Free Trade Agreement between the EU and the Socialist Republic of Viet Nam, [2019] OJ L177/1. 46 Regulation 1219/2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries, [2012] OJ L351/40 (grandfathering regulation).
Potential Incompatibility of International Agreements Concluded before Accession 607 Member States to notify all the agreements they wish to maintain in force (or permit to enter into force).47 At the time of writing, there are still in the region of 1400 of these,48 many of which are in fact pre-accession agreements for the purposes of Article 351 TFEU. The EU investment regime is further complicated by the fact that Member States had concluded BITs with states that subsequently joined the European Union and became Member States, such as the facts of Achmea,49 where one of such agreements has been declared incompatible with EU law by the Court, thus opening the question of the future of other such agreements.50 V. ADDITIONAL READING Koutrakos, P, ‘Case C-205/06, Commission v Austria, judgment of the Court (Grand Chamber) of 3 March 2009, not yet reported; Case C-249/06, Commission v Sweden, judgment of the Court (Grand Chamber) of 3 March 2009, not yet reported’ (2009) 46 CML Rev 2059. Koutrakos, P, EU International Relations Law, 2nd edn (Oxford, Hart Publishing, 2015) ch 6. Lavranos, N, ‘Protecting European Law from International Law’ (2010) 15 European Foreign Affairs Review 265. Lenaerts, K and Gutierrez Fons, JA, ‘A Constitutional Perspective’ in R Schütze and T Tridimas, Oxford Principles of EU Law (Oxford, Oxford University Press, 2018) 105. Rosas, A, ‘The Status in EU Law of International Agreements Concluded by EU Member States’ (2011) 34 Fordham International Law Journal 1304.
47 Report from the Commission to the European Parliament and the Council on the application of Regulation (EU) No 1219/2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries, COM (2020) 134 final, 1. 48 List of the bilateral investment agreements referred to in Art 4(1) of Regulation (EU) No 1219/2012 of the European Parliament and of the Council establishing transitional arrangements for bilateral investments agreements between Member States and third countries, [2012] OJ C149/1. 49 Case C-284/16, Slovak Republic v Achmea, ECLI:EU:C:2018:158. 50 L Ilie, What Is the Future of Intra-EU BITs? (Kluwer Arbitration Blog, 21 January 2018), http://arbitrationblog. kluwerarbitration.com/2018/01/21/future-intra-eu-bits/.
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57 The Application of EU International Agreements to Occupied and Disputed Territories: Brita PAUL JAMES CARDWELL Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2010:91, delivered 25 February 2010. KEYWORDS Association agreements – Territorial scope – Customary international law – Origin of products – EU–Israel – EU–Palestine.
I. INTRODUCTION
T
he Court in Brita had to deal with the question whether the authorities of Member States were entitled to question the actual origin of products entering the EU under an Association Agreement. In this case, a national court in Germany referred to the Court the question of how to interpret the EU-Israel Association Agreement in cases where products were thought to have originated in occupied territories and hence outside the scope of the Agreement. The Court found that the authorities were entitled to do so, though with a markedly different set of reasons to those of the Advocate General (AG). The judgment is instructive in terms of its affirmation of the inclusion of customary international law (the Vienna Convention on the Law of Treaties of 23 May 1969) in the EU legal order, even where neither the EU nor all its Member States are parties to it. Although other instances where the EU, its institutions and Member States are faced with the thorny issues of occupied or disputed territories are likely to be highly differentiated, the Brita case gives a useful insight into how the Court can rely on international law. II. FACTS
Giving a ruling on what constitutes the borders of Israel is probably not high on the wish list of most judges sitting in German finance courts. Nor is it likely to have been in the imagination of
610 Paul James Cardwell the founders of the EU that the Court would have to do so either. However, in Brita, the courts were effectively asked to do just that. Brita, a German company, completed 60 customs declarations in 2002 for goods imported from an Israeli supplier, Soda-Club Ltd. The country of origin of the goods was listed as ‘Israel’ by both companies, and Brita sought preferential treatment for import under the EU–Israel Association Agreement (the Association Agreement).1 The German customs authorities enquired whether the products originated in the West Bank, east of Jerusalem, and hence in Palestinian territory and outside the scope of the EU–Israel Agreement. The German authorities did not receive replies from the Israeli authorities and therefore sought the customs duties owed by Brita, who challenged the decision in a German finance court (Finanzgericht). The national court found that the products were not conclusively made in Israel, but made an order for a preliminary reference to the CJEU under Article 267 TFEU since it related to the interpretation of the Association Agreement, its related protocols and, inter alia, the interim Association Agreement between the EU and Palestine (EU–PLO).2 The main question, whether the goods could be granted preferential treatment since this was permitted under both the EU–Israel and EU–Palestine agreements, had three supplementary questions if the CJEU’s answer was negative insofar as the extent to which national authorities could evaluate the ‘real’ origin of products under the agreements. The CJEU was asked by the German court whether the territorial scope of the agreements really mattered, since the products could enter in any event under similar conditions, and, if it did matter, what could be understood by ‘territory of the State of Israel’ in the Association Agreement, since this was left undefined. III. THE COURT
AG Bot3 was of the view that the national court should not allow the goods to benefit from the preferential treatment regime allowed under the Association Agreement. The Court agreed with this view. However, their reasoning was starkly different. AG Bot put great emphasis on the context of the bilateral and multilateral Euro-Mediterranean Partnership (of which the EU, Israel and Palestine are all part) and the question of how to be certain as to the ‘real’ origin of products. Whilst mutual trust is a cornerstone of bilateral arrangements, the AG found that this meant not that the national authorities were bound to accept the Israeli verification, but, rather, that they were under an obligation to ensure that the products were properly within the scope of the Association Agreement.4 The AG was not swayed by the argument that the products could have entered the EU in any case under the EU–PLO agreement and therefore their certification was irrelevant. He did so by reference to the general purposes of the Association Agreement, namely ‘to contribute to the social and economic development of the West Bank and Gaza Strip’ via trade. AG Bot also referred to a previous judgment of the Court, namely Anastasiou I, where the Court found that export certificates issued in Cyprus by bodies other than the government of 1 Euro-Mediterranean Agreement Establishing an Association between the European Communities and their Member States, of the one Part, and the State of Israel, of the other part, [2000] OJ L146. 2 Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, [1997] OJ L187. 3 Opinion of AG Bot, Case C-386/08, Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2009:674. 4 ibid paras 77, 94.
The Application of EU International Agreements to Occupied and Disputed Territories 611 Cyprus (ie the ‘Turkish Republic of Northern Cyprus’) could not be recognised as valid under the EU–Cyprus Agreement.5 By drawing this analogy, the AG relied on the EU’s development of its autonomous interpretation of its external relations, by reference to the basic purpose of the agreements that could not be divorced from the technicalities. To accept that the goods could be labelled as originating in Israel when they should have entered through a different route would, in the words of the AG, ‘ultimately have the effect of negating the efforts’ of the agreement with the PLO. The AG mentioned neither customary international law nor the Vienna Convention in his opinion. The Court, on the other hand, started its decision with reference to the Vienna Convention on the Law of Treaties 1969, Article 31, and the extent to which it represents ‘general international customary law’.6 At the same time, the Court underlined its ability to interpret the scope of the agreement as part of the legal order of the EU, building on its jurisprudence in Demirel.7 The Court pointed to the good faith requirement of the Vienna Convention when tackling the issue of whether the goods should have entered the EU under the Association Agreement by noting that if the goods were accepted as Israeli, then this would have been the same as imposing on the Palestinian authorities ‘an obligation to refrain from exercising the competence conferred upon them’.8 The Court added that such an interpretation ‘would be to create an obligation for a third party without its consent’ and hence contrary to the principle of general international law, pacta tertiis nec nocent nec prosunt.9 It found that although there is a general level of trust required behind contracting parties, this does not prevent the national authorities of Member States from clarifying beyond the verification of goods if there was any doubt as to their actual origin. The Israeli authorities had not responded to clarification requests by the national authorities, so the Court found that the latter could not simply make an ‘elective determination’ as to whether the goods should enter under the agreement or not. This would mean the national authorities unilaterally interpreting the scope of the agreement. The Court did, however, feel able to hold that its own authority allowed it to interpret the scope of the agreement, rather than refer it to the Association Council established under the Association Agreement. The Court in Brita was willing to refer to international law, but limited itself to drawing on customary international law as codified in the Vienna Convention. The AG had explicitly referred to other sources of international law, in particular resolutions of the United Nations Security Council, calling upon Israel to withdraw from the occupied territories for the purpose of determining the territorial scope of the Agreement.10 The Court did not engage with this; rather, it underlined the importance of the respect for customary international law as a justification for its decision. Nor did the Court refer to the ‘internal’ position of the EU, which had been expressed via a notice issued by the Commission11 about ensuring the true origin of products, but rather placed the emphasis on the ‘locations which have been placed under Israeli administration since 1967’ as understood in international law. In a sense, therefore, 5 Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and others, ECLI:EU:C:1994:277 (Anastasiou I). This case was before Cyprus became an EU Member State. See this volume, ch 25. 6 Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2010:91. 7 Case C-12/86, Meryem Demirel v Stadt Schwäbish Gmünd, ECLI:EU:C:1987:400. See this volume, ch 16. 8 Brita (n 6) para 52. 9 As consolidated in Art 34 of the Vienna Convention. ibid. 10 Including United Nations Security Council Resolutions 242 of 22 November 1967 and 338 of 22 October 1973. Opinion of AG Bot in Brita (n 3) paras 108–12. 11 Notice to importers – Imports from Israel into the Community, of 23 November 2001, [2001] OJ C328/6. Referenced in Opinion of AG Bot in Brita (n 3) para 30.
612 Paul James Cardwell (customary) international law came to the ‘rescue’ of the Court. It provided a pathway through the judicial diplomacy the Court was engaged in regarding one of the most difficult political issues in international polities, even though the Vienna Convention does not formally bind the EU or all its Member States. IV. THE IMPORTANCE OF THE CASE
There are three distinct contributions of the Brita case and the law of the EU’s external relations: first, the relationships between the EU, Israel, and Palestine; second, how the Court confronts thorny questions of ‘territory’; and third, the adoption of customary international law by the Court and how the EU contributes to its development. A. EU Relations with Israel and Palestine Although one might suspect the decision by the Court to effectively declare what constitutes the borders of the State of Israel in the world’s most contested and volatile regions as a fundamental stumbling block to any form of relationship, Brita did not in fact have this effect. The decision by the national authorities in the case to question the ‘true’ origin of the products did not appear from nowhere: since at least the 1980s, doubts were expressed within the EU institutions and national authorities about where the goods were produced. Such doubts formed the basis of a debate in the European Parliament in 1989.12 As such, the Brita judgment formalised, and wrote into the EU legal order, the obligation on national authorities to regard the certification as more than a mere formality, and to use other evidence where appropriate.13 The immediate effect of the judgment in Israel was rather muted. Since the EU–Israel relationship is multifaceted and beset by frequent periods of instability,14 the judgment did not appear to have as great an impact as might be expected. Academic analysis of EU–Israel/ Palestine/Middle East relations do not cite it as a kind of turning point or significant marker in the respective relationships. However, some critiques lamented the opportunity to use the mutual trust and dispute resolution mechanisms in the Association Agreement to resolve the matter.15 Some in Israel have pointed to the treatment of Israel by the EU as inconsistent compared to other contested or occupied territories.16 In fact, shortly after the judgment, the EU and Israel upgraded their relationship in 2012 in 60 areas, including increased access of Israel to the EU’s internal market, closer cooperation on transport and energy, and enhanced ties with nine EU agencies.17 The EU–Israel
12 A Persson, ‘“EU Differentiation” as a Case of “Normative Power Europe” (NPE) in the Israeli-Palestinian Conflict’ (2018) 40 Journal of European Integration 193. 13 Brita was cited in such terms by the Court in Case C-613/12, Helm Düngemittel GmbH v Hauptzollamt Krefeld, ECLI:EU:C:2014:52, paras 32–33. 14 RA Del Sarto, ‘Plus ça change …? Israel, the EU and the Union for the Mediterranean’ (2011) 16 Mediterranean Politics 117. 15 S Pardo and L Zemer, ‘Bilateralism and the Politics of European Judicial Desire’ (2011) 17 Columbia Journal of European Law 263, 301. 16 B Voltolini, ‘Ontological Crises, Framing and the (De)politicisation of EU Foreign Policy: The Case of EU–Israel Relations’ (2020) 42 Journal of European Integration 751. 17 SJ Rosen, ‘A European Boycott of Israel?’ (2014) 21 The Middle East Quarterly, www.meforum.org/3747/ europe-boycott-israel.
The Application of EU International Agreements to Occupied and Disputed Territories 613 Association Council conclusions reaffirmed the strong bilateral ties, and did not mention the Brita decision.18 Following Brita, the Commission took a more legalistic approach to the issue of settlements. It issued ‘Guidelines on the eligibility of Israeli entities and their activities in the territories occupied by Israel since June 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards’,19 effectively codifying the Brita judgment. The guidelines stated that ‘The EU does not recognise Israel’s sovereignty over any of the territories referred to in point 2 [the Golan Heights, the Gaza Strip and the West Bank, including East Jerusalem]’. In a similar vein, a Guidance Notice issued in 2015 on the origin of goods restated the EU’s view of the lack of Israeli sovereignty over these areas, ‘irrespective of their legal status under domestic Israeli law’, and tied any changes to this position specifically to ‘those agreed by the parties to the Middle East Peace Process (MEPP)’.20 The Special Privileged Partnership was offered to both Israel and Palestine, in line with the EU’s established practice of treating both as full partners in the Barcelona Process (Euro-Mediterranean Partnership) and the European Neighbourhood Policy, though the content of the offers was rather vague.21 Palestinian reaction to the Commission’s position was more positive, but EU officials have rebuffed claims that the more ‘legalistic’ approach would lead to (for example) boycotts of products. In any event, the lack of full international recognition of Palestine limits the EU’s activities, including those relating to the economic development as referred to by the AG in Brita as providing the context of the EU–PLO agreement.22 Rather, the EU institutions have stated that the effect of Brita and the subsequent guidelines are ‘technical’ rather than ‘political’, although few subscribe to this distinction.23 The issue of products produced in the settlements returned to the Court almost a decade later, in Organisation juive européenne and Vignoble Psagot Ltd.24 Here, the issue concerned the labelling of products and the notice by national authorities of another Member State proscribing ‘the indication, on foodstuffs originating in the territories occupied by Israel since 1967 and, where applicable, in settlements within those territories, of the territory in question and, additionally, “Israeli settlement”’.25 Although seemingly on a different topic, the relevant law in the case was Regulation No 1169/201126 on food information and labelling, and not the Association Agreement.27 The 2015 Commission notice referred to above was also part of the relevant law considered by the Court, but the Brita judgment that formed the backdrop
18 Council of the European Union, ‘Eleventh Meeting of the EU–Israel Association Council’, Brussels, 24 July 2012, www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/132046.pdf. 19 Guidelines on the eligibility of Israeli entities and their activities in the territories occupied by Israel since June 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards, [2013] OJ C205/05, 9–11. 20 Interpretative Notice on indication of origin of goods from the territories occupied by Israel since June 1967, [2015] OJ C375/05, 4–6. 21 BO Martins, ‘Interpreting EU–Israel Relations: A Contextual Analysis of the EU’s Special Privileged Partnership Proposal’ (2016) 29 Cambridge Review of International Affairs 151. 22 D Bouris and G Kyris, ‘Europeanisation, Sovereignty and Contested States: The EU in Northern Cyprus and Palestine’ (2017) 19 British Journal of Politics and International Relations 755. 23 Persson (n 12) 198. 24 Case C-363/18, Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954. See this volume, ch 89. 25 Opinion of AG Hogan, Case C-363/18 Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances ECLI:EU:C:2019:494, para 2. 26 Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers, [2011] OJ L34/18. 27 See further O Kanevskaia, ‘Misinterpreting Mislabelling: The Psagot Ruling’ (2019) 4 European Papers 763.
614 Paul James Cardwell of this notice was itself mentioned only once by the AG (noting the ‘particular aspect of EU law, namely the respective scope of Association Agreements between the EU and Israel’)28 and was absent from the decision of the Court. Thus,29 the impact of Brita in the political realm of the EU’s external relations can be most keenly felt in the authority attached to the position by a judgment of the Court. As noted, [a]lthough the Brita judgment did not add much to the EU’s established interpretation that the Association Agreement did not apply beyond the pre-1967 borders, EU legal experts have noted that the ‘fact that the [Court] was saying it meant that this position had become more authoritative’,
and other institutional actors, such as MEPs, have ‘emphasiz[ed] the need to ensure conformity of EU–Israeli relations with existing EU legislation, often making explicit reference to the Brita ruling and relevant legally non-binding rules’.30 B. Question of ‘Territory’ Given the extensiveness of the EU’s agreements with third states across the globe and the number of disputed territories – in particular in the EU’s neighbourhood – it seems likely that the Court and national courts will be faced with questions of territorial application. This was already recognised in Brita, which considered the application of Anastasiou I.31 As AG Hogan noted in his Opinion in Organisation juive européenne and Vignoble Psagot, decisions should not be ‘construed as expressing a political or moral opinion’32 on such sensitive matters – though it is axiomatic that decisions are capable of having such an effect on international relations which can stretch far beyond matters of trade. To what extent has Brita helped the Court deal with cases involving disputed or occupied territories? The picture is rather mixed and suggests that Brita – and its reliance on international law – has not provided the Court with a definitive template for how to deal with questions of territorial scope in the absence of explicit statements in the agreements. This would perhaps, however, be overly optimistic since, as both the General Court and Court stated in Front Polisario, ‘The facts of the present case are different, in so far as … the European Union has not concluded an association agreement concerning products originating in Western Sahara, or with the Front Polisario, or with any State or other entity’.33 This provided the Court with an opportunity to back away from its view in Brita, where the consideration of the entry of goods under the separate agreement with Palestine was part of the rationale. In Front Polisario, the Court appeared to place less emphasis on assessing what the EU’s commitments were towards a territory effectively controlled by a partner (third) state, whilst at the same time reaffirming that it was upholding international law. The difficulty, as some have noted, is that it means in effect that the Court has de facto allowed the EU to be complicit in ‘over a decade
28 Opinion of AG Hogan in Organisation juive européenne and Vignoble Psagot (n 25) para 57. 29 Most recently, see ch 89. 30 P Müller and P Slominski, ‘The Role of Law in EU Foreign Policy-Making: Legal Integrity, Legal Spillover, and the EU Policy of Differentiation towards Israel’ (2016) 55 Journal of Common Market Studies 871. 31 Anastasiou I (n 5). See this volume, ch 25. 32 Opinion of AG Hogan in Organisation juive européenne and Vignoble Psagot (n 25) para 8. 33 General Court, Case T-512/12, Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) v Council of the European Union, ECLI:EU:T:2015:953 para 97; Case C-104/16, Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario), ECLI:EU:C:2016:973, paras 100–03. See this volume, ch 75.
The Application of EU International Agreements to Occupied and Disputed Territories 615 long infringement of the right to self-determination’34 and places in doubt the Treaty-based obligation of the protection of human rights and the strict observance and the development of international law in the Union’s relations with the wider world.35 Shortly after the delivery of the Front Polisario judgment, in Western Sahara Campaign,36 the Court again had to assess the validity of an international agreement (the EU–Morocco Fisheries Partnership Agreement and its 2013 Protocol) and the application of the agreement to the Western Sahara. The Court again extensively referred to international law to determine the EU’s own obligations. By accepting Morocco’s sovereignty over the Western Saharan waters, the EU would thus tacitly accept Morocco’s breach of the right to self-determination of Western Sahara. As in Front Polisario, a way out was found in arguing that ‘Moroccan fishing zones’ did not include Western Sahara territory; hence, the agreements did not, in the eyes of the Court, apply to any illegally occupied territory.37 How the Court views ‘territory’ is a prism by which to understand the relationship between EU and international law. In the Court’s mind, it frames the issues in terms of territory in these cases – though the actually citation of Brita is limited to a reference to customary international law (see below) and that international agreements are part of the EU legal order.38 Front Polisario and Western Sahara suggest that the Court has also shifted somewhat from its post-Brita characterisation as adopting a ‘dualist’ approach to international law in the EU legal order. However, this does not make the Court particularly different from national courts, which are often required to rule on the effects of international law too. And as decisions demonstrate, both the quantity and quality of international law for the Court to draw on has increased dramatically.39 By contrast, the Organisation juive européenne and Vignoble Psagot Ltd judgment once again shows that it is difficult to generalise and that the Court continues to have in its cannon a number of approaches to questions of territory (including avoiding the discussion of territory completely) which leave it open to charges of inconsistency.40 In hindsight, Brita therefore stands as one example in a growing list of cases where the Court is likely to have to deal with issues that are highly dependent on individual circumstances. C. The EU and Customary International Law The Court’s reasoning on the principle of the relative effect of treaties to interpret the agreement was found by some commentators on Brita to be unconvincing.41 However, the majority of citations of Brita by the Court use it as a statement on the status of customary international 34 V Kube, ‘The Polisario Case: Do EU Fundamental Rights Matter for EU Trade Policies?’ (European Journal of International Law:Talk, 3 February 2017), www.ejiltalk.org/the-polisario-case-do-eu-fundamental-rights-matter-foreu-trade-polices/. 35 Art 3(5) TEU. 36 Case C-266/16, Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs, ECLI:EU:C:2018:118. See this volume, ch 75. 37 See also the contributions to A Duval and E Kassioti (eds), The Legality of Economic Activities in Occupied Territories (London, Routledge, 2020). 38 ibid para 45. 39 C Eckes, ‘International Law as Law of the EU: The Role of the ECJ’ in E Cannizzaro, P Palchetti and RA Wessel (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2011). 40 PJ Cardwell and RA Wessel, ‘EU External Relations and International Law: Divergence on Questions of ‘Territory’?’ in E Fahey (ed), Framing Convergence with the Global Legal Order (Oxford, Hart Publishing, 2020). 41 E Cannizzaro, ‘A Higher Law for Treaties?’ in E Cannizzaro (ed), The Law of Treaties beyond the Vienna Convention (Oxford, Oxford University Press, 2011) 425, 432; G Harpaz and E Rubinson, ‘The Interface between Trade, Law and Politics and the Erosion of Normative Power Europe: Comment on Brita’ (2010) 35 EL Rev 551, 562.
616 Paul James Cardwell law in the EU legal order. In Racke,42 the Court had already emphasised that customary international law cannot be used to circumvent the EU legal order.43 Cases subsequent to Brita use it as affirmation that ‘the rules which constitute an expression of customary international law are binding, as such, upon the EU institutions and form part of the EU legal order’.44 The Court has underlined on several occasions that even though the Vienna Convention does not bind either the EU or all its Member States, that Convention ‘reflects the rules of customary international law which, as such, are binding upon the EU institutions and form part of the legal order of the European Union’.45 For those Member States that are not part of a specific agreement (such as a 1997 Protocol amending the International Convention of 1973 for the Prevention of Pollution from Ships),46 they are ‘required to observe that principle since it constitutes a customary rule of international law which, as such, is binding upon the European Union institutions and forms part of its legal order’.47 This includes the requirement of good faith in interpretation in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose.48 The significance of the Vienna Convention and customary international law applies not only in the EU’s external relations, but also in the relations between Member States.49 Herein, therefore, lies one of the consequences of the Brita judgment, which goes beyond the scope of external relations and bilateral relations with third states and into the realm of the contribution of the EU to the international legal order. Rather than Brita merely recognising an existing legal principle, recognising the EU as a non-state actor, albeit one which is a powerful economic actor, has in fact challenged the nature of (customary) international law. As claimed,50 the distinction between states and international organisations, on which the two distinct Vienna Conventions on the Law of Treaties are based, has been challenged by the EU and its unique context sitting somewhere between these two types. The Court of Justice’s assertion in Brita is that, although the EU is not a state, the rules contained in the 1969 Vienna Convention are relevant to the types of agreements – such as Association Agreements – to which the EU is a party. V. ADDITIONAL READING Cardwell, PJ, ‘Adjudicating on the Origin of Products from Israel and the West Bank: Brita GbmbH v Hauptzollamt Hamburg-Hafen (C-398/06)’ (2011) 17 European Public Law 37. Cardwell, PJ and Wessel, RA, ‘EU External Relations and International Law: Divergence on Questions of “Territory”?’ in E Fahey (ed), Framing Convergence with the Global Legal Order (Oxford, Hart Publishing, 2020). 42 Case C-162/96, A Racke GmbH & Co v Hauptzollamt Mainz, ECLI:EU:C:1998:293. See this volume, ch 36. 43 ibid para 42. 44 As per Brita (n 6) para 42, citing Case C-641/18, LG v Rina SpA and Ente Registro Italiano Navale, ECLI:EU:C:2020:349, para 54 (citing Brita para 42); Opinion 2/15, Free Trade Agreement between the European Union and the Republic of Singapore, ECLI:EU:C:2017:376, para 161. 45 Case C-410/11, Pedro Espada Sánchez and Others v Iberia Líneas Aéreas de España SA, ECLI:EU:C:2012:747, para 21. 46 Case C-537/11, Mattia Manzi and Compagnia Naviera Orchestra v Capitaneria di Porto di Genova, ECLI:EU:C:2014:1, paras 47–48. 47 Ibid. 48 Case C-464/14, SECIL – Companhia Geral de Cal e Cimento SA v Fazenda Pública, ECLI:EU:C:2016:896, para 94; Case C-464/13, Europäische Schule München v Silvana Oberto and Barbara O’Leary, ECLI:EU:C:2015:163. 49 Case C-648/15, Republic of Austria v Federal Republic of Germany, ECLI:EU:C:2017:664 (citing Brita (n 6) para 43). 50 J Odermatt, ‘The Development of Customary International Law by International Organizations’ (2017) 66 International and Comparative Law Quarterly 491.
The Application of EU International Agreements to Occupied and Disputed Territories 617 Del Sarto, R (ed), Fragmented Borders, Interdependence and External Relations: The Israel–Palestine– European Union Triangle (London, Palgrave Macmillan, 2015). Harpaz, G and Rubinson, E, ‘The Interface between Trade, Law and Politics and the Erosion of Normative Power Europe: Comment on Brita’ (2010) 35 EL Rev 551. Kassoti, E and Saluzzo, S (eds), ‘What’s in a Name? The Psagot Judgment and Questions of Labelling of Settlement Products’ (2020) 4 European Papers 753. Voltolini, B, ‘Non-state Actors and Framing Processes in EU Foreign Policy: The Case of EU–Israel Relations’ (2016) 23 Journal of European Public Policy 1502.
618
58 Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts: Commission v Sweden (PFOS) PIETER JAN KUIJPER Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2010:203 (PFOS), delivered 20 April 2010. KEYWORDS Failure of a Member State to fulfil obligations – Breach of Article 10 EC (now Article 4(3) TEU) and Article 300(1) EC (now Article 218 (1) TFEU) – Mixed agreement – Stockholm Convention on Persistent Organic Pollutants of 22 May 2001 – Unilateral proposal by a Member State to list a substance in Annex A to that Convention – Duty of sincere cooperation.
I. INTRODUCTION
T
he duty of Union loyalty (sincere cooperation) in Article 4(3) TEU has acquired a special place in EU external relations law.1 This is mainly the work of the Court. Commission v Sweden, commonly called the PFOS case, concerned the production and trade of substances which are forbidden or restricted by the Stockholm Convention of 2001,2 and is an important milestone in the Court’s case law. The PFOS case was preceded by two prior infringement cases taken by the Commission against other Member States,3 which were largely identical. In spite of a Council decision of 7 December 1992 authorising the Commission to negotiate a multilateral agreement on behalf of the Union with a number of central and eastern European countries on the freedom of navigation, including cabotage, on their and the Union’s inland waterways, Germany and
1 See, eg E Neframi, ‘The Duty of Loyalty: Rethinking its Scope through its Application in the Field of External Relations’ (2010) 47 CML Rev 323. 2 ‘Perfluoroctane Sulfonate’. Convention on Persistent Organic Pollutants (POPs), Stockholm, 22 May 2001, http://chm.pops.int/TheConvention/Overview/TextoftheConvention/tabid/2232/Default.aspx. 3 Case C-266/03, Commission v Luxemburg, ECLI:EU:C:2005:341; Case C-433/03, Commission v Germany, ECLI:EU:C:2005:462.
620 Pieter Jan Kuijper Luxemburg had continued negotiations on the same subject matter with several of these states, or had finalised but not yet ratified agreements with them negotiated before the adoption of the Council decision. The Court had not the slightest trouble deciding that such behaviour did not comport with the obligation of genuine cooperation laid down, at that time, in Article 10 EC (now Article 4(3) TEU). A few weeks before the PFOS judgment, the case at hand, the Court condemned Greece for the breach of loyalty provision in another infringement case because it had unilaterally made a proposal to the Maritime Safety Committee of the International Maritime Organization (IMO), of which the Union had not yet been able to become a member, and where it merely held the status of observer.4 The PFOS case was allocated to the Grand Chamber, because it went a step beyond these previous three cases. The Commission sought to apply the obligation of Article 10 EC (now Article 4(3) TEU) to situations in which a Member State acted alone in an international forum, without there being a clear decision of the Council to open negotiations with third states, or within an organ of an international organisation or a treaty body, and giving directives for such negotiations. It is with this innovative aspect of the Commission’s case in mind that the factual and legal background of the case should be analysed. II. FACTS
The Stockholm Convention on Persistent Organic Pollutants (POPs) is a so-called multilateral environmental agreement (MEA). It initially had three annexes: Annex A, entitled ‘Elimination’, which contained a number of POPs, including PCBs (polychlorinated biphenyls), which have become known for their extremely slow decay in the natural environment; Annex B, which bore the title ‘Restriction’ and was concerned with DDT (dichlorodiphenyltrichloroethane) alone; and finally Annex C on ‘unintentional production’.5 The Stockholm Convention laid down a procedure by which parties may propose POP’s for inclusion in these annexes.6 The sole governing organ of the Stockholm Convention is the Conference of the Parties (COP). The COP is authorised to create subsidiary bodies, one of which was the Persistent Organic Pollutants Review Committee, charged principally with reviewing the proposals of the parties to include new substances in the annexes to the Convention.7 The Secretariat of the Convention was in the hands of the Executive Director and staff of the United Nations Environment Program.8 The Stockholm Convention was subject to ratification, acceptance or approval, not only by states, but also by regional economic integration organisations (so-called REIOs), such as the Union.9 The Stockholm Convention itself may be amended, and new annexes and amendments of existing annexes may be agreed. Amendments to the Convention, which may be proposed by any party, can be adopted at a meeting of the COP by consensus or, if all efforts at consensus
4 Case C-45/07, Commission v Greece, ECLI:EU:C:2009:81 (IMO). See this volume, ch 53. 5 Later Annexes D, E and F containing various information requirements on the part of the parties were added. The latest Annex G contains Arbitration and Conciliation Procedures for Settlement of Disputes, implementing Art 18 of the Convention. 6 Art 8 of the Stockholm Convention. 7 ibid Art 19(6). 8 ibid Art 20. Part of his staff is dedicated to the Stockholm Convention and the functioning of other MEAs. 9 ibid Art 25(1).
Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts 621 have been exhausted, by a three-quarters majority of the parties present and voting.10 This procedure is also followed for the addition of new POP’s to the annexes.11 Even though the Convention itself states, as is usual in the law of treaties, that the annexes are an integral part of the agreement,12 no ratification procedure follows, except for those parties which have availed themselves at accession of the possibility to make a declaration that such amendments to Annex A, B or C shall enter into force for them only ‘upon the deposit of its instrument of ratification acceptance approval or accession with respect thereto’.13 This is, then, the simplified procedure for amending annexes to the Convention, which was to play such an important role in the PFOS case before the Court. In 1998, the Council authorised the Commission to participate, on behalf of the Union, and together with the then 15 Member States, in the negotiations for the Stockholm Convention. There was no doubt at the time that this was to be a mixed agreement for the EU. The Convention was only very partially about trade – an exclusive power of the Union – and the dominant part was about restriction or outright stoppage of production of chemical compounds considered noxious to the environment, which is a shared competence. There was only very limited EU legislation on this at the time, except for one Council Directive of 1996 on the disposal of, inter alia, PCBs, which was based on the present Article 192 TFEU. It was during the negotiations on the Stockholm Convention that the internal legislation on POPs, including PCBs, began to develop, also with a view to implementing the Stockholm Convention. The Stockholm Convention was signed in 2001 by the Community, its 15 Member States and eight of the new Member States to be. Nearly three years after its signature, it entered into force on 17 May 2004. The necessary 50 ratifications may have included some, or even all, of those deposited by the Member States, but the Union itself followed only later, after the adoption of the Council decision on the conclusion of the Stockholm Convention on 14 October 2004.14 This Decision clarified that the Stockholm Convention sought the elimination of production, use, import and export of ‘the initial twelve priority Persistent Organic Pollutants’.15 During the summer of 2004, while the discussions in the Council on the Decision concerning the approval of the Stockholm Convention were still going on, the preparations for the first meeting of the COP of the Stockholm Convention had already begun. On 4 August 2004, the Commission made a proposal for the inclusion of new POPs in Annex A of the Stockholm Convention.16 Perfluorooctanesulphonic acid (PFOS) did not figure as a possible addition to the annex. This prompted Sweden, in September 2004, to mention a possible unilateral initiative on its part to propose the inclusion of PFOS in Annex A to the Stockholm Convention. This was contrary to the Commission’s earlier insistence on the importance of the principle of the unity of representation of the Union and the Member States in the context of mixed agreements. 10 ibid Art 21. 11 ibid Art 22(3)(a). 12 ibid Art 22(1). 13 ibid Art 22(4) and Art 25(4). This provision was probably inserted at the behest of the USA, but was never invoked by the EU or its Member States. 14 Council Decision of 14 October 2004 concerning the conclusion, on behalf of the European Community, of the Stockholm Convention on Persistent Organic Pollutants (2006/507/EC), [2006] OJ L209/1. In April 2004, Regulation (EC) 850/2004 on persistent organic pollutants had already been approved by the EP and the Council. It has been amended several times and is presently being recast, see www.europarl.europa.eu/legislative-train/ theme-environment-public-health-and-food-safety/file-persistent-organic-pollutants. 15 ibid preambular para 4. 16 COM (2004) 537 final of 4 August 2004.
622 Pieter Jan Kuijper In March 2005, two months before the first COP of the Stockholm Convention was to convene, the Council adopted conclusions to the effect that, after an initial proposal for the inclusion of four new substances in Annex A of the Stockholm Convention, three others could be proposed later. At the first COP in May 2005, two new POPs (chlordecone and hexabromobiphenyl) proposed by the Community and the Member States were referred to the POP’s Review Committee. On 6 July 2005, the Council Working Party on international environmental issues agreed that, when filing proposals for adding new POPs to the lists of the Aarhus Protocol17 and the Stockholm Convention, priority would be given to the lists for Aarhus, as the COP of the Stockholm Convention would meet later. Specifically with respect to PFOS, the Council Working Party agreed that this was a POP and should be proposed as such for inclusion in the internal control measures of the Community first. Subsequently, it should be advanced for inclusion in the Annex to the Aarhus Protocol, and then in that of the Stockholm convention. The Swedish reaction to these decisions was to file a unilateral Swedish proposal for the inclusion of PFOS in Annex A to the Stockholm Convention. Less than a week later, on 20 July 2005, Coreper met and decided that PFOS was indeed to be proposed for inclusion in the Aarhus Protocol lists, on the condition that the Commission would have proposed, in the meantime, its inclusion in the lists of Directive 76/769 on the marketing and use of dangerous chemical substances.18 And, indeed, on 5 December 2005, the Commission adopted a double proposal for the modification of the Directive and for the inclusion of PFOS in the Aarhus lists.19 On 19 December 2005, the Commission started an infringement procedure against Sweden for unilaterally having filed a proposal for the inclusion of PFOS in Annex A to the Stockholm Convention with the Secretariat of that Convention. This resulted in an application by the Commission to the Court, seeking that Sweden had failed to fulfil its obligations under Article 10 EC (now Article 4(3) TEU) and Article 300(1) TEC (now Article 218(1) TFEU). III. THE COURT
During the exchange of written pleadings before the Court, the debate between the parties – and this included a number of Member States that intervened on the side of Sweden, namely Denmark, the Netherlands, Finland and the UK – centred around three points. First, in the absence of a clear decision by the Council laying down a common position, a breach of Article 10 EC (now Article 4(3) TEU) was inconceivable. Second, the right of Sweden to propose PFOS for inclusion in Annex A was merely the external component of the right of the Member States under Article 176 TEC (now Article 193 TFEU) internally to adopt more stringent protective measures in the realm of environmental law. The third point was whether or not the unilateral measure by Sweden could lead, through the procedures laid down in the Stockholm Convention and the conditions under which the EU had become a party to it, to 17 The Aarhus Protocol on Persistent Organic Pollutants 1998, linked to the Convention on Long-Range Transboundary Air Pollution of 1979 and concluded within the UN Economic Commission for Europe pursues the same objectives as the Stockholm Convention. The EU and its Member States have also become parties to this Convention, see Council Decision 2004/259/EC, [2004] OJ L81/35. 18 Council Directive 76/769/EEC of 27 July 1976 on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations, [1976] OJ L262/201, latest consolidated version 21 November 2008. 19 COM (2005) 618 final.
Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts 623 a binding obligation on the Union and its Member States to accept this inclusion and to have to modify the regulation by which the Stockholm Convention was implemented within the Community. Finally, there was a less central but still important fourth point, namely, whether or not economic considerations ought to be taken into account. This had to do with the provisions of the Stockholm Convention, which obliged developed states parties to compensate developing states parties for the costs of implementation of the Convention. Adding products to Annex A would increase those obligations on the part of the Union and its Member States. Should this obligation not be discussed within the Union too, before one Member State took a unilateral initiative?20 The Court broadly followed Attorney General (AG) Maduro, who concluded that what really mattered was not so much Sweden’s right to act unilaterally, but, rather, the manner in which Sweden actually exercised that right.21 He pointed out, on the basis of his own marshalling of the facts of the case, that a process had been engaged in the Council machinery, and that there was no indication that a negative conclusion on Sweden’s proposal to include PFOS in an EU proposal had been reached. Sweden was therefore not (yet) free to act alone.22 The Court stated that Sweden’s position came down to arguing that the duty of cooperation is limited in scope in areas where competence is shared between the Union and its Member States.23 It then recalled that, in the cases on Luxembourg and Germany mentioned earlier, it had already decided that this duty was broadly applicable, and did not depend on whether the Union competence at issue was exclusive or restricted to the right of the Member States to enter into obligations.24 The Court thus situated this case clearly within the framework of the Germany and Luxembourg cases on internal navigation, which was an area of mixed competence, and distinguished it from the case concerning the unilateral proposition made by Greece within the IMO, where the Union power was exclusive, based on the ERTA doctrine.25 It then reaffirmed that, precisely in the areas of mixed competence, it was essential to have close cooperation between the Member States and the EU institutions, and that this applied to both the phase of negotiation of such a mixed agreement and its conclusion, and with regard to the fulfilment of the commitments undertaken under such agreements. For the Court, ‘that obligation to cooperate flows from the requirement of unity in the international representation of the Community’.26 The Court went on to recall that in the Luxembourg and Germany cases it had said that, in respect of mixed agreements, Member States were subject to ‘special duties of action and abstention’ once the Commission had submitted proposals to the Council, which, although not (yet) adopted by the Council, constitute ‘a point of departure for concerted Community action’. This was particularly true once the Council had taken a decision authorising the Commission to negotiate an international agreement. This rendered the duty of cooperation, if not abstention, even stronger, so as to ensure the coherence and consistency of the action
20 See, inter alia, Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2010:203 (PFOS), para 59. 21 Opinion of AG Maduro, Case C-246/07, European Commission v Kingdom of Sweden, ECLI:EU:C:2009:589 (PFOS), paras 46–47. 22 Paras 51 and 53 of the Opinion. 23 Para 70 of the judgment. 24 Para 71 of the judgment. 25 Para 72 of the judgment. This point was conceded by the Commission during the hearing. 26 Para 73 of the judgment. This is the well-known hen and egg problem: was Art 10 EC/Art 4(3) TFEU there first or was the requirement for unity there first?
624 Pieter Jan Kuijper of the Union and its Member States, and its international representation. However, the Court admitted that this was not exactly Sweden’s position in the ongoing discussions within the Council on the question of which substances to add to Annex A of the Stockholm Convention during the first two COP’s; and there was no such decision (yet).27 At that point, the Court stated that it had to look into the question of what in the Commission’s pleading was called ‘a Community strategy’ on the introduction of PFOS into the annexes of the Stockholm Convention. For the analysis of this problem, it reverted to an older case concerning the Council’s lack of respect towards the so-called ‘arrangement’ between it and the Commission on how the Community ought to comport itself within the framework of the organs of the Food and Agriculture Organization (FAO) of the UN.28 In that case, the Court had decided that, in spite of the non-defined status of the ‘arrangement’, it was legal and binding between the parties, and on that basis the Court had condemned the Council. In the present case, this brought the Court to the intermediate conclusion that it is not indispensable that a common position take a specific form for it to exist and to be taken into consideration in an action for failure to fulfil the obligation of cooperation in good faith, provided that the content of that position can be established to the requisite legal standard.29
Next, the Court proceeded to analyse, in detail, all the different steps of the process that had been followed within the preparatory instances of the Council, from the first proposal by the Commission to include certain substances (but not yet PFOS), and the first ‘conclusions’ of the Council to propose these substances at the first COP of the Stockholm Convention of March 2005, to well into 2006. Although 19 December 2005, the date of the Commission’s first communication to Sweden setting out its infringement claim was the formal ‘fatal date’ for the case, the Court attached importance to events in 2006, since these, especially the recommendation of the Council of 9 March 2006 and the Council’s authorising the Commission in April 2006 to present certain substances for inclusion in Annex A of the Stockholm Convention, might bear out the Commission’s assertion that the Commission and the Council had a certain ‘strategy’ to arrive at the inclusion of PFOS in Annex A.30 The Court’s conclusion was crystal clear: ‘in unilaterally proposing the addition of PFOS to Annex A of the Stockholm Convention … Sweden dissociated itself from a concerted common strategy within the Council’.31 As if this was not yet enough to conclude that a breach of Article 4(3) TFEU had occurred, the Court went on to analyse the arguments of both parties on the question whether a unilateral proposal by Sweden could credibly lead to subjecting the Union to an obligation to modify its own legislation on that substance, or, as the Court more prudently put it, have ‘consequences for the Union’.32 To this end, in the Court’s view, an analysis of the specific rules of the Stockholm Convention for adopting such annexes and the relation between the Union and its Member States was necessary. To begin, the Court pointed out that two provisions of the Convention, Articles 23(2) and 25(2), clearly state that a REIO, such as the EU, and its Member States cannot exercise any right under the Convention, in particular the right to vote, concurrently. As the provisions on the respective powers of the EU and its Member States under the Convention are quite
27 Paras 28 Case 29 ibid.
30 Paras
74–76 of the judgment. C-25/94, Commission v Council, ECLI:EU:C:1996:114 (FAO) para. 77. See this volume, ch 31.
78–90 of the judgment. 91 of the judgment. 32 Para 92 of the judgment. 31 Para
Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts 625 general, both in the Convention itself33 and in the EU Council’s Act of Conclusion,34 there was a considerable risk that Sweden and the EU might try to pre-empt each other in exercising the right to vote. In any case, given the large number of parties to the Stockholm Convention, the EU would not be able to raise a blocking minority on its own. Hence, there was a serious chance that the Swedish proposal would be adopted. Second, Sweden had pointed to the possibility of opting out as a way for the EU to escape from becoming bound by the Swedish amendment. However, the Court seemed far from certain that the different provisions on opting out of new Annexes and amendments to existing annexes, at different moments in time, were fully coherent. The Court said that ‘irrespective of that aspect’, the objective of listing a ‘new’ substance in Annex A was to create a legal obligation for the parties to the Stockholm Convention to prohibit that substance. So the Union, as a party to the Convention, would be bound to honour that obligation, unless, within a year, in accordance with Article 14(1) of the POPs regulation,35 it were to notify a declaration of non-acceptance. In this way, the Court arrived at the conclusion that its examination of the decision-making rules of the Convention had ‘consequences for the Union’.36 At the same time, the Court swatted away Sweden’s argument that such ‘consequences’ ought to be redeemed as being an external manifestation of Article 176 EC (now Article 193 TFEU) by joining the Commission’s view that ‘the Union could be bound by an amendment to an Annex of the Stockholm Convention whereas it is not bound by such a national measure’.37 In conclusion, the Court returned to earlier key passages in its judgment. First, it went to where it recalled the case on inland navigation brought against Germany, and reminded the Member States that they were subject to ‘special duties of action and abstention’. Then it continued by pointing to a prior paragraph earlier in the judgment, that said [t]hat this is especially true in a situation such as that in the present case which is characterized … by a unilateral proposal which dissociates the Member State in question from a concerted common strategy within the Council and was submitted within an institutional and procedural framework such as that of the Stockholm Convention.38
All this was likely to compromise the principle of unity in international representation of the Union and its Member States and weaken their negotiating power with regard to the other parties to the Convention concerned. Consequently, ‘the Commission’s … complaint, alleging breach of Article 10 TEC, is well founded’.39 IV. THE IMPORTANCE OF THE CASE
Does this overview confirm the statement at the beginning of this chapter, that the PFOS case was a further development of the Luxembourg and Germany internal navigation cases? 33 Art 25(3) Stockholm Convention simply states that ‘a regional economic integration organization shall declare the extent of its competence in respect of the matters governed by this Convention’ as well as any relevant modification therein. 34 The declaration by the EC under Art 25(3) refers to Art 175 TEC as the source of its power to conclude environmental agreements and goes on to say that the performance of the obligations arising from those treaties is the responsibility of the Community, insofar as these obligations are covered by Community law in force. The final sentence of the declaration laconically notes ‘The exercise of Community competence is, by its nature, subject to continuous development’. See Annex to Council Decision 2006/507/EC in n 14 above. 35 Para 100 of the judgment. 36 Para 101 of the judgment. 37 Para 102 of the judgment. 38 Para 103 of the judgment, referring to para 91. 39 Paras 104 and 105 of the judgment.
626 Pieter Jan Kuijper There can be little doubt that this is indeed so. But how far did this further development go? The Court seemed to say that, when a common concerted strategy has been developed between the Member States in the Council, one of them can no longer disassociate itself from this strategy without infringing the Union loyalty that Article 4(3) TEU demands. However, the Court made this further step look minimal by going back to the case concerning the ‘arrangement’ that the Council and the Commission had agreed with respect to their conduct in the organs, as evidenced in the FAO case, after the EU had become a member of FAO next to its Member States. In reality, the Court had construed that ‘arrangement’ as binding, giving itself a solid basis for its conclusion that Community loyalty had been breached. From a broader perspective, interpreting the ‘arrangement’ in the old FAO case as binding and construing a series of events as a ‘common concerted strategy’ which becomes a reviewable act in PFOS is in line with a long tradition of the Court of laying open to its scrutiny acts which seem merely procedural or almost formless, if such acts threaten to disturb proper procedures in the Union, distort the relations between its institutions or change the legal position of natural and legal persons.40 But how much further did the Court actually go? What precisely were the conditions for the breach of Union loyalty? And what exactly was the content of this notion of a common concerted strategy? Finally, what has been the influence of this PFOS case on the development of the case law of the Court relating to the role of Union loyalty in the field of the foreign relations of the Union? A. Conditions for Breaching Union Loyalty in External Relations In answering the first question, it is important to have a closer look at the two different parts of the legal core of PFOS, in the ‘findings of the court’. The Court arrived at a kind of provisional conclusion to the effect that, by unilaterally proposing the addition of PFOS to Annex A, Sweden had dissociated itself from a concerted common strategy within the Council. The Court, however, did not, as yet, link this to a judicial determination concerning a breach of Union loyalty.41 The following 10 paragraphs then form the second, much shorter, part of the findings devoted to the question whether or not the unilateral action by Sweden could have negative repercussions on the Union, because it could be forced indirectly to adopt Sweden’s unilateral proposal, and have to amend its existing legislation accordingly. The conclusion is equally bereft of a clear judicial qualification of what went before: Sweden’s unilateral proposal merely had ‘consequences for the Union’.42 When, finally, legal consequences were drawn from these two parts of the findings of the Court, what was said in the second part is entirely forgotten. The Court essentially returned to paragraph 91 of its judgment, where the crucial point was that Sweden had dissociated itself from a common concerted strategy within the Council. This was an act that compromised the principle of unity in the international representation – and it was this act which was qualified as a breach of Article 4(3) TFEU by the Court. Hence, the negative consequences that Sweden’s unilateral action might well have had for the Union were not a constitutive part of the ‘delict’
40 The earliest and best example in external relations law is Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA), in which another formless act of the Council (in paper form and not in the form of successive and coherent steps in a discussion) was declared reviewable by the Court, para 42. 41 Paras 69–91 of the judgment. 42 Para 101 of the judgment.
Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts 627 of breaching Article 4(3) TFEU. It was a mere aggravating circumstance, but since the Court cannot condemn Member States to an extra year in EU jail because of aggravating circumstances in committing a breach of Union law, this part of the findings of the Court was strictly obiter dicta, though it still served the important goal of convincing the reader and the EU legal community at large that this was a serious breach of Union loyalty. When considering the second question mentioned above, it is important to look at the form that the ‘common concerted strategy’ that Sweden walked away from finally took. In the relevant passage, the Court used the term ‘common position’,43 which is usually reserved for situations in which Member States and the Union together, and in concerted fashion, are negotiating a mixed agreement – or, in this case, additions to an annex of a mixed agreement. Such common positions taken in connection with mixed agreements were seen as running parallel to the authorisation to open negotiations, the adoption of negotiating directives, the authorisation to sign and conclude an agreement, as presently laid down in Article 218(2)–(5) TFEU, and establishing the position in a body set up by an agreement when the body is called upon to adopt acts having legal effects as in Article 218(9) TFEU. As these treaty provisions were generally considered to apply only to agreements to be concluded by the Union alone, the so-called ‘common positions’, by nature, needed to have their own (informal) form, since, even if they were fulfilling the same functions as the Decisions mentioned in the EU Treaties, they could never be based directly on the EU Treaties, as they also touched the Member States’ competence in external relations.44 Herein lay the root of the Court’s statement that it was not indispensable that a common position took a specific form in order to exist, or to be taken into consideration in a legal case. However, that there was such a thing as a common position had to be ‘established to the requisite legal standard’. The Court then satisfied that challenge to its own requisite legal standard by painstakingly reconstructing from the facts adduced by the Commission, Sweden and some Member States intervening in support of Sweden how, in the course of a number of meetings in different instances of the Council machinery between March 2005 and December of the same year, the members of the Council, minus Sweden, and the Commission had arrived at the conclusion (1) that new substances should be proposed for inclusion in Annex A of the Stockholm convention and (2) that initially PFOS would not be among them, because (3) it should be included only after it would have been introduced, first, in the relevant internal Community legislation and, second, in the annex to the Aarhus Protocol. Finally, the Court found that later events in early 2006 confirmed that this plan, or ‘common concerted strategy’, presumably for arriving at what thus amounted to a common position relating to a mixed agreement, indeed came to fruition. The Court thus followed, to a large extent, the story presented by the Commission. Accordingly, it is interesting to point out how important a good and credible presentation of the facts can be in bringing (infringement) cases before the Court, because it was essentially the sequencing of the facts which convinced the Court that there had been such a thing as, if not a common position in the classical sense, at least a common concerted strategy that was sufficient to demonstrate that Sweden had behaved contrary to the norm of loyal cooperation between the Union institutions and the Member States. This provides a strong feeling of ‘ius in causa positum’ to the PFOS case and to many other infringement cases brought by the
43 Para 77 of the judgment. 44 There can be little doubt that in PFOS the Court accepted, from the beginning, that the ground rule of Union loyalty applies in mixed settings.
628 Pieter Jan Kuijper Commission on the basis of an alleged breach of Article 4(3) TFEU. There is thus no single magic formula that the Commission or the Court can apply that would enable them to arrive at the conclusion that Union loyalty has been infringed by a Member State – which stands to reason, when good faith is the core of the matter. The unique position that Sweden manoeuvred itself into to draw the ire of the Commission, and subsequent condemnation by the AG and the Court, undermines some of the criticism to the effect that, after the PFOS case, it would become virtually impossible for Member States to exercise their own remaining competence in mixed agreements.45 B. Forcing Harmonisation by way of External Relations In this connection, it is also important to draw attention to the fact that the members of the Council wanted that PFOS should first be included in the relevant directive on dangerous chemicals before it was proposed for inclusion in the annexes to the Aarhus Protocol and the Stockholm Convention. This was a very sensitive point for many Member States, and it is not too strong to say that most of them detest being put in the position where, in the Council (and normally needing the help of the Parliament as co-legislator), they have to adapt Union legislation to international agreements concluded by the Union without having been able to decide first whether such a change in internal legislation is justified on its own merits. For a Member State like France, for instance, what is called harmonisation par la bande extérieure46 has to be avoided at almost any price. In the field of trade policy, this sentiment was made explicit after Lisbon in the phrase ‘the Council and the Commission shall be responsible for ensuring that the agreements negotiated are compatible with internal Union policies and rules’ in Article 207(3) TFEU.47 But it is certain that it has played an important role in other fields as well, long before Lisbon, including in this field of environmentally very noxious chemical compounds, such as PFOS. By its action, Sweden ran the risk that other Member States and the Commission would interpret this as an attempt to impose on the Union, through the instrument of the Stockholm Convention, the full restrictions on the production of and trade in PFOS, without going through the normal Union legislative and regulatory cycle first. Seen from this perspective, the Court’s passage on how the Swedish unilateral initiative would create ‘consequences’ for the Union takes on additional colour. C. Influence of the PFOS Case When turning to the third question raised above – namely, what is the influence that this case had on further Court judgments and possibly on Union legislation – the answer must be ambiguous. It is certain that the Court’s reasoning that a Member State’s deviance from an informally agreed line of action in the field of external relations, in particular the conclusion and functioning of international agreements, constitutes a breach of the enhanced obligation
45 For such (mild) criticism, see Cremona and Hillion in the list of further readings. 46 The French saying uses connotations from billiards. The best English translation would probably be: ‘achieving harmonization by playing off the foreign relations cushion’. 47 For a somewhat sceptical view of this provision, see PJ Kuijper et al (eds) The Law of the European Union, 5th edn (Alphen aan den Rijn, Wolters Kluwer, 2018) 1295.
Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts 629 of good faith in Union law, as laid down in Article 4(3) TEU, may contribute to a broader definition of Union loyalty in general. However, in the field of external relations, and in particular in respect of the PFOS case concerning the position to take inside a ‘treaty body’ or an organ of an international organisation by the EU and its Member States, a brief perusal of subsequent cases, most of which are analysed in this book, leads to the conclusion that the influence of the PFOS case, though initially considerable, has proved to be rather limited. This has to do with the entry into force of the Treaty of Lisbon, with its new provisions on external relations, but also with new attitudes in the Council and the Commission, as well as in the Member States, and changes in the Court’s case law in response to all of the above. The relative diminution of the importance of the PFOS case has a lot to do with the re-evaluation of Article 218(9) TFEU in recent Court cases. The PFOS case was handed down at a time, when it was still believed that Article 218(9) TFEU was not suitable to be applied in the case of a modification or amendment to an Annex of a mixed agreement. As was demonstrated, because of the mixed character of the agreement in PFOS, all the interested parties in the procedure – the Member States, the Council, the Commission and the Court – broadly agreed that an ad hoc procedure, analogous to Article 218(9) TFEU or analogous to the granting of directives for negotiation (Article 218(2)–(4) TFEU), was necessary. Such ad hoc procedures could take different forms. In the PFOS case, this was the ‘common concerted strategy’, a purely ad hoc way of creating an analogous procedure to Article 218(9) TFEU. In the FAO case, this took the form of the repeated application during meetings of FAO organs of the so-called ‘arrangement’, which also reflected some of the conditions with respect to its participation, which had been imposed on the EU at the moment it obtained membership of the organisation. In cases in which no such ‘arrangement’ had been achieved, such as in WRC-15 and the International Telecommunication Union (ITU), a certain ‘consistent practice’ had been achieved over the years in meetings of that organisation, and was applied repeatedly. Finally, it should not be excluded, especially under the newly acquired powers of the Parliament with respect to the conclusion of international agreements after Lisbon, that interinstitutional agreements between the Council, the Commission and the Parliament will be concluded concerning the application of Article 218(9) TFEU. Four years after PFOS, the ground under that judgment had already begun to shift. PFOS demonstrated that Union loyalty could apply in a field of mixed competence. In a new case, relating to the International Organization for Wine and Vine (OIV), the Commission and the Council found themselves on the same side of the litigation, which was fairly exceptional in external relations cases involving competence. Moreover, it turned out that the Commission and Council lawyers saw eye to eye, not only on the major question at issue – namely, whether Article 218(9) TFEU could be applied to determine the position of the Union also in the context of organisations, to which the Union was not a party – but also that Article 218(9) TFEU could be applied to rules adopted in treaty bodies of mixed agreements and organisations. The Court agreed and also pointed out that many of the rules to be adopted in the instances of the OIV were certain to have an incidence on the EU legislation in the field of oenology.48 A year after OIV, the WRC-15 case was handed down, and changed the relationship between Article 218(9) TFEU and informal ways in which to lay down positions in organs of
48 Case C-399/12, Germany v Council and Commission, ECLI:EU:C:2014:2258 (OIV), paras 49–55. See this volume, ch 68.
630 Pieter Jan Kuijper international organisations and treaty bodies for good.49 The ITU is in the habit of regularly updating and amending its Radio Regulations in a so-called World Radio Conference (WRC). In laying down a common position in respect of the amendments presented at WRC-15, the Council followed its ‘consistent practice’ in ITU matters of using an intergovernmental procedure, based on consensus, without mentioning any legal basis. The Commission wanted recognition of its preparation of the substantive part as a regular Commission proposal, and claimed that the document should have been a decision based on Article 114 TFEU, as a substantive, and Article 218(9) TFEU, as procedural, legal basis, requiring a qualified majority.50 The Court, following a strong Opinion of AG Saugmandsgaard Øe,51 comprehensively decided in favour of the Commission. This amounted to an instruction from the Court to the Council and the Member States to the effect that no informal work-arounds, analogous to Article 218(9) TFEU, need to be resorted to any longer, whether for subjects of exclusive or mixed competence and whether the EU was a party to an agreement or a member of an international organisation or not,52 and that such a decision based on Article 218(9) TFEU was binding. This was further hammered home in the COTIF I and COTIF II cases involving Germany of 2017 and 2019,53 in which the Member State was involved respectively as complainant and defendant. Both cases were lost completely by Germany. In COTIF II, the Court, after having referred to the PFOS case, put the heart of the matter as follows: [C]ompliance on the part of the Member States with a decision adopted by the Council under Article 218(9) TFEU is a specific expression of the requirement of unity in the [international] representation of the European Union, arising from the obligation of sincere cooperation.54
In other words, if the PFOS case was repeated today, Article 218(9) TFEU could have been used as the legal basis. On the other hand, EU external relations is a sector where, especially in the thick of negotiations and under the pressure of time, the search for quick and informal solutions, when EU positions need to adapt, will still play some role. For such situations, the PFOS case still has something to offer. However, it cannot be denied that, after the four cases mentioned above, it has lost considerable significance because of a wider interpretation of Article 218(9) TFEU and, by analogy, of Article 218(2)–(4) TFEU. And with that, the earlier criticism of the Court’s judgment, next to the reasons given earlier, has lost much of its urgency. That is all to the good. By stating that Article 218(9) TFEU is an expression of the ground rule of Article 4(3) TFEU, in particular in areas of mixed competence, the Court is pushing the Member States and the political institutions of the Union towards more formal and transparent decision-making when preparing for and during negotiations in organs of international organisations and in treaty bodies.
49 Case C-687/15, Commission v Council, ECLI:EU:C:2017:803 (WRC-15), paras 40–58. 50 Art 114 TFEU was the substantive base, since the existing EU decisions in this field were a harmonisation of the external postures of the Member States, in particular in the framework of the ITU (of which the EU is not a full Member, but a Sector Member only) on the use of the radio spectrum on the scale of the Union. 51 Opinion of AG Saugmandsgaard Øe, Case C-687/15, Commission v Council, ECLI:EU:C:2017:645 (WRC-15), in particular paras 68–96. 52 It should be kept in mind that the EU is still not a party to many multilateral treaty regimes and international organisations, whilst the EU has considerable legislation in the areas of activities of these regimes and organisations. Membership of the WTO, OECD and FAO and being party to the Law of the Sea Convention and to some MEAs are exceptions rather than the rule. 53 Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), in particular paras 94–110. 54 Case C-620/16, Commission v Germany, ECLI:EU:C:2019:256 (COTIF II), para 94.
Union Loyalty in Mixed External Relations and the Weight of Informal Preparatory Acts 631 V. ADDITIONAL READING Casolari, F, ‘Like a Bridge over Troubled Water: The 2/15 Opinion through the Lens of EU Loyalty’ in I Bosse-Platière and C Rapoport (eds), The Conclusion and Implementation of EU Free Trade Agreements: Constitutional Challenges (Cheltenham, Edward Elgar, 2019) 85–103. Cremona, M, ‘Annotation of Case C-246/07, Commission v Sweden (PFOS), Judment of the Court of Justice (Grand Chamber) of 20 April 2010’ (2011) 48 CML Rev 1939. Delgado Casteleiro, A, ‘Loyalty in External Relations Law: The Fabric of Competence, Autonomy and Institutional Balance’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 385. Hillion, C, ‘Mixity and Coherence in EU External Relations: The Significance of the Duty of Cooperation’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited – The European Union and Its Member States in the World (Oxford, Hart Publishing, 2010). Van Elsuwege, P, ‘Annotation of Commission v Sweden. Judgment, Court of Justice of the European Union (Grand Chamber), April 20, 2010’ (2011) 105 American Journal of International Law 307.
632
59 The Ambivalent Clarification of the Effects of International Conventional and Customary Law in the European Union: Air Transport Association of America ISABELLE BOSSE-PLATIÈRE Case C-366/10, Air Transport Association of America and others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA), delivered 21 December 2011. KEYWORDS International agreements – International customary law – Direct effect – Direct applicability – Judicial review – Kyoto Protocol – Chicago Convention.
I. INTRODUCTION
T
he Air Transport Association of America and others (ATAA) judgment of 21 December 2011 is undoubtedly one of the most significant judgments of the Court in the last decade. The importance of the case is underlined by the very large number of parties involved in the proceedings. In addition to the parties to the main proceedings, there are not only representatives of the aviation industry1 and five environmental nongovernmental organisations,2 but also 11 EU Member States,3 two non-EU Member States and members of the European Economic Area,4 as well the Commission, the Council and the European Parliament. At the heart of the case was the compliance of the European greenhouse gas emissions trading scheme with international law, which raised not only legal, but also economic and political issues. As Advocate General (AG) Kokott pointed out in her Opinion, this ‘judgment will be of fundamental importance not only to the future shaping of European 1 International Air Transport Association and National Airlines Council of Canada. 2 Aviation Environment Federation, WWF-UK, European Federation for Transport and Environment, Environmental Defense Fund and EarthJustice. 3 Austria, Belgium, Denmark, France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and the UK. 4 Iceland and Norway.
634 Isabelle Bosse-Platière climate change policy but also generally to the relationship between European Union (‘EU’) law and international law’.5 More specifically, the case concerned the delicate but recurrent question of the conditions under which international law can be invoked before national courts in order to assess the validity of EU law. Of course, this question of the relationship between EU law and international law and the subsequent direct effect of international law in EU law was far from new. The applicable rules had long been established in the Court’s case law, from International Fruit6 to Intertanko.7 However, some aspects remained unclear and required clarification. ATAA was therefore very welcome and its interest was twofold. First of all, the Court’s approach clarified all the situations in which international agreements may be relied upon by individuals in domestic law. Furthermore, ATAA was innovative, as, for the first time, the Court was called upon to rule on the conditions under which customary international law may be relied upon. On this point, however, the expected clarifications were disappointing and the Court’s reasoning raised a lot of questions. II. FACTS
In 2003, the then European Community (EC) adopted Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the EC.8 The objective of this Directive is, inter alia, to contribute to the fulfilment of the greenhouse gas emission reduction commitments undertaken by the EC (now the Union) and its Member States under the Kyoto Protocol.9 Article 30 of the Directive provides for the possibility of extending its scope, in particular to the transport sector. Directive 2008/101 partly implements this extension and amends Directive 2003/87/EC by including aviation in the emissions trading scheme.10 The implementation of this directive in British law has been challenged by companies operating in the aviation sector. The case was referred to the Court by the High Court of Justice of England and Wales in a dispute between the Air Transport Association of America (ATAA) and several US and Canadian airlines on the one hand, and the Secretary of State for Energy and Climate Change on the other. Before the referring court, the applicants challenged the validity of the UK measures transposing Directive 2008/101 over several provisions of conventional and customary international law, and claimed that the EU rules could not be applied them to. As regards conventional law, they referred to the Chicago Convention, the Kyoto Protocol and the Air Transport Agreement Between the United States of America and the European Community and Its Member States. The Convention on International Civil Aviation signed in Chicago on 7 December 1944 established the International Civil Aviation Organisation (ICAO). It has been
5 Opinion of AG Kokott, Case C-366/10, Air Transport Association of America, ECLI:EU:C:2011:637 (ATAA), para 4. 6 Joined Cases 21–24/72, International Fruit Company NV v Produktschap voor groenten en Fruit, ECLI:EU:C:1972:115. See this volume, ch 2. 7 Case C-308/06, The Queen, on the application of International Association of Independent Tanker Owners (Intertanko) and Others v Secretary of State for Transport, ECLI:EU:C:2008:312. See this volume, ch 52. 8 [2003] OJ L275/32. 9 5th Recital of Directive 2003/87/EC. 10 Directive 2008/101/EC of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for freehouse gas emission allowance trading within the Community, [2009] OJ L8/3.
The Effects of International Conventional and Customary Law in the EU 635 ratified by all Member States, but the European Union is not a party to it. The Kyoto Protocol to the United Nations Framework Convention on Climate Change was approved in 2002.11 The EC–US Air Transport Agreement was signed in 2007,12 and was complemented in 2010 by a protocol: the two agreements form the so-called ‘Open Skies Agreement’. As regards customary international law, the applicants relied on several alleged rules which essentially concern the sovereignty of each state over its airspace and the freedom of the high seas. By virtue of the Foto Frost judgment,13 the referring national court had no jurisdiction to declare the Directive 2008/101 invalid. It hence referred four questions to the Court for a preliminary ruling. Only the first question, on which the examination of the validity of the directive depended, will be the subject of this chapter, as it concerned the relationship between EU law and international law, and the ability of the principles and provisions of international law to be relied upon by the applicants in judicial proceedings.14 III. THE COURT
In her Opinion delivered on 6 October 2011, AG Kokott took a rather strict approach towards the provisions that could be relied upon in this case. She suggested that the Court should only retain a limited number of provisions deriving from the Open Skies Agreement,15 and set aside all other conventional or customary provisions. The Court, applying the criteria of its traditional case law on this subject, took a broader approach to the provisions that could be invoked. As for the conventional provisions, it considered that only the following articles of the Air Transport Agreement concluded with the USA could be relied upon: Article 7, relating to the compliance with laws and regulations; Article 11(1) and (2)(c), relating to exemptions from customs duties and taxes; and Article 15(3), entitled ‘Environment’, read in conjunction with Articles 2 and 3(4). However, neither the Chicago Convention nor the Kyoto Protocol could be invoked by an individual to challenge the legality of Directive 2008/101/EC. Moreover, the issue was much more delicate with regard to rules of customary international law, as this was the first time the Court had to rule on their potential direct effect in domestic law. AG Kokott had considered that ‘by their very nature and broad logic, [these principles are] by no means capable of having an effect on the legal status of individuals’.16 The Court’s reasoning was different. It accepted that such principles can be relied upon by individuals to challenge the legality of a Union act: ‘in so far as, first, those principles are capable of calling into question the competence of the European Union to adopt an act … and second, the act in question is liable to affect rights which individual derives from European Union law or to create obligations under European Union law in his regard.17
11 The Kyoto Protocol was approved on behalf of the Community by Decision 2002/358/EC, [2002] OJ L130/1. 12 Decision 2007/339/EC, [2007] OJ L134/1. 13 Case 314/85, Foto-Frost v Hauptzollamt Lübeck-Ost, ECLI:EU:C:1987:452. 14 The other three questions regarding the validity of the Directive itself are more relevant to environmental law than to external relations law. See B Mayer (2012) 49 CML Rev 1113. 15 AG Kokott suggested that only Art 7 and the second sentence of Art 15(3) of the Air Transport Agreement between the EC and its Member on the one hand and the USA on the other hand can be relied upon as a benchmark against which the validity of Directive 2008/101/EC can be reviewed. 16 Opinion AG Kokott in ATAA (n 5) para 136. 17 Case C-366/10, Air Transport Association of America and others v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864 (ATAA), para 107.
636 Isabelle Bosse-Platière However, [s]ince a principle of customary international law does not have the same degree of precision as a provision of international agreement, judicial review must necessarily be limited to the question whether in adopting the act in question, the institutions of the European Union made manifest error of assessment concerning the conditions for applying those principles.18
In ATAA, the Court held that the only principles and provisions of international customary law that could be relied upon for the purpose of assessing the validity of Directive 2008/101/EC were the following: • the principle that each state had complete and exclusive sovereignty over its airspace; • the principle that no state may validly purport to subject any part of the high seas to its sovereignty; and • the principle which guarantees freedom to fly over the high seas. The Court then answered the other three questions put by the national court and examined the validity of Directive 2008/101. The customary principles raised the questions of the territorial scope of the Directive. The question was therefore whether the Union was competent, according to these principles, to apply such a greenhouse gas emission allowance trading scheme to all flights arriving at or departing from an aerodrome situated in the territory of a Member State. The Court answered positively:19 as soon as an aircraft is on the territory of a Member State, it is subject to the jurisdiction of that state, and therefore to EU law. Such a rule does not call into question the principles of territoriality and of freedom to fly over the high seas, nor the sovereignty of third states over their own airspace. Furthermore, in the context of the implementation of the ambitious objectives of European environmental policy, in accordance with the commitments made by the Union through the Kyoto Protocol, the EU legislator had room for manoeuvre to set the conditions for the exercise of a commercial activity on its territory. It could therefore require economic operators to comply with the criteria it defined. Finally, as regards the validity of the Directive in light of the Open Skies Agreement, the Court considered that its examination has disclosed no elements affecting its validity. IV. THE IMPORTANCE OF THE CASE
A. General Considerations Regarding the Relationship between Union Law and International Law ATAA illustrates the complexity of the relationship between EU law and international law, and the effects of the latter in the EU legal order. Even before being settled by the Court,20 the obligation of the EU to respect international law when adopting secondary legislation derives directly from the EU Treaties. Indeed, they establish that international agreements concluded by the EU ‘are binding upon the institutions and on its Member States’.21 Since the entry into force of the Treaty of Lisbon, the ranking of international law in the EU hierarchy of norms
18 ibid
para 110. paras 114–30. 20 Case 181/73, R & V Haegeman v Belgian State, ECLI:EU:C:1974:41. See this volume, ch 3. 21 Art 216(2) TFEU. 19 ibid
The Effects of International Conventional and Customary Law in the EU 637 has been solemnly reaffirmed.22 However, neither Article 216(2) TFEU nor Article 3(5) TEU is sufficient to resolve all questions raised by the effects of the international law in the EU legal order.23 Firstly, these provisions remain unclear as to the scope of the particular form of international law concerned. Thus, by explicitly referring to ‘agreements concluded by the European Union’, Article 216 TFEU is silent on the relationship between EU law and customary international law. This issue was first settled by the Court itself, in its well-known Poulsen24 and then Racke25 judgments. The Racke judgment stated that, like conventional law, ‘the rules of customary international law … are binding upon the Community institutions and form part of the Community legal order’.26 Therefore, the obligation to respect international law concerns all international norms, regardless of their nature and origin. It follows that the Court may be called upon to review the legality/validity of secondary EU law with regard to conventional or customary international law. In this respect, ATAA clarified the basis for the EU’s obligation to respect international law, in particular, customary law. By explicitly referring to Article 3(5) TEU, the Court provided a constitutional basis for the EU’s respect for international law, in particular international custom.27 It thus constitutionalised the solution reached in the Racke judgment, and provided a more solid basis for the inclusion of custom law in the Union’s legal order. Insofar as, in ATAA, an act of secondary legislation was involved, the constitutional obligation to respect international law did not raise any issue. This might not be the case if the contested norm were a provision of primary law. Secondly, the binding nature of an international agreement and customary law must be distinguished from its effects in the EU legal order, including the legal order of the Member States implementing the EU’s international obligations. The obligation to respect international law does not necessarily imply that individuals may invoke treaty or customary provisions of international law in court proceedings whenever they wish to challenge the validity of EU acts. This question of the (direct and indirect) effects of international conventional or customary law in an internal order is not regulated by the EU Treaties either, nor by Article 3(5) TEU or Article 216 TFEU. It is therefore subject to a case-by-case approach of judicial review by the national courts or the Court.28 In ATAA, the Court recalled the rationale of this case-by-case approach. In principle, the parties themselves determine the effects of the provisions of an international convention in the domestic orders. As the Court recalled in ATAA, only if that question has not been settled by the agreement does it fall to be decided by the courts having jurisdiction in the matter, and in particular by the Court of Justice, in the same manner as any question of interpretation relating to the application of the agreement in the European Union.29
22 Art 3(5) TEU provides that ‘in its relations with the wider world, the Union shall contribute to … the strict observance and development of international law, including respect for the principles of the United Nations Charter’. 23 See P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2012) 327. 24 Case C-286/90, Poulsen and Diva Navigation, ECLI:EU:C:1992:453. See this volume, ch 21. 25 Case C-162/96, A Racke GmbH v Hauptzollamt Mainz, ECLI:EU:C:1998:293. See this volume, ch 36. 26 ibid para 46. 27 E Neframi, ‘Customary International Law and the European Union from the Perspective of Article 3(5) TEU’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 205–22. 28 JF Delille, L’invocabilité des accords internationaux devant la CJUE et le Conseil d’Etat français (Brussels, Bruylant, 2016) 862 29 ATAA (n 17) para 49. See Case 104/81, Kupferberg, ECLI:EU:C:1982:362. See this volume, ch 14.
638 Isabelle Bosse-Platière This is also the reason why the Court does not consider itself bound when the absence of direct effect is provided for, not by the parties in the agreement itself, but by the Council in its decision to sign or conclude it.30 ATAA was therefore part of a long series of case law aiming to determine the conditions under which international law produces effects in the internal orders of the EU and the Member States. From this perspective, ATAA is interesting as it provided for a fairly exhaustive overview of the conditions for the invocability of international law in EU law. It confirmed the previous case law regarding international treaties (section IVB). It also took a rather innovative – and perhaps more questionable – approach to the question of the invocability and direct effect of international custom (section IVC). B. The Confirmation of the Conditions to Invoke Conventional International Law ATAA is particularly illustrative of the way in which the various conditions under which international agreements produce their effects in the EU legal order are articulated. In particular, it sheds light on the ‘three-step analysis’31 developed by the Court, and makes it possible to consider the full range of its application. The Court had long made the invocability of international agreements subject to a number of conditions, which the Court confirmed very clearly in ATAA: First, the European Union must be bound by those rules;32 Second, the Court can examine the validity of an act in the light of an international treaty only where the nature and the broad logic of the latter do not preclude this;33 Finally, where the nature and the broad logic of the treaty in question permit the validity of the act of European Union law to be reviewed in the light of the provisions of that treaty, it is also necessary that the provisions of that treaty which are relied upon for the purpose of examining the validity of the act of European Union law appear, as regards their content, to be unconditional and sufficiently precise.34
According to the first condition, the Union must be bound by the international rules. This condition, which is self-evident, seems a priori fairly easy to meet. It primarily concerns the external agreements that the EU had concluded and the multilateral conventions to which it is a party. In ATAA, the Kyoto Protocol, to which the EC acceded in 2002, and the Air Transport Agreement concluded with the USA were both relevant. By contrast, the situation with the Chicago Convention, to which the EU is not a party, was more delicate, and made it more difficult to identify the EU’s international obligations. Admittedly, Article 351 TFEU, first paragraph requires the Union not to hinder the performance of obligations undertaken by states under a convention concluded before 1958 or the state’s accession to the Union. But the Union is not bound,35 unless it is possible to apply the ‘succession doctrine’ developed by
30 Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574. See this volume, ch 37. 31 K Lenaerts, ‘Direct Applicability and Direct Effect of International Law in the EU Legal Order’ in I Govaere, E Lannon, P Van Elsuwege and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2014) 46. 32 ATAA (n 17) para 52. 33 ibid para 53. 34 ibid para 54. 35 ibid para 61.
The Effects of International Conventional and Customary Law in the EU 639 the Court in International Fruit,36 and elaborated more clearly in Nederlandse Spoorwegen.37 Under this theory, the Union shall be bound to implement a convention ratified by all the Member States only if the field covered by the convention has been the subject of a full transfer of powers from the Member States to the Union. In the ATAA case, as regards the air transport sector, the Union had acquired certain exclusive competences in the field of international air transport, but ‘that does not mean that it has exclusive competence in the entire field of international civil aviation as covered by that convention’.38 Indeed, the scope of the convention is very vast, and despite the adoption of various regulations regarding the air navigation sector and the signature of a protocol with the ICAO39 reinforcing cooperation in the field of security, the Union had only acquired part of the competences previously exercised by the Member States. It followed that the EU is not bound by the Chicago Convention, which thus could not be relied upon by individuals to challenge the validity of an act of secondary legislation of the Union. This solution is not surprising. Although very well known, the ‘succession doctrine’ is very rarely implemented. The other two conditions are sometimes presented by the Court and by scholars as a sole one because they are closely linked.40 One of the interests of ATAA is precisely to make it clear that they must be dissociated. A distinction could be made between the question of the direct applicability of an international agreement and that of its direct effect.41 By examining the ‘nature and broad logic’42 of the agreement, it would be possible to determine whether it would be intended to be applied directly in the internal order of the Union. Only if this condition were met would it be questioned whether its provisions appear to be ‘unconditional and sufficiently precise’43 to directly affect the situation of individuals and thus produce a direct effect. Direct applicability of an international agreement allows it to be invoked before the national court or Union court. Following the principle of primacy, the national courts will then have to give effect to the international agreement in their own domestic orders. Hence, only if the provision of the international agreement has direct effect can it be used as a benchmark for reviewing the legality of a Union act. In ATAA, the distinct application of these two conditions allowed the Court to exclude the Kyoto Protocol from its examination, but to retain some provisions of the Open Skies Agreement. Although the Kyoto Protocol is an integral part of the Union’s legal order, its nature and logic precluded it from producing direct effect in the Union’s internal order. Indeed, the parties had wide room for manoeuvre for the implementation of its provisions. These ‘cannot in any event be considered to be unconditional and sufficiently precise so as to confer on individuals the right to rely on it in legal proceedings in order to contest the validity of Directive 2008/101’.44 The conclusion was different for the Open Skies Agreement, despite the 36 International Fruit (n 6). See this volume, ch 2. 37 Case 38/75, Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der invoerrechten en accijnzen, ECLI:EU:C:1975:154. See this volume, ch 5. 38 ATAA (n 17) para 69. 39 Council Decision of 31 March 2011 on the signing, on behalf of the Union, and provisional application of a Memorandum of Cooperation between the European Union and the International Civil Aviation Organization providing a framework for enhanced cooperation, [2011], OJ L232/1. 40 See Intertanko (n 7) paras 44–46. 41 JA Winter, ‘Direct Applicability and Direct Effect: Two Distinct and Different Concepts in Common Law’ (1972) 9 CML Rev 425; R Schütze, ‘Direct Effects and Indirect Effects of Union Law’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law, Volume 1: The European Union Legal Order (Oxford, Oxford University Press, 2018) 265. 42 ATAA (n 17) para 54. 43 ibid. 44 ibid para 77.
640 Isabelle Bosse-Platière opinion expressed by the majority of Member States and EU institutions. There are numerous references in the Agreement to individuals and companies. Rights and obligations are provided for air carriers, and the arbitration procedure provided for in the agreement does not preclude jurisdictional application of the agreement. A detailed examination of the provisions of the agreement revealed that several provisions45 had the required degree of precision and unconditionality to allow individuals to rely upon them to challenge the validity of the directive in question. On this point, the Court’s solution was consistent with its previous case law, which it helped to clarify. It underlined the difference that can be made between multilateral conventions and bilateral agreements. Obviously, all external agreements are subject to the same conditions for producing direct effect in the domestic order. But in practice, there is a difference to be made. Direct effect of multilateral agreements is very rarely accepted by the Court, as was illustrated by its case law on World Trade Organization (WTO) agreements.46 Given the oftenflexible nature of their provisions, and the room for manoeuvre available to the parties to implement them, multilateral conventions would rarely meet the conditions set by the case law. The Etang de Berre47 judgment in 2004 and the IATA48 judgment in 2006 were steps towards the recognition of the direct effect of multilateral conventions in the fields of environmental protection49 and air transport law.50 However, the hopes of potential applicants were dashed as subsequent case law confirmed the restricted approach of the Court towards the direct effect of multilateral conventions.51 Nevertheless, even if it was not explicitly envisaged in ATAA, the absence of direct effect does not deprive the international convention of producing any effect: the Court could ask the national courts to apply the principle of consistent interpretation.52 As the Court stated in Lesoochranárske zoskupenie VLK, it is for the national court, in order to ensure effective judicial protection in the fields covered by EU environmental law, to interpret its national law in a way which, to the fullest extent possible, is consistent with the objectives laid down in [the] Convention.53
By contrast, the ATAA judgment confirmed that it might be easier for a bilateral agreement to fulfil the conditions for direct effect.54 One could even argue that, like any other EU act
45 Arts 7, 11(1) and (2) and 15(3) read in conjunction with Arts 2 and 3(4). 46 However, there are some exceptions to this lack of direct effect of WTO agreements. See Case 70/87, Fediol, ECLI:EU:C:1989:254; Case C-69/89, Nakajima, ECLI:EU:C:1991:186. See this volume, ch 17. 47 Case C-213/03, Syndicat professionnel coordination des pêcheurs de l’étang de Berre et de la région v Électricité de France (EDF), ECLI:EU:C:2004:464. 48 Case C-344/04, International Air Transport Association and European Low Fares Airline Association v Department for Transport, ECLI:EU:C:2006:10. 49 The Etang de Berre judgment (n 47) concerned Art 6(3) of the Barcelona Convention for the Protection of the Mediterranean Sea against Pollution, the direct effect of which the Court recognised. 50 The IATA judgment (n 48) concerned Arts 19, 22 and 29 of the Montreal Convention for the Unification of Certain Rules for International Carriage by Air, which the Court recognised as having direct effect. 51 A few months before the ATAA judgment (n 17), the Court had refused to recognise the direct effect of Art 9§3 of the Aarhus Convention on the grounds that it was not sufficiently precise and unconditional. See Case C-240/09, Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky, ECLI:EU:C:2011:125. 52 Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313, para 52; Lesoochranárske zoskupenie VLK (n 51) para 50. See also A Rosas, ‘International Law – Union Law – National Law: Autonomy or Common Legal System?’ in D Petrlik, M Bobek, JM Passer and A Masson, Evolution des rapports entre les ordres juridiques de l’Union européenne, international et nationaux. Liber Amicorum Jiri Malenovsky (Brussels, Bruylant, 2020), 261. 53 Lesoochranárske zoskupenie VLK (n 51) para 50. 54 M Maresceau, ‘The Court of Justice and Bilateral Agreements’ in A Rosas, E Levits and Y Bot (eds), The Court of Justice and the Construction of Europe: Analyses and Perspectives on Sixty Years of Case Law (The Hague, TMC Asser Press, 2013) 693.
The Effects of International Conventional and Customary Law in the EU 641 forming an integral part of the EU legal order,55 such agreements benefit more easily from some ‘presumption of direct effect’. This could explain why bilateral agreements (free trade agreements56 or association agreements57) increasingly contain provisions denying any direct effect to all or part of the agreement. This choice made by the Union (together with its Member States) reveals their willingness to avoid any legal challenge made by an individual to the Union’s secondary legislation based on the agreement’s provisions. C. The Recognition of Specific Conditions to Invoke Customary International Law In Racke, the Court ruled on the integration of international custom in the EU legal order. However, it left aside the question of its effects within the legal order, which attracted criticism.58 In Opel Austria,59 the General Court also avoided the question of the effects of custom in the internal order of the EU and its Member States. Having to rule on the legality of a Regulation with the mutual duty of good faith codified in Article 18 of the Vienna Convention on the Law of Treaties, it found ways to answer the question in the EU legal order. It considered that this principle was the ‘corollary’60 of the Union principle of protection of legitimate expectations in the light of which the legality of the contested regulation could be examined. ATAA filled the gap left by previous case law and clarified the conditions under which an individual can rely upon customary rules of international law to challenge the legality of the EU secondary legislation. On this matter, the judgment is the most innovative. It is also, however, less convincing. Before determining the effects of the custom in the EU legal order, the Court had to decide whether the rules in question were recognised as forming part of international customary law. Beforehand, the Court had to answer the question of the recognition of customary norms in the international order to consider whether the EU was bound by them. This could be considered as the equivalent of the first condition for international agreements. In ATAA, the Court’s reasoning for recognising the existence of customary principles was based entirely on consensus. The Court retained three principles which were ‘regarded as embodying the current state of customary international maritime and air law’.61 These principles62 have been codified in international conventions, and one of them was expressly recognised by the Permanent Court of International Justice (PCIJ) in its well-known ‘Case of the SS Lotus’.63 In addition, these three principles were not contested either by the Member States or by the institutions. This was not the case with the fourth principle mentioned by the applicants,64 the existence of which is disputed by several Member States. 55 Haegeman (n 20). See this volume, ch 3. 56 See, eg Art 23.5 of the EU–Japan Economic Partnership Agreement, [2018] OJ L330/3, entitled ‘No direct effect on persons’. See also Art 30(6) of the EU–Canada CETA, [2017] OJ L11/23. 57 See Art 356 of the Association Agreement between the EU and its Member States, of the one part, and Central America, of the other part, [2012] OJ L346/3. 58 See Eeckhout (n 23) 393. 59 Case T-115/94, Opel Austria GmbH, ECLI:EU:T:1997:3. See this volume, ch 35. 60 ibid para 93. 61 ATAA (n 17) para 104. 62 The principle that each state has complete and exclusive sovereignty over its airspace; the principle that no state may validly purport to subject any part of the high seas to its sovereignty; and the principle of freedom to fly over the high seas. 63 PCIJ 1927, Series A, No 10, p 25. 64 The principle that aircraft overflying the high seas are subject to the exclusive jurisdiction of the state in which they are registered.
642 Isabelle Bosse-Platière The conditions for private parties to rely upon the rules of customary international law are not the same as those for invoking the direct effect of international agreements.65 The Court set out a twofold requirement of affectations: on the one hand, the competence of the Union to adopt the disputed act has to be affected by international principles and, on the other hand, the rights of individuals have to be affected by this act. The first criterion is logical, but it is questionable whether it applies specifically to the particular context of the case in question or whether it has a more general scope. Indeed, in ATAA, the three principles of international law at issue were likely to affect not the content of Directive 2008/101, but the competence of the Union to adopt the Directive. The second criterion of affectation concerned the direct effect of the secondary legislation whose legality was challenged. It is not clear what justifies, for the purposes of the invocability of an international rule, that the legal situation of individuals should be affected by an internal rule of the EU. Here, the scope of this condition may be questioned because, as the Court itself admitted, the principles in question only created obligations between states. Furthermore, the Court placed great emphasis on the circumstances of the case in question. As it states, it is nevertheless possible, in circumstances such as those of the case which has been brought before the referring court, in which the Directive 2008/101 is liable to create obligations under European Union law as regards the claimants in the main proceedings, that the latter may rely on those principles and that the Court may thus examine the validity of Directive 2008/101 in the light of such principles (emphasis added).66
It is even more confusing that the Court did not explain how the principles in question meet the two conditions. Indeed, the following paragraph opened, without any explanation: ‘Having regard to all the foregoing considerations, the answer to the first question is …’.67 More generally, as AG Kokott pointed out writing extrajudicially, ‘The reasons for this distinction between treaty based international law and customary international law are not clear’.68 Customary rules are often codified in conventions, as was the case here. This results in two different regimes, depending on the nature – conventional or customary – of the norm. In practice, the implementation of the Court’s solution can be difficult. However, the recognition of generous conditions for the direct effect of international custom in EU law has a major limit. The Court immediately limits the scope of its solution by restricting the extent of its review: ‘since a principle of customary law does not have the same degree of precision as a provision of an international agreement’,69 the judicial review can only be restricted and limited to the question whether the institutions, when adopting secondary law, made a manifest error of assessment concerning the conditions for applying those principles. The Court thus introduced a modulation of its review, the application of which in concreto was overlooked. As mentioned above, the laconism of the Court is confusing, and contrasts with its previous accuracy as far as international agreements were concerned. Given that many customary principles are codified in international conventions binding on the
65 Neframi (n 27); JF Delille, ‘Les effets de la coutume internationale dans l’ordre juridique de l’Union’; 2017’ Cahiers de droit européen 160. 66 ATAA (n 17) para 109. 67 ibid para 111. 68 J Kokott, ‘International Law – A Neglected “Integral” Part of the EU Legal Order? Newer Tendencies in the European Court of Justice’s Case-Law on the Relationship between EU Law and Public International Law’ in V Kronenberg, MT D’Alessia and V Placco (eds), De Rome à Lisbonne: les juridictions de l’Union européenne à la croisée des Chemins. Mélanges en l’honneur de Paolo Mengozzi (Brussels, Bruylant, 2013), 80. 69 ATAA (n 17) para 110.
The Effects of International Conventional and Customary Law in the EU 643 Union, the application of differentiated criteria entailed an obvious risk, highlighted by the AG, of inconsistency and legal uncertainty for individuals. On this matter, the solution maintains confusion between the question of the applicability of customary principles in the internal order of the Union and that of their direct effect. One may wonder whether the Court could not have refused the direct effect of customary international rules for the benefit of individuals, without denying them any applicability in the internal order. Rather than modulating the scope of the judicial review, the Court could have achieved the same result by finding in the other forms of invocability, in particular in the principle of consistent interpretation, a way of ensuring the judicial protection of individuals, without making the effects of international law in EU law even more complex. V. ADDITIONAL READING Aloupi, N, Flaesch-Mougin, C, Kaddous, C and Rapoport, C, Les accords internationaux de l’Union européenne. Commentaire J Mégret Relations extérieures (Brussels, Editions de l’Université de Bruxelles, 2019) 368. Delille, JF, ‘Les effets de la coutume internationale dans l’ordre juridique de l’Union’ [2017] Cahiers de droit européen 160. Kokott, J, ‘International Law – A Neglected “Integral” Part of the EU Legal Order? Newer Tendencies in the European Court of Justice’s Case-Law on the Relationship between EU Law and Public International Law’ in V Kronenberg, MT D’Alessia and V Placco (eds), De Rome à Lisbonne: les juridictions de l’Union européenne à la croisée des Chemins Mélanges en l’honneur de Paolo Mengozzi (Brussels, Bruylant, 2013) 62–83. Lenaerts, K, ‘Direct Applicability and Direct Effect of International Law in the EU Legal Order’ in I Govaere, E Lannon, P Van Elsuwege and S Adam, The European Union in the World. Essays in Honour of Marc Maresceau (Leiden, Martinus Nijhoff, 2014) 45–64. Neframi, E, ‘Customary International Law and the European Union from the Perspective of Article 3(5) TEU’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 205–22. Petrlik, D, Bobek, M, Passer, JM and Masson, A, Evolutions des rapports entre les ordres juridiques de l’Union européenne, international et nationaux. Liber Amicorum Jiri Malenovsky (Brussels, Bruylant, 2020) 852.
644
60 The Choice of Legal Basis between the AFSJ and the CFSP: Parliament v Council (Smart Sanctions) JOSÉ MANUEL CORTÉS MARTÍN AND GLORIA FERNÁNDEZ ARRIBAS Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:472 (Smart Sanctions), delivered 19 July 2012. KEYWORDS Smart sanctions – Legal basis – International terrorism – Centre of gravity test – Common Foreign and Security Policy – CFSP – Area of freedom, security and justice – AFSJ – Prerogatives of the European Parliament. I. INTRODUCTION
T
he Treaty of Lisbon removed the pillar structure that had previously existed within the EU legal order. Therefore, the Common Foreign and Security Policy (CFSP) is to be understood as being part of the EU’s external relations, even though it remains unique in many ways.1 Although the powers of the European Parliament have been substantially strengthened through its participation in the ordinary legislative procedure courtesy of the Treaty of Lisbon, such improvement does not reach to the CFSP, which remains, by the will of the Masters of the Treaties, a separate policy with different procedures and legal bases. These differences have frequently led to problems in relation to the choice of the legal basis for EU acts. Fundamentally, this is due to the intentions of the different actors to acquire more prominent roles in the decision-making process. However, the choice of the legal basis goes beyond those intentions since it has a constitutional dimension,2 and affects the distribution of powers between the Member States and the Union, as well as the procedure for adopting an act,3 which undoubtedly has an impact on its content.4 1 C Eckes, ‘The CSFP and Other EU Policies: A Difference in Nature?’ (2015) 20 European Foreign Affairs Review 535. 2 Opinion 1/08, ECLI:EU:C:2009:739. 3 RA Wessel and J Larik, EU External Relations Law (Oxford, Hart Publishing, 2021) 88. 4 Case C-211/01, Commission of the European Communities v Council of the European Union, ECLI:EU:C:2003:452, para 52.
646 José Manuel Cortés Martín and Gloria Fernández Arribas These problems have become jurisdictional disputes on many occasions.5 This raising of disputes about the choice of a legal basis has developed uniquely in EU external action, in which the intricate and linked system of objectives and competences has contributed to important case law, especially in the area of Common Commercial Policy (CCP),6 but also in the CFSP. In it again this backdrop that the Smart Sanctions case is analysed. II. FACTS
In December 2009, the Council adopted Council Regulation (EU) 1286/2009 of 22 December 2009 amending Regulation (EC) 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama Bin Laden, the Al-Qaeda network and the Taliban (hereinafter the contested regulation).7 The contested regulation was adopted in order to comply with the requirements established by a previous judgment of the Court, Kadi I,8 which concerned the procedure to be followed by the EU when implementing decisions of the Sanctions Committee established by UN Security Council (UNSC) Resolution 1267 (1999). In particular, the contested regulation introduced new provisions into Regulation (EC) 881/2002,9 providing that the listed person, entity, body or group is to be informed of the reasons for listing, as instructed by the Committee of the UNSC established pursuant to UNSC Resolution 1267 (1999) so as to be given an opportunity of expressing a view on those reasons.10
The Parliament sought the annulment of the contested regulation on the principal ground that it was not adopted on an appropriate legal basis. The regulation was adopted on the basis of Article 215(2) TFEU, while the Parliament submitted as a principal plea that the regulation should have been adopted on the basis of Article 75 TFEU. In this regard, it is necessary to point out that while the measures related to Article 75 TFEU have to be adopted according to the ordinary legislative procedure, Article 215(2) TFEU excludes the participation of the Parliament in the adoption procedure. According to the Parliament, Article 75 TFEU constituted the correct legal basis on the grounds that the main objective of the contested regulation was to fight terrorism and its financing, which are objectives expressly included in Article 75 TFEU. In this regard, Article 215 TFEU could only be used to achieve the CFSP’s objectives, which, according to the Parliament, were not among the objectives included in the contested regulation. In addition, the Parliament considered that it was contrary to Union law to adopt measures that could
5 H Cullen and A Charlesworth, ‘Diplomacy by Other Means: The Use of Legal Basis Litigation as a Political Strategy by the European Parliament and Member States’ (1999) 36 CML Rev 6. 6 P Koutrakos, ‘Legal Basis and Delimitation of Competence in EU External Relations’ in M Cremona and B de White (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford, Hart Publishing, 2008). 7 [2002] OJ L346/42. 8 See Joined Cases C-402/05 P and C-415/05 P, Kadi and Al Barakaat International foundation v Council and Commission, ECLI:EU:C:2008:461. See this volume, ch 49. 9 Council Regulation (EC) No 881/2002 of 27 May 2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan, [2002] OJ L139/9. 10 Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:472 (Smart Sanctions), para 10.
The Choice of Legal Basis between the AFSJ and the CFSP 647 have an impact on the fundamental rights of individuals or groups without the participation of the said institution. Therefore, recourse to Article 215 TFEU would deprive the Parliament of this prerogative. III. THE COURT
This action provided the Court with the opportunity to specify the methods and the criteria for distinguishing, in matters relating to restrictive measures, those that fall within the area of freedom, security and justice (AFSJ) and those that must be adopted under the CFSP. The Court reaffirmed its previous case law on the choice of legal basis, considering that it ‘must rest on objective factors amenable to judicial review, which include the aim and content of that measure’.11 The Court also faced the issue of multiple legal bases wherein one of the bases was not incidental to another, concluding that it is possible to rely on various legal bases, as long as the procedures are not incompatible. In this case, the procedures laid down for Article 75 TFEU and Article 215 TFEU were incompatible because of the different role of the Parliament. Therefore, it was not possible to use both procedures. To choose between the two legal bases, the Court analysed the relationship between the legal basis of Regulation 881/2002, which was amended by the contested regulation (that is, the pre-Lisbon Article 60 EC, Article 301 EC and Article 308 EC (the latter of which is now Article 352 TFEU), with Article 215 TFEU and Article 75 TFEU. The Court concluded that the content of the pre-Lisbon Article 60 EE and Article 301 EC correspond to the post-Lisbon Article 215 TFEU, instead of Article 75 TFEU, since the latter refers to ‘Union policies and internal actions’. In this regard, the Court analysed the ambit of Article 215 TFEU, referencing the Kadi case and the bridge that had been constructed between actions containing economic measures and the objectives of the external relations of the EU, including the CFSP, and stated that that bridge has been included in Article 215 TFEU. The Court concluded that since the objective of fighting international terrorism and its financing is to contribute to international peace and security, and since those objectives are among the objectives of the CFSP, Article 215(2) TFEU may constitute the legal basis of the restrictive measures intended to fight terrorism and natural or legal persons or groups. To confirm Article 215 TFEU as the appropriate legal basis, the Court considered the purpose and tenor of the contested regulation, and stated that since the Court confirmed in Kadi that the purpose of Regulation 881/202 was to combat international terrorism and, furthermore, since the contested regulation was reformulated and was consistent with Regulation 881/2002 establishing an interaction system between the Sanctions Committee of the UN and the EU, it was possible to conclude that ‘the contested regulation relates to a decision taken by the Union under the CFSP’,12 with Article 215(2) TFEU being the appropriate legal basis. The Court also answered the question regarding the prerogatives of the Parliament in relation to the chosen legal basis, considering that ‘it is not procedures that define the legal basis of a measure but the legal basis of a measure that determines the procedures to be followed in adopting that measure’.13 Finally, the Court referred to the requirements and procedural issues regarding the adoption of the contested regulation, and concluded that the joint proposal of
11 ibid 12 ibid 13 ibid
para 42. para 72. para 80.
648 José Manuel Cortés Martín and Gloria Fernández Arribas the High Representative and the Commission was duly submitted.14 According to the Court, Common Position 2002/402,15 which preceded the adoption of Regulation 881/2002, was in force, and it was not necessary to amend or adopt a new decision. IV. THE IMPORTANCE OF THE CASE
This ruling of the Grand Chamber of the Court addressed important questions in the postLisbon context regarding the relationship between the provisions of the EU Treaties on the Union’s external policy and those relating to the AFSJ in relation to the fight against international terrorism. Next, the prerogatives of the Parliament after the entry into force of the Treaty of Lisbon related to the choice of the legal basis for adopting restrictive measures in the context of the fight against international terrorism and the implementation of UNSC resolutions are addressed. Finally, the accumulation of legal bases and the incompatibility of procedures (the ordinary legislative procedure and the requirement of unanimity in the Council in a special two-stage procedure) are discussed. A. The Relationship between the Provisions of the EU Treaties on the EU’s External Action and those on the AFSJ with Regard to the Fight against International Terrorism Before the Treaty of Lisbon, there were no provisions that referred explicitly to the adoption of sanctions against individuals to fight terrorism in either the AFSJ or the CFSP. In order to comply with the UNSC resolutions that impose sanctions on individuals or groups, the EU used different legal bases referring to sanctions, and to the residual power clause Article 308 EC (now Article 352 TFEU).16 The contested regulation was adopted to modify Regulation 881/2002, which had the pre-Lisbon Article 60 EC, Article 301 EC and Article 308 EC as legal bases. In this regard, the then Article 301 EC referred to actions by the Union to interrupt or to reduce economic relations with third countries, and the then Article 60 EC allowed the EU to take the necessary measures on the movement of capital and on payments to comply with the decisions taken according to the then Article 301 EC. This has been called a bridge between the economic actions of the Union and external relations, including the CFSP.17 In addition, since none of the articles from the EU Treaties referred to sanctions against individuals of groups, the then Article 308 EC was included as an additional legal basis. Once the Treaty of Lisbon entered into force, sanctions and actions to combat terrorism could be found in different provisions, which led to the Smart Sanctions case and the issue of choosing the correct legal basis. In this regard, Article 75 TFEU allowed the adoption of measures
14 ibid para 95. 15 Council Common Position of 27 May 2002 concerning restrictive measures against Usama bin Laden, members of the Al-Qaida organisation and the Taliban and other individuals, groups, undertakings and entities associated with them and repealing Common Positions 96/746/CFSP, 1999/727/CFSP, 2001/154/CFSP and 2001/771/CFSP, [2002] OJ L 139/4. No longer in force. Date of end of validity: 21 September 2016. 16 On the ‘residual power clause’, otherwise known as the ‘flexibility clause’, see G Butler, ‘The EU Flexibility Clause is Dead, Long Live the EU Flexibility Clause’ in A Bakardjieva Engelbrekt and X Groussot (eds), The Future of Europe: Political and Legal Integration Beyond Brexit (Oxford, Hart Publishing, 2019) 63–95. 17 Smart Sanctions (n 10) para 59.
The Choice of Legal Basis between the AFSJ and the CFSP 649 regarding capital movements and payments, especially against individuals or groups, to prevent or combat terrorism according to objectives of the AFSJ. Furthermore, Article 215 TFEU, included in Part V of the TFEU, referred to EU external action, including the interruption or reduction of economic and financial relations with third countries, such as with the pre-Lisbon Article 301 EC. However, paragraph 2 of Article 215 TFEU also referred to the adoption of restrictive measures against natural or legal persons and groups. It follows from the foregoing reasoning offered by the Court in Smart Sanctions that when adopting sanctions against individuals to combat terrorism, it would be necessary to choose between these two legal bases since they have different and incompatible procedures. However, it should be recalled that Article 215 TFEU contains a more general reference to the measures to be adopted to combat terrorism, including measures others than those against capital movements and payments, which are the only measures in Article 75 TFEU. Therefore, in those cases in which the measure to be adopted can be included in one or another provision, it will be necessary to determine when the measure falls in the framework of Article 75 TFEU or Article 215 TFEU. According to the Parliament, when a measure has combatting terrorism as an objective, Article 75 TFEU is the appropriate legal base, while the Council considered that Article 75 TFEU refers to ‘internal’ terrorists and Article 215 TFEU refers to ‘external’ terrorists. Neither the Advocate General (AG) nor the Court dealt with these arguments regarding the division between ‘internal’ and ‘external’ terrorists, but AG Bot did state that ‘Such a categorisation is contrary to the very nature of terrorism, which, by attacking common values and the very foundations of the rule of law, affects the entire international community, irrespective of the geographical scale of the threat’. In addition, choosing between two legal bases becomes even more complicated when the external dimension of the AFSJ is considered.18 The new threats of international terrorism and international organised crime make it difficult to establish differentiated policies and actions between the AFSJ and CFSP since, as Monar has stated, ‘the contribution to “security” in the world … given the international nature of crime and terrorism challenges, clearly covers external AFSJ action as well’.19 To solve this issue, the AG established a list of restrictive measures to be adopted under Article 215 TFEU, all of them in the sphere of the CFSP, with Article 75 TFEU being the appropriate legal base for those cases falling outside this sphere. Considering that the list can be quite restrictive, and cannot consider future developments in the AFSJ or the CFSP, a more general approach would result in a more useful interpretation of these two legal bases. In this regard, the Court established that when an act refers to the sphere of the CFSP, Article 215 TFEU is the appropriate legal basis. Therefore, it would be necessary to examine the purpose and objectives of the act, an issue that will be analysed in the next section. In any case, the main difference is whether the act is intended to combat international terrorism, which constitutes a threat to international peace and security, or whether the objective is to combat terrorism in order to comply with the objectives of Article 75 TFEU. This general approach seems to allow the possibility of the overuse of Article 215 TFEU since, as has been stated, international terrorism undoubtedly constitutes a threat to international
18 cf M Cremona, J Monar and S Poli (eds), The External Dimension of the Area of Freedom, Security and Justice (Brussels, Peter Lang-PIE, 2011). 19 J Monar, The External Dimension of the EU’s Area of Freedom, Security and Justice: Progress, Potential and Limitations after the Treaty of Lisbon (Stockholm, Swedish Institute for European Policy Studies, 2014) SIEPS 2012:1, 26.
650 José Manuel Cortés Martín and Gloria Fernández Arribas peace and security. Therefore, when would it be possible to use Article 75 TFEU?20 The answer could be in the Opinion of AG Bot where he states that Article 75 TFEU constitutes the appropriate legal basis for the European Union, autonomously and independently of any initiative falling within the sphere of the CFSP, to adopt measures freezing the funds and economic resources of persons and non-[s]tate entities engaged in terrorist or related activities (emphasis added).21
In any case, these articles must be used to comply with the call of the Council for better coordination between EU external action and the AFSJ.22 As a result of the Smart Sanctions case, however, Article 75 TFEU has not, in effect, been used and has become a ‘dead letter’. B. Multiple Legal Bases and the Centre of Gravity Test The Court admitted that in the case of an act that simultaneously pursues a number of objectives, or has several components that are indissociably linked without one being secondary to the other, the corresponding different legal bases may be used, provided they are not incompatible.23 In addition, in order to determine whether they are compatible and to choose the appropriate legal basis if they are not, ‘it is necessary to consider whether the combination of those legal bases would be such as to undermine the Parliament’s rights’.24 However, in Smart Sanctions, as stated previously, since Article 75 TFEU and Article 215 TFEU established different procedural and decision-making conditions, they could not be used jointly as legal bases for the contested regulation. The Court confirmed this statement by recalling the principles that govern the choice of the legal basis for an EU act, which must be based on objective criteria susceptible to judicial control – in particular, on the purpose and content of the act. Therefore, in the case of several objectives, the Court applies the theory of the main and the accessory, seeking the centre of gravity of the act. In the analysis of the scope of application of Article 215(2) TFEU,25 the Grand Chamber confirmed that this provision is intended to constitute the legal basis for restrictive measures and, in particular, for antiterrorist measures against natural or legal persons, groups or nonstate entities adopted by the Union when the decision falls within the scope of the CFSP. In Smart Sanctions, the Court declared that the two former pillars of the AFSJ and the CFSP are not strangers to each other in the sense that the fight against terrorism and its financing is capable of being framed within the objectives pursued by the AFSJ or, as AG Bot pointed out, that these two policies maintain ‘complementary’ relations. However, the objective of the fight against terrorism, in order to preserve international peace and security, falls more closely within the framework of the Union’s external action in the context of the CFSP.26
20 Before the Treaty of Lisbon, Art 40 TEU mainly had the purpose to protect the non-CFSP legal bases. Wessel and Larik (n 3) 289. 21 Opinion of Advocate General (AG) Bot, Case C-130/10, European Parliament v Council of the European Union, ECLI:EU:C:2012:50 (Smart Sanctions), para 79. 22 C Matera, ‘The European Union Area of Freedom, Security and Justice and the Fight against New Security Threats. New Trends and Old Constitutional Challenges’ in M Arcari and L Balmond (eds), Global Governance and the Challenges of Collective Security (Naples, Editoriale Scientifica, 2011). 23 Case C-155/07, European Parliament v Council of the European Union, ECLI:EU:C:2008:605, para 37. 24 Smart Sanctions (n 10) para 36. 25 ibid paras 55–66. 26 Opinion of AG Bot in Smart Sanctions (n 21) paras 62 ff.
The Choice of Legal Basis between the AFSJ and the CFSP 651 In addition, the purpose and content of the regulation demonstrated that the regulation fell within the framework of the CFSP, aimed at organising coherent mechanisms for the prevention of and fight against terrorism within the framework of decisions of the UNSC. In light of these factors, the action of the Union on the international scene pursuing one or more of the objectives referred to in Article 21(2)(a)–(c) TEU, especially the objectives of preserving peace and strengthening international security, must be regarded as falling within the sphere of the CFSP.27 Accordingly, such action should be conducted in accordance with the specific rules and procedures established in Chapter 2 of Title V of the TEU. Therefore, Article 215(2) TFEU is better suited to the range of actions that the Union can take under the CFSP to combat international terrorism. According to the Court, in light of its objectives and its content, the contested regulation fell within the scope of the provisions of the EU Treaties relating to the Union’s external action, more specifically, within the sphere of the CFSP, resulting in Article 215 TFEU constituting the appropriate legal basis for that regulation because its purpose was to combat international terrorism and its financing in order to maintain international peace and security. C. Prerogatives of the European Parliament While the role of the Parliament is restricted to a mere consultation or consent procedure in the external sphere,28 this is nevertheless already an improvement compared to the pre-Lisbon situation, where the Parliament had even less powers. On the other hand, in Smart Sanctions, the Court rejected the argument put forward by the Parliament that it would be contrary to Union law to pass measures that have a direct impact on fundamental rights through a procedure that excludes the participation of the Parliament. On this point, the Court recalled that the defence of these rights is not a monopoly of the depositary of democratic legitimacy, but rather, it is the responsibility of all institutions, as recalled in Article 51(1) of the Charter of Fundamental Rights.29 Then, the question is whether the Treaty of Lisbon truly reflected the intention of the Member States to improve the democratic profile of the Union through parliamentary scrutiny. This seemed to be deduced from paragraph 235 of the Kadi judgment, where the Court pointed out that the inclusion of Article 308 EC (now Article 352 TFEU) as a legal basis for Regulation No 881/2002 was justified because it ‘enabled the … Parliament to take part in the decisionmaking process relating to the measures at issue which are specifically aimed at individuals whereas under Articles 60 EC and 301 EC, no role is provided for that institution’.30 However, the reality is that the competences of the institutions are determined in the EU Treaties, and vary according to the different fields of action of the Union. Therefore, although the Parliament argued that the Union cannot adopt measures concerning respect for human rights only with Parliament’s involvement, the truth is that Article 215(3) TFEU provides that ‘The acts referred to in this Article shall include necessary provisions on legal safeguards’. This provision makes it sufficiently clear that an act adopted on this
27 cf C Hillion, ‘Fighting Terrorism through the Common Foreign and Security Policy’ in I Govaere and S Poli (eds), EU Management of Global Emergencies: Legal Framework for Combating Threats and Crises (Leiden, Brill/Martinus Nijhoff, 2014). 28 Art 218(6) TFEU. 29 Smart Sanctions (n 10) para 83. 30 Kadi (n 8) para 235.
652 José Manuel Cortés Martín and Gloria Fernández Arribas legal basis may interfere with fundamental rights.31 Certainly, it may be objectionable that the Parliament has reduced powers under the CFSP.32 However, that was the intention of the Masters of the Treaties. Furthermore, it is not procedures that define the legal basis of a measure; rather, it is the legal basis of a measure that determines the procedures to be followed in adopting that measure.33 Finally, on the Parliament’s prerogatives in Smart Sanctions, the Court rejected the second argument invoked in the alternative based on the violation of the conditions required by Article 215(2) TFEU. The Parliament contested, in vain, the Commission’s ability to propose an adaptation of the 2002 regulation on the grounds that the Commission’s mandate had expired at the end of October 2009 while the new Commission took office in February 2010. However, it seems logical that during this interim period, the Commission may not only dispatch current affairs, but also maintain a proposal, and formally adapt it to the amendment EU Treaties that had just entered into force in December 2009 with the Treaty of Lisbon. After all, the contested decision did not constitute a new political initiative that exceeded the powers of a Commission that was restricted to handle current business.34 D. EU External Action and Conflict of Competences The sphere of external competences in the EU legal order is largely characterised by a sui generis nature, and is thus subject to distinct rules and procedures that govern the interplay between the Union, its institutions and its Member States in this highly politicised and sensitive policy area. The Smart Sanctions case can be considered the first leading judgment on the most important provisions of the Treaty of Lisbon determining the Council’s powers with regard to the emergency of international terrorism. This decision also explains the criteria for the choice of the correct legal basis in the post-Lisbon setting. In a broader context, Smart Sanctions contributes to the debate on how the relationship between the CFSP and other external actions could develop after Lisbon in the light of depillarisation.35 Putting this important judgment into the context of an organic development of EU law over recent decades, it must be said that this process has led to the current clear-cut legal framework of the EU counterterrorism sanctions’ regime and a stable judicial interpretation of Article 215 TFEU, in particular when the EU implements UNSC resolutions related to the multilateral cooperation and global reactions to threats caused by international terrorism and concrete terrorist activities that endanger international peace and security.36 As a result, a clear delineation between CFSP and non-CFSP competences in legal basis disputes is certainly desirable in situations where, for example, there are different procedural requirements. The distinction between CFSP and non-CFSP issues, and the choice of the proper legal basis for EU external action, was further developed in two subsequent cases concerning the 31 Smart Sanctions (n 10) para 48. 32 On the Parliament and the CFSP, see G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 73–144. 33 ibid para 80; Opinion of AG Bot in Smart Sanctions (n 21) para 70. 34 Joined Cases T-228/99 and T-233/99, Westdeutsche Landesbank Girozentrale v Commission, ECLI:EU:T:2003:57, para 96. 35 A Ott, ‘Case Note on Case C-130/10, European Parliament v Council of the European Union’ (2012) 19 Maastricht Journal of European and Comparative Law 589. 36 J Czuczai, ‘The Powers of the Council Concerning the Emergency of International Terrorism after the Judgment in Case C-130/10 Parliament v Council’ in I Govaere and S Poli (eds), EU Management of Global Emergencies: Legal Framework for Combating Threats and Crises (Leiden, Brill, 2014) 99.
The Choice of Legal Basis between the AFSJ and the CFSP 653 Parliament, where the areas of CFSP and AFSJ again oppose each other, this time concerning the choice of the legal basis for an international agreement between the EU and third countries – Mauritius37 and Tanzania,38 respectively. Both agreements were found to be correctly based on a CFSP legal basis, although they were annulled for procedural infringement under Article 218(10) TFEU. In Mauritius, the Court engaged with the procedural requirements applicable to international agreements concluded by the EU that fell exclusively within the CFSP.39 In this case, the Parliament challenged the Council’s CFSP decision on the signing and conclusion of an agreement with Mauritius concerning the treatment of suspected pirates and associated seized property, defending its increased prerogatives in the area of external relations established in Article 218 TFEU, which included CFSP agreements. The central point of contention in Mauritius was whether the agreement related exclusively to the CFSP. If that were the case, it would fall under the exception in Article 218(6) TFEU, and the Parliament would not have to be consulted, or provide consent. The Court found that the CFSP legal basis was the correct choice. Hence, the Parliament did not assert its rights regarding the conclusion of the agreement in this particular case. However, the Court explicitly confirmed that the Parliament’s right to be involved during the negotiations under Article 218(10) TFEU was applicable to all different procedures, including procedures that culminate in the conclusion of international agreements on a CFSP legal basis.40 This can be seen as a procedural victory for the Parliament. As a result, the Parliament affirmatively acquired a right for its involvement in the conclusion of international agreements, and its information rights are a new avenue for the Court to exercise jurisdiction over CFSP matters. With its second judgment, in Tanzania,41 the Court tried to recognise Article 40 TEU in its decision-making process. However, the Court again refrained from engaging in a substantive discussion on its effects in the case in question. In fact, the Court only referred to Article 40 TEU (and Article 275 TFEU, second paragraph) to the extent of ensuring that the non-affection between CFSP and non-CFSP provisions shall be observed in relation to the relevant procedures and the powers of the institutions.42 Furthermore, it continued to apply general litigation criteria on a legal basis, in particular, the theory of the ‘centre of gravity’, discussing in detail the object and content of the contested act.43 Surprisingly, however, it appears that the Court did not distinguish between cases of two different legal bases of the CFSP in conflict, and those legal bases that conflict with a ‘cross-pillar’ dimension (one CFSP and one non-CFSP legal basis). The question therefore arises whether the distinction between CFSP and non-CFSP legal bases is being reduced to one of legal instruments and procedures. This may also be supported by the fact that the measures in the Mauritius and Tanzania cases were found to be correctly based on a CFSP legal basis, even though they were annulled for procedural infringement under Article 218(10) TFEU.44 Be that as it may, the relationship between CFSP and other EU policies under the TFEU, as well as the nature of the CFSP, continue to be controversial. Despite a
37 Case C-658/11, European Parliament v Council of the European Union, ECLI:EU:C:2014:2025 (Mauritius). See this volume, ch 66. 38 Case C-263/14, European Parliament v Council of the European Union, ECLI:EU:C:2016:435 (Tanzania). 39 Mauritius (n 37). 40 ibid paras 54 and 80–86. 41 Tanzania (n 38). 42 ibid para 42. 43 ibid paras 43–55. 44 Mauritius (n 37) paras 64–87; Tanzania (n 38) paras 57–85.
654 José Manuel Cortés Martín and Gloria Fernández Arribas greater alignment between the different areas of foreign and domestic policy, the distinction between CFSP and non-CFSP competences remains difficult. Therefore, it will continue to cause conflicts of legal bases in the future.45 V. ADDITIONAL READING Conway, G, ‘Conflicts of Competence Norms in EU Law and the Legal Reasoning of the ECJ’ (2010) 11 German Law Journal 9. Eckes, C, ‘The CSFP and Other EU Policies: A Difference in Nature?’ (2015) 20 European Foreign Affairs Review 4. Engel, A, The Choice of Legal Basis for Acts of the European Union (Cham, Springer, 2018). Matera, C and Wessel, RA, ‘Context or Content? A CFSP or AFSJ Legal Basis for EU International Agreements’ (2015) 18 Revista de Derecho Comunitario Europeo 49. Ott, A, ‘Between Pillars and Policies: The Quest for Consistency in EU External Relations Law’ in M de Visser and AP van der Mei (eds), The Treaty of the European Union 1993–2013: Reflections from Maastricht (Cambridge, Intersentia, 2013). Rees, W, ‘Inside Out: The External Face of EU Internal Security Policy’ (2008) 30 European Integration 1. Sánchez-Tabernero, S, ‘The Choice of Legal Basis and the Principle of Consistency in the Procedure for Conclusion of International Agreements in CFSP Contexts: Parliament v Council (Pirate-Transfer Agreement with Tanzania)’ (2017) 54 CML Rev 3.
45 A Engel, The Choice of Legal Basis for Acts of the European Union Competence Overlaps, Institutional Preferences, and Legal Basis Litigation (Berlin, Springer, 2018) 131.
61 Common Commercial Policy or Internal Market Rules as the Legal Basis for the Conclusion of International Agreements after Lisbon: Commission v Council (Conditional Access Convention) ROBERTO MASTROIANNI* AND GIORGIA LO TAURO Case C-137/12, European Commission v Council of the European Union, ECLI:EU:C:2013:675 (Conditional Access Convention), delivered 22 October 2013. KEYWORDS Legal basis – Scope of the Common Commercial Policy – Decision on the signing of an international agreement – Directive 98/84/CE – Trade in services with third states – Conditional Access Convention – EU exclusive competence.
I. INTRODUCTION
T
he choice of the correct legal basis for EU acts always raises constitutional issues, in both ‘horizontal’ (ie interinstitutional) and ‘vertical’ (EU/Member States) relations, because of its direct link with the principle of conferral.1 Commission v Council (Conditional Access Convention)2 concerned the legal basis of a Council decision on the signing of an international agreement, and gave the Court the chance to address the delicate question of the allocation of EU and Member States’ respective powers after the Treaty of Lisbon reform of the EU external competences. Espousing a broad notion of the Common
* All opinions expressed herein are personal to the author. 1 Opinion 2/00, Cartagena Protocol on Biosafety, ECLI:EU:C:2001:664, para 5. See this volume, ch 39; Opinion 1/08, Amendments to EU Schedules of Commitments under GATS, ECLI:EU:C:2009:739, para 110. See RA Wessel and J Larik (eds), EU External Relations Law. Text, Cases and Materials (Oxford, Hart Publishing, 2020), 36 and 88. 2 Case C-137/12, European Commission v Council of the European Union, ECLI:EU:C:2013:675 (Conditional Access Convention).
656 Roberto Mastroianni and Giorgia Lo Tauro Commercial Policy (CCP), the Court reached a solution that clarifies the applicable rules by choosing an ‘objective-oriented’ approach that gives precedence to the international trade provisions in the international convention at stake over the internal market measures.3 II. FACTS
The case originates from an action for annulment brought by the Commission against Council Decision 2011/853/EU (hereinafter the Decision)4 on the signing, on behalf of the Union, of the European Convention on the Legal Protection of Services based on, or consisting of, conditional access (hereinafter the Convention).5 The Convention was adopted by the Council of Europe in 2001 to ensure a minimum level of protection for the above-mentioned services throughout Europe, taking over (with minimum differences)6 what is provided for in Union law by Directive 98/84/EC.7 In turn, the latter aims to approximate Member States’ rules on measures to protect the same services against illicit devices that allow unauthorised access to them. Monitoring the implementation of the Directive, the Commission adopted a report in 2008 (hereinafter ‘the second report’)8 in which, inter alia, it noted the potential of the Convention to extend that protection beyond EU territory. Therefore, it considered the ratification of the Convention by the Union as a useful means to ‘relaunch international action among the 47 members of the Council of Europe’9 in this field. Thus, on 15 December 2010, the Commission sent the Council a proposal for a decision on the signing of the Convention to be based on Article 207(4) TFEU, in conjunction with Article 218(5) TFEU,10 with a view to ‘extending the scope of the regulatory 3 See E Neframi, ‘Vertical Division of Competences and the Objectives of the European Union’s External Action’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law: Constitutional Challenges (Oxford, Hart Publishing, 2016) 89. 4 Council Decision 2011/853/EU of 29 November 2011 on the signing, on behalf of the Union, of the European Convention on the legal protection of services based on, or consisting of, conditional access, [2011] OJ L336/1. 5 European Convention on the Legal Protection of Services based on, or consisting of, Conditional Access (adopted 24 January 2001, entered into force 1 July 2003), ETS No 178. 6 Explanatory Report to the European Convention on the Legal Protection of Services based on, or consisting of, Conditional Access (adopted 24 January 2001, entered into force 1 July 2003), ETS No 178, para 11: ‘In view of the above, and with the aim of ensuring a similar minimum level of protection of conditional access services across Europe, it was decided that a Council of Europe binding legal instrument on this matter would be desirable. In addition, a Convention at the wider European level on the legal protection of services based on, or consisting of, conditional access would be a valuable complement to the above-mentioned EC Directive 98/84/EC.’ 7 European Parliament and Council Directive 98/84/EC of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access, [1998] OJ L320/54. 8 Report from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions – Second Report on the implementation of Directive 98/84/EC of the European Parliament and of the Council of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access, COM (2008) 593 final. 9 ibid para 4.2.4. 10 Art 207 TFEU, on the common commercial policy, provides in para 4: ‘For the negotiation and conclusion of the agreements referred to in paragraph 3, the Council shall act by a qualified majority. For the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property, as well as foreign direct investment, the Council shall act unanimously where such agreements include provisions for which unanimity is required for the adoption of internal rules. The Council shall also act unanimously for the negotiation and conclusion of agreements: (a) in the field of trade in cultural and audiovisual services, where these agreements risk prejudicing the Union’s cultural and linguistic diversity; (b) in the field of trade in social, education and health services, where these agreements risk seriously disturbing the national organisation of such services and prejudicing the responsibility of Member States to deliver them.’ Article 218 TFEU regards the agreements between the Union and third countries or international organisations. Its para 5 provides: ‘The Council, on a proposal by the negotiator, shall adopt a decision authorising the signing of the agreement and, if necessary, its provisional application before entry into force.’
CCP or Internal Market as the Legal Basis for the Conclusion of International Agreements 657 framework established by Directive 98/84/EC and … thus effectively countering prejudice to protected services’.11 In November 2011, the Council adopted the Decision, but, contrary to the Commission’s proposal, it identified the legal basis in Article 114 TFEU in conjunction with Article 218(5) TFEU, and inserted a new recital 6 to the effect that, since, under the Directive, the Union has exercised its internal competence in (almost all) the areas covered by the Convention, the latter had to be signed by both the Union and the Member States as a mixed agreement.12 The Commission disagreed with the different position adopted by the Council on the legal basis of the act, and decided to reserve its position with a Declaration annexed to the minutes of the Council meeting. Subsequently, it challenged the decision before the Court, considering the choice of legal basis identified by the Council to be incorrect as infringing the exclusive external competence of the Union. In the course of the procedure, five Member States intervened in support of the Council, while the Parliament intervened in support of the Commission. The divergence of views between the two institutions essentially concerned the correct legal basis for the contested decision; they put forward the following arguments before the Court, related to the main objective of the Convention. The Commission reiterated its conviction, as set out in its proposal, that the decision to sign the Convention fell within the scope of the CCP, an exclusive competence of the Union, and therefore had to find a legal basis (in addition to Article 218(5) TFEU for procedural aspects) in Article 207(4) TFEU. This is because, from the Union’s point of view, the main objective of the Convention – and therefore of the Decision – would be to extend the protection of protected services in the territories of the contracting states that are not members of the Union, so as to make those markets more suitable for the provision of services by Union providers. To corroborate this position, the Commission noted that, from Article 11(4) of the Convention, which contains the so-called ‘disconnection clause’,13 the main aim of the text is to facilitate trade in services between the states parties to the Convention by removing obstacles arising from illegal trade activities, and not to improve the functioning of the internal market. This, however, would not be ruled out by the fact that certain measures in the Convention aimed to protect the Union’s internal market and service providers established in EU territory. The main object would, in any case, remain the provision of those services between the Union and other European states that were parties to the Convention, thus supplementing the Directive to ensure a territorial extension of the protection provided for in it, and thus directly affect trade between the Union and those states. It followed, according to the Commission, that the decision on the signing of the Convention by the Union fell within the scope of the CCP, as it related to the Union’s external relations in trade in services with third countries, and should therefore have Article 207(4) TFEU as its legal basis.14 The Council, on the other hand, considered Article 114 TFEU, on the approximation of the provisions of the Member States relating to the functioning of the internal market, as the appropriate legal basis. This is because, according to that institution, the main objective of
11 Proposal for a Council decision concerning the signing of the European Convention on the legal protection of services based on, or consisting of, conditional access, COM (2010) 753 final, para 17. 12 Council Decision 2011/853/EU (n 4) recital 6. 13 Art 11 of the Convention – Relationship with other conventions or agreements: ‘4. In their mutual relations, Parties which are members of the European Community shall apply Community rules and shall not therefore apply the rules arising from this Convention except in so far as there is no Community rule governing the particular subject concerned.’ 14 Conditional Access Convention (n 2) paras 36–43.
658 Roberto Mastroianni and Giorgia Lo Tauro the Convention is, as with Directive 98/84/EC, to harmonise the provisions of all the states parties to the Convention (including EU Member States), so as to combat more effectively unlawful access to the services involved – which is a threat to the economic viability of the related service providers and, in consequence, to the diversity of the programmes and services offered to the public – by requiring the adoption of common definitions for unlawful activities and by introducing a common system of sanctions and remedies. Thus, the primary aim of the Convention was, in the Council’s opinion, to eliminate or prevent any obstacles to trade in the services concerned that arise because of differences between national laws, in order to protect the proper functioning of markets and to improve the functioning of the internal market of the EU. Moreover, some Member States intervening in support of the Council underlined the presence in the Convention of provisions on seizure and confiscation measures, which would not fall within the Union’s competence to conclude agreements under Article 207 TFEU. Furthermore, the Council and the four intervening states noted that the effects of the Convention on trade in services between the Union and the other contracting parties would only be of secondary importance.15 III. THE COURT
With the judgment delivered on 22 October 2013, the Grand Chamber of the Court identified the correct legal basis for the adoption of the contested decision. The choice between the alternatives invoked by the parties implied the delicate question of the extent of the Union’s powers in external action, the practical importance and constitutional nature of which were correctly underlined in the Opinion delivered by Advocate General (AG) Kokott.16 At the outset, the Court noted that the parties agreed that Article 218(5) TFEU was the correct procedural legal basis for the contested decision. The disagreement between the institutions concerned the other rule on the substantive legal basis. From that choice, indeed, came an important consequence. Following the Commission’s position, based on the CCP (Article 207 (4) TFEU), the Convention had to be signed only by the Union, in the exercise of its exclusive external competence (Article 3(1)(e) TFEU). By contrast, following the Council’s position based on Article 114 TFEU, the Convention was to be a mixed agreement, and had to be signed by both the Union and the Member States. Recalling its constant jurisprudence, the Court reiterated that the choice of the legal basis of an act must be based on objective factors, with particular regard to the aim and content of the act; and that if the measure at stake has a twofold purpose or a twofold component, one of which may be considered predominant and the other merely incidental, the act must be based on a single legal basis. That is required by the principal purpose or component (the so-called centre of gravity test).17 Therefore, since the contested decision was intended to authorise the signing of the Convention on behalf of the Union, the Court considered that it should be examined in conjunction with that Convention in order to determine its main objective, and thus to identify its correct legal basis.18
15 ibid paras 44–50. 16 Opinion of Advocate General (AG) Kokott, Case C-137/12, European Commission v Council of the European Union, ECLI:EU:C:2013:441 (Conditional Access Convention), para 1. 17 Conditional Access Convention (n 2) paras 51–53. For the first application of the ‘centre of gravity test’, see Opinion 1/78, International Agreement on Natural Rubber, ECLI:EU:C:1979:224. See this volume, ch 11. 18 Conditional Access Convention (n 2) para 54.
CCP or Internal Market as the Legal Basis for the Conclusion of International Agreements 659 Having clarified this, the Court referred to its recent judgment in Daiichi Sankyo,19 where it was also requested to define the relationship between the internal market and the CCP, confirming that an act falls within the scope of the latter not simply because it may have implications for international trade, but if it is essentially intended to promote and facilitate such trade, or otherwise have immediate effects on it by presenting a ‘specific link’.20 Thus, examining the Decision in conjunction with the Convention, the Court underscored that the latter included almost identical content to Directive 98/84/EC. Indeed, the AG already considered in her Opinion that the finding that the Convention and the Directive are overlapping is crucial in determining which of the institutions’ positions should be accepted.21 From this starting point, in fact, the Court develops its central argument for the solution of the case. The aim of the Convention was – as expressly stated in the Explanatory Report – to guarantee the same minimum level of legal protection of the services concerned across Europe, supplementing the Directive so as to extend the territorial protection of those services to non-EU Member States where legal protection is considered ineffective. Thus, the Court noted that ‘the signing of the Convention on behalf of the Union, which the contested decision is intended to authorise, is undertaken with a view to encouraging broader ratification of the Convention by Member States of the Council of Europe’.22 Hence, the Court clarified the distinction between the aims of the Directive and those of the contested decision. While the Directive intended to promote, at EU level, trade within the internal market, the decision on the signing of the Convention aims to extend that protection beyond the territory of the Union in order to promote the supply of those services by Union providers in the other non-EU Member States party to the Convention. The latter was, therefore, also the main purpose of the contested decision, and presents that ‘specific link’ with international trade that justified its connection to the CCP.23 Furthermore, rejecting the objections of the Council and the intervening Member States, the Court made it clear that the approximation of the legislation of the contracting parties was an instrument to achieve the objectives of the Convention, rather than an end in itself. In the words of the Court: Article 11(4) of the Convention confirms that, since the approximation of the legislation of Member States in the field concerned has already been largely achieved by Directive 98/84, the primary objective of the Convention is not to improve the functioning of the internal market, but to extend legal protection of the relevant services beyond the territory of the European Union and thereby to promote international trade in those services.24
With regard to the further argument of the Council and the intervening Member States that the Convention was intended to prohibit the export of illicit devices to the territory of the Member States in order to protect the Union’s internal market, the Court said that, on the
19 Case C-414/11, Daiichi Sankyo Co Ltd and Sanofi-Aventis Deutschland GmbH v DEMO Anonimos Viomikhaniki kai Emporiki Etairia Farmakonaiichi, ECLI:EU:C:2013:520, paras 52–56. See this volume, ch 64. J Larik, ‘No Mixed Feelings: The Post-Lisbon Common Commercial Policy in Daiichi Sankyo and Commission v Council (Conditional Access Convention)’ (2015) 52 CML Rev 779. For a joint analysis on both cases, see also L Ankersmit, ‘The Scope of the Common Commercial Policy after Lisbon: The Daiichi Sankyo and Conditional Access Services Grand Chamber Judgments’ (2014) 41 Legal Issues of Economic Integration 193. 20 Conditional Access Convention (n 2) paras 55–58. 21 Opinion of AG Kokott in Conditional Access Convention (n 16) para 5. 22 Conditional Access Convention (n 2) para 62. 23 ibid paras 64–65. 24 ibid para 67.
660 Roberto Mastroianni and Giorgia Lo Tauro contrary, it was precisely in that regard that the ‘defence of the European Union’s global interest falls, by its very nature, within the common commercial policy’.25 The Court did not, therefore, deny that the improvement in the functioning of the internal market, achieved by Articles 6 and 8 of the Convention, was an aim of the contested decision, but regarded it as merely incidental. The main aim, as previously identified, had a specific link with the CCP, and therefore, as the ‘centre of gravity’ of the act, justified the finding that the correct legal basis is Article 207(4) TFEU, in conjunction with Article 218(5) TFEU.26 By upholding the first plea put forward by the Commission, the Court annulled the contested decision without having to analyse the second plea in law concerning the infringement of the exclusive competence of the Union. In order not to call into question the fact that the Union had already signed the Convention, in the interest of legal certainty, the Court also ruled that the effects of the decision should be maintained until the adoption, within six months, of the new decision based on the appropriate legal bases.27 IV. THE IMPORTANCE OF THE CASE
A. The Decision Falls within the Scope of the CCP The judgment in Conditional Access Convention belongs to the early post-Lisbon case law, through which the Court had the opportunity to address and clarify the new categorisation of external competences of the EU introduced by the Treaty of Lisbon,28 with specific regard to the CCP.29 As has been noted, in providing a catalogue of competence, the Treaty of Lisbon ‘also creates a false sense of legal certainty as it leaves crucial issues regarding the principle of conferral untouched and unresolved’.30 This judgment clarified that the decision on the signature of the Conditional Access Convention fell within the scope of the CCP. Such a conclusion, which responds to the Commission’s request, involves two fundamental aspects: that of identifying the correct legal basis for the adoption of the decision on the signing of international agreements; and that of defining the scope of the CCP, an exclusive competence of the Union. The analysis of the two aspects, as presented by the Court, sees them converge in the same direction: an exclusive competence of the Union to sign the Convention in question, with the consequent exclusion of any intervention by the Member States in the field of trade in services based on, or consisting of, conditional access with third countries. As to the first aspect, the Commission contested the substantive legal basis chosen by the Council for the decision to authorise the signing of the Convention on behalf of the Union. 25 ibid para 69. 26 Conditional Access Convention (n 2) para 76. On this point, see also the Opinion of AG Kokott (n 16) para 43. 27 The new decision was adopted in respect of the deadline imposed by the Court: see Council Decision 2014/243/EU of 14 April 2014 on the signing, on behalf of the European Union, of the European Convention on the legal protection of services based on, or consisting of, conditional access, [2014] OJ L128/61. 28 For the first reflections on this point, see M Cremona, ‘Defining Competence in EU External Relations: lessons from the Treaty Reform Process’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 34–69; P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 57–69. 29 See M Bungenberg and C Herrmann (eds), Common Commercial Policy after Lisbon (Heidelberg, Springer, 2013). See also PC Müller-Graff, ‘The Common Commercial Policy Enhanced by the Reform Treaty of Lisbon?’ in Dashwood and Maresceau (n 28) 188–201. 30 I Govaere, ‘To Give or To Grab: The Principle of Full, Crippled and Split Conferral of Powers Post-Lisbon’ in M Cremona (ed), Structural Principles in EU External Relations Law (Oxford, Hart Publishing, 2018) 75.
