EU International Relations Law 9781782258964, 9781849463225

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Acknowledgements FIRST EDITION

Part of this book was written on research leave granted by the School of Law, University of Birmingham and the Department of Law, University of Durham. The latter was funded by the Arts and Humanities Research Council. The last parts of the book were written in Ann, Arbor, Michigan, where I spent six months as a Jean Monnet Research Fellow at the University of Michigan Law School. To these institutions I am grateful. Eileen Denza read parts of the book: for her comments, suggestions, corrections and kindness I am deeply grateful. Aurel Sari commented on other parts of the book and helped me enormously with his editorial assistance: I thank him very much. In Ann Arbor, I benefited from conversations with Judge Koen Lenaerts, Daniel Halberstam and Eric Stein. Frank Hoffmeister has been very helpful with a number of queries over the past two years. Sebastian Harter-Bachmann helped me efficiently at the early stages of writing. All omissions and errors are, of course, my own.

SECOND EDITION

I am grateful to Sam Parsons and Ben-Jacob Couch-Diewitz for their editorial assistance and to Niall Coghlan for his research assistance. The usual disclaimer applies.

Στη Νατάσσα

Table of Cases Table of Cases

Table of Cases

A. EUROPEAN COURT OF JUSTICE Case 10/61 Commission v Italy [1962] ECR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .322 Case 26/62 van Gend en Loos [1963] ECR 1 . . . . . . . . . . . . . . . . . . . . . . . . . 82–84, 229, 257, 322, 414 Case 6/64 Flaminio Costa v ENEL [1964] ECR 585 . . . . . . . . . . . . . . . . . . . . . . . . 14, 82, 84, 224, 322 Case 9/70 Franz Grad v Finanzamt Traunstein [1970] ECR 825 . . . . . . . . . . . . . . . . . . . . . . . . 83, 258 Case 11/70 Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel [1970] ECR 1125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83, 85, 274 Case 22/70 Commission v Council (European Road Transport Agreement) [1971] ECR 263. . . . . 73, 77–87', 158, 165, 177, 181, 234, 240 Joined Cases 9/71 and 11/71 Compagnie d’Approvisionnement v Commission [1972] ECR 391 . .294 Joined Cases 21 to 24/72 International Fruit Company NV and Others v Produktschap voor Groenten en Fruit [1972] ECR 1219 . . . 212–13, 215, 216, 219, 235, 244, 252, 259, 261, 280–82, 303–05 Case 5/73 Balkan Import Export GmbH v Hauptzollamt Berlin Packhof [1973] ECR 1091 . . . . . .18 Case 8/73 Hauptzollamt Bremerhaven v Massey Fergusson GmbH [1973] ECR 897. . . . . . . . . . . . .19 Case 9/73 Schlüter v Hauptzollamt Lörrach [1973] ECR 1135 . . . . . . . . . . . . . . . . . . . . . 252, 281, 303 Case 167/73 Commission v France [1974] ECR 359 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119, 339 Case 181/73 R & V Haegeman v Belgian State [1974] ECR 449 . . . . . . . . . . . . . . . . . . . . . . . 210, 236 Case 2/74 Reyners v Belgian State [1974] ECR 631 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .277 Case 16/74 Centrafarm BV et Adriaan de Peijper v Winthrop BV [1974] ECR 1183 . . . . . . . . . . 271, Case 41/74 Van Duyn v Home Office [1974] ECR 1337. . . . . . . . . . . . . . . . . . . . 83, 86, 215, 226, 258 Case 38/75 Douaneagent der NV Nederlandse Spoorwegen v Inspecteur der invoerrechten en accijnzen [1975] ECR 1439 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219, 252, Case 87/75 Conceria Daniele Bresciani v Amministrazione Italiana delle Finanze [1975] ECR 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260–61, 267 Opinion 1/75 (OECD Local Cost Standard) [1975] ECR 1355 . . 20–25, 30–32, 34–35, 73, 137, 213, 230–31, 345 Joined Cases 3, 4 and 6/76 Cornelis Kramer and others [1976] ECR 1279 . .87–90, 94–95, 99, 101, 104, 106–07, 109, 180, 183 Case 33/76 Rewe-Zentralfinanz eG and Rewe-Zentral AG v Landwirtschaftskammer für das Saarland [1976] ECR 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .255 Case 41/76 Suzanne Criel, née Donckerwolcke and Henri Schou v Rrocureur de la Republique au Tribunal de Grande Instance, Lille and Director General of Customs [1976] ECR 1921 . . . 25–26, 486, 490 Case 104/75 De Peijper [1976] ECR 613 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271, 273–74 Opinion 1/76 (Draft Agreement establishing a European laying up fund for inland waterway vessels) [1977] ECR 741 . . . . 89, 91–94, 99–100, 102, 104–08, 114, 117, 121, 123, 126, 128, 177 Case 35/76 Simmenthal v Minister for Finance [1976] ECR 1871 . . . . . . . . . . . . . . . . . . . . . . . . . . .275 Case 50/76 Amsterdam Bulb BV v Produktschap voor Siergewassen [1977] ECR 137 . . . . . . . . . .258 Case 52/77 Leonce Cayrol v Giovanni Rivoira & Figli [1977] ECR 2261 . . . . . . . . . . . . . . . . . . . . . .25 Case 65/77 Jean Razanatsiba [1977] ECR 2229 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .277

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Case 106/77 Administrazione delle Finanze dello Stato v Simmenthal SpA (Simmenthal II) [1978] ECR 629 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83 Case 112/77 Töpfer v Commission [1978] ECR 1019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .312 Case 113/77 NTN Toyo Bearing v Council [1979] ECR 1185 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .375 Case 118/77 Import Standard Office v Council [1979] ECR 1277 . . . . . . . . . . . . . . . . . . . . . . . 375–76 Case 119/77 Nippon Seiko v Council [1979] ECR 1303 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .375 Case 120/77 Koyo Seiko v Council [1979] ECR 1337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .375 Case 121/77 Nachi Fujikoshi v Council [1979] ECR 1363 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .375 Opinion 1/78 (Agreement on Natural Rubber) [1979] ECR 2871 . . . . . 21–22, 24, 30, 32, 34–35, 55, 73, 95, 101, 172–73, 231, 489 Ruling 1/78 re Convention on the Physical Protection of Nuclear Materials, Facilities and Transports [1978] ECR 2151 . . . . . . . . . . . . . . . . . . . . . . . . . . .65, 166, 181, 194, 231, 256, 475 Case 34/79 R. v Maurice Donald Henn and John Frederick Ernest Darby [1979] ECR 3795 . . . .322 Case 35/79 Grosoli v Ministry of Foreign Trade [1980] ECR 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Case 44/79 Hauer v Land Rheinland-Pfalz [1979] ECR 3727 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .498 Case 140/79 Chemial Farmaceutici SpA v DAF SpA [1981] ECR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Case 812/79 Attorney General v Juan C. Burgoa [1980] ECR 2787 . . . . . . . . . 215, 322, 340–41, 349 Case 804/79 Commission v United Kingdom [1981] ECR 1054 . . . . . . . . . . . . . . . . . . . . . . . . . 89, 183 Joined Cases 256, 257, 265 and 267/80 and 5/81 Birra Wührer SpA and others v Council and Commission [1982] ECR 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .290 Case 270/80 Polydor Ltd and RSO Records Inc v Harlequin Records Shops Ltd and Simons Records Ltd [1982] ECR 329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271–76 Case 17/81 Pabst & Richarz KG v Hauptzollamt Oldenburg [1982] ECR 1331 . . . . . . . . . . . . . . . .276 Case 21/81 Criminal proceedings against Daniël Bout and BV I. Bout en Zonen [1982] ECR 381 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89 Case 104/81 Hauptzollamt Mainz v C.A. Kupferberg & Cie KG a.A. [1982] ECR 3641 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211–12, 258, 260, 262–63, 267, 272, 274, 277, 279 Case 283/81 Srl CILFIT and Lanificio di Gavardo SpA v Ministry of Health [1982] ECR 3415 . . . .251 Case 266/81 SIOT v Ministero delle Finanze [1983] ECR 731 . . . . . . . . . . . . . . . . . . . . . 252, 281, 319 Joined Cases 267/81, 268/81 and 269/81 Amministrazione delle Finanze dello Stato v SPI SpA [1983] ECR 801 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252, 281 Case 218/82 Commission v Council [1983] ECR 4063 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Joined Cases 239/82 and 275/82 Allied Corporation and others v Commission [1984] ECR 1005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .375 Case 264/82 Timex v Council and Commission [1985] ECR 849 . . . . . . . . . . . . . . . . . . . . . . . . . . . .375 Case 14/83 Von Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891 . . . . . . . . . .330 Case 59/83 Biovilac v EEC [1984] ECR 4057 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .294 Case 72/83 Campus Oil Ltd v Minister for Industry and Energy [1984] ECR 2727 . . . . 26, 476, 487 Case 59/84 Tezi Textiel BV v Commission [1986] ECR 887 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Case 152/84 Marshall v Southampton and South-West Hampshire Area Health Authority (Teaching) [1986] ECR 723 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .265 Case 174/84 Bulk Oil (Zug) AG v Sun International Limited and Sun Oil Trading Company [1986] ECR 559 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 355, 490 Case 199/84 Procuratore della Republica v Migliorini [1985] ECR 3325 . . . . . . . . . . . . . . . . . . . . . . .27 Case 222/84 Marguerite Johnson v Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334, 480, 506 Case 240/84 NTN Toyo Bearing Company Limited and Others v Council [1987] ECR 1809 . . . .368 Case 255/84 Nachi Fujikoshi v Council [1987] ECR 1861 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .368 Case 28/85 Deghillage v Caisse Primaire d’Assurance Maladie [1986] ECR 991 . . . . . . . . . . . . . . .233 Joined Cases 89, 104, 114, 116, 117 and 125 to 129/85 A. Ahlström Osakeyhtiö and others v Commission [1993] ECR I-1307 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .226

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Joined Cases 277/85 and 300/85 Canon v Council [1988] ECR 5731 . . . . . . . . . . . . . . . . . . . . . . . .376 Case 314/85 Firma Foto-Frost v Hauptzollamt Lübeck-Ost [1987] ECR 4199 . . . . . . . . . . . . . . . . .235 Case 12/86 Meryem Demirel v Stadt Schwäbisch Gmünd [1987] ECR 3719. . . 148, 237–41, 243–44, 267–68, 278, 280, 382 Case 45/86 Commission v Council (GSP) [1987] ECR 1493 . . . . . . . . . . . . . . . . . . . . . . . . . 35, 55, 151 Case 68/86 United Kingdom v Council [1988] ECR 855 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Case 80/86 Criminal Proceedings against Kolpinguis Nijmegen BV [1987] ECR 3969 . . . . . . . . . .330 Case 81/86 De boer Buizen v Council and Commission [1987] ECR 3677 . . . . . . . . . . . . . . . . . . . .294 Joined Cases 294/86 and 77/87 Technointorg v Commission and Council [1988] ECR 6077 . . . .368 Case 299/86 Drexl [1988] ECR 1213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case 51/87 Commission v Council [1988] ECR 5459 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27–28 Case 70/87 Fediol v Commission [1989] ECR 1781 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301–02, 304 Case 85/87 Dow Benelux v Commission [1989] ECR 3137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .372 Case C-87/89 Sonito and Others v Commission [1990] ECR I-1981 . . . . . . . . . . . . . . . . . . . . . . . . .290 Case C-131/87 Commission v Council [1989] ECR I-3764 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Case C-133/87 Nashua Corporation and others v Commission and Council [1990] ECR I-719 . .374 Case C-156/87 Gestetner Holdings v Council and Commission [1990] ECR I-781 . . . . . 368–69, 374 Case 165/87 Commission v Council [1989] ECR 5545 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 Case 5/88 Wachauf v Bundesamt für Ernährung und Forstwirtschaft [1989] ECR 2609 . . . . . . . .498 Case 49/88 Al-Jubail Fertilizer Company and others v Council [1991] ECR 3187 . . . . . . . . . . 371–72 Case C-62/88 Greece v Council [1990] ECR 1527 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 55 Joined Cases C-297/88 and C-197/89 Dzodzi [1990] ECR I-3763 . . . . . . . . . . . . . . . . . . . . . . . . . . .241 Case C-323/88 Sermes v Directeur des services des douanes de Strasbourg [1990] ECR I-3027 . . . .369 Case C-106/89 Marleasing SA v La Comercial Internacionale de Alimentacion SA [1990] ECR I-4135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .330 Case C-170/89 Bureau Européen des Unions de Consommateurs v Commission [1991] ECR I-5709 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366, 375 Case C-188/89 A. Foster and others v British Gas plc [1990] ECR I-3313 . . . . . . . . . . . . . . . . . . . .137 Case C-192/89 S.Z. Sevince v Staatssecretaris van Justitie [1990] ECR I-3461 . . . . . . . . . . . . . . . . .278 Case C-213/89 R. v Secretary of State for Transport, ex parte Factortame [1990] ECR I-2433 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251, 324 Case C-221/89 Factortame and Others [1991] ECR I-3905 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .502 Case C-231/89 Gmurzynska-Bscher [1990] ECR I-4003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241 Case C-69/89 Nakajima v Council [1991] ECR I-2069 . . . . . . . . . . . . . . . . . . . . . . . . . 303–06, 367–68 Case C-170/89 Bureau Europeen des Unions de Consommateurs (BEUC) v Commission [1991] ECR I-5709 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366, 375 Case C-260/89 ERT [1991] ECR I-2925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .372 Case C-300/89 Commission v Council (Titanium Dioxide) [1991] ECR I-1689 . . . . . . . . . . 54, 58, 64 Case C-358/89 Extramet Industrie v Council [1991] ECR I-2501 . . . . . . . . . . . . . . . . . . . . . . 373, 376 Case C-367/89 Criminal Proceedings against Aime Richard and Les Accessoires Scientifiques SNC [1991] ECR I-4621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487–88, 490–91, 500, 503 Case C-16/90 Nölle v Hauptzollamt Bremen-Freihafen [1991] ECR I-5163 . . . . . . . . . . . . . . 369, 377 Case C-18/90 Office national de l’emploi v Bahia Kziber [1991] ECR I-199. . . . . . . . . . . . . . 265, 269 Case C-163/90 Administration des Douanes et Droits Indirects v Leopold Legros and others [1992] ECR I-4625 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268, 273–75 Joined Cases C-258/90 and C-259/90 Pesquerias De Bermeo and Naviera Laida v Commission [1992] ECR I-2901 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .290 Case C-286/90 Anklagemindigheden v Poulsen and Diva Navigation [1992] ECR I-6019 . . 215, 226 Opinion 1/91 (Draft EEA Agreement) [1991] ECR I-6079 . . . . . . . . . . . . . . . . . . . . . . . . 191, 385, 414 Opinion 2/91 (Convention No 170 ILO on safety in the use of chemicals at work) [1993] ECR I-1061 . . . . . . . . . . . . . . . . . 83, 93, 98–101, 105, 118, 124, 177, 181, 196, 198, 231, 248, 341

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Case C-155/91 Commission v Council [1993] ECR I-939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58 Case C-158/91 Ministère public and Direction du travail and de l’emploi v Levy [1993] ECR I-4287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323, 330 Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission (Bangladesh aid) [1993] ECR I-3685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166–67, 535 Case C-207/91 Eurim-Pharm GmbH v Bundesgesundheitsaut [1993] ECR I-372 . . . . . . . . . . 273–75 Case C-316/91 Parliament v Council [1994] ECR I-625 . . . . . . . . . . . . . . . . . . . . 167, 170, 201, 535 Case C-327/91 France v Council (re: Competition Agreement with USA) [1994] ECR I-3641 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 53, 137, 158–60, 211 Case C-312/91 Metalsa [1993] ECR I-3751 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268, 272, 274 Opinion 2/92 (Third Revised Decision of the OECD on national treatment) [1995] ECR I-521 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111, 115, 233 Case C-75/92 Gao Yao (Hong Kong) Hua Fa Industrial Co. Ltd v Council [1994] ECR I-3141 . . . .369 Case C-91/92 Faccini Dori v Recreb [1994] ECR I-3325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .266 Case C-188/92 TWD v Bundesrepublik Deutschland [1994] ECR I-833 . . . . . . . . . . . . . . . . . . . . . .377 Case C-379/92 Peralta [1994] ECR I-3453 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .214 Case C-405/92 Mondiet v Islais [1993] ECR I-6133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .180 Case C-13/93 Office national de l’emploi v Minne [1994] ECR I-371 . . . . . . . . . . . . . . . . . . . . . . . .330 Joined Cases C-46/93 and C-48/93 Brasserie du Pecheur SA v Germany [1996] ECR I-1029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251, 333 Case C-58/93 Zoubir Yousfi v Belgian State [1994] ECR I-1353 . . . . . . . . . . . . . . . . . . . . . . . . 265, 269 Case C-187/93 Parliament v Council [1994] ECR I-2857 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58, 66 Case C-280/93 Germany v Council [1994] ECR I-4973 . . . . . . . . . . . . . . . . . . . . . . . . . . . 281, 304, 498 Case C-360/93 Parliament v Council [1996] ECR I-1195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72, 159 Case C-392/93 R v HM Treasury, ex p British Telecommunications plc [1996] ECR I-1631 . . . . .333 Case C-469/93 Amministrazione delle Finanze dello Stato v Chiquita Italia [1995] ECR I-4533 . . .281 Case C-473/93 Commission v Luxembourg [1996] ECR I-3207 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .323 Opinion 1/94 (WTO Agreements) [1994] ECR I-5267 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36–43, 45, 50, 52, 55, 58–59, 64, 70, 72–73, 101, 103, 105–11, 115 117–18, 126–28, 135, 161, 165, 170–71, 181–82, 202–04, 231–33, 240, 248, 341 Opinion 2/94 (Accession of the European Communities to the European Human Rights Convention) [1996] ECR I-1759 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51, 123–25, 231 Opinion 3/94 (Framework Agreement on Bananas) [1995] ECR I-4577 . . . . . . . . . . . . . . . . . . . . . .232 Case C-25/94 Commission v Council [1996] ECR I-1469 . . . . . . . . . . . . . 145, 179, 181–82, 234, 341 Case C-61/94 Commission v Germany [1996] ECR I-3989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219, 307 Case C-70/94 Fritz Werner Industrie-Ausrüstungen GmbH v Germany [1995] ECR I-3189 . . . . . 55, 489–92, 494, 499–500, 506 Case C-80/94 Wielockx [1995] ECR I-2493 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-83/94 Criminal Proceedings against Peter Leifer and Others [1995] ECR I-3231 . . . . . . . . 55, 489–90, 500, 506 Case C-103/94 Krid v CNAVTS [1995] ECR I-719 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .269 Case C-107/94 Asscher [1996] ECR I-3089. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-120/94 Commission v Greece (re: Former Yugoslav Republic of Macedonia) [1996] ECR I-1513 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480, 506 Case C-268/94 Portugal v Council [1996] ECR I-6177 . . . . . . . . . . . . . . . . . . . . . . . 56, 67, 69–70, 537 Case C-277/94 Taflan-Met [1996] ECR I-4085 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .280 Case C-28/95 Leur-Bloem v Inspecteur der Belastingdienst/Ondernemingen [1997] ECR I-4161 . . .241 Case C-84/95 Bosphorus Hava Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and Communications and others [1996] ECR I-3953 . . . . . . . . . . . . . . . . . . . . . . . . . 497, 499, 502, 504 Joined Cases C-114/95 and C-115/95 Texaco A/S v Middelfaert Havn and others [1997] ECR I-4263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .268

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Case C-120/95 Nicolas Decker v Caisse de maladie des employes prives [1998] ECR I-1831 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190, 501 Case C-124/95 The Queen, ex parte Centro-Com v HM Treasury and Bank of England [1997] ECR I-81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55, 190, 323, 328, 415, 491, 499, 501–0240, 49, Case C-130/95 Giloy v Hauptzollamt Frankfurt am Main-Ost [1997] ECR I-4291 . . . . . . . . . . . . .241 Case C-150/95 Portugal v Council (oilseeds) [1997] ECR I-5863 . . . . . . . . . . . . . . . . . . . . . . . . . . . .303 Case C-177/95 Ebony Maritime SA and Loten Navigation Co. Ltd v Prefetto della Provincia di Brindisi and others [1997] ECR I-1111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502–03 Case C-183/95 Affish [1997] ECR I-4315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .285 Case C-284/95 Safety-Tech Srl v S. & T. Srl [1998] ECR I-4301 . . . . . . . . . . . . . . . . . . . . . . . . . . . .308 Case C-265/95 Commission v France [1997] ECR I-6959 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .326 Case C-341/95 Giannio Bettati v Sagety Hi-Tech Srl [1998] ECR I-4355 . . . . . . . . . . . . . . . . 306, 308 Joined Cases C-364/95 and 365/95 T. Port GmbH & Co v Hauptzollampt Hamburg-Joans (T. Port III) [1998] ECR I-1023. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285, 323 Case C-22/96 Parliament v Council [1998] ECR I-3231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151 Case C-53/96 Hermès International v FHT Marketing [1998] ECR I-3603 . . . . . . 201, 238, 240–43, 249, 252–55, 285, 288, 308–09 Case C-147/96 Netherlands v Commission [2000] ECR I-4723 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .374 Case C-149/96 Portugal v Council [1999] ECR I-8395 . . . . . . . . . 252, 286–90, 293, 295–98,300, 308 Case C-158/96 Raymond Kohll v Union des caisses de maladie [1998] ECR I-1931 . . . . . . . 190, 501 Case C-162/96 Racke v Hauptzollampt Mainz [1998] ECR I-3655 . . . . 159, 226–27, 235, 309, 312–14 Case C-170/96 Commission v Council [1998] ECR I-2763 . . . . . . . . . . . . . . . . . . . . . . . . . . . 531, 533 Case C-262/96 Surul [1999] ECR I-2685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .280 Case C-264/96 ICI v Colmer [1998] ECR I-4695 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-352/96 Italy v Council (tariff quotas on imports of rice) [1998] ECR I-6937 . . . . . . . . . . .303 Case C-355/96 Silhouette International Schmied GmbH & Co. KG v Hartlauer Handelsgeselschaft mbH [1998] ECR I-4799. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .274 Case C-104/97 P Atlanta AG v European Community [1999] ECR I-6983 . . . . . . . . . . . . . . . . 291-92 Case C-189/97 Parliament v Council [1999] ECR I-4741 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151 Case C-269/97 Commission v Council [2000] ECR I-2257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54, 56 Case C-311/97 Royal Bank of Scotland [1999] ECR I-2651. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-414/97 Commission v Spain [1999] ECR I-5585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-36/98 Spain v Council [2001] ECR I-779 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56, 499 Case C-37/98 Savas [2000] ECR I-2927 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276, 293 Case C-62/98 Commission v Portugal [2000] ECR I-5171 . . . . . . . . . . . . . . . . . . . . . .326–27, 332, 339 Case C-84/98 Commission v Portugal [2000] ECR I-5215 . . . . . . . . . . . . . . . . . . . . . . . . . . 326–27, 339 C-84/98 Commission v Portugal [2000] ECR I-5171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .321 Joined Cases C-164/97 and C-165/97 Parliament v Council [1999] ECR I-1139 . . . . . . . . . . 64, 151 Case C-170/98 Commission v Belgium (maritime transport agreement with Zaire) [1999] ECR I-5493 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323–25 Joined Cases C-171, C-201 and C-202/98 Commission v Belgium and Luxembourg (re: maritime transport agreements between the Belgo-Luxembourg Economic Union with Togo, Mali, Senegal and Cote d’Ivoire) [1999] ECR I-5517. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .323 Case C-237/98 P Dorsch Consult Ingenieurgesellschaft mbH v Council and Commission [2000] ECR I-4549 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .293 Joined Cases 300/98 and 392/98 Parfums Christian Dior SA v Tuk Consultancy BV, and Assco Gerüste GmbH, Rob van Dijk v Wilhelm Layher GmbH & Co. Kg, [2000] ECR I-11307 241–42, 247, 250, 288, 309 Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291 . . . . . . . . . . . . . . . . . .290 Case C-376/98 Germany v European Parliament and Council (Tobacco Advertising) [2001] ECR I-2247 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52

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Case C-377/98 Netherlands v Parliament and Council [2001] ECR I-7079 . . . . . . . . . . . . . . . . . . .208 Joined Cases C-397/98 and C-410/98 Metallgeselschaft and Others [2001] ECR I-1727 . . . . . . . .501 Case C-405/98 Konsumerntombudsmannen (KO) v Gourmet International Products AB (GIP) [2001] ECR I-1795 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251 Case C-466/98 Commission v United Kingdom [2002] ECR I-9427 . . . . . . . . . . . . . . . . . . . . . 112, 118 Case C-467/98 Commission v Denmark [2002] ECR I-9519 . . . . . . . . . . . . . . . . . . . . . . . 112, 177, 342 Case C-468/98 Commission v Sweden [2002] ECR I-9575. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112, 342 Case C-469/98 Commission v Finland [2002] ECR I-9627 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112, 342 Case C-471/98 Commission v Belgium [2002] ECR I-9681 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112, 342 Case C-472/98 Commission v Luxembourg [2002] ECR I-9741 . . . . . . . . . . . . . . . . . . . . . . . . 112, 342 Case C-475/98 Commission v Austria [2002] ECR I-9797. . . . . . . . . . . . . . . . . . . . . . . . . 112, 342, 502 Case C-476/98 Commission v Germany [2002] ECR I-9855 . . . . . . . . . . 112, 114, 116, 119, 217, 342 Case C-29/99 Commission v Council [2002] ECR I-11221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175 Case C-89/99 Schieving-Nystad vof and Others and Robert Groeneveld [2001] ECR I-5851 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288, 310 Case C-157/99 B.S.M. Geraets-Smits and H.T.M. Peerbooms v Stichting Ziekenfonds VGZ and Stichting CZ Groep Zorgverzekeringen [2001] ECR I-5473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-239/99 Nachi Europe GmbH v Hauptzollamt Krefeld [2001] ECR I-1197 . . . . . . . . . . . . . . .37 Case C-307/99 OGT v Hauptzollamt Hamburg-St Annen [2001] ECR I-3159. . . . . . . . . . . . 288, 305 Joined Cases C-414 to C-416/99 Davidoff and Levi Strauss [2001] ECR I-8691 . . . . . . . . . . . . . . .274 Opinion 1/00 (European Common Aviation Area) [2002] ECR I-3493 . . . . . . . . . . . . . . . . . . . . . . .233 Opinion 2/00 (Cartagena Protocol on Biosafety) [2001] ECR I-9713. . . 53, 55–61, 65–66, 110, 118, 138, 166, 176, 234, 523 Case C-13/00 Commission v Ireland [2001] ECR I-2943 . . . . . . . . . . . . . . . . . . . . . . . . . . . 202, 243–45 Joined Cases C-27/00 and C-122/00 Omega and Others [2002] ECR I-2569 . . . . . . . . . . . . . . . . .288 Case C-50/00 P Union de Pequeros Agricultores v Council [2002] ECR I-6677 . . . . . . . . . . . . 376–77 Case C-76/00 P Petrotub SA and Republica SA v Council and Commission [2003] ECR I-79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305–06 Case C-112/00 Schmidberger [2003] ECR I-5659 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .499 Case C-312/00 P Commission v Camar and Others [2002] ECR I-11355. . . . . . . . . . . . . . . . . . . . .290 Case C-324/00 Lankhorst-Hohorst GmbH v Finanzamt Steinfurt [2002] ECR I-11779 . . . . . . . . .501 Case C-76/01 P Eurocoton and Others v Council [2003] ECR I-10091 . . . . . . . . . . . . . . 307, 373, 375 Case C-98/01 Commission v United Kingdom [2003] ECR I-4641 . . . . . . . . . . . . . . . . . . . . . . . . 46, 47 Case C-211/01 Commission v Council [2003] ECR I-8913 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .533 Case C-216/01 Budejovicku Budvar v Rudolf Ammersin GmbH [2003] ECR I-13617 . . 328–31, 340 Case C-281/01 Commission v Council [2002] ECR I-12049 . . . . . . . . . . . . . . . . . . . . . . . . 59, 138, 523 Case C-338/01 Commission v Council [2004] ECR I-4829 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64, 533 Case C-491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I-11453 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64, 288 Joined Cases C-317/01 and C-369/01 Abatay [2003] ECR I-12301 . . . . . . . . . . . . . . . . . . . . . . . . . .276 Case C-93/02 P Biret International SA v Council [2003] ECR I-10497 . . . . . . . . . .292, 295, 296, 299 Case C-94/02 P Etablissements Biret et Cie SA v Council [2003] ECR I-10497 . . .292, 295, 296, 299 Case C-233/02 France v Commission [2004] ECR I-2759 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137 Case C-286/02 Bellio F.Ili Srl v Prefettura di Treviso [2004] ECR I-3465 . . . . . . . . . . . . . . . . 219, 308 Case C-319/02 Manninen, [2004] ECR I-7477. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-334/02 Commission v France [2004] ECR I-2229 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-377/02 Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB) ECR, [2005] ECR I-1465 288–90, 295, 296 Opinion 1/03 (Lugano Convention) [2006] ECR I-1145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120–23, 177 Case C-94/03 Commission v Council [2006] ECR I-1. . . . . . . . . . . . . . . . . . . . . . 61, 65, 138, 523, 533 Case C-147/03 Commission v Austria, [2005] ECR I-5969 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .323

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Case C-176/03 Commission v Council [2005] ECR I-7879 . . . . . . . . . . . . . . . . . . . . . . . . 444, 533, 535 Case C-178/03 Commission v European Parliament and Council [2006] ECR I-107 . . . . 63–64, 138 Case C-203/03 Commission v Austria [2005] ECR I-935 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .332 Case C-210/03 Swedish Match [2004] ECR I-11893 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 Case C-239/03 Commission v France, [2004] ECR I–9325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 Case C-265/03 Igor Simutenkov v Ministerio de Educación y Cultura, Real Federación Española de Fútbol, [2005] ECR I-2579 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267, 269 Case C-266/03 Commission v Luxembourg [2005] ECR I-4805 . . . . . . . . . . . . . . . . . . . . . . . 183, 341 Case C-295/03 P Allesandrini Srl and Others v Commission, [2005] ECR I-5673 . . . . . . . . . . . . . .290 Case C-347/03 Regione autonom Friuli-Venezia Giulia and ERSA v Ministero delle Politiche Agricole e Forestali ECR, [2005] ECR I-3785 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61, 67 Case C-433/03 Commission v Germany [2005] ECR I-6985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .183 Case C-446/03 Marks & Spencer [2005] ECR I 10837 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-459/03 Commission v Ireland [2006] ECR I-4635 . . . . . . . . . . . . . . . . . . . . . .65, 184, 246, 341 Case C-214/04 Commission v Italy [2007] ECR I-3475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .339 Joined Cases C – 282/04 and C-283/04 Commission v Netherlands [2006] ECR I-9141 . . . . . 46–47 Joined Cases C-317/04 and C-318/04 Parliament v Council [2006] ECR I-4721 . . . . . . . . . . . . . .444 Case C-344/04 IATA and ELFAA [2006] ECR I-403 . . . . . . . . . . . . . . . . . . . . . . . . .210, 220, 260, 337 Case C-487/04 Commission v Italy [2006] ECR I-85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .339 Case C-522/04 Commission v Belgium [2007] ECR I-5701 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .339 Case C-524/04 Test Claimants in the Thin Cap Group litigation [2007] ECR I 2107 . . . . . . . . . . .501 Case C-16/05 Tum and Dari [2007] ECR I-7415l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .276 Case C-91/05 Commission v Council [2008] ECR I-3651 . . . . . . . . . . . . . . . 69, 139–44, 523, 531–33 Case C-284/05 Commission v Finland [2009] ECR I-11705 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-294/05 Commission v Sweden [2009] ECR I-11777. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Joined Cases C-402/05 P and C-415/05 P Kadi and Al-Barakaat [2008] ECR I-6351. . . . . . 67, 221, 224, 322, 505 Case C-337/05 Commission v Italy [2008] ECR I-2173 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-372/05 Commission v Germany [2009] ECR I-11801 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-378/05 Commission v Italy [2009] ECR I-11831 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-403/05 Parliament v Commission [2007] ECR I-9045 . . . . . . . . . . . . . . . . . . .69, 444, 539–40 Case C-409/05 Commission v Greece [2009] ECR I-11859 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-431/05 Merck Genéricos – Produtos Farmacêuticos Lda v Merck & Co. Inc., Merck Sharp & Dohme Ldª [2007] ECR I-7001 . . . . . . . . . . . . . . . . . . . . . . . . . . . .239, 246, 248–50 C-438/05 The International Transport Workers’ Federation and The Finnish Seamen’s Union [2007] ECR I-10779. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .501 Case C-440/05 Commission v Council [2007] ECR I-9097 . . . . . . . . . . . . . . . . . . . . .444, 533, 535–36 Case C-461/05 Commission v Denmark [2009] ECR I-11887 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Joined Cases C-120/06 P and C-121/06 P FIAMM and Fedon [2008] ECR I-6513 . . . . . . 260, 292 Case C-157/06 Commission v Italy [2008] ECR I-7313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-205/06 Commission v Austria [2009] ECR I-1301 . . . . . . . . . . . . . . . . . . . . . . . . . 334, 336–38 Case C-228/06 Soysal and Savatli [2009] ECR I-1031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220, 276 Case C-239/06 Commission v Italy [2009] ECR I-11913 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-249/06 Commission v Sweden [2009] ECR I-1335. . . . . . . . . . . . . . . . . . . . . . . . . . 334, 336–38 Case C-308/06 Intertanko [2008] ECR I-4057 . . . . . . . . . . . . . . . . . . .214, 217–18, 220, 260, 263, 266 Joined Cases C-399/06 P and C-403/06 P Hassan and Ayadi v Council and Commission [2009] ECR I-11393. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .517 Case C-411/06 Commission v Parliament and Council [2009] ECR I-7585 . . . . . . . . . . . . . . . 66, 138 Case C-13/07 Commission v Council [2005] OJ C 115/10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Case C-45/07 Commission v Greece [2009] ECR I-701 . . . . . . . . . . . . . . . . . . . . . . . . . . . 197, 231, 341 Case C-118/07 Commission v Finland [2009] ECR I-10889 . . . . . . . . . . . . . . . . . . . . . . . . 334, 336–38

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Case C-188/07 Commune de Mesquer v Total France [2008] ECR I-4501 . . . . . . . . . . . . . . . 216, 316 Case C-203/07 P Greece v Commission [2008] ECR I-8161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .313 Case C-246/07 Commission v Sweden [2010] ECR I-3317. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183, 191 Case C-370/07 Commission v Council [2009] ECR I-8917 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156 Case C-478/07 Budĕjovický Budvar, národní podnik v Rudolf Ammersin GmbH [2009] ECR I-7721 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .329 Opinion 1/08 (GATS Schedules) [2009] ECR I-11129. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Joined Cases C-175/08, C-176/08, C-178/08 and C-179/08 Salahadin Abdulla and Others [2010] ECR I-0000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218 Case C-13/08 Erich Stamm and Anneliese Hauser [2008] ECR I-11087 . . . . . . . . . . . . . . . . . . . . . .269 Case C-182/08 Glaxo Wellcome GmbH & Co. KG v Finanzamt München II [2009] ECR I-8591 . . .46 Case C-301/08 Bogiatzi [2009] ECR I-10185 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210, 213, 216 Case C-386/08 Brita [2010] ECR I-1289 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .211 Opinion 1/09 (Draft Agreement on the European and Community Patents Court) [2011] ECR I-1137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .191 Case C-27/09 P France v OMPI, ECLI:EU:C:2011:853 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .522 Case C-31/09 Bolbol [2010] ECR I-5539 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218 Case C-63/09 Walz [2010] ECR I-4239 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210 Case C-70/09 Hengartner and Gasser v Landesregierung Voralberg [2010] I-7233 . . . . . . . . . . . . .269 Case C-160/09 Katsivardas [2010] ECR I-4501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210 Case C-240/09 Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky [2011] ECR I-1255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249–50, 260 Joined Cases C-288/09 and C-289/09 British Sky Broadcasting Group and Pace, [2011] ECR I-2851 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219 Case C-380/09 P Melli Bank plc, ECLI:EU:C:2012:137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .520 Case C-548/09 P Bank Melli Iran v Council, ECLI:EU:C:2011:735 . . . . . . . . . . . . . . . . . . . . . 224, 517 Joined Cases C-7/10 and C-9/10 Staatssecretaris van Justitie v Tayfun Kahveci and Osman Inan, ECLI:EU:C:2011:673 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .267 Case C-79/10 Systeme Helmholz, ECLI:EU:C:2011:797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217 Case C-130/10 European Parliament v Council, ECLI:EU:C:2012:472. . . . . . . . . . . . . . . . . . . 512, 538 Case C-338/10 Grünwald Logistik Service GmbH (GLS) v Hauptzollamt Hamburg-Stadt, ECLI:EU:C:2012:158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .370 Case C-366/10 Air Transport Association of America (ATAA) et, ECLI:EU:C:2011:864. . . . 159, 214, 216, 260, 269–70, 314, 318 Case C-376/10 P Tay Za v Council, ECLI:EU:C:2012:138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521 Joint Cases C-539/10 P and 550/10 P Stichting Al-Aqsa ECLI:EU:C:2012:711 . . . . . . . . . . . . . . . .522 Joined Cases C-584/10 P, C-593/10 P and C-595/10 P, Kadi II, ECLI:EU:C:2013:518. .223–25, 517, 519–20 Case C-615/10 Insinööritoimisto InsTiimi Oy, ECLI:EU:C:2012:324 . . . . . . . . . . . . . . . . . . . . . . . . .481 Case C-11/11 Air France v Folkerts, ECLI:EU:C:2013:106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .211 Case C-35/11 Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue, The Commissioners for Her Majesty’s Revenue & Customs, ECLI:EU:C:2012:707 . . . . . . . . . . . .46 Joined Cases C-320/11, C-330/11, C-382/11 and C-383/11 Digitalnet and Others [2012], ECLI:EU:C:2012:745 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219 Case C-410/11 Espada Sánchez and Others, ECLI:EU:C:2013:479 . . . . . . . . . . . . . . . . . . . . . . . . . . .211 Case C-414/11 Daiichi Sankyo Co. Ltd Sanofi-Aventis Deutschland GmbH v DEMO Anonymos Viomichaniki kai Emporiki Etairia Farmakon, ECLI:EU:C:2013:520 . . . . . . . . . . . . 41, 44–45, 220 Case C-431/11 United Kingdom v Council, ECLI:EU:C:2013:589 . . . . . . . . . . . . . . . . . . . . . . . . . . . .386 Case C-658/11 European Parliament v Council, ECLI:EU:C:2014:2025 . . . . . . . . .143, 149, 444, 539 Case C-114/12 Commission v Council, ECLI:EU:C:2014:2151 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140 Case C-137/12 Commission v Council, ECLI:EU:C:2013:675 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41–42

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C-239/12 P Abdulrahim, ECLI:EU:C:2013:331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521 C-348/12 P Kala Naft, ECLI:EU:C:2013:776 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .520 C-356/12 Glatzel, ECLI:EU:C:2014:350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .220 C-363/12 Z, ECLI:EU:C:2014:159 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220, 260 C-370/12 Pringle, ECLI:EU:C:2012:756 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169–70 C-377/12 Commission v Council, ECLI:EU:C:2014:1903 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70 C-399/12 Germany v Council, ECLI:EU:C:2014:2258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155–57 C-314/13 Vladimir Peftiev, ECLI:EU:C:2014:1645 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521 C-481/13 Qurbani, ECLI:EU:C:2014:2101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218 C-21/14 P-R Commission v Rusal Armenal, pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .371 C-263/14 European Parliament v Council, pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150, 539

B. GENERAL COURT (FORMERLY COURT OF FIRST INSTANCE) Joined Cases T-466, T-469, T-473, T-474 and T-477/93 O’Dwyer and Others v Council [1995] ECR II-2071 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .312 Case T-521/93 Atlanta AG and Others v Council [1996] ECR II-1707 . . . . . . . . . . . . . . . . . . . . . . 291 Case T-115/94 Opel Austria GmbH v Council [1997] ECR II-39 . . . . . . . . . . . . . . . .146, 227, 312–13 Case T-155/94 Climax Paper Converters Ltd v Council [1996] ECR II-873 . . . . . . . . . . . . . . . . . . .368 Case T-161/94 Sinochem Heilongjang v Council [1996] ECR II-695 . . . . . . . . . . . . . . . . . . . . . . . . .370 Case T-184/95 Dorsch Consult Ingenieurgesellschaft mbH v Council and Commission [1998] ECR II-667 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293–94 Case T-84/97 Bureau européen des unions des consommateurs (BEUC) v Commission [1998] ECR II-796 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .374 Case T- 267/97 Broome & Wellington v Commission [1998] ECR II-2191 . . . . . . . . . . . . . . . . . . . .374 Case T-34/98 Petrotub and Republica v Council [1999] ECR II-3837 . . . . . . . . . . . . . . . . . . . . 305–06 Case T-192/98 Eurocoton v Council, ECLI:EU:T:2005:104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307, 373 Case T-3/99 Banatrading GmbH v Council [2001] ECR II-2123 . . . . . . . . . . . . . . . . . . . . 291, 304–05 Case T-18/99 Cordis Obst und Gemüse Großhandel GmbH v Commission [2001] ECR II-913 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291, 305 Case T-30/99 Bocchi Food Trade International GmbH v Commission [2001] ECR II-943 . . . . . . .291 Case T-52/99 T Port GmbH & Co KG v Commission [2001] ECR II-981 . . . . . . . . . . . . . . . 291, 305 Case T-196/99 Area Cova and Others v Council and Commission [2001] ECR II-3597 . . . . . . . .294 Case T- 69/00 FIAMM and FIAMM Technologies [2005] ECR II-5393 . . . . . . . . . . . . . . . . . . . . . .292 Case T-174/00 Biret International SA v Council [2002] ECR II-17 . . . . . . . . . . . . . . . . . . . . . . . . . .292 Case T-210/00 Etablissements Biret et Cie. SA v Council [2002] ECR II-47 . . . . . . . . . . . . . . . . . . .292 Case T-26/01 Fiocchi [2003] ECR II-3951 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Joined Cases T-64/01 and T-65/01 Afrikanische Frucht-Compagnie GmbH and Internationale Fruchtimport Gesellschaft Weichert & Co v Council and Commission, [2004] ECR II-521 . . .294 Case T-135/01 Fedon & Figli and Others [2005] ECR II-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .292 Case T-306/01 Ahmed AH Yusuf and Al Barakaat International Foundation v Council, [2005] ECR II-3533 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214, 220, 505, 514, 431 Case T-315/01 Kadi v Council and Commission [2005] ECR II-3649 . . . . . . . . . . . . . . . 214, 216, 220 Case T-228/02 Modjahedines v Council [2006] ECR II-4665 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .522 Case T-47/03 Sison v Council, [2007] ECR II-73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521–22 Case T-231/04 Greece v Commission [2007] ECR II-63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .313 Case T-49/07 Fahas v Council [2010] ECR II-5555 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521 Case T-256/07 OMPI v Council [2008] ECR II-3019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .522 Case T-284/08 PMOI v Council [2008] ECR II-3487 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .522 Case T-85/09 Kadi v Commission [2010] ECR II-5177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223, 516

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Case T-512/09 Rusal Armenal, ECLI:EU:T:2013:571 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .370 Case T-493/10 Persia International Bank plc, ECLI:EU:T:2013:398 . . . . . . . . . . . . . . . . . . . . . . . . . .520 Case T-256/11 Ezz et al, ECLI:EU:T:2014:93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521

C. INTERNATIONAL COURT OF JUSTICE Reparations for Injuries Suffered in the Service of the United Nations (1949) ICJ Rep. 174 . . . . . . .15 Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt (1980) ICJ Rep. 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200

D. EUROPEAN COURT OF HUMAN RIGHTS Application no. 45036/98 Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v. Ireland . . . .499

E. NATIONAL COURTS Internationale Handelsgesellschaft v EVFG [1974] 2 CMLR 540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 Crotty v An Taoiseach and Others [1987] 2 CMLR 666 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .413 Wünsche Handelsgesellschaft [1987] 3 CMLR 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 Brunner v European Union Treaty [1994] 1 CMLR 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85, 125

F. WTO DECISIONS Ireland – Measures Affecting the Grant of Copyright and Neighbouring Rights – Request for the Establishment of a Panel by the United States WT/DS82/2 of 12 January 1998 . . . . .203 European Communities – Measures Affecting the Grant of Copyright and Neighbouring Rights – Request for the Establishment of a Panel by the United States WT/DS115/2 of 12 January 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203 European Communities – Customs Classification of Certain Computer Equipment – Report of the Panel WT/DS62/R, WT/DS67/R, WT/DS68/R of 5 February 1998 . . . . . . . . . .203 European Communities – Enforcement of Intellectual Property Rights for Motion Pictures and Television Programs – Request for Consultations by the United States WT/DS124/1 and WTO doc WT/DS125/1 respectively, both of 7 May 1998 . . . . . . . . . . . . . . . . . . . . . . . . . .203 European Communities – Customs Classification of Certain Computer Equipment – AB-1998-2 – Report of the Appellate Body WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/ AB/R of 5 June 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203

Table of Legislation Table of Legislation

Table of Legislation

EU PRIMARY LAW

EC and EU Treaties Act of Accession (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345, 348–49 Art 6(2)–(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 Art 6(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 Art 6(12)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 Treaty of Accession for Bulgaria and Romania (2005) [2005] OJ L157/4 Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 Treaty of Accession for Croatia [2012] OJ L112/10 Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 European Atomic Energy Community (EURATOM) Treaty . . . . . . . . . . . . . . . . . . .163–65, 390, 475 Art 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174 Art 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166 Art 103–5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230 Art 184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Single European Act 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411, 413–14, 423, 440 Title III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .413 Art 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .413 Art 30(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .413 Treaty Establishing a Constitution for Europe . . . .1, 7, 9, 44, 76, 381, 413, 416, 421, 425, 427, 430, 434, 449, 450, 479 Treaty Establishing the European Community (Consolidated Version) . . . . .12, 67–69, 80, 95, 124, 213, 215, 232, 260, 326 Title III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Art 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39, 81–82, 168 Art 3(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87 Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .188, 192, 198, 269 Art 11(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Art 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260–61 Art 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272, 282, 329 Art 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272, 322, 329, 487 Art 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Art 44(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 47(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521 Art 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .348 Art 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119 Art 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497, 511 Art 60(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338, 444 Art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390

xxv

xxvi

Table of Legislation

Art 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Art 75(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Art 75(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103 Art 75(1)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Art 80(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 84(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112, 114–15, 117 Art 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272, 276 Art 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Art 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43, 96 Art 100a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Art 100c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .531 Art 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Art 116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88, 173 Art 130s(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Art 130u . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Art 130u(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Art 131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 35 Art 132 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Art 133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 52, 55, 67, 156, 164, 213, 240, 344, 390, 500 Art 133(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Art 133(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, Art 133(5)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 Art 133(6)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Art 133(6)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 Art 172 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Art 174(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 Art 174(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55, 57, 163 Art 175(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55, 56, 156, 1877 Art 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68, 69, 532 Art 177(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Art 179(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526 Art 181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Art 181a(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526 Art 181(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Art 210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158 Art 220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .222 Art 228 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215 Art 230 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233, 252, 532 Art 234 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210, 236, 238, 241, 243, 247 Art 234(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235 Art 235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Art 253 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .306 Art 281 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Art 288 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .291 Art 296 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Art 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .496 Art 300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137, 159, 211, 2369, Art 300(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .192 Art 300(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159

Table of Legislation xxvii Art 300(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151 Art 300(3)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151, 152 Art 300(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .222, 232–34, 239 Art 300(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11, 243, 247, 250 Art 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215, 444, 496–97, 504, 511 Art 307 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212, 322, 327, 329, 337, 347, 501 Art 307(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .344 Art 308 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 68, 105, 124, 125, 240, 390, 505, 511 Art 310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236, 237, 238 Treaty Establishing the European Coal and Steel Community (ECSC) . . . . . . . .2836, 390, 411, 448 Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Art 75(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230 Treaty Establishing the European Economic Community (EEC) . . . . . . . . . . . 98, 163, 213, 258, 412 Part IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261 Art 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Art 110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212 Art 111(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212 Art 113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212 Art 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212 Art 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24–25 Treaty on European Union (Amsterdam) . . . . . . . . . . . . . . . . . . . . . . . . .31, 39, 44, 121, 427, 439, 448 Treaty on European Union (Maastricht) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 150–51, 163, 497 Art J.1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .414 Art J.3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .438 Art K.3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .531 Treaty on European Union (Nice) . . . . . 12, 39–40, 44, 46, 71, 75, 133, 135, 153, 387, 439, 451–52, 463, 532, 535 Declaration 23 on the future of the Union [2001] OJ C80/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75 Treaty on European Union (TEU) (Consolidated Version) Title V . . . .10, 162, 384, 420, 422, 423, 429–30, 438, 440, 442, 444, 447, 458, 470, 511, 537, 538 Art 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Art 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12, 415 Art 3(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 Art 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .386 Art 4(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Art 4(3) . . . . .78, 81, 88, 95, 101, 145, 182, 186, 188, 192, 198, 211, 217, 251, 269, 324, 335, 341 Art 6(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124, 148 Art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .419 Art 11(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .534 Art 13(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143 Art 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 447 Art 17(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141, 169, 432, 434 Art 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428, 452 Art 18(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .428 Art 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .420–21, 537, 540 Art 22(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .426 Art 23(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439, 532 Art 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 476 Art 24(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138–39, 417, 419–21, 438, 443–44, 505, 512 Art 24(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422, 429, 457

xxviii

Table of Legislation

Art 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .424 Art 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .427 Art 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .434 Art 28(2)–(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .423 Art 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150, 425, 539 Art 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454, 476 Art 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .418, 447, 461, 531 Art 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 158, 199–200, 416, 418, 531–33, 535 Art 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189 Protocol (No 10) on permanent structured cooperation established by Article 42 of the Treaty on European Union. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .479 Protocol (No 22) on the position of Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .450 Declaration No 10 (annexed to the TEU) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Treaty on the Functioning of the European Union (TFEU) (Consolidated Version) Part V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9–10, 17, 76, 384 Title IV, Chapter II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Art 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Art 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Art 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Art 3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 76, 126–29, 177 Art 4(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 523, 535 Art 19(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Art 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260, 267, 353 Art 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272, 275, 282, 322, 329–30 Art 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272, 274, 329, 487 Art 50(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .348 Art 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Art 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46, 335–36, 338 Art 64(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46, 135, 335, 338 Art 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335, 338 Art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458, 495 Art 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335, 405, 511–13, 538 Art 78(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218–19 Art 79(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Art 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150, 539 Art 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Art 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150, 539 Art 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Art 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70, 84, 91, 390 Art 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Art 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78, 90 Art 95(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Art 100(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112, 216, 390 Art 110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272, 276 Art 113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135, 390 Art 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41, 52, 60, 440 Art 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135, 390 Art 133(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136 Art 137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .438 Art 153 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95

Table of Legislation xxix Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art Art

153(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 93, 96 153(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95 165(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 165(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 166(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136 166(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 167(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 168(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 168(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136 173(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 189(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 191(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56, 316–17 191(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, , 55, 57, 70, 163 192(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55, 57, 60, 62, 64 195(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 196(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 197(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 17–18, 36 207 . . . 17–23, 25–26, 29, 31, 33–45, 47–48, 52, 54–55, 58, 64, 67, 70–73, 77, 103, 156, 164, 175, 213, 240, 344, 379, 390, 486, 489, 500 207(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 30–32, 38, 40–41, 44–46, 48, 52, 54, 62, 67, 524 207(2)–(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 133–34, 358 207(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 209(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148, 387, 526 214(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .524 214(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134 215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 335–36, 338–39, 341, 495, 504–05, 508, 511–13, 538 216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 126–27 216(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76, 127–29, 177 216(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209–12, 219, 236, 243, 254 217 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10, 75, 148, 150, 237–38, 276, 381–84, 386 218 . . . . . . . . . . . . . . . . . . . . 137, 140, 142, 148, 149–50, 164, 192, 210–11, 247, 254, 384, 444 218(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138, 140, 141, 147 218(2)–(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141 218(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138–41, 155, 165, 170, 431 218(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146–47, 154 218(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147, 149–54, 382 218(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154–55 218(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147–48, 382, 384 218(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 155, 192 218(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142–45, 149, 155–58 218(11) . . . . . . . . . . . . . . . . 21, 36, 55, 58, 121, 124, 149, 154, 166, 197, 201, 222, 230–39, 435 219 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137 219(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 222 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458–59 222(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .458 222(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .458 222(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .458 238(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135, 365 241 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .304

xxx

Table of Legislation

Art 257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .238 Art 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112, 184, 243, 245–46, 326 Art 266 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159 Art 267 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210, 233, 235–36, 238, 239–45, 247, 251, 254, 330, 377 Art 268 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43, 117 Art 288 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265, 424 Art 289(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128 Art 291(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134, 354, 358 Art 291(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134, 354, 368 Art 293(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .373 Art 340 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290–91 Art 347 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .221, 496, 506–08 Art 351 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212, 231–51, 501, 511 Art 351(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322, 330, 331, 341, 344 Art 351(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91–92, 324–27, 331–34, 337, 341, 342, 345–46, 350 Art 352 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102, 105, 124, 135, 390, 417, 505 Treaty Establishing the European Coal and Steel Community (ECSC) . . . . . . . … 37, 230, 390, 411 Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

International Agreements Agreement with the Caribbean, African and Pacific countries and Cooperation Agreements . . . . .244 Agreement establishing an association between the European Economic Community and Greece (Athens Agreement) [1961] OJ English Special Edition, Second Series, I External Relations (1) p 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210 Art 53(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .276 Agreement on intellectual property rights between Austria and the Czechoslovak Socialist Republic in June 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .328 Agreement between EEC and China on trade in textile products [1988] OJ L380/2 . . . . . . . . . . .43 Agreement between EEC and USSR on trade in textile products [1988] OJ L397/2 . . . . . . . . . . . .43 Agreement between EEC and Austria on the control and reciprocal protection of quality wines and ‘retsina’ wine [1989] OJ L56/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Agreement Amending the Fourth ACP–EC Convention of Lomé December 1989 . . . .167–68, 277, 281 Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on trade and commercial and economic cooperation [1990] OJ 68/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Agreement between EC and Australia on trade in wine [1994] OJ L86/3 . . . . . . . . . . . . . . . . . . . . .43 Agreement between the French Republic, the European Atomic Energy Community and the International Atomic Energy Agency for the application of safeguards in connection with the Treaty for the Prohibition of Nuclear Weapons in Latin America and Caribbean [2000] OJ C298/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164 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 [2000] OJ L317/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382, 387, 532 Agreement between the European Union and Bosnia and Herzegovina (BiH) on the activities of the European Union Police Mission (EUPM) in BiH [2002] OJ L293/2 . . . . . . .474

Table of Legislation xxxi Agreement between the European Union and the Czech Republic on the participation of the Czech Republic in the European Union-led Forces in the Former Yugoslav Republic of Macedonia [2003] OJ L229/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Czech Republic on the participation of the Czech Republic in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Government of the Swiss Confederation, represented by the Federal Department of Foreign Affairs, on the participation of Switzerland in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Kingdom of Norway on the participation of the Kingdom of Norway in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the North Atlantic Treaty Organisation on the Security of Information [2003] OJ L80/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Agreement between the European Union and the Republic of Bulgaria on the participation of the Republic of Bulgaria in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Cyprus on the participation of the Republic of Cyprus in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Estonia on the participation of the Republic of Estonia in the European Union-led forces (EUF) in the Former Yugoslav Republic of Macedonia [2003] OJ L216/61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Estonia on the participation of the Republic of Estonia in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Hungary on the participation of the Republic of Hungary in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Iceland on the participation of the Republic of Iceland in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Government of Latvia on the participation of the Republic of Latvia in the European Union-led forces (EUF) in the former Yugoslav Republic of Macedonia [2003] OJ L313/79. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Latvia on the participation of the Republic of Latvia in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Lithuania on the participation of the Republic of Lithuania in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Poland on the participation of Polish armed forces in the European Union force (EUF) in the former Yugoslav Republic of Macedonia [2003] OJ L285/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Poland on the participation of the Republic of Poland in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L64/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Slovenia on the participation of the Republic of Slovenia in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471

xxxii Table of Legislation Agreement between the European Union and the Republic of Turkey on the participation of the Republic of Turkey in the European Union-led forces in the Former Yugoslav Republic of Macedonia [2003] OJ L234/23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Turkey on the participation of the Republic of Turkey in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and Romania on the participation of Romania in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Russian Federation on the participation of the Russian Federation in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L197/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Slovak Republic on the participation of the Slovak Republic in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and Ukraine on the participation of Ukraine in the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2003] OJ L239/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the Member States of the European Union concerning the status of military and civilian staff seconded to the institutions of the European Union, of the headquarters and forces which may be made available to the European Union in the context of the preparation and execution of the tasks referred to in Article 17(2) of the Treaty on European Union, including exercises, and of the military and civilian staff of the Member States put at the disposal of the European Union to act in this context (EU SOFA) [2003] OJ C321/6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Agreement between the European Union and the Former Yugoslav Republic of Macedonia on the status and activities of the European Union Police Mission in the Former Yugoslav Republic of Macedonia (EUPOL Proxima) [2004] OJ L16/66 . . . . . . . . . . . . . . . . . . . . . . . . . . .474 Agreement between the European Union and Georgia on the status and activities of the European Union Rule of Law Mission in Georgia, EUJUST THEMIS [2004] OJ L389/42. . . . .473 Agreement between the European Union and the Kingdom of Norway on the participation of the Kingdom of Norway in the European Union Police Mission in the former Yugoslav Republic of Macedonia (EUPOL Proxima) [2004] OJ L354/86 . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Turkey on the participation of the Republic of Turkey in the European Union Police Mission in the former Yugoslav Republic of Macedonia (EUPOL Proxima) [2004] OJ L354/90 . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and Romania on the participation of Romania in the European Union-led forces (EUF) in the Former Yugoslav Republic of Macedonia [2004] OJ L120/62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Slovak Republic on the participation of the armed forces of the Slovak Republic in the European Union-led Forces (EUF) in the Former Yugoslav Republic of Macedonia [2004] OJ L012/54 . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Swiss Confederation on the participation of the Swiss Confederation in the European Union police mission in the former Yugoslav Republic of Macedonia (EUPOL Proxima) [2004] OJ L354/78 . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and Ukraine on the participation of Ukraine in the European Union Police Mission in the former Yugoslav Republic of Macedonia (EUPOL Proxima) [2004] OJ L354/82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Albania on the participation of the Republic of Albania in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L65/35 . . . . . . . . . . . . . . . . . . . . . . .471

Table of Legislation xxxiii Agreement between the European Union and the Kingdom of Morocco on the participation of the Kingdom of Morocco in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L34/47 . . . . . . . . . . . . . .471 Agreement between the European Union and the Kingdom of Norway establishing a framework for the participation of the Kingdom of Norway in the European Union crisis-management operations [2005] OJ L67/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Agreement between the European Union and New Zealand on the participation of New Zealand in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L127/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Agreement between the European Union and the Republic of Bulgaria establishing a framework for the participation of the Republic of Bulgaria in the EU crisis management operations [2005] OJ L46/50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Agreement between the European Union and the Republic of Iceland establishing a framework for the participation of the Republic of Iceland in the European Union crisis-management [2005] OJ L67/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Agreement between the Former Yugoslav Republic of Macedonia and the European Union the security procedures for the exchange of classified information on exchange of classified information with Former Yugoslav Republic of Macedonia [2005] OJ L94/39 . . . . . . . . . . . . .476 Agreement between the European Union and Romania establishing a framework for the participation of Romania in the European Union crisis-management operations [2005] OJ L67/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Agreement between the European Union and Romania on security procedures for the exchange of classified information [2005] OJ L118/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Geneva Agreement on Trade in Bananas [2010] OJ L141/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .296 Agreement between the European Union and the United States of America on the processing and transfer of Financial Messaging Data from the European Union to the United States for the purposes of the Terrorist Finance Tracking Program [2010] OJ L195/5 . . . . . . . . . . . .153 Agreement on the Protection and Sustainable Development of the Prespa Park Area [2011] OJ L258/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Agreement between the United States of America and the European Union on the use and transfer of passenger name records to the United States Department of Homeland Security [2012] OJ L174/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154 Agreement between the European Union and Australia on the processing and transfer of Passenger Name Record (PNR) data by air carriers to the Australian Customs and Border Protection Service [2012] OJ L18/4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154 Association Agreement between the Association European Community and its Member States, of the one part, and the Republic of Chile, of the other part [2002] OJ L352/3 . . . . .382 Association Agreement concluded between the Community and its Member States and Turkey (Ankara Agreement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236–39, 267, 276, 278 Berne Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202, 243–45 Central European Free Trade Agreement Art 6(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .345 Cooperation Agreement between the European Community and the Republic of India on partnership and development [1994] OJ L223/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Cooperation and Customs Union Agreement with San Marino [2002] OJ L84/43 . . . . . . . 146, 175 Cotonou Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .382, 387–89, 532 Dayton Peace Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .394 EC–USA Agreement on the processing and transfer of passenger name record data by air carriers to the United States Department of Homeland Security, Bureau of Customs and Border Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .233

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Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Tunisia, of the other part [1998] OJ L97/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Hashemite Kingdom of Jordan, of the other part [2002] OJ L129/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398, 399 Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part [2004] OJ L304/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Republic of Algeria, of the other part [2005] OJ L265/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Republic of Lebanon, of the other part [2006] OJ L143/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398, European Convention on Human Rights (ECHR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124, 231, 269 European Economic Area Agreement (EEA) [1994] OJ L1/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .385 Protocol 28, Article 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243–44 Framework Agreement on a Multilateral Nuclear Environmental Programme in the Russian Federation and its Protocol on Claims, Legal Proceedings and Indemnification . . . . . . . . . . .164 Free Trade Agreement with Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .268, 272–74, 312 Art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .273 Art 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .273 Free Trade Agreement between the Community and Portugal [1972] English Special Edition L 301/165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211, 260, 262–63, 271–72 Art 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .271 Art 21(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262, 267–68 Art 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .271 Free Trade Agreement between the Community and Sweden [1972] OJ L300/96 Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268, 273 Free trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part [2011] OJ L127/6. . . . . . . . . . . . . . . . . . . . . . 380–81 Friendship, Navigation and Commerce Agreement between Germany and the United States 1954 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343 Art 17(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343 General Agreement on Tariffs and Trade (GATT 1947)….36, 212, 215, 259, 285–86, 298, 323, 371 Art V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281, 319 Art XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .259 Anti-Dumping Code annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .304 General Agreement on Tariffs and Trade (GATT 1994) . . . 36, 203, 285–86, 288–89, 303, 305, 371 Art II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203

Table of Legislation xxxv Art VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357, 362 Agreement on Trade-Related Aspects of Intellectual Property Rights . . . . . . . . . . … 36, 101, 288 Agreement on Textiles and Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .286 Government Procurement Agreement between EC and USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .344 ILO Convention No 170 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93–98, 100, 196, 231 Interim Agreement on Trade and Trade-related matters between EEC and ECSC and Czech and Slovak Republic [1992] OJ L115/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Interim Agreement on Trade and Trade-related matters between EEC and ECSC and Hungary [1992] OJ L116/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Interim Agreement on Trade and Trade-related matters between EEC and ECSC and Bulgaria [1993] OJ L323/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 International Agreement on Natural Rubber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 33, 35, 172, 489 Investment, Promotion and Protection Agreement between the UK and Paraguay Art 7(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .347 Lomé Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167–68, 260, 277, 281, 387 Multi-Fibre Agreement on Textiles and Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Memorandum of Understanding Between the European Commission and the Ministry of Commerce of the People’s Republic of China on the Export of Certain Chinese Textile and Clothing Products to the European Union, 12 June 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . .354 North East Atlantic Fisheries Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87, 183 Open Aviation Area Agreement between the EC and United States . . . . . . . . . . . . . . . . . . . . . . . . .342 Partnership and Cooperation Agreement (PCA) between the European Communities and their Member States and Belarus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .389 Partnership and Cooperation Agreement between the European Communities and their Member States, of one part, and the Russian Federation, of the other part [1997] OJ L327/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .267, 389–90, 392 Art 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .392 Partnership and Cooperation Agreement between the European Communities and their Member States, and Ukraine [1998] OJ L49/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389–90, 392 Art 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .392 Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Moldova [1998] OJ L181/3 . . . . . . . . . . . . . . . . . 389, 391–92 Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Kazakhstan [1999] OJ L196/3 . . . . . . . . . . . . . . . . . . . . . . .389 Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and Georgia, of the other part [1999] OJ L205/3 . . . . . . . . .389 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .389 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .389 Art 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .392 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .389 Art 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .392 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] 229/3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389, 392

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Partnership and Cooperation Agreement (PCA) between the European Communities and their Member States and Turkmenistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .389 Partnership and Cooperation Agreement (PCA) 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] L 350/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389, 392 Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the former Yugoslav Republic of Macedonia, of the other part [2004] OJ L84/13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393–95 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 [2005] OJ L26/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .394 Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and Bosnia and Herzegovina, of the other part [2008] OJ L169/13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393, 395 Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Albania, of the other part [2009] OJ L107/166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .393 Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Montenegro, of the other part [2010] OJ L108/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .393 Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Serbia, of the other part [2013] OJ L278/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .393 Trade and Cooperation Agreement with the Soviet Union [1989] OJ L68/3 . . . . . . . . . . . . . . . . .390 United Nations Convention on the Law of the Sea . . . 65, 173, 175, 184–91, 227–28, 246, 263–64, 266, 315 United Nations Draft Articles on the International Responsibility of International Organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200 Art 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200 Art 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200–01 Art 6(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201 Art 6(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201 Vienna Convention on the Law of Treaties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56, 146, 159, 325, 338 Art 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146, 312, 313 Art 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209, 321 Art 30(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .321 Art 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56, 336 Art 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227, 312, 339 World Trade Organisation Agreement. . . . . . 36, 39, 45, 73, 104, 111, 150, 166, 170, 232, 240, 242, 247, 252–253, 263, 282–87, 289, 294, 298, 300, 308, 371 Article XVI(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .295 WTO Agreement on Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 WTO Agreement on Application of Sanitary and Phytosanitary Measures . . . . . . . . . . . 37, 285, 292 WTO Agreement on Import Licensing Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .286 WTO Agreement on Subsidies and Countervailing Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .355 WTO Agreement on Technical Barriers to Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37, 288, 308 WTO Agreement on Textiles and Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .286 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) . . . .36, 42–46, 52, 101–02, 104–08, 110, 118, 154, 165, 201, 203, 240–43, 246–48, 252–54, 285, 288, 308–10 Art 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309 Art 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .253

Table of Legislation xxxvii Art 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240-43, 252, 254–55, 309–10 Art 50(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240, 252–53, 309–11 Art 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309 WTO Anti-Dumping Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357–78 WTO General Agreement on Trade in Services (GATS). . . . . . . . . 36, 38–39, 41–42, 101–103, 105, 107–108, 110, 118, 127 WTO International Dairy Arrangement (IDA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219, 307 Yaoundé Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170, 260–61, 267

SECONDARY EU LEGISLATION

EU Directives Council Directive 67/548/EEC of 27 June 1967 on the approximation of laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances [1967] OJ L196/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96 Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions [1976] L 39/40 . . . . . . . . . . . . . . . . . . . . 332–34 Council Directive 79/831/EEC of 18 September 1979 amending for the sixth time Directive 67/548/EEC on the approximation of the laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances [1979] OJ L259/10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96 Council Directive 80/1107/EEC of 27 November 1980 on the protection of workers from the risks related to exposure to chemical, physical and biological agents at work [1980] OJ L327/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96–97 Council Directive 83/189/EEC of 28 March 1983 laying down a procedure for the provision of information in the field of technical standards and regulations [1983] OJ L109/8 . . . . . . .494 Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty [1988] OJ L178/5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46–47 Council Directive 88/379/EEC of 7 June 1988 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the classification, packaging and labelling of dangerous preparations [1988] OJ L187/14 . . . . . . . . . . . . . . . . . . . .96 First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks [1989] OJ L40/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .274 Second Council Directive 89/646/EEC of 15 December 1989 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions and amending Directive 77/780/EEC [1989] OJ L386/1 103, 127 Eleventh Council Directive 89/666/EEC of 21 December 1989 concerning disclosure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State [1989] OJ L395/36. . . . . . . . . . . . . . . . . . . . . . .103 Council Directive 90/531/EEC of 17 September 1990 on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [1990] OJ L297/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343 Council Directive 90/618/EEC of 8 November 1990 amending, particularly as regards motor vehicle liability insurance, Directive 73/239/EEC and Directive 88/357/EEC which concern the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance [1990] OJ L330/44 . . . . . . . . . . . . . . . . . . . . . . . . . . .103

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Council Directive 90/675/EEC of 10 December 1990 laying down the principles governing the organization of veterinary checks on products entering the Community from third countries [1990] OJ L373/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .285 Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [1992] OJ L76/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343 Council Directive 92/75/EEC of 22 September 1992 on the indication by labelling and standard product information of the consumption of energy and other resources by household appliances [1992] OJ L297/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [1993] OJ L199/84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343 Directive 98/4/EC of the European Parliament and of the Council of 16 February 1998 amending Directive 93/38/EEC coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [1998] OJ L101/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .345 Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998 amending Directive 98/34/EC laying down a procedure for the provision of information in the field of technical standards and regulations [1998] OJ L217/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .494 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors [2004] OJ L134/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts [2004] OJ L134/114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .481 Directive 2005/35/EC of the European Parliament and of the Council of 7 September 2005 on ship-source pollution and on the introduction of penalties, particularly criminal penalties, for infringements [2005] OJ L255/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .263 Directive 2006/93/EC of the European Parliament and of the Council of 12 December 2006 on the regulation of the operation of aeroplanes covered by Part II, Chapter 3, Volume 1 of Annex 16 to the Convention on International Civil Aviation, second edition (1988), [2006] OJ L 374/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .216 Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community [2009] OJ L8/3 . . 216, 264, 270, 314–15, 318–19 Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community [2009] OJ L146/1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481–82 Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the field of defence and security, and amending Directives 2004/17/EC and 2004/18/EC [2009] OJ L216/76 . . .481 Commission Directive 2012/10/EU of 22 March 2012 amending Directive 2009/43/EC as regards the list of defence-related products [2012] OJ L85/3 . . . . . . . . . . . . . . . . . . . . . . . . . .482

Table of Legislation xxxix EU Regulations Regulation (EEC) No 950/68 of the Council of 28 June 1968 on the common customs tariff [1968] OJ L172/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .353 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 . . . . . . . .77–78, 81–82, 86 Regulation (EEC) No 2603/69 of the Council of 20 December 1969 establishing common rules for exports [1969] OJ English Special Ed (II) 590 . . . . . . . . . . . . . . . . . . . . . . . . . . . 486, 489 Regulation (EEC) No 2141/70 of the Council of 20 October 1970 laying down a common structural policy for the fishing industry [1970] OJ English Special Ed (III) 703 . . . . . . . . . . .88 Regulation (EEC) No 2142/70 of the Council of 20 October 1970 on the common organisation of the market in fishery products [1970] OJ English Special Ed (III) 707. . . . . . .88 Council Regulation (EEC) No 222/77 of 13 December 1976 on Community transit [1977] OJ L38/1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .487 Council Regulation (EEC) No 1468/81 of 19 May 1981 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs or agricultural matters [1981] OJ L144/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .502 Council Regulation (EEC) No 288/82 of 5 February 1982 on common rules for imports [1982] OJ L35/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Council Regulation (EEC) No 1934/82 of 12 July 1982 amending Regulation (EEC) No 2603/69 establishing common rules for exports [1982] OJ L211/1 . . . . . . . . . . . . . . . . . . . .355 Council Regulation (EEC) No 3589/82 of 23 December 1982 on common rules for imports of certain textile products originating in third countries [1982] OJ L374/106 . . . . . . . . . . . . . .24 Council Regulation (EEC) No 3420/83 of 14 November 1983 on import arrangements for products originating in State-trading countries, not liberalized at Community level [1983] OJ L346/6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Council Regulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community [1984] OJ L201/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .303 Council Regulation (EEC) No 2641/84 of 17 September 1984 on the strengthening of the common commercial policy with regard in particular to protection against illicit commercial practices [1984] OJ L252/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302–03, 355 Council Regulation (EEC) No 3094/86 of 7 October 1986 laying down certain technical measures for the conservation of fishery resources [1986] OJ L288/1 . . . . . . . . . . . . . . . . . . . .226 Council Regulation (EEC) No 3677/86 of 24 November 1986 laying down provisions for the implementation of Regulation (EEC) No 1999/85 on inward processing relief arrangements [1986] OJ L351/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .307 Council Regulation (EEC) No 3842/86 of 1 December 1986 laying down measures to prohibit the release for free circulation of counterfeit goods [1986] OJ L357/1 . . . . . . . . . . . . .42 Council Regulation (EEC) No 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 . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 323–27 Council Regulation (EEC) No 4058/86 of 22 December 1986 concerning coordinated action to safeguard free access to cargoes in ocean trades [1986] OJ L378/21 . . . . . . . . . 102–03 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 . . . . . . . . . . . . . . . . . . . .353 Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community [1988] OJ L209/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .303

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Council Regulation (EEC) No 2299/89 of 24 July 1989 on a code of conduct for computerized reservation systems [1989] OJ L220/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113 Council Regulation (EEC) No 2340/90 of 8 August 1990 preventing trade by the Community as regards Iraq and Kuwait [1990] OJ L213/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .496 Council Regulation (EEC) No 3155/90 of 29 October 1990 extending and amending Regulation (EEC) No 2340/90 preventing trade by the Community as regards Iraq and Kuwait [1990] OJ L304/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .496 Commission Regulation (EEC) No 2228/91 of 26 June 1991 laying down provisions for the implementation of Regulation (EEC) No 1999/85 on inward processing relief arrangements [1991] OJ L210/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .307 Council Regulation (EEC) No 3918/91 of 19 December 1991 amending Regulation (EEC) No 2603/69 establishing common rules for exports [1991] OJ L372/31 . . . . . . . . . . . . . . 486, 489 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .539 Council Regulation (EEC) No 1432/92 of 1 June 1992 prohibiting trade between the European Economic Community and the Republics of Serbia and Montenegro [1992] OJ L151/4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499–500 Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers [1992] OJ L240/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112 Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes [1992] OJ L240/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112 Council Regulation (EEC) No 2409/92 of 23 July 1992 on fares and rates for air services [1992] OJ L240/15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112 Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organization of the market in bananas [1993] OJ L47/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .281, 285, 291, 305 Council Regulation (EEC) No 990/93 of 26 April 1993 concerning trade between the European Economic Community and the Federal Republic of Yugoslavia (Serbia and Montenegro) [1993] OJ L102/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497–98, 502–03 Council Regulation (EEC) No 1461/93 of 8 June 1993 concerning access to public contracts for tenderers from the United States of America [1993] OJ L146/1 . . . . . . . . . . . . . . . . . . . . . .344 Council Regulation (EC) No 3697/93 of 20 December 1993 withdrawing tariff concessions in accordance with Article 23 (2) and Article 27 (3) (a) of the Free Trade Agreement between the Community and Austria (General Motors Austria) [1993] OJ L343/1 . . . . . . . .312 Council Regulation (EEC) No 3030/93 of 12 October 1993 on common rules for imports of certain textile products from third countries [1993] OJ L275/1. . . . . . . . . . . . . . . . . . . . . . . . . .354 Council Regulation (EEC) No 3089/93 of 29 October 1993 amending Regulation (EEC) No 2299/89 on a code of conduct for computerized reservation systems [1993] OJ L278/1 . . . .113 Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark [1994] OJ L11/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Council Regulation (EC) No 517/94 of 7 March 1994 on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific Community import rules [1994] OJ L67/1 . . . . . . .354 Council Regulation (EC) No 3286/94 of 22 December 1994 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 [1994] OJ L349/71 . . . . . . . . . . . . . . . . .355 Council Regulation (EC) No 3381/94 of 19 December 1994 setting up a Community regime for the control of exports of dual-use goods [1994] OJ L367/1 . . . . . . . . . . . . . . . . . . . . . . 488–89

Table of Legislation xli Council Regulation (EC) no 456/95 of 20 February 1995 amending Regulation (EEC) No 3438/92 laying down special measures for the transport of certain fresh fruit and vegetables originating in Greece as regards the duration of their application [1995] OJ L47/3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .355 Council Regulation (EC) No 1488/96 of 23 July 1996 on financial and technical measures to accompany (MEDA) the reform of economic and social structures in the framework of the Euro-Mediterranean partnership [1996] OJ L189/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .399 Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidized imports from countries not members of the European Community [1997] OJ L288/1 . . . . .355 Council Regulation (EC) No 2666/2000 of 5 December 2000 on assistance for Albania, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonia, repealing Regulation (EC) No 1628/96 and amending Regulations (EEC) No 3906/89 and (EEC) No 1360/90 and Decisions 97/256/EC and 1999/311/EC [2000] OJ L306/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .395 Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents [2001] OJ L145/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .472 Commission Regulation (EC) No 358/2002 of 26 February 2002 imposing a provisional anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel originating in the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia and accepting an undertaking offered by an exporting producer in Slovakia [2002] OJ L56/4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359–60 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. . . . . . . . .512, 515–16, 518 Council Regulation (EC) No 1972/2002 of 5 November 2002 amending Regulation (EC) No 384/96 on the protection against dumped imports from countries not members of the European Community [2002] OJ L305/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .342 Commission Regulation (EC) No 1381/2002 of 29 July 2002 laying down detailed rules for opening and administration of the tariff quotas for raw cane sugar for refining, originating in the least developed countries, for the marketing years 2002/03 to 2005/06 [2002] OJ L200/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .356 Commission Regulation (EC) No 1401/2002 of 31 July 2002 laying down detailed rules for the opening and administration of the tariff quotas for rice, originating in the least developed countries, for the marketing years 2002/03 to 2008/09 [2002] OJ L203/42 . . . . . .356 Council Regulation (EC) No 807/2003 of 14 April 2003 adapting to Decision 1999/468/EC the provisions 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 (unanimity) [2003] OJ L122/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .539 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 . . . . . 64, 192 Council Regulation (EC) No 461/2004 of 8 March 2004 amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community and Regulation (EC) No 2026/97 on protection against subsidised imports from countries not members of the European Community [2004] OJ L77/12 . . . . .358 Council Regulation (EC) No 533/2004 of 22 March 2004 on the establishment of European partnerships in the framework of the stabilisation and association process [2004] OJ L86/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .396

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Council Regulation (EC) No 2257/2004 of 20 December 2004 amending Regulations (EEC) No 3906/89, (EC) No 1267/1999, (EC) No 1268/1999 and (EC) No 2666/2000, to take into account of Croatia’s candidate status [2004] OJ L389/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .395 Commission Regulation (EC) No 1084/2005 of 8 July 2005 amending Annexes II, III and V to Council Regulation (EEC) No 3030/93 on common rules for imports of certain textile products from third countries [2005] OJ L177/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Commission Regulation (EC) No 1478/2005 of 12 September 2005 amending Annexes V, VII and VIII to Council Regulation (EEC) No 3030/93 on common rules for imports of certain textile products from third countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Council Regulation (EC) No 2112/2005 of 21 November 2005 on access to Community external assistance [2005] OJ L344/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .399 Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA) [2006] OJ L210/82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395, 525 Regulation (EC) 1638/2006 of the European Parliament and of the Council of 24 October 2006 laying down general provisions establishing a European Neighbourhood and Partnership Instrument [2006] OJ L310/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .525 Regulation (EC) No 1717/2006 of the European Parliament and of the Council of 15 November 2006 establishing an Instrument for Stability [2006] OJ L327/1 . . . . . . . . . 526–27 Regulation (EC) No 1889/2006 of the European Parliament and of the Council of 20 December 2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide [2006] OJ L386/1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .525 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .525 Council Regulation (EC) No 1934/2006 of 21 December 2006 establishing a financing instrument for cooperation with industrialised and other high-income countries and territories [2006] OJ L405/41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .525 Council Regulation (EURATOM) 300/2007 of 19 February 2007 establishing an Instrument for Nuclear Safety Cooperation [2007] OJ L81/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .525 Council Regulation (EC) No 450/2008 of 23 April 2008 laying down the Community Customs Code (Modernised Customs Code) [2008] OJ L145/1 . . . . . . . . . . . . . . . . . . . . . . . . .353 Council Regulation (EC) No 479/2008 29 April 2008 on the common organisation of the market in wine, amending Regulations (EC) No 1493/1999, (EC) No 1782/2003, (EC) No 1290/2005, (EC) No 3/2008 and repealing Regulations (EEC) No 2392/86 and (EC) No 1493/1999 [2008] OJ L148/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157 Commission Regulation (EC) No 1109/2008 of 6 November 2008 amending for the 100th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban [2008] OJ L299/23 . . . . . . . . . . . . . . . . . . . . . . .515 Commission Regulation (EC) No 1190/2008 of 28 November 2008 amending for the 101st time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban [2008] OJ L322/25 . . . . . . . . . . . . . . . . . . . . . . .516 Council Regulation (EC) No 491/2009 of 25 May 2009 amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) [2009] OJ L154/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157 Regulation (EC) No 1900/2006 of the European Parliament and of the Council of 20 December 2006 amending Council Regulation (EEC) No 3922/91 on the harmonisation of technical requirements and administrative procedures in the field of civil aviation [2006] OJ L377/176 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .216

Table of Legislation xliii Council Regulation (EC) No 260/2009 of 26 February 2009 on the common rules for imports [2009] OJ L84/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354, 506 Regulation (EC) No 398/2009 of the European Parliament and of the Council of 23 April 2009 amending Council Regulation (EC) No 338/97 on the protection of species of wild fauna and flora by regulating trade therein, as regards the implementing powers conferred on the Commission [2009] OJ L126/5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156 Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items [2009] OJ L134/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355, 492–94 Council Regulation (EC) No 597/2009 of 11 June 2009 on protection against subsidised imports from countries not members of the European Community [2009] OJ L188/93 . . . .355 Council Regulation (EC) No 625/2009 of 7 July 2009 on common rules for imports from certain third countries [2009] OJ L185/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Council Regulation (EC) No 1061/2009 of 19 October 2009 establishing common rules for exports [2009] OJ L291/1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355, 506 Council Regulation (EC) No 1225/2009 of 30 Novemeber 2009 on protection against dumped imports from countries not members of the European Community [2009] OJ L343/51 . . . .358 Council Regulation (EU) No 1286/2009 of 22 December 2009 amending Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban [2009] OJ L 346/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .512 Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers [2011] OJ L55/13 . . 134, 358, 365 Regulation (EU) No 511/2011 of the European Parliament and of the Council of 11 May 2011 implementing the bilateral safeguard clause of the Free Trade Agreement between the European Union and its Member States and the Republic of Korea [2011] OJ L145/19 . . . .381 Regulation (EU) No 1232/2011 of the European Parliament and of the Council of 16 November 2011 amending Council Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items [2011] OJ L326/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .492 Regulation (EU) No 388/2012 of the European Parliament and of the Council of 19 April 2012 amending Council Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items [2012] OJ L129/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .492 Commission Implementing Regulation (EU) No 933/2012 of 11 October 2012 amending for the 180th time Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with the Al Qaida network [2011] OJ L278/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008 [2012] OJ L303/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .356 Regulation (EU) 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48–49

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Council Regulation (EU) No 517/2013 of 13 May 2013 adapting certain regulations and decisions in the fields of free movement of goods, freedom of movement for persons, company law, competition policy, agriculture, food safety, veterinary and phytosanitary policy, transport policy, energy, taxation, statistics, trans-European networks, judiciary and fundamental rights, justice, freedom and security, environment, customs union, external relations, foreign, security and defence policy and institutions, by reason of the accession of the Republic of Croatia [2013] OJ L158/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Commission Implementing Regulation (EU) No 793/2013 of 20 August 2013 establishing measures in respect of the Faeroe Islands to ensure the conservation of the AtlantoScandian herring stock [2013] OJ L223/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .184 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 . . . . . . . . . . . . . . . . . . . . . . . . . .354 Regulation (EU) No 37/2014 of the European Parliament and of the Council of 15 January 2014 amending certain regulations relating to the common commercial policy as regards the procedures for the adoption of certain measures [2014] OJ L18/52. . . . . . . . . . 134, 358, 365 Regulation (EU) No 38/2014 of the European Parliament and of the Council of 15 January 2014 amending certain regulations relating to the common commercial policy as regards the granting of delegated and implementing powers for the adoption of certain measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134, 358 Council Regulation (EU) No 153/2014 of 17 February 2014 amending Regulation (EC) No 314/2004 concerning certain restrictive measures in respect of Zimbabwe and repealing Regulation (EU) No 298/2013 [2014] OJ L50/1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .505 Regulation (EU) No 231/2014 of the European Parliament and of the Council of 11 March 2014 establishing an Instrument for Pre-accession Assistance (IPA II) [2014] OJ L77/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395, 525 Regulation (EU) No 232/2014 of the European Parliament and of the Council of 11 March 2014 establishing a European Neighbourhood Instrument [2014] OJ L77/27 . . . .403 Regulation (EU) No 236/2014 of the European Parliament and of the Council of 11 March 2014 laying down common rules and procedures for the implementation of the Union’s instruments for financing external action [2014] OJ L77/95 . . . . . . . . . . . . . . . . 395, 525 Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L78/6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443, 505 Regulation (EU) No 599/2014 of the European Parliament and of the Council of 16 April 2014 amending Council Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items [2014] OJ L173/79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355, 492 Commission Implementing Regulation No 447/2014 of 2 May 2014 on the specific rules for implementing Regulation (EU) No 231/2014 of the European Parliament and of the Council establishing an Instrument for Pre-accession assistance (IPA II) [2014] OJ L132/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .395 Council Regulation (EU) No 692/2014 of 23 June 2014 concerning restrictions on the import into the Union of goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol [2014] OJ L183/9 . . . . . . . . . . . . . . . . . . . . . . . . . .443 Council Regulation (EU) No 811/2014 of 25 July 2014 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L221/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443, 505

Table of Legislation xlv Council Regulation (EU) No 825/2014 of 30 July 2014 amending Regulation (EU) No 692/2014 concerning restrictions on the import into the Union of goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol [2014] OJ L226/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .443 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 L220/1 . . . . . . . .443 Commission Implementing Regulation (EU) No 896/2014 of 18 August 2014 repealing Implementing Regulation (EU) No 793/2013 establishing measures in respect of the Faroe islands to ensure the conservation of the Atlanto-Scandian herring stock [2014] OJ L244/10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .184

EU Decisions Council Decision 77/585/EEC of 25 July 1977 concluding the Convention for the protection of the Mediterranean Sea against pollution and the Protocol for the prevention of the pollution of the Mediterranean Sea by dumping from ships and aircraft [1977] OJ L240/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 Commission Decision 87/251/EEC of 12 March 1987 on the initiation of an international consultation and disputes settlement procedure concerning a United States measure excluding imports of certain aramid fibres into the United States of America [1987] OJ L117/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Council Decision 88/540/EEC of 14 October 1988 concerning the conclusion of the Vienna Convention for the protection of the ozone layer and the Montreal Protocol on substances that deplete the ozone layer [1988] OJ L297/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174 Council Decision 90/160/EEC of 22 March 1990 concerning the conclusion of the Agreement between the Federal Republic of Germany and the European Economic Community, on the one hand, and the Republic of Austria, on the other, on cooperation on management of water resources in the Danube Basin [1990] OJ L90/18 . . . . . . . . . . . . . . .163 Council Decision 91/51/EEC of 18 December 1990 on the signing of the International Agreement on Jute and Jute Products, 1989 [1991] OJ L29/1 . . . . . . . . . . . . . . . . . . . . . . . . . . .178 Council Decision 93/323/EEC of 10 May 1993 concerning the conclusion of an Agreement in the form of a Memorandum of Understanding between the European Economic Community and the United States of America on government procurement [1993] OJ L125/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...344 Council Decision 93/324/EEC of 10 May 1993 concerning the extension of the benefit of the provisions of Directive 90/531/EEC in respect of the United States of America [1993] OJ L125/54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .344 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67–68 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111, 285, 287–88, 290 Commission Decision 95/119/EC of 7 April 1995 concerning certain protective measures with regard to fishery products originating in Japan [1995] OJ L80/56 . . . . . . . . . . . . . . . . . . .285

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Decision of the Council and the Commission 95/145/EC, ECSC of 10 April 1995 concerning the conclusion of the Agreement between the European Communities and the Government of the United States of America regarding the application of their competition laws [1995] OJ L95/45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .160 Council Decision 96/191/EC of 26 February 1996 concerning the conclusion of the Convention on the protection of the Alps (Alpine Convention) [1996] OJ L61/31 . . . . . . . . .163 Council Decision 97/430/EC of 2 June 1997 concerning the conclusion of the EuroMediterranean 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 [1997] OJ L187/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398 Council Decision 98/416/EC of 16 June 1998 on the accession of the European Community to the General Fisheries Commission for the Mediterranean [1998] OJ L190/34 . . . . . . . . . .176 Council Decision 2001/264/EC of 19 March 2001 adopting the Council’s security regulations [2001] OJ L101/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2001/469/EC of 14 May 2001 concerning the conclusion on behalf of the European Community of the Agreement between the Government of the United States of America and the European Community on the coordination of energy-efficient labelling programs for office equipment [2001] OJ L172/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Council Decision 2001/539/EC of 5 April 2001 on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention) [2001] OJ L194/38 . . . . . . . . . . . . . . . . . . . . . . . . .174 Council Decision 2001/877/EC of 24 September 2001 on the signing and conclusion on behalf of the European Community of the International Coffee Agreement 2001 [2001] OJ L326/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164 Council Decision 2002/628/EC of 25 June 2002 concerning the conclusion, on behalf of the European Community, of the Cartagena Protocol on Biosafety [2002] OJ L201/48 . . . . . . . . .57 Council Decision 2002/971/EC of 18 November 2002 authorising the Member States, in the interest of the Community, to ratify or accede to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 [2002] OJ L337/55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196 Decision No 3/2003 of the ACP-EC Council of Ministers of 11 December 2003 on the use of resources from the long-term development envelope of the ninth EDF for the creation of a Peace Facility for Africa [2003] OJ L345/108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .525 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Council Decision 2003/462/EC of 19 May 2003 on the signing on behalf of the European Community and provisional application of a Framework Agreement on a Multilateral Nuclear Environmental Programme in the Russian Federation and its Protocol on Claims, Legal Proceedings and Indemnification and approving the conclusion by the Commission on behalf of the European Atomic Energy Community of the abovementioned Agreement and its Protocol [2003] OJ L155/35 . . . . . . . . . . . . . . . . . . . . . . . .164 Council Decision 2004/246/EC of 2 March 2004 authorising the Member States to sign, ratify or accede to, in the interest of the European Community, the Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992, and authorising Austria and Luxembourg, in the interest of the European Community, to accede to the underlying instruments [2004] OJ L78/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196

Table of Legislation xlvii Council Decision 2004/338/EC of 22 March 2004 adopting the Council’s Rules of Procedure [2004] OJ L106/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .472 Council Decision 2004/815/EC of 19 November 2004 amending the declaration by the European Community on the exercise of competence and voting rights submitted to the General Fisheries Commission for the Mediterranean [2004] OJ L357/30 . . . . . . . . . . . . .176 Council Decision 2005/367/EC of 14 April 2005 authorising Member States to ratify, in the interests of the European Community, the Seafarers’ Identity Documents Convention of the International Labour Organisation (Convention 185) [2005] OJ L136/1. . . . . . . . . . . . . . .196 Council Decision 2005/370/EC of 17 February 2005 on the conclusion, on behalf of the European Community, of the Convention on access to information, public participation in decision-making and access to justice in environmental matters [2005] OJ L124/1 . . . . . .249 Council Decision 2006/515/EC of 18 May 2006 on the conclusion of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions [2006] OJ L201/15 . . . . .176 Council Decision 2006/719/EC [2006] of 5 October 2006 on the accession of the Community to the Hague Conference on Private International Law [2006] OJ L297/1 . . . . . . . . . . . . . . . .176 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Council Decision 2007/274/JHA of 23 April 2007 concerning the conclusion of the Agreement between the European Union and the Government of the United States of America on the security of classified information [2007] OJ L115/29 . . . . . . . . . . . . . . . . . .476 Decision 2007/339/EC of 25 April 2007 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 . . . . . . . 270, 343 Council Decision 2008/210/EC of 18 February 2008 on the principles, priorities and conditions contained in the European Partnership with Albania and repealing Decision 2006/54/EC [2008] OJ L80/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .396 Council Decision 2008/211/EC of 18 February 2008 on the principles, priorities and conditions contained in the European Partnership with Bosnia and Herzegovina and repealing Decision 2006/55/EC [2008] OJ L80/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .396 Council Decision 2008/212/EC of 18 February 2008 on the principles, priorities and conditions contained in the Accession Partnership with the former Yugoslav Republic of Macedonia and repealing Decision 2006/57/EC [2008] OJ L80/32 . . . . . . . . . . . . . . . . . . . . . . .396 Council Decision 2008/213/EC of 18 February 2008 on the principles, priorities and conditions contained in the European Partnership with Serbia including Kosovo as defined by United Nations Security Council Resolution 1244 of 10 June 1999 and repealing Decision 2006/56/EC [2008] OJ L80/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .396 Council Decision 2008/667/JHA of 7 April 2008 concerning the conclusion of the Agreement between the European Space Agency and the European Union on the security and exchange of classified information [2008] OJ L219/58 . . . . . . . . . . . . . . . . . . . . . .476 European Council Decision 2009/880/EU taken with the agreement of the President of the Commission of 1 December 2009 appointing the High Representative of the Union for Foreign Affairs and Security Policy [2009] OJ L315/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .432 European Council Decision 2009/882/EU of 1 December 2009 adopting its Rules of Procedure [2009] OJ L315/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .425

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Council Decision 2010/314/EU of 10 May 2010 on the signing and provisional application of the Geneva Agreement on Trade in Bananas between the European Union and Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela and of the Agreement on Trade in Bananas between the European Union and the United States of America [2010] OJ L141/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .296 Council Decision 2010/348/EC of 17 November 2009 concerning the conclusion of the Agreement between the Government of the Russian Federation and the European Union on the protection of classified information [2010] OJ L155/56 . . . . . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2010/427/EU of 26 July 2010 establishing the organisation and functioning of the European External Action Service [2010] OJ L201/30 . . . 143, 435–37, 529–30 Council Decision 2010/428/EU of 28 July 2010 authorising the placing on the market of products containing, consisting of, or produced from genetically modified maize [2010] OJ L201/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .436 Council Decision 2010/465/EU of 24 June 2010 on the signing and provisional application of the Protocol to Amend the Air Transport Agreement between the United States of America, of the one part, and the European Community and its Member States, of the other part [2010] OJ L223/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270, 343 Council Decision 2011/265/EU on the signing, on behalf of the EU, and provisional application of the Free Trade Agreement between the EU and its Member States, on the one part, and the Republic of Korea, on the other part [2011] OJ L127/1 . . . . . . . . 258, 380 Council Decision 2011/292/EU of 31 March 2011 on the security rules for protecting EU classified information [2011] OJ L141/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2011/530/EU 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 2011/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217 Council Decision 2011/646/EU of 23 May 2011 concerning the conclusion, on behalf of the European Union, of the Agreement on the Protection and Sustainable Development of the Prespa Park Area [2011] OJ L258/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147 Decision 2011/712/EU of the Representatives of the Governments of the Member States, meeting within the Council of 10 June 2011 authorising the Presidency of the Council to negotiate, on behalf of the Member States, the provisions of a legally binding agreement on forests in Europe that fall within the competences of the Member States, [2011] OJ L285/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170 Council Decision 2011/265/EU of 16 September 2010 on the signing, on behalf of the European Union, and provisional application of the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part [2011] OJ L127/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258, 380

Table of Legislation xlix Decision No 2012/494/EU of the Representatives of the Governments of the Member States, meeting within the Council of 23 March 2012 authorising the opening of negotiations for an international agreement on the creation of the EU-LAC Foundation as an international organisation [2012] OJ L240/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170 Council Decision 2012/735/EU of 31 May 2012 on the signing, on behalf of the Union, and provisional application of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part [20120] OJ L354/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258, 381 Decision No 377/2013/EU of 24 April 2013 of the European Parliament and of the Council derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community [2013] OJ L113/1 . . . . . . . . . . . . . . . .319 Council Decision 2014/15/EU of 18 November 2013 on the signing and conclusion of the Agreement between the European Union and Georgia establishing a framework for the participation of Georgia in European Union crisis management operations [2014] OJ L14/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2014/20/EU of 23 September 2013 on the signing, on behalf of the Union, and the provisional application of the Cooperation Agreement between the European Union and its Member States, of the one part, and the Swiss Confederation, of the other, on the European Satellite Navigation Programmes [2014] OJ L15/1 . . . . . . . . . . . . . . . .146 Council Decision 2014/51/EU of 28 January 2014 authorising Member States to ratify, in the interests of the European Union, the Convention concerning decent work for domestic workers, 2011, of the International Labour Organisation (Convention No 189) [2014] OJ L32/32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196 Council Decision 2014/52/EU of 28 January 2014 authorising Member States to ratify, in the interests of the European Union, the Convention concerning Safety in the Use of Chemicals at Work, 1990, of the International Labour Organization (Convention No 170) [2014] OJ L32/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196 Council Decision 2014/241/EU of 14 April 2014 concerning the ratification of, or the accession to, the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009, by the Member States in the interests of the European Union [2014] OJ L128/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196 Council Decision 2014/295/EU 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, as regards the Preamble, Article 1, and Titles I, II and VII thereof [2014] OJ L161/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165, 258, 391 Council Decision 2014/451/EU of 26 May 2014 on the signing and conclusion of the Participation Agreement between the European Union and the Swiss Confederation on the participation of the Swiss Confederation in the European Union Integrated Border Management Assistance Mission in Libya (EUBAM Libya) [2014] OJ L205/2 . . . . . . . . . . . . .471 European Council Decision 2014/638/EU of 30 August 2014 electing the President of the European Council [2014] OJ L262/5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .427 European Council Decision 2014/639/EU of 30 August 2014 appointing the High Representative of the Union for Foreign Affairs and Security Policy [2014] OJ L262/6 . . . . .433

EU Joint Actions Joint Action 96/197/JHA of 4 March 1996 adopted by the Council on the basis of Article K.3 of the Treaty on European Union on airport transit arrangements [1996] OJ L63/8 . . . .531

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Council Joint Action 2000/717/CFSP of 16 November 2000 on the holding of a meeting of Heads of State or of Government in Zagreb (Zagreb Summit) [2000] OJ L290/54. . . . . . .394 Council Joint Action 2002/210/CFSP of 11 March 2002 on the European Union Police Mission [2002] OJ L70/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 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 . . . . . . . . . . . . . . . 532, 534 Council Joint Action 2003/423/CFSP of 5 June 2003 on the European Union military operation in the Democratic Republic of Congo [2003] OJ L143/50 . . . . . . . . . . . . . . . . . . . . .465 Council Joint Action 2003/681/CFSP of 29 September 2003 on the European Union Police Mission in the Former Yugoslav Republic of Macedonia (EUPOL ‘Proxima’) [2003] OJ L249/66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467, 527 Council Joint Action 2004/523/CFSP of 28 June 2004 on the European Union Rule of Law Mission in Georgia, EUJUST THEMIS [2004] OJ L228/21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Joint Action 2004/551/CFSP of 12 July 2004 on the establishment of the European Defence Agency [2004] OJ L245/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .479 Council Joint Action 2004/570/CFSP of 12 July 2004 on the European Union military operation in Bosnia and Herzegovina [2004] OJ L252/10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Joint Action 2004/638/CFSP of 13 September 2004 amending Joint Action 2004/523/ CFSP on the European Union Rule of Law Mission in Georgia, EUJUST THEMIS [2004] OJ L291/7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Joint Action 2004/789/CFSP of 22 November 2004 on the extension of the European Union Police Mission in the Former Yugoslav Republic of Macedonia (EUPOL PROXIMA) [2004] OJ L348/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2004/847/CFSP of 9 December 2004 on the European Union Police Mission in Kinshasa (DRC) regarding the Integrated Police Unit (EUPOL Kinshasa) [2004] OJ L367/30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2005/355/CFSP of 2 May 2005 on the European Union mission to provide advice and assistance for security sector reform in the Democratic Republic of the Congo (DRC) [2005] OJ L112/20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2005/643/CFSP of 9 September 2005 Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission – AMM) [2005] OJ L234/13 . . . . . . . 452, 468, 527 Council Joint Action 2005/557/CFSP of 18 July 2005 on the European Union civilianmilitary supporting action to the African Union mission in the Darfur region of Sudan [2005] OJ L188/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Joint Action 2005/797/CFSP of 14 November 2005 on the European Union Police Mission for the Palestinian Territories [2005] OJ L300/65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2005/824/CFSP of 24 November 2005 on the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2005] OJ L307/55 . . . . . . . . . . . . . . . . . .527 Council Joint Action 2005/826/CFSP of 24 November 2005 on the establishment of an EU Police Advisory Team (EUPAT) in the Former Yugoslav Republic of Macedonia (fYROM) [2005] OJ L307/61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2005/889/CFSP of 12 December 2005 on establishing a European Union Border Assistance Mission for the Rafah Crossing Point (EU BAM Rafah) [2005] OJ L327/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Joint Action 2006/319/CFSP of 27 April 2006 on the European Union military operation in support of the United Nations Organisation Mission in the Democratic Republic of the Congo (MONUC) during the election process [2003] OJ L116/98 . . . . . . . .465 Council Joint Action 2006/413/CFSP of 12 June 2006 amending and extending Joint Action 2005/190/CFSP on the European Union Integrated Rule of Law Mission for Iraq, EUJUST LEX [2006] OJ L163/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468

Table of Legislation li Council Joint Action 2006/607/CFSP of 7 September 2006 amending and extending Joint Action 2005/643/CFSP on the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission AMM) [2006] OJ L246/16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Joint Action 2007/245/CFSP of 23 April 2007 amending Joint Action 2005/557/CFSP on the European Union civilian-military supporting action to the African Union mission in the Darfur region of Sudan with regard to the inclusion of a military support element providing assistance to the setting up of the African Union Mission in Somalia (AMISOM) [2007] OJ L106/65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Joint Action 2007/369/CFSP of 30 May 2007 on establishment of the European Union Police Mission in Afghanistan (EUPOL AFGANISTAN) [2007] OJ L139/33 . . . . . . . .467 Council Joint Action 2007/405/CFSP of 12 June 2007 on the European Union police mission undertaken in the framework of reform of the security sector (SSR) and its interface with the system of justice in the Democratic Republic of the Congo (EUPOL RD Congo) [2007] OJ L151/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2007/677/CFSP of 15 October 2007 on the European Union military operation in the Republic of Chad and in the Central African Republic [2007] OJ L279/21 [200] OJ L279/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Joint Action 2007/887/CFSP of 20 December 2007 repealing Joint Action 2005/557/CFSP on the European Union civilian-military supporting action to the African Union missions in the Darfur region of Sudan and in Somalia [2007] OJ L346/28 . . . . . . . .465 Council Joint Action 2009/795/CFSP of 19 October 2009 repealing Joint Action 2007/677/CFSP on the European Union military operation in the Republic of Chad and in the Central African Republic [2009] OJ L283/61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Joint Action 2008/112/CFSP of 18 May 2008 amending Joint Action 2008/112/CFSP on the European Union mission in support of security sector reform in the Republic of Guinea-Bissau [2008] OJ L40/11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Joint Action 2008/760/CFSP of 25 September 2008 appointing the European Union Special Representative for the crisis in Georgia [2008] OJ L259/16 . . . . . . . . . . . . . . . . . . . . . .468 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465

EU Common Positions Common Position 1999/345/CFSP of 17 May 1999 adopted by the Council on the basis of Article 15 of the Treaty on European Union, concerning a Stability Pact for South-Eastern Europe [1999] OJ L133/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .394 Common Position 2001/869/CFSP of 6 December 2001 on participation by the European Union in the Korean Peninsular Energy Development Organisation (KEDO) [2001] OJ L325/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .178 Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism [2001] OJ L344/93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .522 Council Common Position 2008/109/CFSP of 12 February 2008 concerning restrictive measures imposed against Liberia [2008] OJ L38/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .509 Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment [2008] OJ L335/99 . . . . . 492, 509–11

lii Table of Legislation EU Common Strategies Common Strategy 1999/414/CFSP of the European Union of 4 June 1999 on Russia [1999] OJ L157/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Common Strategy 1999/877/CFSP of the European Council of 11 December 1999 on Ukraine [1999] OJ L331/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390 Common Strategy 2003/471/CFSP of the European Council of 20 June 2003 amending Common Strategy 1999/414/CFSP on Russia in order to extend the period of its application [2003] OJ L157/ 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . … 390 Common Strategy 2003/897/CFSP of the European Council of 12 December 2003 amending Common Strategy 1999/877/CFSP on Ukraine in order to extend the period of its application [2003] OJ L333/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .390

Other CFSP Acts Council Decision 94/942/CFSP of 19 December 1994 on the joint action adopted by the Council of the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1994] OJ L367/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488–89 Council Decision 95/127/CFSP of 10 April 1995 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1995] OJ L90/2 . . . . . . . . . . . . .488 Council Decision 95/128/CFSP of 10 April 1995 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1995] OJ L90/3 . . . . . . . . . . . . .488 Council Decision 96/423/CFSP of 27 June 1996 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1996] OJ L176/1 . . . . . . . . . . . .488 Council Decision 96/613/CFSP of 22 October 1996 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1996] OJ L278/1 . . .488 Council Decision 97/100/CFSP of 20 January 1997 amending Decision 96/613/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1997] OJ L34/1 . . . .488 Council Decision 97/419/CFSP of 26 June 1997 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1997] OJ L178/1 . . . . . . . . . . . .488 Council Decision 97/633/CFSP of 22 September 1997 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union, concerning the control of exports of dual-use goods [1997] OJ L266/1. . .488 Council Decision 98/106/CFSP of 26 January 1998 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1998] OJ L32/1 . . . .488 Council Decision 98/232/CFSP of 16 March 1998 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union concerning the control of exports of dual-use goods [1998] OJ L92/1 . . . .488 Council Decision 1999/54/CFSP of 18 January 1999 amending Decision 94/942/CFSP on the joint action adopted by the Council on the basis of Article J.3 of the Treaty on European Union, concerning the control of exports of dual-use goods [1999] OJ L18/1 . . . .488

Table of Legislation liii Council Decision 2000/243/CFSP of 20 March 2000 amending Decision 94/942/CFSP on the Joint Action concerning the control of exports of dual-use goods [2000] OJ L82/1. . . . .488 Council Decision 2000/402/CFSP of 22 June 2000 repealing Decision 94/942/CFSP on the joint action concerning the control of exports of dual-use goods [2000] OJ L159/218 . .492 Council Decision 2001/78/CFSP of 22 January 2001 setting up the Political and Security Committee [2001] OJ L27/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .454 Council Decision 2001/79/CFSP of 22 January 2001 setting up the Military Committee of the European Union [2001] OJ L27/4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .455 Council Decision 2001/80/CFSP of 22 January 2001 on the establishment of the Military Staff of the European Union [2001] OJ L27/7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .455 Council Decision 2002/845/CFSP of 30 September 2002 concerning the conclusion of the Agreement between the European Union and Bosnia and Herzegovina (BiH) on the activities of the European Union Police Mission (EUPM) in BiH [2002] OJ L293/1 . . . . . . .474 Council Decision 2003/157/CFSP of 19 December 2002 concerning the conclusion of the Agreement between the European Union and the Republic of Poland on the participation of this State to the European Union Police Mission (EUPM) in Bosnia and Herzegovina [2003] OJ L64/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/202/CFSP of 18 March 2003 relating to the launch of the EU military operation in the Former Yugoslav Republic of Macedonia [2003] OJ L76/43 . . . . . .465 Council Decision 2003/211/CFSP of 24 February 2003 concerning the conclusion of the Agreement between the European Union and the North Atlantic Treaty Organisation on the Security of Information [2003] OJ L80/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2003/222/CFSP of 21 March 2003 concerning the conclusion of the Agreement between the European Union and the Former Yugoslav Republic of Macedonia on the status of the European Union-led Forces (EUF) in the Former Yugoslav Republic of Macedonia [2003] OJ L82/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .474 Council Decision 2003/563/CFSP of 29 July 2003 on the extension of the European Union military operation in the Former Yugoslav Republic of Macedonia [2003] OJ L190/20 . . . . .465 Council Decision 2003/582/CFSP of 21 July 2003 concerning the conclusion of the Agreement between the European Union and the Russian Federation on the participation of that State in the European Union Police Mission (EUPM) in Bosnia and Herzegovina [2003] OJ L197/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/624/CFSP of 15 July 2003 concerning the conclusion of the Agreement between the European Union and the Republic of Estonia on the participation of the Republic of Estonia in the European Union-led forces (EUF) in the Former Yugoslav Republic of Macedonia [2003] OJ L216/60 . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/650/CFSP of 26 May 2003 concerning the conclusion of the Agreement between the European Union and the Czech Republic on the participation of the Czech Republic in the European Union-led Forces in the Former Yugoslav Republic of Macedonia [2003] OJ L229/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/661/CFSP of 19 May 2003 concerning the conclusion of the Agreement between the European Union and the Republic of Lithuania on the participation of the Republic of Lithuania in the European Union-led forces (EUF) in the Former Yugoslav Republic of Macedonia [2003] OJ L234/18 . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/662/CFSP of 26 May 2003 concerning the conclusion of the Agreement between the European Union and the Republic of Turkey on the participation of the Republic of Turkey in the European Union-led forces in the Former Yugoslav Republic of Macedonia [2003] OJ L234/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . .471

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Council Decision 2003/663/CFSP of 10 December 2002 concerning the conclusion of the Agreements between the European Union and Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Iceland, Latvia, Lithuania, Norway, Romania, the Slovak Republic, Slovenia, Switzerland, Turkey and Ukraine on the participation of these States to the European Union Police Mission (EUPM) in Bosnia and Herzegovina [2003] OJ L239/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471–72 Council Decision 2003/781/CFSP of 29 September 2003 concerning the conclusion of the Agreement between the European Union and the Republic of Poland on the participation of Polish armed forces in the European Union-led forces (EUF) in the former Yugoslav Republic of Macedonia [2003] OJ L285/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/832/CFSP of 26 May 2003 concerning the conclusion of the Agreements between the European Union and the Government of Latvia on the participation of the Republic of Latvia in the European Union-led forces (EUF) in the former Yugoslav Republic of Macedonia [2003] OJ L313/78 . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2003/202/CFSP of 18 March 2003 relating to the launch of the EU military operation in the Former Yugoslav Republic of Macedonia [2003] OJ L76/43 . . . . . .465 Council Decision 2003/222/CFSP on the conclusion of the Agreement between EU and FUROM on the status of the European Union-led Forces in the Former Yugoslav Republic of Macedonia [2003] OJ L82/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …. 474 Council Decision 2004/61/CFSP of 26 May 2003 concerning the conclusion of the Agreement between the European Union and the Slovak Republic on the participation of the armed forces of the Slovak Republic in the European Union-led Forces (EUF) in the Former Yugoslav Republic of Macedonia [2004] OJ L12/53 . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2004/75/CFSP of 11 December 2003 concerning the conclusion of the Agreement between the European Union and the Former Yugoslav Republic of Macedonia on the status and activities of the European Union Police Mission (EUPOL Proxima) in the Former Yugoslav Republic of Macedonia [2004] OJ L16/65 . . . . . . . . . . . . . .474 Council Decision 2004/197/CFSP of 23 February 2004 establishing a mechanism to administer the financing of the common costs of European Union operations having military or defence implications [2004] OJ L63/68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .464 Council Decision 2004/392/CFSP of 19 May 2003 concerning the conclusion of the Agreement between the European Union and Romania on the participation of Romania in the European Union-led forces (EUF) in the Former Yugoslav Republic of Macedonia [2004] OJ L120/61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2004/809/CFSP of 5 July 2004 concerning the conclusion of the Agreement between the European Union and the Swiss Confederation on the participation of the Swiss Confederation in the European Union Police Mission (EUPOL “Proxima”) in the former Yugoslav Republic of Macedonia [2004] OJ L354/77 . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2004/810/CFSP of 5 July 2004 concerning the conclusion of the Agreement between the European Union and Ukraine on the participation of Ukraine in the European Union Police Mission (EUPOL ‘Proxima’) in the former Yugoslav Republic of Macedonia [2004] OJ L354/81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2004/811/CFSP of 5 July 2004 concerning the conclusion of the Agreement between the European Union and the Kingdom of Norway on the participation of the Kingdom of Norway in the European Union Police Mission (EUPOL ‘Proxima’) in the former Yugoslav Republic of Macedonia [2004] OJ L354/85 . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2004/812/CFSP of 19 July 2004 concerning the conclusion of the Agreement between the European Union and the Republic of Turkey on the participation of the Republic of Turkey in the European Union Police Mission (EUPOL ‘Proxima’) in the former Yugoslav Republic of Macedonia [2004] OJ L354/89 . . . . . . . . . . . . .471

Table of Legislation lv 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] L 359/65 . . . . . . . . . . . . . . . 532, 534 Council Decision 2004/843/CFSP of 26 July 2004 concerning the conclusion of the Agreement between the European Union and the Kingdom of Norway on security procedures for the exchange of classified information [2004] OJ L362/28. . . . . . . . . . . . . . . . .476 Council Decision 2004/924/CFSP of 22 November 2004 concerning the conclusion of the Agreement between the European Union and Georgia on the status and activities of the European Union Rule of Law Mission in Georgia, EUJUST THEMIS [2004] OJ L389/41. . .473 Council Decision 2005/109/CFSP of 24 January 2005 concerning the conclusion of the Agreement between the European Union and the Kingdom of Morocco on the participation of the Kingdom of Morocco in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L34/46 . . . .471 Council Decision 2005/134/CFSP of 20 December 2004 concerning the conclusion of the Agreement between the European Union and the Republic of Bulgaria establishing a framework for the participation of the Republic of Bulgaria in the European Union crisis management operations [2005] OJ L46/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2005/191/CFSP of 18 October 2004 concerning the conclusion of agreements between the European Union and the Republic of Iceland, the Kingdom of Norway and Romania establishing a framework for the participation of the Republic of Iceland, the Kingdom of Norway and Romania in the European Union crisis-management operations [2005] OJ L67/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2005/199/CFSP 31 January 2005 concerning the conclusion of the Agreement between the European Union and the Republic of Albania on the participation of the Republic of Albania in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L65/34 . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2005/296/CFSP, JHA of 24 January 2005 concerning the conclusion of the Agreement between the European Union and the former Yugoslav Republic of Macedonia on the security procedures for the exchange of classified information [2005] OJ L94/38. . . .476 Council Decision 2005/364/CFSP of 12 April 2005 concerning the conclusion of the Agreement between the European Union and Romania on security procedures for the exchange of classified information [2005] OJ L118/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2005/365/CFSP of 14 April 2005 concerning the conclusion of the Agreement between the European Union and the Republic of Bulgaria on security procedures for the exchange of classified information [2005] OJ L118/52. . . . . . . . . . . . . . . . .476 Council Decision 2005/386/CFSP of 14 March 2005 concerning the conclusion of the Agreement between the European Union and New Zealand on the participation of New Zealand in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L127/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2005/395/CFSP of 10 May 2005 amending Decision 2001/80/CFSP on the establishment of the Military Staff of the European Union [2005] OJ L132/17 . . . . . . . . . . . .455 Council Decision 2005/447/CFSP of 14 March 2005 concerning the conclusion of the Agreement between the European Union and the Argentine Republic on the participation of the Argentine Republic in the European Union military crisis management operation in Bosnia and Herzegovina (Operation Althea) [2005] OJ L156/21 . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2005/481/CFSP Council Decision 2005/481/CFSP of 13 June 2005 concerning the conclusion of the Agreement between the European Union and Ukraine on the security procedures for the exchange of classified information [2005] OJ L172/83 . .476

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Council Decision 2005/495/CFSP of 11 October 2005 concerning the conclusion of an Agreement in the form of an Exchange of Letters between the European Union and Brunei, Singapore, Malaysia, Thailand and the Philippines on the participation of those States in the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission — AMM) [2007] OJ L273/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2005/593/CFSP of 18 July 2005 concerning the conclusion of the Agreement between the European Union and the Republic of Chile on the participation of the Republic of Chile in the European Union military crisis management operation in Bosnia and Herzegovina (Operation ALTHEA) [2005] OJ L202/49 . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2005/680/CFSP of 12 August 2005 concerning the Conclusion of the Agreement between the European Union and the Democratic Republic of the Congo on the status and activities of the European Union Police Mission in the Democratic Republic of the Congo (EUPOL Kinshasa) [2005] OJ L256/57 . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2005/765/CFSP of 3 October 2005 concerning the conclusion of the agreement in the form of an Exchange of Letters between the European Union and the Government of Indonesia on the tasks, status, privileges and immunities of the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission — AMM) and its personnel [2005] OJ L288/59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2005/851/CFSP of 21 November 2005 concerning the conclusion of the Agreement between the European Union and Canada establishing a framework for the participation of Canada in the European Union crisis management operations [2005] OJ L315/20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2005/966/CFSP of 14 November 2005 concerning the conclusion of an Agreement between the European Union and the Swiss Confederation on the participation of the Swiss Confederation in the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission — AMM) [2005] OJ L349/30 . . . . . . . . . . . .471 Council Decision 2006/201/CFSP of 27 February 2006 concerning the extension of the agreement in the form of an Exchange of Letters between the European Union and the Government of Indonesia on the tasks, status, privileges and immunities of the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission — AMM) and its personnel [2006] OJ L71/53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2006/317/CFSP of 10 April 2006 concerning the conclusion of the Agreement between the European Union and the Republic of Croatia on security procedures for the exchange of classified information [2006] OJ L116/73. . . . . . . . . . . . . . . . .476 Council Decision 2006/448/CFSP of 7 June 2006 concerning the extension of the Agreement in the form of an Exchange of Letters between the European Union and the Government of Indonesia on the tasks, status, privileges and immunities of the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission — AMM) and its personnel [2006] OJ L176/107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2006/467/CFSP of 21 November 2005 concerning the conclusion of the Agreement between the European Union and the Republic of Iceland on security procedures for the exchange of classified information [2006] OJ L184/34. . . . . . . . . . . . . . . . .476 Council Decision 2006/475/CFSP of 12 June 2006 concerning the conclusion of the Agreement between the European Union and the Gabonese Republic on the status of the European Union-led forces in the Gabonese Republic [2006] OJ L187/42 . . . . . . . . . . . . . . . .473 Council Decision 2006/477/CFSP of 30 June 2006 concerning the conclusion of the Agreement between the European Union and the former Yugoslav Republic of Macedonia on the participation of the former Yugoslav Republic of Macedonia in the European Union military crisis management operation in Bosnia and Herzegovina (Operation ALTHEA) [2006] OJ L203/11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471

Table of Legislation lvii Council Decision 2006/482/CFSP of 10 April 2006 concerning the conclusion of the Agreement between the European Union and the Republic of Turkey establishing a framework for the participation of the Republic of Turkey in the European Union crisis management operations [2006] OJ L89/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2008/568/CFSP of 24 June 2005 concerning the conclusion of the Agreement between the European Union and the Swiss Confederation on security procedures for the exchange of classified information [2008] OJ L181/57. . . . . . . . . . . . . . . . .476 Council Decision 2007/665/CFSP of 28 September 2007 concerning the conclusion of the Agreement between the European Union and the Republic of Croatia on the participation of the Republic of Croatia in the European Union Police Mission in Afghanistan (EUPOL AFGHANISTAN) [2007] OJ L270/72. . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2006/666/CFSP of 15 September 2006 concerning the extension of the Agreement in the form of an Exchange of Letters between the European Union and the Government of Indonesia on the tasks, status, privileges and immunities of the European Union Monitoring Mission in Aceh (Indonesia) (Aceh Monitoring Mission — AMM) and its personnel [2006] OJ L273/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2007/670/CFSP of 1 October 2007 concerning the conclusion of an Agreement between the European Union and New Zealand on the participation of New Zealand in the European Union Police Mission in Afghanistan (EUPOL AFGHANISTAN) [2007] OJ L274/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2006/676/CFSP of 10 August 2006 concerning the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and the Government of the Swiss Confederation on the participation of the Swiss Confederation in the European Union military operation in support of the United Nations Organisation Mission in the Democratic Republic of the Congo (MONUC) during the election process (Operation EUFOR RD Congo) [2006] OJ L276/10 . . . . . . . . . . .471 Council Decision 2008/101/CFSP of 28 January 2008 on the launching of the European Union military operation in the Republic of Chad and in the Central African Republic [2008] OJ L34/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Decision 2008/178/CFSP of 28 January 2008 concerning the conclusion of the Agreement between the European Union and the Republic of Cameroon on the status of the European Union-led forces in transit within the territory of the Republic of Cameroon [2008] OJ L57/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2008/266/CFSP of 28 January 2008 concerning the conclusion of the Agreement between the European Union and the Republic of Chad on the status of the European Union-led forces in the Republic of Chad [2008] OJ L83/39 . . . . . . . . . . . . . . . . . . .473 Council Decision 2008/389/CFSP of 7 April 2008 concerning the conclusion of the Agreement between the European Union and the Central African Republic on the status of the European Union-led forces in the Central African Republic [2008] OJ L136/45 . . . . .473 Council Decision 2008/665/CFSP of 9 June 2008 concerning the conclusion of the Agreement between the European Union and the Republic of Albania on the participation of the Republic of Albania in the European Union military operation in the Republic of Chad and in the Central African Republic (Operation EUFOR Tchad/RCA) [2008] OJ L217/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2008/666/CFSP of 24 July 2008 concerning the conclusion of an Agreement between the European Union and the Swiss Confederation on the participation of the Swiss Confederation in the European Union Rule of Law Mission in Kosovo, EULEX KOSOVO [2008] OJ L217/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .470

lviii Table of Legislation Council Decision 2008/669/CFSP of 16 June 2008 concerning the conclusion of the Agreement between the European Union and the Republic of Guinea-Bissau on the Status of the European Union Mission in Support of Security Sector Reform in the Republic of Guinea-Bissau [2008] OJ L219/65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2008/783/CFSP of 15 September 2008 concerning the conclusion of the Agreement between the European Union and the Republic of Croatia on the participation of the Republic of Croatia in the European Union military operation in the Republic of Chad and in the Central African Republic (Operation EUFOR Tchad/RCA) [2008] OJ L268/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .471 Council Decision 2008/814/CFSP of 13 October 2008 concerning the conclusion of an Agreement between the European Union and the United States of America on the participation of the United States of America in the European Union Rule of Law Mission in Kosovo, EULEX KOSOVO [2008] OJ L282/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .470 Council Decision 2008/868/CFSP of 13 October 2008 concerning the conclusion of the Agreement between the European Union and the Russian Federation on the participation of the Russian Federation in the European Union military operation in the Republic of Chad and in the Central African Republic (Operation EUFOR Tchad/RCA) OJ L307/15 . . .471 Council Decision 2008/877/CFSP of 24 October 2008 concerning the conclusion of the Agreement between the European Union and Georgia on the status of the European Union Monitoring Mission in Georgia [2008] OJ L310/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2008/887/CFSP of 25 September 2008 concerning the conclusion of an Agreement between the European Union and the Republic of Croatia on the participation of the Republic of Croatia in the European Union Rule of Law Mission in Kosovo, EULEX KOSOVO [2008] OJ L317/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .470 Council Decision 2009/88/CFSP of 22 December 2008 concerning the conclusion of the Agreement between the European Union and the Republic of Djibouti on the status of the European Union-led forces in the Republic of Djibouti in the framework of the EU military operation Atalanta [2009] 33/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2009/293/CFSP of 26 February 2009 concerning the Exchange of Letters between the European Union and the Government of Kenya on the conditions and modalities for the transfer of persons suspected of having committed acts of piracy and detained by the European Union-led naval force (EUNAVFOR), and seized property in the possession of EUNAVFOR, from EUNAVFOR to Kenya and for their treatment after such transfer [2009] OJ L79/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .478 Council Decision 2009/558/CFSP of 16 March 2009 concerning the conclusionof the Agreement on security procedures for exchanging classified information between the European Union and Israel [2009] OJ L192/63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2009/597/CFSP of 27 July 2009 on the signing and provisional application of the Agreement between the European Union and the Republic of Croatia on the participation of the Republic of Croatia in the European Union military operation to contribute to the deterrence, prevention and repression of acts of piracy and armed robbery off the Somali coast (Operation Atalanta) [2009] OJ L202/81 . . . . . . . . . . . . . . . . . . .470 Council Decision 2009/916/CFSP of 23 October 2009 concerning the signing and conclusion of the Agreement between the European Union and the Republic of Seychelles on the status of the European Union-led force in the Republic of Seychelles in the framework of the EU military operation Atalanta [2009] OJ L323/12 . . . . . . . . . . . . . . . . . . . . . . . . . 473, 478 Council Decision 2010/53/CFSP of 30 November 2009 concerning the conclusion of the Agreement between Australia and the European Union on the security of classified information [2010] OJ L26/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476

Table of Legislation lix Council Decision 2010/199/CFSP of 22 March 2010 on the signing and conclusion of the Agreement between the European Union and Montenegro on the participation of Montenegro in the European Union military operation to contribute to the deterrence, prevention and repression of acts of piracy and armed robbery off the Somali coast (Operation Atalanta) [2010] OJ L88/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .470 Council Decision 2010/298/CFSP of 25 May 2010 amending and extending Joint Action 2008/112/CFSP on the European Union mission in support of security sector reform in the Republic of Guinea-Bissau (EU SSR GUINEA-BISSAU) [2010] OJ L127/16 . . . . . . . . . . .467 Council Decision 2010/404/CFSP of 14 June 2010 concerning the signing and conclusion of the Agreement between the European Union and the Principality of Liechtenstein on security procedures for exchanging classified information [2010] OJ L187/1 . . . . . . . . . . . . . .476 Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP [2010] OJ L195/39 . . . . . . . . . . . . . . . .505 Council Decision 2010/464/CFSP of 6 August 2010 on the signing and conclusion of the Agreement between the European Union and the Republic of Uganda on the Status of the European Union-led Mission in Uganda [2010] OJ L221/1 . . . . . . . . . . . . . . . . . . . . . . . . . .474 Council Decision 2010/587/CFSP of 14 June 2010 concerning the signing and conclusion of the Agreement between the European Union and Montenegro on security procedures for exchanging and protecting classified information [2010] OJ L260/1 . . . . . . . . . . . . . . . . . . . . . .476 Council Decision 2010/686/CFSP of 13 September 2010 concerning the signing and conclusion of the Agreement between the European Union and the Islamic Republic of Afghanistan on the Status of the European Union Police Mission in Afghanistan (EUPOL AFGHANISTAN) [2010] OJ L294/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .473 Council Decision 2010/766/CFSP of 7 December 2010 amending Joint Action 2008/851/CFSP 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 [2010] OJ L327/49. . . .465 Council Decision 2011/210/CFSP of 1 April 2011 on a European Union military operation in support of humanitarian assistance operations in response to the crisis situation in Libya (EUFOR Libya) [2011] OJ L89/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465, 470 Council Decision 2010/755/CFSP of 6 December 2010 amending Decision 2009/906/CFSP on the European Union Police Mission (EUPM) in Bosnia and Herzegovina (BiH) [2010] OJ L320/10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Decision 2011/133/CFSP of 21 February 2011 on the signing and conclusion of the Agreement between the European Union and Montenegro establishing a framework for the participation of Montenegro in European Union crisis management operations [2011] OJ L57/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2011/168/CFSP of 21 March 2011 on the International Criminal Court and repealing Common Position 2003/444/CFSP [2011] OJ L76/56 . . . . . . . . . . . . . . . . . . . . . . . . . .424 Council Decision 2011/318/CFSP of 31 March 2011 on the signing and conclusion of the Framework Agreement between the United States of America and the European Union on the participation of the United States of America in European Union crisis management operations [2011] OJ L143/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2011/361/CFSP of 20 December 2010 on the signing and conclusion of the Agreement between the European Union and the Republic of Serbia establishing a framework for the participation of the Republic of Serbia in European Union crisis management operations [2011] OJ L163/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2011/514/CFSP of 22 November 2010 concerning the signing and conclusion of the Agreement between the European Union and the Republic of Serbia on security procedures for exchanging and protect in classified information [2011] OJ L216/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .476

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Council Decision 2011/640/CFSP of 12 July 2011 on the signing and conclusion of the Agreement between the European Union and the Republic of Mauritius on the conditions of transfer of suspected pirates and associated seized property from the European Union-led naval force to the Republic of Mauritius and on the conditions of suspected pirates after transfer [2011] OJ L254/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .478 Council Decision 2011/764/CFSP of 28 November 2011 repealing Decision 2011/210/CFSP on a European Union military operation in support of humanitarian assistance operations in response to the crisis situation in Libya (EUFOR Libya) [2011] OJ L314/35 . . . . . . . 465, 470 Council Decision 2012/173/CFSP of 23 March 2012 on the activation of the EU Operations Centre for the Common Security and Defence Policy missions and operation in the Horn of Africa [2012] OJ L89/66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .466 Council Decision 2012/174/CFSP of 23 March 2012 amending Joint Action 2008/851/CFSP 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 [2012] OJ L89/69 . . . . .465 Council Decision 2012/281/CFSP of 29 May 2012 in the framework of the European Security Strategy in support of the Union proposal for an international Code of Conduct on outerspace activities [2012] OJ L140/68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .424 Council Decision 2012/312/CFSP of 18 June 2012 on the European Union Aviation Security CSDP Mission in South Sudan (EUAVSEC-South Sudan) [2012] OJ L158/17 . . . . . . . . . . . . .468 Council Decision 2012/315/CFSP of 19 December 2011 on the signing and conclusion of the Agreement between the European Union and New Zealand establishing a framework for the participation of New Zealand in European Union crisis management operations [2012] OJ L160/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2012/344/CFSP of 23 March 2012 on the signing and conclusion of the Agreement between the European Union and the Republic of Albania establishing a framework for the participation of the Republic of Albania in European Union crisis management operations [2012] OJ L169/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2012/372/CFSP of 10 July 2012 amending and extending Decision 2010/330/CSFP on the European Union Integrated Rule of Law Mission for Iraq, EUJUST LEX-IRAQ [2012] OJ L179/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Decision 2012/389/CFSP of 16 July 2012 on the European Union Mission on Regional Maritime Capacity Building in the Horn of Africa (EUCAP NESTOR) [2012] OJ L187/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .469 Council Decision 2012/391/CFSP of 16 July 2012 amending Decision 2010/279/CFSP on the European Union Police Mission in Afghanistan (EUPOL AFGHANISTAN) [2012] OJ L187/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Decision 2012/392/CFSP of 16 July 2012 on the European Union CSDP mission in Niger (EUCAP Sahel Niger) [2012] OJ L187/48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Decision 2012/421/CFSP of 23 July 2012 in support of the Biological and Toxin Weapons Convention (BTWC), in the framework of the EU Strategy against Proliferation of Weapons of Mass Destruction [2012] OJ L196/61 . . . . . . . . . . . . . . . . . . . . . . .423 Council Decision 2012/422/CFSP of 10 March 2012 in support of a process leading to the establishment of a zone free of nuclear weapons and all other weapons of mass destruction in the Middle East [2012] OJ L196/67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .424 Council Decision 2012/486/CFSP of 23 July 2012 concerning the signing and conclusion of the Agreement between the Organisation for Joint Armament Cooperation and the European Union on the protection of classified information [2012] OJ L229/1 . . . . . . . . . . . .476 Council Decision 2013/34/CFSP of 17 January 2013 on a European Union military mission to contribute to the training of the Malian Armed Forces (EUTM Mali) [2013] OJ L14/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465

Table of Legislation lxi Council Decision 2013/87/CFSP of 18 February 2013 on the launch of a European Union military mission to contribute to the training of the Malian Armed Forces (EUTM Mali) [2013] OJ L46/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Decision 2013/178/CFSP of 25 February 2013 on the signing and conclusion of the Agreement between the European Union and the Republic of Mali on the status in the Republic of Mali of the European Union military mission to contribute to the training of the Malian Armed Forces (EUTM Mali) [2013] OJ L106/1 . . . . . . . . . . . . . . . . . . . . . . . . . . .474 Council Decision 2013/183/CFSP of 22 April 2013 concerning restrictive measures against the Democratic People’s Republic of Korea and repealing Decision 2010/800/CFSP [2013] OJ L111/52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .509 Council Decision 2013/233/CFSP of 22 May 2013 on the European Union Integrated Border Management Assistance Mission in Libya (EUBAM Libya) [2013] OJ L138/15 . . . . . . . . . . . .468 Council Decision 2013/446/CFSP of 6 September 2013 amending Decision 2010/452/CFSP on the European Union Monitoring Mission in Georgia (EUMM Georgia) [2013] OJ L240/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Decision 2013/450/CFSP of 22 July 2013 on the signing and conclusion of the Agreement between the European Union and the Republic of Niger on the status of the European Union CSDP mission in Niger (EUCAP Sahel Niger) [2013] OJ L242/1 . . . . . . . .474 Council Decision 2013/468/CFSP of 23 September 2013 amending and extending Decision 2010/565/CFSP on the European Union mission to provide advice and assistance for security sector reform in the Democratic Republic of the Congo (EUSEC RD Congo) OJ L252/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council decision 2013/467/CFSP of 23 September 2013 amending and extending Decision 2010/576/CFSP on the European Union police mission undertaken in the framework of reform of the security sector (SSR) and its interface with the system of justice in the Democratic Republic of the Congo (EUPOL RD Congo) [2013] OJ L252/27 . . . . . . . . . . . . .467 Council Decision 2013/725/CFSP of 9 December 2013 amending and extending Decision 2012/173/CFSP on the activation of the EU Operations Centre for the Common Security and Defence Policy missions and operation in the Horn of Africa [2013] OJ L329/39 . . . . .466 Council Decision 2013/729/CFSP of 9 December 2013 amending Decision 2013/34/CFSP on a European Union military mission to contribute to the training of the Malian Armed Forces (EUTM Mali) [2013] OJ L332/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .465 Council Decision 2013/798/CFSP of 23 December 2013 concerning restrictive measures against the Central African Republic [2013] OJ L352/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .509 Council Decision 2014/42/CFSP of 28 January 2014 amending Decision 2012/281/CFSP in the framework of the European Security Strategy in support of the Union proposal for an international Code of Conduct on outer-space activities [2014] OJ L26/42 . . . . . . . . . . . . . . .424 Council Decision 2014/71/CFSP of 18 November 2013 on the signing and conclusion of the Agreement between the European Union and the Republic of Chile establishing a framework for the participation of the Republic of Chile in European Union crisis management operations [2014] OJ L40/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2014/73/CFSP of 10 February 2014 on a European Union military operation in the Central African Republic (EUFOR RCA) [2014] OJ L40/59] . . . . . . . . . . . . .465 Council Decision 2014/75/CFSP of 10 February 2014 on the European Union Institute for Security Studies [2014] OJ L41/13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .424 Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L78/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424, 443

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Council Decision 2014/181/CFSP of 10 March 2014 on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and the Central African Republic on the status in the Central African Republic of the European Union military operation in the Central African Republic (EUFOR RCA) [2014] OJ L98/1 . . . . . . . . . . . . . .474 Council Decision 2014/198/CFSP of 10 March2014 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 . . . .478 Council Decision 2014/219/CFSP of 15 April 2014 on the European Union CSDP mission in Mali (EUCAP Sahel Mali) [2014] OJ L113/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .469 Council Decision 2014/293/CFSP of 15 April 2014 on the signing and conclusion of the Agreement between the European Union and the Swiss Confederation on the participation of the Swiss Confederation in the European Union military mission to contribute to the training of the Malian Armed Forces (EUTM Mali) [2014] OJ L151/16 . . . .471 Council Decision 2014/326/CFSP of 28 January 2014 on the signing and conclusion of the Agreement between the European Union and the Republic of Korea establishing a framework for the participation of the Republic of Korea in European Union crisis management operations [2014] OJ L166/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .477 Council Decision 2014/447/CFSP of 9 July 2014 amending Decision 2013/354/CFSP on the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) OJ L201/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .467 Council Decision 2014/482/CFSP of 22 July 2014 amending Decision 2012/392/CFSP on the European Union CSDP mission in Niger (EUCAP Sahel Niger) [2014] OJ L217/31 . . . . . . .468 Council Decision 2014/386/CFSP of 30 July 2014 amending Decision 2014/386/CFSP concerning restrictions on goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol [2014] OJ L183/70 . . . . . . . . . . . . . . . . . . . . . . . . .443 Council Decision 2014/430/CFSP of 3 July 2014 amending Joint Action 2005/889/CFSP on establishing a European Union Border Assistance Mission for the Rafah Crossing Point (EU BAM Rafah) [2014] OJ L197/75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468 Council Decision 2014/449/CFSP of 10 July 2014 concerning restrictive measures in view of the situation in South Sudan [2014] OJ L2003/100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .509 Council Decision 2014/485/CFSP of 22 July 2014 amending Decision 2012/389/CFSP on the European Union Mission on Regional Maritime Capacity Building in the Horn of Africa (EUCAP NESTOR) [2014] OJ L217/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .469 Council Decision 2014/508/CFSP of 30 July 2014 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L226/23 . . . . . . . . .443 Council Decision 2014/507/CFSP of 30 July 2014 amending Decision 2014/386/CFSP concerning restrictions on goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol [2014] OJ L226/20 . . . . . . . . . . . . . . . . . . . . .443 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 L229/3 . . . . . . . . . . . . . . . . . .443

EU Miscellaneous Council statement concerning the framework agreement on relations between the European Parliament and the Commission [2005] OJ C161/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145 Joint Declaration of the Paris Summit for the Mediterranean Union of 13 July 2008, 11877/08 (Presse 213) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .400

Table of Legislation lxiii 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: ‘The European Consensus’ [2006] OJ C46/1 . . . . 9, 70, 525 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: ‘The European Consensus on Humanitarian Aid’ [2008] OJ C25/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139 Internal agreement between the representatives of the governments of the Member States, meeting within the Council, on measures to be taken and procedures to be followed for the implementation of the ACP-EC Partnership Agreement [2000] OJ L317/376 . . . . . . . . . .178 Notice of initiation of an ‘illicit commercial practice’ procedure concerning the unauthorised reproduction of sound recordings in Indonesia [1987] OJ C136/3. . . . . . . . . . . . . . . . . . . . . . . .43

MISCELLANEOUS

National Instruments Republic of Slovenia, Negotiating Positions of the Republic of Slovenia for Negotiations on Accession to the European Union (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 House of Lords Select Committee on the European Union, “Open Skies” or Open Markets? The Effect of the European Court of Justice (ECJ) Judgments on Aviation Relations Between the European Union (EU) and the United Stated of America (USA), Session 2002-03, Seventeenth Report (HL 92) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .342 House of Lords Select Committee on the European Union, The Treaty of Lisbon: an impact assessment, Session 2007-08, Tenth Report (HL 62) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .416

United Nations Security Council Resolutions Security Security Security Security Security Security Security

Council Council Council Council Council Council Council

Resolution Resolution Resolution Resolution Resolution Resolution Resolution

1244 1441 1730 1735 1822 1904 2161

(1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .396 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .441 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 (2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225

United Nations General Assembly Resolutions General Assembly Resolution A/RES/65/276 (2011), Participation of the European Union in the work of the United Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162

Introduction Introduction

Introduction In the second edition of his study on treaty law, Anthony Aust notes that ‘[a]nything to do with the European Communities is complex, and this is particularly so for the law governing their external relations’.1 When I was writing this book, not a day went by when this observation was not on my mind. And yet, this area of endless fascination for academic lawyers has become central to discussions about the about the future of the European Union at various levels. The long process leading to the signing of the Treaty establishing a Constitution for Europe made academic lawyers focus on the pillar structure of the Union and examine ways which would facilitate the conduct of the Union’s international relations, whilst respecting the rights of Member States to act as fully sovereign subjects of international law. The uncertain fate of the Constitutional Treaty made politicians wonder about the future role of the Union on the international scene. The war in Iraq raised questions about the commitment of national governments to a truly common EU foreign policy. And Robert Kagan’s discussion about Americans and Europeans and Mars and Venus2 made lawyers, politicians and the public wonder about the distinctiveness of the EU international identity. Indeed, the question whether Europeans are from Venus appears to be raised in every discussion about the Union’s international actions. This is a question which this book will try to avoid. This is mainly because such thesis is as ubiquitous as it is impervious to the rationale, dynamics, development and interactions of legal mechanisms.3 This book will focus on these mechanisms.

This is how the first edition of this book in 2006 started. Since then, a lot has happened. The Constitutional Treaty died a long and painful death and its successor, the Lisbon Treaty, entered into force not without problems. Iraq keeps exercising policy-makers, albeit for different reasons and in a different context. The Union’s neighbourhood is again a source of conflict and destabilisation: Russia is spreading its threatening shadow and has invaded Ukraine, and northern Africa and the Middle East have experienced upheavals for which the international community appeared unprepared. Against this background, the Union has faced a financial crisis which threatened the euro, raised the possibility of sovereign default within the eurozone and, ultimately, acquired an existential dimension. This internal development had implications for the Union’s international relations. According to an editorial in the Financial Times, ‘the EU’s effectiveness as an international actor has been battered by the Eurozone crisis, its political will sapped by economic austerity and by growing public disaffection with the entire European project’.4 In the nine years since the publication of the first edition of this book, the international role of Union law been at the centre of any debate about the future of the Union and has 1 A Aust, Modern Treaty Law and Practice, 2nd edn (Cambridge, Cambridge University Press, 2000) 55. (In the third edition, the second part of the sentence, about EU external relations, is dropped. It is suggested that this may not be because EU external relations law has become straightforward.) 2 R Kagan, Paradise and Power, America and Europe in a New World Order (New York, Knopf, 2003). 3 For an analysis of the oversimplifications of this thesis from an international relations perspective, see T Garton Ash, Free World (London, Penguin, 2005). 4 Financial Times, 23 February, 2014.

1

2

Introduction

also bred considerable interest amongst legal scholars. The days when EU international relations law was merely a footnote in EU law textbooks are gone. Leaving aside books on specific topics of EU international relations, a healthy stream of general analyses has emerged, including a new edition,5 collections of text and materials, 6 monographs,7 and edited collections.8 In line with its first edition and the constantly evolving nature of the EU’s external action, this book constitutes work in progress and aims to provide an analysis of the legal mechanisms pursuant to which the Union relates to the rest of the world. It does not aim to produce an encyclopaedia of all areas of EU international relations law, neither does it seek to provide an exhaustive analysis of specific external policies. Instead, it is selective and organised on the basis of criteria which are both shamelessly subjective (ie the personal interests of its author) and objective (it seeks to examine areas of legislative activity that have provided fertile ground for legal and policy disputes). Two characteristics of the first edition are maintained: the book seeks to examine the law against the practice of the EU’s external action and to highlight the threads which underpin the different strands of that action. Finally, the last part of the book draws on my The EU Common Security and Defence Policy (Oxford, Oxford University Press, 2013)—and I am grateful to Oxford University Press for allowing me to do so.

STRUCTURE

The book is structured in five parts. The first part deals with the regulation of the Union’s international relations law. Its main focus is on the constitutional foundations of the Union’s external action. Chapter 1 sets out the general scheme of the rules which govern the EU as an international actor and outlines the constitutional reconfiguration of the external relations provisions in primary law. Chapter 2 focuses on the Common Commercial Policy (CCP). It analyses the notion of exclusivity in a twofold manner. On the one hand, it examines the legal context within which the Court articulated exclusivity and the ways in which it has applied it over the years. On the other hand, it sets out the approach of the EU institutions and the Member States to the regulation of the CCP and the ways in which it has evolved in parallel with the process of the establishment of the internal market and the international economic environment. The picture of the policy which emerges is characterised by a considerable degree of subtlety and variation. The analysis also tackles the scope of the CCP as set out in the Lisbon Treaty and against the background of the case-law of the Court of Justice. Chapter 3 analyses the implied 5

P Eeckhout, EU External Relations Law (Oxford, Oxford University Press, 2011). See P J Kuijper, J Wouters, F Hoffmeister, G De Baere and T Ramopoulos, The Law of EU External Relations—Cases, Materials and Commentary on the EU as an International Legal Actor (Oxford, Oxford University Press, 2013); B Van Vooren and R Wessel, EU External Relations—Text, Cases and Materials (Cambridge, Cambridge University Press, 2014). 7 G De Baere, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008); R  Holdgaard, External Relations Law of the European Community—Legal Reasoning and Legal Discources (Alphen aan den Rijn, Kluwer, 2008). 8 See amongst others M Cremona and B De Witte (eds), EU Foreign Relations Law—Constitutional Fundamentals (Oxford, Hart Publishing, 2008); A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations—Salient Features of a Changing Landscape (Cambridge, Cambridge University Press, 2008); B Van Vooren, S Blockmans and J Wouters (eds), The EU’s Role in Global Governance—The Legal Dimension (Oxford, Oxford University Press, 2013). 6

Introduction 3 competence of the Union to act on the international scene. Originating in the early 1970s, this principle has had major implications not only for the external dimension of the Union legal order but also the constitutional relationship between the Member States and the Union. Focusing on the evolution of this principle on the basis of the case-law of the Court of Justice and the effort of the drafters of the Lisbon Treaty to articulate it, this chapter examines the various ways in which its application determines the interaction between the Union and national actors. The second part of this book is dedicated to the management of the EU international relations. The term ‘management’ is used in its broadest sense and refers to the various ways in which the Union and the Member States, on the one hand, and the Court of Justice, on the other, translate the constitutional principles of external competence into practice. Chapter 4 examines the processes under which the Union assumes, negotiates and concludes international agreements and participates in international organisations. Chapter 5 focuses on the coexistence of the EU and the Member States in the negotiation, conclusion and implementation of international agreements. This phenomenon of mixity, much-maligned in the academic literature, is assessed in the light of the legal, political and practical mechanisms which have underpinned its application over the years. The analysis also examines its implications for the Member States which have become all the more apparent in the last few years. The third part of the book examines the relationship between international and EU law. Chapter 6 analyses the status of international law within the EU legal order and covers both international agreements and customary international law. Chapter 7 explores the approach of the Court of Justice to the existence and exercise of its jurisdiction over international agreements, including mixed agreements. Chapter 8 examines the enforcement of international law as a matter of EU law and analyses the different ways, direct and indirect, in which international agreements and customary law may penetrate the EU legal order. It identifies different categories of international rules and examines the rights of individuals as well as Member States to invoke them before national courts and the EU judiciary. It also examines the approach of the EU courts to the application of rules adopted within the framework of the World Trade Organization. Tracing its origins back in the interpretation given to GATT rules, this chapter studies the various factors underpinning the Court’s approach and identifies their interrelation with other strands of its case-law. Chapter 9 examines the legal position of international agreements concluded by Member States prior to their membership of the European Union. The significance of this topic is highlighted by recent case-law of the Court and initiatives undertaken by the EU institutions. This chapter will examine their implications for the development of the Union legal order in general and the role of national courts in particular. The fourth part of the book provides an overview of the substantive content of the Union’s international relations. Chapter 10 deals with the CCP. After a brief introduction to the main imports and exports rules, the ‘Everything But Arms’ initiative and the trade policy instruments, it focuses on one of the most popular of the latter, namely the rules on anti-dumping. The chapter summarises the ways in which the discretion of Union institutions to make substantive policy choices has been construed and juxtaposes it with the degree of intensity of judicial control in procedural and other aspects of that policy. It also provides an overview of the recent initiatives to reform it. Chapter 11 provides an overview of the various links which the Union has forged with third countries, either on its own or with its Member States. Its particular focus is on the Partnership and

4

Introduction

Cooperation Agreements with members of the ex-Soviet Union, the Stabilisation and Association Agreements with countries in the West Balkans and the Euro-Mediterranean Agreements. Rather than providing an exhaustive analysis of their content, this chapter seeks to assess them within the context of the Union’s gradually evolving approach as presented in the European Neighbourhood Policy. The final part analyses the political aspects of the international relations of the European Union and the interactions between different strands of external policies. Chapter 12 studies the Common Foreign and Security Policy. It examines the legal rules underpinning its development and the constitutional and political factors which affect the Union’s effort to assert its identity on the international scene. Chapter 13 analyses the Common Security and Defence Policy. It examines the legal rules laid down in the Treaty on European Union and assesses them in the context of the economic and political parameters which determine their effectiveness. It also examines the practice of the Union’s conduct in the area and explores the issues which underpin its effectiveness, namely the capabilities offered by the Member States. Chapter 14, the last chapter, analyses the interactions between different external policies. It focuses on the linkages between trade and foreign policy, examines the legal rules governing sanctions and describes the development of the common rules on exports of dual-use goods. It also examines the interactions between development co-operation and the Common Security and Defence Policy and explores the ways in which they have been managed as a matter of practice and the issues which they have raised before the Court of Justice.

The European Union in the World

1 The European Union in the World 1. INTRODUCTION Introduction

T

HE CAPACITY OF the European Union to engage with third countries and international organisations has been at the centre of the debates about the EU’s constitutional identity and future that began in the early 2000s. In December 2001, the European Council adopted the Laeken Declaration, which initiated the long and unpredictable process that led to the drafting, negotiation and early death of the Treaty Establishing a Constitution for Europe, followed by the drafting, ratification, adjustment and entry into force of the Lisbon Treaty. The international role of the EU featured prominently in the Declaration, which raised the question: Does Europe not, now that is finally unified, have a leading role to play in a new world order, that of a power able both to play a stabilising role worldwide and to point the way ahead for many countries and peoples?1

Throughout the process, which led, ultimately, to the entry into force of the Lisbon Treaty, the international role of the Union never ceased to be one of the core areas of attention for the negotiators. For instance, in the Declaration responding to the negative referendums in France and the Netherlands, European leaders underlined the need for the Union ‘to respond to the challenges of globalisation [and] to safeguard internal and external security’.2 After all, the reform of the EU’s institutional and legal framework to which the EU elites aspired was deemed essential to the role of the Union on the world stage and had been articulated in grand terms in the Laeken Declaration. The Lisbon Treaty, as well as its precursor, was drafted, negotiated and ratified amidst great hopes as to its impact in the area of foreign affairs, and was received with the expression of even greater relief and anticipation. The then President of the Commission, Romano Prodi, on the day of the signing of the Constitutional Treaty, declared: ‘[T]oday, Europe is reaffirming the unique nature of its political organisation in order to respond to the challenges of globalisation, and to promote its values and play its rightful role on the international scene.’3 Launching the Intergovernmental Conference (IGC), which led to the adoption of the Lisbon Treaty, the European Council stated that ‘[i]n order to secure our future as an active player in a rapidly changing world and in the face of evergrowing challenges, we have to maintain and develop the European Union’s capacity to 1

Conclusions of the Laeken European Council (14–15 December 2001), Annex I, 2. Declaration by the Heads of State or Government of the Member States of the European Union on the Ratification of the Treaty Establishing a Constitution for Europe, European Council, SN 117/05 (Brussels, 16–17 June 2005), 2. 3 Speech delivered in Rome at the ceremony on the signing of the Constitutional Treaty (www.europa.eu) (last accessed 25 October 2012). 2

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The European Union in the World

act’.4 The European Council claimed that the Lisbon Treaty ‘will bring increased efficiency to our external action’.5 In its Opinion for the IGC, which led to the Lisbon Treaty, the European Commission expressed the view that the latter ‘will give Europe a clear voice in relations with our partners worldwide, and sharpen the impact and visibility of our message.  … This will mean an EU able to play a more responsive and effective part in global affairs.’6 And the Commission President, José Barroso, in addressing the European Parliament, said that, ‘[w]ith the Reform Treaty, Europe will have the conditions and the instruments to shape globalisation’.7 Therefore, it was expected that the legal mechanisms set out in primary law would enable the Union to assume a central actor on the world stage. This role is defined by the Union itself with ambition and confidence.

2. THE INTERNATIONAL ROLE OF THE EUROPEAN UNION The International Role of the European Union

The Laeken Declaration stated: Now that the Cold War is over and we are living in a globalised, yet also highly fragmented world, Europe needs to shoulder its responsibilities in the governance of globalisation. The role it has to play is that of a power resolutely doing battle against all violence, all terror and all fanaticism, but which also does not turn a blind eye to the world’s heartrending injustices. In short, a power wanting to change the course of world affairs in such a way as to benefit not just the rich countries but also the poorest. A power seeking to set globalisation within a moral framework, in other words to anchor it in solidarity and sustainable development.8

Two years later, in December 2003, the European Council endorsed the European Security Strategy, drawn up by the then High Representative for the Common Foreign and Security Policy, Javier Solana.9 Prepared when the world was still trying to come to terms with the implications of the 9 September 2001 terrorist attacks, this document identifies the main tenets of the Union’s understanding of its internal role. Its starting point is the success of the project of European integration—its first sentence is: ‘Europe has never been so prosperous, so secure nor so free.’10 Its success on the internal plane should be translated into international action: The increasing convergence of European interests and the strengthening of mutual solidarity of the EU makes us a more credible and effective actor. Europe should be ready to share in the responsibility for global security and in building a better world.11

Given the wide range of policies in which it engages (economic, social, political, security) and the wide range of global threats, the European Security Strategy suggests that the 4

Presidency Conclusions, June 2007, 2nd para. EU Declaration on Globalisation, annexed to Brussels European Council Presidency Conclusions, December 14, 2007, at 25. 6 Opinion of the European Commission, pursuant to Article 48 of the Treaty on European Union, on the Conference of representatives of the governments of the Member States convened to revise the Treaties, 13 July 2007, Council 11625/07 POLGEN 83, 8. 7 Speech/07/469 (23 October 2007). 8 Conclusions of the Laeken European Council (14–15 December 2001), Annex I, at 2 9 A Secure Europe in a Better World—European Security Strategy (Brussels, 12 December 2003). 10 Ibid, 1. 11 Ibid. 5

External Action 9 Union ‘is particularly well equipped to respond to such multi-faceted challenges’.12 It refers in detail to the need for strengthening an international order based on effective multilateralism, and concludes as follows: This is a world of new dangers but also of new opportunities. The European Union has the potential to make a major contribution, both in dealing with the threats and in helping realise the opportunities. An active and capable European Union would make an impact on a global scale. In doing so, it would contribute to an effective multilateral system leading to a fairer, safer and more united world.

These documents are striking for both the ambition they convey and the strong sense of global responsibility for the Union that they articulate. This is consistent with the tenor of other policy documents of the period, such as the Report on the Implementation of the European Security Strategy endorsed by the European Council in December 200813 and the European Consensus on Development, drawn up by the Council, the Commission, and the European Parliament, as well as the representatives of the governments of the Member States meeting within the Council.14 The wide range of policies carried out by the Union and the variety of techniques with which it interacts with the rest of the world feed these expectations. Cremona identifies a number of roles which the Union has assumed: laboratory and model, market player, role generator, stabiliser, and magnet and neighbour.15 Political scientists have also been attracted to the different functions which the EU assumes as a global actor.16

3. EXTERNAL ACTION External Action

After Lisbon, the Union’s primary law refers to ‘external action’ rather than ‘external policies’. The use of the word ‘action’ in the singular connotes commonality of purpose and implies coherence and consistency. This was one of the main aims of the drafting of the Constitutional Treaty and the Lisbon Treaty which also intended to enhance the effectiveness of the Union’s international role. The term ‘external action’ is used in the Treaties to describe all policies carried out on the international scene, irrespective of their position in the supranationalism–intergovernmentalism spectrum. Whereas prior to the Lisbon Treaty they were scattered in different parts of primary law, under the current constitutional arrangements all but one of these policies are grouped together in Part V of the Treaty on the Functioning of the European Union (TFEU). These policies are  Common Commercial Policy (Articles 206–07 TFEU);  development cooperation (Articles 208–11 TFEU);  economic, financial and technical cooperation with third countries (Articles 212–13 TFEU); 12

Ibid, 7. S407/08 (Brussels, 11 December 2008). 14 [2006] OJ C46/1. 15 M Cremona, ‘The Union as a Global Actor: Roles, Models and Identity’ (2004) 41 Common Market Law Review 553. 16 See the overview in I Manners, ‘Global Europa: Mythology of the European Union in World Politics’ (2010) 48 Journal of Common Market Studies 67. 13

10 The European Union in the World  humanitarian aid (Article 214 TFEU);  restrictive measures (Article 215 TFEU);  international agreements (Articles 216–19 TFEU). The only strand of the Union’s external action not included in Part V TFEU is the Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP) which are governed by provisions laid down in Title V TEU. This separation is significant in legal terms and will be explored in Chapters 12 and 13. The original Treaty of Rome only referred to the Common Commercial Policy and the negotiation and conclusion of association agreements, ie agreements establishing an association between the Community and one or more states or international organisations ‘involving reciprocal rights and obligations, common action and special procedure’ (Article 217 TFEU). The other policies were added in subsequent Treaty amendments. In addition to the strands of external action grouped together in Title V TFEU, there are TFEU provisions for other forms of international cooperation. In the area of the environment, the Union is endowed with express treaty-making competence (Article 191(4) TFEU). The Union is also competent to establish ‘all appropriate forms of cooperation’ with the organs of the United Nations and its specialised agencies, the Council of Europe, the Organisation for Security and Cooperation in Europe (OSCE), the OECD and to maintain ‘such relations as are appropriate’ with any other international organisation (Article 220(1) TFEU). In the areas of education (Article 165(3) TFEU), vocational training (Article 166(3) TFEU), culture (Article 167(3) TFEU) and public health (Article 168(3) TFEU), the Union is expressly competent to foster cooperation with third countries and international organisations. In the area of trans-European networks (TENS) (Article 171(3) TFEU), the Union is competent to cooperate with third countries to promote projects of mutual interest and to ensure the interoperability of networks. In the area of research, Article 186 TFEU provides that, in the context of its multiannual framework programme, the Union may provide for cooperation with third countries and international organisations. These are the areas where the Treaties grant the Union a specific external role. However, they by no means provide the only terrain where the Union may act in the world. In areas where internal policies are carried out, the Union is often required to act externally too. In fact, a considerable part of its external activities fall within this category of implied competence. The legal issues which are raised in these areas are examined below in Chapter 3. A question central to the Union’s external action is the nature of its competence. In the light of its implications for the powers of both the EU and the Member States, this is a question of utmost significance. Originally, primary law was silent about it and it was left to the Court of Justice to answer it on a case-by-case basis. However, one of the aims of the constitutional process which led to the entry into force of the Lisbon Treaty was the introduction of a clearer division of competence. To that effect, different categories of competence are set out in the TFEU. Exclusive competence in a specific area entails that ‘only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts’.17 These areas are set out in Article 3(1) TFEU and include the Common Commercial Policy. 17

Art 2(1) TFEU.

Principles and Objectives

11

Shared competence in a specific area denotes the coexistence of EU and national power. Under Article 2(2) TFEU, the Union and the Member States may legislate and adopt legally binding acts in that area. 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.

The areas covered by shared competence are set out in Article 4(2) TFEU and include development cooperation and humanitarian aid where the exercise of the Union’s competence ‘shall not result in Member States being prevented from exercising theirs’.18 The Union is also endowed with the competence to introduce arrangements aiming to coordinate the economic and employment policies of the Member States in accordance with Article 5 TFEU.19 In addition, competence is also granted to support, coordinate or supplement the actions of Member States in the areas set out in Article 6 TFEU. A considerable part of the Union’s external action is covered by competence which is set apart from the above categories. This is the Union’s competence to carry out the CFSP and CSDP and is laid down in Article 2(4) TFEU. This is distinguished from all other types of competence because the rules and procedures governing the CFSP and CSDP are similarly distinguished from all other external policies in terms of their legal characteristics and implications, as well as their position in primary law. This issue will be explored in Chapter 12. Finally, in Article 216 TFEU, the Treaty endows the Union with a specific competence to negotiate and conclude international agreements and defines the circumstances under which this competence is exclusive in Article 3(2) TFEU. These provisions are intended to codify the case-law of the Court of Justice in the area and, in doing so, their wording raises more questions than it answers. These are explored in Chapter 3.

4. PRINCIPLES AND OBJECTIVES Principles and Objectives

The reorganisation of the various strands of the Union’s external action is not the only structural innovation introduced at Lisbon. For the first time, a set of common principles and objectives was introduced to govern the entire spectrum of what the Union does in the world. Under the previous constitutional arrangements, no special attention was paid as to the elaboration of specific common objectives and principles which would govern the conduct of external policies. Instead, the drafters of the Treaties were mainly preoccupied with ensuring that, in the light of their subject-matter, external relations provisions were assigned to the appropriate legal framework, and with setting out general constitutional principles aiming to govern their interactions. To that effect, external trade, development, humanitarian aid, and economic, financial and technical cooperation with third countries, as well as the conclusion of association agreements, were all part of the EC Treaty, while foreign and security policy were part of the Treaty

18 19

Art 4(4) TFEU. Art 2(3) TFEU.

12 The European Union in the World on the European Union. As to their overall conduct, this was governed by the principle of coherence.20 The common principles governing the Union’s external action are set out in Article 21(1) TEU: The Union’s action on the international scene shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principle of equality and solidarity, and respect for the principles of the United Nations Charter and international law.

These are the very principles which the Union has sought to apply in its policies over the years. For instance, the enlargement process, the various rounds of which dominated the Union’s activities in the latter part of 1990s and 2000s, is based on criteria for EU membership, some of which echo these principles.21 These principles also emerge as the main cornerstones of the Union’s security policy as set out in the European Security Strategy. The reference to respect for the UN Charter and international law is noteworthy as it reflects the increasing emphasis on multilateralism, which has characterised the Union’s external policies ever more prominently since the terrorist attacks of 9/11.22 The principles that guide the EU’s external action under Article 21(1) TEU are based on the foundation values of the Union which are set out in Article 2 TEU: The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.

The position of these values within the Union’s external action23 is articulated in Article 3(5) TEU, which reads as follows: In its relations with the wider world, the Union shall uphold and promote its values and interests and contribute to the protection of its citizens. It shall contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child, as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.

The objectives of the EU’s external action are set out in Article 21(2) TEU: (a) safeguard its values, fundamental interests, security, independence, and integrity;

20 Art 3 TEU (Nice) referred to the requirement of consistency regarding the activities carried out within the EU legal order. In relation to external relations specifically, in a second subparagraph it stated that the Union ‘shall in particular ensure the consistency of its external activities as a whole in the context of its external relations, security, economic and development policies’. The Council and the Commission were responsible for ensuring that this requirement was met. 21 These were the criteria set out by the Copenhagen European Council in June 1993 and which included references to democracy, the rule of law and human rights (Presidency Conclusions, 21–22 June 1993). See further M Cremona (ed), The Enlargement of the European Union (Oxford, Oxford University Press, 2003) and C Hillion (ed), EU Enlargement—A Legal Approach (Oxford, Hart Publishing, 2004). 22 See eg COM(2003) 526 final, The European Union and the United Nations: The Choice of Multilateralism. 23 See M Cremona, ‘Values in EU Foreign Policy’ in M Evans and P Koutrakos (eds), Beyond the Established Legal Orders—Policy Interconnections Between the EU and the Rest of the World (Oxford, Hart Publishing, 2011) 275.

Principles and Objectives

13

(b) consolidate and support democracy, the rule of law, human rights and the principles of international law; (c) preserve peace, prevent conflicts and strengthen international security, in accordance with the purposes and principles of the United Nations Charter, with the principles of the Helsinki Final Act and with the aims of the Charter of Paris, including those relating to external borders; (d) foster the sustainable economic, social and environmental development of developing countries, with the primary aim of eradicating poverty; (e) encourage the integration of all countries into the world economy, including through the progressive abolition of restrictions on international trade; (f) 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; (g) assist populations, countries and regions confronting natural or man-made disasters; and (h) promote an international system based on stronger multilateral cooperation and good global governance.

These objectives are remarkably broad: they are of a political, security, economic and social nature, and cover activities within the entire range of what the EU may do under any of the legal arrangements set out in primary law. Their main characteristic is their application throughout the entire range of the Union’s external action. In accordance with Article 21(3) TEU: The Union shall respect the principles and pursue the objectives set out in paragraphs 1 and 2 in the development and implementation of the different areas of the Union’s external action covered by this Title and by Part Five of the Treaty on the Functioning of the European Union, and of the external aspects of its other policies.

This provision brings together the different strands of the Union’s external policies, irrespective of their position in the Treaties, within a single set of principles and objectives. Therefore, the latter applies both to the aspects of the external action set out in TFEU (pursuant to Article 206 TFEU), as well as the CFSP/CSDP (pursuant to Article 23 TEU). This is also the main innovation introduced by the reconfiguration of the Union’s constitutional order at Lisbon. The imperative for this change is not difficult to grasp: the articulation of a common set of objectives which would be achieved by whatever it is the Union does in the world would prevent policy fragmentation, enhance coherence and facilitate coordination. To that effect, Article 21(3) TEU provides as follows: The Union shall ensure consistency between the different areas of its external action and between these and its other policies. The Council and the Commission, assisted by the High Representative of the Union for Foreign Affairs and Security Policy, shall ensure that consistency and shall cooperate to that effect.

However, the EU’s legal order is multilevel and idiosyncratic and its structure aims to meet a variety of interests which a range of actors are keen to protect. Different policies are subject to different substantive and procedural rules and this applies to the various strands of the Union’s external action. Therefore, whilst the articulation of common objectives may make sense in principle, the choice amongst them is bound to be far from straightforward given the different legal implications that different legal bases have. These difficulties are compounded by the increasing interactions between different policies, such as trade and environment, trade and foreign policy, or security and defence

14 The European Union in the World policy and development cooperation. The analysis in this book will explore these questions in detail.24

5. LEGAL PERSONALITY Legal Personality

At the core of its international role is the Union’s legal power to act on the international scene. In the briefest of provisions, the Treaty on the European Union addresses the issue of the legal personality of the Union. According to Article 47 TEU: The Union shall have legal personality.

Since its establishment under the Treaty of Rome, the European Economic Community, and then the European Community, had international legal personality. The express provision for the Community’s legal personality was one of the factors illustrating the unique nature of the Community legal order and its ensuing supremacy over national law. In its oft-quoted ruling in Costa in the mid-1960s, the Court stated that: By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity, and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the states to the Community, the Member States have limited their sovereign rights, albeit within limited fields and have thus created a body of law which binds both their nationals and themselves.25

However, when the Union was established under the Maastricht Treaty, it was not endowed with express legal personality, as the areas of foreign policy, security, defence, and judicial and police cooperation in criminal matters, in other words those areas covered in the second and third pillars, were considered by Member States too close to the core of national sovereignty. Instead, and gradually, the Union was granted a treatymaking capacity the exercise of which gave rise to a debate as to whether the EU enjoyed implied legal personality. In the light of Article 47 TEU, this debate is now irrelevant.26 Express legal personality is also provided for in the European Atomic Energy Community27 and in the now expired European Coal and Steel Community.28 When the Lisbon Treaty entered into force, the EU succeeded the EC in all its international obligations. This is made clear in Article 1(3) TEU and has also been communicated in a number of notes verbales which the EU sent to third countries and international organisations such as the Council of Europe. These suggest that the EU is now responsible for the obligations already assumed by both the EC and the EU. This change has been accepted by the Union’s international partners. According to the principles of public international law, the Union’s legal personality 24

See Chapters 2 and 14. Case 6/64 Costa v ENEL [1964] ECR 585 at 593. 26 For the different views on the debate, see U Khaliq, ‘Treaty Conflict and the European Union, or Conflicting Perspectives on the European Union’ (2012) European Law Review 495, 498–99; N Neuwahl, ‘A Partner with a Troubled Personality: EU Treaty-Making in Matters of CFSP and JHA after Amsterdam’ (1998) 3 European Foreign Affairs Review 177; A Sari, ‘The Conclusion of International Agreements in the Context of the ESDP’ (2008) 57 International and Comparative Law Quarterly 53. 27 Art 184 EURATOM 28 Art 6 ECSC. 25

Conclusion

15

entails a number of powers, such as the right to negotiate, conclude and implement international agreements; the right of legation; the right to present international claims by diplomatic procedures or in other available forms and the capacity to be the subject of such rights; and the existence of liability for any breach of international law.29 The precise scope of the powers and duties of the Union is determined pursuant to its primary law. As the International Court of Justice put it in the seminal case on the legal personality of international organisations: Whereas a State possesses the totality of international rights and duties recognised by international law, the rights and duties of an entity such as the [United Nations] Organization must depend upon its purposes and functions as specified or implied in its constituted documents and developed in practice.30

In addition, it was held that ‘[u]nder international law the organization must be deemed to have those powers which, though not expressly, provided in the charter, are conferred upon it by necessary implication as being essential to the performance of its duties’.31 In terms of their acts in the area of EU external relations, the Union’s institutions do not enjoy any autonomous power. Instead, they are to comply with the provisions set out in EU primary law. As the Court put it, it is the Community alone, having legal personality pursuant to Article [281] of the Treaty, which has the capacity to bind itself by concluding agreements with a non-member country or an international organization.32

6. CONCLUSION Conclusion

This chapter has provided an introduction to the general scheme of the legal framework governing the Union’s international relations. The implications of the relevant rules and the procedures which apply in different areas will be explored in the following chapters. In doing so, the analysis will be constantly referring to two major factors. The first is the role of the Court of Justice: already familiar from the development of the constitutional fabric of the Union as well as the internal market, this role has been pivotal to the genesis and gradual emergence of the Union’s international action. The second factor is the dynamic nature of that action and the constant interplay of its rules and procedures with the political dimension of European integration. Whilst apparent in any area of EU law, this characteristic is even more so in EU international relations law.

29 See I Brownlie, ‘International Law at the Fiftieth Anniversary of the United Nations—General Course on Public International Law’ (1995) 25 Recueil des Cours 9, 52, 63–65. 30 Reparations for Injuries Suffered in the Service of the United Nations [1949] ICJ Rep 174, 179–80. 31 Ibid, 182. See also M Rama-Montaldo, ‘International Legal Personality and Implied Powers of International Organizations’ (1970) 44 British Year Book of International Law 111 and K Skubiszewski, ‘Implied Powers of International Organizations’ in Y Dinstein (ed), International Law at a Time of Perplexity (Dordrecht, Martinus Nijhoff, 1989) 855. 32 Case C-327/91 France v Council (re: Competition Agreement with USA) [1994] ECR I–3641, para 24.

Common Commercial Policy

2 Common Commercial Policy: History, Theory and Practice of Exclusivity

1. INTRODUCTION Introduction

T

HE COMMON COMMERCIAL Policy (CCP) is one of the very few areas of external policies expressly provided for in the Treaty of Rome. Its long life, and gradual consolidation through a number of successive Treaty amendments, make it the nucleus of the Union’s external action.

2. THE MAIN LEGAL FEATURES OF THE CCP The Main Legal Features of the CCP

The provisions governing the CCP are set out in Part V of the TFEU which brings together all the TFEU provisions on the Union’s external action. The CCP rules and procedures are laid down in Title II of Part V and cover Articles 206–07 TFEU. The current version of the CCP provisions is streamlined and leaner. The Lisbon Treaty removed provisions which had become irrelevant1 and had no practical significance.2 The basis for the CCP is the establishment of a customs union between the Member States. This is made clear in Article 206 TFEU, which reads as follows: By establishing a customs union in accordance with Articles 28 to 32, the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs barriers. 1 Prior to the entry into force of the current rules, Art 131 EC (now Art 206 TFEU) included a second subparagraph which read as follows: ‘The common commercial policy shall take into account the favourable effect which the abolition of customs duties between Member States may have on the increase in the competitive strength of undertakings in those States.’ 2 Such as Art 132 EC which read as follows: ‘Without prejudice to obligations undertaken by them within the framework of other international organisations, Member States shall progressively harmonise the systems whereby they grant aid for exports to third countries, to the extent necessary to ensure that competition between undertakings of the Community is not distorted.’ The Council was given the power to adopt the necessary directives by qualified majority following a proposal by the Commission. An exception was also provided, in certain circumstances, for a drawback of customs duties or charges having equivalent effect, and the repayment of indirect taxation including turnover taxes, excise duties and other indirect taxes as is allowed when goods are exported from a Member State to a third country. On the application of this provision, see M-L Houbé-Masse, La CEE et les crédits à l’exportation: l’intégration en question (Rennes, Apogée, 1992). The Lisbon Treaty also deleted Art 134 EC which was about the necessary measures in case of trade diversion or economic difficulties in the light of the conduct of the CCP.

17

18 Common Commercial Policy The wording of Article 206 TFEU indicates that the establishment of the CCP follows from the establishment of a customs union. The latter is set out in Article 28(1) TFEU, which reads as follows: The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.

By framing the development of the CCP within the context of the customs union, Article 206 TFEU highlights the link between the internal and external spheres of EU action. This is a first indication of a thread which underpins both the substantive and procedural aspects of the CCP and the articulation of the EU’s international action. As such, it will emerge in different ways in different parts of this analysis. The reference to foreign direct investment in Article 206 TFEU finds its way into a Treaty for the first time at Lisbon. Another change in the wording of this provision is a reference to the Union, whereas, under the previous constitutional arrangements, the precursor to Article 206 TFEU referred to the Member States. It is also worth noting the wording used in Article 207 TFEU in relation to the achievement of the objectives of the CCP: the Union ‘shall contribute’ to it. This is a change from the previous Treaties, according to which the Member States ‘aim to contribute’.3 It is yet unclear whether this change in the wording signifies a stronger commitment which would be enforceable before the Court of Justice.4 Under the previous rules, it was accepted that no precise legal obligation was imposed upon the EU institutions. This was indicated early on in an action against Union measures imposing import levies on agricultural products.5 The applicant argued that such levies were very high and, hence, in violation of the principles laid down in the precursor to Article 206 TFEU. The Court held that the relevant measures ‘do not contravene Article [206], since it has not been established, nor has there been any offer to do so, that by adopting such measures the Council overstepped the wide power of assessment conferred on it by this provision’.6 Therefore, the commitment of the Union institutions to trade liberalisation, as expressed in Article 206 TFEU and illustrated by the adoption of unilateral as well as conventional measures, constituted a policy choice not amenable to judicial review. It is Article 207 TFEU which provides for the core of the CCP. Its first paragraph reads as follows: The common commercial policy shall be based on uniform principles, particularly in regard to 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. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action. 3

ex Art 133 subparagraph 1 EC. For an affirmative view, see A Dimopoulos, ‘The Effects of the Lisbon Treaty on the Principles and Objectives of the Common Commercial Policy’ (2010) 15 European Foreign Affairs Review 153, 155–57 and M Krajewski, ‘The Reform of the Common Commercial Policy’ in A Biondi, P Eeckhout and S Ripley (eds), EU Law After Lisbon (Oxford, Oxford University Press, 2012) 292, 295. 5 Case 5/73 Balkan Import Export GmbH v Hauptzollamt Berlin Packhof [1973] ECR 1091. 6 Ibid, para 27. 4

The History of Exclusivity in the CCP

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This provision raises various questions about the scope of the activities to which it refers. These will be examined later in this chapter. At this juncture, the focus of the analysis is on the genesis and development of the exclusive nature of the Union’s competence in the CCP. It is recalled that this is clearly set out in Article 3(1)(e) TFEU. However, for more than fifty years, from the establishment of the European Economic Community until the entry into force of the Lisbon Treaty on 1 December 2009, the Union’s primary rules were silent on this matter. It was for the Court of the Justice to rule on this issue in a number of controversial judgments. In telling this story, this chapter will adopt a twofold approach: on the one hand, it will examine its interpretation by the Court of Justice as it developed from the early 1970s to the present; on the other hand, it will set it against the evolution of the approach adopted by the Union institutions in that period. This is essential to the proper understanding of the competence assumed by the Union which proved to be neither static in nature nor one-dimensional in its implications. For the purposes of its analysis, suffice it to point out two central aspects of the CCP. The first is about its scope: the CCP covers both unilateral measures adopted by the Union institutions and conventional measures negotiated with third countries and international organisations. As the Court pointed out in Massey Fergusson, the proper functioning of the customs union ‘justifies a wide interpretation of Articles [amongst others, 207] of the Treaty and of the powers which these provisions confer on the institutions to allow them thoroughly to control external trade by measures taken both independently and by agreement’.7 The second significant feature of the CCP is related to decision-making: the Council is to adopt legislation implementing the policy by qualified majority (Article 207(2) and (4) TFEU) following a proposal by the Commission. This supranational feature marks the significance of the CCP for the establishment of the internal market. This became all the more important when the Court articulated the legal position of the Member States in the areas covered by Article 207 TFEU. This will be the focus of the following analysis.

3. THE HISTORY OF EXCLUSIVITY IN THE CCP The History of Exclusivity in the CCP

The provision of exclusivity in Article 3(1)(e) TFEU formalises what has always been the nature of the Union’s competence in the CCP. It was the Court of Justice which first introduced exclusivity in the early 1970s and then articulated its implications in the context of the evolving external relations of the then European Economic Community. The historical and policy context within which the exclusivity of the EU’s competence emerged is worth setting out for four reasons. First, it illustrates clearly the contested nature of and different interests that underpin the way in which the Union exercises the competences granted under primary rules. Secondly, it highlights the central role of the EU’s judiciary in shaping the Union’s external action. Thirdly, it underlines the incremental nature of the framework within which the EU formulates and carries out its external policies. Fourthly, it suggests that the development of legal rules in the area of EU international relations is incremental and multilayered and may only be understood properly in the light of the policy considerations which shape their application as a matter of practice. 7

Case 8/73 Hauptzollamt Bremerhaven v Massey Fergusson GmbH [1973] ECR 897, para 4.

20 Common Commercial Policy 3.1 Introducing Exclusivity In Opinion 1/75 the Court of Justice was asked to rule on a draft Understanding on a Local Cost Standard, an agreement drawn up under the auspices of the Organisation of European Economic Co-operation and Development.8 This agreement was about credits for the financing of local costs linked to export operations. The Court had to address two questions, namely whether the subject-matter of the Agreement fell within the scope of the CCP; and, if so, whether the competence of the Community was exclusive. The former will be examined below in this chapter. As for the latter question, the Court approached it on the basis of ‘the manner in which [the CCP] is conceived in the Treaty’.9 Having concluded that financing local costs linked to export operations fell within the scope of the CCP, the Court held as follows: [The Common Commercial Policy] is conceived in [Article 207 TFEU] in the context of the operation of the Common Market, for the defence of the common interests of the Community, within which the particular interests of the Member states must endeavour to adapt to each other. Quite clearly, however, this conception is incompatible with the freedom to which the Member States could lay claim by invoking a concurrent power, so as to ensure that their interests were separately satisfied in external relations, at the risk of compromising the effective defence of the common interests of the Community. In fact, any unilateral action on the part of the Member States would lead to disparities in the conditions for the grant of export credits, calculated to distort competition between undertakings of the various Member states in external markets. Such distortion can be eliminated only by means of a strict uniformity of credit conditions granted to undertakings in the Community, whatever their nationality. It cannot therefore be accepted that, in a field such as that governed by the Understanding in question, which is covered by export policy and more generally by the common commercial policy, the Member States should exercise a power concurrent to that of the Community, in the Community sphere and in the international sphere. The provisions of Article [133] show clearly that the exercise of concurrent powers by the Member States and the Community in this matter is impossible. To accept that the contrary were true would amount to recognising that, in relations with third countries, Member States may adopt positions which differ from those which the Community intends to adopt, and would thereby distort the institutional framework, call into question the mutual trust within the Community and prevent the latter from fulfilling its task in the defence of the common interest. 10

The various justifications in the Opinion for the exclusive nature of the competence of the Community were characterised by a clear emphasis on the link between the then emerging policy and the operation of the common market: this link is expressed both in general terms, ie the requirement for the defence of the common interests of the Community, and in specific terms, ie the danger of distortion of competition between undertakings of the Member States in external markets. In practical terms, the link between 8

Opinion 1/75 (re: OECD Local Cost Standard) [1975] ECR 1355. Ibid, 1363. 10 Ibid, 1364. 9

The History of Exclusivity in the CCP

21

the CCP and the common market is apparent in the light of the operation of the Community on the basis of a customs union and the ensuing application of a common customs tariff in the relations between Member States and third countries. It was within this context that the Treaty rules on the abolition of both fiscal and non-fiscal impediments to trade were to apply not only to products originating in Member States but also those coming from third countries which are in free circulation in the Union. In other words, the complete abolition of impediments to trade internally requires the adoption and application of common rules in relation to trade in those goods externally. It is this link between the CCP and the internal market which may explain the force with which the Court chose to articulate the foundation of exclusivity (and may also explain why the wording of the CCP provision was only one of the last reasons to be mentioned in the Opinion—after all, it did not appear to provide any indication regarding exclusivity). This force becomes all the more remarkable in the light of the earlier part of the ruling where the scope of the CCP was construed very widely (and which will be examined below in this chapter). Whilst bolstering the foundation of exclusivity, the link between the CCP and the common market also serves to highlight the limits of the former by drawing upon practice under the latter. Indeed, the very development of the common market and the processes of establishing and managing the internal market attest to the paramount importance of observing the dividing line between Union and national competence: this line has not only been extremely fine but has also proved to be in need of constant redefinition. In other words, to construe the CCP as the necessary adjunct to the establishment of the internal market was tantamount to implying the existence of inherent limitations to the exercise of the express competence granted to the Union. This became apparent, albeit rather controversially, only three years later. In Opinion 1/78, another request by the Commission pursuant to Article 218(11) TFEU, the main question was whether the conclusion of a commodity agreement fell within the exclusive nature of the Union.11 The construction of exclusivity three years earlier in Opinion 1/75 and the uncompromising language used by the Court had rendered this issue central to the conduct of EU external relations in general and the concerns of the institutions to enhance their input in decision-making in particular. Having interpreted the scope of the precursor to Article 207 TFEU in wide terms, the Court went on to examine the mechanism set up under the Agreement with the aim of ensuring the financing of the buffer stock. The relevance of this had been highlighted by the Member States. In particular, they had argued that, under the International Agreement on Natural Rubber, the buffer stock would be financed by public funds which, in their view, justified their participation in the conclusion of the Agreement. On the other hand, the Commission had argued that the financial arrangements regarding the implementation of an international agreement should be irrelevant to the more general issue of competence. The Court deemed the financing arrangements central to the very application of the Agreement. Not only were they ‘an essential feature of the scheme for regulating the market [to be set up by the Agreement]’, but also their specific implications for the participation of the Member States would have had an impact on the actual application of the mechanism established thereunder. It noted that ‘the financial structure which [the Agreement] is proposed to set up will make necessary  … co-ordination between the 11

Opinion 1/78 [1979] ECR 2871.

22 Common Commercial Policy use of the specific financial means put at the disposal of the future International Rubber Council and those which it might find in the Common Fund which is to be set up’. The Court then concluded as follows: If the financing of the agreement is a matter for the Community the necessary decisions will be taken according to the appropriate Community procedures. If on the other hand the financing is to be by the Member States that will imply the participation of those States in the decisionmaking machinery or, at least, their agreement with regard to the arrangements for financing envisaged and consequently their participation in the agreement together with the Community. The exclusive competence of the Community could not be envisaged in such a case.12

The thrust of the Court’s ruling in Opinion 1/78 highlighted the first crack in the principle of exclusivity which, according to Opinion 1/75, had been one of the pillars of the CCP. In essence, the Court indicated that, whilst in existence a priori, the exclusive competence of the Union in the area of the CCP did not necessarily entail the conclusion of an agreement exclusively by the Union. Put another way, Member States are not necessarily precluded from concluding, along with the Community, an agreement falling within the scope of Article 207 TFEU despite the fact that their exclusion is inextricably linked to the nature of the Union’s competence in that area. This illustration of pragmatism appeared curious given the link the Court had made earlier between the CCP and the common market and the uncompromising language in which that had been articulated. If the exclusive nature of the competence bestowed upon the Union was as essential to the functioning of the common market as the Court had implied in Opinion 1/75, how could it be diluted simply because the Member States would choose to finance the application of the Agreement? After all, the financial aspects of an Agreement to be concluded under Article 207 TFEU had been expressly deemed irrelevant to the issue of competence three years before. What was it that justified the opposite view in Opinion 1/78? Given that finance was allowed to determine competence, would it not be open to the Member States to instrumentalise the financing of the mechanisms set up by commodity agreements in order to ensure their participation in their conclusion along with the Union? The Court’s approach was criticised for ‘putting the cart before the horse’.13 Cut to its bare essentials, the ruling appeared to suggest that the degree of national involvement in the practical components of what is deemed central to the implementation and application of an international agreement should be relevant to the exercise of the express competence over the CCP. This acknowledgement of the implications of the pronounced role enjoyed by the Member States in the management of areas of activity where their competence had been transferred to the Union echoed the pronounced role that the Member States actually played in the regulation of the CCP during that period. In order to appreciate this parallelism between judicial construction and political reality, an overview of the historical development of the CCP is useful.

12

Para 60. JHH Weiler, ‘The External Legal Relations of Non-Unitary Actors: Mixity and the Federal Principle’ in HG Schermers and D O’Keeffe (eds), Mixed Agreements (Daventer, Kluwer, 1981) 35, 72; reprinted in JHH. Weiler, The Constitution of Europe (Cambridge, Cambridge University Press 1999) 130, 174. 13

The History of Exclusivity in the CCP

23

3.2 Diversity in the Early Conduct of the CCP Article 207 TFEU as well as its precursors make it clear that the CCP would be carried out on the basis of uniform principles. This uniformity is not to be confused with the common interests of the Union which, according to the Court in Opinions 1/75 and 1/78, should be defended. The former served to highlight the nature of the CCP as a necessary component of the common market and to indicate the modus operandi of the emerging policy; the latter served to justify what the Court considered the necessary component of that policy, namely the exclusive nature of the Union’s competence. The early years of the CCP were characterised by considerable lack of uniformity. For instance, in the area of imports, the relevant rules acknowledged the existence of national quotas in specific cases.14 The management of this system required an annual review of the quotas opened to the Member States. Another popular practice consisted of division of quotas on imports of products from third countries to the Union into national sub-quotas. In terms of the relationship between the EU and third countries, this method often consisted of the negotiation, conclusion and application/of voluntary export restraints. These proved to be quite popular in relation to categories of products for which national industries were deemed to be too weak to face foreign competition and too sensitive for their Member States to subject them to it. Such areas included the textiles sector15 and the automobile industry (the latter was considered by Member States too weak to be subject to competition from Japan).16 In the light of the above, a significantly differentiated approach to the CCP emerged that reflected a highly fragmented policy. As far as the introduction of national subquotas was concerned, the practice was significant for both policy and legal reasons. On the one hand, it reflected the concern of the Member States to ensure that their industries would be protected from what they deemed to be unrestrained competition from imported products. Therefore, national interests did affect the determination of what the Court referred to in Opinion 1/75 as ‘the common interests of the Community’. On the other hand, these interests were protected by means of EU legislation, thus enabling the Community institutions to allow Member States to do legally within the CCP framework what they might choose to do illegally beyond it. The existence of national quotas on imports proved to be a popular practice in the late 1970s and throughout the 1980s.17 It would be too easy to dismiss this practice as overtly

14 See Reg 288/82 on common rules on imports [1982] OJ L35/1 and Reg 3420/83 on import arrangements for products originating in state-trading countries [1983] OJ L346/6. 15 The Multi-Fibre Arrangement, a voluntary restraint agreement, was negotiated within the GATT with major supplying countries and, within that Arrangement, a number of agreements were concluded with Asian and South American countries. See P Eeckhout, The European Internal Market and International Trade: A Legal Analysis (Oxford, Oxford University Press, 1994) 186–97 and RJPM van Dartel, ‘The EEC’s Commercial Policy Concerning Textiles’ in ELM Völker (ed), Protectionism and the European Community, 2nd edn (Deventer, Kluwer, 1983) 121. 16 In fact, voluntary restraint agreements, negotiated by the industry and applied informally, had already been in existence in various Member States. Such an agreement had been concluded between the British Society of Motor Manufacturers and the Japanese Automobile Manufacturers Association. See MCEJ Bronckers, ‘A Legal Analysis of Protectionist Measures Affecting Japanese Imports into the European Community’ in Völker, ibid, 57, 79 and Eeckhout, ibid, 197–225. 17 In the early 1990s, approximately 10,000 quotas were estimated to be in existence in individual Member States: see R Madelin, ‘Trade Policy—Opening World Markets for Business’ in M Darmer and L Kuyper, Industry and the European Union—Analysing Policies for Business (Cheltenham, Elgar, 2000) 155, 160.

24 Common Commercial Policy protectionist and indicative of the inertia which underpinned decision-making within the Community legal order. However, a number of other economic and international factors need to be taken into account. During the Tokyo Round, for instance, the international economic arena was facing a considerable expansion of protectionist practices throughout the world. This was largely due to increasing oil prices, structural changes in various industrial activities, floating exchange rates and rising unemployment.18 Therefore, far from constructing a ‘fortress Europe’ by favouring wildly divergent national interests, the Community’s practice was consistent with the patterns characterising the policies of its major trading partners. It also suggested that a truly uniform CCP would only emerge incrementally.19 This gradual process20 did not just render the application of the ‘uniform principles’ an objective of the emerging policy rather than a condition sine qua non; it also necessitated the adoption of further measures which had the potential to undermine the common market. This was because a Member State in whose territory the importation of certain products was subject to a quota would have to ensure that this quota would not be undermined by the import of the same products from another Member State where they had been imported from a third country either freely or subject to a higher quota. Therefore, divergence in import conditions entailed divergence in the operation of intraUnion trade, a practice acknowledged at the time in primary law which also provided for a specific procedure managed by the Commission.21 The national deviations approved by the Commission reaching their peak in the period between 1978 and 1987.22 Against this background, the forceful construction of exclusivity by the Court in the early 1970s took a different dimension: instead of seeking to exclude Member States from the regulation and management of trade relations with the rest of the world, it served to highlight the essential role played by the emerging policy in achieving the main objectives of the Treaty. Such an approach was all the more necessary in the light of the stagnation which characterised decision-making following the ‘Luxembourg compromise’. In theoretical terms, if examined against the antithesis between normative and decisional supranationalism articulated early on by Weiler,23 the approach adopted in Opinion 1/75 is easily explained. However, it also risks losing its iconic role as the foundation for an external policy developed to be supranational par excellence. The first indication that exclusive competence over the content of the CCP did not necessarily entail exclusivity in the conclusion of an international agreement became apparent in Opinion 1/78. Subsequent case-law confirmed this by sanctioning the various arrangements which, as applied by the Community institutions and the Member States, were to 18 See M Elsig, The EU’s Common Commercial Policy—Institutions, Interests and Ideas (Aldershot. Ashgate, 2002) 28. 19 This was acknowledged expressly in secondary legislation: see eg Council Reg 3589/82 on common rules on imports on certain textile products originating in third countries [1982] OJ L374/106. 20 See M Cremona, ‘The Completion of the Internal Market and the Incomplete Commercial Policy of the European Community’ (1990) 15 European Law Review 283. 21 See Art 115 EEC of the Treaty Rome as amended at Maastricht, analysed in P Vogelenzang, ‘Two Aspects of Article 115 EEC Treaty: Its Use to Buttress Community-set Sub-quotas, and the Commission’s Monitoring System’ (1981) 18 Common Market Law Review 169. 22 The maximum number approved by the Commission was 260 in 1979: see the table in BT Hanson, ‘What Happened to Fortress Europe? External Trade Policy Liberalization in the European Union’ (1998) 52 International Organization 55, 69. 23 JHH Weiler, ‘The Community System: The Dual Character of Supranationalism’ (1981) 1 Yearbook of European Law 267.

The History of Exclusivity in the CCP

25

render the notion of ‘uniform principles’ provided for in the precursors to Article 207 TEU very flexible indeed. In a judgment delivered only a year after Opinion 1/75 the Court articulated the practical implications of exclusivity in terms of the position of the Member States. In Donckerwolcke the subject-matter of the dispute was the legality of a French law requiring that importers declare the ultimate origin of products in free circulation, ie products imported into France from another Member State into which they had been imported from a third country.24 Such measures were considered necessary to enable the French authorities to decide whether to exercise the exceptional powers granted under the original Treaty of Rome about deflection of trade. The Court pointed out that, in terms of intra-Union trade, any import restrictions on products in free circulation were contrary to the principle of free movement of goods, provided that these goods were imported under the procedures laid down in what is now Article 29 TFEU: all import formalities should have been complied with, any customs duties or charges of equivalent effect should have been levied in the importing state, and the products in question should not have benefited from a total or partial drawback of such duties or charges. However, the Court observed that, despite the expiry of the transitional period, the CCP had not in fact been complete, as it was possible for different rules to apply to products originating in a third country when they originally entered the Union. It was precisely this disparity which raised the possibility of deflections of trade and which underpinned the exceptional clause of ex Article 115 EEC. In this context, the right of Member States to deviate from the CCP was acknowledged, albeit not unconditionally: As full responsibility in the matter of commercial policy was transferred to the Community by means of Article [207(1) TFEU] measures of commercial policy of a national character are only permissible after the end of the transitional period by virtue of specific authorization by the Community.25

On the facts of the case, the Court concluded that national measures requiring that an importer declare the actual origin of products even when the latter were in free circulation would be consistent with Union law. However, the importer would be required to comply with them only ‘in so far as he knows [the origin] or may reasonably be expected to know it’.26 Furthermore, non-compliance should not give rise to any administrative or penal measures which would be disproportionate to the offence. The judgment in Donckerwolcke highlighted the construction of the CCP as intrinsically linked to the establishment of the common market.27 In doing so, the Court did not take the principle of uniformity, laid down in what is now Article 207 TFEU, as a given but took into account what the state of the policy was. By pointing out the incomplete nature of the CCP, the Court did not hesitate to acknowledge the central role retained by the Member States in the area in question. In doing so, it exhibited a considerable degree 24 Case 41/76 Suzanne Criel, née Donckerwolcke and Henri Pchou v Procureur de la République au Tribunal de Grande Instance, Lille and Director General of Customs [1976] ECR 1921. 25 Ibid, para 33. 26 Ibid, para 35. See also Case 52/77 Leonce Cayrol v Giovanni Rivoira & Figli [1977] ECR 2261. 27 See M Cremona, ‘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) 352 for a detailed analysis of how limits of uniformity in external commercial policy reflected the limits of uniformity in the establishment and functioning of the internal market.

26 Common Commercial Policy of pragmatism: it would have been highly problematic for the Court to seek to bolster the exclusive nature of the Union in an area where the EU institutions had either been very slow to act or very cautious in taking national policy concerns into account. Viewed from this angle, the judgment in Donckerwolcke was based on a teleological approach which, actually, favoured the Member States rather than the Union. However, legal constraints were set: on the one hand, the exercise of the national power to deviate from the CCP had become an issue of Union law in so far as the Member State seeking to rely upon it should do so pursuant to a ‘specific authorization by the [Union]’;28 on the other hand, the determination of how ‘specific’ the relevant Union authorisation should be became a matter ultimately to be determined by the Court. A similar approach was applied in Bulk Oil.29 The subject-matter of this case was a British policy that aimed to control the export of crude oil by confining this only to a number of countries other than Member States. As there already existed Community rules on exports adopted in the context of the CCP which, exceptionally, allowed national restrictions on crude oil, the question was whether this exception constituted a ‘specific authorisation’ in the meaning of Donckerwolcke. The Court answered this question in the affirmative. It also acknowledged the power of the Council to restrict the scope of CCP measures: Having regard to the discretion which it enjoys in an economic matter of such complexity, in this case the Council could, without contravening Article [207 TFEU], provisionally exclude a product such as oil from the common rules on exports to non-member countries, in view in particular of the international commitments entered into by certain Member States and taking into account the particular characteristics of that product, which is of vital importance for the economy of a State and for the functioning of its institutions and public services.30

In acknowledging, albeit provisionally, the fact that the common rules on exports may not be all that common the Court interprets the requirement for a ‘specific Community law authorisation’ widely.31 The specific factual context of the case, however, is noteworthy: crude oil is a sensitive issue which had already given rise to an equally pragmatic approach by the Court in the area of free movement of goods: in Campus Oil it was held that a measure of equivalent effect to quantitative restriction was justified as necessary and proportionate to protect public security, even in the presence of Community legislation in the area, as the latter could not ensure sufficient supplies for Member States in all eventualities.32 Therefore, the Court’s approach to the commercial treatment of that specific product in the area of external trade was not all that different from that already adopted in the process of the establishment of the common market. In addition to further highlighting the link between the regulation of the CCP and that of the common market, the judgment in Bulk Oil also served to illustrate a practical consideration: it was vital that the specific interests of the Member States should have been 28 29

n 24 above, para 33. Case 174/84 Bulk Oil (Zug) AG v Sun International Limited and Sun Oil Trading Company [1986] ECR

559. 30

Ibid, para 36. This interpretation was criticised as ‘extremely generous’: CWA Timmermans, ‘Community Commercial Policy on Textiles: A Legal Imbroglio’ in Völker, n 15 above, 159, 161. See also the criticism in EML Völker, ‘Annotation on Bulk Oil’ (1987) 24 Common Market Law Review 99. 32 Case 72/83 Campus Oil Ltd v Minister for Industry and Energy [1984] ECR 2727. In the context of indirect taxation, see Case 140/79 Chemial [1981] ECR 1. 31

The History of Exclusivity in the CCP

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seen to be adequately protected at Community level. Had this not been the case, and in the light of the highly protectionist and unpredictable international economic climate of that period, the national administrations would have been very reluctant to cooperate in the establishment of even an incomplete CCP. A similar approach was applied in the context of another sensitive product, namely textiles, in Tezi Textiel.33 The Court sanctioned the lack of common rules on imports of textiles and the legality of a Community measure imposing quotas, dividing them in national and regional sub-quotas. What emerges from the above overview is an approach that both acknowledges the reality of the absence of uniformity in the application of CCP rules and sanctions the right of the Community and the Member States to tackle the ensuing practical repercussions by deviations from the existing rules. Whilst not uncontroversial at the time,34 this approach ought to be viewed within the political climate in the Community, the prevailing international economic climate at the time, and the level of development of the Community legal order: during the period in question, the national administrations were faced with the steady process of the constitutionalisation of EU law. To ignore national concerns as well as the repercussions of a very difficult international economic cycle and frustrate the efforts of the Union’s executive to pursue a gradually evolving, yet balanced, policy would have been counterproductive.35

3.3 The Early Development of the CCP The success of the approach adopted by the legislature and sanctions by the Court was borne out in practice.36 And over the years, this approach evolved and the Court made it clear that the institutions would not be given a carte blanche. In Case 51/87 Commission v Council the Court held that the Community’s system of tariff preferences on textile products, which had been applied since the early 1970s, did not meet the administrative, technical or economic requirements which would justify the maintenance of national sub-quotas.37 The judgment suggests that the approach of the Court to the discretion enjoyed by the legislature in the CCP is sufficiently flexible to adjust to evolving policy realities: whilst acknowledging discretion as necessary in order to facilitate the adjustment of ultimate objectives set out in primary law to the political realities of the time, it may be curtailed in order to prevent the perpetuation of old policies. In fact, the Court 33 Case 59/84 Tezi Textiel BV v Commission [1986] ECR 887. See also the limits highlighted both in this judgment and in Case 35/79 Grosoli v Ministry of Foreign Trade [1980] ECR 177, Case 218/82 Commission v Council [1983] ECR 4063 and Case 199/84 Procuratore della Repubblica v Migliorini [1985] ECR 3325. 34 See eg the Opinion of AG VerLoren van Themaat in Case 5/84 Tezi Textiel, ibid, 904. 35 As was pointed out in relation to the position of any given Member State in the 1970s and 1980s, ‘if its only choice is between its own national measures that provide national protection, and accepting a Community regime denying national protection, the choice will inevitably be against the Community regime. Only a nonuniform Community regime that provides for national protection will induce that Member State to give up its own national regime. One may regret the failure of such a common commercial policy to reflect the uniform principles mandated by Article [133]; but unavailability of the intermediate option of a common policy along non-uniform lines will frustrate the development of any common policy’: Vogelenzang, n 21 above, 175–76. 36 In the late 1980s, national deviations were gradually reduced. In 1989, for instance, the Commission approved 119 requests for an authorisation under ex Article 115 EC as opposed to 260 in 1979: see Answer by the Commission to Written Question 2133/90 [1991] OJ C85/29. 37 Case 51/87 Commission v Council [1988] ECR 5459.

28 Common Commercial Policy appeared quite astute in Case 51/87 Commission v Council as it had been made clear that the deviation from the CCP which had been the subject-matter of the dispute had ceased to attract consensus amongst the Community actors as its function was no longer regarded as necessary and uncontroversial. The history of the construction of exclusivity in the CCP is noteworthy for the dexterity that characterises the approach of the Court of Justice. On the one hand, the Court itself acknowledged the practice of a non-uniform policy which had no foundation in primary law and enabled the Community to achieve its objectives in the only manner which its institutions deemed realistic. On the other hand, it articulated the principle of exclusive Union competence in that policy in forceful terms, hence laying the foundation for what became the nucleus of the EU’s international relations. In engaging in this imaginative course of action, the Court was not alone. The gradual development of the CCP highlights various instances where the Union institutions appeared willing to try new methods of establishing a CCP as a common policy. A case in point was the importation of cars from Japan. The 1970s saw a very considerable rise in these imports throughout the Community, causing alarm to national industries about the impact on labour forces and competitiveness and, ultimately, raising the prospect of significant market losses. The extent to which national industries were affected varied considerably: in 1980, for instance, Japanese firms had approximately 43% of the automobile market in Greece and only 0.14% in Italy. Depending on the strength of individual domestic industries, each Member State sought to resist the penetration of its market by Japanese imports pursuant to arrangements negotiated individually. These arrangements took the form of national quotas and voluntary export restraints, the terms of which varied: in 1977, for instance, France imposed a limit on Japanese products of 3% of its market, whereas Portugal only allowed the importation of 20,000 passenger cars.38 This overtly protectionist policy was, at that time, justified in the light of the importance of domestic automobile industries to the economies of Member States.39 In 1991, after three years of negotiation, an agreement was concluded between the Commission and the Japanese Ministry of Trade and Industry. The agreement, entitled ‘Elements of Consensus’, aimed at establishing the progressive and complete liberalisation of the importation of Japanese cars, off-road vehicles and light commercial vehicles by the beginning of 2000. For the period until the end of 1999, it provided for a regulated regime for imports in the five most important European motor vehicle markets, namely France, Italy, Spain, Portugal and the United Kingdom, albeit on the basis of substantially increased quotas. This development should not be seen in isolation; instead, it was part of a broader relaxation of the attitude of the Union and its Member States towards their economic relations with Japan.40 A detailed examination of the content of this agreement is beyond the scope of this analysis.41 It is worth pointing out that, whilst not introducing common rules applicable immediately throughout the Community market, the Commission sought to merge a 38 See M Mason, ‘Elements of Consensus: Europe’s Response to the Japanese Automotive Challenge’ [1994] Journal of Common Market Studies 433, 436. 39 See Hanson, n 22 above, 75. 40 See M Johnson, European Community Trade Policy and the Article 113 Committee (London, Royal Institute of International Affairs, 1998) 42. 41 See Hanson, n 22 above, 74–80; Mason, n 38 above; CRA Swaak, European Community Law and the Automobile Industry (The Hague, Kluwer, 1999) 187–204.

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number of disparate individual national policies into a common, albeit provisionally diverse, policy negotiated and administered at Community level. Therefore, it represented a significant step forward, not only for reducing the scope of diversity within the common market and rendering complete liberalisation a concrete objective, but also for subjecting diversity to a Community discipline in order to create a common policy. Furthermore, it illustrated clearly the evolving nature of the CCP and its continuous link with the common market. The internal market project and the concrete goal of achieving by 1992 what should have been achieved years previously questioned the role of pre-existing and individually negotiated national arrangements in the area of the CCP. Therefore, the impetus underpinning the completion of the internal market had rendered the case for an incomplete CCP untenable. In substantive terms, Elements of Consensus took the interests of the major national industries into account and protected them. Viewed from this angle, the agreement illustrated two broader points: exclusivity in the CCP did not necessarily render national interests irrelevant, neither did it ignore them; the exercise of exclusive competence in the CCP did not necessarily entail the substitution of national concerns for an inflexible and centrally designed policy model. In political and practical terms, the negotiation and conclusion of Elements of Consensus might not have been possible had it not been for the gradual evolution of the CCP: the acknowledgement of national concerns by the Union’s institutions and the sanctioning of the ensuing policies by the EU’s judiciary had created the political environment necessary both for the Commission to step in and seek to address national concerns within a common framework, and for the Member States to entrust the defence of their interests to the EU’s executive. In other words, the implied acknowledgement by the Court in the 1970s and early 1980s both that the CCP was not a genuinely common policy and Union exclusive competence was not truly exclusive was central to the development of that policy. Viewed from this angle, the contribution of the Court of Justice to the development of EU international relations was no less significant than that underpinning the establishment of the single market pursuant to its construction of the principles of free movement.

3.4 Identifying the Main Threads This section told the story of a conversation. The main interlocutors were the Union’s judiciary, on the one hand, and the Union’s legislature and executive, on the other. The topic of this conversation was the competence of the Union to articulate and carry out its external trade policy and its impact on the extent to which Member States were allowed to act on the international scene in order to protect their interests in the area. Placed in their specific legal and political context, the originally bold statements of the Court of Justice were applied in a flexible manner so that the parallel existence of the Member States was not necessarily excluded. To that effect, the policy laid down in the precursors to Article 207 TFEU has been viewed as less common than originally envisaged. Not only did the Union’s institutions, the Member States and the Union’s judicature appear to share this view of the CCP, but they also interacted in indirect ways in order to shape incrementally a regulatory space which was expressly provided for under primary law as complete by the end of the transitional period. These different interlocutors were

30 Common Commercial Policy acutely aware of the practical considerations that underpinned the application of the principal normative characteristic of the CCP, namely the exclusive nature of the Union’s competence. This conversation between the main EU institutional actors shapes the development of the CCP as an incremental process, the pace and intensity of which depends on a number of factors, law being but one of them. The dynamic character of this process becomes all the more noteworthy if viewed in the broader context of the drafting and entry into force of the Lisbon Treaty. This section focused on one aspect of it, namely what preceded the express acknowledgement of the EU’s exclusive competence in Artcle 3(1)(e) TFEU. The following sections will examine another dimension of the construction of the CCP as an adjunct to the establishment of the internal market and its relation to the other sources of external competence by focusing on the scope of the policy.

4. THE SCOPE OF THE CCP The Scope of the CCP

The exclusive competence of the Union rendered the issue of the definition of the scope of the CCP of considerable practical significance: the wider the scope of the policies it covered, the less control the Member States would be able to exercise in the area of external trade and the more significant the powers of the Union institutions. This was all the more so in the light of the qualified-majority voting introduced by Article 207(4) TFEU.

4.1 The Treaty Provision The central provision of the CCP merely refers to a number of activities which fall within the scope of the CCP: The common commercial policy shall be based on uniform principles, particularly in regard to 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. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action.

The wording of Article 207(1) TFEU indicates that this list is non-exhaustive, a conclusion confirmed by the Court’s case-law.42 As to the type of measures which may be adopted pursuant to that provision, both unilateral measures adopted by the Union alone and international agreements concluded with third countries and international organisations are covered. The Court points out that: A commercial policy is in fact made up by the combination and interaction of internal and external measures, without priority being taken by one over the others. Sometimes agreements are concluded in execution of a policy fixed in advance, sometimes that policy is defined by the agreements themselves.43 42 43

Opinion 1/78, n 11 above, para 45; Case 165/87 Commission v Council [1989] ECR 5545, para 15. Opinion 1/75, n 8 above, 1363.

The Scope of the CCP

31

4.2 The Historical Context of Defining the Scope of the CCP When the European Economic Community was established, of the fields currently set out in Article 207 TFE, only trade in goods was mentioned expressly in the Treaty of Rome (ie changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods, 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). The references to services, intellectual property and investment did not find their way into the primary rules until decades later. In fact, the scope of the CCP did not change until the entry into force of the Treaty of Amsterdam in 1999—and even then, it did so tentatively, as the analysis later in this chapter will show. Therefore, the wording of the Treaty did not get policy-makers very far in terms of the definition of the scope of the CCP. The only tools they had were confined to the activities expressly mentioned in the precursor to Article 207 TFEU, the fact that these were set out in a non-exhaustive matter and the implementation of the CCP pursuant to the adoption of both unilateral and conventional measures. It was only a matter of time before this issue was brought before the Court of Justice. The ensuing disputes and the case-law of the Court make for a story worth telling. This is the case not only in order to describe the historical context within which the current provision of Article 207(1) TFEU was drafted, but also in order to highlight the issues that underpinned the development of the CCP. These issues are sensitive, as they touch upon the extent to which Member States have given up some of their powers in their conduct of foreign affairs, and their impact on the ways in which the Union shapes its external trade policy is ever present. The issue of the scope of the CCP arose for the first time in Opinion 1/75, in which the Court was asked to rule on a draft Understanding on a Local Cost Standard, an agreement drawn up under the auspices of the Organisation of European Economic Cooperation and Development.44 This agreement was about credits for the financing of local costs linked to export operations. Asked to rule on its consistency with the Union legal order, the Court referred to the CCP as follows:45 [Measures concerning credits for the financing of local costs linked to export operations] constitute an important element of commercial policy, 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 Community.

This broad reading of the scope of what is now Article 207 TFEU was accompanied by the construction of a dynamic policy: The common commercial policy is above all the outcome of a progressive development based upon specific measures which may refer without distinction to ‘autonomous’ and external aspects of that policy and which do not necessarily presuppose, by the fact that they are linked to the field of the common commercial policy, the existence of a large body of rules, but combine gradually to form that body.46

The combined implications of these statements are very significant. The definition of the 44

Ibid. Ibid, 1362. 46 Ibid, 1363. 45

32 Common Commercial Policy scope of the CCP with reference to that of the external commercial policy of a state may appear to render the former potentially unlimited; furthermore, its development independently of the adoption of internal harmonising legislation not only highlights the central powers of the Union institutions in that area but also brings the Court of Justice to the very centre of the conduct of international trade relations. Indeed, an ill-defined external policy which falls within the exclusive nature of the Union was likely to render the Union judicature the ultimate arbiter in an area challenging directly the autonomy of Member States to act on the international economic arena. The significance of this dynamic definition of the CCP in Opinion 1/75 is further highlighted by the remaining part of the ruling. As analysed above in this chapter, the Court went on to articulate the exclusive nature of the competence which the Union enjoys a priori. Its raison d’être was to ensure that the institutional framework of the Community would not be distorted, the mutual trust within the Union would not be called into question and the Union would not be prevented from fulfilling its task in the defence of the common interest. Viewed in this context, Opinion 1/75 appeared to lay down the foundation of one of the most supranational policies of the Union. It has been argued, for instance, that the CCP ‘represents the EC at the height of its legal powers, control, and supremacy over the member states’.47 A number of subsequent rulings appeared to support such views. In Opinion 1/78 the Court was asked to rule on whether the Community was exclusively competent in the context of the CCP to conclude an agreement aimed at the stabilisation of prices of natural rubber by means of setting up a buffer stock.48 The Agreement aimed at achieving two objectives: on the one hand, to serve the interests of the exporting states by guaranteeing stable export earnings, and, on the other hand, to serve the interests of the importing states by ensuring reliability of supplies at a fair price level. The Contracting States would meet those objectives by building up a buffer stock purchased when prices were in decline and then sold when prices were rising. The effect of this arrangement would be to contain the price of natural rubber within a predetermined fluctuating margin. The wide interpretation put forward by the Court in Opinion 1/75 was the canvas on which the Commission and the Council, the latter supported by a number of Member States, developed two contrasting lines of reasoning as to the proper definition of the scope of the CCP. The agreement in question was a commodity agreement; therefore its aim was to regulate rather than liberalise international trade. The Commission viewed such agreements as necessary for the complete and consistent management of international trade and argued that the CCP should be construed widely enough to cover them. In this way, the EC would be able to use trade instruments already at the disposal of states. Therefore, it viewed the instruments listed in the original precursor to Article 207(1) TFEU as classic mechanisms of international trade relations with which it sought to contrast a modern and dynamic policy, mainly on the basis of the earlier pronouncement of the Court in Opinion 1/75. This argument led to what has been known as the instrumentalist approach to the CCP according to which the character of a given legal measure would determine whether it should be covered by the CCP and, hence, the

47 48

D McGoldrick, International Relations Law of the European Union (London, Longman, 1997) 70. See n 11 above.

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33

exclusive competence of the Union: if that measure was an instrument regulating international trade, then it should be deemed to fall within its scope. The Council, on the other hand, articulated an objective approach, according to which the question whether a given legal measure should be adopted pursuant to the CCP would be determined on the basis of its objective: any measure whose aim was to influence the volume or flow of trade should be considered as a commercial policy measure, hence falling within the scope of Article 207 TFEU. This approach was underpinned by the concern that, in the alternative, there would be no limit on what the Union institutions could do in the area of external trade relations. Furthermore, the Council pointed out that the negotiation and conclusion of the International Agreement on Natural Rubber had been carried out within a distinctly political context. In particular, rubber was a strategic raw material whose regulation had been attempted as a matter of general economic policy and not trade policy, the former remaining within the sphere of national responsibility. Furthermore, the international regulation of natural rubber had been attempted within the context of the responsibilities which Member States had towards developing countries independently of the Union. This approach was also supported by the British and French governments. In its ruling, the Court did not address the merits and drawbacks of these approaches in a comprehensive manner.49 Instead, having identified the main features of the International Agreement on Natural Rubber, it acknowledged both the distinct nature of commodity agreements in the context of international economic relations and their comprehensive scope. It stated the following: As an increasing number of products which are particularly important from the economic point of view are concerned, it is clear that a coherent commercial policy would no longer be practicable if the Community were not in a position to exercise its powers also in connexion with a category of agreements which are becoming, alongside traditional commercial agreements, one of the major factors in the regulation of international trade.50

Having construed the CCP in the light of this particular type of agreements, the Court went on to articulate its scope in the following terms: [I]t seems that it would no longer be possible to carry on any worthwhile common commercial policy if the Community were not in a position to avail itself also of more elaborate means devised with a view to furthering the development of international trade. It is therefore not possible to lay down, for Article [207 TFEU], 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 common commercial policy understood in that sense would be destined to become nugatory in the course of time. Although it may be thought that at the time when the Treaty was drafted liberalization of trade was the dominant idea, the Treaty nevertheless does not form a barrier to the possibility of the 49 See JHJ Bourgeois, ‘The Common Commercial Policy: Scope and Nature of the Powers’ in Voelker (ed), n 15 above, 1 who points out that, if the approach adopted by the Council were to be taken to its logical conclusion, measures inherent in the conduct of commercial policy such as rules of origin would not be covered by Art 133 EC (at 5). See also P Gilsdorf, ‘Portée et délimitation des compétences communautaires en matière de politique commerciale’ [1989] Revue du Marché Commun 195 and CWA Timmermans, ‘Common Commercial Policy (Article 113 EEC) and International Trade in Services’ in F Capotorti et al (eds), Du droit international au droit de l’intégration Liber Amicorum Pierre Pescatore (Baden-Baden, Nomos, 1987) 675. 50 n 11 above, para 43.

34 Common Commercial Policy Community’s developing a commercial policy aiming at a regulation of the world market for certain products rather than at a mere liberalization of trade.51

And as if the point had not been brought home, the Court went on to rule that the precursor to Article 207 TFEU made it clear that ‘the question of external trade must be governed from a wide point of view and not only having regard to the administration of precise systems such as customs and quantitative restrictions’.52 The above approach of the Court of Justice might appear to bring the principles introduced in Opinion 1/75 to their logical conclusion: being defined in parallel to the external commercial policy of a state, the CCP should be dynamic and construed in wide terms in order for it to be ‘worthwhile’ as well as ‘coherent’ and ‘practicable’. However, when viewed in the light of the legal and political context in which the Court was called upon to rule, a more nuanced picture emerges. The type of agreement which formed the subject-matter of the request for an Opinion rendered any outcome other than that reached by the Court difficult to justify. There was an increasing tendency in international economic relations in 1970s towards developing a regulatory approach to international trade. This aimed at taking into account, amongst others, the emerging concerns of developing countries. Both the establishment of systems of export credits and the conclusion of commodity agreements were part of this approach. To exclude them from the scope of the CCP would not only illustrate a short-sighted view of international trade but would also indicate a reading of the Treaty so restrictive as to run counter to the essence of the clearly non-exhaustive enumeration of activities laid down therein. Viewed from this angle, in Opinions 1/75 and 1/78 the Court was asked to adjudicate on ‘normal instrumentalities of commercial policy’.53 Furthermore, both rulings were delivered in the period of stagnation which characterised the Community legal system following the so-called ‘Luxembourg compromise’. Against this political background, the Court of Justice sought to define the normative foundation of the Community’s external trade policy and ensure that its legal implications for the Member States would be accepted. In this respect, it is recalled that the twin principles of the CCP, namely its wide scope and the exclusive nature of Community competence, were introduced in what appeared to be quite uncompromising terms in Opinion 1/75. The Court’s preoccupation with shaping as solid a foundation for the CCP as possible was illustrated by the express linkages made in its rulings with the internal market. In Opinion 1/78, for instance, it was pointed out that ‘a restrictive interpretation of the concept of common commercial policy would risk causing disturbances in intra-Union trade by reason of the disparities which would then exist in certain sectors of economic relations with non-member countries’.54 Made in order further to justify the need for a dynamic interpretation of the scope of the external trade policies of the Union, this link reminds one of the similar link which the Court had already made three

51

Ibid, para 44. Ibid, para 45. 53 E Stein, ‘External Relations of the European Community: Structure and Process’ (1990) 1 Collected Courses of the Academy of European Law 115, 137. 54 n 11 above, para 45. 52

The Scope of the CCP

35

years earlier in order to justify the need for the competence of the Community to be exclusive.55 Whilst the principles purporting to lay down the foundation of the CCP were put forward in uncompromising terms, in fact the Court adopted a more flexible approach to its application. In Opinion 1/78, for instance, it is recalled that the assertion of the exclusive nature of the Community notwithstanding, the participation of the Member States in the conclusion of the International Agreement in Natural Rubber was sanctioned.56 This illustration of pragmatism on the facts of the case57 does not only suggest that the ramifications of exclusivity may not be as severe as they appeared originally; it also questions whether the uncompromising terms in which the broad scope of the CCP was construed should be taken, in fact, at face value. Instead of abating the debate about the scope of CCP, the pronouncements of the Court of Justice were so general that they enabled the Council, the Commission and the Member States to put forward their contrasting approaches in a number of subsequent cases. In Generalised Tariff Preferences the Commission challenged the adoption of two Council regulations applying generalised tariff preferences to a number of industrial and textile products originating in developing countries.58 It argued that the contested measures should have been adopted by the Council under the CCP rules. The Council defended the absence of a reference to a precise legal basis in the contested measures as well as their adoption by unanimity. It argued that they pursued commercial aims as well as aims of development policy. It was for that reason that the CCP had been considered irrelevant to the establishment of a system of generalised tariff preferences. This line of reasoning was rejected by the Court of Justice. Having noted that a system of generalised tariff preferences was based on changes in tariff rates, it opined that it fell within the scope of the indicative list of activities laid down in the precursor to Article 207 TFEU. Therefore, it was undoubtedly covered by the CCP. The Court then repeated that the CCP should have the same content as that of national commercial policy and proceeded as follows: The link between trade and development has become progressively stronger in modern international relations. It has been recognized in the context of the United Nations, notably by the United Nations Conference on Trade and Development (UNCTAD), and in the context of GATT.59

Against this legal and political background, the Union system of generalised preferences was seen as reflecting ‘a new concept of international trade relations in which development aims play a major role’.60 This construction of the CCP was also justified in the light of ex Article 131 EC which referred to the ‘harmonious development of world trade’ as one of the objectives of the CCP.61 In the Generalised Tariff Preferences judgment the Court was faced with the considerable difficulty of delineating a commercial policy broadly understood in the light of its 55

Opinion 1/75, n 8 above, 1364. Opinion 1/78, n 11 above. 57 See T Tridimas and P Eeckhout, ‘The External Competence of the Community and the Case-Law of the Court of Justice: Principle versus Pragmatism’ (1994) 14 Yearbook of European Law 143. 58 Case 45/86 Commission v Council (re: GSP) [1987] ECR 1493. 59 Ibid, paras 17. 60 Ibid, para 18. 61 Ibid, para 19. This objective has been repeated in the Treaty ever since, currently in Art 206 TFEU. 56

36 Common Commercial Policy interactions with other policies with which it shared legal instruments to a considerable extent. It did so by relying upon the expansive statements it had made in the previous decade about the parallelism between the content of the CCP and the external commercial policy of a state. The judgment in Generalised Tariff Preferences illustrated the difficulties that the Court would have to face in order to delineate a widely construed CCP in the light of its interactions with a number of other policies over which the competence enjoyed by the Union was not exclusive. The most prominent examples were provided in the context of the interaction between trade and foreign policy in 1990s. In the light of the specific legal and constitutional issues raised by the regulation of trade policy with foreign policy or security implications, the relevant body of case-law will be analysed in a separate chapter.62 Individual Member States were also keen to advocate a commercial policy restrictively construed for the Community. The Greek government, for instance, sought the annulment of a CCP Regulation setting out the conditions of imports of agricultural products originating in third countries following the Chernobyl accident.63 The Court rejected that action on the basis that, in the light of its objective and content, the contested measure was clearly intended to regulate trade between the EC and third countries. By doing so, it supported the argument put forward by Advocate General Darmon in his Opinion, according to which the definition of conditions of imports of products originating in a non-Member State was a CCP measure by its very nature.64

5. TRADE IN GOODS Trade in Goods

At the time of the drafting of the Treaty of Rome, trade in goods constituted the almost exclusive focus of international trade. This was also reflected by the establishment of the General Agreement on Tariffs and Trade (GATT) concluded in 1947. However, the proliferation of international law-making raised questions as to the scope of activities which would be covered by trade in goods in the meaning of Article 207 TFEU. These were addressed by the Court in the context of the WTO. In 1994, the Commission submitted to the Court a request for an Opinion under what is now Article 218(11) TFEU about the competence of the Union to conclude a number of agreements annexed to the Agreement establishing the WTO. In particular, the Commission argued that the Union was exclusively competent to conclude the following: the General Agreement on Tariffs and Trade (GATT 1994) as far as products covered by the European Coal and Steel Community and the Euratom Community were concerned; the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).65 The Union institutions and the Member States had chosen to set aside the issue of Union competence during the period of the negotiation of the WTO Agreements in order to enhance the effectiveness of the representation of the Union interests. Therefore, whilst they had authorised the Commission to act as the sole negotiator on behalf of the Union and the Member States, they had done so without

62

See Chapter 14 below. Case C-62/88 Greece v Council [1990] ECR 1527. 64 Ibid, para 32 of his Opinion. 65 Opinion 1/94 (WTO Agreements) [1994] ECR I-5267. 63

Trade in Goods

37

prejudice to the determination of the Union and national competence on issues covered by those agreements. As far as the Multilateral Agreements on Trade in Goods were concerned, the exclusive nature of the Union was affirmed in rather uncompromising terms. First, the Court ruled, rather uncontroversially in the light of the absence of any argument to the contrary, that it covered Euratom products. Secondly, as to trade in ECSC products, a number of Member States and the Council argued that national competence was retained in the light of Article 71 ECSC, which provided that the powers of the Member States in matters of commercial policy would not be affected by the conclusion of that Treaty. However, the Court addressed this argument by interpreting the scope of that provision in very restrictive terms, namely as confined to international agreements relating specifically to ECSC products. Furthermore, it referred to Opinion 1/75, where it had been concluded that Article 71 ECSC should not be interpreted in a way which would render the CCP ‘inoperative’.66 In the light of this wide reading of Article 207 TFEU following the very strict reading of Article 71 ECSC, the Court concluded that the exclusive nature of the Union’s competence to conclude the Multilateral Agreements on Trade in Goods ‘cannot be impugned on the ground that they also apply to ECSC products’.67 Thirdly, in relation, specifically, to the Agreement on Agriculture, the Court ruled that Article 207 TFEU was the appropriate legal basis for its adoption. This was the case despite the fact that it had already ruled on the specific Treaty provision on agriculture, ie Article 43 TFEU:68 this was considered the appropriate legal basis for secondary legislation on the conditions under which products, including those originating in nonMember States, could be marketed.69 This was because the Agreement on Agriculture did not aim at pursuing any of the Common Agricultural Policy (CAP) objectives; instead, its objective was ‘to establish, on a worldwide basis, “a fair and market-oriented agricultural trading system”’.70 The fact that the Union would have to comply with its obligations under that Agreement by adopting internal legislation pursuant to the CAP was deemed irrelevant.71 Fourthly, the Agreement on the Application of Sanitary and Phytosanitary Measures was also deemed to fall within the scope of Article 207 TFEU in the light of its objective, namely the establishment of a legal framework which would ‘minimize [the] negative effects [of the development, adoption and enforcement of such measures] on trade’.72 Finally, in relation to the Agreement on Technical Barriers to Trade, the Court rejected the argument of the Netherlands government that, in the absence of either current or prospective complete harmonisation, it should be concluded by the Member States. Instead, it ruled that its conclusion was a CCP measure because its objective was ‘merely to ensure that technical regulations and standards, along with the procedures underpinning their adoption, would not create unnecessary obstacles to international trade’.73

66

n 8 above, 1365. n 65 above, para 27. 68 ex Art 37 EC. 69 See Case C-131/87 Commission v Council [1989] ECR I-3764. 70 Preamble to the Agreement, as referred to in Opinion 1/94, n 65 above, para 29. 71 Ibid. 72 Preamble to the Agreement, as referred to in Opinion 1/94 (ibid) para 31. 73 Ibid, para 33. 67

38 Common Commercial Policy 6. TRADE IN SERVICES Trade in Services

The reference to services in the CCP was absent from the Treaty until the late 1990s. This may be explained in the light of the policy and legal context prevailing at the time. However, technological progress and economic development brought services gradually to the centre international trade. In legal terms, this was reflected by the establishment of the WTO in 1994, the most ambitious framework for the liberalisation of international trade. The inclusion of services in the scope of the CCP needs to be understood against the protracted dispute amongst the European institutions and the Member States about the proper scope of CCP which was long, intense and led to Opinion 1/94, one of the most important rulings of the Court of Justice on EU external relations. In order to appreciate both the significance of the dispute and the intensity with which the EU actors participated in it, two points are worth making. First, the procedural dimension of the CCP is central to the divergence of approaches to the construction of the CCP. Decision-making by qualified majority facilitates the adoption of legislation and may explain the energy and time with which the Commission became involved. This becomes all the more significant given the absence of formal role for the European Parliament under the pre-Lisbon constitutional arrangements. It also explains the strong reaction of the Council and various Member States to what they perceived as the overreaching of the scope of CCP. Secondly, the endowment of the Union with exclusive competence raised the stakes of the disputes pertaining to the proper delimitation of CCP. In principle, a narrow approach to the scope of the policy entailed greater protection for individual interests of Member States and increased their impact on the conduct of the policy. It is in the light of these procedural and political dimensions that the story of the development of CCP needs to be understood. As mentioned above, the subject-matter of Opinion 1/94 was the competence of the Union to conclude a number of agreements annexed to the Agreement establishing the WTO. Amongst the most contentious was the GATS. The Commission had argued that the precursor to Article 207 TFEU was applicable because trade in services was a CCP measure. To that effect, it advanced three main arguments. The first one was the broad construction of the CCP introduced by the Court of Justice in the 1970s and consolidated in the 1980s. The second was of a practical nature, namely the close link between trade and services: it was argued that, in a globalised economy, services had become the main focus of international economic activity. Therefore, it was increasingly difficult to distinguish between trade in goods and trade in services. The final argument was of a contextual nature: the purpose of GATS was to lay down rules aimed at the regulation and liberalisation of trade in services; in addition, the instruments that the Contracting Parties would be called upon to adopt would be of a commercial nature. As such, they would be covered by the instrumentalist approach which the Commission deemed to have been sanctioned by the Court in Opinions 1/75 and 1/78 as well as the GSP judgment. All these arguments were rejected by the Court of Justice. The starting point for its ruling was to accept the main premise of the Commission’s analysis: the non-exhaustive nature of the activities set out in Article 207(1) TFEU and the principle that the scope of the CCP be interpreted widely, both articulated in past case-law, were reaffirmed. The increasing economic significance of trade in services and its central position on the international economic arena was not only acknowledged but also viewed as borne out

Trade in Services 39 by the WTO Agreement and its annexes. However, its conclusion was significantly more nuanced: [I]t follows … that trade in services cannot immediately, and as a matter of principle, be excluded from the scope of Article [207].74

Whilst in accordance with the main contention of the Commission about trade in services in general, this statement was clearly of a negative character, not only in its wording but also its tone. What the Commission saw as sufficient to bring GATS within the scope of the CCP, the Court saw as insufficient to exclude it from it a priori. This rather cautious approach was illustrated by the convoluted statement which followed: 75 [O]ne must take into account the definition of trade in services given in GATS in order to see whether the overall scheme of the Treaty is not such as to limit the extent to which trade in services can be included within Article [207].

The Court identified the four modes of supply of services covered by GATS as follows: cross-frontier supply not involving the movement of a person; consumption abroad entailing the movement of a consumer in the territory of a WTO party where the supplier is established; commercial presence, ie the presence of a subsidiary or branch in the territory of the WTO party where the service is rendered; the presence of natural persons from a WTO member country, enabling a supplier from one member country to supply services within the territory of any other member country. Of these four modes of supplies, only the first, involving no movement of a natural or legal person, was deemed to fall within the scope of Article 207 TFEU on the ground of its similarity to trade in goods. The supply of a service involving the physical movement of a natural person, either as a supplier or a consumer, was viewed as beyond the scope of the CCP,76 hence bringing the treatment of third-country nationals on crossing the external frontiers of Member States beyond the Article 207 TFEU. The same conclusion was reached about the movement of legal persons, as the Court noted the existence of a specific Treaty chapter on the matter.77 Following the ruling in Opinion 1/94, the EU institutions and the Member States agreed on the need to reform the CCP. However, there was considerable disagreement as to the scope and pace of this reform. The Amsterdam Treaty provided for the possibility of a unanimous Council decision extending the scope of the CCP to cover international agreements on services, as well as intellectual property rights.78 The amendment was the result of a compromise that did not satisfy the Commission, a member of which at the time viewed it as ‘tremendously disappointing’, adding that ‘the States sinned for lack of vision and showed an entirely deplorable mistrust towards the institutions’.79 Quite how acute the difficulties underlying the position of services within the CCP actually were became clear by the further amendments introduced by the Nice Treaty. 74

Ibid, para 41. Ibid, para 42. 76 This conclusion found textual support in Art 3 EC which set out the activities of the EU and distinguished clearly between the CCP and measures concerning the entry and movement of persons. 77 Namely Ch 2 of Title IV TFEU. 78 Art 133(5) EC (Amsterdam). See O Blin, ‘L’Article 113 CE après Amsterdam’ (1998) 420 Revue du Marché commun et de l’Union européenne 447. 79 Statement by then Commissioner Oreja before a parliamentary committee: Agence Europe, No 7012, 9 July 1997, 2. 75

40 Common Commercial Policy These went a step further and actually rendered this, along with the commercial aspects of intellectual property rights, within the scope of Article 207 TFEU expressly for the first time. However, the Nice Treaty did so in a heavily circumscribed manner, introducing a number of substantive and procedural qualifications and exceptions. The drafting of these provisions was characterised by neither clarity nor elegance, and contained a number of cross-references which raised as many questions as they answered. Aiming to strike a balance between the competing readings of what type of external trade policy the Union required and the Member States were prepared to grant, the Nice version of the CCP consisted of a disconcertingly complex set of provisions.80 It was in the light of Opinion 1/94 and the gradual, albeit ambivalent, revisions at Amsterdam and Nice that Article 207 TFEU was drafted at Lisbon. This historical and legal context must be taken into account in the process of interpretation and application of this provision, as the latter marks the final stage of a considerable policy shift: from the absence of trade in services in the CCP (pursuant to the Treaty of Rome) to the acknowledgement of its existence provided that no movement of persons is involved (following Opinion 1/94) to the possibility of a future inclusion (at Amsterdam) to the partial and circumscribed inclusion (at Nice) to their final assimilation to other areas covered by Article 207 TFEU (at Lisbon). The wording of Article 207(1) TFEU may appear to confine services (and intellectual property rights, for that matter) as the subject-matter of international agreements only, and not unilateral measures. This interpretation should be rejected.81 First, the Lisbon Treaty refers to these fields in the same context as it does with trade in goods. In doing so, it uses the former two areas of activity the wording in which the core of the CCP has been couched since its establishment with the Treaty of Rome. This constitutes a change: under the Nice Treaty, services and the commercial aspects of intellectual property were regulated separately in the precursor to Article 207 TFEU, the wording of which made it clear that they could only be the subject-matter of international agreements. Both the new position of services and intellectual property in Article 207(1) TFEU and the reorganisation of Article 207(4)–(6) TFEU suggest that it was not the intention of the drafters of the Lisbon Treaty to restrain the impact of the Union’s external action in these fields in such a manner. Secondly, it is recalled that one of the main tenets of the construction of the CCP is the non-exhaustive nature of its activities. Given the normalisation of the position of services in the CCP it would be counterintuitive if a restriction was envisaged on the form of the Union’s action rather than its existence. Thirdly, the wording of Article 207(1) TFEU suggests that, if services were viewed as confined to the conclusion of international agreements, this would also apply to goods, a conclusion which would be so bizarre as to render its rebuttal unnecessary. The provisions of Article 207 TFEU do not define the concept of services. If its interpretation was based on EU internal market law, it should be pointed out that the latter approaches services not only as distinct from establishment but also as the subject-matter 80 See M Cremona, ‘A Policy of Bits and Pieces? The Common Commercial Policy after Nice’ (2001) 4 Cambridge Yearbook of European Legal Studies 61; C Herrmann, ‘Common Commercial Policy after Nice: Sisyphus Would Have Done a Better Job’ (2002) 39 Common Market Law Review 7; and HG Krenzler and C Pischas, ‘Progress or Stagnation? The Common Commercial After Nice’ [2001]  European Foreign Affairs Review 291. 81 To that effect, see M Cremona, ‘The Union’s External Action: Constitutional Perspectives’ in G Amato, H Bribosia and B de Witte (eds), Genesis and Destiny of the European Constitution (Brussels, Bruylant, 2007) 1173, 1214.

Trade in Services 41 of a residual freedom. This distinction between services and establishment does not appear in GATS, whose wide definition of services covers establishment (for which GATS uses the term ‘commercial presence’). Should the term ‘services’ in Article 207(1) TFEU be interpreted strictly or widely? In the light of the ever-present link between the expansion of the scope of the CCP and GATS following the establishment of the WTO and the ruling of the Court of Justice in Opinion 1/94, it would be wrong to interpret ‘services’ under Article 207(1) TFEU consistently with the strict definition afforded within the Union legal order.82 In Case C-137/12 Commission v Council the Court held that the CCP covered the conclusion of the European Convention on the legal protection of services based on, or consisting of, conditional access.83 This convention was about access to television and radio broadcasting as well as information society services subject to remuneration (eg watching films for a subscription fee). The Union had already adopted Directive 98/84/ EC which had introduced a system of protection in the area under what is now Article 114 TFEU.84 In essence, the Convention extended the regime set out in the Directive to the members of the Council of Europe. Whilst the Commission suggested that the Convention be concluded as a CCP measure, the Council chose to conclude it as an internal market measure pursuant to Article 114 TFEU. Following the judgment in Case C-414/11 Daiichi Sankyo where it had ruled on the definition of the commercial aspects of intellectual property rights,85 the Grand Chamber held that the term ‘services’ in Article 207 TFEU should be interpreted in its context, ie the CCP, and, therefore, could be relied upon in relation to trade with third countries and not in the internal market. It then held that ‘those acts of the European Union with a specific link to international trade are capable of falling within the field of the common commercial policy’.86 The Court pointed out that the objective of the Convention was to extend the protection already introduced by the Directive to European non-member countries in order to promote the supply of services based on, or consisting of, conditional access to those states by EU service-providers. Therefore, this objective ‘had a specific connection with international trade in those services, by dint of which it can legitimately be linked to the common commercial policy’.87 The Council had objected to the conclusion of the Convention as a CCP measure, arguing that it would also harmonise legal protection of these services within the EU. The Court rejected this argument. The Convention contained a ‘disconnection clause’, ie a provision often found in Council of Europe agreements, which enables the Member States to apply in relations between them EU law rather than the provisions of the agreements.88 The Court held that,

82 See Cremona, n 80 above, 72; and R Passos and S Marquardt, ‘International Agreements—Competences, Procedures and Judicial Control’ in Amato et al (eds), ibid, 875, 902. 83 Case C-137/12 Commission v Council ECLI:EU:C:2013:675. 84 [1998] OJ L320/54. 85 Case C-414/11 Daiichi Sankyo Co Ltd Sanofi-Aventis Deutschland GmbH v DEMO Anonymos Viomichaniki kai Emporiki Etairia Farmakon, ECLI:EU:C:2013:520. See the analysis in the following section. 86 Case C-137/12 Commission v Council, n 83 above, para. 58. 87 Ibid, para 65. 88 A disconnection clause was also relevant in the contact of Opinion 1/03 (Lugano Convention) [2006] ECR I-1145, analysed in Chapter 3. On disconnection clauses, see M Cremona, ‘Disconnection Clauses in EU Law and Practice’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited—The EU and its Member States in the World (Oxford, Hart Publishing, 2010) 160.

42 Common Commercial Policy 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.89

7. TRADE IN INTELLECTUAL PROPERTY RIGHTS Trade in Intellectual Property Rights

As was the case with trade in services, the Treaty of Rome made no reference to intellectual property rights. Their relevance for the CCP became apparent during the negotiation of the Agreement which established the WTO. In fact, the competence of the Union to conclude the Agreement on Trade Related Intellectual Property Rights was, along with the GATS, the most controversial aspect of Opinion 1/94. The Commission had argued that trade in intellectual property rights was part of the CCP in the light of the very close link between intellectual property rights and trade in the products and services to which they apply. This link was deemed so strong as to bring them within the scope of Article 207 TFEU and render the conclusion of TRIPs a matter covered by the Union’s exclusive competence. In response to this argument, the Court’s approach was developed in a manner similar to that already articulated in relation to GATS. First, it started off by making a distinction similar to that underpinning its analysis of GATS: it identified a specific area of trade-related intellectual property rights covered by TRIPs which was closely linked to trade in goods already regulated under Article 207 TFEU. This was about measures for the prohibition of the release for free circulation of counterfeit goods. Such measures, applied by customs officials at the external frontiers of the Union, had been laid down in Regulation 3842/86.90 Then, the Court accepted the main premise upon which the Commission’s contention was based, ie the link between trade in goods and the enforcement of intellectual property rights. However, this was deemed to be insufficient to bring them within the scope of Article 207 TFEU as ‘intellectual property rights do not relate specifically to international trade; they affect internal trade just as much, if not more than, international trade’.91 The Court further substantiated its conclusion as to the inapplicability of Article 207 TFEU to the conclusion of TRIPs by relying upon the internal effects of that agreement within the Union legal order. Having identified the main objective of TRIPs as the world-wide strengthening and harmonisation of the protection of intellectual property, it pointed out that its conclusion would introduce harmonisation within the Union system too, hence affecting the establishment and functioning of the internal market. Whilst competent to adopt such harmonising legislation internally, the Union could only do so under the internal market harmonising clauses, namely Article 122 TFEU or Article 89

Case C-137/12 Commission v Council, n 83 above, para 67. [1986] OJ L357/1 repealed by Council Reg 3295/94 laying down measures to prohibit the release for free circulation, export, re-export or entry for a suspensive procedure of counterfeit and pirated goods [1994] OJ L341/8 (which was then repealed by Council Reg 1383/2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights [2003] OJ L196/7). 91 n 65 above, para 57. 90

Trade in Intellectual Property Rights 43 268 TFEU.92 However, the procedural requirements laid down in these provisions were different from those under Article 207 TFEU, namely unanimity and consultation with the Parliament in the case of Articles 122 and 268 EC. The Court concluded as follows:93 If the Community were to be recognized as having exclusive competence to enter into agreements with non-member countries to harmonize the protection of intellectual property and, at the same time, to achieve harmonization at Community level, the Community institutions would be able to escape the internal constraints to which they are subject in relation to procedures and to rules as to voting.

Having ruled out the existence of exclusive Union competence on the basis of the insufficient link between intellectual property and trade in goods and the disparities between the international effects of TRIPs and the procedural constraints laid down in primary EU law, the Court went on to dismiss specific examples of secondary legislation affecting protection of IP rights as irrelevant. First, measures adopted in the context of the socalled new commercial policy instrument in order to protect the intellectual property interests of the Union were ‘unrelated to the harmonization of intellectual property protection which is the primary objective of TRIPs’.94 Secondly, the fact that the Union has suspended generalised tariff preferences in response to discrimination by a third state as regards protection of intellectual property rights was also irrelevant to the competence of the Union to conclude an agreement aiming at international harmonisation of intellectual property protection: ‘[S]ince the grant of generalized preferences is a commercial policy measure …, so too is their suspension.’95 Thirdly, provisions on the protection of intellectual property rights in a number of agreements with third countries96 were ‘extremely limited in scope’97 and, therefore, ‘ancillary’.98 They either provided merely for consultations or called on the Union’s partners to raise the level of protection of intellectual property within their territory. Fourthly, the inclusion in agreements with third countries of provisions reserving the names of specific regions exclusively to producers of those countries99was ‘directly linked’ to CAP measures on wine and winegrowing and, in any case, too specific in scope to be relevant to the conclusion of an Agreement as wide in scope as TRIPs.100 Following the ruling of the Court in Opinion 1/94, the story of the gradual inclusion of trade in intellectual property rights in the CCP followed the same pattern as that of trade in services. Therefore, what was written above about the ambivalent approach 92

Arts 100 and 235 EC, respectively. The Court also referred to Art 100a EC. n 65 above, para 60. 94 Ibid, para 63. The Commission had referred to Commission Decision 87/251 on the initiation of an international consultation and disputes settlement procedure concerning a US measure excluding imports of certain aramid fibres into the USA [1987] OJ L117/18, Notice of initiation of an illicit commercial practice procedure concerning the unauthorised reproduction of sound recordings in Indonesia [1987] OJ C136/3 and a similar notice regarding piracy of Community sound recordings in Thailand [1991] OJ C189/26. 95 Ibid, para 65. 96 The Commission referred to the Agreements with China and the then USSR on trade in textile products [1988] OJ L380/2 and [1989] OJ L397/2 respectively and three interim Agreements with Hungary [1992] OJ L116/2, the Czech and Slovak Republic [1992] OJ L115/2 and Bulgaria [1993] OJ L323/2. 97 n 65 above, para 67. 98 Ibid, para 68. 99 The Commission mentioned the Agreement with Austria on the control and reciprocal protection of quality wines and ‘retsina’ wine [1989] OJ L56/2 and the Agreement with Australia on trade in wine [1994] OJ L86/3. 100 n 65 above, para 70. 93

44 Common Commercial Policy under the Amsterdam Treaty and the complex arrangements under the Nice Treaty applies here too. It is noteworthy that, since their reference in primary law for the first time at Amsterdam, trade in intellectual property rights is confined to their ‘commercial aspects’. This is a term that attracted criticism for its ambiguities during the drafting of the Constitutional Treaty.101 Any attempt to interpret it must start with TRIPs as this has been the main point of reference for the gradual inclusion of trade in intellectual property rights in the CCP. Whilst there appears to be a textual difference,102 this is by no means significant. Indeed, the term used in the French version of both texts is almost identical.103 The use of the term ‘commercial aspects of intellectual property’ appears to achieve three objectives. First, it avoids an all-encompassing definition of intellectual property rights, hence seeking to impose a limit on how far this area of law is covered by the CCP. Secondly, it establishes an immediately recognisable link with TRIPs, the conclusion of which gave rise to the very inclusion of intellectual property rights within the scope of Article 207 TFEU. Thirdly, it articulates a constant point of reference for the conclusion of international agreements in the area, hence requiring a trade policy context as a necessary requirement for reliance upon the provisions of Article 207 TFEU. However, the above do not necessarily make the interpretation of the scope of the commercial aspects of intellectual property any easier. In his Opinion in Case C-414/11 Daiichi Sankyo, Advocate General Cruz Villalón viewed the term ‘commercial aspects’ as ‘peculiar’ and pointed out that its application involved ‘interpretative difficulties [which] are formidable’.104 The Daiichi Sankyo case was a preliminary reference by a Greek court of first instance about a patent dispute. Its subject-matter was the patentability of a medicinal product trademarked in Greece. Greek legislation provided for the granting of national patents for the method of production of pharmaceutical products but not for the pharmaceutical products themselves. The question which arose was whether Greek legislation was contrary to WTO law, in particular Article 27(1) TRIPs which provides that ‘patents shall be available for any inventions, whether products or processes’. The central issue in this dispute was whether, following the entry into force of the Lisbon Treaty on 1 December 2009, the reference to ‘the commercial aspects of intellectual property rights’ in Article 207(1) TFEU rendered application of TRIPs to patent law in a Member State a matter of exclusive Union competence. The Commission argued that this question should be answered in the affirmative. It pointed out the similarity between the term used in Article 207(1) TFEU and the title of TRIPs and stressed that the scope of intellectual property as set out in the former coincides with that of the latter. Therefore, it argued, the application and interpretation of Article 27(1) TRIPs are a matter of the EU’s exclusive competence. On the other hand, nine governments intervened in this case and argued that the scope of the commercial aspects of intellectual property under Article 207(1) TFEU is narrower than that of TRIPs. Therefore, they claimed, whether a specific issue of intellectual property regulated by TRIPs falls within the scope of the 101 See the references in M Krajewski, ‘External Trade Law and the Constitution Treaty: Towards a Federal and More Democratic Common Commercial Policy?’ (2005) 42 Common Market Law Review 91, 110–11. 102 TRIPs refers to ‘trade-related intellectual property rights’, whereas Art 207(1) TFEU refers to ‘the commercial aspects of intellectual property rights’. 103 In its French version, Art 207(1) TFEU refers to ‘des aspects commerciaux de la la propriété intellectuelle’ and TRIPs refers to ‘les aspects des droits de propriété intellectuelle qui touchent au commerce’. 104 Case C-414/11 Daiichi Sankyo Co, n 85 above, paras 64 and 65 of his Opinion.

Trade in Intellectual Property Rights 45 CCP is a matter to be determined on a case-by-case basis. In relation to Article 27 TRIPs in particular, they argued that it was about substantive patent law and not the commercial aspects of intellectual property and, therefore, it was for each Member State to determine how to apply it within its legal order. The Court of Justice pointed out that, in the light of the new wording of Article 207(1) TFEU, Opinion 1/94 on TRIPs had become irrelevant. It then focused on the definition of the term ‘commercial aspects of intellectual property rights’ and held that it should be construed within its specific context, ie Article 207 TFEU. As the latter is about the CCP, a measure would fall within ‘the commercial aspects of intellectual property rights’ in the meaning of Article 207(1) TFEU if it had ‘a specific link to international trade’.105 It concluded that TRIPs met this criterion for various reasons. First, this Agreement constitutes an integral part of the WTO system and any violation of its provisions may give rise to suspension of concessions fall other WTO Agreements. Secondly, the wording of the term ‘commercial aspects of intellectual property’ in Article 207(1) TFEU corresponds almost exactly to the title of TRIPs. Thirdly, the objective of TRIPs is to strengthen and harmonise the protection of intellectual property worldwide, and not just in the European Union. This suggests that the scope of this Agreement is covered by the CCP and not the internal market provisions of the TFEU which may be relied upon for intellectual property harmonisation within the Union. Therefore, the scope of the commercial aspects of intellectual property in Article 207(1) TFEU is construed broadly and covers the entire scope of TRIPs. The Court did not follow the advice of Advocate General Cruz Villalón. He had suggested that a balance should be struck between the effectiveness of Article 207(1) TFEU, which required that the commercial aspects of intellectual property should necessarily cover some substantive law rules, and the need to avoid an overly broad interpretation which would render the choice of the term ‘commercial aspects’ irrelevant. He had concluded that the provisions on patents in Article 27 TRIPs did not fall within the scope of Article 207(1) TFEU and therefore were not covered by the Union›s exclusive competence. The judgment in Daiichi Sankyo adjusts the interpretation of CCP to the evolving context which emerges from the new provisions of the Lisbon Treaty. In doing so, it is entirely consistent with the earlier case-law examined above in this chapter as it reflects similar pragmatism to the construction of the scope of the policy. However, the judgment does not address the question of which aspects of protection of intellectual property rights would not be characterised as ‘commercial’. Neither does it explain the relationship between the exercise of exclusive competence under Article 207 TFEU leading to international harmonisation and the exercise of shared internal competence under Article 108 TFEU leading to EU harmonisation. In Daiichi Sankyo it was pointed out that: [I]t remains altogether open to the European Union, after the entry into force of the FEU Treaty, to legislate on the subject of intellectual property rights by virtue of competence relating to the field of the internal market. However, 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

105

Ibid, para 51.

46 Common Commercial Policy are still, as previously, intended to standardise certain rules on the subject at world level and thereby to facilitate international trade.106

The judgment does not explain why TRIPs-based harmonisation does not impinge on the internal powers of EU institutions to adopt EU-wide harmonisation.107

8. FOREIGN DIRECT INVESTMENT Foreign Direct Investment

Investment was covered by the CCP for the first time at Lisbon. Whilst it had referred to services and the commercial aspects of intellectual property, the broader, albeit convoluted and cumbersome, CCP provision introduced by the Nice Treaty had not mentioned investment.108 Article 207(1) TFEU refers specifically to foreign direct investment. However, this term is not defined in the Treaty. The term ‘foreign’ refers to investment from a Member State to a third country or from a third country to a Member State. As for the term ‘direct’, things are somewhat unclear. The Court of Justice has defined direct investment as ‘the form of participation in an undertaking through the holding of shares which confers the possibility of participating effectively in its management and control’.109 It has done so in the context of free movement of capital. This is the only other concept where the EU’s primary rules refer to direct investment. In particular, Article 64(1) TFEU acknowledges the imposition of restrictions on free movement of capital to third countries and therefore a deviation from the principle of Article 63 TFEU, provided that these ‘exist on 31 December 1993 under national or Union law adopted in respect of the movement of capital to or from third countries involving direct investment—including in real estate—establishment, the provision of financial services or the admission of securities to capital markets’. There is also provision for the power of the EU institutions to introduce restrictions ‘on the movement of capital to or from third countries involving direct investment—including investment in real estate—establishment, the provision of financial services or the admission of securities to capital markets’.110 The definition on direct investment was not put forward by the Court in a vacuum. It was first found in Directive 88/361 on capital movement which defines the term in its explanatory notes as

106

Ibid, para 59. See also A Dimopoulos and P Vantsiouri, ‘Of TRIPs and Traps: The Interpretative Jurisdiction of the Court of Justice of the EU over Patent Law’ (2014) 39 European Law Review 210. 108 For an earlier proposal for the inclusion of investment in the CCP, see M Cremona, ‘EC External Commercial Policy after Amsterdam: Authority and Interpretation within Interconnected Legal Orders’ in JHH Weiler (ed), The EU, the WTO, and NAFTA: Towards a Common Law of International Trade? (Oxford, Oxford University Press, 2000) 5, 13–17. 109 See Case C-35/11 Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue, The Commissioners for Her Majesty’s Revenue & Customs, judgment of 13 November 2012, not yet reported, at para. 102. See also Case C-81/09 Idrima Tipou [2010] ECR I-10161, para 48; Case C-182/08 Glaxo Wellcome GmbH & Co KG v Finanzamt München II [2009] ECR I-8591, para 40; Case C-222/97 Trummerand Mayer [1999] ECR I-1661, para 21; Case C-483/99 Commission v France [2002] ECR I-4781, paras 36 and 37; Case C-98/01 Commission v United Kingdom [2003] ECR I-4641, paras 39 and 40; and Joined Cases C-282/04 and C-283/04 Commission v Netherlands [2006] ECR I-9141, para 19. 110 Art 64(2) TFEU. 107

Foreign Direct Investment 47 [i]nvestments of all kinds by natural persons or commercial, industrial or financial undertakings, and which serve to establish or to maintain lasting and direct links between the person providing the capital and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity.111

The definition of direct investment offered by the EU legislature and articulated by the Court is consistent with the approach adopted by other international actors. These include the OECD112 and the International Monetary Fund.113 Direct investment is to be distinguished from portfolio investment, which is about the movement of private equity for personal gain where the element of lasting influence is absent.114 This distinction is widely accepted. The Commission adopted a communication on investment policy in 2010 in which it defined foreign direct investment in these terms.115 The exclusion of portfolio investment from the scope of Article 207 TFEU does not rule out the existence of an EU competence in the area, as such competence may arise from the TFEU provisions of the free movement of capital pursuant to the principle of implied competence.116 However, the distinction between foreign direct investment and portfolio investment does not get us very far, as, in order to determine the scope of investment policy in the meaning of Article 207 TFEU, it is necessary to identify the type of measures that would fall within the scope of direct foreign investment. To that effect, three points are worth making. First, this is not an exercise which may be carried out in the abstract. Instead, the definition of the typology of measures pertaining to foreign direct investment is to be carried out in relation to specific actions which the Union or the Member States envisage in the context of specific relationships with third countries or international organisations. This is all the more so given that, as a matter of practice in international relations, foreign direct investment is provided for with other forms of foreign investment. Second, the Bilateral Investment Treaties (BITs) which Member States have concluded as a matter of course include measures of such wide scope as not to be covered entirely by Article 207 TFEU. They include rules on the admission of foreign investment covering capital movements and the establishment of foreign investors, as well as rules on the

111

Council Dir 88/361 for the implementation of Art 67 of the Treaty [1988] OJ L178/5, 11. See eg OECD Benchmark Definition of Foreign Direct Investment, 4th edn (2008) 1.4.11. 113 See eg IMF Balance of Payments and International Investment Position Manual, 6th edn ( Washington, DC, International Monetary Fund) where direct investment is defined as ‘a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy’ (para 6.8). 114 The Court refers to it, rather succinctly, as ‘acquiring shares without seeking to influence the way in which the company is managed’ (Case C-98/01 Commission v UK [2003] ECR I-4641, para 20) and elsewhere as ‘the acquisition of shares on the capital market solely with the intention of making a financial investment without any intention to influence the management and control of the undertaking’ (Joined Cases C-282/4 and C283/04 Commission v Netherlands [2008] ECR I-9141, para 19). According to the IMF, portfolio investment is defined as ‘crossborder transactions and positions involving debt or equity securities, other than those included in direct investment or reserve assets’ (ibid, para 6.54). 115 COM(2010) 343 final Towards a Comprehensive European International Investment Policy (Brussels, 7 July 2010) 2–3. 116 See Commission, ibid, 8. See also A Dimopoulos, EU Foreign Investment Law (Oxford, Oxford University Press, 2011) 104–05; and A De Luca, ‘New Developments on the Scope of the EU Common Commercial Policy under the Lisbon Treaty’ in KP Sauvant (ed), Yearbook on International Investment Law and Policy 2010–2011 (Oxford, Oxford University Press, 2012) 165, 182–95. For the contrary view, see M Krajewski, ‘The Reform of the Common Commercial Policy’ in A Biondi, P Eeckhout and S Ripley (eds), EU Law after Lisbon (Oxford, Oxford University Press, 2012) 292, 302. On the principle of implied competence, see Chapter 3. 112

48 Common Commercial Policy post-admission treatment and operation of foreign investments which include clauses about Most Favoured Nation, national treatment, fair and equitable treatment, and full protection and security.117 It has been argued that the scope of foreign direct investment under Article 207(1) TFEU should be read restrictively and exclude post-admission measures aiming to protect investors.118 However, this approach has been viewed as undermining the effectiveness of the inclusion of foreign direct investment within the scope of the CCP.119 Third, the lack of clarity that characterises the scope of foreign direct investment under Article 207 TFEU is compounded by the very considerable number of BITs maintained by the Member States. Even the most restrictive reading of the former would have rendered parts of the latter contrary to EU law as of the entry into force of the Lisbon Treaty. However, practical exigencies would have rendered the possibility of a Member State revoking parts of its BITs in the light of the Union’s exclusive competence and in anticipation of a Union approach inconceivable. Investors could not possibly be left in a vacuum and legal uncertainty would undermine investor confidence. The Commission seems to accept that a degree of pragmatism is required in the exercise of the Union’s foreign investment policy. In a communication it adopted in July 2010, it suggested that the determination of the latter is a ‘gradual and targeted’ process which requires time and needs to take a number of factors into account:120 While it is the Union’s responsibility to promote the European model and the single market as a destination for foreign investors,  … it seems neither feasible nor desirable to replace the investment promotion efforts of Member States, as long as they fit with the common commercial policy and remain consistent with EU law.121

Is it noteworthy that, in its document, the Commission avoids engaging in a definition of the scope of its competence in foreign direct investment pursuant to Article 207(1) TFEU.122 Instead, its effort to develop the Union’s foreign direct invstment policy is based on a two-pronged approach, namely the management of the existing BITs concluded by Member States and the request for a wide mandate from the Council for the negotiation of international agreements. The former consists of the establishment of transitional arrangements for bilateral investment agreements between Member States and third countries adopted in 2010. Following a proposal by the Commission,123 the Council and the Parliament adopted Regulation 1219/2012, which provides for the maintenance in force and amendment of existing, as well as the negotiation and conclusion of new, BITs under certain 117

See Dimopoulos, ibid, 49–61 See Krajewski, n 116 above, 303–04 who bases this view on the context, purpose and negotiating history of Art 207(1) TFEU. 119 See P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 64–65. 120 n 115 above, 2. 121 Ibid, 6. 122 See A Dimopoulos, ‘The Development of EU Trade and Investment Policies: Drawing Lessons from Past Experiences’ in Sauvant (ed), n 116 above, 243, 262. 123 COM(2010) 344 final Proposal for a Regulation of the European Parliament and of the Council establishing transitional arrangements for bilateral investment agreements between Member States and third countries (Brussels, 7 July 2010). For an analysis of the proposal, see G De Baere and P Koutrakos, ‘The Interactions between the European Court of Justice and the Legislature in the European Union’s External Relations’ in P Syrpis (ed), The Relationship between the Judiciary and the Legislature in the Internal Market (Cambridge, Cambridge University Press, 2012) 243, 258 et seq. 118

Foreign Direct Investment 49 conditions.124 The Regulation establishes a procedural framework controlled by the Commission itself which considers its role in the area as an illustration of its responsibilities as the guardian of the Treaty. This mechanism revolves around two procedures dealing with the authorisation of existing agreements and the amendment of existing or the conclusion of new agreements. The authorisation of existing BITs is granted following their notification by all the Member States to the Commission. Such authorisation would be granted notwithstanding the Union’s competence in the area,125 and without prejudice to other EU law obligations of the Member States.126 The Commission would review the agreements in order to assess whether they are compatible with EU law, overlap with an agreement which the Union negotiates, or constitute an obstacle to the development and implementation of the Union’s investment policies. These would also constitute grounds for withdrawal of an authorisation by the Commission. As for the authorisation to amend existing or conclude new BITs, this would follow a notification by the Member State concerned (covering the provisions to be addressed in the negotiations, the objectives of the negotiations and any other relevant information) at least five months prior to the commencement of the negotiations. This information would then be disseminated to the other Member States, and, within three months, the Commission would ascertain whether the authorisation to open formal negotiations would be granted. Such an assessment would depend on whether the opening of negotiations would be in conflict with EU law, whether it would be superfluous in the light of imminent negotiations of an EU agreement, whether it is inconsistent with the EU’s principles and objectives for external action, or constitute a serious obstacle to the negotiation or conclusion of BITs with third countries by the EU. All BITs notified to the Commission are published annually.127 The adoption of Regulation 1219/2012 is noteworthy for the considerable intensity and scope of the interaction between Member States and the Commission. It refers, not only to the opening of negotiations, and the signing and conclusion of BITs, but also the application of such agreements. In relation to the first two, separate authorisations would be required, each of which would depend on two separate assessments pursuant to the information provided by the notifying Member State. In the process of the negotiation of a BIT, the Commission could require the Member State to include any appropriate clauses, and could request to participate in the negotiations. As for the application of the agreement, the Commission proposes specific obligations on Member States. For instance, the Commission would be kept informed without undue delay of all meetings under existing BITs and would be entitled to require that the Member State concerned take a particular position. Similarly, any dispute which might arise about the application of a BIT would have to be notified to the Commission which may even go as far as to require that it participate in any settlement procedure. Its agreement would also be required prior to the activation of any dispute settlement mechanisms included in the BIT by the Member State concerned. Rather than reserving for itself the role of a distant and neutral assessor, the

124 Reg 1219/2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries [2012] OJ L351/40. 125 See preamble 3 and Art 1 of Reg 1219/2012. 126 Ibid, Art 3. 127 See [2014] OJ C169/1.