CCP or Internal Market as the Legal Basis for the Conclusion of International Agreements 661 This question, of constitutional significance per se, is of particular relevance here because of its impact on the scope of the Union’s external competences and, therefore, on the boundaries between the Union’s and the Member States’ action at international level as introduced by the new provisions of the Treaty of Lisbon. In this regard, by excluding recourse to Article 114 TFEU, AG Kokott expressly ruled out a strict parallelism between internal and external competences, pointing out that the fact that the Union had adopted internal measures of substantially identical content to the Convention, ergo to the contested decision, does not entail that the latter must have the same legal basis.31 This was implicitly confirmed by the Court when, while acknowledging that the contested decision essentially aims to extend already adopted internal market rules to non-EU Member States, it pointed out that its main purpose has a specific connection with international trade and, therefore, that it must be classified under the CCP.32 As Neframi accurately points out, ‘With the enlargement of the scope of the CCP the Court abandons the strict parallelism between external and internal competence’.33 To solve the question of the legal basis, the Court based its reasoning on settled case law. The Court reiterated that, also in the area of external competence, it is necessary to look at the purpose and content of the act, and that where several purposes or components can be identified, priority should be given to the main or predominant one. Applying the centre of gravity test, the Court found that the main purpose of the contested decision was to authorise the signing of the Convention, and it proceeded to analyse the two acts together in order to identify the objective pursued by them, and thus to derive the correct legal basis.34 It emerged from the Court’s analysis that there was no complete teleological overlap between the two acts, despite their clear substantive proximity: to that end, the Court referred, as previously noted, to the special features of Directive 98/84, in relation to which the Convention had created ‘an almost identical’ regulatory framework.35 If the Directive sought to harmonise the legislation of the Member States on the legal protection of the services in question in order to foster trade in them within the Union, then the ‘added value’36 of the Decision (which confirmed that the two measures have different objectives)37 lies precisely in extending the legal protection of the relevant services beyond the territory of the EU, thereby promoting international trade in those services. This was also confirmed by the Convention’s ‘disconnection clause’, according to which EU Member States, in their mutual relations, apply the rules of the Convention only in the absence of Union rules governing the specific matter.38 Hence, from the EU’s point of view, the Convention was intended to supplement the Directive, as it aimed ‘to ensure a similar minimum level of protection of the services concerned across Europe and thus to provide a valuable complement to Directive 98/84’,39 and thus to harmonise the rules on the protection of the services concerned between EU Member States and other European states. This was the decisive aspect in identifying the purpose of the Decision: harmonisation between Member States for the functioning of the internal market
31 Opinion of AG Kokott in Conditional Access Convention (n 16) para 41. 32 Conditional Access Convention (n 2) paras 64–67. 33 E Neframi, ‘The Dynamic of the EU Objectives in the Analysis of the External Competence’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 70. 34 Conditional Access Convention (n 2) para 54. 35 ibid para 59. 36 Larik (n 19) 789. 37 See Ankersmit (n 19) 204. 38 Conditional Access Convention (n 2) para. 67. 39 ibid para 60.
662 Roberto Mastroianni and Giorgia Lo Tauro was achieved by the Directive, whereas the Convention (and therefore the Decision) met, from the point of view of the EU, the need to improve trade in goods and services with non-EU Member States that were parties to the Convention. On the basis of these observations, the Court found that the contested decision, ‘by authorising the signing of the Convention on behalf of the European Union, is intended to introduce similar protection in European non-member countries, in order to promote the supply of such services to those States by EU service providers’ (emphasis added).40 Such an aim, recognised as the main one for its ‘specific link’ with international trade, was capable of bringing the contested decision within the scope of the CCP,41 and therefore justified the finding that Article 207(4) TFEU was the correct legal basis. Moreover, this conclusion is not contradicted by the existing links with the objectives of the proper functioning of the internal market, or by the provision of measures (of a criminal nature) to protect services from unlawful activities, since these were ancillary objectives which helped achieve the main purpose of defining the Union’s external relations.42 This finding is in line with AG Kokott’s suggestion that ‘The focus is thus less on establishing uniform rules in the European internal market than on attempting “to export” the Union’s internal acquis to third countries’.43 The results of the analysis of this first aspect, the appropriate legal basis, inevitably leads to the conclusion of the second aspect concerning the definition of the scope of the CCP. The Court, reiterating its case law and in particular the Daichii Sankyo judgment, made it clear that for an act to be considered as part of the CCP, it is not sufficient for it to have implications for international trade, but it must be ‘essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade’.44 This required specific reference to international trade therefore remains the key aspect for shaping the scope of the CCP, as was already the case before the Treaty of Lisbon.45 This is consistent with the ‘dynamic’ nature of the CCP’s scope and with the intention of the Court, in the light of the new text of the EU Treaties, to ‘reinstate’ a broad interpretation of the CCP,46 as testified by the judgment in question47 and confirmed by other rulings which will be discussed below. The analysis of the
40 ibid para 64. 41 ibid para 65. 42 ibid paras 66–72. On this point, see M Cremona, ‘The Principle of Conferral and Express and Implied External Competence’ in Neframi and Gatti (n 33) 38. 43 Opinion of AG Kokott in Conditional Access Convention (n 16) para 49. 44 Conditional Access Convention (n 2) paras 57–58. 45 See the comment of Lenaerts and Adam on Opinion 2/00, where the Court, applying the same logic, reached the opposite result, excluding that the decision on the signing of the Cartagena Protocol was covered by the common commercial policy. See this volume, ch 39. 46 On this point, see M Klamert, ‘Article 207 TFEU’ in M Kellerbauer, M Klamert and J Tomkin (eds), The EU Treaties and the Charter of Fundamental Rights: A Commentary (Oxford, Oxford University Press, 2019) 1592–93: ‘The Court had an extensive interpretation, as of the early opinions in 1970s, on international regulation on trade in raw materials. In the 1990s and 2000s its approach was somewhat more restrictive, when it held that GATS and TRIPs were shared competence and remained so after the Treaty of Nice. Under the [Treaty of Lisbon], the Court has taken note of the changes in the Treaties, and found that the Union now had exclusive competence for TRIPs, as well as for provisions on sustainable development.’ 47 Since this ruling insists on expanding the scope of the CCP, some authors have considered it (along with Daiichi Sankyo) to be comparable to the first case law on the subject, particularly progressive in this respect: see Larik (n 19) 792: ‘In doing so, the Court chose clarity over caution, and Treaty reform over path dependency’. Of the same opinion Ankersmit (n 19) 206: ‘In relation to previous case law, the Court seems generally less concerned about the potential for Article 207 TFEU to encroach upon other Competences.’ See also G Kübek, ‘The European Union’s External Trade and Investment Policy Post-Lisbon: Competence, Procedure and Scope of Action’ in M Andenas, L Pantaleo, M Happold, and C Contartese (eds), EU External Action in International Economic Law: Recent Trends and Developments (Heidelberg, Springer, 2020) 101.
CCP or Internal Market as the Legal Basis for the Conclusion of International Agreements 663 scope of the CCP, combined with that of the choice of the legal basis, led to the recognition of an exclusive competence of the Union to act in this field in the international context. As is well known, that the CCP falls within the exclusive competence of the Union was clear even before the codification of the division of competences carried out by the Treaty of Lisbon, since it has traditionally been considered by the Court as being exclusive in nature for its inextricable relationship with the internal market.48 The solution adopted by the Court in Conditional Access Convention, which places the legal basis of the contested decision in the context of the CCP (Article 207 TFEU), leaves no room for doubt as to the classification of the Union’s intervention, as opposed to that of the Member States, for the conclusion of the international agreement at issue. In this sense, as is also clear from the Opinion of the AG, ‘by tilting the balance towards finding “predominant” legal bases that lead to express exclusive Union competence’,49 the Court did not need to apply the ERTA principle, as codified by the Treaty of Lisbon.50 This principle would have been applicable if the Court had chosen Article 114 TFEU as the legal basis, considering the main purpose of the Decision was to be related to the functioning of the internal market.51 The question of the exclusive (implicit or explicit) competence of the Union was, as mentioned above, the subject of the Commission’s second plea in law, not dealt with by the Court, since it was considered absorbed by the solution given to the first plea. Identifying the legal basis of the decision to sign the Convention in Article 207(4) TFEU, the Court clearly excluded the intervention of the Member States. In the words of the Court: It follows from all of the foregoing that the contested decision primarily pursues an objective that has a specific connection to the common commercial policy, which means that, for the purposes of the adoption of that decision, Article 207(4) TFEU, together with Article 218(5) TFEU, must be cited as the legal basis and which also means that the signing of the Convention on behalf of the European Union falls within the exclusive competence of the European Union, pursuant to Article 3(1)(e) TFEU. By contrast, the improvement of the conditions for the functioning of the internal market is an ancillary objective of that decision that provides no justification for its adoption on the basis of Article 114 TFEU.52
The solution reached by the Court affected the scope of the Member States’ intervention at the international level alongside the Union in areas not falling within the latter’s internal exclusive competence, since the scope of the CCP was enlarged, but other areas were proportionately reduced. In particular, the recognition, put forward by AG Kokott in Conditional Access Convention, of Article 207 TFEU as an appropriate legal basis for measures which do not lead to harmonisation of legislative provisions of the Member States within the Union (internal harmonisation) but, as in this case, contribute, in respect of external relations, to the approximation of the legislative provisions in the Union and in third countries (external harmonisation)53
48 Opinion 1/75, Draft understanding on a local cost standard, ECLI:EU:C:1975:145. For a detailed analysis of that Opinion, see this volume, ch 4. See also A Rosas, ‘EU External Relations: Exclusive Competence Revisited’ (2015) 38 Fordham International Law Journal 1073. 49 S Boelaert, ‘Mixity versus Unity: A View from the Other Side of the Rue de la Loi’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon – The Law and Practices of Facultative Mixity (Leiden, Brill/Martinus Nijoff, 2020) 251. 50 Art 3(2) TEU and Art 216(1) TFEU; see Opinion of AG Kokott in Conditional Access Convention (n 16) para 112. 51 In this respect, see also Ankersmit (n 19) 209. 52 Conditional Access Convention (n 2) para 76. 53 See Opinion of AG Kokott in Conditional Access Convention (n 16) para 67, where the AG also underlines that several commercial agreements provide that harmonisation, in order to facilitate cross-border trade.
664 Roberto Mastroianni and Giorgia Lo Tauro has led to other considerations. For example, one author has concluded that ‘EU Member States, even in the absence of EU rules internally, are no longer able to harmonize their own technical standards with a third country through an international agreement: trade facilitation will depend on EU action’.54 This is part of the more general trend of the Court, increasingly present in its jurisprudence after Lisbon, towards a certain disfavour for joint action by Member States to conclude international agreements (‘mixity’). On the one hand, as in the present case, the Court insists on widening the scope of exclusive competences, such as the CCP;55 on the other hand, it reinforces the effects of the ERTA principle, where an exclusive competence is not explicitly mentioned in the EU Treaties.56 B. The Impact on the Subsequent Case Law The judgment in the Conditional Access Convention case is part of the very first post-Lisbon jurisprudence and is therefore destined, together with Daiichi Sankyo, to represent an almost obligatory step in the logic of subsequent rulings, as regards both the definition of the scope of the CCP and the identification of the legal basis for the conclusion of international agreements. In terms of allocation of external powers, it was noted that, while the cases of the first post-Lisbon jurisprudence could be considered ‘easier’, the subsequent ones, while building on the first, had to face more challenging issues.57 For the aspects that are of interest here, this appears to be true, for example, for certain cases handed down by the Court in 2017, which have precisely referred to Conditional Access Convention, sometimes adopting its logic and sometimes partly departing from it. On this front, reference is made to two Opinions submitted to the Court for the conclusion of international agreements under Article 218(11) TFEU, respectively Opinion 2/15 on the Free Trade Agreement with Singapore58 and Opinion 3/15 on the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled,59 as well as to the judgment in Commission v Council (Revised Lisbon Agreement) on Designations of Origin and Geographical Indications.60 The analysis will start with the latter ruling, which presents the most similarities and therefore involves less ‘complexity’ compared to Conditional Access Convention, and then tackle the peculiar legal issues addressed in the two Opinions. With the Revised Lisbon Agreement, the Court annulled the decision on the opening of negotiations, considering, contrary to the Council’s position, that the Agreement fell within the scope of the CCP, and therefore within the exclusive competence of the Union, and not 54 Ankersmit (n 19) 208. 55 Boelaert (n 49) 251: ‘In this case law the [Court] has significantly reduced the material scope of areas that are not covered by the EU’s exclusive competences.’ 56 See, inter alia, M Chamon, ‘Existence or Exercise of EU Competence? From Supervening Exclusivity to Institutional Balance in Limiting Facultative Mixity’ in Chamon and Govaere (n 49) 113: ‘there seems to be a general consensus on the CJEU having broadened its ERTA jurisprudence, ie that it has become easier to find an ERTA effect’. 57 See Govaere (n 30) 75. See also Kübek, ‘The European Union’s External Trade’ (n 47) 100: ‘In its post-Lisbon case law, the CJEU has increased the function of the CCP as a “centre of gravity” of international agreements in three main ways: It has tilted the balance towards deploying external trade – as compared to internal trade – as a treaty’s predominant legal basis … it has construed the CCP in pursuit of the EU’s external relations goals … and it has found other legal bases incidental to the CCP.’ 58 Opinion 2/15, EU–Singapore Free Trade Agreement, ECLI:EU:C:2017:376. See this volume, ch 82. 59 Opinion 3/15, Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled, ECLI:EU:C:2017:114 See this volume, ch 78. 60 Case C-389/15, European Commission v Council of the European Union, ECLI:EU:C:2017:798 (Revised Lisbon Agreement).
CCP or Internal Market as the Legal Basis for the Conclusion of International Agreements 665 under Article 114 TFEU. The relationship with the Conditional Access Convention judgment is thus clear, since in that case, too, the Court addressed the question of the legal basis by examining the relationship between Article 114 TFEU and Article 207 TFEU. Once again, the solution required an analysis of the specific link of the act with international trade,61 and the question of the choice of legal basis for the conclusion of international agreements arose as an alternative between the express exclusive competence of the Union, within the framework of the CCP, and the reference to the proper functioning of the internal market. The other two cases, on the other hand, present some more specific issues in terms of the identification of the Union’s exclusive external competence, involving the relationship between paragraphs 1 and 2 of Article 3 TFEU. In Opinion 3/15, issued on 14 February 2017, the Court was requested by the Commission to decide on the existence of an exclusive competence of the Union to conclude the Marrakesh Treaty. According to the Commission, conclusion of the Marrakesh Treaty should have been based on both Article 114 TFEU (because of the harmonising effect that the treaty will have on the laws of the Member States) and Article 207 TFEU (so as to cover the exchange of accessible format copies with third countries). Therefore, the competence of the EU to conclude the Marrakesh Treaty would be exclusive by virtue of Article 3(1) and (2) TFEU. To answer the question with regard to the CCP, the Court made an express reference to Conditional Access Convention to reiterate that the mere fact that an EU act is liable to have implications for international trade is not sufficient for it to be concluded that the act must be classified as falling within the common commercial policy. On the other hand, an EU act falls within that policy if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade.62
Thus, the Court again expressly referred to the Conditional Access Convention in regard to the specific link that the rules on the protection of the services involved therein have with international trade, to conclude that the same reasoning could not be applied to the provisions of the Marrakesh Treaty. The Court ruled out that those provisions, which were intended to establish an exception or limitation on the rights of reproduction, distribution and making available to the public of those works, had any specific connection with international trade, since their purpose was rather to improve the situation of the beneficiaries, and therefore went beyond the scope of the common commercial policy.63 Nevertheless, it acknowledged that the conclusion of the Marrakesh Treaty fell within the exclusive competence of the Union since, under Article 3(2) TFEU, it may affect the common rules or alter their scope, thus confirming the renewed interpretation and application of the ERTA principle after Lisbon.64 61 ibid paras 74–75: ‘It thus follows from the examination of the draft revised agreement, first, that it is essentially intended to facilitate and govern trade between the European Union and third states and, secondly, that it is such as to have direct and immediate effects on such trade, so that its negotiation falls within the exclusive competence which Article 3(1) TFEU confers on the European Union in the field of the common commercial policy envisaged in Article 207(1) TFEU. Therefore, the Council was wrong in taking the view that the contested decision fell within the approximation of laws in the field of the internal market and, accordingly, within a competence shared between the European Union and its Member States, and in basing that decision on Article 114 TFEU and Article 218(3) and (4) TFEU.’ 62 Opinion 3/15 (n 59) para 61. 63 ibid paras 80–82. 64 See G Kübek, ‘Redefining the Boundaries of the Common Commercial Policy and the ERTA Doctrine: Opinion 3/15, Marrakesh Treaty’ (2018) 3 CML Rev 55, 897: ‘The broadening of the criteria for triggering the ERTA effect may also be viewed as one aspect of a tendency in post-Lisbon external relations case law away from facilitating mixity and towards embracing the “EU-only” procedure.’ For a detailed analysis of Opinion 3/15, see this volume, ch 78.
666 Roberto Mastroianni and Giorgia Lo Tauro What is important for the present purposes, however, is the fact that the Court here, once again, defined the scope of the CCP, but this time mitigating the extensive interpretation chosen in Conditional Access Convention. As correctly noted, [w]hilst recognizing the broad reach of the CCP post-Lisbon, previously confirmed in Daiichi Sankyo and Conditional Access Convention, Opinion 3/15 shows that the scope of Article 207 TFEU is certainly not limitless. International agreements that primarily follow a ‘non-commercial’ purpose fall outside the realm of the CCP.65
Issued a few months later, Opinion 2/15, on the competence to sign and conclude the Free Trade Agreement with Singapore, was also influenced by Conditional Access Convention as regards the scope of the CCP. The logic of Conditional Access Convention, based on the application of the centre of gravity test, is used here to analyse which components of the agreement present a ‘specific connection’ with trade between the EU and Singapore, in order to bring them within the scope of the CCP. In its conclusion, the Court excluded exclusive competence of the EU for parts of the agreement, which therefore could not be concluded by the Union alone. Nevertheless, beyond that specific result, the Opinion is relevant for present purposes precisely because the approach of the first post-Lisbon jurisprudence on the scope of the CCP seems to be confirmed and reinforced.66 In particular, an element of continuity with the earlier case law appears in the structure of the reasoning of the Court, which starts from the possibility of considering the agreement as falling within the scope of the CCP, and only in case of a negative outcome proceeds to examine the existence of implied external powers.67 Moreover, Opinion 2/15 is important because of its emphasis on the need for the Union to pursue the general objectives of external action in the conduction of the CCP, as emphasised by the Treaty of Lisbon from a combined reading of the second sentence of Article 207(1) TFEU, Article 21(3) TEU and Article 205 TFEU.68 Hence, the Court has referred the objective of sustainable development to the CCP, and thus to the exclusive competence of the Union under Article 3(1) TFEU.69 Thus, in this case, as in Opinion 3/15, it emerged that the solution reached in Conditional Access Convention, insofar as it concerns the scope of Article 3(1) TFEU and, therefore, the possibility of tracing an a priori exclusive competence, precedes the application of the ERTA test as codified in Article 3(2) TFEU. The considerations set out above, in particular those regarding the two Opinions, seem sufficient to explain the essence of the relationship between Conditional Access Convention and the ERTA principle. While the former is concerned with defining the scope of the CCP, leading to the finding of an a priori exclusive external competence of the Union (Article 3(1) TFEU), the latter outlines the criteria for identifying an implied exclusive external competence beyond the a priori list introduced by the Treaty of Lisbon (Article 3(2) and Article 216(1) TFEU). In this regard, Conditional Access Convention and the ERTA case law, seen in the light of the
65 Kübek, ‘Redefining the Boundaries’ (n 64) 894. 66 According to M Cremona, ‘Shaping EU Trade Policy Post-Lisbon: Opinion 2/15 of 16 May 2017’ (2018) 14 European Constitutional Law Review, 236: ‘in Opinion 2/15 the Court was willing to find a sufficiently close link to the agreement’s trade objectives for a variety of clauses – including, crucially, the chapter on sustainable development – to be encompassed by the CCP. In this the Court was more explicit than it had been before as to the impact of the general external objectives on the nature of the Union’s trade policy’. 67 Cremona, ‘The Principle of Conferral’ (n 42) 61: ‘In each of the cases … the express legal basis was the starting point; a case needed to be made (and was not often successfully made) for turning to an implied power. This of course is perfectly logical, and it is consistent with the principle of conferral to prefer an express over an implied power … But it also has implications for the principle of conferral.’ 68 Opinion 2/15 (n 58) para 143. 69 ibid para 147.
CCP or Internal Market as the Legal Basis for the Conclusion of International Agreements 667 developments analysed above, represent two sides of the same coin: both are an expression of the Court’s tendency, increasingly noticeable after Lisbon, towards ‘EU-only action’ in the conclusion of international agreements.70 V. ADDITIONAL READING Ankersmit, L, ‘The Scope of the Common Commercial Policy after Lisbon: The Daiichi Sankyo and Conditional Access Services Grand Chamber Judgments’ (2014) 41 Legal Issues of Economic Integration 19. Cremona, M, ‘The Principle of Conferral and Express and Implied External Competence’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 38. Govaere, I, ‘To Give or To Grab: The Principle of Full, Crippled and Split Conferral of Powers Post-Lisbon’ in M Cremona (ed), Structural Principles in EU External Relations Law (Oxford, Hart Publishing, 2018) 75. Kübek, G, ‘The European Union’s External Trade and Investment Policy Post-Lisbon: Competence, Procedure and Scope of Action’ in M Andenas, L Pantaleo, M Happold and C Contartese (eds), EU External Action in International Economic Law – Recent Trends and Developments (Heidelberg, Springer, 2020) 93. Larik, J, ‘No Mixed Feelings: The Post-Lisbon Common Commercial Policy in Daiichi Sankyo and Commission v Council (Conditional Access Convention)’ (2015) 52 CML Rev 779. Neframi, E, ‘Vertical Division of Competences and the Objectives of the European Union’s External Action’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law – Constitutional Challenges (Oxford, Hart Publishing, 2016) 89.
70 Chamon (n 56) 117: ‘In the Court’s post-Lisbon case law, facultative mixity is therefore limited at the level of the existence of EU competences. The Court’s development of its ERTA jurisprudence is a clear case in point but the same may be observed in relation to the Court’s post-Lisbon conception of the EU’s a priori exclusive competence in relation the EU’s CCP’.
668
62 The Choice of Legal Basis for Coordination of Social Security Systems with Associated Third Countries: UK v Council (EEC–Turkey) KATARINA HYLTÉN-CAVALLIUS Case C-81/13, United Kingdom of Great Britain and Northern Ireland v Council of the European Union, ECLI:EU:C: 2014:2449 (EEC–Turkey), delivered 18 December 2014. KEYWORDS Actions for annulment – Coordination of social security systems – EEC–Turkey Association Agreement – Council decision on the position to be taken on behalf of the European Union within the Association Council – Choice of legal basis – Article 48 TFEU – Article 79(2)(b) TFEU – Article 217 TFEU – Protocol No 21.
I. INTRODUCTION
T
he action for annulment in Case C-81/13, UK v Council (EEC–Turkey) was the third and final instalment in a series of cases where the UK, supported by Ireland, sought to challenge the substantive legal basis chosen by the Council for adopting decisions on social security coordination between the EU and associated third countries.1 The core issue in all three cases was whether such decisions belonged within the internal market sphere of Union competence or within the common immigration policy sphere, which, in turn, would have activated the UK’s and Ireland’s special opt-in solutions under Protocol No 21. In this third and final judgment, the Court, sitting in Grand Chamber, ‘sealed the deal’ regarding the appropriateness of relying on an internal market competence as the legal basis for an external relations law measure, when the context of a particular Association Agreement brings the matter closer to the functioning of the internal market, rather than to the common immigration policy.
1 Case C-81/13, United Kingdom v Council, ECLI:EU:C:2014:2449 (EEC–Turkey), preceded by judgments in Case C-431/11, United Kingdom v Council, ECLI:EU:C:2013:589 (EEA). See this volume, ch 65; C-656/11, United Kingdom v Council, ECLI:EU:C:2014:97 (Swiss Confederation).
670 Katarina Hyltén-Cavallius The two similar action for annulment cases preceding the EEC–Turkey case concerned social security coordination measures with, respectively, the European Free Trade Association (EFTA) states of Norway, Iceland and Lichtenstein (the EEA case) and Switzerland (the Swiss case).2 However, the distinct essence of the EEC–Turkey case, and its long-term contribution to the body of EU external relations law, was the Court’s pronounced differentiation between the EU’s relationship to these various associated third countries. This differentiation came from distinguishing the context, and the objective and content that characterise each particular association agreement, as well as the aim and content of the contested Union act.3 The EEA and Swiss cases ended in the conclusion that the internal market competence of Article 48 TFEU was the sufficient and sole legal basis for externalising systems of social security coordination. In the EEC–Turkey case, however, the Court held that the most appropriate substantive legal basis for the contested decision should be a dual legal basis. The Court reasoned that in order to properly safeguard the principle of conferral in EU external relations law, for the purpose of social security coordination with Turkey, the internal legal competence of Article 48 TFEU for social security coordination in the area of freedom of movement for workers should have been applied in conjunction with the general external competence for concluding association agreements under Article 217 TFEU.4 However, the Court’s ultimate finding was that the Council’s omission of Article 217 TFEU as the appropriate joint legal basis for its contested decision was a ‘purely formal defect’ that could not in itself result in an annulment of the contested Union act.5 II. FACTS
On 6 December 2012, the Council adopted Decision 2012/776/EU on the position to be taken on behalf of the European Union within the Association Council set up by the Agreement establishing an association between the European Economic Community and Turkey (the EEC–Turkey Association Agreement), with regard to the adoption of provisions on the coordination of social security systems (the contested decision).6 The measure would repeal and replace provisions concerning social security coordination rules for Turkish workers in the EU, stemming from Decision No 3/80,7 which was connected to the provisions of Regulations No 1401/71 and No 574/72.8 Within EU free movement law, the latter regulation had been repealed and replaced by Regulation 883/2004,9 which motivated a modernisation also of the provisions concerning social security coordination stemming from
2 EEA (n 1); Swiss Confederation (n 1). 3 EEC–Turkey (n 1) paras 38–39. See also the Court’s reasoning on the EEC–Turkey Association Agreement in Case C-221/11, Demirkan, ECLI:EU:C:2013:583. See this volume, ch 54; I Govaere, ‘To Give or to Grab: The Principle of Full, Crippled, and Split Conferral of Powers Post-Lisbon’ in M Cremona (ed), Structural Principles in EU External Relations Law (Oxford, Hart Publishing, 2018) 89–90. 4 EEC–Turkey (n 1) para 63. 5 ibid para 67. 6 [2012] OJ L340/19. 7 Decision No 3/80 of the Association Council of 19 September 1980 on the application of the social security schemes of the Member States of the European Communities to Turkish workers and members of their families, OJ: JOC_1983_110_R_0060_01. 8 Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, [1971] OJ L149/2. 9 Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (Text with relevance for the EEA and for Switzerland), [2004] OJ L166/1.
The Choice of Legal Basis for Coordination of Social Security Systems 671 Decision 3/80. A novelty in the contested decision was its reciprocal character of also coordinating social rights for Union citizens and their family members in Turkey. The rationale for updating and modernising on the basis of Regulation 883/2004 was similar to the already contested decisions adopted by the Council on systems for social security coordination with, respectively, the EFTA states and Switzerland. However, an important distinction from the EEA and Swiss cases was that the contested decision at issue in the EEC– Turkey case did not cover non-economically active persons. This distinction in itself, from the outset, highlighted the more purely economic association between Turkey and the EU, as compared to the objective to extend the internal market acquis to the EFTA states in the EEA Agreement. As with the two decisions regarding, respectively, the EFTA states and Switzerland, the UK challenged the validity of the decision concerning Turkey with the argument that it had been adopted on an incorrect legal basis. While the Council had relied upon Article 48 TFEU as the substantive legal basis for adopting the contested decision and had followed the procedures of Article 218(9) TFEU, as indicated by the first sentence of Article 218(8) TFEU, the UK, supported by Ireland, argued that the decision should have been adopted based on the substantive legal basis of Article 79(2)(b) TFEU. The latter provision refers to the Union’s obligation to, within the common immigration policy area, adopt measures for ‘the definition of the rights of third country nationals residing legally in a Member State, including the conditions governing freedom of movement and of residence’. In turn, the latter Treaty provision would have allowed for the applicability of Protocol No 21, and the UK’s and Ireland’s opt-outs in respect of the Union’s common immigration policy measures within the area of freedom, security and justice.10 The choice of Article 48 TFEU, which is the internal market provision for adopting measures in the field of social security, as necessary, to facilitate freedom of movement for workers, deprived the UK and Ireland of the possibility to not be bound by the contested decision, as then they had no opt-out. The parties agreed that the contested decision had a procedurally sound legal basis in Article 218(9) TFEU, read together with Article 218(8) TFEU. It was not challenged that, according to this provision, it had been adopted by the Association Council, a body set up by the EEC–Turkey Association Agreement of 1963 for taking legally effective decisions to attain the agreement’s objectives. To not involve the European Parliament, and to act by the qualified majority rule, was therefore not challenged. Similarly, all parties agreed that an additional, substantive legal basis was required for the validity of the contested decision. As an additional line of argumentation, the UK put forward that Article 217 TFEU (formerly Article 238 EEC), the general provision for the Union’s competence to conclude association agreements and the basis for the original EEC–Turkey Association Agreement, would not be an appropriate legal basis for the contested decision. The UK motivated this stance by saying that a distinction must be drawn … between the decision to conclude all the measures constituting an association agreement, which must be taken on the basis of that article, and decisions adopted under such an agreement, which must be taken on the legal bases appropriate to their subject-matter (emphasis added).11
This view, on the necessity of having a more specific, policy-related legal basis for the contested decision, was in principle shared by the Council, which also rejected Article 217 TFEU as the most appropriate legal basis, but maintained that Article 48 TFEU was in that regard a 10 Protocol (No 21) on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice, [2016] OJ C202/295. See Title 3, Chapter V TFEU. 11 EEC–Turkey (n 1) para 26.
672 Katarina Hyltén-Cavallius suitable, sector-specific legal basis.12 The motivation being that, even though the level and scope of the contested decision’s provisions regarding social rights of Turkish workers were not as extensive as those that apply to EU nationals exercising freedom of movement within the EU, the objective of the contested decision was nevertheless following the spirit of the EEC–Turkey Association Agreement itself: ‘to secure freedom of movement of workers between the contracting parties by progressive stages’.13 The Council had good reason for its line of argumentation, as the Court had recently ruled in the above-mentioned EEA and Swiss cases that Article 48 TFEU was the correct, and sufficient, sole legal basis for adopting the decisions on systems of social security coordination within the context of the EEA and Swiss Association Agreements. The Court had seen that, through the closeness mapped out in their Association Agreements with the EU, the internal market law extended to include the EFTA states and Switzerland, and in that respect put them on an ‘equal footing’ with EU Member States for the purpose of free movement of persons.14 Characteristic of both the EEA Agreement and the bilateral agreement structure of the EU–Swiss relationship is the objective of creating an ‘alternative’ to EU membership for states who do not wish to join, but wish to take a virtually equal part in all or parts of the internal market. However, this latter objective, as the Court would highlight in its ensuing judgment in the case at issue, does not run through the EEC–Turkey Association Agreement, with its more distinct ‘pre-accession’ features.15 III. THE COURT
In the case at hand, the Court made a clear distinction between the nature of the EU’s relationship with the EEA states and Switzerland and that with Turkey. This distinction is what determined the conclusion of needing a dual substantive legal basis for the contested decision concerning Turkey – but not necessarily one that the UK had claimed. One was the internal competence legal basis that designated the sector-specific internal market dimension to social security coordination within the area of free movement of workers. The other was the external competence legal basis, which respected the principle of conferral for such free movementbased social security coordination with a third state to which the internal market acquis is not generally extended. With regard to the UK’s seeking of an alternative legal basis, the Court largely adopted the reasoning of Advocate General (AG) Kokott in her Opinion to the case on why Article 79 TFEU could not be the appropriate substantive legal basis for the contested decision.16 While Article 79(2)(b) TFEU refers to measures aiming to define the rights of third country nationals residing legally in a Member State, the contested decision did not only seek to regulate the social rights of Turkish workers and their families in the EU, but had the additional content of reciprocally regulating certain social rights for Union citizens and their families residing in Turkey.17 12 ibid paras 29–34. 13 ibid para 30. 14 EEA (n 1) paras 50–58; Swiss Confederation (n 1) paras 59–63. 15 EEC–Turkey (n 1) paras 57–59. On the ‘typology’ of different Association Agreements, see P Van Elsuwege and M Chamon, ‘The Meaning of “Association” under EU Law: A Study on the Law and Practice of EU Association Agreements’ 22–23. 16 Opinion of Advocate General (AG) Kokott in Case C-81/13, United Kingdom v Council, ECLI:EU:C:2014:2114 (EEC–Turkey), paras 43–66. 17 EEC–Turkey (n 1) para 44.
The Choice of Legal Basis for Coordination of Social Security Systems 673 As opposed to what the Court concluded, AG Kokott had, however, reasoned that Article 48 TFEU was equally inappropriate as a substantive legal basis for the contested decision, pointing out that this provision serves only as a basis for adoption of measures within the EU, and may concern social security only of Member State nationals, not of third country nationals in the EU.18 Specifically, the AG held that Article 48 TFEU does not grant the EU the competence to create rules for the coordination of social security systems to take territorial effect in a third state.19 She pointed out the difference between the association with Turkey and the special features of EU’s relationship with the EEA states and Switzerland, respectively; the latter agreements aimed to provide for the fullest possible realisation of the free movement of persons between the EU Member States and these especially privileged associated states.20 For this reason, she could reconcile her line of argumentation with the two previous judgments in the EEA and Swiss cases, where the Court had set Article 48 TFEU as the appropriate legal basis for social security coordination with the EFTA states and Switzerland, with her own stand against relying on Article 48 TFEU for the purpose of similar rules in the EU’s relationship to Turkey.21 Instead, the AG maintained, which she had also done in her Opinion in the EEA case, that the most appropriate, and sole, substantive legal basis for the adoption of the contested decision should have been Article 217 TFEU.22 However, she shared the Court’s conclusion that the Council’s incorrect choice of a substantive legal basis did not formally invalidate the decision, as the procedurally correct legal basis was nevertheless Article 218(9) TFEU.23 In the alternative, the AG put forward Article 216(1) TFEU as a possible appropriate substantive legal basis for the contested decision for this provision’s character of codifying the ERTA doctrine of implied powers.24 In its judgment in the EEC–Turkey case, the Court firstly reiterated what it had held in its case law before: that the choice of correct legal basis for a Union measure must rest on ‘objective factors, which are amenable to judicial review, including the aim and content of the measure’.25 It highlighted that the existence of the opt-in solution for two Member States contained in Protocol No 21 for measures the Union adopts to create a common immigration policy could have no bearing in itself on the choice of correct legal basis.26 Next, the Court engaged in a nuanced assessment of the context of the EEC–Turkey Association Agreement, as well as its specific objectives and content, and linked them both to the aims of the contested decision. In respect of Turkey, the Court pointed out that there is no general freedom of movement of persons in place, and the internal market is not extended to include Turkey.27 Instead, there is an aim, in progressive stages, to move towards freedom of movement of workers, in a process guided by Articles 45–47 TFEU.28 From this viewpoint, an explicit external competence was necessary as a basis for the contested decision in a manner that had not been necessary for the EFTA states and Switzerland. In conclusion, the contested decision could not legitimately 18 Opinion of AG Kokott in EEC–Turkey (n 16) paras 66–86. 19 ibid paras 72–73. 20 ibid paras 74–75. 21 ibid para 82. 22 ibid paras 87–113. See also Opinion of AG Kokott in Case C-431/11, United Kingdom v Council, ECLI:EU:C:2013:187 (EEA). See this volume, ch 65. 23 Opinion of AG Kokott in EEC–Turkey (n 16) paras 97–98. 24 ibid paras 101–04. See this volume, ch 1. 25 EEC–Turkey (n 1) para 35. See also Case C-130/10, Parliament v Council, ECLI:EU:C:2010:472 (Smart Sanctions), para 42. 26 EEC–Turkey (n 1) para 37. 27 ibid para 50. 28 ibid para 48. See also Art 12 of the EEC–Turkey Association Agreement.
674 Katarina Hyltén-Cavallius be adopted solely based on Article 48 TFEU, but should have been taken in conjunction with a substantive basis in the Treaty provision for the underlying Association Agreement as such: Article 217 TFEU. Almost in passing, although this could have been the tipping point for the action for annulment, the Court pointed out that since the aim of the contested decision was solely to ensure the implementation of the objectives of an association agreement, and not the conclusion of such an agreement, it was in accordance with the simplified procedure and qualified majority rule, which is indicated by the first sentence of Article 218(8) TFEU and applies to the procedure of Article 218(9) TFEU, under which the Association Council had adopted it.29 As a result, the omission of Article 217 TFEU as the appropriate, substantive legal basis in conjunction with Article 48 TFEU for adopting the contested decision was a ‘purely formal defect’, which should not result in the contested decision’s annulment.30 With this, the action for annulment by the UK was dismissed. IV. THE IMPORTANCE OF THE CASE
Materially, the Court’s reasoning guides the distinction between measures adopted to define rights for third country nationals residing in the EU when connected to the development of a common immigration policy, which is the premise for Article 79 TFEU, and measures adopted within the context of an Association Agreement with a particular third state aiming to place that state’s nationals on a privileged tier in relation to the internal market.31 For the latter’s purposes, the Court engaged in a detailed assessment, separating the general context for a particular association agreement from its more specific objectives in order to find the most suitable legal basis for adopting measures.32 Interestingly, differentiating between the EU’s relationship with the EEA states and Switzerland and its relationship with Turkey was the grounds for what the UK argued as well, while the latter’s reasoning motivated the use of Article 79(2)(b) TFEU as the appropriate legal basis for the contested decision. A. The Perceived Objective of the EU–Turkey Association Agreement In essence, the Court’s reasoning can be understood as saying: if the particular Association Agreement that underlies a decision relating to the externalisation of parts of free movement law is not to extend the internal market to the third state, the internal legal competence basis (in this case, Article 48 TFEU) must be combined with an additional legal basis for externalising the measure.33 While the EEA and Swiss agreements are far more ‘integration-oriented agreements’, serving to extend part of the EU acquis to these third states’ territories, the main scope of the EEC–Turkey Association Agreement aims to create a customs union for industrial products, keeping it on a more plainly economic level.34 29 EEC–Turkey (n 1) para 66. 30 ibid para 67. 31 On the character of such Association Agreement, see Case 12/86, Demirel, ECLI:EU:C:1987:400, para 9. See this volume, ch 16. 32 EEC–Turkey (n 1) paras 38–63. 33 ibid paras 35, 62–63. 34 See in general M Maresceau, ‘The Role of the EU in International Relations with Special Regard to the Neighbourhood’ in G Bándi, P Darák and K Debisso (eds), Speeches and Presentations from the XXVII FIDE Congress, Congress Proceedings vol 4 (Alphen aan den Rijn, Wolters Kluwer, 2016).
The Choice of Legal Basis for Coordination of Social Security Systems 675 In the EEC–Turkey case, the Court emphasised that both the objective and content of the underlying EEC–Turkey Association Agreement as well as those of the contested decision had to be taken into account.35 In that regard, the context of the contested decision had strong similarities to the context of the contested decisions for social security coordination adopted for the EEA countries and Switzerland. However, the objective of the EEC–Turkey Association Agreement was different from those of the EEA and Swiss agreements, in that it did not contain the aim of extending the internal market to include Turkey as being on an ‘equal footing’ to EU Member States.36 While the EFTA states are to be perceived as ‘insiders’ rather than ‘outsiders’ when it comes to the internal market, and as the Court had already found in its case law that Switzerland should be ‘equated’ to an EU Member State for the purpose of the previous social security coordination Regulation No 1408/71, the EU’s relationship to Turkey could not be said to go as far.37 In a similar fashion, the limits to the EEC–Turkey Association Agreement had already been pronounced by the Court in the case law of Ziebell and Demirkan.38 In Ziebell, it was made clear that the free movement of persons rights of Directive 2004/38 could not be analogously interpreted and applied within the context of the EEC–Turkey Association Agreement because of the lack of a general free movement of persons regime between Turkey and the EU.39 Therefore, as opposed to the spheres of the EEA and Swiss agreements, in relation to Turkey, the principle of conferral in external action measures would not be sufficiently safeguarded if relying solely on Article 48 TFEU.40 This is what necessitated the addition of Article 217 TFEU. Why, then, make the rather surprising choice to have a dual legal basis based on both internal and external competence for a decision that seemed to mostly require the correct external competence?41 Could not Article 48 TFEU, as the AG proposed, have been completely omitted as the combined substantive legal basis, as Article 217 TFEU should in theory be able to cover a wide range of substantive issues?42 B. Externalising Social Security Coordination Association agreements differ from other external policy areas in that they are not tied to any particular part of EU competence areas, but have the potential to include many different sector-specific areas that are relevant to the particular relationship that the agreement seeks to establish with a third state.43 As they can cover a broad range of issues, and may, in fact, encompass ‘all the fields covered by the Treaty’, it can, however, be argued that it is 35 EEC–Turkey (n 1) paras 38–39. 36 ibid para 59. See on this point, Govaere (n 3) 89–90. 37 Swiss Confederation (n 1) para 65. See also the Court’s reference to being equated to an EU Member State in Case C-247/09, Xhymshiti, ECLI:EU:C:2010:698, para 31. See reflections by H Haukeland Fredriksen, ‘A “Special Relationship” Built on a Patchwork – How the CJEU Sees the EEA EFTA States’, www.efta-studies.org/a-specialrelationship. See also Van Elsuwege and Chamon (n 15) 21. 38 Case 371/08, Ziebell, ECLI:EU:C:2011:809, para 62. See also Demirkan (n 3) para 48. See this volume, ch 54. 39 Ziebell (n 38) paras 68–72. 40 Govaere (n 3) 90. On how to safeguard the principle of conferral in EU external relations law, see in general M Cremona, ‘External Competences and the Principle of Conferral’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law: The European Legal Order, vol 1 (Oxford, Oxford University Press, 2018). 41 P Melin, ‘The Search for EU Competence(s) for the Externalization of Social Security Coordination: Where There’s a Will, There’s a Way: Case C-81/13, United Kingdom v Council (Turkish Case), ECLI:EU:C:2014:2449’ (2015) 22 Maastricht Journal of European and Comparative Law 440. 42 Van Elsuwege and Chamon (n 15) 15. 43 Cremona (n 40) 1127.
676 Katarina Hyltén-Cavallius appropriate to specify the particular internal Treaty competence that a given sector-specific act refers to; notably when the adopted measure is a furthering of the original objectives of an association agreement.44 As none of the contested decisions at issue in the three (EEA, Swiss and EEC–Turkey) cases concerned the conclusion of an association agreement, but a sectorspecific furthering, and thereby implementation, of the objectives of such an agreement, it was necessary to base them on a relevant internal EU competence providing the particular policy field of social security of migrant persons in the EU.45 Since the contested decision concerned a specific internal market measure, which was to be externalised to a relationship with a third state, a substantive legal basis for such an internal competence had to be relied upon for an appropriate safeguarding of the principle of conferral. An internal market legal basis ‘may be appropriate where the measure is essentially designed to improve the operation of the internal market, the external dimension serving that internal purpose’.46 In addition, it appears that the ‘implied powers’ situation of Article 216(1) TFEU is not to be preferred as the legal basis for adopting such a Union act of implementing the objectives of an association agreement when a more sector-specific internal competence is relevant, and when that act specifically relates to an association agreement, the explicit external competence of which is in Article 217 TFEU.47 When comparing both the Opinion of AG Kokott and the arguments of the UK and the Council with the Court’s reasoning, it is clearly controversial to apply Article 48 TFEU to an external measure – both with regard to using it as the legal basis for creating social security coordination effects in a third state’s territory and for creating such measures applicable to non-EU nationals.48 It had previously been made clear by the Court that Article 48 TFEU cannot be relied upon to generally regulate the social security rights of third country nationals in the EU, nor of migrants in third states.49 The fact that this provision could serve as the sole necessary legal basis with regard to coordination of social security systems with the EEA countries and Switzerland can therefore only be explained by the very close integrationist links that those particular agreements forge. Because of those links, the EEA states and Switzerland are, for the purpose of social security rights linked to the functioning of the internal market, not perceived as third countries, in that they apply this particular part of the EU’s internal market acquis as if they were Member States.50 Both the EEA Agreement and the EU–Switzerland arrangements have the character of ‘reproducing’ the essence of Articles 45 and 48 TFEU regarding the free movement of workers.51 Being mainly aimed at ensuring the functioning of the internal market, as extended to the EEA and Switzerland, the decisions relating to these countries by necessity had to be based on the relevant internal market legal basis of Article 48 TFEU.52 This was so despite the fact that the structure of the bilateral agreements of the EU with Switzerland lacks the comprehensiveness of the EEA Agreement.53 For this sector-specific purpose of ensuring social rights in the area of free movement of workers, the similarities
44 EEC–Turkey (n 1) paras 47–61. Compare to Demirel (n 31) para 9. 45 See also Cremona (n 40) 1128. 46 ibid 1140. 47 ibid 1130. 48 Opinion of AG Kokott in EEC–Turkey (n 16) paras 67–86; EEC–Turkey (n 1) paras 26 and 32. On this point, see also Melin (n 41) 448. 49 As pointed out in the arguments put forward by the UK in EEC–Turkey (n 1) para 21. 50 N Rennuy and P Van Elsuwege (UGent), ‘Integration without Membership and the Dynamic Development of EU Law: United Kingdom v Council (EEA)’ (2014) 51 CML Rev 935, 945. 51 Melin (n 41) 441. 52 Rennuy and Van Elsuwege (n 50) 946. 53 Van Elsuwege and Chamon (n 15) 29–30.
The Choice of Legal Basis for Coordination of Social Security Systems 677 between the EEA Agreement and that with Switzerland were, however, sufficiently clear to explain why the same, singular, internal market legal basis provided the necessary conferred competence. C. The Method for Choosing the Appropriate Legal Basis The judgment in the EEC–Turkey case affirmed that the correctness of the procedural legal basis for the adoption of a decision is of primary importance for assessing the success of an action for annulment. As, procedurally, the reliance of the first sentence of Article 218(8) TFEU in combination with 218(9) TFEU would have been the same regardless of the Council’s omission or inclusion of Article 217 TFEU as a substantive legal basis for the contested decision together with Article 48 TFEU, the action for annulment had no grounds for success. The Court highlighted that the appropriate substantive legal basis will designate the correct procedure within Article 218 TFEU, and not the other way around.54 The reliance on Article 217 TFEU for externalising social security measures based on an internal market legal basis can, however, be questioned in that the wording of Article 217 TFEU refers to the ‘conclusion’ of an association agreement, and not its ‘implementation’, which, the Court highlighted, is what the contested decision was actually about.55 The character of being an ‘implementation’ measure is, in turn, what decided the correct procedural basis for the decision to be Article 218(9) TFEU, enacted by qualified majority voting under Article 218(8) TFEU.56 For acts like these, adopted within the context of a pre-existing association agreement, there are therefore some concerns that it is too easy to avoid the European Parliament taking a more substantial role, as well as the unanimity rule within the Council, thus furthering an association agreement beyond legitimacy.57 By its reasoning, the Court affirmed that the existence of the opt-in solutions of Protocol No 21 should have no bearing whatsoever on the method for choosing the appropriate legal basis for the adoption of a decision.58 There would be no reason to go for a ‘split conferral’ legal basis for a decision only to allow for the relevant Member States to rely on their opt-outs.59 Thus, only the established method of considering the objectives and content of a decision should guide the choice of legal basis. Article 79(2)(b) TFEU has, however, been used several times in the past to adopt measures for third country nationals’ social security rights in the EU in instances presumably found to have been further removed from the functioning of the internal market compared to the EFTA states, Switzerland and Turkey.60 In 2017, the
54 EEC–Turkey (n 1) para 65. 55 ibid para 66. 56 See also Case C-377/12, Commission v Council, ECLI:EU:C:2014:1903 (Philippines PCA). 57 See in general, W Weiss, ‘Delegation to Treaty Bodies in EU Agreements: Constitutional Constraints and Proposals for Strengthening the European Parliament’ (2018) 14 European Constitutional Law Review 532. 58 EEC–Turkey (n 1) para 37. 59 Govaere (n 3) 87–88. 60 Council Decision 2010/697/EU of 21 October 2010 on the position to be taken by the European Union within the Association Council set up by the Euro-Mediterranean Agreement establishing an association citation the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, with regard to the adoption of provisions on the coordination of social security systems, [2010] OJ L306/1. See also Decision 2010/702/EU of 21 October 2010 on the position to be taken by the European Union within the Stabilisation and Association Council set up by the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Croatia, of the other part, with regard to the adoption of provisions on the coordination of social security systems, [2010] OJ L306/35.
678 Katarina Hyltén-Cavallius UK saw Protocol No 21 activated when the Council chose to adopt three separate decisions, all based on different legal bases, for the purpose of concluding the EU–Ukraine Association Agreement.61 There, the Association Agreement itself was adopted based on Article 217 TFEU, but a separate Council decision, based on Article 79(2)(b)TFEU, was adopted with regard to Ukrainian nationals’ social security rights in the EU. This ‘split conferral’ approach highlights how the objectives and context of the EU–Ukraine relationship has a different characteristic again from both the EEA and Swiss Agreements and the EEC–Turkey Association Agreement. While containing neither an objective of ‘equal footing’ with regard to parts or all of the EU’s internal market law, nor a pre-accession-like relationship, the provisions concerning the rights of Ukrainian nationals in the EU were deemed to be appropriately based on Article 79(2)(b) TFEU, which, in turn, activated the UK and Ireland’s opt-outs.62 This shows that while the context of forging closer ties with neighbouring and third states, and extending certain parts of EU law to them, may be similar across several association agreements, the particular objectives of a given agreement as well as of any Union act adopted for implementing that agreement may motivate quite different choices with regard to the appropriate substantive legal basis. V. ADDITIONAL READING Cremona, M, ‘External Competences and the Principle of Conferral’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law, Volume 1. The European Legal Order (Oxford, Oxford University Press, 2018). Govaere, I, ‘To Give or to Grab: The Principle of Full, Crippled, and Split Conferral of Powers Post-Lisbon’ in M Cremona (ed), Structural Principles in EU External Relations Law (Oxford, Hart Publishing, 2018). Melin, P, ‘The Search for EU Competence(s) for the Externalization of Social Security Coordination: Where There’s a Will, There’s a Way: Case C-81/13, United Kingdom v Council (Turkish Case), ECLI:EU:C:2014:2449’ (2015) 22 Maastricht Journal of European and Comparative Law 440. Thym, D and Zoeteweij-Turhan, M (eds), Rights of Third-Country Nationals under EU Association Agreements: Degrees of Free Movement and Citizenship (Leiden, Brill, 2015).
61 Council Decision 2017/1248 on the conclusion, on the behalf of the European Union, of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part, as regards the provisions relating to the treatment of third country nationals legally employed as workers in the territory of the other party, [2017] OJ L181/4. 62 Van Elsuwege and Chamon (n 15) 16–17.
63 Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget: Elitaliana RICARDO DA SILVA PASSOS Case T-213/12, Elitaliana SpA v Eulex Kosovo, ECLI:EU:T:2013:292, delivered 4 June 2013; Case C-439/13 P, Elitaliana SpA v Eulex Kosovo, ECLI:EU:C:2015:753, delivered 12 November 2015. KEYWORDS Public service contracts – Joint Action 2008/124/CFSP – Call for tenders for helicopter support for the Eulex Mission in Kosovo – Action brought against the decision awarding the contract – Article 24(1), second subparagraph, TEU – Article 275, first paragraph, TFEU – Common foreign and security policy (CFSP) – Jurisdiction of the Court – Article 263, first paragraph, TFEU – Meaning of ‘bodies, offices or agencies of the Union’ – Measures attributable to the European Commission.
I. INTRODUCTION
T
his case arises from an action for annulment brought before the General Court by the Italian undertaking Elitaliana SpA, a company operating in the field of helicopter services, against a decision adopted in the context of a procedure for the award of a public service contract by Eulex Kosovo, a Common Security and Defence Policy (CSDP) mission established under Council Joint Action 2008/124/CFSP of 4 February 2008 as a European Union Rule of Law Mission in Kosovo. As part of that mission, an invitation for tenders was published which concerned a project entitled ‘Helicopter support to the Eulex mission in Kosovo’. Elitaliana participated in the tender process, but was placed second. The Head of Mission of Eulex Kosovo awarded the contract to the tenderer that placed first. Elitaliana brought an action for annulment of the awarding of that contract before the General Court. The action was inadmissible on the ground that Eulex Kosovo did not have the legal capacity to be a defendant. Against this decision of the General Court, Elitaliana lodged an appeal before the Court. Midway through the appeal proceedings, by order, the Court considered it necessary to reopen the oral procedure and invited the parties, as well as the Commission and the Council, to give their views on whether the EU courts had jurisdiction to hear the case, taking into account the provisions concerning the Common Foreign and Security Policy (CFSP) of the EU Treaties. The choice made by the Court, in this particular case, to decide on its own motion on the
680 Ricardo da Silva Passos issue of competence was justified, given the need for clarification on the matter of the Court’s jurisdiction concerning CFSP, and that constitutes the large merit of the judgment under consideration. II. FACTS
On 4 February 2008, the Council of the European Union adopted Joint Action 2008/124/ CFSP on the European Union Rule of Law Mission in Kosovo, and established Eulex Kosovo.1 According to Article 2 (first paragraph), Eulex Kosovo was and continues to assist the Kosovo institutions, judicial authorities and law enforcement agencies in their progress towards sustainability and accountability, and in further developing and strengthening an independent multi-ethnic justice system and multi-ethnic police and customs services, ensuring that these institutions be free from political interference, as well as assisting in their adhering to internationally recognised standards and European best practices. Article 6 sets down the structure of Eulex Kosovo. Paragraph 1 provides that it is a unified CSDP mission across Kosovo. According to paragraph 3, Eulex Kosovo comprises the Head of Mission and staff, together with police, justice and customs components. Pursuant to Article 7(1) and (2), the Civilian Planning and Conduct Capability Director is the Civilian Operation Commander for Eulex Kosovo, who, under the political control and strategic direction of the Political and Security Committee (PSC) and the overall authority of the High Representative of the Union for Foreign Affairs and Security Policy (HRVP), exercises command and control of Eulex Kosovo at the strategic level. Article 11 sets out the chain of command of Eulex Kosovo. According to paragraph 2, the PSC exercises political control and strategic direction of Eulex Kosovo, under the responsibility of the Council and the HRVP. Paragraph 5 provides that the Head of Mission shall exercise command and control of Eulex Kosovo at theatre level and is directly responsible to the Civilian Operation Commander. According to Article 12(1), the PSC is to exercise, under the responsibility of the Council, political control and strategic direction of the mission. Article 16(2) stipulated that all expenditure be managed in accordance with the Community rules and procedures applicable to the general budget of the Union. The Head of Mission was to be responsible for the implementation of Eulex Kosovo budget and, for that purpose, to sign a contract with the Commission, according to Article 8(5). On 18 October 2011, by a restricted procedure, an invitation for tenders for a public service contract concerning a project entitled ‘Helicopter Support to the Eulex mission in Kosovo’ was published in the Official Journal of the European Union (OJ 2011/S 200-324817) under the reference EuropeAid/131516/D/SER/XK. That invitation included the following notice: ‘Contracting authority: the Head of Eulex Kosovo, Pristina, Kosovo’. By letter of 23 December 2011, the Head of Eulex Kosovo requested Elitaliana to participate in the restricted tender procedure. On 29 March 2012, the Director of Administration and Support Services of Eulex Kosovo notified Elitaliana that its bid had been placed second. By letter of 2 April 2012, Elitaliana requested Eulex Kosovo for access to certain documents submitted by the tenderer whose bid had been placed first. By letter of 17 April 2012, the Head of Eulex Kosovo refused to grant access to those documents. On 24 April 2012, the Head of Eulex Kosovo awarded the contract at issue to the tenderer whose bid had been placed first.
1 [2008]
OJ L42/92.
Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget 681 III. THE EU COURTS
A. The General Court On 23 May 2012, Elitaliana brought an action before the General Court against Eulex Kosovo seeking the annulment of the measures taken by the latter, namely the decisions rejecting Elitaliana’s bid and awarding the contract to another tender, and also the refusal to grant access to the documents requested. It also requested that the defendant pay compensation in respect of the loss suffered resulting from those measures. During the proceedings before the General Court, Eulex Kosovo raised an objection of inadmissibility on the basis, first, that Eulex Kosovo did not have legal capacity to be a defendant and, second, that the General Court had no jurisdiction in respect of measures relating to the CFSP. By order of 4 June 2013, the General Court dismissed the action as inadmissible.2 It considered that Eulex Kosovo constituted a mission, that is to say, a simple action limited for a period of time, and a mission cannot be considered a body, office or agency of the Union within the meaning of Article 263 TFEU, first paragraph. The General Court concluded that Eulex Kosovo therefore did not have legal personality, and that there was no provision that it can be a party to proceedings before the EU courts. The General Court accordingly concluded that the action was inadmissible ‘without it being necessary to rule on the alleged lack of jurisdiction of the General Court concerning acts adopted on the basis of the provisions of the [TFEU] relating to the CFSP’.3 B. Opinion of the Advocate General Elitaliana put forward three pleas in law, appealing the decision of the General Court. Firstly, it pleaded that the General Court erred in not recognising Eulex Kosovo as a body, office or agency within the meaning of Article 263 TFEU, first paragraph; secondly, the General Court erred in equating Eulex Kosovo with a delegation; and thirdly, it erred in holding that there was no excusable error. On 4 December 2014, Advocate General (AG) Jääskinen delivered his first Opinion in the appeal, in which he agreed in substance with the judgment of the General Court, and suggested that the Court should reject the three pleas in law. Yet, the Court on 10 February 2015 ordered the reopening of the oral procedure to allow the parties to give their views on the question of [w]hether the General Court of the European Union and the Court of Justice of the European Union have jurisdiction to hear this case, taking into consideration the provisions relating to the [CFSP] which are set out in Section 1 of Chapter 2 of Title V TEU and those in Article 275 TFEU.
In his second Opinion, delivered on 21 May 2015, AG Jääskinen stated at the outset that the Court remained the primary guardian as regards the delimitation of EU powers. In that regard, he recalled the scope of the provisions of the Treaty of Lisbon in the field of CFSP, namely Article 24 TEU, Article 40 TEU and Article 275 TFEU. He also noted the importance of the constitutional principles to which the EU institutions must adhere when they act in the field of
2 Case 3 ibid
T-213/12, Elitaliana SpA v Eulex Kosovo, ECLI:EU:T:2013:292. para 45.
682 Ricardo da Silva Passos external action, namely the principle of sincere cooperation contained in Article 4(3) TEU, the observance of which must be monitored by the Court. Concerning the facts of the case, he focused on the budgetary rules applicable to the CFSP as a starting point for establishing the jurisdiction of the Court. He recalled that already at the Treaty of Maastricht a distinction had been made between administrative and operating expenditure under the second pillar, with administrative expenditure always being charged to the Union budget. Under the Treaty of Lisbon, the first subparagraph of Article 41(2) TEU read that operating expenditure to which the implementation of (the) Chapter (concerning the specific provisions on the CFSP) gives rise … be charged to the Union budget, except for such expenditure arising from operations having military or defence implications and cases where the Council acting unanimously decides otherwise.
Against this background, the AG noted that Article 16(2) of Joint Action 2008/124 stipulates that all of Eulex Kosovo’s expenditure is to be managed in accordance with the Union rules and procedures applicable to the general budget of the EU. He added the factor forming the basis of the Court’s jurisdiction is, therefore, the commitment of funds from the EU budget and the adoption of decisions whose purpose is to ensure that it is implemented in fulfilment of the functions carried out by entities established in accordance with acts falling within the CFSP. That is without prejudice to the provisions of the last sentence of the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU, according to which the Court is not, in principle, to have jurisdiction with respect to the provisions relating to the CFSP or with respect to acts adopted on the basis of those provisions.4
Concerning the implementation of expenditure under the CFSP, the AG noted that the Financial Regulation 1605/2002 applied to the facts of the case. Under Article 54 of that Regulation, the Commission may, when implementing the budget, delegate budget implementation tasks to persons entrusted with the implementation of specific actions pursuant to Title V of the TEU concerning the CFSP and identified in the relevant basic act within the meaning of Article 49 of the Financial Regulation. These basic acts include Joint Actions within the meaning of Article 14 TEU, and Joint Action 2008/124 establishing Eulex Kosovo was adopted under that provision. Finally, AG Jääskinen emphasised that the contested decision consisted of a letter in which the Head of Mission of Eulex Kosovo acted within the framework of the Commission’s financial competences, and that this action does not come under the CFSP. Given the nature of this act, the applicable provisions of the Financial Regulation 1605/2002 were those related to procurement, which also applied to external action financed from the EU budget. AG Jääskinen concluded that because the public contract in question was of a civilian nature, the Court’s jurisdiction was to be undisputed. As for the order under appeal, he considered that the order of examination chosen by the General Court was fully justified in the light of the principle of procedural economy.5
4 See Opinion of AG Jääskinen, Case C-439/13 P, Elitaliana SpA v Eulex Kosovo, ECLI:EU:C:2015:341, 21 May 2015 – Second of two Opinions, para 41. 5 Para 65. Reference is made in this context to the Boehringer Case (C-23/00 P, ECLI:EU:C:2001:501), in which the Court accepted the General Court’s practice of refraining from assessing the admissibility of an action, when it intends to dismiss the case on the merits. Indeed, this practice is used on a regular basis by the General Court, except when the issues raised on the admissibility are of a particular legal interest.
Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget 683 C. Judgment of the Court The Court was called on to consider the question whether Eulex Kosovo was legally responsible for the decisions taken by the Head of Mission of Eulex Kosovo and, more specifically, whether an action for annulment pursuant to Article 263 TFEU could be brought. The appeal also raised arguments concerning the infringement of the fundamental right to an effective remedy, and the existence of an excusable error on Elitaliana’s part in relation to the identification of the defendant in the proceedings before the General Court. The Court decided at the outset to consider, on its own motion, the question of the jurisdiction of the EU courts over the case in the light of the CFSP provisions of the EU Treaties. The General Court rejected the action solely on the ground that Eulex Kosovo did not have capacity to be a defendant. By contrast, the Court took the view that this issue deserved to be explicitly decided. The Court recalled that, in accordance with Article 24(1) TEU, second subparagraph, read in conjunction with Article 275 TFEU, first paragraph, it does not, in principle, have jurisdiction with respect to the provisions relating to the CFSP, or with respect to acts adopted on the basis of those provisions. However, Article 19 TEU is a general rule, which conferred on the Court jurisdiction to ensure that the law is observed in the interpretation and application of the EU Treaties. Therefore, the final sentence of the second subparagraph of Article 24(1) TEU must be interpreted narrowly. The Court underlined that, under the first subparagraph of Article 41(2) TEU, operating expenditure to which the implementation of the Chapter (concerning the specific provisions on the CFSP) gives rise shall … be charged to the Union budget, except for such expenditure arising from operations having military or defence implications and cases where the Council acting unanimously decides otherwise.
That provision was reiterated in substance in Article 4(2)(a) of the Financial Regulation. The Court then referred to Article 16(2) of the Joint Action 2008/124, according to which ‘all expenditure’ of Eulex Kosovo ‘shall be managed in accordance with the rules and procedures applicable to the general budget of the European Union’. The Court noted that it was undisputed that Eulex Kosovo was civilian in nature, and that the expenditure relating to the helicoptersupport service for Eulex Kosovo was to be allocated to the Union budget. The measures at issue, whose annulment was sought on the basis of the rules of EU public procurement law, related to the award of a public contract which gave rise to expenditure to be charged to the EU budget. Consequently, the contract in question was subject to the provisions of the Financial Regulation. Taking into account the specific circumstances of the case, the Court underlined that the scope of the limitation, by way of derogation, on the Court’s jurisdiction, which is provided for in the final sentence of the second subparagraph of Article 24(1) TEU and in Article 275 TFEU, cannot be considered to be so extensive as to exclude the Court’s jurisdiction to interpret and apply the provisions of the Financial Regulation with regard to public procurement.
Consequently, the Court concluded that the General Court and the Court had jurisdiction to hear the case. IV. THE IMPORTANCE OF THE CASE
This case presented to the Court was an opportunity to bring light on the delimitation of the Court’s jurisdiction to hear cases related to CFSP acts. It is worth noting that the Court
684 Ricardo da Silva Passos could have opted not to tackle this issue in order to dismiss the appeal. The fact that the Court reopened, on its own motion, the oral procedure exclusively to consider this issue with the parties demonstrated the importance the Court gave, and continues to give, to the interpretation of the provisions of the EU Treaties that exclude its jurisdiction.6 A. Jurisdiction of the Court in the CFSP Post-Lisbon The Treaty of Lisbon fostered the need for unity in the sphere of external action of the Union. This quest for unity is shown by the fact that there is an overall set of objectives for the Union’s external action, such as in Article 3(5) TEU, as well as greater emphasis on ensuring consistency between the different areas of this external action, as contained in Article 21(3) TEU.7 The CFSP is, therefore, carried out pursuant to a single legal framework, and on the basis of principles and objectives which it shares with other strands of the EU’s external activities.8 Yet, the Treaty of Lisbon maintained some specific provisions on the CFSP in Chapter 2 of Title V of the TEU. One of them is Article 24 TEU, with the last sentence of its second subparagraph (as well as Article 275 TFEU). It is true that a literal interpretation of these provisions seems far-reaching as, ‘at first sight’,9 they simply foresee the exclusion of the jurisdiction of the Court in CFSP matters, unless one of the two exceptions exists. There was therefore a clear need for providing guidance as to the proper interpretation of these provisions, in the light of concrete situations.10 At the time of the Elitaliana case, the Court examined the CFSP international agreement concluded by the EU with Mauritius concerning the conditions of transfer of suspected pirates and arrested by EU staff in the context of the Union’s Operation Atalanta off the coast of Somalia. In that case, Mauritius, the Court emphasised that the above-mentioned provisions introduce a derogation from the rule of the general jurisdiction, which Article 19 TEU conferred on the Court, and they must therefore be interpreted narrowly.11 The Court justified its assertion of jurisdiction because, even though the substantive legal basis of the Council decision purporting to the conclusion of the international agreement was a CFSP provision – Article 37 TEU – the procedural legal basis was Article 218(5) TFEU and Article 218(6) TFEU concerning the procedure for the signing and conclusion of international agreements.12 In this regard, the Court emphasised that, following the entry into force of the Treaty of Lisbon,
6 A comparable situation occurred with the H v Council and Others case, in which the General Court dismissed the action as inadmissible for lack of jurisdiction to hear the case, Case T-272/10, H v Council and others, ECLI:EU:T:2014:702. By contrast, on appeal, the Court stated that it had jurisdiction to review acts of staff management relating to staff members seconded by the Member States working for the European Union Police Mission (EUPM) in Bosnia and Herzegovina, which was established by a CFSP act (Case C-455/14 P, H v Council and Others, ECLI:EU:C:2016:569. See this volume, ch 76). 7 P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2019) 166. 8 P Koutrakos, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018) 67 International and Comparative Law Quarterly 1, 3. 9 Opinion of Advocate General (AG) Wathelet, Case C-72/15, Rosneft Oil Company OJSC v Her Majesty’s Treasury, ECLI:EU:C:2016:381, para 39. See this volume, ch 81. 10 For a very complete analysis and study of the evolution of the jurisdiction of the Court in CFSP matters after the Treaty of Lisbon, see G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 163–222; see also C Eckes, EU Powers under External Pressure: How the EU’s External Actions Alter Its Internal Structures (Oxford, Oxford University Press, 2019). 11 Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025 (Mauritius), para 70; see also Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66. 12 Mauritius (n 11) para 71.
Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget 685 Article 218 TFEU lay down a single procedure of general application concerning international agreements to be concluded by the EU in all areas, including the CFSP.13 Thus, because the Court has jurisdiction to interpret Article 218 TFEU, which does not fall within the CFSP, it concluded that the scope of the limitation, on the Court’s jurisdiction, cannot go so far as to preclude the Court from having jurisdiction to interpret that provision, even though it lays down the procedure on the basis of which an act falling within the CFSP had been adopted. The Court transposed this Mauritius approach to the Elitaliana case. After recalling the derogatory nature of the provisions excluding the Court’s jurisdiction, the Court decided it had jurisdiction to hear an action for annulment brought against a decision taken by a CFSP civilian mission on the award of a public contract, giving rise to expenditure charged to the EU budget, because the contract was governed by the EU Financial Regulation, which is a non-CFSP act. In fact, there was a crucial link between the CFSP context within which the dispute arose and the jurisdiction of the Court, namely, the applicability of the Union’s own rules governing its budget. This link was expressly laid down in primary law in Article 41(2) TEU on operating expenditure of EU missions, the applicable CFSP measure (Joint Action 2008/124) and the EU Financial Regulation – all of which provided a firm foundation for the non-applicability of the exclusion of the Court’s jurisdiction in the CFSP.14 B. Genuine CFSP Content (or Not) The fact that an act is formally based on CFSP provisions, or adopted in that context, is not enough to trigger the jurisdictional derogation. Rather, according to AG Bobek in the subsequent case in SatCen v KF,15 the act must also have genuine CFSP content. In other words, in order for a CFSP act to benefit from the immunity from review afforded by the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU, not only must its legal basis lie in Articles 23–46 TEU, but its substantive content must also fall within the sphere of CFSP implementation.16 In the case at hand, Elitaliana, the Court did not need to be more explicit about the question whether the acts in question had a ‘genuine CFSP content’ because they were actually governed by a non-CFSP legal basis, that is to say, the Financial Regulation. However, it can be implied that the Court recognised the existence, under these circumstances, of an act with such a content. This raises the question of the possibility of defining or delimitating such acts, which will not be objects of judicial review by the Court. This exercise is complex because the provisions of the EU Treaties do not contain any sort of indication in this respect, and this is possibly on purpose. For that reason, AG Wahl in the H v Council and Others case took the view that neither a literal nor a systematic reading of the relevant provisions of the EU Treaties support arguments that would suggest distinguishing between different categories of CFSP acts, depending on their nature and content.17 Yet, the approach developed in his Opinion was not eventually followed by the Court, sitting in Grand Chamber. 13 ibid para 52. 14 Koutrakos (n 8) 6. 15 Opinion of AG Bobek, Case C-14/19 P, European Union Satellite Centre v KF, ECLI:EU:C:2020:220, para 79. 16 Opinion of AG Wathelet in Rosneft (n 9) para 46. See this volume, ch 81. 17 Opinion of AG Wahl, Case C-455/14 P, H v Council and Others, ECLI:EU:C:2016:212, para 57. See this volume, ch 76. AG Wahl argued that the Court may not interpret the rules set out in the EU Treaties to widen its jurisdiction beyond the letter of those rules or to create new remedies not provided therein (para 49).
686 Ricardo da Silva Passos AG Wathelet believed that the reason for the delimitation of the Court’s jurisdiction in CFSP matters brought about by the ‘carve-out’ provision is that CFSP acts are, in principle, solely intended to ‘translate decisions of a purely political nature connected with implementation of the CFSP, in relation to which it is difficult to reconcile judicial review with separation of powers’.18 In this regard, AG Bobek put forward the following test: [C]ould the challenged act, which is formally based on a CFSP provision, be adopted in another, nonCFSP context? If so, would its content and the considerations leading to its adoption be similar, or even the same, if adopted in a non-CFSP context? If the answer is affirmative, it is likely that the act does not have genuine CFSP content.19
It is true that when the challenged acts, despite the fact that they are adopted in the context of the CFSP, are purely administrative and relate to the normal functioning of the EU institutions, organs or agencies, they cannot be excluded from judicial review by the EU courts. In a more recent case, the General Court in KF v SatCen emphasised that the acts in dispute were acts of staff management, which, in the light of their grounds and objectives, and the context in which they were adopted, were not intended to support the conduct, definition or implementation of the CFSP, or, more specifically, to fulfil the missions of EU agencies that were established on a CFSP legal basis.20 On appeal in SatCen v KF, the Court upheld the judgment of the General Court, and confirmed that the EU courts had jurisdiction to hear the case.21 The situation is surely different when the acts in dispute may have political or strategic connotations, requiring a proper scrutiny of the question whether their substantive content falls within the sphere of CFSP. If these acts inherently result from decisions implementing the CFSP and are purely of a political nature, judicial review by the EU courts is, in principle, excluded. In this context, the Court has been prudent and has abstained from providing any sort of definition of what a CFSP act of this nature might be. Of late, a number of cases have proceeded to the EU courts on the basis of the arbitration clause contained within Article 272 TFEU. These cases, in particular, have raised questions about the employment of individuals working in CSDP missions.22 C. A Political Question Doctrine? The Commission triggered a discussion, in particular in the framework of Opinion 2/13 on the accession of the Union to the European Convention of Human Rights23 and in the aforementioned Rosneft case, arguing that the Court’s jurisdiction is excluded only with regard to CFSP acts, which are an expression of sovereign policy (actes de gouvernement). This argument is derived from the case law of the French Conseil d’État and exists in the legal order of many Member States, as well as in the USA (the political question doctrine).24 Irrespective of the merit in the Commission’s argument,25 the Court did not engage with this argumentation in 18 ibid para 52. 19 ibid para 82. 20 Case T-286/15, KF v European Union Satellite Centre, ECLI:EU:T:2018:718, para 91. 21 Case C-14/19, European Union Satellite Centre v KF, ECLI:EU:C:2020:492. 22 See G Butler, ‘The EU’s Contractual Relations and the Arbitration Clause: Disputes at the Court of Justice of the European Union’ (2021) 46 EL Rev 345. 23 See this volume, ch 70. 24 On ‘political questions’, where judicial review may not take place in absence of accessible legal criteria, see G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 45 Legal Issues of Economic Integration 329. 25 P Van Elsuwege, ‘Upholding the rule of law in the Common Foreign and Security Policy: H v Council’ (2017) 54 CML Rev 854.
Jurisdiction of the EU Courts in the CFSP when Linked to the EU Budget 687 the cases at hand, and rightly so. Indeed, in such a complex issue, it does not seem appropriate or necessary for the EU courts to provide a definition of CFSP acts, which, by their nature, are non-justiciable. The EU courts, following their ordinary approach, come to such a conclusion through a case-by-case assessment, which will be ‘heavily context-dependent’.26 This constitutes a challenge that will be taken up by the EU courts in future cases. Another challenge is how to reconcile a possible exclusion of the judicial review in the CFSP, with the principle enshrined in Article 2 TEU of a Union based upon the rule of law, and the right to an effective remedy as guaranteed by Article 47 of the Charter of Fundamental Rights. Indeed, the Court has constantly held that, as is apparent from both Article 2 TEU and Article 21 TEU, the Union is founded on the rule of law.27 The very existence of effective judicial review designed to ensure compliance with provisions of EU law is inherent in the existence of the rule of law.28 The provisions of the EU Treaties regarding the CFSP cannot be interpreted in isolation from the broader objectives of the EU. Yet, the question remains about how to provide an answer about the precise borderline between the right of effective judicial review, on the one hand, and the jurisdictional carve-out in CFSP matters, on the other hand.29 In the case at hand, Elitaliana, it should be recalled that the Court must monitor the observance of the constitutional principles by the institutions to which they must adhere when they act in the field of the CFSP.30 According to Van Elsuwege, ‘the European Union Courts will in the future be unable to avoid addressing the issue of the inadequacy of the protection of individuals’ rights in the context of external action’. The EU courts have addressed this issue in the above-mentioned judgments in Elitaliana, H v Council and Others, KF v SatCen and SatCen v KF, but they will surely be called upon to address this issue again in the future. V. ADDITIONAL READING Bosse-Platière, I, ‘Action extérieure de l’Union européenne – Après l’arrêt Elitaliana et avant l’arrêt Rosneft, la Cour restreint les limites de son incompétence en matière de PESC’ [2017] Revue Trimestrielle de Droit Europeen 123. Bosse-Platière, I, ‘Le juge de l’Union, artisan de la cohérence du système de contrôle juridictionnel au sein de l’Union européenne, y compris en matière de PESC’ [2017] Revue Trimestrielle de Droit Europeen 555. Butler, G, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 163–222. Eckes, C, EU Powers Under External Pressure: How the EU’s External Actions Alter Its Internal Structures (Oxford, Oxford University Press, 2019). Hamonic, A, ‘L’action extérieure de l’Union européenne – Précisions sur le statut contentieux des opérations de gestion de crise de l’Union’ [2016] Revue Trimestrielle de Droit Europeen 129. Koutrakos, P, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018) 67 International and Comparative Law Quarterly 1. Van Elsuwege, P, ‘Upholding the Rule of Law in the Common Foreign and Security Policy: H v Council’ (2017) 54 CML Rev 1.
26 Opinion
of AG Bobek in European Union Satellite Centre (n 15) para 80. 2/13, ECLI: EU:C:2014:2454, paras 168 and 169. 28 Case C-362/14, Schrems, ECLI:EU:C:2015:650, para 95 and the case law cited. 29 Van Elsuwege (n 25) 858. 30 ibid para 28. 27 Opinion
688
64 Intellectual Property and the Post-Lisbon Common Commercial Policy: Daiichi Sankyo JORIS LARIK Case C-414/11, Daiichi Sankyo Co Ltd and Sanofi-Aventis Deutschland GmbH v DEMO Anonimos Viomikhaniki kai Emporiki Etairia Farmakon, ECLI:EU:C:2013:520, delivered 18 July 2013. KEYWORDS Common Commercial Policy – Intellectual property rights – Treaty of Lisbon – Mixed agreements – TRIPs Agreement – World Trade Organization.
I. INTRODUCTION
T
he judgment in Daiichi Sankyo concerns the relationship between intellectual property rights and international trade.1 It is significant because of its ramifications for the scope of the EU’s Common Commercial Policy (CCP), which is an exclusive EU competence (Article 3(1)(e) TFEU). In particular, the judgment matters for the extent to which the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade Organization (WTO) had become part of the CCP at the time of the judgment. This, in turn, also determined which judicial forum could provide interpretations of provisions of the agreement, ie a national court of a Member State or the Court of Justice of the EU. This includes, importantly, consideration of whether these provisions ought to have direct effect in the EU legal order. Following the reforms of the EU Treaties brought about by the Treaty of Lisbon in 2009, the scope of the CCP was defined in Article 207(1) TFEU as encompassing changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. 1 The present chapter draws in part on the author’s earlier case note, J Larik, ‘No Mixed Feelings: The Post-Lisbon Common Commercial Policy in Daiichi Sankyo and Commission v Council (Conditional Access Convention)’ (2015) 52 CML Rev 779.
690 Joris Larik Whether this would cover the entire TRIPs Agreement, however, was not yet fully clear, especially seeing the convoluted way in which trade and intellectual property had been included in the previous version of the EU Treaties. Pre-Lisbon, a reference to ‘commercial aspects of intellectual property’ was missing from the ‘uniform principles’ defining the CCP in the first paragraph of then Article 133 of the Treaty establishing the European Community.2 Instead, these were mentioned in a subsequent paragraph, stating that the procedures for implementing the CCP would also apply to the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property, in so far as those agreements are not covered by the said paragraphs and without prejudice to paragraph 6.3
Paragraph 6 of Article 133 EC noted that the EU would not have the power to conclude an international agreement ‘if it includes provisions which would go beyond the Community’s internal powers’.4 Moreover, Article 133 EC assured the Member States of their right ‘to maintain and conclude agreements with third countries or international organisations in so far as such agreements comply with Community law and other relevant international agreements’.5 The addition of paragraph 5 of Article 133 EC in the wake of the Treaty of Amsterdam itself was in reaction to the seminal Opinion 1/94 on the conclusion of the WTO agreements.6 In that Opinion, the Court had famously declared the competences for concluding the TRIPs Agreement and the General Agreement on Trade in Services (GATS) to be shared between the Union and the Member States, thus requiring both the EU and Member States for their conclusion. Regarding TRIPs in particular, the Court had considered only the provisions on the release into free circulation of counterfeit goods to be covered by Article 133 EC,7 while, as summed up by Herrmann, the remainder of the TRIPs ‘was held to be outside the scope of the CCP, since its primary purpose was not the regulation of trade but the harmonization of intellectual property rights protection’.8 The Daiichi Sankyo judgment is part of a sea change in the case law, in that it clarifies that the TRIPs Agreement had come to be covered by the CCP, an exclusive Union competence. On the one hand, together with the Conditional Access Convention judgment of the same year,9 it heralded the end of a period of caution and doubt in the case law of the Court as regards the scope of the CCP. On the other hand, the judgment limits the international scope of action of the Member States and raises questions about the need of their continued representation at the WTO. II. FACTS
The Daiichi Sankyo case originated from a request for a preliminary reference under Article 267 TFEU from a Greek court, the Court of First Instance in Athens, in a dispute in the area 2 Art 133(1) of the Treaty establishing the European Community [2006] OJ C321E/37 (EC (Nice version)). 3 Art 133(5)(1) EC (Nice version). 4 Art 133(6) EC (Nice version). 5 Art 133(5)(4) EC (Nice version). 6 C Herrmann, ‘Common Commercial Policy after Nice: Sisyphus Would Have Done a Better Job’ (2002) 39 CML Rev 7, 7. 7 Opinion 1/94, WTO Agreements, ECLI:EU:C:1994:384, para 71. See this volume, ch 28. 8 Herrmann (n 6) 9. 9 Case C-137/12, Commission v Council, ECLI:EU:C:2013:675 (Conditional Access Convention). See this volume, ch 61.
Intellectual Property and the Post-Lisbon Common Commercial Policy 691 of intellectual property rights. The parties in the case before the national court were three pharmaceutical companies: on one side, Daiichi Sankyo, a pharmaceutical company with headquarters in Japan and holder of the relevant patent in this dispute, and its German licensee and distributor Sanofi-Aventis Deutschland GmbH; on the other side, DEMO Anonimos, a Greek pharmaceutical manufacturer. In their lawsuit, Daiichi Sankyo and Sanofi-Aventis sought to prohibit DEMO from marketing certain generic medicinal products. These products, marketed by DEMO under the name ‘Talerin’, included an active ingredient called levofloxacin hemihydrate, which is used in antibiotic treatments for which Daiichi Sankyo claimed patent protection through a supplementary protection certificate (SPC) in Greece under EU law.10 The SPC allowed Daiichi Sankyo to continue to benefit from a Greek national patent it had originally obtained in 1986 and which was due to expire in 2006 until 2011.11 The referring court asked the Court three questions: first, it asked essentially whether Article 27 of the TRIPs Agreement [on Patentable Subject Matter] falls within a field for which the Member States have primary competence and, if so, whether the national courts may accord that provision direct effect subject to the conditions laid down by national law.12
Second, it asked essentially whether the invention of a pharmaceutical product such as the active chemical compound of a medicinal product is patentable subject-matter within the meaning of Article 27 of the TRIPs Agreement and, if so, what is the scope of the protection conferred by a patent for such a product.13
Third, the Greek court sought clarification as to whether a patent obtained following an application claiming the invention both of the process of manufacture of a pharmaceutical product and of the pharmaceutical product as such, but granted solely in relation to the process of manufacture, must none the less, by reason of the rules set out in Articles 27 and 70 [on Protection of Existing Subject Matter] of the TRIPs Agreement, be regarded, as from the date of entry into force of that agreement, as covering the invention of that pharmaceutical product.14
The case thus raised legal questions not just regarding the interpretation of certain provisions of the TRIPs Agreement, but also as to whether a national court or the Court would be the appropriate forum to furnish such an interpretation. The answers to these questions hinge, in essence, on whether the provisions of the TRIPs Agreement at hand in the case fell within the scope of the CCP or, instead, remained within what is called here the Member States’ ‘primary competence’. The court in whose remit the interpretation of these provisions would fall would consequently also have the power to accord direct effect to these provisions. III. THE COURT
The Court’s judgment first addressed an admissibility objection brought by DEMO. DEMO had argued that the action was devoid of purpose ‘since Daiichi Sankyo’s basic patent and
10 Case C-414/11, Daiichi Sankyo Co Ltd and Sanofi-Aventis Deutschland GmbH v DEMO Anonimos Viomikhaniki kai Emporiki Etairia Farmakon, ECLI:EU:C:2013:520, paras 23–28. 11 ibid para 25. 12 ibid para 40. 13 ibid para 63. 14 ibid para 70.
692 Joris Larik SPC have expired’.15 The Court rejected this argument, noting that some of Daiichi Sankyo’s claims could still be upheld by the Greek court if it were to find that DEMO had violated the protection provided by the SPC. For instance, this concerns ‘the application for seizure and destruction of packages of Talerin, some of which could have been manufactured and put on sale before the expiry of the SPC’.16 Turning to the first of the referred questions, the Court delved into the issue of competence, and hence the scope of the CCP. The parties to the main dispute and the intervening governments based their arguments on the prior case law on mixed agreements,17 ie international agreements with one or several external partners to which both the Union and Member States are parties. In particular, the intervening governments reasoned that ‘the majority of the rules in the TRIPs Agreement’,18 including Article 27 on patentability, referred to international trade only indirectly, and hence continued to fall under the internal market, which is a shared competence between the Union and the Member States. By contrast, the Commission made a textual argument focused on the wording of Article 207(1) TFEU. Following the amendments effected by the Treaty of Lisbon, this provision explicitly included ‘commercial aspects of intellectual property’ as part of the CCP, which, in the Commission’s view, qualified the relevance of earlier case law.19 Moreover, from the Commission’s point of view, the TRIPs Agreement related ‘as a whole’20 to ‘commercial aspects of intellectual property’. Therefore, it argued that the Agreement fell squarely within the CCP. In its reasoning, the Court ‘chose clarity over caution, and Treaty reform over path dependency’.21 The Court markedly departed from the Opinion of Advocate General (AG) Cruz Villalón. The AG strove to reconcile the language of Article 207(1) TFEU with the arguments emphasising that the TRIPs Agreements went beyond ‘commercial aspects’ and thus continued to cover competences shared between the Union and the Member States. In essence, the AG opted for ‘a very complex and cautiously inwardly oriented approach’,22 concluding that, ‘as European Union law now stands, Article 27 of the TRIPs Agreement does not regulate subject-matter which falls within the commercial aspects of intellectual property within the meaning of Article 207(1) TFEU’.23 Therefore, regarding the authority to interpret these TRIPs provisions, the prior ‘case law of the Court which links the scope of the Court’s jurisdiction to interpret provisions set out in international treaties to the substantive competence for the subject-matter in question continues to be valid’.24 The Court did not share this assessment. Judgments and Opinions of the Court which had been central to this issue before, such as Opinion 1/94 and Merck Genéricos, were no
15 ibid para 36. 16 ibid para 38. 17 ibid para 42. These parties refer in particular to Joined Cases C-300 & C-392/98, Dior and Others, ECLI:EU:C:2000:688; Case C-431/05, Merck Genéricos, ECLI:EU:C:2007:496 (regarding the TRIPs Agreement as falling in an area of shared competence); Case C-240/09, Lesoochranárske zoskupenie, ECLI:EU:C:2011:125 (regarding competence delimitation in mixed agreements). 18 Daiichi Sankyo (n 10) para 44. 19 ibid para 43. 20 ibid para 43. 21 Larik (n 1) 792. 22 L Ankersmit, ‘The Scope of the Common Commercial Policy after Lisbon: The Daiichi Sankyo and Conditional Access Services Grand Chamber Judgments’ (2014) 41 Legal Issues of Economic Integration 193, 198. 23 Opinion of AG Cruz Villalón, Case C-414/11, Daiichi Sankyo Co Ltd and Sanofi-Aventis Deutschland GmbH v DEMO Anonimos Viomikhaniki kai Emporiki Etairia Farmakon, ECLI:EU:C:2013:49, para 81. 24 ibid para 81.
Intellectual Property and the Post-Lisbon Common Commercial Policy 693 longer deemed ‘material’25 by the Court for delimiting the CCP’s scope. The Court observed that Article 207(1) TFEU on the scope of the CCP ‘differs significantly from the provisions it essentially replaced’.26 These were Article 133(1), 133(5)(1), 133(6)(2) and 133(7) of the Treaty establishing the European Community; and before that, Article 113 of the Treaty establishing the European Economic Community, in which ‘commercial aspects of intellectual property’ were not mentioned at all. In view of this ‘significant development of primary law’,27 the Court considered it appropriate to revisit the division of competences between the Union and the Member States. Addressing the concept of ‘commercial aspects of intellectual property’, the Court noted that EU acts, including the conclusion of international agreements, need to have more than mere ‘implications for international trade’ to fall under the CCP.28 The Court recalled its case law on determining the proper legal basis and stated that ‘a European Union act falls within the Common Commercial Policy if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade’.29 With regard to the case at hand, the Court noted that of the rules adopted by the European Union in the field of intellectual property, only those with a specific link to international trade are capable of falling within the concept of ‘commercial aspects of intellectual property’ in Article 207(1) TFEU and hence the field of the common commercial policy.30
The Court then proclaimed that this was the case for the rules of the TRIPs Agreement since they all had such a ‘specific link with international trade’.31 To strengthen this conclusion, the Court pointed to the WTO’s Dispute Settlement Understanding, under which cross-suspension of concessions (commonly known as trade sanctions) is foreseen across different agreements, including the TRIPs,32 thus linking them all together. Responding to the arguments of some of the intervening governments that contested the links between TRIPs and international trade, in particular Article 27 thereof, the CJEU emphasised that the objective of the TRIPs Agreement must be fully accounted for. This objective, in the words of the Court, was ‘to strengthen and harmonize the protection of intellectual property on a worldwide scale’.33 This required ‘effective and adequate protection of intellectual property rights’ to ‘reduce distortions of international trade’.34 According to the Court, Part II of the TRIPs Agreement, where Article 27 is situated, contributed ‘to attaining that objective by setting out, for each of the principal categories of intellectual property rights, rules which must be applied by every member of the WTO’.35
25 Daiichi Sankyo (n 10) para 48. 26 ibid para 46. 27 ibid para 48. 28 ibid para 51. 29 ibid para 51, referring to Opinion 2/00, Cartagena Protocol, ECLI:EU:C:2001:664. See this volume, ch 39; Case C-347/03, Regione autonoma Friuli-Venezia Giulia and ERSA, ECLI:EU:C:2005:285; Case C-411/06, Commission v Parliament and Council, ECLI:EU:C:2009:518 (Waste Shipments). 30 Daiichi Sankyo (n 10) para 52. 31 ibid para 53. 32 ibid para 53. 33 ibid para 58. 34 ibid para 58. 35 ibid para 58.
694 Joris Larik Regarding any EU rules on intellectual property rights as part of its internal market, the Court observed that acts adopted on that basis and intended to have validity specifically for the European Union will have to comply with the rules concerning the availability, scope and use of intellectual property rights in the TRIPs Agreement, as those rules are still, as previously, intended to standardize certain rules on the subject at world level and thereby to facilitate international trade.36
The Court, agreeing with the Commission, found that ‘the rules on patentable subject-matter in Article 27 of the TRIPs Agreement’ fell within the scope of the CCP, reflecting ‘the fact that the context of those rules is the liberalization of international trade, not the harmonization of the laws of the Member States of the European Union’.37 Having concluded that Article 27 TRIPs – and arguably TRIPs at large – had come to fall under the CCP, the Court did not consider it necessary to answer the second part of the first referred question on whether it is for national courts to decide whether to give this provision direct effect.38 The implied answer here is that this would no longer be the case due to the need for uniform application of EU law, which is guaranteed by the Court as the ultimate arbiter of questions of EU law, which includes international agreements concluded by the Union.39 The Court then turned to the two other questions that had been referred to it by the Greek court, which were about the interpretation of certain TRIPs provisions. Concerning the patentability under Article 27 TRIPs and the scope of protection offered by a patent for chemical and pharmaceutical products, the Court ruled that Article 27 TRIPs allowed for the p atentability of pharmaceutical products, certain exclusions provided in the TRIPs notwithstanding, and that no derogation to these exceptions was applicable.40 As to the scope of protection, the Court observed that this issue was addressed elsewhere in the TRIPs and refrained from delving into the second part of this question.41 Lastly, the Court turned to the third referred question on whether Article 27 combined with the transitional provisions contained in Article 70 TRIPs entailed protection of both the process of manufacture and the pharmaceutical product in a situation where the initial patent granted under Greek law only covered the process, not the product, although both had been applied for. The Court answered in the negative here. Based on the information available to it, the Court ruled that the scope of protection remained restricted to the process in the specific context of the case.42 IV. THE IMPORTANCE OF THE CASE
While certainly relevant from the point of view of intellectual property law,43 in the realm of EU external relations law, the Daiichi Sankyo judgment is particularly significant for 36 ibid para 59. 37 ibid para 60. 38 ibid para 61. 39 I Van Damme, ‘Case C-414/11 Daiichi: The Impact of the Lisbon Treaty on the Competence of the European Union over the TRIPS Agreement’ (2015) 4 Cambridge International Law Journal 73, 79; Larik (n 1) 784. 40 Daiichi Sankyo (n 10) paras 64–68. 41 ibid para 69. 42 ibid para 78. 43 M Vatsov, ‘The Complicated Simplicity of the DEMO Case: Side Effects of Developments in the Law – Daiichi Sankyo and Sanofi-Aventis Deutschland v DEMO (C-414/11)’ (2014) 36 European Intellectual Property Review 202; M Montañá Mora, ‘The Practical Consequences of the CJEU Judgment of 18 July 2013 Changing Its Doctrine on the Respective Competences of the EU and Its Member States to Apply the TRIPS Agreement: Have We Seen the Tip of the Daiichi Iceberg Yet?’ (2017) 48 International Review of Intellectual Property and Competition Law 784.
Intellectual Property and the Post-Lisbon Common Commercial Policy 695 establishing the scope of the CCP. Daiichi Sankyo is part of a turn in the case law of the Court following the reforms effected by the Treaty of Lisbon, which favour a wider interpretation of what is covered by the CCP. This turn is also relevant as regards the future of the EU’s mixed representation at the WTO and in other trade agreements. Institutionally, it also favours the Commission as the Union’s sole external representative in the area of trade, which, being an exclusive competence of the Union, limits the scope of manoeuvre of the Member States on the international stage. A. Scope of the Common Commercial Policy Daiichi Sankyo does for the commercial aspects of intellectual property rights what Conditional Access Convention and even the pre-Lisbon Opinion 1/08 did for trade in services, with the latter two affirming that trade in services was now fully part of the CCP (except for transport).44 This case law marks a shift away from a series of judgments and decisions commencing with Opinion 1/94 on the conclusion of the WTO agreements that emphasised the shared nature of significant areas of international trade law and thus the need for mixity. In Daiichi Sankyo, the CJEU qualifies the relevance of what until then were key rulings on the TRIPs Agreement in EU external relations law,45 including Hermès,46 Dior47 and Merck Genéricos.48 By fully acknowledging the textual changes brought about by the amendments contained in the Treaty of Lisbon as regards the scope of the CCP, Daiichi Sankyo reconnects to the Court’s earlier case law pre-Opinion 1/94. These earlier landmark judgments include Commission v Council (Generalised tariff preferences),49 in the sense that they endorse a broad interpretation of the CCP as it stood at the time, including the pursuit of development policy aims (though this was before the expansion of the international trade agenda through the creation of the WTO and its main agreements). In contrast to the Opinion of the AG in Daiichi Sankyo, the Court provided a more straightforward observation that the TRIPs Agreement would now be fully covered by the CCP. Even though ‘the Court’s answer refers only to article 27 of the TRIPS Agreement … the Court’s reasoning shows in essence that it considered the TRIPS Agreement as a whole to fall within the EU’s exclusive competence’.50 The Court thus confirmed that the scope of the CCP, as well as its own interpretative powers, had been broadened by the Treaty of Lisbon to include ‘commercial aspects of intellectual property rights’. This ruling can only appear sweeping from a historical perspective and could not have come as an enormous surprise to the Member States. As the Court pointed out, as ‘the authors’ of the Treaty on the Functioning of the European Union, the Member States ‘could not have been unaware that the terms thus used in that provision correspond almost literally to the very title of the TRIPs Agreement’.51 In this way, the Court issued a ‘gentle rebuke’52 to the Member 44 Opinion 1/08, ECLI:EU:C:2009:739. 45 See F Hoffmeister, ‘Aktuelle Rechtsfragen in der Praxis der europäischen Außenhandelspolitik’ (2013) 16 Zeitschrift für europarechtliche Studien 385, 389. 46 Case C-53/96, Hermès, ECLI:EU:C:1998:292. 47 Dior (n 17). 48 Merck Genéricos (n 17). 49 Opinion 1/75, Local Cost Standard, ECLI:EU:C:1975:145; Case 45/86, Commission v Council, ECLI:EU:C:1987:163 (Generalised Tariff Preferences). See also Ankersmit (n 22) 206–07; this volume, ch 4. 50 Van Damme (n 39) 79. 51 Daiichi Sankyo (n 10) para 55. 52 PJ Kuijper, ‘From the Board – Litigation on External Relations Powers after Lisbon: The Member States Reject Their Own Treaty’ (2016) 43 Legal Issues of Economic Integration 1, 3.
696 Joris Larik State not to reject the new language of EU primary law that they had introduced themselves through Lisbon. The Court took full account of these textual changes regarding the scope of the CCP, by which the Member States had conferred more competences in this area exclusively on the Union. In subsequent case law, the Court confirmed this interpretation. In Opinion 2/15, the Court ruled that the chapter of the EU–Singapore Free Trade Agreement on intellectual property was covered by the post-Lisbon CCP.53 Moreover, the Court annulled a Council decision on the authorisation of the opening of negotiations for a revised Lisbon Agreement on Appellations of Origin and Geographical Indications, as it was erroneously based on a legal basis other than Article 207 TFEU on the CCP.54 Nevertheless, this still means that issues in the area of intellectual property without a link to trade are not covered by the CCP. In Opinion 3/15,55 the Court ruled that the conclusion of the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled was not covered by the CCP, as that agreement, in Wahl and Prete’s summary, is ‘mainly for non-commercial purposes between non-profit entities’.56 The Court’s finding still holds that ‘the mere fact that an EU act is liable to have implications for international trade is not enough for it to be concluded that the act must be classified as falling within the common commercial policy’ and that an EU act falls within the CCP only ‘if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade’.57 The scope of the CCP, though widely defined, continues to be bounded, and the caveat ‘commercial aspects’ remains a relevant textual limit. B. Mixity and the Role of the Member States Seeing that Daiichi Sankyo contributes to a wide interpretation of the scope of the CCP following the Treaty of Lisbon, the case is furthermore relevant regarding the issue of mixity, ie the joint participation of the Union and Member States in international agreements and within international organisations – at least in the sphere of international trade. Daiichi Sankyo essentially means that trade aspects of intellectual property rights can no longer serve as an argument for the Member States to be represented alongside the EU internationally, for legal or political reasons. The EU’s system of external relations traditionally has a ‘polyphonic nature’,58 meaning that both the EU and the Member States have a voice on the international stage, with none fully drowning out the other. Daiichi Sankyo makes a significant contribution in reducing ‘polyphony’ in the EU’s engagement with international economic governance. The fact
53 Opinion 2/15, EU–Singapore FTA, ECLI:EU:C:2017:376, referring to Daiichi Sankyo in para 112. See this volume, ch 82. 54 Case C-389/15, Commission v Council, ECLI:EU:C:2017:798 (Revised Lisbon Agreement), referring to Daiichi Sankyo in para 65. 55 Opinion 3/15, Marrakesh Agreement, ECLI:EU:C:2017:114, paras 60–101. See this volume, ch 78. 56 N Wahl and L Prete, ‘Blowin’ Against the Wind: On ACTA, AA, CETA, TTIP and the Forgetfulness of David Ricardo’ (2017) 51 Journal of World Trade 763, 778. 57 Opinion 3/15 (n 55) para 61, referring to Daiichi Sankyo in para 51. 58 C Hillion, ‘Mixity and Coherence in EU External Relations: The Significance of the “Duty of Cooperation”’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and Its Member States in the World (Oxford, Hart Publishing, 2010) 87.
Intellectual Property and the Post-Lisbon Common Commercial Policy 697 that TRIPs has come to be covered by the CCP, an exclusive EU competence, results in ‘an increasing loss of visibility and powers on the international plain for Member States’.59 It reduces the need for mixity, as now the TRIPs Agreement can be regarded as a so-called ‘false’ mixed agreement.60 TRIPs still has both the EU and the Member States as parties, but if it was concluded today, the Union alone would become a party, not the Member States, due to the exclusive nature of the EU’s powers in the CCP as defined post-Lisbon. However, the Member States have not taken Daiichi Sankyo as a cue to take their leave from the TRIPs Agreement. Instead, they remain parties to this treaty. Thus, the Member States now assume what the German Federal Constitutional Court (Bundesverfassungsgericht) called ‘a merely formal’ membership without substantive powers.61 By contrast, mixity in the GATS Agreement continues to be a possibility due to transport services remaining a shared competence as per Article 207(5) TFEU and Article 4(2)(g) TFEU.62 Daiichi Sankyo and the more recent post-Lisbon case law on the CCP more generally are significant also for the EU’s practice of bilateral trade agreements. While provisions on transport services and ‘political dialogue’ would continue to justify mixity,63 provisions on commercial aspects of intellectual property no longer can. In its 2009 ‘Lisbon judgment’, the Bundesverfassungsgericht anticipated that the postLisbon scope of the CCP would entail a ‘shift of competences’ by which the Member States’ competence for concluding international trade agreements would be reduced.64 The unequivocal language used by the Court of Justice, based on the language of the EU Treaties, in stating that the TRIPs falls under the CCP contributed to more clarity and straightforwardness in delimiting the competences and legal basis questions in this field, with the CCP emerging out of its pre-Lisbon existence as a ‘policy of bits and pieces’.65 C. Towards a Sole Organ of EU External Action The broad interpretation of the post-Lisbon CCP by Daiichi Sankyo and other case law favours the position of the European Commission as the Union’s external representative on the world stage. During the hearing for Daiichi Sankyo, the Portuguese representative referred to the Commission as ‘the single dissenting voice’.66 With this voice having been heeded by the Court, the Commission also strengthened its position as the single external voice of the Union in the area of trade. In a legal landscape characterised less by mixity and ‘polyphony’, the Commission as the Union’s negotiator as per Articles 207 and 218 TFEU approaches what in the USA is known
59 Ankersmit (n 22) 208. 60 H Schermers, ‘Typology of Mixed Agreements’ in D O’Keeffe and H Schermers (eds), Mixed Agreements (Deventer, Kluwer Law and Taxation, 1983) 27; A Rosas, ‘Mixed Union – Mixed Agreements’ in M Koskenniemi (ed), International Law Aspects of the European Union (The Hague, Kluwer Law International, 1998) 130–31. 61 Judgment of 30 June 2009, BVerfGE 123, using the English translation provided by the German Court under www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2009/06/es20090630_2bve000208en.html, para 374. 62 See this volume, ch 61. 63 S Gstöhl and D Hanf, ‘The EU’s Post-Lisbon Free Trade Agreements: Commercial Interests in a Changing Constitutional Context’ (2014) 20 European Law Journal 733, 739. 64 Judgment of 30 June 2009, BVerfGE 123 (n 61) para 374. 65 M Cremona, ‘A Policy of Bits and Pieces? The Common Commercial Policy after Nice’ (2001) 4 Cambridge Yearbook of European Legal Studies 61. 66 Opinion of AG Cruz Villalón in Daiichi Sankyo (n 23) para 43.
698 Joris Larik as the ‘sole organ’ in foreign relations. As the Supreme Court noted in its 1938 Curtiss Wright decision, we are here dealing not alone with an authority vested in the President by an exertion of legislative power, but with such an authority plus the very delicate, plenary and exclusive power of the President as the sole organ of the federal government in the field of international relations.67
In view of the Court’s judgment in Daiichi Sankyo, what can be observed in the area of commercial aspects of intellectual property rights – and other newly exclusive EU external policies – is no longer the authority of the Commission to act ‘by an exertion of legislative power’ according to the ERTA doctrine.68 Instead, external action in this area is now covered by ‘a priori exclusivity’69 under the CCP. Daiichi Sankyo is part of a new era for the CCP. In this judgment, the Court acknowledged the extended boundaries of exclusive EU competences due to the textual changes introduced by the Treaty of Lisbon. As has subsequently become clear, Daiichi Sankyo put the whole of the TRIPs Agreement within the scope of the CCP. In doing so, the Court qualified its prior case law on the relationship between the Union and the Member States needing to appear alongside each other on the world stage and instead ‘increased the efficiency and uniformity of the EU’s external representation in the international trade practice by aligning the fields in which the EU has an exclusive external competence with the areas covered by WTO law’.70 The effect of this turn in the case law is a simplification of the legal structures of EU external relations in the field of trade, though to the detriment of the international presence of the Member States. While Daiichi Sankyo has not resulted in the withdrawal of the Member States from TRIPs, it also has to be seen as helping to pave the way for the more recent practice of ‘splitting’ trade agreements into an EU-only one, which includes a chapter on intellectual property,71 and possibly a mixed agreement, which is limited to investment protection.72 When comparing the European Economic Community to the USA in 1986, Stein observed that ‘there is no evidence that an organ equipped with centralized diplomacy and other requisite instrumentalities will emerge in the foreseeable future in Europe’.73 Even in the area of trade, the EU’s traditionally exclusive competence, this seemed to hold true in the wake of Opinion 1/94 in that it reasserted the position of the Member States. However, since the Treaty of Lisbon and the surrounding case law, the tide is turning strongly in favour of the Union, with the Commission as its designated trade negotiator. Daiichi Sankyo is a crucial part of this new generation of cases, as it makes unequivocally clear that the TRIPs Agreement and parts of any other international agreement pertaining to commercial aspects of intellectual property are part and parcel of the EU’s CCP. 67 United States v Curtiss-Wright Export Corp, 299 US 304 (1936) 320. 68 See this volume, ch 1. 69 A Dashwood, ‘The Relationship between the Member States and the European Union/European Community’ (2004) 41 CML Rev 355, 369. Note that A Dashwood and J Heliskoski, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 16 use the term ‘pre-emptive exclusivity’. 70 Y Tanghe, ‘The EU’s External Competence in IP Matters: The Contribution of the Daiichi Sankyo Case to Cloudy Constitutional Concepts, Blurred Borders, and corresponding Court Jurisdiction’ (2016) 22 Columbia Journal of European Law 139, 163. 71 See, eg Agreement between the European Union and Japan for an Economic Partnership, [2018] OJ L330/3, ch 14 on ‘Intellectual Property’. 72 K Binder, ‘EU–Japan Trade Deal Finalised’ (European Parliamentary Research Service, December 2017). 73 E Stein, ‘Towards a European Foreign Policy? The European Foreign Affairs System from the Perspective of the United States Constitution’ in M Cappelletti, M Seccombe and JHH Weiler (eds), Integration through Law: Europe and the American Federal Experience, Vol I, Book 3 (Berlin, Walter de Gruyter, 1986) 82.
Intellectual Property and the Post-Lisbon Common Commercial Policy 699 V. ADDITIONAL READING Ankersmit, L, ‘The Scope of the Common Commercial Policy after Lisbon: The Daiichi Sankyo and Conditional Access Services Grand Chamber Judgments’ (2014) 41 Legal Issues of Economic Integration 193. Kuijper, PJ, ‘From the Board – Litigation on External Relations Powers after Lisbon: The Member States Reject Their Own Treaty’ (2016) 43 Legal Issues of Economic Integration 1. Kübek, G and van Damme, I, ‘Facultative Mixity and the European Union’s Trade and Investment Agreements’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Martinus Nijhoff, 2020) 137–68. Larik, J, ‘No Mixed Feelings: The Post-Lisbon Common Commercial Policy in Daiichi Sankyo and Commission v Council (Conditional Access Convention)’ (2015) 52 CML Rev 779. Tanghe, Y, ‘The EU’s External Competence in IP matters: The Contribution of the Daiichi Sankyo Case to Cloudy Constitutional Concepts, Blurred Borders, and Corresponding Court Jurisdiction’ (2016) 22 Columbia Journal of European Law 139. Van Damme, I, ‘Case C-414/11 Daiichi: The Impact of the Lisbon Treaty on the Competence of the European Union over the TRIPs Agreement’ (2015) 4 Cambridge Journal of International and Comparative Law 73. Wahl, N and Prete, L, ‘Blowin’ Against the Wind: On ACTA, AA, CETA, TTIP and the Forgetfulness of David Ricardo’ (2017) 51 Journal of World Trade 763.
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65 The Application of EU Internal Competences in an External Context: UK v Council (EEA) TARJEI BEKKEDAL Case C-431/11, United Kingdom of Great Britain and Northern Ireland v Council of the European Union, ECLI:EU:C:2013:589 (EEA), delivered 26 September 2013. KEYWORDS Association agreement – Direct applicability – Duty of loyalty – EEA Agreement – Fragmentation – Nav scandal – Principle of conferral – Reciprocity – Social Security.
I. INTRODUCTION
U
K v Council (EEA)1 concerns the legal basis for extending the reach of Regulation 883/2004 on the coordination of social security systems to third countries.2 The third countries in question, Norway, Iceland and Liechtenstein, constitute the EFTA pillar of the Agreement on the European Economic Area (EEA).3 The question was whether the EEA EFTA states should be considered as (i) assimilated Member States for the purposes of the extension; (ii) ordinary third states; or (iii) parties to an association agreement, implying that the amendment of the EEA Agreement would require the use of the same legal basis as when the agreement was adopted in the first place. At the time of the dispute, the extension of the acquis had already been carried out by decision of the EEA Joint Committee in accordance with the procedure set out in Article 93 of the EEA Agreement.4 The amendment of the Agreement entered into force on 1 June 2012, ie Regulation 883/2004 applied in its entirety within the EEA EFTA states from that date. It is unclear whether and to what extent the decisions of the EEA Joint Committee can be made
1 Case C-431/11, United Kingdom of Great Britain and Northern Ireland v Council of the European Union, ECLI:EU:C:2013:589 (EEA). 2 Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, [2004] OJ L166/1. 3 [1994] OJ L1/3. cf Art 2(b) EEA Agreement. EFTA is the European Free Trade Association. 4 Decision of the EEA Joint Committee No 76/2011 of 1 July 2011 amending Annex VI (Social security) and Protocol 37 to the EEA Agreement, [2011] OJ L262/33.
702 Tarjei Bekkedal subject to judicial review before the Court or the EFTA Court.5 To bypass this issue, the UK lodged an application for annulment of the preceding Council Decision 2011/407/EU on the position to be taken by the European Union within the EEA Joint Committee (the contested decision).6 If the contested decision were annulled, the UK asked the Court to maintain its effects until a new decision was adopted. In other words, the UK challenged the decision of the EU on how to vote within the EEA Joint Committee, not the Joint Committee decision itself. The indirect approach to the crux of the matter might be required for formal reasons, but does not otherwise affect the assessment of the legal issues presented above. It was undisputed that Article 218(9) TFEU constituted the procedural legal basis for the contested decision. The dispute concerned the choice of the substantive legal basis. If the EEA EFTA states were regarded as assimilated Member States, the correct legal basis would be Article 48 TFEU (social security and the free movement of workers within the Union). This was the position of the Council. If the EEA EFTA states were regarded as ordinary third states, the use of Article 79(2)(b) TFEU would have to be considered (common immigration policy). This was the position of the UK. The UK thought this to be of constitutional importance given the opt-outs that are applicable to the UK for the latter legal basis. A third way, introduced by Advocate General (AG) Kokott, was to regard the extension of Regulation 883/2004 as an amendment of the EEA Agreement, similar to the establishment of a new agreement. Then Article 217 TFEU would have to be applied (agreements establishing an association). The judgment in UK v Council (Switzerland)7 and the judgment of the Grand Chamber in UK v Council (EEC–Turkey)8 concern the same legal question as in UK v Council (EEA), but, importantly, within different contexts. Every association agreement must be assessed on its own terms. The Court held Article 48 TFEU to be applicable with regard to both the EEA and Switzerland, but not within the context of the EU–Turkey Association Agreement. As others have correctly observed, the three judgments are of high constitutional importance,9 albeit in an indirect and convoluted manner. As confirmed in UK v Council (EEC– Turkey), the general clause in Article 217 TFEU would in any case empower the Union to enter into arrangements such as those that were contested by the UK, supported by Ireland.10 When Article 48 TFEU is applicable, this marks that the association agreement is the foundation of a special relationship between the European Union and the outsider. This is of particular importance with regard to the status of individuals and the protection of rights. In UK v Council (EEA), the case at hand, the Court noted that nationals of the EEA EFTA states ‘benefit from the free movement of persons under the same social conditions as EU citizens’.11 Further, the extension of the social security acquis would enable EU citizens to ‘rely’ on those rules in Iceland, Liechtenstein and Norway.12 In the recent and important Grand Chamber judgment in 5 Compare Case E-6/01, CIBA Speciality Chemicals Water Treatment Ltd and Others v Norway, EFTA Ct Rep 2002, 281. 6 Council Decision of 6 June 2011 on the position to be taken by the European Union within the EEA Joint Committee concerning an amendment to Annex VI (Social Security) and Protocol 37 to the EEA Agreement, [2011] OJ L182/12. 7 Case C-656/11, United Kingdom of Great Britain and Northern Ireland v Council of the European Union (Switzerland) ECLI:EU:C:2014:97. 8 Case C-81/13, United Kingdom of Great Britain and Northern Ireland v Council of the European Union (EEC–Turkey), ECLI:EU:C:2014:2449. See this volume, ch 62. 9 Opinion of Advocate General (AG) Kokott in United Kingdom v Council (EEA), ECLI:EU:C:2013:187, para 33; N Rennuy and P Van Elsuwege, ‘Integration without Membership and the Dynamic Development of EU Law: United Kingdom v Council (EEA)’ (2014) 51 CML Rev 935, 936. 10 UK v Council (EEC–Turkey) (n 8) paras 62–63. 11 UK v Council (EEA) (n 1) para 58. 12 ibid para 55.
The Application of EU Internal Competences in an External Context 703 IN, the Court confirmed that the status of the nationals of the EEA EFTA states is ‘objectively comparable’ with that of EU citizens within the fields covered by the EEA Agreement.13 As shall be returned to, such reciprocity with regard to the protection of individual rights is premised on the existence of a principle of direct applicability within the EEA legal framework.14 II. FACTS
Regulation 1408/71 was included in the EEA Agreement when it was first adopted.15 The case of UK v Council (EEA) concerned the updating of the EEA Agreement to account for the substitution of Regulation 1408/71 by Regulation 883/2004. To guarantee legal security and to preserve homogeneity, of utmost importance for the guarantees of the continuing of the EEA Agreement, that Agreement establishes a procedure for the continuous updating of the Agreement.16 New EU legislation is incorporated into the annexes to the EEA Agreement by decision of the EEA Joint Committee (Article 102 EEA Agreement). The Committee shall take a decision concerning an amendment of an annex as closely as possible to the adoption of new EU legislation. The EEA Joint Committee consists of representatives of the contracting parties (Article 93 EEA Agreement). The (current) three EEA EFTA states shall speak with one voice. The position to be taken by the Union within the Committee is adopted by the Council on the basis of a proposal from the Commission. The decision of the Council to vote in favour of the incorporation of Regulation 883/2004 into the EEA Agreement applied Article 48 TFEU as its substantive legal basis (the contested decision).17 By Decision No 76/2011, the EEA Joint Committee made the envisaged amendments to Annex VI and Protocol 37 to the EEA Agreement.18 Regulation 1408/71 was repealed and replaced by Regulation 883/2004, the reach of which was thus extended to include the EEA EFTA states. The UK opposed the extension of Regulation 883/2004, mainly due to the fact that the revised coordination rules included rights for economically non-active citizens.19 The UK (supported by Ireland) challenged the validity of the Council decision on the position to be taken by the Union within the EEA Joint Committee. By reference to the principle of the conferral of powers, the appellant claimed that competences pertaining to EU Member States, such as Article 48 TFEU, cannot be relied upon to extend the reach of the acquis to third states. Instead, the UK and Ireland argued that Article 79(2)(b) TFEU would be the correct substantive legal basis for the contested decision.20 The choice of legal basis was important due to Protocol 21 to the TEU and TFEU on the position of the UK and Ireland in respect of the area of freedom, security and justice (AFSJ).21 Pursuant to Article 1 of the Protocol, read in
13 Case C-897/19, IN, ECLI:EU:C:2020:262, paras 50 and 58; compare UK v Council (EEA) (n 1) para 58. The two judgments clarify questions left open after C-72/09, Établissements Rimbaud SA v Directeur général des impôts, ECLI:EU:C:2010:235. 14 UK v Council (EEA) (n 1) paras 53–55. 15 Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, [1971] OJ L149/2. 16 For a thorough analysis of the procedural framework, see T Bekkedal, ‘Third State Participation in EU Agencies: Exploring the EEA Precedent’ (2019) 56 CML Rev 381. 17 Council Decision 2011/407/EU (n 6). 18 Decision No 76/2011 of the EEA Joint Committee (n 4). 19 UK v Council (EEA) (n 1) para 39. 20 ibid paras 30–38. 21 [2016] OJ C202/295.
704 Tarjei Bekkedal conjunction with Article 3, the UK and Ireland benefit from an opt-in clause in matters relating to the AFSJ. It should be added that even if the contested decision had been annulled, it is unclear whether this would have had any bearing on the validity or effects of the decision of the EEA Joint Committee. In accordance with the contested decision, the representatives of the Union had already voted ‘yes’ within the procedural framework of that Committee. The main rule in international law is that breach of internal law and procedures does not affect commitments already entered into at the international level. This issue was not necessary for the Court to assess and will not be further pursued. The Council submitted that the contested decision aimed to extend the new EU acquis on social security systems to the EEA EFTA states. It considered that acquis indispensable to the attainment of the main objective pursued by the EEA Agreement: to guarantee nationals of the EEA EFTA states effective freedom of movement within the European Union. It also claimed that Regulation 1408/71 already covered various categories of economically non-active citizens.22 III. THE COURT
AG Kokott rejected UK’s claim that Article 79(2) TFEU was the correct legal basis for Decision 2011/407/EU on the position to be taken by the European Union within the EEA Joint Committee. She noted that the Article forms part of the chapter on policies in respect of border controls, asylum and immigration. These purposes were not commensurate with the context of the contested decision.23 Still, the AG opined that the UK and Ireland were ‘entirely correct in their view that Article 48 TFEU can only serve as a basis for the adoption of measures within the European Union and, in addition, concerns only social security for Union citizens, but not for third country nationals’.24 She relied on three main arguments. First, it follows from a literal reading of Article 48 TFEU, read in conjunction with Article 45 TFEU, that it secures freedom of movement ‘within the Union’ and grants a right to move freely ‘within the territory of Member States’.25 Certainly, the EEA EFTA states are not Member States. Second, the AG referred to the judgment of the Court in Meade that confirmed that Article 45 TFEU ‘guarantees free movement of persons only to workers of the Member States’ and that Regulation 1408/71 did not apply to a national of a non-member country.26 Certainly, nationals of the EEA EFTA states are not EU citizens. Third, the AG noted that the predecessor to Regulation 883/2004, which was Regulation 1408/71, was enacted on the basis of Article 48 TFEU (formerly Article 51 EC), which provided for its validity within the Union. Because the former regulation was already in force when the EEA Agreement was adopted, it was incorporated in the original Agreement. Consequently, the extension of its reach to cover the whole EEA derived from the power to establish association agreements pursuant to Article 217 TFEU (formerly Article 238 EC).27 According to the AG, it would be ‘absurd’ if the situation was different for the replacement of Regulation No 1408/71 by its successor.28
22 UK
v Council (EEA) (n 1) paras 38–41. of AG Kokott in UK v Council (EEA) (n 9) paras 36–40. para 46. 25 Opinion of AG Kokott in UK v Council (EEA) (n 9) paras 47–48; cf Arts 45(1) and 45(2)(b) TFEU. 26 Opinion of AG Kokott in UK v Council (EEA) (n 9); cf Case 238/83, Meade, ECLI:EU:C:1984:250, para 7. 27 Opinion of AG Kokott in UK v Council (EEA) (n 9) para 54. 28 ibid para 55. 23 Opinion 24 ibid
The Application of EU Internal Competences in an External Context 705 The argument, according to the AG, seemed to be that the extension of the acquis through the enactment by the Union of an association agreement could not function as an ‘add on’ that, in the next turn, extended the reach of the internal competences of the Union to cover its external relations. This led the AG to conclude that Article 217 TFEU would be the correct substantive legal basis for the decision enacted by the Council. She added that this would not result in any modification of the procedure.29 The Court rejected the suggestion of the AG simply by ignoring it. The Court reiterated that ‘the choice of the legal basis for an act of the European Union must rest on objective factors amenable to judicial review, which include the aim and content of that measure’.30 It found that ‘taking into account the context of which it forms part, it was possible for the contested decision to be legitimately adopted on the basis of Article 48 TFEU’.31 The analysis of the relevant context rests on five main arguments. First, the Court took the objective of the EEA Agreement as its starting point.32 It observed that the agreement ‘establishes a close association between the European Union and the EFTA states based on special, privileged links between the parties concerned’.33 Further, it noted that one of the principal aims of the EEA Agreement … is to provide for the fullest possible realisation of the free movement of goods, persons, services and capital within the whole EEA, so that the internal market established within the European Union is extended to the EFTA States.34
Second, to provide more substance to the overarching aims, the Court analysed the EEA legal framework in more detail. It observed that Article 28 EEA Agreement grants freedom of movement for workers among the EU Member States and the EFTA states. Further, Article 29 EEA Agreement ascertains that in the field of social security, the contracting parties shall take further steps to promote free movement to ensure, for instance, exportability of benefits and aggregation of periods.35 Article 29 EEA Agreement mirrors Article 48 TFEU and presupposes the incorporation of EU legislation on the coordination of social security systems into the EEA Agreement. Third, within this context, and by reference to the aim set out in Article 1(2)(f) EEA Agreement, the Court took account of the duty of loyalty pursuant to Article 3 EEA Agreement.36 It was clear, the Court held, that the contested Council decision aimed to fulfil the obligations of the contracting parties under the EEA Agreement. Fourth, in a crucial passage, the Court noted that once an EEA regulation is incorporated into the EEA Agreement, it becomes directly applicable, enabling EU citizens to rely on their rights in Norway, Iceland, and Liechtenstein. As shall be returned to below, the extension of the internal market is premised on ‘reciprocal rights and obligations’.37 In the absence of reciprocity, the EEA EFTA states would rather be third countries applying similar legislation as within the EU. Fifth, the Court referred to the fact that the predecessor of Regulation 883/2004, Regulation 1408/71, was incorporated into the EEA Agreement at the time of its enactment. In contrast to the overly formal approach of the AG, the Court noted that from a ‘substantive
29 ibid
para 61. v Council (EEA) (n 1) para 44; cf para 34 of the Opinion of the AG. 31 UK v Council (EEA) (n 1) para 61. 32 ibid para 48. 33 ibid para 49. 34 ibid para 50. 35 ibid para 51. 36 ibid para 52. 37 cf Art 217 TFEU. 30 UK
706 Tarjei Bekkedal point of view’, the contested Council decision made it possible to maintain the level of integration, in compliance with the commitments entered into by the parties.38 The Court said it was: precisely one of the measures by which the law governing the EU internal market is to be extended as far as possible to the EEA, with the result that nationals of the EEA States concerned benefit from the free movement of persons under the same social conditions as EU citizens.39
Applying the same contextual style of interpretation, the Court also explained why Article 79(2) TFEU was an improper legal basis. Like the AG, the Court noted that the objectives pursued by the association with the EEA EFTA states are manifestly irreconcilable with the purposes of that Article.40 Importantly, the Court added that recourse to Article 79(2) TFEU and the relevant opt-out would, in practice, undermine the realisation of the objectives of the EEA Agreement in breach of Article 3 EEA Agreement. The Court noted that this would give rise to two parallel regimes for the coordination of social security systems.41 IV. THE IMPORTANCE OF THE CASE
A. The Application of EU Internal Competences in an External Context As observed by Rennuy and Van Elsuwege, the judgment in UK v Council (EEA) makes clear that ‘the choice of the legal basis for the adoption of an EU position within the framework of a joint institution established by an international agreement cannot be disconnected from the general objectives of that agreement’.42 While the AG adhered strictly to the principle of conferral (Article 5(1) TEU) and strove to preserve the formal distinction between the Union’s internal and external competences,43 the Court took another approach. Different words may be used to describe the Court’s interpretative method, such as ‘teleological’, ‘dynamic’, ‘substantive’, ‘contextual’, and so on. It could, at least in this author’s view, simply be described as practical. The key to avoiding formalism is the passage in which the Court noted that ‘the legal basis for an act must be determined having regard to its own aim and content and not to the legal basis used for the adoption of other EU measures which might, in certain cases, display similar characteristics’.44 The Court avoided the line of reasoning of the AG and did not focus on the specificities of the legal basis. By necessity, the ‘own aim’ of an act, such as the contested decision, is closely related to the aim of the association agreement. This practical and less formal approach is supported by three main arguments. First, the underlying rationale of the judgment was to preserve the integrity of the internal market and to avoid fragmentation with regard to the EU’s external relations, at least to the extent that the external dimension is interrelated with internal affairs. Clearly, this rationale is of an overarching constitutional nature and must therefore, according to the Court, inform the interpretative approach.45
38 UK
v Council (EEA) (n 1) para 57. para 58. 40 ibid para 64. 41 ibid para 65. 42 Rennuy and Van Elsuwege (n 9) 953. 43 Opinion of AG Kokott in UK v Council (EEA) (n 9) para 30. 44 UK v Council (EEA) (n 1) para 67. 45 cf eg C Hillion, ‘Withdrawal under Article 50 TEU: An Integration-Friendly Process’ (2018) 55 CML Rev 29. 39 ibid
The Application of EU Internal Competences in an External Context 707 Second, Article 217 TFEU was too big to fit, according to the Court. To update the existing rules on the coordination of social security was far from ‘establishing an association’. The latter is typically a one-time event. This is foreseen by Article 217 TFEU, which allows the establishment of an association ‘involving reciprocal rights and obligations, common action and special procedure’. The dynamic adaptation of new EU legislation is the bread and butter of the EEA Agreement, foreseen by the special procedure in Articles 93 and 102 EEA Agreement. The special procedure empowers the EEA Joint Committee to amend the annexes to the Agreement, not its main parts. Only the latter requires that Article 217 TFEU be revisited. Third, from the perspective of the principle of conferral of power, the Union is undoubtedly empowered to enter into arrangements that extend the reach of legislation such as Regulation 883/2004 to include third countries such as the EEA EFTA states. The AG pointed not only to Article 217 TFEU, but also to Article 216(1) TFEU.46 This makes it less controversial to adopt a practical approach that suits the specific context. The judgment in UK v Council (EEC–Turkey) also clarified the scope of the doctrine established in UK v Council (EEA). The Court noted that, as a rule, it is only ‘in the sphere of the internal policies and actions of the European Union or of the external actions relating to third countries which can be placed on the same footing as Member State of the European Union’47 that internal competences such as Article 48 TFEU can be applied as a legal basis for the extension of intra-EU legislation to include third countries. The Court identified three differences that distinguished the EEC–Turkey [EU–Turkey] Association Agreement from the EEA Agreement. First, the aim of the EEC–Turkey Association Agreement, unlike the EEA Agreement, is not to provide for the fullest possible realisation of the free movement of goods, persons, services and capital between the contracting parties, so that the internal market established within the European Union is extended to Turkey.48 Second, as a consequence, the EU–Turkey Association Agreement does not extend to Turkey as complete a freedom of movement for workers as is established within the Union.49 Third, it was also clear that the regulations on the coordination of social security were not incorporated into the EU–Turkey Association Agreement to apply in their entirety to provide for a general extension of the regime.50 While the same legal doctrine applied as a starting point, the context was different. As Turkey was not fully integrated into the EU internal market, the Court reached a different conclusion than in UK v Council (EEA). It should be added that the Court found that, with regard to Turkey, the contested Council decision could have been enacted on the basis of Article 217 TFEU applied in conjunction with Article 48 TFEU.51 However, the omission of Article 217 TFEU had no effect on the content of the contested Council decision or the procedure by which it was adopted. Because the defect of the challenged decision was purely formal, the Court confirmed the validity of the Council decision and dismissed the action of the UK.
46 Opinion of AG Kokott in UK v Council (EEA) (n 9) paras 64–69. In para 64 she states: ‘Only in the event that the Court did not concur with my arguments on Article 217 TFEU, I would add that recourse to Article 216(1) TFEU is also conceivable in the present case. That provision essentially codifies the “ERTA doctrine” to which the Council in particular referred in its written submissions.’ 47 UK v Council (EEC–Turkey) (n 8) para 59. See this volume, ch 62. 48 UK v Council (EEC–Turkey) (n 8) para 57. 49 ibid paras 50–52. 50 ibid para 57. 51 ibid paras 63–64.
708 Tarjei Bekkedal In the UK v Council (EEA) judgment at hand, the Court was careful to note that its analysis concerned the ‘circumstances’ of relevance to the identification of the correct legal basis within the EU legal order.52 In the UK v Council (EEC–Turkey) judgment, it noted that Turkey was not to be equated with a Member State ‘for the purposes of the application’ of the regulations on the coordination of social security.53 These observations were contained and circumscribed: the Court did not state that de facto the EEA EFTA states are EU Member States. They were and are not. The practical importance of the judgment in UK v Council (EEA) concerns the way in which the constitutional considerations and the choice of legal basis guides the future application of the extended acquis. The judgment rests on the premise that the legal protection of citizen’s rights is, and shall continue to be, equal throughout the entire EEA. B. Direct Applicability of EEA Regulations? EU regulations are not directly applicable within the EEA legal framework. As UK v Council (EEA) clearly shows, the incorporation of novel EU legislation into the EEA Agreement by decision of the EEA Joint Committee is required. A pressing question is whether EU regulations that have been incorporated into the EEA Agreement by decision of the EEA Joint Committee become directly applicable ‘as such’.54 In a crucial passage, the Court remarked that, indeed, according to Article 7(a) EEA Agreement, EEA regulations are directly applicable, even in the absence of an implementing measure at the national level.55 The Court followed the AG, who observed that: a European Union regulation, referred to in an Annex to the EEA Agreement, is binding upon all the Contracting Parties – including the three EFTA States concerned – and, as such, is made part of their internal legal order. It does not require any national implementing measures, contrary to the view taken by Ireland.56
The Court confirmed its interpretation of Article 7(a) EEA Agreement in a Grand Chamber judgment in Fonnship.57 However, in a series of judgments delivered in 2015, the EFTA Court seemed to have taken the opposite view and that, as a matter of EEA law, regulations are not directly applicable.58 The EFTA Court’s rejection of a principle of direct applicability within the framework of the EEA Agreement, in its view, appears to be supported on the principle that ‘EEA law does not entail a transfer of legislative powers’.59 This is undoubtedly correct,60 but has no bearing on the interpretation of Article 7(a) EEA Agreement. The EEA EFTA states are not bound by decisions of the EEA Joint Committee unless they vote ‘yes’. In the opposite case, a
52 UK v Council (EEA) (n 1) para 61. 53 UK v Council (EEC–Turkey) (n 5) para 58. 54 cf Case 39/72, Commission v Italy, ECLI:EU:C:1973:13, para 17. For a thorough analysis, see T Bekkedal, ‘Understanding the Nature of the EEA Agreement: On the Direct Applicability of Regulations’ (2020) 57 CML Rev 773. 55 UK v Council (EEA) (n 1) paras 53–54. 56 Opinion of AG Kokott in United Kingdom v Council (EEA) (n 9) para 42. 57 Case C-83/13, Fonnship A/S v Svenska Transportarbetareförbundet and Others, ECLI:EU:C:2014:2053, para 24. 58 Case E-11/14, ESA v Iceland, EFTA Ct Rep 2015, 4; Case E-12/14, ESA v Iceland, EFTA Ct Rep 2015, 12; Case E-13/14, ESA v Iceland, EFTA Ct Rep 2015, 20; Case E-15/14, ESA v Iceland, EFTA Ct Rep 2015, 40, para 32 (only the latter judgment concerned regulations). 59 Case E-4/01, Karl K Karlsson hf v The Icelandic State, para 28. 60 Opinion 1/91, ECLI:EU:C:1991:490, para 20. See this volume, ch 20.
The Application of EU Internal Competences in an External Context 709 decision will not be made. A principle of direct applicability of EEA regulations only grants effectiveness to the decisions made by the EEA EFTA states themselves within the procedural framework of the EEA Agreement. If, hypothetically, implementing measures at the national level are required, non-implementation would be a flagrant violation of the EEA Agreement and the duty of loyalty, completely at odds with the spirit of UK v Council (EEA). Sovereignty is not at stake. The EEA EFTA states may always reject the incorporation of novel EU legislation into the EEA Agreement within the procedural framework of the EEA Joint Committee. But such a drastic measure would, in effect, put an end to the EEA Agreement. The decision-making mechanism guards the principle of homogeneity: the EEA EFTA states must speak with one voice. The Three Musketeers principle bars the creation of different legal regimes within the EFTA pillar.61 If one EEA EFTA state votes ‘no’ (in popular terms often referred to as a ‘veto’), it will affect all. In turn, this will trigger the reciprocity mechanism in Article 102(5) EEA Agreement. Affected annexes in the EEA Agreement will provisionally be suspended throughout the whole EEA. Said procedure will lead to the enactment of decisions that make it possible for EU citizens to assess their legal position and in the case of a ‘veto’ to be informed about the suspension of similar rights as within the EU. In comparison, if implementation at the national level is considered necessary, the silent ‘veto’ of non-implementation will cause fragmentation and be completely invisible for citizens. If, based on their sovereign, autonomous decision, the EEA EFTA states have voted ‘yes’ within the EEA Joint Committee, the only consistent interpretation of the EEA Agreement is that EEA regulations so enacted become directly applicable. If, to the contrary, implementing measures at the national level are necessary, the entering into force of an EEA regulation may be delayed, may take place at different times in the different EEA EFTA states or, in the event of disloyalty, may not take place at all. Such fragmentation is completely at odds with the spirit of the judgment in UK v Council (EEA) and its emphasis on the integrity of the internal market. C. The Protection of EU Citizens within the EEA EFTA States The judgment in UK v Council (EEA) is of direct relevance to the handling of one of the biggest European law scandals ever: the Norwegian social security scandal, or ‘Nav scandal’. The details have been thoroughly described elsewhere.62 In brief: Norwegian authorities rejected the doctrine of direct applicability and chose to implement Regulation 883/2004 by way of administrative regulation, at the bottom of the legal hierarchy. Contrary to the main principles of equivalence of facts and of exportability in Articles 5, 7 and 21 of Regulation 883/2004, the Norwegian Social Security Act imposed a condition of continued presence in Norway to retain sickness benefits.63 The requirement of presence is the basis of a system of prior authorisation. Recipients who want to travel and, as a necessary corollary, take benefits with them must apply to the authorities in advance and acquire permission to stay abroad. Permission
61 See DS Tynes, ‘Article 93’ in F Arnesen et al, EEA Commentary (Baden-Baden, Nomos, 2018) 248–70; Bekkedal, ‘Understanding the Nature of the EEA Agreement’ (n 54) 791–92. 62 See T Bekkedal, ‘The Internal, Systemic and Constitutional Integrity of EU Regulation 883/2004 on the Coordination of Social Security Systems: Lessons from a Scandal’ (2020) 7 Oslo Law Review 145. 63 On the distinction between requirements of ‘past presence’ and ‘continued presence’, see Case C-503/09, Lucy Stewart v Secretary of State for Work and Pensions, ECLI:EU:C:2011:500, para 63.
710 Tarjei Bekkedal may be granted if certain criteria are met, provided that the stay abroad is of a ‘limited duration’. Stays abroad that exceed the ‘limited duration’ threshold cannot be authorised and are prohibited.64 In the absence of prior authorisation, short-term export of sickness benefits in cash has been regarded as welfare fraud, a criminal offence underpinned by severe sanctions. Since Regulation 883/2004 entered into force in Norway in 2012, at least 55 citizens had been sentenced to prison because they travelled to other states within the EU and EEA. Approximately 1100–1200 citizens have had to reimburse benefits that they had already received, while it is assumed that approximately 5000–6000 citizens had their claims rejected or suspended.65 The scandal highlighted a main concern when the EU extends its acquis to third countries: is a decision that is based on Article 48 TFEU but involves third countries as reliable as decisions that apply internally? Can EU citizens expect the same legal protection within the EEA as EEA nationals can within the EU? The premise, or even promise, of the judgment in UK v Council (EEA) is that the answer is ‘yes’. The Court noted that the contested decision: not only enables … nationals of Iceland, Liechtenstein and Norway to invoke the rights conferred by Regulations Nos 883/2004 and 987/2009 within the European Union, but also enables nationals of the Member States to rely on those rights in Iceland, Liechtenstein and Norway (emphasis added).66
In the Norwegian social security scandal, this promise had not been met. In the absence of direct applicability, Regulation 883/2004 was hidden away by an implementing measure at the bottom of the legal hierarchy. Despite the wisdom and positive attitude of the judgment in UK v Council (EEA), the extension of the acquis to the EEA EFTA states leaves the most fundamental question in a legal order based upon the rule of law unresolved: what is the law? The Court has confirmed that Regulation 883/2004, and presumably any other EEA regulation approved by the EEA Joint Committee, is directly applicable within the EEA legal order. When the authorities of Norway and Iceland and the EFTA Court reject the idea, what is the law? If an old regulation is repealed, a new one is incorporated into the EEA Agreement. If the implementing measure is delayed at the national level, is there any law? When authorities, officials, lawyers and citizens do not know where to find the law, what the law is, when it starts to apply and how it applies, it overshadows the careful concerns over fragmentation in UK v Council (EEA).67 It is crucial that these questions are resolved. Further, in the view of the author, unless the premise of direct applicability in UK v Council (EEA) is being respected in the EEA EFTA states, its conclusion is flawed. The extension of the acquis cannot rest on an internal legal basis if the applicability of the rules that are being extended is made dependent on the internal legal order of the third state. Matters are not internal anymore if an EU citizen cannot ‘rely’ on the Council decision based on Article 48 TFEU and the subsequent approval of the EEA Joint Committee, but must check the existence, entry into force and interpretation of a national implementing measure in the third state before he goes there.