50 Common Commercial Policy Commission enables itself to be quite intrusive in all phases of the negotiation, conclusion and application of BITs concluded by Member States. The second strand of the Commission’s approach to the development of the Union’s foreign direct investment policy is about seeking wide negotiating mandates. Since the entry into force of the Lisbon Treaty, it has asked the Council for permission to broaden the scope of ongoing trade negotiations with Singapore and India in order to include investment protection clauses.128 In July 2013, the EU and the United States started negotiating a Transatlantic Trade and Investment Partnership which includes a chapter on investment. This has been controversial. In particular, the negotiation of an investor– state dispute settlement has been met with hostile reaction both amongst governments (in Germany, for instance) and civil society. In August 2014, the negotiations for a free trade agreement with Canada including a chapter on investment were concluded.129 In November 2013 negotiations for an investment agreement with China were launched. This would be the first ever standalone investment treaty negotiated by the Union since the entry into force of the Lisbon Treaty.

9. TRANSPORT Transport

The provision of transport services is not covered by the CCP. This is confirmed by Article 207(5) TFEU which reads as follows: The negotiation and conclusion of international agreements in the field of transport shall be subject to Title VII of Part Three and to Article 218 and Article 300 EC.

This provision is hardly controversial as it reflects the conclusion reached by the Court of Justice in Opinion 1/94, where it pointed out both the existence of a specific set of Treaty provisions on transport and the fact that the principle of implied external competence had been introduced in relation to transport services. It is interesting that, arguing in Opinion 1/94 for a broad CCP which would cover transport services, the Commission had referred to economic sanctions imposed by the Union which had also covered transport services. The Court held that that example could not substantiate the position of transport within the scope of the CCP. On the one hand, it pointed out that the suspension of transport services had been the necessary adjunct to the principal sanctions, as its absence would have undermined the effectiveness of any type of trade sanctions. On the other hand, it held that ‘a mere practice of the Council cannot derogate from the rules laid down in the Treaty and cannot, therefore, create a precedent binding on Community institutions with regard to the correct legal basis’.130

128 See F Hoffmeister, ‘The European Union’s Common Commercial Policy a Year After Lisbon—Sea Change or Business as Usual?’ in P Koutrakos (ed), The European Union’s External Relations a Year after Lisbon (2011) CLEER Working Paper No 3, 83, 86. 129 See A Tzanakopoulos, ‘National Treatment and MFN in the (Invisible) EU Model BIT’ (2014) 15 Journal of World Investment and Trade 484. 130 n 65 above, para 52 with reference to Case 68/86 UK v Council [1988] ECR 855.

Article 207(6) TFEU

51

10. ARTICLE 207(6) TFEU Article 207(6) TFEU

The main legal characteristics of CCP, namely the exclusive competence of the Union and decision-making by qualified majority voting, have placed it traditionally close to the supranational end of the spectrum of principles governing international action. Over the years, the wide construction of its scope by the Court of Justice have strengthened their impact further. This is why the broadening of the scope of the policy by amending primary rules has been accompanied by a reminder of the role of the Member States in external relations. The emergence of this counterpoint to the supranational features of the CCP takes both substantive and procedural dimensions. In substantive terms, the Treaty defines a general limit to what the Union may achieve by its conduct of CCP. This is set out in Article 207(6) TFEU which reads as follows: 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, and shall not lead to harmonisation of legislative or regulatory provisions of the Member States insofar as the Treaties exclude such harmonisation.

This clause has also been called ‘the no-circumvention rule’.131 The first limb of the above paragraph appears to draw upon the principle of limited powers enshrined in Article 5 TEU. In doing so, it may appear to add nothing to the legal framework of EU external relations. There has been no doubt as to the scope of the fundamental principle of limited powers: indeed, in Opinion 2/94, the Court had held that the principle of conferred powers ‘must be respected in both the internal action and the international action of the Community’.132 The significance that the drafters of the Treaty attached to this principle is highlighted by the greater emphasis which is apparent in the Lisbon Treaty. Article 4(1) TEU, for instance, provides that ‘competences not conferred upon the Union in the Treaties remain with the Member States’. However, there may be another dimension in the reference to the delimitation of competences in the first limb of Article 207(6) TFEU. It is conceivable that its main intention is not so much to restrict the ability of the Union to conclude international agreements but to highlight the implications of the exercise of the Union’s CCP competence for internal competence. It has been argued that the expansion of trade in services, the commercial aspects of intellectual property rights and foreign direct investment may well enable the Union to conclude an agreement certain provisions of which the Union might not have the competence to adopt pursuant to internal measures. This reading of Article 207(6) TFEU suggests that the conclusion of any such agreement would not endow the Union with a corresponding internal competence.133 It is noteworthy that the original draft of Article 207(6) TFEU as agreed upon by the Convention on the Future of Europe referred to ‘internal competences’ specifically.134 It is also interesting that the Nice provision in which Article 207(6) TFEU originates, and which was quite clear about the

131 A Dashwood, M Dougan, B Rodger, E Spaventa and D Wyatt, Wyatt and Dashwood’s European Union Law, 6th edn (Oxford, Hart Publishing, 2011) 948. 132 Opinion 2/94 (ECHR) [1996] ECR I-1759, para 24. 133 See R Gosalbo Bono, ‘The Organization of the External Relations of the European Union in the Treaty of Lisbon’ in Koutrakos (ed), n 128 above, 13, 17–18 and Krajewski, n 101 above, 115–8. 134 See Cremona, n 81 above, 1216.

52 Common Commercial Policy parallelism alignment between the scope of the Union’s competence in the CCP and that of its internal competences, was not maintained at Lisbon.135 The second limb of Article 207(6) TFEU aims to prevent the instrumentalisation of the conclusion of international agreements in order to bypass the prohibition of harmonisation laid down in primary law. Harmonisation is expressly excluded in a number of areas, such as education and vocational training,136 culture137 and public health.138 This provision reflects the concern of the Member States that Article 207 TFEU should not be interpreted so broadly as to undermine their rights as sovereign subjects of international law. It also aims to preserve the delicate balance between EU competence and national prerogatives which the drafting of specific internal market legal bases seeks to strike. The concerns of the Member States pertaining to Article 207(6) TFEU are long standing and have not been ignored by the Court of Justice. It is recalled, for instance, that, in Opinion 1/94, the Court proved unwilling to interpret ex Article 133 EC (now Article 207 TFEU) as a general external economic relations policy. Similarly, and in relation to the internal sphere of EU activities, the express prohibition of harmonisation sets a clear limit beyond which the Court would not go. This was made clear for the EU institutions in the Tobacco Advertising judgment, where the Court stressed that the express prohibition on harmonisation in the area of public health, enshrined in Article 168(5) TFEU, could not be circumvented by reliance upon the general decision-making clause of Article 114 TFEU.139 It would be in this vein that the express prohibition on harmonisation could not be circumvented by reliance upon Article 207 TFEU. This was a position also taken in Opinion 1/94, even though there had been no express provision to that effect in the Treaty. It is recalled that the Court had held that the conclusion of TRIPs did not fall within the scope of the CCP in its entirety because the harmonising effect of that Agreement could not be achieved in the Union legal order in a manner which would render irrelevant the internal constraints laid down in primary law.

11. CHOICE OF LEGAL BASIS Choice of Legal Basis

The analysis above of the fields set out in Article 207(1) TFEU illustrates the issues raised by our effort to define the scope of the CCP. Such interpretative difficulties are not confined to the definition of the fields of activities set out in the Treaty, and cover the interactions between these fields and other areas of external action. After all, external trade is intrinsically linked with other areas of economic and political activity. For instance, the development of trade relations brings states closer together and enhances

135 This was ex Art 133(6) subparagraph 1 EC which provided that ‘[a]n agreement may not be concluded by the Council it if includes provisions which would go beyond the Community’s internal powers’. This was relied upon in Case C-13/07 Commission v Council about the conclusion of the agreement on the accession of Vietnam to the WTO. The Court did not rule on this, as the case was withdrawn. Advocate General Kokott delivered her Opinion on 26 March 2009. See also Opinion 1/08 [2009] ECR I-11129. 136 Arts 165(4) and 166(4) TFEU. 137 Art 167(5) TFEU. 138 Art 168(5) TFEU. Other areas include anti-discrimination policy in relation to incentive measures (Art 19(2) TFEU), the integration of immigrants (Art 79(4) TFEU), crime prevention (Art 84 TFEU), social policy cooperation (Art 153(2) TFEU), industry (Art 173(2) TFEU), space (Art 189(2) TFEU), tourism (Art 195(2) TFEU), civil protection (Art 196(2) TFEU) and administrative cooperation (Art 197(2) TFEU). 139 Case C-376/98 Germany v Parliament and Council (re: Tobacco Advertising) [2001] ECR I-2247.

Choice of Legal Basis

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their political ties. Furthermore, trade brings populations out of poverty and supports the development of poor states. Therefore, while poverty breeds political tensions and upheavals, trade may facilitate political stability. In addition, trade is linked to, and may clash with, policies aiming at protecting the environment and public health. For instance, a long-standing area of tension between the United States and the European Union has been the strict restrictions on trade in genetically modified plants and foods imposed by the latter. A measure which the European Union considers essential in order to protect public health may be viewed as a protectionist trade restriction. In other words, to distinguish between external trade and other areas of external action in practical terms is far from easy and becomes even more so in the globalised international environment where the interdependence between states and groups of states is increasingly pronounced. And yet this exercise is vitally important in legal terms, as measures falling within the scope of different, albeit interrelated, areas of activity are adopted under different legal bases.

11.1 The Significance of the Choice of Legal Basis The implications of the choice of the appropriate legal basis are considerable in practical terms, as the latter determines the procedures whereby secondary measures are adopted and the input of the Union institutions in decision-making. However, the significance of this exercise is far wider for the EU legal order. As the Court of Justice pointed out in Opinion 2/00, ‘the choice of the appropriate legal basis has constitutional significance’.140 It indicates compliance with the principle of limited powers, enshrined in Article 5 TEU, and determines the nature and extent of Union competence. In the words of the Court of Justice,141 to proceed on an incorrect legal basis is … liable to invalidate the act concluding the agreement and so vitiate the Community’s consent to be bound by the agreement it has signed. That is so in particular where the Treaty does not confer on the Community sufficient competence to ratify the agreement in its entirety, a situation which entails examining the allocation as between the Community and the Member States of the powers to conclude the agreement that is envisaged with non-member countries, or where the appropriate legal basis for the measure concluding the agreement lays down a legislative procedure different from that which has in fact been followed by the Community institutions.

In the case of an agreement deemed to be concluded by the Union pursuant to an incorrect legal basis, the Union measure concluding the Agreement would be invalidated whilst the Agreement would be binding on the EU under international law.142 This would necessitate not only the adoption of a new measure but also, where appropriate, the submission of an amended declaration of competence. The analysis so far referred to specific examples of links between the CCP and other policies and the difficulties of choosing the appropriate legal basis (eg regarding the choice between the CCP, on the one hand, and internal market provisions as well as development cooperation, on the other hand). One policy area that illustrates the problems of 140

Opinion 2/00 [2001] ECR I-9713, para 5. Ibid. 142 Case C-327/91 France v Commission [1994] ECR I-3641, para 25. 141

54 Common Commercial Policy delineating the CCP is the environment. Over the years, a number of disputes between the European Union institutions have highlighted both the strong disagreements to which the interpretation of Article 207(1) TFEU gives rise as well as the various linkages between external trade and environmental policy. It is recalled that, whilst avoiding the debate about the instrumental or objective approach advocated by the Commission and the Council, the Court made it clear in the 1990s that the CCP was far from unlimited in scope. And yet, the interaction between external trade and environmental policy provided the background for a number of interinstitutional disputes, the outcome of which has not settled things. In order to appreciate the implications of the cases examined in this section about whether an EU measure should be adopted as a CCP or an environmental law one and to understand the rigour with which EU institutions pursue legal basis disputes before the Court of Justice, two points are worth making. First, when these disputes were brought before the Court of Justice, the procedure governing decision-making in these two areas differed, as they were adopted under the pre-Lisbon constitutional arrangements. Therefore, CCP measures were adopted without the formal input of the Parliament, whereas environmental law measures were adopted under what is now the ordinary legislative procedure. The Lisbon Treaty has done away with this distinction as Article 207 TFEU is now governed by the ordinary legislative procedure too. Secondly, the nature of the Union competence in these two areas differs: whilst exclusivity defines the conduct of the CCP, the Union shares with the Member States the competence to carry out an environmental policy. Prior to analysing the links between external trade and environmental policy, it is worth setting out the main two principles on the basis of which the Union institutions decide under which legal basis a given measure should be adopted. The first is the objective nature of this choice. According to the standard formulation put forward by the Court of Justice, ‘the choice of the legal basis for a [Union] measure must rest on objective factors amenable to judicial review’.143 It is in the light of this principle that ‘the fact that an institution wishes to participate more fully in the adoption of a given measure, the work carried out in other respects in the sphere of action covered by the measure and the context in which the measure was adopted are irrelevant’.144 The second is linked to the objective nature of the choice of the appropriate legal basis and is the notion of the institutional balance. Based on ‘a system for distributing powers among the different [Union] 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]’,145 the principle of institutional balance is intrinsically linked to the prerogatives of the various institutions and entails that ‘each of [them] must exercise its powers with due regard for the powers of the other institutions’.146

11.2 Delineating between the CCP and Environmental Policy The first case in which the Court was asked to rule on the diving line between external trade and environmental policy was when the Union was called upon to conclude the 143

Case C-300/89 Commission v Council (re: titanium dioxide) [1991] ECR I-1689. Case C-269/97 Commission v Council (re: beef products regulation) [2000] ECR I-2257, para 44. 145 Case C-70/88 European Parliament v Council [1990] ECR I-2041, para 21. 146 Ibid, para 22. 144

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Cartagena Protocol on Biosafety. This Protocol was adopted in January 2000 within the framework of the Convention on Biological Diversity.147 The Cartagena Protocol concerned the biosafety, in particular as regards to transboundary movement, of any living modified organisms (LMOs) resulting from modern biotechnology that might have adverse effect on the conservation and sustainable use of biological diversity.148 The Protocol was adopted unanimously by the Council on the environmental legal basis of the Treaty149 even though the Commission had proposed that it be adopted as both a CCP and an environmental law measure.150 Following this deviation from its proposal, the Commission requested an Opinion pursuant to Article 218(11) TFEU.151 This case attracted considerable interest amongst the Member States: in addition to the European Parliament and the Council, seven governments submitted observations.152 The main objective of the Commission was to clarify a matter of principle, namely to ‘ensure a framework of legal certainty for management of the Protocol, in particular when voting rights are exercised’. Indeed, the divergence of views with the Council was irrelevant in procedural terms in so far as the Council would have to act by qualified majority voting under either of the above options. The line of reasoning put forward by the Commission was centred around the contention that the Protocol fell predominantly within the scope of the CCP because of its objective and content. Whilst it accepted that a number of issues fell within the powers retained by the Member States, it argued that those were limited in scope and were confined to measures not affecting trade in LMOs: they covered the application of safety conditions to the development, transport, use, transfer and release of any LMOs outside international trade and those covering unintentional transboundary movement of LMOs. The line of reasoning followed by the Commission in Opinion 2/00 typifies an expansive view of the CCP, one which appears to take the statements of the Court of Justice in the 1970s at face value. In addition to the above, it argued that the CCP had been held to be broadly construed and had, in fact, been construed widely enough to cover trade measures pursuing, amongst others, objectives related to public health protection,153 development cooperation,154 foreign and security policy,155 and agricultural policy.156 Finally, the conclusion of the Cartagena Protocol as a CCP measure was seen as necessary for the effectiveness of Union action on the international scene. 147 See B Chaytor, R Gerster and T Herzog, ‘The Convention on Biological Diversity—Exploring the Creation of a Mediation Mechanism’ (2002) 5 Journal of World Intellectual Property 157; and D Thieme, ‘European Community External Relations in the Field of the Environment’ (2001) 10 European Environmental Law Review 252, 260 et seq. 148 See PWB Phillips and WA Kerr, ‘The WTO versus the Biosafety Protocol for Trade in Genetically Modified Organisms’ (2000) 34 Journal of World Trade (JWT) 63; and O Rivera-Torres, ‘The Biosafety Protocol and the WTO’ (2003) 26 Boston College International and Comparative Law Review 263. 149 Art 175(1) EC (now Art 192(1) TFEU). 150 The Commission’s proposal was based on ex Art 133 EC (now Art 207 TFEU) and ex Art 174(4) EC (now Art 191(4) TFEU). The latter provides for the cooperation between the EU and Member States and third countries and international organisations in the area of environmental protection. 151 Opinion 2/00, n 140 above. 152 Namely the Danish, Greek, Spanish, French, Italian, Austrian and British. 153 Case C-62/88 Greece v Council, n 63 above. 154 Opinion 1/78, n 11 above, Case 45/86 Commission v Council, n 58 above. 155 Case C-70/94 Werner [1995] ECR I-3189; Case C-83/94 Leifer and Others [1995] ECR I-3231; Case C-124/95 Centro-Com [1997] ECR I-81. This case-law is examined in Chapter 14. 156 Opinion 1/94, n 65 above, paras 28–30.

56 Common Commercial Policy For the purpose of this analysis, the ruling of the Court in Opinion 2/00 may be divided into three parts. The first one deals with the issue of legal basis in general. Having reaffirmed the principle that its choice should be determined on the basis of ‘objective factors  … amenable to judicial review’ which should include ‘in particular the aim and the content of the measure’,157 the Court ruled that that also covered EU measures adopted in order to conclude an international agreement. The Court then referred to the rule of interpretation laid down in the Vienna Convention on the Law of Treaties (VCLT): according to Article 31 thereof, ‘a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose’. In relation to the Cartagena Protocol in particular, the Court defined the essential question as whether the Protocol, in the light of its context, its aim and its content, constitutes an agreement principally concerning environmental protection which is liable to have incidental effects on trade in LMOs, whether, conversely, it is principally an agreement concerning international trade policy which incidentally takes account of certain environmental requirements, or whether it is inextricably concerned both with environmental protection and with international trade.158

In the second part of its ruling, the Court analysed the context, the objectives and the content of the Protocol. It reached the conclusion that the former should be determined on the basis of the Convention on Biological Diversity, within the framework of which it had been drawn up in the first place. It was pointed out that the environmental nature of that instrument was apparent: it had been adopted under the environment legal basis (current Article 192 TFEU) and, in its first Article, it referred to its objectives as ‘the conservation of 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’.159 As to the Protocol’s purpose, the Court noted that it was ‘clear beyond doubt’ that it pursued an environmental objective: its Article 1 refers to Principle 15 of the Rio Declaration on Environment and Development dealing expressly with environmental protection; it mentions the precautionary principle which is a fundamental principle of environmental protection laid down in ex Article 174(2) EC;160 its title illustrates its objective of ensuring an adequate level of protection in the field of the safe transfer, handling and use of LMOs which is also underlined in its preamble.161 Finally, in dealing with the substantive content of the Cartagena Protocol, the Court ruled that its environmental aim was clearly reflected in the fundamental obligation it imposed on the parties: this was to prevent or reduce the risk to biological diversity in the development, handling, transport, use, transfer and release of any LMOs.162 A number of provisions clearly illustrated the predominantly environmental character of the Protocol: control mechanisms, some

157 n 140 above, para 22 with reference to Case C-268/94 Portugal v Council [1996] ECR I-6177, para 22; Case C-269/97 Commission v Council [2000] ECR I-2257, para 43; and Case C-36/98 Spain v Council [2001] ECR I-779, para 58. 158 n 140 above, para 25. 159 Ibid. Furthermore, the Protocol included various references to the Convention and the Conference of the Parties. 160 Now Art 191(2) TFEU. See ibid, para 29. 161 In particular, reference is made to risks to human health from biotechnology, the need for biotechnology to be used with adequate safety measures for the environment and human health and the crucial importance to humankind of centres of origin and centres of genetic diversity. 162 See Art 2(2) of the Cartagena Protocol.

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of which were typically associated with environmental policy, were established in order to enable the parties to adhere to their obligations; the Protocol deals with the assessment and management of risks associated with the use, handling and transboundary movement of LMOs, unintentional transboundary movements and emergency measures, the handling, transport, packaging and identification of LMOs; the substantive duties imposed upon the contracting parties cover any kind of transboundary movement. In the light of the above, the Court had no difficult concluding that the Protocol’s ‘main purpose or component is the protection of biological diversity against the harmful effects which could result from activities that involve dealing with LMOs, in particular from their transboundary movement’.163 In the final part of its ruling in Opinion 2/00 the Court dealt with the specific arguments put forward by the Commission. Having held that ‘the Protocol is, in the light of its context, its aim and its content, an instrument intended essentially to improve biosafety and not to promote, facilitate or govern trade’,164 it ruled that, in dealing with transboundary movement of LMOs, the Protocol covered not only trade in but also any form of movement of LMOs between states: these included illegal and unintentional movement and movement for charitable or scientific purposes or serving public interest. As to the wide interpretation advocated by the Commission, the Court held that if accepted, [the Commission’s interpretation] would effectively render the specific provisions of the Treaty concerning environmental protection policy largely nugatory, since, as soon as it was established that Community action was liable to have repercussions on trade, the envisaged agreement would have to be placed in the category of agreements which fall within commercial policy.165

The ‘effectiveness’ argument had the same fate as it was pointed out that practical difficulties associated with the implementation of mixed agreements, ‘whatever their scale, … cannot be accepted as relevant when selecting the legal basis for a Community measure’.166 Following the ruling in Opinion 2/00, the Council Decision concerning the conclusion, on behalf of the Union, of the Cartagena Protocol was adopted solely as an environmental measure.167 In its preamble, it pointed out that the Protocol ‘contributes to the achievement of the objectives of the environmental policy of the [Union]’. As the Court held correctly in Opinion 2/00, both the wording and the substantive content of the Cartagena Protocol were hardly unclear as to its predominantly environmental character.168 In order to establish this, the Court engaged in an exercise that 163

n 140 above, para 34. Ibid, para 37. As to the choice between ex Arts 174(4) and 175(1) EC (now Arts 191(4) and 192(1) TFEU), the Court concluded in para 43 that the latter was the correct legal basis. This was because the Cartagena Protocol did not merely provide for cooperation arrangements, as required under the former provision, but set out precise rules on control procedures regarding transboundary movements, risk assessment and management, handling, transport, packaging and identification of LMOs. Finally, the Union was held not be exclusively competence under ex Art 175(1) EC, as ‘the harmonisation achieved at Community level in the Protocol’s field of application covers … only a very small part of such a field’ (para 46). 165 Ibid, para 40. 166 Ibid, para 41. 167 Dec 2002/628 [2002] OJ L201/48. 168 This point was also borne out by the Protocol’s negotiating history: see C Bail, J-P Decaestecker and M Joergensen, ‘European Union’ in C Bail, R Falkner and H Marquard (eds), The Cartagena Protocol on Biosafety—Reconciling Trade in Biotechnology with Environment and Development? (London, The Royal Institute 164

58 Common Commercial Policy would appear to present problems similar to those facing any judicial body. In fact, on the internal plane, the Court had been familiar with delineating the relationship between trade and environmental policies: a case in point is the Titanium Dioxide case,169 a central case in the legal basis debate.170 However, whilst not uncontroversial in the context of the internal market, the choice of legal basis in the area of external relations is all the more complex in the light of the involvement of third states. In addition, it is the constitutional underpinnings of the regulation of different policies under the Treaty that render this task even more fraught with problems: it is recalled that, in the case of the CCP, the Court had sought to foster its normative foundation on the basis of a priori exclusivity for the Union’s competence over a widely construed commercial policy. An interesting feature of the ruling is the rejection by the Court of the Commission’s view that the CCP should be construed too widely. There are three issues which emerge. First, in response to the Commission’s emphasis on the effectiveness of the EU’s external action, the Court stressed that the choice of legal basis could not be influenced by the practical difficulties associated with the implementation of mixed agreements, ‘whatever their scale’.171 In doing so, it followed its approach in Opinion 1/94, where it had pointed out that, whilst ‘quite legitimate’, practical problems about shared competence could not render the Union’s competence exclusive.172 It is noteworthy that, in its ruling, the Court is as elaborate in articulating the alternatives to the CCP as it is forceful in rejecting the requirement for recourse to Article 207 TFEU as a matter of necessity. For instance, having pointed out that the delineation of powers shared by the Union and the Member States exceeded its jurisdiction under Article 218(11) TFEU, it held that: In any event, where it is apparent that the subject-matter of an international agreement falls in part within the competence of the Community and in part within that of the Member States, it is important to ensure close cooperation between the Member States and the Community institutions, both in the process of negotiation and conclusion and in the fulfillment of the commitments entered into. That obligation to cooperate flows from the requirement of unity in the international representation of the Community.173

It is recalled that an elaborate reference to that duty had concluded the ruling in Opinion 1/94, where the Court had rejected the Commission’s claim for exclusivity on almost all grounds. In other words, Opinion 2/00 constitutes the natural continuation of the ruling in Opinion 1/94 in a twofold manner: on the one hand, it makes it clear that neither legal nor practical reasons may justify the transformation of the widely construed CCP into an all-encompassing external economic relations policy; on the other hand, instead of treating mixity as a legal abomination, it highlights the emergence of general principles which may address any ensuing complications. Therefore, the line of reasoning in Opinion 2/00 was consistent both with the Court’s approach to the overall system of EU external relations. of International Affairs, 2002) 166, 168: all three authors were involved in the negotiations, the first leading the Commission delegation. 169

Case C-300/89 Commission v Council, n 143 above. See the criticism in S Crosby, ‘The Single Market and the Rule of Law’ (1991) 16 European Law Review 451. The Court then dealt with the issue of the interaction between trade and environmental policies in Case C-155/91 Commission v Council [1993] ECR I-939 and Case C-187/93 Parliament v Council [1994] ECR I-2857. 171 n 140 above, para 41. 172 See Opinion 1/94, n 65 above, para 107. 173 n 140 above, para 18. 170

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Secondly, the Commission’s arguments in Opinion 2/00 about the relationship between trade and environment effectively undermined the EU provisions on environmental protection. It was for that reason that the language in which the Court stressed the position of environmental policy in the Treaty was identical to that used twenty-five years earlier in relation to the CCP itself.174 Thirdly, the line of reasoning put forward by the Commission and rejected by the Court appeared to read literally the Court’s general pronouncements on the interpretation of the CCP.175 In doing so, it failed to place them in their specific context: this covered not only the substantive content of the agreements in relation to which those pronouncements had been made, but also the emerging character of the CCP, its pronounced linkages with the internal market and the period of stagnation in decisionmaking in the EU at large. As has been pointed out, Opinion 1/94 contains no reference to the substantive parallelism between the content of the CCP and that of the external trade policy of a state;176 the same is true of Opinion 2/00. There is no such reference because there is no need for one: the principle of the dynamic interpretation of this policy and the exclusive nature of the Union competence were by then well entrenched in Union vocabulary. The development of the international economic arena should also be taken into account when assessing the approach of the Court: whilst the negotiation and conclusion of commodity agreements was part of mainstream international practice in the 1970s and early 1980s, the 1990s saw the collapse of commodity prices and the marginalisation of commodity agreements.177 Viewed from this angle, to argue that a worthwhile, widely construed commercial policy is all-encompassing in scope is a logical misnomer: the dynamic development of a policy requires its construction in a manner that is sufficiently consistent to accommodate international developments and flexible to take into account the constitutional underpinnings of the legal system within which it is bound to be carried out. In the light of this, it is noteworthy that the scope of the CCP was articulated in Opinion 2/00 in a manner which, whilst broad in nature, was distinguished from the early pronouncements of the 1970s: it aims at governing agreements which, in the light of their context, aim and content, are intended essentially to promote, facilitate or govern trade. Another case where there was strong disagreement as to whether an international agreement was mainly about trade or environment was in the Energy Star Agreement case.178 This was about the conclusion of a US–EU agreement on the coordination of energy-efficient labelling programmes for office equipment. This programme, called the ‘Energy Star Programme’, originated in United States and aimed at encouraging manufacturers to introduce energy-saving features and at raising consumer awareness of the energy losses of office equipment in stand-by mode. In doing so, it introduced a logo, the Energy Star logo, for the labelling of equipment which adhered to the relevant rules. This 174

Ibid, para 40. For a more detailed critique of the Commission’s arguments, see P Koutrakos, ‘“I Need to Hear You Say It”: Revisiting the Scope of the EC Common Commercial Policy’ (2003) 22 Yearbook of European Law 407, 420 et seq. 176 See J Dutheil de la Rochère, ‘L’ ère des compétences partagées’ [1995] Revue du Marché Commun et de l’Union européenne 461, 469. 177 See A Maizels, Commodities in Crisis (Oxford, Clarendon Press, 1992) 5–22; and C Michalopoulos, Developing Countries in the WTO (Basingstoke: Palgrave, 2001) 32–33. 178 Case C-281/01 Commission v Council [2002] ECR I-12049. 175

60 Common Commercial Policy programme proved to be very popular with manufacturers around the world, including the Community. This prompted the Commission to adopt it. Following its signature, the relevant Agreement was approved on behalf of the Union by Decision 2001/469179 based on Article 192(1) TFEU. The Commission challenged that Decision on the ground that it constituted a CCP measure. The Court repeated the need for the choice of legal basis to rest on objective factors amenable to judicial review, and then noted that the Energy Star Agreement ‘simultaneously pursues a commercial-policy objective and an environmental-protection objective’:180 the former on grounds of its aim to coordinate energy-efficient labelling programmes which ‘necessarily facilitates trade inasmuch as manufacturers henceforth need to refer to just one standard as regards labeling 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’;181 the latter because, ‘on reading the preamble to the Energy Star Agreement and Article I thereof,  … by stimulating the supply of and demand for energy-efficient products, the labeling programme in question is intended to promote energy savings’.182 As to its predominant aim, the Court concluded that the Agreement was ‘[a]n instrument having a direct impact on trade in office equipment’.183 It did accept that ‘in the long term  … the programme should have a positive environmental effect’. However, it went on to conclude that that ‘is merely an indirect and distant effect, in contrast to the effect on trade in office equipment which is direct and immediate’.184 The Council had sought to underline the environmental character of the Energy Star Agreement by referring to various internal EU measures concerning the award of voluntary eco-labels which had been adopted as environmental instruments. This argument was rejected by the Court, which suggested that the legal basis of those measures had been justified in the light of their intra-Union scope. Those measures were not ‘sufficient to establish that the same basis must be used when approving an international agreement with similar subject-matter’.185 Whilst the judgment in the Energy Star Agreement case might appear to be at odds with the ruling in Opinion 2/00, it is suggested that this is not the case. On the facts of the case, the conclusion reached by the Court is entirely justified: whereas the aim of the Energy Star Programme was to promote energy-efficient equipment, that of the Energy Star Agreement was, as far as the Union was concerned, to facilitate the commercial activities of traders originating in the Member States, hence enabling them to penetrate foreign markets more efficiently. This objective distinction, apparent in the judgment

179

[2001] OJ L172/1. n 178 above, para 39. 181 Ibid, para 37. 182 Ibid, para 38. 183 Ibid, para 40. 184 Ibid, para 41. The optional character of the Energy Star Programme was deemed irrelevant to the commercial-policy objective of the Agreement, not only because the latter was ‘none the less designed to have a direct impact on trade in office equipment’ (para 44) but also because ‘nonbinding labelling provisions may constitute an obstacle to international trade’ (para 45). 185 Ibid, para 46. To that effect, the Court mentioned Dir 92/75 on the indication by labelling and standard product information of the consumption of energy and other resources by household appliances [1999] OJ L297/16, adopted under ex Art 95 EC (now Art 114 TFEU) due to its link to the establishment of the internal market. 180

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itself,186 was central to the Court’s reasoning. This was also implied by Advocate General Alber, who referred to the exploratory memorandum accompanying the Commission’s proposal for the contested Decision: this viewed the Energy Star logo as the ‘de facto required standard for office equipment sold on the United States market. In addition, the Energy Star requirements were becoming the applicable standard world-wide and therefore in the Union as well’.187 Viewed from this angle, what was truly at the core of the matter was the extent to which market access could be guaranteed to EU traders of products falling within the scope of the Programme. Indeed, in his Opinion, Advocate General Alber implied a similarity between the Energy Star Agreement and technical standards agreements.188 Therefore, the subject-matter of the Energy Star Agreement case is altogether different from that in Opinion 2/00. The principles determining the choice of legal basis in EU international relations, as elaborated in the Energy Star judgment, have been applied by the Court in the context of protection and control of wine names. The Union relied upon the CCP legal basis and concluded such an agreement with Hungary in 1993 that, protected, amongst others, the Hungarian geographical indication ‘Tokaj’. In implementing its provisions, the Italian authorities prohibited the use in Italy of the grape variety names ‘Tocai friulano’ and its synonym ‘Tocai italico’ on wine labels with effect from 2007. The autonomous region where these varieties are produced, and an organisation called the Regional Agency for Rural Development, challenged this prohibition before the Italian courts. One of their arguments was that the Agreement with Hungary should not have been adopted as the Union did not have exclusive competence to protect intellectual property rights. In its judgment, the Court dismissed this argument.189 It applied the line of reasoning put forward in the Energy Star case, and noted that the specific objective of agreements on the protection and control of wine names is to guarantee reciprocal protection for certain geographical indications which are mentioned on the labelling. These are used to market the wines in the Union and in the third country concerned. Therefore, such agreements constitute an instrument directly affecting trade in wines. So far, this analysis has examined an agreement which was mainly about the environment even though it had an indirect impact on trade (Cartagena Protocol) and an agreement mainly about trade that had an indirect impact on the protection of the environment (Energy Star Agreement). In the following case, the Court identified a different type of agreement. In Case C-94/03, the Commission brought an action against the Council challenging the conclusion of the Rotterdam Convention on the Prior Informed Consent Procedure for certain hazardous chemicals and pesticides in international trade.190 The Council Decision approving the conclusion of the Convention on behalf

186 According to the Court, the US Energy Star Programme ‘was devised in order to stimulate the supply of, and demand for, energy-efficient products and therefore to promote energy conservation’, an objective which the extension of the Agreement to the EU would ‘undoubtedly help’ (ibid, para 42). The Energy Star Agreement ‘does not contain new energy-efficiency requirements’, hence ‘merely render[ing] the specifications initially adopted by the [Programme] applicable on both the American market and the European market and mak[ing] their amendments subject to the agreement on both contracting parties’ (ibid). 187 Quoted in para 66 of this Opinion (ibid). 188 See para 74 of his Opinion (ibid). 189 Case C-347/03 Regione autonom Friuli-Venezia Giulia and ERSA v Ministero delle Politiche Agricole e Forestali [2005] ECR I-3785. 190 Case C-94/03 Commission v Council [2006] ECR I-1.

62 Common Commercial Policy of the Union was adopted unanimously as an environmental measure,191 whereas the Commission had proposed its adoption as a trade measure in the context of the CCP. The Rotterdam Convention describes its objective in Article 1 as follows: ‘to promote shared responsibility and cooperative efforts among Parties in the international trade of certain hazardous chemicals in order to protect human health and the environment from potential harm and to contribute to their environmentally sound use’. This objective is to be achieved ‘by facilitating information exchange about [the] characteristics [of those chemicals], by providing for a national decision-making process on their import and export and by disseminating these decisions to Parties’. The defining characteristic of the Convention is the application of the prior informed consent procedure to exports and imports of certain hazardous chemicals and pesticides. This procedure applies to products listed in an annex to the Convention as well as other ‘banned or severely restricted chemicals’ and ‘severely hazardous pesticide formulations’. A system of information is established whereby the parties communicate, through a Secretariat, their decision to ban or severely restrict trade in hazardous chemicals and pesticides and the importing parties communicate their decision as to whether to consent to future imports of such products. In its judgment, the Court held that the protection of human health and the environment was ‘the most important concern in the mind of the signatories of the Convention’, a fact which was ‘clearly apparent’ and ‘unequivocally confirm[ed]’ in the preamble and the wording of the Convention.192 However, it pointed out that its provisions ‘also contained rules governing trade in hazardous chemicals and having direct and immediate effects on such trade’.193 The Court noted the reference to ‘trade’ in the title of the Convention and observed that, whilst typically an instrument of environmental policy, the prior informed consent procedure would be applicable to products subject to trade. Deemed to establish ‘a specific link between trade and the environment’,194 the Convention was viewed by the Court as providing for a number of measures ‘“governing” or “regulating” international trade … and therefore fall[ing] within the scope of the common commercial policy’.195 In the light of the above, it was held that the Convention had been wrongly concluded on behalf of the Union as an environmental measure. Instead, it should have been concluded under both the CCP and the environmental policy legal bases (now Articles 207(1) and 192(1) TFEU), as it includes, both as regards the aims pursued and its contents, two indissociably linked components, neither of which can be regarded as secondary or indirect as compared with the other, one falling within the scope of the common commercial policy and the other within that of protection of human health and the environment.196

The Rotterdam Convention judgment is not easy to reconcile with the previous case-law on the interactions between trade and environmental policy. Its conclusions are based on

191

Council Dec 2003/106 [2003] OJ L63/27. n 190 above, para 37 of the judgment. 193 Ibid, para 42. 194 Ibid, para 44. 195 Ibid, para 46. 196 Ibid, para 51. Following the judgment, the Rotterdam Convention was concluded under Council Dec 2006/730/EC [2006] OJ L299/23 where reference to the judgment (preamble, paras 2 and 3). 192

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a narrow and selective reading of the Convention.197 The judgment referred, for instance, to the preamble to the Convention, according to which ‘trade and environmental policies should be mutually supportive with a view to achieving sustainable development’, whilst ignoring the identically expressed provision in the preamble to the Cartagena Protocol198 which had been held to illustrate its environmental nature. The judgment distinguishes the Convention from the Cartagena Protocol on the basis that, contrary to the latter, it is characterised by ‘an explicit link between trade and the environment’.199 Whilst the Rotterdam Convention is applicable to imports and exports of chemicals and the advance informed agreement procedure set out in the Cartagena Protocol is applicable to transboundary movement of living modified organisms in general, that is including, in the Court’s own words, ‘illegal and unintentional transboundary movements, movements for charitable or scientific purposes and movements serving the public interest’, to focus on the need for this ‘explicit link’ is unduly formalistic. The application of the Convention to products whose movement is subject to export and import rules does not necessarily render its provisions of a trade nature. In fact, the Convention sets out a procedural framework aiming at enabling the importing countries to make an informed choice as to the harmful effects that the import and export of certain chemicals and pesticides would have on human health and the environment.200 Furthermore, the judgment in Rotterdam Convention ignores both the origins of the Convention and the policy context within which it developed. Negotiated in the context of the Rio and 2002 Johannesburg Conferences and following up from international frameworks which had been drawn up under the Food and Agriculture Organisation (namely the Code of Conduct on the Distribution and Use of Pesticides) and the United Nations Environment Programme (namely the London Guidelines for the Exchange of Information on Chemicals in International Trade), the Convention draws upon and develops further an incrementally developed body of principles and procedures firmly established within the sphere of environmental policy. The narrow, selective and formalistic interpretation of the Rotterdam Convention sets the judgment in this case apart from the other judgments on the relationship between trade and environment. This gives rise to considerable uncertainty as to the choice of the legal basis on which an agreement with a trade and environmental law dimension should be concluded by the Union.201 In its judgment, the Court held that the Decision concluding the Rotterdam

197 For a detailed analysis of the judgment, see P Koutrakos, ‘Annotation on Case C-94/03 Commission v Council and Case C-178/03 Commission v Parliament and Council’ (2007) 44 Common Market Law Review 171. 198 See para 9 of the preamble. The Court also ignored a number of statements underlying the environmental focus of the Convention. For instance, in the preamble to the Convention, the Parties express their ‘desir[e] to ensure that hazardous chemicals that are exported from their territory are packaged and labelled in a manner that is adequately protective of human health and the environment, consistent with the principles of the Amended London Guidelines and the International Code of Conduct’. 199 n 190 above, para 44. 200 In her Opinion, AG Kokott points out that the PIC procedure can only have indirect effects on trade, either by facilitating trade in hazardous chemicals by increasing transparency of the relevant rules or by making trade more expensive for an exporter and concludes that ‘no commercial policy rules’ fall within the scope of the Convention (n 190 above, para 39 of her Opinion). 201 See M Cremona, ‘External Relations of the EU and the Member States: Competence, Mixed Agreements, International Responsibility, and Effects of International Law’, EUI Working Papers LAW No 206/22, n 50 who notes that, the existence of relevant case-law notwithstanding, ‘it does not  … seem any easier to predict the outcome of a future case on the same issue’.

64 Common Commercial Policy Convention on behalf of the Union should be annulled: in the new Decisions, the CCP legal basis should be added to the environmental law one in order to reflect the dual focus of the Decision. It is settled case-law that recourse to a dual legal basis is not possible in a case where the decision-making procedures laid down therein are incompatible with each other or liable to undermine the rights of the European Parliament.202 Indeed, this principle was restated by the Court in the Rotterdam Convention judgment, which then pointed out that the addition of the CCP legal basis along with the environmental law one (now Article 192(1) TFEU) would not change the voting procedure (both require qualified majority voting) and would not undermine the role of the European Parliament (as, at that time, the former provision provided for no formal role for it, whereas the latter provided for consultation).203 Given that the addition of the CCP legal basis would add nothing in procedural terms, why was the annulment of the Decision concluding the Rotterdam Convention on behalf of the Union necessary? The fact that recourse to a dual legal basis, rather than the single one originally envisaged, is legally possible in institutional and procedural terms does not necessarily entail the annulment of the measure in question. In other cases where the Court rules that a new legal basis should be added to the one pursuant to which a measure under review was adopted, the Court held that the annulment of the latter is not necessary as ‘such an error in the legal basis relied on for a Community measure is no more than a purely formal defect’.204 In other words, recourse to the inappropriate legal basis does not question the procedure for adopting the measure in question when the legislative procedure actually followed satisfies the requirements of the legislative procedure which ought to have been applied under the correct legal basis. This was also the conclusion suggested by Advocate General Kokott in her Opinion.205 In the light of the above, the ruling that the Decision concluding the Rotterdam Convention should be annulled was puzzling. It is not necessarily explained by the judgment in Case C-178/03 Commission v Parliament and Council, delivered on the same day as the one in the Rotterdam Convention case. In that judgment, the Court held that Regulation 304/2003 implementing the Rotterdam Convention should also have been based on what is now Article 207 TFEU along with the environmental legal basis and, for that reason, it was necessary that it be annulled. However, the conclusion of an international agreement and the adoption of the implementing measure are two acts that may well be adopted on different legal bases.206 What may shed light on the Court’s reasoning is this extract from the Rotterdam Convention judgment: [I]t is important to note that, by basing the decision approving the Convention on the dual legal basis of [Article 207 TFEU] and Article [192175(1) TFEU], the [Union] is also giving indications to the other parties to the Convention both with regard to the extent of [Union] competence in relation to that Convention which … falls both within the scope of the common

202

See Case C-300/89 Titanium Dioxide, above n 143, paras 17–21. n 190 above, para 52. Now both Arts 207 and 192 TFEU provide for the ordinary legislative procedure. 204 See Case C-210/03 Swedish Match [2004] ECR I-11893, para 98. See also Case C-491/01 BAT [2002] ECR I-11453. 205 See paras 52–54 with reference to Joined Cases C-164/97 and C-165/97 Parliament v Council (Forest protection case), [1999] ECR I-1139, para 14, and Case C-338/01 Commission v Council [2004] ECR I-4829, para 57. 206 See Opinion 1/94, above n 65, para 29. 203

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commercial policy and within that of competences between the [Union] and its Member States, a division which must also be taken into account at the stage of implementation of the agreement at Community level.207

The focus of the above extract on the interests of the third parties, to such an extent as to necessitate the annulment of the Union measure concluding the Rotterdam Convention on behalf of the Union, is at variance with one of the main tenets of EU external relations, namely the internal function of the choice of the appropriate legal basis. This was articulated clearly in the late 1970s, where the Court pointed out that: [I]t is not necessary to set out and determine, as regards other parties to the Convention, the division of powers  … 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.208

The above position was later reaffirmed in Opinion 2/00.209 In the light of the above, the conclusion in the Rotterdam Convention judgment that the Decision be annulled on the basis of the interests of the Union’s international partners is puzzling. The internal function of the choice of legal basis for the conclusion of international agreements follows directly from the constitutional function of this choice and is related to its objective nature. After all, these are the main normative characteristics of the choice of the appropriate legal basis.210 By introducing the interests of third parties as an additional factor in the process of the choice of legal basis, the Court rendered a process already fraught with problems even more difficult to predict. As Cremona puts it: [T]here is a danger, if decisions as to legal base are seen as a signal to third countries, that the issue of choice of legal base will become even more politicised than it is already, making it more difficult to base that choice purely on ‘objective factors which are amenable to judicial review’.211

Another way of understanding the relevant part of the Rotterdam Convention judgment may be its focus on the submission of a new declaration of competence. In this respect, the emphasis also placed on the declaration of competence submitted by the Community to the UN Convention on the Law of the Sea in the Mox Plant judgment is interesting.212 Therefore, the Court may be seen to suggest that more attention should be paid to the uncertainty that third parties often face when dealing with the Union and its Member States in the context of multilateral international agreements. This state of uncertainty may appear more significant as it is linked to the question of responsibility for the implementation of such agreements. This aspect of the Union’s engagement in international

207

Case C-94/03 Commission v Council, above n 190, para 55. Ruling 1/78 (re: Draft Convention of the International Atomic Energy on the Physical Protection of Nuclear Materials, Facilities and Transports), [1978] ECR 2151, para 35. 209 Opinion 2/00, above n 140, para 17. 210 See P Koutrakos, ‘Legal Basis and Delimitation of Competence in EU External Relations’ in M Cremona and B De Witte (eds), EU Foreign Relations Law- Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 171, 172–74. 211 Cremona, above n 201, 10. 212 Case C-459/03 Commission v Ireland [2006] ECR I-4635. 208

66 Common Commercial Policy relations will be examined later in this book.213 At this juncture, suffice it to point out that, in fact, a declaration of competence does not always assist third countries in their understanding of who does what and who is responsible for what under EU law in the context of an international agreement.214 In Case C-411/05 Commission v Council the Grand Chamber of the Court reverted to a less controversial interpretation.215 The dispute was about the conclusion of the Basel Convention on the control of transboundary movements of hazardous waste and its disposal, signed in 1989. The Convention was concluded by the Union as an environmental measure under the precursor to Article 192 TFEU and the EU legislature adopted a regulation implementing it similarly under the same legal basis. A few years later, the Council and the Parliament updated this measure by means of Regulation 1013/2006 on shipments of waste which was also adopted as an environmental measure.216 The Regulation applied to shipment of waste both within the Union and between the Union and the rest of the world. The Commission challenged the latter Regulation and argued that it should have been adopted under both the CCP and the environmental policy legal bases because both its purpose and content related to trade and the protection of the environment and neither component could be considered as secondary to the other. The Grand Chamber of the Court rejected this argument. It held that the main objective of the Convention was to protect human health and the environment against the potentially adverse effects of cross-border shipments of waste. This was expressly acknowledged in the recitals of the Regulation, none of which referred to the pursuit of objectives falling within the CCP. It was also confirmed by the content of the Regulation which established a mechanism centred on the prior written notification and consent procedure. Consistent with Opinion 2/00, the Court described this as a typical instrument of environmental policy. The legislative context of Regulation 1013/2006 was also viewed as underlining its environmental dimension. It was adopted in order to implement the Basel Convention, a predominantly environmental law measure which had been characterised by the WTO itself as a multilateral environmental agreement. It was also adopted in order to update a regulation, the adoption of which as an environmental measure had been endorsed by the Court of Justice.217 As for the shipment of waste itself, Regulation 1013/2006 did not distinguish between waste shipped for commercial purposes and waste shipped for other purposes: the prior written notification and consent procedure applied across the board in order to protect against risks to human health and the environment applied to such shipments. This overview of the case-law on the links between external trade and environmental policies illustrates three points. First, as a matter of law, the rules governing the choice of legal basis appear clear and aim to rule out subjective factors that may undermine the carefully calibrated institutional balance in the Union constitutional order. On the one hand, the choice of legal basis is to be based on objective criteria amenable to judicial review and, on the other hand, in relation specifically to external trade, a Union measure 213

See Chapter 5. On the declarations of competence, see J Heliskoski, ‘EU Declarations of Competence and International Responsibility’ in M Evans and P Koutrakos (eds), The International Responsibility of the European Union— European and International Perspectives (Oxford, Hart Publishing, 2013) 189. 215 Case C-411/06 Commission v Parliament and Council [2009] ECR I-7585. 216 [2006] OJ L190/1. 217 See Case C-187/93 Parliament v Council [1994] ECR I-2857. 214

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falls within the competence in the field of the common commercial policy provided for in Article [207 TFEU] 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.218

Secondly, the application of these principles as a matter of practice is far from straightforward. The case-law examined in this section does not provide the clarity that the constitutional implications of the choice of legal basis would warrant and that the institutional actors involved in the decision-making process would expect. This problem becomes more pronounced in the light of the vague wording of Article 207(1) TFEU and its procedural and normative character which render this provision too difficult for the Commission to resist as a sole legal basis. Thirdly, the constantly evolving international geopolitical and economic environment and its interdependent nature render strict categorisations of legal measures somewhat elusive and challenge our natural quest for certainty in legal basis queries. They also make lawyers all the more uneasy given the political underpinnings of this area: as in the Union legal order the institutional balance is ill-defined and, at times, incrementally redefined, the choice of legal basis is, in any case, a potentially politicised matter.219

11.3 The CCP and Other External Economic Policies A question that often arises is whether there should be strict correlation between each and every provision of an international agreement and the legal bases for the conclusion of the latter, or whether it is the intensity of the obligations imposed by these provisions which would determine the need to include the corresponding legal basis. The Court dealt with this issue in Case C-268/94 Portugal v Council.220 Portugal challenged Council Decision 94/578 concluding the Cooperation Agreement with India on Partnership and Development.221 That Decision had been adopted by qualified majority voting pursuant to ex Article 133 EC (now Article 207 TFEU) and ex Article 181 EC (now Article 209 TFEU). Portugal objected to a number of clauses contained in the Agreement for which, it argued, the EC Treaty provisions on the CCP and development cooperation did not endow the Community with competence. These clauses provided for respect for human rights and democratic principles, cooperation in the areas of energy, tourism and culture, drug abuse control, and intellectual property. In relation to the human rights clause, Portugal claimed that it should have been adopted by the Community only unanimously pursuant to ex Article 308 EC (now Article 358 TFEU). Whilst accepting the significance of respect for human rights and acknowledging the reference to it in the EC Treaty, Portugal argued that the latter specified no powers of action. The human rights clause constituted an essential element of the Cooperation Agreement with India. Portugal argued that such a provision was contrary 218 Case C-347/03 Regione autonoma Friuli-Venezia Giulia and ERSA, n 189 above, para 75 and Joined Cases C-402/05P and C-415/05 P Kadi and Al-Barakaat [2008] ECR I-6351, para 183. 219 See 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 Common Market Law Review 1243. 220 Case C-268/94 Portugal v Council [1996] ECR I-6177 annotated by S Peers (1998) 35 Common Market Law Review 539. 221 [1994] OJ L223/23.

68 Common Commercial Policy to the programmatic nature of the statements included in the EC Treaty in general and ex Article 130u(2) EC in particular. This argument was rejected by the Court, which pointed out that ex Article 177(2) EC required the Community to take account of the objective of respect for human rights when it adopts measures in the field of development cooperation. According to the Court, this wording entailed that the Community should adapt its development policy to that requirement. The fact that respect for human rights had been rendered an essential element of an international agreement did not go beyond that requirement. The Court pointed out that respect for human rights was subordinate to development policy as it was merely one of the factors which ought to be taken into account before the Community exercised its right to suspend or terminate the Agreement with India. It also held that both the context and wording of the human rights clause made it clear that it did not constitute a specific field of cooperation provided for by the Agreement. In relation to the other specific forms of cooperation, Portugal argued that Member States retained competence in the areas of intellectual property, drug abuse control, tourism and culture; therefore, their inclusion in an international agreement by the Community required their participation. As to cooperation in the area of energy, in the absence of any specific provision, action could only be taken under ex Article 308 EC (now Article 358 TFEU). The Court acknowledged that the Community’s express competence in the area of development cooperation was complementary to that of the Member States. It then pointed out that the objectives of this policy as defined in the Treaty (ex Article 130u EC) were ‘broad’ and entailed action covering ‘a variety of specific matters’, in particular in the case of an agreement establishing the framework of such cooperation.222 In practical terms, this meant that to require a development cooperation agreement concluded between the Community and a non-member country to be based on another provision as well as on Article [177] 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 [ex] Article [177 EC].223

It was for that reason that the Court ruled as follows: [T]he 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.224

The Agreement with India provided the framework of cooperation between the parties and did not define specific courses of action: ‘[T]hose provisions establishing the framework of cooperation between the contracting parties  ... contain nothing that prescribes in concrete terms the manner in which cooperation in each specific area envisaged is to

222

n 220 above, para 37. Ibid, para 38. 224 Ibid, para 39. 223

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be implemented’.225 In relation to other provisions of the Agreement which suggest the possibility of further cooperation in specific areas, the Court noted the following:226 The mere inclusion of provisions for cooperation in a specific field does not  … necessarily imply a general power such as to lay down the basis of competence to undertake any kind of cooperation action in that field. It does not, therefore, predetermine the allocation of spheres of competence between the Community and the Member States or the legal basis of Community acts for implementing cooperation in such field.

In examining the specific clauses to which Portugal had objected, the Court concluded that, on the one hand, they served the objectives of development cooperation policy and, on the other hand, they could be concluded under the legal basis for that policy as they merely set out a framework for cooperation. This was the case with the clauses on energy, tourism and culture. As for the clauses on drug abuse control, the Court pointed out that the production of narcotics, drug abuse and related activities could constitute serious impediments to economic and social development. The relevant provisions laid down in the Agreement with India were properly concluded under the legal basis of development cooperation because they merely provided for a declaration of intent. Finally, the clause providing for the improvement in protection of intellectual property rights was relevant to the EC Treaty objective of smoothly and gradually integrating the developing countries into the world economy. As for its content, it merely laid down an obligation ‘of a very limited scope and is ancillary in nature, even in relation to the substance of intellectual property protection’.227 In the EC–India Cooperation judgment the Court construed the scope of development cooperation, and therefore the scope of the Community’s shared competence in the area, in broad terms.228 This is an approach that is borne out in subsequent case-law.229 However, this is not unqualified. The judgment ignored the enthusiastic statements about the protection of human rights as part of development cooperation advanced by Advocate General La Pergola230 and used rather general and non-prescriptive language about quite how the objective of respect for human rights ought to be given substance in the agreement. In this respect, it is interesting that the starting point for the relevant part of the judgment is expressed in negative terms: the ‘mere fact’ that the human rights clause constituted an ‘essential element’ of the Agreement did ‘not justify the conclusion that that provision [went] beyond the objective stated in [ex] Article [172 EC]’. Similarly, the inclusion in the Agreement of the other contested clauses was sanctioned because their content entailed no specific legal duty or course of action. The emphasis on their 225

Ibid, para 45. Ibid, para 47. Ibid, para 75. Art 10 of the Agreement with India provided as follows: ‘The Contracting Parties undertake to ensure as far as their laws, regulations and policies allow that suitable and effective protection is provided for intellectual property rights, including patents, trade or service marks, copyright and similar rights, geographical designations (including marks of origin), industrial designs and integrated circuit topographics, reinforcing this protection where desirable. They also undertake, wherever possible, to facilitate access to the data bases of intellectual property organizations’: [1994] OJ L223/24. 228 In his Opinion, AG La Pergola had argued that ‘it is clear that the objectives laid down in Article [177 EC] reflect a complex vision of development, the product of interaction between its economic, social and political aspects’: Case C-268/94 Portugal v Council, n 220 above, para 13. 229 See Case C-403/05 Parliament v Commission (Philippines Borders) [2007] ECR I-9045 and Case C-91/05 Commission v Council (ECOWAS) [2008] ECR I-3651. See the analysis in Chapter 14. 230 Case C-268/94 Portugal v Council, n 220 above, para 29 of his Opinion. 226 227

70 Common Commercial Policy limited effect underpinned the entire judgment. After all, as the Court underlined, the Agreement with India was a framework agreement which merely set out the context within which specific cooperation was to be carried out. This approach reflects the Court’s reluctance to construe external competence so broadly as to affect the constitutional balance of powers in internal decision-making: the Court noted that the contested clauses did not constitute ‘general enabling powers for their implementation’.231 There are two threads which link this judgment with other strands of EU international relations law. First, another express competence, ie the CCP, had also been construed in Opinion 1/94 in such a manner as to address the concern about the parallelism between the exercise of external competence and the internal rules and procedures. Secondly, in practical terms, the judgment facilitates the exercise of the Union’s concurrent competence on a pragmatic basis, reflecting the multifarious dimensions of both external policy objectives and policy-making: it is recalled that the exercise of exclusive external competence in the CCP was sanctioned even when it included ancillary provisions for the organisation of purely consultative procedures.232 The broad scope of development cooperation has been acknowledged by the Union’s policy-makers over the years. This becomes apparent in The European Consensus on Development, a document drawn by the Council, the Commission, the Parliament, and the representatives of the governments of the Member States meeting within the Council,233 where the various political, economic, social and security dimensions of development are set out. This broad construction has given rise to legal basis disputes, in particular regarding the relationship between development cooperation and security and defence policy. These are examined in Chapter 14. It has also questioned the principles set out in the EC–India Cooperation judgment. These principles were applied to the Partnership and Cooperation Agreement with the Philippines in Case C-377/12 Commission v Council.234 The Agreement was mixed and signed in 2012 pursuant to a variety of legal bases: Articles 207 TFEU (CCP), 209 TFEU (development cooperation), 91 TFEU and 100 TFEU (transport), 191(4) TFEU (environment), and 79(3) TFEU (readmission of third-country nationals). In relying upon these provisions, the decision signing the Agreement deviated from the Commission’s proposal which had suggested that the CCP and development cooperation were the only relevant legal bases. This was the subject-matter of the annulment action brought by the Commission. Following the advice of Advocate General Mengozzi, the Grand Chamber of the Court agreed with the Commission. The starting point for the judgment was the wide construction of the scope of development cooperation. It was pointed out that, whilst its primary objective is the eradication of poverty, this policy also pursues the other objectives of the Union’s external action set out in Article 21(2) TEU, including fostering the sustainable economic, social and environmental development of developing countries.235 This was relied upon to address the main contention of the Council that treaty-making practice had evolved since the EC–India Cooperation judgment and that the Agreement 231

Ibid, para 67. See Opinion 1/94, n 65 above, at para 68 to which the ruling in C-268/94 Portugal v Council, n 220 above, referred in para 77. 233 [2006] OJ C46/1. 234 Case C-377/12 Commission v Council ECLI:EU:C:2014:1903. 235 Art 21(2)(d) TEU. 232

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with the Philippines could not be compared to the Agreement with India. The Court pointed out that the notion of development had evolved too and, to that effect, referred to the European Consensus on Development which construes development in broad terms and anchors it on sustainable development activities. The Court, then, stressed the central role of development in the Agreement with the Philippines. Whilst the word ‘development’ does not appear in the title and is the subject of only one article, the preamble, general objectives and other provisions of the Agreement leave no doubt about it. As for the provisions of the Agreement on environmental protection, transport and readmission of third-country nationals, the Court held that these were couched in such terms as to make it clear that they contributed to the pursuit of the objectives of development cooperation. In addition, the extent of the duties they set out was narrow. For instance, the transport and environmental provisions referred to declarations of the parties on the aims that their cooperation should pursue without determining in specific terms the manner of implementation. As for the readmission of nationals of the parties, whilst specific obligations were mentioned in Article 26(3) of the Agreement, there were no detailed provisions about their implementation. In fact, Article 26(4) of the Agreement merely commits the parties to conclude a readmission agreement very soon. Therefore, the provisions on transport, environmental protection and readmission of nationals of the contracting parties ‘do 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 in relation to the latter objectives’. In the Philippines Agreement the mixed nature of the Agreement was not in dispute. Instead, it was the addition of a number of legal bases to the CCP and development cooperation provisions which was challenged. The principles set out in the EC–India Cooperation judgment were not changed and applied to the Union’s concurrent competence to carry out a development cooperation policy, even though the latter was construed ever more broadly. And whilst the logic of the EC–India Cooperation Agreement judgment remains intact, so does our uncertainty about its precise implications: whilst we know which type of commitment would not necessitate reliance upon a specific legal basis, we are still not clear as to what type of provision would.

12. CONCLUSION Conclusion

The Lisbon Treaty reforms the CCP in various ways. First, it streamlines the provisions of Article 207 TFEU significantly. By abandoning the disconcertingly complex set of rules previously laid down under the Nice Treaty, it makes for a more coherent set of rules. Secondly, it expands the scope of the CCP by bringing fully within it services, the commercial aspects of intellectual property and foreign direct investment, hence developing substantially the process which had started timidly and somewhat ambiguously at Amsterdam. Thirdly, it adjusts the CCP to the constantly evolving international trade environment, it highlights the outward nature of the policy, and reflects the evolution of its scope articulated early on by the Court of Justice in its case-law, which laid down the foundations of CCP. The analysis in this chapter illustrated how the development of the legal framework governing the CCP has been a continuous and incrementally developed process which

72 Common Commercial Policy has been shaped as much by the drafters of the Union’s primary rules as by the case-law of the Court of Justice. Already apparent in relation to the articulation and interpretation of the principle of exclusivity, the role of the Court also emerged clearly in the light of Opinion 1/94 and its impact on the reform of CCP. It is worth recalling that the reception to Opinion 1/94, whose conclusions were subsequently affirmed in the Public Procurement Agreement judgment,236 was hostile.237 It was seen as ‘fatal for the coherence of the Union’238 and, famously, a ‘programmed disaster’.239 Pescatore’s attack was quite violent: the Court’s analysis was seen as ‘lopsided’, its logic ‘disconcerting’ and its arguments ‘microscopic’.240 The Court’s conclusions were seen as a step back with respect to the definition of the CCP because, whilst repeating earlier statements about a wide interpretation, they rendered them redundant in practice.241 In essence, the criticism levelled against the Court was focused on the following two charges: first, the Court adopted an inward approach in defining the scope of CCP which ignored both the context of the agreements concluded under the umbrella of WTO and the evolution of that framework; secondly, the construction of CCP was interpreted in such narrow terms as to undermine the effective pursuit of the Union interest on the international scene. It cannot be denied that, set against earlier case-law, the ruling in Opinion 1/94 is characterised by a shift of emphasis: the former was focused on the establishment of the normative foundation of the CCP through the principle of exclusivity and the consolidation of its dynamic construction within an evolving international framework; the latter is focused on the internal constitutional ramifications, ie within the Union legal order, of that construction in a particular case. This shift of emphasis might be seen to confirm the assumption, widely shared in the late 1980s and 1990s, that the Court responded to the progress towards the establishment of the internal market by adopting a more cautious approach to the construction of the powers of the Community.242 However, the above shift could also be seen as an adjustment of the earlier principles to their proper constitutional setting. In essence, the main premise of Opinion 1/94 is the Court’s refusal to separate the exercise of the powers conferred by Article 207 TFEU from the internal system of the Union and the division of powers established therein. This should not have come as a surprise. After all, the introduction of the main principles 236 Case C-360/93 Parliament v Council [1996] ECR I-1195 annotated by M Cremona in (1997) 34 Common Market Law Review 389 and AJ Halford in (1996) 21 European Law Review 478. 237 See eg A Appella, ‘Constitutional Aspects of Opinion 1/94 of the ECJ concerning the WTO Agreement’ (1996) 45 International and Comparative Law Quarterly 440; N Emiliou, ‘The Death of Exclusive Competence?’ (1996) 21 European Law Review 294; D Chalmers, ‘Legal Base and the External Relations of the European Community’ in N Emiliou and D O’Keeffe (eds), The European Union and World Trade Law after the GATT Uruguay Round (Chichester, Wiley, 1996) 46, 59–60; T Flory and FP Martin, ‘Remarques à propos des Avis 1/94 et 2/92 de la Cour de Justice des Communautés Européennes au regard de la Notion de Politique Commerciale Commune’, [1996] Cahiers de Droit European 376; M Hilf, ‘The ECJ’s Opinion 1/94 on the WTO—No Surprise, but Wise?’ (1995) 6 European Journal of International Law 45. 238 A Maunu, ‘The Implied External Competence of the European Community after the ECJ Opinion 1/94— Towards Coherence or Diversity?’ (1995) 22 Legal Issues of Economic Integration 115, 124. 239 P Pescatore, ‘Opinion 1/94 on Conclusion of the WTO Agreement: Is There an Escape from a Programmed Disaster? (1999) 36 Common Market Law Review 387. 240 Ibid, 401, 398 and 400 respectively. 241 JHJ Bourgeois, ‘The EC in the WTO and Advisory Opinion 1/94: An Echternach Procession’ (1995) 32 Common Market Law Review 763, 779. 242 See the argument about ‘legal minimalism’ underpinning the Court’s case-law in T Koopmans, ‘The Role of Law in the Next Stage of European Integration’ (1986) 35 International and Comparative Law Quarterly 925.

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of the CCP was based on the express link between that policy and the internal market: the exclusive nature of Union competence, for instance, had been read into Article 207 TFEU because the policy laid down in that provision ‘is conceived  … in the context of the operation of the Common Market, for the defence of the common interests of the Community’;243 a restrictive interpretation of the CCP had been rejected because it ‘would risk causing disturbances in intra-Community trade by reason of the disparities which would then exist in certain sectors of economic relations with non-member countries’.244 Viewed from this angle, the constitutional approach underlying the reasoning in Opinion 1/94 amounts to no more than bringing the main tenets of earlier case-law, ie the main principles of the CCP, to their logical conclusion. An external commercial policy dissociated from the internal system of the Union would lead, inevitably, to a construct developed far beyond the system to which it owed its existence. This would entail a fundamental change in the logic underlying that system, which would, then, become an independent policy aimed at accommodating the development of international trade rather than enabling the Union to respond to them in a manner consistent with its constitutional structure. This is the main flaw in the sustained attack against Opinion 1/94. For instance, the argument that the Court ignores the context of WTO Agreements and the evolution of the framework they established245 approaches the CCP as an independent, fully fledged policy originating in a constitutional vacuum. More importantly, it requires that the Court act as an international tribunal entrusted with the task of furthering the development of international trade, whereas, in fact, its function is only related to the application of EU law. Therefore, what was viewed as ‘inward-looking vision’ in the Court’s reasoning246 constituted no more than the performance of the function laid down in Article 19(1) TEU and the judicial acknowledgement of the constitutional parameters of the conduct of EU international relations. There is another problem with the above criticism against the Court in that it treats the CCP as the only legal framework within which the Union may carry out its external relations. It is a truism that the decision-making procedure for the CCP laid down in the Treaty at the time and the exclusive competence of the Union facilitated such action considerably. However, account should be taken of the extent to which the legal alternative to CCP, ie the negotiation, conclusion and implementation of international agreements pursuant to the formula of mixity, could provide a viable framework for the conduct of external relations. Prior to the development of the main characteristics of the CCP, the Court had already introduced the existence of the Union’s implied competence in the AETR case and had recognised the conditions under which it could be rendered exclusive.247 The CCP was not the only strand of the Union’s external action that developed gradually and incrementally. In parallel, other external policies, such as in the area of development and environment, developed over the years. Viewed from this broad perspective, the emphasis on the ‘devastating’ and ‘catastrophic’ consequences

243

Opinion 1/75, n 8 above, 1363–64. Opinion 1/78, n 11 above, para 45. 245 See Bourgeois, n 241 above; Pescatore, n 239 above. 246 Pescatore, ibid, 391. 247 Case 22/70 Commission v Council [1971] ECR 263. 244

74 Common Commercial Policy of the ruling248 were exaggerated, but also highly questionable in so far as it viewed the construction of the CCP in isolation from the overall system of EU external relations. The impact of the Court of Justice in the process of shaping the normative features and substantive contours of the CCP should be viewed in tandem with the role of the Union’s legislature in the process of gradually reforming the legal framework governing this policy. These two central actors in the EU constitutional life have been in a constant dialogue as to how best to adjust the Union’s external trade policy in a manner that would respond to the changing international trade environment whilst reflecting the constitutional idiosyncrasies of the EU.249 Their interactions will also emerge as a central theme in the development of the Union’s external implied competence. This is the subject-matter of the following chapter.

248 249

Pescatore, n 239 above, 389. See the analysis in De Baere and Koutrakos, n 123 above.

Implied Competence

3 Implied Competence 1. INTRODUCTION Introduction

T

HE ANALYSIS IN this book has focused so far on express external competence in general and, in particular, the CCP, one of the very few areas where the Union has been endowed with express competence to act since the establishment of the European Economic Community under the Treaty of Rome. This chapter will analyse the circumstances under which the Union’s external competence may be implied. The existence of the implied competence of the Union to act externally, along with the legal implications of its exercise, has formed the subject-matter of a line of rulings by the European Court of Justice stretching back to the early 1970s. Whilst not quite voluminous, the relevant case-law has given rise to controversy as to its repercussions and even more considerable academic debate as to its precise meaning. It has also led to its acknowledgement in primary rules by the Lisbon Treaty, albeit in a manner that raises many questions. This chapter will tell this story by examining the relevant provisions of the Lisbon Treaty and by analysing the genesis, development and application of the principle of implied competence by the Court of Justice.

2. COMPETENCE TO CONCLUDE INTERNATIONAL AGREEMENTS IN THE LISBON TREATY Competence to Conclude International Agreements in the Lisbon Treaty

Some stories need to be told from the end. The application of the principle of the implied competence of the Union to negotiate and conclude international agreements is such a story and the analysis in this chapter starts with the Lisbon Treaty. It is recalled that the Declaration on the Future of the Union, annexed to the Nice Treaty, identified four issues on which reform should be undertaken, one of which was about ‘how to establish and monitor a more precise delimitation of powers between the European Union and the Member States, reflecting the principle of subsidiarity’.1 This was taken up by the Laeken Declaration on the Future of the European Union which stressed that ‘the important thing is to clarify, simplify and adjust the division of competence between the Union and the Member States in the light of the new challenges facing the Union’.2 It was in this context that the Treaty of Lisbon inserted for the first time provisions on the competence of the EU to conclude international agreements in general.3 These 1

Declaration 23 on the future of the Union, Treaty of Nice [2001] OJ C80/1. Presidency Conclusions of the Laeken European Council (14–15 December 2001): Annex I—Laeken Declaration on the Future of the European Union, 3. 3 The competence to conclude association agreements had been expressly granted under the Treaty of Rome (the current legal basis is provided in Art 217 TFEU). 2

75

76 Implied Competence are intended to answer the questions: when does the Union have the competence to conclude an international agreement? And when is this competence exclusive? The former question is addressed in Part V of the TFEU, which brings together all the provisions about the Union’s external action and, in particular, in Article 216(1) TFEU. This reads as follows: 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, or is provided for in a legally binding act of the Union or is likely to affect common rules or alter their scope.

The question about the circumstances under which the Union is endowed with exclusive competence to conclude an international agreement is addressed in Article 3 TFEU. Having set out in the first paragraph the policy areas where the competence of the Union is exclusive, Article 3(2) TFEU reads as follows: The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or insofar as its conclusion may affect common rules or alter their scope.

Therefore, the Lisbon Treaty introduces two provisions about the external competence of the Union, one about its existence (Article 216(1) TFEU) and another about its nature (Article 3(2) TFEU). Their wording is similar but by no means identical. The wording is also quite vague. For instance, when is the conclusion of an international agreement ‘necessary’ for the Union to exercise its internal competence? Is this the case when it makes it easier for the internal competence to be exercised? If so, on the basis of which criteria is this to be assessed? If not, what other conditions would need to be met? Similarly, when does the conclusion of an agreement by the Union ‘affect’ common rules? Is it when it makes their application more difficult? If so, what is the threshold of difficulty that is required to be met? If not, might it be when the scope of the agreement coincides with that of common rules? If so, should they coincide completely? And what is the definition of ‘common rules’? The interpretation of Articles 216(1) and 3(2) TFEU raises a host of such questions. These may not be addressed other than against the case-law of the Court of Justice. This is supported by the wording of these provisions which reproduces the formulation of some seminal principles articulated by the Court. It is also supported by the preparatory work of the Convention on the Future of Europe which led to the drafting of the Treaty Establishing a Constitution for Europe on which the Lisbon Treaty is based. The Working Group on External Action, which prepared the drafting of these provisions, pointed out that it ‘saw merit in making explicit the jurisprudence of the Court to facilitate the action of the Union in a globalised world, in particular when dealing with the external dimension of internal policies and action’.4 Therefore, the case-law of the Court constitutes the constant point of reference for the interpretation and application of Articles 216(1) and 3(2) TFEU. It is for this reason that 4 CONV 459/02, Final Report of Working Group VII on External Action (Brussels, 16 December 2002) para 18. See P Craig, The Lisbon Treaty—Law, Politics, and Treaty Reform (Oxford, Oxford University Press, 2010) 398–99.

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the examination of this case-law and the principles to which it has given rise ought to precede the analysis of the TFEU provisions.

3. THE FOUNDATION PERIOD: THE AETR PRINCIPLE The Foundation Period: The AETR Principle

The first time the implied competence of the Union to act in international relations was raised was in Case 22/70 Commission v Council (re: European Road Transport Agreement) (AETR).5 The subject-matter of this case was transport policy. The Member States had participated in the conclusion of the European Transport Road Agreement. This agreement regulated the work of crews engaged in international transport and was signed in 1970 under the auspices of the UN Economic Commission for Europe. The Member States passed a resolution within the Council stating that they would conclude the Agreement. The Commission challenged the legality of that measure, claiming that it was the Union which should conclude the agreement rather than the Member States; this argument was based on the assumption that competence in the field of transport had passed on to the Union following the adoption of Regulation 543/69 concerning the harmonisation of certain social provisions in the field of road transport.6 The AETR judgment introduced the principle of implied powers in the external action of the Union according to which the conferment of internal competence in a specific area of activities upon the EU by the Treaty implies the conferment of external competence in that area. The relevant extract of the judgment is worth citing in full: 12. In the absence of specific provisions of the Treaty relating to the negotiation and conclusion of international agreements in the sphere of transport policy—a category into which, essentially the AETR falls—one must turn to the general system of Community law in the sphere of relations with third countries. 13. Article 210 provides that ‘The Community shall have legal personality’. 14. This provision, placed at the head of Part Six of the Treaty, devoted to ‘General and Final Provisions’, means that in its external relations the Community enjoys the capacity to establish contractual links with third countries over the whole field of objectives defined in Part One of the Treaty, which Part Six supplements. 15. To determine in a particular case the Community’s authority to enter into international agreements, regard must be had to the whole scheme of the Treaty no less than to its substantive provisions. 16. Such authority arises not only from an express conferment by the Treaty—as is the case with Articles 113 [now 207 TFEU] and 114 [now deleted] for tariff and trade agreements and with Article 238 [now 272 TFEU] for association agreements—but may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions. 17. 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. 5 6

Case 22/70 Commission v Council (re: European Road Transport Agreement) [1971] ECR 263. [1969] OJ L77/49 (subsequently repealed by Council Reg 3820/85 [1985] OJ L370/1).

78 Implied Competence 18. As and when such common rules come into being, the Community alone is in a position to assume and carry out contractual obligations towards third countries affecting the whole sphere of application of the Community legal system. 19. 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. 20. Under [ex] Article 3(e), the adoption of a common policy in the sphere of transport is specially mentioned amongst the objectives of the Community. 21. Under Article 5 [now Article 4(3) TEU], the Member States are required on the one hand to take all appropriate measures to ensure fulfilment of the obligations arising out of the Treaty or resulting from action taken by the institutions and, on the other hand, to abstain from any measure which might jeopardize the attainment of the objectives of the Treaty. 22. If these two provisions are read in conjunction, it follows that to the extent to which Community rules are promulgated for the attainment of the objectives of the Treaty, the Member States cannot, outside the framework of the Community institutions, assume obligations which might affect those rules or alter their scope. 23. According to Article 74 [now Article 94 TFEU], the objectives of the Treaty in matters of transport are to be pursued within the framework of a common policy. 24. With this in view, Article 75 (1) [now Article 95(1) TFEU] directs the Council to lay down common rules and, in addition, ‘any other appropriate provisions’. 25. By the terms of subparagraph (a) of the same provision, those common rules are applicable ‘to international transport to or from the territory of a Member State or passing across the territory of one or more Member States’. 26. This provision is equally concerned with transport from or to third countries, as regards that part of the journey which takes place on Community territory. 27. It thus assumes that the powers of the Community extend to relationships arising from international law, and hence involve the need in the sphere in question for agreements with the third countries concerned. 28. Although it is true that Articles 74 [now Article 90 TFEU] and 75 [now Article 95 TFEU] do not expressly confer on the Community authority to enter into international agreements, nevertheless the bringing into force, on 25 March 1969, of Regulation no 543/69 of the Council on the harmonization of certain social legislation relating to road transport (OJ L 77, p 49) necessarily vested in the Community power to enter into any agreements with third countries relating to the subject-matter governed by that Regulation. 29. This grant of power is moreover expressly recognized by Article 3 of the said Regulation which prescribes that: ‘the Community shall enter into any negotiations with third countries which may prove necessary for the purpose of implementing this Regulation’. 30. Since the subject-matter of the AETR falls within the scope of Regulation no 543/69, the Community has been empowered to negotiate and conclude the agreement in question since the entry into force of the said Regulation. 31. These Community powers exclude the possibility of concurrent powers on the part of Member States, since any steps taken outside the framework of the Community institutions would be incompatible with the unity of the common market and the uniform application of Community law.

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The Court makes a distinction between the ‘capacity’ of the Community to negotiate and conclude international agreements and its ‘authority’ to do so: the former stems from the Community’s legal personality; the latter refers to whether it is legally possible for the Community to exercise this authority in relation to a specific subject-matter and is determined on the basis of specific provisions of primary and secondary EC law. From a theoretical perspective, this distinction, elaborated upon in the judgment as the starting point for the introduction of the principle of implied powers, is significant: it aims at reconciling that principle with that of limited powers currently laid down in Article 5(2) TEU. Whilst the Union ‘shall act within the limits of the powers conferred upon it by the Member States in the Treaties to attain the objectives set out therein’, the Court seeks to assuage fears that the principle of implied powers would lead to the extension of the Union’s competence.7 Central to the operation of the principle of implied competence is the distinction between the issue of the existence and nature of that competence. The former indicates whether, consistently with the principle of limited powers, the Union has the authority, ie the competence, to conclude an international agreement: the latter determines whether that competence is exclusive or merely coexistent with a parallel competence enjoyed by the Member States. This is a distinction to which the AETR judgment does not appear to adhere very strictly. Indeed, the judgment is surprising short on its analysis of the existence of implied competence and the circumstances in which this may arise. A close analysis of the judgment will reveal that this is not its only shortcoming.

3.1 The General Formulation: Existence and Nature of the Competence (paragraphs 15–19) Having stated that the Union’s competence to act externally ‘may flow’ from primary or secondary EU law, the Court sought, in just one paragraph, to define the fundamental parameters of the principle of exclusivity. On the one hand, it addressed the question when is the Union’s implied competence exclusive, the answer to which is ‘each time the EU, with a view to implementing a common policy envisaged by the Treaties, adopts provisions laying down common rules, whatever form these may take’; on the other hand, in explaining what exclusivity means, it held that ‘the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules’. The corollary of this was spelled out in the following paragraph, hence bringing the point home: ‘[T]he Community alone is in a position to assume and carry out contractual obligations towards third countries affecting the whole sphere of application of the Community legal system.’ These two paragraphs leave open as many questions as they seek to answer. First, is the term ‘common policy envisaged by the Treaty’ in relation to which the Union’s authority may become exclusive to be interpreted literally? If the answer is affirmative, the implications of exclusivity would be very limited indeed, as it would be confined to the common agricultural and transport policies. However, it is not only for the effet utile of this new doctrine that this question should be answered in the negative: according to 7 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, 7.

80 Implied Competence the judgment, it is only ‘in particular’ with regard to a common policy that the Union’s authority may become exclusive. This implies that other instances are envisaged. Secondly, the opening words of paragraph 17 as to when exclusivity may arise raise another question: exactly how wide is the scope for the implied competence to become exclusive? In other words, is exclusivity dependent upon the adoption of ‘provisions laying down common rules’ or may it arise independently of the adoption of secondary legislation? Are there Treaty provisions which may constitute the inherent source of external competence which is both implied and exclusive? Are there circumstances under which the implied competence conferred by an EC Treaty provision or secondary legislation, whilst initially shared, should be exercised exclusively by the Union? Thirdly, what is the scope of ‘common rules’ that may give rise to exclusivity? Should they completely harmonise the subject-matter they intend to cover? The determination of this issue was directly relevant to the assessment of the impact of exclusive implied competence, all the more so in the light of the regulatory model prevailing at that time. Indeed, when the Court delivered the judgment in AETR, the establishment of the internal market was based on the notion of complete harmonisation which underpinned the introduction of secondary legislation. Is this what the term ‘common rules’ entailed? And if so, is its definition static or should it vary according to the regulatory mode prevailing at the time? If the latter were the case, then to define that term so as to encompass the model of minimum harmonisation followed in the mid-1980s would be tantamount to construing exclusivity in rather wide terms. Would such an interpretation be appropriate merely on the basis of a judgment delivered in quite opaque terms in the early 1970s? Fourthly, what exactly are the implications of exclusivity on Member States in practical terms? Whilst the judgment views its effect arising ‘as and when  … common rules come into being’, it does not define quite how national action should affect common rules. It is clear that Member States are prevented from assuming international obligations which would undermine the existing obligations of the Union or its negotiating position. But what about obligations which, when assumed by the Member States, do not raise any threat whatever for the Union’s interests? Is the possibility of a future conflict sufficient to deprive Member States of their freedom to engage in contractual relations with third countries in areas where the EU has adopted ‘common rules’? If so, would that mean that there would be no scope whatever for Member States to act in a field occupied by common rules? In other words, how severe are the legal implications of exclusivity actually in terms of their effect on the positions of the Member States? Fifthly, what exactly is the source of the existence of the Union’s implied competence? Is it the EC Treaty provision itself enabling the Union to act internally from which the external competence ‘flows’? In its judgment, the Court refers to Treaty provisions not expressly providing for external competence ‘and … measures adopted, within the framework of those provisions, by the Community institutions’.8 If the existence of external competence were implied from Treaty provisions, why was the reference to secondary law adopted pursuant to those provisions necessary? Would it not be more accurate to argue that the external competence may flow from either primary or secondary EU law? The reference to ‘common rules’ in the subsequent paragraph seems to suggest that ‘measures adopted within the framework of  … other provisions of the Treaty’ would be 8

n 5 above, para 16

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relevant to the nature of the Union’s competence rather than its existence, hence determining whether it would be exclusive or not. The above questions notwithstanding, the raison d’être of exclusivity lies in the link between secondary law adopted internally and external relations: the former may not be separated from the latter. This abstract formulation of the principle of implied powers is followed by three paragraphs in which a reformulation, adjusted to Treaty provisions, is being presented. However, this reformulation is even less revealing than the original one. On the basis of the insertion of transport policy amongst the Treaty objectives and the duty of cooperation laid down in Article 4(3) TEU, the Court infers that ‘Member States cannot, outside the framework of the Community institutions, assume obligations which might affect [those Community rules promulgated for the attainment of Treaty objectives] which might affect those rules or alter their scope’.9 The above extract is puzzling in so far as it puts forward a construction of exclusivity which differs from that already laid down in paragraph 17: according to the former, Member States would be prevented from ‘assum[ing] obligations which might affect [EU rules] or alter their scope’; according to the latter, Member States would be prevented from undertaking obligation which ‘affect [common] rules’. Two definitions of the same duty in six brief consecutive paragraphs are rather puzzling. Furthermore, it is not immediately apparent why the above construction of exclusivity ‘follows’ from a combined reading of ex Article 3 EC (which set out transport policy as a Community objective) and the duty of cooperation (currently set out in Article 4(3) TEU); this is all the more so in the light of the construction of exclusivity in relation to ‘Community rules promulgated for the attainment of the objectives of the Treaty’ rather than ‘common rules’. Apart from further obscuring the requirements for and implications of exclusivity, the above extract from the AETR judgment adds to the theoretical foundation of the principle of implied powers by referring to Article 4(3) TEU. The reference to the duty of solidarity serves two purposes: on the one hand, it justifies the apparently severe implications of exclusivity by rendering it an extension of the core of national duties under primary EU law; on the other hand, it adds yet another layer to the constitutional foundation of the exclusive nature of the Union’s implied competence.

3.2 The Application of the Principle (paragraphs 23–31) What follows in paragraphs 23–31 of the judgment is the application of the principle on the basis of the specific EU provisions on transport. Perhaps not unsurprisingly, this part of the judgment is as fraught with problems as these preceding it. The Court refers to two types of EU rules, namely the provisions of the Treaty on transport and Regulation 543/69. Whilst it acknowledges that the relevant Treaty provisions assume the extension of the Union’s power to cover the negotiation of international agreements, the Court goes on to argue that the adoption of Regulation 543/69 ‘necessarily vested in the Community power’ to negotiate agreements within the scope of that Regulation. In this part of the judgment, the Court appears to be referring to the issue of the existence of the implied competence of the Community. If that is the case, the question which is raised is why it deemed the reference to secondary legislation necessary. It had already been 9

n 5 above, para 22.

82 Implied Competence established that external competence need not be expressly conferred; does it not follow that such competence ‘flows’ from the transport legal basis in the Treaty , all the more so in the light of the reference in that provision to international transport? The adoption of Regulation 543/69 is relevant only to the assessment of the nature of Union’s competence and, yet, this is not what paragraphs 23–28 are about. Therefore, it is arguable that the reference to the adoption of Regulation 543/69 serves to reinforce the point about the existence of the Community’s competence. This appears to be supported by the wording of the following paragraph which refers to ‘this grant of power’ which ‘is moreover recognised by Article 3’ of the Regulation.10 If the power, that is to say the authority of the Community, followed from the transport legal basis in the Treaty, let alone ex Article 3 EC, was the reference to the specific provisions of the secondary measure necessary? It is suggested that the answer is negative: not only is reference to that provision the very last reference of the Court, but it was also viewed as ‘recognis[ing]’, ie not granting or conferring or even implying, the Union’s power. What makes that paragraph of the judgment all the more interesting is the specific content of Article 3 of that Regulation which enables the EU to negotiate with third countries, if that were to prove necessary, in order to implement Regulation 543/69. In other words, the specific legal context is presented in such a way as to leave no doubt as to the existence of the Union’s external competence: it ‘flows’ from primary law and is ‘expressly recognised’ by secondary law. And yet, the Court goes on to state that the EU had been ‘empowered’ to negotiate the AETR agreement since the entry into force of Regulation 543/69. This is as redundant in the context of the establishment of the Community’s implied competence as it is unhelpful for the determination of the latter’s nature. Instead, the explanation given for the exclusivity enjoyed by the Union in the area covered by Regulation 543/69 is devoid of any analysis: it follows from the existence of Community powers ‘since any steps taken outside the framework of the Community institutions would be incompatible with the unity of the Common Market and the uniform application of Community law’.11 The Court made no reference whatever to how collective action by the Member States would undermine the Union’s policies in the area covered by the Agreement.

3.3 An Overall Comment The introduction of the principle of implied powers has been described as ‘a purely judicial construction’.12 The teleological undertones of the concept, along with its implications for the right of the Member States to negotiate and conclude international agreements, are similar to the tone which had already defined the introduction of the major constitutional principles of the Union legal order. Indeed, the judgment in AETR should be examined in the broader context of the introduction of the principle of supremacy of EU law in Costa13 and direct effect in van Gen en Loos.14 Delivered in the very early 1970s, it followed from the constitutional milestones produced by the Court in order to 10

Emphasis added. n 5 above, para 31. A Dashwood, ‘Implied External Competence of the EC’ in M Koskenniemi (ed), International Law Aspects of the European Union (The Hague, Kluwer Law International, 1998) 113. 13 Case 6/64 Costa v ENEL [1964] ECR 585. 14 Case 26/62 van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1. 11 12

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consolidate the foundations of the new legal order which was in search of a normative identity.15 In fact, by articulating the exclusive nature of the Union’s implied external competence, the Court essentially applies the principle of supremacy broadly understood in so far as the exercise of the internal competence pre-empts Member States from acting either internally or externally.16 In the area of EU external relations, it is this feature which distinguishes the exclusive nature of express competence from that of implied competence: the former is deemed as an a priori concept which produces its legal effects irrespective of any Union action.17 Viewed from this angle, the introduction of the AETR principle and the provision for the exclusivity of the Union’s implied competence appear to be yet another illustration of the elaborate ‘response’ of the Court of Justice to the policy paralysis originating in the Luxembourg Accord. That infamous compromise, a deviation from primary law which lacked Treaty status, had occurred only six years earlier.18 In his earlier work, Weiler juxtaposed decisional supranationalism, ie transfer of powers from the Member States to the Community pursuant to secondary legislation, and normative supranationalism, ie empowerment of the Union structures pursuant to legal principles introduced by the Court; he showed how, in the period of legislative stagnation following the Luxembourg compromise, when decisional supranationalism was malfunctioning, the Court was quite active and innovative.19 Indeed, the case-law of that era was of major constitutional significance: the wide scope of the principle of supremacy of Union law had been clearly affirmed20 and its considerable implications for national courts spelled out;21 the principle of direct effect had already been introduced22 and would be extended to directives23 not too long after the AETR judgment. Therefore, the AETR judgment appeared to be linked organically with the constitutional case-law of the Court of that time. And yet, there is something deeply troubling about the lack of clarity and consistency of the line of reasoning followed in AETR: as has been pointed out, the part of the judgment dealing with the specific issue of competence to conclude the AETR agreement ‘reads as if separate versions had been written and then patched together rather untidily’.24 Indeed, in setting out the definition, scope and implications of the principle of implied powers, the AETR judgment follows three degrees of abstraction: first, it does not refer to any Treaty provision at all (paragraphs 15–18); secondly, it refers to the general provision of Article 3 which mentions transport amongst the Union’s objectives (paragraphs 20–22); finally, it refers to the specific primary and secondary rules on 15 For criticism of the principle and its foundations, see T Hartley, Constitutional Problems of the European Union (Oxford, Hart Publishing, 1999) 35 et seq. 16 For an analysis of this judgment, along with the subsequent line of case-law, as an illustration of the principle of pre-emption, see R Schütze, ‘Parallel External Powers in the European Community: From “Cubist” Perspectives Towards “Naturalist” Constitutional Principles?’ (2004) 23 Yearbook of European Law 225. 17 This would be made clearer in the subsequent ruling in Opinion 2/91 (re Convention No 170 ILO on safety in the use of chemicals at work) [1993] ECR I-1061. 18 See Bull EC 3–1966, 9. 19 See JHH Weiler, ‘The Community System: The Dual-Character of Supranationalism’ (1981) 1 Yearbook of European Law 267. 20 Case 11/70 Internationale Handelsgesellschaft v Einfuhrund Vorratstelle für Getreide und Futtermittel [1970] ECR 1125. 21 Case 106/77 Administrazione delle Finanze dello Stato v Simmenthal SpA (Simmenthal II) [1978] ECR 629. 22 Case 26/62 van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1; Case 9/70 Grad v Finanzamt Traunstein [1970] ECR 825. 23 Case 41/74 Van Duyn v Home Office [1974] ECR 1337. 24 Dashwood and Heliskoski, n 7 above, 7.

84 Implied Competence transport (paragraphs 23–31). This structure of the judgment, the underlying confusion between the issues of the existence and the nature of the Union’s implied competence and the lack of clarity as to the implications of the positions laid down in each of the above parts of the judgment, all make the whole very difficult to read. This is illustrated not only by the number of questions outlined above but also by the reception the new doctrine received. Pescatore even turned the confusion between existence and exercise which seemed to permeate the judgment into a principle. Writing in an extra-judicial capacity, he argued that: [I]t appears, on balance, that though the Court does by no means disregard the fact that a given agreement may in some of its parts pertain to the province of the Union and in part to the jurisdiction of the Member States, there is no place in the system for the construction of ‘concurrent’ or ‘parallel’ powers. In other words, whenever and so far as the matter belongs to the Community’s sphere, jurisdiction over it is exclusive of any concurrent power of Member States.25

This was a remarkable position to take as it was based on a homogenised conception of competence with no place for more subtle understanding of external relations. Admittedly, a fully articulated analysis of all the implications of a legal doctrine rarely accompanies its very introduction, desirable though this might be. After all, the function of a judgment is to apply the law to the specific set of circumstances surrounding a specific legal question; the full details of the implications of that doctrine may be irrelevant to the questions sought to be addressed by the Court and unknown to the judges at the time of the judgment. However, even with this qualification in mind, the inconsistencies in which the judgment in AETR is shrouded and the lack of coherence of its structure are striking. This is all the more so when assessed against the judgments introducing the main constitutional principles of Union law which the AETR principle purports to follow. The overtly teleological approach, articulated in the early parts of Costa and van Gend en Loos, was clear in providing the foundation for the constitutionalisation of the EU legal order.26 Controversial though it may be, what Pescatore famously defined as ‘une certaine idée de l’Europe’27 provided those judgments with a degree of internal coherence which one is longing to find in AETR. The deficiencies of the judgment in AETR illustrate the highly controversial nature of the principles it sought to articulate. This had already become apparent before the Court. In his Opinion, Advocate General Dutheillet de Lamothe had asked the Court to declare the action inadmissible and concluded that ‘it appears clear from the general scheme of the Treaty of Rome that its authors intended strictly to limit the Community’s authority in external matters to the cases which they expressly laid down’.28 He objected to the construction of the precursor to Article 91 TFEU as the basis for implied external competence,29 arguing that the reference to ‘any other appropriate measures’ was too vague a term to be capable of bestowing such important and specific power to the Union. 25 P Pescatore, ‘External Relations in the Case-Law of the Court of Justice of the European Communities’ (1975) 12 Common Market Law Review 615, 624. 26 For the elements of this process, see C Timmermans, ‘The Constitutionalization of the European Union’ (2002) 21 Yearbook of European Law 1. 27 P Pescatore, ‘The Doctrine of “Direct Effect”: An Infant Disease of Community Law?’ (1983) 8 European Law Review 155, 157. 28 n 5 above, 293. 29 Ibid, 290.

The Foundation Period: The AETR Principle

85

Having pointed out that there were various Treaty provisions on commercial policy with general stipulations which were similar to that of the transport legal basis, he stated that ‘it is certain that the authors of the Treaty did not consider that such provisions were sufficient to provide a basis for a Community authority in external affairs’.30 He also argued, ‘albeit with some regret’,31 that not even the adoption of secondary legislation should be deemed as implying a corresponding external competence for the Union.32 This position was not unique. In the early days of European integration, one of its most prominent advocates, and a subsequent member of the Court which delivered the judgment in AETR, had argued for a restrictive reading of the external competence of the EU.33 The significance of the new principle was not lost on the wider public either: for instance, it was met with an editorial in Le Monde which expressed grave reservations about what was viewed as a supranational step par excellence.34 The specific challenges that the introduction of the principle of implied powers posed may also be understood in the light of another factor which placed the Court firmly within the territory of political controversy, namely the third states and international organisations with which the Union may enter into contractual relations. Whilst the application of constitutional principles and decision-making procedures in the internal sphere may be underpinned by legal disputes regarding the equilibrium of power between Members States and the EU, the involvement of third parties places these disputes in an entirely different context. It adds an international dimension which renders internal disputes about competence and procedure of a rather secondary nature. The legal obligations assumed by the Union and its Member States have specific legal consequences for the third countries and international organisations with which the EU negotiates; these consequences are not altered simply because of a dispute between the Community institutions or the Member States. The addition of this international dimension in the constitutionalisation of EU law introduces an element of irreversibility which renders the construction of the principles underlying the Union’s external relations all the more significant. Finally, when the Court of Justice delivered the AETR judgment, the first signs of the reactions that the principle of supremacy of Union law would provoke amongst national courts had appeared. The German Administrative Court had already referred the question of the relationship between Community law and the protection of human rights under national constitutional law and the Court had responded with the seminal Internationale Handelsgesellschaft judgment.35 That judgment was to place the symbiosis of the Court of Justice with the German Constitutional Court upon a basis of doctrinal ambivalence for a long period of time.36 30

Ibid. Ibid, 291. 32 Ibid, 291–2. 33 P Pescatore, ‘Les relations exterieures des communautés européennés’ (1961) 103/II Recueil des Cours de l’Academie de Droit International de la Haye 1, 97 which he later reconsidered expressly in n 25 above, at n 5. 34 Reference to that editorial in JA Frowein, ‘The Competences of the European Community in the Field of External Relations’ in J Schwarze (ed), The External Relations of the European Community, in particular EC–US Relations (Baden-Baden, Nomos, 1989) 29. 35 n 20 above. 36 See the judgment of the Federal Constitutional Court (Bundesverfassungsgericht) in Internationale Handelsgesellschaft v EVFG [1974] 2 CMLR 540. That period appeared to have come to an end with the judgment of the Bundesverfassungsgericht in Wüensche Handelsgesellschaft [1987] 3 CMLR 225, only to get into a new phase with the landmark judgment in Brunner v European Union Treaty [1994] 1 CMLR 57. On the relationship 31

86 Implied Competence The above considerations may explain the deficiencies of the reasoning and structure of the judgment in AETR. They may even suggest that the distinct emphasis of the judgment on the exclusive nature of the implied competence and its lingering confusion with the issue of existence might have been seen as necessary in order to buttress the introduction of this new principle in the Community legal order. The combined effect of these factors shed some light on the principal messages that the ruling in AETR conveys. First, the ‘system of external relations’37 of the Union is not immune to the constitutionalising process of the EU legal order. Instead, it is intertwined with the establishment of the internal market and stems from its regulation. Secondly, the reality of international relations may affect the application of legal principle. On the substance of the dispute, the Commission’s action was dismissed. The negotiations for the conclusion of the AETR Agreement were viewed by the Court as merely another part of the negotiating process which had already produced an agreement as early as in 1962, albeit one which had not been ratified. As Regulation 543/69 had not been adopted then, the competence of the Member States in the area covered by the Agreement had not been given up. Therefore, whilst the Agreement originated in and had been negotiated at a period when the Member States were competent in the area covered therein, at the time of its conclusion that competence had been transferred to the Union. However, this legal development had to be assessed in its factual context in relation to which the Court ruled as follows: 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, as was indeed recognized by the Commission’s representative in the course of the Council’ s deliberations.38

It was for that reason that the solution articulated in the Resolution challenged by the Commission was sanctioned and the action dismissed. The application of strict and broadly worded principles in a restrictive manner is not a novelty in the Court’s constitutional case-law. It is recalled, for instance, that the introduction of the controversial principle of direct effect of directives in Van Duyn was of no help to Mrs van Duyn.39 In their influential critique, Tridimas and Eeckhout showed that the balance between legal principle and pragmatism illustrated in AETR constituted a common theme underlying the Court’s case-law on EU international relations.40 In terms of this analysis, suffice it to point out the following: its deficient reasoning and problematic structure notwithstanding, the judgment in AETR made it clear that, in its international relations, the exclusive nature of the Union’s implied competence would not necessarily exclude the Member States from negotiating and concluding international agreements. This is a point which would re-emerge in subsequent case-law.

between the Court of Justice and national courts more generally, see M Claes, The National Courts’ Mandate in the European Constitution (Oxford, Hart Publishing, 2006) and A-M Slaughter, A Stone Sweet and JHH Weiler (eds), The European Court of Justice and National Courts: Doctrine and Jurisprudence (Oxford, Hart Publishing, 1998). 37 n 5 above, para 19. 38 Ibid, para 86. 39 Case 41/74 Van Duyn v Home Office [1974] ECR 1337. 40 T Tridimas and P Eeckhout, ‘The External Competence of the Community and the Case-Law of the Court of Justice: Principle versus Pragmatism’ (1995) 14 Yearbook of European Law 143.

Building upon the Foundation 87 4. BUILDING UPON THE FOUNDATION Building upon the Foundation

The messages conveyed by the judgment in AETR were also present in the judgment delivered in Joined Cases 3, 4 and 6/76 Cornelis Kramer and others.41 These were references from Dutch district courts about the application of the 1959 North East Atlantic Fisheries Convention. All but two of the then Member States were parties to the Convention the aim of which was ‘to ensure the conservation of the fish stocks and the rational exploitation of the fisheries of the North-East Atlantic Ocean and adjacent waters’. The Convention set out a specific institutional framework: a Fisheries Commission was established in order to make recommendations to the Contracting States on measures falling within the scope of the Convention. Pursuant to a measure adopted in 1970, the Commission became responsible for recommending measures aimed at the regulation of the amount of total catch and fishing effort and the allocation of those amounts to Contracting States. Each Contracting State was under a legal duty to give effect to those recommendations adopted under certain procedural requirements unless an objection was raised within a set period. The references from the Dutch courts were about criminal proceedings initiated against fishermen on grounds of violation of Netherlands rules implementing a recommendation about fishing for sole and plaice. One of the questions referred to the Court of Justice was about competence: did the Union alone have the competence to enter into commitments such as those undertaken by most of its Member States under the system established by the North-East Atlantic Fisheries Convention? In addressing this question, the Court followed the path already set in AETR five years previously. In the absence, at that time, of a Treaty provision endowing the Union with express external competence, regard should be had to the ‘general system of Community law’. Its express legal personality entailed the Community’s capacity to enter into contractual relationships with third countries and international organisations over the whole field of objectives set out in the Treaty; it is ‘the whole scheme of [Union] law’ and ‘its substantive provisions’ which establish the competence of the Union in a particular case; that competence ‘may equally flow implicitly’ from other provisions of the Treaty and from measures adopted by the Union institutions within the framework of those provisions. It is in this last limb of its line of reasoning that the Court deviates slightly from its AETR judgment by adding the Act of Accession to the measures which may establish the external competence.42 The Court then stated that the Community did have the competence ‘on the internal level  … 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’.43 This ‘follows’ from a number of primary and secondary EU rules, along with the Act of Accession, ‘taken as a whole’.44 Primary rules cover ex Article 3(e) EC including the adoption of a common agricultural and fisheries policy in the Union’s objectives; current Article 38(3) TFEU and current Annex I to TFEU on fishery products; Article 39 TFEU specifying the rationalisation of production and the guarantee of availability of supplies as objectives of CAP; Article 40(1)–(3) TFEU requiring the establishment of a common organisation of

41

Joined Cases 3, 4 and 6/76 Cornelis Kramer and others [1976] ECR 1279. Ibid, paras 19–20. 43 Ibid, paras 30–33. 44 Ibid. 42

88 Implied Competence agricultural markets and current Article 43(2) TFEU authorising the Council to adopt secondary rules to that effect. Finally, secondary rules include Regulations 2141/7045 and 2142/7046 which authorise the Council ‘to adopt the necessary conservation measures’ in cases where ‘there is a risk of over-fishing of certain stocks in the maritime waters’ under the sovereignty of a Member State. Finally, the Act of Accession expressly enables the Council to ‘determine conditions for fishing with a view to ensuring protection of the fishing grounds and conservation of the biological resources of the sea’.47 The Court held that the authority of the Union was not confined to the sea under the sovereignty of its Member States; instead, it extended to fishing on the high seas, a conclusion deemed to ‘follow’ from the objectives of Regulation 2141/70 and Article 102 of the Act of Accession and ‘moreover from the very nature of things’.48 This assertion led to the following conclusion: 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 nonmember countries. In these circumstances it follows from the very duties and powers of the Community on the internal level that the Community has authority to enter into commitments for the conservation of the resources of the sea.49

Having established the existence of the Union’s competence, the Court went on to assess whether the Member States retained the power to assume international obligations in the area of fisheries conservation. The starting point for its analysis was the fact that, when the Netherlands gave effect to international duties adopted within the framework of the 1959 Convention, the authority of the Union to adopt similar measures, whilst in existence, had not been exercised, at least ‘not … fully’.50 Indeed, the secondary measures adopted within the fisheries framework had merely enabled the Union to adopt legislation in order to regulate the areas subsequently regulated by the Member States under the framework of the 1959 Convention. It was in the absence of EU action that the Member States retained their power to act externally, hence under the 1959 Convention too, and subsequently ensure compliance with their international obligations by adopting internal legislation. However, the national competence, whilst retained, was qualified in two ways: on the one hand, it was of a transitional nature because it would come to an end at the date on which, according to Article 102 of the Act of Accession, the Council would have adopted internal legislation for the conservation of the resources of the sea; on the other hand, it was held that ‘the Member States are now bound by Community obligations in their negotiations within the framework of the Convention and of other comparable agreements’.51 Those obligations were based on the duty of loyal cooperation laid down in Article 4(3) TEU and the, now repealed, duty of common action in international organisations of an economic character.52

45

[1970] OJ Spec Ed (III) 703. n 41 above, 707. 47 Art 102 of the Act of Accession. 48 n 41 above, paras 30–33. 49 Ibid. 50 Ibid, para 39. 51 Ibid. 52 This duty had been laid down in Art 116 EC. 46

Reinforcing the Principle of Implied Competence 89 The first interesting feature of the judgment in Kramer was the wide construction of the scope of the Union’s competence. The reference to the aim of ‘encouraging rational use of ’ and the ‘conservation of the biological resources of the sea’ in secondary legislation and the Act of Accession respectively was viewed as extending the material scope of EU competence to fishing on the high seas, too. That conclusion was reached not only on the basis of the wording of the above provisions but also ‘from the very nature of things’. It might appear curious that the judgment in Kramer should be as much about internal competence as about external one—and yet, it was the emphasis on the teleological interpretation of the former that led to the equally teleological interpretation of the latter. This is what has been called ‘the principle of complementarity’.53 In terms of the construction of the Community’s competence to conclude the Agreement, the tone of the judgment is similar to that in AETR: whilst widely defined and forcefully articulated, the external competence had not as yet excluded Member States from negotiating international agreements. In a clear illustration of the dynamic nature of the Union’s international relations, that effect was to come about three years later: in an action by the Commission against the United Kingdom, the Court opined that the expiry of the transitional period of the provision of the Act of Accession of Denmark, Ireland and the United Kingdom on fisheries conservation had affected the position of the Member States: these had become ‘no longer entitled to exercise any power of their own in the matter of conservation measures in the waters under their jurisdiction’ as ‘the adoption of such measures, with the restrictions which they imply as regards fishing activities, is a matter … of Community law’.54

5. REINFORCING THE PRINCIPLE OF IMPLIED COMPETENCE (OPINION 1/76) Reinforcing the Principle of Implied Competence

In introducing the principle of implied competence in AETR, the Court drew upon the link between the internal and external powers of the Union in order to establish exclusivity. Combined with the confusion between the issues of the existence and nature of external competence, this raised questions about the Community’s competence in areas where there had been no internal legislation. Such questions were addressed in Opinion 1/76.55 The Commission asked the Court to rule on the compatibility of a draft Agreement establishing a European laying-up fund for inland waterway vessels with the Union’s primary rules. The Agreement aimed at setting out a system which would eliminate the disturbances arising from the surplus carrying capacity for goods by inland waterway in the Rhine and Moselle basins and by the Dutch waterways and the German inland waterways linked to the Rhine basin. It was negotiated by the Commission, on behalf of the Community pursuant to a Council Decision, and Switzerland. In addition, six Member States, namely Belgium, Germany, France, Luxembourg, the Netherlands and Great Britain, participated, as they had already been parties either to the revised Convention for the Navigation of the Rhine, signed in 1868, or to the Convention for the Canalization of the Moselle signed in 1956. What was at the core of the Commission’s 53

Dashwood and Heliskoski, n 7 above, 10. Case 804/79 Commission v United Kingdom [1981] ECR 1054, para 18. See also Case 21/81 Criminal proceedings against Daniël Bout and BV I Bout en Zonen [1982] ECR 381, para 6. 55 Opinion 1/76 (re: Draft Agreement establishing a European laying-up fund for inland waterway vessels) [1977] ECR 741. 54

90 Implied Competence request was the provision in the draft Agreement for a decision-making and adjudicating system which involved for the EU a certain delegation of powers to bodies independent from the Union institutions. The Commission argued that that delegation was compatible with the Union’s primary rules and its request for an Opinion was merely based on its concern for legal certainty. The issue which first arose was whether the Union had the competence to conclude that Agreement in the absence of internal legislation on the matter. The Court ruled as follows: 1. The object of the system laid down by the draft agreement and expressed in the statute Annexed thereto is to rationalize the economic situation of the inland waterway transport industry in a geographical region in which transport by inland waterway is of special importance within the whole network of international transport. Such a system is doubtless an important factor in the common transport policy, the establishment of which is included in the activities of the Community laid down in Article 3 of the EEC Treaty. In order to implement this policy, [ex] Article 75 of the Treaty [now Article 95 TFEU] instructs the Council to lay down according to the prescribed procedure common rules applicable to international transport to or from the territory of one or more Member States. This Article also supplies, as regards the Community, the necessary legal basis to establish the system concerned. 2. In this case, however, it is impossible fully to attain the objective pursued by means of the establishment of common rules pursuant to [ex] Article 75 of the Treaty [now Article 95 TFEU], because of the traditional participation of vessels from a third state, Switzerland, in navigation by the principal waterways in question, which are subject to the system of freedom of navigation established by international agreements of long standing. It has thus been necessary to bring Switzerland into the scheme in question by means of an international agreement with this third state. 3. The power of the Community to conclude such an agreement is not expressly laid down in the Treaty. However, the court has already had occasion to state, most recently in its judgment of 14 July 1976 in Joined Cases 3, 4 and 6/76, Cornelis Kramer and Others, (1976) ECR 1279, that authority to enter into international commitments may not only arise from an express attribution by the Treaty, but equally may flow implicitly from its provisions. The court has concluded inter alia that whenever Community law has created for the institutions of the Community powers within its internal system for the purpose of attaining a specific objective, the Community has authority to enter into the international commitments necessary for the attainment of that objective even in the absence of an express provision in that connexion. 4. This is particularly so in all cases in which internal power has already been used in order to adopt measures which come within the attainment of common policies. It is, however, not limited to that eventuality. Although the internal Community measures are only adopted when the international agreement is concluded and made enforceable, as is envisaged in the present case by the proposal for a Regulation to be submitted to the Council by the Commission, the power to bind the Community vis-à-vis third countries nevertheless flows by implication from the provisions of the Treaty creating the internal power and in so far as the participation of the Community in the international agreement is, as here, necessary for the attainment of one of the objectives of the Community.

The Court went on to apply these principles to the specific primary provisions on transport. It interpreted ex Article 75(1)(d) EC, according to which the Council has the power to lay down ‘any other appropriate provisions’ in order to attain the common transport policy, as entailing that

Reinforcing the Principle of Implied Competence 91 the Community is  … not only entitled to enter into contractual relations with a third country in this connexion but also has the power, while observing the provisions of the Treaty, to cooperate with that country in setting up an appropriate organism such as the public international institution which it is proposed to establish under the name of the ‘European Laying-up Fund for Inland Waterway Vessels’.56

The main contribution of Opinion 1/76 to our understanding of the principle of implied competence is the dissociation of its existence from the exercise of the internal competence. This was a welcome clarification of the application of the doctrine of implied competence. Viewed from this angle, the principles articulated by the Court may be summarised as follows: a system of rationalisation of the inland waterway transport industry such as the one laid down in the Draft Agreement was an important factor in the Common Transport Policy covered by Article 91 TFEU which also provides the legal basis for its establishment. However, the adoption of common rules under that provision would not ‘fully attain the objective pursued’ for practical reasons. That turns out not to be a problem because the Union has the power to conclude international agreements ‘whenever Community law has created for the institutions of the Community powers within its internal system for the purpose of attaining a specific objective’ provided that the conclusion of such agreement is ‘necessary for the attainment of that objective’.57 A first reading of the Opinion reveals the absence of any reference to the nature of the Union’s competence: the part of the Court’s ruling dealing with the general principle of external competence (paragraphs 1–5) appears to refer only to the existence of implied competence. This is all the more striking in the light of the confusion between the issues of existence and nature of the implied competence which had underpinned the AETR judgment. In Opinion 1/76, the participation of the six Member States was sanctioned. The reason for this was the substantive context of the Agreement: the mechanism which it aimed at establishing entailed the amendment of provisions of two pre-existing Agreements, namely the Convention of Manheim for the Navigation of the Rhine and the Convention of Luxembourg on the Canalization of the Moselle. As these agreements had been concluded in 1868 and 1956 respectively, their amendment could only be achieved by the Member States which had concluded them. After all, Article 351(2) TFEU requires that Member States take all appropriate measures to eliminate incompatibilities between agreements they had concluded prior to their accession to the Union and EU law. The amendment of those pre-existing duties was laid down in Article 3 of the Agreement and undertaken by the six Member States. It was for this reason that the participation of Member States along with the Union was sanctioned by the Court. In order to bring this point home, the Court went on to stress that ‘the participation of these States in the Agreement must be considered as being solely for this purpose and not as necessary for the attainment of other features of the system’.58 To summarise, the participation of a number of Member States in the conclusion of the Agreement in question was sanctioned only because the conclusion of the latter would bring about the amendment of obligations already assumed by those States prior to the establishment of the Union. Whilst avoiding the reference to the term ‘exclusivity’, the line of reasoning followed by the Court may appear to be couched in such terms. 56

Ibid, para 5. Ibid, para 3. 58 Ibid. 57

92 Implied Competence Followed up to its logical conclusion, it appears to suggest that, had there been no prior legal regime binding on Member States and affected by the Draft Agreement, the participation of those Member States would not have been considered necessary for the establishment of the new navigation system and, hence, their participation in the conclusion of the Agreement would not have been sanctioned. Is the above not an acknowledgement of exclusivity? Whilst the line of reasoning put forward in Opinion 1/76 appears to provide an affirmative answer,59 it is difficult to see how such conclusion might be sustained. As the common transport policy does not fall within the exclusive competence of the Union, it is difficult to see how, in the absence of common rules, the Member States would have violated their Union law obligations had they concluded an agreement with Switzerland in the area covered by the Rhine Convention.60 What complicates matters further is the Court’s apparent effort to present the participation of Member States as legally necessary when, in fact, this is questionable. Indeed, the duty of Member States to comply with Article 351(2) TFEU does not necessarily entail their participation in an Agreement: instead, the Member States could have amended the pre-existing Manheim and Luxembourg Conventions unilaterally on the basis of public international law. Furthermore, were it accurate, the above reading of the ruling in Opinion 1/76 would be tantamount to suggesting a potential expansion of the scope of exclusivity. Could that have been the intention of the Court in delivering only its third ruling on what appeared to be a highly controversial principle? This question would arise again in subsequent case-law. At this juncture, suffice it to point out that what emerges from the above is a picture of fragmentation: the first part of the judgment appears to refer to the existence of the Union’s implied external competence, whereas the second part appears to make a leap to a rather convoluted articulation of the nature of that competence. The confusion as to the precise implications of the principles laid down in Opinion 1/76 is compounded by yet another piece of the ‘implied competence puzzle’, that of necessity. It is recalled that the Court ruled that, in the absence of internal legislation, the Union’s external competence is implied ‘in so far as the participation of the Community in the international agreement is … necessary for the attainment of one of the objectives of the Community’.61 Whilst ruling that it was applicable on the conclusion of the Agreement in question, the Court did not elaborate on the definition of this term: would it be subject to an inherently indeterminate policy assessment?62 To what extent would considerations related to the political expedience or efficiency be relevant? The lack of clarity underlying the Court’s line of reasoning is striking.63 And in a perverse way, it also provides the link between Opinion 1/76 and the judgment in AETR: in both, the Court seeks to set out the principles pursuant to which the external competence of the Union may be exercised within the framework of a legal order functionally understood; in neither is there a consistent normative foundation for the 59

See eg T Tridimas, ‘The WTO and OECD Opinions’ in Dashwood and Hillion, n 7 above, 48, 55. Tridimas and Eeckhout, n 40 above, 167; Dashwood and Heliskoski, n 7 above, 13. 61 n 55 above, para 4. 62 See eg M Hardy, ‘Opinion 1/76 of the Court of Justice: The Rhine Case and the Treaty-Making Powers of the Community’ (1977) 14 Common Market Law Review 561. 63 However, it has been pointed out that it reflects the substance of the request before the Court, ie whether the participation of Member States in the Agreement on navigation on the Rhine which had already been decided to be concluded by the Community would produce undermining effects: see Dashwood and Heliskoski, n 7 above, 14. 60

The Period of Adjustment: In Search of Limits 93 newly introduced principles articulated or a coherent account of their legal implications provided. These deficiencies notwithstanding, the principal message conveyed in both rulings is clear: widely though the competence of the Union to act externally may be construed, it does not necessarily prevent the Member States from participating in the conclusion of international agreements along with the Union as a matter of fact.

6. THE PERIOD OF ADJUSTMENT: IN SEARCH OF LIMITS (OPINION 2/91) The Period of Adjustment: In Search of Limits

The construction of the principle of implied competence, as introduced in AETR and further developed in Opinion 1/76, was outlined above as based upon two assumptions: the forceful articulation of the presence of the Union’s external competence coexisted with the parallel presence of the Member States in the context of the negotiation and conclusion of international agreements. However, that presence was attributed to the specific practical and legal contexts raised before the Court, whilst their normative foundation, precise preconditions and general legal implications were left unclear. In the early 1990s, the case-law of the Court of Justice appeared to be more focused on the clarification of the application of the principle of implied competence. This became apparent in Opinion 2/91.64 The subject-matter of this request was the conclusion of a Convention signed in 1990 under the auspices of the International Labour Organization (ILO) on safety in the use of chemicals at work. The Commission argued that the Community alone was competent to conclude the agreement on the basis of its internal competence on health and safety under Article 153(2) TFEU (ex Article 118a EC). Whilst not a party to the ILO Convention, the Union has observer status. However, its participation in the implementation of the Convention had already been an issue of contention. Any controversies had been addressed on the basis of ad hoc procedural arrangements which appeared to come to an end when the Council, with the agreement of the Commission, adopted a decision in December 1986. That measure set out a procedural mechanism whose objective was the general management of the participation of the Community and the Member States in the ILO framework. The material scope of this arrangement is strictly confined to areas falling within the exclusive competence of the Union. In terms of decision-making, it provided that the Community would reply to the ILO questionnaires by means of a Council decision following a proposal from the Commission. In terms of representation, it provided that the Commission would speak on behalf of the Community in the Conference and act in close consultation with the Member States whilst the latter could retain their right to speak at the plenary sessions of the Conference. It was on the basis of that Decision that the Commission submitted a proposal to the Council in relation to an ILO questionnaire on Convention No 170. Various Member States chose to reply to the ILO directly, hence deviating from the system set out in the above Decision. The reason for this was the Member States’ contention that the subject-matter of the Convention was not covered by the Union’s exclusive competence. The Commission then requested that it be authorised to negotiate the Convention on behalf of the Union. The Council gave its agreement. The decision adopted to that effect also required that the Commission be in close consultation with the Member States and provided that the latter would retain their right 64

Opinion 2/91 (re: Convention No 170 ILO on safety in the use of chemicals at work) [1993] ECR I-1061.

94 Implied Competence to express views on aspects of the Convention which fell within their competence. Following the adoption of Convention No 170, the Commission informed the Council that it was under a legal duty to inform the International Labour Office that, in terms of the ILO Constitution, the competent authorities were the Community institutions. It was following that request that the dispute about the nature of the Community competence resurfaced, as a number of Member States did not accept that Convention No 170 fell within the scope of the Community’s exclusive competence. The objective of Convention No 170 was to protect workers against the harmful effects of using chemicals in the workplace. Its content sought to achieve this in various ways: it set out consultation procedures between Contracting States and representative organisations of employers and workers, it authorised national authorities to prohibit, restrict or regulate the use of hazardous chemicals, it laid down rules on the classification of chemical products and their transport, labelling and marketing, it defined the relevant responsibilities of employers and the duties and rights of workers.

6.1 Restating the General Principles The core of the substantive issues raised by the Commission in its request for an Opinion was whether the conclusion of Convention No 170 fell within the competence of the Union and, if so, whether that competence was exclusive. In approaching this issue, the Court deemed it necessary to articulate the general premises on which the Community’s implied competence may arise and the circumstances in which that competence may become exclusive. It did so in a distinct part of its ruling which reads like a summary of the general principles of EU external relations in the light of the pre-existing case-law. The Court’s analysis may be divided into three parts. First, it dealt with the issue of the existence of implied competence using its ruling in Opinion 1/76 as the starting point of its analysis: [A]uthority to enter into international commitments may not only arise from an express attribution by the Treaty, but may also flow implicitly from its provisions. The Court concluded, in particular, that whenever Community law created for the institutions of the Community powers within its internal system for the purpose of attaining a specific objective, the Community had authority to enter into the international commitments necessary for the attainment of that objective even in the absence of an express provision in that connection. At paragraph 20 in its judgment in  … Kramer and Others  …, the Court had already pointed out that such authority could flow by implication from other measures adopted by the Community institutions within the framework of the Treaty provisions or the acts of accession.65

Secondly, the Court examined the issue of the nature of the Union’s external competence and makes a distinction: when expressly provided for in the EU’s primary rules, that competence is exclusive; as regards its implied competence, its exclusive nature may  … depend on the scope of the measures which have been adopted by the Community institutions for the application of [primary law] provisions and which are of such kind as to deprive the Member States of an area of competence which they were able to exercise previously on a transitional basis.66 65 66

Ibid, para 7. Ibid, para 9.

The Period of Adjustment: In Search of Limits 95 The foundation for that proposition is the AETR statement: ‘[W]here Community rules have been promulgated for the attainment of the objectives of the Treaty, the Member States cannot, outside the framework of the Community institutions, assume obligations which might affect those rules or alter their scope.’67 In addition, the Court for the first time expressly clarified the material scope of exclusivity in relation to the Union’s implied powers: it is not only in relation to common policies that the Member States are precluded from acting when the Community’s competence has become exclusive. This conclusion was based on two premises: on the one hand, the broad material scope of the requirement of loyalty laid down in current Article 4(3) TEU covers ‘all the areas corresponding to the objectives of the Treaty’;68 on the other hand, there was the need to ensure that the Union’s ‘tasks and the objectives of the Treaty would [not] be compromised if Member States were able to enter into international commitments containing rules capable of affecting rules already adopted in areas falling outside common policies or altering their scope’.69 Thirdly, the Court dealt with the cases where the Union’s implied competence is not exclusive. As that competence ‘is shared between the Community and the Member States’, ‘negotiation and implementation of the agreement require joint action by the Community and the Member States’.70

6.2 Applying the Principles to Convention No 170 ILO In approaching the specific question of competence raised by the Commission, the Court started off by identifying the objective of Convention No 170, namely to prevent or reduce the incidence of chemically induced illnesses and injuries at work. It, then, noted that that also fell within the social provisions of the EC Treaty. Indeed, the improvement of the working environment to protect workers’ health and safety is defined in current Article 153(1)(a) TFEU as an area where the Union supports and complements national actions by means of directives setting out minimum standards. Having established the existence of internal competence over the areas covered by Convention No 170, the Court had no difficulty in asserting the existence of an external implied competence, albeit not without pointing out that the subject-matter of that Convention coincided with that of several directives adopted under the above Treaty provision.71 The analysis, then, turned to whether the implied external competence was exclusive. The Court focused on the effects of the rules laid down in Convention No 170. In the light of the fact that the adoption of internal legislation pursuant to current Article 153(4) TFEU would ‘not prevent any Member State from maintaining or introducing more stringent protective measures compatible with the Treaties’, the Court ruled as follows: [T]he provisions of Convention No 170 are not of such a kind as to affect rules adopted pursuant to Article [153 TFEU]. If, on the one hand, the Community decides to adopt rules which are

67

Ibid, referring to para 22 of the judgment in AETR (n 5 above). Ibid, para 10. 69 Ibid, para 11. 70 Para 12 with reference to Kramer (n 41 above, paras 39–45) and Opinion 1/78 [1979] ECR 2871, para 60. 71 Ibid, para 17. 68

96 Implied Competence less stringent than those set out in an ILO convention, Member States may, in accordance with Article [137(4) TFEU], adopt more stringent measures for the protection of working conditions or apply for that purpose the provisions of the relevant ILO convention. If, on the other hand, the Community decides to adopt more stringent measures than those provided for under an ILO convention, there is nothing to prevent the full application of Community law by the Member States under Article 19(8) of the ILO Constitution, which allows Members to adopt more stringent measures than those provided for in conventions or recommendations adopted by that organization.72

In other words, ILO Convention No 170 did not fall within the exclusive competence of the Union because its conclusion by the Member States could not affect the content of secondary legislation to be adopted pursuant to what is now Article 153(2) TFEU. This was a conclusion which the Commission had sought to challenge on the basis of two further arguments. The first one was of a practical nature: it would be difficult to assess whether a specific provision would be more favourable for the protection of working conditions or not; therefore, in order to avoid a violation of the ILO Convention, Member States might become reluctant to adopt measures necessary for the working environment under what is now Article 153(2) TFEU, hence impairing the development of Union law. The legal argument put forward by the Commission consisted of an alternative foundation for exclusivity, namely secondary legislation adopted under Article 100 EC. Both arguments were rejected by the Court. The practical one was dismissed in a rather summary manner: ‘[D]ifficulties, such as those referred to by the Commission, which might arise for the legislative function of the Community cannot constitute the basis for exclusive Community competence.’73 As for the legal argument, the Court pointed out that the secondary provisions adopted under Article 100 EC laid down minimum requirements, with specific reference to legislation on the protection of workers from the risks related to exposure to chemical, physical and biological agents at work74 and other detailed directives adopted pursuant to this.

6.3 A Foundation for Exclusivity However, the Court identified a specific area which fell within the exclusive competence of the Community. The basis for this conclusion was a number of directives whose subject-matter fell within that covered by Part III of ILO Convention No 170. The main characteristic was the introduction of more than minimum requirements. Reference was made to Union rules on the classification, packaging and labelling of dangerous substances75 and dangerous preparations,76 adopted under Articles 100 EC and 100a EC, respectively. The Court observed that these rules were, in certain respects, more favourable for workers, and their content was quite detailed. Having pointed out that the scope of ILO Convention No 170 was wider than that of the above-mentioned Directives, the Court went on to opine as follows:

72

Ibid, para 18. Ibid, para 20. 74 Dir 80/1107/EEC [1980] OJ L327/8. 75 Dir 67/548/EEC [1967] OJ Spec Ed 234, amended by Dir 79/831/EEC [1979] OJ L259/10. 76 Dir 88/379/EEC [1988] OJ L187/14. 73

The Period of Adjustment: In Search of Limits 97 While there is no contradiction between these provisions of the Convention and those of the directives mentioned, it must nevertheless be accepted that Part III of Convention No 170 is concerned with an area which is already covered to a large extent by Community rules progressively adopted since 1967 with a view to 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 and, on the other hand, to provide, at the same time, protection for human health and the environment. In those circumstances, it must be considered that the commitments arising from Part III of Convention No 170, falling within the area covered by the directives cited above in paragraph 22, are of such a kind as to affect the Community rules laid in those directives and that consequently Member States cannot undertake such commitments outside the framework of the Community institutions.77

6.4 Other Areas of Shared Competence Finally, in examining the content of ILO Convention No 170, the Court identified other areas which fell within the joint competence of the Union and the Member States. These are included in the general principles relating to the implementation of the Convention laid down in its Part II. Whilst general in nature, it was held that they fell within the Community’s competence ‘in so far as it has been established that the substantive provisions of Convention No 170 come within the Union’s sphere of competence’.78 These provisions are about the development of cooperation between organisations of employers and workers as regards the adoption and periodical review of safety measures on the use of chemicals at work. The Court then pointed out the following: Admittedly, as Community law stands at present, social policy and in particular cooperation between both sides of industry are matters which fall predominantly within the competence of the Member States. This matter, has not, however, been withdrawn entirely from the competence of the Community. It should be noted, in particular, that, according to Article 118b of the Treaty, the Commission is required to endeavour to develop the dialogue between management and labour at European level. Consequently, the question whether international commitments, whose purpose is consultation with representative organizations of employers and workers, fall within the competence of the Member State or of the Community cannot be separated from the objective pursued by such consultation.79

Similarly, the Union was competent over the assumption of supervisory powers aimed at ensuring compliance with the substantive content of the Convention even if those powers were to be exercised by national authorities. After all, even on the internal plane, Member States could be authorised to exercise supervisory powers in areas covered by EU law.80 The logic of this provision is clear: once competence over the substantive content of an international agreement has been established, that competence is presumed 77

n 64 above, paras 25–26. Ibid, para 28. 79 Ibid, paras 30–32. 80 The Court referred to Dir 80/1107, n 74 above, and the provision of Art 4. 78

98 Implied Competence to extend to the supervisory framework designed to ensure compliance with that agreement. However, this should not be viewed as an unqualified statement. The wording of the ruling infers that the extent of those powers could be central to the issue of competence; it might be the case that, if the supervision of the agreement were to be exercised entirely by the Member States, the Union’s competence would not extend over the relevant provisions.

6.5 The Duty of Cooperation Having established that the conclusion of ILO Convention No 170 fell within the joint competence of the Union and its Member States, the Court went on to point out the following: [I]t is important to ensure that there is 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. This duty of cooperation, to which attention was drawn in the context of the EAEC Treaty, 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. In this case, cooperation between the Community and the Member states is all the more necessary in view of the fact that the former cannot, as international law stands at present, itself conclude an ILO convention and must do so through the medium of the Member States.

6.6 Comment on Opinion 2/91 In its ruling, the Court sought for the first time to articulate the principles underpinning the Union’s external competence with a certain degree of clarity. In so doing, it clarified a number of issues pertaining to the implied competence: its exclusive nature may follow from the adoption of internal legislation in areas not falling within the common policies; whilst the scope of Union legislation adopted pursuant to the exercise of the internal competence would determine whether the external competence became exclusive, when the former consists of minimum rules the latter would be shared with the Member States. This function of Opinion 2/91 was highlighted by the clear division between the issues of existence and exercise of the Union’s external competence which underlies the Court’s analysis. The clarification of certain issues notwithstanding, the Court’s line of reasoning did not provide complete clarity. One feature of the ruling is the Court’s attempt to avoid a detailed analysis of the internal rules whose scope was deemed to give rise to exclusivity externally. Indeed, whilst reference was made in general ‘to a number of directives adopted in the areas covered by the ILO Convention No 170’ which ‘contain rules which are more than minimum requirements’, specific analysis was provided only ‘for instance’ to two such measures.81 What light does this shed to the correlation between the scope of internal legislation and the nature of external competence? Is the existence of merely a handful of secondary measures sufficient to give rise to exclusivity? Indeed, the Court 81

n 64 above, para 22 (emphasis added).

The Period of Adjustment: In Search of Limits 99 further pointed out that the external competence becomes exclusive when the subjectmatter of the agreement to be concluded falls within an area which is ‘already covered to a large extent by Community rules progressively adopted  … with a view to achieving an ever greater degree of harmonization’.82 This formula may appear problematic in so far as it does not provide for a clear test which would allow the Union institutions and the Member States to ascertain the nature of their competence. How advanced should harmonisation be in order to give rise to exclusivity, and on which criteria should this assessment be based? Whilst this process may be fraught with uncertainty and subject to a qualitative judgment, the Court’s ruling appears to suggest a rather automatic deduction. It is noteworthy that this line of reasoning corresponds with the regulatory climate of the era: in the light of the status of minimum harmonisation legislation as the cornerstone of the single market project, to have concluded otherwise would have been tantamount to rendering exclusivity the norm in the Union’s external relations; on the other hand, in those specific areas which appear to be subject to detailed regulation, the external competence should be presumed to be exclusive. Be that as it may, compared to the judgment in AETR, the Court’s approach in Opinion 2/91 suggests a stricter definition of the conditions under which the Union’s implied competence may become exclusive. It also suggests that, once it has arisen, exclusivity produces its effects in a rather automatic manner. What is noteworthy in the ruling is the absence of any assessment as to whether unilateral action by the Member States might, in fact, undermine the exercise by the Union of its implied competence. In Opinion 2/91 the Court accepted that such an assessment was not necessary, hence construing the effect of national action in very broad terms.83 If this analysis is correct, then a point of convergence between express and implied competence of the Union emerges. It is recalled that, in its ruling, the Court suggested that the exclusive nature of the express competence follows precisely from its express provision—this is what has been described as ‘pre-emptive exclusivity’.84 In the case of implied competence, once the internal competence has been exercised in a detailed manner, the exclusive nature of the external competence follows from the harmonising effect of internal legislation, the absence of a specific contradiction notwithstanding. In both cases, the assessment of the nature of the external competence is independent of a substantive determination of whether exclusivity is in fact essential for the protection of the acquis communautaire pursuant to the characteristics of the specific case under review. Another interesting feature of Opinion 2/91 is the light it appears to shed on the doctrine of necessity already elaborated in Opinion 1/76. It is noteworthy that, in the first part of the ruling, the starting point for the Court’s analysis of the general principles of external competence was Opinion 1/76 rather than the AETR judgment.85 This might appear to provide a link with the rationale underpinning the argument that the

82

Ibid, para 25 (emphasis added). See D O’Keeffe, ‘Exclusive, Concurrent and Shared Competence’ in Dashwood and Hillion, n 7 above, 179, 187. 84 Dashwood and Heliskoski, n 7 above, 16. 85 Dashwood and Heliskoski point out that ‘the principle is cited in a context which shows the intention of the Court to disconnect it from the unusual circumstances of both Opinion 1/76 and, previously, Kramer. Paragraph 3 is evidently to be taken as an expression of the normal (though not necessarily the only) way in which external competence may arise for the Community in the absence of explicit attribution’ (n 7 above, 15). 83

100 Implied Competence conclusion of ILO Convention No 170 falls within the scope of Union competence. It is recalled that the Court referred to the internal competence of the Community to adopt legislation in the area of health and safety requirements for workers under Article 154 TFEU. In that regard, Dashwood and Heliskoski have suggested that the principle of necessity may explain this conclusion: [P]ossession of treaty-making power by the Community facilitates the adoption of such measures: for instance, the raising of minimum standards for Community workers may prove more easily acceptable if the possibility exists of negotiating a similar improvement in third countries, thereby countering so-called ‘social dumping’. The test applied in practice by the Court may, we suggest, be formulated thus: does the Community need treatymaking power to ensure the optimal use, over time, of its expressly conferred internal competence?86

Whilst the first part of the above extract is undoubtedly true, the second is less so in so far as it appears to view ‘necessity’ in the light of what is desirable in policy terms. Such an interpretation is not supported by the relevant part of the Court’s ruling which contains no suggestion as to whether policy-oriented consideration should apply. Indeed, the wording of the ruling suggests a rather automatic process: once the subject-matter of the Convention has been identified as within Chapter 1 of Title III EC Treaty which confers on the Union an internal legislative competence in the area of social policy, it is immediately concluded that ‘consequently, Convention No 170 falls within the Union’s area of competence’.87 Would this be taken to imply that the Union enjoys external competence in all areas over which it is endowed with internal legislative competence? The Court is careful not to make such a statement. Indeed, the affirmation of the existence of the external competence in Opinion 2/91 is accompanied by reference to the fact that the subject-matter of Convention No 170 coincides with that of several directives adopted pursuant to the exercise of the internal legislative competence. This illustrates a tendency which characterises all rulings of the Court affirming the existence of external competence, including the AETR judgment. The above analysis highlights the specific implications of the Court’s ruling for the construction of the Union’s implied competence: the introduction of a stricter definition of the AETR test coupled with a broader reading of the effects of exclusivity points towards the most important function of Opinion 2/91, ie the implicit sanctioning of mixity. More importantly, the message conveyed by the ruling is that, in EU bilateral and multilateral relations, mixity is the rule. Indeed, the starting point for the Court’s analysis appears to be the presumption that the Member States could participate in the conclusion of the agreement, albeit one that may be rebutted. In this respect, two points need to be made. First, whilst in AETR and Opinion 1/76 the participation of Member States along with the Community in the negotiation and conclusion of the Agreements in question had been sanctioned for reasons related to the practical realities of international negotiations, Convention No 170 ought to be concluded by both because the competence over its content was shared. This indicates a shift in emphasis from the application of mixity as a matter of practice to its articulation as a matter of principle and legal logic.

86 87

Dashwood and Heliskoski, n 7 above, 16. n 64 above, para 17 (emphasis added).

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Secondly, the principle of shared competence is accepted by the Court without taking account of the practical problems to which it may give rise. The ruling in Opinion 2/91 constituted the first time where arguments to that effect submitted by the Commission were rejected; this would become quite prominent in subsequent disputes where arguments about the practical problems regarding the international representation of the Union and the Member States in the case of mixed agreements would have the same fate. This suggests the emergence of a practice which confines the determination of the nature of the Community’s external competence to legal issues pertaining to the implementation of the Treaties rather than practical considerations. That is not to say that the Court appears oblivious to the reality of the conduct of international relations. In its ruling in Opinion 2/91, it makes reference to the duty of cooperation which is deemed binding both on the Union institutions and the Member States in the process of the negotiation, conclusion and implementation of international agreements over which they share competence. The significance of this principle cannot be overstated: it is being set out in a distinct manner in the concluding part of the Court’s ruling and it is sanctioned by the Court in the context of both the Union’s express and implied competence.88 Most importantly, its construction suggests a duty which is distinct from the general duty of loyalty laid down in Article 4(3) TFEU. Indeed, the duty of cooperation to which the Court refers in Opinion 2/91 is viewed as stemming from the requirement of unity in the international representation of the Union. As such, it is not merely a procedural instrument aimed at mitigating any undermining effects that may follow from mixity; it is also a legal principle which makes the executive authorities of the Union and the Member States assume responsibility for the conduct of EU external relations. In that regard, it is true that the duty of cooperation appears to be quite vague and the Court offered no indications of the specific ways in which it could be construed. However, whilst its supervision is entrusted to the Court of Justice, its prominent position in the ruling also indicated that the locus of power in the conduct of EU external relations lies with the legislative and executive institutions of the Union and the Member States and the way in which they would manage their coexistence. All in all, by clarifying the conditions giving rise to exclusivity, ruling on the effects of internal legislation introducing minimum standards and focusing on the function of the duty of cooperation, Opinion 2/91 offered the first illustration of the Court’s approach to the principle of mixity. In its subsequent case-law, the Court elaborated upon the duty of cooperation and transformed it into one of the cornerstones of the Union’s external economic policies. In other words, Opinion 2/91 contains the seeds of what is to become the constitutional core of EU external relations.

7. THE CONTROVERSIAL OPINION 1/94 The Controversial Opinion 1/94

In Opinion 1/94 the Court was asked to rule on the competence of the Union to conclude, amongst others, the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).89 In Chapter 2, it was examined how the Court, in rejecting the principal contention by the Commission, ruled 88 89

Reference is made to Kramer, n 41 above, paras 39–45 and Opinion 1/78, n 70 above, para 60. Opinion 1/94 (WTO Agreements) [1994] ECR I-5267.

102 Implied Competence that the content of those agreements fell beyond the scope of the Common Commercial Policy and, therefore, was not covered by the Union’s exclusive competence.90 The Court, then, dealt with the alternative submission, namely that the conclusion of the GATS and TRIPs impliedly fell within the Union’s exclusive competence. This submission was based on three main arguments, namely the effect of the AETR principle, the effect of the necessity principle laid down in Opinion 1/76 and, finally, the effect of the general clauses laid down in Articles 114 and 352 TFEU.

7.1. The Application of the AETR Principle As far as the AETR principle was concerned, the Commission argued that it was applicable to both the GATS and TRIPs. In relation to the former, the Commission focused on a number of areas covered by the Agreement over which the Union enjoyed competence to adopt rules internally, namely the right of establishment, the freedom to provide services and transport. It claimed that internal competence had given rise to exclusive external competence. In relation to TRIPs, it was argued that a number of secondary provisions adopted by the Union institutions internally would be affected were the Member States to participate in its conclusion. This line of reasoning was rejected by the Court. As far as transport was considered: [T]he Community’s exclusive external competence does not automatically flow from its power to lay down rules at internal level. As the Court pointed out in the AETR judgment  …, the Member States, whether acting individually or collectively, 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. Only in so far as common rules have been established at internal level does the external competence of the Community become exclusive. However, not all transport matters are already covered by common rules.91

The absence of common rules on all transport matters was the first point the Court made in order to reject exclusivity. The second point had to do with the practical reasons for which the Commission had argued for exclusivity. In particular, it had been argued that, in the absence of exclusive Union competence, the authority of Member States to conclude individually international agreements with third countries would ‘inevitably lead to distortions in the flow of services and will progressively undermine the internal market’.92 The Court rejected that practical argument on the basis of a legal principle: [T]here is nothing in the Treaty which prevents the institutions from arranging, in the common rules laid down by them, concerted action in relation to non-member countries or from prescribing the approach to be taken by the Member States in their external dealings.93

That conclusion was supported by reference to specific secondary rules on transport which provided for such arrangements: Regulation 4058/86, for instance, deals with the possibility of third states restricting free access by shipping companies of Member States

90

See Chapter 2.3. n 89 above, para 77. 92 Ibid, para 78. 93 Ibid, para 79. 91

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to the transport of linear cargoes by enabling the Council to decide on coordinated action.94 Having rejected the exclusive nature of the Union’s external competence on transport, despite the reference in ex Article 75(1)(a) EC to ‘relationships arising from international law’, the Court had no difficulty reaching the same conclusion in relation to the right of establishment and the freedom to provide services. The Court pointed out that ‘the sole objective of [the chapters on the above freedoms] is to secure the right of establishment and freedom to provide services for nationals of Member States’.95 It then, went on to point out that: They contain no provision on the problem of the first establishment of nationals of nonmember countries and the rules governing their access to self-employed activities. One cannot infer from those chapters that the Community has exclusive competence to conclude an agreement with non-member countries to liberalize first establishment and access to service markets, other than those which are the subject of cross-border supplies within the meaning of GATS which are covered by Article [207 TFEU].96

However, the fact that the Union did not enjoy exclusive competence externally to conclude an agreement on the rights of third-country nationals in the above areas should not be taken to mean that the Union is prevented from relying upon the powers conferred by the relevant provisions in order to specify the treatment which is to be accorded to such nationals. In a later part of its judgment, the Court returns to this issue to point out that that power has actually been exercised by the inclusion of external relations provisions in secondary rules adopted by the Council pursuant to Articles 50 and 53 TFEU. Such provisions may serve different objectives: disclosure requirements imposed on branches established by companies governed by the laws of third countries were included in secondary legislation in order to avoid disparities with similar requirements imposed on companies governed by the laws of a Member State;97 the Second Banking Directive included a specific Title III for credit institutions in third countries setting out various measures which rendered reliance by them upon the system introduced therein conditional upon obtaining comparable competitive opportunities for Union credit institutions in those countries;98 the same applied to secondary rules in the area of insurance.99 However, that was not sufficient to endow the Union with exclusive competence. The relevant part of the Court’s ruling is worth citing in full: 95. Whenever the Community has included in its internal legislative acts provisions relating to the treatment of nationals of non-member countries or expressly conferred on its institutions powers to negotiate with non-member countries, it acquires exclusive external competence in the spheres covered by those acts.

94 [1986] OJ L378/21, Art 3. The Court also referred to Reg 4055/86 [1986] OJ L378/1 on the freedom to provide services to maritime transport between Member States and third countries which requires that Member States phase out or adjust existing cargo-sharing arrangements, as their conclusion became subject to a Community authorisation procedure. 95 n 89 above, para 81. 96 Ibid. 97 Art 54 of Council Dir 89/666 [1989] OJ L395/36 mentioned in para 92. 98 Council Dir 89/646 [1989] OJ L386/1. 99 See eg Council Dir 90/618 [1990] OJ L330/44, amongst other measures mentioned in para 93.

104 Implied Competence 96. The same applies in any event, even in the absence of any express provision authorising its institutions to negotiate with non-member countries, where the Community has achieved complete harmonization of the rules governing access to a self-employed activity, because the common rules thus adopted could be affected within the meaning of the AETR judgment if the Member States retained freedom to negotiate with nonmember countries. 97. That is not the case in all service sectors, however, as the Commission has itself acknowledged.

It was on similar grounds that the Court rejected the Commission’s claim to exclusivity for the Union of TRIPs. It pointed out that ‘the harmonization achieved within the Community in certain areas covered by TRIPs is only partial and  …, in other areas, no harmonization has been envisaged’.100

7.2 The Application of the Necessity Principle Pursuant to Opinion 1/76 The alternative claim for exclusivity put forward by the Commission was based on the principle of necessity elaborated upon in Opinion 1/76. In particular, it was argued that exclusivity was necessary at both internal and external levels for different reasons: in terms of the former, it would maintain the coherence of the internal market, whereas, in terms of the latter, it would enable the Union to remain active, as the need for the conclusion of the WTO Agreements was not in itself disputed. The Court rejected both arguments on the basis that they did not reflect the issues raised in Opinion 1/76. The latter was viewed as a case where the objective of the Draft Agreement was impossible to be achieved in any way other than by concluding an international agreement; similarly, in Kramer, the objective of conservation of biological resources of the high seas ‘would hardly be effective’ if not applicable to non-Union vessels. It was in that context that ‘external powers may be exercised, and thus become exclusive, without any internal legislation having first been adopted’.101 The Court, then, made a distinction: That is not the situation in the sphere of services: 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 non-member countries or in nonmember countries to nationals of Member States of the Community.102

The same conclusion applied to TRIPs in relation to which the Court was quite direct: ‘[U]nification or harmonization of intellectual property rights in the Community context does not necessarily have to be accompanied by agreements with non-member countries in order to be effective.’103

100 n 89 above, para 103. As examples of partial harmonisation, the Court mentioned trademark law, whereas the areas of undisclosed technical information, industrial designs and patents are cited as examples of absence of harmonising legislation. 101 Ibid, para 85. 102 Ibid, para 86. 103 Para 100.

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7.3 The Application of the General Clauses of Articles 95 and 308 EC (now 114 and 352 TFEU) The Commission’s last resort in order to claim exclusivity was to rely upon the general clauses laid down in Articles 95 and 308 EC (now Articles 114 and 352 TFEU). Their wording was deemed sufficiently broad to be construed as giving rise to exclusivity under the circumstances: the former enables the Council to adopt by qualified majority harmonising measures ‘which have as their object the establishment and functioning of the internal market’, whereas the latter enabled the Council to adopt unanimously the measures ‘necessary to attain, in the course of the operation of the common market, one of the objectives set out in the Treaties’ in cases where the latter ‘have not provided the necessary powers’. However, both provisions were held to be insufficient in themselves to render the Union’s external competence exclusive. The Court ruled that only the exercise of the internal competence conferred therein could give rise to exclusive external competence.

7.4 Comment on the Construction of the AETR Principle The ruling of the Court in Opinion 1/94 appeared to be a remarkable defeat for the Commission: the core of its line of reasoning, in all its forms, was rejected in a manner which was as comprehensive as it was forceful. It was pointed out in Chapter 2 that, in dissociating the conclusion of the GATS and TRIPs from the CCP, the Court attracted heavy criticism. The parts of the Court’s judgment rejecting the Commission’s claim for exclusivity pursuant to the principles laid down in AETR and Opinion 1/76 were no less controversial. Its line of reasoning was seen as couched in open-ended terms with a propensity to vagueness.104 Its forceful sanctioning of shared competence was seen as undermining the coherence of the external representation of the Union, and its emphasis on the duty of cooperation was seen as an inadequate remedy for potential inter-institutional conflicts.105 The interpretation of the necessity principle was seen as unduly restrictive and the construction of exclusivity pursuant to the AETR principle as undermining the very raison d’être of the latter’s introduction.106 In the context of the implied competence of the Union pursuant to the AETR principle, exclusivity was construed in strict terms: rather than arising from the existence of ‘common rules’ (AETR) or even ‘Community rules covering an area to a large extent’ (Opinion 1/76), it required the existence of complete harmonisation following the exercise of the Union’s internal competence. This formulation appeared to mark the apogee of a progressive tightening of the criteria laid down by the Court over the years. Does this mean the logic underpinning the ruling in Opinion 1/94 is markedly different to that of previous case-law? A close examination of the ruling suggests a negative answer. After all, Opinion 2/91 had already made it clear that internal rules introducing minimum standards would 104

See N Emiliou, ‘The Death of Exclusive Competence?’ (1996) 21 European Law Review 294, 310. See A Maunu, ‘The Implied External Competence of the European Community after the ECJ Opinion 1/94—Towards Coherence or Diversity?’ (1995) 22 Legal Issues of Economic Integration 115, 123 et seq. 106 JHJ Bourgeois ‘The EC in the WTO and Advisory Opinion 1/94: An Echternach Procession’ (1995)32 Common Market Law Review 763, 780 et seq. 105

106 Implied Competence not give rise to exclusive competence externally. In any case, to view the reference to complete harmonisation as a departure from the broader conditions of exclusivity laid down in earlier case-law presumes that the latter actually sanctioned such a liberal reading of the competence of the Union to negotiate and conclude international agreements to the exclusion of the Member States. However, the analysis of the rulings in AETR, as well as those in Kramer and Opinion 1/76, earlier in this chapter, showed that that had not been the case. In fact, in both legal and practical terms the definitions given by the Court in those cases suggested a positively compromised reading of exclusivity: on the one hand, the examination of the nature of implied competence was intertwined with that of its existence to such an extent that no safe assumption could be made about its legal requirements; on the other hand, the participation of Member States along with the Union had been sanctioned, the ‘broad’ construction of the latter’s exclusive competence notwithstanding. In other words, the requirement in Opinion 1/94 that complete harmonisation be present internally in order for exclusivity to arise externally provides a clarification of, rather than a departure from, the previous statements of the law. Admittedly, such an interpretation of Opinion 1/94 is possible, at least partly, with the benefit of hindsight. However, to argue that the approach adopted in Opinion 1/94 would render it very difficult for exclusivity to arise is to ignore that, under the previous case-law, exclusivity had not, in fact, excluded Member States from participating in the negotiation and conclusion of the Agreements examined by the Court. In other words, far from construing implied competence in too restrictive terms, the ruling in Opinion 1/94 interpreted exclusivity in the light of the context within which it had been intended to function. Viewed from this angle, the criticism levelled against the Court appears to be based on assumptions about exclusivity which had no actual foundation in the Court’s case-law. This argument highlights a link between the Court’s approach in Opinion 1/94 to the nature of implied competence and the construction of the scope of the Common Commercial Policy. It is recalled that, in its ruling, the Court held that TRIPs was excluded from the scope of CCP because, otherwise, the harmonising effect of the TRIPs provisions would be binding upon the Union in deviation from its internal rules. This concern that the external competence of the Union should not produce effects which the Member States had been unable or unwilling to sanction internally is also present in the construction of implied competence. Indeed, the requirement that exclusivity arise following complete harmonisation internally is aimed at addressing precisely that concern. Viewed from this angle, the ruling in Opinion 1/94 is characterised by a degree of internal coherence which, in the light of prior case-law, is both surprising and welcome. To argue that harmonisation of national laws has always been a politically charged issue is to state the obvious: the evolving institutional balance addressed in the TFEU legal bases and the long process of transformation from complete to minimum harmonisation indicate that the adoption of harmonising rules constitutes a political choice left to the Union institutions and implemented on the basis of legal rules laid down in primary law. It is difficult to see how the Court could sanction a practice whereby such a choice is made by bypassing the internal legislative system. This point is brought home by the express reference in the ruling to one example, namely the protection of undisclosed technical information as regards industrial designs. Whilst the Commission had put forward proposals in this area, the legislative process provided internally had been far from complete. In fact, had the assessment of exclusivity been dissociated from

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the existence of internal harmonising legislation, the effectiveness of the Union’s implied competence would have been undermined. Indeed, faced with the possibility of engaging in international negotiations which might lead to a choice of legal regulation deemed unsatisfactory internally, the Council would become increasingly reluctant to give the Commission a negotiating mandate. Furthermore, the construction of exclusivity in Opinion 1/94 is consistent with the logic of the doctrine as introduced in the early 1970s. As the Union’s implied competence was deemed to flow from the existence of the internal competence in order to pursue the Union’s objectives, a different definition of exclusivity in Opinion 1/94 would have rendered that principle an alternative instrument of internal regulation rather than the inevitable consequence of supremacy. In this respect, it is hardly surprising that what underpins the parts of the ruling dealing with external competence pursuant to the AETR doctrine is the linkage between the internal and external competences. In treating it as critical to the definition of the nature of the latter, the Court follows closely the approach it had adopted since the genesis of its relevant case-law. Indeed, so central was that link in AETR that, as mentioned above, the whole judgment was characterised by a distinct confusion between the issue of the existence of the Union’s implied competence and that of its nature.

7.5 Comment on the Construction of the Opinion 1/76 Principle In terms of the interpretation of the principle first introduced in Opinion 1/76, the Court’s approach raises certain questions. In its effort to clarify the vague concept of ‘necessity’, the Court introduced an equally vague one: the conclusion of the GATS was not ‘necessary’ for the attainment of freedom of establishment and freedom to provide services for nationals of the Member States because the latter was not ‘inextricably linked’ to the scope of that Agreement which covered the treatment to be afforded to nationals of third countries. In so far as it required to be further clarified, the purported clarification of the ‘necessity’ doctrine is regrettable. And yet, the ruling in Opinion 1/94 does shed some light on how ‘necessity’ is to be understood in so far as the link it suggests between the fulfilment of the Community’s objectives and the exercise of the external competence is considerably closer than originally assumed. It is in order to highlight this point that the Court juxtaposes the GATS with the issues of the navigation of the Rhine and fisheries conservation which had arisen in Opinion 1/76 and Kramer respectively: the relevant objectives, as laid down in TFEU, could not possibly have been achieved unless an international agreement had been concluded. However, the question is not completely answered: how close should this link be and on what basis should it be assessed? Would the conclusion of an international agreement be inextricably linked to the optimal use of the exercise of the internal competence? In relation to TRIPs, the relevance of the ‘necessity’ principle was ruled out in a very short paragraph where it was held that ‘unification or harmonization of intellectually property rights in the Union context does not necessarily have to be accompanied by agreements with non-member countries in order to be effective’.107 Can this be taken to suggest that, after all, there might be scope for a teleological assessment of whether the exercise of 107

n 89 above, para 100.

108 Implied Competence the Union’s implied competence would be effective?108 This question might appear all the more justifiable in the light of the French wording of the Opinion which refers to the ‘effet utile’ of internal legislation. A second question regarding the construction of the principle of ‘necessity’ in Opinion 1/94 is related to the subject-matter of that notion. What the clarifications in the relevant parts of the ruling do not clarify is whether they refer to the existence of the Union’s implied competence or its nature. In that respect, the ruling compounds the confusion originating in Opinion 1/76. The paragraph rejecting the Commission’s claim in relation to TRIPs appears to refer to the need for the Agreement to be concluded, whereas the relevant section of the ruling concludes on the shared competence of the Union and the Member States. However, if the clarification of the principle of ‘necessity’ refers to the nature of the Union’s competence, it provides no explanation of why this should be assumed to be exclusive.109 Indeed, the questions about this issue raised in relation to Opinion 1/76 are still pertinent. There is one formulation of the doctrine of necessity in Opinion 1/94 which is noteworthy. When applying it to the GATS, the Court concludes that ‘external powers may be exercised, and thus become exclusive, without any internal legislation having first been adopted’.110 Applying the objective definition of necessity, this appears to suggest the following: as the internal competence cannot possibly be exercised except through the conclusion of an international agreement, that is through the exercise of the external competence, the legal implications for the position of the Member States would be determined by approaching the provisions of that agreement as if it provided for internal rules. Therefore, as the exercise of the internal competence would have given rise to exclusivity externally and, therefore, prevented the Member States from acting, so would the exercise of the external competence. However, to identify the effects of the exercise of external competence in an Opinion 1/76 senario with those of the exercise of the internal competence is problematic: it does not follow that the latter would give rise to exclusivity externally because it does not follow that it would produce complete harmonisation. After all, this is one of the main tenets of the ruling in Opinion 1/94. The answer to the above two questions, namely the precise definition of the ‘necessity’ requirement along with its material scope, may be interrelated. In other words, the interpretation of the principle originating in Opinion 1/76 should be taken to refer to the exclusivity of the Union’s competence, albeit in circumstances very strictly construed. In other words, rather than being dependent upon a subjective value judgement as to what is desirable in policy terms, the notion of ‘necessity’ is to be applied as an objective one, hence referring to what is factually a sine qua non for the exercise of the internal competence. All in all, the ruling in Opinion 1/94 appears to suggest that arguments as to the desirability, in policy terms, of the conclusion of an international agreement as a facilitator of the attainment of internal objectives are irrelevant to the application of the ‘necessity’ principle. Instead, what really matters is whether the conclusion of that agreement is the only way for the internal competence to be exercised.

108 For a different view, see Dashwood ‘The Attribution of External Relations Competence’ in Dashwood and Hillion, n 7 above, 115 133–34. 109 See P Eeckhout, EU External Relations, 2nd edn (Oxford, Oxford University Press, 2011) 91–92. 110 n 89 above, para 85.

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7.6 An Overall Comment on Opinion 1/94 It is noteworthy that the Court is distinctly reluctant to say anything not strictly necessary on the existence of the Union’s implied competence. As a result, there is a lingering uncertainty about the precise preconditions for and implications of the principles governing that type of competence. At the very core of this lies the apparent confusion between the existence and the nature of that competence, an unfortunate characteristic that the ruling in Opinion 1/94 shares with past case-law. This is partly due to the maximalistic claims of the Commission that the Union’s competence was exclusive on all possible grounds. However, it is noteworthy that, more than 30 years following the introduction of implied external competence in our legal vocabulary, the relevant rulings should still generate conflicting readings of such fundamental a question as that related to its existence.111 This uncertainty notwithstanding, the ruling is not only clearer in its emphasis but also characterised by a degree of internal coherence. This is illustrated, for instance, in rendering the notion of ‘necessity’ an instrument aimed at the factual assessment of whether the internal competence may be exercised only through the exercise of the external competence. At the core of both the application of the AETR principle and the interpretation of the ‘necessity’ doctrine is the exercise of the internal competence or, in the case of the latter doctrine, the impossibility thereof. By focusing on this link between the internal and external rules, the ruling highlights the normative characteristics of the Union’s external competence within the broader context of the EU legal order: in the absence of an expressly provided competence, any other external competence is implied because of its position as a necessary adjunct to the establishment of the single market and the attainment of the Treaties objectives. Indeed, it had been pointed out in Kramer that the competence of the Community to enter into international commitments for the conservation of the resources of the sea ‘follows from the very duties and powers which Community law has established and assigned to the institutions of the Community on the internal level’.112 Put in another way, the conduct of the EU external relations by the Union itself, rather than being an aim in itself, is developed because it has been conceived as instrumental to the exercise of the internal competences. Viewed from this angle, the general statement included in the AETR judgment according to which ‘with regard to the implementation of the provisions of the Treaty the system of internal Community measures may not  … be separated from that of external relations’ is less maximalistic than it might have originally appeared: far from being construed in isolation and developed into a free-standing system, the latter cannot possibly be conceived and carried out but in the light of the former. Therefore, to view the thrust of Opinion 1/94 as a curtailment of the scope of the AETR principle and the ‘necessity’ doctrine is tantamount to dissociating the Court’s earlier, albeit admittedly vague and at times confusing, pronouncements from their specific legal context and attributing to them a meaning which they were not intended to carry. This approach to the Court’s judgments is hardly novel. It is recalled that the general statements about the scope of the Common Commercial Policy contained in the rulings delivered in the 1970s and 1980s were often misconstrued and interpreted 111 112

See eg Dashwood, n 108 above, 130; Tridimas, n 59 above, 54. n 41 above, para 33.

110 Implied Competence in a maximalistic manner, so much so that, even after the ruling in Opinion 1/94, the Commission insisted on invoking them in its quest for an all-encompassing CCP.113 In its more recent case-law, the Court clarified the scope of those early pronouncements and, therefore, that of the Union’s express external competence. It was in the same vein that implied competence was construed by the Court in Opinion 1/94, hence enabling that ruling to unify different strands of the EU external relations case-law. Another point which is noteworthy in Opinion 1/94 is the distinct reluctance of the Court to delineate which areas of the GATS and TRIPs fall within whose competence. It is quite forceful in its articulation of which areas do not fall within the exclusive competence of either the Union or the Member States: in the case of the latter, for instance, the ruling leaves no doubt as to the fact that no domaine réservé for the Member States exists in relation to a number of issues covered by TRIPs, such as procedural rules for violations of intellectual property rights or interim measures and the award of damages. There is also no doubt as to the existence of the Union’s internal competence to introduce harmonising legislation in those areas. However, having ruled out the exclusive competence of either the Union or the Member States, the Court moves on to make two points. The first is that any problems which may arise in the process of the negotiation of a mixed agreement in terms of coordination between the Member States and the Commission and their effect on the Union’s unity of action may not possibly justify exclusivity. The second related point is that both the Member States and the Union institutions are bound by a duty of cooperation. The Court dedicates a separate section, the final one of its Opinion, to that duty compliance with which is deemed ‘essential’ and which is viewed ‘all the more imperative’114 in the WTO context, where the possibility of cross-retaliation should make it possible for either the Community or the Member States to be able to retaliate in an area of GATS or TRIPs falling beyond their competence. In this phase of maturity of the main tenets of the EU external relations principles, the more the exclusive implied competence appears to be the exception rather than the rule, the more the duty of cooperation becomes a focal point in the Court’s rulings. This duty might appear to be a procedural tool too vague to be of any practical significance in the conduct of international relations. However, to dismiss it in those terms would be a mistake. Close cooperation between the Union institutions and the Member States is an obligation imposed upon them pursuant to Union law, and compliance with it is a matter falling within the jurisdiction of the Court of Justice. To argue that the establishment of the internal market and the development of the EU legal order owe a great debt to the development of legal principles based upon broadly worded Union law duties is to state the obvious. In the context of international agreements, the gradual realisation that mixity is the rule will not only reinforce the central position of the duty of cooperation but will also render its construction by the Court essential to the development of the law of EU international relations. This point will be further analysed later in this book. In emphasising the central position of the duty of cooperation in Opinion 1/94, the Court seeks to convey its second message to the Member States and the Community institutions: having already made it clear that, in essence, it is for them to render the external competence of the Union exclusive by exercising its internal competence in 113 See Chapter 2 above, in particular in relation to Opinion 2/00 (re: Cartagena Protocol) [2001] ECR I-2793. 114 n 89 above, para 109.

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order to adopt harmonising rules, it makes it equally clear that, in the absence of such development, it is for them to ensure the Union’s unity of action. In essence, the ruling in Opinion 1/94 may be seen as an important part of the dialogue in which the Court of Justice engages with the Union’s institutions and the Member States. To define the approach of the Court as a mere illustration of judicial restraint is to ignore the subtle terms in which the above dialogue is carried out. Whilst ruling out maximalistic conceptions of exclusivity and underlining the decisive role of the Member States and the Union legislature, by providing, in return, a general duty as a remedy for any ensuing practical difficulties, the Court reserves for itself a position at the very centre of the conduct of EU international relations. Indeed, it will be the elaboration of the implications of that duty in specific cases which will define the legality of the external action of the Member States. In other words, far from being a conditio sine qua non for the curtailment of any unilateralist and divisive initiatives that Member States might wish to undertake, exclusivity is not the only way for the unity of the Union’s external representation to be ensured. Instead, it will be the construction of the alternative substantive and procedural instruments developed by the Court that will contribute to the achievement of that objective. If this analysis of Opinion 1/94 is correct, the ruling is significant not only for what it rejected, that is broad readings of exclusivity, but also for what it suggested with considerable clarity by bringing the conduct of both Union institutions and Member States in areas of shared competence within a Community law framework at the centre of which stands the Court itself. This was an unequivocal sanctioning of the parallel existence of the Union and the Member States and, accordingly, a call for attention to the phenomenon of mixity.

8. CONSOLIDATING THE PRINCIPLES: THE OPEN SKIES JUDGMENTS Consolidating the Principles: The Open Skies Judgments

The Court’s ruling in Opinion 1/94 appeared to render any paean to the indispensable nature of exclusivity broadly construed redundant. Drawing upon prior case-law, it also consolidated the position of implied competence in the EU international relations framework. This consolidating function is reflected by its acceptance by the Community institutions. In its Decision concluding the WTO Agreements, for instance, the Council expressly referred to it: Whereas the competence of the Community to conclude international agreements does not derive only from explicit conferral by the Treaty but may also derive from other provisions of the Treaty and from acts adopted pursuant to those provisions by Community institutions.115

The position articulated in Opinion 1/94 was also confirmed in Opinion 2/92, where the Court held that the conclusion of the Third Revised Decision of the Organisation for Economic Cooperation and Development fell within the competence of both the Union and its Member States.116 However, the questions it left unanswered regarding the preconditions for and implications of exclusivity were raised by the Commission in a series 115 Council Dec 94/800 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. 116 Opinion 2/92 (re: OECD) [1995] ECR I-521, Part V, paras 31 et seq.

112 Implied Competence of enforcement proceedings it initiated against Member States pursuant to Article 258 TFEU. The subject-matter of those actions was a number of bilateral agreements concluded by eight Member States with the United States in the 1990s.117 The judgments of the Court of Justice attracted considerable attention, not only for the further clarification of the state of the law in the area of EU international relations but also for their implications for policy-making in the area of international aviation.118

8.1 The Legal Background Whilst the EU primary provisions on transport apply to transport by rail, road and inland waterway, ex Article 84(2) EC gave the Council to power to decide ‘whether, to what extent and by what procedure appropriate provisions may be laid down for sea and air transport’.119 In the area of air transport, EU rules were adopted in the form of three separate legislative initiatives.120 The so-called ‘third package’ was adopted by the Council in 1992. Regulation 2407/92 set out a regime under which carrying passengers, mail and cargo by air for remuneration or hire within the Union territory was subject to the appropriate operating licence.121 Such licence would be granted by national authorities only to undertakings which are majority owned and effectively controlled by Member States or their nationals and whose principal place of business and registered office are in the territory of the authorising Member State. Once granted an operating licence, such undertakings are deemed to be Community air carriers within the meaning of Regulation 2408/92122 and may exercise traffic rights on routes within the Community. Member States may regulate the distribution of traffic between their airports without discrimination on grounds of nationality or identity of the air carriers. The establishment of fares and rates charged by Community air carriers for carriage wholly within the Community is subject to Regulation 2409/92,123 the latter expressly being inapplicable to fares and rates charged by non-Community air 117 Case C-466/98 Commission v UK [2002] ECR I-9427; Case C-467/98 Commission v Denmark [2002] ECR I-9519; Case C-468/98 Commission v Sweden [2002] ECR I-9575l Case C-469/98 Commission v Finland [2002] ECR I-9627; Case C-471/98 Commission v Belgium [2002] ECR I-9681; Case C-472/98 Commission v Luxembourg [2002] ECR I-9741; Case C-475/98 Commission v Austria [2002] ECR I-9797; Case C-476/98 Commission v Germany [2002] ECR I-9855. 118 See L Heffernan and C McAuliffe, ‘External Relations in the Air Transport Sector: The Court of Justice and the Open Skies Agreements’ (2003) 28 European Law Review 601; PJ Slot and J Dutheil de la Rochère, annotation on Open skies agreements judgments (2003) 40 Common Market Law Review 697; R Greaves, ‘The Community’s External Competence: Air Transport Services’ (2003) 52 International and Comparative Law Quarterly 499; R Holdgaard, ‘The European Community’s Implied External Competence after the Open Skies Cases’ (2003) 8 European Foreign Affairs Review 365; R Abeyratne, ‘The Decision of the European Court of Justice on Open Skies and Competition Cases’ (2003) 26 World Competition 335; H Wassenbergh, ‘A Mandate to the European Commission to Negotiate Air Agreements with Non-EU States: International Law versus EU Law’ (2003) 28 Air & Space Law 139; N Lavranos, annotation on Open Skies judgments (2003) 30 Legal Issues of Economic Integration 81. 119 Under the current arrangements, Art 100(2) TFEU provides that ‘[t]he European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may lay down appropriate provisions for sea and air transport. They shall act after consulting the Economic and Social Committee and the Committee of the Regions.’ 120 See PS Dempsey, European Aviation Law (The Hague, Kluwer, 2004) ch VI. 121 [1992] OJ L240/1. 122 [1992] OJ L240/8. 123 [1992] OJ L240/15.

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carriers. Furthermore, the right to introduce new products or lower fares than the ones existing for identical products was expressly reserved for Community air carriers. In addition, common rules had already been set out regarding computerised reservation systems (CRSs)124 as well as the allocation of slots at Community airports.125 Against that background, a number of bilateral aviation agreements had been concluded between individual Member States and United States. All but one, that concluded with United Kingdom, were Open Skies Agreements which provided for the exchange of certain rights to be exercised by airlines designated by one contracting party and authorised by the other. These Open Skies Agreements shared a number of features including the following:  free access to all routes between all points situated within the territory of the parties, without limitation of capacity or frequency and with all desired combinations of aircraft;  opportunities for the designated airlines to conclude code-sharing agreements;  provisions for furthering competition or non-discrimination in relation to, amongst others, computerised reservation systems;  exchange of third freedom, ie the right for an airline to carry passengers from its home country to another country;  exchange of fourth freedom, ie the right to carry passengers from another country to the home country;  exchange of fifth freedom, ie the right for an airline to carry passengers to a third country provided that the flight had originated in one of the contracting parties;  a clause on airline ownership and control according to which the authorisation required for the airlines designated by one of the parties to exercise the rights laid down in the agreement would be subject to the condition that a substantial part of the ownership and effective control of that airline be vested in the contracting party designating the airline or/and nationals of it;  a minority shareholders provision according to which United States had the right to withhold or revoke the necessary authorisation to airlines designated by the other contracting party in which citizens of or legal persons based in that party hold less than 50% of its capital. Against this background of extensive secondary legislation on air transport and the conclusion of individual bilateral aviation agreements, the Commission had consistently sought to obtain a mandate by the Council to negotiate an air transport agreement with the United States. Its first two efforts in 1990 and 1992 were rebuffed. A third request in 1995 was met with granting a limited mandate in 1996 confined to specific matters,126 albeit one which did not result in the conclusion of an agreement. The Commission decided to attack all the Open Skies Agreements with the United States concluded by Member States, along with the more limited aviation agreement 124

See Reg 2299/89 [1989] OJ L220/1, amended by Reg 3089/93 [1993] OJ L278/1. [1993] OJ L14/1. 126 These covered competition law, airline ownership and control, computerised reservation systems, codesharing, dispute resolution, leasing, environmental clauses and traditional measures. Pursuant to a later request, these matters were extended to cover state aids, slot allocation at airports, economic and technical fitness of airlines, security and safety clauses, safeguard clauses and any other matter relating to the regulation of the sector. 125

114 Implied Competence between the United Kingdom and the United States. As far as the law of EU international relations is concerned, the main charge levelled by the Commission was that, in negotiating and concluding Open Skies Agreements, the Member States had exercised a competence which they did not have. Instead, the subject-matter of the Agreements fell within the scope of the competence of the Union which was exclusive on two grounds: on the one hand, it was necessary, in the meaning of Opinion 1/76, for the Union to undertake the commitments laid down in the Open Skies Agreements; on the other hand, those commitments affect, within the meaning of the AETR principle, the existing EU rules governing that area.

8.2 The Judgments The Court’s rulings on the Open Skies Agreements were identical in substance. The following analysis will be referring to that delivered in the case against Germany. The Court first qualified the existence of the Community’s competence in the area of international aviation. It was pointed out that the relevant Treaty provision, namely ex Article 84(2) EC, made the power of the Union to act in the area of external aviation dependent on a prior Council decision. This makes it clear that although that provision may be used by the Council as a legal basis for conferring on the Community the power to conclude an international agreement in the field of air transport in a given case, it cannot be regarded as in itself establishing an external Community competence in that field.127

The interpretation of the ‘necessity’ doctrine put forward by the Commission was rejected. The conclusion of an aviation agreement with the USA was not ‘necessary’ in order to achieve the aims of the Treaty in the area of air transport because these aims could be achieved by the establishment of autonomous rules: [T]here is nothing in the Treaty to prevent the institutions arranging, in the common rules laid down by them, concerted action in relation to the United States of America, or to prevent them prescribing the approach to be taken by the Member states in their external dealings, so as to mitigate any discrimination or distortions of competition which might result from the implementation of the commitments entered into by certain member states with the United States of America under ‘open skies’ agreements.128

This point was brought home by reference to the establishment of the internal market in air transport pursuant to the ‘third package’: it was the principle of free movement of services which made this possible rather than any negotiation of an agreement with the United States. In fact, it was following the exercise of the internal competence that the question of the exercise of the external one arose when the Commission was granted a limited negotiating mandate. The second argument put forward by the Commission was that the conclusion of Open Skies Agreements by the Member States was contrary to the competence of the Community, which had been rendered exclusive pursuant to the adoption of internal legislation establishing an internal market in air transport. The starting point for the Court 127 128

Case C-476/98 Commission v Germany, n 117 above, para 81. Ibid, para 85.

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was to assess whether the principle emerging from its post-AETR case-law, namely that the adoption of internal measures entailed recognition of exclusive external competence for the Union, was also applicable to the specific provision of ex Article 84(2) EC; this was necessary because the competence to act, both internally and externally, was subject to a Council decision providing ‘whether, to what extent and by what procedure’ Union rules would be adopted. This question was answered in the affirmative on the basis of the, by now familiar, effet utile rationale.129 The Court, then, went on to summarise the state of the law in a concise manner which makes the relevant extract worth citing in full: 107 It must next be determined under what circumstances the scope of the common rules may be affected or distorted by the international commitments at issue and, therefore, under what circumstances the Community acquires an external competence by reason of the exercise of its internal competence. 108 According to the Court’s case-law, that is the case where the international commitments fall within the scope of the common rules (AETR judgment, paragraph 30), or in any event within an area which is already largely covered by such rules (Opinion 2/91, paragraph 25). In the latter case, the Court has held that Member States may not enter into international commitments outside the framework of the Community institutions, even if there is no contradiction between those commitments and the common rules (Opinion 2/91, paragraphs 25 and 26). 109 Thus it is that, whenever the Community has included in its internal legislative acts provisions relating to the treatment of nationals of non-member countries or expressly conferred on its institutions powers to negotiate with non-member countries, it acquires an exclusive external competence in the spheres covered by those acts (Opinion 1/94, paragraph 95; Opinion 2/92, paragraph 33). 110 The same applies, even in the absence of any express provision authorising its institutions to negotiate with non-member countries, where the Community has achieved complete harmonisation in a given area, because the common rules thus adopted could be affected within the meaning of the AETR judgment if the Member States retained freedom to negotiate with non-member countries (Opinion 1/94, paragraph 96; Opinion 2/92, paragraph 33). 111 On the other hand, it follows from the reasoning in paragraphs 78 and 79 of Opinion 1/94 that any distortions in the flow of services in the internal market which might arise from bilateral ‘open skies’ agreements concluded by Member States with non-member countries do not in themselves affect the common rules adopted in that area and are thus not capable of establishing an external competence of the Community. 112 There is nothing in the Treaty to prevent the institutions arranging, in the common rules laid down by them, concerted action in relation to non-member countries or to prevent them prescribing the approach to be taken by the Member States in their external dealings (Opinion 1/94, paragraph 79).

The Court went on to repeat its dictum in Opinion 1/94: [A]ny distortions in the flow of services in the internal market which might arise from bilateral ‘open skies’ agreements concluded by Member States with non-member countries do not in 129 The Court pointed out that ‘if the Member States were free to enter into international commitments affecting the common rules adopted on the basis of [ex] Article 84(2) of the Treaty, that would jeopardise the attainment of the objective pursued by those rules and would thus prevent the Community from fulfilling its task in the defence of the common interest’ (ibid, para 105).

116 Implied Competence themselves affect the common rules adopted in that area and are thus not capable of establishing an external competence of the Community.130

Instead, what needs to be established is whether the common rules adopted internally are capable of being affected by the international commitments undertaken by the Member States in the context of their Open Skies Agreements. The Court, then, dealt with the general argument put forward by the Commission that the cumulative effect of the Open Skies Agreements would give rise to discrimination and distortions of competition which would, then, affect the normal functioning of the internal market in air transport. That was dismissed: the Court repeated that distortions alone were not capable of affecting the common rules. According to the Court, this clearly indicated that the Third Package did not, in fact, establish complete harmonisation in the area of air transport. Instead, what was required was a detailed assessment of the specific issues covered by the Open Skies Agreements and their effect, or lack thereof, on the common rules laid down in the Third Package. The fifth-freedom rights conferred upon American airlines were deemed not to affect the Union’s competence because they fell beyond the scope of the common rules. Indeed, the latter did not apply to non-EU air carriers operating within the EU.131 On the other hand, the common rules did lay down a number of provisions applicable to third countries and their carriers. These included the introduction of new products or fares lower than the ones existing for identical products and the provision for access to computerised reservation systems. The former was confined to Union air carriers, whereas the latter was also applied to third-country air carriers subject to reciprocity. Therefore, by extending those rights to US air carriers, the Member States had acted in an area which had fallen within the Union’s exclusive competence. The latter was also deemed to cover the allocation of slots at EU airports.132 Finally, the Court went on to conclude that the ownership control clause of the Open Skies Agreements was contrary to the principle of free movement of services.

8.3 Comment on the Open Skies Judgments A noteworthy, albeit not surprising, feature of the Court’s rulings is the confusion between the issues of the existence and nature of the Union’s external competence.133 The parts of the judgment examining the applicability of the ‘necessity’ doctrine and the AETR principle are preceded by a heading referring to the ‘alleged existence of an external Community competence’.134 On the one hand, the Court started off its analysis of whether the Union’s external competence exists at all in the light of the specific wording of ex 130

Ibid, para 111 (emphasis added). Ibid, para 118 where it was pointed out that ‘the international commitments in issue do not fall within an area already covered by [those regulations and, therefore,] cannot be regarded as affecting [them]’. 132 However, the Commission’s claim that the Member States had violated that competence was dismissed as unfounded because no commitments undertaken under the Agreements were identified by the Commission as capable of affecting the relevant rule of Reg 95/93. 133 See R Holdgaard, ‘The European Community’s Implied External Competence after the Open Skies Cases’ (2003) 8 European Foreign Affairs Review 365, 388–89. 134 Case C-476/98 Commission v Germany, n 117 above, paras 71 et seq and 91 et seq. 131

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Article 84(2) EC and in the absence of internal rules;135 on the other hand, it concluded that part of the judgment by ruling out the Community’s ‘exclusive external competence within the meaning of Opinion 1/76’.136 More than thirty years since the recognition of the implied external competence of the Community, such confusion is striking. However, in order to appreciate the implications of this apparent confusion, the main thrust of the judgments in the Open Skies cases need to be examined first. In terms of the principle of necessity as first elaborated in Opinion 1/76, the judgments in Open Skies leave no doubt as to the strictly defined circumstances under which it would apply: it is only in so far as the objectives of the Union may not possibly be achieved pursuant to the exercise of the internal competence that the external one applies. In its judgment, the Court’s determination to confirm the objective definition of ‘necessity’ was at the expense of a clearer definition of exclusivity. In his Opinion, Advocate General Tizzano had argued against the assumption that the competence of the Community would become exclusive automatically when necessary. Relying upon a clear parallelism between the internal and external spheres, he had argued for the ‘proceduralisation’ of necessity, that is its assessment by the EC institutions pursuant to the procedures laid down in the EC Treaty for the exercise of the internal competence or, in the absence thereof, under Article 268 TFEU.137 This analysis was ignored. Instead, the line of reasoning followed by the Court was characterised by a distinct determination to construe necessity in objective terms, with no scope for policy-oriented and inevitably subjective considerations to be taken into account. This approach has been viewed as not only unduly restrictive of the scope of the Opinion 1/76 principle138 but also as making it virtually impossible for the implied competence to arise under such circumstances.139 Be that as it may, it is worth pointing out that the ruling in the Open Skies litigation is consistent with the logic underpinning the ruling in Opinion 1/94 in so far as both are centred around the link between the internal and the external spheres of Union action. This takes various forms. At the constitutional level, this is manifested by approaching implied external competence as an adjunct to the ultimate exercise of internal competence, hence rendering it an instrument for pursuing the EU objectives. The primary objective of the establishment of the internal market in air transport, for instance, is the freedom of the nationals of Member States to provide services: an international agreement regulating the legal treatment of EU nationals in a non-Member State or that of third-country nationals in the Community would be necessary within the meaning of Opinion 1/76 only if the freedoms of the nationals of Member States could not be achieved except through the conclusion of such agreement. After all, had the exercise of the internal competence been possible separately from the external, the latter would have become exclusive pursuant to the AETR principle. The above construction of the relationship between internal and external competence is also evident in the Court’s application of the AETR principle. It is recalled that potential distortions in the internal market which might arise following the conclusion 135

Ibid, paras 81 and 82. Ibid, para 89. 137 See paras 47–57 of his Opinion. 138 See L Grard, ‘La Cour de justice des Communautés européennes et la dimension externe du marché unique des transports aériens—A propos des huit arrêts du 5 novembre 2002 dans l’affaire dite “open skies”’ [2002] Cahiers de Droit Europeen 695. 139 See Eeckhout, n 109 above, 104. 136

118 Implied Competence of bilateral agreements by Member States were considered insufficient to establish exclusive competence in the absence of internal harmonisation. This strict approach has been criticised as too deferential to the Member States and dismissive of the realities of the regulation of international aviation.140 However, the approach adopted in the Open Skies judgments should be viewed in the light of two principal considerations. The first has to do with the line of reasoning upon which the Commission had sought to base its claim to exclusivity, that is arguments of a practical nature and clearly policy-oriented: domestic and international aviation was presented as incapable of being separated either economically or legally and purely internal measures were deemed ineffective in the light of the international character of the activities carried out. It is not the first time the Commission put forward this type of reasoning in order to suggest that exclusivity was essential to the conduct of the Union’s external relations: similar arguments had supported its claims in relation to the GATS and TRIPs in Opinion 1/94 as well as a very broadly defined CCP both in that case and in Opinion 2/00. Indeed, its construction of the CCP, and the exclusive competence underlying its exercise, has been based on precisely such assumptions about the effectiveness of internal rules and the dynamic nature of international trade.141 In adopting this approach so consistently, the Commission appears to view exclusivity as an instrument for effective Union policy-making on the international scene. This is diametrically opposed to the Court’s rationale of exclusivity which has been the attainment of the Union’s objectives and the supremacy of Community law. As Dashwood pointed out, the AETR principle ‘is derived, not from the elusive notion of l’effet utile, but from the fundamental constitutional principle that Community rules prevail over national ones’.142 It is noteworthy that the point of departure in the Court’s judgment appears entirely different from that of the Commission: whereas the latter relies upon the problems raised by the external actions of the Member States as evidence of the need for exclusive Union competence, the Court approaches these problems as merely practical issues which need to be tackled. This approach is explained by the strict construction of the implications of exclusivity. It is recalled that in Opinion 2/91 it had already been made clear that, once the Union competence has been rendered exclusive, any action undertaken by the Member States individually or collectively beyond the Community framework would be contrary to EU law, irrespective of whether its content would be compatible or not with that of the relevant internal rules. In the Open Skies litigation, the Court confirmed this strict construction of exclusivity: a Member State may not argue, in its defence, that the substance of the international commitments it undertook individually was not in conflict with internal common rules; or that there is a provision in the bilateral international agreement requiring that Community measures in existence at that time be complied with. As a matter of principle, Community law is deemed to have been violated and the Member State concerned to have failed to fulfil its obligations by undertaking international

140 See Slot and de la Rochère, n 118 above, 709–10; L Grard, ‘L’Union européenne et le droit international de l’aviation civile’ (2004) 49 Annuaire Français de Droit International 492, 498. 141 See Chapter 2 above. 142 A Dashwood, ‘The Attribution of External Relations Competence’ in Dashwood and Hillion (eds), n 7 above, 115, 135.

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commitments without authorisation even if the substance of that commitment does not necessarily conflict with Community law.143 This rather automatic conclusion as to the illegality of national action is not dissimilar to the approach adopted by the Court in other enforcement procedures initiated by the Commission against Member States: the Court has been particularly sceptical of the various defences put forward by the defendant states in general, all the more so in particular cases where national law maintains ‘an ambiguous state of affairs’ in relation to compliance with Union law.144 However, it should be stressed that the implications of exclusivity would not be of a sweeping scope; the judgments in Open Skies make it clear that the international obligations undertaken by Member States would be examined against existing Union legislation not as a whole but in relation to particular, individually assessed matters. As for the concerns regarding the so-called ‘timid’ approach to national competence, it should be stressed that the Court’s line of reasoning on the issue of competence should not be dissociated from the overall legal context within which the judgments were delivered. It is recalled that the Member States were found to have violated Article 56 EC on the free movement of services by agreeing upon an ‘ownership and control’ clause with the United States. The Court did reject the Commission’s claim to exclusivity over the totality of the Open Skies Agreements as well as the determination of routes, that is their most central aspect. However, by carving out what were considered a number of peripheral issues145 and asserting the exclusive nature of the Union’s competence over the negotiation of their content, the Court created the momentum for which the Commission had been looking for years. Without the right to negotiate on computerised reservation systems, slot allocation and pricing, the negotiation of international aviation agreements unilaterally by individual Member States became a distinctly unattractive option.146 The developments following the judgments illustrate the point made above. Within less than two weeks after the judgments had been delivered, the Commission issued a Communication in which it laid down its policy objectives in the area of international aviation.147 It argued for a unified approach which would enable the Community to negotiate air transport agreements of a broad scope, covering not only the areas which the Court had held to be covered by the Union’s exclusive competence but also areas falling within shared competence such as safety, competition and the environment. It also made it clear that it expected the Member States to denounce their Open Skies Agreements.148 The following year the Commission, again, urged the Council to grant it a general mandate for EU negotiations with third countries which was viewed necessary in policy terms and desirable for rendering the bilateral agreements compatible with Union

143 In relation to the right to charge lower fares or introduce new products, see Case C-476/98 Commission v Germany, n 117 above, para 127; in relation to computerised reservation systems, see ibid, para 131. 144 See eg Case 167/73 Commission v France [1974] ECR 359, para 41. 145 See Grard, n 139 above, 722. 146 As Slot and de la Rochère put it, ‘without the possibility to discuss slots, CRS’s and prices and with the duty to allow other Community carriers to share traffic rights, negotiating and concluding agreements with third countries is no longer an attractive option’: n 118 above, 711. 147 COM(2002) 649 final: On the consequences of the Court judgments of 5 November 2002 for European air transport policy. 148 See also Answer by Commissioner de Palacio in Written Question E-3511/02, [2003] OJ C161E/98.

120 Implied Competence law.149 In particular, the Commission envisaged the conclusion of an agreement which would establish a Transatlantic Aviation Area the aim of which would be ‘to go beyond the current “open skies” agreements and to eliminate fragmentation of the European market that results from existing bilateral agreements and create more operational and financial flexibility for Community airlines’.150 It is beyond the scope of this chapter to analyse how the process of the redefinition of the international aviation policy has developed and to examine the outcome of the negotiation with the United States.151 What is noteworthy in terms of this analysis is that, in approaching the implied competence of the Union from the angle of its intrinsic link with the internal market and construing it in a pragmatic manner, the Court continues to set the tone and pace of the development of the EU international relations. It is difficult to imagine how the implications of its rulings would have been more profound in practical terms had they defined exclusivity in bolder terms. All in all, the construction of the exclusive nature of implied competence is by no means the most decisive factor in the framework within which the Union is called upon carry out its international relations. It is also the legal effects of the fundamental principles of the internal market and the evolving and interdependent international environment which shape the ways in which the EU acts.

9. CONSOLIDATION AND FURTHER QUESTIONS IN OPINION 1/03 Consolidation and Further Questions in Opinion 1/03

The fundamental principles of the Union’s implied external competence were revisited by the Court in Opinion 1/03.152 The subject-matter of the ruling was the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. This was based on the original Lugano Convention concluded between EU Member States and European Free Trade Association (EFTA) states.153 The aim of the Convention was to create a system of jurisdiction and enforcement of judgments which would mirror that applied within the Union and which would govern the relationships between EU and EFTA states. The EU system was originally laid down in the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters concluded in 1968.154 In the light of the increased competence in the area of judicial cooperation in civil matters with which the Union was endowed under

149 Declaration on relations between the Community, its Member States and third countries in the field of air transport [2003] OJ C69/03 and COM(2003) 94 final: Communication on relations between the Community and third countries in the field of air transport. On the practical problems of EC–US negotiations of an aviation agreement of a broad scope, see Wassenbergh, n 118 above. 150 Answer to Written Question E-3510/02 [2003] OJ C222E/78. 151 See the overview in Chapter 9, section 4. See also the interesting account provided in C Woll, Transatlantic Relations as a Catalyst to European Integration—The Activism of the European Commission in the Case of International Aviation (Washington, DC, American Institute for Contemporary German Studies, The Johns Hopkins University, 2003). On the negotiating mandates given to the Commission, see CNK Franklin, ‘Flexibility vs Legal Certainty: Article 307 EC and Other Issues in the Aftermath of the Open Skies Cases’ (2005) 10 European Foreign Affairs Review 79, 103–14. 152 [2006] ECR I-1145. 153 [1988] OJ L319/9. The contracting parties which are not EU Member States are now Iceland, Norway, and Switzerland. The new text of the Convention, which was examined by the Court in Opinion 1/03, is published in [2009] OJ L147/5. 154 [1972] OJ L299/32.

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the Treaty of Amsterdam, the system of the Brussels Convention was amended and set out in Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (known as ‘the Brussels Regulation’).155 As the original Lugano Convention drew on the Brussels Convention, the transformation of the latter in the Brussels Regulation required the revision of the former. The later Lugano Convention largely reproduced the provisions of the Brussels Regulation. It was the outcome of this process that led to the request to the Court of Justice by the Council for an opinion under Article 218(11) TFEU. The question was whether the conclusion of the Convention fell within the exclusive competence of the Union or whether the competence to conclude it was shared between the Union and the Member States. Its significance was illustrated by the fact that 14 national governments submitted observations to the Court. In its Opinion, the Court of Justice distinguished clearly between the existence of the Union’s external competence and its nature. In doing so, it departed from the earlier rulings which had established the main parameters of the EU’s implied external competence and which had somehow failed to treat these two points separately. The Court, then, revisited and clarified the foundations of implied external competence. It clarified, for instance, its ruling in Opinion 1/76156 and made it clear that the principle it had articulated therein gave rise to exclusive competence even though this was not spelled out in that ruling.157 It then summarised the circumstances under which such competence may arise. With reference to Opinion 1/94158 and the Open Skies judgments,159 it identified three situations in which exclusive Union competence may arise: [W]here the conclusion of an agreement by the Member States is incompatible with the unity of the common market and the uniform application of [Union] law ([AETR], paragraph 31), or where, given the nature of the existing [Union] provisions, such as legislative measures containing clauses relating to the treatment of nationals of non-member countries or to the complete harmonisation of a particular issue, any agreement in that area would necessarily affect the [Union] rules within the meaning of the [AETR] judgment.160

However, the Court made it clear that ‘those three situations  …are  …only examples, formulated in the light of the particular contexts with which the Court was concerned’.161 In elaborating on how the AETR principle would apply, the Court held that: [T]he assessment must be based not only on the scope of the rules in question but also on their nature and content. It is also necessary to take into account not ony 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.162

This is, arguably, a broader test than that set out in previous case-law. The rationale was explained as follows:

155 [2001] OJ L12/1, recast by Reg 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2012] OJ L351/1. 156 See n 55 above. 157 See para 115 of Opinion 1/03, n 152 above. 158 See n 89 above. 159 n 117 above, 160 See Opinion 1/03, n 152 above, para 122. 161 Ibid, para 121. 162 Ibid, para 126.

122 Implied Competence [I]t is essential 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.163

In concluding its consolidation of the principles governing the Union’s implied external competence, the Court pointed out that a comprehensive and detailed analysis must be carried out to determine whether the [Union] has the competence to conclude an international agreement and whether that competence is exclusive. In doing so, account must be taken not only of the area covered by the [Union] rules and by the provisions of the agreement envisaged, insofar as the latter are known, but also fo the nature and content of those rules and those provisions, to ensure that the agreement is not capable of undermining the uniform and consistent application of the [Union] rules and the proper functioning of the system which they establish.164

On the specific subject-matter of the request, the Court concluded that the Union’s competence to conclude the Lugano Convention was exclusive. This was preceded by a detailed analysis of the rules and procedures laid down in the Convention. The Court pointed out the ‘uniform and coherent nature of the system of rules’ set out in the Brussels Regulation165 and the fact that the purpose of the Convention and the wording of its provisions were based on the Regulation. It then referred to the disconnection clause contained in the Convention. Such clauses are included in multinational agreements where the Member States participate either on their own or along with the Union and prevent the application of the provisions of the agreement amongst Member States. Such clauses, which became popular since the 1980s and are to be found particularly in agreements concluded within the context of the Council of Europe, aim to ensure that EU law applies instead in the relationships between Member States.166 The existence of this clause (in Article 54B of the Lugano Convention) was presented to the Court as evidence that the conclusion of the latter by the Member States would not have had an effect on the application of EU law. However, the Court rejected this approach and held that ‘such a clause may provide an indication that that agreement may affect the [Union] rules’.167 It pointed out that the clause included exceptions168 which might prevent the application of the rules of jurisdiction laid down in the Brussels Regulation.

163

Ibid, para 128. Ibid, para 133. 165 Ibid, para 148. 166 See M Cremona, ‘Disconnection Clauses in EU Law and Practice’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited—The EU and its Member States in the World (Oxford, Hart Publishing, 2010) 160; C Economides and A Kolliopoulos, ‘La clause de deconnexion en faveur du droit communautaire: Une Pratique critiquable’ (2006) 110 Revue Générale de Droit International Public 273; and M Smrkolj, ‘The Use of the ‘Disconnection Clause’ in International Treaties: What Does it tell us about the EC/EU as an Actor in the Sphere of Public International Law?’ (14 May 2008), available at SSRN: http://ssrn.com/abstract=1133002. 167 Opinion 1/03, n 152 above, para 154. 168 Art 54B(2)(a) of the Convention provides that the provisions of the latter apply in any event where the defendant is domiciled in the territory of the a Contracting State which is not an EU Member State and that Art 16 (on exclusive jurisdiction) and 17 (on the prorogation of jurisdiction) of the Convention confer a jurisdiction on the courts of a Contracting State which is not an EU Member State. Art 54(B)(2)(b) provides that the Convention rules on lis pendens or related actions apply to proceedings instituted in a Contracting State which is not an EU Member State and in a Contracting State which is an EU Member State. 164

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In the light of its line of reasoning and conclusion, Opinion 1/2003 was seen as ‘a bold assertion of exclusivity’.169 In the light of its effort to consolidate and clarify the principles governing the Union’s implied external competence, it may appear to introduce a broader assessment of whether the Union’s implied competence to conclude an international agreement is exclusive under the AETR principle. The implications of this reformulation are not clear. Interpreted literally, consideration for the future development of Union law in the area may extend the scope of the principle unduly. However, such an interpretation would be unwarranted and there is not much in the ruling itself to support it. In fact, the Court reminds us: [T]he [Union] enjoys only conferred powers and  …, accordingly, 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 [Union] law in force and from which it is clear that the conclusion of such an agreement is capable of affecting the [Union] rules.170

Furthermore, the specific context within which Opinion 1/03 was rendered should not be ignored. Not only did the Lugano Convention largely duplicate the content of the Brussels Regulation, but both measures were also about the development of a body of judicial authority which would be recognised and enforced within the territorial scope of their application. Furthermore, both measures were based on a system of rules and procedures which were detailed, coherent and developed. Therefore, whilst signifying ‘a bold assertion of exclusivity’, the approach in Opinion 1/03 needs to be examined in its proper context.171 The ruling in Opinion 1/03 was rendered thirty-five years following the judgment in AETR. During this time, this principle, along with the doctrine of necessity articulated in Opinion 1/76, was introduced, developed, adjusted to the Union’s constantly evolving constitutional framework, and applied to specific sets of circumstances. It is a testament to the dynamic nature of the Union’s idiosyncratic legal order that its institutions should have developed such a rich and multilayered presence in the world on the basis of constitutional principles which are shrouded in considerable ambiguity and the main tenets of which are articulated gradually and somewhat elliptically. And yet, it is regrettable that, after so may years, the Court should not resist the temptation to accompany its clarifications of the previous case-law with yet more ambiguity and to introduce new parameters in the application of exclusivity for the Union’s implied external competence.

10. FURTHER LIMITS ON IMPLIED COMPETENCE

The above analysis on the interpretation of the Union’s implied competence focused on the construction of exclusivity as this has been the aspect upon which the Court has placed considerable emphasis. However, there are also limits to the very existence of implied competence. This became clear in Opinion 2/94, where the Court dealt with

169 See M Cremona, ‘External Relations of the EU and the Member States: Competence, Mixed Agreements, International Responsibility, and Effects of International Law’ (2006) EUI Working Paper No 22, 5. 170 n 152 above, para, 124. 171 See Cremona, n 169 above.

124 Implied Competence the question of the Union’s accession to the European Convention on Human Rights.172 This should be examined in its legal context, which differs from the current one. At the time, human rights were protected solely as part of the Community’s general principles of law and there was no Charter of Fundamental Human Rights of the European Union. Following the entry into force of the Lisbon Treaty, the subject-matter of Opinion 2/94 is dealt with under Article 6(2) TEU, which endows the Union with express competence to accede to the Convention.173 The request for this Opinion was made by the Council and was focused on the compatibility of accession with the EU primary law. The significance of the issue discussed was illustrated by the fact that, in addition to the Commission and the European Parliament, 11 governments submitted observations. The ruling of the Court on the substance of the request was quite brief. First, it referred to the principle of conferred powers currently enshrined in Article 5 TEU and pointed out that it should be respected in both the internal and the international action of the Community. It, then, restated the main principles of implied powers with reference to Opinion 2/91 and pointed out 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.174

The Court went on to examine whether such competence might be based on the general clause of Article 308 EC (now Article 352 TFEU). That provision reads as follows: If action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community and this Treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, take the appropriate measures.

The Court was keen not to render Article 308 EC (now 352 TFEU) an instrument which would extend the Community’s competence unduly: That provision, being an integral part of an institutional system based on the principle of conferred powers, cannot serve as a basis for widening the scope of Community powers beyond the general framework created by the provisions of the Treaty as a whole and, in particular, by those that define the tasks and the activities of the Community. On any view, Article [308] cannot be used as a basis for the adoption of provisions whose effect would, in substance, be to amend the Treaty without following the procedure which it provides for that purpose.175

In its ruling, the Court emphasised the special significance of respect for human rights in Community law: not only was this expressly mentioned in the preamble to the Single European Act, as well as the TEU and the EC Treaty, but it had also been well established in the case-law of the Court. Indeed, fundamental human rights formed an integral part of the general principles of law the observance of which the Court ensures ‘by drawing

172 Opinion 2/94 (re: Accession of the European Communities to the European Human Rights Convention) [1996] ECR I-1759 173 At the time of writing, a draft agreement between the EU and the Council of Europe is being considered by the Court of Justice for its legality under EU law in accordance with Art 218(11) TFEU. On the accession, see P Gragl, The Accession of the European Union to the European Convention on Human Rights (Oxford, Hart Publishing, 2013). 174 n 172 above, para 27. 175 Ibid, para 30.

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inspiration from the constitutional traditions common to the member States and from the guidelines supplied by the international treaties for the protection of human rights on which the Member States have collaborated or of which they are signatories’.176 However, the fact that respect for human rights constituted a condition of the legality of Community law did not entail the Community’s competence to accede to ECHR: Accession to the Convention would  … entail a substantial change in the present Community system for the protection of human rights in that it would entail the entry of the Community into a distinct international institutional system as well as integration of all the provisions of the Convention into the Community legal order. Such modification of the system for the protection of human rights in the Community, with equally fundamental institutional implications for the Community and the Member States, would be of constitutional significance and would therefore be such as to go beyond the scope of Article [308]. It could be brought about only by way of Treaty amendment.177

In terms of the human rights policy of the Community, the ruling gave rise to a healthy academic debate.178 In terms of the construction of implied competence, the overall tone as well as the substance of the line of reasoning followed by the Court highlighted its emphasis on the limits of such powers. This was consistent with the overall tenor of the external relations case-law in the 1990s which was also more explicit in articulating the limits to the function and implications of external competence. In addition, the question of the limits of Community’s competence had recently acquired considerable weight following the ruling of the German Federal Constitutional Court in Brunner and its emphasis on the significance of the principle of conferred powers.179 Whilst ruling out the existence of implied competence in the area of human rights as primary law stood then, the Court was careful not to make a general pronouncement on the external competence of the Community to act in that area pursuant to Article 308 EC: having identified the limits imposed by the principle of limited powers upon the function of that provision, it proceeded to reject the Community’s competence to accede to the ECHR on the basis of its implications upon the constitutional and institutional system of the Union. This left open the question of reliance upon Article 308 EC for other external activities on human rights.180 It is not only constitutional limits which define the Union’s competence. The latter is also subject to the procedural rules set out in primary law and the powers which they allocate to different institutions in a manner which reflects the Union’s idiosyncratic constitutional order. These are explored in Chapter 4.

176

Ibid, para 33. Ibid, paras 34–35. 178 See AM Arnull, ‘Left to its Own Devices? Opinion 2/94 and the Protection of Fundamental Rights in the European Union’ in Dashwood and Hillion, n 7 above, 61; M Cremona, ‘The EU and the External Dimension of Human Rights Policy’ in S Konstadinidis (ed), A Peoples’ Europe—Tuning a Concept into Content (Aldershot, Ashgate, 1999) 155; and JHH Weiler and SC Fries, ‘A Human Rights Policy for the European Community and Union: The Question of Competences’ in P Alston (ed), The EU and Human Rights (Oxford, Oxford University Press, 1999) 147. 179 See n 36 above. 180 See L Bartels, Human Rights Conditionality in the EU’s International Agreements (Oxford, Oxford University Press, 2005) ch 7; E Cannizzaro, ‘The Scope of the EU Foreign Policy Power—Is the EC Competent to Conclude Agreements with Third States Including Human Rights Clauses?’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (The Hague, Kluwer, 2002) 296; Eeckhout, n 109 above, 86. 177

126 Implied Competence 11. INTERPRETING THE LISBON PROVISIONS ON EXTERNAL COMPETENCE Interpreting the Lisbon Provisions on External Competence

The analysis in this chapter began by setting out the provision of Article 216 TFEU about the circumstances under which the Union is endowed with the competence to conclude an international agreement and that of Article 3(2) TFEU about the circumstances under which such competence is exclusive. It was pointed out that the wording of both drew upon the case-law of the Court of Justice and its analysis ought to take that into account. It is recalled that Article 216 TFEU sets out the following four cases where the EU has external competence to conclude an international agreement: (a) where the Treaties so provide; (b) 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; (c) where the conclusion of an agreement is provided for in a legally binding act; (d) where the conclusion of an agreement is likely to affect common rules or alter their scope. The first case is straightforward and refers to the Union’s express external competence. The second appears to refer to the principle of necessity introduced in Opinion 1/76. However, examined against that principle and the case-law which has clarified its application, certain issues arise. On the one hand, it is recalled that the necessity principle has been interpreted extremely strictly so that it only applies where the conclusion of an international agreement is inextricably linked to the achievement of an objective for which an internal competence has been granted and which may not possibly be attained by establishing autonomous rules. In fact, so restrictively has the principle been construed that it has only been applied once, in the Opinion 1/76 which also introduced it. Any reference to this context is missing in Article 216 TFEU—and yet, this context is essential for our understanding of the principle. Interpreted literally, with no reference to the case-law of the Court, the second case in Article 216 TFEU might lead to broadening up the scope of the application of the necessity principle considerably. In relation still to case (b) above, Article 216 TFEU does not confine the application of the necessity principle to the specific objectives set out in a specific legal basis which confers on the Union a specific internal competence. Instead, it may suggest that any matter ‘within the framework of the Union’s policies’ which aims to achieve ‘one of the objectives referred in the Treaties’ may be seen rendering the conclusion of an international agreement ‘necessary’. Such interpretation would not only transform Article 216 TFEU into an autonomous substantive legal basis, but would also render the reference to express external competence in Article 216 TFEU redundant. It would also run counter to the case-law of the Court and would deprive the principle of necessity of its highly exceptional status.181 The third case set out in Article 216 TFEU appears to refer to a set of circumstances which was not articulated by the Court in the early 1970s in the context of either the AETR or the necessity principle. In fact, it was in Opinion 1/94 that the Court referred to secondary legislation providing for the conclusion of an international agreement. It is

181 See A Dashwood, M Dougan, B Rodger, E Spaventa and D Wyatt, Wyatt and Dashwood’s European Union Law, 6th edn (Oxford and Portland, OR, Hart Publishing, 2011) 920–21.

Interpreting the Lisbon Provisions on External Competence 127 recalled that, in ascertaining whether the conclusion of GATS fell within the exclusive competence of the Union. the Court stated that: Whenever the Community has included in its internal legislative acts provisions relating to the treatment of nationals of non-member countries or expressly conferred on its institutions powers to negotiate with non-member countries, it acquires exclusive external competence in the spheres covered by those acts.182

This was preceded by references to such measures.183 It is noteworthy that Article 216(1) TFEU refers only to the latter possibility envisaged by the Court (namely the express conferral in an internal legislative act of the competence to negotiate an agreement) and makes no reference to the former (ie the provision in a legislative act on the treatment of nationals of non-Member States). In any case, the formulation in Article 216 TFEU may appear to imply an unlimited power for the EU institutions to include in secondary measures provisions which would bestow upon the Union the competence to conclude international agreements. Such interpretation would ignore the specific context in Opinion 1/94 within which the Court made the above statement and which made it clear that the conclusion of international agreements was the necessary corollary for the application of internal market legislation.184 It would also run counter to the principle of conferred powers.185 The last case mentioned in Article 216 (1) TFEU appears to reflect the principle first set out in AETR. It is recalled that one of the characteristics of that judgment was the confusion between the existence and the nature of the Union’s implied external competence. Viewed from this angle, a reference to the principle in the context of the existence of external competence may be seen as introducing a degree of conceptual clarity lacking in the relevant case-law. And yet, if the conditions mentioned in Article 216(1) TFEU were met, ie if the conclusion of an international agreement ‘is likely to affect common rules or alter their scope’, then the competence of the Union to conclude would be exclusive. This is at the core of the AETR principle and this is precisely the issue with which the Court dealt in the Open Skies cases and in Opinion 2/03. Therefore, what Article 216(1) TFEU mentions as the foundation of the existence of the Union’s external competence is what the Court has viewed as the foundation of the Union’s exclusive competence. It is somewhat ironic that the introduction of a new provision aiming to codify a complex line of case-law has ended up complicating things further. Whilst Article 216(1) TFEU aims to set out the set of circumstances in which the Union has competence to conclude an international agreement, Article 3(2) TFEU sets out the three circumstances under which the EU has exclusive competence to do so: (a) where its conclusion is provided for in a legislative act of the Union; (b) where its conclusion is necessary to enable the Union to exercise its internal competence; 182

Opinion 1/94, n 89 above, para 95. For instance, Second Council Directive (89/646/EEC) of 15 December 1989 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions and amending Directive 77/780/EEC [1989] OJ L386/1. 184 In fact, Dashwood views this formulation as a case of the application of the principle of necessity and finds its inclusion in Article 216 TFEU ‘redundant and misleading’: n 181 above, 921. 185 See M Cremona, ‘The Union’s External Action: Constitutional Perspectives’ in G Amato, H Bribosia and B de Witte (eds), Genesis and Destiny of the European Constitution (Brussels, Bruylant, 2007) 1173, 1184. 183

128 Implied Competence (c) insofar as its conclusion may affect common rules or alter their scope. It becomes immediately apparent that the wording of the two provisions is similar, if not almost identical. Of the cases mentioned in Article 3(2) TFEU, the first corresponds to the dictum of the Court in Opinion 1/94, the second to the principle of necessity introduced by Opinion 1/76 and the third to the AETR principle (which are reflected by the third, second and last set of circumstances set out in Article 216(1) TFEU, respectively). And yet, there is no cross-reference between them in the Treaties, neither is there any indication of their application within the same substantive context. Their textual similarity notwithstanding, the provisions of Article 3(2) TFEU are not entirely identical to those of Article 216(1) TFEU. Article 3(2) TFEU provides for exclusivity in cases where the conclusion of an international agreement is laid down in a legislative act, whereas Article 216(1) TFEU provides for the existence of the Union’s external competence in cases where the conclusion of an agreement is provided for in a legally binding act. The term ‘legislative’ act has a specific meaning in the Lisbon Treaty and connotes any measure adopted by the EU institutions pursuant to the ordinary or a special legislative procedure.186 Another difference is about the articulation of the AETR principle (case (c) above): Article 3(2) TFEU provides for exclusive competence in cases where the conclusion of an agreement by the Union ‘may affect common rules or alter their scope’, whilst Article 216(1)TFEU refers to a situation where the conclusion of an agreement ‘is likely’ to produce such effect. Furthermore, in articulating the principle of necessity (case (b) above), Article 3(2) TFEU refers to the requirement that the conclusion of the agreement be necessary in order to enable the Union to exercise its internal competences, a provision that is missing from Article 216(1) TFEU. Given their largely similar wording, it is by no means clear what are the practical implications of these differences.187 The interpretation of Article 3(2) TFEU gives rise to problems similar to those set out above in relation to Article 216(1) TFEU. For instance, the articulation of the principle of necessity fails to convey the strict construction adopted by the Court over the years and the very specific context within which this has been applied. Read literally, this provision of Article 3(2) TFEU may appear to broaden up the scope of the Union’s exclusive competence to an extent which is clearly at odds with the genesis and interpretation of the principle of necessity. As for the articulation of the AETR principle, the wording of Article 3(2) TFEU, as well as that of Article 216(1) TFEU, appears to reverse the test introduced in the principle, namely whether the conclusion of an international agreement by the Member States, rather than the Union, would affect common rules or alter their scope. Similarly, there is nothing to suggest that the term ‘common rules’ ought to be defined along the lines suggested in the case-law of the Court. Interpreted literally, it may lead to increase the scope of the Union’s exclusive competence. There is another problem which emerges from the relationship between Articles 3(2) and 216(1) TFEU. Their textual similarity suggests that, whilst they are envisaged as serving different purposes, in fact they render the distinction between the existence and the nature of the Union’s external competence even more elusive. The analysis in this chapter has highlighted the distinct reluctance of the Court of Justice to dwell on this 186

See Art 289(3) TFEU. Craig argues that these are not significant: P Craig, The Lisbon Treaty—Law, Politics and Treaty Reform (Oxford, Oxford University Press, 2010) 400. 187

Conclusion

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distinction. And yet, in Opinion 1/03 the Court approached it with a degree of clarity. It is unfortunate that the Union’s primary rules should perpetuate the ambiguities which their drafting sought to address.188 It follows from the above that the interpretation of the Union’s primary rules on the competence to conclude international agreements is far from straightforward. On the one hand, they conflate the issue of the existence and nature of external competence by couching the relevant provisions in largely similar terms. On the other hand, if construed independently from the case-law of the Court of Justice, they may give rise to exclusivity in cases where the Member States never envisaged the Union to exercise such competence. However, a literal interpretation of Articles 216(1) and 3(2) TFEU, independently from the Court’s case-law so far, and the ensuing broadening up of the Union’s external competence would be inconsistent with the intentions of the drafters of the Treaties and would raise questions for the constitutional balance of power in the Union’s carefully calibrated legal order. Therefore, it is unlikely. This state of affairs may be inevitable where primary law seeks to capture the application of legal principles developed over the years by the judiciary. These principles are still developing incrementally in Luxembourg and the primary law as set out in the Lisbon Treaty does not make it clear how it relates to this process. The case-law on external relations has developed incrementally, changing its emphasis in order to respond to the evolving constitutional order of the Union and the changes in the European and international political landscape, and seeking to strike the balance between legal principle and pragmatism. In the light of the increasing interdependence of the globalised community, the interactions between the economic, political and social dimensions of international challenges, the emphasis which the Union has placed on its international role more recently and the wider range of activities it is prepared to carry out, the external relations case-law of the Court of Justice is constantly evolving. In their effort to reflect the law as it stands, Articles 216(1) and 3(2) TFEU fail to capture the subtlety and the dynamic nature of the Court’s interpretation of competence and risk introducing generalisations in an area that least requires them. Their drafting underlines further the role of the Court of Justice in this area. Already responsible for both the genesis and development of the principles governing implied external competence, the Union’s judiciary is now expected to introduce some order and clarity in the disorder that the drafters of the Treaties imposed in their effort to clarify the state of the law.

12. CONCLUSION Conclusion

The legal rules governing the existence and exercise of the Union’s implied external competence are complex; so much so that any attempt to reformulate them succinctly without reference to their specific legal and factual context runs the risk of missing the subtleties of their construction. This is illustrated by the relevant provisions of the TFEU. It is a measure of the complexity of their articulation that, whilst deeply entrenched in our EU law vocabulary, their fundamental aspects still remain somewhat contested. It is due to this complexity and the controversy it still generates that this chapter 188 See also G de Baere, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008) 70.

130 Implied Competence engaged in a detailed analysis of the relevant case-law. The approach of the Court to EU international relations emerges as pragmatic: its emphasis is on the intrinsic link between the nature of the implied competence of the Union and the content of the internal policies, the objectives of the Union at the core of the construction of the issue of competence, and the strict construction of the doctrine of necessity. And yet, pragmatism, accurate though it is in this context, does not quite capture the subtleties of the overall approach to the conduct of EU international relations. It is not only what is sensitive in political terms or desirable in practical terms that appears to be addressed in the case-law. As the scope of internal legislation constitutes the criterion for exclusivity externally, it follows that the construction of the nature of implied competence will require continuous redefinition. This in itself renders the exercise of external competence a matter of a constantly evolving legal context. However, it is not only the construction of competence which renders the conduct of EU international relations dynamic in nature: it is also the rapidly evolving international climate where regulation becomes steadily globalised and the areas it seeks to cover not only diverse but also increasingly interdependent. As exclusivity becomes a concept requiring constant redefinition, the Union institutions and the Member States should draw their attention to the management of their parallel presence on the international scene. It is recalled that, in the context of the case-law examined in this chapter, even the confirmation of the Union’s exclusive competence did not necessarily exclude the Member States as a matter of practice. In fact, the case-law examined in this chapter alludes to the need for the effective management of the parallel existence of the EU and the Member States in international relations by emphasising the role of the duty of cooperation in areas where the EU is not exclusively competent to act. This is an area with its own complexities and will be examined in Chapter 5.

Decision-making in EU International Relations

4 Decision-making in EU International Relations 1. INTRODUCTION Introduction

T

HE ANALYSIS IN Chapters 2 and 3 examined the circumstances under which the European Union may exercise its external competence and the legal and policy issues raised by the choice of its institutions to do so. This chapter focuses on the procedural rules that govern what the Union does in the world. These shape the ways in which the Union may exercise its external competence and impose procedural constraints on the EU’s external action. As their foundation lies on the EU primary rules, they constitute internal constraints which are to be added to the substantive limitations on the exercise of treaty-making power.

2. CCP DECISION-MAKING CCP Decision-making

The main rules governing decision-making concerning the CCP were originally extremely straightforward: the Council decided by majority voting whilst the European Parliament had no formal role. In fact, it was the simplicity of the procedure, along with the exclusive nature of the Union’s competence, which rendered the CCP such an attractive framework for the conduct of foreign affairs according to the Commission’s view. The amendments introduced at Nice tinkered with this model and introduced exceptions from the principle of majority voting. Whilst it maintains certain exceptions, the Lisbon Treaty simplifies them considerably. It also formalises the role of the European Parliament and the considerable increase of its powers. The procedure for the adoption of autonomous measures is laid down in Article 207(3) TFEU. This reads as follows: The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall adopt the measures defining the framework for implementing the common commercial policy.

The application of the ordinary legislative procedure is introduced at Lisbon for the first time. Its provision brings the CCP into the mainstream of other EU policies in terms of decision-making. In doing so, it maintains the qualified majority voting at the Council and effectively renders the European Parliament co-legislature. This is a significant change, given that under all previous constitutional arrangements, from the Treaty of Rome up to and including the Nice Treaty, the Parliament was not mentioned at all in relation to the CCP. Whilst its input was sought by the Council and the Commission 133

134 Decision-making in EU International Relations as a matter of practice, at no point was this formalised in primary rules. Therefore, the change introduced at Lisbon changed the status of the Parliament fundamentally. This development and its implications are examined in detail below. Whilst it refers specifically to the adoption of ‘measures defining the framework for implementing the common commercial policy’, Article 207(3) TFEU does not define this type of measure. The only other context in which this wording is used is in relation to humanitarian aid.1 There is no indication as to how the term ‘framework measures’ is to be interpreted,2 but it is assumed that it defines measures which set out the main parameters of the Union’s approach to external trade. As for the implementation of such measures, it is to be carried out by measures adopted under the procedure provided for the implementing acts generally which is laid out in Article 291(2) TFEU. This procedure grants the Commission implementing powers and only exceptionally does it enable the Council to exercise such powers.3 The Lisbon Treaty amended the rules on implementing acts so that the Commission acts under the control of the Member States, rather than the Council and the Parliament. This amendment is laid down in Article 291(3) TFEU and necessitated a change in the legal regime pursuant to which the Commission exercised its implementing powers. This change was brought about by Regulation 182/2011.4 In 2014, the Council extended the application of this system to the CCP by adopting Regulation 37/2014 (the ‘Omnibus I Regulation’).5 Decision-making by the Council is by qualified majority voting. This applies both to the adoption of autonomous framework measures under Article 207(2) TFEU and the negotiation and conclusion of international agreements pursuant to Article 207(4) subparagraph 1 TFEU. In relation to international agreements in particular, the other aspects of decision-making, such as the interaction between the Commission and the Council, are laid down in Article 207(3) TFEU. This will be analysed later in this chapter. There are three exceptions to this principle where decision-making at the Council is by unanimity. The first case is the negotiation and conclusion of international agreements in the fields of trade in services, the commercial aspects of intellectual property and foreign direct investment ‘where such agreements include provisions for which unanimity is required for the adoption of internal rules’ (Article 207(4) subparagraph 2 TFEU). The unanimous adoption of internal rules on services is still provided in areas for which the 1 Art 214(3) TFEU provides that the Parliament and the Council, ‘acting in accordance with the ordinary legislative procedure, shall establish the measures defining the framework within which the Union’s humanitarian aid operations shall be implemented’. 2 See R Gosalbo Bono, ‘The Organization of the External Relations of the European Union in the Treaty of Lisbon’ in P Koutrakos (ed), The European Union’s External Relations a Year after Lisbon (2011) CLEER Working Paper No 3, 13, 18. 3 See Art 291(2) TFEU which refers to ‘duly justified specific cases and in the cases provided for in Articles 24 and 26’ TEU, the latter referring to the CFSP. For an overview of this provision, see P Craig, EU Administrative Law, 2nd edn (Oxford, Oxford University Press, 2012) 126 et seq; H Hofmann, ‘Legislation, Delegation and Implementation under the Treaty of Lisbon: Typology Meets Reality’ (2009) 15 European Law Journal 482; and R Schütze, ‘Delegated’ Legislation in the (New) European Union: A Constitutional Analysis’ (2011) 74 Modern Law Review 661, 687 et seq. 4 Reg 182/2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers [2011] OJ L55/13. 5 Reg 37/2014 amending certain regulations relating to the common commercial policy as regards the procedures for the adoption of certain measures [2014] OJ L18/1. For similar amendments to the regime governing the exercise of delegated powers by the Commission, see Reg 38/2014 amending certain regulations relating to the common commercial policy as regards the granting of delegated and implementing powers for the adoption of certain measures [2014] OJ L18/52.

CCP Decision-making

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establishment of the internal market and development of European integration have yet to assuage national concerns, such as tax harmonisation pursuant to Article 113 TFEU. They also cover Treaty provisions the wording of which has been deemed by Member States to be too broad, such as Article 115 TFEU on the approximation of national laws and the residual clause of Article 352 TFEU. Unanimity is also required under Article 64(2) TFEU on movement of capital to and from third countries when new restrictions are introduced.6 This provision maintains a degree of procedural parallelism between international and internal decision-making. It is recalled that one of the main points made by the Court of Justice in Opinion 1/94 was that the CCP procedures should not be relied upon in order to circumvent the decision-making rules which govern the adoption of internal legislation under the Treaty. By aligning the procedural requirements laid down for the conclusion of an international agreement in the areas mentioned in Article 207(4) subparagraph 1 TFEU, this provision reflects the logic articulated by the Court with stark clarity in its seminal ruling. The second exception to the qualified-majority rule applies for the negotiation and conclusion of international agreements ‘in the field of trade in cultural and audiovisual services, where these agreements risk prejudicing the Union’s cultural and linguistic diversity’ (Article 207(4)(a) TFEU). This is the so-called cultural exception and has found its place in primary law, albeit in different form, since the first time when services were covered expressly by the CCP. In fact, the Lisbon Treaty confines the cultural exception to decision-making. This is in contrast to the Nice Treaty, according to which trade in cultural and audiovisual services fell within the scope of the shared competence of the Union and the Member States and the negotiation of international agreements covering them was subject to the common accord of the Member States.7 Therefore, under the pre-existing constitutional arrangements, this particular type of services occupied a sui generis position within the CCP as it deviated from its most fundamental legal characteristics. Whilst maintaining a cultural exception, by circumscribing its scope considerably, the Lisbon Treaty reflects the normalisation of the position of services within the contours of the CCP. The cultural exception ought to be understood in the light of the political sensitivity which underpins its retention in the Union’s primary rules. Its main proponent is France and the passion and commitment with which it is protected cannot be overstated. However, the wording of Article 207(4)(a) TFEU rules out an overly broad interpretation of this exception. As it is confined to a particular set of circumstances, namely where the agreement ‘risk[s] prejudicing the Union’s cultural and linguistic diversity’, its application requires an assessment of whether the latter condition is met. To characterise such an assessment as difficult would be an understatement. The Treaty provides no guidance as to how to define ‘the Union’s cultural and linguistic diversity’. The only other context where this term is used is in Article 3(3) subparagraph 4 TEU where respect for the EU’s ‘rich cultural and linguistic diversity’ is included in the Union’s objectives.8 Given 6 Under the Nice Treaty, unanimity also applied ‘where it relates to a field in which the Community has not yet exercised the powers conferred upon it by this Treaty by adopting internal rules’ (ex Art 133(5)(2) EC). 7 ex Art 133(6) subpara 2 EC. It is recalled that common accord is the most onerous voting procedure for decision-making, as an abstention prevents the adoption of a rule; this is not the case with unanimity, which merely connotes the absence of negative votes (see Art 238(4) TFEU). 8 Art 165(1) TFEU, on the other hand, refers to the cultural and linguistic diversity of the Member States and their right to protect it in the context of education policy.

136 Decision-making in EU International Relations the paucity of criteria of its definition, and the politically sensitive nature of the overall issue, the assessment of whether the condition set out in the Treaty is met may appear inherently indeterminate. And yet, it is subject to interpretation by the Court of Justice. Quite how charged is the context within which Article 207(a) TFEU applies is illustrated by the process of negotiation of a trade agreement between the EU and the USA. Prepared carefully over the years and touted as potentially the most important trade partnership ever,9 the two parties started negotiating a Transatlantic Trade and Investment Partnership in July 2013. However, there was considerable disagreement between Member States as to the content of the negotiating directives given to the Commission by the Council. In particular, the French government was adamant that the regulation of trade in cultural and audiovisual services would be excluded from the negotiations. The issue attracted considerable publicity. Alain Juppé, a former Prime Minister and Foreign Secretary, called the President of the European Commission José Manuel Barroso ‘archaic’ for his unsympathetic approach to trade relations.10 Wim Wenders, the German director of two wonderful films, Paris, Texas and The Wings of Desire, and many other unwatchable ones, stated that dropping the cultural exception would be tantamount to ‘burning our books, closing our museums, cutting our thumbs, sacrificing our first-born, rebuilding the Berlin Wall’.11 A compromise was finally reached, whereby audiovisual services would not be part of the mandate, but it would be possible for the Commission to request additional negotiating directives from the Council at a later stage.12 The seriousness of the French commitment to protect the cultural exception becomes all the more apparent in the light of the considerable importance that both the EU and the US leadership attach to the successful conclusion of the Agreement—so much so that US President Barack Obama referred to it expressly and in strong terms in his 2013 State of the Union Address.13 The third exception to the qualified majority voting rule applies to the negotiation and conclusion of international agreements 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 133(4)(b) TFEU). The political sensitivity of these types of services is apparent and is also reflected by the legal rules and procedures that govern the adoption of internal rules too. For instance, EU law respects the responsibilities of the Member States to define their health policy and determine how best to organise and deliver health services and medical care.14 It also respects the responsibility of Member States for the content and organisation of vocational training.15 As is the case with the cultural exception, the

9 According to a study by the UK-based Centre for Economic Policy Research, a deal could benefit the EU’s economy by €119 bn a year and that of the United States by €95 bn: see https://www.gov.uk/government/ uploads/system/uploads/attachment_data/file/198115/bis-13-869-economic-impact-on-uk-of-tranatlantic-tradeand-investment-partnership-between-eu-and-us.pdf. 10 Financial Times, 3 July 2013, 6. 11 ‘Charlemagne: L’Exception Française’ The Economist, 14 June 2013, 38. 12 ‘The Commission will, in a spirit of transparency, regularly report to the Trade Policy Committee on the course of negotiations. The Commission, according to the Treaties, may make recommendations to the Council on possible additional negotiating directives on any issue, with the same procedures for adoption, including voting rules, as for this mandate’ (MEMO/13/564, Brussels, 15 June 2013). 13 See www.whitehouse.gov/state-of-the-union-2013. 14 Art 168(7) TFEU. 15 Art 166(1) TFEU.

International Agreements 137 application of Article 207(4)(b) TFEU is subject to conditions the assessment of which is fraught with problems.

3. INTERNATIONAL AGREEMENTS International Agreements

The main procedural rules which govern the assumption of international obligations pursuant to international agreements by the Union are set out in Article 218 TFEU. These apply to all agreements except, partly, for those concluded in the context of the CCP and agreements on monetary policy (which are governed by Article 219 TFEU). Therefore, Article 218 TFEU becomes the main locus for the procedural rules which govern the Union’s treaty-making activities in relation to almost all the strands of its external action.16 This development reflects at the procedural level the theme of integration that underpins the constitutional revamping put forward by the Lisbon Treaty. The question of what constitutes an international agreement has been answered broadly by the Court. In relation to the Understanding on a Local Cost Standard, negotiated under the auspices of the OECD, it ruled that ‘the formal designation of the agreement envisaged under international law is not of decisive importance’. The Court pointed out that ex Article 300 EC (now Article 218 TFEU) ‘uses the expression in a general sense to indicate any undertaking entered into by entities subject to international law which has binding force, whatever its formal designation’.17 In essence, the intention of the parties is the decisive criterion for determining whether or not a document is binding. In annulment proceedings brought in Case 233/02 France v Commission the Court examined the nature of a document entitled ‘Guidelines on Regulatory Cooperation and Transparency’.18 This was drawn up between the Commission and the US authorities in the context of the Transatlantic Economic Partnership Action Plan. The French government argued that the Commission was not competent to conclude the contested measure because, under ex Article 300 EC (now Article 218 TFEU), the conclusion of international agreements is a matter falling within the competence of the Council. In its judgment, the Full Court rejected that argument. It noted that the intention of the parties left no doubt as to the non-binding nature of the Guidelines. Therefore, their conclusion fell beyond the scope of ex Article 300 EC. By focusing on the nature of the measure as the criterion for the applicability of Article 218 TFEU, the Court is adopting a functional approach to the scope of that provision. This is not unique in the case-law on international relations. It is recalled, for instance, that in the case-law on direct effect, the possibility of relying on directives as against the state or the emanation of the state is dependent upon the specific functions and status of the body in question rather than its designation under national law.19

16 Dashwood describes Art 218 TFEU as the ‘procedural code’ of the EU’s treaty-making: A Dashwood, M Dougan, B Rodger, E Spaventa and D Wyatt, Wyatt and Dashwood’s European Union Law, 6th edn (Oxford, Hart Publishing, 2011) 936. 17 Opinion 1/75 (re: OECD Local Cost Standard) [1975] ECR 1355, 1359–60 reaffirmed in Case C-327/91 France v Commission [1994] ECR I-3641, para 27. 18 Case C-233/02 France v Commission [2004] ECR I-2759. 19 See Case C-188/89 Foster and others v British Gas plc [1990] ECR I-3313, para 18. See P Craig and G de Búrca, EU Law, 5th edn (Oxford, Oxford University Press, 2011) 196–99.

138 Decision-making in EU International Relations 4. NEGOTIATION OF INTERNATIONAL AGREEMENTS Negotiation of International Agreements

Article 218(2) TFEU provides that international agreements may be negotiated by the Union only following authorisation by the Council. In fact, it is the latter which is responsible not only for the authorisation of the opening of negotiations, but also for the adoption of negotiating directives, the authorisation of the signing of agreements and for their conclusion. In other words, the Council is responsible for any stage in the life of an international agreement which would bind the Union towards its international interlocutors.

4.1 Who Proposes the Negotiation of International Agreements? The negotiation itself of international agreements is carried out by the Commission or the High Representative of the Union for Foreign Affairs and Security Policy who are responsible for recommending to the Council whether an agreement should be negotiated.20 Article 218(3) makes a distinction: the High Representative will propose the negotiation ‘where the agreement envisaged relates exclusively or principally to the common foreign and security policy’; in all other cases, it follows that it is the Commission which will make the proposal. Therefore, the delineation of the scope of an international agreement determines the institutional actor responsible for proposing the negotiation of the agreement. The principle underpinning this formulation and its expression in Article 218(3) TFEU reflects the case-law of the Court of Justice. In cases where an international agreement covers different areas in which the Union is endowed with different powers, the Court identifies the correct legal basis for the negotiation and conclusion of the agreement by examining which area forms the predominant part of the agreement.21 The provision of Article 218(3) TFEU also acknowledges the likelihood of the Union negotiating agreements the subject-matter of which would be covered by different types of competence. The role of the High Representative is envisaged in this provision in the light of the distinct nature of the competence of the Union to conduct its CFSP and CSDP from the other types of competence set out in the Treaties, as well as the rule that the conduct of the latter is ‘subject to specific rules and procedures’.22 However, to ascertain whether an agreement is ‘exclusively or principally’ about the CFSP is by no means a straightforward exercise. Two points are worth making. First, the difficulty of determining whether an international agreement ‘relates exclusively or principally’ to a given policy is illustrated with painful clarity by past experience in relation to agreements with no CFSP dimension. For instance, inter-institutional disputes about

20

Art 218(3) TFEU. In the case of agreements with both trade and environmental policy implications, for instance, see Opinion 2/00 (re: Cartagena Protocol on Biosafety) [2001] ECR I-9713; Case C-281/01 Commission v Council (re: Energy Star Agreement) [2002] ECR I-12049; Case C-94/03 Commission v Council [2006] ECR I-1; Case C-178/03 Commission v Parliament and Council [2006] ECR I-107; and Case C-411/06 Commission v Council and Parliament [2009] ECR I-7585. 22 Art 24(1) subpara 2 TEU. 21

Negotiation of International Agreements 139 the extent to which international agreements relate to trade or environmental policy have been frequent, and the case-law of the Court of Justice not easy to follow or apply.23 Secondly, the very nature of the CFSP renders the application of Article 218(3) TFEU even more complex. Quite apart from the fact that the scope of the CFSP is construed in strikingly broad terms in the Treaties,24 the notion of security, which underpins the conduct of the CFSP in general and the CSDP in particular,25 is also construed broadly by the EU institutions.26 Therefore, its multifarious dimensions are linked to other EU external policies, such as development, trade, environment, energy, humanitarian aid and organised crime. These links are made clear in the European Security Strategy,27 and also emerge in the 2008 Report on the Implementation of the European Security Strategy.28 The increasingly direct interactions between security and other external policies are also acknowledged in policy documents which were adopted in order to enhance the ensuing need for coherence in decision-making and implementation, a case in point being development and humanitarian aid.29 To acknowledge these interactions is to accept that, to a considerable extent, the EU external action has a distinct security dimension, and that the Union’s security and defence policy is instrumental in the effective conduct of the other strands of the Union’s external action. The above analysis suggests that the application of the provision laid down in Article 218(3) TFEU may be fraught with problems. An argument against this scepticism may be the specificity of security and defence policy. In other words, it may be argued that, its broad construction notwithstanding, security and defence policy lack the degree of osmosis which characterises trade and environment. In relation to the proliferation of small arms and light weapons, for instance, the Court of Justice referred to the grant of political support for a moratorium or the collection and destruction of weapons as measures which ‘fall rather within action to preserve peace and strengthen international security or to promote international cooperation, being CFSP objectives stated in [primary law]’.30 This may seem to suggest that, even in the light of the multifarious links between the CFSP and other EU external policies and the ensuing difficulty of defining their respective scope, one would be able to recognise the objectives of the former. However, the very dispute in ECOWAS, and the judgment rendered by the Court of Justice, suggest that this, almost intuitive, approach would be misguided. This issue is further explored in Chapter 14. It follows that the determination of who makes the proposal to the Council for the initiation of negotiation of an international agreement may be contentious. The institutional configuration of the High Representative, in terms of her role as Vice President of the Commission, may, in fact, reduce the scope for disputes. In other words, given

23 See the analysis in Chapter 2. See also P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 42 et seq. 24 Art 24(1) TEU. 25 Art 42(1) TEU provides that the CSDP ‘shall be an integral part of the common foreign and security policy’. 26 See P Koutrakos, The EU Security and Defence Policy (Oxford, Oxford University Press, 2013) ch 4. 27 A Secure Europe in a Better World—European Security Strategy (Brussels, 12 December 2003). 28 Providing Security in a Changing World—Report on the Implementation of the European Security Strategy (Brussels, 11 December 2008). 29 See The European Consensus on Development [2006] OJ C646/1, and The European Consensus on Humanitarian Aid [2008] OJ C25/1. 30 Case C-91/05 Commission v Council (re: ECOWAS) [2008] ECR I-3651, para 105.

140 Decision-making in EU International Relations that any agreement would be negotiated by a Commission member anyway, whether that person would be the High Representative or another Commissioner might be considered of secondary importance. However, this is not the case. It is precisely because of the different functions of the High Representative that the question of who proposes the negotiation of an agreement is bound to be scrutinised closely by the Council. It is interesting, in this respect, that an early draft of what is now Article 218(3) TFEU, in its previous incarnation in the Treaty Establishing a Constitution for Europe, provided for a joint recommendation from the Commission and the Union Minister for Foreign Affairs.31 However, this possibility did not find its way into the text of the Treaties.32

4.2 What Form Should the Decision Authorising the Negotiation Take? Another issue about this juncture of the procedure is the form and content of the Council Decision authorising the negotiation of an international agreement. This may arise in cases where the Council believes that an agreement for which the Commission has requested an authorisation to negotiate falls within the competence of both the EU and the Member States. Does Article 218(2) TFEU provide the legal basis for a decision adopted both by the Council and the Representatives of the Member States meeting in the Council to authorise the negotiation of the agreement in question? This question has arisen in Case C-114/12 Commission v Council in relation to the negotiation of a Convention of the Council of Europe on the protection of the rights of broadcasting organisations. The Commission’s proposal was based on the assumption that the Union was exclusively competent to negotiate and conclude the Agreement. The Council differed and, in a decision adopted along with the Representatives of the Member States meeting in the Council in December 2011, it authorised the Commission to negotiate on behalf of the Union as regards matters falling within the EU’s competence and the Member States to participate on their own behalf in relation to matters falling within their competence. The Commission brought an annulment action against the Decision, arguing that it violated the procedure and the conditions for authorising negotiations of international agreements by the EU, the voting rules in the Council, the objectives of the Treaties and the principle of sincere cooperation. In her Opinion, Advocate General Sharpston agreed that the provisions of Article 218 TFEU had been violated, as the latter is exclusively about the right of the Council to authorise the negotiation of an international agreement by the EU.33

4.3 Who Negotiates International Agreements? A related issue is about the negotiator of an international agreement. Article 218(3) TFEU provides that, once it has received the proposal from the Commission, the Council 31 CONV 685/03 Draft Articles on External Action in the Constitutional Treaty (Brussels, 23 April 2003), Art 33(3). 32 See R Passos and S Marquardt, ‘International Agreements—Competences, Procedures and Judicial Control’ in G Amato, H Bribosia and B De Witte (eds), Genesis and Destiny of the European Constitution (Brussels, Bruylant, 2007) 875, 900. 33 Case C-114/12 Commission v Council, ECLI:EU:C:2014:2151, Opinion of AG Sharpston, delivered on 3 April 2014.

Negotiation of International Agreements 141 nominates ‘the Union’s negotiator or the head of the Union’s negotiating team’. The reference to ‘the Union’s negotiator’ and ‘the Union’s negotiating team’ finds its way in the text of the Treaties for the first time at Lisbon. This formulation is vague and lacking in detail as to which institutional actor is to negotiate each type of agreement. The choice of words is intended be broad enough to cater for all the permutations of representation which the subject-matter of an agreement might require in the process of its negotiation on behalf of the EU. It follows from the structure and logic of Article 218(3) TFEU that, if it is principally or exclusively related to the Union’s policies other than the CFSP/CSDP, then it is to be negotiated by the Commission; if it is exclusively or principally related to the CFSP/CSDP, it is to be negotiated by the High Representative; if it is related to both the CFSP/CSDP and other EU policies, then, in principle, it is to be negotiated by both the Commission and the High Representative.34 In effect, the provision for a negotiating team follows from the abolition of the pillar structure of the Union, the deletion of the separate treaty-making procedure set out therein,35 and the introduction of a single procedure for treaty-making by the EU. In doing so, the reference to the Union’s negotiating team in Article 218(3) TFEU addresses the concern that the distinct nature of the CFSP/CSDP may be overlooked in cases where a CFSP/CSDP dimension, while not central, is present in an agreement pertaining mainly to other EU policies, and which, therefore, is to be negotiated by the Commission. The existence of a negotiating team ensures the participation of the High Representative, and is therefore intended to safeguard the special interests which underpin the CFSP/CSDP. This does not answer the question: who is the head of the negotiating team in any given case? The formulation of Article 218(3) TFEU leaves this question open. A requirement that the head should be the High Representative even if the CFSP/CSDP dimension is incidental would be unduly formalistic. Given that the High Representative would participate in the negotiating team, it is entirely proper that the determination of the centre of gravity of the agreement’s scope also determines the head of the team appointed to negotiate that agreement. To that effect, the logic of the Court’s case-law on the conclusion of international agreements serving a variety of objectives may be applied: if the agreement relates principally to the CFSP/CSDP, the High Representative would be appointed as the head of the negotiating team; if that dimension is marginal, it would be the Commissioner responsible for the policy area which covers the main thrust of the agreement who would head the negotiating team.36 Another consideration which favours this view is the role of the Commission set out in Article 17(1) TEU, according to which, with the exception of the CFSP, the Commission ‘shall ensure the Union’s external representation’. The analysis so far suggests that, given the constitutional idiosyncrasies of the Union and the complexities of treaty-making, the interpretation and application of Article 218(2)–(4) TFEU are far from uncontroversial. This was illustrated clearly by the dispute between the Commission and the Member States in relation to the Union’s participation in the negotiations for an internationally binding instrument on the use of mercury under the auspices of the UN Environment Programme. In July 2009 the Commission 34 See also M Gatti and P Manzini, ‘External Representation of the European Union in the Conclusion of International Agreements’ (2012) 49 Common Market Law Review 1703, 1708–09. 35 Ex Art 24 TEU. 36 See also Gosalbo Bono, n 2 above, 32.

142 Decision-making in EU International Relations submitted its proposal, which was based on the assumption that the Union was exclusively competent to negotiate such an instrument. The Council did not share this view, as it argued that the scope of the negotiations fell within both EU and national competence and, therefore, they should be carried out by both the Commission and the Presidency. When it became apparent that the Council would adopt a decision along with the Representatives of the Member States acting within the Council, the Commission withdrew its proposal. It is noteworthy that no provision for withdrawal is made in Article 218 TFEU. For the next few months, the Member States and the Commission engaged in an antagonistic and public effort before the intergovernmental negotiating committee set up by the UN Environment Programme to protect their speaking prerogatives.37 A compromise was reached in November 2010 whereby the Commission was authorised to negotiate on behalf of the Union for matters falling in the latter’s competence. The negotiations led to the adoption of an agreement in January 2013. This episode reflects the legal and political difficulties which underpin any efforts of the drafters of the Treaties to draw up comprehensive and exhaustive arrangements about treaty-making. This is all the more so given the absence of any substantive disagreement between the Commission, the Council and the Member State about the urgent need for mercury to be regulated at international level.

4.4 How Are International Agreements Negotiated? As mentioned above, once the Council has decided to authorise the initiation of negotiation of an international agreement, it also adopts the relevant negotiating directives.38 It may also ‘designate a special committee in consultation with which the negotiations may be conducted’.39 The negotiating directives are confidential. It is clearly apparent that publicising the negotiating objectives of the Union would not enhance the bargaining power of its negotiator. This practice seems to have been broken recently when an activist network got hold of the negotiating directives issued by the Council in relation to the Transatlantic Trade and Investment Partnership (TTIP) which it then made available on its website.40 The negotiation of TTIP has attracted considerable criticism which focused on its implications for social interests and the perceived lack of transparency with which the Commission carried out its mandate. So intense has the reaction been that the Commission declassified its negotiating mandate and released a number of negotiating documents. The Lisbon Treaty strengthens considerably the role of the European Parliament in decision-making in external relations. Article 218(10) TFEU provides that the Parliament ‘shall be immediately and fully informed at all stages of the procedure’. The Declaration on political accountability by the High Representative of the Union for the Foreign 37 See the detailed analysis in G De Baere, ‘Mercury Rising: The European Union and the International Negotiations for a Globally Binding instrument on Mercury’ (2012) 37 European Law Review 640 who describes this episode as ‘unedifying’ (653). 38 Art 218(2) TFEU. 39 Art 218(4) TFEU. 40 The text of the directives was leaked by this NGO: www.s2bnetwork.org/fileadmin/dateien/downloads/ EU-TTIP-Mandate-from-bfmtv-June17-2013.pdf

Negotiation of International Agreements 143 Affairs and Security Policy, accompanying the Council Decision on the establishment and functioning of the European External Action Service,41 makes it clear that this provision covers CFSP agreements too.42 The wording of Article 218(10) TFEU is sufficiently broad to cover the negotiating stage too. It is also sufficiently strong to suggest that the obligation to consult the Parliament may not be a mere formality. This is borne out by the general duty of cooperation which binds all institutions in their interactions, as set out in Article 13(3) TEU. The scope of the duty set out in Article 218(10) TFEU was explored in Case C-658/11 European Parliament v Council.43 This was about the conclusion of a transfer agreement between the EC and Mauritius. The Council sent the Parliament the decision concluding the agreement more than three months after its adoption and the signing of the agreement, and 17 days after its publication. The Court held that the right of the Parliament to be informed under Article 218(10) TFEU ‘is an expression of the democratic principles on which the European Union is founded’.44 It ruled that the exclusion of the Parliament from the decision-making procedure which governs the negotiation and conclusion of CFPS agreements does not rule out the Parliament’s rights of scrutiny: If the Parliament is not immediately and fully informed at all stages of the procedure in accordance with Article 218(10) TFEU, including that preceding the conclusion of the agreement, it is not in a position to exercise the right of scrutiny which the Treaties have conferred on it in relation to the CFSP or, where appropriate, to make known its views as regards, in particular, the correct legal basis for the act concerned. The infringement of that information requirement impinges, in those circumstances, on the Parliament’s performance of its duties in relation to the CFSP, and therefore constitutes an infringement of an essential procedural requirement.45

The Court held that the Council violated its duty under Article 218(10) TFEU and gave short shrift to its argument that, whilst slightly longer than usual, this period was still reasonable, given that it included the summer break. In 2010, almost a year following the entry into force of the Lisbon Treaty, the Parliament and the Commission adopted a Framework Agreement on their relations.46 Having made it clear that the duty of Article 218(10) TFEU applies not only to the process of the negotiation of an international agreement but also that of the definition of negotiating directives,47 it provides that the Commission would forward information to the Parliament ‘in sufficient time for it to be able to express its point of view if appropriate, and for the Commission to be able to take the Parliament’s views as far as possible into account’.48 Such information is normally provided to the responsible parliamentary committee and, ‘where appropriate’, at a plenary sitting.49 Inevitably, this interaction between the two institutions gives rise to issues of confidentiality.50 These are dealt with on the

41

Council Dec 2010/427/EU [2010] OJ L201/30. [2010] OJ C210/1 (and corrigenda in [2010] OJ C217/12) para 2. 43 Case C-658/11 European Parliament v Council ECLI:EU:C:2014:2025. 44 Ibid, para 81. 45 Ibid, para 86. 46 [2010] OJ L304/47. 47 Point 23. 48 Point 24. 49 Ibid. 50 See D Curtin, ‘Official Secrets and the Negotiation of International Agreements: Is the EU Executive Unbound?’ (2013) 50 Common Market Law Review 423, 443 et seq. 42

144 Decision-making in EU International Relations basis of ‘appropriate procedures and safeguards’51 determined on the basis of principles set out in Annex II to the Framework Agreement. Following the conclusion of the Framework Agreement, the Parliament amended its own security rules in order to dispel any concerns that the Commission and the Council may have about giving it access to classified and sensitive information.52 Similarly, it has also concluded with the Council an inter-institutional agreement about the handling of classified information.53 The temporal scope of the Commission’s duty to provide information is broad—it applies from the time the draft negotiating directives are presented to the Council, covers the entire period during which the agreement is negotiated, and extends to its initialling,54 its provisional application,55 suspension56 and modification.57 As for the material scope of the interactions between the two institutions, the Framework Agreement construes them widely: in relation to the negotiation process, for instance, it provides that the Commission shall explain ‘whether and how Parliament’s comments were incorporated in the texts under the negotiation and if not why’.58 The significance of Article 218(10) TFEU also emerges on practical grounds. As will be shown below, the very final outcome of the negotiation of an international agreement in most cases depends on the willingness of the European Parliament to give its consent. One does not need to be an expert in The Prince to appreciate that, given its role in the conclusion of international agreements, the Parliament’s good will is essential to the success of the negotiation process. Therefore, if they chose not to provide sufficient information, the Union’s negotiators would do so at their peril. This point is made clear in Annex III to the Framework Agreement which makes the distinction between international agreements, the conclusion of which requires the consent of the Parliament, and agreements, which do not. In the case of the former, it provides that the Commission shall forward during the negotiation process all relevant information that it provides to the Council or the special committee appointed by the Council. This includes draft amendments to adopted negotiating directives, draft negotiating texts, agreed articles, the agreed date for initialling the agreement, the text of the agreement to be initialled, as well as any relevant documents received from third parties which it also submits to the Council or the special committee appointed by the Council.59 In addition, the Commission keeps the responsible parliamentary committee informed about developments in the negotiation and is expected to explain how the Parliament’s views have been taken into account.60 As for international agreements the conclusion of which is not subject to the 51

n 48 above. Decision of the Bureau of the European Parliament of 6 June 2011 concerning the rules governing the treatment of confidential information by the European Parliament [2011] OJ C190/2. The Bureau of the Parliament is a body entrusted to lay down rules which govern the Parliament’s conduct. It comprises of the President and the Vice-Presidents and represents the majority of the political groups. 53 Interinstitutional Agreement of 12 March 2014 between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy [2014] OJ C95/1. 54 Art 4 of Annex III. 55 Art 7 of Annex III. 56 Art 8 of Annex III. 57 Art 9 of Annex III. 58 Ibid. 59 Art 5 of Annex III. 60 Ibid. 52

Negotiation of International Agreements 145 Parliament’s consent, the interactions between the Commission and the Parliament are outlined in less detailed terms: the former provides the latter with information that should cover ‘at least’ the draft negotiating directives, the adopting directives, the subsequent conduct of negotiations and the conclusion of the negotiations.61 Two aspects of the Framework Agreement are noteworthy. The first is its detail in setting out the scope of the general provision of Article 218 (10) TFEU about the role of the European Parliament. Rather than maintaining a degree of uncertainty as to how the latter would be construed in relation to the different stages of the life of an international agreement, potentially opening up the whole area to the possibility of endless interinstitutional disputes, it seeks to flesh out specific and practical arrangements. Whilst by no means removing the possibility of squabbles about the precise scope of the Parliament’s input, the Agreement reflects the realisation that inter-institutional practice ought to adjust to the new legal reality set out in the Lisbon Treaty. The second interesting feature of the Agreement follows from the above and is about the very adoption of these arrangements as a specific illustration of the duty of cooperation laid down in Article 4(3) TEU. This duty, along with its specific incarnation which the Court of Justice introduced and developed in the context of mixed agreements, features prominently in the law of EU external relations. Emphasis has been placed on its restraining impact on Member States in order to protect the Union’s interest.62 The conclusion of the Framework Agreement, which refers specifically to ‘the general principle of good cooperation between the institutions’,63 illustrates the function of the duty in the context of inter-institutional interactions. In relation to mixed agreements in particular, the significance of procedural arrangements agreed upon between EU institutions, as well as Union institutions and Member States, was stressed by the Court in the FAO case.64 The function of the Framework Agreement is broader as it aims to flesh out a Treaty provision which, whilst indicative of a radical redrawing of the institutional balance in the area of external relations, is also vague in its scope. The external relations provisions of the Framework Agreement discussed above are not the first example of inter-institutional cooperation in the area. The previous Agreement, concluded in 2005, also included a section on external relations and provided for information sharing, consultation and participation of members of the European Parliament in Commission delegations, albeit in less detail. Another difference is the reaction of the Council to the 2005 Framework Agreement. Following a recommendation by COREPER (Committee of Permanent Representatives), it issued a statement published in the Official Journal in which it expressed its concern about what it viewed as ‘a shift in the institutional balance resulting from the Treaties in force’.65 It expressed regret that

61

Art 6 of Annex III. 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 (Oxford, Hart Publishing, 2008) 125; 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; and P Koutrakos, ‘In Search of a Voice: EU Constraints on Member States in International Law-making’ in R Liivoja and J Petman (eds), International Law-making—Essays in Honour of Jan Klabbers (Routledge, 2014) 211. 63 Point 27 of the Framework Agreement. 64 Case C-25/94 Commission v Council (FAO) [1996] ECR I-1469. See the analysis in Chapter 5. 65 Council statement concerning the framework agreement on relations between the European Parliament and the Commission [205] OJ C161/1. 62

146 Decision-making in EU International Relations it had not been informed earlier, it made it clear that the arrangements between the Commission and the Parliament would not be enforced against it, and reserved the right to respond should the application of these arrangements impinge upon the institutional balance laid down in the Treaties. The Council did not respond in such a polemical manner to the 2010 Framework Agreement. This may be explained in the light of the redrawn institutional landscape and the strengthened role of the Parliament pursuant to the Lisbon Treaty. At this juncture, it is worth pointing out that the interactions between the Commission and the Parliament are not confined to consultation and information sharing. The Framework Agreement provides for the inclusion of a Parliamentary delegation as observers in EU delegation in international conferences.66 Aiming to ensure that the Parliament is immediately and fully informed about the conference proceedings, this arrangement is at the Parliament’s request and ‘subject to the legal, technical and diplomatic possibilities’, whilst it is made clear that its members may not participate directly in the negotiations.67 Similar arrangements also apply to meetings of bodies set up by multilateral international agreements involving the EU, whenever such bodies are called upon to take decisions which require the Parliament’s consent or the implementation of which may require the adoption of legislation pursuant to the ordinary legislative procedure.68

5. SIGNING AND PROVISIONAL APPLICATION OF INTERNATIONAL AGREEMENTS Signing and Provisional Application of International Agreements

International agreements are signed pursuant to a Council decision adopted following a proposal by the EU negotiator (Article 218(5) TFEU). By signing an agreement, the Union is bound by international law not to engage in acts or omissions that would defeat the object and purpose of the agreement.69 Article 218(5) TFEU also provides for the provisional application of agreements prior to their entry into force. The Council decision authorising the signature of an agreement may also provide for the provisional application of the parts of the agreement that fall within the Union’s competence pending the completion of the ratification procedures in all Member States.70 This is by no means rare in EU external relations practice and concerns the whole agreement to be applied in accordance with Article 25 of the VCLT. A comparable role is played by interim agreements in the context of mixed agreements: as the entry into force of the latter requires their conclusion by both the EU and the Member States, considerable delays may ensue.71 66

Point 25 of the Framework Agreement. Ibid. The practicalities of the Parliament’s participation are set out in Point 27 of the Framework Agreement. 68 Point 26 of the Framework Agreement. 69 See Art 18(a) VCLT. To that effect, see Case T-115/94 Opel Austria v Council [1997] ECR II-39, paras 90–95. 70 See eg Council Decision 2014/20/EU of 23 September 2013 on the signing, on behalf of the Union, and the provisional application of the Cooperation Agreement between the European Union and its Member States, of the one part, and the Swiss Confederation, of the other, on the European Satellite Navigation Programmes [2014] OJ L15/1. 71 A notorious example of such delays is the Cooperation and Customs Union Agreement with San Marino which entered into force more than ten years following its approval by the contracting parties ([2002] OJ L84/43). 67

Conclusion of International Agreements 147 The procedure for the signing of international agreements may raise inter-institutional disputes. This is illustrated in Case C-28/12 Commission v Council where the Commission sought the annulment of the Decision 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 the Agreement on the accession of Iceland and Norway to the EU–USA Air Transport Agreement.72 The Commission argued that the adoption of this hybrid decision was contrary to Article 218(2) and (5) TFEU as it should have been adopted by the Council alone. It also argued that it violated the decision-making rules laid down in Article 218(8) TFEU, the objectives of the Treaties and the principle of sincere cooperation laid down in Article 13(2) TEU. The importance that Member States attach to the issues raised in this case is illustrated by the fact that twelve governments have intervened in support of the Council.

6. CONCLUSION OF INTERNATIONAL AGREEMENTS Conclusion of International Agreements

6.1 The Role of the Council In relation to the conclusion of international agreements, Article 218(6) TFEU assigns this role to the Council. In EU law practice, the term ‘conclusion’ is equivalent to national ratification or accession. In concluding an international agreement, the Council carries out two functions: on the one hand, it signifies the assumption of the international obligations laid down in the agreement in question, hence binding the Community under international law; on the other hand, it acts under the constitutional powers given in the Treaties and under the procedure laid down therein. These internal and external functions are carried out by means of a Council decision annexed to which is the text of the agreement in question. As for decision-making, the Treaty sets out the presumptive rule for all international agreements, which is qualified majority voting under Article 218(8) TFEU, but provides for unanimity as an exception in certain cases. These include the following four cases: (i) Agreements Covering a Field for which Unanimity is Required for the Adoption of an EU Act This case is laid down in Article 218(8).73 If, for instance, an agreement relates exclusively or principally to the CFSP/CSDP, and given that the rule in decision-making in these areas is unanimity and that majority voting is very clearly circumscribed and mainly following the adoption of unanimous measures,74 it must be concluded unanimously. Another area where unanimity is also required is taxation. The question is whether unanimity is also required for agreements that are not related exclusively or principally to the CFSP/CSDP but have a CFSP/CSDP dimension. A strict reading of Article 218(8) TFEU suggests an affirmative answer. This provision refers to 72 [2011] OJ L283/1. The Decision was also about accession to the Ancillary Agreement to the Air Transport Agreement. 73 Art 218(8) second subpara first indent TFEU. 74 See Art 31(1)–(3) TEU. See also Art 31(4) TEU which rules out the exceptions to the unanimity rule for decisions having military or defence implications.