64 The Social Security Act, § 9-4 defines ‘limited duration’ as eight weeks maximum within a 12-month period. 65 See Bekkedal, ‘The Internal, Systemic and Constitutional Integrity’ (n 62) s 2 with further references. 66 UK v Council (EEA) (n 1) para 55. 67 cf HP Graver, ‘The Impossibility of Upholding the Rule of Law When You Don’t Know the Rules of the Law: The Norwegian Social Insurance Scandal’ (VerfBlog, 14 November 2019).
The Application of EU Internal Competences in an External Context 711 V. ADDITIONAL READING Bull, H, ‘“Shall Be Made Part of the Internal Legal Order”: The Legislative Approaches’ in The EEA and the EFTA Court (Oxford, Hart Publishing, 2014) 203–13. Dystland, MKF and Sørebø, I, ‘Article 7’ in F Arnesen et al, EEA Commentary (Baden-Baden, Nomos, 2018) 248–70. Fredriksen, HH and Franklin, C, ‘Of Pragmatism and Principles: The EEA Agreement 20 Years On’ (2015) 52 CML Rev 629.
712
66 The Normalisation of CFSP International Agreements in the EU Legal Order: Parliament v Council (Mauritius) and Parliament v Council (Tanzania) JUAN SANTOS VARA Case C-658/11, European Parliament v Council of the European Union, ECLI:EU:C:2014:2025 (Mauritius), delivered 24 June 2014; Case C-263/14, European Parliament v Council of the European Union, ECLI:EU:C:2016:435 (Tanzania), delivered 14 June 2016. KEYWORDS International agreements – Common Foreign and Security Policy – The role of the European Parliament in the conclusion of international agreements – Article 218(10) TFEU – Judicial control of Common Foreign and Security Policy – The choice of legal basis – Delimitation between Common Foreign and Security Policy and other external relations policies – Operation Atalanta – The principle of consistency – Institutional balance in the procedure for concluding international agreements – EU external relations.
I. INTRODUCTION
T
he judgments in Mauritius and Tanzania are significant exponents of the constitutional challenges raised in EU external relations in the post-Lisbon period.1 One of the main aims of the Treaty of Lisbon was to clarify the balance of power among the institutions in the field of external relations. However, the innovations introduced by the Treaty of Lisbon have led to several constitutional conflicts that the Court has been called on to resolve.2
1 Case C-658/11, European Parliament v Council of the European Union, ECLI:EU:C:2014:2025 (Mauritius); Case C-263/14, European Parliament v Council of the European Union, ECLI:EU:C:2016:435 (Tanzania). 2 See R Gosalbo Bono, ‘Insuficiencias jurídicas e institucionales de la acción exterior de la Unión Europea’ (2015) 50 Revista de Derecho Comunitario Europeo 231; J Santos Vara, ‘EU Representation to International Organisations: A Challenging Task for the EEAS’ in L González Alonso (ed), Between Autonomy and Cooperation: Shaping the Institutional Profile of the European External Action Service (2014) CLEER Working Papers 2014/6, 65–79.
714 Juan Santos Vara The complex system of external representation and negotiation of international agreements has resulted in non-stop adjudication by the Court in the context of interinstitutional disputes. In this context, the Parliament has constantly defended the prerogatives conferred on it by the Treaty of Lisbon in interinstitutional conflicts, and particularly in a ‘never ending legal battle’ between the Council and the Commission. The judgments in Mauritius and Tanzania have substantially contributed to reinforcing the role of the Parliament in the conclusion of international agreements in the field of the Common Foreign and Security Policy (CFSP). The judgments have had major implications for the extension of the jurisdiction of the Court in the area of the CFSP, and more generally for the ‘normalisation’ of the CFSP in the EU legal order. II. FACTS
The facts that led to the judgments in Mauritius and Tanzania cases are similar. During 2008, the United Nations Security Council (UNSC) stated in several resolutions that it was gravely concerned by the threat that acts of piracy and armed robbery against vessels posed to international navigation and the safety of commercial maritime routes. UNSC Resolution 1851 (2008) invited third states and regional organisations to conclude agreements with countries willing to bring the pirates to trial.3 In response to those various resolutions, in 2008, the EU launched a naval operation to fight piracy and armed robbery off the Somali coast (EU NAVFOR).4 The operation was and continues to be known as ‘Operation Atalanta’. In this context, the Council considered it necessary to negotiate international agreements with neighbouring countries concerning the transfer of suspects of piracy. In 2009, the Council approved international agreements with Kenya, the Seychelles, Mauritius and Tanzania that foresaw the transfer of persons who commit or were suspected of having committed acts of piracy and armed robbery in the territorial waters of Somalia or on the high seas. These pirate transfer agreements were designed to allow neighbouring countries to exercise jurisdiction over the transferred persons and/or their property. In 2011, the Parliament brought an action for annulment under Article 263 TFEU against Decision 2011/640/CFSP on the signing and conclusion of a pirate transfer agreement with Mauritius.5 After Advocate General (AG) Bot delivered his Opinion on the Mauritius case, the Parliament brought a similar action for annulment against Decision 2014/198/CFSP on the pirate transfer agreement concluded with Tanzania for the transfer of suspects of piracy.6 The Parliament challenged the contested decision in the Tanzania case as a way of showing disagreement with the Opinion of AG Bot and, in particular, with the restrictive interpretation of the Parliament’s prerogatives.7
3 Resolution 1851 (2008) of the United Nations Security Council. 4 Council Joint Action 2008/851/CFSP of 10 November 2008 on a European Union military operation to contribute to the deterrence, prevention and repression of acts of piracy and armed robbery off the Somali coast, [2008] OJ L301/33. 5 Decision 2011/640/CFSP on the signing and conclusion of the agreement on the conditions of transfer of suspected pirates and associated seized property from the European Union-led naval force to the Republic of Mauritius, [2011] OJ L254/1. 6 Decision 2014/198/CFSP of 10 March 2014 on the signing and conclusion of the agreement between the European Union and the United Republic of Tanzania on the conditions of transfer of suspected pirates and associated seized property from the European Union-led naval force to the United Republic of Tanzania, [2014] OJ L108/1. 7 See SR Sánchez-Tabernero, ‘The Choice of Legal Basis and the Principle of Consistency in the Procedure for Conclusion of International Agreements in CFSP Contexts: Parliament v Council (Pirate-Transfer Agreement with Tanzania)’ (2017) 54 CML Rev 899, 900.
The Normalisation of CFSP International Agreements in the EU Legal Order 715 The decision to conclude the agreements with Mauritius and Tanzania were based on Article 37 TEU alone and were therefore concluded in accordance with the specific procedure for international agreements that relate exclusively to the CFSP, without obtaining the prior consent of the Parliament under Article 218(6) TFEU. According to the Parliament, the pirate transfer agreements concluded with Mauritius and Tanzania did not relate exclusively to the CFSP, but they are also clearly connected to judicial cooperation in criminal matters, police cooperation and development cooperation. Therefore, according to the Parliament, the international agreements should have been concluded after obtaining the consent of the Parliament in accordance with Article 218(6)(a)(v) TFEU. In addition, the Parliament argued that the Council infringed the obligation to keep it immediately and fully informed at all stages in the negotiation and conclusion of the agreements with Mauritius and Tanzania as foreseen in Article 218(10) TFEU. In both cases, the Parliament was only informed after the adoption of the contested decisions. The Council sent Decision 2011/640/CFSP and the EU–Mauritius Agreement to the Parliament more than three months after the adoption of the decision and signing of the agreement. As regards Decision 2014/198/CFSP and the EU–Tanzania Agreement, the Parliament was informed nine days later. Article 218(6) TFEU establishes, as a general rule, that the conclusion of an international agreement by the Council must be preceded by the consent of or consultation with the Parliament. It is only by way of an exception that the Council may conclude such international agreements without any involvement of the Parliament in the decision-making procedure ‘where agreements relate exclusively to the [CFSP]’. The legal reasoning developed by the Parliament was slightly different in the two cases. In Mauritius, the Parliament did not challenge that Council Decision 2011/640/CFSP could legitimately be founded solely on Article 37 TEU, which allows the EU to conclude international agreements in the field of CFSP. However, since the EU–Mauritius Agreement also related to judicial cooperation in criminal matters, police cooperation and development cooperation, the Council could only conclude it after obtaining the consent of the Parliament.8 In Tanzania, the Parliament claimed that the contested decision and the EU–Tanzania Agreement were wrongly based on Article 37 TEU alone, and the appropriate legal basis was a combination of Article 37 TEU, Article 82 TFEU and Article 87 TFEU. According to the Parliament, the EU–Tanzania Agreement not only related exclusively to the CFSP, but it also fell within the scope of judicial cooperation in criminal matters and police cooperation. For this reason, the contested decision should have been adopted following the procedure laid down in Article 218(6)(a)(v) TFEU.9 The Council and the intervening Member States claimed that the contested decisions and the pirate transfer agreements concluded with Mauritius and Tanzania were correctly based on Article 37 TEU since the international agreements related exclusively to the CFSP. The Council argued that the pirate transfer agreements essentially relate to measures taken for the purpose of maintaining international security off the Somali coast and therefore fall exclusively within the scope of the CFSP.10 Therefore, for the Council, when the decision for concluding an international agreement is based only on Article 37 TEU, there was no need to obtain the consent of the Parliament. The interpretation of Article 218(6) TFEU made by the Parliament was deemed,
8 Mauritius 9 Tanzania
(n 1) para 29. (n 1) para 26. (n 1) para 39.
10 Mauritius
716 Juan Santos Vara according to the Council, to upset the institutional balance laid down in the EU Treaties and encroach upon Article 40 TEU.11 The latter provision guarantees that competences conferred by the TFEU do not encroach on CFSP competences and procedures, and vice versa. The second plea submitted by the Parliament was focused on the duty of the Council to inform, foreseen in Article 218(10) TFEU. The Parliament argued that by failing to inform it ‘immediately and fully’ at all stages of the negotiations and of the conclusion of pirate transfer agreements concluded with Mauritius and Tanzania, the Council infringed Article 218(10) TFEU. The Council contested that the Court’s jurisdiction to rule on an international agreement based on a CFSP legal basis – Article 37 TFEU – was excluded in light of Article 24(1) TEU and Article 275 TFEU.12 In addition, the Council also responded by pleading that the Parliament was, in fact, duly informed, and ‘albeit slightly longer than usual’, the time was still acceptable ‘taking into account also the fact that this period included the summer break’.13 III. THE COURT
Addressing first the issue of the choice of the legal basis, the Court emphasised in both cases that an EU measure must rest on objective factors amenable to judicial review, which include the aim and content of that measure. If an EU measure pursues a twofold purpose, and if one of them is identified as the main purpose or component whereas the other is merely incidental, the act must be founded on a single legal basis, namely, that required by the main or predominant purpose or component. However, if a measure simultaneously pursues a number of objectives or components, which are inseparably linked without one being incidental to the other, the act will have to be founded on the various legal basis corresponding to those components.14 In the Mauritius case, the Court subsequently recalled, from the beginning, that the Parliament had already admitted that the use of Article 37 TEU as the legal basis for the contested measure was correct. For this reason, the Court did not examine whether Decision 2011/640 and the EU–Mauritius Agreement could be founded solely on the legal basis of Article 37 TEU, or whether the measures should be based also on other provisions of the EU Treaties. Applying the case law on the choice of the legal basis, the Court in Tanzania disregarded the arguments raised by the Parliament on this point. Some of the obligations included in the EU–Tanzania Agreement related to the field of cross-border judicial cooperation in criminal matters and police cooperation, if considered individually. However, as was pointed out by AG Kokott, the fact that certain provisions of such an international agreement, taken individually, have an affinity with rules that might be adopted within an EU policy area is not, in itself, sufficient to determine the appropriate legal basis of the contested decision.15
11 ibid para 42. 12 ibid para 66. 13 ibid para 67. 14 ibid para 43; Tanzania (n 1) para 44. On the origin of the case law on the choice of the legal basis, see Case 45/86, Commission v Council, ECLI:EU:C:1987:163, para 11; Case C-300/89, Commission v Council, ECLI:EU:C:1991:244 (Titanium Dioxide), para 10; Opinion 2/00, ECLI:EU:C:2001:664, para 22; Case C-130/10, Parliament v Council, ECLI:EU:C:2012:472 (Smart Sanctions), para 42. 15 Opinion of AG Kokott, Case C-263/14, European Parliament v Council of the European Union, ECLI:EU:C:2015:729 (Tanzania), para 60.
The Normalisation of CFSP International Agreements in the EU Legal Order 717 Accordingly, the transfer of arrested persons to third countries is an instrument that allows the EU and the Member States to pursue the objectives of the Operation Atalanta. The Court held that ‘since the Agreement falls predominantly within the scope of the CFSP, and not within the scope of judicial cooperation in criminal matters or police cooperation, the contested decision could legitimately be based on Article 37 TEU alone’.16 The consequence of this was that the contested measure, and the EU–Tanzania Agreement, could be adopted without involving the Parliament in the decision-making process. In the Mauritius case, since the Parliament did not question the acceptance of Article 37 TEU as the legal basis, the Court focused its reasoning on the procedure applicable to the adoption of the contested decision. The Court held that in interpreting Article 218(6) TFEU, it was necessary to consider not only its wording, but also its objectives, and the context. As regards the objectives, the Court said that Article 218 TFEU was introduced by the Treaty of Lisbon in order to establish ‘a single procedure of general application concerning the negotiation and conclusion of international agreements which the European Union is competent to conclude in the fields of its activity, including the CFSP, except where the Treaties lay down special procedures’.17 However, the procedure laid down in Article 218(6) TFEU must take into account the specific powers of the institutions in respect of each field of EU activity. Therefore, Article 218(6) TFEU includes three different situations as regards the participation of the Parliament in the procedure for concluding international agreements: consent, consultation and information. This division reflects, externally, the division of powers between institutions that applies internally. Consequently, the Parliament is precluded from participating in the conclusion of international agreements exclusively related to the CFSP. Following the Opinion of AG Bot, the Court considered that Article 218(6) TFEU had to be interpreted in light of the institutional balance provided by the EU Treaties.18 The symmetry between the internal and external decision-making procedure involved and the substantive legal basis of the decision concluding an international agreement determined the type of procedure applicable under Article 218(6) TFEU.19 In particular, when an international agreement was to be based exclusively on a legal basis falling within the CFSP, there was no need to obtain the consent or view of the Parliament. In Mauritius, the Court disregarded the distinction made by the Parliament as regards Article 218(3) TFEU, which related ‘exclusively or principally’ to the CFSP, and paragraph 6 of the same article, which merely related ‘exclusively’ to the CFSP. According to the Court, to follow the Parliament’s reasoning would be contrary to the specificities of the CFSP, which involves only limited intervention from the Parliament. As a result, the first plea of the Parliament was unfounded. Regarding the second argument raised by the Parliament, which focused on the infringement of Article 218(10) TFEU, the Court confirmed that it has jurisdiction to deal with this issue even though it has a limited role of scrutiny in the field of the CFSP. In the Mauritius and Tanzania cases, the Court clarified that the information requirement laid down in Article 218(10) TFEU applied to any procedure for concluding an international agreement, including international agreements relating exclusively to the CFSP. The Court pointed out that the information requirement is ‘an expression of the democratic principles on which the
16 Tanzania (n 1) para 55. 17 Mauritius (n 1) para 52. 18 Opinion of AG Bot, Case C-658/11, European Parliament v Council of the European Union, ECLI:EU:C:2014:41 (Mauritius), para 56. 19 Mauritius (n 1) para 59.
718 Juan Santos Vara European Union is founded’.20 In particular, if the Parliament was not immediately and fully informed at all stages of the procedure for concluding international agreements, it would not be in a position to exercise the right of scrutiny conferred on it in relation to the CFSP, or to undertake a check of the appropriate legal bases for the act concerned to verify that its powers are respected. In the Tanzania case, the Court connected the duty to inform the Parliament under Article 218(10) TFEU with the principle of coherence and consistency enshrined in Article 21(3) TEU in order to sustain the obligations incumbent upon the institutions, including the Council, in the negotiation and conclusion of international agreements based upon a CFSP legal basis. The Court held that the information obligation laid down in Article 218 TFEU includes, inter alia, the authorization to open negotiations, the definition of the negotiating directives, the nomination of the Union negotiator and, in some cases, the designation of a special committee, the completion of negotiations, the authorization to sign the agreement, where necessary, the decision on the provisional application of the agreement before its entry into force and the conclusion of the agreement.21
Even though the information requirement did not extend to stages that are part of the internal preparatory process within the Council, it should cover, as was observed by AG Kokott,22 the intermediate results reached by the negotiations. In particular, the Council had to communicate to the Parliament the text of the draft agreement and the text of the draft decision approved by the Council when they were communicated to the Tanzanian authorities. In Mauritius, the Council provided no information to the Parliament on the progress of the negotiations, except by sending a letter informing it of the opening of the negotiations. The existence of similar agreements concluded with other states and the publication in the Official Journal were of no relevance for this purpose. In the Tanzania case, the Court ended its reasoning by observing that information delivered to the Parliament after a few days could be acceptable in some circumstances, but in the present case, the period of nine days after the adoption of the contested decision did not satisfy the requirement to inform the Parliament immediately and fully in the course of the procedure.23 As a result, the Council infringed Article 218(10) TFEU, and the contested decisions were annulled by the Court in both cases, while their effects were maintained in force.24 IV. THE IMPORTANCE OF THE CASE
A. The CFSP as an Integral Part of the EU Legal Order The Mauritius and Tanzania cases have led to mitigating the ‘intergovernmental’ nature of the CFSP, which, in its earlier years, avoided judicial review and parliamentary control.25 From both cases, it can be inferred that the CFSP and the rest of EU external action cannot be
20 ibid para 81. 21 Tanzania (n 1) para 76. 22 Opinion of AG Kokott in Tanzania (n 15) para 86. 23 Tanzania (n 1) paras 81–82. 24 ibid paras 84 and 89; Mauritius (n 1) paras 87 and 90. 25 See G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019).
The Normalisation of CFSP International Agreements in the EU Legal Order 719 perceived as totally separate constructions. Whilst there is a perception of the CFSP as being intergovernmental, this is misconceived, as it is clearly not so upon analysing the contents of the EU Treaties. Nevertheless, after the abolition of the pillar structure by the Treaty of Lisbon, the CFSP cannot be regarded as a separate pillar, but as an integral part of the EU legal order.26 Article 24(1) TEU, second paragraph states that the CFSP is subject to ‘specific rules and procedures’. This implies a predominant role for the Council and the European Council, and the absence of parliamentary involvement in the decision-making process and the attempted exclusion of the Court’s jurisdiction in CFSP.27 The only exceptions are the judicial review of restrictive measures adopted against natural or legal persons and the mutual non-contamination clause between CFSP and non-CFSP.28 However, the Court held in both Mauritius and Tanzania that the exclusion of the jurisdiction as regards the CFSP constitutes a derogation that has to be interpreted restrictively, allowing the Court to play a role in CFSP issues.29 The broad interpretation of the Court’s jurisdiction in the context of the CFSP was not completely unexpected, since it is not possible to establish a net separation between the CFSP and other external relation policies after the Treaty of Lisbon,30 especially in light of EU external action across the EU Treaties being unified by a single set of objectives. The constitutional significance of the Mauritius and Tanzania cases is confirmed by a growing line of cases from the Court that has ensured judicial protection in regard to CFSP acts in the years that followed. An overview of the case law leads to the conclusion that CFSP acts cannot be regarded as mere intergovernmental measures not subject to judicial review. Hence, CFSP decisions that are not of a purely political nature are increasingly subjected to judicial review.31 It can be inferred from the case law that followed the Mauritius and Tanzania judgments that CFSP has to be interpreted in accordance with the general structure of the Treaties, including the EU system of legal remedies. In H v Council, the Court considered that acts of staff management adopted in the context of the CFSP fall within the jurisdiction of the EU judicature.32 In Rosneft, the Court held that it has jurisdiction to give preliminary rulings, under Article 267 TFEU, on the validity of an act adopted on the basis of provisions relating to the CFSP, concerning restrictive measures against natural or legal persons.33 In Elitaliana, it was underlined that the Court has jurisdiction to interpret and apply the provisions of the financial regulation with regard to public procurement in the field of the CFSP.34 Other cases such as Jenkinson and SatCen v KF have also contributed to expand the scope of judicial control in the field of the CFSP.35
26 P Van Elsuwege, ‘Securing the Institutional Balance in the Procedure for Concluding International Agreements: European Parliament v Council (Pirate Transfer Agreement with Mauritius) (2015) 52 CML Rev 1379. 27 Art 275 TFEU, first paragraph repeats a similar formula. 28 See Art 40 TEU and Art 275 TFEU. 29 Mauritius (n 1) para 70. 30 See C Hillion, ‘A Powerless Court? The European Court of Justice and the Common Foreign and Security Policy’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014) 47–70; RA Wessel, ‘Legal Aspects of Parliamentary Oversight in EU Foreign and Security Policy’ in J Santos Vara and SR Sánchez-Tabernero (eds), The Democratization of EU International Relations through EU Law (London, Routledge, 2019) 135–54. 31 For an analysis of what might be considered purely political in EU external relations law, see G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 45 Legal Issues of Economic Integration 329. 32 Case C-455/14 P, H v Council, ECLI:EU:C:2016:569. See this volume, ch 76. 33 Case C-72/15, Rosneft, ECLI:EU:C:2017:236. See this volume, ch 81. 34 Case C-439/13 P, Elitaliana v Eulex Kosovo, ECLI:EU:C:2015:753. See this volume, ch 63. 35 Case C-43/17 P, Jenkinson v Council and others, ECLI:EU:C:2018:531; Case C-14/19 P, SatCen v KF, ECLI:EU:C:2020:492.
720 Juan Santos Vara More recently, building on previous case law, the Court in Grand Chamber formation delivered its judgment in Bank Refah Kargaran.36 The Court accepted its jurisdiction to rule on the non-contractual liability of the EU for damages against CFSP restrictive measures that have been previously annulled by the General Court. Although the EU Treaties do not expressly foresee an action for damages in the context of the CFSP, they were not specifically excluded either, and the Court relied on the coherence and effectiveness of the EU’s complete system of legal remedies, as well as the need to prevent any lacuna in judicial protection, in order to accept its jurisdiction. The Bank Refah Kargaran judgment confirms that the role of the Court in the field of the CFSP is not as limited as a literal interpretation of the EU Treaties might suggest.37 The question still remains open as to how far judicial control in the context of the CFSP can be expanded, taking into account the limitations laid down in Article 24 TEU. B. The Role of the European Parliament in the Procedure for Concluding International Agreements in the Field of CFSP The Mauritius and Tanzania judgments are also significant because the Court shed light on the role of the Parliament in the procedure for concluding international agreements in the field of the CFSP. Despite the lack of a formal role in the negotiation and conclusion of CFSP international agreements, in the Mauritius case, the Parliament has managed, for the first time, to get a wide interpretation of the obligation to inform it.38 The Court argued that this obligation constitutes an essential procedural requirement, bestowing the Parliament with the ability ‘to exercise democratic scrutiny of the European Union’s external action and, more specifically, to verify that its powers are respected precisely in consequence of the choice of legal basis for a decision concluding an agreement’.39 The Parliament’s right to be fully and immediately informed by the Council, in the context of CFSP international agreements, was further developed in Tanzania. According to AG Kokott, democratic control can only be guaranteed if the Parliament is involved at both the negotiation and conclusion stages of international agreements, including CFSP international agreements.40 The Court emphasised that this requirement allows it to ‘exercise its own powers with full knowledge of the EU’s external action as a whole’.41 The Court connected the duty to inform the Parliament under Article 218(10) TFEU with the principle of consistency enshrined in Article 21(3) TEU in order to sustain the obligations incumbent upon the institutions, including the Council, in the negotiation and conclusion of CFSP international agreements.42 The obligation of cooperation was addressed to the Council and the
36 Case C-134/19 P, Bank Refah Kargaran v Council, ECLI:EU:C:2020:793. See this volume, ch 91. 37 See G Butler, ‘Non-contractual Liability and Actions for Damages Regarding Restrictive Measures through CFSP Decisions: Jurisdiction of the CJEU Confirmed’ (EU Law Live, 7 October 2020). 38 See C Mattera and R Wessel, ‘TJUE – Sentencia del Tribunal de Justicia de 24.6.2014 (Gran Sala), Parlamento/ Consejo, C-658/11 – «Relaciones exteriores de la UE – Anulación de la decisión relativa a la conclusión del acuerdo entre la UE y Mauricio – Elección de la base jurídica adecuada». ¿Contexto o contenido? Una base jurídica de la PESC o del ELSJ para los acuerdos internacionales de la UE’ (2014) 49 Revista de Derecho Comunitario Europeo 1047. 39 Mauritius (n 1) para 80. 40 Opinion of AG Kokott in Tanzania (n 15) para 78. 41 Tanzania (n 1) para 71. 42 ibid para 72. For a detailed analysis of the link between the principle of consistency and the democratic principle, see SR Sánchez-Tabernero, ‘A Tale of Two Principles: Exploring the Democracy–Consistency Nexus in Light of the Pirate-Transfer Saga’ in Santos Vara and Sánchez-Tabernero (n 30) 82–96.
The Normalisation of CFSP International Agreements in the EU Legal Order 721 Commission, assisted by the High Representative, but it was not specifically excluded that the obligation to cooperate is binding upon other institutions not mentioned in Article 21(3) TEU ‘as having a specific consistency-building mandate’.43 The EU sometimes faces difficulties in attaining consistency in external relations because the decision-making procedures applicable in CFSP is different from the rest of EU external action. As a result of Tanzania, the Court contributed to the interpretation of certain procedural obligations towards ‘the achievement of positive synergies that would in turn lead to material consistency between CFSP and non-CFSP external policies being achieved, thanks to the input of the Parliament in both CFSP and non-CFSP policy areas’.44 Since the conclusion of international agreements depends generally on the consent of the Parliament, it seems logical to consider the implications from these two cases in the context of early stages of negotiations that can lead to international agreements. The ratio legis of the duty to inform the Parliament is to afford it the opportunity of bringing some influence to bear on the Commission and the Council as regards the content of an international agreement. However, the involvement of the Parliament is not limited to the negotiation of international agreements where consent by the Parliament is required. The case law of the Court has major implications for the role of the Parliament in the conclusion of international agreements, including the CFSP. The Court has played a key role in reinforcing the Parliament’s prerogatives in the field of international agreements concerning the CFSP. The case law of the Court has also helped the Parliament to increase its influence on CFSP international agreements where the consent of the Parliament is not required. The interpretation of Article 218(10) TFEU by the Court implies, in practice, an extension of the role of the Parliament in the CFSP that could not easily be inferred from that provision.45 Therefore, the difference as regards the involvement of the Parliament in the negotiation of international agreements, for which its consent is required, and CFSP international agreements has been clearly nuanced by the Court. As has been pointed out, both cases can be considered ‘as underlining that CFSP is part and parcel of the Union’s constitutional set-up, including a role of the [Parliament] in situations where it was not excluded by the Treaties in any express manner’.46 C. The Choice of the Legal Basis for the Conclusion of International Agreements in the CFSP The Court reiterated the traditional ‘centre of gravity’ test in both cases, pointing out that in the post-Lisbon context, the aim and content of a measure are also the key factors in determining the legal basis of an EU act. In Mauritius, the Court did not provide a definitive answer on the correct substantive legal basis because the Parliament accepted that the EU–Mauritius Agreement could legitimately be founded only on Article 37 TEU. The Court held that the substantive legal basis of the decision concluding an international agreement determines the type of procedure applicable under Article 218(6) TFEU. In particular, if an international agreement is based solely on a CFSP legal basis, it would ‘relate exclusively to CFSP’.47 43 Sánchez-Tabernero (n 7) 915. 44 J Santos Vara and SR Sánchez-Tabernero, ‘The Democratic Legitimacy of EU International Relations: An Introduction’ in Santos Vara and Sánchez-Tabernero (n 30) 7–8. 45 J Santos Vara, ‘The European Parliament in the Conclusion of International Agreements Post-Lisbon: Entrenched between Values and Prerogatives’ in Santos Vara and Sánchez-Tabernero (n 30). 46 Wessel (n 30). 47 Mauritius (n 1) para 59.
722 Juan Santos Vara According to the Court, the idea of disconnecting the substantive legal basis of a decision concluding an international agreement and the procedure followed under Article 218(6) TFEU would undermine the institutional balance laid down in the EU Treaties. By contrast, in the Tanzania case, the Court was obliged to examine the more lengthy issue of the choice of the legal basis. According to the Parliament, the international agreement with Tanzania went beyond the aim of preserving peace and security, and also involved the transfer of persons suspected of criminal activities who were under the jurisdiction of the Member States to the authorities of a third state. The Court held that the international agreement fell predominantly within the scope of the CFSP, and not within the scope of judicial cooperation in criminal matters and police cooperation. The traditional understanding of the centre of gravity test has not always provided satisfactory results in the post-Lisbon period. The delimitation between the CFSP and non-CFSP policies is sometimes a difficult task in practice. Article 21 TEU includes a comprehensive list of objectives for the entire EU external action, without providing specific objectives for the CFSP. The identification of CFSP competences is presented in general terms since it covers ‘all areas of foreign policy and all questions relating to the Union’s security’.48 The application of the ‘centre of gravity’ doctrine, in practice, is very difficult when there is an overlap between the area of freedom, security and justice (AFSJ) and CFSP measures, in order to reach security purposes, such as in Mauritius and Tanzania.49 For this reason, it has been suggested that additional elements should be taken into consideration to identify the correct legal basis, such as the more specific policy objectives of the Common Security and Defence Policy or the existence of a link with UNSC resolutions.50 While the context in which an international agreement is concluded must play a role in the choice of the correct legal basis, it could lead to overlooking the content and nature of the activities pursued.51 The risk arising from this approach is that the CFSP is extended beyond its scope, including, sometimes, the external dimension of the AFSJ in situations where international security is at stake. The distinction between both components of the EU external action lies mainly in the distinction between internal and international security.52 The consequence is the ‘PESCalisation’ of other external relations policies that combines CFSP elements.53 In Mauritius, following the Opinion of AG Bot, the Court performed a ‘contextualization of the objectives of the agreement’ to determine the legal basis of the measure, not the content.54 In Tanzania, the Court also followed a contextual interpretation by accepting that the objective of the international agreement was to preserve international peace and security, and therefore fell predominantly within the scope of the CFSP.55 48 Art 24(1) TEU. 49 RA Wessel, ‘Legality in EU Common Foreign and Security Policy: The Choice of the Appropriate Legal Basis’ in C Kilpatrick and J Scott (eds) Contemporary Challenges to EU Legality (Oxford, Oxford University Press, 2021). 50 Van Elsuwege (n 26) 1394; Opinion of AG Kokott in Tanzania (n 15) para 59; Opinion of AG Bot in Mauritius (n 18) para 37. See also Case C-130/10, Parliament v Council, 19 July 2012, ECLI:EU:C:2012:472 (Smart Sanctions). See this volume, ch 60. 51 Mattera and Wessel (n 38) 1056. 52 See the Opinions of AG Kokott in Tanzania (n 15) and AG Bot in Mauritius (n 18). For a critical analysis of this approach, see M Gatti, ‘Conflict of Legal Basis and the Internal–External Security Nexus: AFSJ versus CFSP’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 89–110. 53 C Hillion, ‘Fighting Terrorism through the EU Common Foreign Security Policy’ in I Govaere and S Poli (eds), Management of Global Emergencies, Threats and Crisis by the European Union (Leiden, Brill/Martinus Nijhoff, 2014) 75–95. 54 Mattera and Wessel (n 38) 1056. 55 See Gatti (n 52) 99.
The Normalisation of CFSP International Agreements in the EU Legal Order 723 However, it is not always logical to determine the objective of an international agreement on the basis of the context of a decision, giving prevalence of the aim over the AFSJ content.56 In Tanzania, the Parliament explicitly challenged the legal basis of Council Decision 2014/198/CFSP and the EU–Tanzania Agreement, alleging that it should also have been based on Article 82 TFEU and Article 87 TFEU. The Court was directly called to establish the extent to which it was possible to use, at the same time, CFSP and AFSJ legal bases in the conclusion of international agreements after the Treaty of Lisbon. In the pre-Lisbon period, the Court’s case law determined that it was not possible to use more than one legal basis in cases where the procedures were incompatible, despite all provisions being equally relevant.57 In the Smart Sanctions case, the possibility of combining CFSP and TFEU legal bases was previously excluded when adopting unilateral measures.58 Since the Treaty of Lisbon introduced in Article 218 TFEU a common procedure for the negotiation and conclusion of all international agreements, no procedural incompatibilities arose from using a dual CFSP legal basis and non-CFSP legal basis. Nevertheless, the centre of gravity test still remains unclear. In Tanzania, the Court avoided providing a clear answer as to whether it accepts CFSP and non-CFSP legal bases for the conclusion of international agreements. As has been pointed out, by focusing on the context of the international agreement and the CFSP nature of Operation Atalanta, the Court ‘managed to avoid addressing the difficult question of how to determine the centre of gravity in CFSP/non-CFSP cases’.59 The rigorous application of the centre of gravity test in Mauritius and Tanzania might have led the Court to conclude that the AFSJ content prevails over the CFSP component, and the pirate transfer agreements could have been concluded on the basis of Article 82 TFEU and Article 87 TFEU. In conclusion, the Court has not yet provided a definitive answer on the delimitation between CFSP and other external policy areas in the conclusion of international agreements. V. ADDITIONAL READING Gatti, M, ‘Conflict of Legal Basis and the Internal–External Security Nexus: AFSJ versus CFSP’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 89–110. Matera, C and Wessel, RA, ‘TJUE – Sentencia del Tribunal de Justicia de 24.6.2014 (Gran Sala), Parlamento/Consejo, C-658/11 – «Relaciones exteriores de la UE – Anulación de la decisión relativa a la conclusión del acuerdo entre la UE y Mauricio – Elección de la base jurídica adecuada». ¿Contexto o contenido? Una base jurídica de la PESC o del ELSJ para los acuerdos internacionales de la UE’ (2014)49 Revista de Derecho Comunitario Europeo 1047. Santos Vara, J and Sánchez-Tabernero, SR (eds), The Democratization of EU International Relations through EU Law (London, Routledge, 2019). Sánchez-Tabernero, SR, ‘The Choice of Legal Basis and the Principle of Consistency in the Procedure for Conclusion of International Agreements in CFSP Contexts: Parliament v Council (Pirate-Transfer Agreement with Tanzania)’ (2017) 54 CML Rev 899. Van Elsuwege, P, ‘Securing the Institutional Balance in the Procedure for Concluding International Agreements: European Parliament v Council (Pirate Transfer Agreement with Mauritius)’ (2015) 52 CML Rev 1379. 56 Sánchez-Tabernero (n 7) 909; E Cannizzaro, ‘The EU Antiterrorist Sanctions’ in P Eeckhout and M López-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016). 57 See Case C-91/05, Commission v Council, ECLI:EU:C:2008:288 (ECOWAS). See this volume, ch 51. 58 C-130/10, Parliament v Council, ECLI:EU:C:2012:472 (Smart Sanctions), para 46. 59 Sánchez-Tabernero (n 7) 910.
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67 The Legal Basis for International Agreements in the field of Development Cooperation Post-Lisbon, and its Potential as a Catch-All Provision: Commission v Council (Philippines PCA) STEPHAN MARQUARDT AND SOLEDAD RODRÍGUEZ SÁNCHEZ-TABERNERO*
Case C-377/12, European Commission v Council of the European Union, ECLI:EU:C:2014:1903 (Philippines PCA), delivered 11 June 2014. KEYWORDS Choice of legal basis – Centre of gravity – Institutional balance – Conferral – Partnership and Cooperation Agreement.
I. INTRODUCTION
T
HE JUDGMENT OF the Court in relation to the signature of the Partnership and Cooperation Agreement (PCA) with the Philippines is of particular importance as it provided the Court with the opportunity to rule on the scope of development policy post-Lisbon through the so-called ‘centre of gravity’ approach. The case showed that the case law based on the judgment of the Court in Portugal v Council1 was still applicable in the post-Lisbon context, in particular in the light of a common set of EU external action objectives set out in Article 21 TEU. Although the Court’s ruling has to be read in the specific circumstances of the case, the Philippines PCA judgment has significant implications for EU treaty-making practice, particularly in relation to international agreements concluded with developing countries, given the broad understanding of development policy and the high threshold set by the Court, analysing the relevant provisions of the PCA as regards the manner in which cooperation is to be implemented.2 * This contribution reflects the personal views of the authors and any opinions expressed therein do not represent any official position of the High Representative or of the European External Action Service. 1 Case C-149/96, Portugal v Council, ECLI:EU:C:1999:574. See this volume, ch 37. 2 See also Case C-244/17, Commission v Council, ECLI:EU:C:2018:662 (Kazakhstan), para 45. See this volume, ch 86.
726 Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero II. FACTS
On 25 November 2004, the Council authorised the Commission to start negotiations to conclude a framework agreement with the Republic of the Philippines on partnership and cooperation (Philippines PCA).3 Almost six years later, on 6 September 2010, the Commission adopted a proposal for a Council decision on the signing of the Philippines PCA, which had as its legal bases Article 207 TFEU (Common Commercial Policy (CCP)), and Article 209 TFEU (development cooperation) as the substantive legal bases, in conjunction with Article 218(5) TFEU as the procedural legal basis. On 14 May 2012, the Council adopted the contested decision authorising the signing of the PCA. In addition to the legal bases proposed by the Commission, the Council added Article 79(3) TFEU (readmission of third country nationals), Articles 91 and 100 TFEU (transport) and Article 191(4) TFEU (environment). A. The Commission’s Position The Commission sought the annulment of the Council’s decision, as it considered that the addition of the legal bases by the Council was unlawful, as they were entirely covered by Article 209 TFEU (besides Article 207 TFEU for the CCP part, which was not contested). According to the Commission, it followed from Article 21 TEU, Article 208 TFEU and Article 209 TFEU, and from the Court’s case law,4 that development cooperation policy is conducted in the framework of a wide range of policy objectives which pursue the development of the third country concerned, which implied that development cooperation agreements necessarily encompassed a wide range of areas of cooperation.5 Therefore, all the provisions of the PCA, except for the trade and investment part, contributed to furthering the pursuit of the development of the Philippines as a developing country and did not impose extensive obligations distinct from those of development cooperation. Thus, according to the Commission, they came under the objectives of the EU’s development cooperation policy and were covered by Article 209 TFEU. The Commission further submitted that the addition of Article 79(3) TFEU produced unwarranted legal effects, both internally and externally. It gave rise to the application of procedurally incompatible voting rules due to the application of Protocol Nos 21 and 22, and, as a result, to a limitation of the institutional rights of the Parliament and of the Court.6 B. The Council’s Position The Council opposed the Commission’s reasoning, considering that framework agreements sought to establish a comprehensive relationship covering many different areas of cooperation 3 Framework Agreement on Partnership and Cooperation between the European Union and its Member States, of the one part, and the Republic of the Philippines, of the other part, [2017] OJ L343/3. 4 Case C-377/12, Commission v Council, ECLI:EU:C:2014:1903 (Philippines PCA), para 18. 5 Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation, [2006] OJ L378/41; Joint statement by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission on European Union Development Policy, [2006] OJ C46/1 (the European Consensus). 6 Philippines PCA (n 4) para 22.
The Legal Basis for International Agreements in Development Cooperation Post-Lisbon 727 and no particular area could be identified as predominant compared to others.7 For the Council, the nature of commitments being entered into needed to be examined when choosing the appropriate legal bases. A specific or substantial commitment would require the addition of a corresponding legal basis. For the Council, the provisions concerning transport were not merely related to the pursuit of the economic, social and environmental development for the Philippines, and the fact that those provisions were in line with the objectives of EU development policy was not sufficient to demonstrate that they were part of that policy. As to the environment, for the Council, the agreement contained clear obligations which could only be enforced through legal means.8 Concerning readmission of nationals of the contracting parties, the Council considered that the Philippines PCA set out clear legal commitments which had direct legal consequences in case of breach of those commitments. Besides, according to the Council, the international agreement included a best-efforts obligation to conclude a readmission agreement and set out clear legal commitments that could not fall under development cooperation. The Council further emphasised that it was not procedures that define the legal basis of a measure, but the legal basis that determined the procedures. Therefore, it considered that the UK and Ireland could exercise the right to opt in with respect to the adoption of the Council decisions on signature and conclusion of the international agreement, and if they did not enter into obligations under Title V of Part Three of the TFEU as EU Member States, they could enter into them bilaterally.9 III. THE COURT
The Court first restated its legal basis case law whereby the choice of the legal basis of an EU measure, including the measure adopted for the purpose of concluding an international agreement, must rest on objective factors amenable to judicial review, which include the aim and content of the measure. The Court then applied its centre of gravity test, first enunciated in the Titanium Dioxide judgment.10 In Philippines PCA, this meant that [i]f examination of a European Union measure reveals that it pursues a twofold purpose or that it has a twofold component and if one of those is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, the measure must be founded on a single legal basis, namely, that required by the main or predominant purpose or component.11
Exceptionally, only if the measure pursued several objectives which are inseparably linked, without one being incidental to another, would the measure have to be founded on several legal bases, provided that the procedures were not incompatible.12 The Court went on to determine whether the provisions relating to readmission of nationals, transport and environment fell within development cooperation or whether they went
7 ibid para 24. 8 ibid paras 28, 30. 9 As to compatibility of legal basis, common accord of the Member States was necessary in any case as it was a mixed agreement. For the Council, the case law was also flexible where a measure needs to be founded on several legal bases providing for different voting rules. ibid paras 29, 31. 10 Case C-300/89, Commission v Council, ECLI:EU:C:1991:244 (Titanium Dioxide). 11 Philippines PCA (n 4) para 34. 12 ibid.
728 Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero beyond the framework of that policy and required an additional legal basis. The Court referred to Article 208(1) TFEU and Article 21 TEU, and pointed to the need of EU development policy to be conducted within the framework of the principles and objectives of the EU’s external action. However, development cooperation has a specific primary objective enshrined in the EU Treaties, namely the reduction and, in the long term, eradication of poverty. The EU has to take account of this objective in its policies when they are likely to affect developing countries. For the implementation of that policy, according to the Court, Article 209 TFEU empowers the EU to conclude international agreements with third countries and international organisations helping to achieve the objectives referred to in Article 21 TEU and Article 208 TFEU.13 The Court also referred to its case law in Portugal v Council, where it had considered that the objectives of development policy are broad in nature and concern a variety of specific matters, and to require a development cooperation agreement to also be based on other provisions would render the EU competence on development cooperation devoid of substance.14 In Portugal v Council, the Court had found that the characterisation of the international agreement in that case had to be determined having regard to its essential object and not in terms of individual clauses, ‘provided that those clauses do not impose such extensive obligations concerning the specific matters referred to that those obligations in fact constitute objectives distinct from those of development cooperation’. In the words of Advocate General (AG) Mengozzi, the principle set out in Portugal v Council was but a specific application of the centre of gravity case law.15 Therefore, for the AG, the test to be applied did not differ according to whether the policy framework was development cooperation or another policy, but the broad definition of development cooperation could make it more difficult for other legal bases to coexist on the basis of that test.16 For the Court, the findings in Portugal v Council, the applicability of which the Council had contested, had to be read in connection with the evolution of cooperation agreements concluded since then by the EU, which also reflected an expanded scope of the concept of development cooperation. In particular, development policy had seen an increase in its objectives and in the matters concerned by it, as set out in the European Consensus.17 As reflected in the European Consensus, the pursuit of the Millennium Development Goals (MDGs), which included sustainable development and environmental protection, thus also fell within development policy.18 While the Court and the AG arrived at the same conclusion, namely that the centre of gravity of the Philippines PCA was development policy (besides the trade provisions), the AG carried out a more extensive analysis of the preamble of the PCA and its substantive provisions. He concluded from that assessment that the objective of the development of the Philippines was not fully spelled out, as emerged from a quick comparison of the Philippines PCA with the agreement with India at issue in Portugal v Council.19 However, he conceded that development cooperation is now defined more broadly in the post-Lisbon context, and therefore a measure could be adopted on the basis of EU development policy if it contributed to attaining 13 ibid para 36. 14 ibid para 38. 15 Opinion of AG Mengozzi, Case C-377/12, Commission v Council, ECLI:EU:C:2014:29 (Philippines PCA), para 25. 16 ibid paras 26–29. 17 Like the Commission, besides the European Consensus, the Court also referred to secondary law, namely to Regulation (EC) No 1905/2006 (n 5). 18 Philippines PCA (n 4) paras 42–43. 19 Opinion of AG Mengozzi in Philippines PCA (n 15) paras 31–37.
The Legal Basis for International Agreements in Development Cooperation Post-Lisbon 729 the objectives of Article 208 TFEU, read in connection with Article 21 TEU, provided that the main purpose was not the implementation of another policy sector.20 In this context, however, AG Mengozzi warned of the danger of regarding the legal basis for development cooperation alone as sufficient for framework agreements and called for a certain vigilance in light of the constitutional significance of the choice of legal basis for the EU.21 Therefore, the Court had to determine whether the provisions concerning readmission of nationals of the parties, transport and the environment also contributed to the pursuit of the objectives of development cooperation and, if so, whether those provisions did not contain obligations so extensive that they constituted distinct objectives that were neither secondary nor indirect in relation to those objectives.22 In this regard, the Court found that these provisions, besides contributing to the objectives concerning development policy, did not determine, in concrete terms, the manner in which the cooperation was to be implemented.23 The Court devoted particular attention to the question of readmission of third country nationals, as did the AG. Although the Court did not comment on the procedural difficulties raised by the Commission in relation to the possible application of Protocols Nos 21 and 22, the procedural implications of the addition of Article 79(3) TFEU as a legal basis would probably have warranted a more elaborate assessment.24 With regard to the readmission of nationals, the Philippines and the Member States undertook to readmit their nationals who do not fulfil conditions of entry or residence and agreed to conclude an agreement on admission and readmission as soon as possible. However, as the provisions were not so detailed as to enable their implementation, as would be the case of a readmission agreement, it could not be considered, in the view of the Court, that they prescribed, in concrete terms, the manner in which cooperation concerning readmission of nationals had to be implemented. As a result, it could not be considered that the Philippines PCA contained obligations so extensive that they constituted objectives distinct from those on development cooperation, and that were neither secondary nor indirect in relation to the latter.25 IV. THE IMPORTANCE OF THE CASE
Not surprisingly, the Court confirmed its prior case law according to which the determination of the legal basis of a measure must rest on objective factors amenable to judicial review, including the aim and content of the act. The Philippines PCA judgment constitutes an example of the continued applicability of the ‘centre of gravity’ test in the determination of the appropriate legal basis post-Lisbon. This case law has then been applied to the Common
20 ibid para 38. 21 ibid para 43. 22 Philippines PCA (n 4) para 48. 23 For the Court, ‘migration is viewed, in paragraph 38 (of the European Consensus), as being a positive factor for development contributing to poverty reduction, and development is viewed, in paragraph 40, as being the most effective long-term response to forced and illegal migration. The environment and transport are included, in paragraphs 75 and 77, among the main areas of European Union action in order to respond to the needs of partner countries’. See Philippines PCA (n 4) paras 49–59. 24 The AG, in turn, rebutted the Commission’s arguments by reference to the Court’s previous case law, whereby substantive legal bases determine the applicable procedures, and not vice versa. See Opinion of AG Mengozzi in Philippines PCA (n 15) para 57 and case law cited therein. 25 Since the centre of gravity determined that the international agreement should have been concluded on the basis of development policy and trade alone, the Court did not enter into the incompatibility of procedures.
730 Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero Foreign and Security Policy (CFSP)/non-CFSP divide in later judgments, such as the Mauritius and Tanzania pirate-transfer cases and the Kazakhstan and Armenia cases.26 More importantly perhaps, the Philippines PCA case is the first case where the Court was called upon to assess the scope of development policy post-Lisbon, as part of a series of cases on competence demarcation in the context of the conclusion of international agreements. The Court had already had the occasion to rule on the demarcation of development policy pre-Lisbon in the seminal Portugal v Council (India Cooperation Agreement)27 case with a test to which the Court returned in its reasoning to defend the wide scope of development cooperation policy.28 Following that test, the international agreement could be concluded on the basis of Article 209 TFEU alone, unless there was any provision in the international agreement that prescribed, in concrete terms, the manner in which cooperation in a specific area was to be implemented, and formulated in a way that such cooperation pursued an objective distinct from those of development cooperation. It also followed, even though the Court did not mention this expressly in the judgment, that the use of Article 207 TFEU in framework agreements is justified if they contain provisions regulating trade between the parties. The Philippines PCA judgment should, however, not necessarily be read as meaning that whenever the EU concludes a framework agreement with a developing country it should always and only be based on Article 209 TFEU (and Article 207 TFEU for the trade part) alone. The Court refrained from sweeping statements in Philippines PCA, and based its reasoning on a rather succinct assessment of specific provisions of the international agreement at issue. Therefore, the judgment should be read as applied to the circumstances of the case and does not necessarily prejudge the interpretation to be given to other similar, but not necessarily identical, international agreements. A. The Use of the Aim and Content Test Post-Lisbon An important element to be noted in the Court’s reasoning is that it based its assessment of the international agreement starting from the premise that development cooperation constituted the main purpose of the relevant provisions of the international agreement (other than the trade-related provisions).29 Differently than from other policy areas, development cooperation includes a specific policy objective in Article 208 TFEU, namely the ‘reduction and, in the long term, the eradication of poverty’.30 The first sentence of Article 208(1) TFEU also refers to
26 Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025 (Mauritius); Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania); See this volume, ch 66; Kazakhstan (n 2); See this volume, ch 86; Case C-180/20, Commission v Council, ECLI:EU:C:2021:658 (Armenia). 27 Case C-268/94, Portugal v Council, ECLI:EU:C:1996:461 (India Cooperation Agreement). See this volume, ch 34. 28 Philippines PCA (n 4) paras 39–40. 29 See G De Baere and T Van den Sanden, ‘Interinstitutional Gravity and Pirates of the Parliament on Stranger Tides: The Continued Constitutional Significance of the Choice of Legal Basis in Post-Lisbon External Action’ (2016) 12 European Constitutional Law Review 85, 90. 30 Art 208(1) TFEU reads: ‘Union policy in the field of development cooperation shall be conducted within the framework of the principles and objectives of the Union’s external action. The Union’s development cooperation policy and that of the Member States complement and reinforce each other. Union development cooperation policy shall have as its primary objective the reduction and, in the long term, the eradication of poverty. The Union shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries.’
The Legal Basis for International Agreements in Development Cooperation Post-Lisbon 731 Article 21 TEU, which establishes a single set of objectives for the entirety of the EU’s external action. For that reason, in the absence of specific policy objectives, in later cases, the Court applied a similar aim and content test, but, for example, relied on the specific CFSP context to determine the aim of the measure, and thus the applicable legal basis, as was the case in Mauritius and Tanzania.31 In Mauritius and Tanzania, the Court found that the applicable substantive legal basis was Article 37 TEU, based on an assessment of the foreign policy context in which those international agreements had been concluded, namely for the purposes of an EU military operation that exercised a mandate in the framework of a resolution adopted by the UN Security Council under Chapter VII of the UN Charter (maintenance of international peace and security). The Court did not examine whether the agreements pursued CFSP objectives as set out in the TEU. This did not mean, however, that in future cases the Court would not look into the objectives of the EU’s external action as set out in Article 21(2)(a), (b) and (c) TEU, which essentially relate to the CFSP, and also from the angle of Article 40 TEU, which delimits CFSP from non-CFSP policies, and vice versa.32 Nonetheless, the Philippines PCA judgment seems to indicate that the determination of the aim of a measure, even in the context of development policy, which expressly contains its own set of objectives as part of its legal basis, remains a difficult task for the Court post-Lisbon. More specifically, in the context of a decision to be adopted by a body set up by the PCA concluded with Kazakhstan, the Court has also taken recourse to the centre of gravity test and adopted a broad understanding of development policy. If the principle that only provisions that determine, in concrete terms, the manner in which cooperation is to be exercised is used as a test applied horizontally, this may result in the minimisation of other policy areas, which, due to their very nature, do not prescribe the methods of cooperation in concrete terms, such as the CFSP.33 The outcome of the centre of gravity test can, however, be unpredictable in the postLisbon context. It is difficult to draw a precise line between provisions that constitute a distinct component of an international agreement, and therefore warrant a specific legal basis, and those that are only ancillary.34 Admittedly, following the Philippines PCA and Kazakhstan cases, using a CFSP legal basis, even for framework agreements, may seem difficult in the future, considering the high quantitative and qualitative threshold that the Court has set for provisions not to be considered ancillary. In this regard, the words of caution of AG Mengozzi in his Opinion in Philippines PCA should be recalled, particularly in view of
31 On the applicability of the centre of gravity test in the delimitation of CFSP and non-CFSP competences, see G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 56–58; A Dashwood, ‘The Continuing Bipolarity of EU External Action’ in I Govaere et al (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Brill/Martinus Nijhoff, 2014) 12. For critics, see I Govaere, ‘Multi-faceted Single Legal Personality and a Hidden Horizontal Pillar: EU External Relations Post-Lisbon’ (2010–11) 13 Cambridge Yearbook of European Legal Studies 87, 105; P Van Elsuwege, ‘EU External Action after the Collapse of the Pillar Structure: In Search for a New Balance between Delimitation and Consistency’ (2010) 47 CML Rev 987, 1004–05; C Matera and R Wessel, ‘Context or Content? A CFSP or AFSJ Legal Basis for EU International Agreements’ (2014) 49 Revista de Derecho Comunitario Europeo 1047, 1053. 32 Butler (n 31) 60, 62. It is somewhat surprising that the Court did not examine Art 40 TEU in the Mauritius and Tanzania cases (n 26). 33 See P Mahnic, ‘The Process of Integration of the CFSP into the Evolving Constitutional Legal Order of the EU: Article 218 TFEU’ (2019) 79 Zbornik Znanstvenih Razprav 107, 120–21. 34 P Van Elsuwege and G Van der Loo, ‘Legal Basis Litigation in Relation to International Agreements: Commission v Council (Enhanced Partnership and Cooperation Agreement with Kazakhstan)’ (2019) 56 CML Rev 1333, 1342 and fn 40.
732 Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero the special character of the CFSP under the EU Treaties, given the constitutional significance of the determination of the appropriate legal basis,35 and Article 40 TEU.36 In the case of framework agreements, such as PCAs, they may contain CFSP elements of qualitative importance that could imply the use of Article 37 TEU as an additional legal basis in the decisions on the signing and provisional application and on their conclusion. In practical terms, following Philippines PCA and Kazakhstan, one may, however, wonder what the Court would expect those provisions to stipulate in the specific field of the CFSP in order to constitute ‘distinct objectives that are neither secondary nor indirect in relation to the objectives of development cooperation’37 and are sufficiently concrete as regards their implementation.38 B. The Effects of the Philippines PCA Test in EU Treaty-Making Practice Philippines PCA has left open some areas for reflection which can be of great relevance in EU treaty-making practice. A first question is whether all framework agreements with developing countries will now be considered to fall under development policy alone. In the Philippines PCA case, the Court referred to Article 21(2)(d) TEU, which contains a rather broad objective of fostering the sustainable economic, social and environmental development of developing countries, with the primary aim of eradicating poverty, in line with the pre-Lisbon ECOWAS case law.39 An interesting question that still remains unanswered is whether the above test can apply to framework agreements concluded under other legal bases, such as Article 217 TFEU and Article 212 TFEU. With regard to Article 217 TFEU on association agreements, bearing in mind the broad scope of this provision as recognised by the Court in its case law, all policy fields falling within Union competence should be covered by Article 217 TFEU, and therefore the addition of other legal bases would be unnecessary.40 In the case of Article 212 TFEU on agreements with developed countries, the emerging picture is less clear. From the Court’s jurisprudence on international agreements post-Lisbon, it appears clear that the Court would apply its legal basis case law. However, the objectives of Article 212 TFEU appear to be less broad than those of Article 208 TFEU, bearing in mind that it does not contain any specific objectives. In the Philippines PCA case, despite the existence of specific objectives enshrined in Article 208 TFEU, the Court took recourse to the European Consensus as a way to determine the objectives of EU development policy. This could point towards an increasing creativity of the Court when trying to identify the objectives of different 35 Opinion of AG Mengozzi in Philippines PCA (n 15) para 43. 36 A similar interpretation can flow from the Armenia judgment, where the Court maintained the position that CFSP elements were programmatic in nature, lacking specific terms or obligations. For the Court, a CFSP context such as the Nagorno-Karabakh conflict could not in itself alter the agreement’s predominant classification as a development cooperation agreement, since there were no concrete or specific measures aimed at addressing the situation which put international security in issue. Armenia (n 26) paras 45–46 and 54. 37 Philippines PCA (n 4) para 48. 38 Editorial comments, ‘A Stronger Common Foreign and Security Policy for a Self-reliant Union?’ (2018) 55 CML Rev 1675, 1681–82. See also Van Elsuwege and Van der Loo (n 34) 1340; P Koutrakos, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2017) 67 ICLQ 1; S Rodríguez Sánchez-Tabernero, ‘The Choice of Legal Basis and the Principle of Consistency in the Procedure for Conclusion of International Agreements in CFSP Contexts: Parliament v Council (Pirate-Transfer Agreement with Tanzania)’ (2017) 54 CML Rev 899, 918. 39 De Baere and Van Den Sanden (n 29) 94; Case C-91/05, Commission v Council, ECLI:EU:C:2008:288 (ECOWAS). See this volume, ch 51. 40 Case 12/86, Demirel, ECLI:EU:C:1987:400, para 9. See this volume, ch 16.
The Legal Basis for International Agreements in Development Cooperation Post-Lisbon 733 measures and policies, now that a single set of objectives has been established for the EU’s external action in Article 21 TEU, albeit with lex specialis situations such as development cooperation.41 C. The Role of the High Representative in Framework Agreements Post-Lisbon The Treaty of Lisbon and the creation of the function of the High Representative gave rise to a practice of joint recommendations for negotiating mandates and joint proposals for signature and conclusion by the High Representative and the Commission in relation to international agreements, particularly framework agreements.42 As a result of the recent case law, in particular Kazakhstan and Armenia, this practice appears to be put into question in the absence of a significant CFSP component and corresponding legal basis. However, it is submitted here that the practice of joint recommendations and the role of the High Representative in the negotiations is not directly affected by the above case law. As a starting point, the current practice of the High Representative and the Commission is to submit recommendations for Council decisions for the opening of negotiations without a substantive legal basis. Thus, they are only based on Article 218(3) and (4) TFEU. This can be explained by the fact that it is difficult to determine ahead of the negotiations the aim and content of an international agreement and its centre of gravity.43 However, under Article 218(3) TFEU, the Council must take account of ‘the subject of the agreement envisaged’ when appointing the Union negotiator or the head of the negotiating team. It is for that reason, in view of the scope of framework agreements, that in practice, the Commission is appointed as head of the negotiating team, while the High Representative is still formally part of the team negotiating the CFSP aspects.44 The High Representative is responsible for the conduct of the CFSP, including for the negotiation of CFSP agreements, regardless of whether those provisions are incidental or constitute a distinct component of an international agreement. To argue differently would amount to negating the High Representative’s role in the CFSP, which would be in breach of the principle of institutional balance enshrined in the EU Treaties. Framework or partnership agreements concluded by the EU have always included CFSP provisions (eg human rights and the weapons of mass destruction clause, which are considered ‘essential elements’ of an international agreement). The negotiation of such provisions must therefore be entrusted to the High Representative, as the institutional actor responsible for the CFSP, in accordance with Article 218(3) TFEU. In practice, for framework or partnership and cooperation agreements that also cover CFSP matters, the High Representative also negotiates on behalf of the Commission, in his capacity as Vice-President. As a consequence, the European External Action Service (EEAS) (the head of the competent geographical department) has always assumed the role of chief negotiator,
41 Sánchez-Tabernero (n 38), 907, fn 40. 42 This practice is supported by Art 22(2) TEU, which makes explicit reference to joint proposals of the High Representative and the Commission. 43 Even more so, since negotiating directives are not binding on the negotiator, as follows from Case C-425/13, Commission v Council, ECLI:EU:C:2015:483 (Australia ETS), paras 86–91. See this volume, ch 73. 44 In view of its specificities, this has not been the case for the negotiations on the EU–UK Trade and Cooperation Agreement, where the Commission was appointed as the Union negotiator on the basis of a Commission recommendation. In that case, the Council decision stated that for CFSP matters, the Commission will conduct negotiations ‘in agreement’ with the HR. See Council Decision authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for a new partnership agreement, [2020] OJ L58/53.
734 Stephan Marquardt and Soledad Rodríguez Sánchez-Tabernero being the service supporting the High Representative also in his role of Vice-President of the Commission. The role assumed in practice by the High Representative and the EEAS in the negotiations of such international agreements is thus fully in line with Article 18(4) TEU, which entrusts the High Representative (as Vice-President of the Commission) with ensuring consistency of the Union’s external action, with Commission responsibilities incumbent on it in external relations and for coordinating other aspects of the Union’s external action. The negotiation of framework agreements or partnership agreements, which cover a wide range of EU policies, typically falls under this responsibility of the High Representative. V. ADDITIONAL READING Broberg, M and Holdgaard, R, ‘Demarcating the Union’s Development Cooperation Policy after Lisbon: Commission v Council (Philippines PCFA)’ (2015) 52 CML Rev 547. Butler, G, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 56–64. De Baere, G and Van den Sanden, T, ‘Interinstitutional Gravity and Pirates of the Parliament on Stranger Tides: The Continued Constitutional Significance of the Choice of Legal Basis in Post-Lisbon External Action’ (2016) 12 European Constitutional Law Review 85. Ott, A, ‘The Legal Bases for International Agreements Post-Lisbon: Of Pirates and The Philippines Case C-377/12 European Commission v Council (PCA with the Philippines), Judgment of 11 June 2014 and Case C-658/11 European Parliament v Council (Pirate Transfer Agreement with Mauritius), Judgment of 24 June 2014’ (2014) 21 Maastricht Journal of European and Comparative Law 739.
68 Member States as Trustees of the Union in International Organisations: Germany v Council (OIV) THEODORE KONSTADINIDES* Case C-399/12, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:2014:2258 (OIV), delivered 7 October 2014. KEYWORDS External representation – International organisations – Competence – Sincere cooperation.
I. INTRODUCTION
E
xternal representation of the EU in the international arena is a key area of EU external relations, and yet one which raises core internal questions about the division of competence between the EU and its Member States. Such questions have for some time now been contentious, especially since the Treaty of Lisbon’s introduction of Article 47 TEU that more formally established a legal personality for the EU. This development, together with the restatement of the Union’s democratic principles (such as the rule of law), has boosted the commanding presence of EU law in the legal orders of the Member States. It has also amplified the claim of the EU institutions to establish a unified European presence in international representation. The Court has been resourceful in the past about how to tread when the EU Treaties lack the appropriate rules of conduct in the field of external representation. It is now established practice that EU institutions shall rely on the implied powers doctrine in order to prescribe a positive duty upon the Member States to be loyal to the EU when they act externally.1 The doctrine of implied powers also provides a negative duty for the Member States, ie that by * This is a revised and updated version of an earlier case annotation: T Konstadinides, ‘In the Union of Wine: Loose Ends in the Relationship between the European Union and the Member States in the Field of External Representation’ (2015) 21 European Public Law 679. The usual disclaimer applies. 1 See T Konstadinides, ‘EU Foreign Policy under the Doctrine of Implied Powers: Codification Drawbacks and Constitutional Limitations’ (2014) 39 EL Rev 511.
736 Theodore Konstadinides acting in a spirit of loyalty, they shall refrain from engaging in conduct which may otherwise contravene the EU position. The judicial systematisation of loyalty under Article 4(3) TEU as a dual duty has been a key instrument for cementing both the existence and the exclusive character of EU competence under Article 3(2) TFEU in the field of external relations. While judicial flexibility and innovation at the Court are important insofar as they fill the gaps in relation to certain silences and omissions in the EU Treaties, they are nonetheless a cause of concern in some Member States. This is because they may anticipate a direct interference of the Court’s liberal interpretation of loyalty with the preservation of the status quo pertaining to the state’s conduct of its external relations, an essential task for any state. With the above context in mind, this chapter focuses on the OIV judgment, which concerned a dispute between Germany (supported by the UK) and the Council on the external dimension of the common organisation of the wine markets.2 The case is indicative of the customary discord between, on the one hand, judicial innovation of further integration at the supranational level and, on the other hand, the preservation of the status quo in relation to the conduct of external relations at the national level. It is a recent dispute in the lineage of external relations case law examined in this book which throws light onto the perennial debate in EU law about whether it is the national governments or the EU legislature that have competence to prescribe the permissible course of action of Member States in the way they decide to carry out their external commitments. The plot twist in the OIV case is that it concerned a situation where the conduct of an international organisation, to which the EU is not a party, had legal implications for the EU legal order. II. FACTS
The case concerned the agreement between the EU and the Member States in the area of activity of the International Organisation of Vine and Wine (OIV). The OIV was set up by 35 states in 2001 as an intergovernmental scientific and technical organisation, and currently counts 48 member states with competence in the area of vine-based products. Although the majority of EU Member States are members of the organisation,3 the EU itself is not a party to the OIV. Rather, the EU has had a special observer status since 2017 which allows it to intervene and attend relevant meetings. This fact is crucial insofar as the OIV has competence to set international oenological standards in drawing up relevant recommendations and monitoring their implementation in order to improve the production and marketing conditions of wine products. The OIV issues resolutions pertaining to, inter alia, labelling and methods of analyses adopted by the consensus of its members. These are not legally binding, but nonetheless serve as a reference for setting soft law standards in the national and international wine trade. The EU has acknowledged the OIV’s expertise and oenological recommendations, and has made references to certain resolutions in a number of EU Regulations, accepting that wine products imported into the EU are to be produced according to oenological practices recommended and published by the OIV.4 Through the conduit of EU Regulations, OIV resolutions 2 Internally this area is largely regulated by the EU legislature in the exercise of its competence under Art 43 TFEU. 3 Art 14 of the OIV Agreement (www.oiv.int/public/medias/2197/en-oiv-accord-20010403.pdf) provides the relevant rules regarding accession to the OIV. Following Brexit, the UK joined the OIV on 1 January 2021 and became its 48th member. 4 See Commission Delegated Regulation (EU) 2019/934 of 12 March 2019 as regards wine-growing areas where the alcoholic strength may be increased, authorised oenological practices and restrictions applicable to the production and conservation of grapevine products, the minimum percentage of alcohol for by-products and their disposal, and
Member States as Trustees of the Union in International Organisations 737 have transformed from soft to hard law as a matter of EU law. Not only are they legally binding in all Member States, but they have also become key to the harmonisation of European wine standards and competition in the trading of products in the wine sector. While the Commission took steps in the past to negotiate the EU’s accession to the OIV, pursuant to Article 8 of the relevant OIV agreement,5 this had been unsuccessful due to the lack of a majority in the Council.6 Hence, despite the above-mentioned Regulations, EU Member States that were a party to the OIV coordinated their positions within the General Assembly (the OIV decision-making body). This was about to change when the Commission proposed a Council Decision with a view to establishing common positions on OIV resolutions falling within the scope of EU competence. Such a Decision required that EU Member States that were a party to the OIV vote on resolutions at the General Assembly meetings in a manner which was compatible with the interests of the EU (for example, on a future review of purity specifications of substances used in oenological practices). A dispute therefore sprung up when, in 2012, the Council adopted the Decision establishing the EU position with regard to certain resolutions to be voted by Member States in the framework of the OIV.7 The legal bases for this Decision were Article 43 TFEU on common agricultural policy and Article 218(9) TFEU, the latter of which provides the procedure for the negotiation and conclusion of international agreements. The Decision was adopted by qualified majority in the Council, with Germany voting against it. Subsequently, Germany brought an action for annulment of the Council Decision arguing that it was wrongly based on Article 218(9) TFEU as a procedural legal basis. Two main arguments were made against the adoption of the contested decision, which will be examined in turn. The first argument brought forward by Germany pertained to the context and scope of application of Article 218(9) TFEU as a legal basis for adopting the contested Decision. It was contended that the provision is lex specialis for the conclusion of agreements between the EU and third parties. As such, Article 218(9) TFEU could only be utilised by the EU legislature to establish the EU’s position in an international organisation that only concerns the EU itself. Hence, the argument went, Article 218(9) TFEU fell short as a legal basis upon which the EU institutions could resort to establish the EU’s position in an international organisation in which the EU is not participating. Germany’s argument therefore placed emphasis upon the standard practice that, outside of the EU, Member States participate in various international organisations by negotiating separate bilateral agreements. The argument followed that until the EU becomes a party to such international organisations, the Council has no authority to adopt a decision in relation to the representation of the Member States in them. The second argument made by Germany was predicated on the nature and content of the acts that Article 218(9) TFEU covered. Again, using a literal interpretation of the provision,
publication of OIV files, [2019] OJ L149/1; Regulation 1308/2013 establishing a common organisation of the markets in agricultural products (and repealing earlier regulations), [2013] OJ L 347/671; Regulation 606/2009 laying down certain detailed rules for implementing Regulation 479/2008 as regards the categories of grapevine products, oenological practices and applicable restrictions, [2009] OJ L193/1. 5 Art 8 of the Agreement provides that an international intergovernmental organisation may participate in or be a member of the OIV and may help to fund the OIV under conditions determined, on a case-by-case basis, by the General Assembly on a proposal from the Executive Committee. 6 This provision stresses that ‘An international intergovernmental organisation may participate in or be a member of the OIV and may help to fund the OIV under conditions determined, on a case-by-case basis, by the General Assembly on a proposal from the Executive Committee’. 7 Proposal for a Council Decision establishing the position to be adopted on behalf of the European Union with regard to certain resolutions to be voted in the framework of the International Organisation for Vine and Wine (OIV), COM (2012) 192.
738 Theodore Konstadinides it was stressed that only ‘acts having legal effects’, meaning acts binding under international law, are covered by this provision. The relevant OIV resolutions, which the contested Decision addressed by establishing a unified EU position, were soft law recommendations and thus devoid of legal effect. The argument brought forward by the Council and the Commission in defence of the contested Decision, which, in their view, justified recourse to Article 218(9) TFEU, was that it must be applied where the activity of a body set up by an agreement under international law falls within the competence of the EU. They emphasised that Article 218(9) TFEU provided the procedural basis for EU external action, especially when the EU is exercising its exclusive competence pursuant to Article 3(2) TFEU (ie in areas covered by the relevant OIV oenological recommendations listed in the contested Decision, since they are likely to affect common EU rules). Accordingly, the Council and Commission argued that the application of Article 218(9) TFEU, by analogy, was the only way to ensure that the EU and its Member States retain the ability to act in the areas which fall strictly within their competence.8 III. THE COURT
In its judgment delivered on 7 October 2014, the Court held against Germany and abstained from following the Opinion of the Advocate General (AG), which was cautious about the extent to which the obligation of Member States to act as trustees of the EU’s common interest extends to them agreeing on a Decision to have their autonomous external action coordinated. AG Cruz Villalón stressed that Article 218(9) TFEU does not provide a suitable legal basis for the contested Decision and pointed to the fact that, contrary to other international organisations which may preclude membership to the EU for reasons of international law,9 the EU is not excluded from joining the OIV. Such membership would be ‘the most natural way for it to exercise its competences effectively’.10 By contrast to the Council’s and the Commission’s understanding of the EU legislative power to regulate Member States’ external conduct, the AG opposed a teleological interpretation of Article 218(9) TFEU and sided with Germany in declaring that the contested Council Decision had to be annulled. The Court held that the fact that the EU is not a party to the OIV agreement does not prevent it from resorting to Article 218(9) TFEU as a legal basis for the adoption of the contested Decision. It interpreted the provision teleologically, holding that it intends to establish a procedural framework which allows the EU’s position in international organisations to be defined – even in the context of international agreements to which it is not a party – where the acts to be adopted are to be incorporated subsequently into EU law.11
The Court, therefore, effectively linked the first (context and scope) and second (nature and content) arguments made by Germany against the adoption of the contested Decision. It asserted that the EU institutions can clearly adopt a position in relation to these acts regardless
8 This term was used in the Opinion of AG Cruz Villalón, Case C-399/12, Germany v Council, ECLI:EU:C:2014:2258 (OIV)). 9 For instance, only sovereign states can become UN members. On EU–UN relations, see J Wouters and A-L Chané, ‘Brussels Meets Westphalia: The European Union and the United Nations’ in P Eeckhout and M López-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 299–323. 10 Opinion of the AG (n 8) para 107. 11 OIV (n 8) para 41.
Member States as Trustees of the Union in International Organisations 739 of their nature (soft law or otherwise) and irrespective of the fact that the EU is or is not a party to an international agreement, or whether it enjoys formal status within the respective international organisation that produces the acts in question.12 The Court established that the competence of the EU legislature to resort to Article 218(9) TFEU was justified by relying upon the legal effect that OIV resolutions produced internally. The Court stressed that it is possible for non-binding international recommendations to produce legal effects within the EU via the provisions of EU law that enforce them. This was exactly the case with the OIV’s resolutions which contained oenological recommendations: they produced legal effects within the EU legal order by virtue of the fact that the EU legislature turned them into EU legislation. As such, the Court decided that Article 218(9) TFEU, which makes no reference to whether the EU must be a party to an ‘agreement’, was correctly utilised outside its usual context. The broad interpretation of Article 218(9) TFEU helped the EU to establish a unified position to be adopted on its behalf in the OIV, as well as every other international organisation set up by an international agreement to which the EU may not be a party.13 IV. THE IMPORTANCE OF THE CASE
The case is important in terms of drawing attention to the distinction between three important constitutional matters pertaining to EU external relations law: (i) the existence of EU competence; (ii) the nature of that competence as being exclusive; and (iii) the external exercise of that competence.14 In relation to the last matter, the EU’s role in coordinating the Member States’ action in international affairs is crucial. It can therefore be deduced from the Court’s judgment that where the EU has competence in a substantive field, it may act through the Member States as trustees of the EU’s external competence in order to establish a position in relation to an international agreement.15 This means that where the EU enjoys external powers, Member States acting in the spirit of loyalty cannot act to affect EU law, even if the EU is not a member of that international agreement. The Court also set a precedent that Article 218(9) TFEU applies in circumstances where the decisions being taken by an international organisation, despite not having legal effects at the international level, may decisively influence the content of EU legislation. The OIV case is therefore essential in understanding the importance and bindingness of soft law adopted outside the framework of the EU legal order. This is particularly relevant since international soft law measures have proliferated in recent years and their legal foundation and effect in the EU legal order have formed a sub-field of EU external relations that has recently attracted considerable attention and scholarship.16 12 ibid para 44. 13 The Court emphasised that it is not unusual for the EU to adopt a position on its behalf in a body set up by that agreement through, for instance, the Member States which are parties to that agreement acting jointly in its interest. To reinforce its argument, it cited Case C-45/07, Commission of the European Communities v Hellenic Republic, ECLI:EU:C:2009:81 (International Maritime Organisation), paras 30–31; Opinion 2/91, ILO Convention concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106, para 5. 14 F Erlbacher, ‘Recent Case Law on External Competences of the European Union: How Member States Can Embrace Their Own Treaty’ Centre for the Law of EU External Relations, Paper 2017/2, s 2.1.3, www.asser.nl/ media/3485/cleer17-2_web.pdf. 15 OIV (n 8) para 52. 16 See RA Wessel, ‘Normative Transformations in EU External Relations: The Phenomenon of “Soft” International Agreements’ (2020) 44 West European Politics 72.
740 Theodore Konstadinides The Court’s recognition that soft law recommendations adopted by international organisations to which the EU is not a member can influence the EU legislative outcome is crucial for the future of EU external relations law. The EU’s engagement with international organisations in this regard can potentially influence the development of international standards that would then be refined and adopted as part of secondary EU law. The OIV judgment is therefore an excellent example of the EU being part of what Wessel has coined as a ‘global normative web’.17 A. The Importance of the Case in the Current Context The OIV case constitutes a reminder of the pivotal role of the Court in EU external relations. Not only has its role been central in building up the entire framework of EU external relations law from the ground, as observed by the editors of this volume;18 most importantly perhaps, for the purpose of this chapter, the Court has strengthened the constitutional edifice that surrounds it. The systematisation of the duty of loyalty, for instance, has become a key component in the Court’s interpretation of EU legislative initiatives setting up a code of conduct, or, in other words, a unified Europeanised approach to the representation of Member States in the external domain. Loyalty has also become a legitimising factor for pre-emptive EU legislation lacking textual backup in the EU Treaties, ie where the EU Treaties are silent about the external position to be adopted on behalf of the EU on the international plane. The OIV judgment is also a stepping stone towards introducing a new line of judicial precedent. Prior to the judgment, Member States were rather uncertain as to how far they can proceed to adopt positions which would affect EU law, or to what extent they are required to oppose a recommendation in an international organisation that they are members of which is likely to alter the EU position. Following the OIV judgment, the Court, recalling previous practice, confirmed that even in international organisations that the EU is not a member of, Member States still need to operate as agents of the EU and keep in line with their obligations that flow from EU membership.19 This obligation only applies where the issue of an international agreement falls within an area of EU competence. The EU can then exercise its competence under Article 218(9) TFEU by establishing the position to be adopted on its behalf in the organisation set up by an international agreement. Following the OIV judgment, the Court took a similar stance in relation to Article 218(11) TFEU. In Opinion 1/13, it established that the accession of a non-EU state to The Hague Convention on Child Abduction fell within the EU’s exclusive competence.20 Similar to the OIV situation, the EU is not a signatory to that Convention because, pursuant to Article 38 of that Convention, membership to The Hague Convention is only open to states. This did not
17 See RA Wessel and S Blockmans, ‘International Organisations and Other Bodies in the European Union’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Time of Crisis (Oxford, Hart Publishing, 2016) 223–48. 18 See this volume, Introduction. 19 See RA Wessel and J Odermatt, Research Handbook on the European Union and International Organisations (Cheltenham, Edward Elgar, 2019) ch 1. 20 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303. The EU has internal competence under Art 81(3) TFEU (family law). It has also exercised this competence by adopting Regulation 2201/2003. See this volume, ch 69.
Member States as Trustees of the Union in International Organisations 741 stop the Court from claiming that EU external competence ‘may [also] be exercised through the intermediary of the Member States acting in the EU’s interest’.21 According to the Court, Member States needed to demonstrate agency by depositing declarations of acceptance in relation to the accession of eight non-EU states to The Hague Convention. Pursuant to the Council’s proposal, such declarations were in the EU’s interest. The Court therefore pointed to the overlap between the provisions of the Convention and those laid down by an EU Regulation on the international abduction of children.22 It claimed that the EU’s exclusive competence extends to the entirety of The Hague Convention and that its provisions affected the meaning, scope and effectiveness of the rules laid down by the EU on matters of parental responsibility. The latter observation was particularly important vis-à-vis the circumstances under which the EU can establish exclusive competence under Article 3(2) TFEU. B. Wider Ramifications: Agency as a Quasi-constitutional Principle Agency has become a key component in the conduct of EU external relations. Member States need to acknowledge that when the EU is competent to act on a matter, they shall demonstrate a certain degree of support – inter alia to assist it in making its position known and its voice heard externally. The OIV case has helped to ascertain that establishing the EU’s external position is all the more important in cases where it does not have a platform to make its opinion known to an international organisation. Agency has its roots in the duty of loyalty or sincere cooperation, which, ever since ERTA, has become an essential component of the external dimension of EU law and the development of EU implied competences.23 More specifically, the Court has often found in the principle of loyalty an obligation to provide a particular result or, more accurately, a duty to abstain from taking action that may be in conflict with EU law. The Court’s past jurisprudence suggests that agency also derives from the requirement of uniformity in the international representation of the EU that constitutes a key objective in EU external relations.24 In Commission v Greece (International Maritime Organisation), the Court held that even though all EU Member States are members of the International Maritime Organization (IMO), they are prohibited from submitting to the IMO positions on matters within the sphere of transport, given that it falls within EU exclusive competence.25 The argument was that a Greek proposal, which would have led to the adoption of new IMO rules, would have jeopardised EU exclusive competence on transport policy (including enhancing ship and port facility security). The Greek proposal would have been disruptive to an existing EU Regulation, which had given the EU sole competence to assume international obligations on the matter.26 The judgment can be criticised for its coercive character, especially for extending the scope of the ERTA doctrine to a state’s proposal initiating a process which could
21 Opinion 1/13 (n 20) para 44. 22 Regulation 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, [2003] OJ L338/0001. 23 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 24 See S Blockmans and RA Wessel, ‘Principles and Practices of EU External Representation’, CLEER Working Paper 2012/15. 25 International Maritime Organisation (n 13). See this volume, ch 53. 26 Regulation 725/2004 on enhancing ship and port facility security, [2004] OJ L129/6. The Regulation had already integrated the relevant parts of the SOLAS Convention and the ISPS Code regarding maritime standards.
742 Theodore Konstadinides have led to the adoption of new international rules.27 It was immaterial to the Court whether those rules that could have been adopted by the IMO would have been binding upon the EU. The Court underlined the duty of loyalty as a means to ensure that EU competence may be exercised by Member States acting as trustees of the EU interest. The above is in line with the Court’s interpretation of the principle of unity of international representation in Commission v Sweden (PFOS), examined in detail elsewhere in this volume.28 Suffice to say here that the Court established that where the subject matter of a convention falls partly within the competence of the EU and partly within that of the Member States, it is imperative to ensure close cooperation between the Member States and the EU institutions. Such cooperation should take place both in the process of negotiation and conclusion and in the fulfilment of the commitments entered into. Therefore, in this case, the duty of loyalty was given pre-emptive effect to block Member States from undertaking any action that could potentially undermine the objectives of the EU Treaties. It transcended its original meaning (under Article 4(3) TEU) and became synonymous with a duty of agency or abstention (in this particular case, at the OIV), even if the competence at issue was neither exclusive ab initio nor pre-emptive through the application of the ERTA doctrine. The use of a best endeavours obligation, or an obligation of result in the above-mentioned cases, was imposed upon Member States to discard any inconsistencies in the EU’s external relations approach. The Court’s approach (highlighting consistency, unity or any objective protective of the common interest) means that Member States need therefore to tread carefully so as to avoid upsetting the EU’s common interest through their action or, indeed, their inaction. While the OIV judgment and the relevant case law mentioned in this chapter are of course confined to the specific legal context set out by individual treaty provisions, they are sufficient to substantiate broader conclusions about the imposition of a general and, at times, abstract agency obligation upon the Member States. As such, the OIV case involved both a question of principle as well as one of legal basis and external competence. The discomfort that certain Member States have experienced with regard to the doctrines developed by the Court and the questionable reasoning that often characterises such development are likely to generate more litigation, especially given that in the OIV case, Germany was supported in its claim by other Member States, including the Netherlands and the UK, which were not themselves parties to the OIV at the time. C. Open Matters for Future Cases Despite the importance of the OIV judgment, there are questions that the Court did not address, leaving open matters for future cases. Indeed, the OIV judgment confirms the EU’s competence to establish a unified position to be adopted on its behalf with regard to the recommendations of an international organisation, in view of the latter’s direct impact on the EU acquis in its area of application. Nevertheless, the Court did not address in the most convincing manner a number of questions about the status in EU law of international agreements concluded by
27 For a detailed analysis and critique of the case, see this volume, ch 53; M Cremona, ‘Extending the Reach of the AETR Principle: Comment on Commission v Greece’ (2009) 34 EL Rev 754. 28 Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS). See this volume, ch 58.
Member States as Trustees of the Union in International Organisations 743 EU Member States, which for some time has remained subject to speculation.29 Following the jurisprudence of the Court on EU external competence, it is hardly surprising that the EU is not supportive of its Member States adopting a double-hatted approach in the conduct of their external relations. As such, while OIV is an important case highlighting the vitality of agency and comity as its guiding light, it leaves one demanding a more convincing explanation about the degree of agency expected from Member States in the exercise of their own external relations in international fora that the EU does not participate. Future cases may revisit the OIV judgment as to whether it comprised a constitutional step too far and generated inadvertent consequences for the morphological development of the constitution of EU external relations. The Court appeared unprepared in OIV to recognise the full implications of EU Member States’ membership in other international organisations, which, like the EU, prescribe obligations and commitments for these states. So, while the OIV judgment demonstrates openness to the influence of international organisations in substantive areas of law and policy inside the EU, it also implicitly demonstrates the Court’s uncompromising approach towards the susceptibility of EU constitutional principles to compromise by international law.30 In this regard, it is consistent with the case law upon which the Court has adopted what Eeckhout refers to as ‘a constitutional rather than an international perspective’.31 Internally, this insular approach is capable of boosting the EU’s self-confidence levels in the region as a normative power.32 Externally, however, the Court’s single overarching objective may not always correspond to the constitutional specificities of other international organisations – or, indeed, to the Member States’ individual preferences in relation to their own external representation. D. Conclusions The dispute between Germany and the Council in OIV forms an important part of the narrative concerning the gradual broadening of the areas falling under the umbrella of EU exclusive external competence.33 It is also a case that has helped the Court to cement the formulation of a uniform EU position which concerns the conduct of international organisations to which
29 Especially following the repeal (by the Treaty of Maastricht) of former Art 116 EEC (now repealed), which provided a legal basis for a common action by the Member States in cases where the Community could not exercise its powers within the framework of certain international organisations. This provision prevented individual actions by Member States within the framework of international organisations of an economic character. The Union institutions were charged with the task of coordinating common action in this situation. On the impact of agreements concluded by EU Member States which are relevant to EU law, see A Rosas, ‘The Status in EU Law of International Agreements Concluded by EU Member States’ (2011) 34 Fordham International Law Journal 1304. 30 See, eg Opinion 2/13, ECLI:EU:C:2014:2454, where the Court stressed, inter alia, that ‘the agreement [2013 accession treaty to the ECHR] … fails to have regard to the specific characteristics of EU law with regard to the judicial review of acts, actions or omissions on the part of the EU in CFSP matters’. 31 See P Eeckhout, ‘Kadi and Al Barakaat: Luxembourg Is Not Texas – or Washington DC’ (European Journal of International Law Talk, 25 February 2009) www.ejiltalk.org/kadi-and-al-barakaat-luxembourg-is-not-texas-orwashington-dc/. 32 Although this may on occasion lead to intra-institutional conflict about the identity of the EU institution entrusted with the task of deciding upon the position of the EU. See Case C-73/14, Council v Commission, ECLI:EU:C:2015:663 (ITLOS). See this volume, ch 74; Case C-660/13, Council v Commission, ECLI:EU:C:2016:616 (Swiss MoU). See this volume, ch 77. 33 See also Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I). See this volume, ch 84.
744 Theodore Konstadinides Member States are parties insofar as the functioning of such organisations may impact upon the operation of the EU. In this regard, the OIV case is relevant not only because of its immediate outcomes, but most importantly because of its progeny, which confirms the Court’s incremental role in deciding on the matter of ‘who decides’ for matters in international organisations when the Union’s interests are at stake. The OIV judgment is also indicative of the Court’s approach, which does not nourish, but rather presupposes the importance of the duty of loyalty in the field of EU external relations. Since it is almost impossible to conceive of a policy area that falls outside the scope of EU law, the Court’s prescriptive approach concerning the membership of EU Member States in international organisations will inevitably impact upon future bilateral relations between Member States and international organisations, as well as the EU and international organisations more generally. The OIV judgment constitutes a test case for these international organisations, which, in its aftermath, may either welcome the cross-pollination between the EU Member States acting as trustees of the EU and their legal orders or consider reviewing their terms of membership to demonstrate their aversion towards being indirectly managed by the EU institutions. V. ADDITIONAL READING Campo, LA, ‘Why EU-External Relation Debates Should Remain EU-Internal’ (European Law Blog, 19 May 2019) https://europeanlawblog.eu/2019/05/15/case-c-620-16-otif-why-eu-external-relationdebates-should-remain-eu-internal/. Czuczai, J, ‘The Autonomy of the EU Legal Order and the Law-Making Activities of International Organizations: Some Examples Regarding the Council’s Most Recent Practice’ (2012) 31 Yearbook of European Law 452. Erlbacher, F, ‘Recent Case Law on External Competences of the European Union: How Member States Can Embrace Their Own Treaty’ (2017) Centre for the Law of EU External Relations Paper 2017/2, www.asser.nl/media/3485/cleer17-2_web.pdf. Ramopoulos, T and Wouters, J, ‘Charting the Legal Landscape of EU External Relations Post-Lisbon’ (2015) KU Leuven Working Paper No 156. Wessel, R and Blockmans, S, ‘The Legal Status and Influence of Decisions of International Organizations and Other Bodies in the European Union’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 223–48.
69 The ERTA Doctrine Post-Lisbon: Opinion 1/13 (Convention on the Civil Aspects of International Child Abduction) CHRISTIAN THORNING Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303, delivered 14 October 2014. KEYWORDS Accession of third states to international conventions – Risk of undermining the uniform and consistent application of EU rules – Judicial cooperation in civil matters – Admissibly of a request for an Opinion – Special position of Denmark (opt-out).
I. INTRODUCTION
I
n Opinion 1/13, the Court reaffirmed its case law on the interpretation of the ERTA doctrine.1 The Court in this way underlined that the entry into force of the Treaty of Lisbon had not altered the Court’s understanding of the ERTA test, nor had the Treaty altered the full scope of the test. Opinion 1/13 can be considered an important contribution from the Court as to the proper understanding of the scope of the Opinion procedure. The Court thus took a broad view when determining which circumstances did not deprive the Opinion procedure of its essential preventive function as defined in Article 218(11) TFEU. Moreover, during the proceedings leading up to Opinion 1/13, the issue of the special position of Denmark as holder of a so-called ‘opt-out’ within the area of freedom, security and justice (formerly, justice and home affairs) was brought, by the Court itself, into the equation of defining the scope of the exclusive external competence of the EU. This important legal aspect could easily be overlooked, as the issue was left unmentioned by the Court in Opinion 1/13.
1 See
this volume, ch 1.
746 Christian Thorning II. FACTS
All EU Member States are parties to the 1980 Hague Convention on the civil aspects of international child abduction (The Hague Convention, or Convention).2 The EU is not a party thereto, and cannot become one due to provisions of the Convention itself. The aim of the Convention is to ensure the prompt return of children wrongfully removed to or retained in any contracting state, and to ensure that the rights of custody and of access under the law of one contracting state are effectively respected in another contracting state. The fulfilment of this aim is envisaged through a set of obligations on designated authorities within the contracting states to cooperate with each other. The Convention lays out specific rules and procedures in this respect. The final clause of the Convention stipulates that any other state may accede to the Convention. However, the accession will only have effect as regards relations between the acceding state and such contracting states that have declared their acceptance of the accession. The matter of parental responsibility and enforcement of judgments in matrimonial matters was at the time of Opinion 1/13 regulated within EU law by Council Regulation (EC) No 2201/2003 of 27 November 2003.3 This regulation makes several references to The Hague Convention, including in the operational part. A number of third states4 had, on different dates, deposited instruments of accession to The Hague Convention. Taking the view that the question of the international abduction of children fell within the exclusive external competence of the EU, on 21 December 2011, the Commission adopted eight proposals for decisions of the Council concerning the declarations of acceptance by the Member States, in the interest of the EU, of the accession of those third states to the Convention. However, a large majority of the representatives of the Member States within the Council held the view that the EU did not have exclusive competence in the area concerned, and consequently, the Council was under no obligation to adopt the proposals from the Commission. This prompted the Commission to seek an Opinion of the Court pursuant to Article 218(11) TFEU on the question whether the exclusive competence of the EU encompasses the acceptance of the accession of a non-Union country to the Hague Convention. The Council and a number of Member States challenged the admissibility of the request for an Opinion based on several arguments: firstly, that the subject matter of the request – the deposit of declarations of acceptance of accession – did not constitute an ‘agreement’ as prescribed by Article 218(11) TFEU; secondly, that the request for an Opinion did not concern an agreement between the EU and third states within the meaning of the said Article; thirdly, that no agreement with acceding states under the Hague Convention was ‘envisaged’ as prescribed in Article 218(11) TFEU; and finally, that the Commission should have instead used the instrument of the infringement procedures under Article 258 TFEU against the Member States since the Commission, in reality, was seeking to end the current practice of Member States individually accepting the accession of new states to the Convention. The European Parliament and the Commission disagreed with all of those arguments. 2 The text of the Hague Convention can be found on the website of The Hague Conference on Private International Law at www.hcch.net/en/instruments/conventions/full-text/?cid=24. 3 The regulation is still in force with later amendments. 4 Eight in total: the Republic of Armenia, the Republic of Albania, the Republic of the Seychelles, the Kingdom of Morocco, the Gabonese Republic, the Republic of Singapore, the Principality of Andorra and the Russian Federation.
The ERTA Doctrine Post-Lisbon 747 On the substance, the Commission and the Parliament argued in favour of the EU’s exclusive external competence by underlining that The Hague Convention and Regulation 2201/2003 covered not only the same area, but, in the eyes of the Commission and the Parliament, even formed a body of rules that were ‘inextricably linked’ and that the Regulation, by way of complementing and strengthening the provisions of the Convention, had in fact incorporated them. It was furthermore submitted that the EU’s exclusive external competence was extended to the entirety of the Convention, even supposing that certain rules were dissociable from the Convention, since the area in any case was covered to a large extent by EU rules following the principles stated by the Court in Opinion 2/91.5 One Member State, Italy, generally shared the views of the European Parliament and the Commission. By contrast, the majority of Member States as well as the Council were of the firm belief that the EU did not have exclusive external competence on the matter. A few governments were of the opinion that the EU had no competence at all in the area. Firstly, the argument from these parties centred on the nature of the commitment that Member States undertook by way of individually depositing declarations regarding states acceding to The Hague Convention. The objectives of these declarations were related to cooperation with third states and not, as was the case under the Regulation, cooperation among Member States. According to these Member States and the Council, the question of undermining the uniform and consistent application of Regulation 2201/2003 could not arise. Secondly, the argument was raised that EU exclusive external competence cannot arise merely because the area in question was covered to a large extent by equivalent EU rules primarily because that criterion was not included in Article 3(2) TFEU, which otherwise codified the Court’s case law on the EU’s exclusive external competence. It was further added that even if such a test were relevant, the fact in this case was that only a partial overlap occurred between the scope of the Convention and that of the Regulation, and in any case that did not have any effect on the application of the Regulation. Finally, the argument was heard that even though differences occurred among Member States regarding the acceptance or not of states acceding to The Hague Convention, which led to variations in the enforceability of the Convention visà-vis third states, this situation was an inherent nature of the Convention and not an obstacle to the proper application of Regulation 2201/2003. III. THE COURT
The Court first addressed the question of admissibility. Three issues were addressed: firstly, the issue of what constitutes ‘an agreement’; secondly, the issue of such an agreement being ‘envisaged’ (cf the provision laid down in Article 218(11) TFEU); and finally, whether there was in this case an issue concerning misuse by the Commission of the Opinion procedure. First, the Court examined the issue of the classification of the declaration of acceptance of accession as a constituent part of an ‘agreement’ by turning its attention to the relevant international law. The Court thus pointed out that the expression ‘convergence of intent’ as prescribed in the Vienna Convention on the Law of Treaties (VCLT) was met insofar as the act of accession of a third state to The Hague Convention and the subsequent declaration of acceptance gave the said expression, overall, to the ‘convergence of intent’ of the states
5 Opinion 2/91, ILO Convention concerning safety in the use of chemicals at work, ECLI:EU:C:1993:106. See this volume, ch 22.
748 Christian Thorning concerned.6 The Court added that since the declaration of acceptance from a Member State formed a constituent part of an international agreement concluded with a third state, it was encompassed by the concept of an ‘agreement’ under Article 218(11) TFEU, provided that it was an agreement ‘envisaged’ by the EU for the purpose of those provisions.7 It was, according to the Court, an irrelevant factor that the EU could not accede to The Hague Convention, or deposit declarations of acceptance of accession to the Convention. In this regard, the Court made reference to its case law, specifically Opinion 2/91,8 noting that in such a situation the competence may be exercised through the intermediary of the Member States acting in the EU’s interest.9 Turning next to the interpretation of the notion of ‘envisaged’, the Court first pointed out that a request for an Opinion is admissible, in particular when a Commission proposal concerning an agreement has been submitted to the Council and has not been withdrawn at the time when the request is submitted to the Court. The Court reiterated that it was a legitimate concern of a Member State or an EU institution to know the extent of the respective powers of the EU and the Member States before a decision relating to the agreement concerned is taken. To that effect, the Court referred to Opinion 2/94.10 Furthermore, the objective of the Opinion procedure was highlighted by the Court by way of referring to a point made by the Advocate General (AG) in his View11 – that the Opinion procedure is to forestall legal complications caused when Member States find themselves in the unfortunate situation of not having the necessary legislative competence to put the international commitments they have undertaken into effect.12 Such a situation would be liable to provoke serious difficulties and might give rise to adverse consequences for all interested parties.13 Lastly, the Court observed that the Council’s opposition to the proposal by the Commission for the Member States to deposit declarations of acceptance in respect of the states acceding to The Hague Convention was founded solely on its conviction that the matter did not fall under the EU’s exclusive external competence. It was thus not based on a different view of the appropriateness of Member States accepting the acceding states under the Convention. In those circumstances, the Court said, the international agreements of which those declarations of acceptance are a constituent part may be classified as agreements ‘envisaged’ at the time the request for an Opinion was made. The fact that certain Member States already had individually deposited declarations of acceptance did not invalidate that conclusion, as such circumstances alone did not render the request for an Opinion redundant.14 Interestingly, on this point, the Court disagreed with the View of the AG.
6 Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2303, paras 37–41. 7 ibid para 42. 8 Opinion 2/91 (n 5) para 5. 9 Opinion 1/13 (n 6) para 44. 10 Opinion 2/94, Accession by the Community to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:1996:140, paras 11–18. See this volume, ch 32. 11 The only time the Court referred to the View of AG Jääskinen, Opinion 1/13, Convention on the Civil Aspects of International Child Abduction, ECLI:EU:C:2014:2292. 12 On this point, see G Butler, ‘Pre-ratification Judicial Review of International Agreements To Be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 66. 13 Opinion 1/13 (n 6) para 48. The Court made analogy to Opinion 3/94, Framework agreement on bananas, ECLI:EU:C:1995:436, para 17, and to Opinion 1/09, Creation of a unified patent litigation system, ECLI:EU:C:2011:123, para 48. 14 Opinion 1/13 (n 6) para 51.
The ERTA Doctrine Post-Lisbon 749 As the last point under the issue of admissibility, the Court dismissed the argument put forward by Member States and the Council that the Commission, in this case, was misusing the Opinion procedure. The Court observed that it was true that the Commission had not brought infringement proceedings under Article 258 TFEU against Member States relating to the many declarations of acceptance that implicitly were called into question by the request for an Opinion. However, the Court had no evidence to suggest that the Commission, by making its request for an Opinion, had acted with the aim of circumventing the infringement procedure under the Treaties. In any case, the fact that an issue may be addressed under the infringement procedure did not prevent a request for an Opinion from being heard, provided that the question put to the Court fell within the scope of the Opinion procedure.15 On the substance, the Court initially and rather briefly observed that the EU indeed had external competence within the area in question. The Court based its conclusion on the principle of external competence flowing implicitly from other provisions of the Treaties and from measures adopted within the framework of those provisions, which were principles that the Court had referred to in Opinion 1/03,16 and included further reference to the Court’s case law in this respect. The Court briefly mentioned as an add-on that Article 216(1) TFEU made reference to the same. The Court found that internal competence was undisputedly provided by Article 81(3) TFEU, and furthermore, that the EU had even exercised that competence by adopting Regulation 2201/2003.17 The Court then turned to examine the nature of the external competence. The point of departure was the third condition of Article 3(2) TFEU, according to which exclusive external competence for the conclusion of an international agreement arises in so far as its conclusion ‘may effect common rules or alter their scope’. Whether that condition was met or not depended on an examination of the elements laid down in the Court’s case law, with the starting point being the ERTA judgment18 and subsequent jurisprudence. The Court found that the scope of EU rules may be affected or altered by international commitments where such commitments are concerned with an area which had already been covered to a large extent by such rules. The Court added that this finding remained relevant in the context of Article 3(2) TFEU.19 At the same time, the Court stressed the importance of conducting a detailed and comprehensive analysis of the envisaged international agreement, as well as the EU law in force, before drawing a conclusion to that question. Again, the Court referred to its case law in this regard.20 After conducting the said thorough analysis of the circumstances in the present case, the Court concluded firstly that the provisions of Regulation 2201/2003 did cover – to a large extent – the procedures governed by The Hague Convention in relation to child abduction and that the whole of the Convention was covered by EU rules.21 Secondly, the Court found that the scope and the effectiveness of the common EU rules in question were likely to be affected when Member States made separate declarations on an individual basis, accepting third states to the Hague Convention.22
15 ibid para 54. To that effect, the Court referred to Opinion 2/92, Third Revised Decision of the OECD on national treatment, ECLI:EU:C:1995:83, para 14. 16 Opinion 1/03, Lugano Convention, ECLI:EU:C:2006:81. See this volume, ch 46. 17 Opinion 1/13 (n 6) para 68. 18 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. 19 Opinion 1/13 (n 6) para 73. 20 ibid para 74. 21 ibid para 83. 22 ibid paras 88 and 89.
750 Christian Thorning In view of these combined findings, the Court’s Opinion gave an affirmative answer to the Commission’s question put before the Court, meaning that the EU’s exclusive competence encompassed the acceptance of the accession of a third state to The Hague Convention. IV. THE IMPORTANCE OF THE CASE
A. Unfettered Continuation of the Broad ERTA Test Post-Lisbon The Court referred at some length to its prior jurisprudence in this Opinion. In itself, this is, of course, nothing out of the ordinary. At the time, shortly after the entry into force of the Treaty of Lisbon, it was, however, not necessarily clear that the pre-Lisbon case law in the area of defining the scope of the EU’s exclusive external competence was still relevant. At least, it was not clear to the Council, nor to a significant number of Member States. On the contrary. The Treaty of Lisbon had introduced what has popularly been referred to as ‘a catalogue of competence’ by way of a set of provisions in the very beginning of the TFEU spelling out the different types of EU competences. Article 3(2) TFEU – as well as Article 216(1) TFEU – were broadly understood to have codified the original ERTA doctrine from the Court’s 1971 ruling. The broadening of the scope of this doctrine, which the Court had subsequently established in its later jurisprudence, was, in the eyes of several Member States and the Council, not part of this codification. In Opinion 1/13, the Court eradicated any doubt, let alone any alterative views, on whether its case law on implied exclusive powers prior to the entry into force of the Treaty of Lisbon continued to apply. This certainly was the case. The Court embraced the broad view of the ERTA doctrine that it had established in its jurisprudence leading up to the time of the Treaty of Lisbon. Notably, the Court referred to the established doctrine on the interpretation of the original ERTA test. This included, firstly, that the external and internal measures at hand do not necessarily have to coincide fully, but that it may suffice that there is ‘an area already covered to a large extent by EU measures’.23 Secondly, regard also has to be given to ‘foreseeable future developments’ of the EU measures.24 The Court did so despite the fact that the wording of Article 3(2) TFEU does not entail this broader interpretation of the ERTA test. Several Member States had pointed out to the Court that the drafting of this specific treaty provision had deliberately been done in this way by the very Member States themselves as the Masters of the Treaties. It was further added that, in light thereof, the broad ERTA test established through the Court’s jurisprudence was no longer relevant because it was not included in Article 3(2) TFEU. Were the test to be applied anyway, it would, in the eyes of several Member States, constitute a breach of the principle of conferred powers. The essence of Opinion 1/13 is that the understanding that Member States, as authors of the Treaties, can reverse the jurisprudence was firmly rejected. Only a contra-legem interpretation seems to be excluded by the Court.25 As Rosas put it: ‘If the authors of the Treaty of Lisbon contemplated a definitive clarification of all questions related to Union competences
23 Opinion 2/91 (n 5) paras 25–26. 24 Opinion 1/03 (n 16) para 126. 25 I Govaere, ‘“Setting the International Scene”: EU External Competence and Procedures Post-Lisbon Revisited in the Light of ECJ Opinion 1/13’ (2015) 52 CML Rev 1294.
The ERTA Doctrine Post-Lisbon 751 and the division of competences between the Union and its Member States[,] they can be considered to have failed miserably’.26 Let this stand as a lesson learned for any future authors of possible treaty revisions.27 Not surprisingly, however, the interpretation of the ERTA doctrine since Opinion 1/13 has continued to raise questions before the Court. Shortly after Opinion 1/13 was rendered, that was precisely the case in relation to Opinion 2/15 on the free trade agreement with Singapore.28 Nearly all Member States intervened in this case alongside the Council, with a view to airing their understanding of the proper interpretation of, inter alia, the ERTA test after Opinion 1/13. A prominent feature in this regard was the understanding of when ‘an area already was covered to a large extent by EU measures’, thus constituting external competences for the EU. In relation to the Singapore Free Trade Agreement, the Government of Denmark took the view that this was certainly not the case within the area of maritime transport.29 AG Sharpston was, in her View, to a large extent on the same path as the Council and Member States, pointing out a number of areas where she found the competence to be shared among the EU and the Member States, including within the area of maritime transport. The Court, however, continued along its established line of – as seen from a Member State perspective – a broad interpretation of the ERTA test, and thus fundamentally disagreed.30 B. Scope of the Opinion Procedure of Article 218(11) TFEU Referring to the VCLT, the Court swiftly established that the requirement of an ‘agreement’ was met in the present case. By the same token, the Court recited its relevant case law, which had already established that Member States, in certain circumstances, may act as intermediaries in the interest of the EU whereby the requirement of an agreement being envisaged ‘by the EU’ was also met. By and large, these findings of the Court were no surprise. The same cannot necessarily be said of the broad view that the Court took on the issue of agreements being ‘envisaged’. What was at stake was essentially whether the Opinion procedure was still able to fulfil its preventive function in a situation where a good number of the agreements, by way of declarations of acceptances by individual Member States, had already undisputedly taken place prior to the time of the request for an Opinion being submitted by the Commission.31 In this regard, in his View in Opinion 1/13, AG Jääskinen found that the declarations of acceptance already deposited by certain Member States could not be regarded as constituting an international agreement that was still ‘envisaged’ at the time when the request to the Court was made. He considered the Opinion procedure to have lost both its purpose and its
26 Ibid, quoting A Rosas, ‘Exclusive, Shared and National Competence in the Context of EU External Relations: Do Such Distinctions Matter?’ in I Govaere, P Van Elsuwege, S Adam and E Lannon (eds), The EU in the World (Leiden, Martinus Nijhoff, 2014) 17–43. 27 This statement is made with an element of mea culpa, as this author was part of the two-person national delegation from each Member State, in this case for Denmark, forming the so-called ‘Piris Group’ entrusted with drafting the Treaty of Lisbon. 28 Opinion 2/15, EU-Singapore Free Trade Agreement, ECLI:EU:C:2017:376. See this volume, ch 82. 29 The principle view of Denmark was that transport as an area of cooperation was explicitly exempted from the Union’s exclusive competence; cf Art 207(5) TFEU. 30 See this volume, ch 82. 31 300, including one concerning the countries specifically mentioned in the Commission’s request for an opinion.
752 Christian Thorning effectiveness in such circumstances. According to his View, the request should therefore only be partially admitted.32 The conclusion by the AG does not appear to be far-fetched. Rather, it appears to be logical since, generally speaking, it seems difficult to ‘envisage’ something that has already happened. The Court nevertheless came to the opposite conclusion, essentially by declaring that the fact at hand did not render the request for an Opinion redundant. Another issue addressed was whether the Opinion procedure was the right procedure for the Commission to follow, or if the Commission rightly should have opened infringement proceedings against relevant Member States for unilaterally submitting declarations of acceptance. The way in which the Court addressed this issue suggests, at least to some extent, that relevance was given to there being no evidence of intention by the Commission to circumvent the use of the infringement procedure. It is not quite clear, however, if the presence of such evidence necessarily would have led the Court to the opposite conclusion. When taking into consideration that the Court, at the same time, found that the Opinion procedure had not lost its relevance, or its principal function even under the particular circumstances in Opinion 1/13, the Court had in fact established a broader scope for the Opinion procedure than had previously been understood.33 C. The Special Position of Denmark (Opt-Out) Ever since the Edinburgh Agreement of 1992,34 Denmark has held a special position within the area of what was then called justice and home affairs (JHA). With the Treaty of Lisbon, this area of EU cooperation changed its name to the area of freedom, security and justice (AFSJ). The special position of Denmark remained unchanged, as regulated in Protocol No 22 annexed to the EU Treaties. Part I of this protocol contains what is popularly referred to as an ‘opt-out’ for Denmark on all EU legislative measures pursuant to Title V of Part Three of TFEU. It follows from this legal obligation that Denmark did not participate in the adoption of Regulation 2201/2003, nor was it bound by it.35 In light thereof, the Danish government decided not to submit observations in Opinion 1/13. However, during the proceedings, the Court posed a question for written answer on the possible implications owing to the special position of Denmark.36 Denmark answered the question of the Court in written form, and also chose to participate at the subsequent oral hearing, with a view to reiterating its view on the matter of a possible impact of Denmark’s position under EU law when addressing EU’s implied external competence. 32 View of AG Jääskinen(n 11) para 47. Elaborating further, AG Jääskinen found that the Commission could have initiated infringement proceedings, cf his View, para 50. 33 For a comprehensive analysis of these issues, see Govaere (n 25). 34 The Edinburgh Agreement forms Part B of the Presidency Conclusions from the European Council Meeting 11–12 December 1992 in Edinburgh. The Edinburgh Agreement encompasses a set of measures, notably a Decision entitled ‘Decision of the Heads of State or Government, meeting within the European Council, concerning certain problems raised by Denmark on the Treaty on European Union’. 35 Govaere (n 25) 1281 holds that Denmark, contrary to the UK and Ireland, effectively chose to opt out of Regulation 2201/2003. The legal reality is, however, that, unlike the UK and Ireland, Denmark had (and still has) no choice of ‘opting in’. 36 Question of the Court of 17 March 2014 for written answer: ‘The Danish Government, as well as the other parties, are requested to clarify – in light of Opinion 1/03 of February 7, 2006 (Rec p-I-1145) – the possible impact on the present case of the fact that, in accordance with Protocol No 22 on the position of Denmark, annexed to the EU and FEU Treaties, this Member State is not participating in the adoption of measures in the area of freedom, security and justice, and therefore that it did not participate in the adoption of regulation No 2201/2003 and it is not bound by it’ (unofficial translation from French).
The ERTA Doctrine Post-Lisbon 753 The position of Denmark was as short as it was clear: the special position of Denmark had no bearing at all on the issue. Denmark, for which this author acted as agent, pointed to the legal effect of the provisions in Protocol No 22 which exempted Denmark from the Union’s legal measures on freedom, security and justice (cf Part Three, Title V TFEU). Uniquely, Denmark has not conferred powers to the EU within the said area of cooperation, and therefore has maintained its full national competence, including its external competence. In light of this, the legal assessment of whether the Union carries exclusive external competence or not in relation to The Hague Convention has no bearing on the legal position of Denmark. Equally, the legal position of Denmark has no bearing on the assessment of the nature of the external competence the EU may or may not have in the field under review. In other words, were the Court to be of the position (which it was) that an exclusive external EU competence existed, it would have bearings on the legal position of the Member States, with the exception of Denmark.37 The Commission, the Council and the Parliament, as well as a small handful of other Member States that had submitted written replies to the Court’s question, all came to the same conclusion as Denmark.38 The Court did not pursue the matter any further, and chose not to challenge Denmark’s view during the oral hearing. The issue is not mentioned in the Opinion of the Court.39 It may therefore be concluded that the Court found no reason to dispute the concordant observations of the parties that the special position of Denmark had no bearing on the matter of implied external competence of the EU. This was not, however, the end of it. The issue of the special position of Denmark as well as the special position of Ireland (and, until recently, also the UK) within AFSJ matters40 has since continued to raise questions before the Court regarding the EU’s external competence. During the Court proceedings in relation to Opinion 2/15,41 Ireland argued that its special position according to Protocol No 21 would be affected should the Court determine that the EU held exclusive external competence within a certain area of cooperation covered by the draft free trade agreement’s Chapter 8 on services, establishment and electronic commerce. In this case, the issue was of a somewhat different nature than was the case in Opinion 1/13 since it was not clear that Protocol Nos 21 and 22 were at all relevant in relation to the external measure being examined – in this case, the Singapore Free Trade Agreement. Denmark argued
37 This was in line with Opinion 1/03 (n 16). There, the question was raised whether it had any bearing when determining the scope of the EU’s external competence that Denmark and the EU had entered into a so-called parallel agreement on Regulation 44/2001 (Brussels I), which was the relevant internal EU legal measure at stake, and which fell under the Danish opt-out. The answer was in the negative. From the Danish side, the argument was made that it had no bearing due to the legal nature of the parallel agreement that constituted an agreement under international law between the parties. It followed that the legal position of Denmark under EU law had remained unchanged. Still, Denmark had not conferred powers to the EU within the JHA area and, consequently, the Regulation as such was not binding on nor applicable for Denmark. However, the provisions of the Regulation were made applicable between the Union and Denmark as a binding mutual obligation under international law by way of said parallel agreement. 38 The Commission, the European Parliament, the Council and the Czech, Danish, Spanish, French and Polish governments answered the question. Neither the UK nor Ireland, which hold a so-called ‘opt-in’ under Protocol No 21, answered the question. 39 AG Jääskinen found that the request by the Commission for an Opinion should not be declared admissible as far as Denmark was concerned, apparently due to the special position of Denmark, cf his View (n 11) para 106. The Court did not entertain the position of the AG either. 40 cf Protocol No 21 on the position of the UK and Ireland in respect of the area of freedom, security and justice. 41 Opinion 2/15 (n 28).
754 Christian Thorning in Opinion 2/15 that this was essentially not the case, since no legal basis under the relevant treaty provisions within the AFSJ were at play in the draft free trade agreement. The Court explicitly agreed with this Danish view. Against this background, the Court did not find it necessary to address the issue of a possible legal bearing of the protocols in relation to the competence issue vis-à-vis the Singapore Free Trade Agreement.42 The special positions of both Ireland and Denmark have recently troubled the Court in Opinion 1/19 regarding the conclusion by the EU of the Istanbul Convention.43 Denmark has voiced similar arguments as presented in relation to Opinion 1/13 in this new case, including the principal argument that Denmark has not transferred competence to the EU within the AFSJ area, and that the EU, in light thereof, cannot take on obligations under the Istanbul Convention with effect for Denmark within the said area. This legal fact has no bearing, however, on the division of external competences between the EU and its (other) Member States. The Opinion of the Court in Opinion 1/19 is pending at the time of writing. V. ADDITIONAL READING Casteleiro, AD, ‘On the Scope of EU’s Exclusive Competence after the Lisbon Treaty – Comment of the Opinion 1/13 of the Court (Grand Chamber) of 14 October 2014 on Convention on the Civil Aspects of International Child Abduction’ (2015) 51 Revista de Derecho Comunitario Europeo 669. Franzina, P (ed), The External Dimension of EU Private International Law after Opinion 1/13 (Antwerp, Intersentia, 2016). Govaere, I, ‘“Setting the International Scene”: EU External Competence and Procedures Post-Lisbon Revisited in the Light of ECJ Opinion 1/13’ (2015) 52 CML Rev 1277. Olsen, BE and Sørensen, KE (eds), EU-retten i Danmark (Copenhagen, Jurist- og Økonomforbundets Forlag, 2018) chs 3–7.
42 ibid para 218, which reads: ‘Contrary to Ireland’s submissions, that conclusion [that the European Union has exclusive competence] is not affected by the Protocol (No 21) on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice, annexed to the EU and FEU Treaties. It is sufficient to note that the common commercial policy and the common transport policy are not covered by that protocol and to bear in mind that it is the aim and the content of the measure in question which determine the protocols that may be applicable, and not vice versa (see, by analogy, Case C-137/12, Commission v Council, ECLI:EU:C:2013:675, paras 74 and 75). Since the envisaged agreement does not relate to the matters governed by Title V of Part Three of the FEU Treaty, that protocol is irrelevant in the present procedure. The same is true of Protocol (No 22) on the position of Denmark, annexed to the EU and FEU Treaties, as the Kingdom of Denmark indeed stated at the hearing’. 43 Council of Europe Convention on preventing and combating violence against women and domestic violence of 11 May 2011.
70 The Second Attempt at EU Accession to the ECHR: Opinion 2/13 KATJA S ZIEGLER Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:2014:2454, delivered 18 December 2014. KEYWORDS EU accession to the ECHR – Autonomy of the EU legal order – EU fundamental rights – EU law and international law – EU Charter of Fundamental Rights – Hierarchy of norms in EU legal order – Mutual trust – Judicial review of Common Foreign and Security Policy – Co-respondent procedure – Prior involvement mechanism.
I. INTRODUCTION
T
he EU’s internal protection of human rights is inextricably linked with the European Convention on Human Rights (ECHR). Until the Treaty of Lisbon, which made the EU Charter on Fundamental Rights (Charter) formally binding, the EU depended on general principles of EU law, relying heavily on the ECHR for their content. Developing fundamental rights in the EU in that way was necessary to counter Member States’ challenges to the primacy and effective implementation of EU law and to preserve the EU’s legitimacy when it increasingly affected the rights of individuals. Accession of the EU to the ECHR was to create external human rights accountability to further increase the EU’s legitimacy and to prevent conflicting obligations for Member States under EU law and the ECHR. A first attempt of the EU to accede to the ECHR failed in 1996, when the Court held, somewhat unconvincingly,1 that the EU (then EEC) lacked competence to do so.2 In 2009, the Treaty of Lisbon created an explicit competence and requirement to accede in Article 6(2) TEU. Further provisions were laid out in Protocol No 8 and a Declaration to Article 6(2)3 to accommodate procedurally the specific features of the
1 Human
rights accountability would primarily amount to self-limitation of EU powers. 2/94, ECLI:EU:C:1996:140. See this volume, ch 32. 14 to the ECHR paved the way for accession of a non-state party (see Art 59(2) ECHR).
2 Opinion
3 Protocol
756 Katja S Ziegler EU (Article 1 of Protocol No 8).4 With regard to substantive conditions, Protocol No 8 repeats Article 6(2) TEU in that accession should not affect the competences of the EU and its institutions. Protocol No 8 adds two further conditions: accession should not alter the situation of the Member States in relation to the ECHR (Article 2 of Protocol No 8) and the exclusivity of jurisdiction of the Court regarding the treaties must be preserved (Article 344 TFEU, Article 3 of Protocol No 8). II. FACTS
Negotiations between the European Commission and the 47 states parties to the ECHR concluded with a mixed agreement, the Draft Accession Agreement (DAA), in 2013. The DAA provided for the allocation and practical implementation of responsibility under the ECHR, because a breach of the Convention involving EU law could result from the EU acting alone, a Member State acting alone or both acting together. The DAA attributed an alleged violation to the Member States as a rule, and only to the EU if it acted alone (without Member States’ implementing acts). The DAA had to accommodate substantively and procedurally the Court’s previous jurisprudence on the external dimension of EU autonomy, which precludes another tribunal from pronouncing on EU law (including the division of competences) in a way that is internally binding in the EU legal order. First, it envisaged a new procedure, the co-respondent procedure, to enable the EU (or a Member State, as the case may be) to be involved as co-respondent and bound by the decision of the European Court of Human Rights (ECtHR) in the proceedings against the other party.5 If the ECtHR were to find a violation, the respondent and co-respondent would be jointly responsible, without the ECtHR ruling on the allocation of responsibility between them. Second, the DAA foresaw a prior involvement mechanism (a preliminary reference mechanism of sorts between the ECtHR and the Court) to enable the Court to assess the compatibility of EU law with fundamental rights, where it had not already done so.6 Third, the DAA addressed the issue of exclusive jurisdiction over interstate cases because both the ECHR (Article 55 ECHR) and the TFEU (Article 344 TFEU) envisage exclusivity of the ECtHR and Court of Justice of the European (CJEU), respectively. The DAA, in effect, waived the exclusivity of ECtHR jurisdiction with regard to proceedings before the CJEU.7 Following agreement on the text of the DAA, the European Commission requested an opinion under Article 218(11) TFEU. Both Advocate General (AG) Kokott and the Member States on the whole considered that the DAA was compatible with EU law. However, the Court disagreed, a decision for which it was vehemently and widely criticised.8
4 This relates to the participation of the EU in the control bodies of the ECHR (eg Council of Ministers of the Council of Europe), and to the identification of the correct respondent in proceedings before the ECtHR (Member States and/or EU). 5 Art 3(4) DAA; Final Report to the CDDH, Doc 41+1(2013)008rev2, 10 June 2013. 6 Art 3(6) DAA. 7 Art 5 DAA. 8 See, eg S Peers, ‘The EU’s Accession to the ECHR: The Dream Becomes a Nightmare’ (2015) 16 German Law Journal 213; P Eeckhout, ‘Opinion 2/13 on EU Accession to the ECHR and Judicial Dialogue – Autonomy or Autarky?’ (2015) 38 Fordham International Law Journal 955.
The Second Attempt at EU Accession to the ECHR 757 III. THE COURT
The Court’s starting point were the conditions of accession in Article 6(2) TEU, Protocol No 8 and the Declaration on Article 6(2) TEU. These might have simply been construed as relating to technical issues of accession because of the constitutional mandate to accede, but the Court took a wider approach and, in so doing, intensified the standard of its review. It treated the DAA like any other international agreement which the EU might conclude from an autonomous policy choice. This opened up the review against the standards of the entire constitutional framework of the EU9 in order to ‘ensure that accession does not affect the specific characteristics of the EU and EU law’.10 The Court’s review thus went beyond the constitutional fundamentals of the EU legal order, reflecting one concern with the DAA: ‘the autonomy enjoyed by EU law in relation to the laws of the Member States and in relation to international law’.11 In doing so, Opinion 2/13 vastly expanded what EU autonomy was to mean, thus moving ‘the goalposts’.12 First, it held that the DAA did not sufficiently consider certain specific characteristics of the EU legal order (section IIIA). Second, the Court found that its exclusive jurisdiction under Article 344 TFEU was not sufficiently protected by the DAA (section IIIB). Third, the Court objected to technical aspects of the co-respondent and prior involvement mechanisms, in particular the possibility that the ECtHR would interpret EU law (section IIIC). A. Specific Characteristics and Autonomy of the EU Legal Order Having defined the scope and standard of review, the Court located the general basis for its concerns about the DAA in the ‘autonomy’ of the EU legal order. While the notion of autonomy has a long tradition as a broad umbrella term both in its internal and external dimension,13 its independent normative content has remained dubious.14 In the internal dimension, autonomy has been defined by the sui generis character of the EU. The Court in Opinion 2/13 referred to this case law as a reminder that the EU is not a state (and cannot be treated in the same way as the states parties to the ECHR):15 The fact that the EU has a new kind of legal order, the nature of which is peculiar to the EU, its own constitutional framework and founding principles, a particularly sophisticated institutional structure and a full set of legal rules to ensure its operation, has consequences as regards the procedure for and conditions of accession to the ECHR (emphasis added).16 9 Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, ECLI:EU:C:2014:2454, para 163. 10 ibid para 164. 11 ibid para 170. 12 T Lock, ‘The Future of EU Accession to the ECHR after Opinion 2/13: Is It Still Possible and Is It Still Desirable?’ (2015) 11 European Constitutional Law Review 239, 243. 13 For an overview, see KS Ziegler, ‘Autonomy: From Myth to Reality – or Hubris on a Tightrope? EU Law, Human Rights and International Law’ in S Douglas-Scott and N Hatzis (eds), Research Handbook on EU Human Rights Law (Cheltenham, Edward Elgar, 2017) 267, 292 ff. 14 B de Witte, ‘European Union Law: How Autonomous Is Its Legal Order’ (2010) 65 Zeitschrift für Öffentliches Recht 141; J Willem van Rossem, ‘The Autonomy of EU Law: More Is Less?’ in RA Wessel and S Blockmans (eds), Between Autonomy and Dependence: The EU Legal Order under the Influence of International Organisations (The Hague, TMC Asser Press, 2013) 13. 15 Opinion 2/13 (n 9) para 156. 16 ibid para 158.
758 Katja S Ziegler The Court recalled the specific characteristics of EU law that must be protected to implement the process of integration: the principle of conferral, its institutional framework, the principles of primacy, direct effect, the ‘structured network of principles, rules and mutually interdependent legal relations linking the EU and its Member States with each other … “in a process of creating an ever closer union among the peoples of Europe”’ (citing Article 1 TEU) and common values, including fundamental rights.17 It then recalled that they must be protected, in the light of the objectives and the raison d’être of the EU, through the judicial system to ensure consistent and uniform interpretation of EU law.18 Turning to the external dimension of EU autonomy, the Court defensively referred to its case law to confirm that conferral of jurisdiction to an international tribunal in an international agreement ‘is not, in principle, incompatible with EU law’,19 provided that ‘the indispensable conditions for safeguarding the essential character of [its] powers are satisfied and, consequently, there is no adverse effect on the autonomy of the EU legal order’.20 An international agreement ‘must not have the effect of binding the EU and its institutions, in the exercise of its internal powers, to a particular interpretation of the rules of EU law’ (emphasis added).21 However, the specific concerns in Opinion 2/13 reflect a significantly expanded notion of autonomy in the external dimension: the focus of autonomy in the external dimension is shifted from protecting only essential characteristics22 to the broader ‘specific characteristics’ of the EU legal order – which it expands further; it also takes an expansive view on what amounts to an interpretation of EU law that binds the EU internally. (i) Supremacy of EU Law and Fundamental Rights Protection in the EU The Court held that the international agreement (DAA) was incompatible with the supremacy of EU law in respect to the EU Charter of Fundamental Rights and the ‘mutual trust’ in the area of freedom, security and justice (AFSJ). (a) Failure to ‘Coordinate’ Human Rights Standards of the ECHR with the EU’s Fundamental Rights First, the DAA did not ‘coordinate’ the rights of the ECHR (as an external treaty) and the Charter sufficiently with regard to Articles 53 ECHR and 53 of the Charter. Article 53 ECHR allows Member States to grant higher levels of fundamental rights protection in their national legal orders than the ECHR, which serves as a minimum. Although Article 53 of the Charter likewise allows Member States to protect rights at a higher level than the Charter, the Court held in Melloni23 that they could not do so when acting in the scope of EU law to ensure supremacy (and effectiveness) of EU law. Therefore, a conflict with EU law could arise if Member States relied on the ECHR to afford a higher national level of protection than EU law. Opinion 2/13 extrapolated the Court’s internal supremacy jurisprudence with regard to
17 ibid
paras 165–69, quotation from para 167. para 176. para 182. 20 ibid para 183. 21 ibid para 184. See also Opinion 1/00, ECLI:EU:C:2002:231, paras 12–13. 22 Opinion 2/13 (n 9) para 167. 23 Case C-399/11, Stefano Melloni v Ministerio Fiscal, ECLI:EU:C:2013:107, para 60. 18 ibid 19 ibid
The Second Attempt at EU Accession to the ECHR 759 Member States in Melloni to the (external) ECHR context: it required that the same limits to the level of protection must apply to the ECHR, so that Member States could not invoke the ECHR to challenge or avoid obligations under EU law: Article 53 ECHR and Article 53 EUCFR needed to be ‘coordinated’24 to preserve specific characteristics of EU law. The Court thus expanded the internal special characteristic of supremacy into the external context, invoking autonomy. This far-reaching application of autonomy is further highlighted by the context: as a matter of EU law, Member States would still be bound by the Melloni limit in the same way as pre-accession, and this obligation could be enforced under EU law (infringement action). The expansion of external autonomy is, thus, unnecessary. Moreover, in practical terms, such a conflict seems far-fetched because Article 53 ECHR allows for, but does not require, a higher level of protection than under EU law. Member States acting in the scope of EU law are, therefore, able and free to comply with EU law while also complying with the ECHR, even if they might apply a higher/different national standard of protection when acting outside of the scope of EU law. In addition, Article 53 EUCFR already ‘coordinates’ with the ECHR in a way that corresponding rights have the same meaning and scope.25 In other words, as long as the EU complies with the ECHR, the potential for Member States to challenge EU measures via the Strasbourg Court is not a ‘live’ issue,26 and the concerns about the specific characteristics that define autonomy seem overstated. (b) Failure to Accommodate ‘Mutual Trust’ Second, with a similar argument, the Court found the DAA to be incompatible with ‘mutual trust’ in the AFSJ,27 which requires ‘trust’ that other Member States comply with EU law, including fundamental rights when executing European Arrest Warrants. Supremacy of EU law requires mutual trust bar in exceptional circumstances. This means Member States may need to limit review by their own human rights standards to the level of EU law.28 In contrast, externally, the ECtHR would, in principle, always review a potential breach of human rights by an EU act in full, without special regard to mutual trust. The ECtHR has not actually done so in the context of the European Arrest Warrant. But in the Common European Asylum System, based on a comparable presumption, the ECtHR upheld that it will fully review the merits of individual cases.29 Because the DAA did not exclude such an individual review by the ECtHR of Member State decisions in the AFSJ where mutual trust applies, the Court found it to be incompatible with the special characteristics (and hence autonomy) of EU law. It justified this by linking mutual trust to the values of the EU in Article 2 TEU30 and thereby elevating it to a specific characteristic of the EU legal order, thus extending the scope of autonomy.
24 Opinion 2/13 (n 9) para 189. 25 Eeckhout (n 8) 967; Lock (n 12) 257; Ziegler (n 13) 299–300, but see also 289 for a potentially constitutional rank of the ECHR at primary law level via general principles of EU law. 26 If the EU does not comply with the ECHR, accession would mean the complaint could be directed against the EU directly or it could be included as co-respondent in the proceedings. 27 Opinion 2/13 (n 9) para 191. 28 Melloni (n 23) para 60. 29 When returning an asylum seeker under the Dublin Regulation, for example, see Tarakhel v Switzerland, App no 29217/12 (GC), ECHR 2014. 30 Opinion 2/13 (n 9) para 168.
760 Katja S Ziegler Externalising internal EU obligations to restrict human rights review by the ECtHR, regarding both the level of protection (Melloni31) and the review of individual cases, would defeat the rationale of accession to and the object and purpose of the ECHR: to enable a meaningful external human rights review by the ECtHR.32 It demonstrates the far-reaching consequences of autonomy, interpreted widely, for the EU’s ability to engage internationally and the international legal order. However, both the CJEU and the ECtHR have converged in a judicial dialogue on the standard of review and on mutual trust since Opinion 2/13, painting a slightly more optimistic picture. In the asylum context, the CJEU aligned its standard of review with the full review by the ECHR.33 The two courts have also moved towards one another on mutual trust in the European Arrest Warrant, although not completely in parallel with the outcome in the asylum context. The CJEU limited mutual trust where there were manifest deficiencies in another Member State’s criminal justice system,34 and held it not to be applicable in relations with non-Member States35 which might equally apply to the ECHR accession. The ECtHR, in turn, acknowledged the importance of mutual trust for the EU and moved away from its principled full review.36 It restricted its review in the AFSJ in Avotiņš v Latvia to situations where there is ‘a serious and substantiated complaint … that the protection of a Convention right has been manifestly deficient and that this situation cannot be remedied by European Union law’ (emphasis added).37 The evolution of the approaches of both courts should have substantially eliminated mutual trust being an obstacle to accession. (ii) The Preliminary Rulings Procedure and Protocol No 16 to the ECHR Expanding specific characteristics of the EU further, the Court held that even the mere possibility that Member States could circumvent the preliminary ruling procedure under Article 267 TFEU by referring questions of EU law to the ECtHR would violate the autonomy of the EU legal order. Protocol No 16 to the ECHR allows the highest courts of states parties to request an advisory opinion from the ECtHR on ‘questions of principle’ for ECHR. The Court seems to assume that the preliminary rulings procedure is in itself a specific characteristic of the EU legal order (rather than a tool to safeguard the interpretive autonomy over EU law), or that it is at least so closely linked to the substantive specific characteristics that it was not separable.38 This may be inferred by the fact that the reasoning regarding
31 Melloni (n 23) para 60. 32 Ziegler (n 13) 300. 33 Case C-578/16 PPU, CK and others v Slovenia, ECLI:EU:C:2017:127; Case C-163/17, Abubacarr Jawo v Germany, ECLI:EU:C:2019:218. The CJEU, in Joined Cases C-411/10 and C-493/10, NS v Secretary of State for the Home Department, ECLI:EU:C:2011:865, interpreted an earlier ruling of the ECtHR (MSS v Belgium and Greece ECHR 2011) narrowly, holding that Member States could only except from the rules of the Common Asylum System where there were systemic deficiencies in the human rights protection in a Member State. The ECtHR clarified in Tarakhel (n 29), decided about one month before Opinion 2/13, that this was not a sufficient standard of review and that an individual assessment of each case was required. The Court then followed the approach of the ECtHR (and UK Supreme Court: R (EM (Eritrea)) v Secretary of State for the Home Department [2014] UKSC 12) in CK and Jawo. 34 Joined Cases C-404/15 and C-659/15 PPU, Aranyosi and Căldăraru v Generalstaatsanwaltschaft Bremen, ECLI:EU:C:2016:198; Case C-216/18 PPU, LM (Minister for Justice and Equality (Deficiencies in the system of justice)), ECLI:EU:C:2018:586; K Lenaerts, ‘La vie apres l’avis: Exploring the Principle of Mutual (Yet Not Blind) Trust’ (2017) 54 CML Rev 805. 35 Opinion 1/17, ECLI:EU:C:2019:341, para 129. 36 Adopted in Tarakhel (n 29). 37 Avotiņš v Latvia, App no 17502/07, 23 May 2016, para 116. 38 See Opinion 2/13 (n 9) para 174.
The Second Attempt at EU Accession to the ECHR 761 the preliminary rulings procedure is placed in the section of Opinion 2/13 which deals with ‘specific characteristics’ and it is also referred to as a ‘keystone’ of the EU judicial system.39 However, this extends specific characteristics from the substantive to the procedural or jurisdictional. This is so even though the Treaties make explicit provision for the latter: Article 344 TFEU already prohibits Member States from pursuing an alternative dispute settlement forum for questions of EU law. By making the preliminary rulings procedure in itself part of the specific characteristics (rather than the autonomy to interpret EU law in an internally binding way40), the Court extends their scope (and, therefore, also autonomy). This shifts the concern from the question whether EU Member States comply with obligations under EU law to whether the international agreement itself is compatible with EU law. There is an underlying second concern which is more closely related to the classical external dimension of autonomy41 – the ability of an external tribunal to interpret EU law with an internally binding effect. Technically and formally, this is not the case with the DAA. The Court itself applies law from other legal orders, explicitly stating that this is without internally binding effect for that other legal order.42 The ECHR, post-accession, would remain an international treaty, imposing international obligations on the EU. In the EU internal legal order, the ECHR would be directly effective due to a general monist approach to international treaties (hence an ‘integral part’),43 and it would also bind and be directly effective in the Member States when they implement EU law. But the source of the obligation would remain the international treaty. And it is the Court that defined the extent to which international treaties take effect in the EU legal order and their place in the hierarchy norms (for example, not above the EU’s foundational values).44 It is also the Court that ultimately controls the application of general principles of EU law whose content is influenced by the ECHR. The concern, therefore, seems not to be about an internally binding interpretation of EU law by the ECtHR, but about a more indirect effect of the ECHR on EU law, EU human rights and the wider normative framework. There is no denying the very close entanglement of the two legal orders in the area of human rights. Not only is the EU linked to the ECHR as a material source of rights that feed into the general principles of EU law (which rank at the level of primary (Treaty) law in the EU); Article 52(3) EUCFR also connects the EU legal order with the ECHR, requiring (at least) the same protection as corresponding ECHR rights. The Court refers to this Charter provision without explicitly naming it, shining a light on the nature of its concerns.45 However, trying to shield the EU legal order from mere influences or repercussions resulting from another legal order expands in a far-reaching way the specific characteristics into the external dimension and the autonomy of the EU legal order (conflating a potential legal meaning with a political one).46
39 ibid para 195 ff, 198. The Court also makes this connection in its discussion of the legal framework, para 174. 40 See s IIIB below. 41 See above. 42 Regarding GATS, see Case C-66/18, European Commission v Hungary, ECLI:EU:C:2020:792, para 89. 43 Opinion 2/13 (n 9) para 197. 44 See, eg KS Ziegler, ‘The Relationship between EU Law and International Law’ in D Patterson and A Södersten (eds), A Companion to EU Law and International Law (New York, Wiley, 2016) 42. 45 Opinion 2/13 (n 9) para 197. 46 cf the references to an attempt to establish ‘autarky’ by Eeckhout (n 8) and V Moreno-Lax, ‘The Axiological Emancipation of a (Non-)Principle: Autonomy, International Law and the EU Legal Order’ in I Govaere and S Garben (eds), The Interface between EU and International Law (Oxford, Hart Publishing, 2019) 45.