148 Decision-making in EU International Relations an agreement which covers ‘a field for which unanimity is required for the adoption of an act of the Union’, a statement which is not qualified in any way. However, such a conclusion would run counter to the logic of Article 218 TFEU as a whole. The latter sets out the unitary framework for treaty-making on behalf of the European Union, and distinguishes the CFSP areas only with reference to agreements which relate ‘exclusively or principally’ to them. Furthermore, the broad construction of security which the EU institutions have endorsed over the years, and its increasing interactions with the other strands of the EU’s external action,75 might render unanimity the rule, rather than the exception. This cannot have been the intention of the drafters of the Lisbon Treaty.76 Therefore, the crucial issue is the extent to which the CFSP/CSDP provisions cover the agreement in question. (ii) Association Agreements This type of agreement constituted one of the two instances for which the original Treaty of Rome endowed the European Economic Community with express external competence (the other being the CCP). Governed by Article 217 TFEU, such agreements are concluded with third countries or international organisations in order to establish ‘an association involving reciprocal rights and obligations, common action and special procedure’. The wording of this legal basis has always been somewhat opaque and the case-law of the Court of Justice has not clarified it considerably. In Case C-12/86 Demirel the Court defined association agreements by reference to the establishment of special and privileged links and the participation of the associated state, at least to a certain extent, in the Union legal system.77 In practical terms, such agreements have proved a popular instrument for the Union’s external relations and their content varies depending on the associated country. (iii) Agreements on Economic, Financial and Technical Cooperation with Countries which Are Candidates for Accession Such agreements are governed by Article 212 TFEU and cover economic, financial and technical cooperation measures, including assistance, in particular financial assistance, with third countries other than developing countries. Their conclusion is unanimous under Article 218(8) TFEU only in cases where they are concluded with countries which are candidates for accession to the Union. (iv) Accession of the EU to the ECHR The Union’s accession to the ECHR is provided for expressly at Lisbon, for the first time in Article 6(2) TEU. In the summer of 2013, the negotiations between the EU and the Council of Europe led to the adoption of a draft agreement which, at the time of writing

75

See Koutrakos, n 26 above, ch 4 and 8. Cf Dashwood et al, n 16 above, 938. 77 [1987] ECR 3719, para 9. For the range of association agreements, see Chapter 11, section 2.2. 76

Conclusion of International Agreements 149 of this chapter, is being examined by the Court of Justice pursuant to the procedure laid down in Article 218(11) TFEU.78

6.2 The Role of the European Parliament So far, this analysis has focused on the role of the Council in the conclusion of international agreements. This needs to be examined alongside the role of the European Parliament which is set out in Article 218 (6) TFEU.79 This provision defines the role of the Parliament in three sets of circumstances. The first is about agreements ‘which relate exclusively to the common foreign and security policy’. The Parliament has no formal input in the conclusion of such agreements. This does not suggest that the Parliament has no role at all in the process leading to their conclusion. On the one hand, its rights laid down in Article 218(10) TEU are still relevant and, therefore, the Parliament is to be immediately and fully informed at all stages of the procedure. On the other hand, the general, albeit limited, provisions about parliamentary involvement in the conduct of the CFSP pursuant to Article 36 TEU also apply: the Parliament is consulted by the High Representative ‘on the main aspects and the basic choices of the common foreign and security policy’, it is ‘informed  … of how those policies evolve’, its views ‘are duly taken into consideration’ and ‘may ask questions of the Council or make recommendations to it and the High Representative’. Furthermore, in cases of international agreements which do not relate exclusively to the CFSP but have a CFSP component, legal bases laid down in TFEU would need to be relied upon and would also determine the role of the Parliament. The determination of whether an agreement relates exclusively to the CFSP for the purposes of Article 218(6) TFEU has given rise to disputes. In Case C-658/11 European Parliament v Council the legality of the conclusion of the transfer agreement between the EU and Mauritius was challenged.80 This had been concluded as an agreement which related exclusively to the CFSP pursuant to Article 218(6) TFEU and, therefore, the Parliament had not been involved. The Parliament argued that, as the agreement was about the transfer of suspected pirates with a view to their prosecution, it also related to judicial cooperation in criminal matters, police cooperation and development cooperation. Given that the ordinary legislative procedure applied to decision-making in these areas, the Parliament argued that the agreement should have been adopted under Article 218(6)(a)(v) TFEU and should have required the consent of the Parliament. This was the main thrust of its argument, even though the Parliament accepted that the non-CFSP aspect of the agreement was incidental to its CFSP dimension. The Grand Chamber of the Court rejected the Parliament’s argument. It held that the decision-making procedure for the conclusion of international agreements in Article 218 TFEU reflects the division of powers between institutions that applies internally. 78 On the accession more generally, see P Cragl, The Accession of the European Union to the European Convention on Human Rights (Oxford, Hart Publishing, 2013). 79 For a pre-Lisbon analysis of the role of the Parliament, see D Thym, ‘Parliamentary Involvement in European International Relations’ in Cremona and De Witte (eds), n 62 above, 201. For an assessment of the post-Lisbon involvement of the Parliament, see R Passos, ‘The European Union’s External Relations a Year after Lisbon: A First Evaluation from the European Parliament’ in Koutrakos (ed), n 2 above, 49. 80 Case C-658/11 European Parliament v Council ECLI:EU:C:2014:2025.

150 Decision-making in EU International Relations Therefore, the substantive legal basis of the decision concluding the agreement also determines the type of procedure applicable under Article 218 TFEU. As the decision concluding the transfer agreement with Mauritius had been adopted solely as a CFSP measure, the agreement related exclusively to the CFSP in the meaning of Article 218(6) TFEU. Accordingly, the Parliament’s consent was not required. The Court held that this symmetry between substantive legal basis and decision-making procedure was justified in the light of the principles of legal certainty and consistency. At the time of writing, there is another case pending where the Parliament has challenged the adoption of the EU–Tanzania transfer agreement as an agreement which related exclusively to the CFSP and argued that it should have been adopted jointly under Articles 37 TEU (CFSP), 82 TFEU (judicial cooperation in criminal matters) and 87 TFEU (police cooperation).81 The second set of circumstances where the role of the Parliament arises is set out in Article 218(6)(a) TFEU which provides that the Parliament give its consent to five types of international agreements. These are as follows: (i) association agreements The conclusion of association agreements has required the Parliament’s consent since the entry into force of the Single European Act (the term ‘consent’ is introduced at Lisbon and replaces the term ‘assent’ which was used under the previous Treaties). (ii) agreement on Union accession to the European Convention for the Protection of Human Rights and Fundamental Freedoms. This is examined above. (iii) agreements establishing a specific institutional framework by organising cooperation procedures The conclusion of such agreement has required the Parliament’s consent (known as ‘assent’ under the pre-Lisbon rules) since the entry into force of the Maastricht Treaty. This type of agreement is not defined further in primary law. The wording of Article 218(a)(iii) TFEU may appear not entirely dissimilar to that of Article 217 TFEU which refers to association agreements. However, as the latter are mentioned specifically in Article 218(a)(i) TFEU, it follows that a different type of relationship is envisaged, albeit one the contours of which are ill defined. It is argued that such agreements would cover the WTO Agreements or the Agreement establishing the European Economic Area.82 The scope of this category is flexible enough to encompass our evolving understanding of the structures of international cooperation which are necessary to tackle increasingly complex policy realities.

81 82

Case C-263/14 European Parliament v Council, pending. Dashwood et al, n 16 above, 938.

Conclusion of International Agreements 151 (iv) agreements with important budgetary implications for the Union The conclusion of international agreements with important budgetary implications for the Union has required the Parliament’s consent (or rather ‘assent’) since the entry into force of the Maastricht Treaty. This is another type of agreement the definition of which is not clear. However, the Court of Justice provided some guidance as to its scope in Case C-189/97 Parliament v Council.83 This case was about the conclusion of a fisheries agreement between the European Community (now EU) and Mauritania which would enable EU fishermen to fish in waters under the jurisdiction of Mauritania. In return, the Union would grant financial compensation and support at its own expense. The Council concluded the Agreement by merely consulting the Parliament, hence relying upon the rule under the precursor to Article 218(6) TFEU (ex Article 300(3)(1) EC). The Parliament brought annulment proceedings against the Council, arguing it ought to have been asked to give its assent. The line of reasoning put forward by the Parliament was based on both principle and practice. In relation to the former, it argued that its involvement in the conclusion of international agreements should be interpreted broadly, as the Maastricht Treaty had increased its powers substantially. According to the Parliament, this indicated that its position was closer to that of national parliaments and it was the latter which ought to be the main point of reference in relation to the Parliament’s own powers in the field. As for the practical argument, the Parliament stressed its role as a constituent part of the budgetary authority regarding the law of the internal market and suggested a number of specific criteria that would determine whether the conclusion of an agreement would have important budgetary implications. On the other hand, rather predictably, the Council put forward a strict interpretation of this procedural deviation from the consultation principle and suggested that the implications of an agreement be assessed against the overall budget of the Union. Having repeated the well-established principle that the choice of legal basis is determined by objective factors amenable to judicial review,84 the Court went on to rule out the Council’s suggestion: a comparison between the annual financial cost of an agreement and the overall Community budget ‘scarcely appears significant’ and ‘might render the relevant wording of the second subparagraph of [ex Article 300(3), now Article 218(6) (a)(iv) TFEU] of the Treaty wholly ineffective’.85 Instead, the financial implications of an agreement should be examined in the context of EU external relations in particular. Therefore, expenditure under the agreement should be set against the amount of the appropriations designed to finance the Union’s external operations. The Court then held as follows: This test is intended to apply in a flexible manner, account being taken of the specific nature of the agreement and the circumstances surrounding its implementation. To that effect, whether expenditure under the agreement is spread over several years is an issue which should be taken into account as the total amount may end up representing a significant budgetary outlay. Equally, in relation to sectoral agreements, an additional comparison may be carried out between the 83

Case C-189/97 Parliament v Council [1999] ECR I-4741. Reference was made to Case 45/86 Commission v Council [1987] ECR 1493, para 11; Case C-22/96 Parliament v Council [1998] ECR I-3231, para 23; and Joined Cases C-164/97 and C-165/97 Parliament v Council [1999] ECR I-1139, para 12. 85 n 83 above, para 26. 84

152 Decision-making in EU International Relations expenditure entailed by the agreement and the whole of the budgetary appropriations for the sector in question, the latter including both its internal and external aspects. However, this comparison may only be secondary in nature in so far as its findings may not render the financial implications of an agreement significant if they do not represent a significant share of the appropriations designed to finance the Union’s external operations.86

On the basis of those considerations, the Court concluded that the Fisheries Agreement with Mauritania did not have significant financial implications: it was concluded for five years, ie a not particularly lengthy period of time, and it provided for financial compensation which represented barely more than 1% of the whole of the payment appropriations allocated for the Community’s external operations. This proportion was seen as ‘far from negligible’, yet one which ‘can scarcely be described as important’.87 This was deemed to be the case despite the fact that it exceeded 5% of expenditure on fisheries in general. The judgment of the Court is sensible in its assessment of the circumstances under which an agreement is to be deemed to be of significant financial implications. In particular, it is entirely consistent with the degree of significance suggested by Article 218(6) (a)(iv) TFEU which is more clearly borne out in its French version referring to financial implications as ‘notables’.88 However, whilst providing a more solid basis on which the character of an international agreement should be assessed, the Court’s approach did not articulate a set of strict rules which would form part of the relevant test. This flexibility is inevitable, as the application of the test set out in the Treaty may only be determined by practice. The judgment in EC–Mauritania Fisheries Agreements is also interesting for a point of principle about the Parliament’s general role in treaty-making. Drawing a parallel with relying upon the powers of national parliaments in treaty-making, the Parliament argued for broad powers in the area, a position which was rebuffed by the Court in strong terms: [T]he scope [of ex Article 300(3) second subparagraph, current Article 218 (6)(a)(iv) TFEU] …, as set out in the Treaty, cannot, despite what the Parliament suggests, be affected by the extent of the powers available to national parliaments when approving international agreements with financial implications.89

Made in the concluding paragraph of the judgment, the above statement reminds the Parliament in particular, and the Union’s institutional actors in general, that the only criteria for determining the role of institutions in treaty-making are the Union’s primary rules. Under the pre-Lisbon constitutional arrangements, the claim of the Parliament was clearly maximalistic and was rightly dismissed. (v) agreements covering fields to which either the ordinary legislative procedure applies, or the special legislative procedure where consent by the European Parliament is required This provision aligns the powers of the Parliament over the adoption of internal legislation with those over the conclusion of international agreements. This parallelism 86

Ibid, paras 29 and 32. Ibid, para 33. 88 See also C Flaesch-Mougin, ‘Le Traité de Maastricht et les compétences externes de la Communauté européenne: à la recherche d’une politique externe de l’Union’ (1993) 29 Cahiers de Droit Européen 351, 386. 89 n 83 above, para 34. 87

Conclusion of International Agreements 153 between internal and external decision-making procedures renders the Parliament a central player in the Union’s treaty-making activity. It is recalled that, after Lisbon, the ordinary legislative procedure now applies to most areas of decision-making internally, hence consolidating the role of the Parliament as co-legislature.90 The implications of the introduction of this provision at Lisbon become apparent if one were to compare it to the previous arrangements: under the Nice Treaty, the assent of the Parliament was required, amongst others, for agreements which constituted an amendment of an act already adopted pursuant to the co-decision procedure (ie the precursor to the ordinary legislative procedure). A concern about the management of the consent procedure is that it might delay the entry into force of international agreements. Article 218(6) TFEU provides that, in urgent situations, the Parliament and the Council may agree a time limit. All international agreements not mentioned above, namely those concluded beyond the CFSP framework and those which do not require the Parliament’s consent under Article 218(6)(a)(i)–(v) TEU, are concluded after consulting the Parliament. This procedure is the last remnant of the pre-Lisbon arrangements and now applies to only a small number of agreements. It is provided that, to streamline the procedure, the Council may, depending on the urgency of the matter, set a time limit within which the Parliament ought to deliver its opinion. If the latter fails to deliver an opinion within that time limit, the Council may conclude the Agreement on its own. The strengthening of the role of the Parliament in the reformed landscape of EU external relations is one the main innovations of the Lisbon Treaty. Following its entry into force, it did not take long for the Parliament to show that it was prepared to use its new-found powers. It did so in a fairly spectacular manner in February 2010 when it refused to give its consent to the EU–United States Agreement on the Society for Worldwide Interbank Financial Telecommunications (SWIFT). The SWIFT Agreement aimed to allow US authorities to have access to the banking details of millions of EU citizens for anti-terrorist purposes. It was viewed by the Parliament as imposing intolerable restrictions on human rights. This incident attracted considerable attention. The US Vice-President Joseph Biden and the then Secretary of State Hillary Clinton called the President of the European Parliament to urge that the Agreement should enter into force without delay. It was only after the Agreement had been renegotiated that the Parliament granted its consent.91 Two further incidents made it clear that the European Parliament and its consent required for the conclusion of international agreements had to be taken seriously. The first was about Agreements on Passenger Name Records (PNR) with the United States, Australia and Canada. In May 2010, the Parliament was asked to give its consent to their conclusion (the latter two had been applied provisionally since 2006). However, it required that they be renegotiated as it felt that their provisions did not provide 90 On the ordinary legislative procedure, see K Lenaerts and P Van Nuffel, European Union Law, 3rd edn (London, Sweet & Maxwell, 2011) 663–69. 91 Agreement between the European Union and the United States of America on the processing and transfer of Financial Messaging Data from the European Union to the United States for the purposes of the Terrorist Finance Tracking Program [2010] OJ L195/5. For an analysis of this episode, see J Santos Vara, ‘The Role of the European Parliament in the Conclusion of the Transatlantic Agreements on the Transfer of Personal Data after Lisbon’, CLEER Working Papers 2013/2. See also J Monar, ‘The Rejection of the EU–US SWIFT Interim Agreement by the European Parliament: A Historic Vote and Its Implications’ (2010) 15 European Foreign Affairs Review 143.

154 Decision-making in EU International Relations sufficient guarantees for the protection of fundamental human rights. The Commission started negotiations in January 2011 which, in the case of Australia and United States, were concluded in September 2011. The Parliament gave its consent to the conclusion of the EU–Australia Agreement,92 but required changes in the case of the EU–USA Agreement.93 Once these changes had been agreed upon, the new version of the Agreement was given the Parliament’s consent in April 2012 and entered into force on 1 July 2012.94 As for the EU–Canada PNR Agreement, it has now been signed by the Council and awaits the consent of Parliament.95 Another opportunity for the Parliament to flex its muscle was the conclusion of the international Anti-Counterfeiting Trade Agreement (ACTA). Negotiated from 2008 to 2010 between the EU and ten other countries,96 the ACTA drew upon the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) and was about the enforcement of the intellectual property rights laid down therein.97 The Agreement was presented to the Parliament in early 2012 amidst considerable controversy in the EU and the United States about its impact on trade in generic drugs and its implications for fundamental human rights. When it became apparent that the fate of the Agreement was far from certain, the Commission decided in April 2012 to refer it to the Court of Justice under the procedure laid down in Article 218(11) TFEU. Nonetheless, the Parliament proceeded to reject it in July 2012. A few months later, in December 2012, the Commission withdrew its application.

7. MODIFICATION OF INTERNATIONAL AGREEMENTS Modification of International Agreements

In accordance with Article 218(7) TFEU, when concluding an agreement, ‘the Council may  … authorise the negotiator to approve on the Union’s behalf modifications to the agreement where it provides for them to be adopted by a simplified procedure or by body set up by the agreement.’ Article 218(7) adds that the Council ‘may attach specific conditions to such authorisation’. This provision aims to prevent the modification of an agreement from being slowed down by inter-institutional interactions in cases where the substance of the amendments would not warrant reliance upon the procedures set out in Article 218(5), (6) and (9) TFEU. However, in the absence of an authorisation pursuant

92 Agreement between the European Union and Australia on the processing and transfer of Passenger Name Record (PNR) data by air carriers to the Australian Customs and Border Protection Service [2012] OJ L18/4. 93 In doing so, it was not alone as it was joined by the Commission legal service. 94 Information concerning the date of entry into force of the Agreement between the United States of America and the European Union on the use and transfer of passenger name records to the United States Department of Homeland Security [2012] OJ L174/1. 95 See COM(2013) 528: Proposal for a Council Decision on the conclusion of the Agreement between Canada and the European Union on the transfer and processing of Passenger Name Record data (Brussels, 18 July 2013). 96 Australia, Canada, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States. 97 For an analysis of the ACTA from the view point of the Union’s participation in global trade governance, see M Cremona, ‘The EU’s International Regulatory Policy, Democratic Accountability and the ACTA: A Cautionary Tale’ in M Cremona and T Takacs (eds), Trade Liberalisation and Standardisation—New Directions in the ‘Low Politics’ of EU Foreign Policy (The Hague, TMC Asser Instituut, 2013) CLEER Working Papers 2013/6, 67.

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to Article 218(7) TFEU, the agreement may be modified in accordance with the procedure that would govern its conclusion.

8. SUSPENSION OF INTERNATIONAL AGREEMENTS

The application of an international agreement may be suspended in accordance with the procedure laid down in Article 218(9) TFEU. This provision was introduced in the light of the increasingly prominent role of the protection of human rights in the Union’s treaty-making practice. It became customary in the 1990s for economic agreements to include a human rights clause which enabled the Union to suspend or terminate the agreements in the case of violation of fundamental human rights.98 Suspension of an international agreement by the Union requires a Council decision adopted on a proposal from the Commission or the High Representative. Article 218(9) is silent on which of the latter actors would have the right of initiative. This suggests that this matter would be addressed pursuant to Article 218(3) TFEU, hence ensuring that the scope of the agreement would determine the institutional actor responsible for taking the initiative to propose its suspension.99 In the light of the central role of the European Parliament in the conclusion of international agreements, the absence of any reference to it in relation to the suspension of an agreement is striking. This may be explained on two grounds. First, the suspension of the application of an international treaty is a heavily politicised act which is intrinsically linked to the conduct of foreign policy. For instance, following the revelations by Edward Snowden about the US National Security Agency’s tapping of EU citizens’ bank data, the European Parliament adopted a non-binding resolution urging the EU to suspend the application of the SWIFT Agreement which the Union had concluded with the United States.100 Given the sensitivity of the underlying issues, the Member States are keen to ensure that the Council would be in control of the procedure. Secondly, and following from the above, time is of the essence in cases where the suspension of an international agreement is deemed by the Council a foreign policy tool worth using. The participation of the Parliament would slow this process down. It does not follow from the above that the Parliament is excluded entirely. Its role as set out in Article 218(10) TFEU is still relevant and the other participating institutions have a duty to keep it informed immediately and fully.

9. EU POSITION IN A BODY SET UP BY AN INTERNATIONAL AGREEMENT EU Position in a Body Set Up by an International Agreement

Under Article 218(9) TFEU, the procedure which governs the suspension of international agreements also applies to establishing the positions to be adopted on the Union’s 98 See L Bartels, Human Rights Conditionality in the EU’s International Agreements (Oxford, Oxford University Press 2005); and B. Brandter and A. Rosas, ‘Human Rights and the External Relations of the European Community’ (1998) 9 European Journal of International Law 468. See also the Opinion of AG Cruz Villalón in Case C-399/12 Germany v Council ECLI:EU:C:2014:289, para 64. 99 See also Dashwood et al, n 16 above, 938. 100 European Parliament resolution of 23 October 2013 on the suspension of the TFTP agreement as a result of US National Security Agency surveillance (2013/2831(RSP)).

156 Decision-making in EU International Relations behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects. This provision exempts acts supplementing or amending the institutional framework of the agreement.101 Again, there is no reference to any input by the Parliament. In the light of the considerable number of acts adopted as a matter of course by bodies set up by international agreements, practical considerations may explain this choice. Article 218(9) TFEU provides the procedural basis on which the Council can adopt a decision. It does not provide a substantive legal basis which would establish the competence of the Union to act in the policy area covered by the decisions of the bodies set up by an international agreement envisaged under Article 218(9) TFEU. Therefore, any Council decision adopted pursuant to the latter provision must include a reference both to it and the relevant substantive Treaty provision. The nature of the Council decision adopted under Article 218(9) TFEU was explored in Case C-370/07 Commission v Council.102 This was about a dispute regarding the Union’s position in the context of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The aim of CITES, which entered into force in 1975, is to protect wild fauna and flora threatened with extinction. It does so mainly by limiting or regulating trade in those species. The EU is not party. Instead, it has observer status. However, it has adopted secondary legislation in order to implement CITES within the EU legal order.103 In 2007 the Council adopted a decision on the Union’s position at the 14th meeting of the Conference of the Parties to CITES. Whilst the Commission had proposed that the decision be adopted on the basis of the Treat’s legal basis on environmental protection and the CCP104 and what is now Article 218(9) TFEU, the Council adopted it without any reference to its legal basis. In its judgment, the Court held that a decision adopted under Article 218(9) TFEU is ‘a measure which produces binding legal effects  … and which is binding in nature, first, with respect to the Council and the Commission and, second, with respect to the Member States inasmuch as it obliges them to defend that position’.105 It was then concluded that such a decision must be reasoned and must also indicate the legal basis on which it is founded. As the contested measure had failed on both grounds, it was annulled. It is recalled that CITES was a convention to which the Union was not a party and that the decision annulled by the Court had failed to provide any legal basis for its adoption. Is it to be inferred by the CITES judgment that Article 218(9) TFEU applies to any international agreement the scope of which falls within the Union’s competence, irrespective of whether the EU is a party to it? This question was raised in Case C-399/12 Germany v Council.106 This dispute arose in the context of the International Organisation for Vine and Wine (OIV). Whilst the

101 See J Heliskoski, ‘Adoption of Positions under Mixed Agreements (Implementation)’ in Hillion and Koutrakos (eds), n 62 above, 138. 102 Case C-370/07 Commission v Council ECLI:EU:C:2009:590. 103 See Council Reg 338/97 on the protection of species of wild fauna and flora by regulating trade therein [1997] OJ L61/1 and amended by, amongst others, Reg 398/2009 [2009] OJ L126/5. 104 Art 175(1) EC and ex Art 133 EC (now Art TFEU and 207 TFEU). 105 Case C-370/07 Commission v Council EU:C:2009:590, para 44. 106 Case C-399/12 Germany v Council ECLI:EU:C:2014:2258.

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Organisation provides for membership by transnational organisations, the Union is not a party. In 2008, the Council failed to reach agreement and adopt the proposal to authorise the Commission to negotiate the Union’s accession. Twenty-one Member States have acceded to the IOV.107 Since 2008, Union legislation on the common organisation of the market in wine has made direct references to resolutions adopted by OIV organs, providing that EU standards and processes follow those determined by the latter.108 In June 2012, the Council adopted a 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 OIV.109 The Decision was adopted by qualified majority voting under Article 218(9) TFEU. The German government brought an annulment action against the Council measure arguing that the latter was based on an incorrect legal basis on two grounds. First, decisions adopted by bodies set up by an agreement which the Member States had adopted fell beyond its scope of application; put differently, Article 218(9) TFEU applied only in the context of agreements concluded by the Union. Instead, the German government argued that the Member States ought to have coordinated their position in the OIV on the basis of the duty of cooperation. Secondly, as Article 218(9) TFEU is only applicable to decisions that are ‘legally binding’, it would only apply to decisions that are binding under international law. The decisions adopted in the context of the OIV were not binding under international law and, therefore, the Union’s position on such decisions could not be determined pursuant to Article 218(9) TFEU. In his Opinion, Advocate General Cruz Villalón agreed with the submissions of the German government. He concluded that the history, the wording, the context and objective of Article 218(9) TFEU, all suggested that the latter provision applied only in the context of international agreements to which the Union itself was a party. He also argued that the wording, the context and the telos of the provision confined its application to legally binding acts under international law. Finally, Advocate General Cruz Villalón dismissed the argument by the Council and the Commission that the provision should also apply, by analogy, in the context of an agreement the scope of which fell within the Union’s exclusive competence. He argued that, should this position be accepted, the Union would pick and choose to which organisations to accede and in the context of which organisation to rely upon Article 218(9) TFEU in order to protect its interests. However, such a state of affairs would not be in accordance with the institutional balance in the Union’s constitutional order and would undermine the input of the Parliament in treaty-making.

107 Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Finland, France, Germany, Greece, Hungary, Italy, Luxemburg, Malta, the Netherlands, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. 108 See Council Reg 479/2008 on the common organisation of the market in wine, amending Regulations (EC) No 1493/1999, (EC) No 1782/2003, (EC) No 1290/2005, (EC) No 3/2008 and repealing Regulations (EEC) No 2392/86 and (EC) No 1493/1999 [2008] OJ L148/1, and Council Reg 491/2009 amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) [2009] OJ L154/1. 109 Council Doc 11436/12 of 12 June 2012.

158 Decision-making in EU International Relations 10. THE SIGNIFICANCE OF DECISION-MAKING PROCEDURES The Significance of Decision-making Procedures

As the constitutional idiosyncracies of the Union are reflected by its institutional structure and the underlying allocation of different tasks to different actors depending on the subject-matter of the measure to be adopted, compliance with decision-making procedures ensures respect for the institutional balance. It is also about compliance with Article 13(2) TEU which requires that each institution ‘shall act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them’. To that effect, Article 13(2) TEU adds that the institutions ‘shall practice mutual sincere cooperation’. In the case of treaty-making by the European Union, compliance with the applicable procedures is all the more important as the stakes are higher. This is because the repercussions of a violation of procedural rules are not confined to the internal plane but can produce international law effects. This issue was examined by the Court in Case C-327/91 France v Commission.110 This was an annulment action in which the French government sought the annulment of an international agreement with the United States about the application of competition rules which had entered into force in September 1991. Its controversial aspect was the fact that it was actually signed by the European Commission represented by its then Vice-President, Sir Leon Brittan. Aiming at promoting cooperation and coordination between the US competition authorities and the Commission, the Agreement set out certain mechanisms that would minimise the possibility of differences between them in the application of their competition laws.111 The main objection put forward by the French government was that the conclusion of the Agreement by the Commission was contrary to the rule now set out in Article 218(5) TFEU. It is recalled that this provision expressly reserves such power to the Council and confines the role of the Commission to the negotiation of international agreements. The Commission counter-argued that the Agreement was in fact one of an administrative nature which it had the right to conclude. To that effect, it argued that non-compliance with the Agreement would not render the Union liable; instead, it would merely result in its termination. According to the Commission, this ‘secondary’ nature of the Agreement was further illustrated by a clause which precluded the parties from interpreting its provisions in a manner inconsistent with their own laws. This defence was summarily rejected by the Court, which relied upon its well-established functional test in order to determine whether the contested act produced legal effects.112 Having answered the question in the affirmative, the Court held as follows: [I]t is the Community alone, having legal personality pursuant to Article 210 of the Treaty [now Article 47 TEU], which has the capacity to bind itself by concluding agreements with a non-member country or an international organization.113

There is no doubt, therefore, that the Agreement is binding on the European Communities. 110

Case C-327/91 France v Commission [1994] ECR I-3641. These included the following: the notification of measures taken in the enforcement of competition law which might affect important interests of the other party; the exchange of information related to matters of mutual interest pertaining to the application of competition laws; coordination of enforcement activities; reciprocal consultation procedures; cooperation regarding anti-competitive activities in the territory of one party that adversely affect important interests of the other party. 112 This test was elaborated upon in Case 22/70 Commission v Council [1971] ECR 263. 113 Case C-327/91 France v Commission, n 109 above, paras 24–25. 111

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It falls squarely within the definition of an international agreement concluded between an international organisation and a state, within the meaning of Article 2(1)(a)(i) VCLT. In the event of non-performance of the Agreement by the Commission, therefore, the Community could incur liability at international level. The Court also ruled that the specific role of the Commission in the area of competition law, namely to ensure the application of the principles laid down in primary and secondary law, by no means implied the conferment of the power to conclude international agreements in that area. As it put it: [T]he internal power [in a field covered by the Agreement] is not such as to alter the allocation of powers between the Community institutions with regard to the conclusion of international agreements, which is determined by Article 300 of the Treaty [now Article 218 TFEU].114

The judgment illustrates a faithful reading of the procedural rules governing treatymaking. It also reflects the significance of the implications of the non-compliance with such rules which are both internal and external. As far as the former are concerned, the EU act pursuant to which the agreement is concluded would be void since its adoption and the institutions involved ‘shall be required to take the necessary measures to comply with the judgment of the Court of Justice’ in accordance with Article 266 TFEU.115 As far as the latter is concerned, the agreement concluded pursuant to the EU act annulled by the Court still stands under international law and, as such, it binds the Union. According to the 1986 VCLT, [A]n international organisation may not invoke the fact that its consent to be bound by a treaty has been expressed in violation of the rules of the organization regarding competence to conclude treaties as invalidating its consent unless that violation was manifest and concerned a rule of fundamental importance.116

As this provision lays down customary international law,117 which is binding on the Union,118 this rule would render an agreement concluded in violation of the treaties binding on the EU under international law. Article 46 VCLT provides for an exception to Article 27 VCLT in so far as it refers to a violation of internal rules on competence to conclude treaties which is ‘manifest’ and concerns ‘a rule of … internal law of fundamental importance’. However, given the complexity of the EU rules on external competence, the relevance of this exception would be difficult to envisage in this context.119 In any case, in Case C-327/91 France v Commission the validity of the Agreement had not been disputed. In order to reconcile the internal and external implications of non-compliance with treaty-making procedural rules, the Union must either terminate the agreement in 114 Ibid, para 41. The Commission also relied upon ex Art 300(2) EC which it viewed as the legal basis for its competence to conclude international administrative agreements. The Court rejected that argument too. On the conclusion of administrative agreements under the pre-Lisbon arrangements, see I MacLeod, ID  Hendry and S Hyett, The External Relations of the European Communities (Oxford, Oxford University Press, 1996) 95. 115 The temporal effect of the act may be limited: see Case C-360/93 Parliament v Commission (re: government procurement agreement with USA) [1996] ECR I-1195. 116 Art 46(2): [1986] ILM 543. 117 See Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v France) (2008) ICJ Rep 177. 118 Case C-162/96 Racke [1998] ECR I-3655 and Case C-366/10 Air Transport Association of America and Others ECLI:EU:C:2011:864. 119 See A Aust, Modern Treaty Law and Practice, 3rd edn (Cambridge, Cambridge University Press, 2013) 274

160 Decision-making in EU International Relations question in accordance with the rules about termination laid down therein or renegotiate it. This is what happened in Case C-327/91 France v Commission where, following the judgment, the Agreement was renewed by the Council.120

11. CONCLUSION Conclusion

Decision-making in the European Union is complex as it reflects the constitutional idiosyncrasies of its legal order. In the case of EU international relations, this complexity is compounded by the external implications of the Union’s action. This chapter provided an overview of the procedural rules which govern what the Union does in the world and explained them in the context of the Union’s evolving institutional structure. As with so much about EU international relations, the implications or the scope of some of these rules are still not clear. Whilst it is, ultimately, for the Court of Justice to interpret them, it is also for the Union institutions to rely upon them in a constructive manner and without wasting too much energy and time antagonising one another.

120

See Council Dec 95/145 [1995] OJ L95/45.

International Commitments and the Management of Mixity

5 International Commitments and the Management of Mixity 1. INTRODUCTION Introduction

T

HE ANALYSIS IN this book of the case-law on the constitutional foundations of EU external action has shown that the European Union and the Member States coexist in international relations both as a matter of law and practice. In the context of international agreements, this gives rise to the concept of mixity. A phenomenon that reflects the constitutional peculiarities of the EU legal order, mixed agreements have proved a source of endless fascination for EU and international lawyers alike.1 The position of such agreements within the system of EU international relations raises questions about their modus operandi (how are they negotiated, concluded and applied), their interpretation (the relationship between the jurisdiction of the Court of Justice and that of national courts), their implications for the right of Member States to conduct their international relations, and the international responsibility to which their violation may give rise. With the exception of the issue of jurisdiction, which is examined in Chapter 8, this chapter will examine these questions and will highlight the unique position of mixed agreements in the Union’s system of international relations law.

2. INTERNATIONAL COMMITMENTS AND INTERNATIONAL ORGANISATIONS International Commitments and International Organisations

The previous chapter analysed the procedural rules which govern the negotiation and conclusion of international agreements by the EU. In addition to the internal substantive rules which are applicable, these impose certain limitations on the exercise of the Union’s treaty-making powers. There is also a third type of limitation on the EU’s external action which is objective in nature and relates to participation in international organisations. The overwhelming majority of such organisations confine membership to states. In fact, the Union is a party to only a small number of international organisations, such as the World Trade Organization (membership of which gave rise to the seminal Opinion 1/94),2 the Food and Agricultural Organization (FAO), the European Bank for Reconstruction and Development (EBRD), the Codex Alimentarius Commission, and 1 See, amongst others, MJFM Dolmans, Problems of Mixed Agreements—Division of Powers within the EEC and the Rights of Third States (The Hague, TMC Asser Instituut, 1985); C Hillion and P Koutrakos (eds), Mixed Agreements Revisited—The EU and its Member States in the World (Oxford, Hart Publishing, 2010); E Neframi, Les accords mixtes de la Communauté européenne, aspects communautaires et internationaux (Brussels, Bruylant, 2007); D O’Keeffe and HG Schermers (eds), Mixed Agreements (Deventer, Kluwer, 1983). 2 Opinion 1/94 [1994] ECR I-5267. This is analysed in Chapters 2 and 3.

161

162 International Commitments and the Management of Mixity the Hague Conference on Private International Law.3 The EU holds only observer status in the other Specialised Agencies of the United Nations including the International Monetary Fund and the World Bank. In other words, whilst the EU institutions and the Member States have spent considerable energy seeking to define it, the competence of the Union by no means determines in itself membership of international organisations In relation to the United Nations, for instance, the Union is not a party and is, instead, an observer. Over the years, its interests have been presented through its Member States pursuant to the specific provisions set out in Title V TEU.4 In particular, the Union was represented in the UN General Assembly by the EU Presidency. Following the entry into force of the Lisbon Treaty, the post of the High Representative was designed, amongst others, to raise the visibility of the EU as an international actor and enhance its effectiveness and coherence. To that effect, the EU sought to upgrade its role, an objective which it achieved, not without difficulties, pursuant to Resolution 65/276 adopted by the UN General Assembly on 3 May 2011.5 This provides for enhanced rights, such as the right to be inscribed on the list of speakers along with the representatives of major groups, and the right to have its communications circulated directly as documents of the UN General Assembly. The Union may also present proposals and amendments, albeit ‘as agreed by the States members of the European Union’ and which may be put to a vote only at the request of a Member State.6 It has become apparent that there are two types of questions raised by the EU’s participation in international organisations. The first is about the exercise of its role and the issues which arise from its coexistence with the Member States. The second is about the relationship between the EU and its Member States in the context of organisations which the former is prevented from joining whereas the latter are parties. These will be explored in the following sections.

3. THE VARIOUS GUISES OF MIXITY The Various Guises of Mixity

Mixity may be defined as the legal formula enabling the Union and the Member States to negotiate, conclude and implement an international agreement whose subject-matter falls within the competence of both. In its conception and implications, the phenomenon of mixity is multidimensional: aiming at facilitating the coexistence of the Union and the Member States in international contractual relations, it manifests itself in various ways and contexts. The definition of mixity may be as complex as its application. Rosas articulates a 3 See E Denza, ‘The Community as a Member of International Organizations’ in E Emiliou and D O’Keeffe (eds), The European Union and World Trade Law After the GATT Uruguay Round (Chichester, Wiley, 1996) 3; 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 Common Market Law Review 41; and J Sack, ‘The European Community’s Membership of International Organizations’ (1995) 32 Common Market Law Review 1227. 4 See Chapter 12 below. See K Lenaerts and E de Smijter, ‘The United Nations and the European Union: Living Apart Together’ in K Wellens (ed), International Law: Theory and Practice—Essays in Honour of Eric Suy (The Hague, Kluwer, 1998) 439; and J Wouters, F Hoffmeister and T Ruys (eds), The United Nations and the European Union: An Ever Stronger Partnership (The Hague, TMC Asser Press, 2006). 5 UNGA A/RES/65/276 (2011). See the analysis in PA Serrano de Haro, ‘Participation of the EU in the Work of the UN: General Assembly Resolution 65/276’, CLEER Working Papers 2012/4. 6 UNGA A/RES/65/276 (2011), Annex, Art 1(d).

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detailed typology of mixity,7 distinguishing first between parallel and shared competence: the former denotes cases where the Union is competent to conclude an agreement in its entirety, whilst the Member States have the competence to do so too;8 the latter denotes cases where an agreement falls partly within the competence of the Union and partly within that of the Member States. He then focuses on shared competence which gives rise to mixity stricto sensu and distinguishes between coexistent or concurrent competence: the former denotes cases where distinct parts of an agreement fall within the competence of either the Union or the Member States in a way which ‘could, in fact, be seen as two different treaties presented in one and the same document’;9 the latter denotes cases where both the Union and the Member States have competence to conclude an agreement in its entirety without, however, either being, in principle, exclusive. The competences first conferred upon the European Economic Community by the Single European Act and the European Community by the Maastricht Treaty in the areas of environment10 and development cooperation11 expressly provide for the concurrent existence of national competence. The same applies to the area of the economic and monetary union.12 Eeckhout correctly points out that the various ways in which the coexistence of the Union and the Member States is organised in international practice are difficult to capture in detailed, yet easily accessible, categorisations.13 For the purpose of this analysis, suffice it to point out that, in practical terms, mixity may take various forms. It may involve the negotiation and conclusion of an international agreement by the Union and only a number of Member States. In the pre-Lisbon days, this was the case of the Convention on the Protection of the Alps which was concluded by the Community pursuant to Article 130s(1) EC because its subject-matter was deemed ‘a major challenge to all Member States owing to the cross-frontier nature of the economic, social and ecological problems of the Alpine area’;14 the Member States which concluded the Convention were Germany, Italy, France and Austria. Another such example was the agreement on cooperation on management of water resources in the Danube basin concluded in 1990 between Germany and the then EEC, on the one hand, and Austria, on the other hand.15 More recently, the Union has concluded an agreement with Greece, Albania and the Former Yugoslav Republic of Macedonia on the protection and sustainable development of the Prespa Park area.16 This possibility is also provided under the law of the European

7 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) 201, 203–07. 8 The example given by Rosas is that of the Agreement establishing the European Bank for Reconstruction and Development: ibid, 203. In that case, the coexistence of the Community and the Member States is not legally necessary as a matter of Community law and entails no division of duties between them. 9 Ibid, 204. 10 Art 174(4) EC (now Art 191(4) TFEU). 11 Art 181(2) EC (now Art 211 TFEU). 12 Art 11(5) EC (now Art 219(5) TFEU). However, Declaration No 10 annexed to the TEU at Maastricht made it clear that those three provisions ‘do not affect the principles resulting from the judgment handed down by the Court of Justice in the AETR case’. 13 P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 213. For an excellent typology of bilateral agreements, see M Maresceau, ‘A Typology of Mixed Bilateral Agreements’ in Hillion and Koutrakos (eds), n 1 above, 11. 14 Council Dec 96/191/EC [1996] OJ L61/31 third recital. 15 See Council Dec 90/160/EEC [1990] OJ L90/18. 16 [2011] OJ L258/2 (concluded, on behalf of the EU, by Council Dec 2011/646/EU [2011] OJ L258/1).

164 International Commitments and the Management of Mixity Atomic Energy Community.17 Furthermore, it is also possible for the Union to conclude an agreement along with a number of Member States and the European Atomic Energy Community.18 Mixity enables the Union institutions and the Member States to avoid debates about the legal bases of envisaged agreements and arguments about the precise delineation of competences. Rosas refers to ‘mixity at all costs’ in cases where clauses about political dialogue are inserted in international agreements so as to render the participation of Member States uncontroversial.19 This practice reflects the wish of the Member States to remain visible international actors. It also illustrates the internal difficulties which shape the Union’s international action and which are additional to the external difficulties which the Union faces in its interactions with third parties.20 In certain cases, the participation of Member States in addition to that of the Union is deemed necessary for practical reasons. In the pre-Lisbon days, for instance, this was the case with the International Coffee Agreement 2001 which was concluded by the Community under Article 133 EC (now Article 207 TFEU): the relevant Decision provided that notwithstanding the exclusive Community competence in this matter, and in order to avoid certain temporary operational difficulties, it is appropriate to authorise the Member States to conclude the Agreement at the same time as the Community and to participate on a temporary basis in the new arrangement.21

The entry into force of the Lisbon Treaty raised the question of the form of agreements covering issues which, under the pre-Lisbon constitutional arrangements, had been governed by both European Community and CFSP rules. For example, would an agreement on trade in goods and CFSP matters need to be negotiated and concluded as a mixed agreement? This is the phenomenon referred to as ‘cross-pillar mixity’ in order to reflect the Union’s constitutional structure prior to the entry into force of the Lisbon Treaty.22 Dashwood uses the term ‘CFSP/TFEU mixity’ to describe this type of mixity.23 The reform of the procedural rules for the negotiation of international agreements under Article 218 TFEU24 may be viewed as ruling out recourse to mixity in such cases. After all, there is express provision for the involvement of the High Representative of the 17 See eg the Agreement between the French Republic, the European Atomic Energy Community and the International Atomic Energy Agency for the application of safeguards in connection with the Treaty for the Prohibition of Nuclear Weapons in Latin America and Caribbean [2000] OJ C298/1. 18 See eg the Framework Agreement on a Multilateral Nuclear Environmental Programme in the Russian Federation and its Protocol on Claims, Legal Proceedings and Indemnification concluded by Council Dec 2003/462/EC [2003] OJ L155/35. 19 A Rosas, ‘Mixed Union—Mixed Agreements’ in M Koskenniemi (ed), International Law Aspects of the European Union (The Hague, Kluwer, 1998) 125, 145. 20 For criticism of these ‘false mixed agreements’, see PJ Kuijper and E Paasivirta, ‘EU International Responsibility and its Attribution: From the Inside Looking Out’ in M Evans and P Koutrakos (eds), The International Responsibility of the European Union—European and International Perspectives (Oxford, Hart Publishing, 2013) 35, 44–45. 21 Fifth preamble to Council Dec 2001/877/EC [2001] OJ L326/22. Issues relating to voting procedures and membership of the Executive Board had not been finalised between the Commission and Member States in time for signing the Agreement. It was for this reason that the membership of the Member States was provided for a period of up to one year. 22 See RA Wessel, ‘Cross-pillar Mixity: Combining Competences in the Conclusion of EU International Agreements’ in Hillion and Koutrakos (eds), n 1 above, 30 23 A Dashwood, ‘Mixity in the Era of the Lisbon Treaty’ in Hillion and Koutrakos (eds), n 1 above, 351, 354. 24 See the analysis in Chapter 4 above.

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Union for Foreign Affairs and Security Policy in the negotiation of international agreements dealing ‘exclusively or principally’ with CFSP matters.25 There is also provision for a negotiating team, which would allow for the participation of the High Representative in cases where an international agreement deals with CFSP matters incidentally. In the latter case, the agreement would be negotiated by the Commission. On the other hand, the distinct nature of the CFSP26 may suggest that the Member States would still be keen to assert their international stature in shaping the Union’s treaty relations with third parties in cases where foreign and security issues are involved.27 However, there are examples in the post-Lisbon practice which suggests that mixity is not relied upon in such cases. In May 2014 the Union concluded negotiations with Kosovo for a Stabilisation and Association Agreement. These were led by the Commission, while the High Representative negotiated the issues pertaining to the CFSP and political dialogue. Another relevant case is the Association Agreement with Ukraine. Whilst concluded as a mixed agreement, its provisional application is provided for the parts of it ‘to the extent that they cover matters falling within the Union’s competence, including matters falling within the Union’s competence to define and implement a common foreign and security policy’.28 The sensitivities underpinning these issues are illustrated by the preamble to the Decision which concludes the Agreement with Ukraine and which states that: ‘The provisional application of parts of the Agreement does not prejudge the allocation of competences between the Union and its Member States in accordance with the Treaties.’29 The allocation of competence within mixed agreements is a complex exercise that has given rise to considerable litigation and endless debates amongst practitioners and scholars. As indicated in the analysis of the case-law on the Union’s external competence in Chapter 3, the Court is reluctant to engage in a detailed delineation of areas of competence where it can avoid it: once the issue of the exclusive competence of the Union has been addressed and the nature of the agreement as mixed ascertained, the definition of precise demarcation lines appears to the Court a far less attractive prospect than academic lawyers might wish. The tone had been set quite early on in the AETR judgment, where the line of reasoning for the recognition of implied competence was underpinned by confusion between the questions of its existence and nature.30 The ruling in Opinion 1/94 illustrates that approach. It appears to carry out three main functions: first, to define the limited areas of the WTO framework which fell within the Community’s (now Union’s) exclusive competence; then, to put forward a detailed examination of the reasons for which the GATT and TRIPs as a whole fell beyond that competence as well as clarifying that they did not fall within a domaine reservée for the 25

Art 218(3) TFEU. On the distinct nature of the CFSP in the Union’s constitutional order, see the analysis in Chapter 12. See R Gosalbo Bono, ‘The Organisation of the External Relations of the European Union in the Treaty of Lisbon’ in P Koutrakos (ed), The European Union’s External Relations a Year after LISBON (2011) CLEER Working Paper 2011/3, 13, 31, where he argues that, ultimately, the legal formula for CFSP/TFEU agreements is a matter of political discretion. Gosalbo Bono also argues that, ‘given that one of the aims of the Lisbon Treaty is to enable more unified external representation of the Union’, the conclusion of such agreements by the EU alone ‘should always be considered before any decision is taken’ (ibid). 28 See Art 4 of Council Dec 2014/295/EU 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, as regards the Preamble, Article 1, and Titles I, II and VII thereof [2014] OJ L161/1. 29 Ibid, para 4 of the preamble. 30 Case 22/70 Commission v Council [1971] ECR 263: see the analysis in Chapter 3 above. 26 27

166 International Commitments and the Management of Mixity Member States; and finally, to articulate the duty of cooperation which ought to define the management of shared competence in practice.31 This emphasis on the existence of shared competence and the reluctance to address the precise allocation of competences may be explained in the light of the nature of the specific context within which the Court is asked to adjudicate: it is the claim for exclusivity which is usually at the centre of the request of the Commission either in direct actions or requests under Article 218(11) TFEU. It may also be explained by the constant development of EU law and its link to the determination of the nature of Union competence which, hence, renders the allocation of competences subject to continuous redefinition. In fact, the definition of competences is clearly a constitutional question related to the nature and development of the Union legal order and, as such, is viewed as internal to the Community. This was made clear by the Court when it was asked, in 1978, to rule on the compatibility of the Draft Convention of the International Atomic Energy on the Physical Protection of Nuclear Materials, Facilities and Transports. It ruled as follows: It is not necessary to set out and determine, as regards other parties to the Convention, the division of powers  … 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.32

It is in accordance with this ‘internal logic’ that the Court has consistently dismissed arguments by the Commission as to the potentially undermining effects of shared competence on the protection of the Union’s interests internationally. In doing so, the relevant case-law has been characterised by an increasing emphasis on the ways in which shared competence should be managed: this was apparent in its rulings on the conclusion of both the WTO Agreements and the Cartagena Protocol.33

4. THE EXERCISE OF SHARED COMPETENCE BY THE MEMBER STATES The Exercise of Shared Competence by the Member States

In Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission the Parliament challenged the legality of a decision to grant special aid to Bangladesh.34 This decision required that such aid be granted as part of the Community’s policy towards that country. As such, it would be provided by the Member States either directly or by means of an account administered by the Commission. The contested act had been adopted by the Member States meeting in the Council following a Commission proposal and had been incorporated in the conclusions of the relevant Council meeting. The Court held that ‘acts by representatives of the Member States acting, not in their capacity as members of the Council, but as representatives of their governments, and

31

See the analysis in Chapter 3 above. Ruling 1/78 [1978] ECR 2151, para 35. The ruling was delivered under the procedure laid down in Art 103 of the EAEC Treaty. 33 See Opinion 2/00 [2001] ECR I-9713 and the analysis in Chapter 2 above. 34 Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission (re: Bangladesh aid) [1993] ECR I-3685. 32

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thus collectively exercising the powers of the Member States, are not subject to judicial review’.35 However, it also noted that that would be the case only if, ‘having regard to its content and all the circumstances in which it was adopted’, the contested act was not actually a Council decision intending to produce legal effects within the Community legal order.36 First, the Court ascertained the nature and implications of the competence of the Community in the subject-matter of the contested act: [T]he Community does not have exclusive competence in the field of humanitarian aid, and … consequently the Member States are not precluded from exercising their competence in that regard collectively in the Council or outside it.37

The significance of this statement for the exercise of the competence shared by the Member States with the Union can hardly be overstated: Union institutions, procedures and forms of action are available to the Member States in addition to the intergovernmental forms of cooperation to which they may decide to have recourse. This conclusion was confirmed in the remaining part of the judgment. In terms of the involvement of Union institutions in the implementation of such policies, EU law ‘does not prevent 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’.38 In terms of the mode of implementation of such policies, ‘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’.39 In terms of relying upon the Community budget in order to give effect to such policies, since the contested act does not require the use of the Community budget for the part of the aid to be administered by the Commission, the budget entry made by the latter cannot have any bearing on how the act is categorized.40

The exercise of national competence in the context of development cooperation was also the subject-matter of the European Development Fund (EDF) case.41 This was an annulment action brought by the Parliament challenging the financial aspects of the Fourth Lomé Convention as laid down in a Financial Protocol attached to it. That Protocol provided for the financing and administration of Community aid to the African, Caribbean and Pacific (ACP) countries. In order to carry out the obligations undertaken thereunder, the representatives of the governments of the Member States, meeting within the Council, adopted an Internal Agreement. This document provides that the Member States set up a European Development Fund and specifies the contribution of each state; the Union’s institutions became involved in various ways: the Commission was responsible for the administration of the Fund and the Court of Auditors was to control its operations, whereas the discharge for its financial management was to be given to the Commission by the Parliament on the recommendation of the Council. The 35 36 37 38 39 40 41

Ibid, para 12. Ibid, para 14. Ibid, para 16. Ibid, para 20. Ibid, para 22. Ibid, para 24. Case C-316/91 Parliament v Council [1994] ECR I-625.

168 International Commitments and the Management of Mixity implementation of the Agreement would be further defined by a Financial Regulation adopted by the Council. It was the latter measure which was challenged by the Parliament: it argued that it dealt with Community expenditure and, as such, it ought to have been adopted pursuant to the budgetary provisions of the EC Treaty which required that the Parliament be consulted. In its action, the Parliament focused on the provision of financial aid by the Community under the Fourth Lomé Convention. It argued that that entailed an international law obligation for the Community which was distinct from that undertaken by the Member States. Again, the Court first identified the nature and implications of Community competence: The Community’s competence in that field is not exclusive. 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 Community.42

This conclusion was substantiated by the wording of the EC Treaty provision on development cooperation which had just been incorporated at Maastricht and according to which the Member States and the Community were to coordinate their policies and to consult each other on their aid programmes and about the possibility of joint action. In the second part of the judgment, it was recalled that the Fourth Lomé Convention had been concluded by the Community and its Member States on the one part and the ACP states on the other part. Following an examination of a number of its provisions, the Court pointed out the ‘essentially bilateral character of the cooperation’. It then concluded that: [I]n the absence of derogations expressly laid down in the Convention, the Community and its Member States as partners of the ACP States are jointly liable to those latter States for the fulfilment of every obligation arising from the commitments undertaken, including those relating to financial assistance.43

In the third part of the judgment, the Court examined how precisely these obligations were to be performed. It held that it was for the Community and the Member States to choose how to perform their obligation, and in that case to choose the source and method of financing their cooperation with the ACP countries. The contested action merely expressed the choice made by the Member States: the legality of the mode of its implementation and its reliance upon Community institutions and procedures had already been sanctioned in the Bangladesh judgment. The right of the Member States to rely upon the Union’s institutions in cases where they act beyond the Union’s legal order has arisen recently in the context of the financial crisis. Since October 2012, the European Stability Mechanism (ESM) has been in operation, aiming to provide stability support through a number of financial assistance instruments to any of 18 Member States should these experience or be threatened by severe financing problems. The ESM was set up by an international treaty concluded by the Member States which have the euro as their currency. The ESM Treaty confers considerable powers on the European Commission and the European Central Bank (ECB). The former in particular is entrusted with negotiating Memoranda of Understanding

42 43

Ibid, para 26. Ibid, para 29.

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with the Member State in financial difficulty setting out the details of and conditions for the provision of financial assistance. The ESM also provides that disputes about its interpretation and application which may not be resolved by its Board of Directors would be submitted to the Court of Justice, the judgment of which would be binding on the parties.44 The conclusion of the Treaty was challenged before the Irish Supreme Court which then made a reference to the Court of Justice in Case C-370/12 Pringle.45 In a judgment rendered, unusually, by the full Court and which, predictably, attracted considerable media and academic attention,46 the Court sanctioned the choice of the Member States. With references to both the Bangladesh and EDF judgments, the Court reminds us that the Member States are entitled, in areas which do not fall under the exclusive competence of the Union, to entrust tasks to the institutions, outside the framework of the Union, such as the task of coordinating a collective action undertaken by the Member States or managing financial assistance.47

For the purpose of this analysis, the judgment in Pringle deals with two further issues. First, it places more emphasis on ensuring that ‘those tasks do not alter the essential character of the powers conferred on those institutions by the EU and FEU Treaties’.48 The Court concluded they did not.49 In relation to the Commission, it pointed out that the objective of its involvement in the ESM, namely to ensure the financial stability of the euro, was entirely consistent with its Article 17(1) TEU duty to promote the general interest of the Union. As for its ESM task to negotiate Memoranda of Understanding, this would enable the Commission to ensure their compliance with EU law. In doing so, the Commission would carry out its duty under Article 17(1) TEU to ‘oversee the application of Union law’.50 Secondly, it tackles the question whether the judgments in Bangladesh and EDF were still good authority, as they predated the introduction of enhanced cooperation in the Union’s primary rules. In other words, given that even a number of Member States could rely upon the EU institutions by organising their collective action within the Union legal order under Article 20 TFEU, why should they be allowed to choose to operate beyond 44

Art 37(3) ESM Treaty (www.european-council.europa.eu/media/582311/05-tesm2.en12.pdf) Case C-370/12 Pringle ECLI:EU:C:2012:756. 46 See eg S Adam and F J Mena Parras, ‘The European Stability Mechanism through the Legal Meanderings of the Union’s Constitutionalism: Comment on Pringle’ (2013) 38 European Law Review 848; G Beck, ‘The Court of Justice, Legal Reasoning, and the Pringle Case—Law as the Continuation of Politics by Other Means’ (2014) 39 European Law Review 234; T Beukers and B De Witte, ‘The Court of Justice Approves the Creation of the European Stability Mechanism Outside the EU Legal Order: Pringle’ (2013) 50 Common Market Law Review 805; P Craig, ‘Pringle: Legal Reasoning, Text, Purpose and Teleology’ (2013) 20 Maastricht Journal of European and Comparative Law 1. 47 n 45 above, para 158 48 Ibid. 49 It did so having first pointed out that the activities of the ESM fell under economic policy where the EU does not have an exclusive competence; it pointed out that the duties conferred by the ESM Treaties on the Commission and the ECB were not of a decision-making nature and, in any case, would commit the ESM solely. 50 As for the ECB, the Court held that the tasks conferred upon it by the ESM Treaty are in line with the various tasks which the FEU Treaty and the Statute of the ESCB (and of the ECB) confer on that institution. By virtue of its duties within the ESM Treaty, the ECB supports the general economic policies in the Union, in accordance with Art 282(2) TFEU. Moreover, it is clear from Art 6.2 of the Statute of the ESCB that the ECB is entitled to participate in international monetary institutions. Art 23 of that Statute confirms that the ECB may ‘establish relations … with organisations’ (para 165). 45

170 International Commitments and the Management of Mixity the latter whilst still benefiting from its institutions? The Court answered this question by pointing out that a vital condition for recourse to enhanced cooperation was not met. Article 20(1) TFEU provides that enhanced cooperation may be established in a given area only where the Union itself is competent to act in that area. However, the Union is not endowed with a specific competence to establish a permanent stability mechanism.51

5. THE NEGOTIATION OF MIXED AGREEMENTS The Negotiation of Mixed Agreements

If it were possible to identify certain threads in EU practice related to the negotiation of international agreements,52 the following two would become easily apparent: on the one hand, the determination of the dividing line between Union and national competence is dissociated from the process of the actual negotiation of a given agreement; on the other hand, no firm commitment is undertaken by either the Union or the Member States as to the allocation of their competence. In practical terms, the application of those principles entails the assumption of the main negotiating role by the Commission, albeit without prejudice to the allocation of competence between the Union and the Member States. Therefore, the Commission acts as the sole negotiator on the basis of the mandate provided by the Council, and is also entrusted by the Member States to negotiate on their behalf.53 The Presidency is also present at the negotiations, monitoring the way that matters falling within national competence are dealt with.54 The Lisbon Treaty makes express provision for a negotiating team in Article 218(3) TFEU for the first time. It was on the basis of that formula that the WTO Agreement was actually negotiated. It was stated by the Council that ‘in order to ensure the maximum consistency in the conduct of the negotiations, it was decided that the Commission would act as the sole negotiator on behalf of the Community and the Member States’, albeit without ‘prejudg[ing] the question of the competence of the Community or the Member States on particular issues’.55 This arrangement, which has been applied so extensively as to cover association and cooperation agreements,56 has various advantages. In legal terms, it is consistent with the logic of implied competence. By linking the scope of legislation adopted pursuant to the exercise of the internal competence to the nature of the external competence, the clear implication is that the dividing line between Union and national competence may 51

See the analysis in paras 64–66 of the Pringle judgment (n 45 above). See J Groux, ‘Mixed Negotiations’ in O’Keeffe and Schermers (eds), n 1 above, 87. 53 See eg Decision 2012/494/EU of the Representatives of the Governments of the Member States, meeting within the Council of 23 March 2012 authorising the opening of negotiations for an international agreement on the creation of the EU–LAC Foundation as an international organisation [2012] OJ L240/2, and Decision 2011/712 of the Representatives of the Governments of the Member States, meeting within the Council of 10 June 2011 authorising the Presidency of the Council to negotiate, on behalf of the Member States, the provisions of a legally binding agreement on forests in Europe that fall within the competences of the Member States, [2011] OJ L285/1. 54 To that effect, see the Opinion by Jacobs AG in Case C-316/91 Parliament v Council, n 41 above, para 82. 55 Opinion 1/94 (WTO Agreements) [1994] ECR I-5267, 5282. 56 Heliskoski refers to the exceptional cases of the first and second Yaoundé Conventions signed in July 1963 and July 1969 respectively which were negotiated by representatives of the Member States as well as the Commission: Mixed Agreements as a Technique for Organizing the International Relations of the European Community and its Member States (The Hague, Kluwer, 2001) 80. 52

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require redefinition even during the process of negotiating a given international agreement. In practical terms, it provides continuity in the representation of the position of the Union and national positions. In symbolic terms, it ensures that the determination of competence, ie an issue owing its existence to the constitutional idiosyncrasies of the Union legal order, remains internal to that order. However, the presentation of the Union and national positions by the Commission in the context of the negotiation of mixed agreements raises specific questions relating to the coordination between the Commission and the Member States. As the latter enjoy competence over parts of the agreement and, hence, are entitled to express and protect their interests in the negotiations of those parts, the Commission is constrained as to the substance of the position it may present to its negotiating partners. There is no single formula applying to all mixed agreements as to quite how a joint position is to be determined and presented by the Commission. It is recalled that, in its case-law on the external competence of the Union, the Court of Justice has increasingly relied upon the duty of cooperation: binding upon both the Union institutions and the Member States, this duty applies to the process of negotiation, conclusion and implementation of international agreements.57 The coordination between the Commission and representatives of the Member States aiming at enabling the former to present a joint position is a case in which this duty is entirely relevant. An interesting example of quasi-formal arrangement as to the coordination between the Community and the Member States was illustrated by PROBA 20. This was an arrangement applied to commodity agreements negotiated within the context of the 1970s Integrated Commodity Programme of the United Nations Conference on Trade and Development. As this particular type of international agreement was popular in the 1970s, the Community institutions sought to agree upon how to represent the interests of the Community. It is noteworthy that PROBA 20, which was agreed upon by the COREPER on 27 March 1981, had been suggested by the Commission. In terms of the negotiation of agreements, PROBA 20 provides as follows: The Community and the Member States will participate in a joint delegation: (i) within which the Member States will be individually identifiable (accreditation and nameplate). In the conference rooms the Member States will gather around the nameplate ‘EEC’. In the list of delegations the names of the national and Community delegates will be arranged in a single list. … (ii) which will operate on the basis of a common position previously established pursuant to the usual procedures (positions arrived at within the bodies of the Council—coordination on the spot—the possibility of recourse to the Council in case of difficulties on the spot); amongst the matters to be specifically discussed by the management bodies will be certain matters, notably of a technical nature or which concern only certain Member States which will not require a common position. As far as possible, these matters shall be established previously by common agreement. (iii) which will express the common position with a single voice. The spokesman will normally be the representative of the Commission. However, depending on tactical or technical circumstances, the common position may also be presented by the representative of the Member State holding the Presidency or by a representative of another Member State. In 57

See eg Opinion 1/94, n 55 above, paras 107–09.

172 International Commitments and the Management of Mixity certain cases, interventions may be made by Member States provided that they are strictly within the framework of the common position, they aim at supporting and developing that common position and are made in cooperation with the spokesman and the representative of the Member State holding the Council Presidency. In particular, such flexibility will occur in cases where the personality and experience of representatives of Member States could facilitate the defence of the common interests or in cases where a specific issue does not require a common position (cf ii); (iv) which will be represented pursuant to informal means or restraints by the representative of the Commission, normally accompanied by the representative of the Member state holding the Presidency whilst the Member States are being kept constantly informed. The flexibility provided for under (iii) will also apply to this case.58

Two interrelated features of this arrangement are worth exploring. The first is the subjectmatter of the agreements to which PROBA 20 is applicable: commodity agreements, it is recalled, had been held by the Court to fall, in principle, within the scope of the CCP and, therefore, to be covered by the Community’s exclusive competence.59 And yet, it was precisely for such agreements that arrangements for coordination between the Commission and representatives of the Member States were deemed necessary. What makes this all the more interesting is the fact that the above formula had been suggested by the Commission itself, ie the institution which would normally be the sole negotiator in any case. In addition, it is also recalled that the ruling in Opinion 1/78 sanctioned the actual participation of the Member States in the negotiation and conclusion of the Agreement on Natural Rubber, depending on the determination of the issue of financing. As the conclusion reached by the Court suggested a degree of flexibility, so does the content of the arrangements laid down in PROBA 20. Rather than being defined in terms of merely the procedural ways in which national interests could be expressed, flexibility was also given a substantive content. At the Council meeting approving PROBA 20, the German, Danish, French and British delegations insisted on attaching the following general statement to the minutes: These delegations start from the principle that the Arrangement between the Council and the Commission provides for the effective participation of the Community and its Member States in the negotiations, the preparatory work and the institutions of international commodity agreements and, equally, takes into account their national interests regarding commodity policy. If, in the light of essential interests in wholly exceptional cases, the above objective is not met, it should be possible to make national declarations. This should be the case provided that every effort has been made in a persistent manner in order to find a common position and that the interests of the Community are respected.60

The arrangements laid down in PROBA 20, whilst formalising the parallel participation of the Member States, did not provide for the circumstances under which no common position could be reached. It was in the light of this incomplete character that the above declaration was made. The legality of this formula was questioned in the light of the exclusive competence of the Community over commodity agreements in the context of

58

Translation by the author. Opinion 1/78 [1979] ECR 2871. 60 Extracts from the PROBA Agreement are also included in ELM Voelker and J Steenbergen, Leading Cases and Materials on the External Relations Law of the EC (Deventer, Kluwer, 1985) 59 et seq. 59

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the CCP.61 In responding to a written question in the European Parliament, the Commission sought to justify its action as follows: This arrangement is intended to achieve the basic objective of enabling the Community to participate and speak externally as a single entity. It would thus succeed, pragmatically and without prejudice to the various legal arguments advanced, in ending the difficulties which for many years have resulted from the division of powers between the Community and the Member States in respect of their participation in international activities and agreements in connection with commodities.62

Whilst apparently deviating from the principle asserted (rather than the practice sanctioned) in Opinion 1/78, the above approach suggested by the Commission and agreed upon by the Council is an improvement from past practice where the Community delegation had consisted of representatives of the Commission, the Presidency and the Member States.63 At this juncture, it is appropriate to return to one of the themes of the previous chapters, namely pragmatism: it is not only the Court of Justice which construes the management of EU external relations on the basis of various legal and practical considerations. At times, the Union institutions appear equally willing to resort to legal arrangements which would ensure a degree of unity whilst reserving their position as a matter of principle. Indeed, in the above extract describing the Commission’s position, the phrase ‘pragmatically and without prejudice to the various legal arguments advanced’ is central to its approach which, therefore, appears responsive to that emerging from the case-law of that era: the question of the precise delimitation of competences did not detract from the need to set out pragmatic arrangements for the negotiation of international agreements. Moreover, its open-ended character notwithstanding, PROBA 20 is important for formalising an understanding shared with the Council that the Community should speak, and appear to speak, with a single voice. The efforts by the Commission and the Member States to reconcile their interests in the process of the negotiation of international agreements do not always lead to the adoption of a unitary formula. In the case of the United Nations Convention on the Law of the Sea (UNCLOS), for instance, Member States were particularly insistent in making their presence clear and distinct.64 Furthermore, the determination of a common position to be presented by the Commission is not always easy. In this respect, the Treaty of Rome had provided for a mechanism for coordination between the Member States in areas of particular interest to the common market relevant within the context of international organisations. This provision, laid down in Article 116 EC, which was deleted at Maastricht, imposed a duty on Member States to proceed by common action. It even endowed the Council with the power to define the scope and implementation of such action by qualified majority pursuant to a proposal by the Commission.

61 See JHH Weiler, ‘The External Legal Relations of Non-Unitary Actors: Mixity and the Federal Principle’ in O’Keefe and Schermers (eds), n 1 above, 35, 75. For a different view, see R Barents, ‘The European Communities and the Commodity Organisations’ (1984) 10 Legal Issues of Economic Integration 77, 85–88. 62 Answer to Written Question 343/81 [1981] OJ C274/3. 63 See E Wellenstein, ‘Participation of the Community in International Commodity Agreements’ in St John Bates et al (eds), In Memorial JDB Mitchell (London, Sweet & Maxwell, 1983) 65. 64 See KR Simmonds, ‘The European Community and the New Law of the Sea’ (1989) 218 Recueil des Cours de l’Academie de Droit International de la Haye 9, 112–15. See also T Treves, ‘The European Community and the Law of the Sea Convention: New Developments’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (The Hague, Kluwer, 2002) 279, 281–90.

174 International Commitments and the Management of Mixity In practical terms, the adoption of a common position to be presented in the international negotiations of mixed agreements is determined on a case-by-case basis. In the event of failure to reach a common position, and independently of the issue of the application of the duty of cooperation, the involvement of the Member States in the negotiations is not ruled out.65 This has been criticised as contrary to the principle of unity in the international representation of the Union and potentially undermining Union competence.66 Be that as it may, it has been the rule rather than the exception that, in such contexts, the Union does speak with one voice. If not due to the overarching shadow of the duty of cooperation, this has been due to practical considerations. After all, both the Union institutions and the Member States agree that, in this context, they do not need to agree on the division of treaty-making competence. In addition, they realise that third parties should not be enabled to benefit from internal difficulties in the Union’s camp.

6. CONCLUSION AND RATIFICATION OF MIXED AGREEMENTS Conclusion and Ratification of Mixed Agreements

In terms of the conclusion of mixed agreements, there is a degree of coordination between the Union and the Member States in the process of accession to international conventions and ratification of agreements. In relation to the Vienna Convention for the Protection of the Ozone Layer and the Montreal Protocol on Substances that Deplete the Ozone Layer, for instance, the relevant Council Decision set out a deadline by which the Member States are to ‘take the necessary steps to permit the deposit, as far as possible simultaneously, of the instruments of ratification, acceptance, approval or accession  … by the Community and the Member States’;67 to that effect, there is express provision for cooperation between the Commission and the Member States. At other instances, the simultaneous ratification of an agreement is expressly recognised as necessary for the latter’s uniform and complete application within the Union legal order.68 In any case, the limits of this practice are apparent, as ratification of an international agreement falls within the sovereign discretion of states. As to the issue of the entry into force of mixed agreements, in contrast to the EC Treaty, the European Atomic Energy Community provided for a specific rule. Article 102 EAEC Treaty reads as follows: Agreements or contracts concluded with a third State, an international organisation or a national of a third State to which, in addition to the Community, one or more Member States are parties, shall not enter into force until the Commission has been notified by all the Member States concerned that those agreements or contracts have become applicable in accordance with the provisions of their respective national laws.

This arrangement69 is also followed in the EU legal order as a matter of practice. Whilst 65 See Commentaire Mégret, vol 12: Relations Extérieures (Brussels, Editions de l’Université de Bruxelles. 2005) 183. 66 See C Timmermans, ‘Organising Joint Participation of EC and Member States’ in Dashwood and Hillion (eds), n 7 above, 239, 242. 67 Art 3(1) Council Dec 88/540/EEC [1988] OJ L297/8. 68 See Council Dec 2001/539/EC on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention) [2001] OJ L194/38. 69 For its application to the Additional Protocols to the Treaty on the Non-Proliferation of Nuclear Weapons, see E Denza, ‘Non-proliferation of Nuclear Weapons: The European Union and Iran’ (2005) 10 European Foreign Affairs Review 289.

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often applied smoothly, there have been instances where the period between the conclusion of an agreement and its entry into force is unnecessarily long because of delays in the process of ratification in national legal orders. The Cooperation and Customs Union Agreement with San Marino is an infamous example of such delay often mentioned in the academic literature:70 the Agreement actually entered into force on 28 March 2002, ie more than ten years after its approval by the parties.71 This problem is generally dealt with by separating, where possible, the component of the agreement falling with the exclusive competence of the Union (eg the CCP) and incorporating it in an Interim Agreement concluded by the Union under Article 207 TFEU and its contracting partner. Indeed, this was the case in the above-mentioned Agreement with San Marino.72 In cases were international agreements are open to both states and international organisations, they may require that the latter submit a declaration of competence. This aims to declare to the parties the areas covered by the agreement in which competence has been transferred by the Member States to the organisation. The Union has submitted a number of such declarations.73 The first in which the Community agreed to provide such a declaration was the Law of the Sea Convention.74 The Declaration submitted by the Community reads in part as follows: 1. Matters for which the Community has exclusive competence: The Community points out that its Member States have transferred competence to it with regard to the conservation and management of sea fishing resources. Hence in this field it is for the Community to adopt the relevant rules and regulations (which are enforced by the Member States) and, within its competence, to enter into external undertakings with third States or competent international organisations. This competence applies to waters under national fisheries jurisdiction and to the high seas. Nevertheless, in respect of measures relating to the exercise of jurisdiction over vessels, flagging and registration of vessels and the enforcement of penal and administrative sanctions, competence rests with the member States whilst respecting Community law. Community law also provides for administrative sanctions. 2. Matters for which the Community shares competence with its Member States With regard to fisheries, for a certain number of matters that are not directly related to the conservation and management of sea fishing resources, for example research and technological development and development cooperation, there is shared competence.

Declarations of competence are also required in agreements concluded by the European Atomic Energy Community.75

70

See Rosas, n 2 above, 208; Eeckhout, n 13 above, 218; and Commentaire Mégret, n 65 above, 186. [2002] OJ L84/43. 72 [1992] OJ L359/14. 73 See J Heliskoski, ‘EU Declarations of Competence and International Responsibility’ in Evans and Koutrakos (eds), n 20 above, 189. 74 Annex IX to the Convention. For the participation of the Community, see B-J Diewitz, The European Union, its Member States and the Law of the Sea: An Assessment of the Relationship between the EU and its Member States in European External Relations Law Pertaining to the United Nations Convention on the Law of the Sea (PhD thesis, University of Bristol, 2012); and KR Simmonds, ‘The Community’s Participation in the UN Law of the Sea Convention’ in D O’Keeffe and HG Schermers (eds), Essays in European Law and Integration (Deventer, Kluwer, 1982) 179. For a more favourable assessment in the light of its specific context, see R Barents, ‘The European Communities and the Commodity Organisations’ (1984) 10 Legal Issues of Economic Integration 77, 85 et seq. 75 See eg the Convention on Nuclear Safety (1996) concluded under the auspices of the International Atomic Energy Agency. The content of the required declaration of competence was the subject-matter of Case C-29/99 71

176 International Commitments and the Management of Mixity A declaration of competence reflects the division between the Union and national competence in the context of a specific agreement to which both are, or intend to become, parties. Its main function is to inform other parties to the agreement as to whether the Union or the Member States are responsible for the performance of particular obligations. As the provisions of international agreements and the balance between EU and national competence are subject to change, so is the content of a declaration. This was the case with the General Fisheries Commission for the Mediterranean (1998):76 its amendment establishing an autonomous budget and the ensuing financial contribution by the Community necessitated the submission of an amended declaration of competence and voting rights.77 In the case of the Cartagena Protocol on Biosafety and in accordance with Article 34(3) of the Convention on Biological Diversity, the Union submitted a declaration of competence following the ruling of the Court of Justice in Opinion 2/00.78 Whilst the logic of declarations of competence is clear and their objective to bring clarity to a legal context which the coexistence of international actors may render complex is commendable, there are problems with the manner in which such declarations are drafted. A case in point is the declaration which the Union submitted to the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (UNESCO).79 In one paragraph with reference to Treaty provisions, the Declaration describes whether the Union has exclusive or shared competence in a wide range of policy areas. This is followed by a two-page list of secondary Union measures which is intended to ‘illustrate the extent of the area of competence of the Community in accordance with the provisions establishing the European Community’.80 A final paragraph states that: The exercise of Community competence is, by its nature, subject to continuous development. In this respect, therefore, the Community reserves the right to notify other future declarations regarding the distribution of competences between the European Community and the Member States.81

Other declarations of competence are no clearer. An example of a shorter, albeit not more succinct, declaration is provided in the context of the Hague Conference on Private International Law.82 This duplicates Treaty provisions in areas covered by the Conference and explains that, in cases where its competence is not exclusive, the Union will act in accordance with the principle of subsidiarity. It then refers to certain internal measures adopted by the Union and also states that ‘[p]rovisions on private international law can also be found in other Community legislation, notably in the area of consumer protection, insurance, financial services and intellectual property’.83 Finally, it refers to the

Commission v Council [2002] ECR I-11221 annotated by P Koutrakos in (2004) 41 Common Market Law Review 191. 76

It was concluded on behalf of the Community by Council Dec 98/416/EC [1998] OJ L190/34. See Annex to Council Dec 2004/815/EC [2004] OJ L357/30. 78 [2001] ECR I-9713. 79 [2006] OJ L201/17, concluded pursuant to Council Dec 2006/515/EC [2006] OJ L201/15. 80 Ibid, Annex 1(b). 81 Ibid. 82 [2006] OJ L297/3, concluded pursuant to Council Dec 2006/719/EC [2006] OJ L297/1. 83 Ibid, para 5 of the Declaration. 77

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principles on competence as introduced by the Court, mentioning expressly judgments such as AETR and Open Skies and Opinions 1/76 and 2/91.84 It is by no means apparent how such a declaration would make it easier for the Union’s partners to familiarise themselves with the division of competence in the areas covered by a given mixed agreement, let alone ascertain who is responsible for which part of the agreement.85 After all, decades after the introduction of implied external competence, EU academic lawyers and practitioners still rack their brains in their efforts to appreciate the practical implications of the often cryptic ways in which the AETR principle is construed by the Court. The complexity of this exercise is illustrated by the effort of the drafters of the Lisbon Treaty to capture this and the other related principles (such as that of necessity) in primary rules—the analysis in Chapter 3 highlights the perils of this exercise, illustrated by the problematic wording of Articles 3(2) TFEU and 216(1) TFEU. In a similar vein, the principle of subsidiarity, mentioned in the Declaration of Competence of the Hague Conference on Private International Law, is hardly a model of clarity. Therefore, it is puzzling how such declarations may be deemed by their drafters to be helpful to the Union’s partners in international agreements. Commenting on the drafting of these documents, De Witte wonders whether ‘[p]erhaps one could consider this case to be “illustrative” of the fact that the constitutional law of the EU’s foreign relations is out of control’.86 Another issue worth mentioning is the possibility of a disconnection clause in a mixed agreement. The aim of such a clause is to make third parties aware that, in the context of relations between Member States, EU law would apply instead of the rules laid down in the agreement in question. Disconnection clauses are normally provided for in Council of Europe agreements87 and are not confined to mixed agreements, as they may also be included in agreements where the Member States are parties but the Union is not, and also in agreements where the EU is a party but the Member States are not.88 In fact, it has been argued that such clauses are irrelevant in mixed agreements.89 It is recalled that in Opinion 1/03 the Court of Justice held that the provision for a disconnection clause in the Lugano Convention of 1988 on jurisdiction and the enforcement of judgments in civil and commercial matters did not make the exclusive nature of the Union’s competence irrelevant.90

84 Opinion 1/76 [1977] ECR 741; Opinion 2/91 [1993] ECR I-1061; Case 22/70 Commission v Council, n 30 above; Case-C-467/98 Commission v Denmark [2002] ECR I-9519. 85 For the perspective of a third party, see P Olson, ‘Mixity from the Outside: The Perspective of a Treaty Partner’ in Hillion and Koutrakos (eds), n 1 above, 331 (at 347 for declarations of competence in particular). See also the criticism in A Delgado Casteleiro, ‘EU Declarations of Competence to Multilateral Agreements: A Useful Reference Base?’ (2012) 17 European Foreign Affairs Review 491. 86 B De Witte, ‘Too Much Constitutional Law in the European Union’s Foreign Relations’ in M Cremona and B De Witte (eds), EU Foreign Relations—Constitutional Fundamentals (Oxford, Hart Publishing, 2008) 3, 15. 87 See eg Art 52(4) of Council of Europe Convention on laundering, search, seizure and confiscation of the proceeds from crime and on the financing of terrorism (Convention No 198) (signed by the EU in April 2009, not yet in force and not yet published in the OJ). 88 See the analysis in M Cremona, ‘Disconnection Clauses in EU Law and Practice’ in Hillion and Koutrakos (eds), n 1 above, 160. 89 See F Hoffmeister, ‘The Contribution of EU Practice to International Law’ in M Cremona (ed), Developments in EU External Relations Law (Oxford, Oxford University Press, 2008) 37, 68–69. Cf M Cremona, ‘Disconnection Clauses in EU Law and Practice’ in Hillion and Koutrakos (eds), n 1 above, 180–81. 90 Opinion 1/03 [2006] ECR I-1145.

178 International Commitments and the Management of Mixity 7. PARTICIPATION IN MIXED AGREEMENTS Participation in Mixed Agreements

In terms of the practice of the participation of the Union and its Member States in international organisations, the voting rights of the Union are exercised on the basis of the underlying principles of competence. As the International Agreement on Jute and Jute Products specifies: [I]n the case of voting on matters within their competence, such intergovernmental organisations shall vote with a number of votes equal to the total number of votes attributable to their member States in accordance with [the specific provisions of the Agreement]. In such cases, the member States of such intergovernmental organisations shall not be entitled to exercise their individual rights.91

There is no single formula applying to all mixed agreements for how the EU position is determined and presented.92 In some cases, provision to that effect is made in the Council Decision concluding the agreement on behalf of the Union. Furthermore, the Member States may formalise the way in which they are to participate in an agreement concluded along with the Union.93 The case of the participation of the Community and its Member States in the FAO is interesting. The Union is a member of the FAO along with the Member States. This was achieved following an amendment of the FAO’s constitution which, inter alia, permitted international organisations to accede to it. As a result, the Union was required to submit a declaration of competence specifying the areas in which it was endowed with exclusive competence, the latter including all matters concerning fisheries aimed at protecting fishing grounds and conserving the biological resources of the sea.94 In terms of decision-making and voting rights, the General Rules of the FAO provide as follows: Rule XLI(2). Before any meeting of the organization the Member Organization or its Member States shall indicate which, as between the Member Organization and its Member States, has competence  … and which, as between the Member Organization and its Member States, shall exercise the right to vote in respect of each particular agenda item. Rule XLI(3). In cases where an agenda item covers both matters in respect of which competence has been transferred to the Member Organization and matters which lie within the competence of its Member states, both the Member Organization and its Member States may participate in the discussions. In such cases the meeting, in arriving at its decisions, shall take into account only the intervention of the party which has the right to vote.

In relation to the coordination of the positions between the Community and the Member 91

Art 5(2) [1991] OJ L29/4 adopted by the Community by Council Dec 91/51/EEC [1991] OJ L29/1. Issues of representation may also arise in the CFSP context. A case in point is the Union’s participation in the Korean Peninsular Energy Development Organisation (KEDO) (now wound down) where an arrangement about participation in the KEDO Executive Board was agreed upon in Council Common Position 2001/869/ CFSP [2001] OJ L325/1. 93 See eg the Internal Agreement between the representatives of the governments of the Member States, meeting with the Council, on measures to be taken and procedures to be followed for the implementation of the ACP–EC Partnership Agreement [2000] OJ L317/376, amended by Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, amending the Internal Agreement of 18 September 2000 on measures to be taken and procedures to be followed for the implementation of the ACP-EC Partnership Agreement [2006] OJ L247/48. 94 See R Frid, The Relations Between the EC and International Organizations—Legal Theory and Practice (The Hague, Kluwer, 1995) ch 5. 92

Participation in Mixed Agreements 179 States, the Council and the Commission concluded an Arrangement on the preparation for FAO meetings, statements and voting. The following section of that Arrangement is worth quoting in full: 1.12. In the absence of an agreement between the Commission and the Member States  … the matter will be decided according to the procedure provided for in the Treaty and the agreed practice. In the absence of agreement on this basis, the matter will be referred to the Permanent Representatives Committee. 1.13. Decisions referred to in 1.12 are without prejudice to the respective competences of the Community and its Member States. 2.1. Where an agenda item deals with matters of exclusive Community competence, the Commission shall speak and vote for the Community. 2.2. Where an agenda item deals with matters of national competence, Member States shall speak and vote. 2.3. Where an agenda item deals with matters containing elements both of national and of Community competence, the aim will be to achieve a common position by consensus. If a common position can be achieved: —the Presidency shall express the common position when the thrust of the issue lies in an area outside the exclusive competence of the Community. Member States and the Commission may speak to support and/or to add to the Presidency statement. Member States will vote in accordance with the common position. —the Commission shall express the common position when the thrust of the issue lies in an area within the exclusive competence of the Community. Member States may speak to support and/or add to the Commission’s statement. The Commission will vote in accordance with the common position. 2.4. Should it prove impossible to reach a common position, Member States shall speak and vote. In accordance with the FAO rules of procedure, the Commission would be able to participate in the discussion.

The precise interpretation of the provisions of FAO voting arrangements agreed upon by the Council and the Commission is not without ambiguity.95 An interesting case of their application was raised before the Court in an action for annulment. In Case C-25/94 Commission v Council (FAO)96 the Commission challenged a decision adopted by the Council in November 1993 giving Member States the right to vote in the FAO for the adoption of the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas. The clauses on the attribution and changing of flags which were included in a first draft caused controversy between the Commission and the Member States: registration of vessels lies within national competence, whereas the conservation and management of fishery resources falls within the exclusive competence of the Community. Whilst both the Commission and the Member States agreed that the negotiation and conclusion of the Agreement was a matter of shared competence, they disagreed as to the exercise of the right to vote, each arguing that the thrust of the draft Agreement 95 See J Heliskoski, ‘Internal Struggle for International Presence: The Exercise of Voting Rights Within the FAO’ in Dashwood and Hillion (eds), n 7 above, 79, 84. 96 Case C-25/94 Commission v Council (FAO) [1996] ECR I-1469.

180 International Commitments and the Management of Mixity fell within their respective sphere of competence. The disagreement persisted despite the removal of the clauses on registration and flagging in a second draft, following which it was indicated to the FAO that it would be the Member States which would vote. This they duly did. Following the adoption of the Agreement, the Commission requested that the Council, meeting in its Fisheries formation, approve a declaration not only stating that the Agreement ought to have been approved by the Commission alone but also that, in the future, it would be the Commission which would vote on matters of that nature. It was the refusal of the Council to do so and its confirmation of the approach already adopted that constituted the subject-matter of the action brought before the Court of Justice. The Court acknowledged that the Council’s decision as to voting rights in the FAO had legal effects and applied to relations between the Community and the Member States, between the institutions of the Community and, finally, between the Community and its Member States on the one hand and other subjects of international law, especially the FAO and its Member States, on the other.97

As to the substance of the dispute, the Court affirmed that the competence of the Community on the conservation of the biological resources of the sea was exclusive, a fact recognised by its case-law but also illustrated by the Community’s declaration of competence sent to the FAO.98 It was also pointed out that, as regards the high seas and in areas falling within its authority, the Community had regulatory powers identical to those enjoyed under international law by the state whose flag the vessel flew or in which it was registered.99 It then went on to identify the essential object of the draft Agreement as confined to compliance with international conservation and management measures by fishing vessels on the high sea. The Council’s contention that the main thrust of the draft Agreement fell within national competence was based on two arguments: on the one hand, it set out a system of fishing licences which was comparable to the system of authorisation to fly a particular flag given by national authorities; on the other hand, it included provisions referring to the possibility of imposing penal sanctions and to the provision of assistance to developing countries. Both were rejected by the Court. As regards the former, fishing licences had constituted traditional instruments for managing fishing resources and, as such, were fundamentally different from the international law rights of every state to regulate which ship would fly its flag. In relation to the latter argument, the relevant provisions were deemed not to occupy a prominent position in the draft Agreement. Having defined the thrust of the draft Agreement as within the scope of Community competence, the Court went on to recapitulate the significance of the duty of cooperation between the Community institutions and the Member States in the process of the negotiation, conclusion and implementation of mixed agreements. In doing so, it reaffirmed the role of the requirement of unity in the international representation of the

97 Ibid, para 37. The fact that, in its Conclusions, the Council had noted that ‘the substantive questions of competence and exercise of voting rights in matters coming under the future Agreement had not been settled’ and that it had asked COREPER to reconsider the question of voting in due course was considered irrelevant: para 38. 98 See Joined Cases 3/76, 4/76 and 6/76 Kramer and Others [1976] ECR 1279, para 33. 99 Ibid, para 44 with reference to Case C-405/92 Mondiet v Islais [1993] ECR I-6133, para 12.

Participation in Mixed Agreements 181 Community as the basis of the duty of cooperation,100 the latter requiring that the Community institutions and the Member States take all necessary steps to ensure the best possible cooperation.101 It was precisely the voting rules contained in the Arrangement between the Commission and the Council which represented fulfilment of that duty within the FAO. As those rules were clearly intended to bind both institutions to each other, the Council decision to allow the Member States to vote for the adoption of the draft Agreement despite the fact that its main thrust fell within Community competence constituted a violation of the voting rules laid down in the Arrangement. Therefore, it ran counter to Community law. In terms of its approach to the definition of external competence, the judgment in FAO is entirely consistent with the case-law setting out the constitutional foundations of competence as examined in previous chapters. Rather than deconstructing all the elements of the subject-matter of the Agreement, the Court ascertained whether this Agreement covered areas over which the competence of the Union was exclusive. Once those had been found to constitute the core of the Agreement, the Court moved on to the issue of the management of shared competence. In this respect, it should be pointed out that the Court did not conclude that the Community’s exclusive competence covered the entire scope of the Agreement;102 neither did it identify which parts of the latter fell within national competence or over which, if any, the competence of the Community was shared. However, the Court had no difficulty in finding that the ‘thrust’ of the Agreement or its ‘essential object’ fell within the Community’s exclusive competence by relying upon the absence of provisions on registration and flagging in its final draft. In this respect, it deviated from the advice of Advocate General Jacobs, who had argued that ‘at the time of deciding on the indication of competence it was  … legitimate to take account of the flagging dimension of the negotiation’.103 This argument had led him conclude that it was difficult to define competence in terms of the ‘thrust of the issue’. In his analysis, Advocate General Jacobs appeared to adopt a pragmatic approach to the conduct of negotiations: as issues perceived to fall within national competence could re-emerge at a later stage of the negotiations, competence could not be determined on the basis of the Commission’s arguments. It is recalled that, in the past, such practical considerations had influenced the Court in applying the principles of competence to the facts of cases brought before it. In AETR, for instance, the negotiation of the Agreement in question by the Member States had been sanctioned in order to avoid undermining the successful outcome of the negotiations by suggesting to the negotiating parties a new distribution of powers within the Community.104 It is interesting that the Court should have chosen not to take this practical aspect of negotiations into account in FAO. And yet, its judgment had distinct pragmatic overtones in its approach to the Arrangement between the Commission and the Council. It is remarkable that the content of the Arrangement was not assessed in the light of Community law, nor were its effects questioned in any way. This might be explained by the fact that, rather than being an 100 Ruling 1/78 [1978] ECR 2151, paras 34–36; Opinion 2/91, n 84 above, para 36; and Opinion 1/94, n 55 above, para 108. 101 Opinion 2/91, n 84 above, para 38. 102 See N Neuwahl, ‘Shared Powers or Combined Incompetence? More on Mixity’ (1996) 33 Common Market Law Review 667, 682. 103 Para 69 of his Opinion in n 96 above. 104 Case 22/70, n 30 above, para 86.

182 International Commitments and the Management of Mixity inter-institutional agreement stricto sensu, the document in question was broader in its scope, as it expressed the commitment of the Member States as to how to manage their competence. In giving effect to the FAO Arrangement, the Court applied the duty of cooperation in a rigorous manner. One factor which might have rendered this less controversial than might have been assumed originally was the substantive content of the position of the Commission and the Member States: there was no dispute as to the desired outcome of the negotiations and a common position had been formed throughout that process.105 In other words, the rigorous application of the procedural rules laid down in the FAO Arrangement had no effect on the substance of the negotiating position of the Community and the Member States. At a more general level, the judgment in FAO appears to convey two messages to both the Union institutions and the Member States: on the one hand, the ad hoc arrangements about the management of their shared competence upon which they both agree would be accepted by the Union Courts as the valid expression of their will to comply with their duty of cooperation. On the other hand, the effects of such arrangements would be enforced by the Court. This may be a double-edged sword in so far as the encouragement to adopt formalised methods of cooperation is accompanied by the clear threat of judicial intervention.106 However, the Court’s approach in FAO is linked to a theme illustrated more clearly in the rulings in Opinions 1/94 and 2/00, namely the emerging emphasis on the duty of cooperation. Binding upon the Union institutions and the Member States in the process of negotiation, conclusion and implementation of international agreements, this duty is central to the management of EU external relations. In FAO, the Court enforced it rigorously by relying upon the very arrangements reached voluntarily by the Union institutions and the Member States.107

8. THE DUTY OF COOPERATION AND ITS IMPACT ON MEMBER STATES The Duty of Cooperation and its Impact on Member States

The analysis so far has illustrated the central role of the duty of cooperation in the management of mixed agreements. The duty of cooperation, in general, is set out in Article 4(3) TEU108 and has been an important tool in the Court’s armoury which has contributed to the constitutionalisation of the Union legal order over the years. As set out by the Court of Justice in the context of the Union’s international relations, the duty of cooperation is based on the requirement of unity in the international representation of the Union and the Member States.109 Over the years, it has been applied in different contexts and in different ways. 105

See Jacobs AG, n 96 above, para 59; and Heliskoski, n 95 above, 99. See 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, 167 who point out that no code of conduct similar to the FAO Arrangement has been concluded following the FAO judgment. 107 In 2013, the Commission proposed a revision of the arrangements as well as the Union’s Declaration of Competence: see COM(2013) 333 final: The role of the European Union in the Food and Agriculture Organization (FAO) after the Treaty of Lisbon: Updated Declaration of Competences and new arrangements between the Council and the Commission for the exercise of membership rights of the EU and its Member States (Brussels, 29 May 2013). 108 See the analysis in Heliskoski, n 95 above. 109 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 (Oxford, Hart Publishing, 2008) 125; C Hillion, ‘Mixity and Coherence in EU External Relations: The Significance of the “Duty of Cooperation”’ in Hillion and 106

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In cases where there appears a concerted EU position, the Court has held that the Member States are under ‘special duties of action and abstention’.110 This raises two questions: how is an EU position construed; and what types of ‘special duties’ does it entail for Member States? In relation to the latter, it is clear that a Member State may not negotiate and conclude an agreement with a third country. In relation to the former, the limited case-law so far suggests a rather broad approach to the scope of what constitutes an EU position. The first case where this arose was decided in the mid-1970s and became one of the classic authorities on EU external competence. In Kramer111 the Court held that Member States were prevented from assuming obligations in the context of the North Atlantic Fisheries Convention112 in which certain Member States participated. This was because the subject-matter of these measures fell within the exclusive competence of the Community in the light of Article 102 of the 1973 Act of Accession which set out a timetable pursuant to which the Community would adopt secondary measures on the matter under dispute, namely the conservation of the biological resources of the sea. In addition to being prevented from assuming any obligations in this area, the Member States were also required ‘to use all the political and legal means at their disposal in order to ensure the participation of the Community in the Convention and in other similar agreements’.113 Therefore, the provision of a timetable for the adoption of internal measures by the Union imposed on Member States both negative duties (not to assume any international obligations) and positive duties (to facilitate the Union’s participation in an international agreement in which they are already parties). Similar duties are also imposed where the Union institutions have adopted a decision to initiate negotiations of an international agreement. This was the case in the two Inland Waterways judgments,114 where Luxembourg had signed, ratified and implemented, and Germany had ratified and implemented, inland waterway transport agreements with Romania, Poland and Ukraine without consulting or cooperating with the Commission. The genesis of this formulation (‘special duties of action and abstention’) is to be found in a ruling about the Common Fisheries Policy which was rendered in 1981.115 The Council had been trying to discuss common rules on the conservation of fishery resources in the waters under the jurisdiction of the Member States since the beginning of 1979. Having failed to do so, it adopted a series of interim measures, anticipating agreement on common rules by late 1979. The British government decided to adopt a set of specific measures about fishery conservation which the Commission deemed to violate the duty of cooperation. The Court accepted its argument, and pointed out a number of factors: the existence of exclusive Community competence since 1 January 1979, following the expiration of the transitional period;116 the Member States should be Koutrakos (eds), n 1 above, 87; E Neframi, ‘The Duty of Loyalty: Rethinking its Scope Through its Application in the Field of EU External Relations’ (2010) 47 Common Market Law Review 323. 110 Case C-266/03 Commission v Luxembourg, [2005] ECR I-4805, para 59; Case C-433/03 Commission Germany [2005] ECR I-6985, para 65; Case C-246/07 Commission v Sweden [2010] ECR I-3317, para 74. 111 Joined Cases 3, 4 and 6/76 Kramer [1976] ECR 1279. 112 United Nations, Treaty Series, Vol 486, No 7078. 113 n 111 above, para 40. 114 Case C-266/03 Commission v Luxembourg [2005] ECR I-4805; Case C-433/03 Commission v Germany [2005] ECR I-6985. 115 Case 804/79 Commission v United Kingdom [1981] ECR 1045, para 28. 116 See Case 32/79 Commission v United Kingdom [1980] ECR 2403.

184 International Commitments and the Management of Mixity free to act in order to meet the needs raised by the development of relevant biological and technological facts by amending the existing conservation measures in a limited way and not by creating a new conservation policy; the Council had already adopted a set of rules which were applicable on an interim basis; these had been adopted in anticipation of the adoption of a permanent set of common rules by the Council which was only a matter of time. What we see here is a principle, introduced in the internal market sphere and spelled out in this specific context of exclusive Union competence, extended to apply in the context of the negotiation of international agreements. Since the mid-2000s, however, another aspect of the duty has become pronounced, namely its impact on the international role of the Member States. The circumstances to which the duty of cooperation may be relevant are difficult to predict and even more so are its implications for the legal position of the Member States. Therefore, the context of this duty is what the Court tells us it is on the basis of fact-specific disputes which reach Luxembourg. The wide range of situations in which the duty of cooperation may emerge became apparent in the so-called ‘mackerel war’ between the Faroe Islands and the European Union in 2013. This was about fishing quotas of herring and mackerel which are jointly managed under the Atlanto-Scandian Herring Management Arrangements by the Faroe Islands, Iceland, Norway, Russia and the EU. Whilst the parties decide annual quotas, they failed to do so in 2013. This was because they could not agree to the request from the Faroe Islands for a larger quota. The latter increased their quota unilaterally; the EU responded by prohibiting the import of mackerel and herring from the Faroe Islands.117 Whilst a self-governing region, the Faroe Islands have their foreign affairs conducted largely by Denmark. In August 2013 Denmark initiated arbitration proceedings under Annex VII to the UNCLOS in respect of the Faroe Islands against the EU. In November 2013 it requested consultations under Article 4 DSU in the context of the WTO and, once the period for consultation had passed, it requested the establishment of a panel. This is a case of a Member State bringing proceedings against the EU before international dispute-settlement bodies on behalf of an area for which it is responsible under its constitutional arrangements but which is not part of the EU territory. The dispute was solved in June 2014 following negotiations between the Commission and the Faroe Islands, following which the EU repealed the import restrictions it had imposed.118 Whilst its context was highly unusual, the ‘mackerel war’ illustrates the wide range of permutations which the coexistence between the EU and Member States in international relations may take and the difficulty in assessing the duties imposed on them under EU law. The remainder of this section will examine two cases which illustrate the far-reaching implications of the duty to cooperate in directions which had not been envisaged earlier.

8.1 The MOX Plant case The first case where this became clear was in Case C-459/03 Commission v Ireland (MOX Plant).119 This enforcement action, brought pursuant to Article 258 TFEU, concerned

117

Commission Implementing Reg 793/2013 [2013] OJ L223/1. Commission Implementing Reg 896/2014 [2014] OJ L244/10. 119 Case C-459/03 Commission v Ireland (MOX Plant) [2006] ECR I-4635. 118

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Ireland’s decision to institute dispute-settlement proceedings against the United Kingdom before the Arbitral Tribunal provided for in the UNCLOS. It is recalled that both states, along with the EU, are parties to this Convention. The origin of the dispute was the decision by the British government in the mid-1990s to construct a number of facilities, including a mixed-oxide (MOX) fuel reprocessing plant, on a site on the coast of the Irish Sea. The MOX plant was designed to recycle plutonium from spent nuclear fuel which was intended for use as an energy source in nuclear power stations. In the long public consultation process organised by the British authorities, which lasted until August 2001, Ireland intervened on a number of occasions. It challenged the soundness of the environmental statement on which the decision to authorise the construction of the plant was based. It also argued that insufficient information had been made available in the public consultation process. When it became apparent that its objections had been dismissed by the British government, in October 2001 Ireland instituted proceedings against the United Kingdom before the arbitral tribunal set up under Annex VII UNCLOS.120 The thrust of the Irish case was that the decision by the British government was in violation of UNCLOS provisions about the protection and preservation of the marine environment.121 In addition, the Irish government brought an action before the International Tribunal for the Law of the Sea (ITLOS)122 seeking an order that the United Kingdom suspend immediately the authorisation for the operation of the MOX plant. The Tribunal merely prescribed consultations between the two governments. More interestingly, it declared that it had prima facie jurisdiction to rule on the case, the possible EU law dimension of the latter notwithstanding. In June 2003 the Arbitral Tribunal suspended the proceedings until the end of 2003 in order to be better informed of the implications of EU law in relation to the dispute pending before it. It was at that juncture that the Commission brought an enforcement action against Ireland. This was because it objected to the initiation of dispute-settlement proceedings between two Member States beyond the EU legal framework. There were two main aspects of the dispute which made the Commission intervene. The first was the legal context within which Ireland acted: UNCLOS is a mixed agreement and, therefore, the Union has competence over parts of it; and Ireland brought the dispute over the violation of the Agreement against another Member State. The second aspect was the role played in the dispute by EU secondary legislation. In its action, Ireland invoked a number of EU measures before the Arbitral Tribunal. This was allowed under Article 293(1) UNCLOS, which provides that ‘[a] court or tribunal having jurisdiction under this section shall apply this Convention and other rules of international law not incompatible with this Convention’. It was pursuant to this provision that 120 Ireland had also relied upon the 1992 Convention for the Protection of the Marine Environment of the North-East Atlantic and sought the constitution of an arbitral tribunal for its dispute with the United Kingdom. Its action was dismissed by the tribunal in July 2003. This Convention is also a mixed agreement (adopted by the EC pursuant to Council Dec 98/249/EC [1998] OJ L104/1). 121 In particular, Arts 123 (cooperation of states bordering enclosed or semi-enclosed seas), 192 (general obligation to protect and preserve the marine environment), 193 (sovereign right of states to exploit their natural resources), 194 (measures to prevent, reduce and control pollution of the marine environment), 197 (cooperation on a global or regional basis), 206 (assessment of potential effects of activities), and 207 (pollution from land-based sources) UNCLOS. 122 Under Art 290(5) UNCLOS.

186 International Commitments and the Management of Mixity Ireland relied upon a number of EU measures which it claimed that the United Kingdom had violated, including Directive 85/337 on the assessment of the effects of certain public and private projects on the environment,123 Directive 90/313 on the freedom of access to the information on the environment,124 and Directive 92/3/Euratom on the supervision and control of shipments of radioactive waste between Member States and into and out of the Community.125 The Commission argued before the Court of Justice that the Irish government had violated EU law on three grounds: first, the action before the arbitral tribunal was contrary to Article 344 TFEU which describes the jurisdiction of the Court as exclusive in areas covered by EU law; secondly, Article 344 TFEU was also violated because Ireland had submitted to the arbitral tribunal a number of instruments of EU law; thirdly, the Irish government violated the duty of cooperation laid down in Article 4(3) TEU not only for exercising a competence which belonged to the Union but also for failing to have informed and consulted the competent EU institutions. Handed down by the Grand Chamber, the judgment of the Court of Justice is long and, in places, not easy to follow. Its first part is about competence and aims to locate the UNCLOS within the EU legal framework. First, the Court set out to ascertain whether the provisions of the UNCLOS relied upon by Ireland before the Arbitral Tribunal come within the scope of EU law. The fact that the UNCLOS was concluded as an environmental agreement and that the protection of the environment was in principle shared was deemed irrelevant: [T]he question as to whether a provision of a mixed agreement comes within the competence of the Community is one which relates to the attribution and, thus, the very existence of that competence, and not to its exclusive or shared nature. It follows that the existence of the Community’s external competence in regard to protection of the marine environment is not, in principle, contingent on the adoption of measures of secondary law covering the area and liable to be affected if Member States were to take part in the procedure for concluding the agreement in question, within the terms of the principle formulated by the Court in paragraph 17 of the AETR judgment. The Community can enter into agreements in the area of environmental protection even if the specific matters covered by those agreements are not yet, or are only very partially, the subject of rules at Community legal, which, by reason of that fact, are not likely to be affected (see, in that regard, Opinion 2/00, paragraphs 44 to 47, and Case C-239/03 Commission v France [2004] ECR I-9325, paragraph 30).126

Having pointed out that the nature of the Union’s competence which might be relevant to the dispute between Ireland and the United Kingdom was irrelevant, the Court then set out ‘to establish whether and to what extent the Community, by becoming a party to the Convention, elected to exercise its external competence in matters of environmental protection’.127 It answered the first question in the affirmative and justified this conclusion by reference to both the Council Decision which concluded the UNCLOS on behalf of

123

[1985] OJ L175/40. [1990] OJ L158/56. 125 [1992] OJ L35/24. 126 Commission v Ireland, n 119 above, paras 93–95. 127 Ibid, para 96. 124

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the Union128 and the Declaration of Competence attached to the UNCLOS. The former refers to ex Article 175(1) EC as a legal basis. As for the latter, it deduces that it confirms 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, and without any of the Community rules concerned being affected, within the terms of the principle set out in the AETR judgment.129

However, the Court pointed out that, according to the Declaration, the transfer of areas of shared competence was subject to the existence of EU rules, even though the latter need not be affected; in cases where there are no EU rules, competence rests with the Member States. It then concluded that: [W]ithin the specific context of the Convention, 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, irrespective of what may otherwise be the scope and nature of those rules.130

To address this issue, the Court turned to the Declaration of Competence which it viewed as ‘a useful reference base’.131 An appendix to the Declaration referred to a number of secondary measures which the Union had adopted in areas covered by the UNCLOS. The Court pointed out that various such measures were in fact relied upon before the Arbitral Tribunal by Ireland, in the light of which it reached two interrelated conclusions: on the one hand, the Convention provisions on the prevention of marine pollution relied on by Ireland, which clearly cover a significant part of the dispute relating to the MOX plant, come within the scope of Community competence which the Community has elected to exercise by becoming a party to the Convention.132

On the other hand,133 the provisions of the Convention relied on by Ireland in the dispute relating to the MOX plant and submitted to the Arbitral Tribunal are rules which form part of the Community legal order.

Following the above line of reasoning, the Court had no difficulty in concluding that Ireland’s action before the Arbitral Tribunal violated its own exclusive jurisdiction under Article 344 TFEU. This conclusion was further substantiated on two grounds. First, UNCLOS rules did not impose a duty on Ireland to address its UNCLOS-related dispute with the United Kingdom pursuant to UNCLOS dispute-settlement proceedings. In fact, Article 282 UNCLOS provides that: If the States Parties which are parties to a dispute concerning the interpretation or application of this Convention have agreed, through a general, regional or bilateral agreement or otherwise, that such dispute shall, at the request of any party to the dispute, be submitted to a procedure that entails a binding decision, that procedure shall apply in lieu of the procedures provided for in this Part, unless the parties to the dispute otherwise agree. 128

Council Dec 98/392 [1998] OJ L179/1. Commission v Ireland, n 119 above, para 105. Ibid, para 108. 131 Ibid, para 109. 132 Ibid, para 120. 133 Ibid, para 121 129 130

188 International Commitments and the Management of Mixity Therefore, to bring the matter before the Court of Justice would by no means have resulted in a violation of UNCLOS rules by Ireland. In fact, the Court held that, in the light of the provision of Article 282 UNCLOS, review by the Court of Justice took precedence over reliance upon the dispute-settlement system laid down in the UNCLOS.134 Secondly, the Union’s primary rules enable a Member State to bring an action against another Member State in cases where compliance with EU law is an issue. This enforcement procedure is set out in Article 227 TFEU. Therefore, there was an EU cause of action for Ireland against the United Kingdom upon which it chose not to rely. Having established that, by having recourse to the UNCLOS dispute-settlement procedure Ireland had violated its exclusive jurisdiction, the Court of Justice elaborated further on the reliance by Ireland upon EU secondary law before the Arbitral Tribunal. It pointed out that the objective of the Irish move was to get a declaration by the Arbitral Tribunal that the United Kingdom had breached the provisions of the relevant EU measures. To do so, the Tribunal would have to interpret and apply EU law in the context of the proceedings before it. In addition to running counter to Article 344 TFEU, the Irish action had also given rise to ‘a manifest risk that the jurisdictional order laid down in the Treaties and, consequently, the autonomy of the Community legal system may be adversely affected’.135 That risk exists even though, as Ireland avers, it has given a formal assurance that it has not called on, and will not call on, the Arbitral Tribunal to examine or appraise, pursuant to Article 293 of the Convention or an other provision, whether the United Kingdom has breached any rule of Community law. Furthermore, the existence of that risk rendered entirely irrelevant the fact that Ireland may have called on the Arbitral Tribunal to apply Community law by way of renvoi or by recourse to any other technique. Once it had dealt with the implications of the Irish action for its own jurisdiction, the Court approached the dispute from the perspective of the duty of cooperation. It referred, separately, to Article 10 EC (now Article 4(3) TEU) which ‘requires Member States to facilitate the achievement of the Community’s tasks and to abstain from any measure which could jeopardise the attainment of the objectives of the Treaty’,136 and the obligation of close cooperation in the context of mixed agreements, and held that the latter is significant: [I]n particular  … in a case of a dispute which, as in the present case, relates essentially to undertakings resulting from a mixed agreement which relates to an area, namely 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, as is, moreover, evidenced by the Declaration of [Union] competence and the appendix thereto.137

Having referred to the risk of a non-EU body ruling on the scope of obligations imposed on the Member States pursuant to EU law, the Court held that: [T]he 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 [Union] institutions prior to

134

Ibid, Ibid, 136 Ibid, 137 Ibid, 135

para 125. paras 154–56. para 175. para 176.

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instituting dispute-settlement proceedings concerning the MOX plant within the framework of the Convention.138

The implications of the judgment in MOX Plant are considerable. On the one hand, the judgment imposes an onerous duty on Member States which limits their scope of action as autonomous participants in international relations within the context of agreements which they have negotiated, concluded and ratified in accordance with their own constitutional arrangements. On the other hand, it appears to reduce the effectiveness of dispute-settlement mechanisms in the context of international organisations as well as the scope of the jurisdiction of the bodies established under such mechanisms. In the light of the above, the judgment attracted considerable attention139 and even more considerable criticism, particularly amongst international lawyers. Koskenniemi, for instance, considers it ‘stunning’ and views it 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’.140 The temptation to read judgments independently from their specific legal and factual context is too great, especially in cases where their implications appear far-reaching. And yet, it should be resisted. The MOX Plant case presented two central issues which rendered any conclusion other than the one reached by the Court difficult to sustain. First, the recourse to the enforcement proceedings set out under the EU rules was sanctioned by the UNCLOS. Secondly, at no point was there any doubt that the Irish government had submitted a number of EU secondary measures to the Arbitral Tribunal so that the latter would interpret them and applied them to the dispute before it. Of these factors, the latter creates a risk of disjunction between the interpretation of these measures by the Court of Justice and the Arbitral Tribunal which the former had rendered entirely avoidable. It was the choice made by Ireland not to avoid this risk which triggered the action by the Commission. These two aspects of the legal context of the dispute provide ample basis for the interpretation and application of the duty of cooperation articulated by the Court in MOX Plant. Nevertheless, this eminently sensible conclusion is obscured by the reasoning of the judgment. It is recalled that its starting point was to ascertain whether, by concluding the UNCLOS, the Union had chosen to exercise its competence in the area of environmental protection and, in particular, the protection of the marine environment. That part of the judgment and its emphasis on the exercise of the Union’s competence is as convoluted as it is unnecessary in the light of the specific legal characteristics of the case. The judgment engages in an esoteric examination of what the conclusion of the Convention actually signified for the Union’s competence, even though it had already been established that the duty of cooperation was of a wide scope and applied irrespective of the existence of EU secondary legislation in the field. Quite apart from the purported objective of this theological exercise, one wonders whether the omission of that part 138

Ibid, para 179. See, amongst others, J Cazala, ‘La contestation de la compétence exclusive de la Court de justice des Communautés européennes’ (2004) 40 Revue Trimestrielle de Droit Européen 505; N Lavranos, ‘The Scope of the Exclusive Jurisdiction of the Court of Justice’ (2007) 32 European Law Review 83; E Neframi, ‘La mixité éclairée dans l’arrêt Commission contre Irlande du 30 mai 2006 (affaire Mox): une double infraction, un triple apport’ [2007] Revue du Droit de l’Union européenne 687. 140 M Koskenniemi, ‘International Law: Constitutionalism, Managerialism and the Ethos of Legal Education’ [2007] European Journal of Legal Studies (www.ejls.eu/1/3UK.pdf). 139

190 International Commitments and the Management of Mixity of the judgment would have rendered its conclusion any less credible. It appears that the judgment provided the right answer even though it sought to address the wrong question. As Cremona points out, the UNCLOS would have given rise to issues within the Union’s competence even if the Irish view had been correct and in fact the Community had not concluded the environmental aspects of the agreement—there would still be a threat to the Community legal order if such issues were to be submitted to non-Community dispute settlement.141

The reliance upon the UNCLOS Declaration of Competence also raises questions. The analysis above in this chapter highlighted a paradox: on the one hand, the function of such Declarations is to provide clarity to third parties as to the division of competence between the Union and the Member States within the scope of a given mixed agreement; on the other hand, the content of these Declarations is invariably unhelpful as it provides broad statements about exclusive and shared competence, it sets out an indicative list of measures in fields covered by the agreement, and it reminds the Union’s interlocutors of the fluid nature of the Union’s competence. The wording of the Declaration of Competence annexed to the UNCLOS itself is by no means unambiguous.142 In his Opinion, Advocate General Maduro refers to ‘its lack of clarity and elegance’.143 After all, whether the Union has exercised its non-exclusive competence under the UNCLOS provisions is a question that is narrower than whether Ireland violated its EU law obligations by submitting a dispute against another Member State beyond the EU legal framework.144 A Member State is under a duty not to violate Union law even in areas that fall within the sphere of their competence. This is the case in relation to areas of activity as diverse as foreign policy,145 the organisation of the armed forces,146 the organisation of national health care systems147 and criminal law.148 And yet, it features prominently in the judgment, even though it was merely described as ‘a useful reference base’.149 Another prominent feature of the judgment is the emphasis on the autonomy of the Union’s legal order. This is linked to the issue of the jurisdiction of the Court of Justice: if the exclusivity of the latter under Article 344 TFEU were undermined, the autonomy of the EU’s legal order would be in danger. The link between exclusivity of jurisdiction and the autonomy of the Union’s legal order had been acknowledged expressly in the early 1990s. Addressing the question whether the conclusion of the European Economic Area (EEA) Agreement and the adjudication system which it provided was consistent with the then Community’s rules, the Court referred to the Community’s founding Treaty, as

141

Cremona, n 109 above, 151 (emphasis in the original). See eg R Churchill and J Scott, ‘The Mox Plant Litigation: The First Half-Life’ (2004) 54 International & Comparative Law Quarterly 643, 664–66. 143 Para 30 of his Opinion. 144 In this vein, ibid, 150–52. 145 Case C-124/95 The Queen, ex parte Centro-Com/HM Treasury and Bank of England [1997] ECR I-81, para 27. 146 Case C-273/97 Sirdar [1999] ECR I-7403; Case C-285/98 Kreil [2000] ECR I-69; Case C-186/01 Dory [2003] ECR I-2479. For a comment, see P Koutrakos, ‘How Far Is Far Enough? EC Law and the Organisation of the Armed Forces after Dory’ (2003) 66 Modern Law Review 759; and M Trybus, European Union Law and Defence Integration (Oxford, Hart Publishing 2005) ch 9. 147 Case C-120/95 Decker v Caisse de maladie des employés privés [1998] ECR I-1831; Case C-158/96 Kohll v Union des caisses de maladie [1998] ECR I-1931; Case C-372/04 Watts [2006] I-4325. 148 Case C-226/96 Criminal Proceedings against Lemmens [1998] ECR I-3711. 149 Commission v Ireland, n 119 above, para 109. 142

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amended by the Single European Act in 1987, as ‘the constitutional charter of the Community based on the rule of law’.150 It then ruled that the judicial system envisaged under the proposed EEA Agreement posed a ‘threat  … to the autonomy of the Community legal order’.151 More recently, the Court has focused on its jurisdiction in the context of the proposed establishment of a judicial system for the European Patent Convention and the proposed Community patent.152 The interesting aspect of this case is that the Court approached this issue from the viewpoint of national courts and claimed that it was their right to refer to the Court of Justice that ought to be protected in a transnational judicial system.153 The principle of autonomy also emerged prominently in the case-law on smart sanctions and, amongst others, the Kadi litigation.154 The judgment in MOX Plant may appear to substantiate a charge against the Court for undermining the role of international tribunals. However, such a charge is misplaced. The judgment must be viewed within its specific factual and legal context, in particular the reliance upon EU law before the UNCLOS bodies and the provision, under Article 282 UNCLOS, for parties to have recourse to alternative dispute-settlement mechanisms. The latter has been described as ‘inter-regime comity in action’.155 Viewed from this angle, there is no reason why the Court should not have exercised its jurisdiction to interpret and apply EU law and the duty of cooperation between Member States. In this respect, it is worth recalling that the Arbitral Tribunal constituted under the UNCLOS in the case had pointed out ‘that the resolution of the essentially internal problems within the European Community legal order may involve decisions that are final and binding’, and concluded that ‘it would be inappropriate for it to proceed further with hearing the Parties on the merits of the dispute in the absence of a resolution of the problems referred to’.156

8.2 The PFOs Case Another case where the impact of the duty of cooperation on the rights of Member States under mixed agreements was examined was Case C-247/07 Commission v Sweden (PFOs).157 This was another enforcement action and arose in the context of the Stockholm Convention on Persistent Organic Pollutants (POPs). Adopted in 2001 and in force since 2004, this Convention aims to target POPs whose toxic properties and ability to

150

Opinion 1/91 (EEA Agreement) [1991] ECR I-6079, para 21. Ibid, para 47. 152 Opinion 1/09 (Draft Agreement on the European and Community Patents Court) [2011] ECR I-1137. 153 See P Koutrakos, ‘The Court of Justice as the Guardian of National Courts—Or Not?’ (2011) 36 European Law Review 319. 154 See the analysis in Chapter 7. On the concept of the autonomy of the EU legal order, see P Koutrakos, ‘The EU and the Law of Treaties’ in D Kritsiotis and M Bowman (eds), The Modern Law of Treaties (Cambridge, Cambridge University Press, 2015 forthcoming) and 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, Springer, 2013) 13. 155 A Skordas, ‘Völkerrechtsfreundlichkeit as Comity and the Disquiet of Neoformalism: A Response to Jan Klabbers’ in P Koutrakos (eds) European Foreign Policy–Legal and Political Perspectives (Cheltenham, Edward Elgar Publishing, 2011) 115, 127. 156 Annex VII Arbitral Tribunal, MOX Plant case (Ireland v the UK), Order No 2, 24 June 2003, paras 27 and 28. 157 Case C-246/07 Commission v Sweden (re: PFOS) [2010] ECR I-3317. 151

192 International Commitments and the Management of Mixity move across international boundaries is deemed dangerous for both human health and the environment. Parties assume the obligation to reduce or eliminate the release of all POPs listed in the annexes to the Convention. Any party has the right to propose any substance be considered a POP. Following an elaborate process of technical review and risk assessment, the conference of the parties votes on whether the proposed substance should be included in the annexes to the Convention and, therefore, whether they should be reduced or eliminated by all the parties. In addition to the Stockholm Convention, a POPs Protocol has been concluded, under the aegis of the United Nations, and annexed to the 1979 Convention on Long-range Transboundary Air Pollution on Persistent Organic Pollutants (the ‘Aarhus Protocol’). The Protocol tackles the transport of POPs by air. Both the Union and the Member States are parties to the Stockholm Convention. In parallel to the international framework, there is an EU law framework on POPs. In particular, the Union adopted Regulation 850/2004 on POPs.158 This was just one of the measures in areas covered by the Convention.159 The dispute was about the initiative by Sweden to propose that a particular group of POPs (perfluoroctane sulfonates (PFOs)) be included in the annexes to the Convention. First, it brought the matter before the relevant body of the Council where it suggested that the Union submit a common proposal on PFOs to the Convention and the Aarhus Protocol. The Commission also suggested to the Council that the Union make a common proposal that some other POPs, which did not cover PFOs, be included in the Convention and the Aarhus Protocol. After a number of meetings, the Council decided that the Union should submit a proposal to the Convention that a number of substances already set out in Regulation 850/2004 be included in the annexes to the Convention. These substances did not include the PFOs which had been the subject of Sweden’s initiative. Following this decision, Sweden submitted unilaterally a proposal to the Convention that PFOs be included in its annexes. The Commission objected to this action and argued that it amounted to a violation of EU law, in particular the duty of cooperation set out in Article 10 EC (now Article 4(3) TEU).160 Sweden had acted contrary to EU law. What is interesting about this case is that Sweden had sought to get EU agreement on the matter and to convince the Union to make the proposal the subject-matter of a concerted action. However, the Union had decided to list two other substances instead. Sweden argued that the unilateral submission of the specific substance was justified: it had done all it could to consult with the EU institutions; the latter had not adopted a decision expressly refusing to propose its listing; because of the Convention rules, had it not put forward its proposal, there would have been a considerable delay of at least a year. The main thrust of the defence by the Swedish government was that its unilateral proposal in the context of the Stockholm Convention did not amount to a violation of the duty of cooperation. As it had brought the matter first before the Council, and

158

[2004] OJ L158/7, and corrigendum [2004] OJ L229/5. See also Reg 304/2003 concerning the export and import of dangerous chemicals [2003] OJ L63/1, and Council Dir 96/59/EC on the disposal of polychlorinated biphenyls and polychlorinated terphenyls (PCB/PCT) [1996] OJ L243/31. 160 It also argued that Sweden had violated Art 300(1) EC (now Art 218(1) TFEU) on the conclusion of international agreements. As the Swedish action related, instead, to an initiative about the establishment of a position to be adopted on behalf of the Union in a body set up by an agreement, under Art 300(2) second subparagraph (now Art 218(9) TFEU), the Court had no difficulty in dismissing the Commission’s argument. 159

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given that that the latter had failed to act on its proposal, it argued that, in fact, it had complied with the duty of cooperation. The Court was not convinced by this defence. The Grand Chamber held that, whilst the Union had not adopted any formal decision regarding a proposal to list substances in an annex to the Stockholm Convention, there was at the time ‘a Community strategy’161 not to propose the listing of PFOs immediately. This strategy was based on a policy consideration, namely to give emphasis to the listing of substances already set out in the POPs Regulation, in order to align the regime set out under the latter with the Stockholm Convention. There were also economic considerations which determined the Union’s strategy: for every substance listed under the Stockholm rules, the parties, and therefore the EU too, are under a duty to provide financial aid to developing countries or countries with economies in transition.162 Therefore, the unilateral proposal by Sweden constituted a deviation from the Union’s concerted common strategy on the matter. The Court then held that Sweden’s actions had ‘consequences’ for the Union.163 It referred to three types of consequences. The first was about the binding effect on the Union. In the light of the voting rules of the Stockholm Convention, either the Union or the Member States would vote. If the Union voted, it would deprive Sweden of its right to defend its own proposal. If, on the other hand, Sweden voted, it would deprive the Union of the exercise of its right to vote with a number of votes equal to the number of its Member States. Secondly, there was no possibility for the Union to opt out from its obligation to comply with the Convention’s rules in relation to PFOs. While the Convention enables a party to opt out, provided that it does so in time, and contrary to the argument made by a number of governments, the Court held that that option would not have been available to the Union in relation to a proposal made by one of its own Member States. The third consequence of Sweden’s unilateral initiative was related to legal certainty. The Court held that to opt out from an amendment proposed and voted for by several Member States could give rise to legal uncertainty for the Member States, the Secretariat of the Convention as well as other parties to the Convention. The Court then pointed out that: Irrespective of that aspect [namely the legal uncertainty mentioned above], the objective sought by depositing a proposal for the listing of a substance in Annex A to the Stockholm Convention is the adoption of an international legal rule which will be binding on the parties to that convention. Since the Union is a party to that convention, it could be bound by the resulting amendment to that annex.164

It concluded that the duty of cooperation had been violated, as [s]uch a situation is likely to compromise the principle of unity in the international representation of the Union and its Member States and weaken their negotiating power with regard to the other parties to the Convention concerned.165

In PFOs, the scope of the duty of cooperation is extended further than what the MOX 161

Commission v Sweden, n 157 above, para 76. Art 13 Stockholm Convention. 163 Commission v Sweden, n 157 above, para 92. 164 Ibid, para 100. 165 Ibid, para 104. 162

194 International Commitments and the Management of Mixity Plant had suggested. In the latter case, a Member State had been prevented from relying upon dispute-settlement proceedings against another Member State in the context of a mixed agreement where EU secondary legislation would be interpreted and applied by a non-EU tribunal. In the former case, a Member State is required not to deviate from ‘a Union strategy’ by exercising the rights bestowed upon it under a mixed agreement even though it had consulted with the EU institutions. This approach of the duty of cooperation judgment in PFOs has attracted criticism.166 In essence, does the Court not expect the Member States to remain silent in the context of mixed agreements? Does this interpretation not render the participation of Member States in mixed agreements irrelevant? And, in effect, does it not reduce considerably the implications of the difference between mixity and exclusive competence in terms of the EU duties on Member States? The line of reasoning in PFOs is not without its problems. The Court appears rather too keen to establish that the Swedish initiative would undermine the Union’s position. It tells us that unilateral action would have ‘consequences’ for the Union.167 It does not refer to serious or considerable consequences—just ‘consequences’. As for the explanation of what these consequences would be, the judgment is short on analysis. In relation to voting, for instance, the argument by Sweden, and the four other governments which intervened,168 that, under the rules of the Stockholm Convention, the Union could opt out from and, therefore, was not bound by, the listing of PFOs was given short shrift. As for the concern that unilateral action by Sweden would give rise to legal certainty, this raises more questions than it answers. Legal certainty is pronounced as a general imperative which, however, is little more than the last refuge of a weak line of reasoning. There is no explanation in the judgment as to how the exercise by the Union of the right to opt out which is bestowed upon it by the Convention would give rise to legal uncertainty. Would it be the apparent disagreement between its position and that of some of its Member States? Would it be the emergence of questions as to the application of the Convention rules to the product in relation to Sweden and other states which might have voted for it? These are valid questions, and they are far from straightforward to address. And yet, they are being bypassed by invoking the all-encompassing concept of legal certainty. As the judgment deprived Member States of their freedom to act, a freedom which mixity is purported to protect, it would not be unreasonable to expect a more careful line of reasoning. There is also another question raised by the reasoning in PFOs that has to do with the wide scope of actors which the Court views as affected by the alleged legal uncertainty which would ensue if the Union opted out. In addition to the Member States, the judgment refers to the Secretariat of the Convention and to third parties which are parties to the Convention. This is difficult to reconcile with the general approach of the Court to the delimitation of roles between the Union and the Member States. It has been a constant in EU external relations that the division of powers between the Union and the Member States is a matter internal to the EU’s deeply idiosyncratic legal order.169 The interests of third parties to know with whom they are dealing are intended to be 166 See A Delgado Casteleiro and J Larik, ‘The Duty to Remain Silent: Limitless Loyalty in EU External Relations?’ (2011) 36 European Law Review 524. 167 Commission v Sweden, n 157 above, paras 92 and 101. 168 These were the governments of Denmark, the Netherlands, Finland and the United Kingdom. 169 See Ruling 1/78 [1978] ECR 2151, para 35.