762 Katja S Ziegler (iii) Exclusion of Judicial Review in the Common Foreign and Security Policy The Court considered its largely absent47 jurisdiction over the Common Foreign and Security Policy (CFSP) as a special characteristic of EU law, extending the scope of autonomy to a structural deficiency of the EU Treaties, rather than a core structural element or value. It reasoned that jurisdiction of the ECtHR over CFSP measures would therefore ‘effectively entrust’ the judicial review in this policy area to a non-EU body48 which it had previously ruled to be incompatible with the autonomy of the EU legal order.49 Due to its ‘specific rules and procedures’,50 the review of CFSP actions is largely left to Member States’ courts. For AG Kokott, for this reason alone, specific characteristics cannot be affected.51 Additionally, limitations on judicial review need to be interpreted harmoniously with the treaty mandate to accede, given in full knowledge of restrictions in the CFSP.52 To exclude an entire policy area from the external human rights control would fundamentally contradict the aims of accession and the purpose of the ECHR. As CFSP measures can be reviewed via Member States’ courts already without accession, and hence also indirectly by the ECtHR, a more appropriate solution would lie in addressing the shortcomings of judicial protection in the EU with regard to human rights, at least within the scope of the Court’s jurisdiction. This has, in fact, been the trajectory since Opinion 2/13. The Court constitutionalised the CFSP further by expanding its legality review53 with regard to human rights and, specifically, the right for effective judicial protection under Article 47 Charter through the preliminary ruling procedure.54 Although not all aspects of the CFSP might become reviewable, the route to jurisdiction regarding possible human rights violations could be pursued further, thereby addressing the treaty obligation to accede55 and closing a gap in judicial review. B. Exclusivity of Court Jurisdiction and Inter-state Applications at the ECtHR In addition to expanding autonomy through the ‘specific characteristics’ of the EU legal order, Opinion 2/13 also interpreted Article 344 TFEU broadly. Article 344 TFEU specifies an aspect of the external dimension of autonomy. It formally provides for the Court’s exclusive jurisdiction to ensure a uniform interpretation of EU law. However, acceding to the ECHR would also make inter-party proceedings between Member States (or Member States and the EU) conceivable under Article 33 ECHR and hence provide a possibility for Member States to act in breach of Article 344 TFEU.
47 Except for jurisdiction over restrictive measures, eg individual sanctions, Art 275 TFEU, and separation between CFSP and non-CFSP matters, Art 40 TEU. 48 Opinion 2/13 (n 9) para 255. 49 Opinion 1/09, ECLI:EU:C:2011:123, paras 78, 80, 89. 50 Art 24(1) TEU. 51 View of AG Kokott, Opinion 2/13, ECLI:EU:C:2014:2475, paras 96–97, 100–01, 192. 52 A Łazowski and RA Wessel, ‘When Caveats Turn into Locks: Opinion 2/13 on Accession of the European Union to the ECHR’ (2015) 16 German Law Journal 179, 205, 206; Ziegler (n 13) 302–05. 53 For more detail, see G Butler, ‘The Coming of Age of the Court’s Jurisdiction in the Common Foreign and Security Policy’ (2017) 13 European Constitutional Law Review 673, esp 684, 688 ff. 54 Case C-72/15, Rosneft Oil Company v Her Majesty’s Treasury and Others, ECLI:EU:C:2017:236, para 76. See this volume, ch 81. 55 Butler (n 53) 689.
The Second Attempt at EU Accession to the ECHR 763 The Court traditionally interpreted Article 344 TFEU as requiring that an international agreement did not preclude compliance of Member States with EU law.56 Opinion 2/13 lowered that threshold. According to the Court, ‘the very existence of’ the possibility that EU Member States bring an application under Article 33 ECHR, alleging that a Member State or the EU has breached the ECHR in relation to EU law, would undermine the exclusive jurisdiction of the Court.57 This reflects profound distrust of the Court towards the Member States and in the compliance mechanisms available under EU law – to the extent that the burden of compliance with EU law was shifted away from the EU’s Member States and externalised: the international agreement regime and other parties to the treaty (in this case, the DAA) were thus tasked with securing compliance of the Member States with EU law. To accommodate this concern would compromise the coherence and legitimacy of the ECHR system. Even if applications under Article 33 ECHR in the scope of EU law were to be formally excluded by a new DAA, the ECtHR would still need to determine whether an application falls within the scope of EU law. This might, in turn, raise the problem of it interpreting EU law (if as widely understood as in Opinion 2/13). The alternative, to exclude all inter-party proceedings between the EU and Member States (or between Member States) a priori at ECHR level would be an even more problematic exceptionalism with regard to all other parties to the ECHR. The most appropriate way forward would be to revisit the interpretation of Article 344 TFEU in Opinion 2/13 and return to the previous approach, so as not to externalise the problem of exclusive jurisdiction, to avoid that accession would impact on the integrity of the ECHR on the international plane and lead to a less ‘human rights friendly’ protection system. After all inter-state procedures between Member States are not formally restricted by the ECHR without accession (but only by EU law). Regardless, they have, on the whole, not become live issues in practice and, on the rare occasion where a situation has arisen, it has been resolved appropriately, pragmatically and in a spirit of cooperation.58 This shows that obligations under EU law should be sufficient to allay the Court’s concerns. C. Controlling the Interpretation of EU Law: The Special Mechanisms in the DAA The Court ruled that several aspects of the co-respondent and prior involvement mechanism, procedures that were created to take into account the special situation of the EU, were incompatible with the autonomy of EU law. This was because the ECtHR could interpret EU law in a way that, in the view of the Court, would bind the EU internally. The reasoning reflects a very broad (or loose) understanding of what amounts to interpretation of EU law by the ECtHR, and even more so when such interpretation would be ‘internally binding’. (i) The Co-respondent Mechanism The co-respondent procedure was created to avoid the ECtHR from having to decide on questions of EU law, in particular, on competences. These are inextricably linked to how responsibility is allocated between the EU and its Member States when both are acting in tandem (such as legislating and implementing). In principle, the DAA provided that the EU 56 Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant); Opinion 2/94 (n 2); Opinion 1/09 (n 49); AG Kokott (n 51) para 118. 57 Opinion 2/13 (n 9) paras 207–09, 213. 58 See, eg Commission v Ireland (Mox Plant) (n 56) paras 80 ff, 124–25.
764 Katja S Ziegler (and ultimately the Court) would decide whether the EU, a Member State or both would be responsible for a breach of ECHR rights. However, the Court objected to two specific (technical) provisions of the co-respondent mechanism as conflicting with the autonomy of EU law. This was based on a wide view of what amounted to interpretation and application of EU law. First, the DAA required the ECtHR to assess whether the co-respondent status was plausible following a request of the EU or a Member State of the status.59 The Court held that even assessing the mere plausibility of the request would amount to interpreting and applying EU law, contrary to the autonomy of the EU legal order.60 Second, the DAA provided that the ECtHR could make an exception from the general rule of joint responsibility upon the request of the EU or a Member State (with the agreement of both the respondent and the co-respondent – and with the consent of the applicant alleging the breach).61 This mechanism was designed to rely on the submissions of the parties (EU and Member State) in order to avoid the Court assessing and deciding on the division of competences and responsibilities between respondent and co-respondent.62 The co-respondent mechanism thus made significant allowance to the special nature of EU accession to an extent that, from an applicant’s perspective, the compulsory jurisdiction of the ECtHR might be considered compromised. Nevertheless, the Court still found taking the formal decision of apportioning responsibility amounted to interpreting EU law, and had an adverse effect on the autonomy of the EU law.63 Finally, the Court also criticised that the DAA did not explicitly exclude joint responsibility where a Member State had made a treaty reservation to the ECHR – a scenario where the Member State would not be under an obligation in the first place.64 According to the Court, this contradicted the requirement65 that accession should not change the situation of a Member State with regard to the ECHR. However, the reservation would continue to apply, and where there is no obligation under the ECHR in the first place, there is no responsibility to apportion. The co-respondent mechanism does not change this. (ii) The Prior Involvement Mechanism The prior involvement procedure was created66 to enable the Court to decide questions of EU law and to avoid the possibility of the ECtHR interpreting EU law. Nevertheless, Opinion 2/13 was concerned about the interpretation of EU law in an internally binding way. First, the Court objected that the ECtHR could assess whether the Court had already decided a question of EU law prior to an application to the ECtHR, and in so doing might interpret EU law. The Court would most likely have been seized of a case in the scope of EU law via national courts triggering a preliminary rulings procedure, but there are some rare
59 Art 3(5) DAA. 60 Opinion 2/13 (n 9) para 224. 61 Art 3(7) DAA. 62 cf Draft Explanatory Report to the Agreement, Final Report to the CDDH (n 5) para 62. 63 Opinion 2/13 (n 9) para 234. 64 ibid para 227. 65 Art 2 of Protocol No 8 to the TFEU. 66 The Court intervened in the accession negotiations, see Joint Communication by Presidents Costa and Skouris of 24 January 2011, https://curia.europa.eu/jcms/upload/docs/application/pdf/2011-02/cedh_cjue_english.pdf; see also Discussion document of the Court on certain aspects of the accession of the EU to the ECHR of 5 May 2010, para 9, https://curia.europa.eu/jcms/upload/docs/application/pdf/2010-05/convention_en.pdf.
The Second Attempt at EU Accession to the ECHR 765 scenarios where it might not have been67 and where the prior involvement procedure would fill that gap.68 According to the Court, entrusting the ECtHR with the decision whether to initiate the prior involvement procedure already required it to interpret EU law,69 even though the questions would be purely factual (eg has the Court already decided in the case history?) and procedural (eg should the prior involvement procedure be initiated to give the Court ‘sufficient time’ to decide a question of EU law?). It is worth noting that the decision of the ECtHR is not comparable to a national court of last instance assessing whether it is under an obligation to refer to the Court or whether it is exempted under the acte clair doctrine70 because the question has already been decided. It might be that the Court had such a scenario in mind,71 which would make its objections more plausible: the question whether there is an obligation to refer under Article 267 TFEU could require a somewhat more significant assessment of EU law and case law of the Court. However, the DAA merely laid down procedural rules for the prior involvement. In that context, it referred to the absence of an involvement of the Court in the proceedings, which suggested proceedings in the same case that led to the application to the ECtHR. The DAA did not refer to the wider issue of a previous decision on the same substantive legal question in a different case (the most frequent acte clair scenario in the Court, which would require more significant interpretation of EU law). As is clear from the wording of the DAA and the Draft Explanatory Report,72 the rationale of the prior involvement procedure is to fill the gap that might arise in a limited number of cases because it cannot be taken for granted that the Court was already previously involved through a preliminary ruling procedure in all cases.73 All this demonstrates that, while technical amendments of the DAA may be capable of addressing the specific concerns, the Court took a near all-encompassing view of what would amount to interpretation of EU law that has binding effect beyond the ECtHR’s proceedings in the internal legal order of the EU.74 A mere procedural decision would not have such an effect. Second, the prior involvement procedure only explicitly provided for the Court to rule on the compatibility (understood as validity) of EU law, but did not state whether the Court could also rule to clarify the interpretation of EU law.75 It might have been possible to resolve this gap by interpretation of the DAA (and it should not be difficult to address the issue in a future accession agreement). Nevertheless, the Court objected that the prior involvement was not explicitly envisaged for questions of interpretation, even though such cases will be rare, and can only be imagined where a national court of last instance has breached its duty to refer a
67 For example, a national court might not have considered the question of EU law to be relevant for its decision, or it might have (whether correctly or erroneously) considered it to be a decided question under the acte clair doctrine, see text relating to n 70. 68 See also AG Kokott in Case C-109/20, Republic of Poland v PL Holdings, ECLI:EU:C:2021:321, para 62 on the role of national courts in safeguarding the autonomy of the EU legal order. 69 Opinion 2/13 (n 9) para 238. 70 Case 283/81, CILFIT v Ministry of Health, ECLI:EU:C:1982:335. 71 So Lock (n 12) 251–52. 72 Art 3(6) DAA: ‘In proceedings, to which the [EU] is a co-respondent, if the [CJEU] has not yet assessed the compatibility’; Draft Explanatory Report (n 62) para 66 (emphasis added). 73 For example, a national court might not have considered the question of EU law to be relevant for its decision, or it might have (whether correctly or erroneously) considered it to be a decided question under the acte clair doctrine, see text relating to (n 70). 74 See also above text at n 45. 75 Opinion 2/13 (n 9) para 243.
766 Katja S Ziegler question of EU law to the Court. Furthermore, the concern also does not seem justified in a technical procedural sense: where the subject of an application in the ECtHR is a decision of a national court, that court’s decision is the subject of the proceedings and the source of the potential breach of the ECHR. The ECtHR would thus not interpret EU law at all (and in any case not in an internally binding way), but treat it as a question of fact. In sum, the reasoning about the special mechanisms to accommodate accession in Opinion 2/13 reflects an overreaching concern about the internally binding interpretation of EU law by the ECtHR that stretches the limits of the meaning both of what amounts to interpretation and its internally binding character. It reflects an unwillingness of the Court to facilitate ECHR accession in a spirit of cooperation. Opinion 2/13 does not reflect on the nature of the ECtHR’s review, namely that its standard of review is limited to the ECHR – and that, as a human rights court, it is not a further instance of appeal that would be comparable to a Supreme Court that also interprets the (domestic) law that gave rise to an alleged breach. If an alleged breach results from a law, including EU law, in a Court of limited jurisdiction (as the ECtHR is), the domestic law becomes a question of fact similar to a physical act which might breach the ECHR.76 IV. THE IMPORTANCE OF THE CASE
Opinion 2/13 is relevant in multiple dimensions, three of which will be considered here: the consequences of the absolute interpretation of autonomy in the external dimension; the requirements and future chances of EU accession to the ECHR; and Opinion 2/13’s wider potential repercussions for legitimacy of EU action and the EU’s internal legal order. A. The Notion and Consequences of Autonomy Opinion 2/13 was based on a methodologically flawed claim of autonomy, constructed on broad teleological reasoning,77 giving it a ‘nebulous’,78 ‘elusive’79 or ‘volatile’80 meaning which created legal uncertainty.81 Without need, autonomy was presented as an overarching legal principle, going beyond the established specific characteristics of the EU legal order, potentially comprising the entire EU legal order,82 or even mere factual effects on the EU. The lack of clear methodology and definition made it a dangerous vehicle for overstated claims and arbitrary
76 For a similarly restricted standard of review of the German Federal Constitutional Court, see Ziegler (n 13) 301. 77 ibid 292; critically also T Molnár, ‘Revisiting the External Dimension of the Autonomy of EU Law: Is There Anything New Under the Sun?’ (2016) 57 Hungarian Journal of Legal Studies 178, 185. 78 C Contartese, ‘The Autonomy of the EU Legal Order in the ECJ’s External Relations Case Law: From the “Essential” to the “Specific Characteristics” of the Union and Back Again’ (2017) 54 CML Rev 1627, 1628 and passim. 79 M Klamert, ‘The Autonomy of the EU (and of EU Law): Through the Kaleidoscope’ (2017) 42 EL Rev 815, 829. 80 F de Abreu Duarte, ‘“But the Last Word Is Ours”: The Monopoly of Jurisdiction of the Court of Justice of the European Union in Light of the Investment Court System’ (2020) 30 European Journal of International Law 1187, 1219. 81 For a more benign reading: inherent ambiguity and fluctuating depending on autonomy’s function, see E Kassoti and J Odermatt, ‘The Principle of Autonomy and International Investment Arbitration: Reflections on Opinion 1/17’ (2020) 73 Questions of International Law 5, 6, 8. 82 Opinion 2/13 (n 9) paras 170, 172, 174.
The Second Attempt at EU Accession to the ECHR 767 content to justify closure towards the international legal order.83 Its impact was compounded by the loose way in which the notion of autonomy was applied to the facts (the DAA). Opinion 2/13 expanded the notion of autonomy in two respects. The first concerned the scope and content of autonomy. It elevated the principle of mutual trust and the absence of judicial review in the CFSP to specific characteristics of the EU. The second was to take an extremely wide view of what amounted to an internally binding interpretation of EU law by another tribunal coming ‘into contact’ with EU law when discharging its functions under an international agreement. Both were used as reasons to make exceptions from substantive international rules and obligations. For the ECHR, these even went against its very purpose to create external human rights accountability. The wide reading of autonomy had two consequences: it substantively shielded the EU legal order from other areas of international law and international organisations; and, at the same time, it externalised a number of, in essence, EU internal matters. The logic of Opinion 2/13 would subject EU external relations to a general reservation of virtually all features of EU law, both procedural and substantive.84 Such a wide approach emulates states invoking sovereignty to evade international obligations, but goes further.85 It would restrict the EU’s capacity to conclude international agreements, isolating it from wider international law. A wide interpretation of autonomy ignores that the limits of the power to conclude international agreements are themselves limited to essential or specific characteristics of EU law, and that therefore essential or specific characteristics cannot mean all EU law. It also disregards the hierarchy of substantive values in the EU legal order, which might even allow for a more flexible approach in international relations, provided an international agreement does not breach a core of essential, non-derogable characteristics of the EU constitutional order.86 Finally, it disregards the constitutional mandate to engage openly with international law.87 There is, however, no need to plead foreign affairs exceptionalism. The correct interpretation of specific/essential characteristics of the EU is sufficient: one that preserves specificity (the lex specialis character) of EU law over international law, but which is subject to balancing in accordance with the hierarchy of norms in the treaty – without the need for recourse to an overarching absolute notion of autonomy. The wide interpretation of autonomy also affects how the EU interacts in the mechanisms of an international agreement. If autonomy not only requires that international agreements must not prevent Member States from fulfilling their EU obligations, but is extended so that an international treaty itself needs to prevent EU actors from breaching their obligations under EU law, EU internal issues are externalised. Matters of EU law are turned into a matter for the international treaty and treaty partners to resolve, not just in a procedural dimension, but also in a substantive one. Such an externalisation of EU internal matters, in particular the division of competences, is problematic. It is one thing to make allowance in an international treaty for the EU to give it time and space to coordinate procedurally, but quite another to transfer the burden of managing the EU’s incomplete federalism on external treaty partners
83 Ziegler (n 13) 298. 84 The Court explicitly states this: ‘Fundamental rights, as recognised in particular by the Charter, must therefore be interpreted and applied within the EU in accordance with the constitutional framework [of the EU]’, para 177. 85 For more detail, see Ziegler (n 13) 291. 86 Joined Cases C-402 and C-415/05 P, Yassin Abdullah Kadi and Al Barakaat International Foundation v Council and Commission of the European Union [2008] ECR I-6351, ECLI:EU:C:2008:46, paras 282 ff, 301 (Kadi I); Joined Cases C-584/10 P, C-593/10 P and C-595/10 P, European Commission et al v Yassin Abdullah Kadi, ECLI:EU:C:2013:518, para 66 (Kadi II); Ziegler (n 13) 289. See this volume, ch 49. 87 Art 3(5) TEU. See also Opinion of AG Bot, Opinion 1/17, ECLI:EU:C:2019:72, para 175.
768 Katja S Ziegler and international organisations. Moreover, the adjustments such externalisation of EU internal matters require are primarily determined not by the subject matter of the treaty, but by distrust in the EU’s Member States to comply with their obligations under EU law (the division of competences and the duty of sincere cooperation of Member States under Article 4(3) TFEU and the obligation under Article 344 TFEU); yet, procedures to enforce these obligations are well established (eg infringement procedure under Article 258 TFEU). Externalising and injecting the EU’s internal allocation of competence and responsibility into an international agreement goes too far and risks compromising the objectives of international cooperation. In casu, Opinion 2/13 made human rights the collateral damage of the EU’s concerns about its internal governance. The autonomy rationale (or obstacle) is not limited to the ECHR or other systems of international protection of human rights, but would extend to any bilateral or multilateral treaty, including EU trade agreements. In particular, the new generation trade agreements with Canada and the UK post-Brexit provide new context for autonomy post-Opinion 2/13 and may lead to a wider shift in approach beyond their specific context. Opinion 1/1788 on the EU’s trade agreement with Canada already reflects a more nuanced approach, suggesting that Opinion 2/13 is gradually eroding.89 Opinion 1/17 contrasts sharply both in tone and approach with Opinion 2/13,90 starting from the assumptions of compatibility with EU law and openness of the EU legal order towards international law.91 The more nuanced approach is explicitly contextualised by the external relations setting, requiring more flexibility.92 Opinion 1/17 scales back the wide reading of ‘specific’ characteristics of the EU in Opinion 2/13 to the traditional ‘essential’ characteristics,93 applicable in external relations.94 The principle of mutual trust was also diluted.95 It is, first, extended to apply to ‘any area that is subject to EU law’,96 which reduces its specific normative force to a general expectation of compliance with EU law; and, second, it is held not to be applicable between the EU and non-Member States.97 Opinion 1/17 returns to the previous98 standard of review whether an international agreement is ‘preventing the EU institutions from operating in accordance with the EU constitutional framework’99 (rather than creating the mere possibility for Member States to breach their obligations under EU law).100 Thus, Opinion 1/17 also moves away from the structural externalisation of internal issues. The Court also adopted a more technical, defined (and accurate) approach to what amounted to interpretation of EU law by an international tribunal in conflict with autonomy. Its approach is aligned with standard judicial practice when considering law of another legal order101 to consider EU law ‘as a matter of fact’, using ‘the prevailing interpretation’; and it 88 Opinion 1/17 (n 35). 89 cf J Odermatt, ‘The Principle of Autonomy: An Adolescent Disease of EU External Relations Law?’ in M Cremona (ed), Structural Principles in EU External Relations Law (Oxford, Hart Publishing, 2018) 391. 90 Likewise C Rapoport, ‘Balancing on a Tightrope: Opinion 1/17 and the ECJ’s Narrow and Tortuous Path for Compatibility of the EU’s Investment Court System (ICS)’ 57 CML Rev 1725, 1743, 1747. See this volume, ch 88. 91 Opinion 1/17 (n 35) paras 106–07 and passim. 92 ibid para 117. 93 ibid para 109, also 107; likewise Contartese (n 78) 1649, 1661. 94 See, eg Opinion 1/00 (n 21) para 12. 95 In addition to the case law already pointing into this direction, see above text after n 31. 96 Opinion 1/17 (n 35) para 128. 97 ibid para 129. 98 Commission v Ireland (Mox Plant) (n 56) paras 80 ff, 124–25. 99 Opinion 1/17 (n 35) para 118. 100 Opinion 2/13 (n 9) para 208 and above s IIIB. 101 See, eg Ziegler (n 13) 301.
The Second Attempt at EU Accession to the ECHR 769 explicitly clarifies that ‘any meaning given to domestic law by the Tribunal shall not be binding upon the courts or the authorities of that Party’.102 Such an approach does not conflict with the autonomy of EU law, but is merely incidental to the application of the international treaty.103 Moreover, the power of the Appellate Tribunal of the EU–Canada Comprehensive Economic and Trade Agreement (CETA) to correct ‘manifest errors’ when assessing facts, including considering EU law as a fact, did not amount to an interpretation of EU law.104 This means that the autonomy of the EU legal order is not affected when an external tribunal considers, applies or even interprets EU law (by reference to a prevailing interpretation), because any interpretation only binds the EU internationally, not internally.105 While recognising the importance of the preliminary ruling procedure for the consistent and uniform interpretation of EU law, the Court does not maintain its elevated position (‘keystone’) as a specific characteristic in itself, beyond safeguarding the interpretation of EU law.106 This makes a conflict with autonomy through the power of interpretation of EU law virtually impossible. Thus, the clarifications in Opinion 1/17 point towards a revised, more restricted understanding of the notion of autonomy. B. Future EU Accession to the ECHR Opinion 2/13 informs the requirements and the chances of accession of the EU to the ECHR. Commentators have explored how to implement Opinion 2/13 in a future accession agreement.107 Questions have been raised whether accession is still desirable on the terms of Opinion 2/13108 and whether the EU Treaties should be amended to oblige the EU to accede ‘notwithstanding Opinion 2/13’.109 It has also been pointed out that accession is necessary to address the EU’s accountability gaps, and for its credibility and legitimacy.110 Negotiations restarted in 2020, and Opinion 2/13 will inevitably play an important role in them. However, other factors will also need to be considered, in particular the legitimate and almost unanimous criticism of Opinion 2/13,111 and developments in the Court’s case law with regard to autonomy112 and mutual trust.113 Opinion 1/17 clarified the notion of autonomy in a way that requires revisiting some of the Court’s concerns of 2014. New accession negotiations cannot
102 Art 8.31.2 CETA; Opinion 1/17 (n 35) paras 130, 136. 103 Opinion 1/17 (n 35) para 131. 104 ibid para 133. 105 ibid para 136; likewise Rapoport (n 90) 1750, 1748. In the reverse scenario, the Court acknowledges this when it applies an international treaty in Commission v Hungary (n 42). 106 Above text around n 38; Opinion 1/17 (n 35) para 111. See also de Abreu Duarte (n 80) 1196–97, 1213–14. 107 Lock (n 12); P Tacik, ‘After the Dust Has Settled: How to Construct the New Accession Agreement after Opinion 2/13 of the CJEU’ (2017) 18 German Law Journal 919. 108 Peers (n 8) 218–19, 220–22; S Douglas-Scott, ‘Autonomy and Fundamental Rights: The ECJ’s Opinion 2/13 on Accession of the EU to the ECHR’ (2016) 19 Europarättslig Tidskrift 29; Lock (n 12), 267. 109 LF M Besselink, ‘Acceding to the ECHR Notwithstanding the Court of Justice Opinion 2/13’ (Verfassungsblog.de, 23 December 2014) https://verfassungsblog.de/acceding-echr-notwithstanding-court-justice-opinion-213-2/; similarly, Łazowski and Wessel (n 52) 205, 206. 110 Eeckhout (n 8) 992; J Callewaert, ‘Do We Still Need Art 6(2) TEU? Considerations on the Absence of EU Accession to the ECHR and Its Consequences’ (2018) 55 CML Rev 1685; M Kuijer, ‘The Challenging Relationship between the European Convention on Human Rights and the EU Legal Order: Consequences of a Delayed Accession’ (2020) 24 International Journal of Human Rights 998, 1007. 111 Ziegler (n 13) 302–05. 112 Opinion 1/17 (n 35); see s IVA above. 113 Discussed above, see text at n 37.
770 Katja S Ziegler take Opinion 2/13 at face value or treat it as the checklist.114 This would risk freezing a judicial dictum, which overshot its mark in the first place and has since been overtaken. The onus will in part lie with the Commission to take the risk in negotiations not to implement all of the demands of Opinion 2/13. Bearing in mind recent case law, the treaty mandate to accede, the treaty objectives to contribute to the protection of human rights and the strict observance and development of international law in the EU’s international relations need to be brought into a harmonious interpretative balance with the specific characteristics of the EU (or its autonomy).115 There are different types of concerns in Opinion 2/13. Some of the Court’s requirements are for technical and procedural details, which can be accommodated (eg amendments to the co-respondent procedure116 and the prior involvement mechanism). Other concerns of Opinion 2/13 cannot be addressed easily, or would require adjustments which would not be desirable from the perspective of a coherent protection of human rights by the Convention system.117 These concerns all relate to the scope and reach of autonomy as interpreted by the Court in Opinion 2/13, but its interpretation of autonomy must be reconsidered in the light of Opinion 1/17.118 In spite of the different context as a trade agreement, the reasoning in Opinion 1/17, which also concerns a mixed agreement, is in many ways transferable to a future DAA to the ECHR and should lead to a softer approach both to a future accession agreement and international cooperation.119 Since Opinion 1/17, the requirement that an international agreement needed to preclude the possibility that Member States could bypass the exclusive jurisdiction of the Court no longer stands as an obstacle for accession. This immediately disperses what would otherwise be a significant obstacle to accession, namely that Member States could bypass the Court in breach of Article 344 TFEU by using the procedures of Protocol 16120 or Article 33 ECHR.121 Furthermore, the more defined approach, which amounts to permitted consideration or even interpretation of EU law as a fact, as opposed to an internally binding interpretation, could help resolve the remaining obstacles to accession. The fact that the DAA even envisaged the prior involvement procedure, and hence a mechanism which binds the ECtHR to EU law, should make accession more ‘autonomy friendly’ than CETA. The procedure will potentially compensate for the even closer embrace of the EU and ECHR legal orders through the direct effect of the ECHR in EU law. One might wonder, nevertheless, how the implicit concern of the Court about the indirect effects122 of the ECHR on the normative environment, and hence EU human rights, might influence its approach to accession. If persisting concerns stem from the normative affinity, overlap and mutual embeddedness of the two bodies of human rights (general principles
114 See, eg Peers (n 8) 217, writing in 2015 and Tacik (n 107) in 2017. 115 Art 3(5) TEU; see also Case C-104/16 P, Council of the European Union v Front Polisario, ECLI:EU:C:2016:973. See this volume, ch 75. 116 Art 8.21 CETA provides an example for the binding determination of the respondent by the EU which passed muster of the Court, Opinion 1/17 (n 35) para 132. 117 See also B de Witte and Š Imamović, ‘Opinion 2/13 on Accession to the ECHR: Defending the EU Legal Order Against a Foreign Human Rights Court’ (2015) 40 EL Rev 683, 703–04. 118 See s IVA above. 119 Even if Opinion 1/17 does not completely resolve how autonomy is to be interpreted in all respects. Likewise Rapoport (n 90) 1750. 120 See above s IIIA(ii). 121 See above text following n 56. 122 Above text following n 44.
The Second Attempt at EU Accession to the ECHR 771 of EU law and the ‘two Articles 53 problem’123), this might prove a more difficult (but not legitimate) hurdle than the ones erected in Opinion 2/13. As the concerns are about ‘losing control’ over the EU’s internal constitutional development, the Court might be tempted to distinguish between the contexts of the ECHR and CETA. One difference between the two is the lack of direct effect of CETA in the EU legal order, whereas the ECHR after accession would most likely become not just an ‘integral part’ of the EU legal order,124 but also directly effective.125 The formal distinction between direct effect and indirect (interpretive) effect of an international agreement in a domestic legal order is still meaningful in practice, but it should not be overstated.126 In any case, the Court formally is in full control of the interpretation and development of EU human rights and the shaping of its doctrine of direct effect as gatekeeper.127 The cause of direct effect of international agreements is not normally the international agreement itself, but the domestic legal order giving it such an effect. If the ECHR is directly effective in the EU legal order, it would be so by virtue of EU law and as directly effective international law. It would not change its character and source and turn into EU law because of direct effect. However, EU law endows directly effective international law with ‘special powers’ so that international agreements also apply in and vis-à-vis the Member States in the same way as in the EU legal order. But this does not turn them into EU law. Moreover, like the question of competence, the effect of international law in the Member States’ legal orders because of EU law is a matter internal to the EU. It should neither be externalised to the international environment with which the EU engages nor used to shield the EU from any external de facto influences of the international legal order. C. Legitimacy of the EU Extending autonomy – or the effects of the advanced, or even sui generis, nature of EU law – does not only have legal consequences, but also potential implications for the EU’s legitimacy, for both its internal and external interactions. Extending the external dimension of autonomy could backfire in both types if the EU is not also seen to commit itself to the external accountability mechanism of the ECHR. Stressing autonomy over accountability could lead to resistance against the implementation of the EU’s own values in the external dimension, in particular the rule of law,128 if the EU exposes itself to the criticism of applying double standards. Human rights clauses in international agreements concluded by the EU bind states to standards that the EU currently does not bind itself to. Agreements in the European regional space explicitly refer to the ECHR (as in the Association Agreements with Georgia and Ukraine, and the Trade and Cooperation Agreement with the UK). They are also reflected in the accession conditions (Article 48 TEU) for future Member States, and in Article 21 TEU for the CFSP.
123 Above text before n 25. 124 Case C-366/10, Air Transport Association of America v Secretary of State for Energy and Climate Change, ECLI:EU:C:2011:864, para 73. See this volume, ch 59. 125 See AG Kokott (n 51) para 198. 126 Ziegler (n 13) 274–75. 127 KS Ziegler, ‘Beyond Pluralism and Autonomy: Systemic Harmonisation as a Paradigm for the Interaction of EU Law and International Law’ (2016) 35 Yearbook of European Law 667, 681–84. 128 cf recently P van Elsuwege and F Gremmelprez, ‘Protecting the Rule of Law in the EU Legal Order: A Constitutional Role for the Court of Justice’ (2020) 16 European Constitutional Law Review 8.
772 Katja S Ziegler Internally, the values formulated in Articles 2 and 6 TEU and Article 67 TFEU for justice and home affairs, in particular the rule of law, are implemented by the EU judicial architecture, and specifically by the mechanism of Article 7 TEU. While the reasoning in Opinion 2/13 concerns an international agreement and mostly affects EU external relations, it could have repercussions for the normative hierarchy established in EU primary law. It contradicts the notion of non-derogable constitutional principles, which include fundamental rights.129 In prioritising autonomy of the economic integration project over external human rights accountability, Opinion 2/13 inverted the hierarchy between the constitutional foundations and values, including human rights (in Article 2 TEU), and general EU law, including the EU’s objectives or economic integration (in Article 3) in its external relations. This is conceptually incoherent and could also impact on the relationship of market integration and fundamental rights internally.130 Although the aim of the Court is to protect the EU from potentially centrifugal forces of Member States, it must not be forgotten that the Member States required the EU to accede. Not fulfilling this mandate could provide, either directly or indirectly, fertile ground for Member States to resist how the Court conceptualises autonomy and the specific characteristics of the EU legal order.131 It may well provide arguments to resist the interpretation of fundamental rights by the Court on the basis of Member States’ fundamental rights. Resisting external human rights accountability could thus negatively affect the fundamental rights protection in the EU as well as lead to challenges to the supremacy of EU law. Mutual trust in the AFSJ, the Common Asylum System and the limits to judicial review in the CFSP point to existing deficiencies in the human rights protection in the supranational dimension of the EU which amplify the need for an external minimum standard of protection and bear the seeds for potential challenges to supremacy. Thus, a ruling from Strasbourg might even be the preferable mechanism to resolve breaches of fundamental rights because the supremacy challenge does not arise (as acutely) as with the Member States. V. ADDITIONAL READING Douglas-Scott, S, ‘Autonomy and Fundamental Rights: The ECJ’s Opinion 2/13 on Accession of the EU to the ECHR’ (2016) 19 Europarättslig Tidskrift 29. Eeckhout, P, ‘Opinion 2/13 on EU Accession to the ECHR and Judicial Dialogue – Autonomy or Autarky?’ (2015) 38 Fordham International Law Journal 955. Klamert, M, ‘The Autonomy of the EU (and of EU Law): Through the Kaleidoscope’ (2017) 42 EL Rev 815. Lazowski, A and Wessel, RA ‘When Caveats Turn into Locks: Opinion 2/13 on Accession of the European Union to the ECHR’ (2015) 16 German Law Journal 179. Lock, T, ‘The Future of EU Accession to the ECHR after Opinion 2/13: Is It Still Possible and Is It Still Desirable?’ (2015) 11 European Constitutional Law Review 239. Moreno-Lax, V, ‘The Axiological Emancipation of a (Non-)Principle: Autonomy, International Law and the EU Legal Order’ in I Govaere I and S Garben S (eds), The Interface between EU and International Law (Oxford, Hart Publishing, 2019) 45.
129 Kadi I (n 86) para 303; Kadi II (n 86) para 66; see already Ziegler (n 13) 295; Moreno-Lax (n 46) 57. 130 Case C-112/00, Schmidberger v Austria, ECLI:EU:C:2003:333; Case C-438/05, International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line, ECLI:EU:C:2007:772. 131 Ziegler (n 13) 305.
The Second Attempt at EU Accession to the ECHR 773 de Witte, B, ‘European Union Law: How Autonomous Is Its Legal Order’ (2010) 65 Zeitschrift für Öffentliches Recht 141. de Witte, B, ‘A Selfish Court? The Court of Justice and the Design of Institutional Dispute Settlement Beyond the European Union’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014) 46. Ziegler, KS, ‘Autonomy: From Myth to Reality – or Hubris on a Tightrope? EU Law, Human Rights and International Law’ in S Douglas-Scott and N Hatzis (eds), Research Handbook on EU Human Rights Law (Cheltenham, Edward Elgar, 2017) 267.
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71 The Impact of Obligations under International Agreements on the (Judicial) Review of EU Measures: Stichting Natuur en Milieu and Pesticide Action Network Europe ANNE THIES Joined Cases C-404/12 P and C-405/12 P, Council and Commission v Stichting Natuur en Milieu and Pesticide Action Network Europe, ECLI:EU:C:2015:5, delivered 13 January 2015. KEYWORDS Direct effect of international agreement – Review of EU regulation – Access to judicial review – Aarhus Convention – Validity in light of international treaty – Nature and broad logic of international treaty – Implementation of international treaty obligations – Reference to international treaty provisions – Conferral of rights – Review of administrative act – Aarhus Regulation – Access to justice – Environment – Request for internal review – Indirect challenge – Judicial protection – Access to justice in environmental matters – Effective remedy – Public interest litigation.
I. INTRODUCTION
T
he judgment of Council and Commission v Stichting Natuur en Milieu and Pesticide Action Network Europe (hereinafter Natuur en Milieu) concerned the implications of a provision of an EU international agreement for the EU’s internal (judicial) review of EU measures. Natuur en Milieu is thus part of the case law concerning the direct effect of the EU’s obligations under international agreements, and their significance for the interpretation of EU measures when reviewing their validity. According to Article 216(2) TFEU, ‘Agreements concluded by the Union are binding upon the institutions of the Union and on its Member States’ and thus prevail over acts adopted by the institutions.1 However, the EU Treaties do not address the enforceability of the EU’s obligations under international agreements before EU courts, a gap filled by the case law of 1 Joined Cases C-404/12 P and C-405/12 P, Stichting Natuur en Milieu, ECLI:EU:C:2015:5, para 44, with reference to Case C-308/06, Intertanko, ECLI:EU:C:2008:312, para 42 and the case law cited therein.
776 Anne Thies the Court. In turn, the Court has established a two-stage test to decide on the enforceability of a provision of an international agreement when invoked to challenge an EU measure in an annulment action, which it reiterated in Natuur en Milieu.2 According to the Court, provisions of an international agreement to which the European Union is a party can be relied on in support of an action for annulment of an act of secondary EU legislation or an exception based on the illegality of such an act only where, first, the nature and the broad logic of that agreement do not preclude it and, secondly, those provisions appear, as regards their content, to be unconditional and sufficiently precise (emphasis added).3
The applicants in Natuur en Milieu had invoked Article 9(3) of the Aarhus Convention, which states: In addition and without prejudice to the review procedures referred to in paragraphs 1 and 2 above, each Party shall ensure that, where they meet the criteria, if any, laid down in its national law, members of the public have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relating to the environment.4
As analysed in this chapter, the Court concluded that Article 9(3) of the Aarhus Convention ‘lack[ed] the clarity and precision required’ to be directly effective before the EU judicature.5 The Court confirmed that, even where the conditions of direct effect were not satisfied, it could review the legality of EU acts, in light of provisions of international agreements, where an act of EU law refers to (Fediol) or implements (Nakajima) the invoked provision of an international agreement.6 However, while the General Court had annulled the Commission’s decision because of such exceptional ground, the Court, on appeal, concluded that the General Court had erred in law and that no such exceptional ground existed. Rather, the grounds had been established in the particular context of the law of the General Agreement on Tariffs and Trade (GATT 1947) and the World Trade Organization (WTO), and were not easily transferrable to other areas of international law. As a consequence, the challenged EU regulation could not be reviewed in light of Article 9(3) of the Aarhus Convention.7 The Court’s approach regarding the (lack of) direct effect of international legal obligations to challenge EU measures was in accordance with the Court’s prior case law. However, the reluctance of the Court to recognise exceptional grounds in the context of the Aarhus Convention and regulation came as a surprise. Moreover, Natuur en Milieu has dashed hopes for counterbalancing, through internal review, the ongoing preclusion of public interest litigation under Article 263 TFEU, fourth paragraph in the field of environmental law. The interrelationship between the accessibility of different review mechanisms is not only a domestic EU matter, but is covered by the EU’s obligations under the Aarhus Convention, and is thus subject to international monitoring. The limited scope of access to internal and judicial review
2 For an analysis of the test, see A Peters, ‘Position of International Law within the European Community Legal Order’ (1997) 40 German Yearbook of International Law 9–77. 3 Natuur en Milieu (n 1) para 46, with reference to Intertanko (n 1) para 45. See this volume, ch 52; Joined Cases C-120/06 P and C-121/06 P, FIAMM, EU:C:2008:476, paras 110 and 120; Case C-366/10, Air Transport Association of America, ECLI:EU:C:2011:864, para 54. See this volume, ch 59. 4 For full-text of the Aarhus Convention, see https://unece.org/environment-policy/public-participation/ aarhus-convention/text. 5 Natuur en Milieu (n 1) paras 47 and 60. 6 ibid para 48, with reference to Case 70/87, Fediol v Commission, ECLI:EU:C:1989:254, paras 19–23; Case C-69/89, Nakajima v Council, ECLI:EU:C:1991:186, paras 29–32. See this volume, ch 17; Case C-280/93, Germany v Council, ECLI:EU:C:1994:367, para 111; Case C-352/96, Italy v Council, ECLI:EU:C:1998:531, para 19. 7 Natuur en Milieu (n 1) paras 50–54.
Obligations under International Agreements and Judicial Review 777 for environmental NGOs has led to the Aarhus Convention Compliance Committee (ACCC) recommending significant change in the EU institutions’ current approach. II. FACTS
The United Nations Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (the Aarhus Convention) has been in force since 30 October 2001.8 The EU has been a party since 2005.9 In 2006, the European Parliament and Council adopted the Aarhus Regulation, which, in Article 10, allows NGOs to request an internal review under environmental law of acts adopted, or omissions, by EU institutions and bodies.10 In 2008, two environmental protection NGOs, Stichting Natuur en Milieu and Pesticide Action Network Europe, sent letters to the Commission requesting an internal review of Regulation No 149/2008 amending Regulation (EC) No 396/2005 on maximum residue levels of pesticides in or on food and feed of plant and animal origins,11 and establishing Annexes II, III and IV setting maximum residue levels for products covered by Annex I to Regulation No 396/2005.12 The NGOs requested an internal review on the basis of Articles 10 and 2(1)(g) of the Aarhus Regulation, claiming that Regulation 149/2008 constituted an ‘administrative act’ subject to an internal review, even if the Commission adopted it in form of a regulation.13 According to the NGOs, Regulation 149/2008 was thus not exempt from the review mechanism under Article 2(1)(g) of the Aarhus Convention, which defines ‘administrative act’ as ‘any measure of individual scope under environmental law, taken by a Community institution or body, and having legally binding and external effects’. Such reading was necessitated by the objective of the Aarhus Convention and Regulation, which, inter alia, intended to enable NGOs to request internal reviews, even in situations that would not allow them to bring an annulment action under Article 263 TFEU before the General Court due to the restrictive standing case law. Moreover, the Regulation could be considered as a ‘compilation of decisions’, allowing the contents of the Regulation to be seen as individual decisions.14 The Commission rejected the requests for internal review as inadmissible, because it considered Regulation 149/2008 neither to be an ‘act of individual scope’ nor a ‘bundle of decisions’, and thus not an ‘administrative act’ subject to internal review.15 The NGOs challenged the Commission’s decision before the General Court, putting forward two pleas. First, the a pplicants claimed that ‘administrative act’ should be interpreted as covering the Regulation they requested to have reviewed internally. Secondly, if Article 10(1) of
8 See n 4 above. 9 See Council Decision 2005/370/EC approving the Aarhus Convention, [2005] OJ L124/1. 10 See Art 10 of Regulation (EC) No 1367/2006 of the European Parliament and the Council of 6 September 2006 on the application of the provisions of the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters to Community institutions and bodies (Aarhus Regulation) [2006] OJ L264/13. 11 Regulation (EC) No 396/2005 of the European Parliament and of the Council of 23 February 2005 concerning maximum residue levels of pesticides in or on food and feed of plant and animal origin and amending Council Directive 91/414/EEC, [2005] OJ L70/1. 12 [2008] OJ L58/1. 13 Aarhus Regulation (n 10). 14 For letters by NGOs of 8 and 10 April 2009, respectively, see https://ec.europa.eu/environment/aarhus/pdf/title_iv/ RIR%20SNM.pdf; https://ec.europa.eu/environment/aarhus/pdf/title_iv/RIR%20PAN.pdf. 15 SANCO/E3/FA/bp(2008) D530585 and D530586.
778 Anne Thies the Aarhus Regulation were to be interpreted restrictively, as suggested by the Commission, Article 10(1) of the Aarhus Regulation would be incompatible with Article 9(3) of the Aarhus Convention.16 III. THE COURT
The General Court rejected the first plea, concluding that Regulation 149/2008 could not be regarded as a measure of individual scope and could not be categorised as an administrative act under the Aarhus Regulation. However, the General Court applied the Nakajima exception to the case, as ‘the applicants [were] questioning indirectly, in accordance with Article [277 TFEU], the validity in the light of the Aarhus Convention of a provision of Regulation No 1367/2006’.17 According to the General Court, the Aarhus Regulation had been adopted to implement the EU’s international legal obligations under Article 9(3) of the Aarhus Convention.18 As a consequence, it was appropriate to assess the validity of Article 10 of the Aarhus Regulation in light of Article 9(3) of the Aarhus Convention, ‘which entail[ed] determining whether the concept of “acts” in Article 9(3) of the Aarhus Convention can be construed as covering only “measure[s] of individual scope”’.19 Having denied that the Commission acted in a legislative capacity when adopting Regulation 149/2008, and assessing the objectives and wording of the Convention, the General Court concluded that Article 9(3) of the Aarhus Convention could ‘not be construed as referring only to measures of individual scope’.20 Limiting internal review to ‘administrative acts’ as ‘measure[s] of individual scope’ was not compatible with Article 9(3) of the Aarhus Convention.21 The General Court held that the contested Regulation should be subject to internal review and annulled the Commission’s inadmissibility decision.22 The Council and Commission asked the Court to set aside the General Court’s judgment and dismiss the applicants’ annulment actions.23 At the core of the Court’s judgment in Natuur en Milieu was therefore the enforceability of Article 9(3) of the Aarhus Convention to challenge the Aarhus Regulation, as interpreted by the Commission, when dismissing the NGOs requests for internal review of a regulation in the field of environmental law. As mentioned from the outset, the Court confirmed its approach regarding the implications of the EU’s obligations under international agreements within the EU legal order and system of judicial review. The Court reiterated that international agreements that have been ratified by the EU are an integral part of the EU legal order and binding upon the EU institutions and the Member States,24 and ‘consequently prevail over the acts laid down by those institutions’.25 However, the Court continued, where the international agreement did not expressly address
16 Case T-338/08, Stichting Natuur en Milieu and Pesticide Action Network Europe v Commission, ECLI:EU:T:2012:300, para 26. 17 ibid para 57, with reference to Case C-69/89 Nakajima v Council, ECLI:EU:C:1991:186, para 28. See this volume, ch 17. 18 Natuur en Milieu (n 16) para 58. 19 ibid para 59. 20 ibid paras 70, 79. 21 ibid para 83. 22 ibid para 84. 23 Natuur en Milieu (n 1) paras 36–41. 24 Art 216(2) TFEU. 25 Natuur en Milieu (n 1) para 44, with reference to Intertanko (n 1) para 42. See this volume, ch 52. See previously Case 181/73, Haegeman, ECLI:EU:C:1974:41, para 5. See this volume, ch 3; Case 12/86, Demirel, ECLI:EU:C:1987:400,
Obligations under International Agreements and Judicial Review 779 the question of its effects within the contracting parties’ domestic legal orders, it would fall within the jurisdiction of the courts, and the Court in particular, to decide on that matter ‘on the basis in particular of the agreement’s spirit, general scheme or terms’.26 The Court then summarised and applied its two-stage test to assess whether or not Article 9(3) of the Aarhus Convention was considered to be directly effective, namely, whether the ‘nature and broad logic of the agreement’ would preclude direct effect, and whether invoked provisions were ‘unconditional and sufficiently precise’.27 The Court did not explicitly examine whether the ‘logic and nature’ of the Aarhus Convention would allow for some of its provisions to be directly invoked in EU courts. However, as in a previous case on the effect of Article 9(3) of the Aarhus Convention, Lesoochranárske zoskupenie,28 the Court concluded that Article 9(3) of the Aarhus Convention did ‘not contain any unconditional and sufficiently precise obligation capable of directly regulating the legal position of individuals’. Instead, ‘only members of the public who “meet the criteria, if any, laid down in … national law” are entitled to exercise the rights provided for in Article 9(3)’ and, as a consequence, ‘that provision [wa]s subject, in its implementation or effects, to the adoption of a subsequent measure’.29 The Court also denied that any exception to the need for direct effect was applicable, which would enable the Court to review the Regulation in light of the Convention. In accordance with the claims made by the Council and Commission, the Court began by observing that the ‘two exceptions [established in Fediol and Nakajima] were justified solely by the particularities of the agreements that led to their application’, before turning to a short assessment of the applicability of the exceptions to the present cases.30 The Court stated that the regulation challenged in Fediol had ‘referred explicitly to rules of international law based, essentially, on the GATT’ and had ‘conferred on interested parties the right to invoke provisions of the GATT in the context of a complaint lodged under that regulation’.31 Yet, according to the Court, Article 10(1) of the Aarhus Regulation neither makes ‘direct reference to specific provisions of the Aarhus Convention’ nor ‘confers a right on individuals’; on that basis, the Court concluded that Fediol could not ‘be deemed relevant in the present case’.32 Whereas the General Court had applied the Nakajima exception, as analysed above, the Court rejected its relevance in the present case. Again, the Court followed the arguments made by the Council and the Commission, namely, that the exception was only relevant in the context of GATT in regard to anti-dumping law. The Court concluded that Article 10(1) of the Aarhus Regulation was not implementing specific obligations within the meaning of [Nakajima] in so far, as is apparent from Article 9(3) of the Aarhus Convention, the contracting parties thereto have a broad margin of discretion when defining the rules for the implementation of the ‘administrative or judicial procedures’.33
para 7. See this volume, ch 16; Case C-344/04, International Air Transport Association (IATA), EU:C:2006:10, para 36; Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant), paras 81–84. See this volume, ch 47. 26 Natuur en Milieu (n 1) para 45, with reference to FIAMM (n 3) para 108 and the case law cited therein. 27 Natuur en Milieu (n 1) para 46, with reference to Intertanko (n 1) para 45; FIAMM (n 3) paras 110 and 120; Air Transport Association of America (n 3) para 54. 28 Case C-240/09, Lesoochranárske zoskupenie, ECLI:EU:C:2011:125, paras 44, 45. 29 Natuur en Milieu (n 1) para 47, with reference to Lesoochranárske zoskupenie (n 28) para 45. 30 ibid para 49. 31 Natuur en Milieu (n 1) para 50. With regard to Fediol, see this volume, ch 17. 32 Natuur en Milieu (n 1) para 50. 33 ibid para 51.
780 Anne Thies Accordingly, the EU could not be considered to have intended to implement the obligations under Article 9(3) of the Aarhus Convention ‘with respect to national administrative or judicial procedures, which, as EU law now stands, fall primarily within the scope of Member State law’, when adopting the Aarhus Regulation, ‘which concerns only EU institutions and moreover concerns only one of the remedies available to individuals for ensuring compliance with EU environmental law’.34 The Court dismissed the cross-appeal, set aside the judgment of the General Court and dismissed the application for annulment. IV. THE IMPORTANCE OF THE CASE
Natuur en Milieu employed previous case law on the limited circumstances in which the Court reviews EU measures in light of the EU’s obligations under international agreements, denying such direct effect. The judgment is significant in that the Court very narrowly interpreted the exceptional grounds, which it has relied on in other cases to review EU measures, even in the absence of direct effect of an international legal obligation. It is also noteworthy in Natuur en Milieu that the Court did not engage with the principle of consistent interpretation. The judgment dashes prior hopes that the EU’s ratification of the Aarhus Convention, and its adoption of the Aarhus Regulation, would enhance NGOs’ capacity to request internal review, counterbalancing their incapacity to establish standing in annulment actions under Article 263 TFEU, fourth paragraph to hold the EU accountable in the context of environmental matters due to the CJEU’s narrow standing case law. A. Direct Effect and Legality Review Direct effect of EU law provisions in the national courts of EU Member States was established in Van Gend en Loos.35 Direct effect of EU law has been crucial for the functioning of the EU legal order, which relies on the decentralised enforcement of Member States’ obligations under EU law. However, the Court has been more reluctant to recognise the enforceability of the legally binding provisions of international agreements. In the context of the GATT 1947 and WTO agreements, the Court referred to the flexibility of invoked international provisions and the need to allow for scope for manoeuvre, as well as reciprocity at the international level by refraining to enforce the EU’s obligations internally, while other WTO members deny such direct effect within their domestic legal orders.36 At the same time, however, the Court has recognised direct effect of provisions of the EU’s trade and partnership agreements, which arguably extend the reach of EU law – for example, market freedoms, principle of non-discrimination – in particular when acts of Member States were challenged.37 In the context of environmental law, the Court recognised direct effect of provisions of the Protocol for the Protection of the Mediterranean Sea against Pollution from Land-based
34 ibid para 52, with reference to Lesoochranárske zoskupenie (n 28) paras 41 and 47. 35 Case 26/62, Van Gend & Loos, ECLI:EU:C:1963:1. 36 See, eg Case C-377/02, Van Parys, ECLI:EU:C:2005:121, para 53. See this volume, ch 43. 37 See, eg Case 104/81, Kupferberg, ECLI:EU:C:1982:362. See this volume, ch 14; Case C-265/03, Simutenkov, ECLI:EU:C:2005:213. See this volume, ch 44.
Obligations under International Agreements and Judicial Review 781 Sources and the Protocol as later amended, which had been approved by the Council.38 However, in Intertanko, a case concerning, inter alia, the effect of the United Nations Convention on the Law of the Sea (UNCLOS), the Court followed its restrictive approach established in the context of the GATT/WTO agreements, and denied reviewing EU legislation in light of UNCLOS provisions, because of the lack of conferral of rights and the agreement’s ‘broad logic’.39 Similar to the context of international trade agreements, the Court has therefore recognised direct effect of obligations from international agreements where Member State measures have been challenged, while showing more reluctance to constrain the EU as a global actor itself through the domestic enforcement of obligations from international agreements. What distinguishes Natuur en Milieu from the case law in the fields of WTO law and UNCLOS is that it was not the overall nature, aim or logic of the international agreement that led to the denial of direct effect. The Court did not even engage with the Aarhus Convention’s nature, aim and logic. Such lack of analysis can be explained by the fact that the objectives of the Aarhus Convention include the provision of improved ‘access to justice’ for NGOs. It would thus be difficult to argue that the purpose of the agreement was not related to what the applicants tried to achieve when requesting an internal review by the Commission and invoking Article 9(3) of the Aarhus Convention before the EU courts. Instead, the Court denied the direct effect of Article 9(3) of the Aarhus Convention because it did not ‘directly regulat[e] the legal position of individuals’.40 This conclusion has been criticised in light of the Aarhus Convention and the implementing Regulation’s significance for public interest litigation in environmental matters. An interesting aspect of the Court’s approach in Natuur en Milieu is that it rejected the argument that Article 9(3) of the Aarhus Convention should be enforceable because of the Court’s case law on exceptions. According to this case law, EU measures can be reviewed in light of the EU’s international legal obligation, if the EU measure referred to (Fediol) or implemented such obligation (Nakajima), even in the absence of their direct effect. While the Court engaged with both, it denied their applicability in Natuur en Milieu. With regard to the Nakajima exception, the General Court had come to a different conclusion. According to the General Court, the ‘discretion’ given by Article 9(3) of the Aarhus Convention concerned the ‘definition of persons who have a right of recourse to administrative or judicial procedures’ and ‘the nature of the procedures (whether administrative or judicial)’; however, the terms ‘do not offer the same discretion as regards the definition of the “acts” which are open to challenge’, and there was thus ‘no reason to construe the concept of “acts” in Article 9(3) of the Aarhus Convention as covering only acts of individual scope’.41 However, the Court took a less nuanced approach and held that Article 10(1) of the Aarhus Regulation had not implemented specific obligations of the EU because of the ‘broad margin of discretion when defining the rules for the implementation of the “administrative or judicial procedures”’.42 To exclude the application of Nakajima on the basis of discretion, which by then had been exercised by the EU institutions’ adoption of the Aarhus Regulation, seems questionable. The wording of the Aarhus Convention suggests a broad applicability of parties’
38 Case C-213/03, Syndicat professionnel coordination des pêcheurs de l’étang de Berre et de la région v Électricité de France (EDF), ECLI:EU:C:2004:464, para 47. 39 Intertanko (n 1) paras 64, 65. See this volume, ch 52. 40 Natuur en Milieu (n 1) para 47, with reference to Lesoochranárske zoskupenie (n 28) para 45. 41 Natuur en Milieu (n 16) para 77. 42 Natuur en Milieu (n 1) para 51.
782 Anne Thies obligations to provide access to internal review of ‘acts’, rather than giving parties the choice of which type of measures to consider as such and make subject to internal review. Moreover, the Court’s reasoning seems to suggest that because of the nature of the Aarhus Convention as a mixed agreement, the EU was not in a position to turn its own international legal obligations as party to the Convention into directly enforceable ones. Given that the EU has – on the basis of its own competence – adopted the Aarhus Regulation (covering Member States and the EU), as well as Regulation 149/2008, which the applicants wanted to have reviewed internally, it is not clear why the procedural obligations imposed under the Aarhus Convention should not affect the EU as much as its Member States. B. Public Interest Litigation and International Monitoring Natuur en Milieu has been particularly controversial given its implications for public interest litigation on environmental matters covered by the Aarhus Convention.43 Article 9(3) of the Aarhus Convention was meant to fill a gap of access to judicial review left by the Court’s restrictive approach to standing in annulment actions, which makes it very difficult to establish standing in public interest cases.44 Denying the enforceability of access to review provisions of the Convention and accepting the Commission’s narrow interpretation of the Aarhus Regulation implementing it have further dashed the hope that there would be a meaningful alternative to the inability of NGOs to establish their standing in annulment actions before the Court under Article 263 TFEU.45 While access to internal administrative and judicial review within the EU legal order is, as such, not a matter of EU external relations law, the issue remains relevant for the field. The EU is party to the Aarhus Convention in its own right.46 As a consequence, the EU’s approach to implementing its obligations under international agreements in its domestic legal order, including the provision of access to justice in environmental matters, matters under international law and affects the reputation of the EU as a global actor. The EU’s restrictive approach to the standing of environmental NGOs in annulment actions and its approach in Natuur en Milieu have been subject to international scrutiny and criticism. Already in 2011, the ACCC questioned the Court’s approach to the limited standing of private applicants under the Plaumann formula with regard to its compatibility with Article 9(3) of the Aarhus Convention, while waiting for the outcome of the Natuur en Milieu case.47 There was hope that the Court would interpret the Aarhus Regulation in light of the Convention to enable (at least) NGOs to trigger internal review, thereby filling a gap left by the rigorous application of the Plaumann formula and the continuously narrow interpretation of standing in subsequent case law.48 43 See Council Decision 2005/370/EC (n 9); UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention), signed on 25 June 1998, entered into force on 30 October 2001, https://unece.org/environment-policy/public-participation/aarhus-convention/ text. See also Aarhus Regulation (n 10). 44 According to Case 25/62, Plaumann, ECLI:EU:C:1963:17, 107, persons need to show ‘by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons’ their ‘individual concern’ needed to establish standing under Art 263 TFEU, fourth paragraph. 45 For further discussion, see H Schoukens, ‘Articles 9(3) and 9(4) of the Aarhus Convention and Access to Justice before EU Courts in Environmental Cases: Balancing On or Over the Edge of Non-compliance?’ [2016] European Energy and Environmental Law Review 178, 178. 46 Council Decision 2005/370/EC (n 9). 47 Communication ACCC/C/2008/32 (part I) (European Union), ECE/MP.PP/C.1/2011/4/Add of 24 August 2011, para 10. 48 Schoukens (n 45) 182.
Obligations under International Agreements and Judicial Review 783 The doctrine of consistent interpretation has enabled the Court in other cases to interpret EU measures in light of international legal provisions, even in the absence of their direct effect in EU courts.49 In Natuur en Milieu, however, the Court did not employ the doctrine to increase the access of NGOs in the field of environmental law to internal review of EU law measures. Whereas the General Court had interpreted ‘administrative act’ under Article 10 of the Aarhus Regulation in light of Article 9(3) of the Aarhus Convention,50 the Court refrained from engaging with the doctrine of consistent interpretation altogether. The reasoning presented by the CJEU when denying the applicability of the Nakajima exception might explain the Court’s rationale for doing so.51 Similar to its Plaumann formula, the Court considers the EU Member States to be responsible for implementing Article 9(3) of the Aarhus Convention in the same way as they must ensure a complete system of judicial remedies for individuals, even if the lawfulness of an EU measure is challenged. According to the Court, the Aarhus Regulation ‘concerns only EU institutions and moreover concerns only one of the remedies available to individuals for ensuring compliance with EU environmental law’; and obligations regarding administrative and judicial procedures under Article 9(3) of the Aarhus Convention ‘fall primarily within the scope of Member State law’.52 This reluctance to interpret the Regulation in light of the Convention was thereby also made compatible with the Court’s approach taken in a preliminary ruling concerning a Member State court’s dealing with the implications of Article 9(3) of the Aarhus Convention. In Lesoochranárske zoskupenie, the Court had considered it ‘inconceivable that Article 9(3) of the Aarhus Convention be interpreted in such a way as to make it in practice impossible or excessively difficult to exercise rights conferred by EU law’ in order to allow for ‘the effective protection of EU environmental law’.53 As a consequence, it [was] for the national court, in order to ensure effective judicial protection in the fields covered by EU environmental law, to interpret its national law in a way which, to the fullest extent possible, is consistent with the objectives laid down in Article 9(3) of the Aarhus Convention.54
While the Court might have achieved consistency in Natuur en Milieu as regards its previous case law on the Member States’ responsibilities regarding the provision of effective judicial protection and the obligation to interpret national provisions in accordance with the objectives of the Aarhus Convention, it remains surprising that the Court would not have the same expectation for the EU’s (legislative) organs when implementing the Convention with the Aarhus Regulation and applying the Regulation. After all, EU institutions have competence to adopt measures in the field of environmental law, for which the EU should provide internal review mechanisms. Moreover, given that the purpose of Title IV ‘Internal review and access to justice’ is the implementation of the access to justice pillar of the Aarhus Convention, it seems questionable on which basis one could contest that the Aarhus Regulation intended to implement the Convention.55 The Court did not even engage with the proposal made by Advocate General (AG) Jääskinen in Vereniging Milieudefensie to rely on the Biotech case56 – instead of Fediol or 49 See already Case 92/71, Interfood GmbH v Hauptzollamt Hamburg-Ericus, ECLI:EU:C:1972:30, para 6. See also eg Case C-61/94, Commission v Germany, ECLI:EU:C:1996:313, para 52; Case C-286/02, Bellio F.lli Srl v Prefettura di Treviso, ECLI:EU:C:2004:212, para 33. 50 Natuur en Milieu (n 16) paras 71–79. 51 Natuur en Milieu (n 1) para 51. 52 ibid para 52. 53 Lesoochranárske zoskupenie (n 28) para 49. 54 ibid para 50. 55 A Berthier, ‘Rulings in Joined Cases C-401/12P to C-403/12P and Joined Cases C-404/12P and C-405/12P: The Lack of Proper Implementation of Article 9(3) of the Aarhus Convention’ (2015) 12 Journal for European Environmental & Planning Law 207, 210. 56 Case C-377/98, Kingdom of the Netherlands v European Parliament and Council, ECLI:C:2001:523.
784 Anne Thies Nakajima – and review the legality of EU legislation in the light of the international agreement in the absence of its direct effect.57 As summarised by the AG in Vereniging Milieudefensie,58 the CJEU had held in Biotech that: It [was] common ground that, as a rule, the lawfulness of a Community instrument does not depend on its conformity with an international agreement to which the Community is not party … Nor can its lawfulness be assessed in the light of instruments of international law which, like the WTO agreement and the TRIPs and TBT agreements … However, such an exclusion cannot be applied to the [Convention on Biological Diversity signed on 5 June 1992 in Rio de Janeiro, the CBD], which, unlike the WTO agreement, is not strictly based on reciprocal and mutually advantageous arrangements. Even if, as the Council maintains, the CBD contains provisions which do not have direct effect, in the sense that they do not create rights which individuals can rely on directly before the courts, that fact does not preclude review by the courts of the compliance with the obligations incumbent on the Community as a party to that agreement (emphasis added).59
On that basis, AG Jääskinen suggested a modification of conditions required for ‘direct reliance’ on international law as a benchmark, observed that the Aarhus Convention was not based on reciprocal and mutually advantageous arrangements and concluded that, as a ‘mixed provision’, Article 9(3) of the Aarhus Convention might not regulate the legal position of individuals directly, but nonetheless ‘contains an obligation on the part of the contracting parties to ensure that there is a clearly identifiable outcome’.60 According to the AG, those organisations that have the standing to bring legal proceedings could invoke Article 9(3) of the Aarhus Convention as ‘the basis of a review of legality’.61 Overall, restricting the applicability of the exception grounds to the GATT/WTO agreements makes one wonder what room the Court’s approach in Natuur en Milieu has left for an international law-friendly interpretation of EU legislation in the future.62 C. Recommendations and Roadmap In 2017, the ACCC established under the Aarhus Convention recommended the need for all EU institutions to ‘take steps necessary to provide the public concerned with access to justice in environmental matters in accordance with [Article 9(3) and (4)] of the Convention’, to amend the Regulation/adopt new legislation to provide clarity to the Court that it is intended to implement Article 9(3) and to implement it comprehensively, with clear wording. Moreover, the ACCC recommended that, if and to the extent the EU was going to rely on the jurisprudence of the Court to ensure that its obligations under Article 9(3) and (4) of the Aarhus Convention are implemented, the Court should assess EU measures implementing Article 9(3) and (4) of the Aarhus Convention in light of those provisions and act accordingly, and should interpret EU law consistently with regard to the provisions’ objectives.63
57 Opinion of AG Jääskinen delivered on 8 May 2014 in Joined Cases C-401/12 P, C-402/12 P and C-403/12 P, Vereniging Milieudefensie, ECLI:EU:C:2014:310, paras 67–68. 58 ibid para 10 and fn 11. 59 Netherlands v Parliament and Council (n 56) paras 52–54. 60 Opinion of AG Jääskinen (n 58) paras 70 et seq, 88, 91, 92. 61 ibid para 95. 62 See also H Schoukens, ‘Access to Justice in Environmental Cases after the Rulings of the Court of Justice of 13 January 2015: Kafka Revisited?’ [2015] Utrecht Journal of International and European Law 53, 58. 63 Findings and recommendations of the Compliance Committee with regard to communication ACCC/C/2008/32 (part II) concerning compliance by the European Union, 23, 24.
Obligations under International Agreements and Judicial Review 785 In March 2020, the Commission published its Roadmap for the initiative ‘Access to justice in environmental matters’.64 It therein confirmed its commitment to ‘consider revising the Aarhus Regulation to improve access to administrative and judicial review at EU level for citizens and NGOs who have concerns about the legality of decisions with effects on the environment’ and to ‘take action to improve their access to justice before national courts in all Member States’, as expressed in the European Green Deal Communication.65 Referring to the findings of the ACCC in 2008 on the EU’s non-compliance with the Convention,66 the Roadmap announced that the parties to the Convention would discuss them in 2021 to decide whether to endorse them.67 The Roadmap highlighted the ongoing work at EU level. It reported that the ‘Council requested the Commission to submit by 30 September 2020, a proposal for amending the Aarhus Regulation, or to inform the Council on other measures’,68 ‘The European Parliament called on the Commission to ensure EU compliance with the Convention and welcomed a revision of the Aarhus Regulation’69 and ‘The European Economic and Social Committee called on the Commission to work on improving access to justice for civil society before the EU courts’.70 In conclusion, both the Court’s reluctance in Natuur en Milieu to recognise international treaty obligations of the EU as a benchmark in its legality review of EU measures and the EU’s overall foot-dragging in modifying its domestic system of internal review to increase its compliance with the Aarhus Convention have been disappointing. Increasing international visibility of the weaknesses of the EU’s current system of judicial protection and access to justice might serve as a welcome wake-up call. It is time for the EU to become proactive and invest in the reputation of a rules-based global actor that does not shy away from fully implementing its international obligations and enhancing its own environmental accountability at home. V. ADDITIONAL READING Rath, K, ‘The EU Aarhus Regulation and EU Administrative Acts Based on the Aarhus Regulation: The Withdrawal of the CJEU from the Aarhus Convention’ in C Voigt (ed), International Judicial Practice on the Environment: Questions of Legitimacy (Cambridge, Cambridge University Press, 2019) 52–73. Schoukens, H, ‘Access to Justice before EU Courts in Environmental Cases against the Backdrop of the Aarhus Convention: Balancing Pathological Stubbornness and Cognitive Dissonance?’ in C Voigt (ed), International Judicial Practice on the Environment: Questions of Legitimacy (Cambridge, Cambridge University Press, 2019) 74–118. 64 Ref Ares(2020)1406501–06/03/2020. For further details on the EU’s engagement with its implementation of, and compliance with the Aarhus Convention, see, eg Ref Ares(2019)6088660–02/10/2019, Study on EU implementation of the Aarhus Convention in the area of access to justice in environmental matters, Final report, September 2019; SWD(2019) 378 final – 10/10/2019, Commission Staff Working Document – Report on European Union implementation of the Aarhus Convention in the area of access to justice in environmental matters. 65 COM (2019) 640. 66 ACCC/C/2008/32; https://unece.org/fileadmin/DAM/env/pp/compliance/CC-57/ece.mp.pp.c.1.2017.7.e.pdf. 67 Ref Ares(2020)1406501–06/03/2020,https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12165-EUenvironmental-law-better-access-to-justice-updated-rules-, with reference to previous Roadmap on access to justice, https:// ec.europa.eu/info/law/better-regulation/initiatives/ares-2018-2432060_en. 68 Council Decision (EU) 2018/881. 69 European Parliament resolution of 15 January 2020 on the European Green Deal (2019/2956(RSP)). 70 A more constructive role for civil society in implementing environmental law: Exploratory opinion at the request of the European Commission, 30 October 2019, www.eesc.europa.eu/en/our-work/opinions-informationreports/opinions/more-constructive-role-civil-society-implementing-environmental-law-exploratory-opinion-requesteuropean-commission.
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72 Hybrid Acts of the EU and its Member States Concerning International Agreements: Commission v Council (US Air Transport Agreement) JONI HELISKOSKI Case C-28/12, European Commission v Council of the European Union, ECLI:EU:C:2015:282 (US Air Transport Agreement), delivered 28 April 2015. KEYWORDS Action for annulment – Mixed international agreements – Decision authorising the signing of those agreements and providing for their provisional application – Decision of the Council and of the Representatives of the Governments of the Member States meeting within the Council – Autonomy of the EU legal order – Participation of the Member States in the procedure and decision provided for in Article 218 TFEU – Voting arrangements within the Council.
I. INTRODUCTION
I
nternational agreements falling in part within the competence of the EU and in part within that of its Member States are usually concluded as mixed agreements. Mixed agreements are signed, concluded and applied by the EU in accordance with the procedures set out in Article 218 TFEU and by the Member States in accordance with their respective constitutional requirements. In addition, the Member States sometimes also adopt a decision of the representatives of the governments of the Member States meeting within the Council in respect of the negotiation, signature, provisional application or implementation of a mixed agreement. For instance, in conjunction with a decision of the Council to authorise the Commission to open negotiations on an international agreement pursuant to Article 218(2) TFEU, the Member States may also authorise the Commission to negotiate the international agreement on their behalf. While such a decision is usually adopted simultaneously with a decision of the Council based on Article 218 TFEU, the two decisions are, as a rule, legally and formally distinct from one another. However, the decision of the Council and the decision of the representatives of the
788 Joni Heliskoski governments of the Member States have sometimes been combined and merged into a single act of a ‘hybrid’ character. In US Air Transport Agreement,1 the Commission challenged the conformity of such hybrid acts with the EU Treaties, seeking annulment of Decision 2011/708/ EU of the Council and of the representatives of the governments of the Member States meeting within the Council on the signing and provisional application of an air transport agreement negotiated with the USA.2 The principal legal question addressed by the Court in the case was whether such hybrid acts are, as a matter of principle, contrary to the TEU and the TFEU. Before being able to examine that question, however, the Court also had to rule on the claim put forward by the Council that such hybrid acts do not constitute reviewable acts under Article 263 TFEU. II. FACTS
On 25 and 30 April 2007, the then European Community and its Member States, of the one part, and the United States of America, of the other part, signed an air transport agreement,3 which was amended by a protocol signed in Luxembourg on 24 June 2010.4 That air transport agreement provided for the possibility of third states acceding to it, and so, in 2007, the Republic of Iceland and the Kingdom of Norway submitted requests for accession. For the purpose of their accession, those two states, together with the contracting parties to that agreement, concluded the Air Transport Agreement between the United States of America, of the first part, the European Union and its Member States, of the second part, Iceland, of the third part, and the Kingdom of Norway, of the fourth part (the Accession Agreement).5 The Accession Agreement extended the scope of the initial air transport agreement, mutatis mutandis, to each of the contracting parties. The Commission also negotiated an ancillary agreement between the European Union and its Member States, of the first part, Iceland, of the second part, and the Kingdom of Norway, of the third part, on the application of the Air Transport Agreement between the United States of America, of the first part, the European Union and its Member States, of the second part, Iceland, of the third part, and the Kingdom of Norway, of the fourth part (the Ancillary Agreement).6 The Ancillary Agreement was to supplement the Accession Agreement, in that it is intended, in particular, to maintain the bilateral nature of the procedures for adopting measures implementing the initial air transport agreement by providing that the Commission, as a rule, represented the Republic of Iceland and the Republic of Norway in those procedures.
1 Case C-28/12, Commission v Council, ECLI:EU:C:2015:282 (US Air Transport Agreement). 2 Decision (2011/708/EU) of the Council and of the Representatives of the Governments of the Member States of the European Union, meeting within the Council, of 16 June 2011, on the signing, on behalf of the Union, and provisional application of the Air Transport Agreement between the United States of America, of the first part, the European Union and its Member States, of the second part, Iceland, of the third part, and the Kingdom of Norway, of the fourth part; and on the signing, on behalf of the Union, and provisional application of the Ancillary Agreement between the European Union and its Member States, of the first part, Iceland, of the second part, and the Kingdom of Norway, of the third part, on the application of the Air Transport Agreement between the United States of America, of the first part, the European Union and its Member States, of the second part, Iceland, of the third part, and the Kingdom of Norway, of the fourth part, [2011] OJ L283/1 (the contested decision). 3 [2007] OJ L134/4. 4 [2010] OJ L223/3. 5 [2011] OJ L283/3. 6 [2011] OJ L283/16.
Hybrid Acts of the EU and its Member States Concerning International Agreements 789 On 2 May 2011, the Commission adopted a proposal for a Council decision on the signature and provisional application of the Accession Agreement and the Ancillary Agreement.7 The proposal was based on Article 100(2) TFEU, read in conjunction with Article 218(5) TFEU. While the proposal did not expressly state whether the Council would authorise the signing and provisional application of the agreements (solely) on behalf of the EU, the legal basis of the proposed Council decision, in particular, indicated that such was the intention of the Commission. Departing from the Commission proposal, the Council adopted the contested decision in the form of a hybrid decision by both the Council and the representatives of the governments of the Member States meeting within the Council. Article 1, first paragraph, of the contested decision provided that ‘[t]he signing of the [Accession Agreement] and the [Ancillary Agreement] is hereby authorised on behalf of the Union, subject to the conclusion of the said Agreements’. Article 2 of the contested decision provided that ‘[t]he President of the Council is hereby authorised to designate the person(s) empowered to sign the Accession Agreement and the Ancillary Agreement on behalf of the Union’. Article 3 of the contested decision provided that ‘[t]he Accession Agreement and the Ancillary Agreement shall be applied on a provisional basis as from the date of signature by the Union and, to the extent permitted under applicable national law, by its Member States and by the relevant Parties, pending the completion of the procedures for their conclusion’. III. THE COURT
The Court, firstly, roundly rejected the plea of inadmissibility raised by the Council, essentially following the Opinion of Advocate General (AG) Mengozzi.8 Having first recited that an action for annulment must be available in the case of all measures adopted by the Union, irrespective of their nature or form, the Court noted that, by having adopted the contested decision, the Council had participated in the decisions made in respect of the signing and provisional application of the Accession Agreement and the Ancillary Agreement.9 Since there was, moreover, no dispute over whether the contested decision had legal effects, the decision must be regarded as an act of the Council against which an action for annulment may be brought under Article 263 TFEU. Finally, the admissibility of an action for annulment brought by the Commission was not subject to the condition that an interest in its bringing proceedings must be demonstrated. As to the substance, the Court, again following the reasoning of the AG, concluded that the contested decision was contrary to Article 13(2) TEU and Article 218 TFEU. The Court’s assessment may be divided into three parts. The Court first recalled the status of the EU as a new legal order, possessing its own institutions, for the benefit of which the Member States had not only limited their sovereign rights, but also accepted that relations between them as regards the matters covered by that transfer of powers were governed by EU law to the exclusion, if EU law so required, of any other law. In that context, the Court also recited the principle of institutional balance enshrined in
7 COM (2011) 239 final. 8 Opinion of AG Mengozzi, Case C-28/12, Commission v Council, ECLI:EU:C:2015:43 (US Air Transport Agreement), paras 17–21. 9 The Court referred, by analogy, to Case C-114/12, Commission v Council, ECLI:EU:C:2014:2151 (Broadcasting Organisations), para 41, which also addresses the question of reviewability of hybrid acts.
790 Joni Heliskoski Article 13(2) TEU and recalled that the rules regarding the manner in which the institutions arrive at their decisions are laid down in the EU Treaties and are not at the disposal of the Member States or of the institutions themselves. Secondly, the Court turned to Article 218 TFEU governing the procedure for the negotiation and conclusion of international agreements between the European Union and third states or international organisations. It recalled that while the Member States were bound by all the provisions of Article 218(5) TFEU, that provision granted no competence to the Member States for the adoption of a decision authorising the signing of such agreements or their provisional application on behalf of the Union, given that that was solely the prerogative of the Council. Furthermore, it was apparent from Article 218(8) TFEU that the Council acts by a qualified majority in respect of such a decision. Turning, thirdly, to the contested decision, the Court observed that that decision in fact merged two different acts, namely, on the one hand, an act relating to the signing of the agreements at issue on behalf of the Union and their provisional application by it and, on the other, an act relating to the provisional application of those agreements by the Member States, without it being possible to discern which act reflects the will of the Council and which the will of the Member States. It followed that, on the one hand, the Member States had participated in the adoption of the act relating to the signing of the agreements at issue on behalf of the Union and their provisional application. On the other hand, the Council had been involved, as an EU institution, in the adoption of the act concerning the provisional application of those agreements by the Member States, although such an act falls within the scope of the internal law of each of those States as well as international law. The contested decision was adopted by means of a single procedure applied to the two acts, involving, without distinction, elements falling within the decision-making process specific to the Council and elements of an intergovernmental nature of Member States meeting within the Council. However, since the act concerning the provisional application of the agreements at issue by the Member States entailed consensus of the representatives of those states, whereas Article 218(8) TFEU provides that the Council must act, on behalf of the Union, by a qualified majority, the two different acts, brought together in the contested decision, could not be validly adopted under a single procedure. Accordingly, the Court concluded, the contested decision was incompatible with Article 218(2) TFEU, Article 218(5) TFEU and Article 218(8) TFEU, and therefore with Article 13(2) TEU. The contested decision was therefore annulled. IV. THE IMPORTANCE OF THE CASE
A. Implications for the Practice Concerning the actual practice, the implications of the case have been straightforward. As a result of the judgment, the practice of formally combining a decision of the Council and a decision of the representatives of governments of the Member States meeting within the Council into a single hybrid act has come to an end. While this practice mainly covered the negotiation, signature and provisional application of aviation and air transport agreements, such decision-making was also used in the context of negotiating other mixed agreements.10 As regards aviation and air transport agreements, no formal decisions of the representatives
10 For
one example, see ibid.
Hybrid Acts of the EU and its Member States Concerning International Agreements 791 of the governments of the Member States within the Council are taken any longer as regards international agreements, and international agreements are signed and, if applicable, provisionally applied by the Member States based on their national law, possibly together with informal coordination at the level of the Union. As regards the negotiation of mixed agreements, since US Air Transport Agreement, there has been a decision of the Council based on Article 218(3) TFEU authorising the Commission11 to open negotiations and to negotiate, on behalf of the Union, the provisions of the agreement that fall within the competence of the Union, with no (collective) decision of the Member States to give a negotiating mandate to any Union institution or body for matters falling within their competence. In those cases, the Member States may either participate in the negotiations in their individual capacity or informally charge the Commission or the Presidency with the task of conducting the negotiations also on their behalf. In this scenario, the Commission may sometimes negotiate the entire agreement on the understanding that this happens without prejudging whether the agreement eventually becomes a Union agreement or a mixed agreement. Alternatively, there may be a decision of the Council based on Article 218(3) TFEU and a separate decision of the representatives of the governments of the Member States meeting within the Council authorising the Commission to open the negotiations and to negotiate, on behalf of the Member States, the agreement to the extent that it falls within the competence of the Member States.12 However, the practice of formally combining the two decisions into a single hybrid act has ceased entirely as a result of the Court’s US Air Transport Agreement judgment. Hybrid action only takes place informally, if at all, and in many cases simply out of practical necessity dictated by the negotiation and application of mixed agreements. The US Air Transport Agreement judgment has also entailed changes to the procedure governing the implementation of air transport agreements, including the establishment of the positions to be adopted on behalf of the Union and its Member States in the decision-making bodies set up by such agreements. As regards the Air Transport Agreement with the USA, the relevant procedures13 were also based on the principle that the Union and its Member States would always act jointly. For instance, the position to be taken by ‘the Union and its Member States’ within the Joint Committee set up under Article 18 of the Agreement would have been adopted by either the Commission or the Council, irrespective of whether the matter in question fell within the competence of the Union or that of the Member States. Those provisions have now ‘ceased to apply’ by virtue of Article 2 of the Council Decision (EU) 2020/1110 of 23 January 2018 on the conclusion on behalf of the European Union of the Air Transport Agreement,14 on the understanding that the relevant provisions of the TFEU 11 And/or, in the case of agreements concerning the Common Foreign and Security Policy (CFSP), the High Representative. 12 This formula has been used for the authorisation of the Commission to negotiate, on behalf of the Union and the Member States, eg a comprehensive air transport agreement between the Union and its Member States and the Association of Southeast Asian Nations (ASEAN) (see Council documents 7787/20 and 7788/20) and the Economic Partnership Agreements between the European Union and its Member States, of the one part, and the African, Caribbean and Pacific countries and regions (see [2020] OJ L6/101 and 112). 13 See Arts 3–6 of Decision of the Council and the Representatives of the Governments of the Member States of the European Union, meeting within the Council of 25 April 2007 on the signature and provisional application of the Air Transport Agreement (2007/339/EC), [2007] OJ L134/1; Arts 2–4 of Decision of the Council and the Representatives of the Governments of the Member States of the European Union, meeting within the Council of 24 June 2010 on the signing and provisional application of the Protocol to Amend the Air Transport Agreement (2010/465/EU), [2010] OJ L223/1. 14 [2020] OJ L244/6. For the sake of clarity, it should be observed that the Decision does not concern the Accession Agreement or the Ancillary Agreement, which are still being applied on a provisional basis.
792 Joni Heliskoski governing the decision-making by the institutions apply from then on.15 This means that one must always establish, first, whether competence is exercised by the Union or by the Member States on a given occasion and, secondly, if Union competence is being exercised, which decision-making procedure is applicable under the TFEU (presumably Article 218(7) TFEU and Article 218(9) TFEU). In other words, the exercise of Member State competence by the institutions of the Union is no longer deemed to be possible in the context of the implementation of the Agreement. A similar amendment has also been made in respect of certain other air transport and aviation agreements.16 Whether the Court’s judgment is also likely to have similar implications on the decision-making procedures laid down by either secondary law or informal arrangements (eg ‘codes of conduct’) for the purpose of the implementation of mixed agreements in other areas is outside the scope of the present analysis. B. Implications from a Constitutional Perspective At the level of constitutional principles,17 the principal rationale of the judgment was clearly to protect the autonomy of the EU legal order, including the powers of the institutions and their decision-making procedures, from undue interference on the part of the Member States. Unlike in Opinion 1/0918 and Opinion 2/13,19 to which the Court referred, the principle of autonomy of the EU legal order is not expressly mentioned in the reasoning; however, the list of keywords at the beginning of the judgment contains a reference to the ‘autonomy of the EU legal order’. The aspect of protecting, more specifically, the autonomy of the institutions is then incorporated through a reference to the principle of institutional balance (Article 13(2) TEU) – a principle the Court had previously observed to ‘entail’ the autonomy of the institutions20 – as well as the case law stating that the rules regarding the manner in which the EU institutions arrive at their decisions are laid down in the EU Treaties and are not at the disposal of the Member States or of the institutions themselves.21 In the eyes of the Court, those principles were infringed by the contested decision in the light of the fact that that decision merged an act of the institutions and an act of the Member States without making any distinction between their respective elements and that, therefore, the Member States participated in the adoption of the act relating to the signing of the agreements at issue on behalf of the Union and their provisional application by it, even though, under Article 218(5) TFEU, such an act must be adopted by the Council alone. Moreover, the Court pointed out, the Council must act on a qualified majority under Article 218(8) TFEU, whereas the representatives of the Member States act by consensus. The reference to the incompatibility of the above decision-making procedures also serves to protect the autonomy of the institutions and, thereby, the autonomy of the EU legal order. The judgment
15 The seventh preambular para of the Council decision indicates that this change is a consequence of the judgment in Case C-28/12, The US Transport Agreement. 16 Including agreements with Canada, Morocco, Israel, Jordan, Moldova and Georgia. 17 Ever since Case 294/83, Les Verts v Parliament, ECLI:EU:C:1986:166, the Court has referred to the EU Treaties as ‘the constitutional charter’ of the Union. 18 Opinion 1/09, Draft agreement creating a Unified Patent Litigation System, ECLI:EU:C:2011:123. 19 Opinion 2/13, Draft agreement regarding accession of the EU to the ECHR, ECLI:EU:C:2014:2454. See this volume, ch 70. 20 See Case C-409/13, Council v Commission, ECLI:EU:C:2014:2470, para 111. 21 Case 68/86, United Kingdom v Council, ECLI:EU:C:1988:85, para 38; Case C-133/06, Parliament v Council, ECLI:EU:C:2008:257, para 54.
Hybrid Acts of the EU and its Member States Concerning International Agreements 793 has further been seen as a backdrop of,22 or at least as being consistent with,23 the case law concerning the choice of a legal basis, including the case law on the incompatibility of multiple legal bases. Of course, that case law links closely with the principle of institutional balance.24 In sum, hybrid acts such as the contested act are incompatible with the EU Treaties since they mark undue interference on the part of the Member States with the powers and decision-making procedures of the institutions and, in so doing, undermine the principle of autonomy of the EU legal order. The arguments of the Council (and the Member States intervening in its support) to the effect that the adoption of a hybrid decision could be seen as an expression of the duty of loyal cooperation between the Union and its Member States, flowing from the requirement of unity in the international representation of the Union in the context mixed agreements,25 could not justify non-compliance with the provisions governing the powers and the decision-making procedures of the institutions. For an assessment of the Court’s reasoning, one needs to look somewhat more closely at the relationship between the hybrid nature of the contested decision and the principles invoked by the Court to justify its conclusion that the contested act was contrary to the EU Treaties. In that regard, one should take account of not only the contested act and the relevant provisions of the TFEU, but also the provisions of the Accession Agreement and the Ancillary Agreement governing the status of the Union and its Member States as parties to the agreements concerned.26 On the basis of the latter, it emerges that those agreements treat ‘the European Union and its Member States’ as a single contracting party,27 including for the purposes of both signature and provisional application.28 If this is correct, it seems that the ‘European Union and its Member States’, as a single contracting party, could only have signed and started the provisional application by acting jointly. This would mean that, irrespective of whether the internal decision-making of the Union and its Member States took place through one hybrid act or two distinct procedures, the Union could only have signed and started to provisionally apply the agreements together with all of its Member States. In other words, it would follow from the provisions of the agreements concerned that the exercise of Union competence for the purpose of the signature and provisional application of the agreements would necessarily have been subordinated to the exercise by the Member States of their competence and vice versa, irrespective of whether the exercise of those powers takes place through one hybrid act or two separate ones of the institutions and the Member States, respectively. The same would have been true even if the contested act had involved a distinction between the elements subject to the act of the institutions and those covered by the act of the representatives of the governments of the Member States. On this analysis, it seems 22 A Rosas, ‘Recent Case Law of the European Court of Justice Relating to Article 218 TFEU’ in J Czuczai and F Naert (eds), The EU as a Global Actor – Bridging Legal Theory and Practice. Liber Amicorum in Honour of Ricardo Gosalbo Bono (Leiden, Brill Nijhoff, 2018) 365, 378. 23 P Koutrakos, ‘Institutional Balance and Sincere Cooperation in Treaty-Making under EU Law’ (2019) 68 ICLQ 1, 22–24. 24 Case C-244/17, Commission v Council, ECLI:EU:C:2018:662 (Kazakhstan), para 30. See this volume, ch 86. 25 See, eg Case C-246/07, Commission v Sweden, EU:C:2010:203 (PFOS), para 73 and the case law cited therein. See this volume, ch 58. 26 See J Heliskoski, ‘The Procedural Law of International Agreements: A Thematic Journey through Article 218 TFEU’ (2020) 57 CML Rev 78, 90–94. 27 See Art 1 of the Accession Agreement. The Ancillary Agreement does not define ‘the Parties’, but the status of the Union and its Member States as a single contracting party is reflected in the preamble. 28 See Art 5 of the Accession Agreement and Art 8 of the Ancillary Agreement. By virtue of Art 6 of the Accession Agreement, this also applies to the entry into force of the Agreement. In the light of those provisions, the suggestion by AG Mengozzi that ‘The involvement of the Member States as such in the EU procedure was not necessary for the signing of the agreement on behalf of the EU or for its provisional application by the EU’ (para 85) is rather surprising.
794 Joni Heliskoski that, in the circumstances of the present case, it may not have been the hybrid nature of the act, per se, which should be deemed to undermine the autonomy of the EU legal order, or that of the institutions. The interference, if any, would follow from the nature of the agreements concerned as mixed agreements designating the EU and its Member States as a single contracting party.29 One could, however, also argue that the designation of ‘the European Union and its Member States’ as a single contracting party to the Accession Agreement and the Ancillary Agreement would not necessarily have prevented the Union from acting independently regarding the signature and provisional application of the agreements concerned. After all, some mixed agreements define the notion of the ‘EU party’ by way of a reference to the division of competence between the Union and its Member States in EU law as ‘the European Union or its Member States or the European Union and its Member States within their respective areas of competence as derived from the TEU and the TFEU’. While the agreements in question do not involve such a definition, one could argue that, as an alternative to a hybrid act, the Union could have exercised its exclusive and non-exclusive (potential) competence for the signature and provisional application of the agreements in their entirety and, therefore, independently of the Member States.30 In the opinion of the present author, however, such an argument stumbles on the fact that, at the time of the adoption of the contested act, there was clearly no willingness within the Council to do so. That is clear in the light of the fact that the Council was unwilling to accept the proposal of the Commission apparently based on this hypothesis,31 and rather wished to proceed on the basis of facultative mixed action involving a decision of the representatives of the governments of the Member States. As we have now learned from the Court’s more recent case law, the Union (in practice, the Council) is, in principle, entitled to refrain from exercising the Union’s non-exclusive competence, should it wish to do so.32 One must add that the option of limiting the scope of the decisions on signature and provisional application on behalf of the Union to matters falling within the Union’s exclusive competence does not appear to have been on the table at all. Therefore, the only conceivable option to proceed was to act through both a decision of the Council and a decision of the representatives of the governments of the Member States. In that constellation, it seems to have made little substantive difference, in terms of the autonomy of the EU legal order or that of the institutions, including the effectiveness of their decision-making, whether one hybrid act or two separate acts were adopted. A consensus of the Member States would in any case have been needed for the Union and its Member States to proceed with the signature and the decision on provisional application. It therefore seems that the judgment, while certainly pleasing the purist, discloses an excessive degree of formalism. Arguably, the Court could have looked at the question of the 29 Without addressing the specific provisions of the agreements, Verellen has submitted that the Court’s reaffirmation of the principle of the autonomy of the EU legal order therefore ‘fails to take into account the international legal dimension of the mixed agreement’. See T Verellen, ‘On Hybrid Decisions, Mixed Agreements and the Limits of the New Legal Order: Commission v Council (‘US Air Transport Agreement‘)’ (2016) 53 CML Rev 741, 747. 30 See Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), paras 44–52 and 61–66. See this volume, ch 84. 31 See s II above. 32 See Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), para 68. See also Opinion of Kokott AG in Joined Cases C-626/15 and C-659/16, Commission v Council, ECLI:EU:C:2018:362 (Antarctic Marine Protected Areas), fn 71. See this volume, ch 87. According to her, it can be inferred from the COTIF I judgment that ‘the Union can decide in each individual case not to exercise its inherent powers in an area of shared competences fully, but only partially, thereby allowing scope for autonomous action by the Member States’.
Hybrid Acts of the EU and its Member States Concerning International Agreements 795 compatibility of hybrid acts with the EU Treaties in a more nuanced fashion, taking account of the specific nature of the international agreements concerned. Clearly, hybrid acts concerning signature and provisional application of international agreements would seem capable of interfering more genuinely with the powers of the institutions and the decision-making procedures laid down in the EU Treaties in those cases where the exercise of Member State competence is not a prerequisite for the provisional application or the entry into force of the agreement for the Union and in particular when the agreement falls entirely within the Union’s (actual or potential) competence. This is arguably the case with an overwhelming majority of mixed agreements of a multilateral nature. In practice, however, formal hybrid decisions would not seem to have been used in the context of such agreements – except, perhaps, in the negotiating phase.33 Their principal sphere of application has been bilaterally structured mixed agreements, such as air transport and aviation agreements, the entry into force of which requires the ratification by both the Union and its Member States. Should the Union (that is, the Council) not be willing to either exercise the Union’s non-exclusive (potential) competence or to limit the scope of the provisional application to matters falling within the Union’s exclusive competence, the same applies to their provisional application by the Union and its Member States.34 In the case of such bilaterally structured mixed agreements, hybrid decisions on signature and/or provisional application would hardly appear to have entailed any concrete undermining of the autonomy of the EU legal order or the powers of its institutions. Rather, they would have seemed an appropriate device for manifesting the duty of sincere cooperation, hailed by the Court in a different context as a means of ensuring the unity in the international representation of the Union under mixed agreements.35 For better or for worse, that device has now disappeared from the Union’s institutional scenery following the present judgment. V. ADDITIONAL READING Kaddous, C, ‘Cour de justice, gde ch., 28 avril 2015, Commission européenne c/ Conseil de l’Union européenne, aff. C-28/12, ECLI:EU:C:2015:282’ in F Picod (ed), Jurisprudence de la CJUE 2015 (Brussels, Bruylant, 2015) 609–21. Verellen, T, ‘On Hybrid Decisions, Mixed Agreements and the Limits of the New Legal Order: Commission v Council (‘US Air Transport Agreement‘)’ (2016) 53 CML Rev 741.
33 Commission v Council (Broadcasting Organizations) (n 9), which concerned the negotiations on Council of Europe convention on the protection of the rights of broadcasting organisations. 34 The same also applies to the implementation of the agreement. For instance, the position to be expressed on behalf of the Union and its Member States before the Joint Committee set up by the Air Transport Agreement may be established solely by the EU in accordance with Art 218(9) TFEU, should the matter to be considered fall within the Union’s exclusive competence or should the Union decide to make use of its non-exclusive (potential) competence on a given occasion. 35 See, eg Case C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS), para 73. See this volume, ch 58.
796
73 Balancing Institutional Powers in Negotiating Directives and EU External Environmental Relations: Commission v Council (Australia ETS) SANJA BOGOJEVIĆ Case C-425/13, European Commission v Council of the European Union, ECLI:EU:C:2015:483 (Australia ETS), delivered 16 July 2015. KEYWORDS Institutional balance – Article 218 TFEU – Negotiating directives – EU Emissions Trading Scheme – Linking.
I. INTRODUCTION
T
he EU has long been at the forefront of international climate action. In 1998, it signed the Kyoto Protocol,1 which established the first set of legally binding emission reduction targets, thereby filling the power vacuum left as the USA withdrew from international climate engagement. To fulfil its Kyoto obligations, the EU established the then world’s largest emissions trading scheme – the EU Emissions Trading Scheme (EU ETS)2 – which it has employed in taking unilateral action on greenhouse gas emissions from aviation when other players at the international level had lost their appetite.3 Although the EU’s climate advocacy has largely been applauded, recent cases before the Court like Carvalho4 show that it could be more ambitious yet.
1 Kyoto Protocol to the United Nations Framework Convention on Climate Change, opened for signature 11 December 1997, 37 ILM 22 (entered into force 16 February 2005). 2 For a detailed account of the motivations leading to the enactment of the EU ETS, see S Bоgojević, Emissions Trading Schemes: Markets, State and Law (Oxford, Hart Publishing, 2013) ch 3. 3 J Scott and L Rajamani, ‘EU Climate Change Unilateralism’ (2012) 23 European Journal of International Law 469. 4 Case C-565/19 P, Carvalho and Others v Parliament and Council, ECLI:EU:C:2021:252.
798 Sanja Bogojević The Commission has played an ‘extraordinarily strong role’5 in mapping the EU’s climate agenda and has pushed for climate action within and beyond the EU. It has done this not only as the institution vested with law-initiating powers, but also in positioning the EU’s climate ambitions externally. The EU ETS, in particular, is thought of as the ‘Commission’s baby’,6 and has been promoted as the ‘world prototype’,7 a ‘blueprint’8 and a ‘global standardsetter’9 for international carbon emissions trading, as well as the ‘nucleus of a much larger global carbon market’.10 The EU ETS is far from the only carbon market in operation. There are popular regulatory mechanisms in, for instance, New Zealand, China and parts of the USA.11 Yet the EU has projected the EU ETS as the centrepiece of international carbon trading both by encouraging other countries to enact similar trading regimes and by inviting other parties to sign the Kyoto Protocol and its successor and to link their carbon markets to the EU ETS. This would allow each emissions allowance under the EU ETS to be identified and linked to an assigned amount within a corresponding carbon market, enabling crossmarket trade.12 The Commission led the negotiations that resulted in the EU ETS being linked with the Swiss carbon market. Yet the Council and many EU Member States voiced their concerns about being left in the dark as to the progress and direction of the negotiations.13 When, in 2011, Australian representatives approached the Commission with a view to starting bilateral negotiations on linking the EU ETS with a prospective Australian trading scheme, the Council insisted on greater involvement in the process. It is against this interinstitutional battle that Commission v Council (Australia ETS) is set. II. FACTS
Once Australian representatives made their intentions clear to EU officials, the Council, as per Article 218 TFEU, authorised the Commission to open negotiations. In doing so, it laid down negotiating directives within Article 2, in particular outlining that ‘the Commission 5 J Wettestad, ‘The Making of the 2003 EU Emissions Trading Directive: An Ultra-Quick Process due to Entrepreneurial Proficiency?’ (2005) 5 Global Environmental Politics 1, 2. 6 J Wettestad, ‘European Climate Policy: Toward Centralized Governance?’ (2009) 26 Review of Policy Research 311, 313. 7 A Engels, ‘Market Creation and Transnational Rule-Making: The Case of CO2 Emissions Trading’ in M-L Djelic and K Sahlin-Andersson (eds), Transnational Governance: Institutional Dynamics of Regulation (Cambridge, Cambridge University Press, 2006) 329, 343. 8 Y Slingenberg, ‘The International Climate Policy Developments of the 1990s: The UNFCCC, the Kyoto Protocol, the Marrakesh Accords and the EU Ratification Decision’ in J Delbeke (ed), EU Energy Law: The EU Greenhouse Gas Emissions Trading Scheme (Deventer, Claeys & Casteels, 2006) 15, 35. 9 Commission, ‘A Single Market for 21st Century Europe’ (Communication), COM (2007) 724 final. 10 EUROPA, ‘Climate Change: Commission Welcomes Final Adoption of Europe’s Climate and Energy Package’ (12 December 2008), europa.eu/rapid/press-release_IP-08-1998_en.htm. 11 A global, interactive overview of emissions trading schemes is available online at https://icapcarbonaction. com/ets-map. See also S Bоgojević, ‘Emissions Trading’ in E Leeds and J Vinuales (eds), The Oxford Handbook of Comparative Environmental Law (Oxford, Oxford University Press, 2019) ch 41. 12 Art 25 of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC, [2003] OJ L275/32 (EU ETS Directive). 13 For example, the Commission referred the Council to the Swiss Federal Office’s website for the environment when asked to provide an update on how negotiations were going, see A Delgado Casteleiro, ‘Institutional Balance and the Negotiation of International Agreements’ (EU Law Analysis Blog, 21 July 2015), http://eulawanalysis. blogspot.com/2015/07/institutional-balance-and-negotiation.html. See also Case C-425/13, Commission v Council, ECLI:EU:C:2015:483 (Australia ETS), para 6.
Balancing Institutional Powers in Negotiating Directives 799 shall report in writing to the Council on the outcome of the negotiations after each negotiating session and, in any event, at least quarterly’. It also included an Annex, where it provided a detailed procedure for the negotiations, demanding four specific actions from the Commission. First, the Council demanded that the Commission conduct negotiations ‘in accordance with relevant Union legislation in force’ and, where appropriate, establish ‘detailed negotiating positions of the Union’ within the special committee, which, as per Article 218 TFEU, was set up to assist the Commission in this task. Second, it ordered the negotiations to ‘be prepared for well in advance’ and, in this regard, tasked the Commission with informing the Council of ‘the schedule anticipated and the issues to be negotiated’, as well as forwarding the relevant documents ‘as early as possible’ to the Council and the special committee. The motivation for this was to allow the latter two to prepare themselves properly for the forthcoming negotiations. Third, the Commission was to be obligated to meet with the special committee before each negotiating session to ‘identify the key issues and establish negotiating positions or guidance, as appropriate’. The Commission could, as per the Annex, seek guidance on specific technical aspects of the linking negotiations from the Climate Change Committee, on which all Member States are represented, but only ‘subject to prior authorisation from the special committee’. Finally, the Commission was to be obligated to report to the Council on the outcome of the negotiations after each negotiating session, and in any event at least quarterly, to inform the Council and consult the special committee on any major problem that may arise during the negotiations.14 The Commission saw this as an unlawful attempt to obliterate its treaty-entrusted negotiating discretion with regard to international agreements and initiated an annulment action before the Court. Relying on Article 218 TFEU, which governs the external negotiating powers of EU institutions, and Articles 13(2) and 295 TFEU, which stipulate the importance of mutual sincere cooperation and consultation duties in concluding interinstitutional agreements, it argued that the Council had breached institutional balance, tipping it in its own favour. Ultimately, this meant that, in Commission v Council (Australia ETS), the Court was tasked with determining the extent to which the EU Treaties permit the Council to exercise control over the Commission in conducting international negotiations, as well as defining the role of special committees in overseeing the Commission in this regard. III. THE COURT
In delivering its judgment, the Grand Chamber of the Court repackaged the Commission’s annulment pleas into two questions: one concerning admissibility and one dealing with the legality of Article 2 and the Annex of the contested decision. With regard to admissibility, the Council had tried to convince the Court to dismiss the case on the basis that the contested acts were contained in negotiating directives that are non-binding and so not reviewable.15 As Advocate General (AG) Wathelet explained, unlike directives as understood in Article 288 TFEU, negotiating directives for negotiations leading to a potential international agreement need not be published as that would disclose ‘the Union’s hand to the other party and could thus undermine the Commission’s negotiating position’.16
14 Original 15 ibid
text outlined in Commission v Council (Australia ETS) (n 13) para 12. para 24. of AG Wathelet, Case C-425/13, Commission v Council, ECLI:EU:C:2015:174 (Australia ETS), para 67.
16 Opinion
800 Sanja Bogojević Yet, the parallel that might be drawn between the two types of directives ‘is that negotiating directives also leave to the Commission “the choice of form and methods” inasmuch as they can only guide the Commission, as negotiator, in its conduct of the negotiations’. Were it otherwise, the AG continued, ‘it would no longer be a negotiating “directive” but a negotiating “diktat”’.17 Did this mean that negotiating directives have no legal effect? The Court did not engage with AG Wathelet’s reasoning on this point, but, unsurprisingly, it insisted on broad legal safeguards and reiterated its related established case law. More precisely, it made clear that actions for annulment ‘must be available in the case of all measures adopted by the EU institutions, irrespective of their nature or form, provided that they are intended to have legal effects’.18 In other words, it is the substance, not the form, of the act that matters in permitting judicial review. This raised the question whether measures stipulated under Article 218(3) TFEU and Article 218(4) TFEU, such as the negotiating directives, have legal effect. This was easy enough for the Court to answer in the affirmative as it had already decided that matter the previous year, in Commission v Council (Broadcasting Organisation).19 This meant that the negotiating directives in this case were found to have legal effect in outlining a precise and detailed procedure for the Commission to follow in its negotiations with Australian representatives. Subsequently, the Court went ahead to address the legality of these acts. Here, the Court first deliberated on the significance of institutional balance in how international agreements between the EU and third states are concluded. This balance, it explained, is maintained by assigning to the Commission the role of representing the EU externally. As such, agreements entered into by the Commission need to line up with any negotiating directives that have been drawn up by the Council and which are subject to the Council’s approval, on which the Council, in turn, consults the European Parliament.20 This is a neat institutional set-up codified in Article 218 TFEU, but where does it leave the Commission in deciding the procedure and content of negotiation with external parties? Here, the Court paused to explicate the role of the special committees, designed by the Council following Article 218(4) TFEU. According to the Court, the Commission is tasked with providing these committees ‘with all the information necessary for them to monitor the progress of the negotiations’, in particular ‘the general aims announced and the positions taken by the other parties throughout the negotiations’.21 Only in this way, the Court explained, can the special committee formulate opinions and advice pertaining to the negotiations. The Court added, however, that not only does the special committee need to be continually informed on the progress of negotiations, but so too does the Council, as this will expedite the process of concluding the international agreement.22 With this motivation, the Court found that Article 2 of the contested decision, which demanded that the Commission report to the committee and the Council, were in conformity with the EU Treaties. But what about the stipulations found in the Annex, which at least in part severely encroached on the Commission’s negotiation powers? The Court clarified that, by Article 218(4) TFEU, the Council was entitled to set out procedural arrangements for the provision of information and, more generally, for communication and consultation between
17 ibid
para 68. para 26. 19 Case C-114/12, Commission v Council, ECLI:EU:C:2014:2151 (Broadcasting Organisations) para 40. 20 Commission v Council (Australia ETS) (n 13) para 62. 21 ibid para 66. 22 ibid para 67. 18 ibid
Balancing Institutional Powers in Negotiating Directives 801 the special committee and the Commission. Yet it emphasised that this must not deny the Commission the power which it is granted under Article 17(1) TEU.23 As a result, the Council’s demand to set out detailed negotiating positions on the Union’s behalf within the special committee or within the Council (as attempted in this case) was contrary to the EU Treaties. The Court reached the same conclusion with regard to the requirement under the Annex that ‘Each negotiating session shall be preceded by a meeting within the special committee in order to identify the key issues and establish negotiating positions’. This provision, the Court maintained, conferred upon the special committee the task of establishing the EU’s negotiating positions in detail, ‘a task which goes beyond the consultative function assigned to it by that provision’.24 So how, then, to balance and judge the powers shared by the Commission and the Council under Article 218(4) TFEU? The Court explains that whilst Article 218(4) TFEU does authorise the Council to draw up negotiating directives, it does not ‘invest that institution with the power to impose detailed negotiating positions’ on the Commission.25 On grounds of having infringed the principle of institutional balance, Article 13(2) TEU and Articles 28(2)–(4) TFEU, the provisions in question were annulled. IV. THE IMPORTANCE OF THE CASE
By the time the Court ruled in this case, the Australian political landscape had changed, and its plan to set up a national emissions trading scheme, linked with the EU ETS, had been scrapped.26 Thus, the Commission never got to exercise those negotiating powers that the judgment had confirmed. Still, the Court’s ruling is significant for at least three reasons.27 As a starting point, the Court laid down important findings regarding the scope and meaning of Article 218 TFEU, which has been relied upon in subsequent institutional conflicts.28 In fact, the Court had never before been called upon to determine the scope of the Council’s authority to lay down negotiating directives. Clarification was particularly welcome as regards the inclusion of procedural provisions and the role of the special committees. Second, this case raised an important constitutional question, one that concerns the division of powers, responsibilities and competences between the Commission and the Council in the negotiation of international agreements. The impact of the Court’s findings goes beyond linking issues29 and, as AG Wathelet explained, it is relevant to all other negotiations, including negotiations with the USA and Canada.30 Finally, although this case is positioned in EU external relations law – and EU constitutional law – it is significant also for the EU’s climate actions on the global scene. It determined, quite simply, who may negotiate and on what terms.
23 ibid para 79. 24 ibid para 89. 25 ibid para 90. 26 For an overview of Australia’s climate change strategies, see Australian Government, Department of Industry, Science, Energy and Resources, www.industry.gov.au/policies-and-initiatives/australias-climate-change-strategies. 27 AG Wathelet similarly identified three reasons why this judgment is significant, although our lists differ slightly. See Opinion of AG Wathelet in Commission v Council (Australia ETS) (n 16) paras 2–4. 28 See, eg the many other post-Treaty of Lisbon cases on interinstitutional disputes in this book. 29 Opinion of AG Wathelet in Commission v Council (Australia ETS) (n 16) para 4. 30 See, eg the EU–Singapore Free Trade Agreement, as adjudicated upon in Opinion 2/15. See this volume, ch 82; the EU–Canada Comprehensive Economic and Trade Agreement (CETA) in Opinion 1/17. See this volume, ch 88.
802 Sanja Bogojević A. Determining the Extent of the Commission’s Discretion under Article 218 TFEU The Treaty of Lisbon established a single procedure for the negotiation, signing and conclusion of international agreements by the Union, including agreements in the field of the Common Foreign and Security Policy (CFSP). The structure, codified in Article 218(2)–(4) TFEU and described by Dashwood as ‘the procedural code’ for treaty-making,31 seems straightforward enough. It says that the Council shall authorise the opening of negotiations; adopt negotiating directives; designate a special committee in consultation with which the negotiations must be conducted; authorise the signing of agreements; and conclude international agreements in consultation with the European Parliament.32 The Commission33 is tasked with the negotiating itself. In practice, however, interpretation of the delimitations of the various institutional powers involved has triggered the ‘Battlefield of Article 218 TFEU’.34 The key points of contentious, as Van der Mei notes, include how detailed negotiation directives may be; the prerogatives of the European Parliament; and the application of Article 218 TFEU procedures to non-binding agreements.35 These are precisely the issues that the present case dealt with. Still, the basic theme of Article 218 TFEU jurisprudence is the allocation of power between institutions, and between institutions and Member States. The latter may have given their constitutional blessing in adopting Article 218 TFEU, but not without a lingering anxiety as to the extent of the Commission’s power to unilaterally decide the EU’s external relations. This anxiety, Van der Mei argues, has intensified with the EU’s increased prominence on the global stage. Clearly, Article 218 TFEU provides fertile ground for legal disputes about how the EU should exercise its treaty-making powers.36 What, then, does Commission v Council (Australia ETS) add to the jurisprudence pertaining to Article 218 TFEU? The Court explained that the provision constitutes ‘an autonomous and general provision of constitutional scope, in that it confers specific powers on the EU institutions’.37 This meant that the Commission’s role as external representative, and thus its mandate to negotiate international agreements on behalf of the Union, flowed directly from the EU Treaties. In other words, ‘the Commission does not negotiate on behalf of the Council, but on behalf of the Union’.38 The ruling thereby reinforces the key role of the Commission in EU external relations and the importance of institutional balance. B. Underlining the Importance of Institutional Balance in the EU’s External Negotiations Institutional balance demands that various EU institutions practice mutual sincere cooperation,39 consult each other and make arrangements for cooperation by common
31 A Dashwood et al, Wyatt and Dashwood’s European Union Law, 6th edn (Oxford, Hart Publishing, 2011) 936, as quoted in P Koutrakos, ‘Institutional Balance and Sincere Cooperation in Treaty-Making under EU Law’ (2019) 68 ICLQ 1, 2. 32 As stipulated in Art 218(6) TFEU. 33 Or the High Representative of the Union for Foreign Affairs and Security Policy where the agreement envisaged relates exclusively or principally to the CFSP. 34 AP van der Mei, ‘EU External Relations and Internal Inter-institutional Conflicts: The Battlefield of Article 218 TFEU’ (2016) 23 Maastricht Journal of European and Comparative Law 1051. 35 ibid. 36 Koutrakos (n 31) 2–3. 37 Commission v Council (Australia ETS) (n 13) para 62. 38 Van der Mei (n 34) 1058. 39 Art 13(2) TEU.
Balancing Institutional Powers in Negotiating Directives 803 agreement.40 It is an ideal firmly rooted in the EU Treaties. Yet what it means in practice and how powers, responsibilities and competence are supposed to be distributed between the Commission, the Council and the European Parliament are long-standing queries in EU law.41 Article 218 TFEU raises these important constitutional questions anew – this time in the context of external representation. AG Wathelet noted that a deep-rooted suspicion between the institutions has long existed, and although it has generally subsided, it has persisted when it comes to action on external affairs, which is often linked with executive power. Here, AG Wathelet pointed to the drafting history of the current Article 218 TFEU and the Commission’s efforts, rejected by the Member States, to limit its obligations to consult with the committees and to be allowed to stipulate its position independently of other institutions in its dealings with third countries.42 The reason for denying the Commission such prerogatives, AG Wathelet claimed, is connected to the ‘climate of suspicion’ that surrounds the Commission in commercial matters and to the fact that some Member States ‘feared that the Commission, backed by the Court of Justice, would miss no opportunity to further its own ambitious agenda in the field’.43 Fast forward to the case at hand, and this ‘climate of suspicion still surrounds the Commission’.44 This is evidenced not only by the Council’s counterclaims in the case, but also by the argumentation of the seven intervening Member States who sided with the Council. The latter indeed maintained that the raison d’être of negotiating directives (and thus of special committees) is to avoid a ‘politically unacceptable fait accompli, since such an outcome could jeopardise the very approval of the agreement itself’.45 In other words, the Council argued that the Commission’s powers must be reined in and closely supervised. The fact that the Council, together with the Member States, was anxious to safeguard its control and powers over the Commission in this regard was clear also from its attempt to find the Commission’s legal action in the case inadmissible by the Court. The Court insisted on a broad legality review and delivered a carefully balanced judgment. This was important. After all, this is not only a legally complex area, but also a politically sensitive one. That much was evident from the fact that the Council, in accordance with Article 151 of the Rules of Procedure of the Court, asked the Court to remove from the case file the contested decision and the negotiating directives, as well as the passages in the Commission’s application quoting from those directives, ‘to ensure that the content of the negotiating directives “[was] not made public”’ – an appeal that was refused.46 Yet the Court did recognise the Council’s worries as legitimate and therefore insisted on the Commission’s reporting duties, without thereby curtailing all of the Commission’s negotiating powers. In this way, it provided a measured reading of what the principle of institutional balance entails. Does this case signal an increasing institutional divide on how to conduct the EU’s external representation?47 The fact that the Court ruled that the Commission’s power under Article 218 TFEU is autonomous, and does not originate with the Council, promises to prevent further division. It means that the EU’s dealings with third parties cannot be dominated by the Council (and the Member States) but demand a collective, interinstitutional effort.
40 Art
295 TFEU. eg J Adams-Prassl and S Bogojević, Great Debates in EU Law (London, Macmillan, 2021) ch 2. 42 Opinion of AG Wathelet in Commission v Council (Australia ETS) (n 16) para 115. 43 ibid. 44 ibid para 116. 45 ibid para 117. 46 Commission v Council (Australia ETS) (n 13) para 17. 47 As questioned by Delgado Casteleiro (n 13). 41 See,
804 Sanja Bogojević C. The Need to Interlink EU Constitutional Law and EU Climate Action This case should be studied in the context of the EU’s external relations, but the Court’s findings are also relevant to EU climate action. Carbon markets were initially thought of as an easy and legally straightforward way to deal with climate change.48 The idea of linking together different emissions trading schemes is part of that simplified story about carbon markets. Yet the case at hand shows, like most other EU ETS-specific cases, that the construction and management of carbon markets raise major constitutional questions. It has recently been argued that the complexities of linking could be circumvented by distributed ledger technology, which would foster fluid markets and so price carbon emissions more effectively.49 However fascinating such a proposal may be, it still does not answer the basic constitutional questions underpinning all of EU law: who decides on such a move, on what legal basis and with which legal consequence? As mentioned at the outset, the EU is a keen global climate actor. As this case has demonstrated, one of the key constitutional quandaries has been determining who gets to decide on the goals and objectives that the EU pursues externally. Traditionally, the power battles have been waged between institutions, but recent developments may press the EU leadership to broaden its participation.50 For example, Climate Rebellion has demanded broader public participation in climate action.51 Also, in Article 9 of the EU Regulation on climate neutrality, it is stipulated that to achieve climate neutrality by 2050, the Commission will carry out an ‘inclusive and accessible’ dialogue at national, regional and local levels, in concert with ‘social partners, academia, the business community, citizens and civil society, for the exchange of best practice’.52 In addition, the Commission is set to launch a so-called ‘European Climate Pact’ to give ‘everyone a voice and space to design new climate actions, share information, launch grassroots activities and showcase solutions that others can follow’.53 There is no mention of broadening participation in external affairs, which is understandable considering that secondary law is unable to restrain provisions of the EU Treaties. Yet these recent trends raise a valid point about the need to rethink and widen participation. How could this be done with regard to the EU’s external, treaty-making powers, and with what legal consequences? Clearly, the battles about who gets to shape the EU’s climate policy will continue – and the battlefield may well become more crowded in the future. V. ADDITIONAL READING Bogojević, S, Emissions Trading Schemes: Markets, State and Law (Oxford, Hart Publishing, 2013). Hadjiyianni, I, The EU as a Global Regulator for Environmental Protection: A Legitimacy Perspective (Oxford, Hart Publishing, 2019). Marín Durán, G and Morgera, E, Environmental Integration in the EU’s External Relations: Beyond Multilateral Dimensions (Oxford, Hart Publishing, 2012). 48 Bоgojević (n 2). 49 J Macinante, Effective Global Carbon Markets: Networked Emissions Trading Using Disruptive Technology (Cheltenham, Edward Elgar, 2020). 50 A similar point is made in S Bоgojević, ‘COVID-19, Climate Change Action and the Road to Green Recovery’ (2020) 32 Journal of Environmental Law 355. 51 XR’s demands for a citizens’ assembly, even if not directly in relation to EU climate action, https://xrcitizensassembly.uk/uk-climate-assembly/. 52 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) [2021] OJ L243/1. 53 European Climate Pact, https://ec.europa.eu/clima/policies/eu-climate-action/pact_en.
74 EU Representation in International Litigation: Council v Commission (International Tribunal for the Law of the Sea) ALEXANDER KORNEZOV* Case C-73/14 Council of the European Union v European Commission, ECLI:EU:C:2015:663 (International Tribunal for the Law of the Sea), delivered 6 October 2015. KEYWORDS Representation of the European Union in international litigation – Submissions by the European Commission on behalf of the European Union – Article 335 TFEU – Article 218(9) TFEU – Principle of conferral of powers – Article 13(2) TEU – Policy-making within the meaning of Article 16(1) TEU – Principle of sincere cooperation – International Courts and Tribunals – United Nations Convention on the Law of the Sea – International Tribunal for the Law of the Sea.
I. INTRODUCTION
I
n today’s global order, in which international courts and tribunals play a significant role, the way the EU litigates on the international stage is a matter of great importance. The question of which EU institution is to represent the Union and define its legal position in international litigation was examined for the first time by the Court, sitting in Grand Chamber formation, in Case C-73/14 Council v Commission (International Tribunal for the Law of the Sea)1 (the ITLOS case). While Article 335 TFEU has been clear on the representation of the Union in national settings, the lack of clear provisions in the EU Treaties with regard to international litigation has been a considerable challenge for a long time. It threatened to compromise the
* All opinions expressed herein are personal to the author. The author wishes to thank Ben Holles de Peyer and Martin Wagner for their invaluable assistance. 1 Case C-73/14, Council of the European Union v European Commission, ECLI:EU:C:2015:663 (ITLOS).
806 Alexander Kornezov Union’s capacity to defend itself efficiently in international litigation and, more generally, to undermine the Union’s international standing. In an effort to make sense of the general constitutional framework set up by the Treaties, and in particular of Article 218(9) TFEU, Article 335 TFEU, Article 16(1) TEU and Article 17(1) TEU, the Court tried to provide clarity, predictability and legal certainty in the interests of ensuring efficient EU representation in international litigation. The ITLOS judgment is, however, one of those judgments which must be read between the lines. Behind its seemingly clear-cut solutions that strive to clarify the scope of the respective powers of the Commission and of the Council in the context of international litigation, there is more than meets the eye. Thus, while, in an apparent effort to provide clarity and legal certainty, the Court held that it was, in principle, for the Commission to represent the Union in international litigation without it having to obtain the Council’s prior approval, the judgment does not seem to rule out the possibility that such prior approval might still be required if the definition of the Union’s legal position in the context of international litigation is a matter of policy. II. FACTS
The ITLOS case arose in the context of proceedings before the International Tribunal for the Law of the Sea (ITLOS), which was established by the 1982 United Nations Convention on the Law of the Sea (UNCLOS). ITLOS has jurisdiction, in particular, to give advisory opinions concerning matters covered by that convention, to which the EU is a contracting party. In 2013, ITLOS received a request by the Sub-Regional Fisheries Commission (SRFC), an intergovernmental organisation for fisheries cooperation composed of several West African countries. The request, registered as ‘Case No 21’, sought an advisory opinion from ITLOS on questions related to the rights, obligations and liabilities of flag states, coastal states and international agencies in cases of illegal, unreported and unregulated (IUU) fishing. ITLOS invited the parties to UNCLOS, including the EU, to submit written statements on the questions covered by the request. The Commission took the view that it was empowered not only to represent the EU in these proceedings, but also to determine autonomously the content of the Union’s written submissions without seeking or obtaining the prior approval of the Council. The Commission nevertheless engaged in a dialogue with the Council, and took account of some of its views in preparing the final draft. The Council, supported by 10 EU Member States, claimed that, by failing to request and obtain its prior approval of the content of the written statement presented on behalf of the EU, the Commission breached Article 218(9) TFEU and Article 16(1) TEU, as well as the principle of sincere cooperation under Article 13(2) TEU. In turn, the Commission argued that it was competent to submit the written statement without the Council’s prior approval pursuant to Article 335 TFEU and Article 17(1) TEU. III. THE COURT
The Court’s judgment contains three key points. In the first place, the Court espoused a broad interpretation of Article 335 TFEU, pursuant to which ‘In each of the Member States, the Union shall enjoy the most extensive legal capacity’ and, to this end, ‘shall be represented by
EU Representation in International Litigation 807 the Commission’. Referring to its earlier judgment in the Reynolds Tobacco2 case, the Court held that although Article 335 TFEU was ‘restricted to Member States on its wording’,3 that provision was the expression of a general principle according to which the EU has legal capacity and, to that end, it is to be represented by the Commission. Therefore, Article 335 TFEU empowered the Commission to represent the EU before ITLOS in Case No 21. Importantly, however, the Court clarified that Article 335 TFEU did not exhaust the issue at hand, insofar as it also had to be ascertained whether the principle of conferral of powers laid down in Article 13(2) TEU, first sentence required that the content of the written statement presented to ITLOS in Case No 21 by the Commission on behalf of the EU receive the prior approval of the Council.4 In the second place, with regard to the principle of conferral of powers enshrined in Article 13(2) TEU, first sentence, the Court recalled that each institution is to act within the limits of the powers conferred on it by the EU Treaties, and in conformity with the procedures, conditions and objectives set out in them. It then examined whether the Commission had disregarded the Council’s prerogatives under Article 218(9) TFEU or Article 16(1) TEU by submitting to ITLOS the EU’s written statement without prior approval from the Council. First, according to the Court, Article 218(9) TFEU was, in essence, irrelevant in the present case. The Court relied on the wording of that provision, pursuant to which the Council shall adopt a decision establishing the position to be adopted on the EU’s behalf ‘in a body set up by an agreement, when that body is called upon to adopt acts having legal effects’. According to the Court, Article 218(9) TFEU thus applies exclusively to the Union’s positions ‘in’ bodies established by an international agreement, and not, as in this case, to positions expressed ‘before’ such bodies. Put simply, when the EU takes part in international litigation, it simply pleads before the international court or tribunal hearing the case. It does not therefore take a position in that court or tribunal as it does not participate in its deliberations. The literal interpretation of Article 218(9) TFEU was supported by the context and purpose of that provision, which, in the Court’s view, laid down, by way of derogation from the ordinary procedure set out in Article 218(1)–(8) TFEU for the negotiation and conclusion of international agreements, a simplified procedure for deciding on the positions to be adopted on behalf of the Union in the context of its participation in the adoption, within a decision-making body set up by the international agreement concerned, of acts applying or implementing that agreement.5 In light of the above, the Court concluded that Article 218(9) TFEU was not applicable, and that it was therefore not necessary to assess whether an advisory opinion from ITLOS constituted an ‘act having legal effects’ within the meaning of Article 218(9) TFEU. Second, the Court considered whether the Union’s written statement submitted in Case No 21 could be said to formulate a policy in relation to IUU fishing and thus fall within the ambit of Article 16(1) TEU, which contains the constitutional mandate for the Council to carry out policy-making functions. In that respect, the Court drew a distinction between litigating and policy-making. It explained that the subject matter of the written statement submitted on
2 Case C-131/03 P, RJ Reynolds Tobacco Holdings et al. v Commission, ECLI:EU:C:2006:541. 3 ITLOS (n 1) para 58. 4 ibid para 60. 5 In her opinion, Advocate General (AG) Sharpston explained the drafting history of Art 218 TFEU in more detail, while arriving at the same conclusion as the Court. See Opinion of AG Sharpston in Case C-73/14, Council of the European Union v European Commission, ECLI:EU:C:2015:490 (ITLOS) paras 71–74.
808 Alexander Kornezov behalf of the Union to ITLOS was limited to the interpretation and application of certain provisions of UNCLOS, of other relevant international agreements and of the EU regulatory framework. Thus, according to the Court, the written statement did not aim to formulate a policy … but to present to ITLOS, on the basis of an analysis of the provisions of international and EU law relevant to that subject, a set of legal observations aimed at enabling that court to give, if appropriate, an informed advisory opinion on the questions put to it.6
The Court also rejected the Council’s and some of the Member States’ arguments that some considerations in that written statement, namely those pertaining to ITLOS’s jurisdiction, constituted strategic or political choices, and that it was therefore for the Council to define the EU’s position in that regard. The Court simply stated that the question of jurisdiction is characteristic of participation in proceedings before a court and cannot, in those circumstances, be regarded as policy-making within the meaning of Article 16(1) TEU. The fact that the written statement may have political consequences was not deemed relevant either. In her Opinion, Advocate General (AG) Sharpston considered this conclusion to be case-specific and admitted that, in certain cases, the submission of a statement in the context of international litigation may be akin to policy-making.7 Third, the Court found that the Commission had not breached the principle of sincere cooperation under Article 13(2) TEU, second sentence. According to the Court, this principle required the Commission to consult the Council before submitting a statement to ITLOS on behalf of the Union, but not to obtain its prior authorisation. The Court concluded that the Commission had fulfilled this obligation in the present case by consulting the Council and by taking into account some of its views in preparing the Union’s written submission in Case No 21. IV. THE IMPORTANCE OF THE CASE
The rules governing the representation of the Union in international litigation should be framed in a clear, predictable and easy-to-apply fashion. It is indeed paramount for the Union to be able to defend its legal position in the context of international litigation efficiently and quickly, given that judicial proceedings are usually governed by strict standing requirements and deadlines. The infighting between Union institutions to determine which one of them should define the content of the Union’s statements in such litigation, coupled with the lack of express provision to that end in the EU Treaties, threatened to weaken the Union’s position in international litigation. The Court’s judgment thus sought to provide clarity and legal certainty in that regard. This objective was likely the main rationale behind the Court’s reasoning. To a great extent, that objective was achieved. It is now clear that it is, in principle, for the Commission to act on behalf of the EU in legal proceedings before international courts and tribunals, without it having to obtain the Council’s prior approval. There are four key takeaways from this judgment. First, Article 335 TFEU should be construed broadly as providing a legal basis for the Commission to represent the EU in international litigation. However, that article alone does not exhaust the issue since, when representing the Union in such litigation, the Commission must act in accordance with the principle of conferral of powers. Second, Article 218(9) TFEU does not apply to international
6 ITLOS
(n 1) para 71. of AG Sharpston (n 5) para 91.
7 Opinion
EU Representation in International Litigation 809 litigation. Third, as a rule of thumb, litigating is not tantamount to policy-making. Arguably, however, in some cases, international litigation might hinge on policy-making, in which case the Commission may be required to obtain the Council’s prior approval of the content of the Union’s submissions pursuant to the principle of conferral of powers. Fourth, the principle of sincere cooperation arising from Article 13(2) TEU requires the Commission to consult the Council before expressing positions on behalf of the EU in international litigation. These four points are analysed in turn below. Two preliminary remarks are, however, necessary. First, the question whether the subject matter of the case before ITLOS fell within the EU’s exclusive or shared competence was not examined by the Court, because neither the Council nor the intervening Member States argued that the Union lacked competence to intervene in that case. Second, none of the parties argued that the Commission could not represent the EU in those proceedings. The only question put to the Court was which institution – the Commission or the Council – was competent to define the Union’s position in those proceedings, which was then to be presented by the Commission before ITLOS.8 A. The Broad Interpretation of Article 335 TFEU The parties to the ITLOS case disagreed on the scope of Article 335 TFEU, the wording of which empowers the Commission to represent the EU in legal proceedings in ‘each of the Member States’. While some of the intervening Member States were of the view that this provision refers exclusively to judicial proceedings at national level, the Commission contended that Article 335 TFEU reflects the general principle that the Commission is to represent the EU in both national and international litigation. The Council, in turn, was willing to accept that Article 335 TFEU empowers the Commission to represent the EU in international litigation, but argued that it was for the Council to decide which position the Commission should take in such proceedings. In her Opinion, AG Sharpston considered that Article 335 TFEU, read in conjunction with the second sentence of Article 17(1) TEU, empowers the Commission to represent the EU in international litigation. The Court reached the same conclusion without, however, referring explicitly to Article 17(1) TEU. Three observations should be made in this regard. First, the Court’s broad reading of Article 335 TFEU clearly goes beyond the wording of that Treaty provision, which refers only to proceedings in the Member States. Nevertheless, that broad interpretation was unsurprising, as it followed from its earlier judgment in the Reynolds Tobacco case, in which the Court had found that the Commission could bring civil actions against a private party, on behalf of the Union, before the courts of the USA. The Court had thus already taken the view that Article 335 TFEU entrusted the Commission with the task of representing the Union in judicial proceedings not only before the courts of the Member States, but also before the courts of a third state. It was thus unsurprising that the Court adopted a similarly broad interpretation of Article 335 TFEU, expanding the Commission’s powers of representation to international litigation. Second, while the Court’s reasoning in that regard is particularly curt, it must be recalled that its conclusion in the Reynolds Tobacco judgment was based not only on Articles 281
8 Likewise,
see ibid paras 50–55.
810 Alexander Kornezov and 282 of the EC Treaty (the predecessors of Article 335 TFEU), but also on Article 211 of the EC Treaty (replaced, in effect, by what is now Article 17(1) TEU).9 AG Sharpston’s approach to interpret Article 335 TFEU in conjunction with Article 17(1) TEU had thus already been endorsed by the Court in its earlier Reynolds Tobacco judgment. It should be added that the fifth sentence of Article 17(1) TEU provides that ‘with the exception of the common foreign and security policy, and other cases provided for in the Treaties, the Commission shall ensure the EU’s external representation’. Against that background, the Court probably thought that the issue did not deserve further explanation, in light of its earlier Reynolds Tobacco judgment and of the fact that the Council agreed that the Commission could represent the EU before ITLOS. This was therefore not really the main point of contention. The conclusion of the Court thus provides the necessary clarity and legal certainty by ascertaining unequivocally that the Union is to be represented by the Commission in the context of international litigation. Third, crucially, Article 335 TFEU (alone or in conjunction with Article 17(1) TEU) only deals with the question of who represents the EU in national and international litigation (the Commission); it does not exhaust the question of who decides whether the Union should intervene and what the Union’s position should be in such litigation. That question is to be answered on the basis of the principle of conferral of powers laid down in Article 13(2) TFEU, first sentence (see section IVC below).10 B. Clarifying the Scope of Article 218(9) TFEU Article 218(9) TFEU establishes a special simplified procedure that regulates the roles and powers of the EU institutions once an international agreement has been concluded. This specific procedure was deemed necessary because a large number of bilateral and multilateral agreements entered into by the EU set up bodies that implement such agreements and adopt decisions having legal effects. The objective was to allow swift and efficient participation of the EU in such international bodies. To that end, Article 218(9) TFEU empowers the Council – without consulting or seeking the approval of Parliament – to adopt a decision establishing the position of the Union in such a body, where that body is called upon to adopt acts having legal effects, except where the decision to be taken modifies or completes the institutional framework of that agreement. The ITLOS case is one of two principal cases which, following the adoption of the Treaty of Lisbon, helped delimit the scope of Article 218(9) TFEU. The first case was Germany v Council of the European Union (the International Organisation of Vine and Wine case), which focused, in particular, on the notion of ‘acts having legal effects’ within the meaning of Article 218(9) TFEU. The case concerned the adoption of non-binding recommendations and the international harmonisation of wine-making practices and standards in the framework of the International Organisation of Vine and Wine, of which the EU was not a member but a number of EU Member States were. The Court held, in essence, that such recommendations had legal effects even if they were non-binding, in particular because they were capable of
9 Reynolds Tobacco (n 2) para 94. 10 ITLOS (n 1) para 60 reads as follows: ‘the applicability of Article 335 TFEU in the present case does not exhaustively resolve the issue, raised by the first plea in law, of whether the principle of conferral of powers laid down in Article 13(2) TEU required that the content of the written statement presented to ITLOS in Case No 21 by the Commission, on behalf of the European Union, receive the prior approval of the Council’.
EU Representation in International Litigation 811 decisively influencing the content of EU legislation in the area of the common organisation of the wine markets.11 In ITLOS, the Court added a new important element of interpretation by clarifying that Article 218(9) TFEU applies only where the EU takes part in the decision-making of the international body in question. By contrast, international litigation falls outside the scope of Article 218(9) TFEU since, as a party in a dispute, the Union merely conveys its position before an international court, but does not participate in the formation of the decision of that court. Thus, the ITLOS case confirms that Article 218 TFEU, including paragraph 9 thereof, lays down the procedures that must be followed for the adoption of new legal rules or decisions, which includes international agreements and acts adopted in bodies set up by such agreements, but not the submission of observations before independent bodies regarding the interpretation and application of already existing rules.12 C. The Principle of Conferral of Powers as a Means for Determining which EU Institution is Competent to Determine the EU’s Position in International Litigation While Article 335 TFEU, as interpreted by the Court, empowers the Commission to represent the EU in international (and national) litigation, the principle of conferral of powers, as laid down in Article 13(2) TEU, first sentence, is the basis for determining the institution which is competent to define (or approve) the position of the Union which the Commission should present in that litigation. This conclusion can be inferred from the Court’s judgment. Indeed, on the one hand, the Court emphasised that Article 335 TFEU did not exhaust the matter of EU representation in international litigation, while, on the other hand, it went on to verify whether the position that the EU took in that litigation amounted to ‘policy-making’ within the meaning of Article 16(1) TEU and should thus have been reserved for the Council pursuant to the principle of conferral of powers. The crucial point in the ITLOS case was thus whether the written statement that was submitted on behalf of the Union in Case No 21 amounted to policy-making. The Court concluded that this was not the case. Its reasoning should be read carefully. The Court started by pointing out that the request for an advisory opinion concerned the respective obligations and responsibilities of the flag state, the coastal state and international agencies in relation to IUU fishing; that IUU fishing falls within the scope of a range of provisions of UNCLOS, to which the EU is a contracting party, as well as of a number of other international agreements to which the EU also acceded; and that IUU fishing is the subject of detailed regulation in EU law, too. The Court also examined the written statement submitted on behalf of the EU to ITLOS in Case No 21, and found that it consisted in suggesting the proper interpretation and application of the relevant provisions of UNCLOS and of other relevant instruments of international law. It is on that basis that the Court reached the conclusion that the statement submitted by the Commission on behalf of the EU did not involve policy-making, but was instead limited to simple legal representation aimed at providing ITLOS with legal observations on the interpretation of the law. Consequently, the Commission was not required to seek the Council’s prior approval of the substance of that statement. 11 Case C-399/12, Germany v Council of the European Union, ECLI:EU:C:2014:2258 (OIV), paras 56–64. See this volume, ch 68. 12 A Rosas, ‘Recent Case Law of the European Court of Justice Relating to Article 218 TFEU’ in J Czuczai and F Naert (eds), The EU as a Global Actor: Bridging Legal Theory and Practice (Leiden, Brill Nijhoff, 2017) 375 and 378.