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addressed on the basis of the declarations of competence. And yet, in PFOs the Court appears eager to protect the interests of third parties by not exercising a right which it may have under a mixed agreement and, ultimately, by reducing the scope of what Member States may do when they act along with the Union as sovereign subjects of international law. At the core of the dispute is the disjunction between what Sweden viewed as a decision-making ‘vacuum’170 which it had the right to fill and what the Court deemed a ‘Community strategy’,171 namely to prioritise the listing of substances which had already been listed in the POPs Regulation, hence bringing the regime laid down by the latter closer to the Stockholm Convention. The requirements for such a strategy to emerge have been seen as ‘not very high’.172 Indeed, Dashwood considers that, ‘[a]t most, there was an informal understanding between national delegations and the Commission as to the course of action it was appropriate to pursue’.173 This broad construction of what constitutes a Union strategy widens the scope of the duty of cooperation and renders the duties that the latter imposes on Member States more onerous. Another important aspect of the PFOs case is the practical implications of the underlying issues. The financial implications that any listing under the Stockholm Convention would have for the Union’s budget appear prominently in the judgment which also refers to the statement by the Presidency at a meeting of the Council Working Party on International Environmental Issues. This pragmatic and policy dimension is at the centre of the PFOs judgment and sheds some light on the Court’s approach to the duties in accordance with which the Member States must act in the context of mixed agreements. However, the judgment is not easy to understand as setting out a general principle as to the circumstances under which the international conduct of a Member State would be appropriate. It ought to be viewed in its specific factual, legal and policy context, as a number of variables are left open. For instance, it is not clear what is the intensity of the duty imposed on Sweden. How long would the obligation to abstain ought to have lasted? How long does the Union strategy last, short of making a proposal before the Stockholm Convention bodies on behalf of the EU? In his Opinion, Advocate General Maduro suggested that: The implications of the duty of loyal cooperation are  … twofold: first, that Member States cooperate with the Community decision-making process; and, second, that they refrain from taking individual action, at least for a reasonable period of time, until a conclusion to that process has been reached. 174

In order to refute the argument by the Swedish government that there was a decisionmaking vacuum, the judgment points out that there was not ‘even a waiting period equivalent to the absence of a decision’.175 This seems to suggest that there is a limit to 170

Commission v Sweden, n 157 above, para. 87. Ibid, para 76. Heliskoski considers the requirements for such a strategy ‘not very high’: 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, 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) 545, 561. 173 A Dashwood, M Dougan, B Rodger, E Spaventa and D Wyatt, Wyatt and Dashwood’s European Union Law, 6th edn (Oxford, Hart Publishing, 2011) 934. 174 Commission v Sweden, n 157 above, para 49 of his Opinion. 175 Ibid, para 87. 171 172

196 International Commitments and the Management of Mixity what the duty to abstain entails for a Member State keen to ensure that it complies with the duty of cooperation. Quite where this limit does lie depends entirely on the factual and legal context of each case.

9. THE MEMBER STATES AS A MEDIUM FOR THE EU The Member States as a Medium for the EU

Even in areas where Member States act on their own, they may well find themselves unable to act independently from the European Union. In those cases where the subjectmatter of an international organisation falls, even partly, within the competence of the Union but that competence may not be exercised because of the limitations set out in that organisation’s constitutional document, the Union’s ‘external competence may, if necessary, be exercised through the medium of the Member States acting jointly in the [Union]’s interest’.176 The Council, relying upon the legal basis under which it would have concluded the agreement in question on behalf of the Union, adopts a Decision authorising the Member States, in the interest of the Union, to sign and ratify that agreement. Such an organisation is the International Labour Organization and recent agreements which the Member States have been authorised to ratify, in the interest of the European Union, include the Domestic Workers Convention, 2011, concerning decent work for domestic workers (Convention No 189)177 and the Chemicals Convention, 1990, concerning the safety in the use of chemicals at work (Convention No 170).178 Other examples include the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009,179 the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001,180 and the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996.181 Such authorisations may be accompanied by the express requirement that Member States ‘shall, at the earliest opportunity, use their best endeavours to ensure that the [agreement in question] is amended in order to allow the Community to become a Contracting Party’.182 This instrumentalisation of the Member States aiming to make it possible for the EU’s external competence to be exercised provides a specific illustration of the duty of cooperation. In a similar vein, Member States may be required to take specific positions

176 Opinion 2/91, n 84 above, para 5. See the analysis in M Cremona, ‘Member States as Trustees of the Union Interest: Participating in International Agreements on Behalf of the European Union’ in Arnull et al (eds), n 171 above, 435. 177 Council Dec 2014/51/EU [2014] OJ L32/32. 178 Council Dec 2014/52/EU [2014] OJ L32/33. 179 See Council Dec 2014/241/EU [2014] OJ L128/45. 180 See Council Dec 2002/726/EC [2002] OJ L256/7. 181 See Council Dec 2002/971/EC [2002] OJ L337/55. See also Council Dec 2005/367 authorising Member States to ratify, in the interests of the European Community, the Seafarers’ Identity Documents Convention of the International Labour Organisation (Convention 185) [2005] OJ L136/1. 182 Art 4 Council Dec 2004/246/EC authorising the Member States to sign, ratify or accede to, in the interest of the European Community, the Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 and authorising Austria and Luxembourg, in the interest of the European Community, to accede to the underlying instruments [2004] OJ L78/22.

The Member States as a Medium for the EU 197 in the context of the work of international organisations to which the Union may not accede even though it has the competence to do so.183 The reliance of the Union upon Member States for the exercise of its external competence can give rise to considerable complications. This has become apparent in a request for an Opinion submitted by the Commission to the Court of Justice pursuant to Article 218(11) TFEU. This is Opinion 1/13 and is currently pending.184 This case is about the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction. The Convention is not open to international organisations, and therefore the EU has not acceded, though all Member States have. When eight new parties applied to accede to the Convention,185 the Commission submitted proposals for a Council Decision requiring that, in accordance with the Convention rules and in the interest of the Union, the Member States deposit simultaneously a declaration accepting their accession.186 The starting point for the Commission’s proposal was the argument that the Union had acquired exclusive competence in the areas covered by the Convention following the adoption of Council Regulation 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility.187 However, the response of the Member States has been inconsistent, mainly in the light of Article 38(4) of the Convention, which provides that the accession of a state ‘will have effect only as regards the relations between the acceding State and such Contracting States as will have declared their acceptance of the accession’. The subject-matter of the request by the Commission is whether the acceptance of the accession of a third country to the Convention falls within the exclusive competence of the Union. The scope of the duty of cooperation in the context of international organisations of which the Union is not a party has given rise to a dispute that has attracted attention in Case C-45/07 Commission v Greece (IMO).188 This case was about the unilateral conduct of Greece in the context of the International Maritime Organization (IMO). The Union is not a party to the IMO, but Greece, along with all the other Member States, is. Amongst the various conventions drawn up under its aegis, the IMO adopted the International Convention for the Safety of Life at Sea (the ‘SOLAS Convention’) and the International Ship and Port Facility Security Code (the ‘ISPS Code’). In March 2005 Greece submitted a proposal to the IMO Maritime Safety Committee in which it asked it to examine the creation of checklists or other appropriate tools. The aim of this request was to assist the contracting states of the SOLAS Convention in monitoring whether ships and port facilities complied with the requirements of an Annex to that Convention, as well as with the (ISPS) Code. In the Union legal order, a Regulation had been adopted in 2004 the aim of which was to enhance the security of ships used in international trade and domestic shipping and of 183 See COM(2014) 239 final: Proposal for a Council Decision on the position to be adopted on behalf of the European Union at the 103rd session of the International Labour Conference concerning a Recommendation to the supplement the Forced Labour Convention no 29, 1930, of the International Labour Organisation (Brussels, 14 April 2014). 184 [2013] OJ C226/2. 185 Gabon, Andorra, Seychelles, the Russian Federation, Albania, Singapore, Morocco and Armenia. 186 COM(2011) 904 final, COM(2011) 909 final, COM(2011) 908 final, COM(2011) 911 final, COM(2011) 912 final, COM(2011) 915 final, COM(2011) 216 final, COM(2011) 217 final (Brussels, 21 December 2011). 187 [2003] OJ L338/1, amended by Council Reg 2116/2004 [2004] OJ L367/1. 188 Case C-45/07 Commission v Greece [2009] ECR I-701.

198 International Commitments and the Management of Mixity port facilities in the face of threats of international unlawful acts.189 It was also intended to incorporate into EU law the substance of both the SOLAS Convention and the ISPS Code. The adoption of the Regulation was viewed by the Commission as rendering the Union’s competence in the area exclusive. For this reason, the Commission objected to the submission of the Greek proposal to the IMO Maritime Safety Committee. The exclusive competence of the Union in the area covered by the Greek proposal was not in dispute, as the Greek government accepted it. However, the latter argued that its proposal would not give rise to a binding decision, as, under the IMO rules, it would not lead to the adoption of new rules. The Court rejected this argument, and pointed out that the Greek proposal ‘initiates a procedure which could lead to the adoption by the IMO of new rules’, and that the adoption of such new rules ‘would as a consequence have an effect on the Regulation, the Community legislature having decided … to incorporate in substance both of those international instruments into Community law’.190 It concluded that, having ‘set in motion such a procedure’, Greece ‘took an initiative likely to affect the provisions of the Regulation’, hence violating both the duty of cooperation as set out in Article 4(3) TEU and the TFEU legal bases on transport.191 An interesting aspect of this case was the argument by the Greek government that, in fact, it was the Commission that had violated the duty of cooperation. Greece had suggested that its proposal be discussed at the Maritime Safety Committee which was set up under the Regulation and chaired by the Commission. However, the latter refused to do so. Whilst it accepted that the Commission could have allowed a debate on the matter in order to fulfil its duty of cooperation, the Court held that: [A]ny breach by the Commission of Article 10 EC [now Article 4(3) TEU] cannot entitle a Member State to take initiatives likely to affect Community rules promulgated for the attainment of the objectives of the Treaty, in breach of that State’s obligations.192

Reference was also made to the non-participation of the EU in the IMO. The Court held that: [T]he mere fact that the Community is not a member of an international organisation in no way authorises a Member State, acting individually in the context of its participation in an international organisation, to assume obligations likely to affect Community rules promulgated for the attainment of the objectives of the Treaty.193

The Court added that: [T]he fact that the Community is not a member of an international organisation does not prevent its external competence from being in fact exercised, in particular through the Member States acting jointly in the Community’s interest.194

As in other cases where the duty of cooperation has been invoked, the judgment in IMO ought to be understood in its specific factual and legal context. The dispute was about unilateral action by a Member State in the context of an international organisation to which the Union is not a party and in an area where the Union is endowed with 189 Reg 725/2004 of the Parliament and the Council on enhancing ship and port facility security [2004] OJ L129/6. 190 n 187 above, paras 21 and 22. 191 Ibid, para 23. 192 Ibid, para 26. 193 Ibid, para 30. 194 Ibid, para 31, with reference to Opinion 2/91, n 84 above, para. 5.

The Member States as a Medium for the EU 199 exclusive competence. In that specific context, two main issues arise. The first is about the scope for national action in an international organisation. The judgment confirms that, in areas where the competence of the Union is exclusive, Member States may only act as a medium for the EU. Put differently, the AETR principle suggests that a Member State is not just prevented from concluding an agreement which would affect the interests of the Union, but also from acting unilaterally within the context of that agreement unless authorised under EU law. However, this drastic impact on the legal position of the Member State is to be understood in the specific context of what the Union does in the area where a Member State wishes to act (in the IMO case, the incorporation of international standards in Regulation 725/2004).195 The second issue is about the scope of the duty of cooperation imposed on Member States and the broad terms in which it is couched. The judgment acknowledges that the duty works both ways (it applies to the Commission as well as to the Member States). Indeed, it appears to reprimand, albeit gently, the former for not allowing the discussion of the Greek proposal at the relevant committee. The rejection of the reciprocity argument which the Greek government had put forward was both predictable and sound in principle. After all, reciprocity may not be, and is not, an acceptable defence in the context of enforcement proceedings. However, the judgment raises the question whether, in practice, the duty of cooperation is more onerous for the Member States than for the Commission, as an action by the former against the latter would be difficult to sustain.196 The specific practical arrangements agreed upon by the EU institutions and the Member States notwithstanding, the quest of the Union for a coherent presence in international fora where both it and its Member States are represented is a continuing process. Ironically, the ever-present challenges which underpin it have been amplified by the endowment of the EU with express legal personality under Article 47 TEU. In other words, Member States may be concerned that their presence in international organisations may be wiped out given the broad scope of activities that may be covered by the EU. This is not a merely theoretical exercise as it pertains to whether Member States may also be identified as the actors who make statements along with the EU. In 2011, the Council adopted a document designed to set out the general arrangements which would govern the adoption of EU statements in multilateral organisations.197 The provisions of this document vary from stating the obvious (‘Member States and EU actors will coordinate their action in international organisations to the fullest extent possible as set out in the Treaties’) to the anodyne (‘Member States will seek to ensure and promote possibilities for the EU actors to deliver statements on behalf of the EU’) to the detailed (‘EU representation will be exercised from behind an EU nameplate unless prevented by the rules of procedure of the forum in question’) to the controversial (‘Member States may complement statements made on behalf of the EU whilst respecting the principle of sincere cooperation’).198 The reason why the latter is controversial is that it may be seen, 195 See M Cremona, ‘Extending the Reach of the AETR Principle: Comment on Commission v Greece (C- 45/ 07)’ (2009) 34 European Law Review 754, 762 et seq. 196 See B Van Vooren and RW Wessel, EU External Relations Law—Text, Cases and Materials (Cambridge, Cambridge University Press, 2014) 200 where they argue that the duty of cooperation is ‘slightly lopsided’. See also C Hillion, ‘Mixity and Coherence in EU External Relations: the Significance of the “Duty of Cooperation”’ in Hillion and Koutrakos (eds), n 1 above, 113–14. 197 Council of the European Union, 15901/11, EU Statements in Multilateral Organisations—General Arrangements (Brussels, 24 October, 2011). 198 Ibid, 2–3.

200 International Commitments and the Management of Mixity in practical terms, to complicate the international presence of the EU and, potentially, to undermine its coherence.199 It is, however, a position which illustrates a concern that the coherence of the Union’s international action should not come at the expense of either the division of competences laid down in the Treaty or the relevance of the international posture of the Member States.200 Two points are worth making at this juncture. First, at the core of the arrangements outlined above is the understanding that the practicalities of the Union’s external representations should have no impact on the internal distribution of competence as laid down in primary law. This is a principle that has underpinned EU practice and has facilitated the development of the Union’s international role over the years. Secondly, the quest for the Union’s coherence may not ignore either the law or the politics of the coexistence of the Union and its Member States in international relations.201 The question that the relevant actors need to address is whether a combination of flexibility, procedural ingenuity and good will would be sufficient to strike a balance between their, often competing, interests.

10. MIXED AGREEMENTS AND INTERNATIONAL RESPONSIBILITY Mixed Agreements and International Responsibility

One of the complexities of mixed agreement is about the allocation of responsibility. It is recalled that the European Union, which is endowed with express legal personality under Article 47 TEU, incurs international responsibility. As the International Court of Justice put it: [I]nternational organisations are subjects of international law and, as such, are bound by any obligations incumbent upon them under general rules of international law, under their constitutions or under international agreements to which they are parties.202

The International Law Commission of the United Nations adopted in 2011 a set of rules entitled Draft Articles on the International Responsibility of International Organisations which were endorsed by the UN General Assembly later that year (and have been known as ARIO since then).203 Arguably, the Union is not a traditional international organisation. In fact, ARIO has been attacked for failing to take the peculiarities of the Union’s legal order into account.204 Be that as it may, it is worth pointing out that, once it has established the international responsibility of every international organisation for a wrongful act (Article 3 ARIO), it sets out the rules of attribution in Article 4 ARIO as follows: 199

See the criticism in Van Vooren and Wessel, n 195 above, 261–62. See the UK statement for the minutes of the Council and the British government’s view in UK House of Commons, European Scrutiny Committee, 54th Report, 18 (16 November 2011). 201 See KE Jørgensen and RA Wessel, ‘The Position of the European Union in (Other) International Organizations: Confronting Legal and Political Approaches’ in P Koutrakos (ed), European Foreign Policy–Legal and Political Perspectives (Cheltenham, Edward Elgar Publishing, 2011) 261. 202 ICJ Advisory Opinion Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt [1980] ICJ Rep 73, 89. 203 UN Do. A/66/10. 204 See PJ Kuijper and E Paasivirta, ‘EU International Responsibility and its Attribution: From the Inside Looking Out’ in Evans and Koutrakos (eds), n 20 above, 35, who argue that, ‘[i]f applied to the EU such as they are, the ILC articles may well become a threat to the internal law and the basic structure of the EU’ and suggest that the EU ‘should simply make it clear that it will follow its own course in this matter and that it will at best be inspired by certain aspects fo the ILC rules, but will never accept them as such’ (69). 200

Mixed Agreements and International Responsibility 201 There is an internationally wrongful act of an international organization when conduct consisting of an action or omission: (a) is attributable to the international organization under international law; and (b) constitutes a breach of an international obligation of that organization.

As to the conduct attributable to the organisation, Article 6(1) ARIO provides as follows: The conduct of an organ or agent of an international organization in the performance of functions of that organ or agent shall be considered an act of that organization under international law, whatever position the organ or agent holds in respect of that organization.

Article 6(2) ARIO then provides that the definition of organs and agents is subject to the rules of the organisation. These provisions do not really address the question whether it is the Union or its Member States that are responsible for an internationally wrongful act. This question of attribution is by no means straightforward in the multilayered system set out in the Treaties where the Union and the Member States coexist and interact in different ways and in different capacities. In the context of mixed agreements, this thorny question becomes ever more complex. In the context of the ECHR, a Draft Agreement on the Accession of the EU has been drawn up which tackles the issue of responsibility, attribution and the role of the Court of Justice.205 At the time of writing, the legality of the Draft Agreement in terms EU law is considered by the Court of Justice under Article 218(11) TFEU. In certain cases of mixed agreements where there is express allocation of competence over specific provisions, the declarations submitted by the Union may clarify the issue of responsibility. The analysis earlier in this chapter, however, has highlighted the somewhat opaque drafting of these documents. In other cases, the question is raised whether the Union and the Member States are jointly and severally liable. In his Opinion in the EDF case, Advocate General Jacobs argued that ‘under a mixed agreement the Community and the Member States are jointly liable unless the provisions of the agreement point to the opposite conclusion’.206 In relation to a procedural provision of TRIPs, Advocate General Tesauro argued in his Opinion in Hermès that: ‘In these circumstances, it should be recognised that the Member States and the Community constitute, vis-à-vis contracting nonmember States, a single contracting party or at least contracting parties bearing equal responsibility in the event of failure to implement the agreement.’207 In its judgment in the EDF case, the Court held as follows: The Convention was concluded, according to its preamble and Article 1, by the Community and its Member States of the one part and the ACP States of the other part. It established an essentially bilateral ACP–EEC cooperation. In those circumstances, in the absence of derogations expressly laid down in the Convention, the Community and its Member States as partners of the ACP States are jointly liable to those latter States for the fulfilment of every obligation arising from the commitments undertaken, including those relating to financial assistance.208

205 See E Cannizzaro, ‘Beyond the Either/Or: Dual Attribution to the European Union and to the Member State for Breach of the ECHR’ in Evans and Koutrakos (eds), n 20 above, 295 and id, ‘Postscript to Chapter 12’, in ibid, 359; T Lock, ‘Accession of the EU to ECHR—Who Would be Responsible in Strasbourg?’ in D Ashiagbor, N Countouris and I Lianos (eds), The European Union After the Treaty of Lisbon (Cambridge, Cambridge University Press, 2012). 206 n 41 above, para 69 of his Opinion. 207 Case C-53/96 Hermès International v FHT Marketing Choice BV [1998] ECR I-3603, para 14. 208 Case C-316/91, n 41 above, para 29. On joint responsibility, see I MacLeod, I D Hendry and S Hyett, The External Relations of the European Communities: A Manual of Law and Practice (Oxford, Oxford University

202 International Commitments and the Management of Mixity However, Advocate General Mischo reached a different conclusion in his Opinion in the Berne Convention case where he argued in the following terms: It does not appear certain to me, however, that the simple fact that the respective obligations of the Community and the Member States to the other Contracting Parties have not been defined enables the latter to infer that the Community assumes responsibility for fulfilment of the whole of the agreement in question, including those provisions which do not fall within its competence. On the contrary, the very fact that the Community and its Member States had recourse to the formula of a mixed agreement announces to non-member countries that that agreement does not fall wholly within the competence of the Community and that, consequently, the Community is, a priori, only assuming responsibility for those parts falling within its competence.209

For all the complexity which characterises the application of mixed agreements and the incomprehension they often cause to third countries, no serious problem has actually emerged where no responsibility could be apportioned. Whilst the system governing the coexistence of the Union and the Member States in mixed agreements is not a model of clarity, the implications for third parties should not be exaggerated. In this vein, even in cases where the division of competence between them has not been uncontroversial, both the Union and the Member States have been willing to rely upon practical mechanisms which would not raise obstacles to the issue of responsibility. The significance of ad  hoc solutions and practical arrangements should not be underestimated, as, in the absence of a clear demarcation of competence, practice may clarify which party has been involved in the (mis)implementation of which rule.210 In the words of Kuijper: [N]o country and no body with a serious claim of breach of a mixed agreement has been duped by being sent to the wrong ‘responsibility window’ (Member State or EU window) and being left there, like Kafka’s character, waiting for access to the Law until he was told in the hour of his death that the door to the Law he had been hoping to penetrate all his life was there specially for him and would now be closed.211

A case in point is the WTO framework, due to the variety of the agreements it comprises, the various forms of coexistence of EU and national competence it encompassed prior to the expansion of the CCP at Lisbon, and the structure of its enforcement. Under the Dispute Settlement Understanding, the principle of cross-retaliation made it entirely possible for a third country to be found by WTO bodies to have suffered injury in an area covered by the EU competence and, yet, be enabled to impose countermeasures in an area perceived to fall within national competence. It is recalled that, in the concluding part of its ruling in Opinion 1/94, the Court had referred specifically to the rule of crossretaliation the application of which made the duty of cooperation between the EU and the Member States all the more necessary.212 The practice of the coexistence of the EU and the Member States in the WTO Press, 1996) 158–60; and C Tomuschat, ‘The International Responsibility of the European Union’ in Cannizzaro, n 64 above, 177, 185. However, see the analysis in Heliskoski, n 56 above, 147–53. 209

Case C-13/00 Commission v Ireland [2001] ECR I-2943, para 30. See M Bjoerklund, ‘Responsibility in the EC for Mixed Agreements—Should Non-Member Parties Care?’ (2001) 70 Nordic Journal of International Law 373. 211 PJ Kuijper, ‘International Responsibility for EU Mixed Agreements’ in Hillion and Koutrakos (eds), n 1 above, 208, 224. 212 Opinion 1/94, n 2 above, para 109. 210

Mixed Agreements and International Responsibility 203 illustrates the remarkable ability of all the parties involved to tackle substantive issues whilst avoiding addressing matters of principle. A couple of examples are worth mentioning. A dispute arose in 1996 about the classification of local area network (LAN) equipment and multimedia personal computers for tariff purposes. The US authorities argued that the classification carried out by the customs authorities of the Community and those of Great Britain and Ireland resulted in the imposition of higher tariffs and was in violation of Article II GATT 1994. The US authorities initiated separate proceedings against the Community, the UK and Ireland, the latter two covering the alleged violations by the respective national authorities despite the fact that those violations had also formed part of the proceedings initiated against the Community. The Community claimed that the initiation of separate proceedings against its Member States was unacceptable in the light of its exclusive competence over the application of tariff policy. This position was also supported by Ireland and the United Kingdom. The problem was addressed by means of a procedural device: following the suggestion by the Commission, the US authorities agreed that the panel established for the complaint against the EC should examine the complaints against its two Member States too. The uncontroversial existence of the Community’s exclusive competence over the GATT did not render the LAN dispute as challenging as it might have been. In relation to the issue of responsibility, for instance, both the Commission’s argument that, due to the transfer of competence, no violation could possibly have been committed by its Member States and the US counter-argument that the latter were independent WTO members were not addressed directly: in the light of the factual and procedural context of the complaints, neither the Panel213 nor the Appellate Body addressed the issue of responsibility.214 However, things could have been more difficult in the case of disputes which arose in the context of TRIPs, ie the agreement about which the Court rejected the Commission’s claims for exclusivity in a comprehensive manner in Opinion 1/94. In 1998, the United States initiated identical, albeit separate, proceedings against Ireland 215and the Community,216 alleging the violation of a number of TRIPs provisions by Irish legislation on copyright and neighbouring rights. Again, these proceedings were joined, as indeed was the case in another set of complaints by United States against Greece and the Community regarding the enforcement of intellectual property rights in the area of motion picture and television rights.217 These are by no means the only examples which suggest that the ambiguities and complexities of determining competence have not seriously challenged the ability of the EU to act within the WTO structures.218 Both the EU and the Member States have 213

See WTO Doc WT/DS62/R, WT/DS67/R, WT/DS68/R of 5 Feb 1998. See WTO Doc WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R of 5 June 1998. 215 See WTO Doc WT/DS82/2 of 12 Jan 1998. 216 See WTO Doc WT/DS115/2 of 12 Jan 1998. 217 See WTO Doc WT/DS124/1 and WTO Doc WT/DS125/1, respectively, both of 7 May 1998. 218 See A Delgado Casteleiro and J Larik, ‘The “Odd Couple”: The Responsibility of the EU at the WTO’ in Evans and Koutrakos (eds), n 20 above, 233, especially 238 et seq; C Ní Chatháin ‘The European Community and the Member States in the Dispute Settlement Understanding of the WTO: United or Divided?’ (1999) 5 European Law Journal 461; 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; F Hoffmeister, ‘Litigating against the European Union and Its Member States—Who Responds under the ILC’s Draft Articles on International Responsibility of International Organizations?’ (2010) 21 European Journal of International Law 723. 214

204 International Commitments and the Management of Mixity succeeded in fencing off attempts by third parties to divide them and exploit the general distinct reluctance to allocate competence. If anything, the EU has not shied away from assuming international responsibility and from raising its profile as an international actor. Viewed from this angle, compliance with that duty is dependent not only upon the determination of the Commission and the Member States to present a common front, but also the willingness of the other WTO members to accept the arrangements suggested to them. As neither is guaranteed, the limits of procedural ingenuity and tactical cooperation may be challenged.219 However, as a matter of practice, the Union’s interlocutors have acknowledged the peculiarities that division of competence may raise as a matter of EU law. The story of the coexistence of the EU and its Member States in the WTO illustrates the ability of the principles governing mixed agreements to function in practical terms without giving rise to major conflicts or undermining the status of the Union as a reliable international partner.

11. CONCLUSION Conclusion

In a succinct analysis in 1997, Dashwood cogently described the function of mixed agreements in the context of the Community legal order and approached them as ‘a necessary complication, rather than a necessary evil’.220 The outline provided in this chapter endorses this view. The constitutional limitations inherent in the Union legal order, the rapidly developing interdependence of international regulation of different spheres of activities, the constantly evolving state of EU law and, hence, the need for redefinition of the dividing line between Union and national competence, all place mixed agreements at the very centre of EU international relations. This has not changed by the Lisbon Treaty. As Rosas puts it, mixity ‘is here to stay’.221 Once the principal role of this form of treaty-making has been acknowledged, the emphasis of the interested parties should be on effective methods of managing the exercise of shared competence. This may be done by formalising the modalities of the interactions between the EU and its Member States. For instance, various proposals were made for a Code of Conduct222 or a Protocol223 which would govern participation in the WTO. It has also been suggested that a simplified procedure for the collective exercise

219

See Heliskoski, n 217 above, 76 and 80 et seq. A Dashwood, ‘Why Continue to Have Mixed Agreements at All?’ in JHJ Bourgeois, J-L. Dewost, M-A Gaiffe (eds), La Communauté européenne et les accords mixtes. Quelles perspectives? (Brussels, Presses Interuniversitaires Européennes, 1997) 93. 221 A Rosas, ‘The Future of Mixity’ in Hillion and Koutrakos (eds), n 1 above, 367. 222 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 59, 116 et seq. Following the conclusion of the Uruguay Round, a Code of Conduct had been drawn up between the Council, the Commission and the Member States authorising the Commission to carry out the negotiations on transport and investment services: see Opinion 1/94, n 2 above, 5365–66. On the desired content of such an arrangement, see A Antoniadis, ‘The Participation of the European Community in the World Trade Organisation: An External Look at European Union Constitution-Building’ in T Tridimas and P Nebbia (eds), European Union Law for the Twenty-First Century, vol 1 (Oxford, Hart Publishing, 2004) 321, 338–40; PJ Kuiper, ‘The Conclusion and Implementation of the Uruguay Round Results by the European Community’ (1995) 6 European Journal of International Law 222, 243–44; Timmermans, n 66 above, 246–47. 223 See the proposal by the Portuguese Presidency at the Nice IGC: CONFER 4750/00 Presidency report to the Feira European Council (Brussels, 14 June 2000). 220

Conclusion

205

of Member States’ competence in the context of mixed agreements be introduced in primary law.224 The analysis in this chapter has suggested that, rather than functioning on the basis of clearly predetermined principles, the Union and the Member States often manage their participation on the basis of ad  hoc procedural arrangements, leaving, amongst others, the question of precise delimitation of competence and responsibility in an ambiguous state. One should neither overestimate the seriousness of the complications to which the existing dynamic state of affairs has given rise, nor underestimate the advantages that flexibility may provide in practical terms. Whilst the possibilities of challenging the ability of the EU and the Member States to manage their participation in the WTO as a matter of practice are endless, no crisis has actually occurred. Equally, one should be aware of the inherent limits of legal rules which cannot possibly provide for every eventuality, all the more so in the light of the constantly evolving state of EU law and, hence, the ensuing redefinition of the dividing line between EU and national competence. Similarly, one should not underestimate the significance of the constant channels of cooperation between the EU institutions and the Member States. Developed incrementally and relied upon as a matter of practice, these arrangements indicate a culture of cooperation which, the absence of a formal foundation notwithstanding, underlie not only areas of potential controversy but also areas of certainty: in the negotiations leading to the adoption of the Cartagena Protocol on Biodiversity, for instance, the informal arrangements provided by the Commission and the Council were of such wide scope as to allow for meetings aiming at achieving a common position even on issues of exclusive competence.225 Therefore, the capacity of the EU and national structures to respond to legal challenges as a matter of practice and the culture of cooperation which has developed over the years between the EU and Member States and which manifests itself even in areas where the definition of competence is not an issue226 should not be ignored. Similarly, the specific circumstances under which problematic cases reach the Court of Justice put any alarmist views into perspective: it is recalled, for instance, that in FAO, the dispute about voting notwithstanding, the Community and the Member States had had no difficulty during the negotiations in reaching a common position. The above is not to suggest that, in the context of EU international relations, complacency is a virtue. Every effort aiming at facilitating the exercise of the Union’s external competence and its coexistence with national competence should be encouraged. It is in this context that the central role of the duty of cooperation emerges.227 Developed incrementally and at times unpredictably, the duty binding the EU institutions and the Member States in the process of the negotiation, conclusion and application of international agreements cannot but reveal its precise implications through practice and, ultimately, its interpretation by the Court of Justice. After all, no mechanism aiming 224

See A Dashwood, ‘Mixity in the Era of the Treaty of Lisbon’ in Hillion and Koutrakos (eds), n 1 above,

351. 225

See M Kritikos, ‘Mixity and Ad Hoc Arrangements in EU Negotiating Strategies for the Biosafety Protocol’ in F Snyder (ed), International Food Security and Global Legal Pluralism (Brussels, Bruylant, 2004) 153, 166. 226 See the empirical analysis in A Niemann, ‘Between Communicative Action and Strategic Action: The Article 113 Committee and the Negotiations on the WTO Basic Telecommunications Services Agreement’ (2004) 11 Journal of European Public Policy 379. 227 For a suggestion that it be incorporated in the Treaties, see J Heliskoski, ‘Should There Be a New Article on External Relations?’ in M Koskenniemi (ed), International Law Aspects of the European Union (The Hague, Kluwer, 1998) 273.

206 International Commitments and the Management of Mixity at precisely delineating competences and, accordingly, regulating their exercise can be capable of capturing all the aspects and ramifications of the relationship between the EU and its Member States within the context of a mixed agreement. In the light of this somewhat elusive quest for certainty and the ensuing structural limitations of any system aiming to manage shared competence, the role of the Court of Justice becomes all the more significant. After all, any assessment of the function of mixed agreements and the mechanisms of managing shared competence is dependent upon the system of enforcement of international obligations within the Union legal order. This will be examined in the following chapters.

The Status of International Law in the EU Legal Order

6 The Status of International Law in the EU Legal Order 1. INTRODUCTION Introduction

T

HE ANALYSIS HAS so far focused on the competence of the Union to liaise with the rest of the world and the ways in which the latter may choose to exercise this competence, either on its own or along with its Member States. It identified the implications of the existence and the exercise of this competence for both EU law and the Member States. In particular, it explored the impact of the international conduct of the Union for the power of the Member States to act as sovereign subjects of international law. This part will focus on the relationship between EU and international law. This chapter will examine the status of international law within the EU legal order.

2. BINDING EFFECT OF INTERNATIONAL AGREEMENTS CONCLUDED BY THE EU Binding Effect of International Agreements Concluded by the EU

When the Union concludes an international agreement, it becomes bound under international law to fulfil the commitments undertaken pursuant to its provisions. This pacta sunt servanda principle constitutes a principle of customary international law which is expressly laid down in Article 26 VCLT:1 Every treaty in force is binding upon the parties to it and must be performed by them in good faith.

However, the question which this raises is what other dimension the conclusion of such agreements adds to the legal position of the Union institutions and the Member States. Article 216(2) TFEU provides as follows: Agreements concluded by the Union are binding upon the institutions of the Union and its Member States.

This provision suggests that international agreements concluded by the EU constitute sources of EU law.2 This position in the Union legal order was highlighted by the Court of Justice early on. In Haegeman a Belgian court referred to the Court of Justice a number 1 On the EU Courts’ approach to the VCLT, see PJ Kuijper, ‘The European Courts and the Law of Treaties: The Continuing Story’ in E Cannizzaro (ed), The Law of Treaties Beyond the Vienna Convention (Oxford, Oxford University Press, 2011) 256. 2 G Gaja, ‘Trends in Judicial Activism and Judicial Self-Restraint Relating to Community Agreements’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (The Hague, Kluwer, 2002) 117, 119.

209

210 The Status of International Law in the EU Legal Order of questions about the Association Agreement concluded between the Community and its Member States and Greece in 1961 (the ‘Athens Agreement’).3 The applicant in the main proceedings had challenged a national decision imposing countervailing duties on imports of wine from Greece, arguing that it was a violation of a Protocol annexed to the Athens Agreement. The starting point for the judgment was the conclusion of the Agreement by the Council pursuant to the procedures laid down in primary law (now Article 218 TFEU). The Court ruled that the Agreement ‘is therefore, in so far as concerns the Community, an act of one of the institutions of the Community within the meaning of [Article 234 EC, now Article 267 TFEU]’.4 The Court then ruled that the provisions of the Athens Agreement ‘form an integral part of Community law’ from their entry into force.5 This line of reasoning was articulated in four one-phrase paragraphs which are striking in their terseness. They precede any reference even to the first question referred by the Belgian court and were relied upon by the Court in order to address the question of whether it had jurisdiction under the preliminary reference mechanism to rule on an agreement concluded both by the Union and the Member States. This is an issue that will be examined in the next chapter. For the purposes of this analysis, it is the statement about the status of Athens Agreement that is of interest. The absence of any reference to the precursor to Article 216(2) TFEU is curious.6 Instead, the Court chose to focus on the conclusion of international agreements pursuant to the adoption of an EU act. This appears to provide some textual foundation in substantiating the position of international agreements within the EU legal order. Should the Court have distinguished between an Agreement concluded by the Union and the secondary measure adopted by the Council actually concluding the Agreement? It should be pointed out that the Council measure carries out a more important function than merely expressing the Union’s assent to the agreement.7 It expressly concludes the Agreement on behalf of the Union and includes its text in an annex, hence defining the subject-matter of the obligation to which Article 216(2) TFEU refers. Another interesting feature of the Haegeman judgment is that the latter was not about an agreement concluded by the Union alone. It was a mixed agreement which the Court described as ‘an integral part of the Community legal order’. The scope of this conclusion is not as all-encompassing as the terseness of its reasoning might appear to suggest: the agreement constitutes an act of the Union’s institutions ‘in so far as concerns the Community’ and the Court is to exercise its jurisdiction ‘within the framework of [Community] law’.8 However, these qualifications do not address the questions raised by the cryptic manner in which the Court chose to articulate its line of reasoning. Be that as it may, the description of international agreements concluded by the Union as an integral part of the Union legal order has now become settled case-law.9 3

Case 181/73 R & V Haegeman v Belgian State [1974] ECR 449. Ibid, para 4. Ibid, para 5. 6 See M Mendez, The Legal Effects of EU Agreements—Maximalist Treaty Enforcement and Judicial Avoidance Techniques (Oxford, Oxford University Press, 2013) 66–67. 7 This is the phrase used by Hartley in Constitutional Problems of the European Union (Oxford, Hart Publishing, 1999) 32. 8 n 3 above, paras 4 and 6, respectively. 9 See eg Case C-344/04 IATA and ELFAA [2006] ECR I-403, para 36; Case C-301/08 Bogiatzi [2009] ECR I-10185, para 23; Case C-63/09 Walz [2010] ECR I-4239, paras 19–20; Case C-160/09 Katsivardas [2010] 4 5

Binding Effect of International Agreements Concluded by the EU 211 The ratio of Article 216(2) TFEU and the status of international agreements concluded by the EU have legal implications for the Member States. This was the subject-matter of the reference from the German Federal Finance Court on the interpretation of the Free Trade Agreement (FTA) between the Community and Portugal in Kupferberg.10 The Court was asked to examine the legality of the imposition of charges under German law upon quantities of port imported from Portugal. In its judgment the Court relied upon Article 300(7) EC (now Article 216(2) TFEU) and opined that ‘it is incumbent upon the Community institutions, as well as upon the Member States, to ensure compliance with the obligations arising from such agreements’.11 As a corollary of this responsibility, the Court articulated the following duty imposed upon the Member States: In ensuring respect for commitments arising from an international agreement concluded by the Community institutions the Member States fulfill an obligation not only in relation to the non-member country concerned but also and above all in relation to the Community.12

Therefore, the assumption of international obligations by the Union on its own carries with it the assumption of a Union law obligation by the Member States. This is related to the duty of loyal cooperation, ie the duty of Member States under Article 4(3) TEU ‘to take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from action taken by the institutions of the Union’. After all, the conclusion of an agreement pursuant to Article 218 TFEU is an action taken by the Union the effects of which are formalised within the Union legal order by means of the Council measure actually concluding the agreement. Viewed from this angle, the construction of the obligations imposed upon the Member States in Kupferberg is strict in so far as it refers to the internal effects of the agreement on the legal position of the Member States, ie the effects produced within the Union legal order. Arguments to the contrary have been advanced seeking to establish independent legal duties binding the Member States against third parties.13 However, this position is not convincing: when based on an agreement concluded by the Union alone, the obligation borne by the Member States towards third countries is only indirect: their actions or inactions may be the medium upon which the Union would need to rely in order to comply with its international obligations under the agreement. Indeed, in Kupferberg the Court referred to the possibility of an agreement being implemented by means of Community and national law, despite its conclusion by the Community alone.14 To that effect, it is worth recalling the Agreement on competition law between the Community alone and the United States concluded contrary to the procedure laid down in Article 300 EC (now Article 218 TFEU). In its judgment in France v Commission the Court pointed out that the agreement was nonetheless binding on the Community and that, in the event of non-compliance, it would be the Community which would incur liability.15 Therefore, ECR I-4501; Case C-386/08 Brita [2010] ECR I-1289, para 39; Case C-135/10 Società Consortile Fonografici (SCF) v Marco Del Corso ECLI:EU:C:2012:140, para 39; C-11/11 Air France v Folkerts, ECLI:EU:C:2012:747, para 31; Case C-410/11 Espada Sánchez and Others, ECLI:EU:C:2013:106, para 20. 10

Case 104/81 Hauptzollamt Mainz v CA Kupferberg & Cie KG aA [1982] ECR 3641. Ibid, para 11. 12 Ibid, para 13. 13 For a summary and convincing counter arguments, see I Macleod, ID Hendry and S Hyett, The External Relations of the European Communities (Oxford, Oxford University Press, 1996) 127, n 30. 14 n 10 above, para 12. 15 Case C-327/91 France v Commission [1994] ECR I-3641, paras 23–25. See the analysis in Chapter 4. 11

212 The Status of International Law in the EU Legal Order whilst confirming the duty on Member States under a Union agreement, Article 216(2) TFEU may not transform this duty into an international law one. It is for this reason that compliance by the Member States and Union institutions may only be ensured pursuant to the system of judicial review set out under the Union’s primary rules. The judgment in Kupferberg was about an agreement that fell within the exclusive scope of the Union’s competence. The duties imposed on Member States pursuant to mixed agreements are more difficult to ascertain and both their scope and intensity are deeply contested by national authorities. They are examined in Chapter 5.

3. BINDING EFFECT OF INTERNATIONAL AGREEMENTS NOT CONCLUDED BY THE EU Binding Effect of International Agreements Not Concluded by the EU

Whilst Article 216(2) TFEU affirms the binding effect of international agreements concluded by the Union, it does not do so exhaustively. Over the years, the Court has held that the Union may also be bound by international agreements which it has not concluded itself. The first time this was held to be the case was in relation to the General Agreement on Tariffs and Trade (GATT) concluded in 1947. In International Fruit Company16 a Dutch court referred to the Court questions about a set of Community measures restricting the importation of apples from third countries and their validity in the light of the GATT. One of the issues raised before the Court was whether the GATT was binding upon the Union. The Court answered this question in the affirmative on two grounds. First, it pointed out that all Member States had been bound by the GATT at the time of the establishment of the then European Economic Community and they had intended to observe their obligations in formulating and implementing Community law. This was illustrated by the rule of Article 307 EC (now Article 351 TFEU) which recognised the application of the principle of pacta sunt servanda within the new legal order. It was also reflected in Article 110 of the original Treaty of Rome, now deleted, which stated that the Community was to adhere to the same aims as those of the GATT. Secondly, the Court held that the Community ‘has assumed the functions inherent in the tariff and trade policy’ within the context of its Common Commercial Policy, progressively during the transitional period and in their entirety on the expiry of that period.17 It was in the light of this development that it opined that, ‘by conferring those powers on the Community, the Member States showed their wish to bind it by the obligations entered into under [the GATT]’.18 In order to substantiate this position, the Court drew upon the autonomous involvement of the Community, through its own institutions, as a party to the various agreements concluded within the GATT framework pursuant to the now repealed provision of Article 114 of the Treaty of Rome.19 It was on that basis 16 Joined Cases 21 to 24/72 International Fruit Company NV and Others v Produktschap voor Groenten en Fruit [1972] ECR 1219. 17 Ibid, para 14. 18 Ibid, para 15. 19 That provision read as follows: ‘The agreements referred to in Article 111(2) [ie tariff agreements] and in Article 113 [now 133] shall be concluded by the Council on behalf of the Community, acting unanimously during the first two stages and by a qualified majority thereafter.’

Binding Effect of International Agreements Not Concluded by the EU 213 that the Court concluded that ‘in so far as under the EEC Treaty the Community 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 Community’.20 The legal context within which the Court was asked to clarify the position of international agreements in International Fruit Company was not as controversial as it might have been as it did not raise questions of competence. The subject-matter of the GATT, ie the conclusion of tariff and trade arrangements, fell within the scope of the Common Commercial Policy (CCP) as defined expressly in Article 133 EC (now Article 207 TFEU). As such, it was covered by the exclusive competence of the Community: had it been negotiated and concluded following the expiry of the transitional period, and had the GATT provided for membership of international organisations, it would have been the Commission and the Council respectively which would have been responsible, the latter acting by qualified majority voting. The principle that the Union assumes the obligations of Member States set out in an agreement which it has not concluded itself is reminiscent of the principle of state succession in respect of treaties. This is a recognised principle of international law.21 The introduction of the concept of succession in the EU legal order was noteworthy, as the exclusive nature of the agreement in question, namely the GATT, was not stated in express terms in the EC Treaty and had not yet been spelled out by the Court at the time of the reference in International Fruit Company. It would take three more years for it to be articulated.22 With the benefit of hindsight, the ruling of the Court appears to signal what was to become one of the pillars of the Union’s external trade relations. Furthermore, the determination of the effect of GATT provisions in both domestic and the Community legal order became a matter for the Court of Justice: as the Community had replaced the Member States in the fulfilment of their obligations, the interpretation and application of the GATT within the context of a domestic dispute under domestic law was ipso facto a dispute governed by Community law. The significance of the implications of this type of judicial exclusivity became apparent in the judgment in International Fruit Company itself with reference to the legal effect of the GATT. This is discussed in detail in Chapter 8. For the purposes of this analysis, suffice it to point out that, in ruling out even the possibility of a national court being receptive to a more direct enforcement of the GATT, the Court’s judgment determined the effectiveness of that Agreement in the territory of one of the most important international trade actors. It is not often the case that an international agreement concluded by the Member States is also binding on the Union because the latter has assumed the obligations of the former. For instance, the Warsaw Convention (Convention for the Unification of Certain Rules Relating to International Carriage by Air) was held not to bind the Union.23 This is also the case for Marpol 73/78 (International Convention for the Prevention of Pollution 20

n 16 above, para 18 of the judgment. See A Aust, Modern Treaty Law and Practice, 3rd edn (Cambridge, Cambridge University Press, 2013) ch 21; J Crawford, Brownlie’s Principles of Public International Law, 8th edn (Oxford, Oxford University Press, 2012) 438–43; J Klabbers, International Law (Cambridge, Cambridge University Press, 2013) 80–84; M Shaw, Public International Law, 6th edn (Cambridge, Cambridge University Press, 2008) 966–84. See also R Schütze, ‘The “Succession Doctrine” and 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) 459. 22 See Opinion 1/75 (re: OECD Understanding on a Local Cost Standard) [1975] ECR 355. 23 Case C-301/08 Bogiatzi [2009] ECR I-10185, paras 25–33. 21

214 The Status of International Law in the EU Legal Order from Ships of 1973, as supplemented by the Protocol of 17 February 1978)24 and the Chicago Convention (Convention on International Civil Aviation).25 The issue of succession by the Union to obligations assumed by its Member States was also raised in the context of Kadi litigation. This saga has been one of the most hotly contested line of cases emanating from Luxembourg in the last few years. So much so, that a summary of its factual background would be sufficient for this analysis. The dispute originated in sanctions adopted by the Union in order to implement a sanctions regime which had been set up under UN Security Council Resolutions. This regime entailed the freezing of assets of individuals suspected of financing al-Qaeda and whose name was included in a list of individuals and organisations compiled by a committee (the ‘Sanctions Committee’) set up by the UN Security Council in order to monitor the management of the above sanctions regime. As all Member States are parties to the United Nations, they are bound by its Charter to apply the Resolutions adopted by the UN Security Council. In this case, they adopted a CFSP measure in which they authorised the Union (then Community) to adopt the necessary legislation that would implement the sanctions regime set out in the UN Security Council Resolution. The Council did adopt such legislation which transposed the content of the sanctions regime into the Union legal order. Thus, what had been an international law duty on Member States became an EU law obligation. However, the regime set out at UN level was problematic. Individuals were not warned of their listing in advance, were not made privy to the information which led to their listing, and did not have the right to appeal against their listing directly to the Sanctions Committee. Instead, they were allowed to approach their state of origin or residence and ask it to make the case for their delisting for them. In Case T-306/01 Yusuf and Case T-315/01 Kadi26 the applicants challenged the Council Regulation which froze their assets before the General Court (then known as the Court of First Instance (CFI)). A main issue upon which the substantive assessment of the sanctions regime was premised was the status of the UN Charter in the Union legal order. The EU is not a member of the United Nations,27 and therefore is not bound directly by the Charter. However, all its Member States are. The question that arose was whether the obligations of the latter under the Charter had been assumed by the Union. The Court answered this in the affirmative. Whilst it accepted that the UN Charter was not binding on the Union as a matter of public international law, it was as a matter of EU law: [T]he Community must be considered to be bound by the obligations under the Charter of the United Nations in the same way as its Member States, by virtue of the Treaty establishing it.28

The line of reasoning substantiating this conclusion was as follows: 194 In that regard, it is not in dispute that at the time when they concluded the Treaty establishing the European Economic Community the Member States were bound by their obligations under the Charter of the United Nations.

24

Case C-379/92 Peralta [1994] ECR I-3453, para 16; Case C-308/06 Intertanko [2008] ECR I-4057, para 48. Case C-366/10 Air Transport Association of America (ATAA) et al, ECLI:EU:C:2011:864, paras 62–71. 26 Case T-315/01 Kadi v Council and Commission [2005] ECR II-3649. 27 According to Art 4 UN Charter, membership is only open to states. 28 Case T-315/01 Kadi, para 193; Case T-306/01 Yusuf [2005] ECR II-03533, para 243. 25

Binding Effect of International Agreements Not Concluded by the EU 215 195 By concluding a treaty between them they could not transfer to the Community more powers than they possessed or withdraw from their obligations to third countries under that Charter (see, by analogy, Joined Cases 21/72 to 24/72 International Fruit Company and Others (‘International Fruit’) [1972] ECR 1219, paragraph 11). 196 On the contrary, their desire to fulfil their obligations under that Charter follows from the very provisions of the Treaty establishing the European Economic Community and is made clear in particular by Article 224 and the first paragraph of Article 234 (see, by analogy, International Fruit, paragraphs 12 and 13, and the Opinion of Advocate General Mayras in those cases, ECR 1231, at page 1237). 197 Although that latter provision makes mention only of the obligations of the Member States, it implies a duty on the part of the institutions of the Community not to impede the performance of the obligations of Member States which stem from that Charter (Case 812/79 Burgoa [1980] ECR 2787, paragraph 9). 198 It is also to be observed that, in so far as the powers necessary for the performance of the Member States’ obligations under the Charter of the United Nations have been transferred to the Community, the Member States have undertaken, pursuant to public international law, to ensure that the Community itself should exercise those powers to that end. 199 In this context it is to be borne in mind, first, that in accordance with Article 48(2) of the Charter of the United Nations, the decisions of the Security Council ‘shall be carried out by the Members of the United Nations directly and through their action in the appropriate international agencies of which they are members’ and, second, that according to the case-law (Poulsen and Diva Navigation, paragraph 158 above, paragraph 9, and Racke, paragraph 158 above, paragraph 45, and Case 41/74 Van Duyn [1974] ECR 1337, paragraph 22), the Community must respect international law in the exercise of its powers and, consequently, Community law must be interpreted, and its scope limited, in the light of the relevant rules of international law. 200 By conferring those powers on the Community, the Member States demonstrated their will to bind it by the obligations entered into by them under the Charter of the United Nations (see, by analogy, International Fruit, paragraph 15). 201 Since the entry into force of the Treaty establishing the European Economic Community, the transfer of powers which has occurred in the relations between Member States and the Community has been put into concrete form in different ways within the framework of the performance of their obligations under the Charter of the United Nations (see, by analogy, International Fruit, paragraph 16). 202 Thus it is, in particular, that Article 228a of the EC Treaty (now Article 301 EC) was added to the Treaty by the Treaty on European Union in order to provide a specific basis for the economic sanctions that the Community, which has exclusive competence in the sphere of the common commercial policy, may need to impose in respect of third countries for political reasons defined by its Member States in connection with the CFSP, most commonly pursuant to a resolution of the Security Council requiring the adoption of such sanctions. 203 It therefore appears that, in so far as under the EC Treaty the Community has assumed powers previously exercised by Member States in the area governed by the Charter of the United Nations, the provisions of that Charter have the effect of binding the Community (see, by analogy, on the question whether the Community is bound by the General Agreement on Tariffs and Trade (GATT) of 1947, International Fruit, paragraph 18; see also, in that it recognises that the Community exercises circumscribed powers when giving effect to a trade

216 The Status of International Law in the EU Legal Order embargo imposed by a resolution of the Security Council, Dorsch Consult v Council and Commission, paragraph 158 above, paragraph 74).29

This line of reasoning is not convincing. Its analysis of the relevant legal provisions is somewhat vague and lacks any detailed examination of the specific powers that the Member States are alleged to have transferred to the Union. Such a detailed analysis might not have been essential in International Fruit Company, given the specific and clearly confined scope of the GATT and the EU’s primary rule on the CCP. In the case of the UN Charter, however, and the extraordinarily wide mandate it bestows on the United Nations (to assume primary responsibility for the maintenance of international peace and security), the position that the Member States have transferred such responsibility to the Union is nothing short of staggering.30 Its adoption in the above extract comes across as a necessary, albeit problematic, step in the CFI’s overall construction of deference to the UN Charter. On appeal, the Court of Justice did not engage in an examination of the issue of succession, as it held that under no circumstances would international law affect the constitutional fundamentals of the EU legal order, including respect for fundamental human rights.31 Whilst it still approaches Treaty succession as exceptional, subsequent case-law has elaborated on the conditions that need to be met. The Union is bound by an agreement concluded by all its Member States32 only if all the powers exercised by the Member States under the agreement have been transferred to the Member States. Whilst in the past it repeated this statement without engaging in any further analysis, more recently the Court elaborated on it further. It did so in Bogiatzi in relation to the Warsaw Convention where it examined three regulations covering some but not all the issues covered by the Convention.33 It also did so in Case C-366/10 Air Transport Association of America and  Others (ATAA),34 which was about the Union’s policy to apply its gas emissions trading scheme to international flights which land in or depart from an EU airport even for the parts of the flights over non-EU territory.35 The EU policy was challenged for its legality in the light of, amongst others, the Chicago Convention on International Civil Aviation. The Union’s competence on air transport is based on Article 100(2) TFEU, pursuant to which a considerable volume of secondary legislation has been adopted in the area.36 However, the Court held that the EU had not succeeded the Member States in relation to the duties set out in the Convention: it is only if it has assumed ‘all the powers previously exercised by the Member States that fall within the convention in question’ that the Union is bound by the latter.37 There are still areas covered by the Chicago Con-

29

Case T-315/01 Kadi, ibid, paras 194–203. See also J Klabbers, The European Union in International Law (Paris, Editions A Pedone, 2012) 74–75. See the analysis in section 5 of this chapter. 32 Case C-188/07 Commune de Mesquer v Total France [2008] ECR I-4501, para 85. 33 Case C-301/08 Bogiatzi [2009] ECR I-10185, paras 25–33. 34 Case C-366/10 Air Transport Association of America and Others (ATAA), ECLI:EU:C:2011:864 35 Dir 2008/101 [2009] OJ L8/3. 36 See eg Reg 1592/2002 on common rules in the field of civil aviation and establishing a European Aviation Safety Agency [2002] OJ L240/1 and Council Reg 3922/92 on the harmonisation of technical requirements and administrative procedures in the field of civil aviation [1991] OJ L373/4, amended by Reg 1900/2006 [2006] OJ L377/176, Dir 2006/93/EC of the European Parliament and of the Council of 12 December 2006 on the regulation of the operation of aeroplanes covered by Part II, Chapter 3, Volume 1 of Annex 16 to the Convention on International Civil Aviation, second edition (1988), [2006] OJ L374/1. 37 Para 63 of the judgment. 30 31

Binding Effect of International Agreements Not Concluded by the EU 217 vention where the Member States retain the power to adopt legislation, such as those relating to the award of traffic rights, the setting of airport charges, and the determination of prohibited areas in their territory which may not be flown over.38 Whilst the principle it articulates and the conclusion it reaches are entirely consistent with past case-law on the matter, this part of the ATAA judgment is different from previous judgments. Not only is it detailed in its references to secondary Union measures adopted in the area covered by the Chicago Convention, but it also underlines the various interactions between the Union and the International Civil Aviation Organization (ICAO). It refers to Union legislation in the area of energy taxation adopted in order to comply with, amongst others, the Convention and bilateral air services agreements concluded by the EU and/or the Member States with third countries.39 It also points out the development of institutional links between the EU and ICAO.40 Finally, it mentions the exclusive competence of the Union, pursuant to the Open Skies judgments, in certain fields of air transport covered by the Convention.41 In other words, there is a distinct emphasis on the EU’s engagement with the substantive regime and institutional structure of the Chicago Convention, the absence of a binding effect on the Union notwithstanding. This is in contrast to the terseness of previous judgments on the effect of international agreements concluded by the Member States but not the Union. This feature of the judgment in ATAA may be explained in the light of the implications of its conclusion for both the Member States and individuals. It is settled case-law that no EU measure may be challenged in the light of international law unless the latter is binding on the Union. Therefore, the conclusion that the Union does not assume obligations incumbent on Member States by an international agreement which it has not concluded itself has profound consequences for the Member States. A conflict between EU law and such an international agreement would leave them in a difficult position: to comply with their EU law obligations would require that they violate the international law obligations which they assumed when the concluded the agreement in question. This problem would not arise if there was no conflict between an agreement binding on the Member States (but not the Union) and secondary EU law. This may be achieved by construing the latter consistently with the former. This is what the Court held in Intertanko in the light of the duties imposed on Member States by Marpol 73/78: EU judges are required to interpret Union law ‘taking account of ’ the international rules binding on the Member States.42 There are two bases for this duty, both expressly acknowledged in the judgment: the first is the principle of good faith, which constitutes customary international law; the second is the duty of cooperation, laid down in Article 4(3) TEU. This principle of consistent interpretation is intended to bring the EU legal order closer to international rules binding on Member States, hence enabling the latter to comply with EU law without violating their international obligations. 38

Para 70 of the judgment. Dir 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity [2003] OJ L283/51 and Case C-79/10 Systeme Helmholz [2011] ECR I-12511, paras 24 and 25. 40 See Council Dec  2011/530/EU 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 2011/1. 41 See Case C-476/98 Commission v Germany [2002] ECR I-9855, para 124. For an analysis of the Open Skies judgments, see Chapter 3. 42 Case C-308/06 Intertanko, n 24 above, para 52. 39

218 The Status of International Law in the EU Legal Order The Court’s reluctance to adopt the treaty succession principle generously has been criticised.43 However, it is not immediately apparent why the Union should be eager to assume international obligations other than those undertaken by its legislature or imposed on all international actors (ie customary international law). Whilst the need to avoid a conflict between EU law and international law binding on Member States is imperative, this may be addressed by the interpretation requirement spelled out in Intertanko. As it originates from the duty of cooperation, and given the wide scope of the latter, this requirement also gives rise to a duty on the EU institutions to seek to avoid making the Member States choose between compliance with EU or international law. A conflict between EU and international rules may also be avoided by the care that Member States should be expected to show when they negotiate EU secondary measures in the Council in order to ensure that any such measures would not be in conflict with the international obligations already undertaken by national authorities.44 An interesting case has arisen recently in relation to the Geneva Convention of 28 July 1951 and the Protocol of 31 January 1967 relating to the status of refugees. Both are mentioned in Article 78(1) TFEU which provides that the Union’s asylum policy ought to comply with their rules. This has been interpreted as a requirement that secondary legislation must be interpreted in a manner which respects these Treaties.45 However, in a recent case the Court held that it did not have jurisdiction to interpret the Convention itself. In Case C-481/13 Qurbani a German court made a reference about the interpretation of Article 31 of the Convention. The dispute was about an Afghan national had entered Greece and then travelled to Germany under a forged Pakistani passport obtained from a human trafficker. Having pointed out that the Union was not a party to the Geneva Convention, the Court held that neither had it assumed the obligations of the Member States under its provisions. This was because, although several pieces of EU legislation have been adopted in the field to which the Geneva Convention applies as part of the implementation of a Common European Asylum System, it is undisputed that the Member States have retained certain powers falling within that field, in particular relating to the subject-matter covered by Article 31 of that convention.46

The judgment was framed in terms of the jurisdiction of the Court to interpret the Geneva Convention, a question it answered in the negative. It is interesting that this case was considered not to raise an important legal issue and the judgment was rendered without an Opinion by an Advocate General. The conclusion was reached, the reference to the Convention in Article 78(1) TFEU notwithstanding. According to the Court, the latter was relevant to cases where the Court would be asked to interpret secondary legislation referring to the Geneva Convention. As the referring court made no reference to secondary legislation, and the questions it referred were confined to the Convention, the Court held that it had no jurisdiction to interpret the latter. In fact, the judgment points out that there was nothing in the reference to suggest that Article 31 of the Geneva Convention was relevant to the case in the main proceedings. 43

See eg P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 400. See E Denza, ‘A Note on Intertanko’ (2008) 33 European Law Review 870, 878. 45 Joined Cases C-175/08, C-176/08, C-178/08 and C-179/08 Salahadin Abdulla and Others [2010] ECR I-01493, paras 53–54 and Case C-31/09 Bolbol, ECLI:EU:C:2010:351, para 38. 46 Case C-481/13 Qurbani, ECLI:EU:C:2014:2101, para 24. 44

Primacy of International Agreements and the Role of the EU Courts 219 Therefore, the binding effect of the Geneva Convention in the EU legal order pursuant to Article 78(1) TFEU would give rise to the jurisdiction of the Court in cases where the interpretation of specific Union legislation referring to the Convention is raised.

4. PRIMACY OF INTERNATIONAL AGREEMENTS AND THE ROLE OF THE EU COURTS Primacy of International Agreements and the Role of the EU Courts

International rules which bind the European Union take precedence over secondary Union law. In relation to international agreements concluded by the EU, this principle appears to follow from Article 216(2) TFEU which refers to the binding effect of such agreements on both the Union institutions and the Member States. However, it is not set out in primary law expressly. The logic of the principle was articulated in International Fruit Company.47 It is recalled that, adjudicating on the effect of the Free Trade Agreement with Portugal, the Court held that international agreements concluded by the Community form an integral part of the Community legal order. It, then, held as follows: It follows from the Community nature of such provisions that their effect in the Community may not be allowed to vary according to whether their application is in practice the responsibility of the Community institutions or the Member States and, in the latter case, according to the effects in the internal legal order of each Member State which the law of that State assigns to international agreements concluded by it. Therefore it is for the Court, within the framework of its jurisdiction in interpreting the provisions of agreements, to ensure their uniform application throughout the Community.48

This extract suggests that the status of internal agreements within the Union legal order and the exclusive jurisdiction of the Court of Justice to interpret them are intrinsically linked. The issue of the jurisdiction of the Court and its implications is examined in Chapter 7. The principle of primacy of international agreements was spelled out expressly in the International Dairy Arrangement judgment.49 This was about an action brought by the Commission challenging the authorisation granted by German authorities to imports of certain dairy products under inward processing relief arrangements. The Commission argued that this practice was contrary to the International Dairy Arrangement (IDA), as it applied to products the customs value of which was lower than set out in IDA. The Arrangement had been concluded under the GATT umbrella. In its judgment, the Court articulated the principle of primacy of international agreements concluded by the Union over secondary Union legislation. This principle has been repeated in subsequent case-law.50 47 Joined Cases 21 to 24/72 International Fruit Company NV and Others v Produktschap voor Groenten en Fruit [1972] ECR 1219. 48 Ibid, para 14. See also Case Nederlandse Spoorwegen 38/75 [1975] ECR 1439, para 21. This case was about the effect of the Convention on Nomenclature for the Classification of Goods in Customs Tariffs and the Convention establishing a Customs Cooperation Council in relation to which the Court repeated its formula of substitution. Both Conventions had been concluded in 1950. 49 Case C-61/94 Commission v Germany [1996] ECR I-3989, para 52. 50 See eg Case C-286/02 Bellio F.lli [2004] ECR I-3465, para 33 (re EEA); Joined Cases C-320/11, C-330/11, C-382/11 and C-383/11 Digitalnet and Others [2012] ECR, para 39 (re Agreement on trade in information technology products under the WTO umbrella); Joined Cases C-288/09 and C-289/09 British Sky Broadcasting Group and Pace, ECLI:EU:C:2009:572, para 83 (ibid); Case C-335/11 HK Danmark, ECLI:EU:C:2013:222,

220 The Status of International Law in the EU Legal Order The principle of primacy of international agreements is confined to secondary Union legislation and does not extend to primary law. This issue was raised in the context of the Kadi litigation.51 This litigation gave rise to a number of EU international relations issues, including the competence of the EU to impose smart sanctions and the rights that individuals targeted by such sanctions (outlined in Chapter 14), as well as the relationship between EU and UN law and the scope of the jurisdiction of the Court of Justice. It is the latter that this section will examine. The EU judiciary adopted two starkly different approaches. It is recalled that in Case T-315/02 Kadi I and Case T-306/01 Yusuf and Al Barakaat the CFI held that the EU was bound by UN Security Council Resolutions as it had succeeded its Member States, therefore assuming their obligations to comply with UN Security Council measures.52 It also construed the primacy of UN law in broad terms: it held that UN law takes precedence over any other legal obligation imposed on Member States, including under EU law. It concluded that pursuant both to the rules of general international law and to the specific provisions of the Treaty, Member States may, and indeed must, leave unapplied any provision of Community law, whether a provision of primary law or a general principle of that law, that raises any impediment to the proper performance of their obligations under the Charter of the United Nations.53

In the light of the above, the CFI held that the EU Courts had no jurisdiction to review the legality of EU measures implementing UN Security Council Resolutions, as that would imply that they had jurisdiction to review indirectly the legality of the latter. However, they did have jurisdiction to review whether UN Security Council Resolutions complied with jus cogens. The judgment attracted attention and criticism. The stance of the CFI was viewed as distinctly internationalist and indicative of deference to the international legal order.54 However, it was also viewed to be at odds with the idea of the Union as a legal order based on the rule of law.55 For the purposes of this analysis, suffice it to make two points. First, the CFI’s conclusion that the EU had assumed the obligations of its Member States under UN law was deeply unconvincing and is criticised above in this chapter.56 Secondly, there is an inherent conceptual paradox in the judgment in so far as the CFI puts para 28 (re United Nations Convention on the Rights of Persons with Disabilities); Case C-363/12 Z ECLI:EU:C:2014:159, para 71 (ibid); C-356/12 Glatzel, ECLI:EU:C:2014:350, para 70 (ibid); C-414/11 Daiichi Sankyo and Sanofi-Aventis Deutschland, ECLI:EU:C:2013:520, para 22 (re TRIPs); C-228/06 Soysal and Savatli ECLI:EU:C:2009:101, para 59 (re EU–Turkey Association Agreement); Case C-344/04 R v Department of Transport ex parte IATA [2006] ECR I-403, para 35 (re Montreal Convention); and Case C-308/06 Intertanko, n 24 above, para 42 (re UNCLOS). 51

See the facts in section 3 above. See nn 26 and 28 above. 53 Case T-315/02 Kadi, n 26 above, para 190. 54 See C Tomuschat, ‘Annotation on Case T-306/01, Ahmed Ali Yusuf’ (2006) 43 Common Market Law Review 537. 55 See eg D’Aspremont and F Dopagne, ‘Kadi: the ECJ’s Reminder of the Elementary Divide between Legal Orders’ (2008) 5 International Organizations Law Review 371; L van den Herik, ‘The Security Council’s Targeted Sanctions Regimes: In Need for Better Protection of the Individual’ (2007) 20 Leiden Journal of International Law 797; W Vlcek, ‘Acts to Combat the Financing of Terrorism: Common Foreign and Security Policy at the European Court of Justice’ (2006) 11 European Foreign Affairs Review 491. 56 See section 3. 52

Primacy of International Agreements and the Role of the EU Courts 221 forward a deeply deferential approach based on the absence of jurisdiction of EU Courts to review the legality of UN measures whilst it ends up carrying out judicial review of such measures. This paradox is compounded by the reliance upon jus cogens without any explanation of the basis of the jurisdiction of the CFI to enforce it against UN Security Council Resolutions. As if this line of reasoning was not problematic enough, the scope of jus cogens is deeply contested and, however broadly it may construed, it would be rather controversial to assume that it covers the right of property, as the CFI did. It is indicative of the criticism that this judgment attracted that, when Advocate General Maduro rendered his Opinion on appeal in Kadi in which he argued against every point made by the CFI, The Economist published a two-page article about it entitled ‘Coming Up Trumps’.57 In his forceful and concise Opinion, Maduro argued that ‘the Court cannot, in deference to the views of  … institutions [such as the UN Security Council], turn its back on the fundamental values that lie at the basis of the Community legal order and which it has the duty to protect’.58 He also suggested that, ‘had there been a genuine and effective mechanism of judicial control by an independent tribunal at the level of the United Nations, then this might have released the Community from the obligation to provide for judicial control of implementing measures that apply within the Community legal order’.59 In the absence of such mechanism, ‘Community institutions cannot dispense with proper judicial review proceedings when implementing the Security Council resolutions in question’,60 which would require that the relevant authorities ‘justify such measures and demonstrate their proportionality, not merely in the abstract, but in the concrete circumstances of a given case’.61 In the appeal before the Court of Justice against the judgment of the CFI, the British government pointed out that resolutions adopted under Chapter VII of the UN Charter had a special status. This was viewed as substantiated by Articles 25,62 4863 and 10364 of the Charter and acknowledged by Article 347 TFEU which implies that action taken by a Member State in order to perform its obligations with a view to maintaining international peace and security may deviate from the entire body of EU law. The British government argued that ‘the primacy of those obligations clearly extends to principles of Community law of a constitutional nature’.65 This argument was rejected by the Court. Having referred to the principle of primacy of international agreements over secondary legislation, and on the assumption that the UN Charter bound the Union, it held as follows: 57

The Economist, 2 February 2008, 65. Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundations [2008] ECR I-6351, para 44 of his Opinion. 59 Ibid, para 54. 60 Ibid. 61 Ibid, para 47. 62 ‘The Members of the United Nations agree to accept and carry out the decisions of the Security Council in accordance with the present Charter.’ 63 Art 48(1): ‘The action required to carry out the decisions of the Security Council for the maintenance of international peace and security shall be taken by all the Members of the United Nations or by some of them, as the Security Council may determine.’ Art 48(2): ‘Such decisions shall be carried out by the Members of the United Nations directly and through their action in the appropriate international agencies of which they are members.’ 64 ‘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.’ 65 This is how the Court summarised the argument in its judgment, n 58 above, para 276. 58

222 The Status of International Law in the EU Legal Order That primacy at the level of Community law would not, however, extend to primary law, in particular to the general principles of which fundamental rights form part. That interpretation is supported by Article 300(6) EC [now Article 218(11) TFEU], which provides that an international agreement may not enter into force if the Court has delivered an adverse opinion on its compatibility with the EC Treaty, unless the latter has previously been amended.66

The reference to the a priori jurisdiction pursuant to Article 218(11) TFEU in the above extract is not entirely convincing. That provision applies to an international agreement which the Union has not concluded. As such, its relevance to an agreement which had been binding on all the Member States prior to the establishment of the Communities is far from apparent. However, the exclusion of the Union’s primacy rules for the scope of the primacy accorded to international agreements binding on the Union ought to be viewed in the light of two considerations. The first is about the implications for UN Security Council Resolutions and their status under international law of judicial review of an EU measure adopted in order to implement such Resolutions. The Court is at pains to make it clear that its ruling constitutes no statement as to the primacy of the UN Charter and the legal acts based on it under international law. It held that: [I]t must be emphasised that, in circumstances such as those of these cases, the review of lawfulness thus to be ensured by the Community judicature applies to the Community act intended to give effect to the international agreement at issue, and not to the latter as such.67

In fact, the Court ruled out any jurisdiction to review in any way the UNSC Resolutions which the contested EU measures intended to implement: With more particular regard to a Community act which, like the contested regulation, is intended to give effect to a resolution adopted by the Security Council under Chapter VII of the Charter of the United Nations, it is not, therefore, for the Community judicature, under the exclusive jurisdiction provided for by Article 220 EC, to review the lawfulness of such a resolution adopted by an international body, even if that review were to be limited to examination of the compatibility of that resolution with jus cogens.68

It then brought the point home: [A]ny judgment given by the Community judicature deciding that a Community measure intended to give effect to such a resolution is contrary to a higher rule of law in the Community legal order would not entail any challenge to the primacy of that resolution in international law.69

This is one of the main tenets of the judgment: the strict separation between the international legal order (the rules of which are set out in the UN Security Council Resolution and implemented by the EU on the basis of the contested secondary measures) and the Union legal order (within which the EU Courts enjoy exclusive jurisdiction). It is interesting that, on the point of principle, the Court appears to show greater deference to UN law than the CFI, as it envisaged no circumstances whatever under which it could review its legality. 66

Ibid, Ibid, 68 Ibid, 69 Ibid, 67

paras 308–09. para 286. para. 287. para 288.

Primacy of International Agreements and the Role of the EU Courts 223 The second consideration in the light of which the primacy of international agreements is to be assessed is the specific legal principles which the EU measures implementing UN Security Council Resolutions were alleged to violate. Having reaffirmed the oft-repeated dicta about the significance of compliance with fundamental human rights within the Union legal order, the Court held as follows: It follows from all those considerations that the obligations imposed by an international agreement cannot have the effect of prejudicing the constitutional principles of the EC Treaty, which include the principle that all Community acts must respect fundamental rights, that respect constituting a condition of their lawfulness which it is for the Court to review in the framework of the complete system of legal remedies established by the Treaty.70

This principle has been held to ‘form part of the very foundations of the Community legal order’.71 Having accepted that a UN Security Council Resolution may not undermine the constitutional fundamentals of the Community legal order (including the principle of respect for fundamental human rights), the Court held that: [T]he Community judicature must, in accordance with the powers conferred on it by the EC Treaty, ensure the review, in principle the full review, of the lawfulness of all Community acts in the light of the fundamental rights forming an integral part of the general principles of Community law, including review of Community measures which, like the contested regulation, are designed to give effect to the resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations.72

The application of these principles to the fundamental human rights invoked by the applications in Kadi is examined in Chapter 14. For the purposes of this analysis, suffice it to point out that the judgments examined in this chapter, along with the second round of litigation to which they gave rise73 and the voluminous sanctions case-law have attracted considerable attention from both academic and practitioners.74 On the one hand, it has been hailed as providing ‘a heroic story’ where the Court takes ‘the rhetoric 70

Ibid, para 285. Ibid, paras 282, 290 and 304. 72 Ibid, para 326. 73 Case T-85/09 Kadi v Commission [2010] ECR II-5177 and, on appeal, Joined Cases C-583/10 P, C-593/10 P and C-595/10 P, ECLI:EU:C:2012:638 (Kadi II). 74 See, amongst others, M Avbelj, F Fontanelli and G Martinico (eds), Kadi on Trial—A Multifaceted Analysis of the Kadi Trial (Abingdon, Routledge, 2014); I Cameron (ed), EU Sanctions: Law and Policy Issues Concerning Restrictive Measures (Cambridge, Antwerp, Portland, Intersentia, 2014), M Cremona, F Francioni and S Poli (eds), ‘Challenging the EU Counterterrorism Measures Through the Courts’ (2009) EUI Working Paper LAW No 2009/10; C Eckes, EU Counter-Terrorism Policies and Fundamental Rights: The Case of Individual Sanctions (Oxford, Oxford University Press, 2009); P Eeckhout, ‘Community Terrorism Listings, Fundamental Rights, and UN Security Council Resolutions: In Search of the Right Fit’ (2007) 3 European Constitutional Law Review 183; S Griller, ‘International Law, Human Rights and the European Community’s Autonomous Legal Order— Notes on the European Court of Justice Decision in Kadi’ (2008) 4 European Constitutional Law Review 528; D Halberstam and E Stein, ‘The United Nations, the European Union and the King of Sweden: Economic Sanctions and Individual Rights in a Plural World Order’ (2009) 46 Common Market Law Review 13; N Lavranos, ‘Judicial Review of UN Sanctions by the Court of First Instance’ (2006) 11 European Foreign Affairs Review 471; M Nettesheim, ‘UN Sanctions Against Individuals—A Challenge to the Architecture of European Union Governance’ (2007) 44 Common Market Law Review 567; C Sobotta, ‘The Kadi Case—Constitutional Core Values and International Law—Finding the Balance?’ (2012) 23 European Journal of International Law 1015; T Tridimas, ‘EU Law, International Law, and Economic Sanctions Against Terrorism: The Judiciary in Distress’ (2009) 32 Fordham International Law Journal 660. See also S Poli and M Tzanou, ‘The Kadi Rulings: A Survey of the Literature’ (2009) 28 Yearbook of European Law 533. 71

224 The Status of International Law in the EU Legal Order of human rights seriously’.75 On the other hand, it has been criticised as ‘inward-looking’ and at odds with ‘the self-presentation of the EU as an organization which maintains particular fidelity to international law and institutions’.76 The latter criticism suggests that the Court’s approach does not sit comfortably with Article 3(5) TEU which articulates the Union’s commitment to ‘contribute to  … the strict observance and the development of international law, including respect for the principles of the United Nations Charter’. The case-law in Kadi has also been viewed as indicative of a broader approach which enables the EU’s judiciary to be, at best, selective in its reliance upon and application of international law.77 However, the approach of the Court of Justice in Kadi ought to be viewed within its specific legal context. The judgment is articulated clearly in relation to the principles which ‘form part of the very foundations of the Community legal order’, a formulation repeated three times in the judgment.78 It is against this specific background that the notion of the autonomy of the EU legal order emerges as the main point of the Court’s approach. The notion of autonomy set out in Kadi may appear to serve a different function from that first referred to in Costa and the constitutionalising case-law in the early days of the Community. The latter was intended to bolster the normative features of the nascent legal order so that it is enabled to withstand challenges from national law. The former was intended to protect one of the main policy characteristics of the mature legal order from interference originating beyond the Union. Whilst apparently distinct, these internal and external functions of autonomy79 are not easy to distinguish. This is the case not only in conceptual but also in policy terms. After all, the EU’s judges render their judgment with an eye to national courts and, in the Kadi cases, in full awareness of the potential role that national judges might be called upon to assume if judicial review and protection of human rights in Luxembourg were viewed as deficient. It is noteworthy that, in its construction of autonomy, the Court of Justice is at pains to refrain from any hierarchy-based assessment of the Union’s legal order in its relationship with international law. The logic of this approach is based on the premise that the special status of the Treaties establishing the EU and the autonomy of the latter which it entails would not be seen as a threat to the principle of international law and the hierarchies which this has introduced.80 In fact, this underpins the entire body of the Court’s case-law on smart sanctions.81 This approach reminds us that the EU’s judiciary is not prepared to interpret the autonomy of the legal order as a normative construct that would remove EU law from international law. It might be argued that the above 75 C Gearty, ‘In Praise of Awkwardness: Kadi in the CJEU’ (2014) 10 European Constitutional Law Review 15, 16 and 22. 76 G de Búrca, ‘The ECJ and the International Legal Order: A Re-evaluation’ in G de Búrca and JHH Weiler (eds), The Worlds of European Constitutionalism (Cambridge, Cambridge University Press, 2012) 105, 140. 77 See J Klabbers, ‘Volkerrechtsfreundlich? International law and the Union Legal Order’ in P Koutrakos (ed), European Foreign Policy—Legal and Political Perspectives (Cheltenham, Edward Elgar, 2011) 95. 78 Joined Cases C-402/05 P and C-415/05 P, n 58 above, paras 282, 290 and 304. 79 See 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, Springer, 2013) 13, 17. 80 See also the analysis in G Pavlakos and J Pauwelyn, ‘Principled Monism and the Normative Conception of Coercion under International Law’ in M Evans and P Koutrakos (eds), Beyond the Established Legal Orders—Policy Interconnections Between the EU and the Rest of the World (Oxford, Hart Publishing, 2011) 317. 81 See Case C-548/09 P Bank Melli Iran v Council ECLI:EU:C:2011:735, para 105 and Joined Cases C-584/10 P, C-593/10 P and C-595/10 P Kadi II, para 67.

Primacy of International Agreements and the Role of the EU Courts 225 qualification is irrelevant, given that, in effect, EU law is interpreted in such a manner as to render it impossible for Member States, as a matter of EU law, to comply with their international law obligations. However, the specific implications of the Kadi litigation refute this objection. Mr Kadi was listed in October 2001, the Court of Justice rendered the judgment in Kadi I in September 2008, and Mr Kadi was delisted in October 2012,82 nine months before the Court rendered its judgment in Kadi II. At no point during this long period was the EU forced to ignore the UN measures requiring that Member States freeze his assets.83 The pronouncement of the illegality of the EU implementing regulations did not entail a violation of international law by the Member States in fact. Instead, the case-law of the Court of Justice provided the catalyst for the development of the sanctions system at UN level and its gradual adjustment in order to become more transparent and fair. In 2007, a focal point was introduced in order to examine delisting requests84 and Member States were required to provide more information about individuals and legal persons the listing of which was examined by the Sanctions Committee.85 In 2008, the Committee started making available on its website a summary of reasons for listings86 and in 2009 the post of an Ombudsperson was introduced.87 The Ombudsperson is appointed by the UN Secretary General and is responsible for handling requests for delisting submitted by individuals and legal persons. She gathers information and liaises with states and the Committee to which she makes a recommendation about the request for delisting. If there is no consensus in the Committee about whether to follow the recommendation of the Ombudsperson to delist, the individual or legal person will be delisted unless the Committee decides by consensus to maintain the listing. If there is no such consensus, a Committee member may request that the matter be referred to the Security Council. Therefore, the current system for freezing assets of individuals has evolved considerably from the system examined by the Court in Kadi I. And whilst it was not considered sufficiently improved to convince the Court in Kadi II to sanction the legality of EU implementing measures,88 it illustrated a development which is due partly to the approach of the Court of Justice. After all, when the judgment in Kadi I was rendered, there had already been considerable disquiet amongst international lawyers and policymakers about the design and functioning of the UN sanctions system.89 Viewed from this angle, far from signalling detachment from international law, the case-law on Kadi illustrates active engagement with its development. As Skordas puts it, it enables the Union to carry out a ‘bridge function’ establishing comity between the EU and UN legal 82 Commission Implementing Regulation (EU)  933/2012 [2012] OJ L278/11, following a decision by the Sanctions Committee (SC/10785 of 5 October 2012). 83 The point is made in J Larik, ‘EU Counter-Terrorism and the “Strict Observance of International Law: Sewing the Seamless Coat of Compliance’ in E Herlin-Karnell and C Matera (eds), External Dimension of the EU Counter-terrorism Policy (2014) CLEER Working Paper 2014/2 33. 84 UNSCR 1730(2006). 85 UNSCR 1735(2006). 86 UNSCR 1822(2008). 87 UNSCR 1904(2011). The mandate of the Ombudsperson is extended under UNSCR 2161(2014). 88 Joined Cases C-583/10 P, C-593/10 P and C-595/10 P, Kadi II, n 73 above. See the analysis in Chapter 14. 89 See eg T Andersson, I Cameron and K Nordback, ‘EU Blacklisting: The Renaissance of Imperial Power, but on a Global Scale’ (2003) 14 European Business Law Review 111. It has even been argued that Art 25 UN Charter, which requires compliance with UN law, does not extend to UN measures which violate international law; instead, it requires non-compliance: see A Tzanakopoulos, Disobeying the Security Council—Countermeasures against Wrongful Sanctions (Oxford, Oxford University Press, 2011).

226 The Status of International Law in the EU Legal Order systems as it enables their institutions to engage in a silent dialogue which entailed the gradual improvement of the UN Sanctions Committee mechanism without undermining the sanctions regime.90 Finally, there is a whiff of formalism in identifying strict observance with international law only with judicial pronouncements about the unlimited primacy of UN measures. Instead, it is the manner in which international law is enforced within domestic legal orders that matters. Viewed from this angle, preserving the autonomy of the EU legal order is by no means at odds with complying with international law. In the current ‘disorder of orders’91 it is the combined impact of principles pursuant to which EU law gives effect to international law within the EU legal order that determines both the effectiveness of international law and the Union’s adherence to it.

5. BINDING EFFECT OF CUSTOMARY INTERNATIONAL LAW Binding Effect of Customary International Law

Whilst customary international law is accepted as part of the domestic legal order, there are problems with the approach adopted by domestic courts to its interpretation and application.92 The Court of Justice first ruled indirectly on the issue of compliance with customary international law. In the famous judgment in Van Duyn it held that the EC Treaty ‘cannot be assumed to disregard in the relations between Member States’ the principle of international law that a state is precluded from refusing its own nationals the right of entry or residency.93 In relation to the Union’s jurisdiction to apply its competition rules, it was pointed out in Ahlström that it ‘is covered by the territoriality principle as universally recognized in public international law’.94 In subsequent case-law, the focus of the Union’s judiciary on the position of customary international law has been sharper. In Poulsen95 a fishing vessel under a Panamanian flag whose owner and crew were Danish encountered engine trouble in heavy weather whilst sailing in Danish waters. When it called at a Danish port, its cargo, consisting of salmon caught in international waters, was seized by the authorities acting under Regulation 3094/86.96 The latter prohibited fishing of salmon and seat trout in certain parts of the high seas as well as its holding on board. The consistency of this prohibition with a number of principles of international law was contested (the principles including the 90 A Skordas, ‘Völkerrechtsfreundlichkeit as Comity and the Disquiet of Neoformalism: A Response to Jan Klabbers’ in Koutrakos (ed), n 77 above, 115, 140–42. 91 N Walker, ‘Beyond Boundary Disputes and Basic Grids: Mapping the Global Disorder of Normative Orders’ (2008) 6 International Journal of Constitutional Law 373. 92 See P Daillier and A Pellet, Droit International Public, 7th edn (Paris, LGDJ, 2002) 346; and E Denza, ‘The Relationship Between International and National Law’ in MD Evans (ed), International Law (Oxford, Oxford University Press, 2014) 412, 426–27. See also the analysis of Jacobs AG in Case C-162/96 Racke v Hauptzollampt Mainz [1998] ECR I-3655, paras 79–81 which refers to the general wording of customary rules of treaty law and the difficulty of interpreting them (paras 84–86). For a critical view, see J Wouters and D van Eeckhotte, ‘Giving Effect to 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) 183, 230 et seq. 93 Case 41/74 Van Duyn v Home Office [1974] ECR 1337, para 22. 94 Joined Cases 89, 104, 114, 116, 117 and 125 to 129/85 A Ahlström Osakeyhtiö and others v Commission [1993] ECR I-1307. 95 Case C-268/90 Anklagemindigheden v Poulsen and Diva Navigation [1992] ECR I-6019. 96 Reg 3094/86 laying down certain technical measures for the conservation of fisheries resources [1986] OJ L288/1.

Binding Effect of Customary International Law

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freedom to fish on the high seas; navigation in the territorial waters of another state; the right of innocent passage; the legal position of a vessel that is in distress and has taken refuge in a foreign port; the treatment of flags of convenience). The very first paragraph of the judgment states the position of the Community in relation to international law: ‘[T]he European Community must respect international law in the exercise of its powers and  …, consequently, [the relevant Community rule] must be interpreted, and its scope limited, in the light of the relevant rules of the international law of the sea.’97 The rules in question were of customary international law as codified in a number of provisions in certain fisheries conventions, namely the Geneva Conventions on the Territorial Sea and the Contiguous Zone, on the High Seas, and on Fishing and Conservation of the Living Resources of the High Seas; and finally the United Nations Convention on the Law of the Sea. These rules were to be taken into account ‘in so far as they codify general rules recognized by international custom’.98 On the interpretation of the relevant Regulation, the Court held that, in the light of the right of innocent passage and that of free navigation, the prohibition should not apply to third-country vessels in cases where they are either in the exclusive economic zone or the territorial waters of a Member State. However, it would be applicable to them once in port. As to whether third-country vessels in distress should escape the prohibition laid down in the regulation, it was left to the referring court to decide ‘in accordance with international law’.99 There was in fact no Community provision dealing with this matter. This approach was seen as a ‘generous and far reaching recognition of the relevance’ of rules of customary international law within the Community legal order.100 This status of customary international law has been confirmed in subsequent case-law. In Opel Austria101 the rule of customary international law at issue was the obligation not to defeat the object and purpose of a treaty prior to its entry into force. In Racke102 the legal principle at the core of this dispute was the suspension of a treaty following a change of circumstances. In its judgment, the very first point made by the Court was to refer to the statement by the International Court of Justice that the articulation of this principle in Article 62 VCLT constitutes a codification of existing customary international law.103 More recently, in ATAA, the Court was confronted with the question of the consistency with customary international law of legislation applying the EU’s greenhouse gas emission allowance trading scheme to international flights landing on or departing from 97

n 95 above, para 9. Ibid, para 10. 99 Ibid, para 38. 100 C Timmermans, ‘The EU and Public International Law’ (1999) 4 European Foreign Affairs Review 181, 187. 101 Case T-115/94 Opel Austria GmbH v Council [1997] ECR II-39. 102 Case C-162/96 Racke v Hauptzollamt Mainz [1998] ECR I-3655. 103 Ibid, para 24. Art 62, entitled ‘Fundamental change of circumstance’, reads as follows: ‘1. A fundamental change of circumstances which has occurred with regard to those existing at the time of the conclusion of a treaty, and which was not foreseen by the parties, may not be invoked as a ground for terminating or withdrawing from the treaty unless: (a) the existence of those circumstances constituted an essential basis of the consent of the parties to be bound by the treaty; and (b) the effect of the change is radically to transform the extent of obligations still to be performed under the treaty’. According to Art 62(3), ‘[i]f, under the foregoing paragraphs, a party may invoke a fundamental change of circumstances as a ground for terminating or withdrawing from a treaty it may also invoke the change as a ground for suspending the operation of the treaty’. 98

228 The Status of International Law in the EU Legal Order an EU airport.104 It accepted that the Union was bound by a number of principles which embodied the current state of customary international maritime and air law: each state has complete and exclusive jurisdiction over its airspace; no state may validly purport to subject a part of the high seas to its sovereignty; there is freedom to fly over the high seas.105 The issues raised by the enforcement of customary international law within the EU’s legal order are examined in Chapter 8. For the purposes of this analysis, suffice it to point out that the status of customary international law does not differ from that of international agreements binding on the Union.106 Therefore, its primacy is recognised in the EU legal order. Furthermore, the relevant judgments refer liberally to the case-law of the International Court of Justice. Whilst reflecting the difficulties for any domestic court to tackle customary international law in domestic disputes, it also illustrates deference to international courts in general and the International Court of Justice in particular.107

6. CONCLUSION Conclusion

The twists of the story of the relationship between EU and international law reflects of the ambiguous nature of the Union itself: based on international law and self-baptised early on as different, the Union has lived and evolved whilst its Court has adopted a ‘wisely agnostic attitude’ as to its precise nature.108 And whilst the status of international agreements and customary international law had been settled, the Kadi litigation has reminded international and EU lawyers that the relationship between EU and international law is still evolving. However, the status of international rules is only part of the story of this relationship. The other parts are about the jurisdiction of the Court to interpret them and the various ways in which they are enforced. This story will be told in the following two chapters.

104

ECLI:EU:C:2011:864. They were also codified, respectively, in Art 1 of the Chicago Convention, in Art 2 of the Geneva Convention of 29 April 1958 on the High Seas (UN Treaty Series, Vol 450, 11), and in Art 87(1) UNCLOS. In relation to another principle relied upon by the parties, namely the principle that aircraft overflying the high seas are subject to the exclusive jurisdiction of the state in which they are registered, it was held that insufficient evidence existed as to whether it would apply by analogy to aircraft overflying the high seas. 106 See A Rosas, ‘The European Court of Justice and Public International 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 (The Hague, TMC Asser Press, 2008) 71, 80. 107 See also PJ Kuijper, ‘Customary International Law, Decisions of International Organisations, and Other Techniques for Ensuring Respect for International Legal Rules in European Community Law’ in Wouters, Nollkaemper and de Wet (eds), n 106 above, 87, 95–96. 108 B de Witte, ‘The European Union as an International Legal Experiment’ in de Búrca and Weiler (eds), n 76 above, 19, 41. 105

International Law and the Jurisdiction of the Court of Justice

7 International Law and the Jurisdiction of the Court of Justice 1. INTRODUCTION Introduction

T

HE EXERCISE OF judicial authority over the conduct of any international actor presents special challenges for the balance between the judiciary and the executive and legislative branches. To a certain extent, this is due to the wide margin of discretion that the latter are presumed to enjoy in the area of international affairs. However, international law is now applied as a matter of course by domestic courts, a phenomenon that has become all the more significant in this era of increasing and intense interdependence underpinning the current geopolitical environment. This phenomenon has enabled international law to penetrate all aspects of domestic legal orders, hence increasing the significance of the judiciary. When applied to the European Union, this rather obvious observation raises even more challenging questions due to the unique constitutional arrangements which underpin this ‘new legal order of international law’.1 The analysis in Chapter 5 assessed one manifestation of this uniqueness in the central position of mixed agreements in the system of EU external relations. In examining its raison d’être and typology, it showed how it reflects the constitutional idiosyncrasies of the Union legal order. It also underlined its position as deeply entrenched in the ways in which the Union is bound to assert its identity on the international scene. Whilst the phenomenon of mixity has become the rule rather than the exception in the conduct of EU external relations, a number of questions about the jurisdiction of the Court of Justice to supervise the application and interpretation of mixed agreements have been raised: does it extend to the entirety of the provisions of a mixed agreement? Does its scope vary depending on the provision of the agreement upon which the Court has been called to adjudicate? Is there any role left for the national courts, in addition, that is, to the one they enjoy in the context of the preliminary reference procedure? Whilst the answers to these have been far from apparent for a considerable period of time, their significance is self-evident: the existence, scope and exercise of the jurisdiction of the Court of Justice over the interpretation and application of mixed agreements have profound implications for the constitutional structure of the Union at various levels, namely in terms of the interactions between the legislature and the judiciary, between the Union judicature and national courts, between the latter and national legislature and, last but not least, between courts and Union citizens. In addition, the role of the Court of Justice in the interpretation of international agreements concluded by the Union may 1

Case 26/62 Van Gend en Loos [1963] ECR 1, 12.

229

230 International Law and the Jurisdiction of the Court of Justice have serious repercussions for the way in which the legislature and executive choose to represent the EU’s interests on the international scene.

2. PRIOR CONTROL OF LEGALITY OF INTERNATIONAL AGREEMENTS UNDER ARTICLE 218(11) TFEU Prior Control of Legality of International Agreements under Article 218(11) TFEU

In order to avoid the drastic repercussions of treaty-making by the EU in violation of the Union’s primary rules, the latter provide for a mechanism of preventive control of the legality of the conclusion of international agreements in Article 218(11) TFEU. This provision reads as follows: 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 provisions of the Treaties. Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised.

It is not only in the EU Treaties that special procedures are set out regarding the preliminary examination of international agreements. Similar provisions are included in the European Atomic Energy Community Treaty2 as well as the European Coal and Steel Community.3 In relation to Article 218(11) TFEU, the right of the Parliament to request an Opinion was added at Nice. Whilst there is no provision for it in the Treaties, the views of the Advocates General are heard by the Court, which then delivers the Opinion.4 A hearing may also be included.5 As there is no doubt about the legally binding effect of the Court’s rulings under Article 218(11) TFEU, the term ‘Opinion’ may be explained in the light of the noncontentious nature of the procedure. As to the function of this exceptional procedure, it was described by the Court early on as follows: It is the purpose of [the procedure laid down in Article 218(11) TFEU] to forestall complications which would result from legal disputes concerning the compatibility with the Treaty of international agreements binding upon the Community. In fact, a possible decision of the Court to the effect that such an agreement is, either by reason of its content or of the procedure adopted for its conclusion, incompatible with the provisions of the Treaty could not fail to 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.6

Furthermore, the preventative purpose of the procedure justified a broad approach to the subject-matter of requests: This procedure must … be open for all questions capable of submission for judicial consideration, either by the Court of Justice or possible 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.7 2 3 4 5 6 7

See Arts 103–05. See Art 75(2), where this role is to be carried out by the Commission. Art 199 of the Court’s Rules of Procedure. Art 198 of the Court’s Rules of Procedure. Opinion 1/75 (re: OECD Local Cost Standard) [1975] ECR 1355, 1360–61. Ibid, 1361.

Prior Control of Legality of International Agreements under Article 218(11) TFEU 231 The material scope of the procedure is set out in Article 196(2) of the Court’s Rules of Procedure: A request for an Opinion may relate both to whether the envisaged agreement is compatible with the provisions of the Treaties and to whether the European Union or any institution of the European Union has the power to enter into that agreement.8

The Court’s jurisdiction under Article 218(11) TFEU also covers agreements which the Union may not actually conclude. This was made clear in relation to the compatibility of Convention No 170 of the International Labour Organization, an organisation whose membership is confined to states.9 The Court justified the admissibility of the request on the basis of two arguments. The first was rather formalistic: the obstacles that the Union may actually encounter in the exercise of its competence are not for the Court to assess, as a request under Article 218(11) TFEU is related only to the competence of the Union and the Member States in the areas covered by the Convention. The second argument is convincing: despite the objective obstacle to the exercise of the EU’s competence, in fact the latter may be exercised, albeit through the medium of the Member States acting jointly in the Union’s interests.10 The temporal scope of Article 218(11) TFEU has been interpreted in similarly broad terms. The procedure may be invoked about an agreement whose negotiation is at an end11 or has yet to reach an advanced state. In cases where the request for an Opinion is about the definition of competence, the Court held that ‘it is clearly in the interests of all States concerned, including non-Member countries, for such a question to be clarified as soon as any particular negotiations are commenced’.12 However, such questions are bound to be assessed on an ad hoc basis: in Opinion 1/78, for instance, the Court had first pointed out that the subject-matter of the Agreement was already known and it was ‘possible to form a sufficiently certain judgment on the question raised’ on the basis of the documents submitted to the Court and the information provided at the hearing of the parties.13 Indeed, to assess the timeliness of a request for an Opinion on the basis merely of the interests of third countries, even prior to the undertaking of any legal obligation, might appear slightly disingenuous. After all, only a month following the ruling in Opinion 1/78, the Court opined that the delimitation of competence is a matter internal to the Community and of no concern to third parties.14 An international agreement may constitute the subject-matter of a request for an Opinion even prior to the commencement of negotiations, provided that sufficient information exists at the time of the request. This issue was raised in Opinion 2/94 regarding the accession of the Community to the European Convention on Human Rights.15 The Court was asked to rule on two main issues, namely the competence of the Community

8 The broad interpretation of Art 218(11) TFEU had been adopted by the Court in Opinion 1/75 about the conclusion of the Local Cost Understanding under the auspices of the OECD ([1979] ECR 2871). 9 Opinion 2/91 [1993] ECR I-1061, paras 4–5. 10 See also Case C-45/07 Commission v Greece (re: International Maritime Organisation) [2009] ECR I-701 and the comment in M Cremona, ‘Extending the Reach of the AETR Principle: Comment on Commission v Greece (C-45/07)’ (2009) 34 European Law Review 754. See the analysis in Chapter 5, section 9. 11 See Opinion 1/94 [1994] ECR I-5267, para 12. 12 Opinion 1/78 [1979] ECR 287, para 35. 13 Ibid, para 34. 14 Ruling 1/78 [1978] ECR 2151, para 35. 15 Opinion 2/94 [1996] ECR I-1759.

232 International Law and the Jurisdiction of the Court of Justice to accede to the Convention and the compatibility of the latter with the EC Treaty. As regards the former, the Court pointed out that the general purpose and subject-matter of the Convention was clear and would not be affected by whichever mechanism the Community might have chosen to accede to it. It also pointed out that an Opinion at that early stage would address the legitimate concerns of the Council to know the extent of the Community’s powers prior to any decision on the opening of negotiations. As to the question of the compatibility of the Convention with the Community’s judicial system, the Court held that it could not possibly address it: there was no sufficient information on the mechanisms pursuant to which the Community would submit to the jurisdiction of the European Court of Human Rights. The Union’s institutions and the Member States may rely upon Article 218(11) TFEU even in relation to an agreement which has already been signed. In Opinion 1/94, the Court held that a request for an Opinion may be made ‘at any time before the Community’s consent to be bound by the agreement is finally expressed. Unless and until that consent is given, the agreement remains an envisaged agreement.’16 This line of reasoning was brought to its natural conclusion in Opinion 3/94 where the request had been submitted by the German government on the legality of the framework agreement on the EU import regime for bananas concluded between the Community and Colombia, Costa Rica, Nicaragua and Venezuela.17 That agreement was subsequently incorporated in the list of the Community’s commitments contained in the GATT. The request for an Opinion was lodged following the signature of the WTO Agreements but prior to their conclusion. That Agreement was subsequently incorporated in the list of the EC’s commitments contained in the GATT. The Court opined that the critical issue was whether, at the time when its Opinion would be rendered, it would be possible to address any adverse effects by amending the Treaties. This would not be the case if the Agreements had already been concluded. Therefore: [I]t would  … be contrary to the internal logic of Article [218(11) TFEU] to accept that it is appropriate for the Court to rule on the compatibility with the Treaty of an agreement which has already been concluded, since a negative Opinion would not have the legal effect prescribed in that article.18

This conclusion is entirely sensible. And yet, in essence, it allows practical considerations entirely unrelated to the institution or the state submitting the request to determine its admissibility. Such considerations include the case-load of the Court and are bound to affect the assessment of matters of considerable legal and political significance. In its ruling, the Court held that the procedure laid down in Article 218(11) TFEU is not to protect the interests and rights of the parties requesting an opinion. These may be protected pursuant to an action for annulment and the ensuing possibility of an application for interim relief.19 As this is hardly satisfactory, one way of avoiding this, admittedly 16

Opinion 1/94, n 11 above, para 12. Opinion 3/94 [1995] ECR I-4577, paras 11–23. 18 Ibid, para 13. 19 See R Plender, ‘The European Court’s Pre-emptive Jurisdiction: Opinions under Article 300(6) EC’ in D  O’Keeffe and A Bavasso (eds), Liber Amicorum in Honour of Lord Slynn of Hadley—Judicial Review in European Union Law, vol 1 (The Hague, Kluwer, 2000) 203, 213–14, where he explores the application of the duty of cooperation in order to prevent the conclusion of an agreement following a request for an Opinion. However, this might give rise to the manipulation of the procedure for the pursuit of short-term political or practical interests. 17

Prior Control of Legality of International Agreements under Article 218(11) TFEU 233 exceptional, chain of events might be the establishment of a mechanism enabling the Court to deal with a request for an Opinion as a matter of urgency. As such requests are the exception rather than the rule, this would not put too much of a strain on the Court.20 These issues became relevant in June 2004 in relation to the EC–USA Agreement on the processing and transfer of passenger name record data by air carriers to the United States Department of Homeland Security, Bureau of Customs and Border Protection. When submitted for consultation to the Parliament, the latter requested an Opinion under Article 300(6) EC (now Article 218(11) TFEU). However, the Council went on to conclude the Agreement. The Parliament then withdrew its request and brought annulment proceedings against the Council which led to the annulment of the Council Decision concluding the Agreement.21 The wide interpretation of the circumstances under which a request for an Opinion may be submitted raises the question of the relationship between the procedure under Article 218(11) TFEU and the other means of recourse to the Court of Justice. This was examined by the Court in the context of the request submitted by the Belgian government about the competence of the Community to participate in the Third Revised OECD Decision on national treatment.22 Two of the questions submitted were about the correct legal basis of the Council Decision on the Community’s participation in the OECD Decision. The Council and the Spanish and British governments argued that this was beyond the scope of Article 300(6) EC and, instead, should be dealt with within the context of an action under Article 230 EC challenging the annulment of the relevant Council Decision. This view was rejected: the Court held that the existence of alternative procedures capable of bringing certain questions before the Union judicature cannot preclude recourse to Article 218(11) TFEU, provided that such questions are related to the substantive or formal validity of the agreement in question.23 The significance of the procedure laid down in Article 218(11) TFEU may not be overstated.24 Some of the central principles of EU international relations law have been articulated in Opinions rendered in the exercise of this exceptional jurisdiction. That the Court has construed it in broad terms should not come as a surprise in the light of its functional approach to the interpretation of its jurisdiction in the other, non-exceptional procedures laid down in the Treaties. This has been the case both in the sphere of the law of the internal market and that of EU international relations. In Opinion 1/00, for instance, the Court reformulated the question put forward by the Commission because of the lack of clarity resulting from the various language versions;25 it is recalled that, in the context of preliminary references pursuant to Article 267 TFEU, it is by no means unusual for the Court to reformulate the question referred by national courts.26 As for 20 However, in seeking to explain what they perceive as the shortcomings of Opinion 1/94 (n 11 above), its critics pointed out the extremely short period of time within which the Court delivered its ruling. 21 Case C–317/04 Parliament v Council ECLI:EU:C:2006:346. Its request for an accelerated procedure was also rejected by Order of the President delivered on 21 September 2004. 22 Opinion 2/92 [1995] ECR I-521. 23 Ibid, para. 7. 24 See V Christianos, ‘La compétence consultative de la Cour de justice à la lumière de Traité sur l’Union européenne’ (1994) 374 Revue du Marché Commun et de l’Union européenne 37 who places emphasis on its constitutional ramifications of the procedure. See also P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 267–74 and R Plender, ‘The European Court’s Pre-emptive Jurisdiction: Opinions under Article 300(6) EC’ in O’Keeffe and Bavasso (eds), n 19 above, 203. 25 Opinion 1/00 (re: European Common Aviation Area) [2002] ECR I-3493, para 1. 26 See eg Case 28/85 Deghillage v Caisse Primaire d’Assurance Maladie [1986] ECR 991, para 13.

234 International Law and the Jurisdiction of the Court of Justice the EU international relations context, one hardly needs reminding of the broad construction of the notion of a legally binding act pursuant to Article 262 TFEU in the AETR27 and FAO28 cases. What is most interesting in the interpretation of the procedure set out in Article 218(11) TFEU is the existence of a thread which links its broad construction to the substantive strands of EU international relations case-law. In relation to the Cartagena Protocol on Biodiversity, for instance, the Court reaffirmed the broad scope of its jurisdiction by ruling that a request for an Opinion does not need to refer to a dispute about the existence of the competence of the Union or to the compatibility of the envisaged provisions with the substantive provisions of the EC Treaty: its jurisdiction under Article 218(11) TFEU arises in relation to any dispute about the legal basis of the Union’s competence, its nature and the definition of its scope in relation to the competence of the Member States.29 However, it made it clear that once the legal basis pursuant to which the Community competence may be exercised has been ascertained, it is beyond its jurisdiction under Article 218(11) TFEU to engage in a precise delineation of competences. The relevant extract is worth quoting in full: [The] procedure [laid down in Article 300(6) EC, now Article 218(11) TFEU] is not intended to solve difficulties associated with implementation of an envisaged agreement which falls within shared Community and Member State competence.30

In any event, where it is apparent that the subject-matter of an international agreement falls in part within the competence of the Union and in part within that of the Member States, it is important to ensure close cooperation between the Member States and the Union institutions, both in the process of negotiation and conclusion and in the fulfilment of the commitments undertaken thereunder. In confining the scope of its exceptional jurisdiction in the above terms, the Court links this procedural issue with one trend underpinning its case-law and one principle articulated therein: the former is its distinct reluctance to allocate competences once the exclusive nature of the Union’s competence to negotiate and conclude an agreement has been ruled out and the existence of shared competence affirmed; the latter is the duty of cooperation which is intended to address any practical problems raised by the management of shared competence. In conclusion, the analysis in this section suggests that both the provision for the Court’s pre-emptive jurisdiction and the wide construction of its material scope by the Court of Justice may reduce the likelihood of the Union being bound under international law in contravention of the procedural rules governing treaty-making laid down in its primary law.

27

Case 22/70 Commission v Council [1971] ECR 263, para 42. Case C-25/94 Commission v Council [1996] ECR I–1469, paras 32 et seq. Opinion 2/00 [2001] ECR I-9713, paras 4 et seq. 30 Ibid, paras 17–18. See the annotation on the ruling by A Dashwood, (2002) 39 Common Market Law Review 353. For a call for a broader reading of Art 300(6) EC, see G Gattinara, ‘La compétence consultative de la Cour de justice après les avis 1/00 et 2/00’ [2003] Revue du Droit de l’Union Européenne 688. 28 29

Jurisdiction under the Preliminary Reference Procedure 235 3. JURISDICTION UNDER THE PRELIMINARY REFERENCE PROCEDURE Jurisdiction under the Preliminary Reference Procedure

The significance of the role of international law in the exercise of the Court’s jurisdiction under Article 267 TFEU became apparent quite early on. In International Fruit Company the Court dealt with a reference from a Dutch court about a set of Community measures restricting the importation of apples from third countries and their validity in the light of the GATT.31 This Agreement, to which all Member States were parties, had been concluded in 1947. The very first question referred to the Court was whether its jurisdiction pursuant to the preliminary reference procedure to rule on the validity of Community measures also covered their validity under international law. In two very short paragraphs, the Court interpreted the wording of Article 234(1) EC (now Article 267(1) TFEU) broadly: as that provision did not limit it by the grounds on which the validity of Union measures might be contested, its jurisdiction extended to all grounds capable of invalidating those measures. These include international law.32 The precise conditions under which the legality of Union law would be assessed in the light of international law were further elaborated in the judgment and will be analysed below. At this juncture, suffice it to point out that a different construction of the position of international law in the Union legal order would be impossible to envisage, all the more so in the light of the subject-matter of the agreement in question. After all, trade in goods and tariffs constituted one of the very few areas in which the Union enjoyed express treaty-making capacity. In any case, the function of the Court is described in Article 19 TEU as ‘ensur[ing] that in the interpretation and application of the Treaties the law is observed’. In interpreting ‘the law’ broadly, albeit conditionally, as the subsequent analysis will show, the Court made it clear that it is the Union judiciary which is the ultimate authority on the legality of Union law. This conclusion was to be spelled out more clearly fifteen years later in the judgment in Foto-Frost, according to which national courts were precluded from declaring a Community measure invalid.33 In more general terms, the judgment in International Fruit Company ought to be viewed within the broader context of the Court’s constitutional case-law: having shaped the unique normative qualities of the Community legal order in the 1960s by asserting the supremacy and direct effect of its rules, the process of constitutionalisation of the EC Treaty had already built sufficient momentum to enable the Court to address its external implications, ie its position within the international legal order. Viewed from this angle, the ruling in International Fruit Company further highlighted the constitutional function of the Court of Justice: in asserting its authority as the ultimate arbiter of the legality of Union law, it clearly impinged directly upon the role of national courts in the process of the enforcement of international law. However, most importantly, it assumed a function more akin to that of a domestic court: having followed an imaginative combination of legal techniques in order to enable Union law to penetrate national law, it then assumed the function of controlling the ways in which international law would penetrate Union law.

31 Joined Cases 21 to 24/72 International Fruit Company NV and Others v Produktschap voor Groenten en Fruit [1972] ECR 1219. 32 That conclusion also includes customary international law: Case C-162/96 Racke v Hauptzollamt Mainz [1998] ECR I-3655, para 27. 33 Case 314/85 Firma Foto-Frost v Hauptzollamt Lübeck-Ost [1987] ECR 4199.

236 International Law and the Jurisdiction of the Court of Justice 4. THE FIRST PHASE: AVOIDING THE SUBJECT The First Phase: Avoiding the Subject

Similar issues arose two years later in the context of the interpretation of a mixed agreement. In Haegeman a Belgian court referred a number of questions about the Association Agreement concluded between the Community and its Member States and Greece in 1961 (the ‘Athens Agreement’).34 The applicant in the main proceedings had challenged a national decision imposing countervailing duties on imports of wine from Greece, arguing that it was a violation of a Protocol annexed to the Athens Agreement. The issue of the existence of its jurisdiction was the very first point made by the Court. Having pointed out that the Agreement in question had been concluded by the Council pursuant to the procedures laid down in primary law (Articles 300 and 310 EC), it ruled that the Agreement ‘is therefore, in so far as concerns the Community, an act of one of the institutions of the Community within the meaning of [Article 234 EC, now Article 267 TFEU]’.35 The Court then ruled that the provisions of the Athens Agreement ‘form an integral part of Community law’ from their entry into force36 before affirming its jurisdiction ‘within the framework of this law’.37 This line of reasoning, put forward in four one-phrase paragraphs and prior to any reference even to the first question referred by the Belgian court, purported to address the issue of the Court’s jurisdiction in a comprehensive manner. In doing so, it has been criticised as ‘dubious, to say the least’38 and ‘extremely sweeping’.39 A particular objection has been raised regarding the alleged failure of the Court to distinguish between the Agreement concluded by the Community and the secondary measure adopted by the Council actually concluding the Agreement. However, it should be pointed out that the Council measure carries out a more important function than merely expressing the Union’s assent to the agreement.40 It expressly concludes the Agreement on behalf of the Union and includes its text in an annex, hence defining the subject-matter of the obligation to which Article 216(2) TFEU refers. Furthermore, the scope of the Court’s conclusion is not as all-encompassing as the terseness of its reasoning might appear to suggest: the agreement constitutes an act of the Community’s institutions ‘in so far as concerns the Community’ and the Court is to exercise its jurisdiction ‘within the framework of [Community] law’.41 This lack of clarity as to the implications of the ruling in Haegeman was illustrated by a direct challenge to the Court’s jurisdiction to interpret a mixed agreement. This occurred in the context of a preliminary reference on the interpretation of the Association Agreement with Turkey (the ‘Ankara Agreement’). It is interesting that this case should have been referred to the Court in 1984, ie twelve years after the judgment in Haegeman. This is indicative of the capacity of the system of Community law to adjust to periods of normative uncertainty and organise its legal affairs on the international scene

34

Case 181/73 R & V Haegeman v Belgian State [1974] ECR 449. Ibid, para 4. 36 Ibid, para 5. 37 Ibid, para 6. 38 T Hartley, Constitutional Problems of the European Union (Oxford, Hart Publishing, 1999) 31–33. 39 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. 40 This is the phrase used by Hartley in n 38 above, 32. 41 n 34 above, paras 4 and 6, respectively. 35

The First Phase: Avoiding the Subject 237 on a pragmatic basis. In Demirel the dispute was about the provisions of the Ankara Agreement on free movement of workers and its Additional Protocol.42 Having started off its analysis by referring to the judgment in Haegeman, the Court went on to address the specific objections to its jurisdiction raised by the British and German governments. These centred on the mixed character of the Ankara Agreement and its Protocol. In particular, it was argued that the subject-matter of the provisions invoked before the referring court, ie free movement of workers, fell within national competence. As such, the commitments they entailed had been entered into by the Member States in their capacity as fully sovereign subjects of international law and were excluded from the jurisdiction of the Court of Justice. This objection was rejected on the basis of two separate, albeit interrelated, arguments regarding the nature of the Ankara Agreement and its Protocol and the duties imposed by them in relation to the implementation of their provisions on free movement of workers. As far as the former was concerned, the Court ruled that the Agreement provisions on free movement were not adopted in the exercise of national powers: as the free movement of workers was covered by the EC Treaty, commitments in that area ‘fall within the powers conferred on the Community by Article [310 EC, now Article 217 TFEU]’.43 The reason for this was that the Ankara Agreement ‘is 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’.44 The Court then ruled that Article 310 EC (now Article 217 TFEU) ‘must necessarily empower the Community to guarantee commitments towards non-member countries in all the fields covered by the Treaty’,45 including that of free movement of workers. In order to bring this point home, it then concluded that, in interpreting the free movement of workers provisions of the Ankara Agreement, the Court would not interpret ‘a provision in a mixed agreement containing a commitment which only the Member States could enter into in the sphere of their own powers’.46 On the other hand, the judgment focused on the obligations imposed by the Agreement in the area of free movement of workers. Whilst the above provisions or the relevant decisions of the Association Council needed to be implemented in the territory of the Member States by means of national measures, the Court did not accept any encroachment on its jurisdiction: it opined that, ‘in ensuring respect for commitments arising from an agreement concluded by the Community institutions the Member States fulfil, within the Community system, an obligation in relation to the Community, which has assumed responsibility for the due performance of the agreement’.47 Once more, whilst addressing the questions referred to it, the Court did not offer a comprehensive answer regarding the scope of its jurisdiction over the provisions of mixed agreements. In his Opinion, Advocate General Darmon had sought to articulate such an answer by adopting a broad approach. He argued that:

42 Case 12/86 Demirel v Stadt Schwäbisch Gmünd [1987] ECR 3719. See the annotations by N Neuwahl, (1988) 13 European Law Review 360 and G Nolte, (1988) 25 Common Market Law Review 403. 43 Ibid, para 9. 44 Ibid. 45 Ibid. 46 Ibid. 47 Ibid, para 11.

238 International Law and the Jurisdiction of the Court of Justice [I]n the absence of any reservations of powers in the Agreement, and subject to the various prerogatives as to its implementation, both the nature and the scope of its provisions suggest that, having regard to the principles defined in the case-law, the interpretation of those provisions is within the jurisdiction of this Court, particularly with a view to ensuring their uniform application.48

This approach was endorsed by Advocate General Tesauro who provided a broad reading of the Court’s position in the subsequent Hermès case. He argued as follows: It appears to follow from [the] statements [in Demirel], first, that the Court itself considers that the only matters on which it has no interpretative jurisdiction pursuant to Article [234 EC, now 267 TFEU] are matters within the exclusive competence of the Member States  … and, second, that in the case of an agreement (even a mixed agreement) concluded by the Community institutions the Community is competent with respect to the agreement in its entirety  … I should add that I do not think these considerations can be confined solely to association agreements, where the Community’s exclusive competent to conclude the agreements is based on the Treaty itself, in this case Article [310 EC, now 217 TFEU]. While it must be recognized that mixed agreements vary considerably in nature and type, depending on the degree of participation by States,  … the fact remains that the problem with which we are concerned in the present case inevitably arises in the same terms in the case of an association agreement, when it is concluded in the form of a mixed agreement, and in the case of agreements (also mixed) which have no ad hoc legal basis in the Treaty.49

It is difficult to see what justification there could be for the exercise of the Court’s jurisdiction over provisions of mixed agreements whose subject-matter would fall within the exclusive competence of the Member States. For instance, in the unlikely event that the Union negotiated and concluded an agreement whose provisions contained commitments in the area of trade in goods as well as defence, those covering the latter would be excluded from its jurisdiction.50 An argument to the contrary would be difficult to sustain not only on practical but also on legal grounds, not least in the light of Article 257 TFEU which excludes from its jurisdiction the foreign and security policy of the EU.51 Whilst the objections raised in Demirel were about the existence of the Court’s jurisdiction, the judgment itself was underpinned by a distinct effort to reject any national claim to exclusivity. It was for this reason that it appears to assume that, in relying upon the authority provided under the competence to conclude association agreements, the 48

Ibid, para 15 of his Opinion. Case C-53/96 Hermès International v FHT Marketing [1998] ECR I-3603, 3617–18. See also N Neuwahl, annotation on Demirel, (1988) 13 European Law Review 360; A Rosas, ‘Mixed Union—Mixed Agreements’ in M Koskenniemi (ed), International Law Aspects of the European Union (The Hague, Kluwer, 1998) 140–41; J  Rideau, ‘Les accords internationaux dans la jurisprudence de la cour de justice des communautés européennes: reflexions sur les relations entre les ordres juridiques internationaux, communautaire et nationaux’ [1990] Revue Générale de Droit International Public 289, 347, albeit with criticism. For a restrictive view, see A Dashwood, ‘Preliminary Rulings on the Interpretation of Mixed Agreements’ in O’Keeffe and Bavasso (eds), n 19 above, 167, 170–71 and J Heliskoski, ‘The Jurisdiction of the European Court of Justice to Give Preliminary Rulings on the Interpretation of Mixed Agreements’ (2000) 69 Nordic Journal of International Law 395, 400–1. 50 It is interesting that, in its intervention in Demirel, the Commission argued that it would be ‘illogical’ to refer to the Court of Justice provisions over which the Member States have exclusive jurisdiction: see Opinion of AG Darmon, n 42 above, para 5. 51 See I Macleod, ID Hendry and E Hyett, The External Relations of the European Communities: A Manual of Law and Practice (Oxford, Oxford University Press, 1996) 157; D Anderson and M Demetriou, References to the European Court, 2nd edn (London, Sweet & Maxwell, 2002) 67. 49

The Second Phase: Establishing Broad Jurisdiction

239

Community actually exercised its competence in the entire sphere covered by the Agreement.52 Indeed, in relation to the area of free movement of workers in particular, the Court held that the Ankara Agreement did not provide for commitments ‘which only the Member States could enter into in the sphere of their own powers’.53 Therefore, exclusivity was rejected, not only in terms of national but also Community competence. This ‘competence-based’ line of reasoning is noteworthy for two reasons. First, it indicates the wide implications of reliance upon Article 267 TFEU: it is assumed to amount to the exercise of EU competence. The agreement concluded thereunder becomes part of Union law and gives rise to the exercise of the Court’s jurisdiction. It is for these reasons that the Ankara Agreement could have been concluded by the Community alone.54 Secondly, the tenor of the judgment in Demirel is entirely consistent with that of the case-law on EU international relations which has laid down the foundations of the Union’s external competence. Its distinct reluctance to define the scope of its jurisdiction over provisions falling within the scope of exclusive national power is reminiscent of the distinct reluctance to delineate competences between the Union and the Member States in the rulings delivered over the years under Article 218(11) TFEU and its precursor (Article 300(6) EC). In both cases, the main focus was exclusivity or, rather, its absence. Therefore, the judgment in Demirel is an interesting link in a line of cases whose underlying premises are as consistent as they are ambiguous. This is a line which was not broken by subsequent judgments.

5. THE SECOND PHASE: ESTABLISHING BROAD JURISDICTION The Second Phase: Establishing Broad Jurisdiction

The analysis so far has illustrated the distinct reluctance of the Court of Justice to address directly the scope of its jurisdiction to interpret mixed agreements. Since the later 1990s a number of judgments have been rendered in which this jurisdiction has been interpreted in broad terms. However, neither the reasoning nor the implications of this approach have been articulated with any degree of clarity. As Advocate General Colomer put it in his Opinion in Case C-431/05 Merck, [whilst] the case-law [is] copious,  … successive developments, far from offering a smooth passage, have constructed a long and winding path, whose complex route demands certain adjustments in order to help its confused users find their way.55

In the same Opinion, he refers to the ‘deficiencies’ of the relevant case-law as well as its ‘illogical’ consequences.56 This section will seek to analyse this case-law, examine its line of reasoning, tease out its main threads and explore its implications.

52 See 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 65, 72 et seq. 53 n 42 above, para 9 (emphasis added). 54 See JHJ Bourgeois, ‘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, 2000) 71, 83. 55 Case C-431/05 Merck Genéricos—Produtos Farmacêuticos Lda v Merck & Co Inc, Merck Sharp & Dohme Lda [2007] ECR I-7001, para 33 of his Opinion. 56 Ibid, paras 60 and 59, respectively.

240 International Law and the Jurisdiction of the Court of Justice In Hermès,57 a judgment delivered ten years after Demirel, the Court addressed the scope of its jurisdiction over provisions of mixed agreements directly and articulated its current approach to this issue. The case was referred by a Dutch court and was about the interpretation of Article 50(6) of the TRIPs Agreement. In accordance with Article 50 TRIPs, the judicial authorities of the Member States are under a duty to protect the intellectual property rights which fall within the scope of the Agreement by means of provisional measures. The provision of Article 50(6) requires that a decision imposing such measures and adopted inaudita altera parte be revoked or otherwise cease to have effect if proceedings on the merits are not initiated within a reasonable time. Having been granted interim relief for the infringement of their trade mark, the applicant in the main proceedings asked the referring court to set a period after the expiry of which the defendant would not have the right to ask that the order against him or her be lifted. The referring court then asked the Court of Justice to rule, under the preliminary reference procedure, whether that request was consistent with Article 50(6) TRIPs. Once again, the Court’s jurisdiction was directly challenged, this time in the submissions made by the Dutch, French and British governments. They argued that the interpretation of Article 50 of the TRIPs Agreement fell beyond the Court’s jurisdiction. Their objection was based on Opinion 1/9458 where it had been held that the TRIPs Agreement did not fall within the exclusive competence of the Community, either pursuant to Article 133 EC (now Article 207 TFEU) or the doctrine of implied competence articulated in AETR59 or the general clauses of Articles 95 and 308 EC. They recalled that the Court had referred specifically to the issue of enforcement of intellectual property rights and had ruled that the Community had not exercised its powers to introduce harmonising legislation, except on the release for free circulation of counterfeit goods.60 As this had remained the case until the reference in Hermès, they claimed that the Court should not exercise its jurisdiction. This line of reasoning did not convince the Court. It observed that the conclusion of the TRIPs Agreement by the Community and its ratification by the Member States contained no allocation of obligations between them What followed in the judgment was an elaborate line of reasoning which may be summarised as follows. First, at the time of the signature of the Final Act and the WTO Agreement, the Council had already adopted a Regulation on Community trade marks.61 As the Community was a party to the WTO, the adoption of this Regulation entailed that, when national courts were to protect rights stemming from a Community trade mark, they should apply national remedies in the light of Article 50 TRIPs. This was the case on two grounds: (i) Article 50 TRIPs applies in order to protect the proprietor of trade marks conferred under the laws of the Members; (ii) Regulation 40/94 provided that rights from a Community trade mark are to be safeguarded by means of provisional measures. The Court then ruled that

57 Case C-53/96 Hermès, n 49 above. See the annotation by A von Bogdandy, (1999) 36 Common Market Law Review 663; see also Dashwood, n 49 above; AF Gagliardi, ‘The Right of Individuals to Invoke the Provisions of Mixed Agreements before the National Courts: a New Message from Luxembourg?’ (1999) 24 European Law Review 276; and Heliskoski, n 49 above. 58 Opinion 1/94, n 11 above. 59 Case 22/70 AETR, n 27 above. 60 See n 49 above, para 104. 61 Council Reg 40/94 [1994] OJ L11/1.

The Second Phase: Establishing Broad Jurisdiction

241

‘it follows that [it] has, in any event, jurisdiction to interpret Article 50 of the TRIPs Agreement’.62 However, the reference by the Netherlands was about a dispute that arose from the application of national trade mark law. Did that not add another dimension to the exercise of the Court’s jurisdiction? Did it not suggest the absence of an EU law aspect in the dispute? This point was addressed by two arguments: the first was somewhat formalistic and familiar from the Court’s overall approach to questions referred by national courts under Article 227 TFEU: it was pointed out that it was the responsibility of the referring court to assess the need for the reference.63 The second argument sought to articulate the issue of jurisdiction in more general terms: [W]here a provision can apply both to situations falling within the scope of national law and to situations falling within the scope of Community law, it is clearly in the Community interest that, in order to forestall future differences of interpretation, that provision should be interpreted uniformly, whatever the circumstances in which it is to apply.64

Whilst further clarifying the terse line of reasoning originating in Haegeman and developed in Demirel, the conclusion of the Court in Hermès does not appear to provide a definitive answer to the scope of its jurisdiction under Article 267 TFEU. Would it cover only provisions of mixed agreements which may apply to situations both within a national and a Union legal context?65 Would it extend to all provisions of a mixed agreement which cover areas under Union competence when the latter is non-exclusive? Would the issue of the actual exercise of that competence be relevant?66 These questions were subsequently raised in Dior and Others, two further cases referred by Dutch courts, one of them the Dutch Supreme Court.67 Their subject-matter was the interpretation of Article 50 of the TRIPs Agreement and, in particular, whether the ruling in Hermès was confined to situations covered by trade mark law. In his Opinion, Advocate General Cosmas suggested a strict reading of the ruling in Hermès. He argued that the jurisdiction of the Court of Justice should be confined to provisions of mixed agreements which would be applicable to both national and Community areas of competence only when there was actually legislation in both that would be affected by those provisions. Therefore, the absence of Union legislation would render the jurisdiction of the Court redundant. He argued that: [I]n the context of Article [234 EC, now Article 267 TFEU], to extend the Court’s interpretative jurisdiction to TRIPs provisions relating to areas in which the (potential) Community competence has not yet been exercised would constitute pursuit of a policy of judge-made

62

n 49 above, para 29. Reference was made to Joined Cases C-297/88 and C-197/89 Dzodzi [1990] ECR I-3763 and Case C-231/89 Gmurzynska-Bscher [1990] ECR I-4003. 64 Reference was made to Case C-130/95 Giloy v Hauptzollamt Frankfurt am Main-Ost [1997] ECR I-4291, para 28, and Case C-28/95 Leur-Bloem v Inspecteur der Belastingdienst/Ondernemingen [1997] ECR I-4161. 65 See Heliskoski, n 49 above, 404 et seq. 66 See Dashwood, n 49 above, 173–74; Rosas, n 49 above, 215. See the criticism in S Weatherill and P  Beaumont, EU Law, 3rd edn (London, Penguin Books, 1999) 319–20. See also P Koutrakos, ‘The Interpretation of Mixed Agreements under the Preliminary Reference Procedure’ (2002) 7 European Foreign Affairs Review 25, 36. 67 Joined Cases 300/98 and 392/98 Parfums Christian Dior SA and Tuk Consultancy BV and Assco Gerüste GmbH, Rob van Dijk, and Wilhelm Layher GmbH & Co KG [2000] ECR I-11307. 63

242 International Law and the Jurisdiction of the Court of Justice law in conflict with the constitutional logic of the Treaty and would be difficult to justify on grounds of expediency.68

In its judgment, the Court started off by asserting its jurisdiction as follows: [As the TRIPs Agreement] was concluded by the Community and the Member States under joint competence  … [i]t follows that where a case is brought before the Court in accordance with the provisions of the Treaty, in particular, Article 177 [now 267 TFEU] thereof, the Court has jurisdiction to define the obligations which the Community has thereby assumed and, for that purpose, to interpret TRIPs.69

This statement is as forceful in its tone as it is broad in its scope. The Court appears to assert its jurisdiction in relation to all types of procedures whereby a provision of a mixed agreement is brought before it. And whilst there is no reference in the above extract to the judgment in Hermès, there is a link between the principle set out in Dior and Others and this prior authority: In particular, the Court has jurisdiction to interpret Article 50 TRIPs in order to meet the needs of the courts of the Member States when they are called upon to apply national rules with a view to ordering provisional measures for the protection of rights arising under Community legislation falling within the scope of TRIPs (see Hermès, paragraphs 28 and 29). Likewise, where a provision such as Article 50 of TRIPs can apply both to situations falling within the scope of national law and to situations falling within that of Community law, as is the case in the field of trade marks, the Court has jurisdiction to interpret it in order to forestall future differences of interpretation (see Hermès, paragraphs 32 and 33). In that regard, 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 concluded the WTO Agreement, including TRIPs (see, to that effect, Opinion 1/94, … paragraph 108).70

The above extracts appear to define the ruling in Hermès as merely one example of a provision of mixed agreements whose interpretation falls within the Court’s jurisdiction. It is recalled that Article 50 of the TRIPs Agreement is a provision of procedural content. As such, it is capable of being applied in different contexts, involving either national or EU law. However, again, the above extracts are unclear in terms of their underlying rationale as well as their implications: the reference to the duty of close cooperation appears to be rather out of place. Does it suggest that it should be interpreted broadly enough to apply to national courts in the application of mixed agreements? Would it require that national courts give a uniform meaning to provisions of mixed agreements which might, conceivably, be applied in another, Union law, context? The paragraphs immediately following the above extracts appear to support this view: Since Article 50 of TRIPs constitutes a procedural provision which should be applied in the same way in every situation falling within its scope and is capable of applying both to situations covered by national law and to situations covered by Community law, that obligation requires the judicial bodies of the Member States and the Community, for practical and legal reasons, to give it a uniform interpretation.