812 Alexander Kornezov In her Opinion, AG Sharpston noted that the Council had already exercised its policymaking role within the framework of UNCLOS before the Commission submitted the written statement to ITLOS. It had done so, firstly, by deciding that the EU become a party to both UNCLOS and the other relevant international agreements in accordance with procedures in which the Council played to the full the role reserved to it by the EU Treaties, and thus by agreeing that the EU be bound by their dispute settlement provisions and, more generally, by arrangements concerning the jurisdiction to interpret them. Secondly, according to AG Sharpston, the Council had already exercised its policy-making powers by participating in the adoption of a wide range of internal rules which cover the substantial aspects of those agreements. According to AG Sharpston, these were the policy-making choices which the Council had made in accordance with Article 16(1) TEU and the specific procedural rules in the EU Treaties which protect the Council’s prerogatives with respect to the negotiation, signing and conclusion of international agreements. By contrast, the subsequent clarification and application of existing commitments of the EU under international law through international litigation represent ‘in most cases’ merely the consequences of the Council’s earlier policy choices and thus do not require defining a new policy.13 In its judgment, the Court thus drew a distinction between litigation and policy-making. In principle, litigation is not tantamount to policy-making, since the former is usually only about interpreting and applying the policy choices that have already been made by the competent stakeholders. It is, however, important to recognise that the Court’s reasoning was not based on sweeping general statements, but was instead case-specific. It is indeed on the basis of the specificities of Case No 21 that the Court reached the conclusion that the Union’s written statement in that case fell squarely into the ‘litigation’ box, and not in the ‘policy-making’ box.14 Two important conclusions should thus be drawn from the Court’s considerations. First, defining the EU’s position in international litigation would not, as a general rule – or ‘in most cases’, as AG Sharpston put it – involve policy-making and would thus fall within the Commission’s competence. This is a logical assumption, insofar as the mere submission of legal observations in the context of a legal dispute rarely implies the determination of policy choices. Secondly, however, this general assumption might not always hold true. AG Sharpston explicitly recognised this, by pointing out that, in the context of international judicial proceedings, the EU might need to take a position on an issue that is not yet covered either by existing EU commitments under international law which are to be interpreted (and applied) in those proceedings or by any other rules of international law on which the EU has already taken a position. She argued that, in such circumstances, the Council’s prerogatives would need to be respected.15 Even though the Court did not explicitly make a similar proviso, the same conclusion can be inferred from the overall reading of its judgment. Indeed, as mentioned above, the Court’s conclusion that the written statement at issue did not involve policy-making was based (i) on the subject matter of Case No 21, which, according to the Court, pertained to questions on which the EU has already defined its policy, both on the international and the internal level, and (ii) on the content of the written submission itself, which did not show traces of any policy-making either. Therefore, it cannot be excluded that, in some cases,
13 Opinion 14 ITLOS
of AG Sharpston (n 5) paras 87–90. (n 1) paras 69–70. of AG Sharpston (n 5) para 91.
15 Opinion
EU Representation in International Litigation 813 international litigation on behalf of the EU could involve policy-making within the meaning of Article 16(1) TEU, which is to be reserved to the Council. The judgment could also be read, albeit simplistically, through the lens of the ‘rule and exception’ rationale. As a rule, litigation is not a matter of policy-making, and is therefore to be dealt with by the Commission. Exceptionally, however, international litigation might involve policy decisions, in which case the Council’s prior approval would be required. As with every exception, that scenario is to be construed and applied restrictively. That reading of the judgment also ensures the objectives of clarity, predictability and legal certainty that underpins the Court’s reasoning. The question of ITLOS’s jurisdiction in Case No 21 is a telling example. The Council and several Member States considered that ITLOS’s jurisdiction to give advisory opinions involved political and strategic choices, and that it was a novel question on which the EU had not yet defined its policy.16 In essence, the issue was twofold: whether ITLOS’s statute conferred upon it only contentious jurisdiction or also advisory jurisdiction; and whether ITLOS could hear Case No 21, insofar as the questions put to it were liable to affect the rights and obligations of third states that were not members of the SRFC without their consent (‘the issue of state consent’). Indeed, in Case No 21, the request for an advisory opinion referred to ITLOS by the SFRC arose under an international agreement concluded by several West African states, to which the Union and its Member States were not a party and which conferred jurisdiction to ITLOS.17 The concern therefore was that ITLOS’s advisory opinion could then be opposed to the Union and its Member States, even though they are not parties to that agreement and have thus not accepted ITLOS’s advisory jurisdiction under that agreement or in that particular case. In all fairness, it must be acknowledged that the limits to the jurisdiction of an international court or tribunal might sometimes be a matter of political controversy.18 There are many such examples across the globe. The Court was acutely aware of this. Indeed, while it noted that the question of jurisdiction was ‘characteristic of participation in proceedings before a court’19 and therefore fell into the ‘litigation box’, it also emphasised that ‘the neutral position’ expressed by the Commission in the written statement concerning the issue of ITLOS’s jurisdiction was dictated by the concern to take into account ‘the divergent views on that issue expressed by the Member States within the Council’.20 The Court’s view that ITLOS’s jurisdiction in Case No 21 was a matter of litigation and not of policy was thus based, in particular, on the content of the Union’s written submission. Moreover, ITLOS’s advisory opinion was already available at the time of the Court’s judgment. The Court was thus aware of the fact that ITLOS had explicitly held that its advisory opinion as such had no binding force and was ‘given only to the SRFC’; that the object of the request by the SRFC was ‘to seek guidance in respect of its own actions’; and that its jurisdiction in that case was ‘limited to the exclusive economic zones of the SRFC Member States’.21 While, for obvious reasons, the scope of
16 ITLOS (n 1) paras 49, 50, 72. 17 See Request for an Advisory Opinion Submitted by the Sub-regional Fisheries Commission, Advisory Opinion of 2 April 2015 (ITLOS Advisory Opinion), paras 37–79. For a comment, see M Lando, ‘The Advisory Jurisdiction of the International Tribunal for the Law of the Sea: Comments on the Request for an Advisory Opinion Submitted by the Sub-regional Fisheries Commission’ (2016) 29 Leiden Journal of International Law 441. 18 It must also be recognised that in certain cases the decision to initiate litigation may also be a matter of policy, although such a decision might not be a reviewable act. To that end, see Reynolds Tobacco (n 2). 19 ITLOS (n 1) para 73. 20 ibid para 88. 21 ITLOS Advisory Opinion (n 17) paras 69, 76.
814 Alexander Kornezov ITLOS’s jurisdiction in Case No 21 was not a matter for the Court to discuss in its judgment, these elements likely convinced the Court that, on balance, that matter was one for ordinary litigation and not for policy determination. D. The Commission’s Duty to Consult the Council Article 13(2) TEU, second sentence enshrines the principle of sincere cooperation between the institutions of the EU. That principle represents one of the key tenets of EU external relations law. The judgment in the ITLOS case made a subtle but significant contribution in this context. Firstly, the Court noted that since the Commission had not infringed Article 218(9) TFEU and Article 16(1) TEU by submitting the written statement without the Council’s prior approval, it had not infringed the principle of sincere cooperation either, given that that principle applies within the limits of the powers conferred on each institution by the EU Treaties, but is not such as to change those powers.22 Secondly, however, the Court went on to interpret the principle of sincere cooperation as ‘requiring’ the Commission to consult the Council before finalising the position it was going to submit before ITLOS.23 The Court did not dwell on that statement of principle, which, at first sight, seems at odds with the position that the duty of sincere cooperation does not alter the powers of the institutions. That first impression is, however, misleading. The Commission’s duty to consult the Council does not alter the fact that the Commission is solely competent to determine the content of the statement. Put differently, the Commission is under no obligation to amend the content of that statement pursuant to the Council’s observations. Likewise, while the Council obtained the procedural privilege to be consulted as a matter of courtesy, it retained no legal power to change the content of that statement. The duty of sincere cooperation, as interpreted by the Court, does not therefore alter the powers of the institutions as defined by the Treaties, but merely requires a specific act of courtesy or of ‘good faith’ and ‘active cooperation between institutions’ in the exercise of their powers, which means informing each other at a minimum, as AG Sharpston put it in another case.24 V. ADDITIONAL READING Casado Raigón, R, ‘La dimension internationale de la compétence de l’Union européenne en matière de pêche’ in J Crawford, A Koroma, S Mahmoudi and A Pellet (eds), The International Legal Order: Current Needs and Possible Responses (Leiden, Brill/Martinus Nijhoff, 2017) 288–311. Cremona, M, ‘Structural Principles and Their Role in EU External Relations Law’ (2016) 69 Current Legal Problems 35.
22 ITLOS (n 1) paras 84, 85. 23 ibid para 86. 24 Case C-660/13, Council of the European Union v European Commission, ECLI:EU:C:2016:616 (Swiss MoU), para 134. See this volume, ch 7. See also P Koutrakos, ‘Institutional Balance and Sincere Cooperation in Treaty-Making under EU Law’ (2018) 68 ICLQ 1, 20. For the opposite view, see C Delcourt, ‘Chronique L’action extérieure de l’Union européenne – La Commission est compétente non seulement pour représenter l’Union mais aussi pour décider de la position de celle-ci devant le Tribunal international du droit de la mer’ [2016] Revue trimestrielle de droit européen 113, 115.
EU Representation in International Litigation 815 Delcourt, C, ‘Chronique L’action extérieure de l’Union européenne – La Commission est compétente non seulement pour représenter l’Union mais aussi pour décider de la position de celle-ci devant le Tribunal international du droit de la mer’ [2016] Revue trimestrielle de droit européen 113. Koutrakos, P, ‘Institutional Balance and Sincere Cooperation in Treaty-Making under EU Law’ (2018) 68 ICLQ 1. Kuijper, PJ, ‘The Court and the New EU Foreign Relations Law: Institutional Balance’ in J Czuczai and F Naert (eds), The EU as a Global Actor – Bridging Legal Theory and Practice (Leiden, Brill/Martinus Nijhoff, 2017) 48–64. Rosas, A, ‘Recent Case Law of the European Court of Justice Relating to Article 218 TFEU’ in J Czuczai and F Naert (eds), The EU as a Global Actor – Bridging Legal Theory and Practice (Leiden, Brill/ Martinus Nijhoff, 2017) 363–79. Sánchez-Tabernero, SR, ‘Swimming in a Sea of Courts: The EU’s Representation before International Tribunals’ (2016) 1 European Papers 751. van der Mei, AP, ‘EU External Relations and Internal Inter-institutional Conflicts: The Battlefield of Article 218 TFEU’ (2016) 23 Maastricht Journal of European and Comparative Law 1051.
816
75 The Compatibility of EU International Agreements Extending to Occupied Territories with International Law: Front Polisario and Western Sahara Campaign UK EVA KASSOTI* Case T-512/12, Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) v Council of the European Union, ECLI:EU:T:2015:953, delivered 10 December 2015; Case C-104/16 P, Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario), ECLI:EU:C:2016:973, delivered 21 December 2016; Case C-266/16, Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs, ECLI:EU:C:2018:118, delivered 27 February 2018. KEYWORDS EU trade agreements – International law – Occupied territories – Interpretation of international agreements – Locus standi of national liberation movements – Voelkerrechtsfreundlichkeit.
I. INTRODUCTION
T
he judgments of the EU courts in Front Polisario and Western Sahara Campaign UK pertain to the legality of international agreements concluded between the EU and a third state covering occupied territories and to the numerous legal questions this issue poses both from an international and an EU law perspective. The main issues and questions arising from these judgments relate to: (i) the Court’s approach to treaty interpretation under the Vienna Convention on the Law of Treaties (VCLT);1 (ii) the legal status of occupied territories; and (iii) the locus standi of national liberation movements under Article 263 TFEU.
* The author would like to thank Ms Alina Carrozzini for her research assistance in writing this chapter. 1 Vienna Convention on the Law of Treaties (VCLT) (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331.
818 Eva Kassoti The importance of this line of case law cannot be overstated since it involved complex questions of international law, thereby directly feeding into the debate of the Court’s approach to international law and, more fundamentally, to the overarching question of the EU’s identity as a normative power committed to the strict observance of international law. II. FACTS
Western Sahara has been claimed, consecutively, by Spain, Mauritania and Morocco.2 The UN added it to the list of non-self-governing territories in 1963.3 Front Polisario, the main Sahrawi national liberation movement, was established in 1973 with a view to gaining independence for the territory. In time, this prompted the UN General Assembly (UNGA) to request an advisory opinion from the International Court of Justice (ICJ).4 The ICJ opined that no legal ties existed between Western Sahara, Morocco and Mauritania of such a nature that could affect the application of the principle of self-determination of the people of the territory.5 After the delivery of the Advisory Opinion, Moroccan armed forces invaded Western Sahara, and soon thereafter an armed conflict broke out between Front Polisario on the one hand and Morocco and Mauritania on the other.6 While Spain and Mauritania withdrew from Western Sahara – in 1976 and 1979 respectively – Morocco continues to occupy the territory, having annexed it in 1979. The UNGA has characterised the presence of Morocco in the territory as ‘occupation’,7 and numerous UN Security Council and UNGA resolutions have repeatedly affirmed the right of the Sahrawi people to self-determination.8 Despite this, the EU has concluded a series of agreements with Morocco over the years which have been de facto applied to the territory of Western Sahara and the legality of which has subsequently come under judicial scrutiny in the context of the Front Polisario and Western Sahara Campaign UK cases. The Front Polisario saga consists of two cases: the first one, before the General Court (Front Polisario v Council); and the second one – the appeal – before the Court (Council v Front Polisario). The factual background is identical and relates to an action for annulment brought by the Front Polisario against Council Decision 2012/497 establishing a (trade) liberalisation agreement between the EU and the Kingdom of Morocco9 insofar that the act approved the agreement’s application to Western Sahara.10 The Western Sahara Campaign UK
2 Case T-512/12, Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) v Council of the European Union, ECLI:EU:T:2015:953, paras 1–4. 3 UN GA Res 2229 (XXI) (1966), UN Doc A/RES/229/XXI. 4 Western Sahara (Advisory Opinion) [1975] ICJ Rep 12. 5 Front Polisario (n 2) para 162. 6 Human Rights Watch, ‘Keeping It Secret: The United Nations Operation in the Western Sahara’ (October 1995), www.hrw.org/reports/1995/Wsahara.htm. 7 UN GA Res 34/37 (1979) UN Doc A/RES/34/37, para 5. See also UN GA Res 35/19 (1990), UN Doc A/RES/35/19, para 3. 8 UN SC Res 2351/2017, UN Doc S/RES/2351; UN GA Res 71/106 (2016), UN Doc A/RES/71/106. 9 Council Decision 2012/497 of 8 March 2012 on the conclusion of an Agreement in the form of an Exchange of Letters between the European Union and the Kingdom of Morocco concerning reciprocal liberalization measures on agricultural products, processed agricultural products, fish and fishery products, the replacement of Protocols 1, 2 and 3 and their Annexes and amendments to the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, [2012] OJ L241. See also Front Polisario (n 2) para 115. 10 ibid.
EU International Agreements, Occupied Territories, and International Law 819 case originated from a preliminary reference made by a national court.11 The applicant in the national proceedings, Western Sahara Campaign (an organisation supporting the Sahrawi’s quest for independence12) claimed that the EU–Morocco Fisheries and Partnership Agreement (FPA)13 and the 2013 EU–Morocco Fisheries Protocol14 were invalid to the extent that they applied to the waters adjacent to Western Sahara.15 In both cases, the main issue was whether the application of the agreements to Western Sahara contravened fundamental rules of international law, such as the right to self-determination and the principle of permanent sovereignty over natural resources. III. THE COURT
In Front Polisario v Council, the General Court interpreted the pleas raised by the applicant as entailing two primary questions: a procedural one, relating to whether Front Polisario had the required standing to contest the decision before the Court; and a substantive one, inquiring whether international or EU law forbade the conclusion of agreements applicable to disputed territories.16 In relation to the first issue, the General Court accepted that Front Polisario could be considered a legal person within the meaning of Article 263(4) TFEU – albeit avoiding the question of its international legal personality.17 It approached the question of legal personality purely from an EU law perspective, ruling the applicant had legal personality to the extent that it has been treated as a distinct person by the EU.18 Next, the question whether the agreement had been applied to the territory in question was crucial for ascertaining whether the act was of direct and individual concern to the applicant. In the absence of a territorial clause in the contested agreement, the General Court relied on Article 94 of the EU–Morocco Agreement,19 concluding that the basis of the subsequent practice of the parties – the territorial scope of the agreement at bar – covered Western Sahara.20 On the substantive claim, the General Court observed that neither international nor EU law provides an absolute prohibition against the conclusion of agreements applicable to contested territories.21 Nevertheless, the Court went on to annul the contested act, insofar as it approved the application of the agreement to Western Sahara, due to the Council’s failure to ascertain that there was no evidence of an exploitation of the natural resources of the territory likely to be to the detriment of its inhabitants and to infringe their fundamental rights.22 11 Case C-266/16, The Queen, on the Application of Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs, Secretary of State, Food and Rural Affairs (Western Sahara Campaign UK), ECLI:EU:C:2018:118. 12 ibid paras 30–31. 13 Fisheries Partnership Agreement between the European Community and the Kingdom of Morocco (adopted 26 July 2006, entered into force 28 February 2007), [2006] OJ L141/4. 14 Council Decision of 16 December 2013 on the conclusion, on behalf of the European Union, of the Protocol between the European Union and the Kingdom of Morocco setting out the fishing opportunities and financial contribution provided for in the Fisheries Partnership Agreement between the European Union and the Kingdom of Morocco, [2013] OJ L349/1. 15 ibid para 32. 16 Front Polisario (n 2) paras 115–18. 17 ibid para 46. 18 ibid paras 56–60. 19 Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part [2000] OJ L70/2, Art 94 (EU–Morocco Association Agreement). 20 Front Polisario (n 2) para 103. 21 ibid paras 215 and 223. 22 ibid para 238.
820 Eva Kassoti On appeal, the Court of Justice adopted a diametrically opposite approach. It began by noting that the General Court had failed to take into account Article 31(3)(c) VCLT, according to which treaty interpretation needs to take place in light of ‘any relevant rules of international law applicable in the relations between the parties’.23 The Court pointed out three relevant rules of international law rules which, in its view, implied that Western Sahara was excluded from the territorial scope of the agreement: the right to self-determination; Article 29 VCLT (which relates to the territorial scope of international agreements); and Article 34 VCLT (the pacta tertiis principle).24 The Court observed that the right to selfdetermination is applicable erga omnes and, as such, to the EU and Morocco as well.25 On the basis of the UN Friendly Relations Declaration,26 the Court argued that, as a non-self-governing territory whose peoples have an internationally recognised right to self-determination, Western Sahara has a legal status separate and distinct from that of Morocco and this legal status precludes the legal application of the EU–Morocco agreements thereto.27 Next, the Court pointed out that, in accordance with Article 29 VCLT, when an international agreement is intended to apply outside the geographical space where a state exercises full sovereign powers, its territorial clause must explicitly provide for that extension.28 This implied, in turn, that the agreement at stake could not be applicable to Western Sahara as the territory was not expressly mentioned in the territorial clause of the association agreement.29 Finally, the Court turned to the principle of the relative effect of treaties contained in Article 34 VCLT. Relying on the status of Western Sahara as a non-self-governing territory, the Court argued that the territory constitutes a third party in relation to the EU and Morocco, and as such the territorial scope of the agreement at hand cannot be interpreted as implicitly including it.30 Interestingly, the Court rejected the view that the de facto application of the agreement to Western Sahara constituted ‘subsequent practice’ within the meaning of Article 31(3)(b)31 extending the application of the agreement to territory in the absence of any evidence of agreement between the parties to do so.32 In this light, the Court overturned the judgment under appeal since Front Polisario’s action was deemed inadmissible.33 A similar interpretative strategy is discernible in the Western Sahara Campaign UK judgment. In this case, the Court undertook to establish whether the territorial scope of the FPA and of the 2013 Fisheries Protocol extended to Western Saharan waters.34 The Court ruled that this was not the case. In interpreting the territorial scope of the FPA, the Court relied on the interconnectedness of the EU’s different agreements with Morocco and found that the parties must have intended the same territorial scope for all agreements concluded between
23 Case C-104/16 P, Council of the European Union v Front populaire pour la libération dela saguia-el-hamra et du rio de oro, ECLI:EU:C:2016:973 (Council v Front Polisario), para 86. 24 ibid para 87. 25 ibid paras 88–89. 26 Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations, UN Doc A/RES/25/2625 (1970) (Friendly Relations Declaration). 27 Council v Front Polisario (n 23) paras 89–92. 28 ibid paras 94–96. 29 ibid paras 95–97. 30 ibid paras 100–07. 31 ibid paras 117–25. According to the text of Art 31(3)(b) VCLT, account must be taken, together with the context, of ‘any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation’. 32 ibid paras 121–22. 33 ibid. 34 Western Sahara Campaign UK (n 11) paras 52–56.
EU International Agreements, Occupied Territories, and International Law 821 them – thereby excluding Western Sahara from the territorial scope of the FPA.35 According to the Court, interpreting the FPA as including Western Saharan waters would be contrary to a number of international law principles binding upon the EU, such as the principle of self-determination and the principle of the relative effect of treaties.36 The Court turned next to the examination of the territorial scope of the 2013 Fisheries Protocol. Since the 2013 Protocol did not contain a specific territorial clause, the Court argued that this should be understood in the same way as in the FPA, namely as excluding the waters adjacent to the territory of Western Sahara.37 Against this background, the Court ruled that since neither the FPA nor the 2013 Fisheries Protocol applies to Western Sahara, the relevant EU implementing acts remain valid.38 The Court’s methodology and findings in Western Sahara Campaign UK stand in stark contrast to the Opinion delivered by Advocate General (AG) Wathelet.39 Both on the basis of the historical background to the contested acts and on the basis of different maps provided by the Commission, the AG opined that the territorial scope of the agreements at bar included Western Sahara.40 Furthermore, the AG buttressed this conclusion by exploring alternative legal titles (other than sovereignty) that would justify Morocco’s treaty-making capacity over Western Sahara. In particular, he addressed the possibility that Morocco could make treaties extending to the territory in question as Western Sahara’s de facto administrative power – according to the EU’s long-standing view on the matter.41 Nonetheless, he concluded that this would not be possible as this concept does not exist as a matter of international law. In his view, Morocco’s presence in the territory constituted occupation.42 Against this background, he concluded that the relevant EU–Morocco agreements violated a series of international law obligations incumbent upon the EU and that they failed to protect the interests of the affected population.43 As such, he proposed that the Court find the agreements invalid as incompatible with Article 3(5) TEU44 – an approach which the Court declined to follow, as seen above. IV. THE IMPORTANCE OF THE CASES
A. The Court’s Approach to Treaty Interpretation The Western Sahara cases before the Court arguably evidence its willingness to ‘instrumentalise international law’ in order to avoid pronouncing on the EU’s responsibility under international law in cases involving economic agreements covering occupied territories.45 The Court’s approach to treaty interpretation attests thereto. 35 ibid paras 61–62. 36 ibid. 37 ibid paras 74–79. 38 ibid paras 85–87. 39 Opinion of AG Wathelet, Case C-266/16, The Queen, on the Application of Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs, Secretary of State, Food and Rural Affairs, ECLI:EU:C:2018:1 (Western Sahara Campaign UK). 40 ibid paras 40–74. 41 ibid paras 221–33. 42 ibid. 43 ibid paras 256–87. 44 ibid paras 293–96. 45 J Odermatt, ‘Council of the European Union v Front Populaire pour la Libération de la Saguia-el-hamra et du rio de oro (Front Polisario)’ (2017) 111 Am J Int’l Law 731, 737. See also E Kassoti, ‘Between Sollen and Sein: The CJEU’s Reliance on International Law in the Interpretation of Economic Agreements Covering Occupied Territories’ (2020) 33 Leiden Journal of International Law 371, 378.
822 Eva Kassoti In the cases at bar, the Court relied on international law rules on treaty interpretation in order to ascertain the territorial scope of the various EU–Morocco agreements. However, the Court’s approach to treaty interpretation is highly problematic. More specifically, the excessive weight given to Article 31(3)(c) VCLT; the Court’s reliance on rules of international law of doubtful relevance; and the refusal to engage with the ‘subsequent practice of the parties’ under Article 31(3)(b) casts doubt on its findings. First, the Court’s almost exclusive reliance on Article 31(3)(c) VCLT in the context of interpreting the relevant EU–Morocco agreements goes against the ‘crucible approach’ to treaty interpretation envisaged under Article 31 VCLT; a process that according to the International Law Commission (ILC) is predicated on the combined application of all means of interpretation set out in Article 31.46 International judicial practice confirms that treaty interpretation according to the Vienna rule requires that: (i) all elements of a treaty provision be evaluated together; and (ii) no firm conclusion be reached on the basis of particular elements before the end of the interpretative process.47 Yet, in none of the judgments is this holistic approach to treaty interpretation to be found. To the contrary, the Court’s over-reliance on Article 31(3)(c) VCLT means that it muddled the very purpose of treaty interpretation. By excessively focusing on the normative context of the agreement, the Court arguably did not ascertain what the parties actually intended to include therein, but what they should have intended to include according to relevant rules of international law.48 This leads to the second problematic aspect of the Court’s line of reasoning, namely, its reliance on international law rules of doubtful relevance. The Court in Front Polisario relied on the right to self-determination for the purpose of ascertaining the separate and distinct territorial status of Western Sahara vis-à-vis Morocco. This interpretation of the principle is problematic because it conflates the concepts of territorial sovereignty and international legal personality. Under international law, the reference to the ‘separate and distinct’ status of non-self-governing territories in the UN Friendly Relations Declaration (UNFRD) is understood to mean that these territories possess a degree of international legal personality, rather than territorial sovereignty.49 There is also judicial practice confirming that, in the context of non-self-governing territories, territorial title and sovereignty remain with the administering power.50 Finally, the very applicability of the UNFRD in this particular context remains doubtful. The relevant passage of the Declaration relied upon by the Court defines the status of non-self-governing territories in relation to their administering states; yet, Morocco does not
46 International Law Commission, Draft Articles on the Law of Treaties with Commentaries (Yearbook of the ILC, vol 2, 1966) 219, para 8. See also R Gardiner, Treaty Interpretation (Oxford, Oxford University Press, 2015) 31–32. 47 ICSID, Award of 21 October 2005, Case No ARB/02/03, Aquas del Tunari v Bolivia, para 91; Appellate Report European Communities – Customs Classification of Frozen Boneless Chicken Cuts, adopted 12 September 2005, AB-2005-5, para 177. For an overview on the process, see T Bernárdez, ‘Interpretation of Treaties by the International Court of Justice Following the Adoption of the 1969 Vienna Convention on the Law of Treaties’ in G Hafner, A Rest, G Loibl, K Zemanek and L Suchapira-Behrmann (eds), Liber Amicorum Ignaz Seidl-Hohenveldern in Honour of His 80th Birthday (The Hague, Kluwer Law, 1998) 726. See also E Kassoti, ‘The Council v Front Polisario Case: The Court of Justice’s Selective Reliance on International Rules on Treaty Interpretation’ (2017) 2 European Papers 23, 30. 48 Kassoti, ‘The Council v Front Polisario Case’ (n 47) 31; G Van der Loo, ‘Law and Practice of the EU’s Trade Agreements with Disputed Territories’ in S Garben and I Govaere (eds), The Interface between EU and International Law (Oxford, Hart Publishing, 2019) 14–17. See also Odermatt (n 45) 735. 49 J Crawford, The Creation of States in International Law (Oxford, Oxford University Press, 2006) 618–19; A Schwed, ‘Territorial Claims as a Limitation to the Right to Self-Determination in the Context of the Falkland Islands Dispute’ (1982) 6 Fordham International Law Journal 443, 452. 50 Crawford (n 49) 613–15; V Gowlland-Debbas, Collective Responses to Illegal Acts in International Law: United Nations Action in the Case of Southern Rhodesia (Dordrecht, Martinus Nijhoff, 1990) 157.
EU International Agreements, Occupied Territories, and International Law 823 administer Western Sahara: it militarily occupies it.51 Thus, the principle does not seem to lead to the conclusion reached by the Court. Another rule of doubtful relevance employed by the Court is Article 29 VCLT, which, contrary to what suggested by the Court, does not create a presumption against the extraterritorial application of treaties.52 Indeed, the ILC expressly left this issue outside the ambit of Article 29 VCLT – having considered it too complex to tackle.53 In addition, according to practice, Article 29 VCLT only comes into play in relation to treaties without an explicit territorial application, which is not the case with the EU–Morocco Association Agreement.54 Finally, the Court’s decision to employ the pacta tertiis principle also lends itself to criticism. The applicability of this rule to non-state actors remains unclear as its conceptual roots lie in the notions of state sovereignty and sovereign equality.55 Indeed, Article 34 VCLT clearly refers to ‘third states’ rather than ‘third parties’, a point that has been highlighted by the ILC in its 1966 commentary.56 In this light, the relevance of the international law rules employed by the Court to ground its interpretation of the territorial scope of the EU–Morocco agreements is open to doubt. Finally, the Court’s unwillingness to engage with the subsequent practice of the parties has been fiercely criticised in the literature.57 The element of ‘subsequent practice’ is one of the most distinctive features of the Vienna rules,58 and international judicial bodies routinely have recourse thereto in the context of treaty interpretation.59 The Court has itself, in the past, acknowledged the importance of this element for the purpose of interpreting international agreements,60 going so far as to state that ‘the subsequent practice followed in the application of a treaty may override the clear terms of that treaty if that practice reflects the parties’ agreement’.61 In the literature, an argument has been floated to the effect that the Court’s prioritisation of contextual interpretation (Article 31(3)(c) VCLT) over subsequent practice (Article 31(3)(b) VCLT) is justified in the light of the jus cogens status, and thus the higher rank of the principle of self-determination.62 According to this line of argumentation, the Court’s reasoning in Front Polisario is defensible since the higher rank of the norm in question allows the interpreter to prioritise contextual interpretation over the element of subsequent practice.63
51 Kassoti, ‘Between Sollen and Sein’ (n 45) 380–81. 52 ibid 381. 53 International Law Commission (n 46) 213–14, para 5. 54 ibid para 2. See also Odermatt (n 45) 736. 55 C Ryngaert, ‘The Polisario Front Judgment of the EU Court of Justice: A Reset of EU–Morocco Trade Relations in the Offing’ (Reinforce blog), http://blog.renforce.eu/index.php/en/2017/01/15/the-polisario-front-judgment-of-theeu-court-of-justice-a-reset-of-eu-morocco-trade-relations-in-the-offing-2/; P Hilpold, ‘“Self-Determination at the European Courts: The Front Polisario Case” or “The Unintended Awakening of a Giant”’ (2017) 2 European Papers 907, 917; Kassoti, ‘The Council v Front Polisario Case’ (n 47) 35–37; Odermatt (n 45) 736; Van der Loo (n 48) 17. 56 International Law Commission (n 46) 226, para 1. 57 E Cannizzaro, ‘In Defence of Front Polisario: The ECJ as a Global Jus Cogens Maker’ (2018) 55 CML Rev 569, 578; Hilpold (n 55) 917; Kassoti, ‘The Council v Front Polisario Case’ (n 47) 37–40; Odermatt (n 45) 737; Van der Loo (n 48) 16. 58 International Law Commission (n 46) 221, para 15. 59 See, eg Case concerning Kasikili/Seduku Island (Botswana v Namibia), Judgment of 13 December 1999 [1999] ICJ Rep 1045, para 50; Appellate Report Japan – Taxes on Alcoholic Beverages, adopted 4 October 1996, AB-1996-2, 12–13. 60 Case 52/77, Leonce Cayrol v Giovanni Rivoira & Figli, ECLI:EU:C:1977:196, para 18; Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and others, ECLI:EU:C:1994:277 (Anastasiou I), paras 43, 50. 61 Case C-464/13, Europäische Schule München v Silvana Oberto and Barbara O’Leary, ECLI:EU:C:2015:163, para 61. 62 ibid 578–80. 63 ibid 580.
824 Eva Kassoti However, this view is problematic on a number of grounds. Firstly, it does not find support in the Vienna rule on interpretation to the extent that Article 31 VCLT does not ascribe a special role to jus cogens norms in the context of the interpretative process.64 Secondly, this view is premised on the assumption that the different means of interpretation enshrined in Article 31 VCLT are in conflict with one another. However, as seen above, the very idea of ‘conflicting means of interpretation’ departs from the ‘crucible’ approach to the interpretative process as intended by the ILC and as applied in international judicial practice.65 Finally, the argument is problematic because, taken to the extreme, it would imply that in all cases where there is a discrepancy between the normative context of an agreement and the subsequent practice of the parties thereto, this discrepancy could simply be interpreted away – regardless of the actual evidence on the ground.66 B. The Legal Status of Occupied Territories These cases have largely revolved around the question whether Morocco possessed treatymaking power over Western Sahara. For the purpose of ascertaining whether the EU–Morocco agreements extended to the territory, one would have anticipated that the Court would have explored the question of the legal status of Western Sahara as an occupied territory vis-à-vis Morocco. However, as will be seen below, the Court sidestepped this question. In doing so, the Court followed earlier case law involving occupied territories and showed a distinct reluctance to avoid politically sensitive questions by ignoring the broader international legal framework of the dispute – and the relevant obligation of non-recognition incumbent upon the EU. This unwillingness first manifested itself in the Anastasiou saga,67 in which the Court was called upon to review the legality of the British customs authorities’ practice of importing Northern Cypriot produce accompanied by origin and phytosanitary certificates68 issued by the authorities of the Turkish Republic of Northern Cyprus (TRNC). The Court refrained from discussing the status of the TRNC as an occupied territory, classifying it as pertaining to the ‘internal affairs of Cyprus’69 – despite a number of UN Security Council Resolutions condemning the Turkish occupation and calling upon all members of the international community not to recognise the self-proclaimed TRNC.70 It is thus unsurprising that, when Northern Cypriot producers began to export produce through Turkey – and thus relying on the occupying power’s ability to issue such certificates – the Court adopted a permissive stance as the technical EU legal background had been complied with (Anastasiou II).71 And once again, the occupation was not discussed either by the Court or by the AG, even 64 Kassoti, ‘Between Sollen and Sein’ (n 45) 382. 65 International Law Commission (n 46) 219, para 8. See also Bernárdez (n 47) 726. 66 Kassoti, ‘Between Sollen and Sein’ (n 45) 383. 67 Anastasiou I (n 60); Case C-219/98, Regina v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd and Others, ECLI:EU:C:2000:360 (Anastasiou II); Case C-140/02, Regina on the application of SP Anastasiou (Pissouri) Ltd and Others v Minister of Agriculture, Fisheries and Food, ECLI:EU:C:2003:520 (Anastasiou III). For a commentary of these cases, see this volume, ch 25. 68 See Council Regulation 290/77 of 20 December 1977 on the conclusion of the Additional Protocol to the Agreement establishing an Association between the European Economic Community and the Republic of Cyprus, [1977] OJ L339/1; Council Directive 77/93/EEC of 21 December 1976 on protective measures against the introduction into the Community of organisms harmful to plants or plant products, [1977] OJ L26/20. 69 ibid para 47. See also M Cremona, ‘Case C-432/92, R. v Minister of Agriculture, Fisheries and Food, ex parte S.P. Anastasiou (Pissouri) Ltd and others, Judgement of 5 July 1994’ (1996) 33 CML Rev 125, 134. 70 See also UNSC Res 541, UN Doc S/RES/541(1983). 71 Anastasiou II (n 67).
EU International Agreements, Occupied Territories, and International Law 825 though the preliminary reference unequivocally mentioned the territorial dispute.72 Finally, the aspect of occupation was also not dealt with in the last instalment of the saga, which simply described it as a political issue.73 The Court’s reluctance to elaborate on the status of occupied territories was reprised in the Brita case,74 where the Court was confronted with the question of the territorial scope of the EU–Israel Association Agreement.75 The Court was thus asked whether the territorial scope of the EU–Israel Agreement as described under Article 83 covered the West Bank and the Gaza Strip too.76 The Court treated the question merely as one of competence to issue the relevant certificates.77 To this end, it avoided the thorny question of occupation by relying on the ‘politically detached’ principle of pacta tertiis.78 The Court argued that the EU–PLO Association Agreement79 implicitly restricted the territorial scope of the EU–Israel Association Agreement, and thus that the latter did not extend to the Palestinian territories.80 The reasoning underpinning this decision is nonetheless not satisfactory from an international law point of view since the Court failed to discuss various relevant questions, including the broader international legal framework applicable to the case (including Israel’s status as an occupying power); the violation of the Palestinian people’s right to self-determination; and the corollary breach of the EU’s duty of non-recognition.81 The same reluctance to engage with the international legal status of Western Sahara as a territory occupied by Morocco permeates the Front Polisario and Western Sahara Campaign UK judgments. Indeed, only the General Court referred to Western Sahara as a ‘disputed territory’82 whose ‘international status is currently undetermined’,83 whereas the Court did not touch upon the question at all in its subsequent judgments – despite its obvious significance in establishing Morocco’s treaty-making power over the territory and thus in defining the territorial scope of the relevant EU–Morocco agreements. It is important to note that the General Court’s classification of Western Sahara as a ‘disputed territory’ is technically incorrect. Indeed, Western Sahara is a non-self-governing territory, a status that has been confirmed not only by the ICJ,84 but by the EU itself on a number of occasions.85 At the same time, Morocco’s
72 ibid. Question 3 acknowledges the territorial dispute by clearly referring to the area north of the United Nations Buffer Zone. The remaining questions, however, concern interpretation of Council Directive 77/93/EEC of 21 December 1976 on Protective Measures Against the Introduction into the Member States of Organisms Harmful to Plants or Plant Products, [1976] OJ L26/20. 73 Opinion of AG Stix-Hackl, Case C-140/02, Regina on the application of SP Anastasiou (Pissouri) Ltd and Others v Minister of Agriculture, Fisheries and Food, ECLI:EU:C:2003:322, para 1. 74 Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg–Hafen, ECLI:EU:C:2010:91, paras 30–36. 75 Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the State of Israel, of the other part, [2000] OJ L147/3. See this volume, ch 57. 76 Opinion of AG Bot, Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2009:674, paras 109–12. 77 Brita (n 74) para 38. 78 G Harpaz and E Rubinson, ‘The Interface between Trade, Law and Politics and the Erosion of Normative Power Europe: Comment on Brita’ (2010) 35 EL Rev 551, 566. 79 Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, [1997] OJ L187/3. 80 Brita (n 74) paras 45–53. 81 R Holdgaard and O Spiermann, ‘Case C-386/08, Brita GmbH v Hauptzollamt Hamburg-Hafen, Judgment of the Court of Justice (Fourth Chamber) of 25 February 2010 nyr’ (2011) 48 CML Rev 1667, 1680–82. 82 Front Polisario v Council (n 2) paras 117, 141, 211. 83 ibid para 56. 84 Western Sahara (Advisory Opinion) (n 4) para 162. 85 See, eg the statement of 14 October 2014 by the EU and its Member States at the UN General Assembly Fourth Committee on Agenda item 54, Question of Western Sahara; the statement of 15 October 2015 by the EU and its
826 Eva Kassoti presence in Western Sahara meets the objective threshold of occupation under international humanitarian law, making it an occupied territory as well.86 The UNGA87 has characterised Western Sahara as a territory occupied by Morocco – a view also shared by several EU Member States. It is important to add, in this regard, that these two statuses are not mutually exclusive as the question of occupation does not affect the status of the territory as a non-self-governing one.88 The Court’s failure to consider the question of occupation is problematic insofar as it prevented it from giving due weight to the international legal obligations incumbent upon the EU in relation to the territory, such as the duties of non-recognition and non-assistance.89 The Court’s eschewal of engagement with the question of the legal status of Western Sahara as an occupied territory as well as with the international legal obligations incumbent on the EU exactly because of this status allowed it to conclude that: (i) international law does not forbid the EU from concluding agreements applicable to contested territories;90 and (ii) Western Sahara was not included in the territorial scope.91 These conclusions have been vociferously criticised in the literature92 and have had serious implications for the future of the territory. In July 2018, a Council Decision amending Protocols 1 and 4 to the EU–Morocco Association Agreement93 was adopted, amending the Agreement so as to include a legal basis granting the same trade benefits enjoyed by Moroccan products to those coming from Western Sahara.94 This development is noteworthy since, on the basis of this Decision, the territorial scope of the EU–Morocco Association Agreement is extended to expressly include Western Sahara.95 Arguably, the Court’s failure to address the question of the international legal status of the territory as an occupied one as well as to identify the international law norms governing the EU’s obligations towards the territory exactly because of this status (duties of non-recognition and non-assistance) have allowed the express extension of the Association Agreement to the territory; something that is highly problematic from an international law point of view.
Member States by Mr Carl Hallergard, Minister Counsellor, Delegation of the EU to the UN, Fourth Committee, agenda item 63, Question of Western Sahara, available at eu-un.europa.eu. 86 See Convention (IV) respecting the Laws and Customs of War on Land and its annex: Regulations concerning the Laws and Customs of War (The Hague Regulations) (adopted on 18 October 1907, entered into force 26 January 1910) Art 42. 87 UN GA Res 34/37 (1979) UN Doc A/RES/34/37, para 5; UN GA Res 35/19 (1990), UN Doc A/RES/35/19, para 3. 88 See International Committee of the Red Cross (ICRC), Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of International Armed Conflicts (Protocol I), 8 June 1977, 1125 UNTS 3, Art 4, para 1. 89 E Kassoti, ‘The Front Polisario v Council Case: The General Court, Völkerrechtsfreundlichkeit and the External Aspect of European Integration (First Part) (2017) 2 European Papers 339, 353. 90 Front Polisario (n 2) paras 211, 215, 223. 91 Council v Front Polisario (n 23) para 92. 92 Kassoti, ‘The Council v Front Polisario Case’ (n 47) 23ff; Odermatt (n 45) 731ff; Van der Loo (n 48) 1ff; Hilpold (n 55) 907ff. See contra Cannizzaro (n 57) 569ff. 93 Council Decision (EU) 2018/1893 of 16 July 2018 regarding the signature, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and the Kingdom of Morocco on the amendment of Protocols 1 and 4 to the Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part [2018] OJ L310/1. 94 Annex to the Proposal for a Council Decision regarding the signature, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and the Kingdom of Morocco on the amendment of Protocols 1 and 4 to the Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, SWD (2018) 346 final, point 1. 95 E Kassoti, ‘The Empire Strikes Back: The Council Decision Amending Protocols 1 and 4 to the EU–Morocco Association Agreement’ (2019) 4(1) European Papers 307, 309.
EU International Agreements, Occupied Territories, and International Law 827 In this light, it needs to be stressed that the Court’s willingness to take into account the international legal status of the occupied Palestinian territories in the recent OJE and Vignoble Psagot ruling96 pertaining to the interpretation of Regulation 1169/2011 on the provision of food information to consumers97 is a welcome respite from its previous recalcitrant stance towards international law. In OJE and Vignoble Psagot, the Court unequivocally held that the establishment of settlements in some of the territories occupied by Israel gave expression to a policy of population transfer by Israel outside its territory contrary to international humanitarian law – a policy which has been condemned by both the UN and the EU.98 Taking into account the EU’s commitment to contribute to the strict observance of international law under Article 3(5) TEU, as well as consumer law considerations, the Court concluded in OJE and Vignoble Psagot that foodstuffs originating in territories occupied by Israel must bear both the indication of that territory and the indication that they come from an ‘Israeli settlement’. In this light, the OJE and Vignoble Psagot judgment arguably marks an important shift in the Court’s approach towards occupied territories. In this case, the Court showed not only a considerable degree of openness towards international law, but also a certain amount of boldness in handling politically charged questions that was patently absent in previous cases. C. The Standing of National Liberation Movements The General Court’s Front Polisario judgment also raises important issues pertaining to the legal standing of entities such as national liberation movements to bring a claim under Article 263 TFEU. The problems in this respect are twofold. Firstly, the General Court failed to take into account the (limited) international legal personality of the applicant as a national liberation movement for the purpose of establishing its legal standing within the framework of an action for annulment. Secondly, the fact that the General Court analysed the question of legal personality exclusively on the basis of EU law, coupled with its mislabelling of the status of Western Sahara as a ‘disputed territory’, means that, from a procedural point of view at least, it would be almost impossible for entities such as the applicant to initiate a successful action for annulment. More particularly, the General Court approached the question of the legal personality of Front Polisario purely from an EU law perspective, thereby eschewing engagement with the broader issue of whether the applicant enjoys a degree of international legal personality.99 In order to justify the applicant’s legal personality, the General Court relied on previous case law in cases where entities lacking legal personality under national law had been treated as distinct persons by the EU or its institutions.100 However, the factual and legal context of cases such
96 Case C-363/18, Organisation juive européenne and Vignoble Psagot, ECLI:EU:C:2019:954, paras 34, 48, 56. See this volume, ch 89. 97 Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers, amending Regulations (EC) No 1924/2006 and (EC) No 1925/2006 of the European Parliament and of the Council, and repealing Commission Directive 87/250/EEC, Council Directive 90/496/ EEC, Commission Directive 1999/10/EC, Directive 2000/13/EC of the European Parliament and of the Council, Commission Directives 2002/67/EC and 2008/5/EC and Commission Regulation (EC) No 608/2004 Text with EEA relevance, [2011] OJ L304/18. 98 OJE and Vignoble Psagot (n 96) para 48. 99 Front Polisario (n 2) paras 44ff. 100 ibid paras 50–55.
828 Eva Kassoti as Groupement des Agences v Commission101 and PKK and KNK v Council,102 on which the General Court relied, are not really comparable to the one at bar. More particularly, the EU has not actually treated Front Polisario as a distinct person in its practice since the entity did not participate in the negotiations of the relevant EU–Morocco agreements.103 Instead of shoehorning the case into previous rulings that are patently dissimilar, the General Court could have addressed the question of legal personality of Front Polisario, in the context of exploring its standing, with reference to international law. There is abundant evidence not only that Front Polisario is a national liberation movement, but also that such entities have a degree of international legal personality that allows them to bring claims before domestic courts.104 Similarly, the Court refrained from analysing this issue. The General Court’s approach to standing is also problematic from a procedural point of view. It needs to be recalled here that an applicant such as Front Polisario may only challenge a legislative measure under Article 263 TFEU if it is able to demonstrate direct and individual concern. In this context, individual concern means that the relevant act ‘affects them by reason of certain attributes peculiar to them or by reason of circumstances in which they are differentiated from all other persons’.105 This definition, in accordance with the Court’s jurisprudence, implies that the applicant must be singled out by the relevant act and not simply be affected thereby as a member of a broader category of individuals. In casu, in order to satisfy the individual concern requirement, Front Polisario would have to prove that the relevant act distinguished it from all other persons – both actually and potentially. However, the General Court’s mislabelling of the status of Western Sahara as a ‘disputed territory’ and its finding to the effect that Front Polisario was a legal person under EU law like any ordinary private applicant beg the question.106 As Ganesh argues: ‘for the Front Polisario to have standing, one would have to take seriously its claim to be the reincarnation of the Sahrawi people, and a person at international law’.107 If the same inward-looking approach to legal personality is followed in future cases, then, arguably, an entity such as Front Polisario would never be able to satisfy the already strict Plaumann criteria, and thus to successfully challenge an act before the Court.
101 Case 135/81, Groupement des Agences de Voyages, Asbl, v Commission of the European Communities, ECLI:EU:C:1982:371. 102 Case T-229/02, PKK and KNK v Council, ECLI:EU:T:2008:87; Case C-229/05 P, PKK and KNK v Council of the European Union, ECLI:EU:C:2007:32. 103 Kassoti, ‘The Empire Strikes Back’ (n 95) 350. 104 ibid 350–51. There is much evidence supporting this finding: first, Front Polisario is considered by the UN GA as the representative of the people of WS. See UN GA, Res 34/37 (1979) UN Doc A/RES/34/37, para 10. Second, several states have recognised it as a national liberation movement. See K Mastorodimos, ‘National Liberation Movements: Still a Valid Concept (with Special Reference to International Humanitarian Law)?’ (2015) 17 Oregon Review of International Law 100 fn 149. Third, it possesses treaty-making capacity and has concluded agreements with Morocco and Mauritania. See Mauritano-Saharoui Agreement, signed 10 August 1979, annexed to Letter dated 18 August 1979 from the Permanent Representative of Mauritania to the United Nations addressed to the Secretary-General, UN Doc A/34/427 – S/13503. 105 Case 25/62, Plaumann v Commission, ECLI:EU:C:1963:17, para 107; Case C-583/11 P, Inuit Tapiriit Kanatami and Others v Parliament and Council, ECLI:EU:C:2013:625, para 72. 106 A Ganesh, ‘Distant Strangers and Standing in Polisario’ in H Ruiz Fabri (ed), International Law and Litigation: A Look into Procedure, Studies of the Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law, vol 15 (Baden-Baden, Nomos, 2019) 625, 638, citing T Fleury Graff, ‘Accords de Libre-Échange et Territoires Occupés: A Propos de L’arret TPIUE, 10 Decembre 2015, Front Polisario C. Conseil’ (2016) 120 Revue Generale de Droit International Public 263, 270. 107 Ganesh (n 106) 641.
EU International Agreements, Occupied Territories, and International Law 829 V. ADDITIONAL READING Cannizzaro, E, ‘In defence of Front Polisario: The ECJ as a global jus cogens maker’ (2018) 55 CML Rev 569. Kassoti, E, ‘The Front Polisario v Council Case: The General Court, Völkerrechtsfreundlichkeit and the External Aspect of European Integration (First Part)’ (2017) 2 European Papers 339. Kassoti, E, ‘The Council v Front Polisario Case: The Court of Justice’s Selective Reliance on International Rules on Treaty Interpretation (Second Part)’ (2017) 2 European Papers 23. Kassoti, E, ‘The ECJ and the Art of Treaty Interpretation: Western Sahara Campaign UK’ (2019) 56 CML Rev 209. Odermatt, J, ‘Council of the European Union v Front Populaire pour la Libération de la Saguia-el-hamra et du rio de oro (Front Polisario)’ (2017) 111 American Journal of International Law 731.
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76 The Scope of the Court’s Jurisdiction in the CFSP: H v Council and Others LUCA PRETE* Case C-455/14 P, H v Council of the European Union, European Commission and European Union Police Mission (EUPM) in Bosnia and Herzegovina, ECLI:EU:C:2016:569, delivered 19 July 2016. KEYWORDS European Union Police Mission (EUPM) in Bosnia and Herzegovina – National staff member on secondment – Decisions of the Head of Mission – Actions for annulment and compensation – Articles 24(1) TEU and 275 TFEU – Jurisdiction of the CJEU in CFSP matters.
I. INTRODUCTION
P
ursuant to Articles 24(1) TEU and 275 TFEU, the Court of Justice of the European Union (CJEU) does not have jurisdiction ‘with respect to the provisions relating to the common foreign and security policy nor with respect to acts adopted on the basis of those provisions’. Only two exceptions are set out in those provisions, concerning respectively compliance with the non-encroachment clause provided for in Article 40 TEU and the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the TEU. Despite the apparent clarity of the wording of those provisions, as from the entry into force of the Treaty of Lisbon, the scope of the jurisdictional ‘carve-out’ (the general rule excluding the CJEU’s jurisdiction) and of the ‘claw-back’ (the two exceptions to the general rule)1 in relation to the Common Foreign and Security Policy (CFSP) laid down therein gave rise to much discussion within and between the EU institutions, as well as in academic circles.2
* All opinions expressed herein are personal to the author. 1 For the expressions ‘carve-out’ and ‘claw-back’ in this context, see Opinion of Advocate General (AG) Wathelet, Case C-72/15, Rosneft, ECLI:EU:C:2016:381 paras 47 and 50. See this volume, ch 81. 2 Among many, and with further references, see C Hillion, ‘A Powerless Court? The European Court of Justice and the EU Common Foreign and Security Policy’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law: Constitutional Challenges (Oxford, Hart Publishing, 2014) 47–70; G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy (Oxford, Hart Publishing, 2019) 145–222.
832 Luca Prete The issue was explicitly raised in the context of the Opinion 2/13. In its Opinion, however, the Court of Justice (the Court) merely noted that, at that stage, it had not yet had the opportunity to define the extent to which its jurisdiction is limited in CFSP matters as a result of Articles 24(1) TEU and 275 TFEU. The Court then went on to add that, for the purpose of that procedure, it was sufficient to declare that, as EU law stood, ‘certain acts adopted in the context of the CFSP fall outside the ambit of judicial review by the Court of Justice’.3 To date, there is still no decision of the Court that provides a comprehensive and systematic explanation of the scope of the CJEU’s jurisdiction in CFSP matters. Yet, a number of cases did shed some light in that regard. The H v Council and Others (H) case is particularly important in that context. It follows a number of decisions (especially Mauritius,4 Tanzania5 and Elitaliana6) in which the Court had, in an incremental fashion, reduced the scope of the carve-out.7 Essentially, in those cases, the Court had made clear that, although an EU act may relate to the CFSP or be adopted in a CFSP context, as long as the act is based, at least partly, on a (substantive or procedural) non-CFSP legal basis, the EU judicature has jurisdiction to review compliance with the relevant non-CFSP provisions.8 However, up until the judgment in H, the Court did not have an opportunity to address the following question: does the jurisdictional carve-out, in principle, concern all CFSP acts – that is, all acts save those made expressly reviewable by the jurisdictional claw-back– or only certain categories of CFSP acts? In other words, is it enough that an act is based on a CFSP provision to exclude the CJEU’s jurisdiction altogether, unless one of the two exceptions applies? II. FACTS
H (the applicant) is an Italian magistrate who was seconded to the European Union Police Mission (EUPM) in Sarajevo (Bosnia and Herzegovina) by the Italian Minister for Justice in 2008. By decision of 7 April 2010, the Chief of Personnel of the EUPM informed the applicant that she would be redeployed for operational reasons in the Banja Luka regional office. After receiving that decision, the applicant lodged a complaint within the EUPM. By decision of 30 April 2010, the Head of Mission confirmed the previous decision (together, the contested decisions) and informed the applicant that her redeployment was due to the need for prosecutorial advice in the Banja Luka office. In June 2010, the applicant first brought an action against the EUPM before an Italian court, and subsequently brought a similar action against the Council, the Commission and the EUPM before the General Court. In both sets of proceedings, the applicant sought the annulment of the contested decisions and compensation for the harm allegedly suffered. By order of 10 July 2014, the General Court dismissed the action for lack of jurisdiction. The General Court took the view that the applicant’s situation did not fall under one of the exceptions to the general rule as laid down in Articles 24(1) TEU and 275 TFEU, and that
3 Opinion 2/13, Accession to the ECHR, ECLI:EU:C:2014:2454, paras 251–52. See this volume, ch 70. 4 Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025. See this volume, ch 66. 5 Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435. See this volume, ch 66. 6 Case C-439/13 P, Elitaliana v Eulex Kosovo, ECLI:EU:C:2015:753. See this volume, ch 63. 7 The Court’s approach has been referred to, with similar expressions, as ‘grignotage’ (L Coutron, ‘Consécration de la compétence préjudicielle de la Cour de justice dans le contentieux des mesures restrictives’ [2017] Revue Trimestrielle de Droit Europeen 418) and ‘nibbling away’ (SØ Johansen, ‘H v Council and Others: a minor expansion of the CJEU’s jurisdiction over the CFSP’ [2016] European Papers 1297). 8 cf Opinion of AG Bobek, Case C-14/19 P, SatCen v KF, ECLI:EU:C:2020:220, para 59.
The Scope of the Court’s Jurisdiction in the CFSP 833 the CJEU does not have jurisdiction in CFSP matters. The General Court considered that the contested decisions were adopted by the Head of Mission, who had exercised powers delegated to him by the national authorities. It thus concluded that it was for Italian courts to review the legality of the contested decisions and to hear the action for damages. The General Court added that should those courts consider the contested decisions unlawful, they could make that finding and draw the necessary conclusions, even with respect to the very existence of those decisions.9 The applicant appealed that order before the Court. III. THE COURT
In his Opinion of 7 April 2016, Advocate General (AG) Wahl largely, although not completely, agreed with the General Court’s findings, and thus proposed that the Court dismiss the appeal.10 At the outset, he emphasised that the CFSP has been conceived, since its creation, as lex imperfecta: a law that imposes a duty or prohibits a behaviour, but does not provide for any penalty for its infringement. In his view, that is so from two angles. First, no judicial procedure for enforcement and penalties in case of breaches is expressly provided for in the EU Treaties. Accordingly, there is hardly any way to ensure compliance with those rules by recalcitrant Member States or by non-conforming EU institutions. Second, AG Wahl stated that only limited remedies are available to individuals whose rights may be breached by acts adopted in the framework of the CFSP. Indeed, save for the aforementioned exceptions, the CJEU has no jurisdiction to hear actions – either directly, by means of direct actions, or indirectly, through references for preliminary rulings – which concern CFSP acts.11 In that regard, he saw no basis in the EU Treaties for operating a distinction between different categories of CFSP acts: for example, between administrative acts and operational acts, or between foreign policy acts and acts of implementation. The applicant and the Commission had in fact suggested that, depending on their nature or content, CFSP acts do or do not fall within the CJEU’s jurisdiction. Nor did the Advocate General find the applicant’s argument more persuasive, according to which the concept of ‘restrictive measures’ under Article 275 TFEU encompassed all EU acts which adversely affect the interests of individuals. Those measures only cover measures which are generally referred to as ‘sanctions’.12 AG Wahl thus concluded that, insofar as the contested decisions did not fall into either of the two exceptions set out in the EU Treaties, they had to be challenged before the competent Italian courts.13 However, he added that should those courts have doubts as to the extent and the consequences of their review over CFSP acts, they would be entitled (and may sometimes be obliged, in respect of courts or tribunals for whose decisions there is no judicial remedy under national law) to submit a request for a preliminary ruling under Article 267 TFEU. Although the Court is, in that context, precluded from interpreting CFSP rules, it may still be able to assist those courts while remaining within the boundaries established by the EU Treaties. For instance, the Court could determine whether or not the EU acts or provisions at issue in the main proceedings are actually excluded from the CJEU’s jurisdiction. More importantly, the Court
9 Order in Case T-271/10, H v Council and Others, ECLI:EU:T:2014:702. 10 Opinion of AG Wahl, Case C-455/14 P, H v Council of the European Union, European Commission and European Union Police Mission (EUPM) in Bosnia and Herzegovina, ECLI:EU:C:2016:212. 11 ibid paras 35–51. 12 ibid paras 52–81. 13 ibid paras 83–88.
834 Luca Prete would be able to interpret, inter alia, EU provisions of a horizontal nature (of substance or of procedure) or general principles of EU law. The Court could also clarify the limits to national procedural autonomy by explaining the legal consequences stemming from the national court’s duty to provide remedies sufficient to ensure effective legal protection of the individuals, as mandated under Article 19 TEU. That said, as regards the powers of national courts, AG Wahl took the view that – contrary to what the General Court had held – those national courts may, in principle, not annul an act adopted by a body set up by the EU, in line with the Foto-Frost case law.14 National courts could only adopt suspensive measures with no erga omnes effect.15 In its judgment of 19 July 2016, the Court – sitting in Grand Chamber – did not follow the Advocate General, and found that the General Court had erred in declining jurisdiction. At the outset, the Court recalled its settled case law according to which Articles 24(1) TEU and 275 TFEU introduce a derogation from the rule of general jurisdiction which Article 19 TEU confers on the Court to ensure that in the interpretation and application of the Treaties the law is observed, and they must, therefore, be interpreted narrowly. The Court then emphasised the importance, within the European construction, of the principles of equality and the rule of law, and of the right to effective judicial protection. The Court acknowledged that the contested decisions were ‘set in the context of the CFSP’, since they related to an operational action of the Union decided upon and carried out under the CFSP. However, that circumstance alone was not sufficient to exclude the CJEU’s jurisdiction.16 Having said that, the Court first noted that acts adopted vis-à-vis staff seconded from the EU institutions could, by virtue of Article 270 TFEU, be challenged before the CJEU. The Court also found that EU staff and national staff were in some regards, although not in all regards, subject to the same rules and chain of command within Common Security and Defence Policy missions, such as that of the EUPM. In particular, the Court held that, while the decisions adopted by a mission relating to the allocation of the human resources assigned to it for the purpose of performing activities at theatre level ‘have an operational aspect falling within the CFSP’, they also ‘constitute, by their very essence, acts of staff management, just like all similar decisions adopted by the EU institutions in the exercise of their competences’. In those circumstances, the Court ruled that the scope of the limitation on the Court’s jurisdiction, laid down in Articles 24(1) TEU and 275 TFEU, could not be considered to be so extensive as to exclude the jurisdiction of the EU judicature to review acts of staff management relating to staff members seconded by the Member States the purpose of which is to meet the needs of that mission at theatre level, when the EU judicature has, in any event, jurisdiction to review such acts where they concern staff members seconded by the EU institutions.
The Court then confirmed its interpretation of the EU Treaties provisions by looking at the rules governing the European Defence Agency (EDA) and the European External Action Service (EEAS), which treated EU staff and national staff alike. Finally, the Court pointed out that any other interpretation could have given rise to inconsistencies, since national courts and the CJEU could have arrived at different conclusions with regard to acts that apply to both EU and national staff.17
14 Case
314/85, Foto-Frost, ECLI:EU:C:1987:452. paras 89–104. 16 Case C-455/14 P, H v Council and Others, ECLI:EU:C:2016:569, paras 39–43. 17 ibid paras 44–57. 15 ibid
The Scope of the Court’s Jurisdiction in the CFSP 835 The Court thus concluded that the CJEU has jurisdiction to review acts such as the contested decisions. That jurisdiction stems, as regards the review of the legality of those acts, from Article 263 TFEU and, as regards actions for non-contractual liability, from Article 268 TFEU, read in conjunction with Article 340 TFEU, taking into account Article 19(1) TEU and Article 47 of the Charter. Since the substance of the applicant’s claims at first instance had not been examined, the Court set aside the order under appeal and referred the case back to the General Court. In that connection, the Court made clear that the contested decisions were imputable to the Council and, accordingly, the action was admissible only in so far as it was directed against that institution.18 IV. THE IMPORTANCE OF THE CASE
In H, the Court has, for the first time, held that the CJEU’s jurisdiction extends to some EU acts that are not only adopted ‘in relation to’ or ‘in the context of’ the CFSP, but that are actually adopted on the basis of CFSP provisions. Given the wording of Articles 24(1) TEU and 275 TFEU, this is clearly not a question of terminology, but one of substance. The leap made by the Court in H is significant. The CJEU can, after H, review certain measures that, at least formally, fall within the CFSP, beyond those set out in the jurisdictional claw-back. In fact, the judgment in H goes even further than that: the Court made clear that jurisdiction also exists in respect of acts which have both non-CFSP and CFSP-related content.19 The importance of the judgment thus goes well beyond the realm of EU staff matters,20 having significant constitutional implications regarding the jurisdiction of the Court in general. A. Reactions to the Judgment Following the delivery of the judgment, legal scholarship has not failed to note the groundbreaking nature of the Court’s findings. Nonetheless, the reactions to that judgment varied. On the one hand, some authors welcomed the Court’s decision, noting its contribution to the strengthening of the rule of law and the protection of individuals’ rights, and to the furthering of the overall coherence of the system.21 The judgment was also considered significant in that it helps demystify the CFSP as a peculiar area of EU law, whilst confirming the
18 ibid paras 58–71. 19 Or ‘dual-content decisions’, as AG Bobek called them in para 56 of the Opinion in SatCen v KF (n 8). 20 That is a fortiori true given the Union’s recent practice to include arbitration clauses in employment contracts used by certain EU bodies, offices or agencies (such as of the CFSP and CDSP missions) to recruit staff. Those clauses may well designate the CJEU as the forum for contractual disputes. In those cases, the CJEU’s jurisdiction stems from Art 272 TFEU. However, it must be pointed out that only contractual matters may be brought before the Court under Art 272 TFEU, whereas disputes on non-contractual matters are, where relevant, governed by the other Treaty provisions (in primis, Arts 263 and 268 TFEU). The delimitation between those two areas is, for the time being, not entirely clear: see, inter alia, Cases C-730/18 P, SC v Eulex Kosovo, ECLI:EU:C:2020:505, paras 30–52; C-14/19 P, SatCen v KF, ECLI:EU:C:2020:492, paras 78–86. On this issue in general, see G Butler, ‘The EU’s Contractual Relations and the Arbitration Clause: Disputes at the Court of Justice of the European Union’ (2021) 46 EL Rev 345. 21 Regarding the overall coherence of the system, see also, by analogy, Opinion of AG Hogan, Case C-134/19 P, Bank Refah Kargaran v Council, ECLI:EU:C:2020:396, para 63. See this volume, ch 91.
836 Luca Prete applicability of EU’s horizontal principles (such as equality) thereto.22 The reasoning followed by the Court was found to be ‘creative’ but by all means sound.23 On the other hand, other observers pointed to certain ambiguities in the text of the judgment, and gaps in the reasoning followed by the Court, which rendered the judgment problematic. To begin with, it was noted that, although the carve-out must be interpreted narrowly, the judgment construes it ‘so narrowly as to turn around the rule-exception regime’, which betrays the clear will of the drafters of the Treaties.24 To some, the ‘anthology’ of provisions of the EU Treaties and of the Charter, which the Court mixed indiscriminately, reveals that the judgment in H is mainly the result of an a priori intention of the Court to enlarge the scope of its jurisdiction in the CFSP.25 To that end, the Court did not hesitate to engage ‘in interpretative acrobatics’ and rely ‘on issues of questionable relevance’.26 In particular, the analogy between the EUPM’s seconded staff and those of the EDA and the EEAS was found unconvincing, insofar as the respective rules are markedly different.27 In addition, reliance on a general jurisdiction conferred by Article 19 TEU was considered questionable, since that provision is mainly laying down the general tasks of the EU judiciary, which then take more concrete form in the specific provisions of the TFEU that give actual competence to the CJEU.28 Furthermore, the characterisation of the contested decisions as ‘acts of staff management’ was considered ‘highly artificial’, to the extent that those decisions fell within the operational activity of the mission and were aimed at furthering its statutory objectives.29 The reading put forward by the Advocate General was, arguably, more consistent with the wording of the EU Treaties, whilst ensuring a fair distribution of labour between the national courts and the CJEU. The former courts would have had the power to examine the substance of the applicants’ claims (which may require looking into the specificities and technicalities of each case), leaving the assessment of any issue of a horizontal or constitutional nature (for example, the interpretation of any relevant Charter provision) to the latter. At the same time, however, the splitting of jurisdiction suggested by AG Wahl – whereby national courts would end up adjudicating upon certain disputes relating to the day-to-day management of EU missions, established by EU decisions – could have raised a number of further issues concerning the nature and scope of that assessment.
22 See P Van Elsuwege, ‘Upholding the Rule of Law in the Common Foreign and Security Policy: H v Council’ (2017) 54 CML Rev 841; T Verellen, ‘H v Council: Strengthening the Rule of Law in the Sphere of the CFSP, One Step at a Time’ (2017) 1 European Papers 1041. 23 See G Butler, ‘The Coming of Age of the Court’s Jurisdiction in the Common Foreign and Security Policy’ (2017) 13 Eur Const LR 673; L Lonardo, ‘The Court of Justice and EU Foreign Policy: What Jurisdiction Should It Have?’ (EU Law Analysis Blog, 22 September 2016). 24 C Moser, Accountability in EU Security and Defence: The Law and Practice of Peacebuilding (Oxford, Oxford University Press, 2020) 209–21. That echoes the considerations developed in the View of AG Kokott, Opinion 2/13, ECLI:EU:C:2014:2475, para 89. Regarding the intention of the drafters of the EU Treaties, however, the views – at least among the Advocates General – diverge: cf View of AG Kokott in Opinion 2/13, para 193 and Opinion of AG Wahl in H (n 10) para 49 with Opinion of AG Bobek in SatCen v KF (n 8) para 72. 25 I Bosse-Platière, ‘Après l’arrêt Elitaliana et avant l’arrêt Rosneft, la Cour restreint les limites de son incompétence en matière de PESC’ [2017] Revue Trimestrielle de Droit Europeen 123. 26 P Koutrakos, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018) 67 ICLQ 1. 27 ibid. 28 M Kuisma, ‘Jurisdiction, Rule of Law, and Unity of EU Law in Rosneft’ (2018) 37 Yearbook of European Law 3. 29 J Heliskoski, ‘Made in Luxembourg: The Fabrication of the Law on Jurisdiction of the Court of Justice of the European Union in the Field of the Common Foreign and Security Policy’ (2018) 2 Europe and the World: A law review 3.
The Scope of the Court’s Jurisdiction in the CFSP 837 B. Confirmation of the Judgment and Open Issues Be that as it may, the key principle devolving from H has subsequently been confirmed and generalised by the Court in SatCen v KF.30 The latter case concerned two decisions of the Director of the European Union Satellite Centre (SatCen) concerning the suspension and removal of a member of its staff, and the decision of the SatCen Appeals Board confirming those two decisions. Despite the contrary arguments put forward by SatCen and the Council, the General Court accepted jurisdiction and, finding the applicant’s claims to be well founded, set aside the contested decisions and awarded compensation for the non-material harm sustained by her.31 On appeal, the Court, following the proposal by AG Bobek,32 upheld the judgment of the General Court. In particular, the Court ruled that the contested decisions constituted ‘acts of staff management’ and, as such, were not subtracted from the jurisdiction of the Court.33 Both the General Court and the Court expressly referred to the judgment in H in that regard. Nevertheless, the judgment in H left a number of important issues open. So far, the Court has not needed to address them directly, although some Advocates General have attempted to provide some answers. First, are there other categories of acts, in addition to those of staff management, that, despite being based on CFSP provisions, do not fall within the jurisdictional carve-out and can thus be reviewed by the CJEU? If so, is there any overarching criterion (or general test) that can be used to identify those categories of acts? A positive answer to both questions was suggested by AG Bobek in KF v SatCen. He argued that, in order to fall within the CFSP derogation, an EU act must fulfil two requirements. On the one hand, it must be formally based on CFSP provisions. On the other hand, the act must also correspond, as to its content or substantively, to a CFSP measure. He acknowledged that the second requirement does not follow from the wording of the EU Treaties provisions. However, he considered that reading as being supported by a systemic, historical and teleological interpretation of those provisions.34 In particular, he stated that Articles 24(1) TEU and 275 TFEU are expressions of a ‘content-based exceptionalism’: the drafters of the EU Treaties took the view that CFSP matters are inherently political and, consequently, are not amenable to judicial review. On that basis, they decided that any dispute with regard to the application of those provisions should be resolved at political level, without involving the courts. Consistent with that approach, the CFSP derogation cannot be understood – according to AG Bobek – as covering acts that, despite relating to, or even formally being adopted within, the CFSP, are not immediately or directly concerned with the definition, implementation or execution of that policy. Any judicial intervention in that regard would be very unlikely to constrain the room for manoeuvre that the EU institutions and Member States are meant to enjoy when acting in the field of the CFSP. For those reasons, AG Bobek concluded that the fact that an act is formally based on CFSP provisions or adopted in that context simply is not enough to trigger the carve-out. The act must, according to AG Bobek, also have genuine CFSP content.35 As regards the concept of ‘genuine CFSP content’, the Advocate General recognised that it is impossible
30 cf
M Chamon, ‘The CFSP Derogation before the Court – Ongoing Developments’ (EU Law Live, 30 June 2020). T-286/15, KF v SatCen, ECLI:EU:T:2018:718. 32 Above n 8. 33 SatCen v KF (n 20). 34 Opinion of AG Bobek in SatCen v KF (n 8) paras 61–63. 35 ibid paras 64–73. 31 Case
838 Luca Prete to ‘envisage an ironclad test that would serve to draw a bright line between CFSP content and non-CFSP content’. In his view, that delineation necessarily involves a case-by-case assessment. However, he suggested that normal administrative acts – that is, acts of the EU administration that are not inextricably linked to the pursuit of the CFSP – do not display (sufficient) CFSP content to be excluded from judicial review. Those acts typically include, for example, decisions on staff management, decisions relating to the budget and spending or decisions in normal and ordinary procurement procedures. More practically, he suggested a rule of thumb: could the challenged act, which is formally based on a CFSP provision, be adopted in another, non-CFSP, context? If so, would its content and the considerations leading to its adoption be similar, or even the same, if adopted in a non-CFSP context? If the answer to both of these questions is affirmative, it is likely – in AG Bobek’s view – that the act does not have genuine CFSP content.36 Unfortunately, in its judgment in the case, the Court did not delve into this issue. Second, to the extent that the jurisdictional carve-out must encompass a hard core of acts which are unquestionably subtracted from the jurisdiction of the CJEU, a fundamental question remains unanswered: could those acts be reviewed by the national courts and, if so, what are the powers of those courts? AG Kokott (in her View in Opinion 2/1337) and AG Wahl (in his Opinion in H38), took the view that, absent any possibility by the CJEU to review those acts, the national courts ought to have that power. Article 19(1) TEU – which the judgment in H expressly referred to – states that ‘Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law’. In that connection, the Court has repeatedly emphasised that the national courts, in collaboration with the Court, fulfil a duty entrusted to them both of ensuring that in the interpretation and application of the Treaties the law is observed.39 Moreover, Article 274 TFEU too appears to support the position taken by AG Kokott and AG Wahl, as it provides that ‘save where jurisdiction is conferred on the [CJEU] by the Treaties, disputes to which the Union is a party shall not on that ground be excluded from the jurisdiction of the courts or tribunals of the Member States’. A different solution would, furthermore, be hardly compatible with the principle of the rule of law (that too referred to by the Court in H), and with the settled case law according to which, with the EU judicial system, the EU Treaties have established ‘a complete system of legal remedies and procedures’ designed to ensure review of the legality of acts of the institutions, bodies, offices and agencies of the Union.40 That said, even if the jurisdiction of the national courts were to be retained, it remains unclear whether those courts would have the power to declare the challenged acts null and void. Although the principles devolving from the Foto-Frost case law41 may not be fully applicable in those circumstances, it is hardly imaginable that a national court could adopt any measure with erga omnes effects. A better view is, probably, that such national courts could declare the act in question invalid with a mere inter partes effect, meaning that the act would be simply declared inapplicable vis-à-vis the applicant(s) in the dispute at issue. For completeness,
36 ibid paras 74–85. 37 View of AG Kokott in Opinion 2/13 (n 24) paras 95–103. 38 Opinion of AG Wahl in H (n 10) paras 41–44 and 101–03. 39 See, among many, Opinion 1/09, Unified Patent System, ECLI:EU:C:2011:123, para 69; Case C-64/16, Associação Sindical dos Juízes Portugueses, ECLI:EU:C:2018:117, para 33; Opinion 1/17, CETA, ECLI:EU:C:2019:341, para 55. See this volume, ch 88. 40 To that effect, see Case 294/83, Les Verts v Parliament, ECLI:EU:C:1986:166, para 23; more recently, see Rosneft (n 1) para 66 and the case law cited therein. 41 Foto-Frost (n 14).
The Scope of the Court’s Jurisdiction in the CFSP 839 in Rosneft, the Court appears to discard the possibility that national courts be involved.42 Arguably, however, the Court’s statements concerned only those situations, such as that at issue in those proceedings, in which the CJEU does have jurisdiction. Third, in cases of dual-content acts, does the CJEU’s review extend to the whole of the acts, or is it limited to the non-CFSP parts thereof? The consequences flowing from that choice may be significant, at least on a theoretical level. In practice, however, it is likely that the CJEU will at any rate be unwilling to review issues of high politics or, as the Commission put it in H, decisions that are the expression of sovereign foreign policy (with French terminology, actes de Gouvernement).43 Fourth and last, given the progressive erosion of the jurisdictional carve-out, another question will, at some point in the future,44 inevitably arise: should the Court’s findings in Opinion 2/13 be reconsidered? In other words, does the general exclusion of the Court’s jurisdiction in CFSP matters – given its significantly narrower scope than that presumed when Opinion 2/13 was delivered – still preclude the accession of the European Union to the Convention for the Protection of Human Rights and Fundamental Freedoms?45 V. ADDITIONAL READING Cremona, M, ‘“Effective Judicial Review Is of the Essence of the Rule of Law”: Challenging Common Foreign and Security Policy Measures Before the Court of Justice’ (2017) 2 European Papers 671. Eckes, C, ‘Common Foreign and Security Policy: The Consequences of the Court’s Extended Jurisdiction’ (2016) 22 European Law Journal 492. Hillion, C and Wessel, RA, ‘The Good, the Bad and the Ugly: Three Levels of Judicial Control over the CFSP’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018) 65–87. Van Elsuwege, P and Gremmelprez, F, ‘Protecting the Rule of Law in the EU Legal Order: A Constitutional Role for the Court of Justice’ (2020) 16 European Constitutional Law Review 8. Wessel, RA, ‘Lex Imperfecta: Law and Integration in European Foreign and Security Policy’ (2016) 1 European Papers 439.
42 Paras 77–78 of the judgment. 43 cf Opinion of AG Bobek in SatCen v KF (n 8) para 78. 44 See Joint statement on behalf of the Council of Europe and the European Commission of 29 September 2020 expressing, inter alia, the hope that the negotiations on EU’s accession to the ECHR ‘can be brought to a speedy and successful conclusion’. 45 On this issue in general, see C Timmermans, ‘EU Common Foreign and Security Policy and Protection of Fundamental Rights’ in J Czuczai and F Naert (eds), Liber Amicorum in Honour of Ricardo Gosalbo Bono (Leiden, Brill, 2017) 295–305.
840
77 Institutional Balance in the Conclusion of Non-binding International Agreements Revisited: Council v Commission (Swiss MoU) ANDERS NEERGAARD* Case C-660/13, Council of the European Union v European Commission, ECLI:EU:C:2016:616 (Swiss MoU), delivered 28 July 2016. KEYWORDS Memorandum of understanding on a financial contribution – Conferral of powers – Non-binding international agreement – Interinstitutional balance – External representation – Policy-making – Absence of decision-making procedure – Roles of the institutions – Financial contribution.
I. INTRODUCTION
T
he judgment in Swiss MoU addresses the limits of the Commission’s powers under Article 17 TEU to ensure the Union’s external representation in the light of the horizontal principle of institutional balance laid down in Article 13(2) TEU. The case builds on the earlier case law according to which a non-binding1 international agreement falls outside the scope of Article 218 TFEU (ex-Article 300 EC) and finds that a non-binding international agreement may involve policy-making and therefore requires the involvement of the Council. Nevertheless, in the absence of an applicable procedure, important questions remain to be settled after Swiss MoU in order to ensure that non-binding international agreements are concluded in a manner that is coherent with the roles of all institutions.2 * All opinions expressed herein are personal to the author. 1 In the case, as well as in this article, the reference to the ‘non-binding’ nature of the case does not mean that the agreement is without legal effects, but only that the parties’ intention was not to take a binding commitment under international law. 2 The European Parliament did not intervene in the case. It should be noted that the European Parliament has developed a rather restrictive practice through the guidelines for the application of Rule 141 of the Rules of Procedure established by the Legal Affairs Committee, according to which the European Parliament should not intervene where
842 Anders Neergaard II. FACTS
In view of the forthcoming enlargement set to occur in 2004, the Council and the Representatives of the Governments of the Member States in April 2003 mandated the European Commission to negotiate the necessary adaptations to the agreement between the European Union and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons.3 The Council also authorised the Commission to negotiate an agreement on a financial contribution to economic and social cohesion in an enlarged Union. According to the negotiating directives, ‘in exchange for free access to the enlarged Internal Market, the Swiss Confederation should contribute financially to social and economic cohesion in the enlarged Union in a way comparable to Norway, Iceland and Liechtenstein’. Later, it became clear that the Swiss Confederation could not conclude a binding agreement on such a financial contribution. Instead, a memorandum of understanding (MoU) had to be agreed, to be followed by the conclusion of bilateral agreements with each beneficiary Member State. A first MoU was signed on 27 February 2006, drawing up guidelines for the negotiations between the Swiss Federal Council and the 10 new Member States that acceded to the Union in 2004 on the Swiss financial contribution. An addendum concerning two additional new Member States, the Republic of Bulgaria and Romania, which acceded to the Union in 2007, was signed on 25 June 2008. Both memoranda were signed by the Swiss Federal Council and the President of the Council and the Commission. The Council and the Representatives of the Governments of the Member States adopted Conclusions on 20 December 2012, noting the wish of the Republic of Croatia, a future Member State (acceding in 2013), to receive a financial contribution commensurate with the sums agreed for the other Member States and invited the Commission, acting in close cooperation with the Presidency of the Council, to engage in the necessary discussions with the Swiss Federal Council on such a contribution. The Commission formulated a statement, included in the minutes of the meeting of the Committee of Permanent Representatives, according to which these Conclusions constituted a political decision under Article 16 TEU and were to be understood as a political decision of the Council, not of the Member States. On 3 October 2013, the Commission adopted, on the basis of Article 17 TEU, the contested decision, noting that ‘the proposed addendum does not, nor is it intended to, create any binding or legal obligations on either side under domestic or international law’.4 In the decision, the Commission approved the addendum concerning the Swiss financial contribution for the Republic of Croatia and authorised its Vice-President responsible for external relations and the member of the Commission responsible for Regional Policy to sign it on behalf of the Union. The two Commissioners signed the addendum on 7 November 2013. In the addendum, the Swiss Federal Council agrees to negotiate an agreement with the Republic of Croatia on a financial contribution, the amount and the period for which it is to be provided, and proposes that the Swiss Parliament approves that contribution.
the validity of an act adopted or co-adopted by Parliament is not at stake, unless the case raises major legal issues that are also relevant to Parliament. In practice, this means that Parliament very rarely intervenes in other cases than where an act of Parliament is contested through a plea of illegality. 3 [2002] OJ L114/6. At the time, the agreement was concluded between the European Community and its Member States and the Swiss Confederation. 4 Commission Decision C (2013) 6355 final of 3 October 2013 on the signature of the Addendum to the Memorandum of Understanding on a Swiss financial contribution, Recital 8.
Institutional Balance in the Conclusion of Non-binding International Agreements 843 The Council brought an action for annulment before the Court under Article 263 TFEU claiming that the Court should annul the contested decision. Under its first plea, the Council argued that the Commission had breached the principle of conferral and the principle of institutional balance in Article 13(2) TFEU by adopting the contested decision and signing the 2013 Addendum without the Council’s prior approval. Under the Council’s second plea, the decision constituted a breach of the principle of sincere cooperation also laid down in Article 13(2) TEU. A number of Member States intervened in favour of the Council. In respect of the first plea, the Council and the Commission agreed that the MoU and the addenda were non-binding international agreements, reflecting the political commitment of the parties. Likewise, they agreed that Article 218 TFEU was not applicable and that the TFEU did not lay down any specific procedure as regards the negotiation and conclusion of such international agreements. Furthermore, there was no disagreement that the principle of conferral of powers, established in Article 13(2) TEU, Article 16(1) TEU and Article 17(1) TEU, should be adhered to. There was disagreement only as to the procedure to be followed as regards the approval and signature of such instruments. Referring to the case law,5 the Council submitted that the fact that a measure is non-binding does not mean that the Commission has the power to adopt it. The Council submitted that Article 17 TEU does not empower the Commission to sign a non-binding international agreement, such as the 2013 Addendum, on behalf of the Union without the Council’s prior approval. By deciding unilaterally to authorise the signature of the 2013 Addendum and to accept its content, the Council argued that the Commission determined the Union’s policy and deprived the Council of the opportunity to define its position in that regard. The Council also claimed that the Commission also determined the Union’s policy by treating the 2013 Addendum as a matter falling under the Union’s exclusive competence. It argued that in changing the signatories to the addendum by signing it alone on behalf of the Union, the Commission acted against the Council’s expressly stated position. The Council also argued that even if Article 218 TFEU is not applicable, it is still relevant in so far as it reflects the general distribution of powers among the institutions, as established in Articles 16 and 17 TEU. The Commission acknowledged that, in accordance with Article 16(1) TEU, it falls to the Council to decide on the Union’s policy and to ensure consistency in the external action of the Union. However, the Commission argued that, under Article 17 TEU, it is required to execute that policy to ensure the Union’s external representation and that this requires a degree of autonomy. It argued that Article 17 TFEU allows the Commission to sign non-binding instruments of a political nature on behalf of the Union as an act of external representation if they reflect a position established by the Council without need for that institution’s prior approval. The Commission also argued that a common position does not have to take a specific form6 and that the 2012 Conclusions constituted the political decision of the Union, by which the Council under Article 16(1) TEU determined that the Swiss financial contribution for the Republic of Croatia was to be based on the same calculations as those of the MoU and the 2008 Addendum. The Commission pleaded that the contested decision did not depart from that position, and nor did the Council claim that it did. The signature of the 2013 Addendum formed part of the executive and management functions, which the Commission under Article 17(1) TEU performed in accordance with the MoU and the related addenda.
5 Case C-233/02, France v Commission, ECLI:EU:C:2004:173 (France v Commission II), para 40. See this volume, ch 42.
6 Case
C-246/07, Commission v Sweden, ECLI:EU:C:2010:203 (PFOS), para 77. See this volume, ch 58.
844 Anders Neergaard III. THE COURT
The Court stated that the EU Treaties have set up a system allocating powers among the EU institutions, assigning to each institution its own role in the institutional structure of the Union and the accomplishment of the tasks entrusted to the Union.7 Accordingly, Article 13(2) TEU reflected the principle of institutional balance, characteristic of the institutional structure of the Union, a principle which requires that each of the institutions exercise its powers with due regard for the powers of the other institutions.8 Against this background, the Court recalled the roles of the two institutions that were engaged in this dispute. Under Article 16(1) TEU, the Council is to carry out policy-making and coordinating functions as laid down in the EU Treaties. The third subparagraph of Article 16(6) TEU provides that the Foreign Affairs Council (FAC) is to plan the Union’s external action on the basis of strategic guidelines laid down by the European Council and to ensure that the Union’s action is consistent. Under Article 17(1) TEU, the Commission is to promote the general interest of the Union and take appropriate initiatives to that end; exercise coordinating, executive and management functions, as laid down in the EU Treaties; and ensure the Union’s external representation.9 As to the Commission’s claim that the MoU reflected a Union position already established by the Council, the Court noted that the mere fact that the Commission enjoys a power of external representation of the Union under Article 17(1) TEU is not sufficient to address the issue of whether the principle of conferral of powers laid down in Article 13(2) TEU required the Commission to obtain the Council’s approval before signing the 2013 Addendum on behalf of the Union.10 The Court went on to note that the 2012 Conclusions did not contain any authorisation empowering the Commission to sign the resulting addendum on behalf of the Union and that no other evidence as to such an authorisation had been brought forward. The Court then found that the contested decision concerning the signing of an agreement with a third country covering an area under Union competence requires an assessment of the Union’s interests in the context of its relations with the third country and a reconciliation of the divergent interests arising in those relations. This assessment has to be made in compliance with strategic guidelines laid down by the European Council and the principles and objectives of the Union’s external action laid down in Article 21(1) and (2) TEU. The Court said such an assessment has to be made irrespective of whether or not the agreement is binding. Therefore, the contested decision, such as the one at issue in the case, was part of the Union’s policymaking and external action planning for the purpose of the second sentence of Article 16(1) TEU and the third subparagraph of Article 16(6) TEU. This analysis was not altered by the fact that the Council had already carried out an assessment of the Union’s interests at the time of the adoption of the decision to open the negotiations, because it had to be assessed whether the agreement still reflected its interest. That assessment required, inter alia, verification of the actual content of the non-binding international agreement, and this content cannot be determined or predicted when the decision to
7 Case C-70/88, Parliament v Council, ECLI:EU:C:1990:217 (Chernobyl), para 21. 8 Case C-409/13, Council v Commission, ECLI:EU:C:2015:217, para 64, and 6 October 2015 in Case C-73/14, Council v Commission, ECLI:EU:C:2015:663 (International Tribunal for the Law of the Sea), para 61. See this volume, ch 74. 9 With the exception of the Common Foreign and Security Policy and other cases provided for in the EU Treaties. 10 The Court referred by analogy with regard to Art 335 TFEU to Case C-73/14, Council v Commission, ECLI:EU:C:2015:663 (ITLOS), paras 59 and 60.
Institutional Balance in the Conclusion of Non-binding International Agreements 845 start such negotiations is made. The Court said the fact that the content corresponds to the given negotiating mandate does not mean that the approval is already covered by a position established by the Council and therefore is not sufficient to confer on the Commission the power to sign such a non-binding measure. The information in the 2013 Addendum concerning the amount of that contribution and its duration were found to be essential aspects of the Union’s policy-making as regards the adaptation of the Swiss financial contribution consequent to the accession of Croatia to the European Union.11 The Court therefore concluded that, in order to sign the 2013 Addendum on behalf of the Union, the Commission needed the Council’s prior approval and that, by signing the addendum without such prior approval, the Commission infringed the principle of distribution of powers in Article 13(2) TEU and the principle of institutional balance. The contested decision was therefore annulled, without it being necessary to examine the second plea.12 IV. THE IMPORTANCE OF THE CASE
A. The Exercise of Powers Regarding Soft Law and the Roles of the Institutions Outside Formal Decision-Making Procedures It followed from the judgment in France v Commission II that Article 218 TFEU does not apply to the conclusion of non-binding international agreements.13 However, in that case it had not been necessary to specify further how a non-binding international agreement should be concluded by the Union.14 The Swiss MoU case complements the case law by defining the conditions for concluding such agreements where they involve some level of policy-making. It does so by applying Article 13(2) TEU and assessing the limits of the powers conferred on the institutions in the EU Treaties.15 As there was no applicable procedure that determined the respective roles more precisely, the Court had to base its assessment on the fundamental conditions and objectives set out in the Treaties. The Court thus referred to the conditions and objectives laid down in Article 17 TEU in respect of the role of the Commission to ensure the external representation of the Union. The Court also referred to Article 16(1) TEU in respect of the role of the Council to carry out policy-making and coordinating functions and to Article 16(6) TEU and Article 21(1) and (2) TEU to elaborate the Union’s external action on the basis of strategic guidelines laid down by the European Council and ensure that its action is consistent. Through this analysis, it becomes clear that, while Article 17 TEU was not sufficient in the present case, both it and Article 16 TEU are in themselves capable of forming the basis for action by the Commission and the Council respectively. The delimitation between these two provisions is also clarified by the finding that policy-making requires the involvement of the Council. By making this analysis, the judgment confirms that the adoption of the decision to conclude a non-binding international agreement may constitute the exercise of a power and 11 See Case C-660/13, Council v Commission, ECLI:EU:C:2016:616 (Swiss MoU), paras 39–45 of the judgment. 12 It was uncontested between the parties that the effects of the decision should be maintained, which the Court also decided. 13 See France v Commission II (n 5), para 45. 14 Although some hints may have been given; ibid para 40. 15 For a similar reasoning but concerning the roles under Art 218 TFEU, see also Case C-425/13, Commission v Council, ECLI:EU:C:2015:483 (Australia ETS). See this volume, ch 73.
846 Anders Neergaard that this power under Article 13(2) TEU must be exercised by each institution within the limits of its powers.16 Nevertheless, the political commitments established in non-binding international agreements may be of a very varied nature and importance. Some may have legal consequences, such as providing the interpretative context for legally binding acts, whereas others may not. It could be discussed whether the fundamental requirements laid down in the Swiss MoU case are sufficient to cater for all these different types of non-binding international agreements, in particular the most politically important ones. This chapter is limited to a discussion on the conclusion of non-binding international agreements of the Union. It does not question the need for acts that fall outside the scope of Article 218 TFEU or enter into an analysis of other aspects of the wider debate on the use of soft law and its definition in external relations.17 B. The Coherence of the Legal Regime for Adopting Acts Concluding Non-binding International Agreements The starting point for the reasoning of the Court is that each institution under Article 13(2) TEU shall act within the limits of the powers conferred on it in the EU Treaties and in conformity with the procedures, conditions and objectives set out therein. It would appear, under these provisions, that the institutions should make use of the specific powers conferred in the legal bases in accordance with the procedure defined in that legal basis.18 Nevertheless, against the background of its finding in France v Commission II under which the specific procedure laid down in Article 218 TFEU did not apply,19 the Court instead made use of the conditions laid down in Articles 16 and 17 TEU. Certainly, Article 16 TEU specifies that policy-making and coordinating functions of the Council are to be carried out ‘as laid down in the Treaties’, so there still needs to be a specific provision on these functions. In this regard, the Court found a sufficient basis in Article 16(6) TEU, which specifies that the FAC shall elaborate the Union’s external action.20 However, the conditions and objectives laid down in Articles 16 and 17 TEU are not very precise in respect of the conditions for the adoption of the relevant acts. It could therefore be argued that they are not suitable for providing an alternative to the procedures. This question is of limited importance as long as the relevant act would remain within the powers of a single institution, such as the Commission under Article 17 TEU, because the decision-making of each institution is already defined in and under the EU Treaties. The additional requirement of an authorisation by the Council, by contrast, means that the relation between the acts of two institutions needs to be determined in relation to the exercise of a 16 It was already clear from the earlier case law that the decisions concerning the signature (or conclusion) of such acts can be reviewed by the Court under Art 263 TFEU. 17 For this wider subject matter, see RA Wessel, ‘Normative Transformation in EU External Relations: The Phenomenon of “Soft’ International Agreements” [2021] West European Politics 72; P Garcia Andrade, ‘The Role of the European Parliament in the Adoption of Non-legally Binding Agreements with Third Countries’ in J Santos Vara and SR Sanchez-Tabernero (eds), The Democratization of EU International Relations Through EU Law (London, Routledge, 2018). 18 See Wessel (n 16) 11–12. 19 Case C-233/02 (n 5) para 45. 20 The requirement for a final authorisation by the Council appears to be relatively strict even compared to the obligation to consult the European Parliament again in case of new amendments in the consultation procedure (Case C-388/92, Parliament v Council, ECLI:EU:C:1994:213, para 10).
Institutional Balance in the Conclusion of Non-binding International Agreements 847 specific power. This leads to some uncertainty as to the precise conditions for the adoption of the act, not only between the Commission and the Council, but, equally importantly, in respect of other institutions.21 A specific procedure laid down in the treaties has the great advantage that it specifies in a precise manner the conditions for the adoption of the act, notably the role of each institution.22 In particular, the Swiss MoU case does not address the question of the role of the European Parliament.23 Under Article 10(1) TEU, the functioning of the Union shall be founded on representative democracy. Under Article 10(2) TEU, citizens are directly represented at Union level in the European Parliament. Under Article 14(1) TEU, the European Parliament shall exercise functions of political control and consultation as laid down in the treaties. The European Parliament has to give its consent under Article 218(6) TFEU to most international agreements, and is consulted on others. Furthermore, it has the right to be fully and immediately informed under Article 218(10) TFEU at all stages of the procedure of all international agreements.24 The Court in Tanzania had acknowledged that the participation of the Parliament in the conclusion of international agreements expresses ‘a fundamental democratic principle that the people should participate in the exercise of power through the intermediary of a representative assembly’, which is among the principles on which the Union is founded.25 Therefore, although no specific role is specified for policy-making, it would appear that Parliament’s consultative role under Article 14 TEU is of comparable relevance to the role of the Council, at least when it comes to the conclusion of non-binding international agreements outside the procedures specified in the relevant legal bases. The fact that non-binding international agreements can constitute both the exercise of a power and policy-making would not only seem to require an involvement of the Council, but could also require a role for the European Parliament. A reason for this could be that the agreement has particularly high importance as a policy-making instrument,26 or could have an effect on the interpretation of binding agreements or Union law decided under the ordinary legislative procedure.27 C. The Difficulties in Practice – The Global Compact for Safe, Orderly and Regular Migration Leaving aside the specific agreement at stake in the Swiss MoU case, the question of principle would seem more important in cases where non-binding international agreements or other acts have a particularly high relevance for the development of Union policy. 21 See Wessel (n 16) 5, 8, 12–14; Garcia Andrade (n 17) 121–25. 22 It may also be noted that ‘the rules regarding the manner in which the Community institutions arrive at their decisions are laid down in the Treaty and are not at the disposal of the Member States or of the institutions themselves’ (Case C-133/06, Parliament v Council, ECLI:EU:C:2008:257, para 54; see also Case 68/86, United Kingdom v Council, ECLI:EU:C:1988:85, para 38). 23 As mentioned, Parliament did not intervene in the case. It is probably easier to see the consequences for the interinstitutional balance after the judgment than before, and that when the case was brought it was primarily the role of the Commission that was at stake. 24 Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025 (Mauritius); Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66. 25 Tanzania (n 24) para 70. See G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy: Competence and Institutions in External Relations (Oxford, Hart Publishing, 2019) 119–20. 26 Admittedly, it may be discussed whether this was the case of the agreements concerned by this case and by France v Commission II (n 5). 27 See Garcia Andrade (n 17) 122–25.
848 Anders Neergaard An example of this came shortly after the Swiss MoU judgment. In September 2016, the UN General Assembly (UNGA) adopted the New York Declaration for Refugees and Migrants, which launched the process of elaboration of a Global Compact for Safe, Orderly and Regular Migration (GCM), a non-binding document containing political orientations and commitments of participating states in this area. After a consultation and stocktaking phase, several rounds of negotiations took place in the first half of 2018 and the final text of the GCM was agreed on 13 July 2018. The Intergovernmental Conference to Adopt the Global Compact for Safe, Orderly and Regular Migration, which took place in Marrakesh, Morocco, adopted the text of the GCM on 10 December 2018. The GCM was then endorsed by the UNGA on 19 December 2018. It may be noted that some Member States of the EU voted against the GCM. The European Council welcomed the launching of the process in its conclusions on migration of 20 October 2016, and on 21 March 2018 the Commission proposed two draft Council decisions ‘authorising the Commission to approve, on behalf of the Union, the Global Compact for Safe, Orderly and Regular Migration in the field of development cooperation’. The legal bases of the proposed decisions were Article 16 TEU (powers of the Council), in conjunction with Article 79 (immigration policy) and Article 209 TFEU (development policy). Two separate decisions were considered necessary for the approval of the GCM on behalf of the Union (one based on Article 16 TEU and Article 79 TFEU, the other based on Article 16 TEU and Article 209 TFEU) because, in accordance with Protocols No 21 and 22 to the TEU and to the TFEU, three Member States – Ireland, the UK and Denmark – were not taking part in the adoption of the Decision based on Article 16 TEU and Article 79 TFEU. According to the explanatory memorandum of the proposal, in order to ensure that the Council Decisions on approval of the Global Compact on Migration are done at a stage where the policy making function is exercised in substance and that the EU continues to be active and influence its approval to ensure that the final text of Global Compact on Migration is consistent with the EU acquis and policy, a proposal is submitted exceptionally in order to allow the prior approval by the Council of the Global Compact on Migration.
The EU participated in the negotiation of the GCM through Union delegation statements, which nevertheless mentioned that the positions were made ‘on behalf of 27 Member States’.28 This was because Hungary proposed a different approach. Later on, however, significant opposition to participation in the GCM adoption process arose in several other Member States, such as Austria, Belgium and Slovakia. The draft Council decisions authorising the Commission to approve the GCM were eventually withdrawn.29 Although the European Parliament had no role in the procedure, on 18 April 2018 it adopted a Resolution on Progress on the UN Global Compacts for Safe, Orderly and Regular Migration and on Refugees (2018/2642 RSP), calling the EU Member States to unite behind a single EU position in supporting the GCM.
28 Note that, at the time, the UK was an EU Member State, and thus there were 28 EU Member States in total. 29 See the Annex to the Commission Work Programme for 2019 (COM (2018) 800), which explains ‘Proposals not needed any more as the adoption of the Compact will go through a two-step process, ie the adoption of the negotiated outcome at the Intergovernmental Conference and then subsequent formal endorsement by a UN General Assembly resolution’.
Institutional Balance in the Conclusion of Non-binding International Agreements 849 D. The Difficulties to Define the Role of the Institutions in the Absence of a Procedure The legal basis and procedure chosen by the Commission for the GCM may appear as a logical consequence of the Swiss MoU case. Article 218 TFEU does not apply to non-binding international agreements, but such agreements may still constitute the exercise of a power within the meaning of Article 5 TEU and require a referral to the Council under Article 16 TEU if they involve policy orientation. However, this way of action appears to be fundamentally incoherent because it applies only a part of the procedure laid down in the Treaties. The Commission took great care to ensure that the prerogatives of the Council and the Member States under Articles 79 and 209 TFEU, as well as under Protocol No 21, were respected. By contrast, the prerogatives of the European Parliament under Articles 79 and 209 TFEU were totally disregarded. Certainly, there was no question of adopting any legislative act, so the ordinary legislative procedure did not apply. Certainly, the international agreement was meant to be non-binding, so Article 218 TFEU did not apply. However, the Council and the Member States only have prerogatives under those legal bases in the same situations as the European Parliament has its prerogatives, which is under the ordinary legislative procedure and under Article 218 TFEU. These difficulties illustrate, on a more fundamental level, the difficulties in determining the interinstitutional balance outside the procedures laid down in the EU Treaties.30 The clearer legal bases and the clearer distribution of roles that would follow from an application of Article 218 TFEU would constitute a major advantage. It should be noted that Article 218 TFEU does not explicitly exclude non-binding international agreements from its scope. Article 216 TFEU provides that the international agreements concluded by the Union are binding on the institutions and the Member States. However, the purpose of this provision does not appear to be to limit the scope of Article 218 TFEU, but rather to ensure that the international agreements concluded are respected. While the earlier case law appears rather categorical in its terms when excluding the application of the then Article 300 EC to non-binding agreements,31 this issue was not raised in relation to Article 218 TFEU in the Swiss MoU case. It could therefore be argued that the fact that an international agreement is non-binding should not necessarily exclude it being concluded after following the procedure laid down in Article 218 TFEU if there are other reasons for ensuring that it has the same high level of legitimacy as legally binding agreements, be it democratic through the European Parliament or intergovernmental through a decision of the Council. In the alternative, it could also be reflected upon whether the Parliament could take up the Council’s argument in the Swiss MoU case that Article 218 TFEU, even if not applicable, could be relevant in determining the respective roles of the institutions as it reflects the general distribution of powers between the institutions.32
30 See,
eg Case T-192/16, NF v European Council, ECLI:EU:C:2017:762. See this volume, ch 79. v Commission II (n 5) para 40. 32 See s III above. 31 France
850 Anders Neergaard V. ADDITIONAL READING Garcia Andrade, P, ‘The Role of the European Parliament in the Adoption of Non-legally Binding Agreements with Third Countries’ in J Santos Vara and SR Sanchez-Tabernero (eds), The Democratization of EU International Relations through EU-Law (London, Routledge, 2018). Ott, A, ‘Informalization of EU Bilateral Instruments: Categorization, Contestation, and Challenges’ (2020) 39 Yearbook of European Law 569. Wessel, RA, ‘Normative Transformation in EU External Relations: The Phenomenon of “Soft” International Agreements’ (2021) 44 West European Politics 72.
78 The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon: Opinion 3/15 (Marrakesh Treaty) GESA KÜBEK Opinion 3/15, Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled, ECLI:EU:C:2017:114, delivered 14 February 2017. KEYWORDS Common Commercial Policy – CCP – Intellectual property rights – IPRs – Copyright – Mixed agreements – Competences of the Union – Measures having repercussions on trade – Non-commercial aspects of IPRs – ERTA doctrine – ERTA effect – International agreements of the EU – Legal basis.
I. INTRODUCTION
I
n Opinion 3/15, 1 the Court was asked to determine whether the EU has exclusive competence to conclude the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled (hereinafter Marrakesh Treaty2), either by virtue of Article 3(1)(e) TFEU in conjuncture with Article 207 TFEU (Common Commercial Policy, CCP) or the last indent of Article 3(2) TFEU (the ERTA doctrine). The Court found that the Marrakesh Treaty did not fall within the CCP because it principally pursues a non-commercial purpose. In that regard, Opinion 3/15 followed on from earlier case law concerning measures merely having repercussions on trade without promoting,
1 Opinion 3/15, ECLI:EU:C:2017:114. 2 Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled [2013] WIPO-Administered Treaties, TRT/MARRAKESH/001. See further D Conwell, ‘The Miracle at Marrakesh: Doing Justice for the Blind and Visually Impaired While Changing the Culture of Norm Setting at WIPO’ in I Calboli and S Ragavan (eds), Diversity in Intellectual Property: Identities, Interests, and Intersections (Cambridge, Cambridge University Press, 2015) 36–41; K Koklu, ‘The Marrakesh Treaty – Time to End the Book Famine for Visually Impaired Persons Worldwide’ (2014) 45 International Review of Intellectual Property and Competition Law 737.
852 Gesa Kübek facilitating or governing international trade.3 It added to that case law by further defining the concepts of (non-)commercial policy in general, and (non-)commercial aspects of intellectual property rights (IPRs) specifically, in light of Article 207(1) TFEU. Opinion 3/15 was nonetheless paradigmatic for the broad scope of the EU’s exclusive competence post-Lisbon and, by inference, the reduced legal scope for mixity. It exemplified that the Court lowered the threshold for finding ERTA effects post-Lisbon, and it reaffirmed a narrow reading of the ‘minimum harmonisation exception’ established in Opinion 2/91.4 A third theme that emerged from Opinion 3/15 was the relevance of the correct choice of legal basis for exercising implied external competence. The Commission considered the choice of legal basis to be secondary because it deemed Article 3(2) TFEU applicable. Legal uncertainties notwithstanding, it did not ask the Court to clarify the correct choice of legal basis for concluding the Marrakesh Treaty. As a result, the Court remained silent on this issue. II. FACTS
Persons who are blind, visually impaired or otherwise print disabled have limited or no access to published works, such as books, magazines and other printed material, unless those published works are made available in formats that are accessible to them (‘accessible format copies’5). As published works are generally protected by copyright as literary works, their production and distribution as accessible format copies require the consent of the right holder, unless there are exceptions or limitations to copyright. In 2009, the World Intellectual Property Organization (WIPO) initiated the negotiations of the Marrakesh Treaty with a view to establishing a set of international rules that facilitate access to published works for persons who are blind, visually impaired or otherwise print disabled. To achieve this aim, the Marrakesh Treaty uses ‘two separate and complementary instruments’.6 First, it requires the parties to introduce an obligatory limitation or exception to copyright in their respective national laws for the benefit of persons who are blind, visually impaired or otherwise print disabled (essentially Article 4 Marrakesh Treaty); and secondly, it facilitates the cross-border exchange of accessible format copies (Articles 5, 6 and 9 Marrakesh Treaty). On 14 April 2014, the Council adopted a decision on the signature of the Marrakesh Treaty on the basis of Article 114 TFEU and Article 207 TFEU, as proposed by the Commission.7 The subsequent proposal of the Commission to conclude the Marrakesh Treaty on the same dual legal basis did not receive the required majority in the Council.8 The Member States opposed the Commission’s legal view that the Marrakesh Treaty fell within the EU’s exclusive competence, and instead maintained that the Treaty should be concluded as a mixed agreement.9 The Member States issued diverging views about the choice of legal basis within the Committee 3 See especially Opinion 2/00, Cartagena Protocol, ECLI:EU:C:2001:664. See this volume, ch 39. See also Case C-411/06, Commission v Parliament and Council, ECLI:EU:C:2009:51 (Shipments of Waste). 4 Opinion 2/91, ECLI:EU:C:1993:106. See this volume, ch 22. 5 See further Art 2(b) Marrakesh Treaty. According to the WIPO, in 2016, only 1–7% of books were made available as accessible format copies (‘book famine’), www.wipo.int/edocs/pubdocs/en/wipo_pub_marrakesh_overview.pdf. 6 Opinion 3/15 (n 1) para 109. 7 Council Decision (EU) 2014/221 [2014] OJ L115/1. 8 See also Council Legal Service [2017] 9106/17, https://data.consilium.europa.eu/doc/document/ST-9106-2017INIT/en/pdf, para 4. See further A Ramalho, ‘Signed, Sealed, but Not Delivered: The EU and the Ratification of the Marrakesh Treaty’ (2015) 6 European Journal of Risk Regulation 629. 9 See further the statement by Czech Republic, Finland, France, Germany, Romania, Slovakia and Slovenia; the statement by Poland; and the statement by the United Kingdom on the competence of the EU to sign the Marrakesh Treaty [2014] interinstitutional file 2013/0444 (NLE), 8305/14 ADD 1.
The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon 853 of the Permanent Representatives, and subsequently before the Court. Some Member States considered that the Commission’s choice of Article 114 TFEU and Article 207 TFEU was correct. Several other Member States instead advocated recourse to Article 114 TFEU alone. A further group of Member States argued that Article 19 TFEU should have been used, either alone or in conjuncture with Article 114 TFEU and/or Article 207 TFEU. During the hearing, France further referred to Article 209 TFEU.10 In view of the decision-making deadlock in the Council, the Commission asked the Court if the EU had exclusive competence to conclude the Marrakesh Treaty.11 The Commission, the Parliament, and eight12 Member States submitted observations before the Court. The Council did not submit observations essentially because it was not of a single institutional mind.13 III. THE COURT
The Court assessed whether the Marrakesh Treaty fell within the EU’s exclusive competence, either pursuant to Article 3(1)(e) TFEU or pursuant to Article 3(2) TFEU, third indent. The Commission, supported by the Parliament, argued that the Marrakesh Treaty would principally aim to facilitate the cross-border exchange of accessible format copies, ie trade in goods. The harmonisation of certain aspects of the parties’ copyright law would be a simple instrument to that end.14 Advocate General (AG) Wahl also believed that the Marrakesh Treaty fell in part within the CCP. He considered the ‘increase of international trade with regard to accessible format copies [to be] very much at the heart of the system established by the Marrakesh Treaty’.15 Conversely, the Court concluded that the facilitation of international trade was only one of several means through which the Marrakesh Treaty intends to improve the position of persons who are blind, visually impaired or otherwise print disabled by increasing their access to published works.16 First, the Court found that the harmonisation of exceptions and limitations to copyright specified particularly in Article 4 Marrakesh Treaty did not qualify as a ‘commercial’ aspect of IPRs because such harmonisation was not undertaken with a view to facilitating international trade but, instead, the access to published works for persons who are blind, visually impaired or otherwise print disabled.17 Secondly, the Court held that the scheme introduced by Articles 5, 6 and 9 Marrakesh Treaty for the cross-border exchange of accessible format copies was ‘special’,18 as accessible format copies may only be distributed or made available to beneficiary persons19 by authorised entities20 on a non-profit
10 See in more detail, Council Legal Service (n 8) paras 4–5. 11 Opinion 3/15: Request for an opinion submitted by the European Commission pursuant to Art 218(11) TFEU [2015] OJ C 311/13. 12 Observations were submitted by the governments of the Czech Republic, France, Italy, Lithuania, Hungary, Romania, Finland, and the United Kingdom. 13 Council Legal Service (n 8) para 5: ‘The Council did not submit observations because of (…) divisions of the positions especially within the Coreper’. 14 See Written Observations of the Commission in Opinion 3/15 (document requested by the author in accordance with Regulation 1049/2001) paras 50–51. 15 Opinion of AG Wahl, Opinion 3/15, ECLI:EU:C:2016:657, para 73. 16 Opinion 3/15 (n 1) para 70. 17 ibid para 83. See also Recital 12 Marrakesh Treaty. 18 ibid para 97. 19 A beneficiary person is a person who is blind, visually impaired or otherwise print disabled (Art 3 Marrakesh Treaty). Pursuant to Art 2(b) Marrakesh Treaty, an accessible format copy is used exclusively by beneficiary persons. 20 An authorised entity is ‘an entity recognised by the government to provide education, instructional training, adaptive reading or information access to beneficiary persons on a non-profit basis’ (emphasis added) (Art 2(c) Marrakesh Treaty).
854 Gesa Kübek basis.21 Such a special scheme could not qualify as a measure of a commercial nature, and therefore did not constitute an independent objective of the Marrakesh Treaty.22 The Court nevertheless ruled that the Marrakesh Treaty was fully covered by the EU’s exclusive competence, as Directive 2001/2923 could have been affected or altered by the conclusion of the Marrakesh Treaty within the meaning of Article 3(2) TFEU. The Court dismissed the intervening Member States’ argument that they had ‘retained competence’24 because Directive 2001/29 left the introduction of exceptions or limitations to copyright law for the benefit of persons with a disability at the discretion of the Member States.25 Although those provisions of Directive 2001/29 introduced a derogation from the rights harmonised at EU level, the discretion enjoyed by the Member States was confined by EU law, and could not have been used in such a way as to compromise the smooth functioning of copyright law protection within the internal market.26 Moreover, the Court underlined that derogations from harmonised rules, in contrast to minimum requirements, were not, per se, exempted from Article 3(2) TFEU, third indent.27 IV. THE IMPORTANCE OF THE CASE
Opinion 3/15 was delivered in the shadow of Opinion 2/15, and the Grand Chamber avoided touching upon issues that could have become relevant in the subsequent Full Court decision on the EU–Singapore Free Trade Agreement, such as the nature of the EU’s competence over moral rights.28 Yet, the importance of Opinion 3/15 should not be underestimated. It shed significant light on the distinction between international agreements of a commercial and a non-commercial nature. Moreover, Opinion 3/15 illustrated that the Court reduced the threshold for finding an ERTA effect post-Lisbon, making it easier to conclude that an international agreement falls within exclusive EU competence in its entirety. A. The Concept of Non-Commercial Aspects of IPRs The term ‘commercial aspects of intellectual property rights’ included in Article 207(1) TFEU and the title of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) suggest that not all aspects of IPRs are ‘commercial’ or ‘trade-related’. In Daiichi Sankyo,29 the Court found that the entire TRIPs Agreement fell within the scope of the CCP,30 implying that all ‘trade-related’ aspects of IPRs within the meaning of the TRIPs 21 Opinion 3/15 (n 1) paras 94–97. 22 ibid para 99. 23 Directive (EC) 2001/29 [2001] OJ L167/10. Directive 2001/29 was amended by Directive (EU) 2017/1564 [2017] OJ L242/6 to implement in EU law the mandatory exceptions and limitations to copyright for the benefit of persons who are blind, visually impaired or otherwise print disabled prescribed by the Marrakesh Treaty. The Marrakesh Treaty was further implemented by Regulation (EU) 2017/15637 [2017] OJ L242/1. 24 Opinion 3/15 (n 1) para 37. 25 ibid para 113. 26 ibid para 116. 27 ibid para 120. 28 On Opinion 2/15, see M Cremona, ‘Shaping EU Trade Policy post-Lisbon: Opinion 2/15 of 16 May 2017’ (2018) 14 EuConst 231. See this volume, ch 82. 29 See further I Van Damme, ‘Case C-414/11 Daiichi: The Impact of the Lisbon Treaty on the Competence of the European Union over the TRIPs Agreement’ (2015) 4 Cambridge International Law Journal 73. 30 Case C-414/11, Daiichi Sankyo, ECLI:EU:C:2013:520, para 53. See this volume, ch 64.
The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon 855 Agreement are also ‘commercial’ aspects of IPRs within the meaning of Article 207 TFEU.31 It did not, however, clarify whether and when aspects of IPRs qualify as ‘non-commercial’ and, as a result, fall outside the CCP. In reference to Daiichi Sankyo, AG Wahl argued that the conception of the CCP excludes ‘only the non-commercial aspects of intellectual property rights’, ie ‘sectors of intellectual property law which are not strictly or directly concerned with international trade’.32 The AG therefore distinguished different categories of IPRs by their nature.33 In his view, only a ‘residual category’34 of IPRs would not be concerned with international trade. The AG named moral rights as an example for a non-commercial aspect of IPRs,35 which are also excluded from the TRIPs Agreement.36 The Court defined the concept of non-commercial aspects of IPRs differently than the AG. It did not exclude certain aspects of IPRs, such as moral rights, categorically from the scope of Article 207(1) TFEU.37 That reasoning suggests that at least most categories of IPRs may display a specific link with international trade, and are not, per se, assumed to be of a non-commercial nature.38 It equally suggests that IPRs, irrespective of their categorisation, may exceptionally fall outside the scope of the CCP if the corresponding agreement does not principally intend to harmonise or strengthen the international protection of intellectual property but, instead, predominantly pursues a non-commercial purpose.39 The distinction between commercial and non-commercial aspects of IPRs can therefore only be drawn on a case-by-case basis, taking account of the specific objective, context and regulatory regime established by individual agreements governing IPRs. B. The Commercial Nature of the CCP Opinion 3/15 raised broader questions about the commercial nature of the CCP as a whole. As was explained above, Articles 5, 6 and 9 Marrakesh Treaty concern the cross-border exchange of goods, namely accessible format copies. Pursuant to Article 5(1) Marrakesh Treaty, accessible format copies may only be distributed or made available by an authorised entity to a beneficiary person or an authorised entity in another contracting party. Pursuant to Article 2(c) Marrakesh Treaty, authorised entities operate on a non-profit basis. Hence, in contrast to the general model of an open-economy supply-and-demand analysis, the Marrakesh Treaty does not envisage that goods, ie accessible format copies, are freely traded between buyers and sellers at market-clearing price. Instead, it facilitates the cross-border
31 It may be noted that the TRIPs Agreement also contains rules stipulating exceptions to IPRs for non-commercial use. A topical example in light of the COVID-19 pandemic is compulsory licensing in the case of national emergency, extreme urgency or public non-commercial use (Art 31(b) TRIPs Agreement). See further J Bäumler and J P Terhechte, ‘Handelsbeschränkungen und Patentschutz für Impfstoffe’ (2020) 48 Neue Juristische Wochenschrift 3481. 32 Opinion of AG Wahl in Opinion 3/15 (n 15) para 56. 33 See also Opinion of AG Cruz Villalón in Case C-414/11, Daiichi Sankyo, ECLI:EU:C:2013:49, para 68, who suggested a ‘compartmentalised’ interpretation of the concept of commercial aspects of IPRs. 34 Opinion of AG Wahl in Opinion 3/15 (n 15) para 56. 35 ibid. 36 Moral rights are covered by Art 6 bis Berne Convention and are thus part of the general exemption stipulated in Art 9.1 TRIPs Agreement. 37 Opinion 3/15 (n 1) para 85. 38 ibid para 79. 39 ibid paras 82–85.
856 Gesa Kübek exchange of goods between a specific and confined group of operators and recipients, and generally on a non-profit basis.40 Both the Commission, in its written observations,41 and AG Wahl argued that it is irrelevant for the CCP if goods or services are being exchanged for the purpose of making a profit or supplied free of charge. The fact that goods and services may be exchanged on a non-profit basis would ‘not imply that those goods or services are not traded’.42 Conversely, the Court found that the mere exchange of goods and services cross-border is not enough to bring that exchange within the scope of the CCP. It admitted that there is ‘no doubt’ that the rules of the Marrakesh Treaty pertaining to the cross-border exchange of accessible format copies ‘relate to international trade in such copies’.43 Yet, the Court did not find any indication that these provisions follow a distinct objective other than that of the Marrakesh Treaty as a whole, ie improving the position of persons who are blind, visually impaired or otherwise print disabled by increasing their access to published works.44 In this respect, the Court applied the reasoning it advanced in Opinion 2/00 and Shipments of Waste by analogy, highlighting that, irrespective of the broadening of the CCP by the Treaty of Lisbon, there may be situations where an international agreement has repercussions on trade without simultaneously pursuing a commercial purpose.45 The Court found that the cross-border exchange promoted by the Marrakesh Treaty is ‘outside the normal framework of international trade’ because it covers only exports and imports which are intended for beneficiary persons, possibly through authorised entities, on a non-profit basis.46 That conclusion suggests, by inference, that the term ‘commercial’ within the meaning of Article 207 TFEU generally implies that international trade is liberalised between all potential buyers and sellers, with the aim of making a profit.47 C. ERTA Doctrine, Part One: A Partial but Still Largely (Enough) Covered Area The Treaty of Lisbon expressly recognised the EU’s implied exclusive competence, which found its conceptual origin in the ERTA judgment.48 As is well known, the third indent of Article 3(2) TFEU only partially codifies the judge-made two-level ERTA test,49 which the Court nonetheless applies post-Lisbon.50 Accordingly, the EU’s competence to conclude an 40 Pursuant to Art 4(5) Marrakesh Treaty, the national lawmaker may decide whether exceptions or limitations to copyright are subject to a remuneration. Yet, ‘such remuneration may be envisaged only within the limits imposed by the fact that the exporter’s activities are undertaken on a non-profit basis’. See Opinion 3/15 (n 1) para 93. 41 The Commission maintained that ‘trade in any product or service’ is covered by Art 207(1) TFEU because the TFEU would not ‘provide for an exception when goods or services are provided on a “non-profit” basis’. See Observations of the Commission in Opinion 3/15 (n 14) para 57. 42 Opinion of AG Wahl in Opinion 3/15 (n 15) para 53. 43 Opinion 3/15 (n 1) para 87. 44 ibid para 89. 45 See Opinion 2/00 (n 3) para 40; Shipments of Waste (n 3) para 70. See further C Herrmann, ‘Die EG-Außenkompetenzen im Schnittbereich zwischen internationaler Umwelt- und Handelspolitik’ (2002) 21 Neue Zeitschrift für Verwaltungsrecht 1168. 46 Opinion 3/15 (n 1) para 97. 47 G Kübek, ‘Redefining the Boundaries of the Common Commercial Policy and the ERTA Doctrine: Opinion 3/15, Marrakesh Treaty’ (2018) 55 CML Rev 883, 895. 48 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA). See this volume, ch 1. See also G Butler and R A Wessel, ‘Happy Birthday ERTA! 50 Years of the Implied External Powers Doctrine in EU Law’, https://europeanlawblog.eu/2021/03/31/happy-birthday-erta-50-years-of-the-implied-external-powers-doctrine-in-eu-law/. 49 See esp M Cremona, ‘A Constitutional Basis for Effective EU External Action? An Assessment of the Provisions on EU External Action in the Constitutional Treaty’, EUI Working Paper Law 2006/30. 50 Case C-114/12, Commission v Council, ECLI:EU:C:2014:2292 (Broadcasting Organisations) para 67.
The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon 857 international agreement is exclusive if that agreement concerns an area that is largely covered by EU law and insofar as its conclusion may affect or alter common EU rules.51 In Opinion 3/15, the intervening Member States argued that the Marrakesh Treaty was not largely covered by internal EU legislation. Indeed, Article 5(3)(b) and (4) of Directive 2001/29 left the introduction of an exception or limitation to copyright for the benefit of persons with a disability fully at the discretion of Member States.52 The intervening Member States therefore claimed that they had ‘retained’ competence with regard to introducing such exceptions or limitations to copyright, and that the Marrakesh Treaty did not alter or affect common EU rules. In its prior case law, notably Opinion 1/0353 and Green Network,54 the Court had already confirmed that a ‘considerable latitude’ on the side of the Member States in the implementation of a Directive does not preclude a material area from being largely covered by common EU rules.55 The Court further advanced this line of reasoning in Opinion 3/15. It admitted that Directive 2001/29 ‘brought about only a partial harmonisation of copyright and related rights’ (emphasis added).56 A literal interpretation of the term ‘partial harmonisation’ might suggest that the first stage of the ERTA test, ie the ‘area largely covered’ criterion, was not fulfilled.57 Yet, the Court emphasised that the legislative discretion granted to the Member States by Directive 2001/29 was authorised and heavily circumscribed by EU law, considering the boundaries of that discretion, as it were, as part of the ‘area largely covered’ by EU law.58 It found that the Member States could not have used their legislative discretion ‘in such a way as to compromise the objectives of Directive 2001/29 which relate … to the establishment of a high level of protection for authors and to the smooth functioning of the internal market’.59 As regards this finding, Chamon rightly observed that ‘by qualifying the telos of [implied60] exclusivity itself as the objective pursued by the directive, the Court sets up a circular reasoning destined to find an ERTA effect’.61 Opinion 3/15 is thus an excellent example to demonstrate that the Court 51 On the pre-Lisbon evolution of the ERTA test, see, eg A Dashwood and J Heliskoski, ‘The Classic Authorities Revisited’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 3; J Temple Lang, ‘The ERTA Judgement and the Court’s Case Law on Competence and Conflict’ (1986) 6 Yearbook of European Law 183; P Mengozzi, European Community Law, 2nd edn (London, Kluwer Law International, 1999) 292–93; P Mengozzi, ‘The EC External Competencies: From the ERTA Case to the Opinion in the Lugano Convention, The Past and Future of EU Law’ in MP Maduro and L Azoulai (eds), The Past and Future of EU Law (Oxford, Hart Publishing, 2010) 213. On the post-Lisbon developments, see T Verellen, ‘The ERA Doctrine in the Post-Lisbon Era: Note under Judgment in Commission v Council (C-114/12) and Opinion 1/13’ (2015) 21 Columbia Journal of European Law 383; A Arena, ‘Exercise of EU Competences and Pre-emption of Member States’ Powers in the Internal and the External Sphere: Towards “Grand Unification”?’ (2016) 35 Yearbook of European Law 28; M Chamon, ‘Implied Exclusive Powers in the ECJ’s Post-Lisbon Jurisprudence: The Continued Development of the ERTA Doctrine’ (2018) 55 CML Rev 1101. 52 Directive (EC) 2001/29 (n 23). 53 Opinion 1/03, ECLI:EU:C:2006:81. See further this volume, ch 46. 54 Case C-66/13, Green Network, ECLI:EU:C:2014:2399. 55 ibid para 54. 56 Opinion 3/15 (n 1) para 115. 57 R Schütze, Foreign Affairs and the EU Constitution: Selected Essays (Cambridge, Cambridge University Press, 2014) 291 et seq. 58 See also Kübek (n 47) 897. 59 Opinion 3/15 (n 1) para 124. 60 Some authors use the term ‘supervening exclusivity’, post-Lisbon, to refer to implied exclusivity. For the sake of simplicity, the present chapter uses the same term pre- and post-Lisbon. See further esp A Dashwood, ‘Mixity in the Era of the Treaty of Lisbon’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited: The EU and its Member States in the World (Oxford, Hart Publishing, 2010) 360; A Rosas, ‘Exclusive, Shared and National Competence in the Context of EU External Relations: Do Such Distinctions Matter?’ in I Govaere, E Lannon, P Van Elsuwege and S Adam (eds), The European Union in the World: Essays in Honour of Marc Maresceau (Leiden, Brill/Martinus Nijhoff, 2014) 27. 61 Chamon (n 51) 1126.
858 Gesa Kübek lowered the threshold for triggering ERTA effects post-Lisbon. It is true that the Court’s more lenient application of the ERTA test narrowed the material scope of areas not covered by EU exclusive competence and, by inference, the legal scope for mixity.62 Nonetheless, as Bolaert pointed out, ‘in the inter-institutional discourse, mixity of international agreements remains somewhat of a battleground, albeit a shrinking one’.63 D. ERTA Doctrine, Part Two: ‘Derogations from’ versus ‘Minimum Level of’ Harmonisation In Opinion 2/91, the Court found that Convention No 170 of the International Labour Organization (ILO) did not alter or affect existing EU directives within the meaning of the ERTA doctrine, as the existing directives only established a level of minimum harmonisation (‘minimum harmonisation exception’). The ILO Convention provided for a higher level of protection than common rules and therefore complemented the attainment of the Union’s internal objectives.64 Opinion 3/15 marked the second instance65 where Member States invoked the ‘minimum harmonisation exception’ post-Lisbon.66 Several Member States contended that Article 5(3) (b) and (4) of Directive 2001/29 set minimum requirements because it left the introduction of exceptions and limitations to copyright for the benefit of persons with a disability at the legislative discretion of the Member States. The Court disagreed. Instead of setting a minimum level of protection, Article 5(3)(b) and (4) of Directive 2001/29 introduced a ‘derogation from the rights harmonised by the EU legislature’ (emphasis added) that permitted the Member States, within the limits imposed by EU law, to deviate from the otherwise harmonised Union standards.67 The Court found that the situation was not comparable to that in Opinion 2/91, where EU law set a minimum level of protection while leaving the Member States’ competence to provide for greater protection untouched. Indeed, had Member States relied on Article 5(3)(b) and (4) of Directive 2001/29 to introduce exceptions or limitations to copyright for the benefit of persons with a disability, they would have lowered – and not raised – the level of copyright protection generally afforded at Union level.68 Therefore, Article 5(3)(b) and (4) of Directive 2001/29 did not qualify as a minimum requirement and, by inference, did not, per se, exclude ERTA effects. Verellen correctly observed that the explicit distinction between ‘derogations from’ and a ‘minimum level of’ harmonisation reaffirmed
62 M Chamon, ‘Constitutional Limits to the Political Choice for Mixity’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018) 137. 63 S Boelaert, ‘Mixity versus Unity: A View from the Other Side of the Rue de la Loi’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill, 2020) 251, 252. 64 Opinion 2/91 (n 4) para 18. See this volume, ch 22. 65 The first instance was Broadcasting Organisations (n 50). AG Sharpston also returned to the ‘minimum harmonisation exception’, pointing out that Art 8(3) of Directive 2006/115 only governed rebroadcasting by wireless means, leaving legal space for the Member States to implement such a right for the retransmission by wire or cable in the context of concluding the Broadcasting Rights Convention (Opinion of AG Sharpston, Case C-114/12, Commission v Council, ECLI:EU:C:2014:224 (Broadcasting Organisations) paras 148–50). The Court, however, dismissed that claim. It found that common EU rules ‘assign[ed] a precise material scope to the right of retransmission’ (para 91). See further Verellen (n 51). 66 See further A Arena, ‘The ERTA Pre-emption Effects of Minimum and Partial Harmonisation Directives: Insights from Opinion 3/15 on the Competence to Conclude the Marrakesh Treaty’ (2018) 43 EL Rev 770; T Verellen, ‘Opinion 3/15 on the Marrakesh Treaty: ECJ Reaffirms Narrow “Minimum Harmonisation” Exception to ERTA Principle’ (2017) 42 Revista General de Derecho Europeo 160. 67 Opinion 3/15 (n 1) para 121. 68 ibid.
The Concept of (Non-)Commerciality and the ERTA Doctrine Post-Lisbon 859 a narrow reading of the Opinion 2/91 exception.69 That finding bodes well with the Court’s general tendency to tilt towards (implied) exclusivity post-Lisbon. The added legal clarity about the conception of the ‘minimum harmonisation exception’ may, nonetheless, enable the Member States to invoke that exception more successfully in the future. E. The Relevance of Legal Bases for Exercising Implied External Competence The Commission’s request for Opinion 3/15 related exclusively to the nature of the Union’s competence to conclude the Marrakesh Treaty. It did not ask the Court to clarify the correct choice of legal basis. In its written submissions, the Commission asserted that ‘the nature of the competence based on Article 3(2) TFEU is independent from the legal basis’.70 Once Article 3(2) TFEU applied, according to the Commission, the legal basis would ‘becom[e] secondary, as its determination cannot change the nature of the competence to conclude [an agreement]’.71 Nevertheless, the Commission considered it ‘important’ to know the correct choice of legal basis for concluding the Marrakesh Treaty.72 By contrast, AG Wahl considered it ‘necessary’ to clarify the correct choice of legal basis prior to determining whether the EU has exclusive competence.73 In view of the Marrakesh Treaty’s aim to increase access to published work for persons with a disability, he considered that Article 19(1) TFEU should be one of the legal bases for concluding the Marrakesh Treaty.74 Article 19(1) TFEU stipulates that the Council shall act unanimously. This raised further questions with regard to the applicable voting majority in the Council for adopting a decision on the conclusion of the Marrakesh Treaty on behalf of the Union. The emergence of these questions, in turn, demonstrated that the choice of legal basis is not generally ‘secondary’ in the context of Article 3(2) TFEU, as the Commission maintained. The Court precisely adhered to the request for Opinion 3/15, and remained silent on the correct choice of legal basis, leaving that choice fully at the discretion of the EU institutions. The Council decision on the conclusion of the Marrakesh Treaty was ultimately based on Article 114 TFEU alone, implying that the Council voted by a qualified majority.75 Whether Article 114 TFEU was correctly chosen as a single legal basis remains uncertain, especially in light of the AG’s perspective. In view of the constitutional76 and practical relevance of the correct choice of legal basis, including, as Opinion 3/15 showed, for exercising implied external competence, it may only be hoped that the EU institutions and the Member States will, in case of legal doubt, include this aspect in future requests to the Court pursuant to Article 218(11) TFEU.77 69 Verellen, ‘Opinion 3/15 on the Marrakesh Treaty’ (n 66). 70 Written observations of the Commission (n 14) para 40. 71 ibid para 75. 72 ibid para 40. 73 Opinion of AG Wahl in Opinion 3/15 (n 15) para 31. 74 ibid para 86. 75 Council Decision (EU) 2018/254, [2018] OJ L48/1. 76 The Court has repeatedly held that the legal basis of an EU act has constitutional significance. See, eg Opinion 2/00 (n 3) para 5. 77 A request for an Opinion pursuant to Art 218(11) TFEU may also concern the choice of legal basis. See Opinion 2/92, ECLI:EU:C:1995:83. See this volume, ch 29. On Art 218(11) TFEU, see further G Butler, ‘Pre-Ratification Judicial Review of International Agreements to be Concluded by the European Union’ in M Derlén and J Lindholm (eds), The Court of Justice of the European Union: Multidisciplinary Perspectives (Oxford, Hart Publishing, 2018) 53; M Cremona, ‘The Opinion Procedure under Article 218(11) TFEU: Reflections in the Light of Opinion 1/17’ (2020) 4 Europe and the World: A law review 1; J Heliskoski, ‘The Procedural Law of International Agreements: A Thematic Journey through Article 218 TFEU’ (2020) 57 CML Rev 79.
860 Gesa Kübek V. ADDITIONAL READING Arena, A, ‘The ERTA Pre-emption Effects of Minimum and Partial Harmonisation Directives: Insights from Opinion 3/15 on the Competence to Conclude the Marrakesh Treaty’ (2018) 43 EL Rev 770. Conwell, D, ‘The Miracle at Marrakesh: Doing Justice for the Blind and Visually Impaired while Changing the Culture of Norm Setting at WIPO’ in I Calboli and S Ragavan (eds), Diversity in Intellectual Property: Identities, Interests, and Intersections (Cambridge, Cambridge University Press, 2015) 36. Koklu, K, ‘The Marrakesh Treaty – Time to End the Book Famine for Visually Impaired Persons Worldwide’ (2014) 45 International Review of Intellectual Property and Competition Law 737. Kübek, G, ‘Redefining the Boundaries of the Common Commercial Policy and the ERTA Doctrine: Opinion 3/15, Marrakesh Treaty’ (2018) 55 CML Rev 883. Ramalho, A, ‘Signed, Sealed, but Not Delivered: The EU and the Ratification of the Marrakesh Treaty’ (2015) 6 European Journal of Risk Regulation 629. Verellen, T, ‘Opinion 3/15 on the Marrakesh Treaty: ECJ Reaffirms Narrow “Minimum Harmonisation” Exception to ERTA Principle’ (2017) 42 Revista General de Derecho Europeo 160.
79 Attribution of Authorship of ‘EU’ Legal Acts: NF and Others v European Council MAURO GATTI Case T-192/16, NF v European Council, ECLI:EU:T:2017:128; Case T-193/16, NG v European Council, ECLI:EU:T:2017:129; T-257/16, NM v European Council, ECLI:EU:T:2017:130, delivered 28 February 2017; Joined Cases C-208/17 P to C-210/17 P, NF and Others v European Council, ECLI:EU:C:2018:705, delivered 12 September 2018. KEYWORDS EU–Turkey Statement – EU–Turkey deal – Migration – Refugees – Authorship of EU acts – Soft law – Acte de gouvernement – Atto politico – Political question doctrine – Judicial passivism – Judicial avoidance – Rule of law – Values.
I. INTRODUCTION
T
he EU increasingly concludes informal ‘deals’ with countries of origin and transit of migrants to reduce border crossings. According to critics, such arrangements might prevent refugees’ access to asylum and foster human rights violations.1 The EU–Turkey Statement of 18 March 2016 (hereinafter the Statement) is the most (in-)famous migration ‘deal’.2 The Statement was the object of three annulment actions (NF, NG and NM), dismissed by the General Court on the ground of its lack of jurisdiction. The appeals against these General Court’s orders were also dismissed by the Court. This case is relevant, firstly, because it highlights the ambiguity of the case law on the authorship of legal acts. The General Court arguably exploited such ambiguity by ruling, counter-intuitively, that the EU–Turkey Statement was, in its view, authored by the Member States. Secondly, the case suggests that, in politically sensitive situations, the EU courts are
1 See, eg I van Liempt et al, ‘Evidence-Based Assessment of Migration Deals: The Case of the EU–Turkey Statement’ (Utrecht University, 2017), https://migratiedeals.sites.uu.nl/wp-content/uploads/sites/273/2017/12/20171221-FinalReport-WOTRO.pdf. 2 European Council, ‘EU–Turkey Statement, 18 March 2016’, www.consilium.europa.eu/en/press/press-releases/ 2016/03/18/EU-Turkey-statement.