68 69 70

Para 51 of his Opinion. Ibid, para 33. Ibid, paras 34–36, emphasis added.

Broad Jurisdiction Confirmed in Enforcement Actions 243 Only the Court of Justice acting in cooperation with the courts and tribunals of the Member States pursuant to Article [234] of the Treaty [now Article 267 TFEU] is in a position to ensure such uniform interpretation. The jurisdiction of the Court of Justice to interpret Article 50 of TRIPs is thus not restricted solely to situations covered by trade-mark law.71

If the above analysis is correct, the judgment in Dior, as a whole, constitutes a significant advancement in the construction of the role of the Court of Justice in EU international relations. On the one hand, it appears to define the twin principles governing the status of mixed agreements within the Union legal order, namely the jurisdiction of the Court of Justice over their interpretation and the duty of close cooperation imposed upon Union institutions and Member States over their application. On the other hand, both these principles are construed in very broad terms. Whilst not atypical in the case-law on EU international relations, the absence of a clearer line of reasoning is regrettable. This is a trend which characterises subsequent case-law in the area too.

6. BROAD JURISDICTION CONFIRMED IN ENFORCEMENT ACTIONS Broad Jurisdiction Confirmed in Enforcement Actions

The analysis so far focused on the evolution of the line of cases originating in Haegeman and Demirel and leading to Dior via Hermès and highlighted the thread which brought them together, namely the broad scope of the Court’s jurisdiction to interpret mixed agreements. It also suggested that this evolution was incremental and characterised by a cryptic line of reasoning. This line of cases needs to be examined alongside the approach of the Court of Justice to its jurisdiction to interpret mixed agreements in the context of enforcement actions. The first case where the issue of the scope of the Court’s jurisdiction was raised directly in the context of Article 258 TFEU was in Case C-13/00 Commission v Ireland.72 This was about the failure by Ireland to adhere to the Berne Convention for the Protection of Literary and Artistic Works. The Commission argued that this was in violation of Article 300(7) EC (now Article 216(2) TEU) and Article 5 of Protocol 28 to the European Economic Area Agreement. The Full Court first examined whether the subject-matter of the dispute fell within the scope of Community law. It ruled as follows: 14. The Court has ruled that mixed agreements concluded by the Community, its Member States and non-member countries have the same status in the Community legal order as purely Community agreements, as these are provisions coming within the scope of Community competence (see, to that effect, Case 12/86 Demirel [1987] ECR 3719, paragraph 9). 15. From this the Court has concluded that, in ensuring respect for commitments arising from an agreement concluded by the Community institutions, the Member States fulfil, within the Community system, an obligation in relation to the Community, which has assumed responsibility for the due performance of the agreement (Demirel, cited above, paragraph 11).

The above extracts do not merely clarify the position of mixed agreements in the Union legal order: they read previous statements by the Court in a new light. It is recalled that

71 72

Ibid, paras 37–39. Case C-13/00 Commission v Ireland [2001] ECR I-2943.

244 International Law and the Jurisdiction of the Court of Justice the judgment in Demirel was delivered under the preliminary reference procedure about the interpretation of an association agreement. It is also recalled that, when delivered, it raised various questions about whether it should be interpreted broadly or restrictively, which were then addressed in other judgments delivered under Article 267 TFEU in quite specific contexts. And yet, in Commission v Ireland the statements in Demirel become the foundation for the complete assimilation of all mixed agreements, ie not only those establishing an association, to purely Union law agreements. Once this sweeping reading of Demirel has been adopted, the broad reading of the duties of Member States simply follows. Indeed, paragraph 15 of the above extract refers to a passage of Demirel which had been articulated expressly in the context of the exercise of a Community competence and with a further reference to International Fruit Company, ie a judgment concerning the status of a ‘purely Community agreement’. To sum up, the following development appears to have occurred: having affirmed the Community law duties of Member States in the context of an agreement the scope of which falls within Community competence (International Fruit Company),73 the Court went on to read the conclusion of an association agreement as the exercise of the competence of the Community over the entire scope of the EC Treaty (Demirel) and, then, to assimilate all mixed agreements to Union agreements in a judgment delivered in an enforcement action. This gradual generalisation of the position of mixed agreements within the Union legal order is relevant to the construction of the Court’s jurisdiction. This becomes apparent in the remaining part of the judgment where, prior to any assessment of the substance of the dispute, the Court examines whether the contested obligations fell within the scope of Union law. In so doing, it pointed out that ‘there can be no doubt’ that the Berne Convention covers an area which falls ‘in large measure’ within the scope of Community competence.74 In order to substantiate this assessment, it referred to the objective of the Berne Convention, namely the protection of literary and artistic works, and stated that it is ‘to a very great extent governed by Union legislation’.75 To that effect, it cited as examples the protection of computer programs, rental and lending intellectual property rights, copyright protection in the area of satellite broadcasting and cable retransmission, the protection of databases and the terms of protection of copyright and certain related rights. Following this assessment, the Court concluded as follows: The Berne Convention thus creates rights and obligations in areas covered by Community law. That being so, there is a Community interest in ensuring that all Contracting Parties to the EEA Agreement adhere to the Convention. It follows that the requirement of adherence to the Berne Convention which Article 5 of Protocol 28 to the EEA Agreement imposes on the Contracting Parties comes within the Community framework, given that it features in a mixed agreement concluded by the Community and its Member States and relates to an area covered in large measure by the Treaty. The Commission is thus competent to assess compliance with that requirement, subject to review by the Court.76

Having assimilated the position of mixed agreements to that of purely Union agreements 73 See n 39 above: this was the case even though the GATT had not in fact been concluded by the Community. 74 n 72 above, para 16. 75 Ibid, para 17. 76 Ibid, paras 19–20.

Broad Jurisdiction Confirmed in Enforcement Actions 245 and deemed them as wholly within the Union legal order, the Court established the Union law nature of the obligations laid down therein on the basis of a very brief examination. This comprised only a short paragraph in which the subject-matter of the Agreement was deemed within the scope of Union law by reference to a handful of related areas in which the Union had legislated. No reference was made to specific secondary measures, neither was there any attempt to define the extent to which the mixed nature of the agreement might affect the nature of the Union duty imposed upon the Member States. The assessment of the Court appears rather general and confined to identifying the scope of the Agreement with that of secondary Union law ‘in large measure’ and ‘to a very great extent’. This approach suggests a reluctance to engage in detailed analysis of the provisions of the Berne Convention against EU law. Whilst striking, this approach may be understood within the proper context of the case: the existence of a Union law obligation was not in dispute. Indeed, the Irish government had informed the Commission that the draft legislation required was at an advanced stage of scrutiny by the Irish Parliament. That was not the case in a subsequent enforcement action, namely Case C-239/03 Commission v France,77 which was about the application of the Convention for the Protection of the Mediterranean Sea against Pollution.78 The Commission argued that the Convention had been violated because the French authorities had failed to take all appropriate measures to prevent, abate and combat heavy and prolonged pollution of a saltwater marsh called Étang de Berre. The French government counter-argued that the action was inadmissible because the obligations alleged to have been infringed fell beyond the scope of Union law. The judgment was rendered without an Opinion by an Advocate General, as it was deemed not to raise any new point of law. The Court rejected the objection of the French government and referred verbatim to the line of reasoning of the judgment in Commission v Ireland.79 Again, the subject-matter of the Convention was deemed to fall within the scope of Community law ‘without doubt’ and ‘in large measure’.80 It is noteworthy that the Court referred to a number of specific Community measures on the protection of waters against pollution, which indicated that the subject-matter of the Convention ‘is in very large measure regulated by Community legislation’.81 However, the French government had argued against the existence of EU competence because there was no EU Directive regulating the specific type of the alleged pollution, ie discharges of fresh water and alluvia into a saltwater marsh. The Court appears to have found this degree of specificity unnecessary for the establishment of the Union competence and, hence, its jurisdiction. All in all, there appears to be a thread between the interpretation of the Court’s jurisdiction under Article 267 TFEU and the above judgments rendered under Article 258 TFEU: in both cases, it is a broadly construed criterion which gives rise to judicial review pursuant to the Treaties. In the case of preliminary references, it is the possibility of the provision of the mixed agreement being applied in a Union law context in a future 77

Case C-239/03 Commission v France [2004] ECR I-9325. Concluded by Council Dec 77/585/EEC [1977] OJ L240/1. 79 In its English version, the judgment in Commission v France states that the position of the mixed agreements has been ‘inferred’ (para 26) rather than ‘concluded’ (Commission v Ireland, n 72 above, para 15). However, in French, both judgments use the term ‘la Court en a tiré la conséquence’. 80 n 77 above, para 27. 81 Ibid, para 28. 78

246 International Law and the Jurisdiction of the Court of Justice dispute which gives rise to the requirement for uniform interpretation, hence necessitating the exercise of the Court’s jurisdiction. In the case of Article 258 TFEU it is the assessment that the provision of the mixed agreement falls within the scope of Union law ‘in large measure’ and ‘to a very great extent’. If the above analysis is correct, then the thread which brings together different aspects of the Court’s jurisdiction under primary law appears to suggest that only in cases where an area clearly falling within the exclusive competence of the Member States in a mixed agreement would not be covered by the broad, albeit ill-defined, jurisdiction of the Court. Another thread which has emerged is the cryptic line of reasoning put forward by the Court in order to substantiate quite bold statements about its jurisdiction. A controversial example of this tendency is illustrated in Case C-459/03 Commission v Ireland (MOX Plant).82 This case was analysed in Chapter 5 above. For the purposes of this analysis, suffice it to recall the convoluted reasoning, based on the somewhat esoteric analysis of whether the EU had exercised its competence, as well as the very specific legal context within which the Irish government chose to have recourse to UNCLOS dispute settlement procedures. All in all, this section has highlighted a thread which brings together the case-law of the Court of Justice in enforcement actions and the preliminary rulings on mixed agreements. Developed incrementally over the years, the jurisdiction of the Court is construed in broad terms, its limits ill-defined and its articulation based on reasoning that is either cryptic or unnecessarily convoluted.

7. THE QUEST FOR MORE CLARITY The Quest for More Clarity

In its more recent case-law, this aspect of the Court’s approach has been pointed out in the Court’s own quarters. In Case C-431/05 Merck Genéricos83 the Grand Chamber was sent a reference by the Portuguese Supreme Court about the effect of Article 33 TRIPs. This provision states that patents are protected for a minimum period of 20 years from the filing date. Whilst the Portuguese Industrial Property Code, as amended in June 1995, provided for a 20-year period of protection, it also stipulated that patents filed before the entry into force of that provision were protected for 15 years, a period stipulated under prior law. The claimant in the main proceedings sold a pharmaceutical product under the trade mark ‘Enalapril Merck’. This was claimed to be the same as a product under the trade mark ‘Renitec’ and was sold at considerably lower prices. The patent holder of the latter product brought an action against Merck Genéricos arguing that selling its product without an authorisation constituted a violation of its patent right. Whilst Merck Genéricos argued that the patent protection had expired in the light of the expiration of the 15-year period set out in Portuguese law for patents issued before June 1995, the patent holder counter-argued that that provision was contrary to Article 33 TRIPs and that its patent was protected under the 20-year minimum rule set out therein. The latter claim was accepted by the Court of Appear but was further challenged by Merck Genéricos before the Supreme Court, arguing that Article 33 TRIPs could not 82 83

Case C-459/03 Commission v Ireland (MOX Plant) [2006] ECR I-4635. Case C-431/05 Merck Genéricos, n 55 above.

The Quest for More Clarity 247 have direct effect. The referring court asked two questions: does the ECJ have jurisdiction to interpret Article 33 TRIPs? If it does, may this provision be invoked in disputes between individuals before national courts, either on their own initiative or at the request of one of the parties? In its reference, the Portuguese Supreme Court took the view that the interpretation of Article 33 TRIPs fell within the scope of the jurisdiction of the Court of Justice.84 This was because a number of Community measures existed in the area of patents, namely regarding the creation of a supplementary protection certificate for medicinal products,85 the Community plant variety rights,86 and the legal protection of biotechnological inventions.87 However, it did accept that the above measures only covered certain limited areas of patent law and, therefore, the point required clarification by the Court of Justice. Having summarised the development of the case-law by references to the binding effect of agreements concluded by the Community under Article 300(7) EC (now Article 218 TFEU), the status of the WTO Agreement as an integral part of the Community legal order, the ensuing jurisdiction of the Court of Justice to interpret its provisions, and the absence of any allocation of competence between the Community and the Member States, the Court held that: It follows that, the TRIPs Agreement having been concluded by the Community and its Member States by virtue of joint competence, the Court, hearing a case brought before it in accordance with the provisions of the EC Treaty, in particular Article 234 EC [now Article 267 TFEU], has jurisdiction to define the obligations which the Community ahs thereby assumed and, for that purpose, to interpret the provisions of the TRIPs Agreement.88

It then focused on the question of direct effect and reaffirmed the Dior and Others dictum that Community law requires that TRIPs not be granted direct effect only in a field in which the Community has legislated, in which case national courts would only be required to interpret national law consistently with TRIPs as far as possible. Therefore, what became central was the question whether there is Community legislation in the area of patents. This is answered by what must be one of the shortest paragraphs to be found in a judgment delivered by the Court of Justice: As Community law now stands, there is none.89

This conclusion is substantiated by the very limited scope of the existing Community measures: the only one in the field of patents itself, namely Directive 98/44, deals with the specific isolated case of biotechnological invention; Regulation 2100/94 on plant varieties sets up a system which is distinct from patent law (as, for instance, it provides for much longer terms of protection); Regulation 1768/92 and Regulation 1610/9690 have a secondary function as they aim to compensate for the period that may elapse between 84 In 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, Oxford University Press, 2010) 116, this author stated, incorrectly, that the Portuguese Supreme Court argued that the interpretation of Art 33 TRIPs was beyond the scope of the Court’s jurisdiction (at 130). One hopes that this lapsus has been unnoticed. 85 Council Reg 1768/92 [1992] OJ L182/1. 86 Council Reg 2100/92 [1992] OJ L227/1. 87 Dir 98/44/EC [1998] OJ L213/13. 88 n 55 above, para 33. 89 Ibid, para 40. 90 The latter message is about the creation of a supplementary protection certificate for plant protection products: [1996] OJ L198/30.

248 International Law and the Jurisdiction of the Court of Justice the filing of a patent application and the granting of authorisation to place the relevant product on the market. This assessment led the Court to repeat the above statement, albeit in a rather qualified manner: The fact is that the Community has not yet exercised its powers in the sphere of patents or that, at the very least, at internal level, that exercise has not to date been of sufficient importance to lead to the conclusion that, as matters now stand, that sphere falls within the scope of Community law.91

The line of reasoning followed in the judgment is problematic on a number of grounds. In relation to the assessment of EU rules necessary in order to establish the Court’s jurisdiction to rule on direct effect, one is left puzzled as to the required criteria which the scope and intensity of such rules would need to meet. What is it that would make them ‘of sufficient importance’ to render direct effect a matter of Community law? What are, as Advocate General Colomer put it, ‘the parameters that would make it possible to ascertain the level of legislative activity sufficient to establish the competence of the community and therefore of the Court of Justice’?92 This does not become clear in the judgment. Instead, it is as if one were to guess, almost intuitively, whether secondary measures amount to a sufficient body of law as to justify the existence of EC competence. In another area of external relations, that of exclusive implied competence, it took us more than two decades to understand what ‘common rules’ meant in the context of the AETR judgment,93 and the relevant principles still evolve. It would be regrettable if it took as long to determine the degree of EU legislative activity necessary to give rise to EU competence. Another problem has to do with the intensity with which the Court is prepared to carry out its examination of the existing secondary legislation. There is a distinct shift between the judgment in Étang de Berre and that in Merck: in the former, the Court referred generally to environmental legislation and held that the absence of specific measures dealing with the specific subject-matter of the mixed agreement in question was irrelevant; in Merck, the Court examined the substance of the existing measures, only to conclude that they were not ‘of sufficient importance’ to give rise to Union competence. In a similar vein, whilst acknowledging that the existing patent measures were not sufficient to substantiate jurisdiction, Advocate General Colomer suggested in his Opinion the possibility of a broader test: should patent law be viewed as part of the broader area of intellectual property law, the Court would have jurisdiction to interpret the effects of Article 33 TRIPs. This suggestion echoes the above approach adopted in Étang de Berre with which, however, the judgment in Merck sits uncomfortably. It is also interesting, in this respect, that the Court should have made no reference to four legislative proposals pending at the time; these included measures on compulsory licensing of patents relating to pharmaceutical products for export to countries with public health problems,94 the Community patent,95 the conferment of jurisdiction 91

n 55 above, para 46. Para 49 of his Opinion. 93 See Opinion 2/91 (Re: Convention No 170 ILO on safety in the use of chemicals at work) [1993] ECR I-1061 and Opinion 1/94, n 11 above. 94 COM(2004) 737 final and SEC (2004) 1348 which led to the adoption of Reg No 816/2006 of the European Parliament and of the Council of 17 May 2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems [2006] OJ L157/1. 95 COM(2000) 412 final [2000] OJ 337E/278 (withdrawn: [2012] OJ C156/10). 92

The Quest for More Clarity 249 on the Court of Justice in disputes relating to the Community patent,96 and the establishment of the Community Patent Court and concerning appeals before the CFI.97 The problems associated with basing competence on the above measures notwithstanding,98 it is curious that they should have been ignored even as indicative of an incrementally developed legislative activity in the area. In relation to the link between the judgment in Merck and prior case-law, it has been argued that the former expands the scope of the Court’s jurisdiction considerably and unduly.99 This argument is based on the wording of the judgment, in which it is pointed out that, following its conclusion by the Community, ‘according to settled case-law, the provisions of that convention now form an integral part of the Community legal order … [w]ithin the framework [of which] the Court has jurisdiction to give preliminary rulings concerning the interpretation of that agreement’.100 In particular, it is pointed out that, contrary to previous case-law, this statement does not qualify the status of the mixed agreement, and consequently the jurisdiction of the Court, with reference to the scope of the Union’s competence.101 However, it is suggested that the implications of the formulation of this statement should not be exaggerated. On the one hand, it is difficult to see quite how the Court could justify its jurisdiction to interpret a provision of a mixed agreement falling within the exclusive competence of the Member States. On the other hand, the Court’s approach in all the judgments examined in this chapter (and, in fact, in most of the judgments delivered in the area of EU external relations in general) is characterised by distinct reluctance to rule on issues not raised in the dispute before it and articulate general pronouncements. It would be inexplicable if this approach was changed in Merck in such an unobtrusive manner with such profound implications.102 The other recent case where the lack of clarity about the interpretation of mixed agreements became apparent was Case C-240/09 Lesoochranárske zoskupenie VLK.103 This was a reference by the Slovakian Supreme Court about the Aarhus Convention on access to information, public participation in decision-making and access to justice in environmental matters. Both the EU and the Member States are parties to the Convention.104 The dispute before the domestic court was about the protection for species such as the brown bears. This is covered by rules laid down in Council Directive 92/43 on the conservation of natural habitats and of wild fauna and flora.105 These rules introduce some derogations provided that certain strict conditions are met. When hunting associa96

COM(2003) 827 final (withdrawn: [2012] OJ C156/10). COM(2003) 828 final. 98 AG Colomer points out that ‘harmonising legislation is wanting, and the creation of a Community patent has met with insuperable resistance in the Council. At this stage, the Hermès case-law, as altered by the judgment in Étang de Berre, which calls for applicable legislation, collapses, although uncertainty immediately arises concerning the parameters that would make it possible to ascertain the level of legislative activity sufficient to establish the competence of the Community and therefore of the Court of Justice’ (para 49). 99 See R Holdgaard, annotation on Case C-431/05 Merck, (2008) 45 Common Market Law Review 1233, 1241–42. 100 Case C-431/05 Merck Genéricos, n 55 above, para 31. 101 Ibid. 102 In his Opinion, AG Colomer argued for an even broader interpretation of the Court’s jurisdiction. This is criticised in Koutrakos, ‘The Interpretation of Mixed Agreements’ in Hillion and Koutrakos (eds), n 84 above, 133–35. 103 Case C-240/09 Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky ECLI:EU:C:2011:125. 104 The Aarhus Convention is concluded by the EU pursuant to Council Dec 2005/370/EC [2005] OJ L124/1. 105 [1992] OJ L206/7. 97

250 International Law and the Jurisdiction of the Court of Justice tions in Slovakia initiated administrative proceedings aiming for derogations from these protective conditions to be granted, an association for environmental protection sought to intervene. It claimed that its right was based on Article 9(3) of the Aarhus Convention which provides that [E]ach 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.

The application of the organisation was rejected and, following a number of appeals, it reached the Slovakian Supreme Court which referred to the Court of Justice. The main thrust of the reference was whether an individual had the right to invoke Article 9(3) of the Aarhus Convention. The judgment of the Court was rendered by the Grand Chamber. Its starting point was similar to that we have seen in earlier judgments: the Court referred to the binding effect of international agreements concluded by the Union under Article 300(7) EC (now Article 216 (2) TFEU), the position of the Aarhus Convention as an integral part of the EU legal order, and the jurisdiction of the Court of Justice to give preliminary rulings concerning its interpretation. It then held that: ‘[T]he Court has jurisdiction to define the obligations which the Community has assumed and those which remain the sole responsibility of the Member States in order to interpret the Aarhus Convention.’106 The Court then sought to determine ‘whether, in the field covered by Article 9(3) of the Aarhus Convention, the European Union had exercised its powers and adopted provisions to implement the obligations which derive from it’.107 Two points were made: first, the EU is endowed with express external competence in the area of environmental protection; secondly, Article 9(3) of the Aarhus Convention is invoked in a dispute about participation in an administrative process which would determine the legal protection of a species mentioned in the Habitats Directive. In the light of these considerations, the Court concluded that the dispute fell within the scope of EU law.

8. THE COOPERATION OF NATIONAL COURTS The Cooperation of National Courts

In the judgments examined in this chapter, the central questions raised by either the referring court or intervening governments or both were about the existence and scope of the jurisdiction of the Court of Justice over mixed agreements. A common feature of these questions is the underlying concern that, if broadly construed, this jurisdiction would give rise to judicial review the intensity of which would undermine the competence of Member States as exercised in the context of mixed agreements. The above analysis indicated that, over the years, the Court has developed an evolving definition of its jurisdiction, one which is broad in scope and ill-defined as to its limits. However, this 106 Case C-240/09 Lesoochranárske zoskupenie VLK, n 103 above, para 31. This statement is accompanied by a reference to Joined Cases C-300/98 and C-392/98 Dior and Others, n 67 above, para 33 and Case C-431/05 Merck, n 55 above, para 33. It is interesting that, in contrast to the judgment in this case, neither of these authorities refer to the provisions of the mixed agreement which would remain the sole responsibility of the Member States. 107 Case C-240/09 Lesoochranárske zoskupenie VLK, n 103 above, para 32.

The Cooperation of National Courts 251 does not necessarily entail the assumption of an intrusive judicial role, neither does it imply ipso facto undue interference with the national legal order. The assessment of the implications of the Court’s jurisdiction requires the examination of the role of national courts. It is a truism to argue that the relationship between the Union and national judicature is far from the outcome of a zero-sum power game. In fact, the main principles of Union law have become a deeply entrenched part of the domestic legal order precisely because the Court of Justice has entrusted their application to the active involvement of national courts. The preliminary reference procedure set out in Article 267 TFEU provided the obvious mechanism for the interaction between national and Union courts, one that has been gradually adjusted by the Court of Justice to the evolving requirements of the Union legal order and the increasing familiarity of national courts with Union law. A case in point is the construction of the duty of certain national courts to refer when a decision on a question raised before them is necessary to enable them to give judgment. By developing the acte claire formula in CILFIT,108 for instance, the Court has acknowledged the function that national courts are expected to carry out in the process of the application of Union law.109 However, the significance of this function is revealed if assessed in the light of less apparent and more indirect mechanisms. These consist of the Court’s construction of the general cooperation clause set out in Article 4(3) TEU, according to which Member States ‘shall take all appropriate measures, whether general or particular, to ensure fulfillment of the obligations arising out of the Treaties’. This provision has been consistently interpreted widely enough to impose specific Union law duties on national courts in the area of enforcement of Union law.110 Another mechanism is provided through the specific construction of the various constitutionalising principles developed by the Court of Justice. For instance, a number of specific conditions relating to the application of the principle of state liability in damages for breach of Union law are to be defined under national law.111 Another example is the area of free movement where national courts are to determine whether a national measure which, in principle, violates the EU law principle, is actually justified as necessary and proportionate for the protection of other public interests.112 In the context of the application of mixed agreements, a significant role emerges from the Court’s case-law. This may take various forms, including the determination of the effects of the relevant provisions or the application of specific concepts in accordance with national law.

108

Case 283/81 Srl CILFIT and Lanificio di Gavardo SpA v Ministry of Health [1982] ECR 3415. On different readings of this formula, see A Arnull, ‘The Use and Abuse of Article 177’ (1989) 52 Modern Law Review 622 and H Rasmussen, ‘The European Court’s Acte Claire Strategy in CILFIT’ (1984) 9 European Law Review 242. 110 See eg Case C-213/89 R v Secretary of State for Transport, ex parte Factortame Ltd & Others [1990] ECR I-2433. 111 See Cases C-46/93 and C-48/93 Brasserie du Pêcheur SA v Germany and R v Secretary of State for Transport, ex parte Factortame Ltd and others [1996 ]ECR I-1029. 112 See eg Case C-405/98 Konsumentombudsmannen (KO) v Gourmet International Products AB (GIP) [2001] ECR I-1795. For a study of the role of national courts in the area of free movement of goods, see M  Jarvis, The Application of EC Law by National Courts: The Free Movement of Goods (Oxford, Oxford University Press, 1998). 109

252 International Law and the Jurisdiction of the Court of Justice 8.1 Assessing the Effect of Provisions of Mixed Agreements Apart from the scope of the Court’s jurisdiction, another question referred in Dior was about the rights of individuals to invoke Article 50(6) of the TRIPs Agreement before the referring courts. A detailed examination of the state of the law on the effects of WTO agreements within the Union legal order and the contribution of the ruling in Dior is beyond the scope of this chapter. For the purposes of this analysis, suffice it to point out the following. Prior to the conclusion of the WTO Agreements, the Court had ruled out the direct effect of the GATT on the ground that it provided for a system of rules the application of which was characterised by considerable flexibility.113 However, the tighter legal regime set out in the WTO Agreements raised that question once more. It had been only a year prior to the Dior judgment had the Court had ruled on the effect of the WTO Agreements in determining the legality of Community legislation pursuant to Article 230 EC (now Article 265 TFEU). In the Portuguese Textiles case it had ruled that the WTO Agreements did not constitute rules in the light of which the legality of Community measures could be reviewed.114 This conclusion was substantiated by reference to the considerable scope of negotiation enjoyed by the WTO parties, not least in the area of dispute settlement. The Court also mentioned that the most important trading partners of the Union had also excluded them from the rules applied by their courts in reviewing the legality of domestic legislation. It was in the light of this considerations that the Court had pointed out that: [To] accept that the role of ensuring that Community law complies with those rules devolves directly on the Community judicature would deprive the legislative or executive organs of the Community of the scope for manoeuvre enjoyed by their counterparts in the Community’s trading partners.115

In its judgment in Dior the Court referred to the above line of reasoning in order to reject the direct effect of WTO rules and, hence, Article 50(6) TRIPs. However, the Court proceeded to point out that ‘the finding that the provisions of TRIPs do not have direct effect in that sense does not fully resolve the problem raised by the national courts’.116 Having thus underlined once more the procedural nature of Article 50 of the TRIPs Agreement and the fact that it is intended to be applied by both Community and national courts in relation to commitments undertaken both by the Community and the Member States, the Court made the following distinction: In a field to which TRIPs applies and in respect of which the Community has already legislated, as is the case with the field of trade marks, it follows from the judgment in Hermès, in particular paragraph 28 thereof, that the judicial authorities of the Member States are required by virtue of Community law, when called upon to apply national rules with a view to ordering provisional measures for the protection of rights falling within such a field, to do so as far as possible in the light of the wording and purpose of Article 50 of TRIPs.

113 Case 21-4/72 International Fruit Company, n 31 above; Case 9/73 Schlüter [1973] ECR 1135; Case 38/75 Nederlandse Spoorwegen [1975] ECR 1439; Case 266/81 SIOT [1983] ECR 731; Case 267-9/81 Amministrazione delle Finanze dello Stato v SPI SpA [1983] ECR 801. 114 Case C-149/96 Portugal v Council [1999] ECR I-8395, para 47. 115 n 67 above, para 46. 116 Ibid, para 45 of the judgment.

The Cooperation of National Courts 253 On the other hand, in a field in respect of which the Community has not yet legislated and which consequently falls within the competence of the Member States, the protection of intellectual property rights, and measures adopted for that purpose by the judicial authorities, do not fall within the scope of Community law. Accordingly, Community law neither requires nor forbids that the legal order of a Member State should accord to individuals the right to rely directly on the rule laid down by Article 50(6) of TRIPS or that it should oblige the courts to apply that rule of their own motion.117

By distinguishing between areas covered by the TRIPs Agreement in which the Union has legislated and areas in which there is no EU legislation, the Court thereby enhanced the position of national courts in the area of the application of mixed agreements. This is further highlighted in the final part of the judgment in Dior, where the Court dealt with the substantive questions referred by the Dutch Supreme Court. One of them was whether industrial designs fall within the scope of TRIPs. The Court responded in the affirmative and left it to the national courts to decide whether the requirements for their protection, laid down in Article 25 TRIPs, were met. Therefore, national courts are entrusted not only with the application of procedural rules contained in TRIPs but also the determination of their legal effects in a case where there is no Community legislation. The emergence of a significant role for national courts in the above context is understandable. It is consistent with the role of national courts at the various stages of the preliminary reference procedure, from the choice and definition of the questions referred to the application of the interpretation given by the Court to the facts of the case.118 Within the context of EU international relations, it also operates as a considerable counterweight to the assertion of the Court’s jurisdiction. However, the criterion on the basis of which this role of national courts is introduced, namely the existence of Union legislation in the area covered by the specific provision of TRIPs, is puzzling. This is the case not only because of its lack of clarity: indeed, it remains to be seen how the existence of harmonising Union rules or rules laying down minimum standards might affect its application. First, it sits uncomfortably with the logic underpinning the broad jurisdiction of the Court of Justice, namely the need for uniform interpretation of the TRIPs Agreement: is this not paramount in terms of the effects of WTO provisions, all the more so in the light of the reluctance of the Union’s trading partners, to grant WTO rules direct effect? And is it significant that the right of Member States to determine this was laid down in a case referred by a Dutch court traditionally sympathetic to the direct effect of international treaties? Secondly, it ignores the link between the direct effect of WTO rules and the discretion enjoyed by the Union’s legislature and executive when acting within the WTO framework.119 The importance of this link was highlighted in Hermès at the hearing of which the French government had asked the Court to give the national court some indication as to whether or not the provisions of the WTO Agreement, 117

Ibid, paras 47–48. To that effect, see Anderson and Demetriou, n 51 above, ch 5, and M Broberg and N Fenger, Preliminary References to the European Court of Justice (Oxford, Oxford University Press, 2010) ch 5. For the evolution of the preliminary reference procedure and the involvement of national courts, see T de la Mare and C Donnelly, ‘Preliminary Rulings and EU Legal Integration: Evolution and Stasis’ on P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 363; and T Tridimas, ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Reference Procedure’ (2003) 40 Common Market Law Review 9. 119 See M Cremona, ‘EC External Commercial Policy after Amsterdam: Authority and Interpretation within Interconnected Legal Orders’ in Weiler (ed), n 54 above, 5, 27 et seq. 118

254 International Law and the Jurisdiction of the Court of Justice including those of the TRIPs, have direct effect. That request had been made precisely in order to forestall differences of interpretation on such an important matter.120 Thirdly, the acknowledgement of the right of national courts to determine the effect of Article 50 of the TRIPs Agreement in areas where the Union has not legislated sits uncomfortably with the logic of denying direct effect. Indeed, if uniformity in the application of TRIPs justified the lack of direct effect, this would apply to the Agreement as a whole.121

9. PROCEDURAL INTEGRATION AND COOPERATION Procedural Integration and Cooperation

In examining the case-law on the interpretation of mixed agreements within the Union legal order, the analysis in this chapter has identified two threads. The first is related to the broad construction of the jurisdiction of the Court of Justice not only to rule on the application of mixed agreements pursuant to Article 267 TFEU but also to determine their legality prior to their adoption pursuant to Article 218 TFEU. The second is concerned with the ensuing role of national courts in the application of mixed agreements and the emphasis on their cooperation with the Court of Justice. In relation to the jurisdiction of the latter, the interpretation of Article 216(2) TFEU is clearly not related to the interpretation of mixed agreements as such. However, it was included in this analysis not only because of the parallel development of its scope, but also because the principles to which it has given rise have been relied upon consistently by the Court in order to articulate the foundation for the role of national courts in the application of mixed agreements. This evolving process of procedural integration and cooperation adds another dimension to the position of mixed agreements within the Union legal order. The analysis in the previous chapter highlighted the principal role of mixity as sanctioned by the Court of Justice and managed by the Union institutions and the Member States. It also examined the various pragmatic mechanisms which have been developed as a matter of practice in order to deal with the practical issues raised by the absence of a clear delimitation of competences. It was against that background that the principle of close cooperation, articulated by the Court in the 1970s and emphasised in the 1990s, has been assessed and its role underlined. The analysis of the jurisdiction of the Court of Justice to interpret mixed agreements and its cooperation with national courts shapes the other pillar of the management of mixed agreements under Union law. In other words, originating in the constitutional idiosyncrasies of the Union, necessitated by the comprehensive and multifarious scope of international negotiations and favoured by the distinct reluctance of the Court to allocate non-exclusive competences, mixity has now become the focus of a twofold mechanism aimed at curtailing its problems: first, the negotiation, conclusion and application of mixed agreements are subject to compliance with the duty of close cooperation which is binding on the Union institutions and the Member States; secondly, the interpretation of such agreements becomes the subject-matter of the jurisdiction of the Court of Justice which is acting in close cooperation with national courts. Viewed from this angle, there is a clear thread which brings together various strands 120 AG Tesauro in his Opinion in Hermès, n 49 above, n 28, where he refers to this request as ‘somewhat unorthodox and contentious’. 121 See the criticism in Koutrakos, n 66 above, 43–47.

Conclusion

255

of the case-law on mixed agreements and is centred on the role of the Court of Justice: by introducing binding principles in an area developed by practice, extending its scope of application and interacting with a variety of institutional and judicial actors, it shapes a flexible mechanism aiming at the effective supervision of all aspects of mixed agreements. The incremental development of this mechanism carries out a variety of functions. In practical terms, it succeeds in fencing off maximalistic claims for exclusivity. In legal terms, it illustrates the various elements whose interaction forms the foundation of the system of EU international relations law. In this respect, the following statement by Advocate General Tesauro in his Opinion in Hermès is noteworthy: The Community legal system is characterized by the simultaneous application of provisions of various origins, international Community and national; but it nevertheless seeks to function and to represent itself to the outside world as a unified system. That is, one might say, the inherent nature of the system which, while guaranteeing the maintenance of the realities of States and of individual interests of all kinds, also seeks to achieve a unified modus operandi. Its steadfast adherence to that aim, which the Court itself has described as an obligation of solidarity, is certainly lent considerable weight by the judicial review mechanism which is defined in the Treaty and relies on the simultaneous support of the Community courts and the national courts.122

In fleshing out the ‘unified modus operandi’ mentioned above, the Court of Justice has assumed a constitutional function. In the light of the analysis in this chapter, that is not to say that the system emerging from its case-law is either complete or flawless. The specific legal and factual context within which the Court has delivered its judgments should not be dismissed. For instance, the provision whose interpretation gave rise to this case-law, ie Article 50 of the TRIPs Agreement, is one of a strictly procedural nature, as the Court has underlined time and again in its judgments.123 In the absence of Union law, diversity in the application of procedural rules has been accepted by the Court of Justice as the foundation for the application of Union law by national courts provided that the latter comply with certain conditions defined and supervised by the Court itself.124 In addition, the host of questions raised by the line of reasoning followed in these judgments suggests that the mechanism emerging from the case-law on EU international relations is still evolving. On the other hand, the implications of those questions should not be overestimated: for instance, the right of national courts to ascertain the direct effect of international provision should be viewed in the context of the rapid development of Union law.125

10. CONCLUSION Conclusion

The analysis in this chapter has focused on the various mechanisms pursuant to which the Court of Justice has assumed the role of interpreting mixed agreements. The assessment 122

n 49 above, 3621. In addition, the TRIPs Agreement has been criticised for the considerable discretion it grants its contracting parties: see JH Reichman, ‘Securing Compliance with the TRIPs Agreement After US v India’ (1998) 1 Journal of International Economic Law 585. 124 See the principle of procedural autonomy articulated in Case 33/76 Rewe-Zentralfinanz eG and ReweZentral AG v Landwirtschaftskammer für das Saarland [1976] ECR 1989. For its development and adjustments, see P Craig and G de Búrca, EU Law, 5th edn (Oxford, Oxford University Press, 2011) ch 8. 125 See Koutrakos, n 66 above, 50–51. 123

256 International Law and the Jurisdiction of the Court of Justice of the exercise of its jurisdiction and its implications for national courts aimed at complementing the analysis in the previous chapter on the various mechanisms pursuant to which the formula of mixity is regulated in the process of the negotiation, conclusion and application of international agreements. It has taken the Union legal order more than thirty years to develop incrementally the system of principles emerging from this analysis. Whilst underlining the multifaceted implications of mixity within the context of Union law, its articulation in ways which raise as many questions as they answer indicates a rather inward-looking posture. In other words, the approach to the interpretation of mixed agreements was clearly focused on the constitutional idiosyncrasies of the Union and aimed at striking a balance between the various actors these involved, namely the Union legislature and executive, the national institutions as well as the Union and national courts. This approach is apparent in the early statement in Ruling 1/78 regarding the allocation of competences between the Community and Member States and the character of this allocation as internal to the Union.126 Whilst this is undoubtedly correct, the increasing interdependence of international activities and the ensuing proliferation of international legal mechanisms will raise other types of challenges for Union law. The relationship between those mechanisms and the Union legal order and their direct impact on the role of the Court of Justice is a case in point. It is hoped that the response to those challenges will further clarify the function and implications of the principles governing the position of mixity within the Union legal order.

126

Ruling 1/78, n 14 above, para 35.

Enforcement of International Law in the EU Legal Order

8 Enforcement of International Law in the EU Legal Order 1. INTRODUCTION Introduction

T

HE ANALYSIS SO far has examined the circumstances under which the European Union is bound by international law and the jurisdiction of the Court of Justice to interpret and apply it as a matter of EU law. This chapter will focus on the enforcement of international law within the Union legal order. It is for the legislative and judicial organs of the domestic legal orders to determine the ways in which international law is enforced within their realm. It is part of their constitutional function and they carry it out with reference to domestic constitutional arrangements.1 International and constitutional law theory has advanced the theories of monism and dualism in order to describe the effect of international rules within a domestic legal order. The former denotes the supremacy of international law and its application without the need to be incorporated by means of national law, whereas the latter views such incorporation as a requirement for the enforcement of international law by domestic organs. As the analytical usefulness of this dichotomy is now generally contested,2 it will not be a point of reference for this chapter. The following analysis will explore the direct and indirect mechanisms of enforcement of international law within the Union legal order and their evolving interactions in the complex and constantly developing system of the EU international relations law.

2. ENFORCEMENT OF INTERNATIONAL AGREEMENTS BY INDIVIDUALS Enforcement of International Agreements by Individuals

It is recalled that the premise under which individuals were deemed to enjoy rights under Community law which they could enforce before national courts was the very first proposition of the Court on the effect of Community law within the domestic legal orders.3 1 See E Denza, ‘The Relationship Between International and National Law’ in M Evans (ed.), International Law, 4th edn (Oxford, Oxford University Press, 2014) 412. 2 Von Bogdandy describes monism and dualism as ‘intellectual zombies of another time’: A von Bogdandy, ‘Pluralism, Direct Effect, and the Ultimate Say: On the Relationship between International and Domestic Constitutional Law’ (2008) 6 International Journal of Constitutional Law 397, 400. See also Denza, n 1 above, 418; and RA Wessel, ‘Reconsidering the Relationship Between International and EU Law: Towards a Content-based Approach?’ in E Cannizzaro, P Palchetti and RA Wessel (eds), International Law as Law of the European Union (Leiden, Martinus Nijhoff, 2012) 7. 3 Case 26/62 NV Algemene Transporten Expeditie Onderneming van Gend en Loos v Nederlandse Administratie der Belastingen [1962] ECR 1.

257

258 Enforcement of International Law in the EU Legal Order Whilst not articulated expressly in the EEC Treaty, the Court held that its application followed from its spirit, general scheme and wording.4 Applicable originally to Treaty provisions, its scope was broadened to cover regulations,5 decisions6 and, most controversially, directives.7 The introduction of the principle of direct effect provided considerable momentum for the development of Community law, being at the very centre of the process of constitutionalisation of the EC Treaty. In public international law, it is for the parties to international treaties to determine the effect of its provisions and, in particular, whether individuals may rely upon it before domestic courts. This principle is acknowledged by the Court of Justice which has 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 agreement itself.8 In pointing out this public international law principle, the Court not only acknowledges the primary role of the Member States on that matter, but also points out an alternative, should they find its interpretation of direct effect detrimental to the international interests of the Union. A considerable number of agreements were silent on the issue. More recently, however, the Union has been explicit about the effects of international agreements that it concludes.9 This may take different forms. In the case of the Free Trade Agreement (FTA) with South Korea10 and the Association Agreement with Central America,11 for instance, direct effect is excluded pursuant to a provision in the Council Decision which concludes it on behalf of the Union. The Trade Agreements with Colombia and Peru rule out direct effect in relation to the schedule of commitments in services which fall within its scope,12 whereas the FTA with Singapore includes an express provision to that effect which covers the entire agreement. In relation to the Association Agreement with Ukraine, Article 5 of Council Decision 2014/295/EU provides 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’.13

4

Ibid. Case 50/76 Amsterdam Bulb BV v Produktschap voor Siergewassen [1977] ECR 137. 6 Case 9/70 Franz Grad v Finanzamt Traunstein [1970] ECR 825. 7 Case 41/74 Van Duyn v Home Office [1974] ECR 1337. The case-law on the effects of directives has been long and controversial and the literature on the topic voluminous. For a sample, see P Craig, ‘The Legal Effects of Directives: Policy, Rules and Exceptions’ (2009) 34 European Law Review 349, A Dashwood, ‘From Van Duyn to Mangold via Marshcall: Reducing Direct Effect to Absurdity?’ (2006–07) 9 Cambridge Yearbook of European Legal Studies 81; and M Dougan, ‘In Defence of Mangold?’ 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) 219. 8 Case 104/81 Hauptzollamt Mainz v CA Kupferberg & Cie KG aA [1982] ECR 3641, para 4. 9 See A Semertzi, ‘The Preclusion of Direct Effect in the Recently Concluded EU Free Trade Agreements’ (2014) 51 Common Market Law Review 1125. 10 Art 8 of Council Decision 2011/265/EU on the signing, on behalf of the EU, and provisional application of the Free Trade Agreement between the EU and its Member States, on the one part, and the Republic of Korea, on the other part [2011] OJ L127/1. 11 [2012] OJ L346/3, concluded pursuant to Council Dec 2012/734 [2012] OJ L346/1. 12 [2012] OJ L354/3, concluded pursuant to Council Dec 2012/735 [2012] OJ L354/1. 13 [2014] OJ L161/1. See the analysis in G Van der Loo, P Van Elsuwege and R Petrov, ‘The EU–Ukraine Association Agreement: Assessment of an Innovative Legal Instrument’, EUI Working Paper LAW 2014/09. 5

A Precondition for Direct Effect 259 3. A PRECONDITION FOR DIRECT EFFECT: THE NATURE AND LOGIC OF THE AGREEMENT A Precondition for Direct Effect

It is ironic that the Court should have dealt explicitly for the first time with the binding effect of international law upon the Union and its enforcement in the Union legal order in a case about an agreement to which the Union was not a party. This was in International Fruit Company14 about the GATT concluded in 1947. It is recalled that a Dutch court referred to the Court questions about a set of Community measures restricting the importation of apples from third countries. The action was brought by a trader who relied upon the GATT before domestic courts in order to challenge the validity of EU measures. In its judgment, the Court articulated the general conditions for the direct enforcement of international agreements against EU law. Such agreements may be relied upon in order to challenge the validity of EU law provided that two conditions were met: first, the agreement in question must be binding on the Union; secondly, the agreement in question must confer rights on individuals which may be invoked before courts. The first condition, and the issues raised by the fact that the Community had not been a party to the GATT, were examined in Chapter 6 above. Similarly, the jurisdiction of the Court to interpret the Agreement was examined in Chapter 7 above. Having established the binding effect of the GATT upon the Community, the Court went on to examine whether that Agreement was capable of conferring rights which individuals could invoke before national courts. The answer to this question relied upon ‘the spirit, the general scheme and the terms’ of the GATT.15 Their examination suggested that the answer to the question of direct effect was negative. The main reason for this was the ‘great flexibility’ of the Agreement which, according to the Court, was illustrated by a number of its provisions: these included the duty of contracting parties to engage in consultations on any issue pertaining to the operation of the GATT and their right to engage in further consultation if a satisfactory solution was not reached; the settlement of a conflict provided for written recommendations or proposals to be given sympathetic considerations, consultations between the parties, authorisation to suspend the application of parts of the GATT and, in that case, the right to withdraw from the Agreement; the possibility of derogation by means of unilateral suspension of GATT obligations in the event or the threat of serious damage. Therefore, compliance with the duties imposed by the GATT upon the contracting parties provided for such flexibility as to render its rules incapable of conferring Community rights enforceable before national courts. In acknowledging the possibility of international agreements concluded by the Community being directly effective, the Court transposed one of the foundations of the process of constitutionalisation of the internal market law into the area of EU international relations. However, whilst its impact on the reception of international law in the Union legal order has not been any less considerable, the principle has not been applied in the area of international agreements without an adjustment. In the judgment in International Fruit Company the Court did not engage in a detailed examination of Article XI GATT, ie the specific provision upon which the applicant relied 14 Joined Cases 21 to 24/72 International Fruit Company NV and Others v Produktschap voor Groenten en Fruit [1972] ECR 1219. 15 Ibid, para 20 of the judgment.

260 Enforcement of International Law in the EU Legal Order in the main proceedings in order to challenge EU law. Instead, it held that the GATT was incapable of conferring rights enforceable before national courts because of its very nature, scheme and wording. This approach suggests that the determination of whether a specific provision of an agreement is directly effective is preceded by the determination of a broader issue, namely whether the agreement as a whole is capable of conferring enforceable rights. Therefore, and assuming that an international agreement is binding on the Union, its direct effect depends on a two-tier test: first, the agreement in question as a whole must be capable of conferring enforceable rights; secondly, the specific provision of the agreement relied upon by an individual must be sufficiently clear, precise and not subject to further implementing measures. If either of these conditions is not met, the agreement may not be relied upon by an individual in order to challenge the validity of EU law. Subsequent case-law has been clearer about the existence of this two-tier test but has phrased it in different ways. In Kupferberg, a case about the FTA with Portugal, the Court held that ‘neither the nature nor the structure of the Agreement  … may prevent a trader from relying on the provisions of the said Agreement before a court in the Community’.16 In subsequent case-law it refers to the logic of the agreement. In Case C-344/04 IATA, for instance, it was held that ‘neither the nature nor the broad logic’ of the Montreal Convention precludes the direct effect of specific provisions of it.17 In any case, such assessment is made on the basis of ‘the aims, preamble and terms’ of the agreement in question.18 The Court has not always applied this test in a systematic manner. For instance, in Case C-240/09 Lesoochranárske zoskupenie VLK it focused on the direct effect of Article 9(3) of the Aarhus Convention without examining whether the Agreement as a whole was capable of conferring enforceable rights.19 In ATAA, on the other hand, it referred to the direct effect of Article 2(2) of the Kyoto Protocol even though the latter had been held to be incapable of conferring rights on individuals. In early case-law, the first part of the two-tier test was interpreted liberally. This became apparent in Bresciani, a preliminary reference about the legality of Italian customs law in the light of the Yaoundé Convention.20 This Convention (signed in 1963, a precursor to the Lomé and Cotonou Conventions) was an association agreement concluded between the Community and its Member States, on the one hand, and the African states and Madagascar, former dependent territories of France, Belgium and the Netherlands, on the other. The claimant in the main proceedings was an importer of raw cowhides from France and Senegal into Italy. He objected to being charged a fee for a compulsory veterinary and public health inspection of his imports, and argued that that fee constituted a charge of an equivalent effect to a customs duty and, as such, was contrary not only to Article 25 EC (now Article 30 TFEU) but also to Article 2(1) of the Yaoundé Convention which provided for the progressive prohibition of such charges on goods originating in 16

n 8 above, para 22. Case C-344/04 IATA and ELFAA [2006] ECR I-403, para 39. Similarly, see Case C-363/12 Z ECLI:EU:C:2014:159, para 85; Case C-59/11 Association Kokopelli ECLI:EU:C:2012:447, para 85; Case C-366/10 ATAA ECLI:EU:C:2011:864, para 54; Case C-308/06 Intertanko [2008] ECR I-4057, para 54; Joined Cases C-120/06 P and C-121/06 P Fabbrica italiana accumulatori motocarri Montecchio SpA (FIAMM) and Others, para 110. 18 See Intertanko, ibid, para 54. 19 Case C-240/09 Lesoochranárske zoskupenie VLK ECLI:EU:C:2011:125. 20 Case 87/75 Conceria Daniele Bresciani v Amministrazione Italiana delle Finanze [1975] ECR 129. 17

A Precondition for Direct Effect 261 any of the associated states. Having interpreted the notion of a charge of an equivalent effect to a customs duty in the former provision broadly enough to cover the contested charge, the Court went on to ascertain whether the latter was also illegal under Article 2(1) of the Yaoundé Convention. In order to address this question, it turned to the issue of the direct effect of the Convention for the examination of which ‘regard must be simultaneously paid to the spirit, the general scheme and the wording of the Convention and that of the provision concerned’.21 First, the Court identified the specific context within which the Convention had been adopted. Its aim was to replace an arrangement concluded pursuant to Part IV of the EEC Treaty, which had established an association between the Community and dependent territories of some of its Member States. Following the expiry of that arrangement and the process of independence of many of the associated states, the Community and its Member States concluded the Yaounde Convention in order to maintain the special preferential economic and political connections between them. Secondly, the Court examined the spirit of the Convention and concluded that it was characterised by an ‘imbalance’ between the obligations assumed by the Community and those assumed by the associated states: whilst Article 2(1) of the Convention provided for the progressive abolition of customs duties and charges of an equivalent effect to a customs duty, Article 3(2) enabled the associated states to retain or introduce such charges if they were deemed to correspond to their needs or their industrialisation requirements or were intended to contribute to their budget; this exceptional clause did not alter the obligation of the Community and its Member States to adhere to their duty under Article 3(2). It was in the light of these provisions that the Court concluded that: [I]t is apparent  … that the Convention was not concluded in order to ensure equality in the obligations which the Community assumes with regard to the associated states, but in order to promote their development in accordance with the aim of the first convention annexed to the Treaty.22

However, ‘this imbalance’ was deemed ‘inherent in the special nature of the Convention’ and did ‘not prevent recognition by the Community that some of its provisions have a direct effect’.23 The judgment in Bresciani is underpinned by a more liberal interpretation of direct effect in EU external relations: it was neither dependent upon reciprocity of obligations undertaken under the agreement in question nor restricted by the existence of consultation mechanisms in relation to the application of the specific provision invoked before the national court. This approach may be juxtaposed to that in International Fruit Company: whilst the latter was keen to stress the parameters within which the principle of direct effect would be applied, the former illustrated the flexibility with which it could be employed. And yet, the absence of reasoning in the judgment in Bresciani is striking: why did the imbalance of obligations not prevent the possibility of direct effect? Was it only because the Convention was of a special nature, ie to maintain and develop the relations between the Community and a number of countries traditionally linked with

21

Ibid, para 16. Ibid, para 22. 23 Ibid, para 23. 22

262 Enforcement of International Law in the EU Legal Order some of its Members? Is this both a sufficient and necessary condition for the imbalance of obligations to be irrelevant to the direct effect of the Agreement? A similarly liberal approach to the nature and logic of an agreement as a precondition to the direct effect of its provisions was adopted in Kupferberg, a reference from the German Federal Finance Court on the interpretation of the FTA between the Community and Portugal.24 A German importer of port from Portugal into Germany was asked to pay a charge imposed upon all imported spirits under national law. He brought an action before German courts, arguing that the imposition of that charge was contrary to Article 21(1) of the FTA with Portugal. The governments of four Member States, namely Denmark, Germany, France and Great Britain, had argued against the direct effect of FTA provisions. In its judgment, the Court defined the principles under which the principle of direct effect may be applied to international agreements concluded by the Community. These may be summarised as follows. First, the Court referred to the international origin of the rules in question. It noted that, in accordance with public international law, it is for the parties to an agreement to determine its effect within their domestic legal order: the Court of Justice would determine whether the provision of an international agreement concluded by the Community would be directly effective before national courts only if the Community institutions had not addressed this issue in the agreement itself. Secondly, the Court referred to what may be called judicial reciprocity. It pointed out that: [T]he fact that the courts of one of the parties consider that certain of the stipulations in the agreement are of direct application whereas the courts of the other party do not recognize such direct application is not itself such as to constitute a lack of reciprocity in the implementation of the agreement.25

What is significant is that the obligations contained in the agreement are fulfilled, in accordance with the general rules of international law, bona fide: whilst under a duty to comply fully with their contractual obligations, the parties are free, in the absence of an express provision in the agreement, to determine how to do so. Thirdly, the Court referred to the establishment of a special institutional framework by an agreement concluded by the Community. The FTA with Portugal, for instance, had entrusted its administration to joint committees which enjoyed the power to make recommendations about the proper implementation of the Agreement and take decisions in the areas specified therein. However, ‘the mere fact’ that such structures had been established was deemed ‘not in itself sufficient to exclude all judicial application of that Agreement’.26 The Court justified this conclusion by pointing out that a provision viewed as directly applicable by the judiciary of one of the parties would not adversely affect the powers of the committee set up by the FTA given that that provision would be presumed to be unconditional. Fourthly, the Court referred to the provision of safeguard clauses which was also viewed as ‘not sufficient in itself to affect the direct applicability’ of certain provisions of the agreement.27 This was because of their limited scope: the contracting parties were 24

n 8 above. Ibid, para 18. 26 Ibid, para 20. 27 Ibid, para 21. 25

A Precondition for Direct Effect 263 allowed to deviate from the Agreement only in specific circumstances and following consultations in the Joint Committee. In the light of the above considerations, the Court deemed the FTA with Portugal capable of conferring rights upon individuals enforceable before national courts. The construction of the first part of the two-tier test for determining the direct effect of international rules in Kupferberg is so liberal that its actual function in the process of enforcing these rules becomes questionable: neither judicial reciprocity nor the establishment of autonomous bodies with decision-making power nor the provision for safeguard clauses is alone sufficient to make provisions of an agreement incapable of conferring rights upon individuals, provided, that is, that they meet the specific conditions for direct effect. The best-known (some might say notorious) example of a case where the logic of an international agreement was held to preclude direct effect was, originally, the GATT and, subsequently, the WTO Agreements. This will be examined in section 6 below. For a long time, this was also the only such case. More recently, the Court held that two other important international treaties also fell at this hurdle. These are the United Nations Convention on the Law of the Sea (UNCLOS) and the Kyoto Protocol. The former was examined in Intertanko.28 This was a reference from the High Court of England and Wales about the legality of Council Directive 2005/35/EC on ship-source pollution29 under international law. Various associations within the international maritime transport industry claimed that the Directive contravened UNCLOS and the 1973 International Convention for the Prevention of Pollution from Ships and the 1978 Protocol thereto (Marpol 73/78). The Directive required Member States to target ship-source discharges of polluting substances in cases where these are committed with intent, recklessly or by serious negligence. The applicants argued that this provision was stricter than that laid down in Marpol 73/78. According to the latter, the prohibition applied in cases where the owner of the ship or its master acted with intent to cause damage, or recklessly and with knowledge that damage would probably result. Therefore, it was argued, in adopting the contested Directive, the Council had violated international law. The Court defined as the main objective of UNCLOS the codification, clarification and development of general international law relating to the peaceful cooperation of the international community in the sea. It does so by introducing legal rules governing the various areas of the sea and by striking a fair balance between the interests of coastal and flag states. The Court then pointed out that UNCLOS did not grant individuals independent rights and that their status under the Convention was dependent upon the existence of a coastal connection between their ship and the flag state. In the absence of such a link, in cases, that is, where a ship was not attached to a state, the freedom of navigation guaranteed by UNCLOS would apply to neither the ship nor the persons on board. Whilst the Convention attaches rights to ships these are due to the latter’s link to the flag state and are not extended to the ship’s owners. After all, it is the flag state that is responsible for ensuring safety at sea and protecting the interests of other states. In other words, the role of the flag state is so central to the system established under UNCLOS that the Convention was not intended to confer rights enforceable by individuals. In ATAA the same conclusion was reached in relation to the Kyoto Protocol.30 The 28

n 17 above. [2005] OJ L255/11. 30 n 17 above. 29

264 Enforcement of International Law in the EU Legal Order subject-matter of this case was the legality of Directive 2008/10131 and the extension of the Union’s trading emissions scheme to international flights departing from and landing in EU airports. In particular, it was argued that to charge airlines for the journey of their aircrafts above non-EU territory was in violation of international law, including the Kyoto Protocol.32 The Court observed that the aim of the Protocol was to reduce greenhouse gas emissions by adopting the necessary measures in order to meet specific objectives. For countries in transition to the market economy, a degree of flexibility was allowed in the implementation of their commitments. The Protocol also allows certain parties to meet their reduction commitments collectively. Finally, it is for the states, in the Conference of the Parties established under the Protocol, to determine the appropriate mechanisms for non-compliance. In other words, it is for its contracting parties to determine how and at what speed to comply with their obligations. It was in the light of the above considerations that the Kyoto Protocol was held not be capable of conferring enforceable rights to individuals.33 It is interesting that all international agreements held to be incapable of conferring any enforceable rights on individuals should be multilateral. It is also interesting that they are still exceptional (as the following section will illustrate). However, the assessment of the broad nature and logic of the agreements is not carried out in the same manner.34 The following section will show that, in relation to the WTO rules, it is judicial reciprocity and the room for manoeuvre granted to the contracting parties in the enforcement of the relevant rules that is the guiding principle of the Court. In contrast, it is the absence of individual rights which renders UNCLOS incapable of being enforced directly in the Union legal order.35 As for the Kyoto Protocol, it is the flexibility with which the contracting parties are endowed in the implementation of the agreement which rules out its direct effect. The assessment of the nature and broad logic of an international agreement as a precondition for its direct effect has been criticised both generally and in relation to specific agreements. It is viewed as a technique that enables the Court to fence off EU law from the challenges to its validity based on international law. Acting as ‘the gatekeeper’36 that chooses which parts of international law may penetrate the EU legal order and be enforced against secondary measures, the Court is viewed as ‘highly reluctant to give any effect to international law’.37

31

[2009] OJ L8/3. Also customary international law (see the analysis in Chapter 7 above), the Chicago Convention (ibid), and the EU–US Open Skies Agreement (see the analysis in Chapter 3 above). 33 However, as was mentioned above, the Court went on to examine the specific provision of the Protocol relied upon by the claimants, ie Art 2(2), which provided that the parties would seek to limit emissions of certain greenhouse gases by working through the ICAO. It held that this was not unconditional and sufficiently precise and, therefore, incapable of being relied upon by individuals in order to challenge the validity of Dir 2008/101. 34 See M Cremona, ‘External Relations and External Competence of the European Union’ in P Craig and G de Búrca (eds), The Evolution of EU Law, 2nd edn (Oxford, Oxford University Press, 2011) 217, 242. 35 Cf P Wennerås, ‘Towards an Ever Greener Union? Competence in the Field of the Environment and Beyond’ (2008) 45 Common Market Law Review 1645, 1680. 36 The term is used in Cremona, n 34 above, 234. 37 J Klabbers, The European Union in International Law (Paris, Editions A Pedone, 2012) 77. See also G Gaza, ‘Trends in Judicial Activism and Judicial Self-restraint Relating to Community Agreements’ in E Cannizzaro (ed), The European Union as an Actor in International Relations (The Hague, Kluwer, 2002) 118, 128–30 32

A Precondition for Direct Effect 265 However, it is the construction of the conditions of direct effect rather than their existence which determines the impact of the formula. The infrequent use of the principle, as illustrated by the above overview, suggests that the criticism levelled against the Court is exaggerated. This conclusion is also supported by the story of the construction of the direct effect of internal market law. Even on the internal plane, the assessment of whether individuals may rely upon specific rules of Union measures before national courts is dependent upon a more general assessment of the nature of those measures. This is illustrated clearly in the case of directives: in the light of their unique legal features, as defined in Article 288 TFEU, the conditions for their enforcement by individuals have been modulated, limited and refined over the years. This is not the case in relation to other sources of EU law, such as regulations.38 It is recalled that the limited direct effect of directives, namely against the state or the emanation of the state and not to other individuals,39 was justified because of their very nature as instruments addressed to the Member States. This indicates that the acknowledgement of direct effect by the Court has always followed a preliminary assessment of the type of effects that a specific instrument may be deemed to carry in the light of its nature. The painfully long and protracted story of the direct effect of directives makes it clear that such an assessment is still being carried out well into the phase of maturity of the Union legal order. Viewed from this angle, the two-tier test associated with the direct effect of international agreements is not unique to EU external relations. The two-tier test attached to the application of the principle of direct effect to international agreements is more pronounced because the stakes may appear to be higher: the extent to which the Union courts are prepared to enforce international commitments undertaken by the EU (on its own and with its Member States) may determine the extent to which the latter are prepared to undertake such commitments, hence affecting international negotiations. This point may be illustrated by a case on the interpretation of the Cooperation Agreement between the EC and Morrocco. In Kziber the Court had ruled that its provision on social security was directly effective and should be viewed as analogous with the identical one in Regulation 1408/71, hence covering disability allowances.40 When this issue, amongst others, was referred again in Yousfi the German government submitted written observations urging the Court to review its case-law.41 In particular, it was argued that not only had the parties to the Cooperation Agreement not intended to confer direct effect on its provision on social security, but also the Court’s decision to grant such effect would have a negative effect on the negotiating position of the Member States in the conclusion of similar agreements, not least a new one negotiated with Morocco at that time. Whilst summarily dismissed by the Court in that specific context,42 it is precisely this concern that appears to be addressed by the attachment to 38 Lenaerts views the assessment of the nature and broad logic of an international agreement as a test of direct applicability and, as such, an unavoidable requirement for direct effect: K Lenaerts, ‘Direct Applicability and Direct Effect of International Law in 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, Brill, 2014) 45, 46. It has also been argued that this assessment is one of justiciability: see I Cheyne, ‘International Instruments as a Source of Community Law’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 254, 255 et seq. 39 Case 152/84 Marshall v Southampton and South-West Hampshire Area Health Authority [1986] ECR 723. 40 Case C-18/90 Office national de l’emploi v Bahia Kziber [1991] ECR I-199. 41 C-58/93 Yousfi [1994] ECR I-1353. 42 This argument had also been dismissed by AG Tesauro who pointed out that ‘the Court’s interpretation cannot and may not be made to depend on the “approval” of the Member States’ (para 7 of his Opinion).

266 Enforcement of International Law in the EU Legal Order the direct effect test of the express requirement that the relevant agreement be capable, in principle, of conferring such effect. However, this function of the test signifies more than merely the Court’s willingness to interact with the executive and the legislature in the area of international law; it also acknowledges the constitutional implications of any assessment of direct effect in the area of provisions contained in agreements concluded by the Union. It should be recalled that the Court has been acutely aware of such implications even on the internal plane. When asked to extend the direct effect of directives to relations between individuals, for instance, it declined on the basis of, amongst others, the following argument: The effect of extending that case-law to the sphere of relations between individuals would be to recognize a power in the Community to enact obligations for individuals with immediate effect, whereas it has competence to do so only where it is empowered to adopt regulations.43

This was a constitutional argument44 that determined the ways in which legally binding Community measures were allowed to penetrate the domestic legal orders. Similarly, the recognition that certain international rules, whilst legally binding, should not be granted unlimited ways of being enforced within the Union legal order is based on a constitutional premise related to the proper function of the judiciary and the scope for manoeuvre enjoyed by the executive and the legislature in international negotiations. This point becomes clearer in the context of the discussion of WTO rules. The recognition of the constitutional underpinnings of the application of direct effect renders the enforcement of international agreements a more nuanced exercise. Again, this is not unique in the area of external relations. The Court’s insistence that directives may not be horizontally directly effective has given rise to a considerable body of case-law seeking to consolidate and adjust the existing principles whilst introducing new ones. The incremental development of these principles and the subtlety of their interaction illustrate that the application of the principle of direct effect, far from being a straightforward exercise, is a long process requiring various adjustments in the light of factors subject to constant evolution. This process may be unpredictable. For instance, the judgment in Intertanko has attracted criticism, mainly because it appears to shield EU law from UNCLOS.45 Viewed from this angle, it appears to be in line with a trend which Mendez highlights in his empirical study of the interpretation of international agreements in the EU legal order. He shows that the Court is considerably more willing to enforce international agreements in actions where national, rather than EU, law is contested.46 He sets out cogently the ‘maximalist’ treaty enforcement against national law and explains the avoidance techniques upon which the Court relies when the legality of EU law is at stake. However, in relation to Intertanko, in particular, Denza argues that the Court’s reading of the provisions of UNCLOS was both careful and faithful and that, had it reached a different conclusion, it would have been accused of judicial activism.47 43

Case C-91/92 Faccini Dori v Recreb [1994] ECR I-3325, para 24. S Weatherill and P Beaumont, EU Law, 3rd edn (London, Penguin, 1999) 403. 45 See eg M Mendez, The Legal Effects of EU Agreements (Oxford, Oxford University Press, 2013) 273–81. 46 Ibid. 47 See E Denza, ‘A Note on Intertanko’ (2008) 33 European Law Review 870, 876. She also argues, more generally, that in dealing with international-law-based challenges of EU legislation, the Court acts as a domestic would: E Denza, ‘Placing the European Union in International Context: Legitimacy of the Case Law’ in 44

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It is still the case, however, that, if we discount WTO law (where the case-law is settled) and the association, cooperation and trade agreements (where direct enforcement is granted liberally), our sample for enforcing international agreements within the EU legal order is still small. Therefore, in order to assess the enforcement of international rules in the Union legal order, the focus should shift to understanding direct effect as part of a multidimensional enforcement system where there are alternative, indirect mechanisms of enforcement. The question, then, would be how all these mechanisms are applied by the judiciary and how they interact. These questions are as important as that about granting direct effect.

4. THE APPLICATION OF THE PRINCIPLE OF DIRECT EFFECT The Application of the Principle of Direct Effect

Once the nature and broad logic of an international agreement binding on the Union is deemed not to preclude the direct effect of its provisions, the question arises whether the specific provision relied upon by an individual is directly effective. This would be the case if it ‘contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’.48 It would also cover disputes between an individual and the state (vertical direct effect) as well as disputes between individuals (horizontal direct effect).49 Quite early on, the Court showed a willingness to interpret provisions of international agreements concluded by the Union as directly effective. This was the case, for instance, in Bresciani, with Article 2(1) of the Yaoundé Convention prohibiting charges of equivalent effect to quantitative restrictions. The obligation imposed under this provision was construed in strict terms: on the one hand, whilst the application of the prohibition could be subject to consultations within the Association Council at the request of an associated state, that was deemed to be irrelevant to the nature of the obligation imposed upon the Community, the latter having to comply with it automatically; on the other hand, Article 2(1) of the Convention referred expressly to the similar prohibition laid down in EU primary law (now Article 30 TFEU). This was read by the Court to imply that the nature of the obligation the Community had assumed towards the associated states was precisely the same as that which its Member States had assumed towards one another: since the latter was ‘specific and not subject to any implied or express reservation’, so was the former.50 A similar approach was adopted in Kupferberg to Article 21(1) of the FTA with Portugal. The purpose of the FTA was the establishment of ‘a system of free trade in which rules restricting commerce are eliminated in respect of virtually all trade in products originating in the territory of the parties’.51 As the main pillars of this system

M  Adams, H de Waele, J Meeusen and G Straetmans (eds), Judging Europe’s Judges (Oxford, Hart Publishing, 2013) 175. 48

Case 12/86 Meryem Demirel v Stadt Schwäbisch Gmünd [1987] ECR 3719, para 14. See Case C-438/00, Deutsher Handballbund eV v Maros Kolpak, [2003] ECR I-4135 (re Association Agreement with Slovakia); Case C-265/03 Igor Simutenko [2005] ECR I-2596 (re PCA with Russia); Joined Cases 7/10 and 9/10 Staatssecretaris van Justitie v Tayfun Kahveci and Osman Inan ECLI:EU:C:2012:180 (re Ankara Agreement). 50 n 20 above, para 25. 51 n 8 above, para 24. 49

268 Enforcement of International Law in the EU Legal Order referred to the abolition of customs duties and charges of an equivalent effect as well as quantitative restrictions and measures of an equivalent effect, the Court had no difficulty in viewing the prohibition on fiscal measures laid down in Article 21(1) of the Agreement as a necessary part of that system. Therefore, that provision imposes on the contracting parties an unconditional rule against discrimination in matters of taxation, which is dependent only on a finding that the products affected by a particular system of taxation are of like nature, and the limits of which are the direct consequence of the purpose of the Agreement. As such this provision may be applied by a court and thus produce direct effects throughout the Community.52

Following the clarifications of the conditions under which the principle of direct effect would be applied, a number of provisions of the FTAs were found to meet the relevant criteria. In Legros the Court held that the dock dues imposed upon all products imported into the French region of Réunion were contrary to the prohibition on charges of an equivalent effect to customs duties under both EC primary law as well as Article 6 of the FTA with Sweden, concluded in 1972.53 In Texaco the prohibition on internal fiscal measures discriminating, directly or indirectly, against imported products laid down in the FTA with Sweden was held to be directly effective.54 This was also the case with a similar prohibition in the FTA with Austria concluded in 1972.55 However, in Demirel the Court held that a number of the provisions laid down in the Association Agreement with Turkey, concluded in 1963, were not directly effective.56 The applicant before the referring court was the Turkish wife of a Turkish citizen who had been working in Germany for five years since the date he arrived there in order to join his family. She had returned to Germany in order to rejoin her family. However, her visa was valid only for the purposes of a visit and not for family reunification. Following its expiry, she was asked to leave the country or otherwise be expelled. The reason was that national law required a period of eight years of continuous and lawful residence for the right of family reunification to arise. Ms Demirel attacked this order, arguing that it violated a number of provisions of the Association Agreement: Article 12 provided that the contracting parties would be guided by the EC Treaty provisions on free movement of persons for the purpose of progressively securing free movement of workers between them; Article 36 of the Additional Protocol attached to the Agreement provided that freedom of movement would be secured in progressive stages on the basis of the principle set out in Article 12 of the Agreement and pursuant to Decisions adopted by the Association Council; Decision 1/80 of the Association Council prohibited the imposition of further restrictions on the conditions of access to employment on Turkish workers already integrated into the labour force of a Member State. The Court first identified the objective of the Association Agreement as a series of steps: first, to enable Turkey to strengthen its economy with aid from the Community, then to establish progressively a customs union and enable the alignment of economic policies on the basis of a transitional stage and, finally, the achieve the functioning of the 52

Ibid, para 26. Case C-163/90 Administration des Douanes et Droits Indirects v Leopold Legros and others [1992] ECR I-4625. 54 Joined Cases C-114/95 and C-115/95 Texaco A/S v Middelfaert Havn and others [1997] ECR I-4263. 55 Case C-312/91 Metalsa [1993] ECR I-3751. 56 n 48 above. 53

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customs union and close coordination of economic policies. To that effect, the Agreement set out an institutional structure, including the Association Council which was endowed with decision-making powers. The Court focused on the specific provisions which formed the subject-matter of the reference, and concluded that they could not be invoked by individuals before national courts because, far from being precise and unconditional, they were of a programmatic nature. This was the case even though the Agreement contained a clause (Article 7) equivalent in content and wording to the cooperation clause laid down in Article 10 EC (now Article 4(3) TEU). The Court pointed out that that provision does no more than impose on the contracting parties a general obligation to cooperate in order to achieve the aims of the Agreement and it cannot directly confer on individuals rights which are not already vested in them by other provisions of the Agreement.57

This point was brought home by the Court’s refusal to rule on whether the German measure contested before the referring court was in violation of the European Convention on Human Rights (ECHR): as the Association Council had not yet adopted any measures on family reunification, national measures regulating this issue were beyond the reach of Community law, hence rendering the applicability of the ECHR in this context a matter beyond the jurisdiction of the Court of Justice. It is noteworthy that the Court did not examine in great detail whether the first condition of its two-tier test was met, namely whether the Association Agreement with Turkey was capable of conferring rights upon individuals directly enforceable before national courts: there was a leap from outlining the objective and structure of the Agreement to the wording and context of the specific provisions invoked before the referring court. The Court seems to presume that the Agreement was potentially directly effective, a presumption all the more noteworthy in the light of the programmatic nature of the provisions mentioned in the judgment. This is sensible, as the institutional structures established by the Agreement ensure its dynamic development. In other words, the Agreement itself provides for the legal means to ensure that its programmatic content would be transformed into concrete rules. To rule out the possibility of producing direct effect would be tantamount to ignoring its raison d’être as the foundation for gradual integration between the parties. Indeed, the incremental development of the relationship provided for in the Agreement was inherent in its structure: Article 36 of the Protocol granting the Association Council exclusive powers to adopt detailed rules on the movement of workers, for instance, makes it clear that such powers are to be exercised ‘in accordance with political and economic considerations arising in particular out of the progressive establishment of the customs union and the alignment of economic policies’.58 In addition to FTAs and association agreements, direct effect has been granted liberally to cooperation agreements,59 and the agreements on free movement of persons with Switzerland.60 In Case C-366/10 Air Transport Association of America and Others (ATAA)

57

Ibid, para 24. On the effect of acts adopted by Association Councils, see section 5 below. 59 For instance, the Agreements with Morocco (Case C-18/90 Kziber [1991] ECR I-199; C-58/93 Yousfi [1994] ECR I-1353), Algeria (Case C-103/94 Krid [1995] ECR I-719; C-113/97 Babahenini [1998] ECR I-183) and Russia (Case C-265/03 Simutenko [2005] ECR I-2579). 60 See eg Case C-13/08 Erich Stamm and Anneliese Hauser [2008] ECR I-11087; Case C-70/09 Hengartner and Gasser v LAndesregierung Voralberg ECLI:EU:C:2010:430. 58

270 Enforcement of International Law in the EU Legal Order the Court held that EU law applying the Union’s gas emissions trading scheme to international aviation could be challenged in the light of the Open Skies Agreement with the United States.61 Not only was it binding on the Union, as the latter had concluded it,62 but it was also capable of being relied upon by airlines as its provisions were designed to apply directly to them, hence conferring upon them rights enforceable before courts. The specific provisions of the Open Skies Agreements relied upon before the referring court were also held to be unconditional and sufficiently precise. These included Article 7 requiring that aircrafts departing from or entering the territory of a contracting party comply with the rules of that party, Article 11 exempting from taxes, on the basis of reciprocity, the fuel load of an aircraft established in the United States, and Article 15(3) requiring that the parties follow the aviation environmental standards set out in the Chicago Convention. However, the Court concluded that that the EU measure did not violate the Agreement. It held that Article 7 of the Agreement is not violated as the Directive does not apply generally to aircrafts registered in third states that are flying over third states or the high seas—it only applies in cases where these aircrafts have chosen to depart from or land in an airport situated in a Member State. Article 11(1) and (2)(c) of the Agreement is not infringed because the emissions trading scheme does not impose a duty, tax, fee or charge on fuel consumption. Instead, it introduces a system aiming to improve environmental protection which does not link directly the quantity of fuel consumed by the aircraft and the financial burden on the airline. The actual cost for the latter depends on the number of allowances initially allocated to it and their market price when the purchase of additional allowances becomes necessary in order to cover the operator’s emissions. In fact, it may not be ruled out that the airline might even make a profit by assigning its surplus allowances for consideration. The Court concluded that: [U]nlike a duty, tax, fee or charge on fuel consumption, the scheme introduced by Directive 2003/87 as amended by Directive 2008/101, apart from the faxt that it is not intended to generate revenue for the public authorities, does not in any way enable the establishment, applying a basis of assessment and a rate defined in advance, of an mount that must be payable eper tonne of fuel consumed for all the flights carried out in a calendar year.63

Finally, the Court held that Article 15(3), read in conjunction with Articles 2 and 3(4), of the Agreement is not infringed either. On the one hand, it pointed out that at no point had it been established than the Union had violated an aviation environmental standard adopted by the ICAO. On the other hand, it held that the above provision did not prevent the parties from adopting measures would limit the volume of traffic, frequency or regularity of service, or the aircraft type operated by the airlines established in the territory of those parties, when such measures are linked to protection of the environment.64

The judgment in ATAA was controversial. Its implications as well as its specific policy context are examined in Section 9 below.

61

n 17 above. The measure applying the scheme was Dir 2008/101 [2009] OJ L8/3. Pursuant to Council Dec 2007/339 [2007] OJ L134/1 and Council Dec 2010/465 [2010] OJ L223/1 63 n 17 above, para 143 of the judgment. 64 Ibid, para 162. 62

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4.1 Issues of Interpretation of Directly Effective Provisions Once a provision of an international agreement has been held to be directly effective, questions about its interpretation by the Court of Justice arise: how broadly is the Court prepared to interpret the wording and context of such provisions? To what extent is it prepared to infuse the product of the international contractual actions of the Union with the constitutionalising qualities it had attributed to the other sources of EU law? To what extent is it prepared to draw upon provisions of primary and secondary EU law for inspiration in interpreting similarly worded provisions of international agreements? These questions arose in Polydor, a preliminary reference from the Court of Appeal about the application and interpretation of the FTA with Portugal.65 The dispute before the referring court arose because the proprietor of the copyright of recordings by the group the Bee Gees had relied upon national law in order to exercise their rights to exclusive commercial exploitation and to prevent the parallel import of recordings from Portugal. As regards intra-Community trade, the Court had held that whilst the existence of intellectual property rights could justify a deviation from the rules on free movement of goods, their exercise by their proprietor would constitute a measure of equivalent effect to a quantitative restriction if it targeted imports of products from another Member State where they had been put on the market by the proprietor himself or with his consent.66 As the imported recordings had originated in Portugal, the question was whether the exercise of the exclusive rights granted under national law to the copyright proprietor was consistent with the FTA governing trade relations between the Community and Portugal. The Agreement provided for the abolition of quantitative restrictions and measures of equivalent effect on imports; it also introduced an exception enabling the parties to protect a number of public interests, including industrial and commercial property, albeit not in a way that would amount to arbitrary discrimination or a disguised restriction on trade.67 In order to decide whether the transposition of the Court’s case-law on free movement of goods would be appropriate regarding the Agreement in question, the Court set out to assess its object, purpose and wording. The object of the Agreement was to consolidate and to extend the economic relations existing between the Community and Portugal and to ensure, with due regard for fair conditions of competition, the harmonious development of their commerce for the purpose of contributing to the work of constructing Europe.68

In order to pursue this objective, a set of provisions was introduced in order to liberalise trade in goods: customs duties and charges of equivalent effect were to be abolished along with quantitative restrictions and measures of equivalent effect; fiscal measures amounting to discrimination and all restrictions on payments relating to trade in goods were prohibited; provisions on competition law, state aid and anti-dumping were included; and a joint committee responsible for the administration and proper implementation of the Agreement was established. 65 Case 270/80 Polydor Ltd and RSO Records Inc v Harlequin Records Shops Ltd and Simons Records Lmd [1982] ECR 329. 66 See eg Case 16/74 Centrafarm BV et Adriaan de Peijper v Winthrop BV [1974] ECR 1183. 67 See Arts 14(2) and 23 of the FTA, respectively. 68 n 65 above, para 10 of the judgment referring to the preamble to the FTA.

272 Enforcement of International Law in the EU Legal Order The Court then proceeded to examine the wording of the relevant FTA provisions which was similar to that of the prohibition laid down in Article 28 EC (now Article 34 TFEU) and the exceptional clause of Article 30 EC (now Article 36 TFEU). However, such similarity was deemed ‘not a sufficient reason for transposing to the provisions of the Agreement’ the Court’s case-law on the relationship between intellectual property rights and free movement of goods as their scope had to be assessed in different contexts: the relevant case-law on free movement of goods had developed in the light of the Community’s objectives and activities as defined in the  … EC Treaty [which]  … by establishing a common market and progressively approximating the economic policies of the Member States, seeks to unite national markets into a single market having the characteristics of a domestic market.69

On the other hand, the FTA with Portugal, ‘although it makes provision for the unconditional abolition of certain restrictions on trade between the Community and Portugal, such as quantitative restrictions and measures having equivalent effect, it does not have the same purpose as the EEC Treaty’.70 The Court went on to argue that that conclusion was supported by the absence, within the framework set up by the FTA, of the significant legal tools the EC has at its disposal in order to ensure the uniform application of EC law and its progressive harmonisation. The starting point for the Court’s interpretation of the prohibition on measures having equivalent effect to quantitative restrictions laid down in an FTA is sensible: as legal rules are interpreted in the light of their context, similarly worded rules cannot possibly be dissociated from the set of provisions of which they form part. However, the judgment in Polydor provides no firm guidance on the conditions that need to be met for such similarly worded provisions to be interpreted in a similar manner. The Court underlines the distinct objectives of the Treaty and the unique legal machinery available to the EU institutions to pursue them: is this intended to be a precondition for the interpretation given to EU provisions to apply to other treaties? In other words, is this a normative standard that ought to be met before similarly worded provisions are interpreted in the light of the Treaties? The relevance of the difference between the objectives pursued by an FTA and the EC Treaty was also mentioned in Kupferberg. In that judgment the Court pointed out that the interpretation given to the prohibition on discriminatory taxation in Article 90 EC (now Article 110 TFEU) could not be applied by way of simple analogy to the equivalent provision of the FTA with Portugal.71 The same conclusion was later reached in Metalsa in respect of the analogous prohibition contained in the FTA with Austria: whilst ex Article 90 EC (now Article 110 TFEU) had been interpreted as prohibiting the penalisation of offences concerning the payment of VAT on imports more severely than those concerning the payment of VAT on domestic products, no such prohibition could be inferred on imports from Austria.72 In the light of the analysis so far, a number of provisions of FTAs (on measures of equivalent effect to quantitative restrictions, charges of equivalent effect to customs duties and discriminatory taxation) were given a different interpretation from that of the 69

Ibid, para 16. Ibid, para 18. 71 See n 8 above, para 30. 72 See n 55 above. 70

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similar provisions laid down in the Union’s primary rules. However, in other cases on the interpretation of FTAs, the Court reached a different conclusion. In the context of the FTA with Sweden, the French government relied upon the judgment in Polydor and argued in Legros that dock dues imposed upon all products imported into the French region of Réunion, whilst contrary to the Treaty’s prohibition on measures of equivalent effect to customs duties, were not contrary to the analogous prohibition of the FTA.73 This argument was rejected by the Court, which stressed the central role of the prohibition on charges of equivalent effect to customs duties in the context of the objective of eliminating obstacles to trade. It was in the light of this consideration that it concluded: [T]he agreement would  … be deprived of much of its effectiveness if the term ‘charge having equivalent effect’ contained in Article 6 of the agreement were to be interpreted as having a more limited scope than the same term appearing in the [EC] Treaty.74

In Eurim-Pharm questions about the interpretation of the FTA with Austria were referred by a German court.75 The applicant had bought consignments of a medicine in Austria and had sought to import it into Germany. However, the Federal Health Authority did not authorise the placing of the product in circulation on the German market on the ground that significant information such as the method of its manufacture, its length of storage and the quality control methods used had not been established. The applicant challenged that decision, arguing that it was contrary to the FTA with Austria, in particular Article 13 which prohibited quantitative restrictions and measures of equivalent effect, and Article 20 which allowed the parties to deviate from Article 13 in order to protect certain public interests which included intellectual property rights. What was interesting about this case was the fact that the Federal Authority had already authorised the placing of the medicine in question on the market by the trade mark owner; it was the placing of the parallel imported medicine in the market that was not authorised. The substantive point in question had already been addressed in the judgment in De Peijper, where it had been held that a national rule rendering the grant of an authorisation to a parallel importer of medicines subject to the production of documents which had already been supplied to the competent health authority by the manufacturer of that medicine constituted a measure of an equivalent effect to a quantitative restriction on imports which was not necessary in order to protect the life and health of humans.76 The question was whether that interpretation could be applied in the context of an FTA. The British and Italian governments, along with the Commission, argued before the Court for a negative response in the light of the absence of any provision in the Agreement for legislative harmonisation or administrative cooperation in the pharmaceutical sector. That argument was rejected: Even on the assumption that the Court’s case-law on Articles [28] and [30] of the Treaty cannot be applied to the interpretation of Articles 13 and 20 of the Agreement, it is sufficient to note that, since the German health authority already possessed all the necessary information about the medicine and there was no dispute that the imported medicine and the authorized

73

See n 53 above. Ibid, para 26. 75 Case C-207/91 Eurim-Pharm GmbH v Bundesgesundheitsaut [1993] ECR I-372. 76 Case 104/75 De Peijper [1976] ECR 613. 74

274 Enforcement of International Law in the EU Legal Order medicine were identical, the authority had no need to secure cooperation of any kind from the Austrian authorities.77

It was then concluded that the interpretation already given to Articles 28 and 30 EC (now Articles 34 and 36 TFEU) in De Peijper should also apply to the equivalent provisions of the FTA with Austria for, otherwise, the latter would be deprived ‘of much of their effectiveness’.78 What emerges is an apparent conflict: on the one hand, in cases such as Polydor, Kupferberg and Metalsa, the Court denies any automatic extension of the interpretation of EC Treaty prohibitions in the area of free movement of goods to similarly or identically worded provisions of FTAs; on the other hand, in cases such as Eurim-Pharm and Legros, the Court suggests that the effectiveness of prohibitions set out in the latter would be undermined if the liberal interpretation of the analogous EU prohibitions were not transposed. Are these cases inconsistent? The answer should be negative. These judgments, all delivered under the preliminary reference procedure, should be viewed within their specific factual and legal context. In Polydor, for instance, it would be very difficult to envisage any other answer to the question of the transposition to the FTA of the case-law on exhaustion of intellectual property rights. It is recalled that the definition of the territorial scope of that principle has given rise to considerable controversy at various levels: in the negotiations leading to the adoption of the Trade Marks Directive,79 for instance, the idea of introducing the principle of international exhaustion was rejected; the provision for EEA-wide exhaustion has been interpreted by the Court as introducing complete harmonisation in the area, hence enabling trade mark owners in a Member State to rely upon their right to object to parallel imports of a trademarked product from a non-EEA state.80 For the Court to have ruled otherwise in Polydor would have been tantamount to extending, as early as in 1982, the scope of the principle of exhaustion beyond the reach of what would be considered necessary by the Community legislature twenty years later. Not to have done so has two advantages: first, it acknowledges the distinct origin and, hence, meaning of the provisions laid down in international agreements; secondly, it illustrates a certain degree of deferment to the discretion enjoyed by the executive and the legislature in the area of external relations. It is one thing for the Court to enhance the penetration of national legal orders by a dynamic reading of the rules contained in primary law and quite another to extend this reading to the international obligations assumed by the Union. With hindsight, Polydor contains an element of what would become the cornerstone of the Court’s approach to the WTO rules after more than two decades. The caution of the Court is all the more understandable in the light of the number of agreements concluded by the Union with third countries. In fact, the caution underpinning the Court’s approach to the application of the FTA prohibition on measures of equivalent effect to quantitative restrictions goes even further than limiting the material scope of that prohibition: the judgment appears to suggest a presumption of legality of the national deviation from the prohibition on measures of equivalent effect to 77

Para 24 of the judgment in Eurim-Pharm, n 75 above. n 76 above, para 25. 79 First Council Dir 89/104/EEC to approximate the laws of the Member States relating to trade marks [1989] OJ L40/1. 80 See Case C-355/96 Silhouette International Schmied GmbH & Co KG v Hartlauer Handelsgesellschaft GmbH [1998] ECR I-4799 as confirmed and refined in Joined Cases C-414 and 416/99 Davidoff and Levi Straus [2001] ECR I-8691. 78

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quantitative restrictions. This is not merely dissimilar to the construction of the exception laid down in Article 34 TFEU; it is quite the opposite of the construction of any exceptional clause contained in primary and secondary Union legislation. Normally, the Court is keen to point out that the exceptions to the principle of free movement should be interpreted restrictively: in relation to Article 34 TFEU, for instance, the Court has made it clear quite early on that the social interests set out therein do not reserve the relevant areas of activity to the exclusive competence of the Member States; instead, the latter may deviate from the principle of free movement in order to protect those interests only if, in doing so, certain standards of necessity and proportionality are met.81 As to the conclusion in Legros, it is clearly explained within its specific context: had the notion of charges of equivalent effect to customs duties been interpreted as restrictively as the French government had suggested, there would have been nothing to prevent the Member States from establishing internal customs borders so as to levy similar charges upon imports from third states with which the Community had concluded an FTA. In a similar vein, the ruling in Eurim-Pharm is not inconsistent with the conclusion in Polydor: as the judgment was delivered in response to a reference from a German court, the Court of Justice had established that the marketing of the medicine in question had been authorised in Germany and that the relevant authorities had been in possession of all the necessary information about its production, manufacture and storage; ‘in those circumstances’,82 to have sanctioned the prohibition on the authorised marketing of the same product simply because it had been imported from Austria would indeed have been unduly formalistic.

4.2 The Significance of the Context It was argued above that the specific factual and legal context of the cases brought before the Court of Justice may explain the potential divergence of interpretation of provisions of international agreements whose wording is similar to or even identical with provisions of the Union’s primary rules. Such divergence may also be explained as a matter of principle. To point out the conception of the Union as a ‘new legal order of international law’ as the fundamental factor underpinning all aspects of interpretation of EU law is to state the obvious; so is to identify its links to the interconnecting nature of the various supranational and intergovernmental features of this system and the interaction between national and Union actors.83 In rendering the specific context within which a provision of an international agreement is set central to its interpretation, the Court acknowledges the specific challenges that the enforcement of international rules in the Union legal order must meet. This is apparent in the Court’s overall approach: on the one hand, not all international agreements concluded by the Union are presumed to be capable of being directly justiciable before the EU courts; on the other hand, even those which are may not necessarily be interpreted in a manner analogous to that of EU primary and secondary law irrespective of whether their wording is similar or identical.

81

See and Case 35/76 Simmenthal v Minister for Finance [1976] ECR 1871. Para 25 of the judgment in Case C-207/91, n 75 above. 83 See the early analysis in JHH Weiler, ‘The Community System: the Dual Character of Supranationalism’ (1981) 1 Yearbook of European Law 267. 82

276 Enforcement of International Law in the EU Legal Order Viewed from this angle, the overall interpretation of the Court is consistent. An interesting case in point is its approach to agreements providing for a more integrated relationship between the Union and third countries or groups of countries. The EU is competent to conclude them pursuant to Article 217 TFEU which provides as follows: ‘The Union may conclude with one or more States or international organisations agreements establishing an association involving reciprocal rights and obligations, common action and special procedure.’ The issue of the interpretation of such an agreement with Greece concluded in 1961 was raised before the Court in Pabst in the year in which Greece joined the then EEC.84 Imports of spirits from Greece had been subject to a consumption tax which was deemed by the importer to be contrary to, amongst other provisions, Article 53(1) of the Athens Agreement. Having concluded that the charge in question constituted a tax measure favouring German producers, hence being contrary to the directly effective rule of Article 90 EC (now Article 110 TFEU), the Court went on to examine whether the similarly worded provision of the Association Agreement with Greece had been violated. It answered this in the affirmative, pointing out that: that provision, the wording of which is similar to that of Article [110] of the Treaty, fulfils, within the framework of the association between the Community and Greece, the same function as that of Article [110]. It forms part of a group of provisions the purpose of which was to prepare for the entry of Greece into the Community by the establishment of a customs union, by the harmonization of agricultural policies, by the introduction of freedom of movement for workers and by other measures for the gradual adjustment to the requirements of Community law.85

Following this assessment, the Court had no difficulty in transposing its interpretation of the Treaty prohibition on discriminatory taxation to that laid down in the Agreement with Greece; the latter provision was also declared directly effective from the expiry of the period within which all conflicting measures ought to have been abolished. It is noteworthy that the judgment in Pabst was delivered only three months after that in Polydor. What seemed to differentiate the two agreements was the ultimate objective of membership which was served by a number of policies referred to by the Court. The liberal reliance upon direct effect and the significance of the context for the interpretation of international agreements may lead to quite bold judgments. A case in point is Case C-228/06 Soysal about the establishment and services standstill clause in the Additional Protocol to the Ankara Agreement.86 The Court confirmed previous case-law on its direct effect,87 and held that German legislation applying the Union’s visa rules was too restrictive and, therefore, contrary to the standstill clause. The judgment is interesting both for the bold manner in which it interpreted EU law in the light of the Ankara Agreement and its considerable practical implications for Member States.88 The establishment of an association between the Union and its Member States and a third country or group of countries by no means entails automatically membership 84

Case 17/81 Pabst & Richarz KG v Hauptzollamt Oldenburg [1982] ECR 1331. Ibid, para 26 of the judgment. 86 Case C-228/06 Soysal [2009] ECR I-1031. 87 See Case C-37/98 Savas [2000] ECR I-2927; Joined Cases C-317/01 and C-369/01 Abatay [2003] ECR I-12301; and Case C-16/05 Tum and Dari [2007] ECR I-7415l. 88 See G Kaya, ‘Free Movement of Turkish Citizens after the Soysal Judgment’ in F Cengiz and L Hoffmann (eds), Turkey and the European Union—Facing New Challenges and Opportunities (London, Routledge, 2014) 121. 85

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as a matter of course. The association with the African, Caribbean and Pacific (ACP) countries, for instance, denotes the special nature of the relationship between the parties without preparing the Union’s partners for membership. In Razanatsiba, where issues regarding the interpretation of the Lomé Convention were referred to the Court of Justice, the latter’s case-law on establishment and services was deemed non-applicable to Article 62 of the Convention which prohibited discriminatory treatment.89 That provision also absolved a party to the Convention from the obligation imposed thereunder towards the nationals or firms of another party unable to provide non-discriminatory treatment in a given area. The question referred under the preliminary reference procedure was whether Article 62 of the Convention conferred upon an individual of Madagascan nationality the right to establish himself in the territory of a Member State without any condition as to nationality. This would entail the transposition to the Lomé Convention of the judgment in Reyners on the right of residence accorded to Union citizens wishing to establish themselves in another Member State.90 The answer provided by the Court was negative: the wording of Article 62 of the Convention did not oblige the parties to the Convention to give the nationals of the other parties treatment identical to that given to their own nationals. Furthermore, it also allowed a Member State party to enter into arrangements which would reserve more favourable treatment to the nationals of one ACP country in relation to specific activities provided that such treatment resulted from an international agreement comprising reciprocal rights and advantages. The acknowledgement of the central role that the context of an international rule binding on the Union plays in its interpretation has one drawback, namely uncertainty. It is not always easy to determine how this context is to be approached by the Court. And yet this, in fact, may be positive: as the context within which international agreements operate evolves, so should the judiciary be free to take any developments into account when interpreting international rules. In other words, the approach of the Court appears sufficiently flexible to adjust to the evolving legal and political circumstances surrounding the application of international agreements. This need for flexibility has two dimensions. The first is internal and is related to the manner in which the Union implements its international commitments. As the state of EU law is in flux, with the effect of redefining the nature of competence enjoyed by the Union and that retained by the Member States, so should the assessment of the effects of international commitments be left inherently flexible.91 The second dimension is external and is related to the evolving international context within which the Union may be called upon to comply with international obligations. A case in point are the agreements the Union has concluded with its neighbours: the Partnership and Cooperation Agreements with former Soviet Republics (succeeded by Association Agreements in the case of Moldova, Ukraine and Georgia), and the EuroMediterranean Agreements with states in northern Africa and the Middle East. Such Agreements are now applied in a new policy framework, as they are part of increasingly 89

Case 65/77 Jean Razanatsiba [1977] ECR 2229. Case 2/74 Reyners v Belgian State [1974] ECR 631. 91 In Kupferberg, n 8 above, the Court pointed out that ‘the measures needed to implement the provisions of an agreement concluded by the Community are to be adopted, according to the state of Community law for the time being in the areas affected by the provisions of the agreement, either by the Community institutions or by the Member States. That is particularly true of agreements such as those concerning free trade where the obligations entered into extend to many areas of a very diverse nature’ (para 12). 90

278 Enforcement of International Law in the EU Legal Order structured and multilayered forms of cooperation such as the Eastern Partnership and the European Neighbourhood Policy. Similarly, the Stabilisation and Association Agreements with the Western Balkans are now applied in the context of their pre-accession process.92 In other words, the international rules concluded by the Union and which the Court is asked to interpret often operate in a constantly evolving legal and political context. Whilst mindful of the discretion enjoyed by the executive and legislature in international negotiations, the Court needs to be prepared to take this context into account. This is not a question of non-legally binding developments determining the interpretation of legally binding rules;93 it is rather one of flexibility that the system of interpreting international rules may be prepared to exhibit under certain circumstances.

5. DIRECT EFFECT OF ACTS BY BODIES ESTABLISHED UNDER ASSOCIATION AGREEMENTS Direct Effect of Acts by Bodies Established under Association Agreements

The diversity of the contractual relations between the Union and the rest of the world and the sophistication of their development are illustrated by the various mechanisms established under some agreements the aim of which is the management of their application and development of the relationship between the contracting parties.94 When these mechanisms involve the establishment of bilateral bodies with decision-making powers, a number of important questions are raised about the effects of their acts within the Union legal order: can the Court’s case-law treating international agreements concluded by the Union as an integral part of EU law apply to them? Can they grant rights which individuals may enforce before national courts? These questions were addressed in the context of the Ankara Agreement, ie the Association Agreement concluded with Turkey. It is recalled that the provisions of the Agreement on free movement of persons were deemed in Demirel to be programmatic in nature and, therefore, not directly effective.95 In Sevince the Court was asked to interpret a number of decisions of the Association Council established under the Agreement.96 The applicant was a Turkish citizen whose application for an extension of his residence permit had been turned down by the Dutch authorities on the ground that the family circumstances which had justified the grant of the permit no longer existed. He challenged that decision as contrary to two Decisions of the Association Council: Decision 2/76 provided that a Turkish worker employed legally in a Member State for five years would enjoy free access to any paid employment of his choice;97 Decision 1/80 provided that a Turkish worker duly registered as belonging to the labour force of a Member State would enjoy free access to any paid employment in that state after four years’ legal 92

See the analysis in Chapter 11. See M Hedemann-Robinson, ‘An Overview of Recent Legal Developments at Community Level in Relation to Third Country Nationals Resident within the European Union, with Particular Reference to the Case Law of the European Court of Justice’ (2001) 38 Common Market Law Review 525, 560–61. 94 See N Lavranos, Decisions of International Organizations in the European and Domestic Legal Orders of Selected EU Member States (Groningen, Europa Law Publishing, 2004); and B Martenczuk, ‘Decisions of Bodies Established by International Agreements and the Community Legal Order’ in V Kronenberger, The European Union and the International Legal Order: Discord or Harmony? (The Hague, TMC Asser Press, 2001) 141. 95 Case C-12/86 Demirel, n 48 above. 96 Case C-192/89 SZ Sevince v Staatssecretaris van Justitie [1990] ECR I-3461. 97 In Art 2(1)(b). 93

Direct Effect of Acts by Bodies Established under Association Agreements 279 employment.98 Having ruled that the interpretation of these provisions fell within its jurisdiction under the preliminary reference procedure, the Court ruled that they could be directly effective provided that the conditions applicable to the direct effect of international agreements were met. The Court, then, proceeded to find the provisions invoked before the referring court directly effective. Their wording was clear, precise and unconditional and provided for the right of a Turkish worker, after a number of years’ legal employment, to enjoy free access to any paid employment, but also their nature and purpose. They also formed part of Decisions 2/76 and 1/80 which had been adopted precisely in order to give flesh to the programmatic aims of Article 12 of the Agreement and Article 36 of the Additional Protocol. The Court applied the conditions of direct effect as liberally as it had down in cases of provisions of international agreements. A number of features of the relevant Association Council Decisions which might have appeared to rule out direct effect were considered irrelevant. First, the requirement under Decision 1/80 that the procedures for applying the rights conferred on Turkish workers be established under national law was deemed irrelevant: such provisions merely clarify the obligation of the Member States to take such administrative measures as may be necessary for the implementation of those provisions, without empowering the Member States to make conditional or restrict the application of the precise and unconditional right which the decisions of the Council of Association grant to Turkish workers.99

Secondly, the provisions of Decisions 12/76 and 1/80 requiring the parties, each for its own part, to take any measures necessary for the purpose of implementing the decisions were also irrelevant to the direct effect of the Decisions: they were seen as ‘merely lay[ing] emphasis on the obligation to implement in good faith an international agreement, an obligation which, moreover, is referred to in Article 7 of the Agreement itself ’.100 Thirdly, the fact the Decisions had not been published, whilst possibly preventing their direct effect horizontally, did not affect the right of private individuals relying upon them before state authorities. Fourthly, the existence of safeguard clauses enabling the parties to derogate from the provisions of the Decisions did not affect the latter’s direct effect as they were of limited scope, hence applying only to very specific situations. This liberal construction of direct effect of provisions contained in Association Council Decisions is similar to that underpinning the judgment in Kupferberg: both cases provided a list of legal features which were considered incapable of undermining the conferment of rights upon individuals by either an international agreement or a decision of body adopted thereunder. Interestingly enough, whilst the applicant before the referring court was allowed to rely upon Decisions 2/76 and 1/80 of the Association Council, the substance of those Decisions turned out to be of no help: he could not be considered to be legally employed during the period within which his appeal was examined, as that would have enabled him to contrive to fulfil the conditions laid down in the Decisions relied on. There is a degree of internal logic in the approach of the Court to the Association

98

In Art 6(1) third indent. n 96 above, para 22. 100 Ibid, para 23. 99

280 Enforcement of International Law in the EU Legal Order Agreement with Turkey: whilst its provisions on free movement of workers were viewed as of a programmatic nature and, hence, in themselves incapable of producing direct effect (Demirel), the Decisions adopted by the Association Council implementing them did have such effects (Sevince). As the Court pointed out in the latter judgment: [T]he fact that the  … provisions of the Agreement and the Additional Protocol essentially set out a programme does not prevent the decisions of the Council of Association which give effect in specific respects to the programmes envisaged in the Agreement from having direct effect.101

Over the years, the Court has ruled on a number of provisions laid down in decisions adopted by the EU–Turkey Association Council. In relation to the rights of third-country nationals resident in a Member State, the Association Council adopted Decision 1/76 which was applicable for the first stage of association provided by the Agreement. Following that, Decisions 1/80 and 3/80 were adopted, the former on the development of the Association and the latter on the application of the social security schemes of the Member States to Turkish workers and their families. As the effects of Decision 1/80 were outlined above, the interpretation of Decision 3/80 on social security is indicative of the Court’s approach. On the one hand, it was pointed out Taflan-Met that the provision of that Decision setting out the principle of aggregation for workers employed in more than one Member State could not be applied in so far as supplementary implementing measures had not been adopted by the Association Council.102 This was the case despite the fact that ‘the binding effect of decisions of the Association Council cannot depend on whether implementing measures have in fact been adopted by the Contracting Parties’.103 On the other hand, the denial of direct effect to a number of provisions of Decision 3/80 by no means ruled out the direct effect of the non-discrimination clause laid down in Decision 3/80.104 The practical implications of these rulings for the regulation of the very sensitive sector of social security were taken into account by the Court: its ruling on the direct effect of the above clause was expressly confined to future applications and proceedings initiated prior to the date of the delivery of the judgment.105

6. DIRECT EFFECT OF WTO LAW Direct Effect of WTO Law

The Court’s approach to the WTO law is worthy of detailed examination. This section will outline, first, the Court’s approach to the WTO’s precursor, ie the GATT, and then it will focus on WTO law.

6.1 GATT It is recalled that, in International Fruit Company, the Court held that the GATT was not capable of conferring enforceable rights upon individuals. This was because of the flexibility of its provisions. This rationale was applied by the Court in a wide range of 101

Ibid, para 21. Case C-277/94 Taflan-Met [1996] ECR I-4085, para 37. 103 Ibid, para 20. 104 Case C-262/96 Sürül [1999] ECR I-2685. 105 In Art 3 of the Decision: ibid, para 109 et seq. 102

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circumstances. It was applied in actions brought by individuals before national courts seeking to challenge indirectly the legality of Community measures, the dispute in International Fruit Company being a case in point.106 It was also applied to challenges brought by individuals against national legislation. This was the case in SIOT where an Italian company challenged Italian legislation levying charges on unloading and loading of goods in specified ports as contrary to Article V GATT.107 The most controversial case of the Court’s approach to the direct effect of the GATT was the extension of its conditions to actions brought by Member States challenging the legality of EU law. This became apparent when Germany challenged the Community regime on imports of bananas in 1993 in Case C- 280/93.108 This set of rules was introduced by Regulation 404/93 which set up a common market organisation.109 The main objective of this system was to protect the limited production of bananas within the Community territory and, mainly, to ensure the protection afforded to imports of bananas by ACP countries pursuant to the Lomé Convention. In order to achieve this objective, a complex system of annual tariff quotas was introduced which became accessible to importers on the basis of annual licences. This system was controversial: on the one hand, imports from Latin American countries in excess of the quota allocated were subject to very high tariffs, whereas imports from ACP countries deemed to be in accordance with the volume of trade prior to the adoption of this system were to be imported duty free; on the other hand, the allocation of quotas favoured importers of ACP bananas to a very great extent. Germany, which had been outvoted in the Council, was particularly hit by this system as the consumption of bananas in its territory relied exclusively on imports. In fact, prior to the adoption of the contested regime, Germany had been entitled to import an annual quota of bananas from third countries free of customs duties pursuant to a special arrangement.110 Furthermore, the majority of its importers were trading in bananas from non-ACP countries. It was in that context that Germany brought an annulment action against the Council. It claimed that the contested measure violated, amongst others, the GATT. In essence, Germany argued that the failure of the agreement to confer rights enforceable by individuals should not prevent the Court from assessing the validity of a secondary EU measure in the light of that agreement in an action brought by a Member State. This position was rejected by the Court, which, having repeated the main characteristics of the GATT as set out in International Fruit Company, concluded as follows: Those features of GATT, from which the Court concluded that an individual within the Community cannot invoke it in a court to challenge the lawfulness of a Community act, also 106

See also Case 9/73 Carl Schlüter v Hauptzollamt Lörrach [1973] ECR 1135. See Case 266/81 SIOT v Ministero delle Finanze [1973] ECR 731. See also 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) [1983] ECR 801; and Case C-469/93 Amministrazione delle Finanze dello Stato v Chiquita Italia [1995] ECR I-4533. 108 Case C-280/93 Germany v Council [1994] ECR I-4973. For an account of the bananas saga, see E Vranes, ‘From Bananas I to the 2001 Bananas Settlement: A Factual and Procedural Analysis of the WTO Proceedings’ in F Breuss, S Griller and E Vranes (eds), The Banana Dispute—An Economic and Legal Analysis (Vienna/New York: Springer-Verlag, 2003) 1. 109 [1993] OJ L47/1. 110 This arrangement was provided under Art 136 of the original Treaty of Rome and was annexed to the Implementing Convention on the Association of the Overseas Countries and Territories with the Community. 107

282 Enforcement of International Law in the EU Legal Order preclude the Court from taking provisions of GATT into consideration to assess the lawfulness of a regulation in an action brought by a Member State.111

Despite the express reference to the legal position of individuals, it is not accurate to say that the ruling in Germany v Council made the direct effect of the GATT, or rather the absence thereof, a condition for reliance upon it by a Member State in annulment proceedings: what it did hold was that the reasons which prevented GATT provisions from being directly effective in actions by individuals against Community measures also prevented Member States from attempting similar actions. This parallelism is based on the broad construction of the principle of direct applicability proper.112 Viewed from this angle, in rejecting the action brought by the German government, the Court identified a thread which brings together different aspects of the effects of the GATT within the Community legal order, namely the legal position of individuals and Member States. This mitigates the implications of the two-tier test for the application of direct effect of international agreements in so far as both individuals and Member States are precluded from relying upon them in order to challenge Community measures. It also brings consistency in the system of the enforcement of international obligations undertaken by the Community. In the context of the WTO, Eeckhout views it as ‘eminently defensible’ as the identity of the claimant should not be relevant to the Court’s conclusion on the effect of WTO rules.113 It could be argued that, in this instance, consistency is brought by the Court because of the specific features of the GATT, and subsequently the WTO, rather than as a matter of principle. After all, the identity of the claimant is generally relevant to the effectiveness of their claims: the variation in the locus standi rules under Article 263 TFEU, for instance, does acknowledge variations in the effect of legal claims brought before the EU Courts. This is not merely a procedural point, as the divergence illustrated by the different classes of applicants under the annulment procedure reflects a divergence of substantive interests: the interest of privileged applicants in the legality of any Union measure is presumed by their very status.114 The judgment in Germany v Council highlighted the limits on the enforcement of the GATT within the Community legal order: in principle, its provisions could not be relied upon by either individuals or Member States in order to challenge the validity of Community measures in either national courts or the European Court. This approach was subject to criticism on various grounds. Even prior to the adoption of the WTO agreements, the emphasis on the incomplete legal nature of the GATT was seen as legally indefensible.115 It was argued, for instance, that many provisions laid down in the GATT were more precise and unconditional than certain vague and conditional rules of the EC Treaty, Article 28 EC (now Article 34 TFEU) being such an example.116 In dismissing 111 112

n 108 above, para 109. See also the Opinion of AG Mayras in Joined Cases 21 to 24/72 International Fruit Company, n 14 above,

1240. 113

P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press) 295. However, see the criticism by Bronckers in PJ Kuijper and M Bronckers, ‘WTO Law in the European Court of Justice’ (2005) 42 Common Market Law Review 1313, 1343–54. 115 See E-U Petersmann, ‘The EEC as a GATT Member—Legal Conflicts Between GATT Law and European Community Law’ in M Hilf, FG Jacobs and E-U Petersmann (eds), The European Community and GATT (The Hague, Kluwer, 1989) 23, 58–59. 116 E-U Petersmann, ‘The GATT Dispute Settlement System as an Instrument of the Foreign Trade Policy of the EC’ in N Emiliou and D O’Keeffe (eds), The European Union and World Trade Law (Chichester, Wiley, 1996) 253, 275. 114

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every single basis of what was seen as ‘an extremely compelling attempt’ to use the GATT as ‘a kind of economic constitution’,117 the Court was viewed as engaging in a process of judicial protectionism which undermined the ability of international law to penetrate the Community legal order. In addition, the identification of the legal position of Member States with that of individuals was criticised as legally problematic.118

6.2 The Tighter System of WTO Law The establishment of the WTO, its distinctly developed character in relation to the GATT and the conclusion of a number of agreements within its framework appeared to change the context of the application of the principles set out in the above section. The adoption of the WTO Agreements in 1994 following the Marrakesh Round brought the issue of direct effect back to the centre of EU international relations law. This was due to the considerable juridification of this new framework for multilateral trade negotiations.119 The strongest indication of the process of legalisation of the WTO system were its dispute-settlement rules which became applicable on 1 January 1995. Laid down in the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), a system which drew upon and further developed the pre-existing GATT mechanism was established. As the nature and modalities of this system are central to the Court’s approach to the effect of WTO rules under EU law, they are worth considering in brief.120 Prior to reliance upon the detailed procedures set out in DSU, a WTO Member must enter into ‘good faith’ consultations with the Members with which it is in dispute.121 If the dispute is not settled within 60 days, or 20 days in cases of urgency, the complaining WTO Member may request that the Dispute Settlement Body (DSB) establish a panel to examine the dispute. It is the General Council of the WTO which serves as the DSB, albeit operating under its own chairman and pursuant to distinct procedures. The panel, consisting of individuals appointed from a list maintained by the General Council Secretariat, submits first a draft and then an interim report on which the parties in dispute may comment. Its final report must be adopted by the DSB, unless the latter decides by consensus not to do so.122 The report may be challenged on appeal by any party to the dispute before the Appellate Body which, within a period not exceeding 90 days, has the power to uphold, modify or reverse the legal reasoning and conclusions of the Panel report.123 The Appellate Body’s report must be adopted by the DSB, unless the latter decides by consensus not to do so. Under Article 19(1) DSU, ‘where a panel or the Appellate Body concludes that a 117

S Dillon, International Trade and Economic Law and the European Union (Oxford, Hart Publishing, 2002)

378. 118 See C Kaddous, Le droit des relations extérieures dans la jurisprudence de la Cour de justice des Communautés européennes (Basel/Brussels: Helbing & Lichtenhahn/Bruylant, 1998) 374. 119 See JHH Weiler, ‘The Rule of Lawyers and the Ethos of Diplomats: Reflections on WTO Dispute Settlement’ in RB Porter, P Sauve, A Subramanian and AB Zampetti (eds), Efficiency, Equity, Legitimacy: The Multilateral Trading System at the Millennium (Washington, DC, Brookings Institution Press, 2001) 334. 120 For a more detailed overview, see AF Lowenfeld, International Economic Law, 2nd edn (Oxford, Oxford University Press, 2008) chs 7 and 8; and M Matsushita, TJ Schoenbaum and PC Mavroidis, The World Trade Organization—Law, Practice, and Policy, 2nd edn (Oxford, Oxford University Press, 2006) chs 4 and 5. 121 Art 4(3) DSU. 122 Art 16(4) DSU 123 Art 17(13) DSU.

284 Enforcement of International Law in the EU Legal Order measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the measure into conformity with the agreement’, whereas Article 21(1) DSU stresses that prompt compliance with any recommendations or rulings made by the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members. The losing party must inform the DSB of how it intends to proceed regarding the implementation of the recommendations and rulings of the DSB. In case of failure to comply within the reasonable period of time determined under the DSU procedures,124 a number of options are available to the winning party. The first option consists of retaliation by means of suspension of trade concessions. In order to do so, it should submit the relevant request to the DSB within 20 days of the expiry of the abovementioned reasonable period; the DSB may either grant such authorisation or refer the matter to arbitration. The second option is compensation which is the subject of negotiation between the parties to the dispute and which ought to be mutually acceptable. In case of failure to reach such agreement, any party having invoked the DSU procedures may proceed to request authorisation in order to suspend trade concessions.125 The level of retaliation should be equivalent to the level of violation and could apply to either the same economic sector in which the violation of WTO rules has been determined (parallel retaliation) or a different sector in the same agreement annexed to the WTO (cross-sector retaliation) or a different WTO agreement altogether (cross-agreement retaliation).126 The retaliation is authorised and monitored by the DSB, whereas disputes over its level and procedures may be referred to arbitration. The procedure outlined above is carried out within strict time limits laid down in the DSU which also seeks to clarify the nature of sanctions it sets out: [T]he suspension of concessions or other obligations shall be temporary and shall only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Member that must implement recommendations or rulings provides a solution to the nullification or impairment of benefits, or a mutually satisfactory solution is reached.127

The introduction of this elaborate set of procedures has been viewed as the culmination of a considerable process of judicialisation of international economic law. Drawing upon increasing reliance upon and the concomitant maturity of the mechanisms provided under the GATT, the DSU was seen as ‘in many respects strengthening the “rule-orientation” and “legal methods” in the WTO dispute settlement system’ and illustrating ‘progressive “judicialization” of GATT dispute settlement procedures’.128

124 What is a reasonable period of time within which the losing party must comply with WTO law is determined either by the DSB following a proposal by the party concerned or by the parties to the dispute themselves or through binding arbitration, in which case it should not exceed 15 months from the date of the adoption of the report (Art 21(3) DSU). 125 Art 22(2) DSU. 126 Art 22(3) DSU. 127 Art 22(8) DSU. 128 E-U Petersmann, ‘The Dispute Settlement System of the World Trade Organization and the Evolution of the GATT Dispute Settlement System since 1948’ (1994) 31 Common Market Law Review 1157, 1189.

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6.3 Direct Effect of WTO Law The Court of Justice was initially quite reluctant to pronounce on the legal effects of the new rules laid down in the WTO Agreements. In Affish129 importers of frozen fishery products from Japan into the Netherlands challenged the prohibition of the importation of such products laid down in a Commission Decision.130 That Decision aimed at protecting public health from the risks resulting from what the Commission deemed to be seriously defective hygiene during production and storage. One of the arguments of the applicants was that the contested measure was incompatible with the Agreement on the application of sanitary and phytosanitary measures annexed to the WTO Agreement.131 The Court declined to examine that argument because an examination of the contested Decision in the light of that Agreement had not been requested by the referring court, whilst such an examination by the Court of its own motion was considered ‘unnecessary’.132 Within a short period of time, the issue of the effect of WTO rules was raised in the context of the bananas litigation in T.Port III133 where German importers challenged the import regime on bananas laid down by the Council in Regulations 404/93 and 478/95. The referring court raised the question of the compatibility of that regime with the GATT and the right of the applicants to rely upon it before the national judiciary. Having pointed out that the exporting country, namely Ecuador, had not been a party to either the GATT 1947 or the GATT 1994, the Court of Justice deemed it unnecessary to answer either question. In both cases, the Advocates General had not hesitated to offer their views on the relationship between the WTO rules and Community law. In Affish Advocate General Cosmas argued that the rules laid down in the WTO Agreement and the GATT 1994 were still characterised by ‘great flexibility’, hence precluding individuals from relying upon them before national courts.134 Similarly, Advocate General Elmer in T.Port III merely argued for the transposition of the Court’s case-law on the GATT 1947 to the WTO rules in the light of the preamble to Council Decision 94/800.135 Another occasion where the Court chose to avoid the issue of the direct effect of the WTO rules was in Hermès, a preliminary reference from a Dutch court on the application of provisional measures laid down by national law in order to protect trade mark rights and their interpretation in the light of the TRIPS Agreement.136 This was despite the call of Advocate General Tesauro to reconsider its case-law in the light of the significantly different characteristics of the WTO regime.137 It was only in late 1999, ie nearly five years after the WTO Agreement had entered

129

Case C-183/95 Affish [1997] ECR I-4315. Dec 95/119 [1995] OJ L80/56 adopted pursuant to Council Dir 90/675 [1990] OJ L373/1 laying down the principles governing the organisation of veterinary checks on products entering the Community from third countries. 131 [1994] OJ L336/40. 132 n 129 above, para 28 of the judgment. 133 Joined Cases C-364/95 and 365/95 T Port GmbH & Co v Hauptzollamt Hamburg-Joans (T Port III) [1998] ECR I-1023. 134 Ibid, paras 119–28 of his Opinion where he refers to specific provisions of the Agreement in question. 135 Ibid, paras 27–30 of his Opinion. 136 [1998] ECR I-3603. 137 Ibid, paras 22–37 of his Opinion. 130

286 Enforcement of International Law in the EU Legal Order into force, that the Court of Justice addressed the issue of the effect of the rules within the Community legal order. This was in the Portuguese Textiles case, where Portugal challenged a Council Decision concerning the conclusion of Memoranda of Understanding between the EC and Pakistan and India on arrangements in the area of market access for textile products.138 These arrangements provided for the removal of restrictions on the importation of certain textile products into the Community and the latter’s commitment to give favourable consideration to the flexible management of existing tariff and quotas. Having been outvoted in the Council, Portugal brought annulment proceedings on the basis of alleged incompatibility of the Decision with both WTO rules and fundamental principles of Community law. In relation to the former, it was argued that, in adopting the contested decision, the Council had violated the GATT 1994, the Agreement on Textiles and Clothing, and the Agreement on Import Licensing Procedures. In order to address the pre-existing approach of the Court to the GATT, Portugal put forward a twofold argument: on the one hand, the WTO agreements were presented as significantly different from the GATT 1947, especially in relation to the rules governing dispute settlement; on the other hand, the issue of direct effect was irrelevant in so far as the dispute was about the right of a Member State to challenge the legality of a Community measure before the European Court of Justice. The Court started off its analysis by reaffirming two general points: on the one hand, it was for the contracting parties to every agreement to determine whether that agreement should have direct effect—it was only in the absence of such a statement that it was left to the courts to determine the effect of the agreement; on the other hand, whilst there should be bona fide performance of every agreement under international law, each contracting party is free to determine the legal means through which the commitments entered into should be fully executed in its legal system provided that such means are not specified in the agreement itself. As for the WTO Agreements themselves, the Court accepted that they differed ‘significantly’ from the rules laid down in the orginal GATT with particular emphasis on the tighter regime provided in the system of safeguards and the dispute-settlement procedure. However, after this briefest of statements, the Court proceeded to put forward a number of reasons which justified its conclusion that ‘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’.139 The arguments put forward by the Court may be summarised as follows. First, the subject-matter and purpose of the WTO Agreements indicated that ‘the system resulting from [them] accords considerable importance to negotiation between the parties’.140 This was illustrated by the DSU, whose Article 22(1) enables a contracting party whose actions have been found to be in violation of WTO law to grant compensation on an interim basis where the immediate withdrawal of the measure is impracticable. This was so despite the fact that such compensation is temporary in nature and that a preference is shown for full implementation of a DSB recommendation in order to ensure conformity with WTO law. Having mentioned the fact that compensation should

138

Case C–149/96 Portugal v Council [1999] ECR I-8395. Ibid, para 47. 140 Ibid, para 36. 139

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be mutually acceptable and subject to negotiation between the parties involved in the dispute settlement procedures, the Court held that: [T]o require the judicial organs to refrain from applying the rules of domestic law, which are inconsistent with the WTO agreements would have the consequence of depriving the legislative or executive organs of the contracting parties of the possibility afforded by Article 22[DSU] of entering into negotiated arrangements even on a temporary basis.141

The second argument put forward by the Court was based on the nature of the system set out by the WTO Agreements. The general purpose of the WTO agreements, namely to be implemented on the basis of the principle of negotiations with a view to entering into reciprocal and mutually advantageous arrangements, was similar to that of the original GATT. According to the Court, this feature distinguished the WTO framework from the typology of agreements concluded by the Community in order to provide either for an asymmetry of obligations or to create a special legal framework of integration with the Community. The third argument may be called a balance-of-power one, and is based on the approach to the issue of direct effect taken by some of the most important commercial partners of the Union. Whilst in the case of many other international agreements a divergent approach to direct effect would not be problematic, the distinct nature of the WTO Agreements meant that the lack of reciprocity in their effect may lead to disuniform application of the WTO rules. The Court then concluded that: To accept that the role of ensuring that those rules comply with Community law devolves directly on the Community judicature would deprive the legislative or executive organs of the Community of the scope for manoeuvre enjoyed by their counterparts in the Community’s trading partners. 142

It is noteworthy that the intention of the executive and the legislature as to the effets of WTO law could not have been clearer. In the preamble to Decision 94/800 on the conclusion of the WTO Agreements on behalf of the Community, the Council had stated 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’.143 Equally, the proposal by the Commission had pointed out that: [I]t is already known that the United States and many other of our trading partners will explicitly rule out  … direct effect. Without an express stipulation of such exclusion in the Community instrument of adoption, a major imbalance would arise in the actual management of obligations of the Community and other countries.144

Whilst referring to Decision 94/800, the formula used by the Court in Portuguese Textiles was such as to make it impossible to assess the weight that it had attached to it. Having elaborated on the reasons why the WTO Agreements should not determine the legality

141 Ibid, para 40. The Court then concluded that ‘the WTO agreements, interpreted in the light of their subject-mater and purpose, do not determine the appropriate legal means of ensuring that they are applied in good faith in the legal order of the contracting parties’ (para 41). 142 Ibid, para 46. 143 Council Dec 94/800 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. 144 COM(94) 414 final: Uruguay Round of Multilateral Negotiations.

288 Enforcement of International Law in the EU Legal Order of EC measures, the Court merely pointed out that that interpretation corresponded to the content of Decision 94/800. The conclusion reached in the Portuguese Textiles judgment has since been repeated in relation to a number of agreements concluded under the WTO umbrella, such as the GATT 1994,145 the Agreement on Technical Barriers to Trade146 and the Agreement on Trade-Related Aspects of Intellectual Property Rights.147 The judgment in Omega is interesting for the direct attack on the line of reasoning underpinning the ruling in Portuguese Textiles by the applicant. It was argued that the distinction between international agreements based on reciprocal and mutually advantageous arrangements such as those under the WTO umbrella and agreements not based on such arrangements was unhelpful: the conclusion of all international agreements aims at conferring advantages upon the contracting parties. Following the response already put forward by Advocate General Alber, the Court dismissed Omega’s argument as misunderstanding ‘the basis of [its] case-law’, namely that:148 [T]he decisive factor … is that the resolution of disputes concerning WTO law is based, in part, on negotiations between the contracting parties. Withdrawal of unlawful measures is indeed the solution recommended by WTO law, but other solutions are also authorised, for example settlement, payment of compensation or suspension of concessions.