862 Mauro Gatti willing to exercise (excessive) restraint. Several commentators stigmatised the General Court’s orders as instances of ‘judicial passivism’.3 In light of the appeal – obtained from the appellants’ lawyers – the order of the Court also appears as a case of ‘judicial passivism’.4 II. FACTS
To address the so-called ‘refugee crisis’ of 2015, the Union entered into a dialogue with Turkey, culminating in three meetings of EU and Turkish leaders (on 29 November 2015, 7 March 2016 and 18 March 2016). The 18 March 2016 meeting took place in the Council building in Brussels and its results were published on the Council website as a press release titled the ‘EU–Turkey Statement’. The statement confirms the commitments undertaken in the previous two meetings and affirms that ‘the EU and Turkey’ agreed on additional action points. This included that: ‘All new irregular migrants crossing from Turkey into Greek islands as from 20 March 2016 will be returned to Turkey’, and ‘For every Syrian being returned to Turkey from Greek islands, another Syrian will be resettled from Turkey to the EU’ (the so-called ‘1:1 scheme’). In exchange for Turkey’s commitments, the EU undertook several engagements, such as speeding up the disbursement of €3 billion committed under the ‘EU Facility for Refugees in Turkey’5 and mobilising an additional €3 billion. In April 2016, three asylum seekers (known as NF, NG and NM) who had entered Greece from Turkey brought three actions against the European Council, claiming that the General Court should annul ‘The agreement between the European Council and Turkey dated 18 March 2016’.6 III. THE COURTS
The General Court dismissed the case brought by NF, NG and NM through three orders issued on 28 February 2017. As the orders are almost identical, they henceforth will only be referred to as the NF order. In the NF order, the General Court recalled that, under the case law, it is possible to seek the annulment of all measures adopted by the EU institutions, irrespective of their nature or form, provided that they are intended to have legal effects.7 It is necessary, at any rate, to determine whether the contested measure may be attributable to an EU institution ‘having regard to its content and all the circumstances in which it was adopted’.8 The General Court focused
3 I Goldner Lang, ‘Towards “Judicial Passivism” in EU Migration and Asylum Law?’ in T Ćapeta, I Goldner Lang and T Perišin (eds), The Changing European Union: A Critical View on the Role of Law and Courts (Oxford, Hart Publishing, 2022); see also, among others, E Cannizzaro ‘Denialism as the Supreme Expression of Realism: A Quick Comment on NF v European Council’ (2017) 1 European Papers 251. 4 For an early criticism of the Court’s order, see A Guérin, ‘Déclaration UE–Turquie du 18 mars 2016: la CJUE ou les singes de la sagesse’ (2019) 16 Revue des droits de l’homme, para 37; E Cannizzaro, ‘Fundamental Values and Fundamental Disagreement in Europe’ (2018) 2 European Papers 469, 472. 5 See Commission Decision of 24 November 2017, C (2015) 9500 final, on the coordination of the actions of the Union and of the Member States through a coordination mechanism – the Refugee Facility for Turkey. 6 Rectius, the form of order sought by the applicant must be understood as seeking the annulment of a measure by which the European Council sought to conclude, on behalf of EU, an agreement with Turkey, see Case T-192/16, NF v European Council, ECLI:EU:T:2017:128, para 46. 7 ibid; see also paras 42–43. 8 ibid paras 45 and 47.
Attribution of Authorship of ‘EU’ Legal Acts 863 initially on the context, finding that the Statement was preceded by two meetings between EU and Turkish authorities, where the representatives of Member States allegedly participated as national representatives. This was demonstrated, according to the General Court, by the press releases following those meetings, which affirm that Turkish representatives met with ‘[European Union] Heads of State or Government’.9 The content of the EU–Turkey Statement of 18 March 2016 differed from the previous two statements in referring to the ‘Members of the European Council’ and to action points agreed by the ‘European Union’. The Statement might thus suggest that the representatives of the Member States participated in the meeting of 18 March 2016 ‘in their capacity as members of the “European Council”’.10 However, according to the European Council, the expression ‘Members of the European Council’ must be understood as a reference to the ‘Heads of State or Government of the Member States’; the reference to the ‘EU’ is purportedly ‘explained by the emphasis on simplification of the words used for the general public in the context of a press release’.11 The General Court accepted this explanation, and held that the expression ‘Members of the European Council’ and the term ‘EU’ are ‘ambivalent’.12 To clarify these purportedly ambivalent expressions, the General Court referred to documents produced by the European Council (thus implicitly shifting the focus back to the context). Various ‘items of press material’, an internal note of the Council protocol and the invitations sent by the President of the European Council to EU Member States and Turkey refer to the ‘[European Union] Heads of State or Government’.13 These documents allegedly demonstrated, ‘notwithstanding the regrettably ambiguous terms of the EU–Turkey statement’, that the Member States’ representatives participated in the meeting of 18 March 2016 ‘in their capacity as Heads of State or Government of the Member States’.14 This conclusion was, according to the General Court, unaffected by the participation of the President of the European Council and the President of the European Commission in the meeting of 18 March 2016: they were performing representation tasks ‘conferred’ by the Member States or at their ‘invitation’.15 The General Court concluded that the Statement cannot be regarded as a measure adopted by the European Council (or by other EU institutions, bodies, offices or agencies), but was entered into by the Heads of State or Government of EU Member States.16 According to settled case law, the EU courts do not have jurisdiction to rule on the lawfulness of an international instrument concluded by the Member States.17 The General Court therefore dismissed the action on the grounds that it lacked jurisdiction, and did not rule on the substantive issues raised by this case, such as the definition of the legal effects of the Statement.18 NF, NG and NM subsequently lodged appeals at the Court (later joined in NF and others v Council). The Court also dismissed the appeals with an order of 12 September 2018; the
9 ibid paras 49–51. 10 ibid paras 54 and 56. 11 ibid para 57; see also paras 58–60. 12 ibid para 61. 13 ibid paras 63–65. 14 ibid para 66. 15 ibid para 67–68. 16 ibid para 71. 17 ibid para 73; see eg Case C-146/13, Spain v Parliament and Council, ECLI:EU:C:2015:298, para 101; Joined Cases C-181/91 and C-248/91, Parliament v Council and Commission, ECLI:EU:C:1993:271 (Bangladesh Aid) para 14. See this volume, ch 23. 18 The General Court (First Chamber) incidentally affirms that the Statement contains ‘political commitments’ in Case T-851/12, Access Info Europe v Commission, ECLI:EU:T:2018:69, para 90.
864 Mauro Gatti Court found that the appeals were ‘manifestly inadmissible’ because they were ‘incoherent’, and did not indicate with precision ‘the contested elements in the orders under appeal or the legal arguments specifically advanced in support of the application for annulment’.19 According to the Court, ‘the appeals contain assertions and allegations that are also inadmissible’.20 The appellants, according to the Court, did not provide any legal argument to demonstrate how the General Court erred in law regarding its alleged failure to state reasons.21 The appellants did not ‘specifically’ identify the evidence that had been distorted by the General Court.22 They also made an ‘unsubstantiated’ claim regarding the General Court’s decision to analyse ‘form rather than substance’ and its failure to examine the competence of the author of the Statement. Finally, the appellants did not identify any error of law in this respect.23 IV. THE IMPORTANCE OF THE CASE
The NF case is important for two reasons. On the one hand, the General Court’s NF order suggests that the criteria for the attribution of legal acts are not clearly defined in the case law (section IVA). On the other hand, NF points at ‘judicial passivism’: both the General Court and the Court of Justice arguably avoided ruling on the substance of this case for political reasons (section IVB). A. Imprecise Criteria on the Authorship of Legal Acts Over the course of European integration, it has often been difficult to distinguish between acts adopted jointly by the representatives of EU Member States and acts of the (European) Council.24 The case law suggests that, to determine the author of an act, one should employ not formal criteria (eg the nomen of a legal act), but substantive criteria.25 However, the application of such criteria is complicated for two reasons. First, the case law does not consistently identify the substantive criteria that should be used to define the author of a legal act. The ERTA judgment suggested that the distribution of competences is crucial. To decide whether the contested act had been adopted by the Council, the Court determined first of all whether ‘power to negotiate and conclude’ the act ‘was vested in the community or in the Member States’.26 The Court found the act to be authored by the Council since it ‘dealt with a matter falling within the power of the Community’.27 In European Development Fund, the Court referred to both the distribution of competences and the content of the contested act, by holding that the determination of the author of an international convention ‘depends on an interpretation of the Convention and on how in Community law powers are distributed between the Community and its Member States’.28 19 Joined Cases C-208/17 P to C-210/17 P, NF and Others v European Council, ECLI:EU:C:2018:705 para 16. 20 ibid para 19. 21 ibid paras 20–22. 22 ibid paras 25–29. 23 ibid paras 23–24. 24 See, eg F Bellanger, ‘Contribution à l’etude de la nature juridique des “Accords de Luxembourg” du 29 janvier 1966’ (1968) 2 Nederlands Tijdschrift Voor Internationaal Recht 179. 25 Bangladesh Aid (n 17) para 14. See this volume, ch 23. 26 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA) paras 4–5. See this volume, ch 1. 27 ibid para 52. 28 Case C-316/91, Parliament v Council, ECLI:EU:C:1994:76 (European Development Fund) para 24. See further this volume, ch 24.
Attribution of Authorship of ‘EU’ Legal Acts 865 More recently, in Representatives of the Governments of Member States and Council v Sharpston, the Vice-President of the Court only analysed the content of the contested act in order to assess its authorship.29 The Bangladesh Aid judgment adopted a different approach, emphasising both content and context, in that one must have regard to the ‘content and all the circumstances’ in which an act was adopted.30 Nonetheless, the Court implicitly acknowledged the relevance of competences, by noting that the contested act fell within the scope of a non-exclusive Union competence and therefore the Member States ‘were not precluded from exercising their competence in that regard collectively’.31 Three criteria seem relevant for the assessment of the authorship of an act: (i) the distribution of competences; (ii) the content of the act; and (iii) the context in which it was adopted. It is unclear, however, whether all three criteria should be applied in every case, and what weight they should have. ERTA suggested that the criterion of competence should be applied first: if it is demonstrated that a certain act falls within the scope of exclusive EU competences, that act should be attributed to the Union.32 However, European Development Fund pointed to the simultaneous assessment of both competence and content, while Bangladesh Aid hinted at content and context (and, perhaps, competence) and Representatives of the Governments of the Member States and Council v Sharpston focused on content only. This ambiguity in the case law weakens legal certainty and leads to arbitrary results, since the EU courts might discretionally employ the criteria that suit their policy preferences. This risk is elucidated by the order in NF v European Council in the General Court: the Court applied only two criteria – content and context – citing the point in Bangladesh Aid that refers to them.33 The General Court completely disregarded the criterion of competence, and never cited either the European Development Fund case or the paragraph of Bangladesh Aid referring to competences. The General Court’s disregard for the distribution of competences is regrettable, considering that the EU–Turkey Statement arguably encroaches on EU exclusive competences.34 The Statement concerns the disbursement of EU funds included in the ‘EU Facility for Refugees in Turkey’35 and acts relating to expenditure that the Union assumed should be attributed to the Union.36 Moreover, the commitments contained in the Statement fall within an area that is already covered to a large extent by ‘common rules’ (the EU–Turkey Readmission Agreement) and therefore pertains to exclusive EU competences.37 As the EU–Turkey Statement deals ‘with
29 Orders of the Vice-President of the Court, Case C-424/20 P(R), Representatives of the Governments of the Member States v Eleanor Sharpston, ECLI:EU:C:2020:705, para 23; Order of the Vice-President of the Court, Case C-423/20 P(R), Council v Eleanor Sharpston, ECLI:EU:C:2020:700, para 23; see also Opinion of AG Tesauro in Case C-327/91, France v Commission, ECLI:EU:C:1993:941, para 19. See this volume, ch 26. 30 Bangladesh Aid (n 17) para 14. See this volume, ch 23. 31 Bangladesh Aid (n 17); to that effect, see also Opinion of AG Jacobs, Joined Cases C-181/91 and C-248/91, Parliament v Council, ECLI:EU:C:1992:520 (Bangladesh Aid) paras 20, 22 and 25. 32 To that effect, see FP Mansi, ‘La Corte di giustizia e gli atti comunitari “di confine”’ (1996) 4 Il diritto dell’Unione europea 1077; see also Bellanger (n 24) 185–90. 33 General Court, NF (n 6) paras 45 and 48. 34 See N Idriz, ‘The EU–Turkey Statement or the “Refugee Deal”: The Extra-legal Deal of Extraordinary Times?’ (2017) Asser Institute Research Paper; C Molinari, ‘EU Institutions in Denial: Non-agreements, Non-signatories, and (Non-)Effective Judicial Protection in the EU Return Policy’ (2019) Maastricht Faculty of Law Working Paper Series, 2019/02, 18; Cannizzaro, ‘Denialism as the Supreme Expression of Realism’ (n 3) 253–55. 35 See s II above. 36 See, mutatis mutandis, EDF (n 28) para 38. 37 See Art 3(2) TFEU and, inter alia, Opinion 2/15, ECLI:EU:C:2017:376, paras 180–81. See also the Agreement between the European Union and the Republic of Turkey on the readmission of persons residing without
866 Mauro Gatti a matter falling within the power of the [Union]’, it could not be adopted by the Member States.38 Secondly, the case law is ambiguous because it does not define the meaning of the criteria for the attribution of EU legal acts. In particular, what is the ‘context’ of an act? In NF v European Council, the General Court defined such ‘context’ through documents of the European Council, such as items of press material and an internal note.39 However, this is a very selective definition. The General Court should also have taken into account other elements of the context, such as the political framework of the Statement. This act was part of the political dialogue between Turkey and the Union: the Statement indeed refers to the ‘Customs Union’, ‘accession talks’ and ‘visa liberalisation’.40 The conduct of EU institutions is another essential element of the context: the European Council confirmed its authorship of the Statement by expressly reiterating, in its conclusions of 15 December 2016, ‘its commitment to the EU–Turkey statement’ (emphasis added).41 The conduct of Turkey goes in the same direction: when it provided assurances regarding the treatment of Syrian citizens, it wrote to the European Commission.42 Procedural aspects are also relevant as part of the context of an act. The Statement was de facto proposed by the Commission, which introduced ideas such as the ‘1:1 scheme’ through a Communication on 16 March 2016.43 The Statement was then negotiated in the Council building, with the support of the President of the European Council and the President of the European Commission, and its outcome was published on the Council website.44 None of these elements, taken in isolation, are sufficient to demonstrate that the Statement was adopted by the Union: the Commission’s proposal does not necessarily imply that the Statement was adopted through an EU procedure;45 the Council building might have been used for practical reasons;46 and the Member States may entrust tasks to EU institutions outside the framework of the Union.47 Nonetheless, one cannot simply ignore that almost all the circumstances in which the Statement was adopted point towards Union authorship. The ambiguity of the case law possibly facilitated the selective application of the law in the NF order of the General Court. Similar incidents might occur again in the future, since the EU and its Member States are increasingly involved in opaque ‘deals’ with third countries.48 At any rate, even clearer legal standards might not have affected the outcome of the NF case.
authorisation, [2014] OJ L134/3. The readmission obligations under the agreement became applicable on 1 June 2016, see Commission Communication COM (2016) 231 final, 5 38 cf ERTA (n 26) para 52. 39 General Court, NF (n 6) paras 64–65. 40 See further A Ott, ‘Informalization of EU Bilateral Instruments: Categorization, Contestation, and Challenges’ (2020) 39 Yearbook of European Law 569, 596; Guérin (n 4) para 26. 41 European Council conclusions, 15 December 2016, EUCO 34/16, para 1. 42 Permanent Delegation of Turkey to the EU, Letter to the Director General of the DG Migration and Home Affairs of the European Commission, 24 April 2016, Ref Ares(2016)1974245 – 24/04/2016, available at www.statewatch.org/ media/documents/news/2018/jan/eu-com-turkey-letters.pdf. 43 Commission Communication COM (2016) 166 final, p 5. 44 These elements also suggest that the EU intended to be bound by the EU–Turkey Statement, notwithstanding the probable violation of its treaty-making procedures (Art 218 TFEU), see F Casolari, ‘La crisi siriana, l’esodo dei rifugiati e la Dichiarazione UE–Turchia’ in N Ronzitti and E Sciso (eds), I conflitti in Siria e Libia: Possibili equilibri e le sfide al diritto internazionale (Turin, Giappichelli, 2018) 223. 45 General Court, NF (n 6) para 52; cf Bangladesh Aid (n 17) para 18. 46 General Court, NF (n 6) paras 55 and 63. 47 cf Case C-370/12, Pringle v Ireland, ECLI:EU:C:2012:756, para 158; EDF (n 28) para 41; Bangladesh Aid (n 17) para 20. 48 See, eg RA Wessel, ‘Normative Transformations in EU External Relations: The Phenomenon of “Soft” International Agreements’ (2020) 1 West European Politics 72.
Attribution of Authorship of ‘EU’ Legal Acts 867 As shown in the next section, the General Court’s disregard for the content of the Statement, as well as the Court of Justice’s assessment of the appeal, suggest that EU courts simply did not intend to take a position on the substantive aspects of this case. B. Judicial Passivism in EU External Relations The salience of certain cases might complicate judicial review from a political perspective, particularly in the field of foreign policy. Therefore, courts have developed doctrines that justify limited judicial supervision in politically troubled situations or situations lacking justifiable accessible criteria, such as the acte de gouvernement in France, the atto politico in Italy or the political question doctrine in the United States.49 The Court has never endorsed a similar doctrine.50 The Court grants Union institutions ‘broad discretion’ in areas which involve political, economic and social choices,51 but otherwise exercises its jurisdiction on all EU acts, with the partial, yet narrowing exception of the Common Foreign and Security Policy.52 Nonetheless, the EU courts apparently decided not to exercise any judicial control on the EU–Turkey Statement. As shown in the previous section, the General Court departed from the case law by disregarding the Member States’ (in-)competence to conclude the EU–Turkey Statement and taking into account only a few elements of the Statement’s context. Such a discretionary application of the law is criticisable, but is perhaps understandable in light of the vagueness of the case law. What is truly striking in the General Court’s order, however, is its disregard for the third criterion on the attribution of legal acts: the content of the Statement. The text of the Statement clearly indicates that it was authored by the Union, as it consistently refers to the ‘Members of the European Council’ (three references) and to the ‘European Union’ or ‘EU’ (21 references, including the title). These clear references to the author of the Statement are not conclusive, in the European Council’s view: the Statement uses ‘simplified wording, plain language and shorthand’ because it ‘serves only an informative purpose and has no legal value’.53 The General Court unquestioningly accepted this argument and found that the text of the Statement is ‘ambivalent’.54 This General Court’s position is questionable.55 Press releases of EU institutions can have legal value and have often been analysed by the EU courts.56 In Bangladesh Aid, for instance, the contested act was reported in a press release (whose ‘official character’ was also denied by the Council);57 yet, the Court did not question the relevance of the press release’s content.58
49 G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 4 Legal Issues of Economic Integration 329; G Tropea, ‘Genealogia, comparazione e decostruzione di un problema ancora aperto: l’atto politico’ (2012) 3 Diritto amministrativo 329. 50 The Court might nonetheless ‘pretend to exercise judicial control, without exercising it in fact’, A Rottola, Controllo giurisdizionale e atti politici nel diritto dell’Unione europea e nel diritto interno in materia internazionale (Bari, Cacucci, 2001) 301 (the translation is mine). 51 See, inter alia, Case C-72/15, Rosneft v HM Treasury, ECLI:EU:C:2017:236, para 113. See this volume, ch 81. 52 See Art 24 TEU and Art 275 TFEU; see also, eg Case C-134/19 P, Bank Refah Kargaran v Council, ECLI:EU:C:2020:793, paras 35–39. See this volume, ch 91. 53 General Court, NF (n 6) paras 58, 59 and 61. 54 ibid para 61. 55 To that effect, see also Guérin (n 4) paras 15–26. 56 See, eg Case C-62/14, Gauweiler, ECLI:EU:C:2015:400; Case C-76/01 P, Eurocoton v Council, ECLI:EU:C:2003:511, para 93; Case T-496/11, UK v ECB, ECLI:EU:T:2015:133, paras 42–49. 57 Opinion of AG Jacobs in Bangladesh Aid (n 31) para 12. 58 One may also note that Advocate General (AG) Jacobs analysed in depth the content of the press release, see ibid paras 23 and 29.
868 Mauro Gatti Press releases are indeed relevant in international relations, as they may be indicative of international agreements. In Aegean Sea Continental Shelf, the International Court of Justice (ICJ) held that ‘it knows of no rule of international law which might preclude a joint communiqué from constituting an international agreement’;59 the expression ‘joint communiqué’ in this case refers to a document bearing no signature or initials, ‘issued directly to the press during a press conference’,60 ie a press release. To ascertain whether a press release constitutes an international agreement (attributable to an international subject), one ‘must have regard above all to its actual terms and to the particular circumstances in which it was drawn up’ (emphasis added).61 The position of the General Court is not only incompatible with the case law, but also internally inconsistent. According to the General Court, the representatives of the Member States participated in two meetings with Turkish authorities (on 29 November 2015 and 7 March 2016) in their capacity as national representatives, because the press releases following those meetings refer to EU Heads of State or Government.62 Why do these press releases have legal value whereas the EU Turkey Statement (which is also contained in a press release) has none? The General Court then finds that ‘various items of press material’ demonstrate that the members of the European Council negotiated the Statement of 18 March 2016 in their capacity as national representatives.63 A remarkable finding, considering that press material apparently uses ‘simplified wording, plain language and shorthand’! The General Court’s selective application of the case law and its lack of interest in the content of the Statement suggest that its order in NF v European Council was motivated more by political than legal reasons. Curiously, the General Court chose a counterintuitive approach, although it could dismiss the case in a less arbitrary manner by arguing that the applicants lacked standing because the Statement does not concern them directly and individually.64 One might hypothesise that, through its ‘creative’ interpretation of the EU–Turkey Statement, the General Court intended not only to dismiss the case, but also to discourage future preliminary references to the Court (a preliminary reference may concern the validity of an EU act that does not address a person directly and individually, but cannot concern acts of the Member States).65 The Court was nonetheless called to take a stance on the Statement, since the applicants introduced an appeal. But the Court dismissed the appeal as manifestly inadmissible, since the appellants allegedly did not indicate with precision the contested elements in the General
59 ICJ, Greece v Turkey, judgment of 19 December 1978, para 96; see also ICJ, Qatar v Bahrain, judgment of 1 July 1994. 60 ICJ, Greece v Turkey (n 59) para 95. 61 ibid para 96. 62 General Court, NF (n 6) paras 49–51. 63 ibid para 63. 64 See Art 263(4) TFEU. 65 In this sense, see T Spijkerboer, ‘Bifurcation of People, Bifurcation of Law. Externalization of Migration Policy before the EU Court of Justice’ (2018) Journal of Refugee Studies 216. To be sure, ‘nothing would prevent a national court called upon to apply aspects of the EU–Turkey statement from referring preliminary questions to the Court of Justice’, K Lenaerts, ‘The Court of Justice of the European Union and the Refugee Crisis’ in K Lenaerts et al, An Ever-Changing Union?: Perspectives on the Future of EU Law in Honour of Allan Rosas (Oxford, Hart Publishing, 2019) 10. However, the General Court’s order might discourage national judges from referring a preliminary question on the EU–Turkey Statement and might legitimise (at least politically) a possible decision not to make a reference.
Attribution of Authorship of ‘EU’ Legal Acts 869 Court’s NF order,66 and did not ‘identify any error of law that the General Court may have committed in the orders under appeal’.67 The order of the Court is unconvincing because the appellants clearly identify the errors made by the General Court. Consistent with the case law discussed above (see section IVA above), the appellants claim that the General Court erred in law in confining its considerations to the ‘form’ rather than the ‘substance’ of the EU–Turkey Statement.68 The appellants mention several elements of the context disregarded by the Court, stressing, for example, that ‘In all meetings purportedly between the Heads of State or Government with Turkey focus was placed on relations between the EU and Turkey’.69 Moreover, the appellants refer to the distribution of competences, since the General Court gave no consideration ‘to whether the Heads of State or Government of the Member States the European Union had, prima facie, any power to enter into the Challenged Agreement’.70 Finally, the General Court disregarded the content of the Statement, because it ‘relied entirely on the alleged “authors”’ representations rather than on the plain wording of the Challenged Agreement’.71 It is indeed ‘evident from the terms of the Challenged Agreement that the agreement was the result of a meeting between the Members of the European Council and Turkey’.72 The appellants also lament the General Court’s erroneous application of international law. By overlooking the terms of the EU–Turkey Statement, the General Court ‘disregarded customary international law on the interpretation of treaties (Article 31 [of the] Vienna Convention [on the Law of Treaties 1969 (VCLT)]) and failed to interpret, or consider interpreting, the Challenged Agreement in accordance with the ordinary meaning to be given to its terms’.73 According to the Court’s case law, the EU courts must indeed observe the rules of interpretation codified in Article 31 VCLT.74 To be sure, Article 31 VCLT refers to ‘treaties’ (and it is unclear whether the Statement is a binding ‘treaty’), but its rules of interpretation arguably apply to nonbinding instruments, too. For example, in France v Commission II, the Court interpreted a nonbinding instrument by taking the VCLT terms into account.75 Whatever the shortcomings of NF’s appeal,76 it is difficult to understand why the Court could not find therein ‘any error of law that the General Court may have committed’.77 Arguably, the Court, like the General Court, dismissed the case for political reasons. EU courts are not the first to engage in ‘judicial passivism’, particularly in the field of external relations. However, the EU courts’ refusal to rule on the NF v European Union case
66 Court of Justice, NF and others (n 20) para 16. 67 ibid para 24. 68 See IVA above. 69 Appeal brought on the 21 April 2017 by NF residing on the Island of Lesbos (Greece) against the Order of the General Court (First Chamber, extended composition) delivered (and served on the Appellant) on the 28 February 2017 in Case T-192/16 NF v European Council, para 8 (NF appeal). 70 ibid para 3. 71 ibid para 8. 72 ibid para 8. Remarkably, the Vice-President of the Court of Justice (Silva de la Puerta) echoed this statement in Sharpston, by holding that ‘it is immediately clear from the content of the contested act’ that it was adopted by the Representatives of the Governments of the Member States, see Case C-424/20 P(R), Sharpston (n 29) para 23. 73 NF appeal (n 70). 74 See, eg Case C-86/19, SL v Vueling, ECLI:EU:C:2020:538, para 27; Case C-266/16, Western Sahara Campaign, ECLI:EU:C:2018:118, para 58. 75 Case C-233/02, France v Commission, ECLI:EU:C:2004:173 (France v Commission II) para 43. See this volume, ch 42. 76 For instance, the appellants fail to mention some of the relevant case law, such as Bangladesh Aid (n 17) and European Development Fund (n 28). 77 Court of Justice, NF and others (n 20) para 24.
870 Mauro Gatti constitutes an ‘escape from law’,78 at odds with the vaunted ‘Union based on the rule of law’79 and its supposedly value-based external relations. It may be wondered whether the rule of law would not be better served by an express doctrine of judicial restraint, such as the acte de gouvernement. A ‘political question’ doctrine would be a ‘véritable objet de scandale’,80 but nonetheless preferable to denial of justice shrouded in formalism. V. ADDITIONAL READING Butler, G, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 4 Legal Issues of Economic Integration 329. Cannizzaro, E, ‘Denialism as the Supreme Expression of Realism: A Quick Comment on NF v European Council’ (2017) 1 European Papers 251. Guérin, A, ‘Déclaration UE–Turquie du 18 mars 2016: la CJUE ou les singes de la sagesse’ (2019) 16 Revue des droits de l’homme. Idriz, N, ‘The EU–Turkey Statement or the “Refugee Deal”: The Extra-legal Deal of Extraordinary Times?’ (2017) Asser Institute Research Paper. Ott, A, ‘Informalization of EU Bilateral Instruments: Categorization, Contestation, and Challenges’ (2020) 39 Yearbook of European Law 569. Wessel, RA, ‘Normative Transformations in EU External Relations: The Phenomenon of “Soft” International Agreements’ (2020) 44 West European Politics 72.
78 The expression is borrowed from C Tovo, ‘Il Consiglio europeo in tempo di crisi: dall’involuzione istituzionale all’unità nella frammentazione’ (2018) 5 Quaderni di SidiBlog 351. 79 See, eg Bank Refah Kargaran (n 52) paras 35–36. 80 M Virally, ‘L’introuvable “Acte de gouvernement”’ (1952) 58 Revue du droit public 317, 318.
80 The Absence of Rights to Humanitarian Visas, and Missions of EU Member States in Third Countries: X and X v Belgium LOUISE HALLESKOV Case C-638/16 PPU, X and X v Belgium, ECLI:EU:2017:173, delivered 7 March 2017. KEYWORDS Preliminary ruling – Applications for international protection made within the territory of a third country – Regulation (EC) No 810/2009 (Visa Code) – Visa with limited territorial validity – Issuing of a visa on humanitarian grounds – Charter of Fundamental Rights of the European Union – European Convention for the Protection of Human Rights and Fundamental Freedoms.
I. INTRODUCTION It is, in my view, crucial that, at a time when borders are closing and walls are being built, the Member States do not escape their responsibilities, as they follow from EU law or, if you will allow me the expression, their EU law and our EU law.
T
Opinion of Advocate General Mengozzi.1
he Advocate General’s (AG) statement in the Opinion in this case encapsulates its significance for EU’s external relations. Essentially, the case centred on the humanitarian clause in Article 25(1)(a) of the Visa Code,2 which is based on Article 77 TFEU, interpreted in light of the Charter of Fundamental Rights of the European Union (the Charter), which could have opened a new legal route for third country nationals into the EU
1 Opinion of Advocate General (AG) Mengozzi, Case C-638/16 PPU, X and X v Belgium, ECLI:EU:2017:93, para 44. 2 Regulation (EC) No 810/2009 of the European Parliament and of the Council of 13 July 2009 establishing a Community Code on Visas (Visa Code), [2009] OJ L243/1. It has subsequently been amended on multiple occasions without Art 25 thereof being affected.
872 Louise Halleskov by allowing for the submission of applications for international protection to diplomatic or consular representations of Member States3 that are located in third countries. The case, presented to the Court as a preliminary reference under Article 267 TFEU from a national court in Belgium, was decided in the aftermath of the migration crisis and at a point in time where many Member States had instated internal border control measures, derogating from the Schengen Border Code, in order to compensate for the lack of an effective, integrated EU approach to the challenges facing the EU’s external borders and the Common European Asylum System (CEAS). It was therefore not surprising that a total of 14 EU Member States submitted observations to the Court, which argued against the applicability of the Visa Code and the Charter.4 Had the Court answered in the affirmative and interpreted the Visa Code and the Charter in a manner that, de facto, allowed for extraterritorial applications for international protection at diplomatic and consular missions of EU Member States, the judgment would, to some extent, have remedied the (continued) failure of the EU legislature to reach an agreement on reforming the CEAS. However, the political and legal consequences of such an approach would, arguably, have been considerable. This might be one of the reasons why the Court chose not to follow the strong call for solidarity and burden-sharing made by AG Mengozzi, who, in his Opinion in the case, carved out the way for a legal ‘humanitarian path’ to the EU for international protection seekers. In a relatively short judgment, the Court ruled that applications for humanitarian visas made to an EU Member State’s diplomatic and consular mission in a third country, with a view to lodging, upon arrival in that Member State, an application for international protection, do not fall within the scope of the Visa Code and, consequently, not within the scope of the Charter either. II. FACTS
The Visa Code harmonises the rules on the issuing of short-term visas to the EU. These are amongst other things, the procedures and conditions for issuing visas to third country nationals for transit through or intended stays in the territory of EU Member States not exceeding 90 days in any 180-day period.5 The legal basis of the Visa Code is Article 77 TFEU, which, inter alia, allows for the adoption of measures concerning ‘the common policy on visas and other short-stay residence permits’.6 X and X was presented to the Court under the preliminary reference procedure in Article 267 TFEU by the Belgian Council for asylum and immigration proceedings (Conseil du Contentieux des Étrangers). The case concerned a Syrian family (a married couple and their three minor children) who were all living in Aleppo, Syria. On 12 October 2016, the family arrived at the Belgian Embassy in Beirut, Lebanon, and applied for visas with limited territorial validity in accordance with Article 25(1)(a) of the Visa Code, for which a visa with limited territorial validity shall be issued, exceptionally, when ‘the Member State concerned considers
3 The Schengen area consists of 26 European states, of which 22 are EU Member States. When this chapter refers to ‘EU Member States’, it is those EU Member States that are part of the Schengen acquis. This is in line with the approach used by the Court in X and X. 4 Opinion of AG Mengozzi (n 1) para 44. 5 Art 1(1) of the Visa Code. 6 Ex Art 62(2)(a) and (b), now TFEU Art 77(2)(a) and (b).
The Absence of Rights to Humanitarian Visas, and Missions of EU Member States 873 it necessary on humanitarian grounds, for reasons of national interest or because of international obligations’. The family declared that the purpose of their visa applications was to enable them to leave Syria and apply for asylum in Belgium. It was stated that one of the family members had been ill-treated by a terrorist group. They also referred to the precarious security situation in Syria in general, and in Aleppo in particular, in addition to the fact that, being Orthodox Christians, they were at risk of persecution on account of their religious beliefs. Furthermore, the family submitted that it was impossible for them to register as refugees in neighbouring countries. The family also argued that the right to asylum in Article 18 of the Charter7 provides a positive obligation on EU Member States to guarantee the right to asylum, and that granting international protection to the family was the only way to avoid a violation of Article 3 of the European Convention on Human Rights (EHCR) and Article 4 of the Charter.8 By decisions of 18 October 2016, the Belgian Immigration Office (Office des Étrangers) rejected the applications pursuant to Article 32(1)(b) of the Visa Code on the grounds that the family intended to stay more than 90 days in Belgium. Article 32(1)(b) of the Visa Code stipulates that, ‘Without prejudice to Article 25(1)’, a visa shall be refused if there are reasonable doubts as to the applicant’s intention to leave the territory of the Member States before the expiry of the visa applied for. The Belgian Immigration Office also stated that Article 3 of the European Convention on Human Rights (ECHR) does not require states parties to admit into their respective territories ‘victims of a catastrophic situation’, and that issuing a visa to the family in order for them to be able to lodge an application for international protection in Belgium would be tantamount to allowing such an application to be submitted to a diplomatic or consular post. III. THE COURT
The case was referred to the Grand Chamber of the Court, and it was decided under the urgent procedure (PPU).9 The Court was asked, firstly, whether ‘international obligations’ referred to in Article 25(1)(a) of the Visa Code covered the rights guaranteed by the Charter (in particular, Articles 4 and 18), as well as the obligations of EU Member States under the ECHR and Article 33 of the Geneva Convention (the non-refoulement principle). Depending on the answer given to the first question, the Court was, secondly, asked if Article 25(1)(a) of the Visa Code was to be interpreted as meaning that an EU Member State to which an application for a humanitarian visa has been made is required to issue such a visa if a risk of infringement of Article 4 and/or Article 18 of the Charter or another international obligation by which it is bound is established – and, if so, whether the existence of links between the applicant and the Member State in question affects that question. Belgium disputed the jurisdiction of the Court, maintaining that the situation in the proceedings did not fall within the scope of EU law since the applicants did not fulfil the conditions required for the granting of a short-term visa in Article 25(1)(a) of the Visa 7 Art 18 of the EU Charter states that: ‘The right to asylum shall be guaranteed with due respect for the rules of the [Geneva Convention] and in accordance with the Treaty on European Union and the Treaty on the Functioning of the European Union.’ See J Christoffersen et al, EU’s Charter om Grundlæggende Rettigheder, 2nd edn (Copenhagen, Jurist- og Økonomforbundets Forlag, 2018) 209. 8 Opinion of AG Mengozzi (n 1) para 34. Art 4 of the Charter provides that: ‘No one shall be subjected to torture or to inhuman or degrading treatment or punishment.’ It corresponds to Art 3 of the ECHR; cf Art 52(3) of the Charter. 9 Arts 113(2) and 108(1) of the Rules of Procedure of the Court of Justice.
874 Louise Halleskov Code. On the substance of the case, Belgium argued that neither applicable EU legal provisions on asylum nor the Charter could link the situation of the applicants in the proceedings with EU law.10 The EU Member State also pleaded that neither Article 3 of the ECHR nor Article 33 of the Geneva Convention implies an obligation to admit a third country national to the territory of an EU Member State, but only to refrain from deporting such third country nationals. Without challenging the admissibility of the case, the Commission, along with the intervening EU Member States, essentially endorsed the arguments put forward by Belgium.11 AG Mengozzi reasoned that the case was admissible since the situation of the applicants in the proceedings fell within the scope of the Visa Code, and since the applicants’ intention to apply for international protection could only provide a ground for refusal of their applications, and not for not applying the Visa Code.12 On the substance of the case, the AG stated that although the Charter is not among the ‘international obligations’ covered by Article 25(1)(a) of the Visa Code, the Charter did apply to the circumstances of the case as a Member State implementing EU law for the purpose of Article 51(1) of the Charter when adopting a decision under Article 25 of the Visa Code, irrespective of the fact that the applicants were not in the territory of a Member State when filing their applications.13 Finally, the AG interpreted Articles 25(1)(a) and 32(1) of the Visa Code as meaning that a Member State is required to issue a humanitarian visa submitted to its representation in a third country if, in the light of the circumstances of the case, there are substantial grounds for believing that a refusal to issue such visa(s) will have the direct consequence of exposing such individual(s) to treatment prohibited by Article 4 of the Charter, by depriving such persons of a legal route to exercise their right to seek international protection in that Member State.14 The Court addressed the issue admissibility first and ruled that it had jurisdiction to hear the case since the applications for international protection at issue in the proceedings were submitted on humanitarian grounds on the basis of Article 25 of the Visa Code. This was decided since the question of the applicability of the Visa Code to the specific circumstances of the case was inextricably linked to the answers to be given to the questions from the referring national court.15 On the substance of the case, in contrast with the Opinion of the AG, the Court concluded that the circumstances in the proceedings were not governed by EU law, and therefore the Charter did not apply. The Court asserted this conclusion on an interpretation of the object and purpose of the Visa Code in light of the context of the EU asylum acquis, as well as the intentions of the applicants.16 More specifically, the Court emphasised that the legal basis of the Visa Code only allows for the adoption of short-term visas for intended stays of no more than three months which is reflected in both its objective and its definition of a ‘visa’ (Articles 1(1) and 2(2)(a)).17 The defining feature of the case was, according to the Court, that the ‘purpose of the application differs from that of a short-term visa’.18 Since the declared intention of the applicants was to file applications for international protection in Belgium immediately upon their arrival in that Member State, their applications for visas on
10 Opinion
of AG Mengozzi (n 1) paras 44–45. paras 46–47. 12 ibid paras 51 and 66–67; cf paras 43–70. 13 ibid para 84, cf paras 75–108. 14 ibid paras 109–75. 15 Case C-638/16 PPU, X and X v Belgium, ECLI:EU:2017:173, paras 35–37. 16 ibid paras 40–51. 17 ibid paras 40–41. 18 ibid para 47. 11 ibid
The Absence of Rights to Humanitarian Visas, and Missions of EU Member States 875 humanitarian grounds fell outside the scope of the Visa Code, regardless of the fact that they were submitted on the basis of Article 25 thereof.19 Echoing the arguments of the Belgian authorities, the Commission and the intervening EU Member States, the Court explained that to conclude otherwise would be tantamount to allowing third country nationals to submit applications to diplomatic and consular missions of EU Member States in third countries. Such effect, the Court explained, would be contrary to EU asylum law measures agreed upon by the EU Member States pursuant to Article 78 TFEU – the legal basis for the harmonisation of procedures for applications for international protection.20 Thus, the Asylum Procedures Directive applies only to applications made on EU Member State territory and explicitly excludes ‘request[s] for diplomatic or territorial asylum submitted to representations of Member States’,21 and the obligations and procedures in the Dublin Regulation similarly apply exclusively to applications made in the territory of a Member State, including at the border or in the transit zones.22 IV. THE IMPORTANCE OF THE CASE
X and X is an important case in EU external relations law, EU asylum law and EU fundamental rights law for several reasons. The most significant of these reasons is the Court’s firm refusal to recognise that the Visa Code provides a legal pathway into the EU for international protection seekers situated outside EU territory. The important legal questions dealt with in the case were brought to a head by the weighty, opposing humanitarian and political considerations underlying the case. As pointed out by the AG, the humanitarian reality was that if the applicants had managed to enter the EU irregularly and apply for international protection in the territory of Belgium, their applications would in all likelihood had been successful due to the extreme and indiscriminate violence in Syria at that time.23 By refusing their visa applications following their receipt at the Belgian Embassy in Lebanon, the Belgian authorities therefore left the applicants in a situation where there was a genuine risk of suffering ill-treatment within the meaning of Article 4 of the Charter and with no other alternative than to pursue the sorts of irregular and potentially fatal means of accessing the EU, which the EU Member States have a declared intention to counter.24 On the other hand, the political reality was (and remains) that since 2016, EU Member States have failed to agree on a reform of the CEAS, and that access to humanitarian visas was not explicitly secured in any EU law instrument. 19 ibid paras 42–43. 20 ibid para 49. 21 Art 3(1) and (2) of Directive 2013/32/EU of 26 June 2013 of the European Parliament and of the Council on common procedures for granting and withdrawing international protection (recast), [2013] OJ L180/60. The directive also applies to applications made at the border, in the territorial waters or in transit zones of the Member States. 22 Arts 1 and 3 of Regulation (EU) No 604/2013 of the European Parliament and of the Council of 26 June 2016 establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third country national or a stateless person (recast), [2013] OJ L180/31. 23 Opinion of AG Mengozzi (n 1) paras 149 and 159, with reference to information from the Belgian authorities. 24 As evidenced by, eg the EU–Turkey Statement of 18 March 2016, together with Commission, ‘The European Council and the Council, Next Operational Steps in the EU–Turkey Cooperation in the Field of Migration’ (Communication), COM (2016) 166 final. The validity of the EU–Turkey Statement remains questionable. As noted, the Court has not yet ruled on its legality. K Lenaerts, ‘The Court of Justice of the European Union and the Refugee Crisis’ in K Lenaerts et al (eds), An Ever-Changing Union?: Perspectives on the Future of EU Law in Honour of Allan Rosas (Oxford, Hart Publishing, 2019) 10.
876 Louise Halleskov A. Extraterritorial Application of the Charter? Since the Court’s 2013 ruling in Åkerberg Fransson, it has been common ground that EU Member States ‘implement EU law’ for the purpose of Article 51(1) of the Charter whenever they act within the scope of EU law.25 However, the issue of the extraterritorial application of the EU Charter is not explicitly addressed in the wording of this provision, or in its Explanations.26 During the hearing in X and X, Belgium, along with several of the intervening EU Member States, submitted that it follows from Article 52(3) of the Charter that the rights under it corresponding to rights guaranteed by the ECHR are subject to a jurisdiction clause, similar to Article 1 of the ECHR, which prescribes that the High Contracting Parties shall secure the rights of the Convention ‘to everyone within their jurisdiction’. As a result, Article 4 of the EU Charter, which corresponds to Article 3 of the ECHR,27 would not apply to situations similar to the one in X and X as the threshold established for triggering jurisdiction in the case law of the European Court of Human Rights (ECtHR) on Article 1 of the ECHR would normally not be met in such situations.28 Arguably, the interpretation proposed by Belgium disregarded Article 52(3) of the Charter, which expressly allows for EU law to grant wider protection than the ECHR. In other words, according to Article 52(3) of the Charter, the ECHR only constitutes a minimum standard, below which the rights in the Charter corresponding to rights in the ECHR may not descend.29 The consequence of the interpretation advanced by Belgium would be that in situations where EU law does in fact govern actions taken by EU institutions or Member States taken extraterritorially, key rights of the Charter would not apply. For example, if the law on humanitarian visas were to be harmonised, the rights of the EU Charter corresponding to rights of the ECHR would only apply when the jurisdiction threshold of Article 1 of the ECHR is met. Reading such an additional criterion into Article 51(1) of the Charter by way of Article 52(3) of the Charter would, as pointed out by the AG, not only compromise the parallelism between the applicability of the Charter and EU law as laid down by the Court in Åkerberg Fransson, but also entail legal consequences beyond the area of visa policy.30 The Court refrained from addressing the question of the extraterritorial applicability of the Charter. Instead, it focused solely on whether the Belgian authorities were implementing EU law for the purpose of Article 51(1) of the Charter when refusing applications for international protection (section IVB below). Although, the Court did not explicitly reject that EU Charter rights covered by Article 52(3) of the Charter are subject to a territorial criterion, it has been implicitly done. B. Article 51(1) of the Charter: Implementing EU Law The conclusions of both the Court and the AG turned on the question whether, under the circumstances in the proceedings, the Belgian authorities were implementing EU law (the Visa Code) within the meaning of Article 51(1) of the Charter. 25 Case C-617/10, Åkerberg Fransson, ECLI:EU:C:2013:105, paras 20–21. 26 Explanations relating to the EU Charter on Fundamental Rights, [2007] OJ C303/02. 27 cf the Explanations on Arts 4 and 52(3) of the Charter. 28 This was confirmed in the ECtHR’s decision (GC) in M.N. and Others v Belgium (3599/18) of 5 March 2020, cf s IVD below. 29 Concurring: Opinion of AG Mengozzi (n 1) paras 99. 30 ibid para 91; cf paras 89–103 and Åkerberg Fransson (n 25) para 21, where the Court famously stated that: ‘The applicability of EU law entails the applicability of the fundamental rights guaranteed by the Charter.’
The Absence of Rights to Humanitarian Visas, and Missions of EU Member States 877 The AG found that the Visa Code applied ratione personae as well as ratione materiae to the situation in the proceedings.31 In support thereof, the AG pointed, firstly, to the fact that the decisions on visas on humanitarian grounds were dealt with by the Belgian authorities on the basis of the procedure and provisions laid down in the Visa Code and therefore ‘in the framework of and pursuant to EU law’.32 Secondly, the AG pointed to the fact that recital 29 of the Visa Code prescribes that it is subject to the fundamental rights and principles of the Charter.33 The Court, on the other hand, focused on the intentions of the applicant and the nonexistence of rules on long-term visas, including those on humanitarian grounds. Importantly, by not choosing the interpretation proposed by the AG, the Court drew a line between the competence of the EU and the competence of EU Member States as regards humanitarian visas, a line which, in accordance with Article 51(2) of the Charter, implies that the Charter cannot be invoked to support an interpretation that establishes new powers for the EU. More generally, the Court confirmed what it had already stated in cases such as Iida – that it is not sufficient, for the purpose of Article 51(1) of the Charter, that an application is filed and processed under national law measures which implement secondary EU law, since the conditions for the applicability of that secondary norm must also be fulfilled.34 It has been submitted that declaring the Visa Code non-applicable due to the applicants’ motives negates the rule of (EU) law and is tantamount to accepting that failed asylum seekers are, ab initio, excluded from the scope of the Qualification Directive and the Asylum Procedures Directive.35 Against this point of view, however, it can be submitted that the object and purpose of both of these asylum law measures, which are adopted on the basis of Article 78 TFEU, are to allow the possible harmonisation of the rules on and procedures for deciding on applications for international protection, whereas the object and purpose of the Visa Code are to harmonise the law on short-term stays in the EU. C. Subsequent Legal Developments: EU Law The idea of creating humanitarian visas at EU level is not new. It was the subject of a 2002 study for the European Commission,36 and featured in both the 2007 Green Paper on Asylum37 and the 2009 Stockholm Programme.38 Following this, it disappeared from the official EU agenda for a number of years as the focus turned to various voluntary resettlement solutions, most notably in the context of the EU–Turkey Statement.39 It resurfaced in 2016 at the initiative 31 Opinion of AG Mengozzi (n 1) para 58. 32 ibid paras 78–80. 33 ibid para 85. The same follows from the Handbook for the processing of visa applications and the modification of issued visas, C (2010) 1620 final, along with C (2011) 5501 final and C (2014) 2727. 34 Case C-40/11, Iida, ECLI:EU:C:2012:691, paras 80–81. 35 V Moreno-Lax, ‘Asylum Visas as an Obligation under EU Law, Case PPU C-638/16 X,X v État belge’ (EU Migration Law blog, 17 February 2017), https://eumigrationlawblog.eu/asylum-visas-as-an-obligation-under-eu-lawcase-ppu-c-63816-x-x-v-etat-belge/. 36 Commission, ‘Danish Centre for Human Rights, Study on the Feasibility of Processing Asylum Claims Outside the EU against the Background of the Common European Asylum System and the Goal of a Common Asylum Procedure, 2002’, https://ec.europa.eu/home-affairs/sites/homeaffairs/files/e-library/docs/pdf/asylumstudy_dchr_2002_ en_en.pdf. 37 Commission, ‘Green Paper on the Future European Asylum System’, COM (2007) 301 final, 6 June 2007. 38 Council of the European Union, ‘The Stockholm Programme – An Open and Secure Europe Serving and Protecting the Citizens’, Doc 17024/09 of 2 December 2009. 39 Moreno-Lax (n 35).
878 Louise Halleskov of the European Parliament in the context of the discussions on the European Commission’s 2014 proposal for a recast of the Visa Code.40 Following a deadlock in those negotiations, and the Court’s judgment in X and X, the European Parliament adopted on 11 December 2018 a resolution requesting the European Commission to present a proposal for a regulation establishing an European Humanitarian Visa allowing third country nationals to enter the EU for the sole purpose of applying for international protection.41 However, the Commission deemed it ‘politically not feasible’ to reach an agreement on a substantive right to admission and explained that the proposed Union Resettlement Framework addresses the objective pursued by the Parliament’s initiative.42 This proposal is still pending, along with the other CEAS reform proposals.43 Accordingly, as it stands today, EU law still does not contain a right to a humanitarian visa applied for extraterritorially. D. Subsequent Legal Developments Involving the ECHR During the past decade, judgments by the ECtHR in cases such as M.S.S. v Belgium and Greece on returning international protection seekers to the overburdened and dysfunctional asylum system in Greece have demonstrated how the ECHR system can offer an external impetus to a deadlocked EU legislative situation in the area of asylum and immigration law, which is inextricably linked with the EU’s external relations.44 Any hopes that the ECtHR would do the same in respect of humanitarian visas were laid to rest in March 2020. Following X and X, proceedings in an essentially identical case, MN and Others, were filed in Strasbourg at the ECtHR in January 2018.45 The case concerned another Syrian couple and their two children who had also been refused the humanitarian visas they had applied for at the Belgian Embassy in Lebanon on the basis of Article 25 of the Visa Code. It was submitted by the applicants that the negative decisions of the Belgian authorities had exposed them to a situation incompatible with Article 3 ECHR, with no possibility of remedying it effectively as required by Article 13 ECHR.46 On 5 March 2020, the Grand Chamber of the ECtHR declared the case inadmissible, holding that the applicants were not within Belgium’s jurisdiction within the meaning of Article 1 ECHR since the Belgian authorities had not effectively exercised authority or control over them.47 The fact that the authorities had exercised public power when deciding on the visa application was not sufficient to trigger Article 1 ECHR.48
40 ‘Report of the European Parliament on the proposal for a regulation of the European Parliament and of the Council on the Union Code on Visas’, COM (2014) 164, Doc A-0145/2016 of 22 April 2016. 41 European Parliament resolution of 11 December 2018 with recommendations to the Commission on Humanitarian Visas (2018/2271(INL)), cf Art 225 TFEU. It builds on a LIBE Committee report (A8-0423/2018) (rapporteur: Juan Fernando López Aguilar). 42 Commission, ‘Proposal for a Regulation of the European Parliament and the Council establishing a Union Resettle-ment Framework and amending Regulation (EU) No 516/2014 of the European Parliament and the Council, 13 July 2016’, COM (2016) 468 final. 43 European Parliament, ‘Legislative Train, Proposal for a regulation establishing a European humanitarian visa’ (May 2020), https://www.europarl.europa.eu/legislative-train/theme-towards-a-new-policy-on-migration/file-proposalfor-a-regulation-on-establishing-a-european-humanitarian-visa. 44 ECtHR (GC), M.S.S. v Belgium and Greece, App no 30696/09, judgment of 21 January 2011. 45 ECtHR (GC), M.N. and Others v Belgium, App no 3599/18, judgment of 5 March 2020. 46 ibid paras 64–65. An (unsuccessful) complaint was also raised under Art 6 ECHR. 47 ibid paras 110–26. In paras 71–73, the ECtHR referred to X and X. 48 ibid para 112.
The Absence of Rights to Humanitarian Visas, and Missions of EU Member States 879 Two months prior to this case, the ECtHR had ruled on another high-profile case concerning external border control measures taken by a Member State. In N.D. and N.T. v Spain,49 the ECtHR concluded that the Spanish authorities’ immediate return to Morocco of two third country nationals who had irregularly accessed the Spanish enclave of Melilla by climbing the border fences did not violate Article 4 of Protocol 4 (prohibition of collective expulsion) as the applicants had not made use of the (effective and genuine) official procedures for applying for visa or international protection that were available in the border zone and nearby diplomatic and consular missions. Accordingly, the ECtHR held that the lack of an individualised procedure had been the result of the applicants’ own conduct.50 Notably, N.D. and N.T. v Spain did not concern the obligations under EU law, and the question of the conformity of the actions taken by the Spanish authorities with the Asylum Procedures Directive therefore remains open. V. ADDITIONAL READING Beijer, M, ‘The Limited Scope for Accepting Positive Obligations under EU Law: The Case of Humanitarian Visas for Refugees’ (2018) 11(1) Review of European Administrative Law 37. Brouwer, E, ‘The European Court of Justice on Humanitarian Visas: Legal Integrity vs Political Opportunism?’ (CEPS Commentary, 16 March 2017) www.ceps.eu/ceps-publications/european-cour t-justice-humanitarian-visas-legal-integrity-vs-political-opportunism/. Fahey, E, ‘Hyper-legalisation and De-legalisation in the AFSJ: On Contradictions in EU External Migration Law’ in S Carrera, J Santos Vara and T Strik (eds), Constitutionalising the External Dimensions of EU Migration Policies in Times of Crisis: Legality, Rule of Law and Fundamental Rights Reconsidered (Cheltenham, Edward Elgar, 2019) 127–29. Foblets, M-C and Leboeuf, L (eds), Humanitarian Admission to Europe: The Law between Promises and Constraints (Baden-Baden, Nomos/Oxford, Hart Publishing, 2020). Koutrakos, P, ‘A Realist Court?’ (2017) 42 EL Rev 311. Law, S, ‘Humanitarian Admission and the Charter of Fundamental Rights’ in M-C Foblets and L Leboeuf (eds), Humanitarian Admission to Europe: The Law between Promises and Constraints (Baden-Baden, Nomos/Oxford, Hart Publishing, 2020) 77–114. Moreno-Lax, V, ‘Asylum Visas as an Obligation under EU Law, Case PPU C-638/16 X,X v État belge’ (EU Migration Law, 17 February 2017) https://eumigrationlawblog.eu/asylum-visas-as-an-obligatio n-under-eu-law-case-ppu-c-63816-x-x-v-etat-belge/. Spijkerboer, T, ‘Bifurcation of People, Bifurcation of Law: Externalization of Migration Policy before the EU Court of Justice’ (2018) 31 Journal of Refugee Studies 216. Wibault, T, ‘Humanitarian Admission and the Charter of Fundamental Rights’ in M-C Foblets and L Leboeuf (eds), Humanitarian Admission to Europe: The Law between Promises and Constraints (Baden-Baden, Nomos/Oxford, Hart Publishing, 2020) 271–82.
49 ECtHR (GC), N.D. and N.T. v Spain, App nos 8675/15 and 8997/15, judgment of 13 February 2020. See also ECtHR, Asady and Others v Slovakia, App no 24917/15, judgment of 24 March 2020. On this case law, see, eg N Markard, ‘A Hole of Unclear Dimensions: Reading N.D. and N.T. v Spain’ (EU Immigration and Asylum Law and Policy blog, 1 April 2020), https://eumigrationlawblog.eu/a-hole-of-unclear-dimensions-reading-nd-and-nt-v-spain/. 50 ECtHR (GC), N.D. and N.T. v Spain, App nos 8675/15 and 8997/15, judgment of 13 February 2020 paras 206–32.
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81 Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures: Rosneft PETER VAN ELSUWEGE Case C-72/15, PJSC Rosneft Oil Company v Her Majesty’s Treasury and Others, ECLI:EU:C:2017:236, delivered 28 March 2017. KEYWORDS Reference for a preliminary ruling – Validity control – Common Foreign and Security Policy (CFSP) – Restrictive measures – Russia – Ukraine conflict – Jurisdiction of the Court of Justice – EU–Russia Partnership and Cooperation Agreement.
I. INTRODUCTION
O
n 28 March 2017, the Grand Chamber of the Court decided in a preliminary ruling case that the restrictive measures adopted by the Council against Russian undertakings, including oil company Rosneft, are valid.1 The judgment is of constitutional significance. It clarified the powers of the Court with respect to acts adopted in the sphere of the EU’s Common Foreign and Security Policy (CFSP). In particular, it revealed that the EU system of judicial protection fully applies in relation to restrictive measures against natural and legal persons (so-called ‘targeted sanctions’), in the sense that the legality of these measures can be challenged not only directly, as is typical, on the basis of Article 263 TFEU, but also indirectly, on the basis of Article 267 TFEU, on referrals from national courts of Member States. Moreover, the reasoning developed in Rosneft significantly influenced subsequent case law, implying, amongst others, a recognition of the Court’s jurisdiction to hear an action for damages in relation to CFSP decisions pertaining to restrictive measures in Bank Refah Kargaran.2 1 Case C-72/15, PJSC Rosneft Oil Company v Her Majesty’s Treasury and Others, ECLI:EU:C:2017:236. 2 Case C-138/19 P, Bank Refah Kargaran, ECLI:EU:C:2020:793. For comments, see P Van Elsuwege and J De Coninck, ‘Action for Damages in Relation to CFSP Decisions Pertaining to Restrictive Measures: A Revolutionary Move by the Court of Justice in Bank Refah Kargaran?’ (EU Law Analysis, 9 October 2020), http://eulawanalysis. blogspot.com/2020/10/action-for-damages-in-relation-to-cfsp.html. See this volume, ch 91.
882 Peter Van Elsuwege The Rosneft judgment thus partly addressed the issues raised in Opinion 2/13 where the Court simply observed that ‘as EU law now stands, certain acts adopted in the context of the CFSP fall outside the ambit of judicial review by the Court’, without, however, clarifying the precise limits of its jurisdiction in relation to CFSP acts.3 Proceeding from a teleological interpretation of the EU Treaties and building upon the full integration of the CFSP in an EU legal order based on respect for the rule of law, the Rosneft ruling confirmed that the ‘the exclusion of the Court’s jurisdiction in the field of CFSP should be interpreted strictly’.4 Whereas the approach followed by the Court in Rosneft has also been criticised5 and certainly did not answer all remaining questions regarding the scope of judicial review in the field of CFSP,6 it is definitely one of the landmark judgments in the post-Lisbon EU legal order. In particular, it may be regarded as a crucial episode in the process which is sometimes referred to as the ‘normalisation’ of the CFSP,7 revealing that the role of the Court in CFSP matters is not as limited as a cursory reading of the EU Treaties might suggest.8 II. FACTS
Rosneft, a Russian company active in the gas and oil sector, challenged the validity of sanctions (formally known as ‘restrictive measures’) imposed by the EU in response to Russia’s role in destabilising the situation in Ukraine. The sanctions regime involved CFSP Decision 2014/5129 and Regulation 833/2014,10 reflecting the EU’s well-established ‘two-stage procedure’ of combining a CFSP act adopted under Article 29 TEU and a regulation under Article 215 TFEU for the implementation of the restrictive measures falling within the EU’s competences.11 This combination is reminiscent of the pre-Lisbon ‘bridge’ between the political objectives pursued under the old second pillar and economic measures to be adopted in the then Community framework.12 Even though the post-Lisbon legal framework no longer includes specific CFSP objectives but only horizontal objectives listed in Article 21 TEU, the procedure for the adoption of restrictive measures remains particular in its combination of legal instruments from the TEU and TFEU.13 CFSP Decision 2014/512 and Regulation 833/2014 introduced restrictions regarding sensitive goods and technologies for deepwater oil exploration and production, Arctic oil exploration 3 Opinion 2/13, Accession to the ECHR, ECLI:EU:C:2014:2454, para 251. See this volume, ch 70. 4 Case C-72/15 (n 1) para 74. 5 See, eg P Koutrakos, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018) 67 ICLQ 1; L Lonardo, ‘Law and Foreign Policy before the Court: Some Hidden Perils of Rosneft’ (2018) 3 European Papers 547. 6 S Poli, ‘The Common Foreign Security Policy after Rosneft: Still Imperfect but Gradually Subject to the Rule of Law’ (2017) 54 CML Rev 1799. 7 RA Wessel, ‘Common, Foreign, Security and Defence Policy’ in RA Wessel and J Larik (eds), EU External Relations Law: Text, Cases and Materials (Oxford, Hart Publishing, 2020) 283. 8 C Hillion, ‘A Powerless Court? The European Court of Justice and the EU Common Foreign and Security Policy’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law. Constitutional Challenges (Oxford, Hart Publishing, 2014) 47–72. 9 Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, [2014] OJ L229/13. 10 Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, [2014] OJ L229/1. 11 See further C Eckes, ‘The Law and Practice of EU Sanctions’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018) 206–29. 12 See, eg Joint Cases C-402/05 and C-415/05, Kadi and Al Barakaat v Council, ECLI:EU:C:2008:46, para 202. 13 C Eckes, EU Powers under External Pressure: How the EU’s External Actions Alter Its Internal Structures (Oxford, Oxford University Press, 2019) 139.
Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures 883 and production, and shale oil projects. This affected Rosneft, a largely state-owned company, in its activities of hydrocarbon exploration, production and refining of crude oil, and gas marketing.14 Rosneft challenged the validity of the restrictive measures before the General Court of the EU15 as well as before the High Court of England and Wales. The latter referred a set of questions through the preliminary reference procedure in Article 267 TFEU to the Court in the framework of the legal action launched by Rosneft’s subsidiary in the UK against the national legislation implementing the EU’s sanctions regime. The questions essentially concerned the jurisdiction of the Court to give a preliminary ruling on the validity of some of the provisions of the CFSP decision; the possibility to impose criminal penalties before the scope of the relevant offence has been sufficiently clarified by the Court; and the interpretation of certain provisions of the contested acts.16 Taking into account that the content of CFSP Decision 2014/512 and Regulation 833/2014 largely overlaps, Rosneft argued that the Council infringed Article 40 TEU in the sense that the detailed description of the sanctions in the CFSP decision encroached upon the joint power of proposal of the High Representative of the Union for Foreign Affairs and Security Policy and the Commission under Article 215 TFEU. In addition, it was argued that the EU’s restrictive measures violated the Partnership and Cooperation Agreement (PCA) between the EU and Russia as well as several general principles of law, such as the obligation to state reasons, the rights of defence and the right to effective judicial protection.17 III. THE COURT
The Court first of all decided to answer the referred questions regarding the validity of the contested CFSP decision, notwithstanding the argument of the Council and the intervening Member States (Estonia and Poland) that the dispute could be resolved in the light of the contested regulation alone. The Court considered that limiting its analysis to the validity of the regulation would provide an inadequate answer to the concerns of the referring court. Moreover, it pointed to the requirement of effective judicial protection under Article 19 TEU and the obligation of Member States to ensure that their national policies comply with the Union position adopted under the CFSP.18 Pursuant to the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU, the Court cannot, in principle, adjudicate with respect to acts adopted in the context of the CFSP. As observed by Advocate General (AG) Wathelet, this is a so-called ‘carveout’, derogating from the general jurisdiction which Article 19 TEU confers on the Court to ensure that in the interpretation and application of the EU Treaties the law is observed.19 However, the last sentence of the second subparagraph of Article 24(1) TEU and the second
14 Case C-72/15 (n 1) paras 30–31. 15 Case T-715/14, Rosneft and Others v Council, EU:T:2018:544. 16 As observed by Poli, it is noteworthy that the interpretative questions essentially concerned the regulation rather than the CFSP decision. This may be due to the national court’s awareness that there are no limitations to the Court’s competence on the interpretation and validity of a regulation adopted on a TFEU legal basis, whereas the situation is different regarding the CFSP decision and the letter of Art 275 TFEU, second paragraph, which only refers to ‘review of legality’ of CFSP acts providing for restrictive measures. See Poli (n 6) 1803. 17 Case C-72/15 (n 1) para 83. 18 ibid para 56. 19 Opinion of Advocate General (AG) Wathelet, Case C-72/15, PJSC Rosneft Oil Company v Her Majesty’s Treasury and Others, ECLI:EU:C:2016:381, para 38.
884 Peter Van Elsuwege subparagraph of Article 275 TFEU include an ‘exception to the exception’ in the sense that the Court is competent to monitor compliance with Article 40 TEU and to review the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of the CFSP provisions in the TEU. This ‘claw-back’ provision, in combination with the full integration of the CFSP in the EU legal order, implies that the Treaty of Lisbon gave the Court significant powers in the field of CFSP. First, with respect to its jurisdiction to monitor the compliance of CFSP decisions with Article 40 TEU, the Court pointed out that the EU Treaties do not specify any particular means by which such monitoring is to be carried out. As a result, it followed from the general jurisdiction awarded on the basis of Article 19 TEU that this exercise can also be the subject of a preliminary ruling.20 From a substantive point of view, the overlap between the content of the CFSP decision and the regulation imposing restrictive measures was deemed unproblematic. According to the Court, it was a consequence of the technical nature of targeted restrictive measures and the broad discretion of the Council in the field of CFSP.21 Moreover, in response to Rosneft’s argument that the contested CFSP decision constituted a ‘legislative act’, the Court simply referred to the procedure for the adoption of such acts. In this respect, Article 289(3) TFEU provides that ‘legal acts adopted by legislative procedure constitute legislative acts’. The exclusion of legislative acts under Article 24(1) TEU and Article 31 TEU was therefore interpreted as a purely procedural matter reflecting the ‘special rules and procedures’ in the field of CFSP.22 Hence, the adoption of CFSP Decision 2014/512 following the procedure laid down in Article 24 TEU implied that it is not a legislative act and, mutatis mutandis, there was no infringement of Article 40 TEU.23 Second, as far as the judicial review of CFSP decisions pertaining to the adoption of restrictive measures against natural or legal persons is concerned, Article 24(1) TEU refers to the second paragraph of Article 275 TFEU, which provides that ‘the Court has jurisdiction to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 TFEU’.24 A literal interpretation of these provisions may lead to the conclusion that a direct action for annulment is the only option for reviewing the legality of targeted sanctions. However, the Court firmly rejected such an understanding of the ‘claw-back’ provisions: the reference in Article 24(1) TEU to the second paragraph of Article 275 TFEU did not concern the type of procedure (ie a direct action for annulment), but rather the type of decision (ie ‘restrictive measures’) whose legality may be reviewed.25 Moreover, the plea of illegality as part of the preliminary reference procedure was essential to ensure effective judicial protection. Proceeding from a combined reading of Articles 2, 21 and 23 TEU, which link the CFSP as an integral part of the EU’s external action to respect for the rule of law, together with Article 47 of the Charter of Fundamental Rights (Charter, or CFR), which concerns the right to an effective remedy, the Court concluded that the exclusion of its jurisdiction in the field of CFSP should be interpreted strictly.26 Furthermore, ‘it would be inconsistent with the system of effective judicial protection established by the Treaties’ to exclude the possibility of preliminary references pertaining to the validity of CFSP decisions relating to restrictive
20 Case
C-72/15 (n 1) para 62. paras 87–90. para 91. 23 ibid para 92. 24 ibid para 65. 25 ibid para 70. 26 ibid paras 72–74. 21 ibid 22 ibid
Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures 885 measures against natural or legal persons.27 In this respect, the Court recalled the well-known Foto-Frost rule that national courts are not entitled to declare EU acts invalid. This task is exclusively reserved for the Court under Article 267 TFEU, which is essential to ensure the uniform application of EU law.28 Finally, the Court upheld the validity of the contested restrictive measures. Even if these measures would in principle be incompatible with certain provisions of the EU–Russia PCA, the security exception included in Article 99(1)(d) of the latter agreement permits their adoption. The Court pointed to the Council’s broad discretionary powers to decide on the adoption of measures for the protection of essential EU security interests and for the maintenance of international peace and security.29 Likewise, the Court found that the restrictive measures did not violate the fundamental rights of the defendant. IV. THE IMPORTANCE OF THE CASE
In Rosneft, the Court elaborated its view on the position of the CFSP in the post-Lisbon EU legal order. Moreover, it further clarified the boundaries of its jurisdiction in this particular field of EU law. Proceeding from a teleological interpretation of the EU Treaties, the Court confirmed that the EU’s system of judicial review fully applied with respect to restrictive measures against natural and legal persons. Of course, the judgment also left some issues untouched. For instance, the Court exclusively focused on the validity of the contested measures, without explicitly tackling its competence of interpretation under Article 267 TFEU. Moreover, the judgment confined itself to the peculiar situation of CFSP decisions pertaining to the adoption of restrictive measures as referred to in Article 275 TFEU, second paragraph. Hence, the Court’s reasoning in Rosneft does not solve all questions regarding the judicial review of CFSP decisions. A. The CFSP as an EU Policy Based on Respect for the Rule of Law Consistent with other post-Lisbon judgments, the Court in Rosneft confirmed that the CFSP is no longer to be regarded as a separate area of intergovernmental cooperation, but as an integral part of the EU legal order.30 As a result, the EU’s horizontal principles, such as respect for the rule of law and the right to effective judicial protection, also apply in relation to CFSP measures. Consequently, the so-called ‘carve-out’ provisions laid down in the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU on the Court’s general jurisdiction under Article 19 TEU must be interpreted narrowly. Accordingly, the Rosneft judgment puts the exceptional nature of the CFSP, understood as lex imperfecta by AG Wahl in H v Council, further in perspective.31 It implies that the provisions of the EU Treaties regarding the CFSP cannot be interpreted in isolation from the general constitutional principles of the EU. 27 ibid para 76. 28 ibid paras 77–80. 29 ibid paras 111–16. 30 See, amongst others, Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025 (Mauritius); Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66; Case C-439/13 P, Elitaliana v Eulex Kosovo, ECLI:EU:C:2015:753. See this volume, ch 63; Case C-455/14 P, H v Council, ECLI:EU:C:2016:212. See this volume, ch 76; Case C-14/19 P, European Union Satellite Centre (SatCen) v KF, ECLI:EU:C:2020:492; Case C-138/19 P, Bank Refah Kargaran, ECLI:EU:C:2020:793. See this volume, ch 91. 31 Opinion of AG Wahl, Case C-455/14 P, H v Council, ECLI:EU:C:2016:212, para 38.
886 Peter Van Elsuwege Of particular significance is the application of the principle of effective judicial protection, defined as ‘the essence of the rule of law’ and enshrined in Article 47 CFR.32 Whereas the Court expressly admitted that the Charter cannot confer jurisdiction where it is excluded by the EU Treaties, the horizontal application of the Charter to all situations falling within the scope of EU law is a crucial argument for the interpretation of the Court’s jurisdiction in CFSP matters. In particular, it implied that the exclusion of the Court’s jurisdiction in the field of CFSP should be interpreted strictly.33 This fundamental rights approach contributes to the normalisation of the CFSP in the EU legal order insofar as it builds upon the core foundational principles of EU law.34 In particular, the Court’s reasoning developed in Rosneft may be regarded as an answer to pre-Lisbon criticism that the self-imposed claim of respect for the rule of law in Les Verts was perhaps valid for the Community, but not for the EU as such.35 With its Rosneft judgment, the Court has placed the rule of law at the centre stage of EU external action, including in the field of CFSP. Moreover, the principle of effective judicial review, as interpreted in Rosneft, turned out to be crucial for the Court’s developing case law regarding rule-of-law issues in EU Member States.36 Accordingly, the judgment in Rosneft belongs to a trend in the post-Lisbon case law where respect for the rule of law and the principle of effective judicial review is increasingly used as a crucial point of reference for strengthening the Court’s constitutional role.37 This approach minimises the specific nature of the CFSP and the Treaty-based limitations to the Court’s jurisdiction, even though it does not imply that all decisions adopted in the realm of CFSP are now subject to judicial review (see section IVC below). The ‘integrationist’ logic followed in Rosneft and other CFSP-related judgments has also been criticised.38 In particular, it has been argued that the Court disrespects the intention of the drafters of the EU Treaties to retain a separate constitutional status for the CFSP. Koutrakos, for instance, argued that ‘the Court has extended its jurisdiction contrary to the wording of the Treaties and the ratio of Article 24(1) paragraph 2 TEU and Article 275 TFEU’.39 A similar warning against a broad interpretation of the Court’s jurisdiction in the field of CFSP was given by AG Kokott in her view on Opinion 2/1340 and AG Wahl in H v Council.41 In his Opinion to the Rosneft case, AG Wathelet followed a different approach in stressing the importance of Article 23 TEU.42 The latter provides that the Union’s action in relation to the CFSP shall be guided by the general principles and objectives of the Union’s external action, which itself is subject to the EU’s foundational values. In other words, provisions of the EU Treaties relating to the CFSP – including the part on the limits to the Court’s jurisdiction – cannot be interpreted in isolation from the general structure and logic of the EU Treaties. This holistic approach, which results from a combined reading of Article 23 TEU (on CFSP), Article 21 TEU 32 Case C-72/15 (n 1) para 73. It is noteworthy that this was the first time the Court invoked the CFR in its reasoning in a case on CFSP matters; see G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy. Competence and Institutions in External Relations (Oxford, Hart Publishing, 2019) 178. 33 Case C-72/15 (n 1) para 94. 34 Koutrakos (n 5) p 23. 35 W Van Gerven, The European Union: A Polity of States and Peoples (Oxford, Hart Publishing, 2005) 118. 36 See, eg the reference to Rosneft in Case C-64/16, Associação Sindical dos Juízes Portugueses v Tribunal de Contas, ECLI:EU:C:2018:117, para 36. 37 See P Van Elsuwege and F Gremmelprez, ‘Protecting the Rule of Law in the EU Legal Order: A Constitutional Role for the Court of Justice’ (2020) 16 European Constitutional Law Review 8–32. 38 See, eg Koutrakos and Lonardo (n 5). 39 Koutrakos (n 5) p 25. 40 View of AG Kokott in Opinion 2/13 (n 3) para 101. 41 Opinion of AG Wahl in H (n 31) para 49. 42 Opinion of AG Wathelet in Rosneft (n 19) para 66.
Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures 887 (on EU external action) and Article 2 TEU (on values), was followed by the Court in Rosneft and constitutes the backbone for understanding the post-Lisbon position of the CFSP in the EU legal order. Accordingly, it laid the ground for further evolutions in the case law, not least regarding the option of an action for damages in relation to CFSP decisions pertaining to restrictive measures.43 B. The Scope of Judicial Review of EU Sanctions Whereas the Rosneft judgment is particularly important for understanding the place of the CFSP in the EU legal order (see section IVA above), it also contributed to the expanding case law regarding the EU’s sanctions policy. Traditionally, sanctions have been the subject of an exceptionally large number of disputes before the General Court and the Court.44 This is the logical result of the specific features of targeted sanctions, which directly affect the legal rights of individuals, and the undisputed right to challenge the legality of regulations adopted under Article 215 TFEU.45 In Rosneft, the Court clarified that the judicial review involves not only the TFEU regulation, but also the underlying CFSP decision, notwithstanding the substantive overlap between the two acts. In this respect, the Member States’ obligation to ensure that their national policies are in conformity with their commitments under the CFSP is a key consideration.46 Even though it may well be argued that an annulment of the largely overlapping regulation would in any event require the Council to take the necessary measures to make the equivalent provisions of the CFSP decision compatible with the Court’s judgment as a result of Article 266 TFEU,47 the Court’s approach prevents a lacuna of judicial protection with respect to sanctions which are not implemented at EU level. Significantly, the Court did not open the gates to the judicial review of CFSP measures of general application. Only measures of an individual nature fall within the scope of the term ‘restrictive measures against natural or legal persons’ under the second paragraph of Article 275 TFEU.48 As a result, provisions of a CFSP decision imposing in a general and abstract manner restrictions that are applicable to all operators involved in the sale, supply, transfer or export of certain technologies fall outside the Court’s jurisdiction. Such a limitation does not exist with respect to the judicial review of regulations adopted under Article 215 TFEU.49 In addition to the rather narrow interpretation of the term ‘restrictive measures against natural and legal persons’ under the second paragraph of Article 275 TFEU, the Court in Rosneft also stressed the broad discretionary powers of the Council in the field of CFSP. This implies, amongst others, that the Council cannot be criticised for predetermining the content of the implementing regulation in describing in detail the persons and entities that are subject to restrictive measures.50 Moreover, the Council can broadly define the measures which are deemed necessary for the protection of essential EU security interests and for the maintenance of peace and international security.51
43 See
Case C-138/19 P (n 2). ‘The Law and Practice of EU Sanctions’ (n 11) p 209. 45 ibid. 46 This obligation is laid down in Art 29 TEU. See Case C-72/15 (n 1) para 56. 47 This argument was made in Opinion of AG Wathelet in Rosneft (n 19) para 93. 48 Case C-72/15 (n 1) paras 95–99. 49 ibid para 106. 50 ibid para 90. 51 ibid para 116. 44 Eckes,
888 Peter Van Elsuwege The complex policy choices in the area of CFSP also affect the judicial review of compliance with the principle of proportionality in the sense that the legality of a measure can only be affected if it is manifestly inappropriate in relation to the objective that it seeks to pursue.52 Hence, whereas the Court asserted a broad interpretation of its jurisdiction in relation to CFSP decisions imposing restrictive measures, it also restrained interference in the policy choices made at the level of the Council. Finally, the availability of preliminary references concerning the validity of CFSP decisions as confirmed in Rosneft raises the issue of potential forum shopping between the General Court under a direct annulment action (Article 263 TFEU) and the Court under an Article 267 TFEU procedure.53 The classic TWD Textilwerke Deggendorf rule implies that a plea of illegality through a preliminary reference is not admissible for applicants having the undisputed right to bring a direct action for annulment but failing to exercise that right within the available time limit.54 Also in Rosneft, the Court stressed the complementarity of both avenues of judicial protection.55 In this particular case, the applicant had also previously submitted an action for annulment before the General Court.56 The latter procedure was suspended until the delivery of the judgment of the Court. Whereas the pleas and arguments relied on by the applicants broadly overlapped in the two procedures, the General Court noted that the procedural context and the legal basis of the actions differed. For instance, in a direct action the General Court has jurisdiction to find and assess the facts by itself, whereas in an indirect action the Court depends on the facts as presented by the referring national court. Of course, while the General Court is not strictly bound by the judgment of the Court as having the authority of res judicata, it cannot ignore the latter’s reasoning either.57 It is therefore no surprise that the General Court dismissed all claims, as did the Court in the appeal judgment of the direct action.58 The General Court ruling further clarified the locus standi criteria set in Article 263(4) TFEU. In particular, it found the actions against certain export restrictions regarding oil technologies admissible on the ground that the applicants, although not individually concerned, were directly affected by a regulatory act not entailing implementing measures.59 Accordingly, the Rosneft saga contributed to a further clarification of the judicial protection of natural and legal persons in relation to EU sanctions. C. Remaining Issues in Relation to the Court’s Jurisdiction Regarding CFSP Matters The Court’s judgment in Rosneft does not solve all questions regarding the precise boundaries to the Court’s jurisdiction in the field of CFSP. First of all, the case concerned questions of judicial review regarding CFSP decisions pertaining to restrictive measures. The latter form a particular area of CFSP action, which almost by definition affects the rights of individuals. This explains the Court’s preoccupation with the right to effective judicial protection, leading to a broad interpretation of its jurisdiction under Article 275(2) TFEU, without, however, 52 ibid para 146. 53 On this issue, see also G Butler, ‘The Coming of Age of the Court’s Jurisdiction in the Common Foreign and Security Policy’ (2017) 13 European Constitutional Law Review 685. 54 Case C-188/92, TWD Textilwerke Deggendorf, ECLI:EU:C:1994:90, para 18. 55 Case C-72/15 (n 1) para 66. 56 Case T-715/14 (n 15) para 98. 57 ibid para 100. 58 Case C-732/18 P, PAO Rosneft Oil Company and Others v Council, ECLI:EU:C:2020:727. 59 Case T-715/14 (n 15) paras 78–91.
Securing a Coherent System of Judicial Protection in Relation to Restrictive Measures 889 including measures of general application that are unrelated to targeted individuals (see section IVB above). Hence, while definitely strengthening the judicial review on the legality of restrictive measures, it does not imply that all CFSP acts now fall within the Court’s jurisdiction.60 Secondly, the Court in Rosneft did not rule on its competence to interpret a CFSP decision in the framework of the preliminary reference procedure and confined itself to questions of validity. This is remarkable because the questions from the referring British court also entailed issues of interpretation, and AG Wathelet had expressed himself on this issue. In his view, the competence to perform the broader task of a legality review necessarily implies the competence to perform the narrower task of interpretation.61 In addition, the crucial role of the preliminary reference procedure in ensuring the uniform interpretation of EU law and the coherence of the system envisaged by the EU Treaties may be a forceful argument in favour of such a broad interpretation.62 An important counter-argument, however, is the express reference to the ‘review of legality’ in Article 275 TFEU, second paragraph, which makes it difficult to further stretch the role of the Court in relation to CFSP decisions pertaining to restrictive measures. Hence, it appears that the Court’s interpretative competence under Article 267 TFEU cannot be disconnected from questions of validity. Thirdly, the question remains whether the Court’s confirmation of the Foto-Frost logic in Rosneft applies with respect to all CFSP decisions or only for those acts pertaining to the adoption of restrictive measures. In light of the uniform application of EU law and the coherence of the system of judicial protection, a broad understanding may be expected. However, the text of Article 275 TFEU, second paragraph specifically refers to ‘decisions providing for restrictive measures’, implying that a further extension of the Court’s jurisdiction beyond this particular area of CFSP decisions is difficult to reconcile with the text of the EU Treaties.63 Hence, it appears that a certain gap in the EU system of judicial review is the unsurmountable consequence of the drafting of the EU Treaties. When reading Rosneft in conjunction with a series of other CFSP-related judgments, it nevertheless becomes increasingly clear that the role of the Court in this special field of EU law is less limited than what a literal interpretation of the EU Treaties may suggest. V. ADDITIONAL READING Bosse-Platière, I, ‘Le juge de l’Union, artisan de la cohérence du système contrôle juridictionnel au sein de l’Union européenne, y compris en matière de PESC’ [2017] Revue trimestrielle de droit européen 555. Butler, G, ‘The Coming of Age of the Court’s Jurisdiction in the Common Foreign and Security Policy’ (2017) 13 European Constitutional Law Review 673. Gatti, M, ‘Juridiction de la Cour de justice sur les renvois préjudiciels en matière de politique étrangère et de sécurité commune: à propos de l’arrêt Rosneft de la CJUE’ [2018] Annuaire français de droit international 440. Koutrakos, P, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018) 67 ICLQ 1. Lonardo, L, ‘Law and Foreign Policy before the Court: Some Hidden Perils of Rosneft’ (2018) 3 European Papers 547. Poli, S, ‘The Common Foreign Security Policy after Rosneft: Still Imperfect but Gradually Subject to the Rule of Law’ (2017) 54 CML Rev 1799. 60 See also Poli (n 6); P Van Elsuwege, ‘Judicial Review and the Common Foreign and Security Policy: Limits to the Gap-Filling Role of the Court of Justice’ (2021) CML Rev 1765. 61 Opinion of AG Wathelet in Rosneft (n 19) para 75. 62 Poli (n 6) 1829. 63 ibid 1828.
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82 The EU Competence to Conclude the New Generation of Free Trade Agreements: Opinion 2/15 (EU–Singapore FTA) CHRISTINE KADDOUS Opinion 2/15, Free Trade Agreement between the European Union and the Republic of Singapore, ECLI:EU:C:2017:376, delivered 16 May 2017. KEYWORDS Competence to conclude an international agreement – Common commercial policy – Trade in goods and services – Foreign direct investment – Commercial aspects of intellectual property – Trade with third states and sustainable development – Article 207(5) TFEU – Services in the field of transport – Article 3(2) TFEU – International agreement which may affect common rules or alter their scope – Non-direct foreign investment – Article 216 TFEU – Agreement necessary in order to achieve one of the objectives of the Treaties – Succession of treaties concerning investment – Institutional provisions of the agreement – Investor–state dispute settlement – Dispute settlement between the parties.
I. INTRODUCTION
I
n Opinion 2/15, the Court ruled for the first time on the competence of the European Union to conclude the ‘new generation’ of free trade agreements (FTAs). It decided on the division of competences between the EU and its Member States in the field of the Common Commercial Policy (CCP), in particular as to the new areas included in Article 207 TFEU since the entry into force of the Treaty of Lisbon. Opinion 2/15 also dealt with issues beyond the scope of the CCP. It interpreted the various assumptions of the Union’s exclusive competence to conclude international agreements under Article 3(2) TFEU, and analysed the dispute settlement mechanisms envisaged in the new generation of FTAs. According to the Court, the envisaged agreement fell within the Union’s exclusive competence, except for the provisions which relate to non-direct investments (portfolio investment) and to the dispute settlement mechanism between states and investors, as well as to the institutional provisions corresponding to the areas which fell under a shared competence between the EU and its Member States. The Court emphasised at the outset that Opinion 2/15 related only
892 Christine Kaddous to the nature of the Union’s competence to conclude the envisaged agreement, and that this was without prejudice to the question whether the content of the agreement’s provisions was compatible with EU law.1 This differentiated Opinion 2/15 from Opinion 1/17,2 the request of which was made in September 2017 by a Member State (Belgium) on the FTA with Canada (EU–Canada Comprehensive Economic and Trade Agreement, CETA). Opinion 2/15 was delivered with the Court sitting as a Full Court, and 25 Member States submitted observations. These elements demonstrate the key importance of the Opinion for the future of EU trade policy and the conclusion of the new generation of FTAs with the partners of the EU, such as Canada, the USA and Japan. II. FACTS
On 8 December 2006, the European Commission addressed a recommendation to the Council, seeking its authorisation to open negotiations with a view to the conclusion of an FTA with the ASEAN states. The Council acceded to the recommendation. It did also provide that, should it not be possible to reach an agreement with all ASEAN states, the Commission would be authorised to negotiate bilaterally. Three years later, the Commission was thus authorised to negotiate bilaterally with Singapore. The negotiations began in March 2010, and in February 2011, the Commission addressed a recommendation to the Council seeking modification of the negotiating directives so as to include investment protection, to which the Council agreed in September 2011. In December 2012, negotiations were concluded on all chapters except the investment protection chapter, and in October 2014, the negotiations on that last chapter were completed. On 26 June 2015, the Commission informed the Trade Policy Committee of the Council that there was now an envisaged agreement. During the negotiations, differences became apparent in consultations within the Trade Policy Committee (appointed according to Article 207(3) and Article 218(4) TFEU) on the nature of the EU’s competence to conclude the envisaged agreement. In the Commission’s view, the EU has exclusive competence to sign and conclude the envisaged agreement. It contended, first, that all the provisions of the agreement, with the sole exception of those concerning cross-border transport services and non-direct foreign investment, fell within the scope of the CCP as defined in Article 207(1) TFEU and, therefore, within the EU’s exclusive competence pursuant to Article 3(1)(e) TFEU. It contended, secondly, that cross-border transport services fell within the EU’s exclusive competence referred to in Article 3(2) TFEU, in the light of the rules of secondary EU law which are in force in that field. It submitted, finally, that, insofar as the envisaged agreement related to non-direct investments, the EU likewise had exclusive competence pursuant to Article 3(2) TFEU, because of the overlap between (i) the commitments contained in that agreement concerning those investments and (ii) the prohibition of restrictions on movements of capital and on payments between Member States and third states that is laid down in Article 63 TFEU. The Parliament stated that it agreed with the overall Commission’s appraisal and, like the Commission, took the view that the envisaged agreement falls within the exclusive competence of the EU.
1 Opinion 2 Opinion
2/15, EU–Singapore Agreement, ECLI:EU:C:2017:376, para 30. 1/17, EU–Canada CET Agreement, ECLI:EU:C:2019:341.
The EU Competence to Conclude the New Generation of Free Trade Agreements 893 On the other hand, the Council, and all the Member States which submitted observations, contended that certain provisions of the envisaged agreement did not fall within the exclusive competence of the EU, arguing the agreement had the characteristics of a ‘mixed agreement’. They submitted that the provisions relating to the field of transport fell within the common transport policy. According to them, those provisions, for the most part, cannot ‘affect common rules or alter their scope’ within the meaning of Article 3(2) TFEU. They therefore argued that these provisions did not fall within the exclusive competence of the EU referred to in the TFEU, but within a competence shared between the EU and its Member States pursuant to Article 4(2)(g) TFEU. Furthermore, the Council and the Member States, having submitted observations, argued that the provisions concerning environmental protection, social protection and intellectual property (IP) protection, fell within the competences shared between the EU and its Member States in those fields, those provisions having no specific link with international trade. The envisaged agreement was also said to contain provisions which fell within competences of the Member States alone. That was so, they argued, inter alia in the case of the provisions of Chapter 14, which lay down rules on transparency, and of the provisions of Chapter 9 insofar as they relate to non-direct foreign investment. In that regard, the Council and the Member States which had submitted observations to the Court stated that the TFEU does not confer any competence on the EU in the field of investment which does not come under ‘direct investment’. They added that, contrary to the Commission’s submissions, ‘common rules’ within the meaning of Article 3(2) TFEU cannot consist of rules of primary EU law, such as Article 63 TFEU. They held that the Commission’s line of argument was not consistent with the Court’s case law concerning the implied external competences of the EU. In support of its line of argument relating to the lack of the Union’s exclusive competence in respect of investment, the Council referred to certain provisions of that chapter which, in its submission, fall within the competence of the Member States, such as those relating to public order or public security. The Council and some Member States furthermore stated that Chapter 9 related only to investment protection, and not to the admission of investments. In their views, and in so far as that chapter related to foreign direct investment, it could not be approved by the EU alone, as investment protection was not specifically linked to international trade. III. THE COURT
In Opinion 2/15, the Court examined whether the provisions of the EU–Singapore FTA fell within the Union’s exclusive competence, a competence shared between the EU and its Member States or a competence of the Member States alone. To deal with the arising questions, the Court observed in the first place that the subject matter and objectives of the envisaged agreement consisted of establishing an FTA to liberalise and facilitate trade and investment between the contracting parties. It considered it appropriate to examine, at the outset, to what extent the provisions of the envisaged agreement fell under the Union’s exclusive competence, referred to in Article 3(1)(e) TFEU relating to the CCP. In a second part of Opinion 2/15, the Court analysed whether specific commitments of the agreement concerning services in the field of transport, public procurement in the field of transport and non-direct investments, which did not fall within the Union’s exclusive competence under Article 3(1)(e) TFEU, nevertheless fell within the Union’s exclusive competence under Article 3(2) TFEU. In a third part, the Court dealt with the competence to approve the institutional provisions of the agreement, ie exchange of information, notification, verification,
894 Christine Kaddous cooperation, mediation and decision-making power, transparency and dispute settlement (investor–state dispute settlement and state-to-state dispute settlement). In the part of Opinion 2/15 related to the Union’s exclusive competence referred to in Article 3(1)(e) TFEU, the Court began by recalling the terms of Article 207(1) TFEU and the settled case law related to the CCP. It emphasised that the mere fact that an EU act, such as an agreement concluded by it is liable to have implications for trade with one or more third states is not sufficient to conclude that that act must be classified as falling within the CCP. On the other hand, an EU act falls within this policy if it relates specifically to trade that is essentially intended to promote, facilitate or govern such trade and has direct and immediate effects on it.3
It followed that only the components of the envisaged agreement that display a specific link, in the above sense, with trade between the EU and Singapore fell within the field of the CCP. Accordingly, the Court had to establish, area by area, whether the commitments contained in the agreement were intended to promote, facilitate or govern such trade, and had direct and immediate effects on it. To achieve this, it examined the commitments contained in the agreement. The Court held that the chapters relating to market access meet the aforementioned criteria, namely to ‘promote, facilitate or regulate trade and have direct and immediate effects on trade’. Regarding the provisions on services, which cover the four modes of supply of services corresponding to the classification developed in the WTO, all of these provisions aim to promote, facilitate or regulate trade and have direct and immediate effects on trade in services. This conclusion was not new. The Court already admitted in Opinion 1/08 that these four modes of supply fall within the CCP.4 However, according to Article 207(5) TFEU, there was an exception that related to the provision of services in the field of transport. The Commission’s view, according to which services in the field of transport are excluded only so far as they concern the cross-border supply of services, that is to say, modes 1 and 2, was held to be unfounded.5 As pointed out by the Court, such a view disregarded the wording of Article 207(5) TFEU, which excluded international agreements in the field of transport in their entirety from the CCP. The commitments concerning investment protection in the envisaged agreement related both to direct investment and to any other type of investment. To deal with this issue, the Court recalled that the settled case law related to the definition of ‘direct investment’.6 It then referred to Article 207(1) TFEU, which provides that EU acts concerning ‘foreign direct investment’ fall within the CCP and concluded therefrom that the EU has exclusive competence, pursuant to Article 3(1)(e) TFEU, to approve any commitment vis-à-vis a third state relating to investments made by natural or legal persons of that state in the EU, and vice versa, which enables effective participation in the management or control of a company carrying out an economic activity.7 On the other hand, the Court emphasised that the use, by the framers of 3 Opinion 2/15 (n 1) para 36 and the case law mentioned therein, inter alia, Case C-414/11, Daiichi Sankyo and Sanofi-Aventis Deutschland, ECLI:EU:C:2013:520, para 51; Case C-137/12, Commission v Council, ECLI:EU:C:2013:675 (Conditional Access Convention), para 57. See this volume, ch 61; Opinion 3/15, Marrakesh Treaty on access to published works, ECLI:EU:C:2017:114, para 61. See this volume, ch 78. 4 Opinion 1/08, Agreements modifying the Schedules of Specific Commitments under the General Agreement on Trade in Services (GATS), ECLI:EU:C:2009:739, paras 4, 118 and 119. 5 Opinion 2/15 (n 1) para 60. 6 ibid para 80 and the case law mentioned therein, eg Case C-446/05, Test Claimants in the FII Group Litigation, ECLI:EU:C:2006:774, paras 181–82; Case C-326/07, Commission v Italy, ECLI:EU:C:2009:193, para 35; Case C-464/14, SECIL, ECLI:EU:C:2016:896, paras 75–76. 7 Opinion 2/15 (n 1) para 82.
The EU Competence to Conclude the New Generation of Free Trade Agreements 895 the TFEU, of the words ‘foreign direct investment’ in Article 207(1) TFEU is an unequivocal expression of their intention not to include other foreign investment in the CCP.8 Accordingly, the commitments relating to other foreign investment fall outside the EU exclusive competence pursuant to Article 3(1)(e) TFEU. With regard to IP rights, the Court recalled that CCP as provided in Article 207(1) TFEU includes ‘the commercial aspects of intellectual property’. Accordingly, the international commitments concerning intellectual property entered into by the EU fall within those ‘commercial aspects’ when they display a specific link with international trade in that they are essentially intended to promote, facilitate or govern such trade and have direct and immediate effects.9 The Court referred to the formula used in Daiichi Sankyo and reaffirmed in Opinion 3/15. After having examined the various IP rights included in the envisaged agreement, the Court emphasised that the text of the agreement consisted of a reminder of existing multilateral international obligations and bilateral commitments, and had as its basic aim to guarantee entrepreneurs of the EU and Singapore an ‘adequate … level of protection of their intellectual property rights’.10 The Court also held that the provisions in the envisaged agreement enable entrepreneurs to enjoy, in the territory of the other contracting party, standards of protection of IP rights displaying a degree of homogeneity and thus contributing to their participation on an equal footing in the free trade of goods and services between the EU and Singapore,11 given that the rules ensured ‘a degree of homogeneity’ between the levels of judicial protection available to holders of IP rights in both parties.12 Accordingly, the provisions were such as to ‘have direct and immediate effects on trade’ between the parties, and did relate to ‘commercial aspects of intellectual property’ within the meaning of Article 207(1) TFEU.13 The whole chapter consequently falls within the EU exclusive competence pursuant to Article 3(1)(e) TFEU. In the area of competition, the Court said the provisions obliged the parties to ‘maintain legislation which effectively addresses measures that result in a substantial lessening of competition’ or impede it, and to ‘maintain authorities responsible for the enforcement of their respective legislations’.14 For the Court, those provisions formed part of the ‘liberalization of trade’ between the EU and Singapore, and related specifically to the ‘combatting of anti-competitive activity and of concentrations whose object or effect is to prevent trade between the parties from taking place in healthy conditions of competition’.15 Consequently, those provisions were considered as falling within the field of the CCP and not of the internal market.16 The envisaged agreement also included a provision according to which any public undertaking, any undertaking entrusted with special or exclusive rights and any state monopoly is to accord non-discriminatory treatment to goods and to service suppliers of the other party.17 Consequently, this was held as falling within the EU’s exclusive competence referred to in Article 3(1)(e) TFEU. As to the commitments concerning sustainable development provided for in the envisaged agreement, the Court recalled the features of this ‘new generation’ of FTAs that included, in
8 ibid
para 83. para 112. 10 ibid para 121. 11 ibid para 122. 12 ibid para 123. 13 ibid paras 127 and 128. 14 ibid paras 132 and 133. 15 ibid para 134. 16 ibid para 135. 17 ibid para 136. 9 ibid
896 Christine Kaddous addition to the classical elements, other aspects that are relevant, or even essential, to such trade.18 It referred to the fact that the TFEU differs appreciably from the former EC in that it includes new aspects of contemporary international trade in the CCP. Those principles and objectives specified in Articles 21(1) and (2) TEU, and as is stated in Article 21(2)(f) TEU, relate inter alia to sustainable development linked to the preservation and improvement of the quality of the environment and the sustainable management of global natural resources.19 For the Court, the obligation on the EU to integrate those objectives and principles into the conduct of its CCP was apparent from the second sentence of Article 207(1) TFEU read in conjunction with Article 21(3) TEU and Article 205 TFEU.20 On that basis, the Court held that the objective of sustainable development henceforth ‘forms an integral part’ of the CCP.21 In the light of the foregoing, the Court concluded that Chapter 13 falls within the EU exclusive competence referred to in Article 3(1)(e) TFEU.22 In the second part of Opinion 2/15, the Court examined whether provisions of the EU–Singapore envisaged agreement fall within the exclusive EU competence referred to in Article 3(2) TFEU. For the Court, the commitments concerning the international maritime transport services, rail transport services, road transport services and internal waterways transport services, and the services inherently linked to those transport services, do not fall within the CCP, but must be approved in accordance with the division of competences between the EU and the Member States in the field of the common transport policy.23 After having made reference to Title VI of Part Three of the TFEU (Articles 90–100 TFEU) governing the common transport policy, the Court recalled the ERTA judgment.24 It also stated, in line with that case law, that Article 216 TFEU grants to the EU competence to conclude, inter alia, any international agreement which ‘is likely to affect common rules or alter their scope’. Additionally, the Court recalled that the competence to conclude such an agreement under Article 3(2) TFEU was exclusive.25 In order to assess whether the commitments in respect of services ‘may affect common rules or alter their scope’ within the meaning of Article 3(2) TFEU, the Court emphasised that regard must be had to the settled case law, according to which there is such a risk where those commitments fall within the scope of those rules.26 In accordance with that case law, such a risk does not presuppose that the area covered by the international commitments and that covered by the EU rules coincide fully. The scope of the common EU rules may also be affected or altered by those commitments where the latter fall within an area which is already covered to a large extent by those rules.27 After a thorough examination of the provisions of the envisaged agreement, the Court concluded that the EU had exclusive competence, pursuant to Article 3(2) TFEU, to approve those commitments relating to maritime,28 rail29 and
18 ibid para 140. 19 ibid para 142. 20 ibid para 143. 21 ibid para 147. 22 ibid para 167. 23 ibid para 168. 24 ibid para 170. 25 ibid paras 171 and 172. 26 ibid para 180 and the case law referred to therein: Case C-114/12, Commission v Council, ECLI:EU:C:2014:2151, para 68; Opinion 1/13, ECLI:EU:C:2014:2303, para 71; Case C-66/13, Green Network, ECLI:EU:C:2014:2399, para 29, Opinion 3/15 (n 3) para 105. 27 Opinion 2/15 (n 1) para 181. 28 ibid paras 192–93. 29 ibid paras 201–02.
The EU Competence to Conclude the New Generation of Free Trade Agreements 897 road transport.30 As to the provisions of the EU–Singapore envisaged agreement relating to public procurement in the field of transport, the Court examined whether the commitments fall within an area which is already covered to a large extent by common EU rules. It answered positively, and emphasised that the commitments made in the envisaged agreement may affect or alter the scope of the EU common rules in that field.31 The commitments concerning the protection of ‘foreign direct investment’, as already stated, fall within the EU’s exclusive competence pursuant to Article 3(1)(e) TFEU. However, as to the commitments concerning non-direct investments, the Court examined whether the EU has an exclusive competence under Article 3(2) TFEU. It recalled that non-direct investment may, inter alia, take place in the form of the acquisition of company securities with the intention of making a financial investment without any intention to influence the management and control of the undertaking (portfolio investment), and that such investments constitute movements of capital for the purposes of Article 63 TFEU.32 It then examined whether the commitments relating to portfolio investments could fall within one of the grounds provided for in Article 3(2) TFEU. The Court emphasised that the ERTA judgment could not be applied to a situation where the EU rules referred to are provisions of the TFEU and not common rules adopted on the basis of the TFEU.33 In addition, according to EU law as it stood at the time the Court rendered Opinion 2/15, the conclusion of an international agreement concerning nondirect foreign investment is not provided for in a legislative act of the Union.34 Additionally, the Court held that the conclusion of such an agreement does not appear ‘necessary to enable the Union to exercise its internal competence within the meaning of Article 3(2) TFEU’.35 Consequently, the EU does not have exclusive competence to conclude an international agreement with Singapore insofar as it relates to the protection of non-direct foreign investment.36 The Court then turned to examine whether the conclusion of such an agreement may prove to be ‘necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties’ within the meaning of Article 216(1) TFEU.37 It emphasised that the conclusion of an international agreement that contributes to the establishment of free movement of capital and payments between Member States and third states on a reciprocal basis may be classified as necessary in order to achieve fully such free movement, which is one of the objectives of Title IV of the TFEU (free movement of persons, services and capital). As this title falls within the competence relating to the internal market that is shared between the EU and the Member States pursuant to Article 4(2)(a) TFEU, the competence conferred on the EU by Article 216(1) TFEU in respect of the conclusion of an agreement which is ‘necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties’ is also shared since Article 4(1) TFEU provides that the EU ‘shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6’, which is the case here.38 It follows from the aforementioned elements that the commitments concerning 30 ibid para 210. 31 ibid paras 219–24. 32 See, inter alia, Joined Cases C-282/04 and C-283/04, Commission v Netherlands, ECLI:EU:C:2006:208, para 19; Case C-81/09, Idryma Typou, ECLI:EU:C:2010:622, para 48; Case C-212/09, Commission v Portugal, ECLI:EU:C:2011:717, para 47. 33 Opinion 2/15 (n 1) paras 233–34. 34 ibid para 236. 35 ibid para 237. 36 ibid para 238. 37 ibid para 239. 38 ibid paras 240 to 242.
898 Christine Kaddous the protection of ‘foreign non-direct investment’ fall within a competence shared between the EU and the Member States pursuant to Article 4(1) and (2)(a) TFEU.39 In the third part of Opinion 2/15, the Court dealt with the competence to approve the institutional provisions of the envisaged agreement. With regard to these elements, the Court recalled its case law, according to which the competence of the EU to enter into international commitments includes competence to couple those commitments with institutional provisions. Their presence in the agreement had no effect on the nature of the competence to conclude it. Those ‘provisions are of an ancillary nature and therefore fall within the same competence as the substantive provisions which they accompany’.40 Consequently, the Court applied this principle, and indicated which provisions of the envisaged agreement fall within the exclusive competence of the EU and which do not.41 As to dispute settlement, the envisaged agreement establishes a regime for the investor– state dispute settlement, which is defined as a dispute between a claimant of one Party and the other Party concerning treatment alleged to breach the provisions of ‘investment protection’ (section A of Chapter 9) which breach allegedly causes loss or damage to the claimant or its locally established company.42
Clearly, the EU – but also the Member States – can be parties to such disputes, as the respondent. In that regard, the Court emphasised that while the agreement did not rule out the possibility of a dispute between a Singapore investor and a Member State being brought before the courts of that Member State, this remains merely a possibility at the discretion of the claimant investor.43 The Court held that the claimant investor may decide to submit the dispute to arbitration without the Member State being able to oppose this, as its consent in this regard is deemed to be obtained under the envisaged agreement.44 It then concluded that ‘such a regime, which removes disputes from the jurisdiction of the courts of the Member States cannot be of a purely ancillary nature within the meaning of the case-law recalled’,45 and ‘cannot therefore be established without the Member States’ consent’. The approval of this dispute settlement regime fell within a competence shared between the EU and the Member States.46 The envisaged agreement also provides for a regime to settle dispute between the parties as to ‘any difference concerning the interpretation and application of the provisions of (that agreement), except as otherwise provided’.47 The Court first stated that this regime does not apply to the chapter concerning trade and sustainable development, but does apply to other chapters of the envisaged agreement.48 It then emphasised the main features of that regime.49 As to the question of the competence of the EU to approve these provisions, the Court recalled that the competence of the EU in the field of international relations and its capacity to conclude international agreements necessarily entail the power to submit to the decisions of a court 39 ibid para 243. 40 ibid para 276 and the case law referred to therein, inter alia, Opinion 1/76, Agreement on the establishment of a European Laying-up Fund for Inland Waterway Vessels, ECLI:EU:C:1977:63, para 5; Opinion 1/78, International Agreement on Natural Rubber, ECLI:EU:C:1979:224, para 56; Conditional Access Convention (n 3) paras 70–71. 41 Opinion 2/15 (n 1) paras 277–79. 42 ibid para 285. 43 ibid para 290. 44 ibid para 291. 45 ibid para 292. The case law is recalled in para 276 of Opinion 2/15. It is related to Opinion 1/76 (n 40) para 5; Opinion 1/78 (n 40) para 56; Conditional Access Convention (n 3) paras 70–71. 46 Opinion 2/15 (n 1) para 293. 47 ibid para 294. 48 ibid para 295 49 ibid paras 296–97.
The EU Competence to Conclude the New Generation of Free Trade Agreements 899 which is created or designated by such agreements as regards the interpretation and application of their provisions.50 It also emphasised that Opinion 2/15 did not relate to the question of the compatibility of the envisaged agreement with EU law.51 In conclusion, the envisaged agreement fell within the exclusive competence of the EU, with the exception of the provisions that relate to non-direct investment, to investor–state dispute settlement and to institutional provisions of the envisaged agreement, in so far as they relate to fields falling outside the EU’s exclusive competence. IV. THE IMPORTANCE OF THE CASE
Opinion 2/15 is a landmark case of EU external relations law for several reasons. It is notably remarkable as to the broad definition of the EU trade policy and the competence to conclude the new generation of FTAs. It revealed the legal impacts of the reforms brought by the Treaty of Lisbon and confirmed the wide interpretation of the ERTA effect as well as the function of Article 3(2) TFEU. It also shed light on the relationship between the CCP and sustainable development, and on the division of competences to conclude international agreements providing for institutional provisions and two different dispute settlement mechanisms (investor–state disputes and state-to-state disputes). This section will proceed by commenting on the abovementioned issues dealt with in Opinion 2/15.52 A. Enlarged Scope of the CCP The approach developed by the Court was to examine at the outset the extent to which the provisions of the EU–Singapore FTA fell under the EU’s exclusive competence within the field of the CCP. Article 207(1) TFEU mentions traditional areas of the CCP, like trade in goods that are well-established and falling under the EU exclusive competence. However, this provision also mentions newer areas that are still disputed. Daiichi Sankyo and the Conditional Access Convention reflected the type of issues that may arise in relation to these newer areas of CCP.53 Opinion 2/15 was about the traditional, as well as the newer, areas of CCP. In order to identify the commitments of the envisaged agreement that fall within the scope of the CCP, the Court applied a test it developed in the above-mentioned case law as well as in Opinion 3/15.54 According to that test, the mere fact that an EU act, such as an agreement concluded by it, is liable to have implications for trade with one or more third states is not enough for it to be concluded that the act must be classified as falling within the common commercial policy. On the other hand, an EU act falls within that policy if it relates specifically to such trade in that it is essentially intended to promote, facilitate or govern such trade and has direct and immediate effects on it.55 50 ibid para 298 and the case law referred to therein: Opinion 1/91, ECLI:EU:C:1991:490, paras 40 and 70; Opinion 1/09, ECLI:EU:C:2011:123, para 74; Opinion 2/13, ECLI:EU:C:2014:2454, para 182. 51 Opinion 2/15 (n 1) para 300. 52 Issues such as succession and application of Art 351 TFEU are not dealt with in this commentary. See, inter alia, J Malenovský, ‘L’Union, ses Etats membres, les Etats tiers et la succession en droit international’ in Liber amicorum Antonio Tizzano, ‘De la Cour CECA à la Cour de l’Union: le long parcours de la justice européenne’ (Turin, G Giappichelli Editore, 2018) 544–53. 53 Daiichi Sankyo (n 3). See this volume, ch 64; Conditional Access Convention (n 3). 54 Daiichi Sankyo (n 3) para 51; Conditional Access Convention (n 3) para 57; Opinion 3/15 (n 3) para 61. 55 Opinion 2/15 (n 1) para 36.
900 Christine Kaddous That test, consisting in an analysis of the ‘aim and content’ of the measures at stake, is in essence a classical test that has been welcomed in practice.56 The test allowed the Court to determine which components of the EU–Singapore FTA display such a specific link with trade between the parties. Accordingly, the Court had to establish whether the commitments contained in the envisaged agreement were intended to promote, facilitate or govern such trade and have direct and immediate effects on it. The conclusion it reached was to consider the commitments relating to market access of goods and services (all GATS modes) fell within the field of the CCP, with the exception of the transport services excluded by virtue of Article 207(5) TFEU. The Court also acknowledged that IP rights play a key role in trade in goods and services in general, and in combating unlawful trade in particular, and could then be considered as having direct and immediate effects on trade. It is worth noting that some Member States contended that provisions of this chapter on IP rights had a non-commercial nature as they were referring to multilateral conventions, which include a provision relating to moral rights. This line of reasoning did not succeed before the Court. The reference made to those multilateral conventions in the EU–Singapore FTA was not sufficient to be regarded, on its own, as a component of the envisaged agreement. The whole chapter on IP rights was then essentially intending to facilitate and govern trade between the parties. The field of intellectual property rights was also scrutinised in the Commission v Council (Lisbon Agreement) case rendered a couple of months after Opinion 2/15. Referring largely to Opinion 2/15, the Court considered that an international agreement in the field of appellations of origin and geographical indications falls under the scope of the ‘commercial aspects of intellectual property rights’ within the meaning of Article 207 TFEU.57 The wide interpretation of the CCP has therefore been confirmed in this Lisbon Agreement judgment. Some commentators have noted in that judgment a willingness of the Court to go even further than Opinion 2/15 in matters of IP.58 As to investment protection, the Court clarified in Opinion 2/15 that the Union does not have the same kind of competence to conclude international agreements on foreign direct investments and on non-direct investments. It only has an exclusive competence to approve any commitment vis-à-vis a third state relating to investments made by natural or legal persons of that third state in the EU and vice versa which enable effective participation in the management or control of a company carrying out an economic activity.59 To conclude an agreement on non-direct investments, the competence of the Union is shared with the Member States. It is worth noting that the Council and some Member States contended that the provisions related to foreign direct investments in the agreement could not fall within the CCP, given that they concerned only the protection of investments and not their admission.60 After recognising that these provisions indeed related only to the treatment of investments after their admission under the legislation either of Singapore or of the EU, as the case may be, the Court held that this fact nonetheless does not preclude the rules agreed upon in the agreement concerning
56 C Kaddous and N Piçarra, ‘The External Dimension of the EU Policies: Horizontal Issues; Trade and Investment; Immigration and Asylum’in JL da Cruz Vilaça et al (eds), FIDE Congress Proceedings 2018, vol 3 (Almedina, Coimbra, 2018) 42–153, especially ch 4 on trade and protection of investments, 104–30. 57 Case C-389/15, Commission v Council, ECLI:EU:C:2017:798. 58 F Castillo de la Torre, ‘The Opinion on the Free Trade Agreement and Its Aftermath: Some Personal Reflections’ in I Bosse-Platière and C Rapoport (eds), The Conclusion and Implementation of EU Free Trade Agreements. Constitutional Challenges (Cheltenham, Edward Elgar, 2019) 37. 59 Opinion 2/15 (n 1) para 82. 60 ibid para 85.
The EU Competence to Conclude the New Generation of Free Trade Agreements 901 the protection of direct investments from falling within the CCP when they display a specific link with trade between the EU and Singapore. The provisions on investment protection, such as ‘no less favourable treatment’ and ‘prohibitions of arbitrary treatment’, contribute rightly to the legal certainty of investors and are rightly considered as promoting, facilitating and governing trade between the parties. Indeed, Article 207(1) TFEU refers generally to EU acts concerning ‘foreign direct investment’ without drawing a distinction between admission and protection.61 This reasoning allowed the Court to integrate investment protection provisions within the scope of the CCP. On the other hand, the use, by the framers of the TFEU, of the words ‘foreign direct investment’ in Article 207 TFEU was an unequivocal expression of their intention not to include other foreign investment in the common commercial policy. These non-direct investments have been defined by the Court and may, inter alia, take place in the form of the acquisition of company securities with the intention of making a financial investment without any intention to influence the management and control of the undertaking (portfolio investment). They constitute movements of capital for the purposes of Article 63 TFEU.62 Accordingly, commitments vis-à-vis a third state relating to other foreign investment did not fall within the exclusive competence of the EU.63 At the same time, the Court held that there is no exclusive competence of the Union in this area under Article 3(2) TFEU. Therefore, the commitments concerning non-direct investments (portfolio investment) did not fall under an exclusive competence of the Union but under a shared competence between the Union and the Member States. The Court also held that the investor–state dispute settlement mechanism falls outside the scope of the CCP.64 Opinion 2/15 assesses the wide interpretation of the CCP, which was confirmed later in particular in the Lisbon Agreement judgment on the appellations of origin and geographical indications.65 The Opinion also reflected the limits to the scope of the CCP. This policy does not include either transport (exclusion by Article 207(5) TFEU) or portfolio investment. This wide interpretation corresponds to the current trend in the field of trade of the main international actors, partners of the EU. B. The ERTA Effect and Article 3(2) TFEU The ERTA judgment states that when the EU adopts provisions laying down common rules, whatever form these may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third states which affect those rules.66 In line with that judgment and the subsequent case law, and after the modifications brought by Treaty of Lisbon, Article 216 TFEU grants to the EU competence to conclude, inter alia, any international agreement which ‘is likely to affect common rules or alter their scope’. Furthermore, under Article 3(2) TFEU, the EU competence to conclude international agreements is exclusive if their conclusion ‘may affect common rules or alter their scope’. 61 ibid paras 86 and 87. 62 ibid para 227. See, inter alia, Commission v Netherlands (n 32) para 19; Idryma Typou (n 32) para 48; Commission v Portugal (n 32) para 47. 63 Opinion 2/15 (n 1) para 83. 64 ibid paras 291 and 292. 65 Case C-389/15 (n 57). 66 Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA), para 17. See also Case C-467/98, Commission v Denmark, ECLI:EU:C:2002:625, paras 77–80.
902 Christine Kaddous In Opinion 2/15, the ERTA effect (Article 3(2) TFEU) is considered in the context of two different issues: cross-border transport services and non-direct investments. According to the case law, the existence of a risk of affectation of EU common rules does not presuppose that the area covered by the international commitments and that covered by the EU rules coincide fully.67 It suffices that the area at stake is already largely covered by common rules.68 A couple of months before Opinion 2/15, the application of Article 3(2) TFEU was also discussed in Opinion 3/15.69 In that Opinion, concerning the Marrakesh Treaty to facilitate access to published works for persons who are blind, visually impaired or otherwise print disabled, the Court held that the conclusion of the envisaged international agreement may affect or alter the scope of the common rules laid down in Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society and therefore falls within the exclusive competence of the EU.70 It recalled at that occasion that since the EU is vested only with conferred powers, any competence, especially where it is exclusive, must have its basis in conclusions drawn from a comprehensive and detailed analysis of the relationship between the international agreement envisaged and the EU law in force. It followed that the analysis to be conducted to apply Article 3(2) TFEU must take into account the areas covered, respectively, by the rules of EU law and by the provisions of the agreement envisaged, their foreseeable future development and the nature and content of those rules and those provisions, in order to determine whether the agreement is capable of undermining the uniform and consistent application of the EU rules and the proper functioning of the system which they establish.71 It must also be stressed that, according to the settled case law, Member States may not enter, outside the framework of the EU institutions, into international commitments falling within an area that is already covered to a large extent by common rules, even if there is no possible contradiction between those commitments and the common rules.72 According to the settled case law recalled above, the commitments foreseen in the field of transport in the EU–Singapore FTA fell within an area which was already covered to a large extent by common rules and therefore could have affected or altered the scope of those rules.73 The conclusion was then rightly in favour of an exclusive competence of the Union to conclude the envisaged agreement in that field. As to non-direct investments, the question was whether the EU had an exclusive competence pursuant to Article 3(2) TFEU, because of the overlap between the commitments contained in the agreement and the prohibition of restrictions on movements of capital and on payments between Member States and third states as laid down in Article 63 TFEU. The Court rightly held that ‘common rules’ within the meaning of Article 3(2) TFEU cannot consist of rules of primary EU law, such as Article 63 TFEU. Common rules can only comprise rules of secondary legislation adopted on the basis of the TFEU. It follows that the EU does not have exclusive competence pursuant to Article 3(2) TFEU to conclude an international agreement with Singapore insofar as it relates to the protection of non-direct investments.74 The Court nevertheless held that the EU has competence to conclude an international agreement including provisions on portfolio investment by virtue of Article 216(1) TFEU, on the basis that
67 Opinion
2/15 (n 1) para 181. C-114/12 (n 26) para 70 and the case law cited therein. 69 Opinion 3/15 (n 3). 70 ibid paras 102–30. 71 ibid para 108. 72 Opinion 3/15 (n 3) para 113. 73 Opinion 2/15 (n 1) paras 168–224. 74 ibid para 238. 68 Case
The EU Competence to Conclude the New Generation of Free Trade Agreements 903 ‘where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties’.75 The free movement of capital, which is one of the objectives of Title IV, falls under a shared competence between the Union and the Member States in accordance with Article 4(1) and (2)(a) TFEU. In conclusion, Article 3(2) TFEU, according to which the Union shall have exclusive competence for the conclusion of an international agreement when its conclusion may affect common rules or alter their scope, received an extensive interpretation in Opinion 3/15 and Opinion 2/15, which equates to a large recognition of the ERTA effect as developed there and in the subsequent case law. Whereas some criticisms have been addressed to the wide application of Article 3(2) TFEU by the Court in Opinion 2/15, the ERTA effect was largely accepted.76 However, it does also have a limit. The Court rightly did not accept that the concept of ‘common rules’ includes provisions of primary law. C. CCP and Sustainable Development An important and innovative element in Opinion 2/15 concerned the provisions on sustainable development. Those are now part of the CCP. This was linked to the transformation of the CCP following the entry into force of the Treaty of Lisbon, which now requires a combined reading of the general objectives of the EU’s external action and the specific objectives in terms of CCP. In concrete terms, the CCP is nowadays subject to two categories of objectives. The specific aspects of liberalisation enshrined in Article 206 TFEU continue to be encouraged, but they are complemented by a number of general principles and objectives which must be respected and pursued in all fields of the EU’s external actions. This more comprehensive legal framework results from the text of Article 207(1) TFEU, Article 21(3) TEU and Article 205 TFEU. In Opinion 2/15, the Court held that the obligation to integrate those general objectives and principles into the conduct of the CCP is apparent from the second sentence of Article 207(1) TFEU read in conjunction with Article 21(3) TEU and Article 205 TFEU.77 Reference was also made to Article 9 TFEU (social protection of workers), Article 11 TFEU (environmental protection) and Article 3(5) TEU (free and fair trade).78 It followed that the objective of sustainable development henceforth forms an integral part of the common commercial policy.79 Clearly, the provisions relating to environment and to the social protection of workers were considered as forming part of the trade objectives between the Union and Singapore,80 and play an essential role in the agreement.81 At the same time, the exclusive competence of the Union so gained under the CCP cannot be exercised in order to regulate the levels of social and environmental protection in the parties’ respective territory. As noted by the Court, the provisions of the EU–Singapore FTA did not provide for a harmonisation of labour and environmental standards, but only intended to govern trade by making
75 ibid para 242. 76 The analysis of the concept of ‘affectation’ was considered, by some reports, as not detailed enough in order to be considered in conformity with the conditions developed in the settled case law, in particular the idea of a ‘comprehensive and detailed analysis’. See Kaddous and Piçarra (n 56) 69–70. 77 ibid para 143. 78 ibid para 146. 79 ibid para 147. 80 ibid para 148. 81 ibid para 162.
904 Christine Kaddous liberalisation of that trade subject to the condition that the parties comply with their existing international obligations in the same fields.82 This kind of provision, which is included in the new generation of FTAs, aims at promoting the respect by the contracting parties of their international commitments in those fields in order to reduce the risk of lowering the social and environmental protection in the respective territories below the standards set in the international conventions. With the line of reasoning developed by the Court, the provisions on sustainable development fall within the scope of the CCP and within the Union’s exclusive competence. The broad interpretation of CCP in this regard presents large similarities with the approach developed in Opinion 1/78.83 At that time, the CCP was construed in broad terms in order to allow the then Community to adapt its policy with a view to furthering the development of international trade.84 Opinion 2/15 is to be welcomed as a contribution to the achievement of environmental and social objectives through trade policy, even if the interaction between the various objectives may give rise in practice to difficulties of interpretation and application.85 D. Institutional Provisions and Dispute Settlement Mechanisms Pursuant to settled case law, the competence of the Union to enter into international commitments includes the competence to couple those commitments with institutional provisions. The presence of these institutional provisions in an agreement has no effect on the nature of the competence to conclude it. Those provisions are of an ancillary nature, and fall within the same competence as the substantive provisions which they accompany.86 The institutional provisions of the envisaged agreement established various obligations and procedures for the exchange of information, notification, verification, cooperation and mediation, as well as the creation of trade committees.87 They are intended to ensure the effectiveness of the substantive provisions of the envisaged agreement, by establishing, essentially, an organisational structure, methods of cooperation, obligations to exchange information and certain decision-making powers.88 Therefore, the competence of the Union for these provisions essentially followed the competence of the Union in the corresponding substantive provisions. Consequently, these provisions fell within the exclusive competence of the Union, unless they related to an area falling under a shared competence between the EU and its Member States, such as, for example, portfolio investment. As to the dispute settlement provisions, a distinction had to be made between the investor–state dispute settlement, and the dispute settlement between the contracting parties. The investor–state dispute settlement mechanism was a quite interesting and sensitive topic, as was evidenced by the legal and political debate surrounding the signature of the CETA in 82 ibid para 166. 83 Opinion 1/78 (n 40). 84 ibid para 44. 85 The interaction between the provisions on sustainable development and other provisions of an international agreement concluded by the EU with third states was at the heart of the recent and final report of the Arbitration Panel, dated 11 December 2020, on the restrictions applied by Ukraine on exports of certain wood products to the European Union, https://trade.ec.europa.eu/doclib/docs/2020/december/tradoc_159181.pdf. 86 Inter alia, Opinion 1/76 (n 40) para 5; Opinion 1/78 (n 40) para 56; Conditional Access Convention (n 3) paras 70–71; Opinion 2/15 (n 1) para 276. 87 Notably specialised committees: Committee on Trade in Goods, Committee on Sanitary and Phytosanitary Measures, Committee on Customs and Committee on Trade in Services, Investments and Public Procurement. 88 Opinion 2/15 (n 1) para 275.
The EU Competence to Conclude the New Generation of Free Trade Agreements 905 autumn 2016. The envisaged agreement provided for the conditions to be fulfilled in order for a dispute to be submitted to arbitration. If the dispute could not be settled amicably or through consultations, the investor concerned may notify their intention to resort to arbitration. The established regime allowed the claimant investor to decide to submit the dispute to arbitration, without that Member State being able to oppose this, as the consent of the latter in this regard was deemed to be obtained under the envisaged agreement.89 Such a regime, which allowed the potential removal of disputes from the jurisdiction of the courts of the Member States, could not be held to be of a purely ancillary nature within the meaning of the case law recalled above and cannot, therefore, be established without the Member States’ consent.90 Consequently, these provisions do not fall within the exclusive competence of the EU, but within a competence shared between the EU and its Member States.91 This conclusion has been discussed in Germany v Council (COTIF I). The mechanism for settling disputes between the parties (state-to-state disputes) on the interpretation and application of the envisaged agreement is largely inspired by the dispute settlement mechanism of the World Trade Organization (WTO). The envisaged agreement provided, as a first step, for a consultation procedure, which was followed, in case of non-settlement of the dispute, by the possibility for the complaining party to request the establishment of an arbitration panel, which takes binding decisions on the parties.92 It is also envisaged that the complaining party may decide not to apply the dispute settlement regime provided for in the agreement, but instead to bring an action within the framework of the WTO. After having highlighted that Opinion 2/15 did not address the issue of the compatibility of the mechanism envisaged with EU law, the Court held that the dispute settlement regime formed part of the institutional framework of the envisaged agreement. Since that regime related to disputes between the EU and Singapore, it was, unlike the investor–state dispute settlement regime, not liable to remove disputes from the jurisdiction of the courts of the Member States or of the EU. Accordingly, the rule laid down in the case law as to the institutional provisions of an agreement (ancillary nature) was applicable here. In these circumstances, the Union’s competence over dispute settlement provisions between the contracting parties followed the same competence of that applicable to the substantive provisions they supported. E. Conclusion It follows from Opinion 2/15 that the scope of the CCP is broadly interpreted by the Court. It covers the fields contained in the new generation of FTAs, including intellectual property, competition, public procurement and sustainable development. The areas of non-direct investment (portfolio investment), transport services and the investor–state dispute settlement mechanism are, however, excluded from the CCP. The field of transport is expressly excluded according to Article 207(5) TFEU. However, the services in that field were recognised as falling under the exclusive competence of the EU pursuant to Article 3(2) TFEU, despite a reluctance of some Member States that intervened in the procedure. Very few provisions are in fact recognised as being outside the Union’s exclusive competence, essentially non-direct investments and the investor–state dispute settlement mechanism. The Court’s extensive interpretation of
89 ibid
para 291. para 292. 91 ibid para 293. 92 ibid para 296. 90 ibid
906 Christine Kaddous the external competence of the Union takes into account the normative evolution resulting from the modifications brought by the Treaty of Lisbon and the perspectives drawn by the previous case law of the Court.93 The analysis of the Court in Opinion 2/15 has clearly provided the basis for a new architectural approach to EU trade agreements.94 However, one of the main issues that needed to be dealt with after Opinion 2/15 was to identify how the new generation of FTAs should be negotiated and concluded in the future, in particular the question relating to the implications of a shared competence as to the conclusion of agreements, including portfolio investment provisions. Since then, the Court made clear that the mere fact that international action of the Union falls within a competence shared between it and the Member States does not preclude the possibility of the required majority being obtained within the Council for the Union to exercise that external competence alone,95 implying the conclusion of an EU-only agreement. The extensive application of the ERTA effect rendered the competence of the Union to conclude a wide range of international agreements exclusive. The main difficulty still resides in the assessment to be conducted in order to determine where the requirement of coverage ‘to a large extent’ is fulfilled in order to shift from an area of shared competence to one of exclusive competence. As suggested by Allan Rosas, it seems agreeable if 70–80 per cent of the agreement is covered.96 More generally, Opinion 2/15 is a reflection of the design of a trade policy in line with the current developments at global level. V. ADDITIONAL READING Kaddous, C, ‘Commentaire de l’avis 2/15’ in Jurisprudence de la CJUE 2017 (Brussels, Bruylant, 2018) 633–95. Kaddous, C and Piçarra, N, ‘The External Dimension of the EU Policies: Horizontal Issues; Trade and Investment; Immigration and Asylum’ in JL da Cruz Vilaça et al (eds), FIDE Congress Proceedings 2018, vol 3 (Almedina, Coimbra, 2018) 42–153. Kleimann, D, ‘The Legitimacy of “EU-Only” Preferential Trade Agreements’ in M Hahn and G Van der Loo (eds), Law and Practice of the Common Commercial Policy (Leiden, Brill Nijhoff, 2021) 461–85. Rosas, A, ‘Mixity and the Common Commercial Policy after Opinion 2/15’ in M Hahn and G Van der Loo (eds), Law and Practice of the Common Commercial Policy (Leiden, Brill Nijhoff, 2021) 27–46.
93 C Kaddous, ‘The Transformation of the EU Common Commercial Policy’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 429–51. 94 D Kleimann, ‘The Legitimacy of “EU-Only” Preferential Trade Agreements’ in M Hahn and G Van der Loo (eds), Law and Practice of the Common Commercial Policy (Leiden, Brill Nijhoff, 2021) 461–85. 95 Joined Cases C-626/15 and C-659/16, Commission v Council, ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas), para 126. See this volume, ch 87; Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I), para 68. See this volume, ch 84. 96 A Rosas, ‘Mixity and the Common Commercial Policy after Opinion 2/15’ in Hahn and Van der Loo (n 94) 44.
83 International Agreements Assessed Through the Prism of the Charter of Fundamental Rights: Opinion 1/15 (EU–Canada PNR) SUZANNE KINGSTON Opinion 1/15, Draft Agreement between Canada and the European Union on the transfer and processing of Passenger Name Record data, ECLI:EU:C:2017:592, delivered 26 July 2017. KEYWORDS Data protection – External relations – Data transfers – Privacy – Charter of Fundamental Rights of the European Union.
I. INTRODUCTION
W
hat balance should be struck between the rights to data protection and privacy and the rights to security and protection from the threat of terrorism or serious crime? Which body should strike that balance, where an international agreement applies? And can – or must – the EU impose its own human rights standards in negotiating international agreements with third countries? These fundamental questions are at the heart of the Grand Chamber’s ruling in Opinion 1/15 on the EU–Canada Draft Agreement on the Transfer of Passenger Name Record Data (PNR) from the EU to Canada. In holding the draft agreement to be incompatible with the EU legal order, the Opinion broke important new ground, confirming for the first time that international agreements concluded by the EU must comply with the EU’s own human rights standards as provided for in the EU’s Charter of Fundamental Rights, including the rights to privacy and data protection. By requiring third countries to which data is transferred from the EU to comply with EU data protection standards, this effectively meant exporting the EU’s own data protection and fundamental rights regime. Moreover, building on its Digital Rights and Schrems I judgments,1 the Court went into detail on what it considered the appropriate balance between privacy and
1 Joined Cases C-293/12 and C-594/12, Digital Rights Ireland, ECLI:EU:C:2014:238; Case C-362/14, Schrems v Data Protection Commissioner, ECLI:EU:C:2015:650.
908 Suzanne Kingston security should be, and how that should be reflected in the nuts and bolts of the proposed international agreement. In so doing, the Court showed itself willing to assess the substance of Canadian law, albeit indirectly through the prism of EU standards. The Opinion therefore marks a significant chapter in the Court’s crafting of distinctive and robust EU fundamental rights to data protection and privacy, even where this may have difficult practical implications for data transfers to third countries. II. FACTS
It is standard practice for airlines to collect data concerning their passengers extracted from bookings. Such PNR data includes the passenger’s name, date of travel, contact and billing information, and Advance Passenger Information (API)2 collected by airlines. Such data may be useful not only to the airlines, but also to state agencies, including for law enforcement purposes. In 2003, the Commission adopted a Communication on a ‘global EU approach’ to transfer of airline PNR data,3 which was reviewed in a 2010 Communication.4 These set out the broad principles of the EU’s external PNR policy. This external dimension of PNR policy is today also supplemented by an internal regime. Within the EU, a directive on intra-EU PNR data transfers and processing was passed in 2016, allowing the use of such PNR data for preventing, detecting, investigating and prosecuting terrorist offences and serious crime.5 Reviewing the operation of this directive in 2020, the Commission reported that such data had been successfully used by law enforcement agencies of Member States to identify potential terrorists or persons involved in serious crime, and had resulted in the arrest and/or investigation of persons previously unknown to the police, and has helped to prevent crimes from being committed.6 In Opinion 1/15, the Court was asked to address the compatibility with the EU Treaties of the draft EU–Canada PNR agreement, which would have permitted transfers of PNR data from the EU to Canada, and the processing of such data, under certain conditions. The draft agreement followed a prior EU–Canada PNR agreement concluded in 2006, which expired in 2009, and aimed to ensure the provision of APR/PNR data covered by the agreement to the Canada Border Services Agency (CBSA) in a manner compliant with fundamental rights, in particular the right to privacy.7 Pending adoption of a new agreement, the Canadian authorities applied their own PNR system unilaterally to air carriers flying into Canada. Separately, PNR agreements were signed on the EU’s behalf with the USA and Australia, both in 2011.
2 API entails the capture of a passenger’s biographic data, typically found in the machine-readable zone of passports, by the airline prior to departure, and the electronic transmission of those details to the border control agencies in the destination country. API can then be used for screening against, eg lists of those subject to a travel ban. See WCO/IATA/ICAO Guidelines on Advance Passenger Information (2014). 3 Commission, ‘Transfer of Air Passenger Name Record (PNR) Data: A Global EU Approach’ (Communication), COM (2003) 826 final. 4 Commission, ‘On the Global Approach to Transfers of Passenger Name Record (PNR) Data to Third Countries’ (Communication), COM (2010) 492. 5 Directive 2016/681 of the European Parliament and of the Council of 27 April 2016 on the use of passenger name record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime, [2016] OJ L119/132. 6 Report from the Commission to the European Parliament and the Council on the Review of Directive 2016/681 on the use of passenger name record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime, COM (2020) 305 final, 6–7. 7 See the summary in Opinion 1/15, Draft Agreement between Canada and the European Union on the transfer and processing of Passenger Name Record data, ECLI:EU:C:2017:592, paras 14–17.
International Agreements Assessed Through the Prism of the Charter 909 In the case of the proposed EU–Canada PNR agreement, the Council authorised negotiations for a further agreement on the matter in 2010. In 2013, the Commission adopted proposals for Council decisions on the conclusion and signature of a draft agreement.8 The stated purpose of that draft agreement was to set out the conditions for the transfer and use of PNR data ‘to ensure the security and safety of the public and prescribe the means by which the data is protected’.9 The draft agreement’s essential features included: • an obligation for Canada to ensure that the CBSA, as the competent authority receiving the PNR data, as defined in the Annex to the agreement, processed the data strictly for the purpose of preventing, detecting, investigating or prosecuting terrorist offences or serious transnational crime,10 as defined in the agreement;11 • an obligation for the EU to ensure that air carriers were not prevented from transferring PNR data to the CBSA pursuant to the agreement;12 • a provision deeming the CBSA to provide an ‘adequate level of protection’ within the meaning of EU data protection law, for the processing and use of PNR data.13 This mapped onto the provision in the then-applicable EU Data Protection Directive, Directive 95/46/EC, permitting data transfers to third countries where the Commission has taken a decision that the third country in question ensured an adequate level of protection (an ‘adequacy decision’);14 • an obligation for Canada to share relevant and appropriate analytical information containing PNR data obtained under the agreement with Europol, Eurojust or Member State law enforcement or judicial authorities, as soon as practicable;15 • specific provisions requiring heightened protection for so-called ‘sensitive’ data, such as information revealing racial or ethnic origin, political opinions, religious beliefs or medical information; • a requirement that the agreement’s data protection safeguards be overseen by an ‘independent public authority, or by an authority created by administrative means that exercises its functions in an impartial manner and that has a proven record of autonomy’;16 • obligations for Canada to ensure that individuals could access and correct their PNR data, and could complain to the aforementioned oversight body concerning these rights;17 • a possibility for Canada to retain PNR data for up to five years;18 and • conditions limiting disclosure by the CBSA to other Canadian government authorities on a case-by-case basis, and limiting disclosure to third countries.19 8 COM (2013) 529 final. 9 Draft Agreement annexed to the Commission Proposal (ibid) Art 1. 10 Defined as any offence punishable in Canada by a maximum custodial sentence of at least four years, if transnational in nature. 11 Draft Agreement (n 9) Art 3. 12 ibid Art 4. 13 ibid Art 5. 14 Art 25(1) of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, [1995] OJ L281/31. See similarly, now, Art 45 of Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, [2016] OJ L119/1 (General Data Protection Regulation). 15 Draft Agreement (n 9) Art 6. 16 ibid Art 10. 17 ibid Arts 12–14. 18 ibid Art 16. 19 ibid Arts 18 and 19.
910 Suzanne Kingston In 2013, the European Data Protection Supervisor (EDPS) issued an Opinion questioning the proportionality of the draft agreement, on the basis that the EDPS had not seen convincing elements showing that such ‘massive and routine processing of data of non-suspicious passengers’ for law enforcement purposes was, in fact, necessary.20 Following the Council decision on the signing of the agreement, the Council sought the Parliament’s approval for the draft agreement’s conclusion. In 2014, the Parliament sought an Opinion of the Court pursuant to Article 218(11) TFEU on the compatibility of the draft agreement with the EU Treaties. In its request for an opinion, the Parliament expressed the view that: (a) While the draft agreement pursued two aims, namely to ensure the security and safety of the public and to prescribe the means by which PNR data will be protected, it amounted in effect to an adequacy decision. Accordingly, the Parliament argued that the decision concluding the agreement should be based on Article 16 TFEU (on data protection), and not on Articles 82(1) and 87(2)(a) TFEU (on judicial and other cooperation in criminal matters, and information exchange in law enforcement, respectively). (b) It was unclear whether the draft agreement complied with Articles 7 and 8 of the Charter. In particular, the Parliament argued that it was unclear whether an international agreement comprises a ‘law’ that could form the basis for a restriction of fundamental rights within the meaning of Article 52 of the Charter, and whether the restrictions were in fact objectively necessary. The Parliament raised specific concerns about the fact that it was not necessary to show a link between a particular passenger’s PNR data and a threat to public security; access to the PNR data was not dependent on a prior review by a court or independent administrative body; and PNR data could be retained for up to five years without any distinction made as to passengers. III. THE COURT
A. Opinion of Advocate General Mengozzi Advocate General (AG) Mengozzi delivered his Opinion in 2016, observing that the questions raised were ‘unprecedented and delicate’.21 He concluded that it was appropriate to follow the approach laid down in cases such as Digital Rights Ireland and Schrems in the case of internal EU/Member State measures, namely ‘strict review of compliance’ with the Charter.22 This was so even though, as he recognised, the draft agreement in this case was the outcome of international negotiations with a third country, and that Canada might well decide not to conclude the agreement and continue to apply its PNR system unilaterally to all air carriers established in the EU which provide flights to Canada.23 That, however, was not sufficient, in his view, to mean that the Court should ‘lower the degree of vigilance’ applicable to fundamental rights. For AG Mengozzi, it was incumbent on the Court to ensure that the draft agreement reflected a ‘fair balance between the legitimate desire to maintain public security and the equally
20 See
[2014] OJ C51/06 (Executive Summary) and www.edps.europa.eu (full text). of AG Mengozzi, Opinion 1/15, ECLI:EU:C:2016:656, para 5. 22 ibid para 7. 23 ibid para 8. 21 Opinion
International Agreements Assessed Through the Prism of the Charter 911 fundamental right for everyone to be able to enjoy a high level of protection of his private life and his own data’.24 This was particularly so, in his view, as the interference constituted by the agreement envisaged is of a considerable size and a not insignificant gravity. It systematically affects all passengers flying between Canada and the Union, that is to say, several tens of millions of persons a year … Furthermore, as most of the interested parties have confirmed, no one can fail to be aware that the transfer of voluminous quantities of personal data of air passengers, which includes sensitive data, requiring, by definition, automated processing, and the retention of that data for a period of five years, is intended to permit a comparison, which will be retroactive where appropriate, of that data with pre-established patterns of behaviour that is ‘at risk’ or ‘of concern’ in connection with terrorist activities and/or serious transnational crime, in order to identify persons not hitherto known to the police or not suspected. Those characteristics, apparently inherent in the PNR scheme put in place by the agreement envisaged, are capable of giving the unfortunate impression that all the passengers concerned are transformed into potential suspects.25
In his view, the draft agreement met the quality of ‘law’ for the purposes of Article 52 of the Charter, and the objective of combating terrorism and serious transnational crime undoubtedly constituted an objective of general interest within the meaning of that provision. He was also of the view that the correct legal basis for the decision concluding the draft agreement was Article 16(2) TFEU (on data protection) as well as Article 87(2)(a) TFEU (on police cooperation), as the two objectives were inseparably linked. Of particular interest was AG Mengozzi’s rejection of the argument that the Court was essentially being asked to review the substance of Canadian law. Here, while stating that the Court ‘cannot express a view on the legislation or the practice of a third country’ in examining the compatibility of a draft agreement through the Opinion procedure in Article 218(11) TFEU, he acknowledged that this limit ‘raises certain difficulties’, as the matters to be considered clearly were not confined to those expressly addressed in the terms of the draft agreement, but should also include those matters that were not addressed but should have been.26 However, while rejecting the argument that a greater degree of discretion should be applied in the context of negotiating an international agreement than an internal EU measure, he recognised that ‘the means to which Canada may have recourse for the purpose of ensuring an adequate level of protection may differ from those employed within the Union’.27 Ultimately, he opined that certain features of the proposed agreement were incompatible with Articles 7, 8 and 52(1) of the Charter, namely: • it allowed for processing of PNR data to be extended beyond the specific purpose of preventing and detecting terrorist offences and serious transnational crime; • it allowed for processing, use and retention of sensitive data by Canada; • it conferred a right for Canada to disclose information that went beyond what was strictly necessary to achieve that purpose; • it permitted Canada to retain PNR data for up to five years without any connection to that purpose; and • it enabled transfer of the PNR data to public authorities in a third country without any requirement for Canada to ascertain that such public authority would not itself transfer the data to another body in another third country.
24 ibid
para 8. para 176. 26 ibid paras 164–65. 27 ibid para 204. 25 ibid
912 Suzanne Kingston Beyond these specific existing problematic elements of the draft agreement, AG Mengozzi also set out a detailed list of conditions that he would apply in order for the draft agreement to be compatible with the Charter, including that the provisions enabling data processing and retention should be clear and precise, should make any decision to disclose PNR data subject to ex ante control by an independent authority or a court on a case-by-case basis and should make provision for requests for access, rectification and annotation to be made to an independent public authority. B. Opinion of the Court Largely following the Opinion of AG Mengozzi, the Grand Chamber of the Court agreed that the decision concluding the draft agreement should be based jointly on Article 16(2) TFEU and Article 87(2)(a) TFEU, as data protection and public security were inextricably linked and fundamental to the agreement.28 Furthermore, as there was no incompatibility between the procedures laid down in those two provisions, the agreement could be based on both provisions.29 The Court then went on to set out the conceptual framework for its analysis of the compatibility of the draft agreement with the Charter. At the outset, it clarified that the draft agreement should be assessed for compatibility with Article 8 of the Charter rather than Article 16 TFEU, as the Charter lays down the requirements for data processing ‘in a more specific manner’.30 Next, analysing whether the draft agreement interfered with the rights at issue, it held that this requirement was satisfied because the data covered by the agreement would be subject to processing within the meaning of Article 8 of the Charter, as it may be subject to transfer from the EU to Canada, enabling access to the data with a view to its use and/or retention of the data.31 Here, the Court applied its developed case law in the internal EU context, recalling that the communication of personal data to a third party constitutes an interference with Article 7 of the Charter ‘whatever the subsequent use of the information communicated’.32 Accordingly, both the transfer of PNR data to Canada and the framework concerning retention of that data and subsequent transfer to other authorities all constituted interferences with Articles 7 and 8 of the Charter.33 This conclusion was supported by the nature and scope of the transfer, whereby, even if some of the PNR data, taken in isolation, does not appear to be liable to reveal important information about the private life of the persons concerned, the fact remains that, taken as a whole, the data may, inter alia, reveal a complete travel itinerary, travel habits, relationships existing between air passengers and the financial situation of air passengers, their dietary habits or state of health, and may even provide sensitive information about those passengers, as defined in Article 2(e) of the envisaged agreement.34
The Court noted that, upon arrival in Canada, the data would be processed by automated means ‘based on pre-established models and criteria’, which may provide additional information on the private lives of air passengers.35
28 Opinion
1/15 (n 7) para 94. para 106. 30 ibid para 120. 31 ibid para 122–23. 32 ibid para 124. 33 ibid paras 125–26. 34 ibid para 128. 35 ibid para 131. 29 ibid
International Agreements Assessed Through the Prism of the Charter 913 Finally, the Court analysed whether these interferences could be justified and proportionate to the objective pursued, as required by Article 52(1) of the Charter. Here, the Court recalled that Articles 7 and 8 of the Charter were not absolute rights, but ‘must be considered in relation to their function in society’.36 It further held that the basis for the transfer satisfied the requirement in Article 52 of the Charter of being ‘laid down by law’.37 Turning to proportionality, the Court also confirmed that the transfer and processing of the PNR data may be regarded as appropriate to achieve the public security objective pursued. The core of the Court’s detailed reasoning concerned, therefore, whether the individual features of the draft agreement could be said to be strictly necessary to achieve the objective pursued. Here, the Court specified that, in order to be compatible with the EU Treaties, the draft agreement must preclude the transfer of sensitive data from the EU to Canada, and the use and retention of that data, applying the General Data Protection Regulation (GDPR) by analogy to hold that processing of sensitive data requires a ‘precise and particularly solid justification’ which was not present.38 Beyond that, the Court adopted AG Mengozzi’s approach of effectively setting out a judicial ‘to do’ list for the EU negotiators, detailing what would be required of the draft agreement for it to be compatible with the EU Treaties. The list comprised the following stipulations. First, the agreement must determine, in a clear and precise manner, the PNR data to be transferred from the EU to Canada, as the Court considered that the agreement did not adequately define the type of data covered.39 Second, the agreement must provide that the models and criteria used for automated processing of PNR data will be specific, reliable and non-discriminatory, enabling Canada to ‘arrive at results targeting individuals who might be under a “reasonable suspicion” of participation in terrorist offences or serious transnational crime’.40 Further, the databases for cross-checking the PNR data must be restricted to those used by Canada for the fight against terrorism and serious transnational crime.41 Third, the agreement must make the use of the PNR data by the CBSA, and any disclosure to other public authorities, subject to substantive and procedural conditions based on objective criteria. Further, such use/disclosure during or after a passenger’s stay in Canada must be subject to a ‘prior review carried out either by a court or by an independent administrative body’ following a reasoned request by the public authorities, ‘except in cases of validly established urgency’.42 Fourth, the agreement must limit the retention of PNR data after the air passengers’ departure to that of passengers in respect of whom there is ‘objective evidence from which it may be inferred that they may present a risk in terms of the fight against terrorism and serious transnational crime’.43 Fifth, the agreement must make the disclosure of PNR data by the CBSA to the government authorities of a third country subject to the condition that there be either an agreement between the EU and that third country equivalent to the envisaged agreement or an adequacy decision of the Commission covering those authorities.44 Here, the Court went further than AG Mengozzi.
36 ibid
para 136. para 147. 38 ibid para 165. 39 ibid para 163. 40 ibid para 172. 41 ibid. 42 ibid paras 202, 208. 43 ibid para 207. 44 ibid para 214. 37 ibid
914 Suzanne Kingston Sixth, the agreement must provide for a right to individual notification for air passengers in the event that their PNR is used during their stay in Canada and after their departure, and in the event of disclosure of that data by the CBSA to other authorities or to individuals. However, that information must be provided ‘only once it is no longer liable to jeopardise the investigations being carried out by the government authorities’ referred to in the draft agreement.45 Seventh, the agreement must guarantee that the oversight of the agreement’s data p rotection rules will be carried out by an independent supervisory authority.46 IV. THE IMPORTANCE OF THE CASE
A. Practical Effects for the EU’s International Agreements on PNR Beginning first with the immediate practical effects of Opinion 1/15, following the delivery of the Opinion, negotiations for a new PNR agreement with Canada were launched in June 2018; these concluded in 2019 and approval of the agreement is pending in Canada. In the interim, however, domestic PNR laws of Canada continue to apply on a unilateral basis to air carriers providing flights to Canada. The EU’s PNR agreements with the USA and with Australia, signed in 2011, remain in force and were last reviewed in 2019. Those reviews noted that several aspects of those agreements are ‘not fully in line’ with Opinion 1/15 concerning retention of PNR data, the processing of sensitive data, notification to passengers, prior independent review of the use of PNR data, rules for domestic sharing and onwards transfers, and independence of oversight.47 The parties committed to work on the recommendations in the light of Opinion 1/15, and the Commission has stated it will review the EU external strategy towards PNR transfers to third countries in 2022.48 B. International Agreements Must be Assessed in the Light of the Charter Beyond these immediate practical effects, Opinion 1/15 was groundbreaking, with implications well beyond data protection. The Court’s confirmation that it would assess the legality of international agreements in light of the Charter represents the logical consequence of the amendments made by the Treaty of Lisbon, in giving the Charter the status of primary EU law49 and cementing the legal foundations for the EU’s external action, which must be guided, inter alia, by respect for human rights.50 Nevertheless, while this step may be legally logical, it has major broader implications for the manner in which the EU will negotiate future international agreements.
45 ibid paras 223–24. 46 ibid para 230. 47 COM (2021) 17 final on the joint evaluation of Agreement between the European Union and Australia on the processing and transfer of PNR data; COM (2021) 18 final on the joint evaluation of Agreement between the European Union and the United States of America on the processing and transfer of PNR data. 48 In February 2020, the Council authorised the opening of negotiations between the EU and Japan for a PNR agreement. Negotiations with Mexico were launched in 2015, but are currently at a standstill. 49 Art 6(1) TEU. 50 Art 21 TEU.
International Agreements Assessed Through the Prism of the Charter 915 Specifically, negotiating partners may well be nervous, or even hostile, to the idea that they should spend years negotiating a draft agreement with the EU via the Commission only to have that agreed text struck down by their treaty partner’s court – in this case, some seven years after the opening of negotiations – in applying the Charter. Further, it necessarily raises the bar for those considering entering into an international agreement with the EU. The prospective partner must be willing to accept the EU’s fundamental values as set out in the Charter, and to make any relevant changes necessary to comply with them. This will necessarily place the bar far higher for those considering entering into an international agreement with the EU, particularly in areas where, as with data protection, the Charter rights, as currently being developed by the Court, set a particularly high standard. In practice, it is reasonable to assume that, in practice, this may make prospective partners wary of entering into negotiations at all with the EU in some areas. More broadly, in circumstances where the EU is fighting its own well-publicised battles with certain Member States concerning failure to respect the EU’s fundamental values of the rule of law and fundamental rights, one may predict complaints of double standards from third countries being judged by values that the EU’s own Member States do not all (at least entirely) live up to. From the Court’s perspective, however, in terms of protecting the fundamental rights of EU citizens guaranteed by the Charter, this may be a price worth paying. C. The Emergence of a Distinctive and Robust Charter Right to Data Protection As concerns Articles 7 and 8 of the Charter specifically, Opinion 1/15 is a further important building block in the Court’s construction of a distinctive and robust right to data protection specific to EU law. The Court’s expansive and dynamic approach to data protection rights has been one of the most remarkable and defining features of its case law on the Charter in recent years.51 In adopting a notably strict approach, the Court appears to view data protection as a pivotal right that may go to the heart of the values of the Charter and the EU’s democratic model. This is, in part, inspired by the profound challenges posed by the rapidly developing business models of major technology companies, including the growth of artificial intelligence, which has made the digital challenge, including data protection, central to the Commission’s current priorities.52 In this conception, as Zuboff claimed, privacy ‘is a collective good that is logically and morally inseparable from the values of human autonomy and self-determination upon which privacy depends and without which a democratic society is unimaginable’.53 Contrary to cases involving the interference by corporations with Charter privacy rights, such as Google Spain,54 Opinion 1/15 entailed interference by a third country, for avowedly legitimate purposes (the fight against terrorism and transnational crime). Nevertheless, this difference did not deter the Court from adopting a robust approach, and it was clearly unwilling to leave the Commission – or, indeed, the partner negotiating third country – a wide margin of discretion in striking the appropriate balance between data protection and security.
51 See similarly O Lynskey, ‘Delivering Data Protection: The Next Chapter’ (2020) 21 German Law Journal 80, 80, who observes, ‘This role for the Charter in the metamorphosis of EU data protection law from niche regulatory framework to lodestar in the EU’s fundamental rights acquis stood in stark contrast to the role that the Charter had played in lending life to other rights.’ 52 See, eg Commission, ‘Shaping Europe’s Digital Future’ (Communication) COM (2020) 67 final. 53 S Zuboff, ‘You Are Now Remotely Controlled’ New York Times (24 January 2020. 54 Case C-131/12, Google Spain, ECLI:EU:C:2014:317.
916 Suzanne Kingston In particular, the Court’s reasoning on proportionality in Opinion 1/15, and its detailed analysis of what could and could not be considered strictly necessary, showed that it was willing, itself as a court, to be explicit about the correct balance, and was unafraid to dictate that balance. This was so even where the balance arguably went beyond the requirements of the European Convention on Human Rights in certain respects: for instance, as concerns data retention, the obligation to notify potential suspects that their data is being processed and the requirement for prior authorisation.55 The robust approach in Opinion 1/15 has since been further developed and confirmed in Schrems II, where the Court invalidated the adequacy decision in respect of the USA,56 and Privacy International.57 D. Exporting EU Data Protection Standards: A Global Data Protection Court? Finally, drawing the previous themes together, the approach in Opinion 1/15 ultimately implies the exporting of EU data protection standards as a compulsory condition for any third country or international organisation who wishes to enter into an international agreement with the EU that may entail data processing. Given the Court’s approach to interpreting Articles 7 and 8 of the Charter by reference to the GDPR (even though the GDPR was not formally applicable), this effectively means exporting the GDPR regime.58 More than that: as the ultimate arbiter of the Charter data protection standards, it renders the Court a de facto global data protection court for all those who are willing to negotiate and sign international agreements with the EU.59 V. ADDITIONAL READING Kuner, C, ‘International Agreements, Data Protection, and EU Fundamental Rights on the International Stage: Opinion 1/15, EU–Canada PNR’ (2018) 55 CML Rev 857. Lynskey, O, ‘Delivering Data Protection: The Next Chapter’ (2020) 21 German Law Journal 80. Vedaschi, A, ‘The European Court of Justice on the EU–Canada Passenger Name Record Agreement’ (2018) 14 European Constitutional Law Review 410.
55 The case law of the European Court of Human Rights (ECtHR) is, however, itself in the process of development: see, eg Big Brother Watch v United Kingdom, App nos 58170/13, 62322/14 and 24960/15, judgment of the First Section of 13 September 2018, subsequently referred to the Grand Chamber; further judgment pending. 56 Case C-311/18, Data Protection Commissioner v Facebook Ireland and Schrems, ECLI:EU:2020:559. 57 Case C-623/17, Privacy International v Secretary of State for Foreign and Commonwealth Affairs, ECLI:EU:C:2020:790. 58 On the exporting of the EU’s legal standards by means of regulation, see A Bradford, The Brussels Effect (Oxford, Oxford University Press, 2020). 59 In the case of PNR data, this in effect complements the approach taken by the Union in international organisations such as the International Civil Aviation Organisation (ICAO), where, upon launch of the process to draft new international PNR standards, the European Commission has sought, on the EU’s behalf, to promote the inclusion of key data protection principles derived from the EU’s own legal regime. Those standards were adopted by the ICAO in 2020. See Council Decision (EU) 2019/2017, adopting the Union position on the ICAO PNR standards, and Amendment 2B to Annex 9 (Facilitation) of the Convention on International Civil Aviation (the ‘Chicago Convention’), adopted by the ICAO Council on 23 June 2020. See also United Nations Security Council Resolution 2396 (2017), which requires all UN states to develop the capability to collect, process and analyse PNR data and to ensure PNR data are used by and shared with all their competent national authorities.
84 The Unitary Representation of the Union in an International Forum and Clarification of Shared Competence and Facultative Mixity Post-Lisbon: Germany v Council (COTIF I) and Commission v Germany (COTIF II) MACIEJ SZPUNAR AND ROLAND KLAGES* Case C-600/14, Federal Republic of Germany v Council of the European Union, ECLI:EU:C:2017:935 (COTIF I), delivered 5 December 2017; Case C-620/16, European Commission v Federal Republic of Germany, ECLI:EU:C:2019:256 (COTIF II), delivered 27 March 2019. KEYWORDS External EU competence – Amendments to the Convention concerning International Carriage by Rail (COTIF) and the appendices thereto – Validity of Council Decision establishing the Union position of a session of the OTIF Revision Committee – Article 216(1) TFEU – Criteria for existence of a shared competence – Lack of internal rules – Obligation to state reasons – Article 4(3) TEU – Principle of sincere cooperation.
I. INTRODUCTION
I
t is well known that the Treaty of Lisbon attempted, for the first time, to clarify the division of competences between the Union and the Member States. As regards the Union’s external competences in particular, the Treaty of Lisbon essentially affirmed and incorporated previous case law of the Court. This is to be welcomed and, moreover, constitutes one of the rare examples where decisional supranationalism has been transformed into normative supranationalism.1 In the two cases under discussion, COTIF I and COTIF II, the Court was * All opinions expressed herein are personal to the authors. 1 This terminology is borrowed from JHH Weiler, ‘The Community System: The Dual Character of Supranationalism’ (1981) 1 Yearbook of European Law, 267.
918 Maciej Szpunar and Roland Klages called upon to assess a situation in which an EU Member State (Germany) disagreed with a Council decision on the modalities of voting between the Union and its Member States in the context of a meeting of a body set up by an international organisation to which both the Union and its Member States are part. The ensuing litigation between Germany and the Council, on the one hand, and the Commission and Germany, on the other, led the Court to clarify key concepts on shared competence post-Lisbon, as well as the specific obligations of cooperation of Member States with the Union in international fora. II. FACTS
All EU Member States, with the exception of Cyprus and Malta,2 are parties to the Convention concerning International Carriage by Rail (COTIF) of 9 May 1980, establishing the Intergovernmental Organisation for International Carriage by Rail (OTIF), based in Berne, Switzerland,3 the aim of which is to promote, improve and facilitate international traffic by rail, in particular by establishing systems of uniform law in various fields relating to international traffic by rail.4 In view of the preparation for a meeting of that organisation (the 25th session of the OTIF Revision Committee), the Council, on 24 June 2014, adopted Decision 2014/699/EU,5 which established the division of competence between the Union and its Member States regarding the exercise of voting rights at the said meeting. Germany voted against the adoption of the contested decision. At the subsequent 25th session of the OTIF Revision Committee on 25 and 26 June 2014, Germany voted against the position laid down in Council Decision 2014/699 and publicly declared its opposition to that position and to the arrangements for the exercise of voting rights provided for therein. These events led to two sets of proceedings before the Court: first, an annulment action pursuant to Article 263 TFEU introduced by Germany against the Council, alleging, in essence, that the EU did not have competence to adopt the decision; and secondly, infringement proceedings on the basis of Article 258 TFEU brought by the Commission against Germany, alleging both that Germany had acted in breach of the decision and that Germany had violated the principle of sincere cooperation pursuant to Article 4(3) TEU. In fact, it was the Commission which was first to act. On 4 August 2014, it addressed a ‘pre-Article 258 TFEU letter’6 to Germany, inviting it to explain its conduct at the 25th session of the OTIF Revision Committee of 25 and 26 June 2014. Germany replied on 12 November 2014, saying it considered its conduct to be entirely legitimate and lawful on the grounds that none of the amendments at issue fell within an EU competence, inasmuch as the Union had not exercised its internal competence in the areas in question. On 22 December 2014, Germany went on the offensive and introduced the said action for annulment under Article 263 TFEU against Council Decision 2014/699/EU of 24 June 2014. On 29 May 2015, the Commission opened an infringement procedure pursuant to Article 258(1) TFEU by addressing a letter of formal notice to Germany. Germany replied on 2 For obvious reasons relating to their physical insularity. 3 The COTIF was amended by the Vilnius Protocol of 3 June 1999 and was ratified by the European Union with effect from 1 July 2011. 4 See Art 2(1) of the COTIF. 5 Council Decision establishing the position to be adopted on behalf of the European Union at the 25th session of the OTIF Revision Committee as regards certain amendments to the Convention concerning International Carriage by Rail (COTIF) and to the Appendices thereto, [2014] OJ L293/26). 6 This is the terminology of the authors of this chapter.
The Unitary Representation of the Union in an International Forum 919 7 July 2015, to which the Commission responded, on 11 December 2015, by issuing a reasoned opinion against Germany. Not being satisfied with Germany’s reply of 1 February 2016, the Commission took the matter to the Court on 29 November 2016.7 On 5 December 2017, the Court handed down its judgment in the annulment action, COTIF I.8 On 27 March 2019,9 the Court’s judgment in the infringement action followed, COTIF II.10 III. THE COURT
A. COTIF I After recalling that the principle of conferral applies to both the internal and the international action of the Union,11 and that Union competence to conclude international agreements may not only arise from express conferment by the EU Treaties, but may equally flow implicitly from other provisions of the EU Treaties and from measures adopted within the framework of those provisions by the EU institutions,12 the Court recalled that Article 216(1) TFEU refers to the situation where the Union has the competence to undertake international commitments necessary for the attainment of the objectives of the Union, even in the absence of an express provision to that effect.13 The Court then recalled its long-standing case law, according to which a distinction must be made between whether an external competence by the Union exists and whether such a competence is exclusive or shared.14 This distinction was reflected in the TFEU.15 The Court stated that Article 216(1) TFEU made no distinction as to whether the Union’s external competence is exclusive or shared, thereby refuting Germany’s argument, which stressed that Article 3(2) TFEU constituted only one of those situations.16 Crucially, the Court went on to state that the external competence of the Union under the second situation laid down in Article 216(1) TFEU,17 unlike the fourth situation laid down in that provision, is not subject to any condition relating to the prior adoption of EU rules that are likely to be affected.18 7 By a separate document of 8 February 2017, Germany raised an objection of inadmissibility under Art 151 of the Court’s Rules of Procedure. By decision of 10 May 2017, the Court reserved a decision on this objection for the final judgment. 8 The hearing in that case having taken place on 25 October 2016 (Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I)) and the Opinion of AG Szpunar having been read on 24 April 2017 (Opinion of AG Szpunar, Case C-600/14, Germany v Council, ECLI:EU:C:2017:296 (COTIF I)). 9 The judge-rapporteur in both cases under discussion was the British judge Christopher Vajda. It is therefore no coincidence that the date of the judgment was before 28 March 2019, which was the first deadline (subsequently prolonged) for the UK to withdraw from the European Union. 10 Further to the hearing of 4 July 2018 (Case C-620/16, Commission v Germany, ECLI:EU:C:2019:256 (COTIF II)) and the Opinion of AG Szpunar on 9 January 2019 (Opinion of AG Szpunar, Case C-620/16, Commission v Germany, ECLI:EU:2019:3 (COTIF II)). 11 COTIF I (n 8) para 44. 12 ibid para 45. 13 ibid para 45. 14 ibid para 46. 15 ibid para 47. 16 ibid para 49. 17 Pursuant to which the Union may conclude an agreement with one or more third countries or international organisations where the treaties so provide, or where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the treaties. 18 COTIF I (n 8) para 52.
920 Maciej Szpunar and Roland Klages Next, the Court examined whether, in the case at issue, the conditions of the second s ituation referred to in Article 216(1) TFEU were fulfilled, that is to say, whether the fact that the Union was undertaking international commitments with respect to the amendments at issue was ‘necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties’.19 The Court came to the conclusion that the amendments fell within the scope of the common transport policy under Article 91(1) TFEU.20 Next, the Court rejected Germany’s (and France’s) argument which sought to deny external competence if, as in the case at issue, no internal action had first been taken, by pointing to relevant – pre-Lisbon – case law21 in this respect,22 stressing in particular that these considerations were valid for both explicit and implicit external competences.23 The Court referred to Opinion 2/15 and stated in COTIF I that: The fact that the existence of an external European Union competence is not, in any event, dependent on the prior exercise, by the Union, of its internal legislative competence in the area concerned is also apparent from paragraph 243 of Opinion 2/15 … from which it is clear that the relevant provisions of the agreement concerned, relating to non-direct foreign investment, fall within the shared competence of the Union and its Member States, even though it was common ground between the parties, as is clear from paragraphs 228 and 230 of that Opinion, that the Union had taken no internal action, by adopting rules of secondary law, in that field.24
The Court went on to specify that: Admittedly, the Court found, in paragraph 244 of that Opinion [2/15], that the relevant provisions of the agreement concerned, relating to non-direct foreign investment, which fall within the shared competence of the European Union and its Member States, could not be approved by the Union alone. However, in making that finding, the Court did no more than acknowledge the fact that, as stated by the Council in the course of the proceedings relating to that Opinion, there was no possibility of the required majority being obtained within the Council for the Union to be able to exercise alone the external competence that it shares with the Member States in this area.25
Finally, the Court distinguished COTIF I from the OIV case26 by stressing that the Union had acceded to COTIF.27 The Court therefore rejected Germany’s first plea in law. The Court also rejected the second plea (alleged breach of Article 296 TFEU), stressing that the failure to make explicit reference, in the contested decision, to the second situation referred to in Article 216(1) TFEU ‘does not give rise to any confusion as to the nature and legal scope of that decision or with respect to the procedure to be followed for its adoption’.28 The Court considered that the Council has stated sufficient reasons for the contested decision with regard to the criterion of necessity provided for in the second situation referred to in Article 216(1) TFEU, taking into account also the fact that the reasons to be stated in that second situation differ from those required by Article 3(2) TFEU.29 19 ibid para 53. 20 ibid paras 56 and 57. 21 See Case C-459/09, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant) para 95. See this volume, ch 47; Case C-240/09, Lesoochranárske v Ministerstvo životného, paras 34 and 35. 22 COTIF I (n 8) paras 62–64. 23 ibid paras 65 and 66. 24 ibid para 67. 25 ibid para 68. 26 See Case C-399/12, Germany v Council, ECLI:EU:C:2014:2258 (OIV). See this volume, ch 68. 27 COTIF I (n 8) para 69. 28 ibid para 92. 29 ibid para 87.
The Unitary Representation of the Union in an International Forum 921 The Court also rejected the third plea (alleged infringement of the principle of sincere cooperation, in conjunction with the principle of effective judicial protection). Here, the Court was fairly swift in stating that four meetings of the appropriate Council working group and of the Council’s Committee of Permanent Representatives were devoted to the clarification of the allocation of powers between the Union and the Member States (ergo: no infringement of the principle of sincere cooperation), and that Germany had not demonstrated that, during the 25th session of the OTIF Revision Committee, the contested decision had become irreversible (ergo: no infringement of the principle of effective judicial protection).30 B. COTIF II On admissibility, Germany argued, in essence, that its conduct at issue had exhausted all its effects by the end of the 25th session of the OTIF Revision Committee and that, consequently, the infringement action was inadmissible, given that the act for which Germany was criticised had ceased to produce any legal effects before that time limit had expired. Moreover, Germany claimed to have taken all measures necessary under Article 258 TFEU to comply with the Commission’s reasoned opinion. In its elaborate analysis on admissibility,31 the Court stressed that the detrimental effects of an infringement of a Council decision under Article 218(9) TFEU are not confined to the decision-making process of the body of the international organisation, but also manifest themselves, more generally, in the international action of the Union, and may call into question the unity and consistency of the Union’s external action beyond the specific decisionmaking process concerned.32 A Member State could thus evade infringement proceedings on the grounds that the infringement had already exhausted its effects, and that it could take advantage of its own misconduct in a situation in which the Commission would, moreover, be unable to bring infringement proceedings under Article 258 TFEU, barring that institution from performing fully its role of guardian of the EU Treaties, conferred by Article 17 TEU.33 The Court went on to stress that the question whether or not Germany had complied with the Commission’s reasoned opinion was a substantive one, and not one of admissibility.34 As for the substance, the Commission made two submissions: that, voting against the Union position and by publicly challenging the exercise of the right to vote by the Union, Germany, first, infringed Decision 2014/699, and secondly, infringed the principle of sincere cooperation enshrined in Article 4(3) TEU. The Court upheld both submissions. Concerning the first submission, after having confirmed that Decision 2014/699 was of a binding nature,35 Germany, by its described conduct, infringed the Union position.36 This binding nature was not called into question by the fact that Germany subsequently challenged its lawfulness.37 Moreover, the Court said that Member States cannot unilaterally adopt, on their own authority, corrective or protective
30 ibid
para 107 et seq. same goes for the Opinion of AG Szpunar. 32 COTIF II (n 10) paras 46 and 47. 33 ibid paras 48 and 49. 34 ibid para 56. 35 ibid paras 78–82. 36 ibid para 83 37 ibid para 86. 31 The
922 Maciej Szpunar and Roland Klages measures designed to cure any breach by an institution of rules of Union law.38 On the second submission, the Court recalled that it is essential to ensure close cooperation between the Member States and the EU institutions, both in the process of negotiation and conclusion, and in the fulfilment of the commitments entered into, especially where the subject matter of an agreement or convention falls partly within the competence of the Union and partly within that of its Member States.39 Here, the Court said that compliance on the part of the Member States with a decision adopted by the Council under Article 218(9) TFEU is a specific expression of the requirement of unity in representation of the European Union, arising from the principle of sincere cooperation.40
The fact that Germany distanced itself from the EU’s position as established in Decision 2016/699 ran ‘the risk of undermining the EU’s power of negotiation within the OTIF, so far as concerns the subjects discussed during that session, as well as related subjects’.41 Subsequent behaviour, such as Germany’s declaration a few months later that it dispelled any doubts as to its future conduct, did not alter this finding, especially as Germany continued to stress the legitimacy of its conduct.42 The Court concluded that Germany ‘harmed the effectiveness of the international action of the European Union, as well as the latter’s credibility and reputation on the international stage’.43 IV. THE IMPORTANCE OF THE CASES
Both the COTIF I and COTIF II cases fall into the category of incremental and indispensable groundwork, rather than glittering spotlight. Using the terminology of the Echternach procession,44 the Court each time took one step forward (rather than three), but, crucially, did not take one or more steps back. Both judgments are didactic judgments,45 with virtue lying in their clarity and coherent reasoning, without contradictory statements. In particular, COTIF II belongs to the category of cases where ‘still waters run deep’ – a fact which is also evidenced by the little attention it has hitherto received in legal literature. A. COTIF I – A Didactic Judgment One of the purported aims of the Treaty of Lisbon as the successor to the hapless46 Constitutional Treaty had been to provide clarity as far as the division of competences between the Union and the Member States is concerned. It was for this reason that the Treaty of Lisbon,
38 ibid para 88. 39 ibid para 93. 40 ibid para 94. 41 ibid para 95. 42 ibid para 96. 43 ibid para 98. 44 Which has been famously brought into the realm of EU external relations law by JHJ Bourgeois, ‘The EC in the WTO and Advisory Opinion 1/94: An Echternach Procession’ (1995) 32 CML Rev 763: ‘Rather than for its charming surroundings and attractive character, the Luxembourg town of Echternach is known for its peculiar annual procession: for each three steps forward participants take two steps backward.’ 45 And also both Opinions of AG Szpunar in COTIF I (n 8) and COTIF II (n 10). 46 In the sense of not having passed the stage of ratification.
The Unitary Representation of the Union in an International Forum 923 for the first time,47 clarified,48 in summary form, the situation in which the Union has an external competence.49 Article 216(1) TFEU now stipulates the four situations in which the EU has an external competence. Here, it is no secret that this provision essentially affirmed the pre-Lisbon case law of the Court concerning external competences.50 Thus, under Article 216(1) TFEU, the EU may conclude an agreement with one or more third countries or international organisations (1) where the EU Treaties so provide;51 or where the conclusion of an agreement (2) is necessary in order to achieve, within the framework of the EU’s policies, one of the objectives referred to in the Treaties,52 (3) is provided for in a legally binding EU act53 or (4) is likely to affect common rules or alter their scope.54 What Article 216(1) TFEU does not regulate, however, is whether an external competence is exclusive for the EU or is shared with the Member States. This question is dealt with by Articles 3 and 4 TFEU. The overriding merit of COTIF I is that it clarified this very point, ie that Article 216 TFEU deals with the existence of an external competence, while Article 3 TFEU deals with the nature (exclusive or shared) of an external competence. Moreover, it clearly transpired from the COTIF I judgment that Article 216(1) TFEU exhaustively deals with the existence of an external competence, in the sense that no further unwritten conditions need to be fulfilled. The consequence of the Court’s analysis is the following: if – as regards the COTIF I case – all of the conditions stipulated in Article 216(1) TFEU, second situation are fulfilled (the conclusion of an international agreement is necessary in order to achieve, within the framework of the EU’s policies, one of the objectives referred to in the EU Treaties), then external competence for the Union exists. Ergo, contrary to Germany’s assertion, there is no need for the Union to have previously legislated in the domain internally. The existence of an EU external competence does not presuppose prior corresponding internal EU legislation. Such a condition exists when the external competence is exclusive (see Article 3(2) TFEU), but not when it is shared, as was the case in COTIF I. While this may not constitute a novelty to the learned expert in EU constitutional law and EU external relations law,55 it does not appear to have been clear to Germany, which brought the action.56 B. COTIF I – Facultative Mixity Ironically perhaps, COTIF I may first and foremost be remembered for an obiter dictum on facultative mixity which, however, had no bearing on the case at issue. Facultative mixity, a 47 See R Geiger, ‘Article 216, point 1’ in R Geiger, DE Khan, and M Kotzur (eds), European Union Treaties (Oxford, Hart Publishing, 2015). 48 See also M Cremona, ‘Defining Competence in EU External Relations: Lessons from the Treaty Reform Process’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 34, 56. 49 See also Opinion of AG Szpunar in COTIF II (n 10) para 65. 50 For more details, see ibid para 54 et seq. 51 This is a simple affirmation of the principle of conferral of competences. See also Opinion 1/13, ECLI:EU:C:2014:2303, para 67 and the case law cited therein. See this volume, ch 69. 52 See Opinion 1/76, ECLI:EU:C:1977:63, para 3. See this volume, ch 9; Opinion 2/91, ECLI:EU:C:1993:106, para 7. See this volume, ch 22; Opinion 1/03, ECLI:EU:C:2006:81, para 115. See this volume, ch 46. 53 See Opinion 1/94, ECLI:EU:C:1994:384, para 95. 54 See Case 22/70, Commission v Council, ECLI:EU:C:1971:32 (ERTA) paras 17 and 18. See this volume, ch 1. 55 Indeed, this finding pretty much results already from a combined reading of Opinion 1/76 (n 52) para 3. See this volume, ch 9; Opinion 2/91 (n 52) para 7. See this volume, ch 22; Opinion 1/03 (n 52) para 115. See this volume, ch 46. 56 Nor to France and the UK, which intervened in support of Germany.
924 Maciej Szpunar and Roland Klages term first coined by Allan Rosas,57 denotes the question whether agreements falling under a shared Union competence may be concluded as EU-only agreements if the Council so decides. Ergo, under this concept, which had been overwhelmingly accepted by the legal literature58 as well as by several Advocates General,59 in a situation of shared competence, an international agreement need not necessarily be concluded in the form of mixed agreement, that is to say, with the Union and the Member States. In Opinion 2/15, on the free trade agreement with Singapore, the Court had appeared to imply that the relevant provisions of the agreement concerned, relating to non-direct foreign investment, which fell within the shared competence of the EU and its Member States, could not be approved by the Union alone.60 This had fuelled speculations that for the Court there was a parallelism between shared competence and mixed agreements. The Court elegantly and swiftly did away with such speculations in COTIF I by stressing that this statement in Opinion 2/15 only reflected the political reality of the free trade agreement with Singapore. COTIF I is, therefore, one of those very rare occasions where the Court takes the opportunity to explicitly clarify an earlier ruling, the clarification being that there is, in fact, such a thing as facultative mixity. C. COTIF II – Strengthening Admissibility of Infringement Actions in External Relations The Court addresses fundamental questions in two respects:61 first, on the admissibility of an infringement action where the alleged improper conduct lay in the past and its legal effects have purportedly been exhausted; and secondly, on the principle of sincere (loyal) cooperation pursuant to Article 4(3) TFEU in the context of the Union’s external relations. By clearly refuting Germany’s line of argumentation according to which its conduct at the 25th session of the OTIF Revision Committee had exhausted its effects, and was therefore not subject to judicial review in the context of the infringement procedure, the Court exposed such argumentation as a bluff, holding, in essence, that even though the incriminated acts may have lain in the past, they nevertheless continue to deploy legal effects.62 The Court therefore upheld the rule of law and strengthened the infringement procedure in the field of EU external relations.
57 See I Govaere, ‘“Facultative” and “Functional” Mixity Consonant with the Principle of Partial and Imperfect Conferral’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill Nijhoff, 2020), 21. 58 The most in-depth analysis to date on the matter is Chamon and Govaere (n 57). 59 See Opinion of AG Wahl in Opinion 3/15, ECLI:EU:C:2016:657, para 122. See this volume, ch 78; Opinion of AG Szpunar in COTIF II (n 10) para 83; Opinion of AG Kokott, Joined Cases C-626/15 and C-659/16, Commission v Council, ECLI:EU:C:2018:362 (Antarctic Marine Protected Areas) para 105. See this volume, ch 87. See also Opinion of AG Sharpston in Opinion 2/15, ECLI:EU:C:2016:992, para 75. See this volume, ch 82. 60 Opinion 2/15, ECLI:EU:C:2017:376, para 244. See this volume, ch 82. 61 See also Opinion of AG Szpunar in COTIF II (n 10) paras 4 and 5. 62 In this respect, it should be noted that the Court took a marginally different route than AG Szpunar. While the Court stressed that the German conduct in question continued to deploy legal effects, AG Szpunar saw no need to analyse this specific point as, for him, an infringement is admissible even if the infringement ceased to exist when the Commission was not in a position to act in order to prevent the alleged infringement from producing legal effects. See, in particular, Opinion of AG Szpunar in COTIF II (n 10) para 59.
The Unitary Representation of the Union in an International Forum 925 D. COTIF II – The Importance of the Principle of Sincere Cooperation in External Relations The COTIF II judgment is remarkable with regard to its substance,63 in that it provides for an important clarification on the reach of the principle of sincere cooperation pursuant to Article 4(3) TEU in the context of the EU’s external relations. Typically, this principle is of a general and residual nature, serving to guide the interaction between the Union and the Member States. It thus tends to stand back behind other, more concrete and specific provisions of the EU Treaties. The Court follows such an approach in the majority of areas of EU law.64 For the case at issue, this would have meant that once the Court found a breach of Decision 2014/699, the matter would end there, as Article 4(3) TEU would be consumed, so to speak, by the Decision. But this is not the route the Court took in COTIF II, for it found room for a separate application of Article 4(3) TEU, and it accepted that that provision is an independent source for obligations. In this connection, it should be recalled that, previously, in the domain of mixed agreements, the Court had, on several occasions, stressed the importance of close cooperation between the Member States and the EU institutions, not only in the process of negotiation and conclusion of an international agreement, but also in the fulfilments of the commitments entered into flowing from the requirement of unity in the international representation of the EU.65 What was new in COTIF II, and where the Court went further than it had previously, in essence clarified that the reputation and credibility of the Union on the international stage constitutes a distinct legal interest which is protected by Article 4(3) TEU and which, in COTIF II, transcended the letter and purpose of Decision 2014/699.66 V. ADDITIONAL READING Colas, D, ‘Retour sur la competence externe partagée de l’Union: L’arrêt COTIF et les conditions de sa mise en application’ in M Chamon and I Govaere, EU External Relations Post-Lisbon – The Law and Practice of Facultative Mixity (Leiden, Brill Nijhoff, 2020) 384–96. Hillion, C and Chamon, M, ‘Facultative Mixity and Sincere Cooperation’ in M Chamon and I Govaere, EU External Relations Post-Lisbon – The Law and Practice of Facultative Mixity (Leiden, Brill Nijhoff, 2020) 384–96. Neframi, E, ‘Article 216(1) TFEU and the Union’s Shared External Competence in the Light of Mixity: Germany v Council (COTIF)’ (2019) 56 CML Rev 489.
63 See D Simon, ‘Recours en manquement – Action extérieure de l’Union, commentaire 187’ [2019] Revue Europe 1. 64 By way of example, the Court refrains from analysing this principle explicitly when it comes to infringement proceedings relating to the non-transposition of directives. Once a breach of non-transposition is found, in the words of the Court, there is ‘no need’ to analyse Art 4(3) TEU. See, eg Case C-378/92, Commission v Spain, ECLI:EU:C:1993:843, para 6; Case C-66/94, Commission v Belgium, ECLI:EU:C:1995:13, para 6. 65 For more details, see Opinion of AG Szpunar in COTIF II (n 10) para 92 et seq. 66 In this sense, see also ibid para 92.
926
85 The Web of Autonomy of the EU Legal Order: Achmea XAVIER GROUSSOT AND MARJA-LIISA ÖBERG Case C-284/16, Slowakische Republik (Slovak Republic) v Achmea BV, ECLI:EU:C:2018:158 delivered 6 March 2018. KEYWORDS Autonomy of the EU legal order – Intra-EU bilateral investment treaties – Dispute settlement – Arbitration clauses – Preliminary rulings – Mutual trust – Rule of law.
I. INTRODUCTION
A
is a seminal case on intra-EU bilateral investment treaties,1 which will have wider effect on EU external relations law. The judgment has triggered the renegotiation of all intra-EU bilateral investment treaties (BITs), and is one in a long strand of cases in which the Court has interpreted the principle of autonomy of the EU legal order.2 In Achmea, the Court reinstates the claim against international law and, more specifically, against the judicial control of external judicial views. The case is closely connected to the subsequent Opinion 1/17, and was expected to anticipate the results thereof in terms of the compatibility of investor–state dispute settlement proceedings with the principle of autonomy.3 The aim of this chapter is to study the relevance and consequences of Achmea for the EU legal order in general and EU external relations in particular. The ‘blind autonomy’ which the Court has purportedly resorted to in Achmea may be difficult to maintain in all practical situations. Inevitably, some exceptions will be necessary to accommodate ‘reasons of policy’, which are already appearing at both judicial and legislative levels. The former includes Opinion 1/17. At the legislative level, four Member States have refrained from signing the Agreement for chmea
1 Case C-284/16, Achmea, ECLI:EU:C:2018:158. 2 Opinion 1/91, EEA Agreement I, ECLI:EU:C:1991:490. See this volume, ch 20; Opinion 1/00, ECAA, ECLI:EU:C:2002:231. See this volume, ch 40; Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:345 (Mox Plant). See this volume, ch 47; Opinion 1/09, Patents Court, ECLI:EU:C:2011:123; Opinion 2/13, ECHR II, ECLI:EU:C:2014:2454. See this volume, ch 70. 3 Opinion 1/17, CETA, ECLI:EU:C:2019:341. See this volume, ch 88.
928 Xavier Groussot and Marja-Liisa Öberg the termination of Bilateral Investment Treaties between the Member States of the European Union (the Termination Agreement) following the Achmea judgment.4 These exceptions lead in the direction of an asymmetric conception of autonomy in EU law, which strongly contrasts with the ‘totalitarian vision’ endorsed by Achmea. II. FACTS
Achmea was a preliminary ruling case concerning the interpretation of Article 18 TFEU, Article 267 TFEU and Article 344 TFEU. It was delivered upon request from the Bundesgerichtshof (Federal Court of Justice, Germany) in proceedings between the Slovak Republic and Achmea BV concerning an arbitral award of 7 December 2012 made by the arbitral tribunal provided for by the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic (the BIT). The BIT was concluded in 1991 and entered into force on 1 January 1992. At the time, the Netherlands was an EU Member State but the other party was not. On 1 May 2004, the Slovak Republic, which succeeded to the rights and obligations of the Czech and Slovak Federative Republic under the BIT, acceded to the EU. That same year, upon the opening of the Slovak market to national and other Member States’ private sickness insurance service providers in 2004, Achmea – an undertaking belonging to a Netherlands insurance group – established a subsidiary in Slovakia. In 2006, the liberalisation of the private sickness insurance market in Slovakia was partly reversed. A law of 25 October 2007, in particular, prohibited the distribution of profits generated by private sickness insurance activities. The Ústavný súd Slovenskej republiky (Constitutional Court, Slovak Republic) subsequently held in 2011 that the prohibition was contrary to the Slovak Constitution, and the distribution of profits was again allowed. Achmea brought arbitration proceedings against the Slovak Republic in October 2008 pursuant to Article 8 of the BIT on grounds of damage caused by the temporary prohibition. Frankfurt am Main (Germany) was chosen as the place of arbitration, rendering German law applicable. In the arbitration proceedings, the Slovak Republic raised an objection that the arbitral tribunal lacked jurisdiction. It was submitted that, as a result of Slovakia’s accession to the EU, recourse to an arbitral tribunal under the BIT was incompatible with EU law. The objection was dismissed by an arbitral award, which was thereafter challenged unsuccessfully before the German courts at first instance and on appeal. By arbitral award of 7 December 2012, the Slovak Republic was ordered to pay damages to Achmea. The Slovak Republic subsequently brought an action to set aside that arbitral award before the Oberlandesgericht Frankfurt am Main (Higher Regional Court, Frankfurt am Main, Germany). Upon dismissal of the action, the Slovak Republic appealed to the Bundesgerichtshof, which referred the case to the Court. The essence of the referring court’s concern was the possible incompatibility of Article 8 of the BIT with Article 18 TFEU, Article 267 TFEU and Article 344 TFEU. In particular, it was doubted whether Article 344 TFEU would be applicable to an investment dispute under the BIT, but also whether Article 267 TFEU would preclude an arbitration clause, as the arbitration procedure cannot ensure the uniform application of EU law. In addition, the arbitral tribunal must interpret the provisions of the BIT in light of EU law – in particular, the free movement of capital – potentially challenging the autonomy of the EU legal order. Finally, the referring court flagged potential discrimination prohibited by Article 18 TFEU, in view of the 4 SN/4656/2019/INIT, [2020] OJ L169/1. The agreement was signed on 23 May 2020 by 13 Member States and entered into force on 29 August 2020.
The Web of Autonomy of the EU Legal Order 929 fact that investors from other Member States are unable to bring proceedings before an arbitral tribunal, but must instead turn to a Slovakian court. III. THE COURT
In its ruling, the Court deemed the question of discrimination secondary to an analysis of autonomy. The Court first recalled its previous case law, and specifically Opinion 2/13,5 that an international agreement cannot affect the allocation of powers fixed by the EU Treaties or, consequently, the autonomy of the EU legal system.6 That principle, the Court noted, was enshrined in Article 344 TFEU, under which the Member States undertake not to submit a dispute concerning the interpretation or application of the EU Treaties to any method of settlement other than those provided for in the EU Treaties. The Court also recalled that the autonomy of EU law with respect both to the law of the Member States and to international law is justified by the essential characteristics of the EU and its law, relating in particular to the constitutional structure of the EU and the very nature of that law.7
EU law is based, first, on a set of common values recognised by all Member States, as stated in Article 2 TEU, and second, on mutual trust among the Member States that the values are recognised and that the EU law implementing them is respected. The Member States were accordingly obliged, inter alia, of the principle of sincere (loyal) cooperation provided in Article 4(3) TEU to ensure the application of and respect for EU law. Moreover, the Court noted, they were to take for those purposes any appropriate measure to ensure fulfilment of the obligations arising out of the EU Treaties or the acts of the institutions of the EU.8 According to the Court, the specific characteristics and the autonomy of the EU legal order were to be preserved by the judicial system of the EU, intended to ensure consistency and uniformity in the interpretation of EU law.9 National courts and tribunals, and the Court, were tasked with ensuring the full application of EU law in all Member States and the judicial protection of the rights of individuals under that law.10 This was particularly through the preliminary rulings procedure in Article 267 TFEU, which serves the purpose of securing uniform interpretation of EU law to thereby ensure its consistency, full effect, autonomy and, ultimately, the particular nature of the law established by the EU Treaties.11 The Court ascertained that the arbitral tribunal in the BIT may be called upon to interpret or apply EU law, especially the provisions concerning fundamental freedoms, as the law in force and deriving from international agreements concluded between the Member States.12 The Court thereafter assessed whether the arbitral tribunal would be situated within the EU judicial system and whether its decisions would thereby be subject to mechanisms capable of ensuring the full effectiveness of EU law.13
5 Opinion
2/13 (n 2). (n 1) para 32. 7 ibid para 33. 8 ibid para 34. 9 ibid para 35. 10 ibid para 36. 11 ibid para 37. 12 ibid paras 40–42. 13 ibid para 43. 6 Achmea
930 Xavier Groussot and Marja-Liisa Öberg The view of Advocate General (AG) Wathelet had been that an arbitral tribunal set up under Article 8 of the BIT should be regarded as ‘a court or tribunal of one of the Member States’.14 The Court, in fact, concluded that the tribunal could be classified neither as a court or tribunal of a Member State within the meaning of Article 267 TFEU, nor as a court common to a number of Member States, such as the Benelux Court of Justice.15 On whether the dispute concerned the interpretation or application of the EU Treaties, the AG contended that the exclusive jurisdiction guaranteed to the Court by Article 344 TFEU is not affected: the EU is not a party to the BIT, which means the latter is not part of EU law and neither does the arbitral tribunal therefore interpret and apply EU law.16 Furthermore, according to the AG, the scope of the BIT and the legal rules which it introduces and which the tribunal can rule on differs from the scope of the legal rules of the EU Treaties.17 The AG’s interpretation was strict, looking at whether the parties actually relied on a particular interpretation of EU law. He concluded that this was not the case and found instead that EU law was part of the applicable lex loci arbitri (law of the place where arbitration is to take place).18 Pursuant to the AG, arbitral awards cannot escape review by national courts, which may engage in judicial dialogue with the Court.19 The AG considered international commercial arbitration to be comparable to arbitration under the BIT,20 as the latter originates from an international agreement between the Member States by which the Member States remove from their judicial remedies system disputes, which may concern the application or interpretation of EU law. In fact, the AG contended that, in contrast to commercial arbitration, states’ participation in international investment arbitration entails more transparency and more effective control in the form of infringement proceedings provided for in Articles 258 and 259 TFEU.21 This view was not shared by the Court that proceeded from the definition of autonomy and the general removal of certain disputes from the national judicial system that is part of the EU judicial system. The Court concluded that the arbitral mechanism established by the BIT would not allow dispute resolution in a manner that ensures the full effectiveness of EU law.22 The establishment of a court responsible for the interpretation of the provisions of an international agreement was not contrary to EU law so long as the autonomy of the EU legal order was respected.23 In the case at hand, the dispute settlement body was set up not by the EU, but by an international agreement between the Member States. According to the Court, this jeopardised the mutual trust between the Member States, as well as ‘the particular nature of the law established by the Treaties, ensured by the preliminary ruling procedure provided for in Article 267 TFEU’.24 The Court ruled that Article 8 of the BIT was incompatible with the principle of sincere cooperation, and therefore capable of impairing the autonomy of EU law.25
14 AG Wathelet in Achmea, ECLI:EU:C:2017:699, para 131. 15 Achmea (n 1) para 48. 16 ibid paras 167–68. 17 ibid para 173. 18 ibid paras 176–78. 19 ibid paras 239–41. 20 AG Wathelet in Achmea (n 14) para 245. 21 ibid para 259. 22 Achmea (n 1) para 56. 23 ibid para 57, with particular reference to Opinion 1/91 (n 2). See this volume, ch 20; Opinion 1/09 (n 2); Opinion 2/13 (n 2). See this volume, ch 70. 24 ibid para 58. 25 ibid paras 58 and 59.
The Web of Autonomy of the EU Legal Order 931 IV. THE IMPORTANCE OF THE CASE
A. The Conceptualisation of Autonomy and the Centrality of Mutual Trust The concept of the autonomy of the EU legal order has been employed by the Court since the 1970s, culminating in post-Lisbon Treaty landmark rulings such as Opinion 1/09,26 Opinion 2/13, Achmea and Opinion 1/17.27 The cases have had tremendous repercussions on the discussion and understanding of the concept of autonomy in the EU legal order. The autonomy of the EU legal order appears in different contexts – both internal and external – in reference to the control of influence on the EU emanating from either the Member States or the international legal community. Vajda has identified three interconnected concepts of autonomy: normative autonomy, jurisdictional autonomy and institutional autonomy.28 To him, normative autonomy claims independence towards national law (internal autonomy) and international law (external autonomy);29 jurisdictional autonomy recognises exclusive jurisdiction of the Court over the final interpretation of EU law;30 and institutional autonomy concerns the allocation of competences between the EU and its Member States.31 The jurisdictional autonomy of the EU institutions, in particular the Court, is enshrined in Article 267 TFEU. It entails the exclusive jurisdiction of the Court to interpret and apply EU law, including under Article 344 TFEU. A common feature of much of the Court’s case law on autonomy is the interpretation by a non-EU judiciary or body of either EU law or legal rules that mirror the EU acquis. Prior to Achmea, the Court had affirmed that it is not, as such, contrary to the concept of autonomy to accept the jurisdiction of an international court or tribunal for the purpose of interpreting rules of international law. In fact, part of the autonomy of the EU legal order is the ability to voluntarily submit itself to the jurisdiction of an external judiciary.32 A threat to autonomy may occur in cases where an external judiciary is tasked with the interpretation of EU law and, thereby, potentially encroaches upon the Court’s jurisdictional autonomy. In Opinion 1/91, the Court had established that the jurisdictional autonomy of the EU legal order rests on two main premises: Article 19(1) TEU and Article 344 TFEU.33 These provisions assert the exclusive jurisdiction of the EU judiciary to ensure that, in the interpretation and application of the EU Treaties, the law is observed and the Member States are obliged not to submit EU law disputes to external fora, respectively. In Opinion 1/91, the Court found that the fact that the European Economic Area (EEA) Court, which had been envisaged by the Draft EEA Agreement, would have to interpret the term ‘contracting party’ in the context of the EEA Agreement would result in a judicial body other than the Court making an assessment of the division of competences between the EU and its Member States.34 Furthermore, in Mox Plant,35 a non-EU international arbitral tribunal – the International Tribunal for the
26 Opinion 1/09 (n 2). 27 Opinion 1/17 (n 3). See this volume, ch 88. 28 C Vajda, ‘Achmea and the Autonomy of the EU Legal Order’, Law TTIP Working Papers 2019/1, 10–11. Institutional autonomy and jurisdictional autonomy are not hermetically sealed categories of autonomy. 29 ibid. 30 ibid. 31 ibid. 32 Opinion 1/09 (n 2) para 74. 33 Opinion 1/91 (n 2). 34 ibid paras 31–35. 35 Mox Plant (n 2). See this volume, ch 47.
932 Xavier Groussot and Marja-Liisa Öberg Law of the Sea (ITLOS) – was called upon by an EU Member State to rule on the application and interpretation of EU law. When infringement proceedings were brought against the Member State concerned, the Court ruled that, on the basis of Article 344 TFEU, which is closely connected to the duty of sincere cooperation between the Member States under Article 4(3) TEU, the fact that ITLOS was to interpret EU law constituted a threat to the autonomy of the EU legal order.36 In Achmea, the interpretive autonomy of the Court was highlighted in the interplay between Article 267 TFEU and Article 344 TFEU in the context of the compatibility of the system of preliminary rulings with the EU Treaties. In Opinions 1/91 and 1/92,37 the Court had stated that if the Court were to give a preliminary ruling without guaranteeing its binding force, this would be incompatible with the EU Treaties, as it would defeat the ‘nature of the function’ of the Court as one whose decisions are binding.38 In Opinion 1/09,39 the Court had assessed the conformity with the EU Treaties of the envisaged international agreement setting up a European and Community Patents Court. This new body was to take on the respective responsibilities of the national courts, including the application and interpretation of EU law, and request preliminary rulings from the Court in the fields covered by the agreement. The Court concluded that the national courts would thereby be deprived of their tasks as ‘ordinary’ courts, jeopardising the foundations of the EU legal system.40 The ‘very nature of EU law’, according to the Court, would be adversely affected by an alteration of the complete system of legal remedies and procedures for reviewing the validity of EU measures that includes both the Member States’ courts and the EU judiciary without a due revision of the EU Treaties.41 The Court reasoned via Article 4(3) TEU, Article 19 TEU and Article 267 TFEU, and it could not establish a conflict with Article 344 TFEU.42 In contrast, the Benelux Court can and is regarded as part of the national judicial systems, to the extent that it serves to provide a common interpretation to a set of rules common to the Benelux countries.43 In Opinion 2/13, one of the Court’s concerns had been the effectiveness of the preliminary ruling procedure – ‘a keystone of the judicial system’ of the EU – which the Member States could possibly circumvent through a procedure for the prior involvement of the Court.44 In Achmea, the Court followed its previous autonomy case law, in particular Opinion 2/13 with respect to normative autonomy, relying on the ‘structured network of principles’ and the common values enshrined in Article 2 TEU.45 In both rulings, Article 2 TEU constituted the fundamental premise that implied and justified the existence of mutual trust between the Member States. Mutual trust constitutes the meta-justification of the normative claim against international law. Yet, Achmea also features dissimilarities in its reasoning on normative autonomy. This is partly due to the question put forward by the referring court asking specifically about the compatibility of an intra-EU investor–state arbitration clause with Article 344 TFEU.
36 ibid para 169. 37 Opinion 1/92, EEA Agreement II, ECLI:EU:C:1992:189. 38 ibid paras 59–61. 39 Opinion 1/09 (n 2). 40 ibid paras 80, 85 and 89. 41 ibid paras 70 and 85, citing Case C-50/00 P, Unión de Pequeños Agricultores, ECLI:EU:C:2002:462, para 40. 42 ibid para 63. 43 Case C-337/95, Parfums Christian Dior, ECLI:EU:C:1997:517, paras 21–23; Case C-196/09, Miles and Others, ECLI:EU:C:2011:388, para 41; Achmea (n 1) para 48. 44 Opinion 2/13 (n 2) paras 197–99. 45 ibid paras 167–69.
The Web of Autonomy of the EU Legal Order 933 The question highlighted the standing of Article 344 TFEU in the Court’s reasoning on normative autonomy. The Court adopted a broad understanding of Article 344 TFEU by extending its application not only to disputes between the Member States and private parties, but also to situations where EU law is remotely applicable,46 in contrast to Mox Plant and Opinion 2/13. This has led some scholars to argue that Article 344 TFEU is the central norm encapsulated in the concept of autonomy.47 Another difference in Achmea compared to Opinion 2/13 is the insistence on the significance of jurisdictional autonomy by relying explicitly on Article 19 TEU and the progressive Association of Portuguese Judges judgment.48 In paragraphs 35–37 of Achmea, the Court relied on the same tenets as Opinion 2/1349 when it comes to underlining the importance of the EU judicial system in ensuring that the specific characteristics and the autonomy of the EU legal order are preserved. However, it must be noted that the political and legal context in Achmea and Association of Portuguese Judges is very different from Opinion 2/13. By the time of Achmea, it was impossible to ignore the rule of law crisis in Europe ignited by Hungary and Poland, which fundamentally challenged the existence of common values, and thus the existence of mutual trust. The existence of mutual trust in the EU legal order is currently debatable, whereas, in parallel, the Court’s case law has boasted the application of Article 19 TEU as a judicial tool to repair and protect the effectiveness of the rule of law in the EU legal order.50 These two main differences based on Article 19 TEU and Article 344 TFEU make the Achmea judgment not only a copycat of Opinion 2/13, but a case where the autonomy of EU law is protected at all costs by a bellicose Court, which is demonstrably ready to give justice by relying on a blunt and blind vision of autonomy (‘unfolded justice’).51 From the perspective of autonomy, the Achmea judgment is like Opinion 2/13 ‘on steroids’. Therefore, it is particularly problematic to rely on mutual trust and common values in Achmea. This is so, given that the core reasoning of normative autonomy – which, as underlined before, is based on common values and mutual trust – is, at the time of writing, currently non-existent, or at best, fundamentally rotten as a result of the rule-of-law crisis in Europe.52 In other words, the Court should change tune, put this reasoning53 au fond du placard (… et bien au fond svp!) and have the wisdom to stop linking normative autonomy to Article 2 TEU, rule of law and mutual trust.54
46 Achmea (n 1) para 44. 47 See S Hindelang, ‘Conceptualisation and Application of the Principle of Autonomy of EU Law: The CJEU’s Judgement in Achmea Put in Perspective’ (2019) 44 EL Rev 383. 48 Case C-64/16, Association of Portuguese Judges, ECLI:EU:C:2018:117. In Association of Portuguese Judges, the Court made reference to the para 36 of Achmea (n 1). 49 Opinion 2/13 (n 2) paras 174–76. 50 X Groussot and J Lindholm, ‘General Principles: Taking Rights Seriously and Waiving the Rule of Law Stick in the European Union’ in K Ziegler et al (eds), Research Handbook on General Principles in EU Law: Constructing Legal Orders in Europe (Cheltenham, Edward Elgar, 2022). See also M Fanou, ‘Intra-European Union Investor–State Arbitration Post-Achmea: RIP? An Assessment in the Aftermath of the Court of Justice of the European Union’ (2019) 26 Maastricht Journal of European and Comparative Law 316, 330. The author shows doubts as to the reliance of mutual trust as a justification due to the current rule of law crisis. 51 See in general S Barbou des Places, E Cimiotta and J Santos Vara, ‘The Achmea Case between International Law and European Union Law’ (2019) 4 European Papers 7. 52 See D Kochenov and N Lavranos, ‘Rule of Law and the Fatal Mistake of Achmea – Could the Intra-EU BIT’s Have Been the Last Hope for Justice for Captured Illiberal Member States?’ Reconnect, Working Paper No 12. 53 Achmea (n 1) paras 32–34. 54 However, to stop referring to mutual trust is not an easy task since Art 344 TFEU cannot be relied on in isolation for justifying internal autonomy. Nor is ‘democratic justification’ an option for justifying autonomy in the European Union.
934 Xavier Groussot and Marja-Liisa Öberg B. The Consequences of Achmea and Its Multiple Reactions The Achmea judgment is of the brief and bold type, often leading to an avalanche of reactions and equal amounts of criticism. Another significant consequence, like the equally brief and bold Zambrano case, is that its full meaning and scope must be clarified by subsequent cases.55 Achmea cannot, therefore, be read in isolation. In that sense, Achmea may have been drafted with an eye on the at the time forthcoming delivery of Opinion 1/17.56 The boldness in Achmea lies particularly in the lack of reasoning in the interpretation of Article 344 TFEU.57 The message was loud and clear: Article 344 TFEU is applicable to intraEU BITs and prevails over the dispute resolution clause in Article 8 of the BIT.58 The intensive defence of autonomy in Achmea leads to an application à la lettre of the Treaty of Lisbon text on the Common Commercial Policy (CCP) of Article 207 TFEU, which urges the Member States to terminate all intra-EU BITs still in force. It thus supports the Commission’s policy and the inclusion of direct foreign investment in the CCP.59 The confrontational attitude of the Court towards arbitration tribunals in intra-EU BITs is also reflected in other EU litigation, such as the Micula saga in the context of state aids granted by an arbitration tribunal.60 In turn, and arguably in line with the spirit of revenge, one can find many examples of arbitration tribunals refusing to apply the Achmea judgment. In UP v Hungary, the International Centre for Settlement of Investment Disputes (ICSID) Tribunal drew a distinction between the circumstances in Achmea and the ‘multilateral public international treaty’ context of ICSID.61 In Masdar v Spain, the ICSID Tribunal, relying on the Opinion of AG Wathelet in Achmea, considered the logic of Achmea to be inapplicable since the Energy Charter Treaty (ECT) constitutes a multilateral external agreement.62 This attempt to limit the impact of Achmea shows a conflictual relationship with international law. Yet, in line with previous ICSID Tribunals, the Court’s approach was more nuanced in Opinion 1/17 than it had been in Achmea.63 In Opinion 1/17, the Court was asked to review the compatibility with the EU Treaties and, especially, the principle of autonomy of the envisaged Comprehensive Economic and Trade Agreement between Canada, of the one part, and the EU and its Member States, of the other
55 See Case C-34/09, Ruiz-Zambrano, ECLI:EU:C:2011:124. 56 See, eg M Gatti, ‘Opinion 1/17 in Light of Achmea: Chronicle of An Opinion Foretold?’ (2019) 4 European Papers 109. 57 Nor is there any reference to the AG Opinion at all. See P Koutrakos, ‘The Autonomy of EU Law and International Investment Arbitration’ (2019) 18 Nordic Journal of International Law 41. As put by Koutrakos, ‘whilst the Court considers the violation of autonomy to be based on the violation of Articles 267 and 344 TFEU, the latter is not analy[s]ed in the judgment’. 58 B Hess, ‘The Fate of Investment Dispute Resolution after the Achmea Decision of the European Court of Justice’, Max Planck Institute Luxembourg for Procedural Law, Research Paper Series No 2018 83. For Hess, international arbitral tribunals should reconsider their attitude to EU law since it is a battle they cannot win (at 20). 59 See Barbou des Places (n 51) 16. 60 Case C-638/19 P, Commission v European Food, pending. This is an appeal from a case of the General Court (see in particular, Cases T-624/15, T-694/15 and T-704/15, European Food v Commission, ECLI:EU:T:2019:423, para 85). 61 ICSID Case No ARB/13/35, UP and CD Holding Internationale v Hungary, 9 October 2018. This case concerns claims arising out of the enactment of legislation granting the government a monopoly over the prepaid corporate vouchers industry, allegedly introducing a state-run voucher system with conditions more favourable than those granted to private operators. 62 ICSID Case No ARB/14/1, Masdar Solar & Wind Cooperatief UA v The Kingdom of Spain. Spain requested the tribunal to reopen the arbitration following Achmea. The case concerns the interpretation of the application of Achmea to the ECT (Art 26). See also AG Saugmandsgaard Øe in Joined Cases C-798 and C-799/18, Federazione Nationale, ECLI:EU:C:2020:876; Case C-741/19, Komstroy, pending. 63 See n 2.
The Web of Autonomy of the EU Legal Order 935 part (CETA).64 The core issue – similar to Achmea, as it related to jurisdictional autonomy – was whether the Court would be able to preserve its exclusive jurisdiction to give definitive interpretations of EU law in the light of the planned investor–state dispute settlement featuring a CETA Tribunal, an Appellate Tribunal and, eventually, a multilateral investment tribunal – the so-called Investment Court System (ICS).65 The Court first analysed the interpretative telos of CETA, then looked specifically at the scope of the interpretative powers/duties of the CETA Tribunal. The Court underlined the reciprocal nature of the CETA and the Union’s need to uphold an international presence as grounds for accepting the Union’s submission to the jurisdiction of dispute settlement bodies which do not, however, directly interpret or apply EU law, nor restrict the EU institutions’ operation within the EU’s constitutional framework.66 Any interpretation of CETA, according to the Court, must be undertaken in accordance with the rules of public international law, rather than EU law.67 It was also emphasised that the CETA Tribunal must follow the Court’s interpretation of relevant EU law as the ‘prevailing interpretation’ without binding the Court, the other EU institutions or the Member States to a particular interpretation of EU law.68 Furthermore, the Court examined whether the CETA Tribunal as part of the ICS can execute a task which may jeopardise the level of protection of public interest in EU law,69 and which is conferred under Article 19 TEU exclusively upon the Court.70 The Court made clear in Opinion 1/17 that a risk to the autonomous operation of the EU’s institutions exists if the Union or the Member States are bound to amend or repeal legislation following a decision of a judicial body outside the EU’s judicial system.71 The Court concluded, however, that no such authority has been granted to the ICS, therefore rendering the international agreement compatible with the principle of autonomy and, specifically, its regulatory dimension.72 The conclusion is different from Achmea, where the Court found the establishment and jurisdiction of the arbitration tribunal to infringe EU law and the sacrosanct principle of autonomy. In Opinion 1/17, the Court applied the rule of law criteria enshrined within the principle of effective judicial protection (Article 47 of the Charter of Fundamental Rights) for the very first time to a court system outside the EU legal order – a court system with an external dimension.73 According to Damjanovic and de Sadeleer, the Court made a clear distinction between the internal EU dimension (the Achmea situation) and the external dimension (the Opinion 1/17 situation): in the internal EU dimension, all investors enjoy a high level of judicial protection under EU law, whereas in the external dimension, the special remedy under the ICS is justified
64 [2017] OJ L11/23. 65 Opinion 1/17 (n 3) paras 110 and 119. See this volume, ch 88. The Court was to answer questions on, firstly, whether the envisaged tribunals would be conferring any powers to interpret or apply EU law other than with regard to the rules and principles of international law; and secondly, whether the tribunals might have the power to issue awards which, falling short of interpreting or applying EU rules, could curtail the possibilities of the EU’s institutions to act within the Union’s ‘unique’ constitutional framework. 66 ibid paras 117–18. 67 ibid para 122. 68 ibid paras 130–31. 69 Such as public order or public safety, the protection of public morals, the protection of health and life of humans and animals, the preservation of food safety, the protection of plants and the environment, welfare at work, product safety, consumer protection and fundamental rights. 70 Opinion 1/17 (n 3) para 151. 71 ibid para 150. 72 See P Koutrakos, ‘More on Autonomy – Opinion 1/17 (CETA)’ (2019) 44 EL Rev 293. 73 See also Joined Cases C-402/05 and C-415/09 P, Kadi, ECLI:EU:C:2008:461. Achmea arguably goes further than Kadi.
936 Xavier Groussot and Marja-Liisa Öberg in order to ensure the same level of protection for EU investors abroad, which they would not enjoy under the legal systems of third states.74 The ICS’s compliance with the rule of law in the EU falls short of the rule-of-law standards required for judicial bodies under EU law.75 Damjanovic and de Sadeleer’s reasoning essentially suggests that the Court applies the rule of law in an asymmetric fashion.76 This asymmetric application of the rule of law leads to an asymmetric understanding of the concept of autonomy in the EU legal order: autonomy in an internal EU dimension with strong rule-of-law safeguards, and autonomy in an external dimension with a weaker standard of protection for the rule of law. Kochenov and Lavranos argue that the concept of autonomy shaped by the Court, founded on the principle of mutual trust and Article 2 TEU, poses a threat to the rule of law itself.77 In essence, they argue that the use of mutual trust as a meta-justification to autonomy is not appropriate and morally fallacious. This is so when the system of mutual trust is destroyed due to the backsliding of the rule of law in Poland and Hungary.78 Indeed, constant attacks on the independence of the judiciary in these Member States have led to a situation where a part of the national judiciary cannot be trusted by its European counterpart. In Achmea, by extracting the arbitration tribunals from the EU judicial system, the Court de facto prioritised the use of national courts. In the present context of rule-of-law backsliding, however, some of the national judges may not be in the position or willing to apply EU law correctly. This undermines the entire system of mutual trust in the EU. It becomes particularly problematic when the conceptual core of autonomy is based on mutual trust as made clear by Opinion 2/13 and Achmea.79 Finally, it is important to underline that, as a result of the Achmea, on 5 May 2020, 23 Member States signed a Termination Agreement of intra-EU BITs. This termination agreement does not, however, cover intra-EU proceedings based on Article 26 ECT, and was not signed by four Member States: Austria, Finland, Ireland and Sweden. The first request for a preliminary reference on the impact of Achmea on these Member States was submitted to the Court by the Swedish Supreme Court on 11 May 2020.80 The material and procedural discrepancies in the Termination Agreement points towards an asymmetric application of autonomy as defined in Achmea. V. ADDITIONAL READING Barbou des Places, S, Cimiotta, E and Santos Vara, J, ‘The Achmea Case between International Law and European Union Law’ (2019) 4 European Papers 7. Fanou, M, ‘The CETA ICS and the Autonomy of the EU Legal Order in Opinion 1/17 – A Compass for the Future’ [2020] Cambridge Yearbook of European Legal Studies 1.
74 I Damjanovic and N De Sadeleeer, ‘Values and Objectives of the EU in Light of Opinion 1/17: “Trade for All”, above All’ [2020] Europe and the World: A law review 1. 75 ibid 12. 76 See also M Fanou, ‘The CETA ICS and the Autonomy of the EU Legal Order in Opinion 1/17 – A Compass for the Future’ (2020) 22 Cambridge Yearbook of European Legal Studies 106. The relaxation of the Court’s position is explained by the need to maintain the powers of the Union in international relations. 77 Kochenov and Lavranos (n 52). 78 ibid. 79 See also J Komárek, ‘It’s a Stupid Autonomy’, https://verfassungsblog.de/its-a-stupid-autonomy-2/. For Komárek, the justification of autonomy cannot be based on democracy. Mutual trust and rule of law as common values are presented as constituting substitutes to the democracy justification. 80 See Case C-109/20, Poland v PL Holdings, pending.
The Web of Autonomy of the EU Legal Order 937 Kochenov, D and Lavranos, N, ‘Rule of Law and the Fatal Mistake of Achmea – Could the Intra-EU BIT’s Have Been the Last Hope for Justice for Captured Illiberal Member States?’ (Reconnect, 2020) Working Paper No 12. Komárek, J, ‘It’s a Stupid Autonomy’, https://verfassungsblog.de/its-a-stupid-autonomy-2/. Koutrakos, P, ‘The Autonomy of EU Law and International Investment Arbitration’ (2019) 18 Nordic Journal of International Law 41. Vajda, C, ‘Achmea and the Autonomy of the EU Legal Order’, Law TTIP Working Papers 2019/1.
938
86 The Delineation between CFSP and Non-CFSP Matters: Commission v Council (Kazakhstan) THOMAS VERELLEN* Case C-244/17, European Commission v Council of the European Union, ECLI:EU:C:2018:662 (Kazakhstan), delivered 4 September 2018. KEYWORDS Common Foreign and Security Policy – Choice of legal basis – Centre of gravity – Institutional balance – Conferral – Decision establishing the positions to be adopted on behalf of the European Union in a body set up by an international agreement.
I. INTRODUCTION
I
n Commission v Council (Kazakhstan),1 the Court reaffirmed that Article 218(8) TFEU contains the voting rule for Council decisions adopted on the basis of Article 218(9) TFEU on positions to be adopted on the Union’s behalf in bodies set up by an international agreement. The voting rule – unanimity or qualified majority – will accordingly be determined by the substantive legal basis of the decision at issue, as is the case for Council decisions which have other paragraphs of Article 218 TFEU as their procedural legal basis. This is problematic if the Council decision has a Common Foreign and Security Policy (CFSP) component, as was allegedly the case in Kazakhstan, given that the scope of the CFSP remains the object of interinstitutional disputes. The Court did not resolve this controversy in Kazakhstan, and the absence of CFSP-specific objectives in the current TEU, coupled with the very broad definition of the scope of the CFSP in Article 24(1) TEU (‘all areas of foreign policy’), all but guarantees that the Court will be faced with further opportunities to clarify the law in this area. The judgment in Kazakhstan did, however, have broader implications for EU external action: by indicating that the CFSP provisions of the EU–Kazakhstan Enhanced Partnership * The author is grateful to Soledad Rodríguez Sánchez-Tabernero for having reviewed an earlier draft of this chapter. 1 Case C-244/17, European Commission v Council of the European Union, ECLI:EU:C:2018:662 (Kazakhstan).
940 Thomas Verellen and Cooperation Agreement (the EPCA) do not constitute a distinct component of that agreement, the Court cast doubt the CFSP legal basis undergirding the EPCA as well as a similar agreement the EU concluded early 2021 with Armenia.2 This uncertainty has given rise to additional litigation: in a case brought in April 2020, Commission v Council (Armenia), the Commission appears to draw on the Court’s reasoning in Kazakhstan to challenge the Council’s choice for Article 37 TEU as a legal basis for a decision on a Union position to be defended within the EU–Armenia Partnership Council.3 II. FACTS
A. Introduction and Procedural Background The dispute in this case arose in the context of the implementation of the above-mentioned EPCA. The EU signed the EPCA – a mixed agreement – on 26 October 2015.4 The Council agreed to the provisional application of the international agreement pending ratification by the EU Member States and, following this, the conclusion of the agreement by the EU. At the time of the facts leading to the judgment in Kazakhstan, the ratification process was still ongoing, and the EPCA was thus being applied provisionally.5 The EPCA established an institutional framework consisting of a Cooperation Council and a Cooperation Committee.6 As part of the EU’s efforts to make the EPCA’s institutional framework operational, on 3 February 2017 the Commission and the High Representative adopted a proposal for a Council decision on an EU position to be adopted on behalf of the EU in the Cooperation Council (the joint proposal).7 The Council disagreed with the legal bases proposed by the Commission and the High Representative, and added a number of legal bases that had not appeared in the (initial) joint proposal. On 3 March 2017, the Council adopted the decision, as revised.8 The Commission subsequently challenged the revised decision before the Court (the contested decision). 2 Council Decision (EU) 2021/270 of 25 January 2021 on the conclusion, on behalf of the Union, of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part, [2021] OJ L61/1. 3 Case C-180/20, Commission v Council (Armenia), action brought on 24 April 2020. In addition, the Commission challenges the Council’s decision to ‘split’ a hypothetical, single decision into two decisions, one adopted on the basis of Article 37 TEU, the other on the basis of TFEU competence. The Court issued a judgment in this case on 2 September 2021. This judgment is not covered in this chapter. 4 Council Decision (EU) 2016/123 of 26 October 2015 on the signing, on behalf of the European Union, and provisional application of the Enhanced Partnership and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Kazakhstan, of the other part, [2016] OJ L29/1. 5 On 20 January 2020, the Council adopted the decision to conclude the EPCA. See Council Decision (EU) 2020/244 of 20 January 2020 on the conclusion, on behalf of the Union, of the Enhanced Partnership and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Kazakhstan, of the other part, [2020] OJ L52/1. 6 Arts 268–69 EPCA. 7 Joint Proposal for a Council decision on the position to be adopted on behalf of the European Union, in the Cooperation Council established under the Enhanced Partnership and Cooperation Agreement between the European Union and its Member States and the Republic of Kazakhstan as regards the working arrangements of the Cooperation Council, the Cooperation Committee, specialised subcommittees or any other bodies, JOIN (2017) 5 final. 8 Council Decision (EU) 2017/477 of 3 March 2017 on the position to be adopted on behalf of the European Union within the Cooperation Council established under the Enhanced Partnership and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Kazakhstan, of the other part as regards the working arrangements of the Cooperation Council, the Cooperation Committee, specialised subcommittees or any other bodies, [2017] OJ L73/15.
The Delineation between CFSP and Non-CFSP Matters 941 The table below provides an overview of the legal bases of the Council decision to sign and provisionally apply the EPCA, of the joint proposal and of the contested decision. The underlined Treaty provisions were not included in the joint proposal; they were, however, included in the earlier Council decision on the signature and provisional application of the EPCA. Procedural legal basis Non-CFSP
CFSP
Substantive legal basis Non-CFSP
CFSP
Council decision on the signing and provisional application of the EPCA
Article 218(5) and (8) TFEU
Article 31(1) TEU Articles 91, 3 Article 7 TEU 100(2), 207 and 209 TFEU
The joint proposal
Article 218(9) TFEU
The contested decision (final)
Article 218(9) TFEU Article 31(1) TEU Articles 91, Article 37 TEU 100(2), 207 and 209 TFEU
Articles 207 Article 37 TEU and 209 TFEU
The choice of legal basis often has repercussions for the horizontal balance of power between EU institutions and, indirectly, for the vertical balance of powers between the EU and the EU Member States. This explains why interinstitutional disagreements on this issue regularly lead to litigation. The present case is no different. By including Article 31(1) TEU as a legal basis, the Council expressed its conviction that the Council must decide by unanimity rather than by qualified majority vote (QMV). Conversely, by not including Article 31(1) TEU, the Commission and the High Representative indicated that, in their view, a decision by QMV is required for all Council decisions adopted on the basis of Article 218(9) TFEU, including those that deal with CFSP matters, such as the contested decision in Kazakhstan. Article 218(9) TFEU provides for a simplified procedure (compared to the treaty-making procedure) for the adoption of positions to be adopted on the Union’s behalf within certain international bodies established by international agreement. Decisions adopted on this procedural basis are referred to as ‘Article 218(9) TFEU decisions’. Article 218(9) TFEU reads: The Council, on a proposal from the Commission or the High Representative of the Union for Foreign Affairs and Security Policy, shall adopt a decision … establishing the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.
For the above simplified procedure to apply, three conditions must thus be met: (i) the Council decision leads to the establishment of an EU position to be defended on the EU’s behalf in a body set up by an international agreement; (ii) the body concerned is called upon to adopt acts having legal effects; and (iii) the acts to be adopted by the international body do not supplement or amend the institutional framework set up by the international agreement. The simplified procedure involves the Council and, depending on whether or not the decision pertains to the CFSP, the Commission or the High Representative. In contrast to the treaty-making procedure, the simplified procedure never involves the European Parliament. Crucially, and again in contrast to the treaty-making procedure, Article 218(9) TFEU does not
942 Thomas Verellen clarify which voting procedure is to be followed within the Council (unanimity or QMV). This omission has given rise to the dispute in Kazakhstan whereby the Commission maintained that the contested decision had to be adopted by QMV within the Council, whereas the Council maintained that unanimity was required. B. The Commission’s Position The Commission argued before the Court that QMV within the Council is always required for an Article 218(9) TFEU decision, except if the act which the international body is called upon to adopt does not supplement or amend the institutional framework of the agreement concerned, in which case the Council decision establishing an EU position falls outside of the scope of Article 218(9) TFEU.9 The Commission considered that this voting rule is contained in Article 218(8) TFEU, which, in the Commission’s view, applies not only to decisions adopted by the Council in the process of negotiating and concluding international agreements, but also to Article 218(9) TFEU decisions. Article 218(8) TFEU reads as follows: The Council shall act by a qualified majority throughout the procedure. However, it shall act unanimously when the agreement covers a field for which unanimity is required for the adoption of a Union act as well as for association agreements and the agreements referred to in Article 212 with the States which are candidates for accession. The Council shall also act unanimously for the agreement on accession of the Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms; the decision concluding this agreement shall enter into force after it has been approved by the Member States in accordance with their respective constitutional requirements.
In the Commission’s view, the voting rule contained in Article 218(8) TFEU is a lex specialis to the general rule, set out in Article 16(3) TEU, according to which the Council decides by QMV except when the Treaties provide otherwise (which they do, in particular, in the context of the CFSP). C. The Council’s Position The Council disagreed with the Commission. It made two main points. First, it argued that the contested decision was ancillary to the EPCA. For this reason, the contested decision needed to be adopted on the same legal bases as those withheld for the Council decision on the signature and provisional application of the EPCA (see the table above). Second, the Council argued that Article 218(8) TFEU, first subparagraph, applies only to the negotiation and conclusion of international agreements, not to the adoption of Article 218(9) TFEU decisions. Since Article 218(9) TFEU itself does not provide for a voting rule, the lex generalis applies. In this case, the Council considered that the lex generalis is not Article 16(1) TEU, but rather Article 31(1) TEU – a provision that, as mentioned, provides for decision-making by unanimity within the Council on CFSP matters. It follows that for the adoption by the Council of EU positions on CFSP matters to be defended within international bodies, the Council needs to decide on the basis of unanimity rather than QMV. 9 The final phrase of Art 218(9) TFEU excludes ‘acts supplementing or amending the institutional framework of the agreement’ from the scope of the provision.
The Delineation between CFSP and Non-CFSP Matters 943 III. THE COURT
The Court brought together elements of the Commission and the Council’s accounts. The Court agreed with the Commission that Article 218(8) TFEU does contain the voting rule applicable to Article 218(9) decisions.10 However, it disagreed with the Commission in its interpretation of that voting rule. As mentioned, the Commission had argued that QMV is always required for the adoption of Article 218(9) TFEU. The Court, by contrast, held that QMV is the general rule as required by the first subparagraph of Article 218(8) TFEU, but that unanimity is necessary in the presence of one of the hypotheses mentioned in the second subparagraph of that provision (the full provision is cited above in section IIB). In other words, while, as a general rule, the Council needs to proceed by QMV when adopting Article 218(9) TFEU decisions, in the following hypotheses, set out in Article 218(8) TFEU, second subparagraph, it must do so by unanimity: • when the agreement covers a field for which unanimity is required; • for association agreements; • for agreements to provide economic, financial and technical cooperation assistance to countries which are candidates for accession to the EU; and • for the EU-ECHR accession agreement. The first hypothesis in particular was relevant in Kazakhstan because the EPCA allegedly contains provisions on CFSP matters, and the CFSP is a field for which unanimity is required (Article 31(1) TEU). As mentioned, the Council decision to sign and provisionally apply the EPCA was adopted on the basis of inter alia Article 37 TEU, which provides that ‘[t]he Union may conclude agreements with one or more States or international organisations in areas covered by [the CFSP] Chapter’. The Court went on to clarify that ‘to determine … whether a decision adopted within the framework defined in Article 218(9) TFEU does cover such a field [ie a field for which unanimity is required], it is necessary to refer to its substantive legal basis’.11 By turning to the substantive legal basis for guidance on the voting rule to be followed in adopting an Article 218(9) TFEU decision, the Court followed recent precedent. In the CMR-15 case, the Court had already confirmed that the substantive legal basis of an Article 218(9) TFEU decision is crucial, as the choice of substantive legal basis determines under Article 218(8) TFEU whether QMV or unanimity is required within the Council. The CMR-15 case involved an Article 218(9) TFEU decision. In that case, the Court had held: [A]n indication of the legal basis is necessary in order to determine the voting procedure within the Council … In particular, since the contested act does not correspond to any of the situations mentioned in the second subparagraph of Article 218(8) TFEU, the Council must, in principle, in accordance with the provisions, read together, of the first subparagraph of Article 218(8) and Article 218(9) TFEU, act by qualified majority when adopting that act.12
The question that remained in the present case was whether the Council had opted for the correct substantive legal basis (or bases) when adopting the contested decision. As shown in 10 AG Kokott had considered, as the Council had argued, that the voting rule for Art 218(9) TFEU decisions can be found in the general provisions on the adoption of decisions in the Council. See Opinion of AG Kokott, Case C-244/17, European Commission v Council of the European Union, ECLI:EU:C:2018:364 (Kazakhstan), para 45. 11 Kazakhstan (n 1) para 35. 12 Case C-687/15, Commission v Council, ECLI:EU:C:2017:803 (WRC-15), para 51.
944 Thomas Verellen the table above, the Council had opted for Articles 91, 100(2), 207 and 209 TFEU as well as Article 37 TEU as substantive legal bases. Following a ‘centre of gravity’ approach whereby the Court identifies the ‘main or predominant purpose or component’ of the contested decision, the Court held that the field within which the contested decision falls had to be determined in light of the EPCA as a whole. In so doing, the Court dramatically raised the stakes. Not only was the Court now assessing the legality of the contested decision, but indirectly it was also reviewing the legality of the Council decision to sign and provisionally apply the EPCA. For if both decisions – the decision to sign and provisionally apply the EPCA on the one hand, and the contested decision on the other – must be adopted on the same substantive legal basis or bases, a mistake made on the latter implies that a mistake had also been made on the former. The Court considered that the CFSP-related provisions of the EPCA – provisions primarily on the establishment of political dialogue – were not of a magnitude to be characterised as a ‘distinct component of that agreement’ that required a separate legal basis.13 For this reason, the Court concluded that the Council had been wrong to include Article 31(1) TEU amongst the substantive legal bases of the contested decision. Consequently, the decision had been wrongly adopted under the voting rule requiring unanimity.14 IV. THE IMPORTANCE OF THE CASE
A. The Latest Flare-Up of a Decade-Long Interinstitutional Dispute on the Delineation between CFSP and Non-CFSP Matters Kazakhstan is the latest flare-up of an interinstitutional dispute with a long pedigree. Already in ECOWAS,15 a case that predates the Treaty of Lisbon, the Court had to grapple with the demarcation between the CFSP and other areas of EU external action. In that case, the EU had aimed to make a financial contribution to the Economic Community of West African States (ECOWAS) to combat the accumulation and spread of small arms and light weapons in that region. The contested decision was part of the EU’s efforts to implement the Cotonou Agreement, a partnership agreement between the EU and the members of the African, Caribbean and Pacific Group of States. The Commission had proposed to base the contested decision on a development policy legal basis; the Council had opted instead for a CFSP legal basis. Applying a ‘centre of gravity’ analysis, the Court ruled that the contested decision had both a development policy and a CFSP component, without one being incidental to the other. Then Article 47 TEU (the non-affectation clause)16 required the EU to favour the development policy legal basis over the CFSP legal basis, which led the Court to annul the contested decision. Post-Lisbon, the proper delineation between CFSP and non-CFSP matters continued to provoke interinstitutional disagreements that found their way to the Court. In Tanzania, the
13 Kazakhstan (n 1) para 46. 14 ibid para 47. Despite the clear language suggesting that the Council decision to sign and provisionally apply the EPCA was adopted on the wrong legal bases, on 20 January 2020 the Council adopted the decision to conclude the EPCA on the same legal bases as those used for the decision to sign and provisionally apply the agreement. These include Art 37 TEU, a CFSP legal basis. See the reference to the decision in n 6. 15 Case C-91/05, Commission v Council, ECLI:EU:C:2008:288 (ECOWAS). See this volume, ch 51. 16 Now Art 40 TEU, but no longer requiring favourability of one over the other.
The Delineation between CFSP and Non-CFSP Matters 945 delineation between the area of freedom, security and justice and the CFSP was at issue.17 The case pertained to the EU’s anti-piracy mission off the coast of Somalia. The EU had concluded agreements with a number of states neighbouring Somalia. The agreements aimed to enable the transfer of pirates detained by EU Member State military personnel to those neighbouring states with a view to bringing them to trial there. At issue in Tanzania was the Council’s choice for a CFSP legal basis for the decision to sign and conclude such an agreement with Tanzania. The Court again applied a centre of gravity analysis. It concluded that the agreement providing for the transfer of persons arrested by the EU anti-piracy mission was an instrument to pursue the objectives of that mission and was thus ancillary to that mission.18 The Court held that the mission itself was clearly a CFSP matter, as it aimed to preserve international peace and security – an objective the Court seemed to characterise as a CFSP-specific objective.19 Despite the revision of then Article 47 TEU brought about by the Treaty of Lisbon in what is now Article 40 TFEU, there is continuity in the Court’s approach in dealing with choice of legal basis controversies involving the CFSP. In ECOWAS, the Court identified two components that required it to apply then Article 47 TEU and thus to privilege the then Community component of the contested decision. In Tanzania, the Court did not reach this point, since the contested decision was considered ancillary to the naval mission in the context of which the contested decision had been adopted – a mission the Court considered to be a CFSP matter. Arguably, following the logic of ECOWAS, the Court might have reached a similar conclusion pre-Lisbon had it been faced with a decision the main aim of which unambiguously fell within the scope of the CFSP. Kazakhstan adds a layer of procedural complexity to the above. The case did not involve a Council decision to sign, provisionally apply or conclude an international agreement. Rather, it involved an Article 218(9) TFEU decision taken in the process of implementing an international agreement that had already provisionally entered into force. In its judgment in Kazakhstan, the Court reaffirmed – as it had done in CMR-15, mentioned above20 – that the approach to the choice of substantive legal basis of Article 218(9) TFEU decisions is the same as the approach to be taken with regard to decisions to sign, provisionally apply or conclude international agreements. In both cases, a centre of gravity analysis must be undertaken. Article 218(8) TFEU requires that the voting rule to be followed within the Council (QMV or unanimity) will depend on the applicable substantive legal basis. If the substantive legal basis does not relate to ‘a field for which unanimity is required’21 (such as the CFSP), QMV will be required. Conversely, if the substantive legal basis does relate to an area within which unanimity is required (such as the CFSP), unanimity will be necessary. In both cases, the procedural legal basis will be Article 218(8) TFEU. When read in its entirety, this provision reflects the bipolarity between CFSP and non-CFSP matters and the symmetry between internal and external decision-making procedures which can also be observed elsewhere in Article 218 TFEU.22 17 Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66; T Verellen, ‘Pirates of the Gulf of Aden: The Sequel, or How the CJEU Further Embeds the CFSP into the EU Legal Order’ (European Law Blog, 23 August 2016), www.europeanlawblog.eu/?p=3304. Shortly before, in Mauritius, the Parliament had defended its right to be involved in the procedure in a slightly different way, relying on Art 218(6) TFEU, without directly challenging the choice of substantive legal basis. The judgment does not need to be discussed further here. See Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025 (Mauritius). See this volume, ch 66. 18 Tanzania (n 17) para 51. 19 ibid para 54. 20 CMR-15 (n 12) para 51. 21 Art 218(8), second para TFEU. 22 The Court pointed to this symmetry in Kazakhstan (n 1) para 30.
946 Thomas Verellen B. Lingering Questions Will Kazakhstan put to rest the now decade-long interinstitutional controversy between Commission and Council on the delineation between CFSP and non-CFSP matters (with the occasional intervention of the European Parliament as applicant or intervener in support of non-CFSP legal bases23) ? Arguably not. Kazakhstan confirms what authors have called the ‘normalisation’ of the CFSP within the broader EU legal order.24 It is well established today that the centre of gravity test, which the Court had developed in the context of disagreements on the choice of various non-CFSP legal bases before Lisbon, now applies to controversies involving CFSP and non-CFSP legal bases alike. As mentioned, the Court had applied the test pre-Lisbon in ECOWAS, and it continued to do so post-Lisbon, both in Tanzania and in Kazakhstan. In so doing, the Court arguably respects the intention of the Treaty of Lisbon drafters to tear down, to some extent, the barriers between the CFSP and other areas of EU external action. This intention is visible, for example, in the introduction of a single treaty-making procedure in Article 218 TFEU, which may enable the Council to conclude ‘cross-pillar’ international agreements based on a dual CFSP/non-CFSP legal basis.25 It is visible also in the introduction of a unified EU with its own international legal personality (current Article 47 TEU) and the integration of CFSP objectives into a single list of external action objectives in Article 21 TEU. Yet the normalisation of the CFSP comes with its own difficulties. Ten years after the entry into force of the Treaty of Lisbon, questions remain as to how the CFSP is to be delineated from other areas of EU external action. What distinguishes CFSP aims from non-CFSP aims? What actions are, in terms of their content, CFSP-related and which actions are not? Both factors – aim and content – are crucial as they carry equal weight in the centre of gravity analysis. Admittedly, the task is not an easy one. As mentioned, post-Lisbon, the EU Treaties no longer provide a list of CFSP-specific aims. Instead, Article 21 TEU contains a single list of EU external action objectives. To revive a list of CFSP-specific objectives, as Advocate General (AG) Bot had argued for on two occasions,26 would run counter to the intention of the Treaty
23 Compared to CFSP legal bases, non-CFSP legal bases typically provide for a more significant role for Parliament in the decision-making process. This explains the Parliament’s strategy to challenge before the Court the Council’s choice for CFSP legal bases. 24 In this sense, see also ‘Editorial Comments: A Stronger Common Foreign and Security Policy for a Self-Reliant Union?’ (2018) 55 CML Rev 1675, 1682. On the ‘normalisation’ of the CFSP, see P Van Elsuwege and G Van der Loo, ‘Legal Basis Litigation in Relation to International Agreements: Commission v Council (Enhanced Partnership and Cooperation Agreement with Kazakhstan)’ (2019) 56 CML Rev 1333, 1352 and the references to the literature therein. See also G Butler, Constitutional Law of the EU’s Common Foreign and Security Policy: Competence and Institutions in External Relations (Oxford, Hart Publishing, 2019) 11; RA Wessel, ‘Legality in EU Common Foreign and Security Policy: The Choice of the Appropriate Legal Basis’ in C Kilpatrick and J Scott (eds) Contemporary Challenges to EU Legality (Oxford, Oxford University Press, 2021). 25 In this sense, see F Naert, ‘The Use of a CFSP Legal Basis for EU International Agreements in Combination with Other Legal Bases’ in J Czuczai et al (eds), The EU as a Global Actor – Bridging Legal Theory and Practice (Leiden, Brill Nijhoff, 2017) 405–07; S Adam, ‘The Legal Basis of International Agreements of the European Union in the Post-Lisbon Era’ in I Govaere et al (eds), The European Union in the World (Leiden, Brill Nijhoff, 2014) 82; G De Baere, ‘From “Don’t Mention the Titanium Dioxide Judgment” to “I Mentioned It Once, but I Think I Got Away with It All Right”: Reflections on the Choice of Legal Basis in EU External Relations after the Legal Basis for Restrictive Measures Judgment’ (2013) 15 Cambridge Yearbook of European Legal Studies 537, 561 (‘A general impermissibility of the combination of CFSP and non-CFSP legal bases would seem to sit uncomfortably with the fact that Article 218 TFEU now indisputably provides for international agreements containing both CFSP and non-CFSP elements’). 26 Opinion of AG Bot, Case C-130/10, Parliament v Council, ECLI:EU:C:2012:472 (Smart Sanctions), paras 63–64; Opinion of AG Bot, Case C-658/11, Parliament v Council, ECLI:EU:C:2014:41 (Mauritius), para 87.
The Delineation between CFSP and Non-CFSP Matters 947 drafters to do away with such CFSP-specific objectives.27 As for the content of measures, Article 24(1) TEU unhelpfully states that the CFSP covers ‘all areas of foreign policy’, a choice of words which, at first sight, suggests the CFSP is to be seen as a broad, residual competence, to be relied upon when no other, more specific TFEU competences are available. Certainly in the present time frame, when various forms of external action are being weaponised by third countries in pursuit of strategic aims and ‘security’ is becoming an ever-broader concept,28 ‘foreign policy’ is an area that is potentially all-encompassing.29 It is noteworthy that neither in Tanzania nor in Kazakhstan did the Court explain how CFSP matters can be identified. In Tanzania, the Court relied on the broader context of the EU–Tanzania agreement, which had to do with the preservation of international peace and security.30 The Court did not explain, however, why the preservation of international peace and security should be considered an objective specific to the CFSP. In Kazakhstan, the Court held that the EPCA had ‘certain links’ with the CFSP, and it went on to list a number of issues that the parties to the EPCA were called upon to discuss in the framework of the ‘political dialogue’ and ‘cooperation in the fields of foreign and security policy’ which the EPCA was to set up.31 The following issues were mentioned: conflict prevention and crisis management, regional stability, non-proliferation, disarmament and arms control, nuclear security and export control of arms, and dual-use goods. While a consensus may exist within the Council that issues such as these are CFSP matters, no explanation was provided as to why they are indeed specific to the CFSP. The Court may not have felt compelled to address the question, since in any case the provisions concerned did not constitute a distinct component of the EPCA. They were, after all, not sufficient in number, and were not very concrete on the specifics of how cooperation should be implemented.32 It remains to be seen whether the Court will be more forthcoming on a next occasion.33 V. ADDITIONAL READING Bosse-Platière, I, ‘Chronique Action extérieure de l’Union européenne – À propos de la mise en oeuvre de l’Accord de partenariat et de coopération (APC) avec le Kazakhstan, la Cour confirme la banalisation du contentieux de la base juridique PESC’ (2019) Revue trimestrielle de droit européen 119.
27 In this sense, see G De Baere and T Van den Sanden, ‘Interinstitutional Gravity and Pirates of the Parliament on Stranger Tides: The Continued Constitutional Significance of the Choice of Legal Basis in Post-Lisbon External Action’ (2016) 12 European Constitutional Law Review 85, 106, characterising AG Bot’s proposal as ‘at least to some extent contra legem’. Endorsing this view, see SR Sánchez-Tabernero, ‘The Choice of Legal Basis and the Principle of Consistency in the Procedure for Conclusion of International Agreements in CFSP Contexts: Parliament v Council (Pirate-Transfer Agreement with Tanzania)’ (2017) 54 CML Rev 899, 908. 28 On the subject of the weaponisation of globalisation, see generally H Farrell and AL Newman, ‘Weaponized Interdependence: How Global Economic Networks Shape State Coercion’ (2019) 44 International Security 42. On the impact thereof on EU external action, see H Farrell, ‘A Most Lonely Union. The EU Is a Creature of Multilateralism. Can It Survive in a Deglobalized World?’ (2020) Foreign Policy 44. 29 P Eeckhout has referred to this feature of the division of competences as EU external action’s ‘original sin’. See P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011) 172. 30 Tanzania (n 17) para 54. 31 Kazakhstan (n 1) para 42. 32 ibid para 45. 33 It is interesting to speculate, as Luigi Lonardo did in his recent article, whether the Court does not embrace the lack of clarity surrounding the scope of the CFSP. It provides the Court with flexibility to resolve politically sensitive controversies. See L Lonardo, ‘Commission v Council (Kazakhstan) the Subject-Matter Question in EU External Relations Law, or the Asymmetry of Art 40 TEU’ (2020) 45 EL Rev 427, 439.
948 Thomas Verellen Denys, S, ‘Décisions prises au sein d’une instance créée par un accord international. CJUE, Gr. Ch., 4 Sept. 2018, Aff. C-244/17, Commission c/ Conseil’ [2018] Europe, Commentaires, 11. Kuijper, PJ, ‘Case C-244/17 – Commission v Council: The Centre of Gravity Test Revisited in the Context of Article 218 (9) TFEU’ (European Law Blog, 26 November 2018) https://europeanlawblog. eu/2018/11/26/case-c-244–17-commission-v-council-the-centre-of-gravity-test-revisited-in-the-cont ext-of-article-218–9-tfeu/. Lonardo, L, ‘Commission v Council (Kazakhstan) the Subject-Matter Question in EU External Relations Law, or the Asymmetry of Art. 40 TEU’ (2020) 45 EL Rev 427. Van Elsuwege, P and Van der Loo, G, ‘Legal Basis Litigation in Relation to International Agreements: Commission v Council (Enhanced Partnership and Cooperation Agreement with Kazakhstan)’ (2019) 56 CML Rev 1333. Wessel, RA, ‘Legality in EU Common Foreign and Security Policy: The Choice of the Appropriate Legal Basis’ in C Kilpatrick and J Scott (eds), Contemporary Challenges to EU Legality (Oxford, Oxford University Press, 2021).
87 Mixity and Exercising Shared Competence in International Fora: Commission v Council (Antarctic Marine Protected Areas) FREDERIK NAERT* Joined Cases C-626/15 and C-659/16, European Commission v Council of the European Union, ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas), delivered 20 November 2018. KEYWORDS Competence – Legal bases – Common fisheries policy – Environment – Research – Mixity – International law – Antarctic treaty system – Convention on the Conservation of Antarctic Marine Living Resources – Marine protected areas – COREPER – EU positions – External representation – Admissibility – Challengeable act.
I. INTRODUCTION
T
he Antarctic Marine Protected Areas (Antarctic MPAs) cases primarily concerned the choice of legal basis – common fisheries policy (CFP) and/or protection of the environment – and the exercise of shared external competence in an international forum in which the EU and Member States are represented. The original contribution of the judgment in these cases to the law on EU external relations relates to the impact of international law on the exercise of shared competences. However, the judgment also shed light on the extent to which environmental issues can be addressed under the CFP and contained findings on the role of Council’s Committee of Permanent Representatives (COREPER) regarding the establishment of the Union’s position in international fora and the possibility to challenge COREPER decisions before the Court.
* All opinions expressed herein are personal to the author.
950 Frederik Naert II. FACTS
The EU1 and 11 of its Member States2 are parties to the Convention on the Conservation of Antarctic Marine Living Resources (the Canberra Convention).3 This Convention is part of the Antarctic Treaty System,4 which is founded on the Antarctic Treaty.5 The Union is not a party to the Antarctic Treaty, but 11 EU Member States are.6 In 2014, the Council adopted a decision on the position to be adopted, on behalf of the EU, in the Commission for the Conservation of Antarctic Marine Living Resources (CAMMLR) (the multiannual position),7 based on Article 43 TFEU and Article 218(9) TFEU. Article 1 of the decision provided that [t]he position to be taken by the European Union in the annual meeting of the CCAMLR when that body is called upon to adopt decisions having legal effects in relation to matters pertaining to the Common Fisheries Policy is set out in Annex I to this Decision (emphasis added).
As is the practice with regard to regional fisheries management organisations, this decision covered several years (it was replaced in 2019) and set out a process for the year-to-year specification of the position (Article 2 and Annex II). It stated that the … Commission shall transmit to the Council or to its preparatory bodies in sufficient time before each annual Meeting … a written document setting out the particulars of the proposed specification of the Union position for discussion and endorsement of the details of the position to be expressed on the Union’s behalf
and ‘If, in the course of further meetings … it is impossible to reach an agreement in order for the Union position to take account of new elements, the matter shall be referred to the Council or its preparatory bodies’. Accordingly, in view of the 2015 annual meeting of CCAMLR, in August 2015, the Commission submitted to the Council Working Party on Fisheries (the Working Party) a ‘non-paper’, to which a draft reflection paper relating to a future proposal to create a marine protected area (MPA) in the Weddell Sea was annexed (the reflection paper). The Commission proposed that the reflection paper be submitted to the Scientific Committee of the CCAMLR on behalf of the EU, arguing that it fell within the EU’s exclusive competence under the CFP. The Working Party approved the content, but considered that the reflection paper fell within the area of environmental (and research) policy – areas of shared EU competence – so should be submitted on behalf of the EU and its Member States. In September 2015, COREPER confirmed that the reflection paper should be submitted on behalf of the EU and its Member States (the 2015 decision). The Commission made a statement, noted in the minutes of COREPER, in which it disagreed with this decision, and indicated that it would implement the decision, but reserved the right to bring legal proceedings.8
1 See Council Decision 81/691/EEC [1981] OJ L252/26. 2 At the time of the case, it was 12 Member States (including the UK). Eight Member States are members of the Commission for the Conservation of Antarctic Marine Living Resources and take part in its decision-making process, whereas three others are ‘Acceding States’ without decision-making rights. 3 Signed in Canberra on 20 May 1980 and entered into force on 7 April 1982. 4 See www.scar.org/policy/antarctic-treaty-system/. 5 Signed in Washington on 1 December 1959 and entered into force on 23 June 1961. 6 See www.ats.aq/devAS/Parties?lang=e (12 at the time of the case). 7 Council Doc ST 10840/14 of 11 June 2014. 8 See the summary in the judgment in Joined Cases C-626/15 and C-659/16, European Commission v Council of the European Union, ECLI:EU:C:2018:925 (Antarctic Marine Protected Areas) paras 28–33; Opinion of AG Kokott,
Mixity and Exercising Shared Competence in International Fora 951 Subsequently, the Commission brought an action for annulment of the conclusion of the COREPER chair, insofar as it approved the submission of the reflection paper to the CCAMLR on behalf of the EU and its Member States: Case C-626/15, Commission v Council. Essentially the same happened in 2016 with regard to draft proposals regarding the creation of MPAs in the Weddell Sea, the Ross Sea and the East Antarctic, and regarding the creation of a group of special areas for scientific study of the marine area concerned, of climate change and of the retreat of ice shelves (the 2016 proposals). The Commission proposed that these proposals be submitted on behalf of the EU alone, but the Council decided, on 10 October 2016, that they should be submitted also on behalf of the Member States, as they fell outside the scope of the multiannual position. The Commission made a statement in the minutes of the Council recording its disagreement, and subsequently brought an action for annulment against the decision: Case C-659/16, Commission v Council (Antarctic Protected Marine Areas).9 Nine Member States intervened in the first case and 11 in the second – all in support of the Council.10 III. THE COURT
First, in line with Advocate General (AG) Kokott’s views,11 the Court rejected the Council’s argument that the 2015 decision was not a challengeable act because it was adopted by COREPER and did not produce legal effects. It held that: Whilst the function of preparing the work of the Council and of carrying out the tasks assigned by it does not give Coreper the power to take decisions, a power which belongs, under the Treaties, to the Council (… judgment of 19 March 1996, Commission v Council, C-25/94, EU:C:1996:114, paragraph 27) … a measure adopted by Coreper must be amenable to judicial review where it is intended, as such, to produce legal effects and therefore falls outside the framework of that preparation and implementation function.12
Furthermore, the 2015 decision intended to produce legal effects, since (i) it ‘was adopted with a view to persuading the CCAMLR to establish an MPA in the Weddell Sea’; (ii) ‘in deciding [on submission] on behalf of the … Union and its Member States, Coreper obliged the Commission not to depart from that position in the exercise of its power to represent the … Union externally … [in CCAMLR]’; and (iii) the 2015 decision ‘had the objective of establishing definitively the Council’s and, accordingly, the … Union’s position so far as concerns submission of the reflection paper … on behalf of the … Union and its Member States’.13 As regards the substance, the Commission invoked, first, a breach of the exclusive EU competence for the conservation of marine biological resources under Article 3(1)(d) TFEU, and second, in the alternative, a breach of the exclusive EU competence under Article 3(2) TFEU. The Court held that the decisions not only concerned on whose behalf the reflection paper and the 2016 proposals were to be submitted, but also approved their content. The Court therefore stated that it was necessary to first determine the correct legal basis.14 Joined Cases C-626/15 and C-659/16, European Commission v Council of the European Union, ECLI:EU:C:2018:362 (Antarctic Marine Protected Areas) paras 24–28. 9 Judgment (n 8) paras 34–40; Opinion of the AG (n 8) paras 29–34. 10 Judgment (n 8) paras 43 and 48. 11 Opinion the AG (n 8) paras 48–58. 12 Judgment (n 8) para 61. 13 ibid paras 61–66. 14 ibid paras 75–78.
952 Frederik Naert Concerning Article 3(1)(d) TFEU, the Court pointed to the words ‘under the [CFP]’, and found, as the Council had argued, that, on the basis of the ordinary meaning and the origins of this provision, it is only insofar as the conservation of marine biological resources is pursued under the CFP that it falls within the exclusive competence of the … Union and is, consequently … excluded from the [shared] competence … in the area of agriculture and fisheries.15
Next, the Court determined whether the exclusive or main purpose and component of the reflection paper and the 2016 proposals fell within that area of competence. It examined the tasks assigned to the CCAMLR and the rights and obligations of the states represented within it. The Court acknowledged that some tasks assigned to the CCAMLR related to the conservation of Antarctic marine living resources that were fished, but found that the CCAMLR tasks went beyond fisheries, and aimed to safeguard the environment and protect the integrity of the ecosystem of the seas surrounding Antarctica and its fauna and flora from all forms of harmful human interference.16 It added that the general framework for the establishment of CCAMLR MPAs also ‘does not assign fishing activities or the conservation of fishery resources as the main purpose of those areas’, but pursued broader environmental protection objectives,17 and concluded that ‘environmental protection … constitutes the main purpose and the main component of those measures’.18 As regards the content of the reflection paper and the 2016 proposals, the Court found that ‘whilst it is true that [they] are concerned in part with regulation of the activities of fishing vessels … environmental protection … nevertheless constitutes their main component’.19 It reached the same conclusion as regards their objectives.20 The Court concluded, as the Council had argued, that ‘fisheries constitute only an incidental purpose’ of the reflection paper and the 2016 proposals, that ‘protection of the environment is [their] main purpose and component’ and that the contested decisions therefore did not fall within the exclusive EU competence under Article 3(1)(d) TFEU but within the shared competence under Article 4(2) (e) TFEU regarding protection of the environment.21 The obligation under Article 11 TFEU to integrate environmental protection requirements into the Union’s other policies, including the CFP, did not alter the fact that environmental policy is an autonomous area of competence, and that, ‘when the main purpose and component of a measure relate to that area of competence, the measure must also be regarded as falling within that area of competence’.22 The Court therefore dismissed the plea alleging a breach of Article 3(1)(d) TFEU.23 AG Kokott had taken the same view as regards the legal basis,24 but argued that the Council had decided to exercise the Union’s competence under the environmental legal basis, and that this precluded submission also on behalf of the Member States.25 As regards Article 3(2) TFEU, the Court first confirmed that this provision not only applies to the conclusion of an international agreement, but also ‘at an earlier stage, when such an agreement is being negotiated and, at a later stage, when a body established by the agreement
15 ibid
paras 82–86. paras 89–92. 17 ibid para 95. 18 ibid para 96. 19 ibid paras 95–97. 20 ibid paras 98–99. 21 ibid para 100. 22 ibid para 101. 23 ibid para 103. 24 Opinion of the AG (n 8) paras 88–99. 25 ibid paras 100–24. 16 ibid
Mixity and Exercising Shared Competence in International Fora 953 is called upon to adopt measures implementing it’.26 It then recalled its case law on when an international agreement may affect common rules or alter their scope,27 in particular Opinion 1/1328 and its judgment in Broadcasting Organisations,29 and on the burden of proof in this respect.30 It found that the Commission had not put forward the necessary evidence or arguments that Article 3(2) TFEU was violated, taking into account that CCAMLR measures essentially concern the protection of the environment, whereas ‘the area covered by the multiannual position and by Regulations No 600/2004 and No 601/2004 is, in essence, limited to fisheries’,31 and hence the former ‘did not predetermine in the slightest whether the contested decisions … had to be adopted by the … Union alone’,32 and that the Commission had ‘not identified … the provisions of [the envisaged] measures which are said to give rise to those adverse effects, or even specified in what the adverse effects consist’.33 The Court therefore followed the Council’s arguments, and rejected as unfounded the alleged breach of Article 3(2) TFEU,34 also in line with AG Kokott’s views.35 The Court furthermore rejected the Commission’s argument that the Council confused the concepts of ‘shared competence’ and of ‘joint nature of external action’.36 It repeated that the mere fact that international action of the Union falls within a shared competence does not preclude the possibility of the required majority being obtained within the Council to exercise that external competence alone.37 However, ‘the … Union[’s] powers … must be exercised in observance of international law’,38 and ‘in the specific context of the system of Antarctic agreements, exercise by the … Union of the external competence at issue in the present cases that excludes the Member States would be incompatible with international law’.39 In particular, ‘It is clear from … the Canberra Convention … that … the European Union, can … become a member of the CCAMLR only if its Member States are members’,40 and ‘the Canberra Convention does not grant … the European Union, a fully autonomous status within the CCAMLR’.41 Furthermore, the Court pointed to the importance that the Canberra Convention accords to the Antarctic Treaty, and to the obligation of all the parties to the Canberra Convention to observe the measures recommended by the Antarctic Treaty consultative parties.42 The Court concluded: In those circumstances, to permit the European Union to have recourse, within the CCAMLR, to the power which it has to act without the participation of its Member States in an area of shared competence, when, unlike it, some of them have the status of Antarctic Treaty consultative parties, might well, given the particular position held by the Canberra Convention within the system of
26 Judgment (n 8) para 112. 27 ibid paras 113–14. 28 Opinion 1/13, ECLI:EU:C:2014:2303, notably paras 71–73 and 85. See this volume, ch 69. 29 Case C-114/12, Commission v Council, ECLI:EU:C:2014:2151 (Broadcasting Organisations), notably para 102. 30 Judgment, para 114, citing Broadcasting Organisations (n 29) para 75. 31 Judgment (n 8) paras 116–24. 32 ibid para 122. 33 ibid para 123. 34 ibid para 124. 35 Opinion of the AG (n 8) paras 125–33. 36 Judgment (n 8) paras 125 and 134. 37 ibid para 126, citing Case C-600/14, Germany v Council, ECLI:EU:C:2017:935 (COTIF I) para 68 (see this volume ch 84), and Opinion 2/15, ECLI:EU:C:2017:376, para 244 (see this volume, ch 82). 38 Judgment (n 8) para 127, citing Joined Cases C-402/05 P and C-415/05 P, Kadi and Al Barakaat International Foundation v Council and Commission, ECLI:EU:C:2008:461, para 291. See this volume, ch 49. 39 Judgment (n 8) para 128. 40 ibid para 129. 41 ibid para 130. 42 ibid paras 131–32.
954 Frederik Naert Antarctic agreements, undermine the responsibilities and rights of those consultative parties – which could weaken the coherence of that system of agreements and, ultimately, run counter to Article V(1) and (2) of the Canberra Convention.43
Having rejected both pleas, the Court dismissed the action.44 IV. THE IMPORTANCE OF THE CASE
As a direct consequence of the judgment, the Council has persisted in its view that positions relating to MPAs under the Convention should continue to be expressed on behalf of the EU and its Member States (section IVA). While it is too early to assess the impact of the case beyond this, three other points can already be identified. In particular, the findings concerning the choice of legal basis clarified the delimitation between the CFP and the environmental policy legal bases (section IVB).45 Further significance of the judgment lies in its conclusions about the impact of the mixed membership of the Canberra Convention on the exercise of the Union’s competences (section IVC). Finally, the considerations on the role of COREPER and the possibility to challenge its decisions also deserve attention (section IVD). A. Subsequent Positions on MPAs in CCAMLR The most direct consequence of the judgment has been that the Council has maintained its view that positions relating to MPAs under the Convention should be expressed on behalf of the EU and its Member States. This was clear when the 2014 multiannual position was replaced by Council Decision (EU) 2019/867 of 14 May 2019,46 accompanied by a Statement of the Representatives of the Governments of the Member States meeting within the Council on the position to be taken by Member States within CCAMLR as regards MPAs, in which Member States agreed to support, together with the Union, the establishment of MPAs in the Southern Ocean, ‘including through the submission of specific MPA proposals by the Union and its Member States’.47 On the other hand, the Commission made a statement in the Council minutes objecting to the scope of the decision and to the conclusions drawn from the judgment.48 Further litigation on this point is therefore not excluded. B. Environmental Policy and the CFP: The Limits of Environmental Aspects of the CFP In accordance with settled case law, the Court determined the correct legal basis by looking at ‘objective factors’49 – in particular, the context, content and aim of a measure. As the Court 43 ibid para 133. 44 ibid para 135 and operative part. 45 In the Opinion of AG Kokott (n 8) paras 84–87, she explicitly added that the research component was only subordinate. 46 Recital 7 and Art 1 of Council Decision (EU) 2019/867 of 14 May 2019 on the position to be taken on behalf of the European Union in the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR), and repealing the Decision of 24 June 2014 on the position to be adopted, on behalf of the Union, in the CCAMLR [2019] OJ L140/72. 47 See the annex to Doc 8707/19 of 3 May 2019. 48 See Doc 8707/19 ADD 1 of 10 May 2019. 49 Although the author considers that the Court’s findings on this point are solid in this case, he concurs with M Chamon, ‘Verplicht gemengd optreden van de Unie en de lidstaten binnen de Canberra Conventie ondanks het
Mixity and Exercising Shared Competence in International Fora 955 had previously addressed the choice between the CFP and environment policy legal bases only to a limited extent,50 the judgment clarified their delimitation. First, the Court clarified that it is ‘only insofar as the conservation of marine biological resources is pursued under the CFP that it falls within the [Union’s] exclusive competence’ under Article 3(1)(d) TFEU.51 Second, it concluded that the obligation under Article 11 TFEU to integrate environmental protection requirements into the Union’s other policies, including the CFP, does not alter the fact that environmental policy is an autonomous area of competence, and that, ‘consequently, when the main purpose and component of a measure relate to that area of competence, the measure must also be regarded as falling within that area of competence’.52 At the same time, the Court acknowledged that environmental aspects may be integrated in the CFP so long as they do not amount to distinct environmental measures, ‘as is illustrated by recital 13 of Regulation No 1380/2013 and Articles 2(3) and 4 of that regulation’.53 Indeed, there are other measures which have been based on the environmental policy legal basis, even though they also have an impact on fisheries, such as the accession to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES),54 and the EU positions for meetings of the International Whaling Commission.55 Antarctica MPA is therefore likely to enable the further development of a broad CFP which includes environmental considerations – but within limits.56 C. The Exercise of Shared Competence in International Fora and the Impact of International Law The most distinctive feature of this case is undoubtedly, in this author’s view, the final part of the judgment on the impact of the mixed membership of the Canberra Convention on the exercise of the Union’s competence and its external representation. Indeed, this is a point where the Court did not follow AG Kokott57 but relied on arguments not actually invoked by the Council and which have given rise to discussion.58 bestaan van een gedeelde bevoegdheid’ [2019] Sociaal-Economische Wetgeving 253, 253 and 256 that the assessment of these factors is not always so objective. 50 See Opinion of the AG (n 8) para 88. For another recent case touching on this issue, albeit from a different angle, see Case C-683/16, Deutscher Naturschutzring – Dachverband der deutschen Natur- und Umweltschutzverbände eV v Bundesrepublik Deutschland, ECLI:EU:C:2018:433. 51 Judgment (n 8) paras 82–86. Both Chamon (n 49) 253 and A Hamonic, ‘L’Union européenne dans les enceintes internationales: la Cour de justice souffle le chaud et le froid dans l’arrêt AMP Antartique’ [2020] Cahiers de Droit Europeen 286 qualify the interpretation of the exclusive competence as restrictive. 52 Judgment (n 8) para 101. 53 ibid para 102. Compare Chamon (n 49) 253–54, who sees a limitation to the ‘green’ interpretation of the CFP which the Court enabled in Case C-405/92, Mondiet, ECLI:EU:C:1993:906, para 26. However, the CCAMLR cases differ from that case, since in Mondiet the prohibition to use drift nets was clearly a fisheries measure in content. 54 Council Decision (EU) 2015/451 of 6 March 2015 concerning the accession of the European Union to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) [2015] OJ L75/1, based on Art 192(1) TFEU. 55 Eg the 2017 position in Doc 14970/17 (not public), based on Art 192(1) TFEU, as proposed by the Commission (see Doc 11894/17; note the explanatory memorandum on 10 thereof). 56 Compare T Appleby, ‘Taking the Pulse of Environmental and Fisheries Law: The Common Fisheries Policy, the Habitats Directive, and Brexit’ (2019) 31 Journal of Environmental Law 443. 57 See Opinion of the AG (n 8) paras 100–24. 58 See, eg Chamon (n 49) 254–57; C Flaesch-Mougin, ‘L’arrêt sur les aires marines protégées dans l’Antarctique jette un froid sur la capacité d’action de l’Union dans les instances internationales’ [2019] Revue Trimestrielle de Droit Europeen 125; Hamonic (n 51) 290–310; C Eckes, ‘Antarctica: Has the Court of Justice Got Cold Feet?’
956 Frederik Naert The judgment contributes to the jurisprudence and debate on mixity, especially in cases falling within the Union’s shared competence but outside its exclusive competence (whether by nature or as a result of prior exercise), and also falling outside Member States’ reserved competence.59 After the Court appeared to have ruled that shared competence led to compulsory mixity in its Opinion 2/15,60 it clarified in COTIF I61 that the Union may – but does not have to – decide to exercise its shared competence externally, even in the absence of any internal rules that might be affected (‘facultative mixity’). As these two cases are discussed in other chapters, this issue is only discussed briefly here: the Court clarified that where there is shared competence (which has not become exclusive), it is (at least in principle) a political choice whether or not the Union exercises that competence. If it does not, the Member States may act alongside the Union. AG Kokott argued that there had been a decision to exercise the Union’s competence fully.62 This is surprising, since it was clear that the Council and COREPER had specifically refused to agree the position on behalf of the Union only, and that this was not because of confusion between shared competence and mixity, as the Court concluded,63 but was a political choice that the Union should not fully exercise its competence.64 In any event, the Court did not decide on that basis, but looked at the status of the Union in CCAMLR and decided that for that reason mixity was necessary.65 It remains to be seen how broadly or narrowly the Court will construct such international law considerations in any future cases, taking into account that it relied on two specific arguments: first, that the Union does not have a fully autonomous status in CCAMLR, namely, that it can only be a party if there are also Member States which are a party;66 and second, that the special responsibilities of those Member States which are consultative parties to the Antarctic Treaty had to be respected.67 In this regard, it is worth noting that an over-eager pursuit by the Commission of ‘Union only’ participation in some international agreements has risked leaving the Union without any votes in the decision-making bodies under those Conventions.68 One pending case may allow the Court to shed further light on this.69
(5 December 2018), https://acelg.blogactiv.eu/2018/12/05/antarctica-has-the-court-of-justice-got-cold-feet-by-christinaeckes/; T Roes, ‘Facultative Mixity: Blessing Disguised’ (5 March 2019), https://leidenlawblog.nl/articles/facultativemixity-blessing-disguised. 59 See extensively M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Martinus Nijhoff, 2020). 60 Opinion 2/15 (n 37) para 244. See this volume, ch 82. 61 COTIF I (n 37) paras 67–68. See this volume, ch 84. 62 See Opinion of the AG (n 8) para 114. 63 Judgment (n 8) paras 125–26. 64 The Council even requested the Court to reopen the oral procedure to discuss this point (see ibid paras 52–55). 65 ibid paras 127–33. 66 ibid paras 129–30. 67 ibid paras 131–33. Compare the critical comments by Chamon (n 49) 256–57; Hamonic (n 51) 301–10. 68 This problem has arisen with regard to the European Convention on the legal protection of services based on, or consisting of, conditional access (Strasbourg, 24 January 2001, CETS 178). See, eg the statement annexed to the decision in Doc 7597/1/14, the Commission statement in Doc 8421/14 ADD 1 and the statements by some Member States and the Commission in Doc 16170/14 ADD 1. See RG Bono and F Naert, ‘The Reluctant (Lisbon) Treaty and Its Implementation in the Practice of the Council’ in P Eeckhout and M Lopez-Escudero (eds), The European Union’s External Action in Times of Crisis (Oxford, Hart Publishing, 2016) 56–61; F Naert, ‘Increasing the EU’s Impact in International Organisations: Favouring Effective Positions over Formal Status?’ in S Blockmans and S Marquardt (eds), The European Union’s Contribution to International Peace and Security – A Legal Practitioners’ Perspective (Leiden, Brill, forthcoming). 69 Case C-24/20, Commission v Council, pending, concerning Council Decision (EU) 2019/1754 of 7 October 2019 on the accession of the European Union to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications [2019] OJ L271/12.
Mixity and Exercising Shared Competence in International Fora 957 D. The Role of COREPER and the Possibility to Challenge a COREPER Decision Although the 2015 decision had been adopted by COREPER and not by the Council itself,70 the Court considered that it was a challengeable act which could be annulled in proceedings brought against the Council.71 AG Kokott more explicitly said that ‘the acts of Coreper are attributable to the Council’,72 and that, where exceptionally only Coreper takes action, while the Council does not act at all at ministerial level … the act of Coreper is the conclusion of the procedure in question … and the position of the Council as a Union institution is definitively laid down by that act of Coreper … as an act attributable to the Council.73
Attribution of the conduct of Council bodies to the Council is consistent with the Court’s judgment in H v Council,74 in which the Court even attributed a decision by the head of a civilian Common Security and Defence Policy mission to the Council.75 In fact, COREPER and other Council preparatory bodies often play an important role in the establishment of the Union’s position in international fora. This is especially the case under a number of Council decisions adopted under Article 218(9) TFEU for a period of several years, which often set out a process for specifying the position as regards specific meetings at the level of the relevant Council working party (and COREPER or Council if necessary), as was the case for the multiannual position at issue in this case.76 AG Kokott also advocated a broad scope of Article 218(9) TFEU,77 which is in line with the Court’s OIV judgment.78 This certainly has merits, given the absence of clear procedures on positions other than those covered by Article 218(9) TFEU.79 V. ADDITIONAL READING Chamon, M, ‘Verplicht gemengd optreden van de Unie en de lidstaten binnen de Canberra Conventie ondanks het bestaan van een gedeelde bevoegdheid’ [2019] Sociaal-Economische Wetgeving 250. Govaere, I, ‘“Facultative” and “Functional” Mixity Consonant with the Principle of Partial and Imperfect Conferral’ in M Chamon and I Govaere (eds), EU External Relations Post-Lisbon: The Law and Practice of Facultative Mixity (Leiden, Brill/Martinus Nijhoff, 2020) 21–47. Hamonic, A, ‘L’Union européenne dans les enceintes internationales: la Cour de justice souffle le chaud et le froid dans l’arrêt AMP Antartique’ [2020] Cahiers de Droit Europeen 257.
70 On the organisation and functioning of the Council, see J Bauerschmidt, ‘Internal Organisation of the Council’ in EU Encyclopaedia (Oxford, Oxford University Press, forthcoming); M Bishop and F Naert, ‘The Role of the Council Legal Service in Ensuring Respect for the Law’ in J Czuczai and F Naert (eds), The EU as a Global Actor – Bridging Legal Theory and Practice: Liber Amicorum in honour of Ricardo Gosalbo Bono (Leiden, Brill, 2017) 88–98. Compare Case C-25/94, Commission v Council, ECLI:EU:C:1996:114 (FAO) paras 24–28. See this volume, ch 31. 71 Judgment (n 8) paras 61–66. 72 See also Chamon (n 49) 251; compare Hamonic (n 51) 271–72. 73 Opinion of the AG (n 8) paras 49 and 51. 74 Case C-455/14 P, H v Council and Others, ECLI:EU:C:2016:569. See this volume, ch 76. 75 ibid paras 66–68. 76 See Opinion of the AG (n 8) para 56. See also Case C-611/17, Italy v Council, ECLI:EU:C:2019:332, paras 78–79, which involved a position specified by a Working Party. Compare the criticism by Hamonic (n 51) 268–82. 77 See Opinion of the AG (n 8) para 64. 78 Case C-399/12, Germany v Council, ECLI:EU:C:2014:2258 (OIV). See this volume, ch 68. 79 See the interesting observation in Opinion of the AG (n 8) para 65; Naert (n 68).
958
88 Investor–State Dispute Tribunals Established under EU International Agreements: Opinion 1/17 (EU–Canada CETA) KIERAN BRADLEY* Opinion 1/17, EU–Canada CET Agreement, ECLI:EU:C:2019:341, delivered 30 April 2019. KEYWORDS EU–Canada Comprehensive Economic and Trade Agreement (CETA) – Compatibility with EU law – Investor–state dispute settlement (ISDS) – CETA Tribunals – Autonomy of the Union legal order – Protection of public interests – EU Charter of Fundamental Rights – Principle of equality – Effective judicial protection – Independence of Tribunals.
I. INTRODUCTION
I
n Opinion 1/17,1 the Court ruled on three aspects of the arrangements for the resolution of disputes between investors and states (including for this purpose the EU) regarding which Belgium had expressed legal reservations. These concerned the maintenance of the autonomy of Union law, respect for the principles of equality and effectiveness, and investors’ access to an independent and impartial tribunal. The Court upheld the compatibility with Union law of the relevant provisions of the envisaged international agreement on each of these matters, thereby giving the green light to the new approach of the Union’s political authorities to the settlement of such disputes, which has been adopted with only minor variations in negotiations on a number of subsequent international agreements covering investment protection. The positive Opinion, in effect, also ratifies and provides guidelines for the Union’s project for the creation of a multinational investment court, which could assume the functions of the tribunals in future agreements.
* Thanks are owed to Jürgen Kurtz for his enlightening comments. The usual author disclaimer applies. 1 Opinion 1/17, EU–Canada CET Agreement, ECLI:EU:C:2019:341, 30 April 2019.
960 Kieran Bradley II. FACTS
On 30 October 2016, Canada, the European Union and its (then 28) Member States signed a Comprehensive Economic and Trade Agreement (CETA) (the Agreement).2 Most of the Agreement was applied provisionally with effect from 21 September 2017,3 though excluding Section F (‘resolution of disputes between investors and states’) of Chapter Eight (‘Investment’). The Agreement guaranteed investors in the territory of the other Party ‘fair and equitable treatment … with respect to their covered investments’; the former notion was defined exhaustively, though subject to a number of specified exceptions, while that of ‘covered investments’ was defined very widely.4 The Agreement reaffirms [the] right [of the parties] to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, safety, the environment or public morals, social or consumer protection of the promotion and protection of cultural diversity.
A number of clarifications of the scope of this right were added ‘For greater certainty’.5 Section F of Chapter Eight created a dispute resolution mechanism for EU companies investing in Canada and Canadian companies investing in the Member States of the European Union. This included a first instance Tribunal comprising two pools of five members, nominated respectively by the Union and Canada, and a pool of five chairmen, nominated jointly, who are to be nationals of third states. Claims were to be decided by divisions of three members, one from each pool, whose decisions would be subject to appeal to an Appellate Tribunal. Members of both Tribunals6 would be appointed by the CETA Joint Committee, the principal decision-making forum for the implementation of the Agreement. The Tribunal was to be charged with interpreting the Agreement in accordance with international law. It would have no jurisdiction to determine the legality of a measure under the domestic law of the party concerned and may only consider such law ‘as a matter of fact’. In so doing, the Tribunal ‘shall follow the prevailing interpretation … by the courts or authorities of that Party’; moreover, ‘any meaning given to domestic law by the Tribunal shall not be binding upon the courts or the authorities of that Party’.7 III. THE COURT
A. Request for an Opinion and Participation in the Procedure Under pressure from its regional parliaments,8 Belgium requested an Opinion of the Court, pursuant to Article 218(11) TFEU, on the compatibility of CETA with the EU Treaties, ‘including fundamental rights’ with regard to three aspects of the dispute resolution mechanism: the autonomy of the Union legal order, the principle of equality and the requirement of effectiveness, and the right of access to an independent tribunal. Thirteen other Member State governments, the Council and the Commission presented observations on the request. Given
2 [2017]
OJ L11/23; the text is 1054 pages long. Decision (EU) 2017/38, [2017] OJ L11/1080. Arts 8.10.2–8.10.7 CETA and Art 8.1 CETA. 5 Art 8.9.1 CETA. 6 For convenience, ‘Tribunal’ refers to one or both Tribunals, unless it is necessary to distinguish between them. 7 Arts 8.31.1 and 8.31.2 CETA. 8 Statement by the Kingdom of Belgium, [2017] OJ L11/21. 3 Council
4 Respectively
Investor–State Dispute Tribunals Established under EU International Agreements 961 its interest in trade agreements generally, and dispute resolution mechanisms in particular,9 the non-participation of the Parliament in the procedure is surprising. For its part, the Court took the view that the request was ‘of exceptional importance’, and referred it to the Full Court formation.10 B. Autonomy of the Union Legal Order and Exogenous International Courts The Opinion proper opened by setting out the principles governing the participation of the Union in international agreements providing for the establishment of a court system, which have led to the rejection of a number of envisaged international agreements over the years.11 Such participation is compatible in principle with the EU Treaties, subject to respect for the autonomy of Union law which ‘stems from its essential characteristics’: primacy, direct effect of certain provisions, the Union’s ‘unique’ constitutional framework, which encompasses the shared values of the Member States and the Union, and the constitutional distribution and attribution of powers. The jurisdiction of the Union courts and the Member State courts to interpret and apply such international agreements as acts of Union law does not oust that of the courts of third states or any international court set up by an international agreement. It followed from the ‘reciprocal nature of international relations and the need to maintain the powers of the Union in international relations’ that the Union may confer autonomous jurisdiction on an international court to interpret and apply the provisions of that agreement, on condition that it have no ‘power to interpret or apply provisions of EU law other than those of [that agreement] or to [take decisions] that might have the effect of preventing the EU institutions from operating in accordance with the EU constitutional framework’.12 On the grounds that the Tribunal must interpret the Agreement in accordance with international law and may not rule on the legality of any act under the domestic law of the party concerned, the Court held that the Tribunal had no jurisdiction to interpret or apply EU law.13 The Court distinguished the Tribunal from the European Patent Court envisaged in Opinion 1/09, the bilateral investment tribunal in Achmea and the European Court of Human Rights (ECtHR), all of which would have interpreted EU law.14 True, the CETA Tribunal would have to consider Union law ‘as a matter of fact’ and ‘will inevitably have to undertake … an examination of the effect of that measure’. However, the Court found that the ‘domestic law’ exclusion meant that this exercise ‘cannot be classified as equivalent to an interpretation of Union law’. In the light of this exclusion, the Court was satisfied that the Appellate Tribunal’s jurisdiction to rule on alleged ‘manifest errors in the appreciation of … relevant domestic law’ did not contravene ‘the intention of the Parties [not] to confer on the Appellate Tribunal jurisdiction to interpret’ EU law.15 Belgium was also concerned that, in making awards against the Union, the Tribunal would be empowered to override policy choices made by the Union institutions. The Court
9 See, in particular, its resolution of 8 July 2015 on the TTIP, [2017] OJ C265/35. 10 Art 16, fifth para CJEU Statute; 23 judges participated in Opinion 1/17. 11 See Opinion 1/91, ECLI:EU:C:1991:490. See this volume, ch 20; Opinion 1/09, ECLI:EU:C:2011:123; Opinion 2/13, ECLI:EU:C:2014:2454. See this volume, ch 70. 12 Opinion 1/17 (n 1) paras 109–18. 13 Arts 8.31.1 and 8.31.2 CETA. 14 Opinion 1/09 and Opinion 2/13 (n 12); Case C-284/16, Slovak Republic v Achmea, ECLI:EU:C:2018:158. See this volume, ch 85. 15 Opinion 1/17 (n 1) paras 131–33.
962 Kieran Bradley acknowledged that the dispute resolution system would indeed ‘adversely affect the autonomy of the EU legal order’ if an award were capable of ‘call[ing] into question the level of protection of a public interest’ set for itself by the Union. This was not the case, given both substantive protections for the policy-making autonomy of the parties and different restrictions on the material jurisdiction of the Tribunal, including the exhaustive character of the definition of ‘fair and equitable treatment’ and some very forthright statements in the Joint Interpretative Instrument. The Court concluded that the ‘tribunals have no jurisdiction to call into question the choices democratically made within a Party relating to’ the level of protection of the listed public interests.16 C. Equal Treatment and Effectiveness Belgium was exercised by the fact that while Canadian companies investing in the EU would have access to the Tribunal, European companies active in the same market would not, in possible breach of the principle of equality.17 For the Court, the purpose of creating tribunals outside the judicial systems of the parties, and providing for non-discriminatory treatment and the protection of investments, was ‘to give complete confidence’ to foreign investors that they would be treated on an equal footing with domestic investors, and that their investments would be secure. In the light of this purpose, the Court found that the situation of EU companies operating in the EU was not comparable to that of Canadian investors in the Union. The latter were entitled to rely on the provisions of CETA before the CETA Tribunals as they had been granted a ‘specific remedy against EU measures’, which was not open to European companies in the EU. Equally, while it was true that a ‘locally established enterprise’ of a Canadian investor may be awarded damages by the CETA Tribunal whereas an EU-owned competitor in the same market may not, that enterprise would still be an ‘investment’ for the Canadian investor, whose position was therefore not comparable to that of a European company.18 Although, theoretically, the Tribunal could award damages to compensate for a fine levied under the Union’s competition rules if this were found not to constitute ‘fair and equitable treatment’, the Court found such an award to be ‘unimaginable’ where those rules have been correctly applied by the Commission or the competent national competition authority.19 D. Right of Access to an Independent Tribunal The Court’s starting point was that Article 47 of the Charter applies where an EU international agreement establishes a body which is ‘primarily judicial in nature’ for the resolution of disputes between private investors and states. The Union’s obligation to ensure that such body have ‘the characteristics of an accessible and independent tribunal’ is not affected by
16 ibid paras 148–60. 17 ibid para 162; it excluded Art 21 of the Charter, on discrimination on grounds of nationality, as being irrelevant (para 170). 18 ibid paras 180–82. 19 ibid para 185.
Investor–State Dispute Tribunals Established under EU International Agreements 963 the facts that Canada was not bound by the Charter, and that the CETA Tribunal still bore some vestiges of investor–state dispute settlement (ISDS), such as the provisions on the initiation of the dispute procedure. The rules on the composition and functioning of the Tribunal clearly distinguished it from ‘traditional ISDS mechanisms’ as regards, notably, its permanent character, the random selection of the members who will hear a given case and the duty of the Appellate Tribunal to ensure the ‘consistency of the decisions of the Tribunal of first instance’. The Court was in no doubt that, whatever the denomination of the members of the Tribunal, they ‘will, in essence, exercise judicial functions’.20 The authors of the Agreement had recognised that the accessibility, in principle, to the Tribunal of small and medium-sized enterprises (SMEs) could be restricted in practice by their potential financial liability for costs, both of legal representation and of members of the Tribunal. The Court noted that the Union institutions had undertaken to reduce the financial burden on Union SMEs presenting claims to the Tribunal unilaterally, if need be, and held that the Union’s approval of the CETA was ‘dependent on the … commitment by the Union to guarantee effective access to the envisaged tribunals for all EU investors subject to the CETA’.21 In line with its case law, the Court distinguished between the external and the internal aspects of the Tribunal’s independence. It took as proof of the former the fixed term of office of members, the requirements that they have specific expertise, that they benefit from an appropriate level of remuneration and that they enjoy safeguards against their removal. The Tribunal’s independence would not be affected by the vesting in the Joint Committee – a political body – of the power to appoint members or to increase their number by multiples of three. For the Court, the requirement of the consent of Union representatives for the adoption of decisions of that Committee was sufficient guarantee of the external aspects of the Tribunal’s independence.22 The same requirement of consent was relied on to clear the rule allowing the Joint Committee to adopt interpretations of the CETA which were to be binding on the Tribunal. Noting that this technique was ‘neither illegitimate nor unusual under international law’, the Court held that, in order to be compatible with the independence of the Tribunal, such interpretations ‘have no effect on the handling of disputes that have been resolved or brought prior to those interpretations’; any other solution would allow the Joint Committee itself to participate in dispute resolution.23 The so-called ‘internal aspect’ of independence, according to the Court, was ‘linked to impartiality and [sought] to ensure that an equal distance is maintained from the parties to the proceedings and their respective interests’. Here, the Court relied on the ‘random and therefore unpredictable’ composition of the division which would be charged with dealing with a particular dispute, as well as the requirement that members comply with the International Bar Association Guidelines on Conflicts of Interest in International Arbitration, or any rules adopted to supplement these.24 The Court therefore ruled that ‘Section F of Chapter Eight of the CETA is compatible with EU primary law’.
20 ibid
paras 190–97. paras 207–21. 22 ibid paras 223–31. 23 ibid paras 232–37. 24 ibid paras 238 and 239. 21 ibid
964 Kieran Bradley IV. THE IMPORTANCE OF THE CASE
A. Continuity versus Rupture: The Misunderstood Role of the Court The Agreement was important, in large part,25 because the mechanism for resolving investor– state disputes was radically innovative;26 Opinion 1/17 is important, in large part, because it is not. This view is not universally shared. In particular, the Court’s approach to defending the autonomy of the Union’s legal order has been described as ‘surprising’ and ‘atypical’, ‘contrasting sharply with the Court’s previous case law’, in some respects ‘quite extraordinary’ or at least ‘a change of perspective’.27 According to one view, Opinion 1/17 leads to ‘the questionable outcome that the EU could not submit itself to external human rights review but is able to offer an alternative route of investment protection’.28 Some of these comments display a slightly skewed view of the judicial function. In Opinion 2/13, for example, the Court did not hold that the Union ‘could not submit itself to external human rights review’; it held that the particular draft agreement by which it was proposed that the Union accede to the European Convention on Human Rights was not compatible with the conditions laid down in Union law, notably in Protocol No 8 to the EU Treaties. Equally, in Achmea, the Court did not find investor–state arbitration as a means of dispute resolution to be incompatible with Union law in all circumstances, but held that recourse to such a mechanism in disputes between Member State investors and host Member States contravened Union law. This is not to deny the value of Court rulings, including Opinion 1/17, as precedents, but it is essential to be clear about what the Court has decided in a particular case and not to extrapolate without restraint. In the present case, it is the Agreement under (p)review which was starkly different, rather than the Court’s position on the matters at issue. The Agreement neither incorporated EU law provisions into the material law that was to be applied between the parties, as did the first European Economic Area (EEA) Agreement in Opinion 1/91, the Patent Court Agreement in Opinion 1/09 and the bilateral investment treaty in Achmea, nor granted the Tribunal the power to adopt binding interpretations of Union law, as the ECtHR would have had under the proposed accession agreement in Opinion 2/13. None of those fora would have been acting ultra vires if it were to interpret EU law, as the CETA Tribunal clearly would. This significant difference compared to previous agreements appears to be downplayed or underestimated in some quarters. It does not follow from these cases, for example, that the
25 Of course, CETA is much more than arrangements for investment protection; the giveaway is in the title. However, it has become identified in the public mind with these arrangements, and may live or die in national parliaments or courts how these are perceived and evaluated. 26 ‘CETA moves decisively away from the traditional approach of investment dispute resolution’: Joint Interpretative Instrument, point 6(f). 27 S Grigonis, ‘Investment Court System of CETA: Adverse Effects on the Autonomy of EU Law and Possible Solutions’ (2019) 5 International Comparative Jurisprudence 127, 128; C Rapaport, ‘Balancing on a Tightrope: Opinion 1/17 and the ECJ’s Narrow and Tortuous Path for Compatibility of the EU’s Investment Court System (ICS)’ (2020) 57 CML Rev 1725, 1743; G Leonelli, ‘CETA and the External Autonomy of the EU Legal Order: Risk Regulations as a Test’ (2020) 47 Legal Issues of Economic Integration 43, 50; E Szyszczak, ‘Opinion 1/17: Towards a Modern EU Approach to Investor–State Dispute Settlement’ (May 2019) UK Trade Policy Observatory Briefing Paper, 2. 28 C Eckes, ‘The Autonomy of the EU Legal Order’ (2020) 4/1 European and the World: A law review.
Investor–State Dispute Tribunals Established under EU International Agreements 965 ‘mere possibility that an “external” tribunal might … interpret [EU] law was enough to rule a dispute mechanism incompatible’ with the Treaties,29 as this was not a ‘mere possibility’ for the tribunals examined but part of their functions. It is also inaccurate to say that the proposed Patent Court ‘was likely to apply and interpret EU law [and] to examine the validity of EU acts’ (emphasis added).30 It would instead have been obliged to apply large chunks of Union law on patents, to ‘base its decisions on … directly applicable [Union] law’ and to determine the applicable national law in accordance with rules of Union law.31 This is a difference in kind, not of degree. Similarly, the Court’s concern in examining the jurisdictional arrangements of previous international agreements was not that the tribunal in question could ‘unduly influence’ (emphasis added) it.32 Where another court or tribunal is entitled, as a matter of law, either to interpret provisions of Union law or rule on their compatibility with the agreement, the Court is bound, as a matter of law, by that tribunal’s rulings, as the Court recalled in Opinion 1/91.33 It was the absence of any such tribunal in the second EEA Agreement, scrutinised in Opinion 1/92, for example, which allowed the Court to give it the green light; the Court need take no account of the rulings of the European Free Trade Association (EFTA) Court.34 Far from being in any sense a ‘stark contrast’ to previous positions, in Opinion 1/17, the Court displayed a high degree of consistency with its existing case law – as witness its recapitulation of the established principles governing the autonomy of the Union’s legal order – albeit in regard to an international agreement with markedly different features to those it had previously considered. In this context, it seems somewhat gratuitous to suggest that the Court twisted its reasoning in order to obtain ‘the result it clearly wanted’.35 B. Autonomy of EU Law: ‘Formalism and Double Standards Go Hand in Hand’ The fiercest criticisms of Opinion 1/17 were directed at the Court’s alleged failure to defend the judicial and regulatory autonomy of the Union.36 Some commentators seem to think that the Court not only gave away the family silver, but threw in the colour television and the keys to the Jag. Obviously, the Union’s autonomy was a central concern in the context of an international agreement creating an autonomous court, but these criticisms do not do justice to the subtlety of the Court’s analysis or the soundness of its conclusions.37 Particular opprobrium was reserved for the Court’s reliance on the text of the relevant provisions of the Agreement, including certain ancillary instruments,38 and its alleged failure
29 Grigonis (n 27) 132. 30 Rapaport (n 27) 1736. 31 Opinion 1/09 (n 11) para 9. 32 M Hahn, ‘Never Get High on Your Own Supply – “Autonomy of the EU Legal Order” and Effective Treaty-Based Dispute Settlement Mechanisms’ in M Hahn and G van der Loo (eds), Law and Practice of the Common Commercial Policy (Brill, 2020) 128, 154. 33 Art 216(2) TFEU; Opinion 1/91 (n 11) para 37. 34 Opinion 1/92, ECLI:EU:C:1992:189. See this volume, ch 20. The EFTA Court was set up under a separate agreement between the EFTA-EEA states. 35 Hahn (n 32) 132. 36 Such as Leonelli, cited in the sub-heading (n 27) 52. 37 Some of the critics were, in reality, challenging the very notion of investment protection, or perhaps the pursuit of international trade, full stop. While worthy of debate, these matters were not the subject of Opinion 1/17. 38 On the notion of ‘envisaged agreement’, see IVD below.
966 Kieran Bradley ‘thoroughly [to] explore the impact that CETA’s ISDS mechanism is liable to have in practice’, and in particular the possibility that the CETA Tribunals might not apply the limits on their jurisdiction correctly.39 It has been argued that the Tribunals will have to determine the precise requirements of EU law, their effects on respective investors, and to ascertain if it results in … discrimination, expropriation, or … unfair and inequitable treatment … considering law as a ‘matter of fact’ without interpreting it is impossible in practice.
Here the nub of problem is identified as being ‘what to do if an error of EU law interpretation … is made by the ICS tribunal’.40 It is true that the Court based itself on the explicit limitations on the jurisdiction of CETA Tribunals, as well as the guarantee of the Union’s right to regulate, laid down in the text of the Agreement.41 It is difficult to see what else it could have done. The Court’s duty under Article 218(11) TFEU in the Opinion procedure is to examine the ‘envisaged agreement’ referred to it, rather than engage in speculative inquiries as to whether or not the agreement might be misapplied and, if so, how. Equally, whether or not divining the ‘effects’ of Union law involves an element of interpretation, they are clearly different exercises. Determining the interpretation of a provision is within the exclusive province of the judge and does not depend on the action of the parties, while in the Tribunal system, the ‘effects’ of the relevant legal provisions must be proven as facts by the party relying on them, regardless of whether the particular rule has been interpreted correctly or not in the legal order of the respondent party. Second, it is in the nature of things that, at some point, the Tribunal might come to an appreciation of the meaning of Union law which is inconvenient for the Union authorities, or even clash with a ruling of the Court,42 just as may any other international forum charged with the resolution of disputes between the Union and its partners. Moreover, as has been pointed out, the ‘prevailing interpretation’ may be difficult to determine, where the interpretation of a particular provision is a matter of controversy and where the Court has not yet provided a ruling.43 While the Commission may be well placed to suggest such an interpretation, it will also be a participant in such proceedings, and its views may not necessarily be adopted by the Tribunal. That is not in itself a sufficient reason, however, for the Union not to agree to confer jurisdiction on such a forum, where neither its judicial nor its regulatory autonomy is jeopardised. In Opinion 1/17, the Court acknowledged that in the context of external relations, there are other judicial autonomies which cannot be avoided, and of which the Union must take full account.44 In essence, the Court viewed the possible errors of the Tribunal as a political problem, which would be amenable to a political solution. C. Can Opinion 1/17 Bind the CETA Tribunal? The obvious answer is ‘no’. The ‘whole point’ of the establishment of the Tribunal is that it was to provide, in the context of investor–state disputes, authentic interpretations of the Agreement which were binding on the parties.
39 Leonelli
(n 27) 43. (n 27) 131–32. 41 Art 8.31 CETA. 42 Opinion 1/17 (n 1) para 144. 43 Hahn (n 32) 157–58. 44 Opinion 1/17 (n 1) para 116. 40 Grigonis
Investor–State Dispute Tribunals Established under EU International Agreements 967 The obvious answer, however, may not be a complete one. The Agreement is entirely silent, for example, as to whether a binding interpretation of its provisions adopted by the Joint Committee could be applied to a pending or closed dispute. The Court deduced from the independence of the Tribunal that these interpretations may not have any effect on such disputes and underlined the fact that the Union representatives on the Joint Committee will be able and, by necessary implication, obliged to prevent the adoption of an interpretation which would apply retrospectively.45 On the one hand, the Court was seeking to preserve the Tribunal’s judicial character. On the other hand, the Court’s acceptance that the adoption of such interpretations by a political body was ‘neither illegitimate nor unusual’46 removed one possible objection to the judicialisation of investor protection dispute resolution, that is, of a run-away Tribunal ‘develop[ing] its own institutional dynamic and becom[ing] even more independent from government influence than is currently the case with arbitration’.47 D. What is an ‘Envisaged Agreement’? Previous Opinions of the Court have provided guidance on the notion of ‘envisaged’ in the term ‘envisaged agreement’. Thus, to rule on the Union’s competence to conclude an agreement, it is enough that ‘the general purpose and the subject-matter’ of the agreement be known; because competence is adjudged on the basis of the EU Treaties, rather than the text of the international agreement being considered, the matter is best resolved before negotiations have even begun.48 Equally, it is known that once an international agreement has been concluded, the Opinion procedure can no longer serve its preventive function, and that a request, even if admissible when presented, becomes devoid of purpose; the Court may not rule on the compatibility of an agreement which is no longer ‘envisaged’.49 As regards the notion of ‘agreement’, it is clear that the Court must have ‘sufficient information on [its] actual content’ to rule on the matters raised in the request for an Opinion. It is not necessary that the Court dispose of the final version of the agreement if it is able ‘to form a sufficiently certain judgment on the question raised’ in the request.50 In Opinion 1/17, the Court took account not only of the text of the main agreement, but also of the Joint Interpretative Instrument and a unilateral position of the Union, in assessing respectively the preservation of the Union’s right to regulate and the accessibility to the Tribunals for the purposes of Article 47 of the Charter.51 Given that the EU institutions had not yet made good on the latter undertaking, the Court’s approval of the dispute resolution mechanism was effectively conditional.52
45 ibid paras 236–38. 46 ibid para 233. 47 S Schill, ‘Editorial: US versus EU Leadership in Global Investment Governance’ (2016) 17 Journal of World Investment and Trade 1, 3; the Court’s jurisprudence is given as an example of ‘unexpected dynamics’. 48 Opinion 2/94, ECLI:EU:C:1996:140, paras 12 and 17. See this volume, ch 32. 49 Opinion 3/94, ECLI:EU:C:1995:436. 50 Opinion 1/09 (n 11) para 53. 51 Paras 154 and 217 (Statement No 36 in the Council minutes). 52 For a similar technique employed by a national court, see G Prieto, ‘The Colombian Constitutional Court Judgment C-252/19: A new frontier for reform in international investment law’ (EJIL:Talk!, 29 July 2019), www.ejiltalk.org/ the-colombian-constitutional-court-judgment-c-252-19-a-new-frontier-for-reform-in-international-investment-law/.
968 Kieran Bradley E. ‘ISDS is Dead, Long Live ICS!’: The Road Ahead Of course, ISDS is not dead; the thousands of bilateral investment agreements which provide for this form of dispute resolution are not going to disappear overnight. Reform of this contested process is, however, afoot. Working Group III of the United Nations Commission on International Trade Law has been examining mechanisms for the resolution of such disputes for some years, with the active participation of the EU and its Member States.53 At the same time, the Union has convinced a number of its partners of the benefits of CETA-like tribunals in investment protection agreements, the so-called ‘Investment Court System’ (ICS), and is actively promoting the creation of a permanent Multinational Investment Court, which would, in due course, replace the existing Tribunal system.54 Not all of the Union’s trade partners are likely to accept the proposed judicialisation of investor protection. In recent years, the United States was said to favour ‘a continuation of the loosely institutionalised system of one-off arbitration, although with additional safeguards and subject to transparency’, such as that which features in the Transpacific Partnership.55 Other proposals which also fall short of judicialisation are doing the rounds, such as that for a Multilateral Institution for Dispute Settlement on Investments (MIDSI), which would provide a framework within which trading states would be able to choose their investor protection model, which may or may not include a permanent investment court system. In this competition for ideas, the Court has lent its considerable moral authority in favour of the Union’s approach. The Agreement itself is not yet out of the woods at the time of writing, and its approval by all the Member States according to their own constitutional requirements cannot be taken for granted. It remains contested in some quarters, including for reasons purportedly related to the investor–state dispute resolution mechanism. Some in civil society appear to have difficulty in shaking off the idea that CETA’s Tribunal system is anything other than a rebranded version of the ‘secret corporate courts’ of traditional ISDS, a tendency which is not entirely absent from academic commentary either.56 Opinion 1/17 may serve an important didactic function in explaining how the concerns raised by Belgium are, in fact, met in the Agreement as interpreted by the Court.57 CETA is the poster boy of the EU’s vaulting ambition to export its values to the international stage, and in particular, the notion that economic activity – here foreign investment – should be subject to the rule of law, rather than the might of either private enterprise or state sovereignty. It is not a panacea, but Opinion 1/17 shows that new solutions are possible, both politically and legally.
53 For information on the state of play and available documents, see https://uncitral.un.org/en/working_groups/3/ investor-state. 54 Joint Interpretative Instrument, point 6(i); see further http://trade.ec.europa.eu/doclib/press/index.cfm?id=1608. 55 Schill (n 47) 1. 56 ‘What Is CETA?’ (Global Justice Now), www.globaljustice.org.uk/what-is-ceta-2/ (this organisation’s reservations regarding CETA, however, go well beyond dispute resolution); L Ankersmit, ‘Regulatory Autonomy and Regulatory Chill’ (2020) 4(1) Europe and the World: A law review. 57 See, eg K Lenaerts, ‘Modernising Trade while Safeguarding the EU Constitutional Framework: An Insight into the Balanced Approach of Opinion 1/17’, speech of 6 September 2019, Belgian Ministry of Foreign Affairs, Brussels.
Investor–State Dispute Tribunals Established under EU International Agreements 969 V. ADDITIONAL READING Cremona, M, ‘The Opinion Procedure under Article 218(11) TFEU: Reflections in the Light of Opinion 1/17’ (2020) 4(1) Europe and the World: A law review. Damjanovic, I and de Sadeleer, N, ‘Values and Objectives of the EU in Light of Opinion 1/17: “Trade for All”, above All’ (2020) 4(1) Europe and the World: A law review. Fanou, M, ‘The Independence and Impartiality of the Hybrid CETA Investment Court System: Reflections in the Aftermath of Opinion 1/17’ (2020) 4(1) Europe and the World: A law review. Riffel, C, ‘The CETA Opinion of the European Court of Justice and its Implications – Not That Selfish after All’ (2019) 22 Journal of International Economic Law 503. Von Walter, A and Andrisani, ML, ‘Resolution of Investment Disputes’ in MM Mbengue and S Schacherer, Foreign Investment under the Comprehensive Economic and Trade Agreement (CETA) (Berlin, Springer, 2019) 185.
970
89 Ensuring Respect for International Humanitarian Law Through Labelling Requirements: OJE and Vignoble Psagot SARA POLI Case C-363/18, Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954, delivered 12 November 2019. KEYWORDS International humanitarian law – Occupied territories – Right to self-determination of peoples – Non-autonomous territories – Labelling of foodstuffs – Consumer information – EU–Israel – EU–Palestine – Principle of non-recognition of acts breaching jus cogens obligations – Consistency of EU exernal action.
I. INTRODUCTION
T
he judgment in Organisation Juive Européenne and Vignoble Psagot (OJE) concerns the indication of origin of products coming from Israeli settlements in the Golan Heights, East Jerusalem and the West Bank (disputed territories). In the context of a preliminary ruling, the Court was asked to interpret Regulation 1169/2011 on the provision of food information to consumers (the Labelling Regulation).1 The Court ruled that consumers have a broad right to information. In order for them not to be deceived, products coming from the aforementioned territories must bear a label indicating their geographic origin and also that they come from the ‘Israeli settlements’. The Court recognised that consumers’ purchasing choices may be influenced by considerations such as the observance of international humanitarian law, and need to be informed through adequate labelling requirements that the products they buy originate from illegally occupied territories. The ruling in OJE is to be welcomed for the legal implications: consumers are empowered to enforce international humanitarian law. As a result of the judgment, an average consumer
1 Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers, [2011] OJ L304/18.
972 Sara Poli may indirectly promote respect for international law by refusing to buy goods and products coming from illegally occupied territories. It would thus be desirable for the position of the Court to be explicitly reflected in the Labelling Regulation. The EU institutions could change the latter act and adopt a uniform approach whereby products coming from illegally occupied territories, breaching international law, should bear a label that unequivocally indicates the origin of the products. II. FACTS
In November 2016, the French Ministry for Economics and Finance published a notice to economic operators concerning the indication of origin of goods coming from the territories occupied by the State of Israel since June 1967.2 According to this administrative act, the labelling of these products would require the explicit mention of the wording ‘Israeli settlement’. Had the label only referred to the Golan Heights or the West Bank, this could have misled consumers as to the true origin of the product. In support of this position, the Ministerial Notice refers to the Labelling Regulation, as well as to the Interpretative Notice of the European Commission 20153 regarding the indication of origin of goods from the territories occupied by Israel, published after the Brita judgment of the Court was delivered.4 The Commission Notice, which was a non-legally binding act for the Member States, stressed that the EU does not recognise Israel’s sovereignty over the territories of the Golan Heights and the West Bank, including East Jerusalem.5 This soft law act stated that consumers have to be accurately informed that products originate from an Israeli settlement in those occupied territories.6 The Labelling Regulation aimed to ensure that appropriate information is provided to consumers,7 who should be able to make informed choices based on health, economic, environmental, social and ethical considerations.8 The origin of a product was to be recognised as a factor capable of influencing consumers’ purchasing decisions. Indeed, according to the Labelling Regulation, the indication of the country of origin or place of provenance of a foodstuff is mandatory if the failure to indicate this piece of information may mislead the consumer as to the true origin or provenance of a product.9 In January 2017, Organisation Juive Européenne, a French organisation fighting against antisemitism, and Vignoble Psagot, a winery company based in the territories occupied by Israel, sought the annulment of the Ministerial Notice before the French Council of State. The applicants claimed that the notice was in violation of the Labelling Regulation. The Court was asked to answer two questions: the first one was whether EU law, and in particular the above-mentioned act, required that a product originating in an Israeli settlement in the occupied territories bears the indication of the origin of the occupied territory, and the more
2 French Ministry of the Economy and Finance, ‘Avis aux opérateurs économiques relatifs à l’indication de l’origine des marchandises issues des territoires occupés par Israël depuis juin 1967’ (2016) (hereinafter the Ministerial Notice). 3 ‘Interpretative Notice on Indication of Origin of Goods from the Territories Occupied by Israel since June 1967’, [2015] C375/05 (hereinafter the Commission Notice). 4 Case C-386/08, Firma Brita GmbH v Hauptzollamt Hamburg-Hafen, ECLI:EU:C:2010:91. See this volume, ch 57. 5 ibid para 7. 6 ibid para 10. 7 Labelling Regulation, Art 1(1). 8 ibid Art 3(1). 9 ibid Art 26(2)(a).
Ensuring Respect for International Humanitarian Law 973 specific provenance from the Israeli settlement.10 The second question, which needed to be answered only if the answer to the first question was negative, was whether the aforementioned act11 leaves a Member State free to impose a labelling requirement related to the origin of the product.12 III. THE COURT
The Court began examining the meaning of ‘country of origin’. The Union Customs Code (UCC),13 which replaced the Community Customs Code (CCC)14 to which Labelling Regulation referred, affirmed that goods are to be considered originating in a ‘country’ or ‘territory’ if they undergo either their whole production or their last substantial processing or working in that country or territory.15 The Court emphasised that, in the EU Treaties, the term ‘country’ is used numerous times as a synonym of ‘state’,16 and thus the same should also apply to the Labelling Regulation and the UCC.17 However, given that ‘territory’ and ‘country’ are mentioned as alternative notions in the UCC, it followed that ‘territory’ differed also from ‘state’.18 This was confirmed by the Front Polisario and Western Sahara Campaign UK19 rulings, where the Court found that Western Sahara was a non-autonomous territory, which is defined as an entity with a distinct legal status from the State of Morocco. The Court concluded that products originating in ‘territories’, like those originating in ‘countries’, must bear an indication of their origin or provenance because a failure to do so might mislead the consumer as to the true origin of the product.20 Returning to the present case, the products at issue were exported from the territories occupied by the State of Israel. Under international humanitarian law, those territories were and are subject to limited jurisdiction of the State of Israel as an occupying power.21 The Court stressed that in the West Bank, including East Jerusalem, the Palestinian people enjoy the right to self-determination as recognised by the International Court of Justice (ICJ) in its Opinion on the Wall.22 The Golan Heights belong to the Syrian Arab Republic, a state different from Israel. Consequently, if products originating in the occupied territories were labelled with the 10 Case C-363/18, Organisation juive européenne and Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954 (OJE), para 20(1). 11 Labelling Regulation. 12 ibid para 20(2). 13 Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code [2013] OJ L269/1 (hereinafter the Union Customs Code). 14 Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code [1992] OJ L302/1 (hereinafter the Community Customs Code). 15 ibid Art 60. 16 However, in a recent judgment, the General Court did not consider ‘third country’ as a synonym of ‘third state’. For the General Court, the former term was broader than the latter, and included entities other than sovereign states. Case T-370/19 Spain v Commission, ECLI:EU:T:2020:440, para 36. This judgment of the General Court is currently subject to appeal before the Court. Case C-632/20 P, Spain v Commission, pending. 17 OJE (n 10) para 28. 18 ibid para 30. 19 Case C-104/16 P, Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) ECLI:EU:C:2016:973, paras 92, 95; Case C-266/16, Western Sahara Campaign UK v Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs ECLI:EU:C:2018:118, paras 62 to 64. See this volume, ch 75. 20 OJE (n 10) para 32. 21 ibid para 34. 22 International Court of Justice Advisory Opinion of 9 July 2004, Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, ICJ Reports 2004, para 118 and 149. Hereinafter Opinion on the Wall.
974 Sara Poli wording ‘State of Israel’ – that is, the country of origin – consumers might erroneously believe that Israel was present as the sovereign entity in those territories, not as an occupying power. According to the Court, products originating in the occupied territories must display their territory of origin on the label.23 The next question was whether this was sufficient for the purpose of consumer information. In order to solve this issue, the Court turned to the concept of ‘place of provenance’, enshrined in the Labelling Regulation. The question was whether the indication of ‘Israeli settlement’ could fall within this notion. The position that was taken was that, unlike the place of provenance, the word ‘settlement’ has a demographic nature rather than a geographic one. However, the Court observed that, if circumscribed to a specific geographical area, the concept of ‘settlement’ could be regarded as ‘place of provenance’.24 As a result, the wording ‘Israeli settlement’ could be considered an indication of ‘place of provenance’ within the scope of the Labelling Regulation.25 At this juncture, the Court remarked that the settlements established by the State of Israel in some of the occupied territories constituted a policy of population transfer conducted by that state outside its territories.26 As such, this policy violated principles of international humanitarian law codified by the Convention of Geneva,27 as was recognised by the ICJ in its Opinion on the Wall,28 as well as by the United Nations Security Council (UNSC) and the EU. In this context, the Court affirmed that the Union respects and contributes to strengthening international law.29 Should one of the parties omit to indicate ‘Israeli settlement’ for a foodstuff originating in that place of provenance and refer only to the territory of origin (the West Bank or the Golan Heights), the Court said this may lead the consumer to believe that the product in question came, respectively, from Palestinian or Syrian producers.30 In the view of the Court, a consumer could indeed be unaware that foodstuffs originate from settlements which breach international humanitarian law.31 The Court drew the conclusion that, under the Labelling Regulation, consumers should be provided with adequate food information enabling them to make informed choices based on health, economic, environmental, social and ethical considerations.32 Observance of international law could also be added to that list.33 Moreover, the consideration that a foodstuff comes from a settlement violating international humanitarian law, and especially the fundamental rules of international law, may be included in those ‘ethical assessments’,34 capable of informing consumers’ purchasing decisions to which the labelling rules refer. The Court therefore answered the first question by holding that the indication of ‘Israeli settlement’ as place of provenance within the meaning of Labelling Regulation is mandatory for foodstuffs
23 OJE (n 10) paras 36–38. 24 ibid para 44. 25 ibid para 45. 26 ibid para 48. 27 In particular, Art 49(6) of the Convention signed in Geneva on 12 August 1949 relative to the Protection of Civilian Persons in Time of War, United Nations Treaty Series, vol 75, no 973. This provision prohibits the occupying power from ‘deport[ing] or transfer[ring] part of its own civilian population into the territory it occupies’. 28 Opinion on the Wall (n 22) para 120. 29 OJE (n 10) para 48. 30 ibid para 49. 31 ibid paras 50,51. 32 Labelling Regulation, Art 3(1). 33 OJE (n 10) para 54. 34 ibid para 56. For a criticism to the creative interpretation given to the concept of ‘ethical consideration’, see O Kanevskaia, ‘Misinterpreting Mislabelling: The Psagot Ruling’ (2019) 4 European Papers 763, 775.
Ensuring Respect for International Humanitarian Law 975 originating in the occupied territories. As a result, these products must bear a label indicating not only their territory of origin, but also the place of provenance, which is ‘Israeli settlement’.35 Advocate General (AG) Hogan36 drew the same conclusion as the Court;37 however, unlike the latter, he also addressed the second question.38 According to the Labelling Regulation, Member States may not legislate on matters harmonised by the Regulation itself unless specifically provided. AG Hogan observed that national authorities may adopt national legislation on labelling requirements indicating the place of origin or the place of provenance, since the Regulation did not fully harmonise the field.39 Yet, the power to legislate at national level is limited to the condition of ‘a proven link between certain qualities of the food and its origin or provenance’.40 Thus, there is no connection between the origin of the products and the quality of the product itself.41 As a result, Member States could not require products coming from an occupied territory to bear the indication either of the territory of origin or their provenance from the Israeli settlement. IV. THE IMPORTANCE OF THE CASE
In the judgment, the possibility of using labelling requirements of products for purposes related to broader EU foreign policy interests was envisaged for the first time. The case is important since the Court contributed to a decentralised application of international humanitarian law and indirectly strengthened the principle of self-determination of peoples (the Palestinians). For non-states parties, decentralised application of international law is possible, to some extent, with respect to EU institutions or the Member States as a result of the direct effect of international agreements of the EU. Private parties do not usually have the possibility to enforce international law vis-à-vis third countries. It is rare for these categories of subjects to be able to promote respect of international law at all, given that the primary responsibility belongs to states, as well as to international organisations. This case offered such an opportunity.42 As a result of the judgment, consumers are promoted by the Court as enforcers of international humanitarian law vis-à-vis Israel. Some may find that this is a not very welcome development. considering that consumers, to some extent, interfere with the discretion that the EU institutions and Member States enjoy in deciding the kind of relations that they may want to develop with Israel and the Palestinians. A further reason for interest in this judgment is that the political institutions of the EU (in particular, the Commission that issued the 2015 Notice) and the Court formed a united front, and acted consistently with one of the objectives of the Union, which is to contribute
35 OJE (n 10) para 57. 36 Opinion of AG Hogan, Case C-363/18, Organisation juive européenne, Vignoble Psagot Ltd v Ministre de l’Économie et des Finances, ECLI:EU:C:2019:954 (OJE). 37 In contrast with the Court, the AG finds it necessary to dwell on the case law related to the notion of ‘reasonable consumer’ and also on the concept of ‘ethical considerations’. See ibid paras 47 and 50. The more thorough analysis of these concepts carried out in the AG’s opinion makes it more solid and convincing than the Court’s judgment. 38 OJE (n 10) para 79. 39 ibid paras 82–83. 40 Labelling Regulation, Art 39(2). 41 Opinion of AG Hogan in OJE (n 36) para 87. 42 For a negative view taken on private enforcement of international law, see S Hummelbrunner, ‘Contextualisation of Psagot in Light of Other CJEU Case Law on Occupied Territories’ (2019) 4 European Papers 779, 788.
976 Sara Poli to the strict observance of international law.43 Finally, it is noteworthy that the Court de facto imposed on the Member States the obligation to respect the 2015 Commission’s Notice, which is, in principle, a non-legally binding act. A. The Teleological Interpretation of a Secondary Act Aimed at Consumer Protection in the Light of International Humanitarian Law The OJE judgment is unique since an internal measure, the objective of which is to ensure consumer information, is interpreted in the light of international humanitarian law. This should not be taken for granted. For example, in contrast to this case, in Diakité,44 the Court provided an independent interpretation of the notion of ‘non-armed conflict’ embedded in a piece of EU law45 on the status of persons in need of international protection, with respect to that provided by Common Article 3 of the four Geneva Conventions. Despite the Court’s openness to international law in OJE, the Court was criticised for the lack of reference to the duty not to ‘recognize as lawful a situation created by a serious breach [of a peremptory norm of international law], nor render aid or assistance in maintaining that situation’.46 This general duty, which is applicable in case of serious breaches of jus cogens rules, imposes the non-recognition of Israel’s sovereignty over the occupied territories.47 It is not the first time that the Court omitted reference to this principle. The OJE case is similar in this respect to the Anastasiou I case, in which the Court had to decide about the territorial application of an association agreement concluded with the Republic of Cyprus and resolved the case without referring to the international position adopted by the UN Security Council48 in 1974 after Turkey invaded the Island of Cyprus.49 It is, however, submitted that reference to this principle was not necessary in the OJE case. In order to answer the specific questions of the Conseil d’Ètat, the referring national court, the provisions of the Labelling Regulation, read in conjunction with the 2015 Notice and international humanitarian law, were sufficient. The Court was able to clarify the uncertainties
43 Art 3(5) TEU. See A Pau, ‘“Made in Settlements”! Il consumatore europeo deve sapere se i beni sono prodotti in un territorio occupato da Israele’ (2020) 15 Studi sull’integrazione europea 431, 449. 44 Case C-285/12, Aboubacar Diakité v Commissaire général aux réfugiés et aux apatrides, ECLI:EU:C:2014:39. 45 Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted, [2004] OJ L304/12 (corrigendum, [2005] OJ L204/24). 46 See Art 42(2) of the International Law Commission’s Draft Articles on the Responsibility of International Organizations (DARIO), 2011 as quoted by C Ryngaert, ‘Indications of Settlement Provenance and the Duty of Non-recognition under International Law’ (2019) 4 European Papers 791, 792. 47 E Kassoti, ‘The EU’s Duty of Non-recognition and the Territorial Scope of Trade Agreements Covering Unlawfully Acquired Territories’ (2019) 1 Europe and the World: A law review 6. 48 See UNSC Resolution 550 (1984) [Cyprus], 11 May 1984, S/RES/550 (1984), para 3, in which the principle of nonrecognition was clearly stated. 49 Case C-432/92, R v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) LtD and others, ECLI:EU:C:1994:277 (Anastasiou I). See this volume, ch 25. Also, commented on by M Cremona, ‘Annotation of Anastasiou I’ (1996) 33 (1996) CML Rev 125, 134. Here, the Court was concerned with the rules of origin included in an association agreement between the EC and Cyprus and its Protocol of 1977. The Court excluded that the phytosanitary certificates issued by the custom authorities of the northern zone of Cyprus could be accepted by the Member States to import goods coming from that territory. The Court did not base its finding on the principle of non-recognition of the acts of the authorities of the Turkish Republic of Northern Cyprus, as mandated by the United Nations Security Council in 1984. The Court was concerned by the uniform application of rules of origin and standards applied to goods from this country, and solved the case without referring to international law obligations deriving from the mentioned UNSC resolution.
Ensuring Respect for International Humanitarian Law 977 on the labelling requirements through the teleological interpretation of the provisions of the Regulation.50 Although the latter was primarily aimed at informing consumers about the quality or the content of products, the Court was convincing in concluding that consumers would be misled if they did not know that the food they were buying comes from illegal Israeli settlements. The mentioned right is not unduly stretched. Indeed, the Labelling Regulation listed a non-exhaustive range of concerns that should be taken into consideration when imposing labelling requirements. Thus, the breach of international humanitarian law by the Israeli settlements producing goods to be exported to France can be considered a legitimate factor capable of influencing the purchase decisions of consumers. It is noteworthy that there are some ambiguities in the Court’s reasoning leading to this solution. Indeed, on the one hand, the Court considers that observance of international law is a concern that is not included in the range of factors capable of affecting the consumer’s choice;51 yet, this did not matter, since such a list in the Regulation was of a non-exhaustive nature. On the other hand, the Court seemed to consider that breaches of international law by the settlements may form the object of an ‘ethical assessment’ by consumers,52 particularly since some of those rules constitute fundamental rules of international law. Therefore, it is not clear whether the observance of international law can be considered a factor justifying the mandatory labelling under the text of the Regulation or a legitimate concern that is relevant but is not specifically provided for by the mentioned act. However, apart from this uncertainty, the teleological interpretation of the Labelling Regulation is convincing. B. The Pronouncement of the Court in Relation to Previous Case Law and the Principle of Consistency The OJE judgment presents links with other preliminary rulings and annulment actions directly or indirectly concerned with the status of occupied (or disputed) territories in Cyprus, Israel and Morocco. The Anastasiou judgment, concerning the first above-mentioned third country, has already been mentioned.53 The Brita54 case was related to Israel and revolved around the rules of origin of products coming from the West Bank and the territorial application of two bilateral agreements between the EU, on the one hand, and Israel and the Palestine Liberation Organization respectively, on the other hand. The difference between the Brita and OJE judgments is that in the former case, the Court was called on to interpret the territorial application of two international agreements, whereas in the latter the judicature was asked to examine the meaning of the term ‘territory’ in an internal measure whose aim was to protect consumers. In addition, in Brita, the Court relied on some provisions of the Vienna Convention on the Law of the Treaties (VCLT) corresponding to customary international law in order to answer the questions of the national courts. In contrast, in OJE, the Court took substantive international humanitarian law into consideration in its interpretation. In neither case was the principle of self-determination of peoples invoked; yet, as a result of the two judgments, the Court strengthened the observance of this principle.
50 On this point, see G Harpaz, ‘Mandatory Labelling of Origin of Products from Territories Occupied by Israel and the Weight of Public International Law: Psagot’ (2020) 5 CML Rev, 1587. 51 OJE (n 10) para 54. 52 ibid para 56. 53 See n 49. 54 Above n 4.
978 Sara Poli The second group of relevant cases is the Front Polisario appeal55 and the preliminary ruling in Western Sahara Campaign UK.56 In these two judgments, the Court struggled57 with the decision of the EU institutions to conclude and apply international agreements in a situation in which their provisions were drafted by the EU negotiators, without taking the right to selfdetermination of the Saharawi people into due consideration. In these cases, the Court ruled on the territorial application of the Protocol on the liberalisation of agricultural products58 and on that of the Protocol to the partnership agreement on fisheries59 concluded between the EU and Morocco. By excluding that the territorial application of the concerned international agreements of the EU stretched to Western Sahara, including to the waters adjacent to that territory, the Court implicitly applied the principle of self-determination of people. The Court was thus faced with the difficult task of assessing the legality (or validity) of international agreements in the light of the principle. For the EU, it is crucial to have good neighbourly relations with Morocco. Pragmatic considerations were at the basis of the judgment to disregard the position of the Front Polisario when concluding those international agreements. The Front Polisario case was criticised for the method of interpretation adopted by the Court and for its selective reliance on the provisions of the VCLT that are concerned with the interpretation of treaties.60 In contrast with the acrobatics of the Court in Front Polisario, the stance taken by the Court in the OJE judgment is far more coinvincing, as illustrated in the previous section. When assessing the consistency of the political institutions’ positions vis-à-vis Israel and Morocco, the accusation addressed to the EU of adopting a double standard in upholding the principle of self-determination of people is hard to reject. Certainly, it is true that it falls on Morocco’s responsibility to apply the international agreements concluded with the EU in conformity with international law, as the Commission has claimed in the Front Polisario case. This implies that it is for Morocco to make sure that natural resources are used to the benefit of the Saharawi population. Yet, the Union has at its disposal a number of legal and political instruments to apply pressure on Morocco to respect the rights of the people in Western Sahara. To date, the initiatives adopted by the Commission to support the Saharawi population are limited. In particular, in 2018, the Commission negotiated a new fisheries agreement with Morocco that extended to the waters of Western Sahara, so as to apply the ruling of the Court in Western Sahara Campaign UK. In this case, the Court had interpreted the applicable fisheries agreement and the implementing Protocol as excluding the waters adjacent to Western Sahara. However, the EU has left the task of settling the dispute between Morocco and Western Sahara to the UN. This affects the credibility of the Union in the international community and the consistency of its action.61 The EU entertains good relations with Morocco
55 Front Polisario (n 19). 56 Above n 19. 57 J Odermatt, ‘Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) – Case C-104/16 P’ (2017) 111 American Journal of International Law 731, 737. For additional comments to the case, see the bibliography listed by E Kassoti and S Saluzzo, ‘The CJEU’s Judgement in Organisation Juive Européenne and Vignoble Psagot. Some Introductory Remarks’ (2019) 4 European Papers 753, 754 fn 8. For an overall appreciation of the judgment, see E Cannizzaro, ‘In Defence of Front Polisario: The ECJ as a Global Jus Cogens Maker Case C-104/16 P, Council of the European Union v Front Polisario, Judgment of the Court (Grand Chamber), of 21 December 2016, EU:C:2016:973’ (2018) 55 CML Rev 569. 58 Front Polisario (n 19) para 92. 59 Western Sahara Campaign UK (n 19) para 79. 60 E Kassoti, ‘The ECJ and the Art of Treaty Interpretation: Western Sahara Campaign UK’ [2019] CML Rev 210, 235. 61 An EU obligation of adopting consistent action and policies is provided for by Art 13 TEU and Art 7 TFEU.
Ensuring Respect for International Humanitarian Law 979 and has not adopted any kind of retorsion or sanctions against this state’s breach of the rights of the Saharawi population. The choices made by the EU political institutions can certainly be criticised for lack of consistently with respect to the stricter position adopted vis-à-vis Israel. However, it is also true that the EU has not reduced its trade relations with Israel over the years. For example, it is possible to import goods from the illegal settlements,62 and this can be criticised for being inconsistent with the EU position condemning the activities of the illegal settlements.63 Finally, by way of conclusion, it should be noted that there are also cases in which the EU’s reaction to breaches of fundamental rules of international law by third countries other than Israel has been more responsive than that adopted for equivalent or similar breaches committed by this state. The violation of the principle of territorial integrity, and the undermining of the stability of Ukraine in particular, were invoked to support the adoption of restrictive measures respectively against the self-proclaimed republics in Eastern Ukraine and Russia. This is in contrast with Israel, which has never been the object of any EU restrictive measure or sanction. V. ADDITIONAL READING Cannizzaro, E, ‘In Defence of Front Polisario: The ECJ as a Global Jus Cogens Maker Case C-104/16 P, Council of the European Union v Front Polisario, Judgment of the Court (Grand Chamber), of 21 December 2016, EU:C:2016:973’ (2018) 55 CML Rev 569. Cremona, M, ‘Case C-432/92, R. v Minister of Agriculture, Fisheries and Food, ex parte S.P. Anastasiou (Pissouri), judgment of 5 July 1994’ (1996) 33 CML Rev 125. Harpaz, G, ‘Mandatory Labelling of Origin of Products from Territories Occupied by Israel and the Weight of Public International Law: Psagot’ (2020) 57 CML Rev 1587. Hummelbrunner, S, ‘Contextualisation of Psagot in Light of Other CJEU Case Law on Occupied Territories’ (2019) 4 European Papers 779. Kanevskaia, O, ‘Misinterpreting Mislabelling: The Psagot Ruling’ (2019) 4 European Papers 763. Kassoti, E, ‘The ECJ and the Art of Treaty Interpretation: Western Sahara Campaign UK (2019) 56 CML Rev 209. Kassoti, E, ‘The EU’s Duty of Non-recognition and the Territorial Scope of Trade Agreements Covering Unlawfully Acquired Territories’ (2019) 5 Europe and the World: A law review 1. Kassoti, E, and Saluzzo, S, ‘The CJEU’s Judgement in Organisation Juive Européenne and Vignoble Psagot. Some Introductory Remarks’ (2019) 4 European Papers 753. Odermatt, J, ‘Council of the European Union v Front populaire pour la libération de la saguia-el-hamra et du rio de oro (Front Polisario) – Case C-104/16 P’ (2017) 111 American Journal of International Law 731. Pau, A, ‘“Made in Settlements”! Il consumatore europeo deve sapere se i beni sono prodotti in un territorio occupato da Israele’ (2020) 15 Studi sull’integrazione europea 431. Ryngaert, C, ‘Indications of Settlement Provenance and the Duty of Non-recognition under International Law’ (2019) 4 European Papers 791.
62 According to one view, imports by the EU from the illegal settlements amount to an implicit recognition of the situation created by Israel in the occupied territories. Ryngaert (n 46) 796. 63 See, eg the last Statement by High Representative Josep Borrell on settlement expansion in Givat Hamatos, 15 November 2020.
980
90 Inter se Agreements between Member States, and the Outer Limits of the Court’s Jurisdiction in Infringement Proceedings: Slovenia v Croatia FEDERICO CASOLARI Case C-457/18, Republic of Slovenia v Republic of Croatia, ECLI:EU:C:2020:65, delivered 31 January 2020. KEYWORDS Border dispute between Member States – Arbitration agreement – Territorial scope of application of EU law – Jurisdiction of the CJEU – Principle of sincere cooperation – EU enlargement.
I. INTRODUCTION
S
Croatia represents the first case where the Court was asked to directly examine matters related to a border dispute between Member States.1 Numerous cases have been brought before the Court where legal issues flowing from territorial disputes were subject to judicial scrutiny.2 A first series of cases concerned the implementation of EU law provisions on the provenance of products originating in contested territories outside the Union (such as the northern part of the island of Cyprus,3 the territories occupied by the State lovenia v
1 Case C-457/18, Slovenia v Croatia, ECLI:EU:C:2020:65. On that case, see also E Kassoti, ‘Between a Rock and a Hard Place: The Court of Justice’s Judgment in Case Slovenia v Croatia’ [2020] 5 European Papers 1061; D Petrić, ‘A Matter of (A)political Interpretation: Some Reflections on Case C-457/18 Slovenia v Croatia’ (2020) 3 Nordic Journal of European Law 87; E Cannizzaro, ‘Inter-Member State International Law in the EU Legal Order: Some Thoughts on Slovenia v Croatia’ (2021) 58 CML Rev 1473; B McGarry, ‘Republic of Slovenia v Republic of Croatia. No C-457/18’ (2021) 115 American Journal of International Law 101; L Lonardo, ‘“Am I My Brother’s Keeper?” International Agreements by Member States and the Limits of the European Court of Justice’s Jurisdiction’ (2021) 46 EL Rev 105. 2 For a general overview, see PJ Cardwell and RA Wessel, ‘EU External Relations and International Law: Divergence on Questions of “Territory”?’ in E Fahey (ed), Framing Convergence with the Global Legal Order: The EU and the World (Oxford, Hart Publishing, 2020). 3 Case C-432/92, Anastasiou, ECLI:EU:C:1994:277. See this volume, ch 25.
982 Federico Casolari of Israel4 and the Western Sahara5). Furthermore, Spanish and British disputes over Gibraltar have been considered by the Court in Spain v United Kingdom, where the particular situation of the individuals residing in Gibraltar and the electoral rights of EU citizens were at stake.6 In Slovenia v Croatia, however, the Court was requested to assess whether or not the respect of an international law dispute settlement by two Member States concerning their borders could represent an issue of EU law per se. What is more, the case provided the Court with the opportunity to reconsider to what extent EU law may influence the bilateral relations between Member States, and the role the constitutional principle of sincere cooperation may play in this respect.7 II. FACTS
Slovenia v Croatia is one of the few inter-state disputes to be brought before the Court of Justice under Article 259 TFEU.8 It concerned the long-standing territorial dispute between Croatia (which acceded to the EU in 2013) and Slovenia (acceding to the EU in 2004), tracing back to the dissolution of the former Socialist Federal Republic of Yugoslavia.9 In order to find a solution to that dispute, the two states concluded an Arbitration Agreement (the Agreement) in 2009, setting up an arbitral tribunal. Quite significantly, the negotiation of the Agreement was fully supported by the European Commission, and the Swedish EU Council Presidency witnessed its signature. The Agreement entered into force on 1 July 2013, the same day the Republic of Croatia became an EU Member State. However, due to unofficial communications in the course of the deliberations of the arbitral tribunal between the arbitrator appointed by Slovenia and that state’s agent before the tribunal, Croatia claimed a material breach of the Agreement by Slovenia under Article 60 of the Vienna Convention on the Law of the Treaties 1969, and eventually decided to terminate the Agreement. This notwithstanding, after a change in its composition, the arbitral t ribunal concluded, first, that Croatia was not entitled to terminate the Agreement,10 then issued an arbitration award,11 with a binding delimitation of the sea and land borders between the two EU Member States.
4 Case C-386/08, Brita GmbH, ECLI:EU:C:2010:91; Case C-363/18, Psagot, ECLI:EU:C:2019:954. See this volume, chs 57 and 89. 5 Case C-104/16 P, Front Polisario, ECLI:EU:C:2016:973; Case C-266/16, Western Sahara Campaign UK, ECLI:EU:C:2018:118. See this volume, ch 75. 6 Case C-145/04, Spain v United Kingdom, ECLI:EU:C:2006:543. L Burgorgue-Larsen, ‘L’identité de l’Union européenne au cœur d’une controverse territoriale tricentenaire. Quand le statut et Gibraltar réapparaît sur la scène judiciaire européenne (CJCE 12 septembre 2006, aff. C-145/04, Royaume d’Espagne c/ Royaume-Uni de Grande-Bretagne et d’Irlande du Nord)’ (2007) 43 Revue trimestrielle de droit européen 25. Furthermore, G Butler, ‘The Court of Justice as an Inter-state Court’ (2017) 36 Yearbook of European Law 179, 191–92. 7 On that principle, see, inter alia, M Klamert, The Principle of Loyalty in EU Law (Oxford, Oxford University Press, 2014); F Casolari, Leale cooperazione tra Stati membri e Unione europea: Studio sulla partecipazione all’Unione al tempo delle crisi (Naples, Editoriale Scientifica, 2020). 8 See Butler (n 6). 9 G Cataldi, ‘Prospects for the Judicial Settlement of the Dispute between Croatia and Slovenia over Piran Bay’ in N Boschiero et al (eds), International Courts and the Development of International Law: Essays in Honour of Tullio Treves (The Hague, TMC Asser Press, 2013); T Bickl, The Border Dispute between Croatia and Slovenia (Cham, Springer, 2021). 10 cf Permanent Court of Arbitration, Case No 2012-04, Partial Award, 30 June 2016, para 225, https://pcacases. com/. 11 cf Permanent Court of Arbitration, Case No 2012-04, Final Award, 29 June 2017, https://pcacases.com/.
Inter se Agreements between Member States and the Court’s Jurisdiction 983 Croatia contested the validity of the arbitration award and refused to implement it. This was the reason why Slovenia decided to initiate infringement proceedings under Article 259 TFEU, bringing the matter, according to the Article 259 TFEU procedure, before the European Commission first and foremost. Since the Commission did not deliver a reasoned opinion, Slovenia brought the case before the Court. According to Slovenia, Croatia’s rejection of the arbitration award represented a major threat to the respect of fundamental values of the Union, especially the rule of law, and also to the principle of sincere cooperation. Moreover, by preventing Slovenia from exercising its sovereignty over its territory, as defined in the arbitration award, Slovenia pleaded that Croatia had failed to fulfil a number of obligations enshrined in EU legislation dealing with the common fisheries policy, the free movement of persons and maritime spatial planning. On the other hand, Croatia requested the Court to dismiss the action as inadmissible. In its view, the EU law obligations at issue were ancillary to those pertaining to the international law dispute between the two Member States. Moreover, since the real dispute was related to the implementation of an international agreement, the Arbitration Agreement of 2009, which did not form part of EU law, the Court lacked jurisdiction to rule on the validity and effects of both the Agreement and the related arbitration award. III. THE COURT
The Court first assessed the interaction between the alleged infringements of EU law and the implementation of the Agreement. After having considered the different allegations, the Court stated that relevant infringements resulted ‘from the alleged failure by the Republic of Croatia to comply with the obligations arising from the Arbitration Agreement and from the arbitration award made on the basis of that Agreement’.12 While this statement seemed to suggest the existence of a direct and strict linkage between the two different sets of obligations, the Court eventually downplayed the impact of the Agreement over obligations arising from EU law for both Slovenia and Croatia. On the one hand, the Court stressed the circumstance that the Agreement was not covered by EU competence, and it was not formally binding upon the Union.13 As a consequence, it was not possible to invoke the Haegeman formula, according to which, from the date they come into force, EU agreements form an integral part of EU law.14 On the other hand, the Court recognised that the Union contributed to the negotiation and conclusion of the Agreement within the framework of Croatia’s accession to the Union itself, and Annex III to the Act of Accession of Croatia explicitly mentioned the ‘full implementation of the arbitration award resulting from the Arbitration Agreement’.15 To the Court, however, those circumstances were ‘not … sufficient for the Arbitration Agreement and the arbitration award to be considered an integral part of EU law’.16 In the light of the foregoing, and also relying on its previous judgment in the European Schools case,17 the Court concluded that Slovenian claims at issue concerned obligations that were ancillary to the alleged failure to comply with the content of the Agreement, which did
12 Slovenia
v Croatia (n 1) para 101. para 102. 14 Case 181/73, Haegeman, ECLI:EU:C:1974:41, para 5. See this volume, ch 3. 15 [2012] OJ L112/6. 16 Slovenia v Croatia (n 1) para 103. 17 Case C-132/09, Commission v Belgium, ECLI:EU:C:2010:562, paras 40–42. 13 ibid
984 Federico Casolari not sufficiently fall within the scope of EU law on the basis of the infringement procedure in Article 259 TFEU, to which the Court said it did not have jurisdiction. Quite significantly, the Court also stressed the need to respect the allocation of competences between the Union and Member States, and the fact that it is for Member States to determine the extent and limits of their territory, in accordance with international law.18 Ultimately, the Court urged the two Member States to fulfil their mutual duties in the light of the principle of sincere cooperation enshrined in Article 4(3) TEU to settle their dispute in a definitive way. Among the options available, the possibility to submit the case to the Court by means of a special agreement under Article 273 TFEU, as had been done previously between two other Member States,19 was suggested in obiter dictum.20 IV. THE IMPORTANCE OF THE CASE
A. Member States’ inter se Agreement and the ‘Framing of Powers’ Doctrine The main point in Slovenia v Croatia concerns the possibility to draw up a line separating the contractual relations between Member States outside the scope of EU law. In its previous case law, the Court has repeatedly considered those relations, making clear that in some cases Member States’ inter se agreements may be of relevance for EU law, even though they are placed outside the scope of the EU legal order. More to the point, the Court has focused its attention on the possibility that Member States’ relations may jeopardise obligations under EU law, thus leading to a breach of the loyalty duties that Member States have under EU law. In Hurd,21 for instance, the Court stated that if the implementation of a provision of the Treaties or of secondary Community law or the functioning of the Community institutions were impeded by a measure taken to implement … an agreement concluded between the Member States outside the scope of the Treaties … the measure in question could be regarded as contrary to the obligations arising under … Article 5 of the EEC Treaty [now Article 4(3) TEU].22
A more recent example of the same approach can be seen in Pringle23 concerning the interaction of the Treaty establishing the European Stability Mechanism with EU law. In Pringle, the Court made it clear that Member States could not ‘disregard their duty to comply with European Union law when exercising their competences’ in the area of economic cooperation.24 Quite significantly, this line of reasoning is perfectly consistent with the well-consolidated jurisprudence of the Court tracing back to the 1960s,25 stressing the role that loyalty duties of Member States may play in preventing the exercise of Member State prerogatives (or retained powers) from undermining the fulfilment of EU objectives. There are numerous areas where such an approach – the ‘framing of powers doctrine’, as it has been called by Advocate General
18 Slovenia
v Croatia (n 1) para 105. C-648/15, Austria v Germany, ECLI:EU:C:2017:664. See Butler (n 6), 197–202. 20 Slovenia v Croatia (n 1) para 109. 21 Case 44/84, Hurd, ECLI:EU:C:1986:2. 22 ibid para 39. 23 Case C-370/12, Pringle, ECLI:EU:C:2012:756. 24 ibid para 69. 25 Case 30/59, De Gezamenlijke Steenkolenmijnen in Limburg, ECLI:EU:C:1961:2. 19 Case
Inter se Agreements between Member States and the Court’s Jurisdiction 985 (AG) Pikamäe in his Opinion in the case at hand26 – has been affirmed: loss and acquisition of nationality,27 maintenance of public order and safeguarding of internal security,28 social security,29 organisation of education systems,30 organisation of justice31 and direct taxation.32 In this perspective, the strengthening of the loyalty duties of the Member States – especially the abstention duties flowing from the loyalty clause enshrined in Article 4(3) TEU – contributed to blurring the divide among EU and Member State prerogatives, leading, in turn, to a more flexible understanding of the principle of conferral.33 The core question upon which the framing of powers doctrine is based is that of a relevant intertwinement between the exercise of Member States’ powers/prerogatives and the effectiveness of EU law. The more evident and sound such an intertwinement is, the more the Court feels comfortable in invoking the loyalty duties that Member States shall perform towards the Union. B. The Outer Limits of the Court’s Jurisdiction Slovenia v Croatia contributes to establishing, in a more clear-cut way, the outer limits of EU law. This would thus be reaffirming the possible autonomy of the contractual relations among Member States vis-à-vis EU law. However, doubt might be cast as to whether the approach seen in Slovenia v Croatia represented the correct avenue for a more viable (and effective) distinction among the EU’s and Member States’ prerogatives. As it emerged from the Court’s judgment, the two-limb test used by the Court to exclude its own jurisdiction in Slovenia v Croatia, on the basis of the inter-state infringement procedure pursuant to Article 259 TFEU, looked first at the nature of Member State prerogatives under the Arbitration Agreement of 2009. Secondly, the Court considered the interaction of Member States with EU law, ie their interference with the effectiveness of EU law. The Court’s view was that the prerogatives at stake were the expression of an autonomous treaty-making power of the two Member States, and their link with EU law was not sufficiently strong. This conclusion of the Court was remarkable, although not altogether completely surprising, since it seemed to ignore some elements which suggested a significant connection between the Arbitration Agreement of 2009 between Slovenia and Croatia and the implementation of EU law, particularly in the latter country’s desire for accession to the EU at that point in time. That the Agreement was manifestly intertwined with the implementation of EU law was demonstrated by different circumstances. First, as has already been mentioned, the circumstances leading to the conclusion of the Agreement, as well as some of its provisions – such as Article 9(2), recognising that ‘Both 26 Opinion of AG Pikamäe, Case C-457/18, Slovenia v Croatia, ECLI:EU:C:2019:1067, para 138. On that doctrine, see L Azoulai, ‘The “Retained Powers” Formula in the Case Law of the European Court of Justice: EU Law as Total Law?’ (2011) 4 European Journal of Legal Studies 192. cf also B de Witte, ‘Exclusive Member States Competences – Is There Such a Thing?’ in S Garben and I Govaere (eds), The Division of Competences between the EU and the Member States – Reflections on the Past, the Present and the Future (Oxford, Hart Publishing, 2017); L Boucon, ‘EU Law and Retained Powers of Member States’ in L Azoulai (ed), The Question of Competence in the European Union (Oxford, Oxford University Press, 2014). 27 Case C-369/90, Micheletti, ECLI:EU:C:1992:295, para 10. 28 Case C-265/95, Commission v France, ECLI:EU:C:1997:595, paras 33–35. 29 Case C-647/13, Melchior, ECLI:EU:C:2015:54, para 21. 30 Joined Cases C-11/06 and C-12/06, Morgan and Bucher, ECLI:EU:C:2007:626, para 24. 31 Case C-619/18, Commission v Poland, ECLI:EU:C:2019:531, para 52. 32 Case C-279/93, Schumacker, ECLI:EU:C:1995:31, paras 21–24. 33 E Neframi, ‘Principe de coopération loyale et principe d’attribution dans le cadre de la mise en œuvre du droit de l’Union’ (2016) 52 Cahiers de droit européen 221; Casolari (n 7) 88.
986 Federico Casolari parties shall refrain from any action or statement which might negatively affect the accession negotiations’34 – clearly show, as also stressed by the arbitral tribunal in its partial award, that ‘the Agreement is intimately tied to the process of Croatia’s accession to the European Union’.35 Secondly, it is evident that the aim of the Agreement, which was to solve the border dispute between the two, was likely to have an impact on the definition of the territorial scope of EU law, starting with the relevant EU legislation that Slovenia had alleged that Croatia was violating. In the AG’s and Court’s eyes, however, these elements were not decisive. For the Court, these elements were considered ‘instead an objective fact that it has to accept’.36 In other words, the linkage with EU law only represented a factual background, which could not be stressed to trigger the framing of powers doctrine, as well as the loyalty duties upon which that doctrine is based. True, this was not the first time that the Court relied on the existence of ‘mere facts’ to limit its jurisdiction on international law obligations. For instance, in Opinion 1/17,37 the Court maintained that the circumstance that the permanent tribunal established by the Comprehensive Economic and Trade Agreement with Canada may take into consideration EU law ‘as a matter of fact’ is not inconsistent with the Court’s monopoly of the interpretation of that law.38 Exactly as in Slovenia v Croatia, the international law obligations (arising from CETA), on the one part, and the EU obligations, on the other, were supposed to ‘operate within legal orders that are wholly separate’.39 Criticisms of that (rather) formalistic approach demonstrated by the Court in Opinion 1/17 in dealing with the jurisdiction of the CETA tribunal are known.40 Mutatis mutandis, they could have been extended to the position taken in Slovenia v Croatia. In this vein, the reference made by the Court to its previous judgment in the European Schools case does not represent a sound argument to further support its lack of jurisdiction. In that case, the Court had to assess a possible infringement by the Kingdom of Belgium of the Establishment Agreement of European Schools in Brussels. The Court denied its jurisdiction by making reference to the circumstance that the agreement at stake was concluded by the Member States without any specific involvement of the Union. It was, therefore, impossible to identify rights and obligations falling under the scope of the EU Treaties. However, as rightly recognised in the literature,41 the situation in Slovenia v Croatia was rather different. While the allegation in the European Schools case was mainly based on the implementation of the inter se agreement, by contrast, in the case at hand, Slovenia essentially relied on EU law arguments – though related to the Arbitration Agreement of 2009 – to claim the responsibility of Croatia. At a closer inspection, rather than applying the rationale behind the European Schools case, in Slovenia v Croatia, the Court was better inspired by the same line of reasoning expressed in Hungary v Slovakia,42 another Article 259 TFEU inter-state infringement action characterised
34 Pursuant to Art 9, para 1, Slovenia ‘shall lift its reservations as regards opening and closing of negotiation chapters where the obstacle is related to the dispute’. The text of the Agreement is available at https://pca-cpa.org. 35 cf Permanent Court of Arbitration, Case No 2012-04, Partial Award (n 10) para 220. See also Lonardo (n 1) 111. 36 Slovenia v Croatia (n 1) para 111. 37 Opinion 1/17, ECLI:EU:C:2019:34. See this volume, ch 88. 38 Opinion 1/17 (n 37) para 76. 39 ibid para 77. 40 See C Rapoport, ‘Balancing on a Tightrope: Opinion 1/17 and the ECJ’s Narrow and Tortuous Path for Compatibility of the EU’s Investment Court System (ICS)’ (2020) 57 CML Rev 1725, 1747. 41 Kassoti (n 1) 1065. 42 Case C-364/10, Hungary v Slovakia, ECLI:EU:C:2012:630.
Inter se Agreements between Member States and the Court’s Jurisdiction 987 by political tension.43 As in that case, the Court reshaped the applicant’s claims based on EU law in terms of an international law dispute, thus leading to the exclusion of the jurisdiction of the Court.44 More significantly, exactly as in Hungary v Slovakia, the strict delimitation of borders between the Court’s jurisdiction and the Member States’ prerogatives, which was supported by the Court, undermined the foundations of the framing of powers doctrine, as well as the role that the principle of sincere cooperation was called to play in that respect. In other words, the Court’s approach in Slovenia v Croatia clearly revealed an effort of the Court to keep its distance from a long-standing dispute between the two Member States – a boundary dispute traditionally placed in the realm of international law45 – by making reference to the prerogative that EU Member States possess in the field of border delimitation.46 Of course, the territorial scope of the Union is still based on a determination that falls within the Member States’ retained powers, a circumstance that the Court has already had the opportunity to confirm in its previous case law.47 It is also worth recalling that Article 4(2) TEU enumerates, among the essential functions that the Union has to respect, the territorial integrity of Member States. However, as illustrated in the case of national security, the protection of Member States’ prerogatives under this national identity clause does not completely prevent EU law from exercising a role.48 Besides the need to respect, in any case, the fundamental values upon which the Union is based,49 that clause must be read in conjunction with the other principles governing the interaction between the Union and its Member States that are enshrined in Article 4 TEU. In particular, it is the principle of sincere cooperation that ensures that national identities do not amount to general reservations to the effectiveness of EU law.50 C. Member States’ inter se Agreements and Potential for Future Use of Article 273 TFEU In order to prevent possible criticism, the judgment in Slovenia v Croatia contains an obiter dictum, which is placed right after the point where the Court recognises its lack of jurisdiction on the merit of the case, reading as follows: This conclusion [ie the lack of jurisdiction of the Court] is without prejudice to any obligation arising – for both of the Member States concerned, in their reciprocal relations but also vis-à-vis 43 On this case, see LS Rossi, ‘EU Citizenship and the Free Movement of Heads of State: Hungary v Slovak Republic’ (2013) 50 CML Rev 1451. 44 In Hungary v Slovakia (n 42) paras 46–49, the Court relied on norms of international law applicable to heads of state. 45 Petrić (n 1) 90. 46 Kassoti (n 1) 1063. 47 Case C-111/05, Aktiebolaget NN v Skatteverket, ECLI:EU:C:2007:195, para 54. cf also the answer given by Vice-President Timmermans on behalf of the Commission to a question posed by Andrej Plenković, MEP (later Prime Minister of Croatia, 2016–present) on the Arbitration Agreement of 2009. According to Mr Timmermans, ‘the setting of the border between Member States does not fall within the competences conferred upon the Union’. The Vice-President recognised, however, that the resolution of that dispute was functional to a ‘smooth and clear application of Union law in both Member States’. Doc P-011825/2015, 4 September 2014, www.europarl.europa.eu/. 48 Case C-300/11, ZZ, ECLI:EU:C:2013:363, para 38; Case C-187/16, Commission v Austria, ECLI:EU:C:2018:194, paras 47–48. 49 See, eg, Case C-502/19, Oriol Junqueras Vies, ECLI:EU:C:2019:1115, where the Court recognised that MEPs’ immunities, which contribute to giving concrete form to the value of democracy referred to in Art 2 TEU, shall prevail over the reaction put in place by a Member State (Spain) to preserve its territorial integrity against a secession bid. 50 B Guastaferro, ‘Sincere Cooperation and Respect for National Identities’ in R Schütze and T Tridimas (eds), Oxford Principles of European Union Law – The European Union Legal Order, vol I (Oxford, Oxford University Press, 2018); G Di Federico, L’identità nazionale degli Stati membri nel diritto dell’Unione europea. Natura e portata dell’art. 4, par. 2, TUE (Naples, Editoriale Scientifica, 2017) 149; Casolari (n 7) 207.
988 Federico Casolari the European Union and the other Member States – from Article 4(3) TEU to strive sincerely to bring about a definitive legal solution consistent with international law, as suggested in the Act of Accession, that ensures the effective and unhindered application of EU law in the areas concerned, and to bring their dispute to an end by using one or other means of settling it, including, as the case may be, by submitting it to the Court under a special agreement pursuant to Article 273 TFEU.51
The wording of this point is rather vague and ambiguous. In particular, since the international law machinery arranged by both Slovenia and Croatia to solve the border dispute (the Arbitration Agreement of 2009) was assumed to fall outside the scope of EU law, it is not clear how and to what extent Slovenia and Croatia should be obliged under EU law (and in particular in light of the principle of sincere cooperation) to find a definitive legal solution.52 Seemingly, there are only two ways to reconcile this obiter dictum with the reluctant attitude shown by the Court in its judgment. The first one is to consider the obiter dictum as nothing but an exhortation to bring the inter-state dispute to an end,53 perhaps by setting aside the international law framework and fully relying on the inter-state mechanism represented by Article 273 TFEU.54 There is, however, a subtle irony in this affirmation if one considers that in the Opinion of AG Mengozzi in Austria v Germany, the first case where a dispute had been brought before the Court under Article 273 TFEU, AG Mengozzi made it clear that any dispute pursuant to Article 273 TFEU should not be excessively distant from the subject matter of the EU Treaties. This is why, according to AG Mengozzi, it would be difficult to trigger Article 273 TFEU ‘in order to settle a dispute [between states] relating to their respective territorial, maritime or island sovereignty’.55 The Court in Austria v Germany did not dwell on such considerations, and thus it remains open to how the Court would resolve cases brought to it pursuant to Article 273 TFEU.56 The other possibility consists of interpreting the obiter dictum, in particular the reference to the principle of sincere cooperation it contained, in the same perspective adopted in the Opinion of AG Bot in Hungary v Slovakia. Although not directly relevant in a border dispute between two Member States, the principle of sincere cooperation could become significant in a scenario where a long-standing border dispute risks producing a ‘persistent paralysis in diplomatic relations between two Member States’.57 In such a case, the sincere cooperation principle could be invoked to impose an obligation of means upon concerned Member States,
51 Slovenia v Croatia (n 1) para 109. 52 Cannizzaro (n 1) 1486. 53 In this perspective, the obiter dictum would echo the final words of the Opinion of AG Pikamäe: ‘Ultimately, I am bound to say that it is regrettable that the boundary dispute could not be definitively resolved even once the arbitration award at issue was made. Nevertheless, I am persuaded that the resolution of that dispute must be a political one.’ Opinion of AG Pikamäe in Slovenia v Croatia (n 26) para 165. See also G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 45 Legal Issues of Economic Integration 329. 54 On the nuances of Art 273 TFEU, see Butler (n 6); Cannizzaro (n 1) 1485–87. 55 Opinion of AG Mengozzi, Case C-648/15, Austria v Germany, ECLI:EU:C:2017:311, para 44. Actually, the possibility that the two states can reach an agreement to submit the issue to the Court is unlikely. Slovenia is fully convinced that the award of the arbitral tribunal is final while Croatia can be expected not to be keen to bring the matter before another tribunal. 56 cf also Opinion AG Maduro, Case C-459/03, Commission v Ireland, ECLI:EU:C:2006:42 (Mox Plant), fn 9, where the Advocate General maintains that ‘it may preferable to bring “hybrid disputes” between Member States – concerning both matters falling within and matters falling outside the scope of Court’s jurisdiction – in their entirety before the Court under Article 239 EC [now 273 TFEU]’. 57 Opinion of AG Bot, Case C-364/10, Hungary v Slovakia, ECLI:EU:C:2012:124, para 59.
Inter se Agreements between Member States and the Court’s Jurisdiction 989 the implementation of which would likely lead to a solution of the dispute. It remains to be clarified, however, when exactly a dispute between two Member States may evolve into a ‘significant diplomatic crisis’ so as to reach the high threshold envisaged by AG Bot. D. A Missed Opportunity for Clarification? Regardless of the way one looks at Slovenia v Croatia, however, the Court’s attempt to recognise a role for the principle of sincere cooperation in the dispute at stake is unconvincing and did not shed any light on the shadows generated by its decision on the jurisdiction. More generally, Slovenia v Croatia represented a missed opportunity for the Court to clarify the relevance of the framing of powers doctrine on the contractual relations among Member States. Looking at the relationship between Slovenia and Croatia, this is a worrying development that may question the role the Union should play to actively contribute, in the context of the EU enlargement, to the definitive solution of an inter-state dispute. This is a role, it should be recalled, that implies a strict respect for international law in accordance with Article 21(1) TEU.58 In a text analysing the legal context within which the arbitral tribunal established under the Arbitration Agreement of 2009 was supposed to give its decision, Cataldi noted how encouraging it was to consider ‘that membership of the Union, or the aspiration to membership, is a fundamental element in bringing together two nations and encouraging a positive solution to an ongoing dispute’.59 Unfortunately, the subsequent events, including the Court’s judgment in Slovenia v Croatia, have significantly tempered the enthusiasm shown by Cataldi. In this perspective, it is doubtful whether the Union might effectively contribute to clearing up outstanding issues concerning candidate states and Member States,60 such as the dispute between Turkey and Cyprus, which has escalated further since the decision of the former to launch drilling operations in the Eastern Mediterranean in 2020. Even more worrying, perhaps, is the fact that the Court’s approach in Slovenia v Croatia contributed to undermining the idea of a ‘mutual membership within the Union’, that is, the idea that supranational loyalty duties between Member States are likely to have an influence on their interaction even in situations where the linkage with EU law is less strict.61 As the reactions to the COVID-19 pandemic have clearly illustrated, the strengthening of that mutual membership may favour the emergence of a sort of European space of cooperation where loyalty duties among Member States, and towards the Union, contribute to the emergence of coordinated actions and convergent strategies that, although not falling within fields covered by EU law, are functional in the fulfilment of the EU’s supranational objectives.62 If not necessary, a more coherent approach to delimiting the outer limits of that space of cooperation would be at least highly desirable.
58 As rightly stressed in the literature, the award given by the arbitral tribunal in the dispute at hand should constitute a final and binding solution under international law, a circumstance that the Court simply ignores in its judgment: Kassoti (n 1) 1067–69; McGarry (n 1) 105. 59 Cataldi (n 9) 259. 60 McGarry (n 1) 104. 61 Editorial Comments, ‘Union Membership in Times of Crisis’ (2014) 51 CML Rev 1, 7. 62 Casolari (n 7) 198–202.
990 Federico Casolari V. ADDITIONAL READING Butler, G, ‘The Court of Justice as an Inter-state Court’ (2017) 36 Yearbook of European Law 179. Cannizzaro, E, ‘Inter-Member State International Law in the EU Legal Order: Some Thoughts on Slovenia v Croatia’ (2021) 58 CML Rev 1473. Kassoti, E, ‘Between a Rock and a Hard Place: The Court of Justice’s Judgment in Case Slovenia v Croatia’ [2020] 5 European Papers 1061. Lonardo, L, ‘“Am I My Brother’s Keeper?” International Agreements by Member States and the Limits of the European Court of Justice’s Jurisdiction’ (2021) 46 EL Rev 105. McGarry, B, ‘Republic of Slovenia v Republic of Croatia. No C-457/18’ (2021) 115 American Journal of International Law 101. Petrić, D, ‘A Matter of (A)political Interpretation: Some Reflections on Case C-457/18 Slovenia v Croatia’ (2020) 3 Nordic Journal of European Law 87.
91 Jurisdiction of the Court for Non-contractual Liability and Actions for Damages Claims within the CFSP: Bank Refah Kargaran GRAHAM BUTLER AND RAMSES A WESSEL Case C-134/19 P, Bank Refah Kargaran v Council of the European Union, ECLI:EU:C:2020:793, delivered 6 October 2020. KEYWORDS Jurisdiction – Common Foreign and Security Policy – CFSP – Non-contractual liability – Action for damages – Restrictive measures – Sanctions – Article 29 TEU – Article 215 TFEU.
I. INTRODUCTION
I
n October 2020, the Court in Grand Chamber formation delivered its judgment in Bank Refah Kargaran v Council.1 The case marked another landmark in the sphere of judicial protection guaranteed under EU law. At issue was a question of EU constitutional law and EU external relations law – the jurisdiction of the Court (and thus the General Court) to rule on the non-contractual liability of the Union and actions for damages relating to Common Foreign and Security Policy (CFSP) Decisions based on Article 29 TEU, entailing restrictive measures, otherwise popularly known as sanctions. Article 268 TFEU and Article 340 TFEU govern damages and the non-contractual liability of the Union. However, it has never been certain if this applied to actions under the CFSP. With regard to Bank Refah Kargaran, the Court confirmed that it did, at least as far as restrictive measures were concerned.
1 Case C-134/19 P, Bank Refah Kargaran v Council of the European Union, ECLI:EU:C:2020:793. For early assessments of this case, see G Butler, ‘Non-contractual Liability and Actions for Damages Regarding Restrictive Measures through CFSP Decisions: Jurisdiction of the CJEU Confirmed’ (EU Law Live, 7 October 2020); P Van Elsuwege and J De Coninck, ‘Action for Damages in Relation to CFSP Decisions Pertaining to Restrictive Measures: A Revolutionary Move by the Court of Justice in Bank Refah Kargaran?’ (EU Law Analysis, 9 October 2020); C Eckes, ‘The ECJ Accepts Jurisdiction over Claims for Damages under the Common Foreign and Security Policy (CFSP)’ (Verfassungsblog, 18 October 2020).
992 Graham Butler and Ramses A Wessel To many, judgments of the Court in relation to the CFSP still come as a surprise. After all, Article 24(1) TEU, second paragraph states that the CFSP is subject to ‘specific rules and procedures’, and that the CFSP ‘shall not have jurisdiction with respect to … [the CFSP] … provisions’. In addition, Article 275 TFEU, first paragraph repeats a similar formula. These two differently formulated ‘carve-outs’ of the Court’s jurisdiction are, however, accompanied by two ‘claw-back’ clauses: Article 40 TEU (on the Court’s jurisdiction in relation to the correct choice of legal basis) and Article 275 TFEU, second paragraph (permitting the EU courts to review restrictive measures adopted under the CFSP). Yet, the supposed limited jurisdiction of the EU courts pursuant to the CFSP, if taken purely at face value, would be a profound misreading of the state of the law, given the consistent and growing line of case law from the Court since the reforms brought on by the Treaty of Lisbon in 2009. The Grand Chamber of the Court, in particular, has been making major strides to ensure that judicial protection is not absent in the EU legal order for a variety of actors – institutions and private actors alike – with regard to the CFSP. For example, in Mauritius and Tanzania,2 key information rights for the Parliament regarding international agreements concluded on a CFSP legal basis were stated by the Court in light of Article 218(10) TFEU. In H v Council,3 the Court confirmed that acts of staff management within the CFSP came within the scope of judicial review. In Rosneft,4 the Court confirmed that it had jurisdiction to hear restrictive measures cases through the preliminary reference procedure in Article 267 TFEU, rather than just a direct action on the basis of Article 263 TFEU. And in Venezuela v Council,5 the Court confirmed that third states had the right to bring actions for annulment against restrictive measures. Cases that were not heard by the Grand Chamber, such as Elitaliana,6 Jenkinson7 and SatCen v KF,8 have also played their respective roles in expanding the scope of judicial protection, trying to encapsulate the entirety of the policy sphere. Combined, these cases provide the following picture: in the Court’s view, the exclusion of its jurisdiction in relation to matters of CFSP, as formulated in Articles 24 TEU and 275 TFEU, is not to be interpreted as blocking the Court from exercising its main judicial protection tasks. The simple fact that certain issues (such as staff matters or questions of public procurement) arise in a CFSP context does not imply that the Court should ignore its general brief and scope of review on the basis of Article 19 TEU. Bank Refah Kargaran adds to this line of case law. It is an important case in which the Court confirmed its jurisdiction with regard to the non-contractual liability of the Union and actions for damages claims in relation to the CFSP. Given the rather consistent line of case law on CFSP-related issues over the past years, however, the outcome did not come as a surprise. Nevertheless, the case reveals that the Court chooses not to have, prima facie, its jurisdiction excluded under CFSP, and is keen to ensure judicial protection under the same conditions as in other policy areas.
2 Case C-658/11, Parliament v Council, ECLI:EU:C:2014:2025 (Mauritius); Case C-263/14, Parliament v Council, ECLI:EU:C:2016:435 (Tanzania). See this volume, ch 66. 3 Case C-455/14 P, H v Council, ECLI:EU:C:2016:569. See this volume, ch 76. 4 Case C-72/15, Rosneft, ECLI:EU:C:2017:236. See this volume, ch 81. 5 Case C-872/19 P, Venezuela v Council, ECLI:EU:C:2021:507. See this volume, ch 92. 6 Case C-439/13 P, Elitaliana, ECLI:EU:C:2015:753. See this volume, ch 63. 7 Case C-43/17, Jenkinson, ECLI:EU:C:2018:531. 8 Case C-14/19 P, SatCen v KF, ECLI:EU:C:2020:492.
Jurisdiction of the Court for Non-contractual Liability within the CFSP 993 II. FACTS
Bank Refah Kargaran (the Bank) had been affected by restrictive measures imposed by the EU to deter Iran from continuing with its nuclear weapons programme. In the appeal case before the Court, which forms the focus of the current contribution, the Bank requested partial setting aside of the judgment of the General Court of 10 December 2018,9 whereby the General Court had denied compensation for the damage the Bank claims to have suffered by placing its name on various sanction lists. The name of the Bank was included for the first time on 26 July 2010 in an Annex to Council Decision 2010/413/CFSP of 26 July 201010 and in the Annex to the connected Regulation,11 and has been included in subsequent amendments. Bank Refah Kargaran is no stranger to the EU courts in Luxembourg. On 19 January 2011, the Bank had already initiated proceedings before the General Court in a previous case for annulment of the then current CFSP Decision and the connected Regulation.12 The General Court then decided to accept the claim that there was a breach of the obligation to state reasons, and ruled that the name of the Bank should be removed from the sanctions list.13 However, this did not have much practical effect because, due to a pending appeal, the annulment did not immediately take effect,14 and the name of the Bank was simply included in the list of restrictive measures yet again.15 However, this time, the motivation for doing so was added by the Council, which saw the Bank as an ‘Entity providing support to the Government of Iran. It is 94 per cent owned by the Iranian Social Security Organisation, which in turn is controlled by the Government of Iran, and it provides banking services to government ministries.’ On 28 May 2014, the Bank subsequently requested the annulment of this Decision and of the implementing Regulation. This claim was rejected by the General Court in its judgment of 30 November 2016.16 No appeal was brought against this second judgment of the General Court. Yet, on 25 September 2015, a request was made for compensation for the damage resulting from the adoption and enforcement of the relevant restrictive measures.17 However, the General Court held that it did not have jurisdiction to rule on any liability arising from CFSP Decisions, and that, as regards the implementing Regulations, the first condition for 9 Case T-552/15, Bank Refah Kargaran v Council of the European Union, ECLI:EU:T:2018:897. 10 Decision (EU) concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP, [2010] OJ L195/39. 11 Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran, [2007] OJ L103/1. See also Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Art 7(2) of Regulation (EC) No 423/2007 concerning restrictive measures against Iran, [2010] OJ L195/25. 12 In the end, it concerned Council Decision 2011/783/CFSP of 1 December 2011 amending Decision 2010/413/ CFSP; Council Implementing Regulation (EU) No 1245/2011 of 1 December 2011 implementing Regulation (EU) No 961/2010 on restrictive measures against Iran; and Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010, [2012] OJ L88/1. 13 Case T-24/11, Bank Refah Kargaran v Council of the European Union, ECLI:EU:T:2013:403, para 83. An infringement of procedural rights is not unusual in the case of sanction decisions, and the Court has frequently decided on a ‘de-listing’ of individuals. See C Eckes, ‘EU Restrictive Measures Against Natural and Legal Persons: From Counterterrorist to Third Country Sanctions’ (2014) 51 CML Rev 869. 14 According to the second paragraph of Art 60 of the Statute of the Court of Justice of the European Union, decisions of the General Court declaring a regulation to be void are to take effect only as from the date of expiry of the period for bringing an appeal referred to in the first paragraph of Art 56 of that Statute or, if an appeal has been brought within that period, as from the date of dismissal of the appeal. 15 See Council Decisions 2013/661/CFSP of 15 November 2013, [2013] OJ L306/18; Council Implementing Regulation No 1154/2013 of 15 November 2013, [2013] OJ L306/1; and Council Regulation No 267/2012 of 23 March 2012, [2012] OJ L88/1. 16 Case T-65/14, Bank Refah Kargaran v Council of the European Union, ECLI:EU:T:2016:692. 17 Case T-552/15, Bank Refah Kargaran (n 9).
994 Graham Butler and Ramses A Wessel non-contractual liability of the Union was not met, as there was no wrongful conduct of the Council. All of this eventually led to the case before the Court to which this contribution relates. III. THE COURT
The Opinion of Advocate General (AG) Hogan had already given a clear push towards the end result.18 Whereas, in a previous case, the General Court had concluded that the second paragraph of Article 275 TFEU does not confer jurisdiction on the courts of the Union to hear an action for damages in the event of unduly imposed sanctions because that article is limited to Article 263 TFEU situations,19 the AG indicated that the Court does have jurisdiction (contrary to the General Court), even if the damage arises from a CFSP Decision. In fact, the AG was remarkably short and clear on this point, as if he was surprised that the issue had come up in the first place. He stated, why should the Court have no jurisdiction to award damages where the relevant CSFP [sic] restrictive measures decision has been adopted pursuant to Chapter 2 of Title V TEU, yet at the same time enjoy such jurisdiction where the Council has also adopted a regulation (as it invariably does) pursuant to Article 215 TFEU, which, to all intents and purposes, has simply reproduced the original restrictive measures decision? It is hard to avoid the conclusion that such a state of affairs would simply result in indefensible anomalies which would be impossible to justify. All of this would lead to a situation such that the system of remedies envisaged by the Treaties in respect of judicial review of restrictive measures would lack the necessary coherence.20
The AG thus established a clear link between Article 29 TEU, which serves as the CFSP legal basis for sanctions decisions, and Article 215 TFEU, on the basis of which the actual (economic) sanction is determined. Indeed, the link between the two legal bases is clearly identified in the EU Treaties, and the sanctions Regulation (based on Article 215 TFEU; by qualified majority) is adopted on the basis of the content of the CFSP decision (Article 29 TEU; unanimously). Indeed, it is not possible to separate the two instruments on the basis of the relationship established by the EU Treaties. For AG Hogan, this firm bridging was enough to establish jurisdiction. Yet, another view was possible, and colleagues at the Court, AG Kokott (in Opinion 2/13) and AG Wathelet (in Rosneft) (whom AG Hogan succeeded), indeed came to different conclusions. In the latter Opinion, it was argued by AG Wathelet that ‘actions for damages which relate to a CFSP act are covered by the “carve-out” provision[s]’ and ‘not by the “claw-back” provision[s]’.21 Previously, such as in Opinion 2/13, on the Treaty of Accession of the EU to the European Convention on Human Rights (ECHR), the Court stated at the time that it ‘has not yet had the opportunity to define the extent to which its jurisdiction is limited in CFSP matters as a result of those provisions’.22 The Court was well beyond Opinion 2/13 when Bank Refah Kargaran came around, and there had been multiple opportunities, through the cases
18 Opinion of Advocate General (AG) Hogan, Case C-134/19 P, Bank Refah Kargaran v Council of the European Union, ECLI:EU:C:2020:396, paras 35–71. 19 Case T-328/14, Jannatian, ECLI:EU:T:2016:86, para 33. 20 Opinion of AG Hogan in Bank Refah Kargaran (n 18) para 63. 21 Opinion of AG Wathelet, Case C-72/15, Rosneft, ECLI:EU:C:2017:236, fn 36 See this volume, ch 81. See also View of AG Kokott, Opinion 2/13, ECLI:EU:C:2014:2475, paras 86–91. See this volume, ch 70. 22 Opinion 2/13, ECLI:EU:C:2014:2454, para 251.
Jurisdiction of the Court for Non-contractual Liability within the CFSP 995 mentioned in the introduction, to clarify what exactly it means that it does ‘not have jurisdiction with respect to the provisions relating to the common foreign and security policy nor with respect to acts adopted on the basis of those provisions’ (Article 275 TFEU). In essence, in Bank Refah Kargaran, the question can be summarised as follows: do the EU courts have the necessary jurisdiction to determine whether the Union can be held noncontractually liable and hear actions for damages pleas against restrictive measures imposed through a CFSP Decision made on the basis of Article 29 TEU? Given this opportunity, and in light of the aforementioned case law, the Court unequivocally said yes. This in itself is not that surprising, for the case even being referred to its Grand Chamber through an internal decision, and the affirmative Opinion of AG Hogan, meant that the Court was only ever really going to go in one direction. But whilst the outcome was not surprising, what is striking is how easily the Court reached its determination, without much hesitancy. In its own words, the necessary coherence of the system of judicial protection provided for by EU law requires that, in order to avoid a lacuna in the judicial protection of the natural or legal persons concerned, the Court of Justice of the European Union must also have jurisdiction to rule on the harm allegedly caused by restrictive measures provided for in CFSP Decisions.23
This in itself is consistent with previous case law on securing legal protection in this area, but would compensation based on the sanctions Regulation alone (Article 215 TFEU) not be sufficient? No, the Court stated. As put, CFSP Decisions, and the regulations enacted pursuant to Article 215 TFEU to implement them, may not be substantively identical. In particular, as far as natural persons are concerned, restrictions on admission to the territory of the Member States are likely to be included in CFSP Decisions, without necessarily being included in regulations based on Article 215 TFEU.24
CFSP Decisions can thus also independently form the basis for parts of the sanctions regime, and therefore also lead to actions for damages, which is good news for those affected by sanctions based on a CFSP Decision not followed by a regulation. ‘It is true,’ the Court holds, ‘that Article 275 TFEU does not expressly mention the jurisdiction of the Court of Justice of the European Union to rule on harm allegedly caused by restrictive measures taken in CFSP Decisions.’25 However, as is clear from previous case law, the restrictions on CFSP jurisdiction must be interpreted restrictively, and an action for damages must be assessed having regard to the whole of the system established by the Treaties for the judicial protection of the individual.26 IV. THE IMPORTANCE OF THE CASE
To the aforementioned finding by the Court in Opinion 2/13, that it had not yet had the opportunity to state exactly how far its jurisdiction over the CFSP extends, it added at the time that ‘certain acts adopted in the context of the CFSP fall outside the ambit of judicial review by the Court of Justice’.27 The latter remains the case, but it has since become clear
23 Bank
Refah Kargaran (n 1) para 39. para 41. 25 ibid para 31. 26 ibid para 34. 27 Opinion 2/13 (n 22) para 251. 24 ibid
996 Graham Butler and Ramses A Wessel that escaping the Court’s jurisdiction has become increasingly difficult. As indicated, previous cases had already made it clear that, in certain constitutional areas, the Court has opted for a Union-wide application of certain fundamental rules and principles.28 That principle was already valid before the Treaty of Lisbon, when, for example, the Court made clear that when it comes to access to information, no distinction is made on the basis of the content of the requested document (and thus that the Court has jurisdiction to decide on access to CFSP documents).29 Still, the effects of Bank Refah Kargaran are manifold. A number of matters stand out in particular. A. The Possibility of Damages in the CFSP Firstly, non-contractual liability and actions for damages can be immensely powerful remedies in the EU legal order. In fact, they are open to a much broader array of entities, given that the typical standing requirements that are normally to be met under Article 263 TFEU do not apply to non-contractual liability claims.30 Yet, in order for non-contractual liability to be found, jurisdiction must be recognised in the first place. With Bank Refah Kargaran, the Court has now enabled at least the possibility for private actors to allege non-contractual liability of the Union for CFSP Decisions on restrictive measures. Prior to Bank Refah Kargaran, the existence of a possibility to bring such actions under the CFSP had remained unclear. In fact, there had been a consistent line of case law from the General Court that had found such claims inadmissible.31 Bank Refah Kargaran has now shed some light on this, and confirmed that non-contractual liability and actions for damages can be heard with regard to CFSP Decisions concerning restrictive measures, at the very least. But what about damages actions regarding CFSP Decisions concerning matters that are not restrictive measures – say, actions taken by the Union in the form of their activities in Common Security and Defence Policy missions outside of the Union? The judgment in Bank Refah Kargaran concerned non-contractual liability on the basis of Article 29 TFEU. While, in practice, this article forms the basis for decisions on restrictive measures, its scope is more general and allows for the adoption of ‘decisions which shall define the approach of the Union to a particular matter of a geographical or thematic nature’. This opens the door to other potential claims, and it can at least be concluded that the Court has pierced the veil of the EU Court’s jurisdiction more generally on non-contractual liability of the Union on the basis of the CFSP. The possibilities, it is submitted, remain to be clarified in future case law.
28 For application of EU principles on the CFSP, see also RA Wessel, ‘General Principles in EU Common Foreign and Security Policy’ in V Morena-Lax, P Neuvonen and K Ziegler (eds), Research Handbook on General Principles of EU Law (Cheltenham, Edward Elgar, 2022). 29 Case T-174/95, Svenska Journalistförbundet, ECLI:EU:T:1998:127. Somewhat more implicitly, this was already at stake in Case T-194/94, Carvel and Guardian Newspapers, ECLI:EU:T:1995:183 and later, with regard to access to documents regarding permits for arms trade, in Case C-353/99 P, Hautala, ECLI:EU:C:2001:661. 30 As pointed out, historically, the Union had to make good damage caused, and it could not be drawn, on the basis of the Treaty of Rome, that ‘a group of groups of persons should be excluded in general from lodging actions’. G Lysén, The Non-contractual and Contractual Liability of the European Communities (Stockholm, Almqvist & Wiksell International, 1976) 55–56. 31 For example, Case T-338/02, Segi and Others v Council of the European Union, ECLI:EU:T:2004:171. Confirmed on appeal, Case C-355/04 P, Segi, Araitz Zubimendi Izaga and Aritza Galarraga v Council of the European Union, ECLI:EU:C:2007:116. See P Aalto, Public Liability in EU Law: Brasserie, Bergaderm and Beyond (Oxford, Hart Publishing, 2011) 106.
Jurisdiction of the Court for Non-contractual Liability within the CFSP 997 B. The Council’s Use of Restrictive Measures The Bank Refah Kargaran judgment may also affect the Council’s restrictive measures regime. Because non-contractual liability of the Union can now be found for restrictive measures, this may impact the behaviour of the Council with regard to on whom and for how long the restrictive measures are imposed. From a potential effectiveness perspective, the Council’s behaviour might be more cautious in the future. This may contribute to the Council second-guessing each individual use of its immense powers in restrictive measures, notwithstanding the normal procedural safeguards of unanimity in the Council. Yet, from the opposing perspective, that of protection of the rights of private actors, the judgment in Bank Refah Kargaran can be welcomed in that more certainty on the Council’s part will be required when it continues to list entities for prolonged periods of time. In time, and with the sheer extensiveness of the use of restrictive measures today, this will lead to noncontractual liability and actions for damages taken by private actors being successful, even if the threshold was not met in this individual case. The Bank Refah Kargaran judgment is further affirmation that the Gestoras32 and Segi33 case law on lack of jurisdiction of the EU courts is well and truly dead. In the Court’s own words in Bank Refah Kargaran, ‘the structure of the Treaties has changed’.34 The Council’s barrel-scraping arguments of continuously trying to present the CFSP as a ‘pillar’ to the world, including to the EU courts, is no longer convincing at a time when it is now over 10 years since the constitutional framework was ‘Lisbonised’. Pillarisation is now just a detail of EU legal history. The correct way to look at the CFSP, as it has been for over a decade, quite counterintuitively for the Council (and, dare it be said, in much scholarship outside of EU external relations law), is to understand that judicial review of the CFSP is the norm, and only exceptionally should there not be judicial review, such as where the political question doctrine might come into play.35 A slew of General Court judgments over the years have explicitly rejected jurisdiction of the EU courts for non-contractual liability and actions for damages on the foot of EU legal acts adopted within the CFSP. In one line of case law, a few jump to mind, including Trabelsi and Others,36 Dagher,37 Georgias and Others38 and Jannatian.39 These, and others in the same vein, can no longer be understood as good law on points concerning non-contractual liability and actions for damages on CFSP Decisions. With Bank Refah Kargaran now settling the jurisdictional question on CFSP Decisions entailing restrictive measures, it is the General Court, as the court of first instance, that will in the future face more substantive questions about thresholds for non-contractual liability to be established. With so many restrictive measures cases before the EU courts, a particular question can rightly be asked of the practitioner community: why did it take so long for this question in this case to be adjudicated upon by the Court (on appeal from the General Court)? A regretful
32 Case C-354/04 P, Gestoras, ECLI:EU:C:2007:115. 33 Segi (n 31). 34 Bank Refah Kargaran (n 1) para 47. 35 See G Butler, ‘In Search of the Political Question Doctrine in EU Law’ (2018) 45 Legal Issues of Economic Integration 329. 36 Case T-187/11, Trabelsi and Others, ECLI:EU:T:2013:27. 37 Case T-218/11, Dagher, ECLI:EU:T:2012:82. 38 Case T-168/12, Georgias and Others, ECLI:EU:T:2014:781. 39 Jannatian (n 19).
998 Graham Butler and Ramses A Wessel hypothesis one arrives at is that lawyers appearing for private parties, ie non-privileged applicants, might not be sufficiently specialised in the law of restrictive measures, which translates, in reality, into incomplete pleadings lodged before the EU courts. Moreover, opposing the highly skilled lawyers of the Council – who are repeat players before the EU courts in this exceptionally complicated area of EU law – is a formidable and daunting task. There is much to be said for the subjects of restrictive measures to choose their legal counsel before the EU courts wisely. C. Towards ‘Full Review’ of the CFSP? The textual significance of dropping the pillar structure of the EU legal order cannot be underestimated. The integration of the CFSP into the norm was long overdue. Yet, this is despite the CFSP still being seen as a bit of a ‘hidden pillar’.40 That said, the case law is making up for the deficiency. Whilst national courts do play some role in the CFSP, they are limited, and in Bank Refah Kargaran, which was about non-contractual liability of the Union, national courts are limited by their powers to find liability of states. The judgment of the Court in Bank Refah Kargaran can be welcomed for its clear assertion of a wide breadth of judicial protection on a specific question that was unclear, a jurisdiction which the General Court had denied in a line of prior cases. Private actors that are the subject of restrictive measures now have an additional legal remedy at their disposal, ensuring that the Council acts in accordance with the rule of law. Grand Chamber judgments of the Court are the law of the land; thus, the direction of the jurisdiction of the EU courts on CFSP matters is clearer than ever, as elucidated subsequently in Venezuela v Council.41 The Bank Refah Kargaran ruling will be particularly important in light of the recently resumed negotiations concerning the EU’s accession to the ECHR, in which the CFSP will be a key sticking point to overcome following Opinion 2/13. What is clearly apparent from Bank Refah Kargaran, as well as many of the recent CFSP cases before the Court, is that the Les Verts doctrine of a ‘complete system of legal remedies and procedures’42 is alive and well (when the Court wants it to be), and living in current EU external relations case law. While all of this is interesting from a theoretical and dogmatic point of view, the practical importance of the judgment must be put into perspective. Given the strict conditions, it remains difficult to actually establish liability. After all, demonstrating ‘the existence of a sufficiently serious breach of a rule of EU law intended to confer rights on individuals capable of giving rise to non-contractual liability on the part of the European Union’43 is perhaps even more difficult with regard to the imposition of sanctions than in other cases, because here it is very clear that policy decisions of the Council are largely fuelled by a political argument. The Council has this competence and the political balance is an explicit part of the procedure because of the link between Article 29 TEU and Article 215 TFEU. In this case, according to the Bank, there was an unlawful act by the Council for violation of the principle of reasons.
40 See I Govaere, ‘Multi-faceted Single Legal Personality and a Hidden Horizontal Pillar: EU External Relations Post-Lisbon’ in C Barnard and O Odudu (eds), Cambridge Yearbook of European Legal Studies 2010–2011: Volume 13 (Oxford, Hart Publishing, 2011). 41 Venezuela v Council (n 5). See this volume, ch 92. 42 Case 294/83, Les Verts, ECLI:EU:C:1986:166. 43 See also Bank Refah Kargaran (n 1) para 72.
Jurisdiction of the Court for Non-contractual Liability within the CFSP 999 However, the consequences of non-compliance with the obligation to state reasons are also insufficient, according to the Court, to lead to liability on the part of the Union. The case will most probably become known for its contribution to a further clarification of the Court’s jurisdiction in CFSP-related issues. All this confirms that the Court regards the CFSP as an essential part of the constitutional structure of the Union and rejects arguments of the Council based on earlier case law. Nevertheless, Bank Refah Kargaran is not the final piece in the discussion of the jurisdiction of the Court with regard to CFSP legal acts. Where the restrictions on the basis of Article 24(1) TEU and Article 275 TFEU remain most clearly visible is when it comes to powers and decision-making procedures, which in substance fall entirely within the legal regime of the CFSP. The inclusion of the CFSP within the same legal order as the other EU policies was a compromise at the time, reached only by excluding the CFSP from the legislative procedure and by clearly indicating that the Court would have no role in Member States’ non-compliance of adopted CFSP decisions.44 The latter remains special in view of the clear legal nature of these decisions and their binding character.45 It is therefore not surprising that, for example, the Council occasionally frowns when the Court seems to deviate from what it sees as clear provisions in Article 24(1) TEU and Article 275 TFEU that the Court of Justice of the European Union has no competence over CFSP provisions. Some may perhaps see this as ‘judicial activism’ and as ‘stretching’ a competence that is clearly laid down in the EU Treaties. Yet the Court seems to see this differently, and rightfully so. Due to the inconsistencies in the EU Treaties, the Court is repeatedly confronted with a conflict between the alleged lack of jurisdiction and the duty to ensure legal protection throughout the Union as far as possible. In recent cases, the Court has made a clear choice in favour of the latter, indicating that jurisdiction is implicit in these situations, further strengthening its role as a constitutional Union judge.46 Partly in the light of the aforementioned ‘normalisation’ of the CFSP and the clear links between this policy field and the other external activities of the Union, future judgments in the same direction as Bank Refah Kargaran will come as no surprise either. V. ADDITIONAL READING Butler, G, Constitutional Law of the EU’s Common Foreign and Security Policy: Competence and Institutions in External Relations (Oxford, Hart Publishing, 2019). Bartoloni, ME, ‘“Restrictive Measures” under Art. 215 TFEU: Towards a Unitary Legal Regime? Brief Reflections on the Bank Refah Judgment’ (2020) 5 European Papers 1359.
44 Compare also the remark by AG Hogan that we are dealing with a limited scope and only include ‘questions of high-level politics and diplomacy, which by their nature are inapt for judicial resolution’: Opinion of AG Hogan in Bank Refah Kargaran (n 18) para 47. That is also in line with what AG Bobek had already noted in the abovementioned SatCen case: ‘the fact that an act is formally based on CFSP provisions or adopted in that context simply is not enough to trigger the CFSP derogation. The act must also have genuine CFSP content’: SatCen (n 8) para 79. 45 In that sense, Art 29 TEU provides with regard to CFSP Decisions: ‘Member States shall ensure that their national policies conform to the Union positions.’ And Art 28(2) TEU not only provides that ‘Decisions referred to in paragraph 1 shall commit the Member States in the positions they adopt and in the conduct of their activity’, but also quite precisely lists the conditions under which deviations are allowed for. See RA Wessel, ‘Resisting Legal Facts: Are CFSP Norms as Soft as They Seem?’ [2015] European Foreign Affairs Review 123. 46 Compare also Van Elsuwege and De Coninck (n 1).
1000 Graham Butler and Ramses A Wessel Heliskoski, J, ‘Made in Luxembourg: The Fabrication of the Law on Jurisdiction of the Court of Justice of the European Union in the Field of the Common Foreign and Security Policy’ [2018] Europe and the World: A law review 1. Hillion, C, ‘A Powerless Court? The European Court of Justice and the Common Foreign and Security Policy’ in M Cremona and A Thies (eds), The European Court of Justice and External Relations Law (Oxford, Hart Publishing, 2014). Hillion, C and Wessel, RA, ‘The Good, the Bad and the Ugly: Three Levels of Judicial Control over the CFSP’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018). Koutrakos, P, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018)] 67 ICLQ 1. Verellen, T, ‘In the Name of the Rule of Law? CJEU Further Extends Jurisdiction in CFSP (Bank Refah Kargaran)’ (2021) 6 European Papers 17.
92 The Right of Third States to Challenge EU Restrictive Measures before the Court: Venezuela v Council FRANCESCA FINELLI Case C-872/19 P, Bolivarian Republic of Venezuela v Council of the European Union, ECLI:EU:C:2021:507, delivered 22 June 2021. KEYWORDS Restrictive measures – Third country sanctions – Third states – Legal standing – Action for annulment – Article 263 TFEU – Right to effective remedy.
I. INTRODUCTION
R
estrictive measures,1 most commonly known as sanctions,2 represent a cornerstone element of EU external relations law, as well as one of the most debated issues before the Court.3 In fact, the judicial scrutiny of these measures enjoys a special distinctiveness in the field of Common Foreign and Security Policy (CFSP). Although this area of EU law is traditionally considered inapt for judicial review,4 and the jurisdiction of the Court is sometimes considered as excluded,5 the Lisbon Treaty has established an explicit legal basis for judicial review in sanctions matters.6 In other words, the Court’s jurisdiction on these CFSP decisions constitutes an exception, in contrast with the traditional deference of the judiciary to high-level (foreign) politics, ‘a realm of sovereign wills and national interests par excellence’.7 1 See Arts 29 TEU and 215 TFEU. 2 Reference will be made interchangeably to ‘sanctions’ and ‘restrictive measures’ throughout this Chapter. 3 See A Alì, ‘The Challenges of a Sanctions Machine: Some Reflections on the Legal Issues of EU Restrictive Measures in the Field of Common Foreign Security Policy’ in L Antoniolli et al (eds), Highs and Lows of European Integration (Cham, Springer, 2019). 4 On the ‘tradition of otherness of the CFSP’, see PJ Cardwell, ‘On “Ring-Fencing” the Common Foreign and Security Policy in the Legal Order of the European Union’ [2013] Northern Ireland Legal Quarterly 64. 5 Arts 24(1) TEU and 275 TFEU. This jurisdictional ‘carve-out’ in relation to the CFSP derogates from the general jurisdiction which Art 19(1) TEU confers on the Court. 6 Also known as jurisdictional ‘clawback’. 7 P Koutrakos, ‘Judicial Review in the EU’s Common Foreign and Security Policy’ (2018) 67 ICLQ 1.
1002 Francesca Finelli It is Article 275 TFEU, second paragraph that explicitly empowers the Court to exercise its judicial control over CFSP decisions ‘providing for restrictive measures against natural or legal persons’. The Court’s oversight on these measures is ‘the same as the one it exercises over other EU acts’ – in line with its general mandate established in Article 19 TEU and the principle of effective judicial remedies enshrined in Article 47 of the Charter of Fundamental Rights.8 Due to the considerable impact on fundamental rights and freedoms of targeted persons, Article 275 TFEU, second paragraph aims to ensure the ‘review, in principle the full review, of the lawfulness’ of EU sanctions.9 Accordingly, targeted persons are entitled to file complaints to the General Court, challenging the legality/validity of their listing decisions through direct actions for annulment. Following the conditions laid down in Article 263 TFEU, fourth paragraph, they can directly ask the EU courts to review – and eventually annul – those CFSP decisions. In the last few years, the General Court has received hundreds of applications, brought by targeted persons (both natural and legal persons), challenging the validity of EU sanctions.10 However, no state had ever filed an application pursuant to Article 263 TFEU, fourth paragraph seeking to annul EU sanctions, and the application of Venezuela, lodged at the General Court on 6 February 2018, represented the first attempt. Consequently, in Venezuela v Council, the EU courts for the first time had to deal with the following question: do third countries have legal standing to bring proceedings against EU acts which impose restrictive measures on them?11 Many follow-up questions have arisen from this main legal issue (inter alia whether a third state enjoys the right to a judicial remedy before the Union’s judicature; whether the autonomy of the EU law – and CFSP decisions – could be negatively affected by third-state actions for annulment), and that is why the Venezuela v Council represented a landmark judgment, not only in the field of EU sanctions, but also for EU external relations law. Indeed, it constituted an unprecedented opportunity for the Court to clarify its ‘implied jurisdiction’ on the review of EU sanctions,12 its crucial role in promoting EU founding values (particularly the right to effective judicial protection and the rule of law) when the Union acts externally13 and the irrelevance of the principle of reciprocity – which may characterise public international law, but not EU external relations law. II. FACTS
Since November 2017, the EU has imposed (autonomous, non-UN based) restrictive measures in view of the enduring deterioration of democracy, the rule of law and human rights 8 See C Hillion and RA Wessel, ‘“The Good, the Bad and the Ugly”: Three Levels of Judicial Control Over the CFSP’ in S Blockmans and P Koutrakos (eds), Research Handbook on the EU’s Common Foreign and Security Policy (Cheltenham, Edward Elgar, 2018) 68. 9 In line with the reasoning of the Court in Joined Cases C-402/05 P & C-415/05 P, Kadi and Al Barakaat International Foundation v Council, ECLI:EU:C:2008:461, para 326. See this volume, ch 49. 10 See the latest annual reports of the Court. For instance, Annual Report 2020 – The Year in Review, 61; Annual Report 2019 – The Year in Review, 59; Annual Report 2018 – The Year in Review, 45; Annual Report 2017 – The Year in Review, 39. 11 In Venezuela v Council, the Court explicitly addressed that question for the first time. It had never (explicitly) ruled on whether third states may have legal standing for the purposes of Art 263 TFEU, fourth paragraph. However, it is worth mentioning that third states have already brought proceedings before the Court seeking to annul EU acts (concerning non-CFSP matters). The Switzerland v Commission cases represent the most relevant precedent (see Cases C-70/04, T-219/05 and C-547/10 P), and in that particular context (whereby an international agreement is in force between the Union and a third state) the Court recognised the legal standing of Switzerland. 12 The concept of ‘implied jurisdiction’ recalls the principle of ‘implied competence’ and the ERTA doctrine. 13 In line with Arts 3(5), 21 and 23 TEU.
The Right of Third States to Challenge EU Restrictive Measures before the Court 1003 in Venezuela.14 The EU sanctioning regime has thus far entailed export restrictions on the sale, supply, transfer or export of equipment, which might be used for internal repression in Venezuela (mainly military and surveillance equipment, technology and software).15 Moreover, the regime also provides for individualised restrictive measures – namely, travel bans and assetfreezing measures – against natural or legal persons, entities and bodies (i) responsible for serious human rights violations or abuses, or the repression of civil society and democratic opposition; (ii) whose actions, policies or activities otherwise undermine democracy or the rule of law in Venezuela; and (iii) natural or legal persons, entities and bodies associated with them.16 Those individualised measures were not, however, the subject of the Venezuela v Council proceedings, since the Venezuelan action for annulment focused on export restrictions imposed by the EU against that state. In February 2018, Venezuela brought the action for annulment before the General Court. Four months later, by a separate document lodged at the Registry of the General Court, the Council raised an objection of inadmissibility. More specifically, the Council raised three grounds for inadmissibility, claiming that the applicant: first, had no legal interest in bringing proceedings; second, was not directly concerned by the contested provisions; and third, was not even a ‘natural or legal person’ within the meaning of Article 263 TFEU, fourth paragraph. Following the Council’s arguments, in particular the second ground of inadmissibility raised, the General Court dismissed the action on 20 September 2019.17 According to the General Court, EU sanctions did not impose any direct restriction on Venezuela. They merely imposed legal obligations on EU individuals and economic operators, which, ‘at most’, were likely to have indirect effects on Venezuela, as a state, insofar as the restrictive measures imposed ‘could [only] have the effect of limiting the sources from which the Bolivarian Republic of Venezuela can obtain the goods and services in question’ (emphasis added).18 In addition, the General Court stated the fact that Venezuela was not the explicit target of the contested measures:19 EU sanctions are imposed ‘in view of the situation in Venezuela’ and not ‘against Venezuela’. Therefore, the General Court concluded that EU measures only indirectly restrict the ‘opportunities’ of Venezuela to maintain economic relations with certain third states (namely EU Member States) – but not Venezuela’s right to take sovereign decisions in this respect.20 Lacking the requirement of ‘direct concern’ (as prescribed in Article 263 TFEU, fourth paragraph), the General Court dismissed the Venezuelan action as inadmissible. On 22 June 2021, the Court, before which Venezuela lodged an appeal, overturned the General Court, and ruled that the dismissal of the action (based on lack of direct concern) represented an error in law.21
14 See Council Decision (CFSP) 2017/2074 of 13 November 2017 concerning restrictive measures in view of the situation in Venezuela and Council Regulation (EU) 2017/2063 of 13 November 2017 concerning restrictive measures in view of the situation in Venezuela. 15 See Council Regulation (EU) 2017/2063 (n 14) Annex I and II. 16 See Council Decision (CFSP) 2017/2074 (n 14) Arts 6 and 7; Council Regulation (EU) 2017/2063 (n 14) Art 8. 17 Case T-65/18, Venezuela v Council, ECLI:EU:T:2019:649. 18 ibid para 33. 19 ibid para 36. 20 ibid para 43. 21 Case C-872/19 P, Bolivarian Republic of Venezuela v Council of the European Union, ECLI:EU:C:2021:507, para 73.
1004 Francesca Finelli III. THE COURT
By setting aside the General Court’s judgment, the Court held that Venezuela had the right to challenge the validity of EU restrictive measures imposed on that state. More interestingly, in Venezuela v Council, the Court established that the application made by a third state may be considered admissible before the EU judiciary, insofar as the conditions laid down in Article 263 TFEU, fourth paragraph are met.22 A. Third States and the Concept of ‘Legal Person’ Differently from the General Court, the Court raised of its own motion some preliminary observations on the question whether Venezuela was to be regarded as a ‘legal person’ within the meaning of Article 263 TFEU, fourth paragraph, since the answer to that question was necessary for the examination of the second ground of inadmissibility raised by the Council. On the one hand, the Council, as defendant, took the view that a third state should not be regarded as a ‘legal person’ in the context of Article 263 TFEU, fourth paragraph.23 It argued that, although Venezuela is a sovereign state with indisputable legal personality under public international law, the concept of ‘legal person’ is an autonomous (independent) concept of EU law. It insisted on the fact that, since third countries are not part of the EU legal system (which is limited to EU Member States) and have no right conferred by the Treaties, they could not claim to have access to EU courts.24 The Council feared that recognising the right to a judicial remedy for non-EU states would put the Union at a disadvantage. Its main concern related to the lack of reciprocity at the international level, meaning that, if third countries could challenge the validity of EU restrictive measures before the Court, the Union would not be (automatically) able to file complaints against third countries’ foreign policy decisions ‘before their courts’ (emphasis added).25 The Council highlighted that the lack of reciprocal judicial remedies would ‘unduly restrict the EU in the conduct of its policies and international relations’, because third states would be (unduly) allowed ‘to use the EU Courts as a back door for resolution of international disputes between subjects of public international law’.26 Thus, it invited the Court to dismiss Venezuela’s action (and the following appeal). On the other hand, the Court was not convinced by the Council’s arguments. According to its case law,27 the term ‘legal person’ used in Article 263 TFEU, fourth paragraph could not be interpreted ‘restrictively’.28 On the contrary, the Court held that its interpretation should be in the light of the EU founding values,29 particularly the principle of effective judicial review and
22 These conditions concern natural and legal persons – the so-called non-privileged applicants – to enjoy legal standing before the EU courts. 23 Venezuela v Council (n 21) para 26. 24 ibid paras 28 and 60. 25 ibid para 29. 26 ibid. 27 See ibid paras 44–47. In the field of sanctions, the Court has also recognised the legal standing of an organisation which did not have legal personality on the ground that, ‘if the EU legislature takes the view that an entity has an existence sufficient for it to be subject to restrictive measures, it must be accepted, on grounds of consistency and justice, that that entity also has an existence sufficient to contest those measures’: Case C-229/05 P, PKK and KNK v Council, ECLI:EU:C:2007:32, para 112). 28 Venezuela v Council (n 21) para 44. 29 As established in Arts 2 and 21 TEU.
The Right of Third States to Challenge EU Restrictive Measures before the Court 1005 the rule of law. As already ruled in H v Council and Others,30 Rosneft31 and, more recently, Bank Refah Kargaran,32 the Court (re)affirmed that the principle of effective judicial protection was an essential requirement of the rule of law, which was, in turn, a milestone in the EU legal order. In line with this jurisprudence, the Court further insisted on a broad, substantive and holistic understanding of the EU founding values, which shall not only guide the EU external action,33 but also impose a ‘methodological imperative’.34 It followed that the interpretation of Article 263 TFEU, fourth paragraph must be coherent with these constitutional values,35 and ‘militates in favour of finding that a third state should have standing to bring proceedings, as a “legal person”, within the meaning of the fourth paragraph of Article 263 TFEU, where the other conditions laid down in that provision are satisfied’.36 Furthermore, the Court clarified that the respect for EU founding values ‘cannot in any way be made subject to a condition of reciprocity’.37 To use the words of Advocate General (AG) Hogan, EU values – including its highest democratic standards, its obligations to ensure the respect for the rule of law and the principle of effective judicial protection – ‘cannot be traded or compromised in diplomatic exchanges or made subject to reciprocal treaty obligations’.38 B. Third State Sanctions and ‘Direct Concern’ Having established that Venezuela must be regarded as a ‘legal person’ within the meaning of Article 263 TFEU, fourth paragraph, the Court then analysed the concept of ‘direct concern’. Pursuant to Article 263 TFEU, fourth paragraph and the case law interpreting it, Venezuela, as an applicant, would have to prove that it was ‘directly concerned’ by the EU measure which formed the subject matter of its action. This required Venezuela to satisfy two cumulative criteria, namely that (i) the contested EU acts directly affect its legal situation and (ii) the same acts leave no discretion to the addressees who are responsible for their implementation, making the implementation of those acts purely automatic, and without the involvement of intermediate (domestic) rules. Contrary to the General Court, the Court reached the conclusion that EU restrictive measures directly affect the legal situation of Venezuela. Firstly, the reasoning of the Court clarified that, when analysing the EU restrictive measures, it was necessary to look to their purpose, content, scope, substance and the legal and factual context in which they were adopted.39 As a result, even if Venezuela was not explicitly and specifically referred to in the contested Regulation (as the target), this did not mean that it
30 Case C-455/14 P, H v Council and Others, ECLI:EU:C:2016:569. See this volume, ch 76. 31 Case C-72/15, PJSC Rosneft Oil Company v Her Majesty’s Treasury and Others, ECLI:EU:C:2017:236. See this volume, ch 81. See also S Poli, ‘The Common Foreign and Security Policy after Rosneft: Still Imperfect but Gradually Subject to the Rule of Law (2017) 54 CML Rev 1799. 32 Case C-134/19 P, Bank Refah Kargaran v Council of the European Union, ECLI:EU:C:2020:793. See this volume, ch 91. 33 See Arts 3(5) and 21(1) TEU. 34 RA Wessel, ‘Integration and Constitutionalisation in EU Foreign and Security Policy’ in R Schütze (ed), Governance and Globalization: International and European Perspectives (Cambridge, Cambridge University Press, 2018) 343. 35 See Art 21(3) TEU. 36 Venezuela v Council (n 21) para 50. 37 ibid para 52. 38 See Opinion of AG Hogan, Case C-872/19 P, Venezuela v Council, ECLI:EU:C:2021:37, para 87. 39 Venezuela v Council (n 21) para 66.
1006 Francesca Finelli was not directly affected by the EU sanctioning regime. In fact, as pointed out by AG Hogan, the EU restrictive measures were designed to affect Venezuela, as a state, and claiming otherwise would be ‘highly artificial and unduly formalistic’.40 Secondly, the Court ruled that, even if EU sanctions do not constitute an absolute restriction for Venezuela to conduct economic relations and develop its economic strategies (outside the territory of the Union), EU restrictive measures directly concern that state, since they prevent it from carrying out numerous economic activities. The notion of ‘direct concern’ did not mean that it must be entirely impossible for Venezuela to conduct its economic relations, but that it is sufficient to establish that the contested EU provisions prevent it from obtaining numerous goods and services.41 Hence, the Court stated that the General Court erred in law in considering that the restrictive measures at issue did not directly affect the legal situation of Venezuela. C. Other Grounds of Inadmissibility Lastly, the Court also addressed the additional two grounds of inadmissibility raised by the Council. Concerning the alleged absence of an interest in bringing proceedings, the Court clarified that the EU restrictive measures were liable to harm the interests – in particular, the economic interests – of Venezuela. It followed that the action for annulment was capable of procuring an advantage for the state; and such advantage presupposed Venezuela’s interests in bringing proceedings before the Court.42 Concerning the necessity of implementing measures, the Court clarified that the contested act (namely, Council Regulation (EU) 2017/2063) was adopted by the Council under the nonlegislative procedure.43 It could not be regarded as a legislative act, and clearly constituted a ‘regulatory act’ within the meaning of Article 263 TFEU, fourth paragraph.44 Its provisions did not entail further implementing measures, and therefore applied without leaving any discretion to its addressees (both the Union and the Member States). The Court concluded that all the conditions laid down in Article 263 TFEU, fourth paragraph were fulfilled: Venezuela was a ‘legal person’, ‘directly concerned’ by the contested EU measures, which directly affect its legal situation and leave no discretion to the addresses who are responsible for their implementation. As a result, the action for annulment brought by Venezuela was admissible. Finally, the Court referred the dispute back to the General Court for delivering its judgment on the merits. IV. THE IMPORTANCE OF THE CASE
In Venezuela v Council, the Court established, for the first time, that third states have the right to file direct actions for annulment before the General Court, challenging the validity of EU
40 See Opinion of AG Hogan in Venezuela v Council (n 38) para 109. For instance, EU measures plainly impact on the reputation of Venezuela at the international level, since they are intended to suggest that Venezuela’s commitment to democratic values and human rights is unfilled/unsatisfactory. 41 Venezuela v Council (n 21) para 71. 42 ibid paras 82 and 83. 43 On the basis of Art 215 TFEU. 44 Venezuela v Council (n 21) para 92.
The Right of Third States to Challenge EU Restrictive Measures before the Court 1007 restrictive measures imposed on them. This has led to an unprecedented expansion of potential applicants before the EU courts,45 in a way that they now include any third states in respect of which the Union decides to interrupt or reduce economic and financial relations. In upholding the right to effective judicial protection and the rule of law, the Court has empowered (directly concerned)46 states to access EU justice. The reasoning of the Court was an expression of the ubi ius ibi remedium principle, which requires the Union to ensure that any natural or legal person must be allowed to challenge EU acts that are prejudicial to them, in so far as the conditions established in Article 263 TFEU, fourth paragraph are met.47 This generous interpretation of the concept of ‘legal person’ in Article 263 TFEU, fourth paragraph (as to include sovereign states) extends the breadth of judicial review on EU sanctions. In this way, Article 275 TFEU, second paragraph does not merely reflect the Kadi case law on the need for effective judicial protection for targeted individuals, but rather protects the (extended) right to challenge EU restrictive measures even when the action is submitted by a third state. Notwithstanding the specific (Treaty-based) limitations to the Court’s jurisdiction in CFSP, which has been interpreted narrowly post-Lisbon, the Venezuela v Council judgment further demonstrated that the Court is not as powerless as one might understand from a literal interpretation of the EU Treaties (particularly Article 275 TFEU, second paragraph).48 Conversely, the Court upheld (once again) the ‘cardinal importance’ of the principle of effective judicial protection as ‘a concretisation of the rule of law’.49 It stretched the boundaries of its powers in CFSP matters and, acting as ‘the guardian of the rule of law’,50 it confirmed that ‘its jurisdiction [is] the rule, rather than the exception’.51 If the Venezuela v Council judgment consolidated the respect of the rule of law in the CFSP area, it nevertheless failed to fully address the fears expressed by the Council and several EU Member States.52 For instance, Greece and Slovenia were deeply concerned by the Venezuelan appeal: the former argued that granting sovereign states judicial guarantees before EU courts would undermine the integrity and autonomy of EU restrictive measures; the latter observed that the Court would become the forum for (directly) contesting EU foreign policy decisions (and for establishing the EU responsibility for its own unilateral sanctions).53 In this way, the potential proliferation of third-state applications before the General Court risks placing the Union at a ‘judicial disadvantage’, being the only global actor providing sovereign states with
45 Actions for annulment against EU sanctions can now be brought by directly concerned (i) individuals and (ii) non-state entities (including organisations which lack legal personality under national law, see PKK and KNK v Council (n 27) para 114), as well as (iii) third states. 46 Not only Venezuela, but also North Korea, Russia, Belarus, Turkey, Tunisia, Libya and so on. 47 See Opinion of AG Hogan in Venezuela v Council (n 38) para 32. 48 Recalling C Hillion, ‘A Powerless Court? The European Court of Justice and the EU Common Foreign and Security Policy’ in M Cremona and A Thies (eds), The ECJ and External Relations: Constitutional Challenges (Oxford, Hart Publishing, 2014). 49 P Van Elsuwege and F Gremmelprez, ‘Protecting the Rule of Law in the EU Legal Order: A Constitutional Role for the European Court of Justice’ (2020) European Constitutional Law Review 16, 10. 50 ibid 9. 51 G Butler, ‘The Coming of Age of the Court’s Jurisdiction in the Common Foreign and Security Policy’ (2017) 13 European Constitutional Law Review 684. 52 Opinion of AG Hogan in Venezuela v Council (n 38) paras 39–57, presenting the observations of the Republic of Estonia, the Hellenic Republic, the Kingdom of the Netherlands, the Republic of Poland, the Republic of Slovenia, the Slovak Republic and the Kingdom of Sweden. 53 See A Tzanakopoulos, ‘Sanctions Imposed Unilaterally by the European Union: Implications for the European Union’s International Responsibility’ in AZ Marossi and MR Bassett (eds), Economic Sanctions under International Law (The Hague, TMC Asser Press, 2015).
1008 Francesca Finelli legal remedies against its foreign policy strategies. Additionally, the proliferation of these judicial challenges might have a more general chilling effect on the EU’s willingness to resort to (unilateral) sanctions in the future.54 Poland and Slovakia also expressed interesting legal arguments against the extended judicial scrutiny of the EU courts. They both stressed the fact that CFSP decisions (including EU restrictive measures) are not addressed to third states: EU provisions do not have extraterritorial application,55 meaning that they are not binding on non-EU territory and the Union has no regulatory competence on non-EU states. As a result, Poland and Slovakia argued that CFSP measures could not confer either obligations or rights on third states – not even the right to effective judicial protection before EU courts. More interestingly, Slovakia presented an additional observation – which was partly reaffirmed by Sweden but not duly addressed in the reasoning of the Court. It highlighted the different wording of Article 215 TFEU, paragraphs (1) and (2), and pointed out that, while the first paragraph refers to ‘the interruption or reduction, in part or completely, of economic and financial relations with one or more third countries’ (namely, comprehensive or selective embargoes), the second one concerned targeted restrictive measures against ‘natural or legal persons and groups or non-State entities’ (also known as ‘smart’ or individualised sanctions). According to Slovakia, this distinction clearly demonstrated that the concept of ‘legal person’ as referred to in the second paragraph did not cover sovereign states, but covered standard examples of legal persons, such as commercial companies, associations, unions and various other non-state entities. For Slovakia, there were no grounds for interpreting the concept of ‘legal person’ appearing in Article 215(2) TFEU as to include states, since that would only generate redundancy. Moreover, Slovakia claimed that the same ‘personalistic understanding’ of the concept of ‘legal person’ shall apply to Article 275 TFEU, second paragraph because its rationale was ‘to offer [exceptional] legal safeguards to natural and legal persons, as opposed to countries’ (emphasis added).56 Nevertheless, the broad understanding of ‘legal person’ undertaken by the Court in Venezuela v Council seems to miss this distinction provided by EU primary law between third state sanctions (ie measures of general application)57 and targeted sanctions (ie individualised measures against non-state entities). In conclusion, the Venezuelan action, at the time of writing, is now back on the docket of the General Court, which is responsible for delivering its judgment on the merits. Therefore, the substantive matters in the Venezuela v Council dispute are far from settled, with the EU constitutional issue of third state rights now on firmer ground. In principle, the General Court must ensure ‘the full review’ of the lawfulness of EU sanctions against Venezuela. However, in practice, EU courts have traditionally limited their evaluation of sanctions to procedural considerations (mainly due process aspects). They have usually ‘not delved into substantive
54 In order to prevent this trend, the Council could evaluate the shift from geographical to thematic sanctions regimes – whereby no third country could claim to be ‘directly concerned’. See F Finelli, ‘The New EU Human Rights Sanctions Regime: A SWOT Analysis’ (European Law Blog, 7 June 2021). 55 According to the Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy (doc 15579/03), last updated on 4 May 2018, paras 51 and 52, ‘EU restrictive measures should only apply in situations where links exist with the EU’. 56 See C Eckes, ‘EU Restrictive Measures against Natural and Legal Persons: From Counterterrorist to Third Country Sanctions (2013) 51 CML Rev 882. 57 See Rosneft (n 31) paras 97–99. Here the Court did not extend its jurisdiction under Art 275 TFEU, second paragraph to cover measures of general application unrelated to the list of targeted individuals, such as embargoes and trade restrictions on categories of products. See also C Eckes, ‘The Law and Practice of EU Sanctions’ in Blockmans and Koutrakos (n 8) 5.
The Right of Third States to Challenge EU Restrictive Measures before the Court 1009 questions’ and ‘have given virtually absolute deference to the Council’,58 recognising its broad discretion in taking these CFSP decisions.59 This gives reason to believe that the General Court will avoid a substantive evaluation of the lawfulness of EU sanctions against Venezuela. As a matter of fact, such substantive analysis would be particularly problematic for the General Court since the lawfulness of unilateral sanctions (including EU autonomous restrictive measures) is still characterised by absence of consensus at the international level. Moreover, the assessment of these unilateral coercive measures lacks an appropriate legal framework,60 and is ‘one of the least developed areas of international law’.61 V. ADDITIONAL READING Butler, G, ‘The Coming of Age of the Court’s Jurisdiction in the Common Foreign and Security Policy’ (2017) 13(4) European Constitutional Law Review. Hofer, A, ‘The Developed/Developing Divide on Unilateral Coercive Measures: Legitimate Enforcement or Illegitimate Intervention?’ (2017) 16 Chinese Journal of International Law 175. Poli, S, ‘Effective Judicial Protection and Its Limits in the Case Law Concerning Individual Restrictive Measures in the European Union’ in E Neframi and M Gatti (eds), Constitutional Issues of EU External Relations Law (Baden-Baden, Nomos, 2018). Tzanakopoulos, A, ‘Sanctions Imposed Unilaterally by the European Union: Implications for the European Union’s International Responsibility’ in AZ Marossi and MR Bassett (eds), Economic Sanctions under International Law (The Hague, TMC Asser Press, 2015). van Elsuwege, P and Gremmelprez, F, ‘Protecting the Rule of Law in the EU Legal Order: A Constitutional Role for the European Court of Justice’ (2020) European Constitutional Law Review. Wessel, RA, ‘Integration and Constitutionalisation in EU Foreign and Security Policy’ in R Schütze (eds), Governance and Globalization: International and European Perspectives (Cambridge, Cambridge University Press, 2018).
58 E Chachko, ‘Foreign Affairs in Court: Lessons from CJEU Targeted Sanctions Jurisprudence’ (2019) 44 Yale Journal of International Law 14. See also Michael Bishop’s intervention in House of Lords Select Committee on the European Union, EU Justice Sub-committee, ‘Corrected Oral Evidence: The Legality of Sanctions’ (2016), http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/eu-justice-%20subcommittee/ eu-sanctions/oral/41152.pdf: ‘the court is not the arbiter of whether a person should be listed, or whether it is right or proper to list someone. It does not rule in a general way like that. This is a policy decision for the Council to make.’ 59 See Case C-348/12 P, Council v Kala Naft, ECLI:EU:C:2013:776, para 120. 60 There is no general prohibition under customary international law. Moreover, there is no general rule that establishes what a proportionate sanction is. A Hofer, ‘The Proportionality of Unilateral “Targeted” Sanctions: Whose Interests Should Count?’ (2020) 89 Nordic Journal of International Law 399. 61 D Hovell, ‘Unfinished Business of International Law: The Questionable Legality of Autonomous Sanctions’ (2019) 113 American Journal of International Law Unbound: Symposium on Unilateral Targeted Sanctions 140. See also HRC, ‘Report of the Special Rapporteur on the Negative Impact of Unilateral Coercive Measures on the Enjoyment of Human Rights’ (21 July 2020), UN document A/HRC/45/7.
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