Following this ‘clarification’ of the thrust of its reasoning, the Court proceeded to repeat the arguments in the Portuguese Textiles judgment verbatim. Finally, the line of reasoning of that ruling was also relied upon in order to rule out the direct effect of TRIPS provisions within the scope of Community law in actions before national courts.149 A question which was raised following the judgments in Portuguese Textiles and Hermès had to do with the effects of rulings of a WTO Appellate Body. In the WTO legal system, such a ruling is as final a pronouncement on compatibility with WTO law as a party can possibly get. Once such a ruling has been issued, the state whose conduct has been held to be contrary to WTO rules is given a reasonable period of time to remedy the violation. In the light of such a ruling, and provided that this period of time has expired, is it possible for a private party to challenge a Union measure on the ground that the latter has failed to comply with the ruling and remedy the violation of WTO law? The Court answered the question in the negative in Van Parys.150 Referred by the Highest Administrative Court in Belgium, this was, again, an action which arose out of the Bananas litigation. Van Parys had been importing bananas into the Community from Ecuador and applied for import licences to the Belgian Intervention and Refund Bureau. Although granted, the import licences were not for the full amounts applied for: applying a Commission Regulation which provided for reduction coefficients for applications to import bananas from, amongst others, Ecuador, the Bureau deducted certain 145

Case C-307/99 OGT v Hauptzollamt Hamburg-St Annen [2001] ECR I-3159. Case C-27/00 and 122/00 Omega and Others [2002] ECR I-2569. 147 Joined Cases 300/98 and 392/98 Parfums Christian Dior SA v TUK Consultancy BV, and Assco Gerüste GmbH and Rob van Dyk v Wilhelm Layher GmbH and Co KG and Layher BV [2000] ECR I-11307; and Case C-89/99 Schieving-Nystad vof and Others and Robert Groeneveld [2001] ECR I-5851. 148 n 146 above, para 89. 149 Case C-300/98, n 147 above; and Case C-491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I-11453. 150 Case C-377/02 Léon van Parys NV v Belgisch Interventieen Restitutiebureau (BIRB) [2005] I-01465. 146

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amounts corresponding to those coefficients. Van Parys challenged the legality of two such decisions by the Bureau: it argued that they implemented Community measures on imports of bananas that were illegal under WTO law. The overall tone of the judgment indicates a willingness to reaffirm the state of the law. The question referred by the Belgian court about the validity of Community regulations in the light of the GATT 1994 is preceded by one formulated by the Court: do the WTO agreements give Community nationals a right to rely upon them in legal proceedings challenging the validity of Community legislation where the DSB has held that both that legislation and subsequent legislation adopted by the Community in order, amongst others, to comply with the relevant WTO rules are incompatible with those rules? Having summarised its position on the review of Community law in the light of WTO rules, the Court went on to rule that: [B]y undertaking after the adoption of the decision of the DSB  … to comply with the WTO rules …, the Community did not intend to assume a particular obligation in the context of the WTO, capable of justifying an exception to the impossibility of relying on WTO rules before the Community Courts and enabling the Community Courts to exercise judicial review of the relevant Community provisions in the light of those rules.151

This conclusion is substantiated on the basis of two interrelated reasons. The first is the considerable importance that the WTO dispute-settlement system accords to negotiation between the parties. The Court repeats the, by now well-rehearsed, line of reasoning put forward in Portuguese Textiles. However, the judgment places more emphasis on the DSU procedures and the legal implications of their fruitless conclusion in that case. For instance, it refers specifically to the provision of Article 22(8) DSU, according to which the dispute remains on the agenda of the DSB until it is resolved, ie until the inconsistent measure has been removed or the parties reach a mutually satisfactory solution. The Court also refers to Article 21(5) DSU, according to which, in the event of a failure to agree on the compatibility of the measures taken to comply with the DSB’s recommendations and decisions, the dispute should be decided through recourse to DSB procedures, which include an attempt by the parties to reach a negotiated solution.152 It was in the light of the above that the Court referred to the discretion enjoyed by the legislative or executive organs of the contracting parties to reach a negotiated settlement, even on a temporary basis. Then, the Court summarised how, following the amendment of the bananas regime, the Community negotiated agreements with the United States and Ecuador in order to bring Community law into conformity with WTO law and pointed out the following: Such an outcome, by which the Community sought to reconcile its obligations under the WTO agreements with those in respect of the ACP States, and with the requirements inherent in the implementation of the common agricultural policy, could be compromised if the Community Courts were entitled to judicially review the lawfulness of the Community measures in question in light of the WTO rules upon the expiry of the time-limit  … granted by the DSB within which to implement its decision.153

151

Ibid, para 41. Ibid, paras 46–47. 153 Ibid, para 50. 152

290 Enforcement of International Law in the EU Legal Order In its first pronouncement on a point upon which considerable academic literature has focused in order to strengthen the effects of the WTO, the Court ruled as follows: The expiry of that time-limit does not imply that the Community had exhausted the possibilities under the understanding of finding a solution to the dispute between it and the other parties. In those circumstances, to require the Community courts, merely on the basis that that time-limit has expired, to review the lawfulness of the Community measures concerned in the light of the WTO rules, could have the effect of undermining the Community’s position in its attempt to reach a mutually acceptable solution to the dispute in conformity with those rules.154

The second reason for preventing the review of legality of Union law in actions brought by individuals is the lack of reciprocity. In the paragraph concluding that part of its judgment, the Court refers, again, to the position of some of the most important commercial partners of the Community and the need to enable the Community’s legislative and executive bodies to enjoy discretion in dealing with them: ‘[S]uch lack of reciprocity, if admitted, would risk introducing an anomaly in the application of the WTO rules.’155 It is interesting that, contrary to Portuguese Textiles, the line of reasoning in Van Parys should contain no reference to Council Decision 94/800 and the intention of the Council to determine the status of WTO rules within the Community legal order. And yet, the judgment is couched in such terms as to suggest clearly that the logic underpinning the ruling in Portuguese Textiles and the subsequent line of cases is here to stay.

6.4 Non-contractual Liability for Unlawful Acts In accordance with Article 340 second subparagraph TFEU: In the case of non-contractual liability, the Union shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties.

This provision has been consistently interpreted to apply when three conditions are met, namely the existence of an unlawful measure adopted by the Union institutions, actual damage and a causal link between them.156 These conditions were then refined in relation to the exercise of legislative function by the EU: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the author of the act and the damage sustained by the injured parties.157 In order to ascertain whether the breach in question is sufficiently serious, the decisive test is whether the Union institution concerned has manifestly and gravely disregarded the limits on its discretion; where the institution in question has only a considerably reduced or even no discretion, the mere infringement of EU law may be sufficient to establish the existence of a sufficiently serious breach.158 154

Ibid, para 51. Ibid, para 53. See eg Joined Cases 256/80, 257/80, 265/80, 267/80 and 5/81 Birra Wührer SpA and others v Council and Commission [1982] ECR 85, para 9; Case C-87/89 Sonito and Others v Commission [1990] ECR I-1981, para 16; Joined Cases C-258/90 and C-259/90 Pesquerias de Bermeo and Naviera Laida v Commission [1992] ECR I-2901, para 42; and Case C-295/03 P Allesandrini Srl and Others v Commission [2005] ECR I-05673, para 61. 157 See Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291, paras 41 and 42. 158 Ibid, para 44; and Case C-312/00 P Commission v Camar and Others [2002] ECR I-11355, para 54. 155 156

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The question whether the EU could be liable for breach of GATT/WTO rules first arose at the aftermath of the Bananas litigation.159 Atlanta, a company established in Germany, was an importer of bananas which had challenged the legality of Regulation 404/93 before the CFI and had also sought damages under Article 288 EC (now Article 340 TFEU).160 Of the various pleas put before the CFI, the one relevant to this analysis was that relating to the GATT rules. The CFI relied upon the judgment of the Court of Justice in Germany v Council161 and concluded that no illegality sufficient to establish non-contractual liability on the Community could be found. In challenging that conclusion before the Court of Justice, Atlanta relied first and foremost upon a decision adopted by the DSB after the CFI had delivered the contested judgment. It argued that that decision left no doubt about the inconsistency of Regulation 404/93 with WTO law and, hence, its illegality. This argument was rejected by the Court, albeit on procedural grounds. In particular, it had not been raised by the appellant because the DSB decision had been published six months after it had lodged its appeal. The Court viewed this decision as in ‘an inescapable and direct link’162 with the plea of breach of the GATT, one which, whilst rejected by the CFI, had not been repeated by Atlanta on appeal. Therefore, the argument based on the DSB decision was dismissed as inadmissible. It is noteworthy that the Court did not refer to any link between the lack of direct effect of the GATT rules and the status of the DSB decision. Even the statement about the ‘inescapable and direct link’ was referred to only in procedural terms and confined to the conclusion that reliance upon the DSB decision could only be examined as part of a plea of illegality in the light of the GATT. In doing so, it did not follow the Opinion of Advocate General Mischo who, having argued for the inadmissibility of the appellant’s argument, went on to conclude that ‘the rights which a decision of the Appellate Body would intend to confer on individuals have nowhere near the scope which the appellant seeks to give them’;163 in other words, it does not constitute a rule intending to confer rights on individuals and, therefore, is unable to establish non-contractual liability of the Community.164 In a number of subsequent judgments, the CFI relied upon the Court of Justice’s settled case-law on the lack of direct effect of WTO rules in order to conclude that the Community could not incur non-contractual liability as a result of infringement of those rules.165 In these cases, the alleged unlawful conduct by the Commission had occurred following the adoption of the Appellate Body’s report by the DSB declaring the inconsistency between the Bananas legislation and the WTO rules; the applicants alleged that the legislation subsequently adopted by the Community was contrary to the WTO rules in general and the commitment undertaken by the Community to remedy the illegality concluded by the DSB. Their arguments were rejected rather swiftly by the CFI. 159

C-104/97 P Atlanta AG v EC [1999] ECR I-6983. Case T-521/93 [1996] ECR II-1707. See n 108 above. 162 n 159 above, para 19 of the judgment. 163 Ibid, para 30 of his Opinion. 164 AG Mischo went on to argue that ‘unlike  …a judgment in infringement proceedings, such a decision entails only an obligation to remedy the unlawful conduct in the future, accompanied by a number of conditions’ (ibid, para 31). 165 See Case T-18/99 Cordis, Obst and Gemüse Grosshandel GmbH v Commission [2001] ECR II-913, paras 44–60; Case T-30/99 Bocchi Food Trade International GmbH v Commission [2001] ECR II-943, paras 49–65; Case T-52/99 T Port GmbH & Co KG v Commission [2001] ECR II-981, paras 44–60; and Case T-3/99 Banatrading GmbH v Council [2002] ECR II-47, paras 43–45. 160 161

292 Enforcement of International Law in the EU Legal Order This issue again reached the Court of Justice on appeal in Biret.166 The question was whether the Community was liable in damages for a violation of the Agreement on the Application of Sanitary and Phytosanitary Measures following the expiry of the deadline for compliance set by the Dispute Appellate Body.167 Whilst the reasonable period within which the Community ought to comply with the DSB decision was 15 months, it took it over three years to do so. The CFI pointed out that there was an ‘inescapable and direct link between the decision and the plea alleging infringement of the SPS Agreement’ and concluded that the former could only be taken into account if the latter were directly effective. In doing so, the CFI relied upon the judgment in Atlanta from which it quoted the above phrase directly. On appeal, the Court of Justice concluded that, on the facts of the case, the Community could not possibly have been liable for the period alleged by Biret: when the period of time granted by the DSB as to enable the Community to comply with its decision expired, the appellant had been declared bankrupt by the national judicial authorities and payments had ceased. However, the Biret judgment is most interesting for the comments the Court made about the CFI judgment. In particular, it also pointed out that the contested judgment contained two errors of law. The first one consisted of the failure of the CFI to comply with its duty to state reasons, for its line of reasoning was not sufficient to address Biret’s argument regarding the violation of the SPS Agreement. In particular, the question which ought to have been addressed was whether the DSB decision was relevant to the conclusion already reached by the Court of Justice regarding the lack of direct effect of WTO rules. The second error consisted of misinterpreting the scope of the ruling of the Court of Justice in Atlanta.168 According to the Court, the latter judgment was irrelevant to the case before it because it was confined to the facts of the case: whilst the decision of the Dispute Settlement Body was inescapably and directly linked to the issue of inconsistency with WTO rules, that plea had not been repeated on appeal. It was for this reason that the argument had been rejected as inadmissible. The judgment in Biret revived the academic debate about the effects of WTO rules within the Community legal order and whether the expiry of the implementation period following the adoption of a DSB decision would make any difference.169 This issue was addressed in Joined Cases C-120/06 P and C-121/06 FIAMM and Fedon.170 The appellants were importers of stationary batteries and spectacle cases from various Member States. They had suffered from US measures which had imposed increased customs duties in retaliation for the failure of the EU to comply with the DSB Bananas decision. The CFI had dismissed their compensation claims.171 166 Case C-93/02 P Biret International SA v Council; and Case C-94/02 P Etablissements Biret et Cie SA v Council [2003] ECR I-10497; the CFI judgments were Cases T-174/00 Biret International SA v Council [2002] ECR II-17 and T-210/00 [2002] ECR II-47. 167 For the application of EC liability in such circumstances, see G Zonnekeyn, ‘EC Liability for Nonimplementation of Adopted WTO Panels and Appellate Body Reports—The Example of the “Innocent Exporters” in the Banana Case’ in Kronenberger (ed), n 94 above, 251. 168 Case C-104/97 P Atlanta, n 159 above. 169 See eg G Zonnekeyn, ‘EC Liability for Non-implementation of WTO Dispute Settlement Decisions—Are the Dice Cast?’ (2004) 7 Journal of International Economic Law 483; and J Wiers, ‘One Day, You’re Gonna Pay: The European Court of Justice in Biret’ (2004) 31 Legal Issues of Economic Integration 143. 170 Joined Cases C-120/06 P and C-121/06 P FIAMM and Fedon [2008] ECR I-6513. 171 Case T-69/00 FIAMM and FIAMM Technologies [2005] ECR II-5393; and Case T-135/01 Fedon & Figli and Others ECLI:EU:T:2005:454.

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In its judgment, the Grand Chamber reaffirmed certain principles of its case-law and clarified some others. It made it clear that, in terms of the direct enforcement of WTO rules, no distinction should be drawn between annulment proceedings and non-contractual liability actions: As is apparent from the Court’s case-law, there is also no reason to draw a distinction in these various respects according to whether the legality of the [Union] action is to be reviewed in annulment proceedings or for the purpose of deciding an action for compensation (see to this effect, with regard to the period preceding the expiry of the reasonable period of time allowed for implementing a decision of the DSB, Biret International v Council, paragraph 62). First, as the Court has pointed out, the prospect of actions for damages is liable to hinder exercise of the powers of the legislative authority whenever it has occasion to adopt, in the public interest, legislative measures which may adversely affect the interests of individuals … Second, any determination by the Community courts that a Community measure is unlawful, even when not made in the exercise of their jurisdiction under Article [263 TFEU] to annul measures, is inherently liable to have repercussions on the conduct required of the institution that adopted the measure in question.172

The Court also made it clear that, in EU liability proceedings, it makes no difference to the effects of a WTO rule in the EU legal order whether the DSB has adopted a decision holding the Union guilty of violating that rule and that the deadline for the implementation of that decision has expired: A DSB decision, which has no object other than to rule on whether a WTO member’s conduct is consistent with the obligations entered into by it within the context of the WTO, cannot in principle be fundamentally distinguished from the substantive rules which convey such obligations and by reference to which such a review is carried out, at least when it is a question of determining whether or not an infringement of those rules or that decision can be relied upon before the [Union] courts for the purpose of reviewing the legality of the conduct of the [Union] institutions.173

The judgment in FIAMM reaffirms with considerable rigour the Court’s previous case-law on the effects of WTO law within the Union legal order. All in all, the later case-law suggests that the approach articulated in Portuguese Textiles is unlikely to change. Neither individuals nor Member States are able to challenge the legality of EU measures pursuant to WTO rules directly or to seek compensation.

6.5 Non-contractual Liability for Lawful Acts The Union may incur liability for a valid act. In Dorsch Consult the Court of Justice held that ‘in the event of the principle of Community liability for a lawful act being recognised in Community law, a precondition for such liability would in any event be the existence of “unusual” and “special” damage’.174 In addition to these conditions, the 172

n 170 above, paras 120–22 (references omitted). Ibid, para 128. 174 Case C-237/98 P Dorsch Consult Ingenieurgesellschaft mbH v Council and Commission [2000] ECR I-4549, para 18. 173

294 Enforcement of International Law in the EU Legal Order damage should be real and a causal link should be established between the act on the part of the Community and the damage. Whilst expressed in rather qualified terms, this statement appears to accept the possibility of non-contractual liability for a valid act.175 However, the conditions attached to it are very restrictive: damage is deemed ‘unusual’ if it exceeds the limits of the economic risks inherent in the activities of the traders sustaining it;176 furthermore, in order to be considered ‘special’ it must affect a category of economic operators in a manner which distinguishes them from all other economic operators.177 In the sparse case-law in which this cause of action has been raised, the requirement that the damage be unusual and special has never been deemed to have been met.178 This is hardly surprising: the requirement of the ‘special’ nature of the damage, for instance, is not dissimilar to that of individual concern which needs to be met for a private applicant to be able to challenge a Union decision addressed to a third party, which is one of the most notoriously difficult requirements to be met pursuant to the Court’s case-law.179 The question whether liability for a lawful act could be incurred in the context of WTO law was raised before the CFI by a number of importers of bananas in Afrikanische Frucht-Compagnie.180 However, it was rejected in a judgment which suggested that such a remedy would only have a slim chance of success.181 In FIAMM and Fedon the Court of Justice closed the door to this possibility. It addressed the issue of damages for lawful conduct in the context of a WTO rule violation determined by a DSB decision. In the judgments under appeal, the CFI had ruled that that would have been possible had the damage suffered by the applicants been unusual and special, which it was not. The Court reached a different conclusion: [A]s Community law currently stands, no liability regime exists under which the Community can incur liability for conduct falling within the sphere of its legislative competence in a situation where any failure of such conduct to comply with the WTO agreements cannot be relied upon before the Community courts.182

Had the opposite been the case, the Union’s legislative function would have been hindered and the wide discretion enjoyed by the legislature compromised. However, the Court pointed out that the Union might be liable in damages if an EU legislative measure led to restrictions on the right to property and the freedom to pursue a trade or profession that impaired the very substance of those rights in a disproportionate and intolerable manner. That was not the case in FIAMM, as traders exporting to third countries should be aware

175 See HJ Bronkhorst, ‘The Valid Legislative Act as a Cause of Liability of the Communities’ in T Heukels and A McDonnell (eds), The Action for Damages in Community Law (The Hague, Kluwer, 1997) 153. 176 Case 59/83 Biovilac v EEC [1984] ECR 4057, para 29. 177 See Case 81/86 De Boer Buizen v Council and Commission [1987] ECR 3677 as reiterated in Case T-184/95 Dorsch Consult Ingenieurgesellschaft mbH v Council and Commission [1998] ECR II-667, para 80. 178 See the strict construction of ‘special’ and ‘unusual’ damage in Case T-196/99 Area Cova and Others v Council and Commission [2001] ECR II-3597, paras 174 et seq. 179 See generally AM Arnull, ‘Private Applicants and the Action for Annulment since Codorniu’ (2001) 38 Common Market Law Review 7. 180 Joined Cases T-64/01 and T-65/01 Afrikanische Frucht-Compagnie GmbH and Internationale Fruchtimport Gesellschaft Weichert & Co v Council and Commission, [2004] ECR II-521, paras 150–55. The question had also been raised in Joined Cases 9/71 and 11/71 Compagnie d’Approvisionnement v Commission [1972] ECR 391, paras 45–46. 181 See also Case T-196/99 Area Cava, n 178 above. 182 n 170 above, para 176.

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of the various risks inherent in their activity, including the possibility of suspension of certain measures by the relevant third country. The main thrust of the Court’s judgment was contrary to the advice of Advocate General Maduro, who argued in his Opinion for the principle of non-contractual liability for a legislative act and suggested that the applicants had suffered unusual damage.183

6.6 Assessment of the Court’s Approach The approach of the Court of Justice to the legal effects of WTO rules within the Union legal order has been criticised heavily on a number of grounds. The various strands of the criticism levelled against the Court’s approach focus on legal, constitutional and political arguments, all of which are intrinsically interrelated. In legal terms, the line of reasoning underpinning the judgments from the Portuguese Textiles through Van Parys to Biret and FIAMM, etc, has been seen as misconstruing the nature of the obligations laid down in WTO rules. In relation to the dispute-settlement procedures set out in the DSU, the emphasis on the provision of compensation and the engagement of the relevant parties in negotiation in order to reach a mutually acceptable solution has been argued to be an attempt to cast doubt on the binding nature of the WTO rules.184 According to this criticism, the provision for compensation or suspension of concessions or other obligations under Article 22(1) DSU does not constitute an alternative to full compliance with WTO rules: that provision makes it clear that both are to be temporary in nature as ‘full implementation of a recommendation to bring a measure into conformity with the covered agreements’ is ‘preferred’. Furthermore, Article 21(1) DSU makes it clear that ‘prompt compliance with recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members’, whereas ‘the implementation of adopted recommendations or rulings’ is to be kept ‘under surveillance’ by the DSB.185 It is on the basis of those provisions that the final outcome of the dispute-settlement procedures as ascertained in a DSB or an Appellate Body report is deemed to impose an international law duty to comply with its findings. 186 After all, Article XVI(4) WTO provides that ‘each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements’. The process of juridification illustrated by the reform of the WTO rules is in no doubt and is acknowledged by the Court of Justice. After all, its case-law relies expressly on 183 See also the criticism of the Court’s approach in 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, 892–94; and the analysis in A Thies, International Trade Disputes and EU Liability (Cambridge, Cambridge University Press, 2013) ch 5. This remedy also seems to be preferred by A von Bogdandy, ‘Legal Effects of World Trade Organization Decisions within European Union Law: A Contribution to the Theory of the Legal Acts of International Organizations and the Action for Damages Under Article 288(2) EC’ (2005) 39 Journal of World Trade 45, 64–66 where he refers to this possibility as a ‘“soft” solution’ (65). 184 See S Griller, ‘Judicial Enforceabilty of WTO Law in the European Union—Annotation to Case C–149/96 Portugal v Council’ [2000] Journal of International Economic Law 441, 451 et seq. 185 Art 21(2) DSU. 186 For a cogent analysis of this approach to WTO duties, see J Jackson, ‘International Law Status of WTO Dispute Settlement Reports: Obligation to Comply or Option to “Buy Out”?’ (2004) 98 American Journal of International Law 109.

296 Enforcement of International Law in the EU Legal Order and reproduces faithfully the wording of the relevant provisions of the DSU. However, both the wording and overall system laid down in the latter suggest a more nuanced understanding of the obligations they impose on the contracting parties. For instance, full implementation of a DSB report is merely ‘preferred’. Whilst the suspension of concessions should be temporary under Article 22(8) DSU, that same provision allows its application ‘until such time as [amongst other options] a mutually satisfactory solution is reached’. Such provisions appear to enable the Members to choose a remedy which, in the light of the specific context of a dispute, they may consider appropriate.187 Viewed from this angle, not only does the DSU sanction the discretion of the contracting parties as to how to comply with their WTO obligations, but also the juridication of the system set out in WTO appears to be neither complete nor unlimited.188 There is a choice underpinning the dispute-settlement system under the WTO and that is to strive for negotiation; merely one illustration of this is provided by the absence of any remedy regarding financial compensation for past losses or interest. This indicates that the juridification of the WTO system, far from amounting to the establishment of a rules-oriented structure, constitutes a process which evolves around, rather than beyond, the political will of the contracting parties.189 As has been pointed out, ‘remedies  … in an integration system between unequal players like the WTO are there to “equalize” inequalities’.190 The defining limits of the WTO system, as pointed out by the Court of Justice, are also borne out in the light of current practice. In relation to the foreign sales corporation tax imposed by the US administration, for instance, the Commission was notably keen to avoid the imposition of trade sanctions in order to ensure compliance with the WTO rules.191 Even after years of judicial proceedings involving the EU bananas import regime, the US administration never abandoned the policy of seeking to strike a deal with the Commission,192 which was finally reached in 2010.193 The central role granted to the contracting parties in the DSU does not change in the light of a DSB decision finding that the Union has violated WTO law. In fact, the reasoning in FIAMM and Fedon is based firmly on the logic underpinning the judgments in Portuguese Textiles, Van Parys and Biret and the limits on the enforcement of WTO obligations which are inherent in the DSU system.194 The emphasis on the 187 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, 644 where he notes that ‘the GATT 1994 may actually be a unique international agreement in that it attempts to utilize the “realpolitik” of the environment in which it operates to its benefit by providing methods of remedying violations which are flexible enough to maintain the functioning of the agreement: that is, the GATT 94 may provide a choice of remedy precisely because allowing such a choice helps preserve momentum for the trade liberalization process which is the ultimate purpose of the agreement’ (645). 188 See, to that effect, J Pauwelyn, ‘The Transformation of World Trade’ (2005) 104 Michigan Law Review 1. 189 See RE Hudec, ‘The New WTO Dispute Settlement Procedure: An Overview of the First Three Years’ (1999) 8 Minnesota Journal of Global Trade 1, 10–15. See the overview by P-T Stoll and A Steinmann, ‘WTO Dispute Settlement: The Implementation Stage’ (1999) 3 Max Planck Yearbook of United Nations Law 407. 190 PC Mavroidis, ‘Remedies in the WTO Legal System: Between a Rock and a Hard Place’ (2000) 11 European Journal of International Law 763, 811. 191 See the statements of then Commissioner Lamy in Financial Times, 26 February 2004, 10. 192 See H Hauser and A Roitinger, ‘Renegotiation in Transatlantic Trade Disputes’ in E-U Petersmann and MA Pollack (eds), Transatlantic Economic Disputes—The EU, the US, and the WTO (Oxford, Oxford University Press, 2004) 487. 193 Geneva Agreement on Trade in Bananas [2010] OJ L141/3, concluded pursuant to Council Dec 2010/314/ EU [2010] OJ L141/1. See E Guth, ‘The End of the Bananas Saga’ (2012) 46 Journal of World Trade 1. 194 See Mendez, n 45 above, 224–27. See also the criticism of the FIAMM and Fedon judgment in BM Hoekman and PC Mavroidis, ‘Bite the Bullet—Trade Retaliation, EU Jurisprudence and the Law and Economics

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binding nature of the duties laid down in the WTO rules as ascertained by the DSB appears to misunderstand the reasoning of the Court. It is not the binding character of the WTO obligations which lies at the core of the Court’s approach but the extent to which the contracting parties may be allowed to choose the method of enforcement of those obligations. In other words, it is the discretion enjoyed by the executive and legislative bodies of the Union to negotiate mutually acceptable arrangements pursuant to the DSU that the Court seeks to ensure. It is expressly stated that that discretion should be preserved even if, in accordance with Article 22 DSU, it were to be exercised for negotiating arrangements on a temporary basis.195 In other words, to stress the binding nature of the obligations imposed upon the Union under WTO rules does not refute the line of reasoning underpinning the Court’s case-law, for the latter did not question that nature. In any case, the management of obligations within the framework set out pursuant to the dispute-settlement procedures is by no means static. Indeed, these have cogently been described as assuming ‘the role of shaping a new bargaining environment by attributing costs to the continuing violation of contract’.196 Within such a legal environment, the judicial acknowledgement of the discretion that the EU executive should be allowed ought not to be seen as an illustration of judicial restraint; instead, it shows that the Court of Justice is receptive to the specific dynamics that underlie the international economic arena and the way they vary depending on the nature of the specific framework of cooperation under review.197 Another aspect of the Court’s approach which has been criticised is the distinction it draws between the WTO framework (and its objective of ‘entering into reciprocal and mutually advantageous arrangements’) and other agreements held to be capable of conferring rights upon individuals (and their ‘asymmetry of obligations’ or the establishment of ‘special relationships with the Community’.198 The Court further emphasises this special position of WTO rules by focusing on the lack of reciprocity regarding their effect by important trade partners of the Community. In other words, reciprocity is viewed by the Court as a twofold concept: on the one hand, it refers to the rights and duties provided for under WTO rules (substantive reciprocity); on the other hand, it refers to the approach of the judiciary of the Community’s partners (judicial reciprocity). Both have been attacked. Reliance upon substantive reciprocity is viewed as anachronistic, given that the WTO framework contains principles the application of which is not subject to reciprocity,199 and unhelpful given its nebulous definition.200 Whilst the Court of Justice has not been as forthcoming as one might wish in of “Taking One for the Team”’ (2013) 20 European Law Journal 317; and, more generally, in Thies, n 183 above, ch 3. 195

See para 40 of the Portuguese Textiles judgment, n 138 above. Hauser and Roitinger, n 192 above, 506. 197 It is interesting that a WTO Panel Report has noted that ‘neither the GATT nor the WTO has so far been interpreted by GATT/WTO institutions as a legal order producing direct effect. Following this approach, the GATT/WTO did not create a new legal order the subjects of which comprise both contracting parties or Members and their nationals’: US ss 301–10 of the Trade Act of 1974, Panel Report of 8 Nov 1999, WT/DS 152, para 7.78. 198 n 138 above, para 42. 199 See the Opinion of AG Saggio in Portuguese Textiles where he argued that the lack of reciprocity should be irrelevant to the effect of WTO law: n 138 above, para 21. See also G Zonnekeyn, ‘The Status of WTO Law in the Community Legal Order: Some Comments in the Light of the Portuguese Textiles case’ (2000) 25 European Law Review 293, 300. 200 Griller, n 184 above, 459. 196

298 Enforcement of International Law in the EU Legal Order distinguishing them from the other Agreements it was asked to deal with in the past, there can be little doubt about the distinctive features of the WTO rules. Rather than its multilateral nature,201 two characteristics emerge. The first was mentioned above and is the room for manoeuvre which the contracting parties are granted under the dispute-settlement system and which is expressly sanctioned therein. The second follows from the above and is about the overall character of the WTO which distinguishes it from other agreements. The criterion of this distinction is not the extent to which derogations from the substantive content of an agreement are available and the right to adopt safeguard measures unilaterally recognised; after all, it is difficult to find any agreement where the possibility of derogation is ruled out altogether. Instead, the distinction pointed out by the Court may be understood as referring to the overall character of the WTO system and the incremental development its dispute-settlement procedures generate by enabling the fine balance between different interests to be subject to continuous redefinition, ie what the Court referred to as the nature and structure of the WTO Agreements. Viewed from this angle, the complexity and distinct features of the system set out in the WTO Agreements demand an equally sophisticated and, inevitably, incrementally developed system of enforcement. As Mendez puts it, the WTO ‘has been treated as a case apart because it is indeed a case apart’.202 The emphasis on substantive reciprocity fails to address the concern about the effects of judicial reciprocity. This issue is most important not only in the light of its effects on the balance of powers under the WTO umbrella but also in the light of the unique position of the Court of Justice within the Union legal order. For instance, in his Opinion in Portuguese Textiles Advocate General Saggio points out that: [T]here is  … a strong case for holding that the rules of the agreement are not applicable or a fortiori binding even if the agreement was not suspended or extinguished, whenever the fulfilment of an obligation under the WTO entails a risk for the Community of jeopardising the balanced operation of the Community legal order and the pursuit of its objectives.203

He then goes on to argue that: [E]ven if this may cause the Community to be held to be in breach of international law, the Court, which has the duty to ensure respect of the independence of the Community legal order, may not apply provisions that require the institutions to act in a manner that is inconsistent with the proper functioning and the objectives of the Treaty.204

Its vagueness aside, this position is rather curious as it is in itself contrary to the content of the DSU, Article 23 of which prohibits unilateral retaliatory measures adopted beyond the framework of the procedures laid down therein.205 Therefore, he appears to argue for the irrelevance of reciprocity to the full enforcement of the binding rules set out in WTO Agreements whilst suggesting that the EU judiciary violates those rules in the absence of such reciprocity. 201 See JHJ Bourgeois, ‘Effects of International Agreements in European Community Law: Are the Dice Cast?’ (1984) 82 Michigan Law Review 1250 where he makes this argument in relation to the GATT 1947 (1265); also N Neuwahl, ‘Individuals and the GATT: Direct Effect and Indirect Effects of the General Agreement on Tariffs and Trade in Community Law’ in Emiliou and O’Keeffe, n 116 above, 313, 320. 202 Mendez, n 45 above, 246. 203 n 138 above, para 22 of his Opinion. 204 Ibid. 205 See A Rosas, Annotation of Portuguese Textiles (2000) 37 Common Market Law Review 797, 812.

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More broadly, the concern of domestic courts for the effect granted to international agreements by the courts of other contracting parties is not as uncommon as it might appear to be. It has been argued, for instance, that domestic courts seek to assess that effect as a matter of course when asked to adjudicate upon the application of an international agreement within their own legal order.206 If this consideration is significant for the approach of domestic courts to international agreements as a matter of judicial policy, it is essential as a matter of constitutional balance given the role of the Court in the regulation of EU international relation. The acknowledgement of the discretion enjoyed by the executive and the legislature in the evolving context of the WTO is another aspect of the exercise of this function. In constitutional terms, the approach of the Court of Justice may appear to run counter to the construction of international economic law as a legal process with distinct constitutional features in which the European Union ought to assume a leading role: it ought to promote a global democratic framework where individuals were active participants with specific legal rights conferred upon them which were enforceable before both national and transnational judicial bodies.207 The perceived constitutionalisation of international economic law has been relied upon in order to attack the Court’s construction of the legal effects of the WTO in the Union legal order. Its direct effect may be deemed necessary in order both to enhance the substantive and procedural rights of individuals and support the constitutionalising process of WTO law.208 In that respect, the link has been made with the development of the law of the single market and the very considerable extent to which its success has been underpinned by the enhancement of the legal position of the individual though the conferment of legally enforceable rights. To that effect, it has been argued that ‘this enlargement of “individual sovereignty” and the empowerment of EU citizens vis-a-vis EU member states has … not been applied to the EU’s external relations’.209 It has also been argued that the right of individuals to carry out commercial activities as a general principle of EU law should inform the enforcement of WTO rules.210 However, given the limits of the WTO system outlined above and the room for manoeuvre which its grants its contracting parties, to apply the logic that underpinned the constitutionalisation of the EU legal order to the rules laid down in the WTO framework is tantamount to ignoring the specific features of the latter. It would also suggest a parallelism which is supported neither in legal nor in practical terms.211 As for the right

206 E Benvenisti, ‘Judicial Misgivings Regarding the Application of International Law: An Analysis of Attitudes of National Courts’ (1993) 4 European Journal of International Law 159. 207 See E-U Petersmann, ‘European and International Constitutional Law: Time for Promoting “Cosmopolitan Democracy” in the WTO’ in G de Búrca and J Scott (eds), The EU and the WTO—Legal and Constitutional Issues (Oxford, Hart Publishing, 2001) 81. See also N Walker, ‘The EU and the WTO: Constitutionalism in a New Key’ in de Búrca and Scott (eds), ibid, 31. 208 See KJ Kuilwijk, The European Court of Justice and the GATT Dilemma (Beuningen, Centre for Critical Legal Studies, 1996). 209 E-U Petersmann, ‘From State Sovereignty to the “Sovereignty of Citizens” in the International Relations Law of the EU?’ in N Walker (ed), Sovereignty in Transition (Oxford, Hart Publishing, 2003) 145, 154. 210 See eg EU Petersmann, ‘National Constitutions and International Economic Law’ in M Hilf and E-U Petersmann (eds), National Constitutions and International Economic Law (Deventer, Kluwer, 1993) 3. See also the Opinion of AG Albert in Biret, n 166 above. 211 As Howse and Nicolaidis point out, ‘constitutionalization was made acceptable in Europe by characteristics whose functional equivalent cannot be obtained at the WTO level, including the complex relationship between constitutional politics and legislative politics in the European Union’: R Howse and K Nicolaidis,

300 Enforcement of International Law in the EU Legal Order of individuals to engage in commercial activities, it is supported by neither EU law nor its interpretation by the Court of Justice,212 and to rely upon it in order to introduce the direct effect of the WTO following a DSB decision would be tantamount to asking the Court to engage in a significant constitutional leap. Finally, in policy terms, another criticism levelled against the Court’s approach in Portuguese Textiles is centred around the general scheme of the WTO framework. In setting out a rules-oriented system for the regulation of international trade, it took a considerable step towards trade liberalisation. As such, not only did it provide for the evolution of the system which originated in the Bretton Woods initiatives but it also ensured the maintenance and reinforcement of an incremental process towards economic interdependence and trade liberalisation on the international arena. The Court’s approach might be viewed as undermining the effective application of the WTO, hence raising potential obstacles to the process of trade liberalisation instigated by those rules. It is not self-evident that the direct enforcement of WTO law within the domestic legal order of its members would speed up the process of trade liberalisation on the international economic arena. The substantive rules and procedures laid down in the WTO amount to a system of policies that is based as much on legal agreement as on political choice amongst the WTO members. It is the interaction between these factors, in itself subject to a number of parameters such as the general economic climate, political stability and development of regional economic cooperation, that renders the WTO rules the dynamic framework within which trade liberalisation is to be achieved. In other words, trade liberalisation in general and the effectiveness of the WTO system in particular constitute an economic and political imperative to which the WTO members ought to strive by relying upon multifarious legal, economic and political tools—they do not constitute a normative proposition compliance with which ought to be devolved to the judiciary of the WTO members. Quite the contrary, were the courts to intervene in order to impose a specific type of legal effectiveness contested amongst the WTO members, the incomplete process of evolution generated by the functioning of the WTO system might be at risk: the more active the domestic courts were in enforcing WTO rules, the more intransigent the executive and legislature might prove to be in negotiating the further development of the WTO policies. In other words, the system set out under the WTO Agreements is multifaceted in nature and evolving in its application: it provides the institutional machinery, the legal commitment and the political momentum for testing the commitment of its Members to trade liberalisation on the basis of successive rounds of negotiations on the adjustment of the existing agreements annexed to the WTO. Furthermore, the balance of powers between the various legislative, executive and judicial organs within the WTO system is far from settled.213 Its enforcement system, whilst undoubtedly developed when compared ‘Legitimacy and Global Governance: Why Constitutionalizing the WTO Is a Step Too Far’ in Porter et al (eds), n 119 above, 227, 238. 212 See S Peers, ‘Fundamental Right or Political Whim? WTO Law and the European Court of Justice’ in G de Búrca and S Scott (eds), The EU and the WTO—Legal and Constitutional Issues (Oxford, Hart Publishing, 2001) 111. 213 See F Roessler, ‘The Institutional Balance between the Judicial and the Political Organs of the WTO’ in M Bronckers and R Quick (eds), New Directions in International Economic Law. Essays in Honour of John H Jackson (The Hague, Kluwer Law International, 2000) 325 for criticism of the rulings of the Appellate Body on the balance-of-payments settlement procedures and regional trade agreements.

Indirect Enforcement of WTO Law 301 to that laid down in the original GATT, is as flexible and open-ended in setting out ways to ensure compliance as it is clear in seeking to point out the binding nature of ‘judicial’ organs’ determinations.214 In other words, in light of the deficiencies of the available remedies, compliance is not only a matter of formal enforcement; it also depends on the various political interests whose interaction the multilevel structure and dynamic nature of the WTO system appears to envisage.215 In the light of the above, there may be a direct correlation between the activism that courts might be prepared to demonstrate domestically and the unilateralism that the executive might feel compelled to adopt internationally: should this underpin the approach of only a major economic actor or a handful of minor ones, it would be bound to influence the stance of other WTO members, hence stalling the evolution of the international economic order. Viewed from this angle, the endowment of WTO rules with direct effect would entail a shift in the balance of powers, not only within the EU legal order, but also the WTO framework itself, a development hardly envisaged by its contracting parties.216 Therefore, the internationalist position, according to which domestic courts are responsible for the enforcement of conventional international law irrespective of the existence of a specific national political authorisation,217 may, in fact, endanger rather than enhance the achievement of the WTO aims and the successful development of the process of trade liberalisation. In the light of the above analysis, it becomes clear that, rather than focusing on the principle of direct effect, what is crucial is how the case-law of the Court of Justice has enabled the binding effect of WTO rules to penetrate the Union legal order in practice.

7. INDIRECT ENFORCEMENT OF WTO LAW Indirect Enforcement of WTO Law

Whilst the Court has rejected the direct enforcement of WTO rules against both EU and national law and in the context of non-contractual liability disputes, it has accepted that, in two sets of circumstances, the provisions of an international agreement may be relied upon in order to challenge the validity of EU law even though, in principle, the agreement itself may not be capable of conferring enforceable rights. Both these two cases were developed in the context of the GATT/WTO.

7.1 The ‘Reference’ Case (Fediol) The first case arose in a direct action against the Commission brought by the Seed

214 The structure of this system has been characterised as ‘peculiar’: P-T Stoll and A Steinmann, ‘WTO Dispute Settlement: The Implementation Stage’ (1999) 3 Max Planck Yearbook of United Nations Law 407, 437. 215 See S Princen, ‘EC Compliance with WTO Law: The Interplay of Law and Politics’ (2004) 15 European Journal of International Law 555. 216 See the arguments put forward in C-D Ehlermann, ‘Six Years on the Bench of the “World Trade Court”. Some Personal Experiences as Member of the Appellate Body of the World Trade Organization’ (2002) 36 Journal of World Trade 637. 217 For a critical assessment of that position, see M Kumm, ‘The International Rule of Law and the Limits of the International Model’ (2003) 44 Virginia Journal of International Law 19.

302 Enforcement of International Law in the EU Legal Order Crushers’ and Oil Processors’ Federation in 1987.218 The applicant challenged a decision addressed to them and adopted pursuant to Regulation 2641/84219 in which the Commission declined to initiate a procedure in order to examine certain commercial practices of Argentina regarding the export of soya cake to the Community. Regulation 2641/84 had established a procedure aimed at enabling the Community to deal with illicit commercial practices other than dumping and subsidies; both the Member States and Community producers were given the right to submit a complaint to the Commission, which, having examined the legality of the targeted practice and the alleged injury, would then decide whether it was necessary in the light of Community interest to pursue the complaint. The argument of Fediol that a scheme of differential charges on exports of soya products and the imposition of quantitative restrictions on the exportation of soya beans were contrary to a number of GATT provisions was rejected by the Commission as unfounded and unsubstantiated. The thrust of the Commission’s defence before the Court was confined to the consistent case-law so far: individuals may not rely upon GATT rules in order to challenge Community measures as those rules, because of their nature, are incapable of conferring rights upon them. This argument was rejected by the Court in the light of the legal context set out by Regulation 2641/84 which should be viewed as allowing individuals to rely upon GATT rules. The subject of the request made by individuals pursuant to that Regulation was the illicit nature of a commercial practice which, according to Article 2(1) of the Regulation, was defined as ‘incompatible with international law or with the generally accepted rules’. The Court relied upon the preamble to Regulation 2641/84 and concluded that the GATT provisions form part of the international rules to which Article 2(1) refers. Having established the interest of individuals to invoke GATT rules in the context of Regulation 2641/84, the Court went on to leave no doubt about the scope of its own jurisdiction. On the one hand, it made it clear that the reason which rendered the GATT incapable of conferring rights upon individuals, ie its broad flexibility, did not prevent the Court from interpreting the Agreement in order to assess the consistency of a specific commercial practice with its provisions: ‘[T]he GATT provisions have an independent meaning which, for the purposes of their application in specific cases, is to be determined by way of interpretation.’220 On the other hand, the existence of a special procedure under GATT rules for the settlement of disputes arising from the application of the Agreement did not preclude the interpretation of that Agreement: in drawing upon its case-law on the institutional framework set up by agreements concluded by the Community, the Court concluded that ‘the mere fact that the contracting parties have established a special institutional framework for consultations and negotiations inter se in relation to the implementation of the agreement is not in itself sufficient to exclude all judicial application of that agreement’.221 On the substance of the case, every single argument of the applicant was rejected on the basis of the interpretation of a number of GATT provisions by the Court. Two aspects of this ruling are particularly interesting. First, it took the Court only one

218

Case 70/87 Fediol v Commission [1989] ECR 1781. [1984] OJ L252/1. 220 n 218 above, para 20. 221 Ibid, para 21. 219

Indirect Enforcement of WTO Law 303 paragraph to articulate the right of the applicant to challenge a Commission decision pursuant to the GATT; in this articulation, very specific terms were used, all in reference to the detailed procedure set up under Regulation 2641/84. Therefore, the Court appeared reluctant to articulate a general exception to the rule followed consistently after the ruling in International Fruit Company. While it is difficult to view the above Regulation as the only Community measure in the context of which GATT rules were relevant to actions brought by private applicants, the formulation used by the Court begs the following question: how clearly should a Community measure refer to the GATT in order to enable the latter’s rules to be invoked in actions against Community decisions? Should the reference be expressed in either the operative part of the measure or its preamble? Would it be sufficient if the legislative history of the measure indicated that its adoption had aimed at ensuring compliance with the GATT? Be that as it may, the tenor of the judgment was clear as to the exceptional nature of the effect of GATT rules in that case. Indeed, the Court was keen to stress that its conclusion was consistent with the thrust of its line of reasoning originating in International Fruit Company and reaffirmed in Schlüter and SPI and SAMI. Secondly, in its judgment, the Court appeared willing to justify its conclusion in terms of its own jurisdiction too. In acknowledging the judicial application of an Agreement whose broad flexibility had been affirmed time and again, the Court assumed a considerable interpretative function: not only was it called upon to identify the ‘independent meaning’ of the GATT provisions,222 but it also indicated that the discretion enjoyed by Community institutions in the area covered by the GATT would become subject to judicial scrutiny. The application of the implementation principle is not confined to actions by individuals. As the absence of direct effect of international agreements has an impact on their enforcement in actions by Member States, so does the implementation principle apply to the latter too.223

7.2 The ‘Implementation’ Case (Nakajima) This principle was set out in Nakajima, an action brought by a producer of typewriters and printers against the Council.224 Following a complaint by the Committee of European Printer Manufacturers, the Commission found dumping in imports of serial-impact dotmatrix printers and imposed provisional anti-dumping duties on the applicant and other importers pursuant to the general rules laid down in Regulation 2176/84.225 Following the adoption of the new Basic Regulation,226 the Council extended the provisional anti-dumping duties on Nakajima, and then imposed definitive duties. Amongst other arguments, the applicant argued that the Regulation imposing definitive anti-dumping 222

Ibid, para 20. See Case C-352/96 Italy v Council (re: tariff quotas on imports of rice) [1998] ECR I-6937, para 20 with regard to GATT 1994; Case C-150/95 Portugal v Council (re: oilseeds) [1997] ECR I-5863 in which area figures contained in an annex to the Blair House Agreement were mentioned in the challenged Regulation and the Court and its AG proceeded to examine the contested regulation in the light of, amongst others, the Blair House Agreement. 224 Case C-69/89 Nakajima v Council [1991] ECR I-2069. 225 [1984] OJ L201/1. 226 Reg 2423/88 [1988] OJ L209/1. 223

304 Enforcement of International Law in the EU Legal Order duties was void because it was adopted pursuant to an illegal measure, namely the Basic Regulation. In particular, it was argued that the latter’s provisions on constructing the normal value of the imported product were in violation of essential procedural requirements, certain general principles of law and, most importantly for this analysis, the AntiDumping Code annexed to the original GATT. The Court pointed out that reliance upon the provisions of the Anti-Dumping Code did not amount to direct effect: instead, the applicability of the Basic Regulation was being questioned ‘in an incidental manner’ in the context of an annulment action where the applicant relied on the plea of illegality under Article 184 EC (now Article 241 TFEU).227 It accepted to examine the plea of illegality as the preamble to the Basic Regulation made it clear that the latter had been adopted precisely in order to implement the Anti-Dumping Code. The Court then concluded: It follows that the new basic regulation, which the applicant has called in question, was adopted in order to comply with the international obligations of the Community, which, as the Court has consistently held, is therefore under an obligation to ensure compliance with the General Agreement and its implementing measures. 228

On substance, the Court dismissed all the arguments put forward by the applicant and affirmed the legality of the contested measure. The principle set out in Nakajima was introduced as a method of ensuring compliance with WTO rules within the Community legal order without compromising the logic of the International Fruit line of cases: indeed, the Nakajima principle was repeated on every occasion on which the Court felt compelled to reaffirm the special structure and nature of the GATT.229 The rulings in both the Fediol and Nakajima enabled individuals to benefit from the binding effect of the GATT in challenging secondary Community measures without, strictly speaking, suggesting that specific rights enforceable before the Community courts were conferred upon them. The principles introduced in those judgments have been referred to as the ‘reference’ exception and the ‘implementation’ exception, respectively.230 Strictly speaking, rather than introducing exceptions to the principle enunciated in International Fruit Company, they dissociate the enforcement of legally binding international rules from the principle of direct effect; or rather, they view the duties undertaken by the GATT as ‘internalised’ in the Community legal order. It is this act of internalisation which renders the analysis of the nature and purpose of the GATT irrelevant to its enforcement.231 It is noteworthy that the Court was at pains to draw the distinction between the direct effect of GATT rules, whose rejection remained good law, and the incidental effect of such rules in strictly defined cases and in a manner which would still enable the Court to review the legality of a Community measure. In seeking to maintain this distinction, the Court appears keen to strike the balance between, on the one hard, enabling Community institutions to exercise considerable discretion in determining their trade policies within 227

n 224 above, para 27. Ibid, para 31. See eg Case C-280/93 Germany v Council, n 108 above, para 111. 230 See eg Case T-3/99 Banatrading, n 165 above, para 49. 231 Cf PJ Kuijper in Kuijper and Bronckers, Common Market Law Review, n 114 above, 1324–27 (he views the Nakajima principle as ‘untenable on grounds of legal logic’, 1340) and Mendez, n 45 above, 199. 228 229

Indirect Enforcement of WTO Law 305 the WTO framework and, on the other hand, giving effect to the principle that GATT rules form an integral part of the Community legal order. It is not only in international relations law that the Court seeks to observe this fine line between the above interests: in the area of the enforcement of the law of the single market, when the construction of direct effect of directives had reached its limits, the Court sought to introduce alternative ways in which they would affect the legal position of individuals whilst stressing that those would not amount to direct effect, the so-called ‘incidental’ or ‘triangular’ effect being a case in point. In effect, this approach is consistent with the logic underpinning the rulings in International Fruit Company and Germany v Council: as the main point of emphasis in the latter case-law was the discretion of Community institutions within the flexible system set out by the GATT, it is the exercise of that discretion which determines the enforcement of specific GATT provisions within the Community legal order. Inevitably, this shifts the emphasis to the construction of the conditions under which the duties undertaken by the Community would be deemed to have been internalised to such an extent as to enable the Community courts to enforce them. The actual significance of the principle articulated in Nakajima ought to be determined by the extent to which the Union’s judicature has been prepared to apply it.232 The case-law has revealed a degree of ambivalence. The CFI deemed that principle irrelevant to the legality of the amendment of Regulation 404/93, which was the origin of the Bananas litigation and which had been amended following the adoption by the Dispute Settlement Body of a report declaring it incompatible with the GATT 1994.233 This approach was subsequently confirmed by the Court of Justice, which regarded the matter so clear as to enable it to address it in an Order and declared simply that: [C]ontrary to [the] assertions [by the applicant before the referring court],  … [t]he common organisation of the market in bananas, as introduced by Regulation No 404/93 and subsequently amended, is not designed to ensure the implementation in the Community legal order of a particular obligation assumed in the context of GATT, nor does it refer expressly to specific provisions of GATT.234

The paucity of reasoning notwithstanding, the Court appears to confine the application of the Nakajima principle to cases where the contested Union measure provides textual evidence as to the intention of the EU institutions to comply with an obligation imposed under WTO law. Further questions about the function of the principle were raised by the way it was applied by the Court of Justice in Petrotub.235 This reached the Court on appeal from the CFI,236 before which the appellants had challenged a Council regulation imposing definitive anti-dumping duties on their imports of seamless pipes and tubes of steel originating in Russia, the Czech Republic, Romania and the Slovak Republic. 232 It was argued that, originally, both the ECJ and CFI adopted a strict approach: G Zonnekeyn, ‘The ECJ’s Petrotub Judgment: Towards a Revival of the “Nakajima Doctrine”?’ (2003) 30 Legal Issues of Economic Integration 249. See also the Opinion of AG Geelhoed in Case C-313/04 Egenberger [2006] ECR I-6331, where the Commission argued in favour of the indirect effect of WTO law and against the Nakajima principle (the Court did not deal with this issue). 233 Case T-30/99 Banatrading, n 165 above, para 64; Case T-18/99 Cordis, n 165 above, para 59; Case T-52/99 T Port, n 165 above, para 59. 234 Case C-307/99 OGT, n 145 above, 28. 235 Case C-76/00 P Petrotub SA and Republica SA v Council and Commission [2003] ECR I-79. 236 Case T-34/98 Petrotub and Republica v Council [1999] ECR II-3837.

306 Enforcement of International Law in the EU Legal Order They challenged the contested judgment because they claimed that two of their pleas had not been adequately addressed by the CFI. These referred to the method used by the Commission to determine the dumping margin and the normal value of the product. The appellants had argued before the CFI that the choice by the Commission was illegal because it was not properly reasoned, even though Article 2(4)(2) of the 1994 AntiDumping Code required that an explanation as to this choice be provided. However, the CFI did not take the Anti-dumping Code into account. The Court of Justice referred to the Nakajima principle and the preamble to the Basic Regulation which makes it clear that its purpose was inter alia, to transpose into Community law as far as possible the new and detailed rules contained in the 1994 Anti-dumping Code, which include, in particular, those relating to the calculation of dumping, so as to ensure a proper and transparent application of those rules.237

However, it went on to reiterate the principle that Community law be interpreted ‘so far as possible’ consistently with international law.238 And then it did exactly that: the absence of a reference in the Basic Regulation to the duty to state reasons in relation to the determination of the dumping margin should be viewed in the light of the general duty to state reasons laid down in Article 296 TFEU (ex Article 253 EC). Therefore, the specific duty provided for in the Anti-Dumping Code is presumed to have been subsumed by the general duty imposed upon all Community institutions.239 Having established the existence of a legal duty imposed on the Community institutions to give reasons in the choice of methods in the area of anti-dumping, the Court concluded that the CFI had erred in law because the contested regulation ‘does not contain even the merest reference to the second symmetrical method or, a fortiori, the slightest explanation as to why that method would not enable [the elements mentioned in the Basic Regulation] to be taken appropriately into account’.240 The same conclusion was reached in relation to the determination of normal value too. In Petrotub the Court was not confined to a textual interpretation of the relevant provision of the Basic Regulation: it did not let the absence of any reference to the duty to state reasons prevent it from giving effect to a WTO rule. Instead, it adopted a contextual approach and read that specific objective of the Anti-Dumping Code into the Basic Regulation. In fact, in doing so, it appeared to blur the distinction between the Nakajima formula and the principle of consistent interpretation.241 Whilst the principle articulated in Nakajima may appear as an attractive alternative to direct effect, a note of caution is necessary. For all its promising signals, the judgment in Petrotub was delivered in the context of anti-dumping law in which the Nakajima principle was introduced and for which there has never been any doubt as to its relevance. Furthermore, the dispute before the Court was about the right to state reasons, ie a right which, linked to the principle of transparency, has enabled the Union judiciary over the 237

n 235 above, para 55 of the judgment Ibid, para 57 with reference to Case C-341/95 Bettati [1998] ECR I-4355, para 20. 239 The Court further substantiated this conclusion with reference to a Commission communication addressed to the WTO Committee on Anti-dumping Practices, according to which the reasoning required under Art 2(4)(2) of the 1994 Anti-dumping Code would be given directly to the parties and in regulations imposing antidumping duties. 240 Ibid, para 61 of the judgment. 241 Kuijper reads the judgment as either an application of the consistent interpretation principle or an adaptation of the Nakajima principle: n 114 above, 1326–27. See also Mendez, n 45 above, 233–34. 238

Indirect Enforcement of International Agreements—Interpretation 307 years to exercise quite an intensive level of review of secondary legislation.242 It is noteworthy that, in the area of anti-dumping, the Court has construed the duty laid down in Article 296 TFEU in quite wide terms.243

8. INDIRECT ENFORCEMENT OF INTERNATIONAL AGREEMENTS—INTERPRETATION Indirect Enforcement of International Agreements—Interpretation

International agreements may be enforced within the Union legal order in an indirect manner, ie by way of interpretation. This method was articulated by the Court two years after the judgment in Germany v Council. In the International Dairy Arrangement case the Commission challenged the authorisation granted by German authorities whereby imports of certain dairy products were made under inward processing relief arrangements.244 The Commission argued that this practice was applied to products the customs value of which was lower than set out in the (now defunct) International Dairy Arrangement (IDA). That Agreement, to which the Community was a party, had been concluded under the GATT umbrella. It aimed at the liberalisation of world trade in dairy products under stable market conditions and the economic and social development of developing countries. The parties had undertaken to desist from importing certain categories of products, specified in three protocols annexed to the Agreement, at prices lower than the minimum prices defined therein. One of the interesting features of this case is that the German government did not seek to rely upon and reverse the thrust of the Court’s approach to the GATT as articulated in Germany v Council a short time prior to the action in question. In other words, it did not argue that the GATT was incapable of being invoked by Community institutions against Member States, given that the latter could not invoke it in actions against the former. That issue was not raised before the Court. Instead, the line of reasoning put forward by the German government was focused on the interpretation of the IDA and its Protocols. Having identified the purpose of the IDA as seeking to achieve stability on the world market in dairy products in the mutual interests of exporters and importers, the Court held that ‘the Community must interpret its terms in such a way as to encourage the attainment of the objective pursued’.245 It then held that the protocols to the IDA imposed a duty on the contracting parties to implement its provisions. The German government sought to defend its position by relying upon secondary Community law, which, it argued, set out specific arrangements precluding the application of the measures provided in the IDA.246 This argument was rejected by the Court. It had been a well-established principle that, in cases where a Community provision was open to more than one interpretation, every effort should be made to interpret it consist-

242 See eg Case C-76/01P Comité des industries du coton et des fibres connexes de l’Union européenne (Eurocoton) and Others v Council [2003] ECR I-10091, para 91; and Case T-192/98 Eurocoton v Council ECLI:EU:T:2005:104. 243 Case C-76/01 P Eurocoton and Others v Council [2003] ECR I-10091. 244 Case C-61/94 Commission v Germany [1996] ECR I-3989. 245 Ibid, para 31. 246 These were Commission Reg 2228/91[1991] OJ L210/1 implementing Reg 3677/86 on inward processing relief arrangements [1986] OJ L351/1.

308 Enforcement of International Law in the EU Legal Order ently with the EC Treaty or, in the case of an implementing Community measure, with the basic regulation. The Court concluded as follows: Similarly, the primacy of international agreements concluded by the Community over provisions of secondary Community legislation means that such provisions must, so far as is possible, be interpreted in a manner that is consistent with those agreements.247

The Court then applied this principle to the Community measures in question: the construction of their scope in a way which would exempt the goods covered by it from the IDA was deemed incompatible with the Agreement. The duty of consistent interpretation is not of unlimited scope: it applies ‘as far as possible’. Following from the principle of primacy of international agreements, it applies to all agreements concluded by the Community and to any type of action bringing their interpretation before the Court of Justice.248 However, its function is particularly useful in cases where it may mitigate the constraints imposed by the strict reading of direct effect of the GATT. The way in which the Court reviews the consistency of EU law with international law is not always clear. A case in point is the action where the Netherlands sought the annulment of Directive 98/44 on the legal protection of biotechnological inventions.249 This required that the Member States protect their biotechnological inventions through their patent laws whilst complying with their international obligations. In Article 2, the Directive provided that it ‘shall be without prejudice to the obligations of the Member States pursuant to international agreements and in particular the TRIPs Agreement and the Convention on Biological Diversity’. The Dutch government argued that the content of the Directive was incompatible, amongst others, with international obligations laid down in a number of agreements, namely TRIPs, the Agreement on Technical Barriers to Trade (TBT), the Convention on the Grant of European Patents and the Convention on Biological Diversity (CBD). Having repeated the thrust of the judgment in Portuguese Textiles, the Court distinguished between the WTO and the CBD, as the latter ‘unlike the WTO agreements, is not strictly based on reciprocal and mutually advantageous arrangements’.250 It then went on to rule as follows: Even if, as the Council maintains, the CBD contains no 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 compliance with the obligation incumbent on the Community as a party to that agreement. … Moreover, and in any event, this plea should be understood as being directed, not so much at a direct breach by the Community of its international obligations, as at an obligation imposed on the Member States by the Directive to breach their own obligations under international law, while the Directive itself claims not to affect those obligations.251 247

n 244, para 52. To that effect, see Case C-286/02 Bellio FIli Srl v Prefettura di Treviso [2004] ECR I-3465, para 33 in relation to the EEA Agreement; Case C-284/95 Safety-Tech Srl v S&T Srl [1998] ECR I-4301, para 22; and Case C-341/95 Giannio Bettati v Sagety Hi-Tech Srl [1998] ECR I-4355, para 20 in relation to the 1985 Vienna Convention for the Protection of the Ozone Layer and the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer; and Case C-53/96 Hermès, n 136 above, para 28 in relation to TRIPs. 249 Case C-377/98 Netherlands v Parliament and Council [2001] ECR I-7079. 250 Ibid, para 53. 251 Ibid, paras 54–55. 248

Indirect Enforcement of International Agreements—Interpretation 309 All the arguments put forward by the applicant in relation to this plea were rejected. The line of reasoning in the judgment is not easy to follow.252 For instance, the Directive is examined against the European Patent Convention even though the Community was not a party. However, a couple of points are worth making. First, the judgment might appear to dissociate the issue of the enforcement of international obligations from that of their direct effect.253 In his Opinion, Advocate General Jacobs had suggested as much.254 Secondly, and more importantly, the judgment places emphasis firmly on the enforcement of international law in the EU legal order. It is noteworthy that the Court’s statement about the Community’s international law obligations is accompanied by a reference to Racke, and in particular those paragraphs which seek to justify the enforcement of customary international rules as an issue distinct from that of their direct effect.255 The specific examples where national and EU law are interpreted in the light of international agreements, and in particular WTO law, illustrate clearly this emphasis on enforcement of international rules within the EU legal order. The Court engaged in consistent interpretation in Case C-53/96 Hermès in a dispute about national trade marks and the application of the procedural provision laid down in Article 50(6) TRIPs.256 In Dior and Others, having defined its jurisdiction in broad terms and confirmed the right of national courts to determine the direct effect of a provision of the TRIPs Agreement in areas where there is no Union legislation, the Court went on to address the substantive issues about the interpretation of Article 50(6) TRIPs.257 It is recalled that the main premise of the analysis was that, in areas where the EU has legislated, national courts are required as a matter of EU law to interpret national law as far as possible in the light of the wording and purpose of Article 50 TRIPs. One such question was about the right to sue in accordance with general provisions of national law in order to protect an industrial design against copying: does it constitute an intellectual property right within the meaning of Article 50 of the Agreement? As there was no express definition of the term ‘intellectual property right’ in the Agreement, the Court proceeded to interpret it ‘in its context and in the light of its objective and purpose’.258 Having referred in detail both to the preamble to and a number of substantive provisions of the TRIPs Agreement,259 it pointed out that: TRIPs leaves to the Contracting Parties, within the framework of their own legal systems and in particular their rules of private law, the task of specifying in detail the interests which will be protected under TRIPs as ‘intellectual property rights’ and the method of protection, provided always, first, that the protection is effective, particularly in preventing trade in counterfeit goods and, second, that it does not lead to distortions of or impediments to international trade.260 252

Mendez finds it ‘impenetrable’ (n 45 above, 206). See M Cremona, ‘External Relations of the EU and the Member States: Competence, Mixed Agreements, International Responsibility, and Effects of International Law’ (2006) EUI Working Papers 2006/22, 29-30. 254 n 249 above, para 147 where he suggested that ‘more generally, it might be thought that it is in any event desirable as a matter of policy for the Court to be able to review the legality of Community legislation in the light of treaties binding the Community. There is no other court which is in a position to review Community legislation; thus if this Court is denied competence, Member States may be subject to conflicting obligations with no means of resolving them.’ 255 Case C-162/96 Racke [1998] ECR I-3655, paras 45, 47, 51. 256 n 136 above. This judgment is analysed in Chapter 8 above. 257 Joined Cases 300/98 and 392/98, n 147 above. 258 Ibid, para 55. 259 Reference is made to Arts 1(1) and 62 TRIPs. 260 Ibid, para 60. 253

310 Enforcement of International Law in the EU Legal Order This is a clear example not only of the broad construction of the Court’s own jurisdiction but also of a robust application of the principle of consistent interpretation: the judgment actually interprets the TRIPs Agreement in a dispute about an industrial design governed by national law and with no reference whatsoever to Union rules in the judgment. A similar example is provided in Schieving-Nijstad.261 This was another preliminary reference from the Dutch Supreme Court to interpret Article 50(6) of the TRIPs Agreement. The dispute was about the protection of a trade mark registered in the Netherlands. The applicant, the owner of a club in the Netherlands, operated a café called ‘Route 66’, a name which was displayed in various ways throughout the club. This name of an old highway in the United States had been registered as a trade mark in the Netherlands by the respondent in the main proceedings in respect of various classes of goods and services. He then granted licences to manufacturers for the marketing of products sold under the name ‘Route 66’. As the applicant was not one of the respondent’s licensees, the latter obtained an order from the District Court under which Schieving-Nijstad was required to refrain from using the name ‘Route 66’ for the café and the services provided therein. On appeal, that order was upheld and challenged all the way up to the Supreme Court. All but one of the questions referred dealt with specific aspects of the content of Article 50(6) TRIPs and its application in the Netherlands. The Court provided guidance to national courts by placing the balance between the above competing rights within the objectives of Article 50 TRIPs.262 It identified the objectives of the procedural provision of Article 50 TRIPs and the logic which should underpin its application and held as follows: It should  … be made clear that  …, where the judicial authorities are called upon to apply national rules with a view to ordering provisional measures for the protection of intellectual property rights falling within a field to which TRIPs applies and in respect of which the Community has already legislated, they are required to do so as far as possible in the light of the wording and purpose of Article 50(6) of TRIPs, taking account, more particularly, of all the circumstances of the case before them, so as to ensure that a balance is struck between the competing rights and obligations of the right holder and of the defendant.263

The role that national courts are expected to play in the application of non-directly effective international agreements concluded by the Union is tied in with the role of national law in determining various aspects of their interpretation. In Schieving-Nijstad, for instance, it was for each Member State to determine the point in time at which the period prescribed by Article 50(6) TRIPs was to start, provided always that the period thus fixed is ‘reasonable having regard to the circumstances of each case and taking into account the balance to be struck between the competing rights and obligations of the intellectual property right holder and of the defendant’.264 In the same vein, as regards the limits of the powers of the judicial authorities in ordering provisional measures, it was for each Member State to determine them in the light of the absence of any Union

261

n 147 above. Ibid, paras 39–40. 263 Ibid, para 54 of the judgment. 264 Ibid, para 65. 262

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rule.265 Another procedural aspect of the application of Article 50(6) TRIPs dealt with was whether it was necessary for the defendant against whom a provisional decision had been adopted to make a request for that measure to be revoked or to cease to have effect. Whilst answering this question in the affirmative, the Court stated that there was no reason to consider whether national law may expressly provide for the provisional measure to lapse automatically. This may be interpreted as an implied endorsement of the position put forward by Advocate General Jacobs, who had argued for the right of Member States to provide for more extensive protection than that granted under Article 50(6) TRIPs.266 The application of the duty of consistent interpretation and the indirect enforcement of international law that it entails need to viewed along with the broad scope of the jurisdiction of the Court of Justice to interpret mixed agreements (examined in Chapter 7) and the role of national courts. The former renders the application of various aspects of mixed agreements a matter of Union law whose uniform interpretation is deemed of paramount significance. It is within these Union law parameters that national law may determine specific aspects of the interpretation of such agreements. As for the national courts, in assessing such determinations, they carry out a function of a Union nature in the exercise of which they are to be aided by the Court of Justice. Indeed, in the preliminary references examined in this chapter, there is considerable detail in the judgments about what the referring courts are expected to do in order to interpret national law consistently with international law. Viewed from this angle, the principle of consistent interpretation enables national courts to participate in the process of the enforcement of international law within the EU legal order. In decentralising the management of compliance with WTO rules, the Court gradually has constitutionalised the system of EU international relations even in an area where the one of the core tenets of the constitutionalisation process of EU law, namely direct effect, is deemed not applicable. After all, the effective enforcement of EU law may not be confined to the extent to which a particular method of enforcement is relied upon. As Rosas puts it, direct effect ‘is not a panacea which would always guarantee that international law be respected. It might even, in some instances, make it more difficult to maintain a uniform interpretation of Union law rules which have been granted direct effect.’267

9. ENFORCEMENT OF CUSTOMARY INTERNATIONAL LAW Enforcement of Customary International Law

The principles which govern the enforcement of customary international law in the EU legal order have been clarified only recently. The older case-law enforced it with an interesting, albeit puzzling, twist.

265 Ibid, para 68. In practical terms, this approach reads Art 50(6) TRIPs as neither requiring nor forbidding national rules to allow the judicial authorities to determine a reasonable time limit within which substantive proceedings are to be instituted (paras 69–70). That provision was also read as neither requiring nor forbidding national rules to confer that power both on appellate courts and on courts of first instance (paras 71–73). 266 See para 49 of his Opinion where he suggested that the exercise of this right could not undermine the balance between the interests of the right holder and the defendant. 267 A Rosas, ‘International Responsibility of the EU and the European Court of Justice’ in M Evans and P Koutrakos (eds), The International Responsibility of the European Union—European and International Perspectives (Oxford, Hart Publishing, 2013) 139. 158.

312 Enforcement of International Law in the EU Legal Order In Opel Austria268 the Council adopted Regulation 3697/93269 withdrawing tariff concessions originally granted under the FTA between the Community and Austria. The additional duties were imposed one week after the conclusion of the European Economic Area Agreement, which prohibited charges of equivalent effect to customs duties. However, that prohibition had not yet entered into force: in fact, the Council measure imposing additional charges was adopted two weeks prior to the specific date on which the Agreement was to enter into force. The applicant sought the annulment of the Regulation by the then CFI, arguing that its adoption at that time was contrary to the principle of good faith. According to this principle, as codified in Article 18 VCLT,270 the parties to an international agreement may not adopt measures which would defeat the object and purpose of the agreement pending its entry into force. The CFI annulled the Regulation. However, rather than applying the principle enshrined in Article 18 VCLT directly, it read it into a Community law principle: it opined that ‘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’, and added that ‘[a]ny economic operator to whom an institution has given justified hopes may rely on the principle of protection of legitimate expectations’.271 This method of asserting the position of customary international law in relation to EU law by applying it in a rather indirect way was similar to the approach adopted by the Court of Justice in Racke.272 This reference from Germany was about the effects of the suspension of the Cooperation Agreement between the Community and Yugoslavia following the war in that country. It was the Community which suspended the Agreement and, along with it, the trade concessions it provided. Racke was an importer of wine from Kosovo who had been asked by the Customs Office to pay the difference between the preferential rates of customs duty originally paid pursuant to the Agreement and the full third-country rate imposed following the suspension of the Agreement. On appeal before the Federal Finance Court, he argued that the suspension of the trade concessions provided for by the Cooperation Agreement273 was contrary to international law. In Racke the legal principle at the core of this dispute was the suspension of a treaty following a change of circumstances. This principle is laid down in Article 62 VCLT. The Court pointed out that, according to the International Court of Justice, that provision codifies customary international law.274 It, then, held that the applicant relied on that 268

Case T-115/94 Opel Austria GmbH v Council [1997] ECR II-39. [1993] OJ L343/1. 270 This provision reads as follows: ‘A State is obliged to refrain from acts which would defeat the object and purpose of a treaty when: (a) it has signed the treaty or has exchanged instruments constituting the treaty subject to ratification, acceptance or approval, until it shall have made its intention clear not to become a party to the treaty; or (b) it has expressed its consent to be bound by the treaty, pending the entry into force of the treaty and provided that such entry into force is not unduly delayed.’ 271 n 268 above, para 93 with reference to Case 112/77 Töpfer v Commission [1978] ECR 1019, para 19; and 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, para 48. 272 Case C-162/96 Racke v Hauptzollamt Mainz [1998] ECR I-3655. 273 Reg 3300/91 [1991] OJ L315/1. 274 n 272 above, para 24. Art 62, entitled ‘Fundamental change of circumstance’, reads as follows: ‘1. A fundamental change of circumstances which has occurred with regard to those existing at the time of the conclusion of a treaty, and which was not foreseen by the parties, may not be invoked as a ground for terminating or withdrawing from the treaty unless: (a) the existence of those circumstances constituted an essential basis of the consent of the parties to be bound by the treaty; and (b) the effect of the change is radically to transform 269

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principle only incidentally: in essence, it was Article 22(4) of the Cooperation Agreement and the preferential rates granted thereunder upon which the applicant sought to rely. Therefore, the question which had to be addressed first was whether that provision was capable of being invoked by individuals before national courts. The Court answered this question in the affirmative: in the light of the aim of the Agreement to promote trade relations with Yugoslavia, the provision granting trade concessions contained a clear and precise obligation which was not subject to the adoption of subsequent measures. The Court then focused on whether the principle pacta sunt servanda was violated. Two points were made: first, the Court noted that ‘the rules of customary international law concerning the termination and the suspension of treaty relations by reason of a fundamental change of circumstances are binding upon the Community institutions and form part of the Community legal order’;275 secondly, it was held that, whilst relevant to the action before the referring court, the application of customary law in that context was not a case of giving it direct effect: ‘[T]he plaintiff is 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.’276 That did not mean that Racke would be denied the possibility of invoking its directly effective rights by challenging Community law on the basis of customary international law. However,277 because of the complexity of the rules 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

The Court concluded that no manifest error of assessment had occurred.278 Given the wide-ranging objectives of the Cooperation Agreement, the maintenance of peace in Yugoslavia and the existence of institutions capable of ensuring implementation of the cooperation envisaged by the Agreement constituted an essential condition for that  cooperation. The impact of the war on economic and trade relations undermined the cooperation envisaged under the EC–Yugoslavia Agreement. The judgments in Opel Austria and Racke appear to be pulling in two directions. On the one hand, they defer to the status of customary international law: in both judgments there are references to rulings of the International Court of Justice, in the case of Opel Austria in order to define the duties required by an international treaty which had not yet entered into force. On the other hand, they avoid the issue of direct effect and, in doing so, they illustrate a rather convoluted approach to the enforcement of customary

the extent of obligations still to be performed under the treaty.’ According to Art 62(3): ‘If, under the foregoing paragraphs, a party may invoke a fundamental change of circumstances as a ground for terminating or withdrawing from a treaty it may also invoke the change as a ground for suspending the operation of the treaty.’ 275

Ibid, para 46. Ibid, para 47. Ibid, para 52. 278 Ibid, paras 54–56. On the principle of good faith and Art 18 VCLT, see also Case T-231/04 Greece v Commission [2007] ECR II-63 (and the appeal judgment in Case C-203/07 P Greece v Commission [2008] ECR I-8161). 276 277

314 Enforcement of International Law in the EU Legal Order international law.279 And yet, in both cases, the principles in question were applied in the context of provisions of international agreements concluded by the Union and granting specific rights which individuals could invoke before courts and which were undermined by actions by Union institutions.280 The controversial judgment in Case C-366/10 Air Transport Association of America and  Others281 has clarified the principles governing the enforcement of customary international law in the EU legal order. This case was about the Union’s approach to global warming and the aviation industry. The EU has made the fight against global warming a cornerstone of its external policies in general and its environmental policy in particular.282 As a party to the Kyoto Protocol, it has been an active and ambitious player.283 In implementing the Kyoto Protocol, the Union adopted a scheme for greenhouse gas emission allowance trading within its territory.284 In 2008 the Council and the Parliament adopted Directive 2008/101 which extended the scheme to international aviation.285 In particular, it provided that ‘from 1 January 2012 all flights which arrive at or depart from an aerodrome situated in the territory of a Member State to which the Treaty applies shall be included’. In practical terms this meant that any aircraft, even if registered outside the Union, should report its emissions for any commercial flight arriving at or departing from an airport situated in the territory of a Member State. This requirement applied to the entire flight, including those parts which took place outside the airspace of EU Member States. Rather predictably, the latter requirement proved controversial. The Air Transport Association of America (ATAA), an association of the US airline industry, and the three big US airlines (American Airlines, Continental Airlines and United Airlines) brought an action before the High Court in England against legislation adopted by the United Kingdom which implemented Directive 2008/101. They put forward three main arguments.286 First, by adopting the Directive which covered the sections of international flights that take place over the high seas or over the territory of third countries and by not confining it to entirely intra-Union flights, the EU had exceeded its powers under international law. In particular, they argued that the Directive was contrary to customary international law, the Chicago Convention on International Civil Aviation, the Open Skies Agreement which the EU and its Member States had concluded with the United States, and the Kyoto Protocol. 279 In his Opinion in Racke, n 272 above, AG Jacobs argued that the law of the Treaties was not intended to be invoked by individuals and that the definition of the principle rebus sic stantibus was so nebulous as to make it unsuitable for conferring rights on individuals: Case C-162/96 Racke v Hauptzollamt Mainz, paras 84–85 of his Opinion. 280 See P-J Kuijper, ‘From Dyestuffs to Kosovo Wine: From Avoidance to Acceptance by the European 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 (The Hague, TMC Asser Press, 2003) 151, 162–63. 281 n 17 above. 282 See G Marín Durán and E Morgera, Environmental Integration in the EU’s External Relations – Beyond Multilateral Dimensions (Oxford, Hart Publishing, 2012). 283 See A Ellerman, F Convery and C de Perthuis (eds), Pricing Carbon: The European Union Emissions Trading Scheme (Cambridge, Cambridge University Press, 2010); M Lee, EU Environmental Law, Governance and Decision-Making, 2nd edn (Oxford, Hart Publishing, 2014) ch 6; C Parker and C Karlsson ‘Climate Change and the European Union’s Leadership Moment: An Inconvenient Truth’ (2010) 48 Journal of Common Market Studies 923. 284 Dir 2003/87 [1987] OJ L275/32. 285 [2009] OJ L8/3. 286 Summarised by AG Kokott in her Opinion, n 17 above, para 42.

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Secondly, it was argued that it was not for the Union to impose an emissions trading scheme for international aviation activities. Instead, such a scheme should be negotiated and adopted under the auspices of the International Civil Aviation Organization (ICAO). Thirdly, it was argued that the emissions trading scheme amounted to a tax or charge prohibited by international law. The case attracted considerable attention both for its legal interest and its financial implications for the aviation industry. The governments of eleven Member States and two EEA countries intervened, along with the Council, the Commission and the Parliament, and the judgment was rendered by the Grand Chamber. The part of the judgment relating to the Chicago Convention, the Kyoto Protocol and the Open Skies Agreement is examined elsewhere in this book.287 In relation to customary international law, the Court started its analysis by referring to Article 3(5) TEU. This was added at Lisbon and provides that the Union ‘shall contribute  … to the strict observance and development of international law’. In ATAA the Court held that, according to this provision, ‘when [the Union] adopts an act, it is bound to observe international law in its entirety, including customary international law, which is binding upon the institutions of the European Union’.288 Of the principles relied upon by the parties, the Court accepted that the following were indeed recognised as embodying the current state of customary international maritime and air law: each state has complete and exclusive jurisdiction over its airspace; no state may validly purport to subject an part of the high seas to its sovereignty; there is freedom to fly over the high seas.289 However, for these principles to be relied upon in order to challenge the validity of an EU act, two conditions ought to be met: first, they must be capable of calling into question the Union’s competence to adopt the act; and, secondly, the act in question must be liable to affect rights which the individual derives from EU law or to create obligations under EU law in this regard. The Court accepted that an airline could rely upon the above principles in order to challenge the validity of Directive 2008/101, as the latter imposed duties on it. However, it then introduced a qualification: [S]ince a principle of customary international law does not have the same degree of precision as a provision of an 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 errors of assessment concerning the conditions for applying those principles.290

Once it had identified the international rules (customary international law, the EU–US Open Skies Agreement) in the light of which the validity of Directive 2008/101 ought to be assessed, the Court examined whether the latter violated the former. Its analysis is at pains to appear to construe the scope of the Directive in narrow terms: time and again, it points out that the Directive does not apply as such to international flights flying over Union territory and indicates the connection with the latter which triggers 287

See Chapter 7 and section 3 of this chapter. Para 101 of the judgment. 289 They were also codified, respectively, in Art 1 of the Chicago Convention, in Art 2 of the Geneva Convention of 29 April 1958 on the High Seas (UN Treaty Series, Vol 450, 11), and in Art 87(1) UNCLOS. In relation to another principle relied upon by the parties, namely the principle that aircraft overflying the high seas are subject to the exclusive jurisdiction of the state in which they are registered, it was held that insufficient evidence existed as to whether it would apply by analogy to aircraft overflying the high seas. 290 n 17 above, para 110. 288

316 Enforcement of International Law in the EU Legal Order the application of the contested regime, ie the arrival at or departure from an airport in a Member State. The Court opines that, in the light of this connection, the Directive has no extraterritorial effect ‘since those aircraft are physically in the territory of one of the Member States of the European Union and are thus subject on that basis to the unlimited jurisdiction of the European Union’.291 It also points out that, in the absence of this connection—in cases, for instance, where an aircraft would fly over EU territory without either having departed from or landing in an airport in a Member State—a flight would not be subject to the Directive.292 On the controversial element of the system, namely the duty on the airline to surrender allowances calculated in the light of the whole of the international flight, including the part not over EU territory, the Court held that: [A]s European Union policy on the environment seeks to ensure a high level of protection in accordance with Article 191(2) TFEU, the European Union legislature may in principle choose to permit a commercial activity, in this instance air transport, to be carried out in the territory of the European Union only on condition that operators comply with the criteria that have been established by the European Union and are designed to fulfil the environmental protection objectives which it has set for itself, in particular, where those objectives follow on from an international agreement to which the European Union is a signatory, such as the Framework Convention and the Kyoto Protocol. Furthermore, the fact that, in the context of applying European Union environmental legislation, certain matters contributing to the pollution of the air, sea or land territory of the Member States originate in an event which occurs partly outside that territory is not such as to call into question, in the light of the principles of customary international law capable of being relied upon in the main proceedings, the full applicability of European Union law in that territory (see to this effect, with regard to the application of competition laws, Ahlström Osakeyhtiö and Others v Commission, paragraphs 15 to 18, and, with regard to hydrocarbons accidentally spilled beyond a Member State’s territorial sea, Case C-188/07 Commune de Mesquer [2008] ECR I-4501, paragraphs 60 to 62).293

The judgment in ATAA attracted considerable criticism. A number of third countries, eg the United States, China, Russia, Brazil, Japan and India, made it clear that the Union’s extension of its own climate change legislation was not acceptable. In fact, China instructed its airlines to ignore the Union’s emissions trading scheme.294 The policy dimension of the scheme ought to be highlighted. On the one hand, when the Directive was adopted, emissions from air aviation constituted about 3% of total emissions, a number which, whilst small, rose fast: in the period between 2005 and 2010, they had grown by 11.2%.295 On the other hand, the ICAO had been clearly incapable of brokering a deal which would address the problem in a period of over fifteen years. It was in this context of a growing problem and institutional inertia (or incompetence) that the Union chose to address the issue unilaterally.296 291

Ibid, para 125. See also paras 115 et seq, and para 127. Ibid, para 126. 293 Ibid, paras 128–29. 294 See Financial Times, 7 February 2012. 295 The Economist, 11 February 2012, 66. 296 See H Vedder, ‘Diplomacy by Directive? An Analysis of the International Context of the Emissions Trading Scheme Directive’ in M Evans and P Koutrakos (eds), Beyond the Established Legal Orders—Policy Interconnections Between the EU and the Rest of the World (Oxford, Hart Publishing, 2011) 105. 292

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As for the practical implications of the EU scheme itself, the airlines would not have been billed until April 2013, ie 15 months after its entry into force. And, even then, they would only have been required to pay for 15% of their emissions (as, for that year, the EU had arranged to give the airlines permits to cover 85% of their emissions). The most controversial aspect of the Directive is the application of the emission trading scheme even for parts of an international flight over the territory of third countries or the high seas. This is the extra-territorial effect of the Directive to which the plaintiffs, and the governments of a number of third states, objected.297 However, the choice of the criterion by the EU legislature for the application of the EU system, namely whether an aircraft lands in or departs from an EU airport, is by no means indefensible. Given the paucity of international regulation and the increasingly apparent inability of international institutions to intervene, the choice made by the EU is legitimate. In any case, the choice for a system based on access to the EU aviation market as the criterion which triggers the application of the emissions trading scheme is no less legitimate than the alternative choice for a production-based system.298 Be that as it may, the part of the judgment in ATAA which examines this aspect of the Directive in the light of customary international law is characterised by a striking disjunction. On the one hand, it tackles directly the status of customary international law in the EU legal order and sets out the conditions upon which individuals may rely against EU law. In doing so, it clarifies the conditions which govern its enforcement and addresses the unnecessarily convoluted approach adopted in earlier case-law. It normalises the position of customary international law in the EU system and gives teeth to the oft-repeated principle that the Union is based on the rule of law and that it is bound by international law. Denza views this part of the judgment as part of the Court’s ‘increasing determination to integrate EU law into the wider international legal order’.299 On the other hand, in examining whether specific principles of customary international law were violated, the judgment was staggering in its brevity and lack of clarity. In essence, the Court’s reasoning consisted of three strands: it restated in different ways the territorial criterion set out in the Directive (ie the fact that its regime would apply only to aircraft that land in or depart from an EU airport); it referred to Article 191(2) TFEU and the objective of EU environmental policy to ensure a high level of protection; and it referred obliquely to regimes with an extraterritorial dimension adopted by the EU in the area of competition law and oil spillage. However, neither of the above amount to reasoning. To describe the main criterion for the applicability of the system set out in 297 For an overview of the issues raised by extra-territorial jurisdiction, see F Hoffmeister, ‘The Contribution of EU Practice to International Law’ in M Cremona (ed), Developments in EU External Relations Law (Oxford, Oxford University Press, 2008) 37, 80–86. 298 See J Scott and L Rajamani, ‘EU Climate Change Unilateralism’ (2012) 23 European Journal of International Law 469 who approve of the EU system as a considerable number of emissions are generated in areas over which no state may claim jurisdiction, eg the high seas. They note that the Union’s approach ‘does not eschew territoriality but insists upon the relevance of a different territorial factor than that privileged by the dominant production-based approach’ (475) and point out that the Union’s system ‘is extra territorial when viewed through the lens of a production-based system boundary. However, it is merely differently territorial when viewed through a system boundary that posits market access as key’. Viewed from this angle, the observation by AG Kokkot that the Directive ‘does not contain any extraterritorial provisions’ (n 17 above, para 145) is less extreme than it may appear initially. 299 E Denza, ‘International Aviation and the EU Carbon Trading Scheme: Comment on the Air Transport Association of America Case’ (2012) 37 European Law Review 314, 323 where she views the test set out in para 107 of the judgment ‘rigorous … but also realistic’ (ibid).

318 Enforcement of International Law in the EU Legal Order the Directive does not explain why the latter does not violate customary international law; to merely refer to one of the main tenets of the Union’s environmental policy cannot substantiate in itself the legality of the Union’s action under international law; and the reference to other EU regimes raises as many questions as it purports to answer: is it clear that these precedents are similar to the regime set out in the Directive? If so, are they of general applicability in all areas? And even if territorial jurisdiction were established, would its scope be unlimited in how it would decide to construe what would be covered by the contested policy?300 The reasoning of this part of the judgment does not do justice to either the conclusion of the judgment or the logic and ultimate objective of the Directive. On the former, Denza has shown that, even if the Court had engaged in a more detailed and comprehensive analysis, the plaintiffs would not have found a more sold basis for their arguments.301 As for the latter, the judgment has been viewed as legitimising the EU leadership in the environmental arena.302 However, there is another dimension worth exploring. A central aspect of the Directive is the construction of the emissions scheme it establishes as merely a step towards the establishment of an internationally agreed system. Its preamble refers expressly to the ICAO and places the Union’s emissions scheme in the context of a wider effort to address pollution in air aviation. The relevant extract is worth setting out in full:   The Community and its Member States should continue to seek an agreement on global measures to reduce greenhouse gas emissions from aviation. The Community scheme may serve as a model for the use of emissions trading worldwide. The Community and its Member States should continue to be in contact with third parties during the implementation of this Directive and to encourage third countries to take equivalent measures. If a third country adopts measures, which have an environmental effect at least equivalent to that of this Directive, to reduce the climate impact of flights to the Community, the Commission should consider the options available in order to provide for optimal interaction between the Community scheme and that country’s measures, after consulting with that country. Emissions trading schemes being developed in third countries are beginning to provide for optimal interaction with the Community scheme in relation to their coverage of aviation. Bilateral arrangements on linking the Community scheme with other trading schemes to form a common scheme or taking account of equivalent measures to avoid double regulation could constitute a step towards global agreement. Where such bilateral arrangements are made, the Commission may amend the types of aviation activities included in the Community scheme, including consequential adjustments to the total quantity of allowances to be issued to aircraft operators.303

This extract suggests that the emissions trading scheme introduced in the Directive is viewed by the Union as a way of exercising leverage on third countries to address the problem of pollution in air aviation. The system was designed to be flexible enough to

300 See also A Gattini, ‘Between Splendid Isolation and Tentative Imperialism: the EU’s Extension of its Emission Trading Scheme to International Aviation and the ECJ’s Judgment in the ATA case’ (2012) 61 International & Comparative Law Quarterly 977, 981. 301 Denza, n 299 above, 324–35. 302 See S Bogojević, ‘Legalising Environmental Leadership: A Comment on the CJEU’s Ruling in C-366/10 on the Inclusion of Aviation in the EU Emissions Trading Scheme’ (2012) 24 Journal of Environmental Law 345. See also more generally on the role of the EU in the area, C Eckes, ‘Climate Change Policy: Can the Union Be Just (and) Green?’ in D Kochenov and F Amtenbrink (eds), The European Union’s Shaping of the International Legal Order (Cambridge, Cambridge University Press, 2014) 191. 303 Dir 2008/101. Para 17 of the preamble.

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respond to policy initiatives adopted by third parties. In other words, an internal policy which was viewed as unilateralist was adopted in order to pursue multilateral objectives. After the judgment had been rendered, and in the midst of the vocal reaction of various third states, the Union suspended the application of Directive 2008/101 for 2012, and, for the period between 2013 and 2016, it has confined it to flights within the European Economic Area.304 This decision was adopted after the ICAO Assembly had agreed to work on an international mechanism on international aviation emissions by 2016 and apply it by 2020.

10. CONCLUSION Conclusion

International law is enforced within the EU legal order on the basis of an evolving system of principles whose interrelated application aims to meet a range of objectives: to respect the Union’s international obligations, to reflect the differing characteristics of the sources of these obligations, to afford the EU institutions the discretion they have safeguarded in different policy spheres, and to maintain control over the Court’s jurisdiction. At the core of this system lies the distinction between compliance with and the methods of enforcing international law. In this vein, the assessment of the nature and spirit of an agreement prior to reliance on it against EU law does not determine whether the legally binding nature of the agreement can be enforced by the Court; it merely provides the criterion for deciding how the legally binding nature of the agreement could be enforced within the Union legal order. To that effect, an extract from the ruling in SIOT is noteworthy: having determined that Article V GATT was not capable of conferring rights enforceable by individuals before national courts, the Court of Justice concluded as follows: ‘[T]hat [conclusion] in no way affects the Community’s obligations to ensure that the provisions of GATT are observed in its relations with non-Member States which are parties to GATT.’305 Therefore, the overall assessment of the enforcement of international law in the EU legal order requires a broader approach which takes into account the range of mechanisms developed incrementally in order to ensure compliance with international law whilst reflecting the constitutional peculiarities of the Union. Even in the case of rules which are not directly effective, the analysis in this chapter has highlighted the various ways in which they may penetrate the Union legal order and affect legal disputes. In the light of the various limitations underpinning their conception and the conditions attached to their application, each one of them may be viewed as incomplete. However, it is their cumulative effects within the overall system of the Union legal order that determine the commitment of the Union’s courts to the effective enforcement of international law. After all, in defending its own mandate under EU primary law and in the context of the Union’s deeply idiosyncratic legal order, the Court does not adopt an approach markedly different from that of domestic courts.306

304

Dec 377/2013 [2013] OJ L113/1. Case 266/81 SIOT, n 107 above, para 28. 306 See Denza, ‘Placing the European Union in International Context: Legitimacy of the Case Law’, n 47 above, 195; and Rosas, n 267 above, 158. 305

Prior International Agreements

9 International Agreements Concluded by Member States Prior to their Membership of the European Union 1. INTRODUCTION Introduction

T

HE ANALYSIS SO far has focused on the various ways in which the progressive development of the European Union as an international actor has interacted with the rights and duties of the Member States as sovereign subjects of international law. The specific case of international agreements concluded by states prior to their membership of the Union raises different, albeit no less interesting, questions. The starting point is Article 351 TFEU, the first paragraph of 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.

The above provision acknowledges that the establishment of the Union legal order should not be taken to undermine international law, a main tenet of which is the pacta sunt servanda principle as enshrined in Article 26 of the 1969 VCLT.1 Article 30(4)(b) VCLT further makes it clear that, in a case of successive treaties where the parties to the later one do not include all the parties to the earlier one, ‘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’. Therefore, Article 351 TFEU appears to state the obvious: instead of introducing an exception to the principle of supremacy of EU law, Article 351 TFEU acknowledges that the establishment of the Union legal order cannot possibly run counter to one of the foundation of public international law. As Advocate General Mischo pointed out: [N]o-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.2

Be that as it may, the proviso of Article 351 TFEU is of paramount significance in the light of the normative qualities underlying the Union framework in its conception as ‘a 1 2

UKTS No 58 (1980), Cmnd 7964. Case C-84/98 Commission v Portugal [2000] ECR I-5171, para 57.

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322 Prior International Agreements new legal order of international law’3 whose foundation is viewed as ‘an independent source of law’.4 Indeed, while it aims to reconcile the international obligations that the Member States assume prior to their accession to the EU with their duties under EU law, there is a limit to what such agreements may justify. In the well-known judgment in Case C-402/05  P Kadi, the Court of Justice held that Member States could not rely upon their pre-existing obligation to comply with UN Security Council Resolutions in order to justify freezing assets of individuals in a manner which would violate the core constitutional principles of the EU legal order (in that case, protection of fundamental human rights). In particular, it 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.5

This chapter will analyse the implications of this provision for the Member States and the relationship between EU and international law that this entails.

2. THE INTERPRETATION OF ARTICLE 351 TFEU The Interpretation of Article 351 TFEU

International agreements concluded between Member States prior to their accession to the Union are clearly not within the scope of Article 351 TFEU in so far that the Treaties apply automatically to all matters falling within the competence of the Union and supersede earlier agreements between Member States to the extent of any incompatibility.6 The material scope of Article 351 TFEU is unlimited in principle as it covers all types of international agreements, irrespective of their subject-matter, which may be capable of affecting the application of the Treaties.7 However, the existence of such an agreement is not sufficient in itself to justify a deviation from Union law. The ratio of Article 351(1) TFEU aims at ensuring that pre-existing international obligations of Member States are complied with and the corresponding rights of the third contracting parties are respected. In Henn and Darby the House of Lords referred a number of questions relating to the prohibition on imports of pornographic material on grounds of public morality.8 One of the questions referred was about the Geneva Convention of 1923 for the Suppression of Traffic in Obscene Publications and the Universal Postal Convention which had been renewed in 1974: could they justify the national deviation from the principle of free movement of goods? Whilst a violation of that principle, the Court found the national restriction justified on the basis of ex Article 30 EC (now Article 34 TFEU). Therefore, it concluded that ex Article 307 3

Case 26/62 van Gend en Loos [1963] ECR 1, 12. Case 6/64 Flaminio Costa v ENEL [1964] ECR 585, 593. Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundations [2008] ECR I-6351, para 304. This judgment is analysed in detail in Chapters 7 and 14. 6 Case 10/61 Commission v Italy [1962] ECR 1. For subsequent agreements between Member States, see B de Wittte, ‘Old-fashioned Flexibility: International Agreements between Member States of the European Union’ in G de Búrca and J Scott (eds), Constitutional Change in the EU—From Uniformity to Flexibility? (Oxford, Hart Publishing, 2000) 31. 7 Case 812/79 Attorney General v Juan C Burgoa [1980] ECR 2787, para 6. 8 Case 34/79 R v Maurice Donald Henn and John Frederick Ernest Darby [1979] ECR 3795. 4 5

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EC (now Article 351 TFEU) did not preclude the national authorities from fulfilling their obligations under pre-existing treaties. The sole focus of Article 351 TFEU is the obligation imposed upon a Member State by a pre-existing agreement. Therefore, it does not enable Member States to exercise rights conferred upon them by such agreements in violation of EU law.9 Equally, Article 351 TFEU may not be invoked in relation to obligations based on pre-existing agreements if these obligations may not be invoked by a third party in a particular case. Therefore, the rules in the GATT, whilst binding on the Member States since 1947, could not be invoked by them in order to justify imports of bananas from Ecuador in 1995: this was because the latter became a member of the WTO, and hence a party to the GATT, only in 1996.10 Having acknowledged the binding nature of pre-existing contractual arrangements of Member States, Article 351 TFEU seeks to address ways in which any ensuing incompatibilities between such arrangements and EU law may be resolved. Its second paragraph reads as follows: 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.

There is no reference in the Treaties to the period of time within which the incompatibilities between pre-existing international duties of Member States and EU law may be addressed. However, such provision may be made in secondary legislation. This is illustrated by Regulation 4055/86 on maritime transport.11 This measure gives shipping lines rights relating to the provision of maritime services between Member States and between Member States and third countries. Explicit reference is made to cargo arrangements contained in pre-existing bilateral agreements concluded by Member States with third countries: under Article 3, they should be phased out or adjusted, the latter option being carried out in accordance with EU law. Regulation 4055/86 makes a distinction on the basis of the United Nations Code of Conduct for Liner Conferences: trades not governed by it should be adjusted as soon as possible and in any event before 1 January 1993. As for trades governed by the Code, no deadline is set and Member States are required to comply with their obligations under EU rules implementing that Code. In a case regarding compliance with Regulation 4055/86, the Court held that, in the absence of a specific period within which adjustment of a pre-existing bilateral treaty may be made in order to ensure compliance with EU law, such adjustment should be carried out immediately after the entry into force of the relevant EU rule.12 However,

9 Case C-158/91 Ministère public and Direction du travail et de l’emploi v Levy [1993] ECR I-4287, para 12; Case C-124/95 The Queen, ex parte Centro-Com v HM Treasury and Bank of England [1997] ECR I-81, para 60; Case C-473/93 Commission v Luxembourg [1996] ECR I-3207, para 40; and Case C-147/03 Commission v Austria [2005] ECR I-5969, at para 73. 10 Joined Cases C-364/95 and C-365/95 T Port GmbH & Co v Hauptzollamt Hamburg-Jonas [1998] ECR I-1023, paras 60–64. 11 [1986] OJ L378/1. 12 Case C-170/98 Commission v Belgium (re: maritime transport agreement with Zaire) [1999] ECR I-5493, para 40. See also the judgment delivered on the same day in Joined Cases C-171/98, C-201/98 and C-202/98 Commission v Belgium and Luxembourg (re: maritime transport agreements between the Belgo-Luxembourg Economic Union with Togo, Mali, Senegal and Cote d’Ivoire) [1999] ECR I-5517.

324 Prior International Agreements this should not be taken to imply that, in general, the absence of a reference to a period for adjustment should impose an absolute legal obligation on Member States to adjust their pre-existing international duties with immediate effect. That would not only be too harsh an obligation but would also ignore the practical realities of international relations; most importantly, it would run counter to the ratio of the first paragraph of Article 351 TFEU by providing for a disproportionately inflexible way of striking the balance between the international law duties of Member States and those based on Union law. Instead, the conclusion of the Court in Case C-170/98 Commission v Belgium is confined to the specific legal framework and justified in the light of the express distinction made in Regulation 4055/86.

2.1 ‘All Appropriate Steps’: Renegotiation, Adjustment, Denunciation Article 351(2) TFEU refers to ‘all appropriate measures’ that Member States bound by a pre-existing agreement with a third country ‘shall’ take in order to eliminate incompatibilities with Union law. This is a Union law duty imposed on Member States, and it requires Member States to find a way of accommodating their international law obligations within the Union legal order. The wording of this provision is reminiscent of the general duty of cooperation enshrined in Article 4(3) TEU. Indeed, Article 351(2) TFEU may be viewed as a specific illustration of that duty. It is recalled that the principle laid down in Article 4(3) TEU has enabled the Court to articulate the practical implications of the principles of supremacy and direct effect by means of specific duties imposed on all national authorities, including the judiciary, hence becoming one of the cornerstones of the constitutionalisation of the Union legal order.13 This special character of the duty of cooperation illustrates the significance of the ancillary duty applicable in the area of external relations as laid down in Article 351(2) TFEU. This is all the more so in the light of the foreign policy dimension of treaty-making: in negotiating and concluding an international treaty, Member States make foreign policy choices in their capacity as fully sovereign subjects of international law. The principle of Article 351(2) TFEU makes it clear that, in so far as such past choices may run counter to EU law, they must be reviewed. This constitutes a stark illustration of the interaction between foreign policy carried out by national authorities and Union law. The way in which the above interaction should be regulated is often not apparent. In the light of the absence of a specific indication as to what the appropriate measures to be taken by Member States might be or when they should be taken, it follows that a case-by-case approach must be adopted. This makes perfect sense as the specific circumstances under which a Member State may be called to fulfil its international law obligations towards a third country may vary considerably. After all, it may take a considerable period of time for an incompatibility with EU law to become apparent either because the EU competence has not been fully exercised or because the implications of an EU measure are unclear and require interpretation by the Union judiciary. Furthermore, even in cases where the incompatibility between a pre-existing agreement and EU law is not in doubt, there may be considerable scope for manoeuvre as to how this 13

See eg Case C-213/89 The Queen v Secretary of State for Transport, ex parte Factortame [1990] ECR I-2433.

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could be remedied. A number of factors may be relevant to this assessment, including the content of the agreement and the wishes of the contracting third party. Indeed, in most cases where the interpretation of Article 351 TFEU was relevant to a dispute before the Court of Justice, the main issue of contention has been the appropriateness of the response of the national authorities to the incompatibility rather than the determination of the latter. Of the possible ways in which a Member State may remedy the incompatibility between a pre-existing agreement with a third country and EU law, adjustment of the agreement following renegotiation with the contracting third party is usually the least onerous. As most provisions of such an agreement are likely not to contravene EU law, its adjustment allows the Member State to retain rights that it may enjoy pursuant to those clauses which are either compatible with EU law or to the application of which EU law is irrelevant. The termination of a pre-existing treaty by a Member State, on the other hand, is a more drastic measure whose exercise is constrained by international law. Whilst most international agreements provide for their termination, the 1969 Vienna Convention on the Law of Treaties sets the general conditions for unilateral termination to be legal under international law.14 The place of denunciation within the options envisaged under Article 351(2) TFEU was at the centre of Case C-170/98 Commission v Belgium. The Commission attacked the failure of the Belgian government to adjust or denounce its pre-existing Agreement with Zaire which, in the light of the cargo-sharing clauses it contained, was contrary to Regulation 4055/86. This measure set out the application of the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries. A ‘cargo-sharing’ clause provided that the carriage of goods by sea between Belgian ports and ports of Zaire would be carried out on the basis of equal shares by vessels flying the flag of either of the parties or operated by persons or undertakings having the nationality of either of the parties. The effect of this clause was to exclude vessels operated by nationals of the remaining Member States from trade between the ports of Belgium and Zaire. There are two points worthy of comment in the Court’s judgment. First, the Court dismissed the arguments put forward by the Belgian government regarding the practical difficulties in adjusting the Agreement due to the political developments in Zaire which made negotiations impossible: it was held that a difficult political situation in a third country may not justify the failure of a Member State to fulfil its EU obligations. Secondly, if such a situation makes the adjustment of the agreement impossible, the Member State concerned is under a duty to denounce it. The brevity of analysis in the Court’s judgment is as significant as its conclusions. In two short paragraphs, the Court leaves no doubt as to the Union law duty on the Belgian government to denounce its Agreement with Zaire. In doing so, the Court went further than both the Commission, which had stated that it had not in fact requested the denunciation of the Agreement, and Advocate General La Pergola, who had argued that denunciation would have been necessary ‘only if the other Contracting Party had not accepted the amendments needed’.15 The Court’s conclusion may be understood in the light of two considerations. On the one hand, the absence of an express reference to it in the operative part of the judgment 14 15

See Arts 42–45 and 54–65. n 12 above, 5499.

326 Prior International Agreements notwithstanding, the Agreement with Zaire did contain a denunciation clause providing for only six months’ notice. On the other hand, the disregard for the practical difficulties that a Member State must face in seeking to comply with EU law is entirely consistent with its approach to similar claims in enforcement actions under Article 258 TFEU when the relations with a third country are not an issue. In the well-known judgment about the blockades organised by French farmers, for instance, the Court had been equally dismissive of the argument that the French authorities had not prevented the free movement of goods from being disrupted because their intervention was likely to have resulted in civil unrest.16 In other words, the objective nature of the Article 258 TFEU procedure and the automatic rejection of practical arguments put forward by the defending Member States constitute a thread which links the Court’s approach to violations of EU law irrespective of whether these difficulties are due to the internal political scene in the Member State concerned or to a third country whose rights would be affected by that state’s compliance. The question whether a specific duty to denounce a pre-existing agreement was imposed upon a Member State under Article 351(2) TFEU arose again in two infraction cases brought by the Commission under Article 258 TFEU. Their subject matter was an agreement on merchant shipping with Angola17and the then Federal Republic of Yugoslavia.18 Both agreements had entered into force prior to the accession of Portugal to the Community on 1 January 1986, the former in July 1979 and the latter in May 1981. As those Agreements included cargo-sharing clauses, the Commission argued that, having failed to adjust or denounce them, Portugal had violated Regulation 4055/86 on maritime transport. The central finding of these actions was not in doubt as Portugal accepted that the application of cargo-sharing clauses was contrary to Regulation 4055/86. The dispute, however, centred on whether the failure to adjust or denounce the Agreements amounted to a violation of EU law. The Portuguese government argued in the negative on the basis of Article 351 TFEU and put forward three main arguments: first, no specific legal requirement is set out that Member States eliminate the incompatibility of their prior agreements irrespective of the legal and political implications of doing so; secondly, negotiations with Angola and Yugoslavia had been slow because of the political situations prevailing in those countries, namely war and constant tension in the former and war and disintegration in the latter; finally, a combined reading of the first and second paragraphs of Article 351 TFEU indicates that such incompatibility should be eliminated in a manner which affects to the least extent possible the contracting third country, thus, rendering the denunciation of the agreement necessary only when that party clearly does not wish to adjust it. The Court rejected this line of reasoning and concluded that Portugal had indeed violated Regulation 4055/86. It opined that a continuing failure of a Member States to comply with Union law may not be justified by the existence of a difficult political situation in the country with which the Agreement in question had been concluded. As to the denunciation of the agreements, the Court essentially made three points. First, it acknowledged that the rights that the contracting third country derives from 16

Case C-265/95 Commission v France [1997] ECR I-6959. Case C-62/98 Commission v Portugal [2000] ECR I-5171. 18 Case C-84/98 Commission v Portugal [2000] ECR I-5215. 17

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the agreement should be respected in all cases. Secondly, it pointed out that the express provision for a denunciation clause in the contested Agreements made it clear that denunciation would not encroach upon the rights of the contracting third countries whilst ensuring compliance with Regulation 4055/86. Thirdly, whilst Article 351 TFEU enables Member States to make a choice as to how to eliminate incompatibilities between their pre-existing agreements and EU law, it also imposes a duty to ensure that such incompatibilities are actually eliminated. Therefore, ‘if a Member State encounters difficulties which make adjustment of an agreement impossible, an obligation to denounce that agreement cannot …be excluded’.19 This does not amount to disregarding the foreign policy interest that the Member State may wish to serve by approaching its pre-existing agreements in a particular manner. In an interesting description of Article 351 TFEU, the Court pointed out that: [T]he balance between the foreign-policy interests of a Member State and the Community interest is already incorporated in Article [307] of the Treaty, in that it allows a Member State not to apply a Community provision in order to respect the rights of third countries deriving from a prior agreement and to perform its obligations thereunder. That article also allows them to choose the appropriate means of rendering the agreement concerned compatible with Community law.20

It is noteworthy that, in approaching the denunciation of the pre-existing agreement as one of the options open to a Member State under Article 351(2) TFEU, the Court expresses its conclusion in the negative: it ‘cannot be excluded’ in the light of ‘difficulties’ that may make the adjustment of the agreement ‘impossible’. The lack of further criteria has been criticised.21 However, the elaboration of a detailed set of rules which would dictate the circumstances under which a Member State should denounce a pre-existing agreement would be neither realistic nor useful: the political framework within which states negotiate, carry out their contractual obligations, and then renegotiate are highly unpredictable and subject to a variety of factors which cannot plausibly be categorised for the purposes of the application of a judicial formula. In acknowledging that renegotiation of a pre-existing agreement may be rendered impossible, in which case denunciation should be considered, the Court accepts, on the one hand, the prime position of renegotiation within the options covered under Article 351(2) TFEU and, on the other hand, the realities of international relations which may render that option impossible. Furthermore, the judgments of the Court should be viewed within their legal and factual context: in addition to the objective character of the procedure pursuant to which the Court was asked to adjudicate, the action was brought eleven years following the date from which Belgium was required to adjust the agreement in question and five years following the expiry of the period laid down by Regulation 4055/86. Another point of interest is the tension between the foreign policy interests of the Member State required to adjust its pre-existing agreements and the interest of the Union in having its rules respected by national authorities. The conclusion that, whilst present, such national interest ought to be balanced with the interests of the Union is most significant. The Court implies that the Union legal order may provide the framework 19

Case C-62/98, n 17 above, para 49 and Case C-84/98, n 18 above, para 58. Case C-62/98, n 17, above, para 50 and Case C-84/98, n 18 above, para 59. 21 See the annotation on the judgments by C Hillion, (2001) 38 Common Market Law Review 1269, 1277 et seq. 20

328 Prior International Agreements within which the Member States may pursue their foreign policy interests. That framework is construed in broad terms: as it cannot possibly dictate the substance of choices that national authorities may make in the foreign policy arena, it merely defines the parameters within which such choices may be made. This approach to the interpretation of Article 351 TFEU typifies the Court’s approach to the legal management of areas in which trade and foreign policy interact. Its central tenet had already been articulated in its interpretation of EU rules imposing sanctions on third countries. In addressing the argument of the British government in Centro-Com that the implementation of those rules constituted a foreign policy act which fell within their exclusive competence, the Court had pointed that, whilst Member States did retain their sovereignty in the area of foreign policy, they must exercise it in a manner consistent with Union law.22 In other words, there is a thread which links the construction of the duty imposed on Member States to reconcile their pre-existing international obligations with Union law with the broader context of the powers of Member States as sovereign subjects of international law. In identifying the limits to the international action of the Member States, the Court’s requirement may appear harsh in its implications.23 However, it also suggests a degree of flexibility: the omnipresent interaction between trade and foreign policy in the conduct of external relations renders the elaboration of a simple formula which could achieve the aims of Article 351 TFEU impossible. Instead, these aims are to be achieved on the basis of a multifaceted and inherently flexible system of principles whose application involves a variety of institutional actors. This point was brought home in subsequent case law.

2.2 … and Interpretation In the Budvar case, an Austrian court referred questions on the interpretation of the Agreement on intellectual property rights concluded between Austria and the Czechoslovak Socialist Republic in June 1976.24 That Agreement established a system of protection for certain agricultural and industrial products bearing indications of source, designations of origin and other designations referring to their source. The Czechoslovak designations listed in the Agreement would be reserved exclusively for Czechoslovak products in Austria. Budvar exported and marketed in Austria beer under the name Budweiser Budvar. It brought an action before Austrian courts against Ammersin, a company marketing a beer called American Bud bought from a company in Austria, and relied, inter alia, on the Agreement between Austria and Czechoslovakia. In particular, it was argued that the use of the designation American Bud was contrary to the system of protection established under that agreement which reserved the designation Bud exclusively for Czech products. The first main issue was whether the system of protection set up by that agreement was contrary to EU law. Having established that the existence of a national system protecting simple indications of geographical source was not prohibited under EU secondary legislation on the protection of geographical designation, the Court held that that protection 22

Case C-124/95 The Queen, ex parte Centro-Com v HM Treasury and Bank of England [1997] ECR I–81. See J Klabbers, ‘Moribund on the Fourth of July? The Court of Justice on Prior Agreements of the Member States’ (2001) 26 European Law Review 187 where the construction of Art 351(2) TFEU is viewed as rather narrow. 24 Case C-216/01 Budejovicku Budvar v Rudolf Ammersin GmbH [2003] ECR I-13617. 23

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bestowed upon Czechoslovak products was a measure of equivalent effect to a quantitative restriction on imports under ex Article 28 EC (now Article 34 TFEU). However, it could be justified under ex Article 30 EC (now Article 36 TFEU) as necessary for the protection of fair competition if the referring court concluded that, in the Czech Republic, the name Bud was deemed as directly or indirectly referring to the region or place in the territory of the state that it designates. The relevance of Article 351 TFEU arose in the event that the answer to the above question was negative: was the national court under a duty to apply the system of protection accorded under the pre-existing Agreement, its illegality under Article 34 TFEU notwithstanding?25 In relation to the interpretation of Article 351 TFEU, the first issue was whether, in the light of the dissolution of Czechoslovakia, the agreement with Austria was applicable at all. The Court engaged in a lengthy analysis of the principles underpinning the phenomenon of state succession in respect of treaties. Having identified the principle of the continuity of treaties as prevailing in the international practice of the law of the treaties, it went on to assess whether both Austria and the Czech Republic actually intended to apply it to the agreement in question. The latter state had expressly accepted the principle of the automatic continuity of treaties. Austria, on the other hand, had indicated in the past that the treaties concluded by a state should be deemed to expire automatically following a complete break-up of that state. However, in the light of a more pragmatic approach adopted by the Austrian authorities in recent years, it fell to the referring court to decide whether both Austria and the Czech Republic actually intended to apply the principle of the continuity of treaties to the agreement in question. If the answer to that question was affirmative, then the first paragraph of Article 351 TFEU would apply and the question would be limited to the type of measures the Austrian authorities should take in order to comply with the second paragraph of Article 351 TFEU by reconciling the system of protection set up under the agreement with Article 34 TFEU. The Court held as follows: [T]he national court must ascertain whether a possible incompatibility between the Treaty and the bilateral convention can be avoided by interpreting the convention, to the extent possible and in compliance with international law, in such a way that it is consistent with Community law. If it proves impracticable to interpret an agreement concluded prior to a Member State’s accession to the European Union in such a way that it is consistent with Community law then, within the framework of Article 307 EC [now Article 351 TFEU], it is open to that State to take the appropriate steps, while, however, remaining obliged to eliminate any incompatibilities existing between the earlier agreement and the Treaty. If that Member state encounters difficulties which make the adjustment of an agreement impossible, an obligation to denounce that agreement cannot therefore be excluded.26

In conclusion, the Court made two observations: on the one hand, the agreement with the Czech Republic did, in fact, provide for the possibility of denunciation by giving notice of at least one year in writing through diplomatic channels; on the other hand, pending the effort of the Austrian authorities to address the incompatibilities of the agreement

25 On the substantive point of law raised in this case, see Case C-478/07 Budĕjovický Budvar, národní podnik v Rudolf Ammersin GmbH ECLI:EU:C:2009:521. 26 Ibid, paras 169–70.

330 Prior International Agreements with Article 34 TFEU, the former’s provisions could continue to apply pursuant to the first paragraph of Article 351 TFEU in so far as they contain international law obligations which remain binding on Austria. The Court’s judgment in Budvar is useful for our understanding of the proper application of Article 351 TFEU. It confirms the duty of Member States to consider denunciation of a pre-existing agreement if its adjustment has proved impossible and provided that the agreement in question provides for its denunciation. However, there are two additional elements which further clarify the legal position. The first one is the central role reserved to national courts in the process of addressing conflicts between pre-existing international law duties and Union law. This role is defined in a number of ways: they are expected to assess whether a number of factors relevant to the application of a fundamental Treaty provision are present not only in their territory but also in that of a third country; they are left with the task of determining the position of their national authorities in a matter of public international law, that is state succession; and, most importantly, they are being asked to prevent an incompatibility between a pre-existing international obligation of the Member State and Union law from arising by seeking consistency between the two. Whilst some of these requirements are not surprising in terms of what is expected of a referring court within the context of Article 267 TFEU, their combination in general and the duty of interpretation in particular place national courts right at the centre of the application of Community law in the area of external relations. In the broader context of Article 351 TFEU, the role of national courts had also been highlighted in previous judgments. In the context of preliminary reference proceedings, it is for the referring court to determine whether an agreement concluded by a Member State prior to accession has been effectively annulled by subsequent agreements binding on the same parties, in which case Article 351(1) TFEU would not apply.27 Similarly, it is left to the national court to determine the scope and nature of the obligations imposed upon a Member State by a pre-existing agreement.28 In the context of Union law in general, the interpretative task imposed upon national courts is, of course, hardly a novelty. It is a well-established principle that national courts are to interpret national legislation in the light of a non-directly effective directive.29 The Court does accept that there is a limit to what national courts can do in that consistent interpretation must be ‘possible and in compliance with international law’. Again, this approach had already been adopted in the application of the principle of indirect effect: national courts are required to read the rules of a non-directly effective directive in national legislation ‘as far as possible’.30 On the internal plane, this limit had been deemed to refer ‘to the general principles of law which form part of Union law and in particular the principles of legal certainty and non-retroactivity’;31 in the light of the paramount importance of the rights of third countries, it is sensible that the limit to the duty of interpretation imposed upon national courts should be wider, namely ‘to the extent possible and in compliance with [Union] law’. The Court also refers to the possibility of consistent interpretation being ‘impracticable’—one wonders what this may mean and whether it should be taken to refer to yet another situation where the duty of interpretation would reach its limit. Be 27

Case C-158/91, n 9 above, paras 20–21. Case C-13/93 Office national de l’emploi v Minne [1994] ECR I-371, para 18. 29 Case 14/83 Von Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891. 30 Case C-106/89 Marleasing SA v La Comercial Internacionale de Alimentacion SA [1990] ECR I-4135, para 8. 31 Case 80/86 Criminal Proceedings against Kolpinghuis Nijmegen BV [1987] ECR 3969, para 13. 28

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that as it may, the reference to respect of international law is very significant: it would not be acceptable for a national court to engage in so creative an interpretation of an agreement as to undermine the rights of the contracting third country and, ultimately, the objective of the agreement in the name of Union law. In other words, Article 351(2) TFEU aims at reconciling the international law obligations of the Member States with Union law, not at superseding, even indirectly, international law. Viewed from this angle, the construction of the duty of interpretation imposed upon national courts constitutes a clear link between the first and second paragraphs of Article 351 TFEU. In rendering national courts involved in the process of achieving the objectives of this TFEU provision, the Court follows the ingenious strategy which has marked the introduction of the main principles of Union law leading to the constitutionalisation of the Treaties. The interpretive role of national courts leads us to the second important aspect of the judgment in Budvar, namely the paramount importance of international law in the effort to reconcile the pre-existing international obligations of Member States with Union law. What lies at the core of Article 351 TFEU is respect for the international rules imposing legal obligations on Member States. In its judgment, the Court refers to the options left open to a Member State under Article 351(2) TFEU. These include interpretation of the existing agreement in a way which would be consistent with Union law, adjustment following renegotiation with the contracting third party and denunciation. These options were mentioned in that order, from the least onerous to the most radical. However, the choice between these options may be neither apparent nor immediate: it may take time for the plausibility of a consistent interpretation to be established or accepted, or in the alternative for the negotiations for adjustment to be carried out. There may be exceptional cases where this process may not have a happy conclusion in terms of compliance with Union law: national courts may conclude that to interpret a pre-existing agreement in a manner consistent with Union law would impair its objectives; the agreement in question may not have a denunciation clause or the contracting third party may be unwilling to renegotiate or unable to do so because of internal political conditions. In such a scenario, the ruling in Budvar suggests that the principle of Article 351(1) TFEU should apply and the Member State cannot be accused of violating its Treaties obligations. In other words, international law is accepted as the limit not only to the Union law interpretive duty imposed on national courts but also to the process of seeking to reconcile the pre-existing international duties of Member States with EU law under Article 351(2) TFEU.32 In theoretical terms, the significance of this conclusion cannot be overstated in so far as it appears to counterbalance the Court’s approach to the exercise of the national foreign affairs power: whilst, in doing so, Member States must act in accordance with Union law, the process of ensuring compliance with the latter must be carried out in accordance with international law. This conclusion further underlines the significance of the role entrusted by the Court to national courts: the way they carried out their task would determine the extent to which alternative methods of ensuring compliance with Union law should be explored and might lead to the conclusion that no such method was in fact appropriate. Entirely consistently with their role in the establishment of the single market, national courts are entrusted, in essence, with safeguarding Union law in the area of external relations. 32 However, see the concerns expressed in 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.

332 Prior International Agreements 2.3 When Is Denunciation Necessary? Termination of an international agreement is the most extreme action expected of Member States under Article 351(2) TFEU. Not only must it be carried out in accordance with the procedure laid down in the relevant agreement, but it also targets the totality of the agreement, including provisions compatible with Union law. Therefore, the question of the timing of termination is important, all the more so in the light of the benefits that any delay may bring for the Member State seeking to rely upon Article 351 TFEU. This issue was raised before the Court in Case C-203/03 Commission v Austria. Its subject-matter was the legality of national legislation on the employment of women in the underground mining industry, in a high-pressure atmosphere and in diving work.33 For the purpose of this analysis, it is the area of employment in the underground mining industry which is of interest. National rules adopted in 2001 in order to amend legislation originating in 1938 prohibited the employment of women except for a limited number of specified posts; these included management or technical responsibilities without strenuous physical work, social or health services and work in the context of vocational training for the duration of that training or on an occasional basis in an occupation which is not physically strenuous. The Commission argued that such legislation was contrary to the principle of equal treatment for men and women as enshrined in Articles 2(1) and 3(1) of Directive 76/207.34 The Austrian government responded by relying upon the exception to the principle of equal treatment laid down in Article 2(3) of Directive 76/207, which refers to the protection of women, particularly as regards pregnancy and maternity. However, that argument was dismissed by the Court, which pointed out that the exception to the principle of sex equality should be interpreted strictly as aiming at protecting the woman’s biological condition during and after pregnancy and the special relationship between a woman and her child over the period following pregnancy and childbirth. The Austrian measures were held to go beyond what was necessary in order to meet those objectives, as they excluded women even from work that was not physically strenuous.35 It is the second argument put forward by the Austrian government which is of relevance to this analysis. It was argued that the national restriction in question had been adopted in order to implement Convention No 45 of the ILO ratified by Austria in 1937. Indeed, both the prohibition and the exceptions laid down in Austrian legislation mirrored the content of that Convention. The Commission counter-argued that the above Convention ought to have been denounced in accordance with the relevant clause (Article 7(2)). According to this provision, an ILO member could denounce the Convention within a year after the expiry of each period of ten years following its entry into force. As it had entered into force on 30 May 1937, the Commission argued that Austria ought to have denounced it in the year following 30 May 1997. In its judgment, the Court accepted that the Austrian rules adopted in order to comply with the Convention did not go beyond its requirements. Having established the incompatibility of the Convention with Directive 76/207, the Court went on to reaffirm the conclusion in Case C-62/98 Commission v Portugal, namely that the appropriate steps 33

[2005] ECR I-935. [1976] OJ L39/40. 35 See n 33 above, paras 43–49. 34

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for the elimination of such incompatibility include denunciation.36 It concluded that, by maintaining in force the national provisions in question, Austria had not violated the ratio of Article 351(2) TFEU. This was because on the only occasion following its accession to the Community on which it could have denounced the Convention (the year following 30 May 1997), ‘the incompatibility of the prohibition laid down by that Convention with the provisions of Directive 76/207 had not been sufficiently clearly established for that Member State to be bound to denounce the convention’.37 It was added that the next opportunity for Austria to denounce the Convention would occur in the year following 30 May 2007. The Austrian government had argued that it could not have known that the rules in question were contrary to the Directive before the Commission issued its first statement on their illegality in September 1998, ie after the expiry of the year during which the Convention could have been denounced legally. That argument was rejected by Advocate General Jacobs as immaterial38 and was ignored by the Court. The position of the Austrian government is linked to the position that the illegality of the Austrian rules had not been clear and is also vaguely reminiscent of the case-law on state liability in damages for a breach of Union law. It is recalled that, in cases where a legislative authority enjoyed wide discretion, the existence of liability for a breach of Union law would depend upon, amongst others, the existence of a sufficiently serious breach; one of the factors which would determine whether that condition occurred would be ‘the clarity and precision of the rule breached’ and whether ‘the position taken by a Community institution may have contributed’ towards the violation.39 In British Telecommunications the adoption of national legislation wrongly implementing Directive 90/351 on procurement procedures in certain utilities sectors was held not to be a sufficiently serious breach of Union law: the provisions of the Directive breached were held not to be clear and precise and, inter alia, the Commission had not raised the issue when the national rules were adopted.40 Nonetheless, there can be no connection between the two legal contexts: in relation to state liability, the above conditions were included in a number of factors aiming at assisting national courts in carrying out the complex tasks articulated in Brasserie du Pêcheur; in the context of Article 351 TFEU, the Austrian government had sought to rely upon the non-authoritative approach by the Commission in order to absolve it of its responsibilities under primary law. In its judgment, the Court appears to suggest a link between the clarity of the state of Union law which triggers the application of Article 351(2) TFEU and the time when a Member State is bound to denounce an international agreement. Rather than complete certainty, it is ‘sufficient clarity’ which appears to be the prerequisite for the duty of Member States to apply. However, the conclusion reached in Commission v Austria is problematic on two counts. First, both the definition of the principle of equal treatment between men and women and the exception laid down in Articles 2(1) and 2(3) respectively of Directive 76/207 had hardly been unclear in the year following 30 May 1997, that is when Austria had the first opportunity to denounce the Convention legally. For instance, in Johnston the Court had already ruled that the exception of Article 2(3) of the 36

Ibid. Ibid, para 62. 38 Ibid, para 50 of his Opinion. 39 Joined Cases C-46 and C-48/93 Brasserie du Pêcheur SA v Germany [1996] ECR I-1029, para 56. 40 Case C-392/93 R v HM Treasury, ex p British Telecommunications plc [1996] ECR I-1631, para 45. 37

334 Prior International Agreements Directive should be interpreted strictly, adding that ‘it is clear from the express reference to pregnancy and maternity that the Directive is intended to protect a woman’s biological condition and the special relationship which exists between a woman and her child’.41 To that effect, it had held that national legislation preventing women from undertaking general policing duties carrying firearms in Northern Ireland was illegal. That judgment had been delivered in May 1986, ie eleven years prior to the date when Austria had the opportunity to denounce ILO Convention No 45. Indeed, the ruling in Johnston was mentioned by the Court in order to substantiate the illegality of the Austrian prohibition. Secondly, in his Opinion Advocate General Jacobs argued that, because of its failure to denounce the Convention, the Austrian government had lost its right to rely upon Article 351 TFEU. He referred to the fact that thirteen Contracting Parties, including six Member States, had already denounced ILO Convention No 45 and the majority had given as reasons for their denunciation that the Convention was incompatible with the principle of equal treatment for men and women. He also added that the ILO Governing Body had invited the parties to that Convention to contemplate ratifying ILO Convention No 176 on Safety and Health in Mines, applicable equally to men and women, and possibly denouncing Convention No 45.42 Whilst ignored by the Court, this information further weakens the claim that the inconsistency between the Convention and Directive 76/207 had not been ‘sufficiently clearly established’. One way of reading the conclusion reached by the Court is as an effort to strike a balance between the requirement of loyal cooperation which underpins the ratio of Article 351(2) TFEU and the drastic implications of denunciation of an international agreement. However, as applied to the facts of this case, the Court’s line of reasoning tilted the balance in the Member States’ favour without proper justification.

3. DOES ARTICLE 351 TFEU APPLY TO POTENTIAL VIOLATIONS OF EU LAW? Does Article 351 TFEU Apply to Potential Violations of EU Law?

The analysis above focused on the application of Article 351 TFEU to actual violations of EU law by Member States in the light of agreements concluded prior to their accession to the Union. Does the possibility of a violation render the ratio of this provision applicable? In other words, are potential violations caught by the duty of Member States laid down in Article 351(2) TFEU? This question was raised in a series of high-profile enforcement actions brought by the Commission in the late 2000s.43 In Case C-249/06 Commission v Sweden,44 Case C-205/06 Commission v Austria45 and Case C-118/07 Commission v Finland46 the Commission challenged a series of BITs concluded by these states

41

Case 222/84 Johnston [1986] ECR 1651, para 44. n 33 above, para 47 of his Opinion. 43 This section draws on 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 Common Market Law Review 2059. 44 Case C-249/06 Commission v Sweden [2009] ECR I-1335. 45 Case C-205/06 Commission v Austria [2009] ECR I-1301. 46 Case C-118/07 Commission v Finland [2009] ECR I-10889. 42

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prior to their accession to the Union47 as incompatible with the Treaty provisions on the movement of capital.48 The BITs concluded by the Member States safeguarded the principle of free movement of capital as laid down in Article 63 TFEU. They also contained a ‘transfer clause’: this guarantees for the investors of each party the free transfer, without undue delay and in freely convertible currency, of payments connected with an investment. The Commission took the view that, whilst facilitating the free movement of capital to and from third countries, the transfer clauses undermined the ability of the Union to impose restrictions on such movement. Such restrictions may be imposed in three sets of circumstances. First, in accordance with Article 64(2) TFEU, the Council may adopt measures on the movement of capital to or from third countries involving direct investment, including investment in real estate, establishment, the provision of financial services or the admission of securities to capital markets; such measures are adopted by qualified majority on a Commission proposal, except where they would constitute a step back in Union law as regards the liberalisation of the movement of capital to or from third countries, in which case unanimity would be required.49 Secondly, in accordance with Article 66 TFEU, the Council may adopt safeguard measures with regard to third countries for a period up to six months if such measures are strictly necessary 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; such measures are adopted by qualified majority on a Commission proposal. Thirdly, the Council has the power to impose financial sanctions on third countries, individuals, groups or state entities in order to achieve foreign and security policy objectives or in order to prevent and combat terrorism. Following the entry into force of the Lisbon Treaty, this power is set out in Article 75 TFEU (for anti-terrorism objectives) and Article 215 TFEU (following a CFSP measure).50 The thrust of the Commission’s argument was that compliance with the transfer clauses in the BITs would make it impossible for Member States to comply with any secondary measures which the Union might decide to adopt pursuant to Articles 64(2), 66, 75 and 215 TFEU. Therefore, the maintenance of such clauses was contrary to the above primary rules, any secondary legislation adopted under them, as well as the duty of cooperation laid down in Article 4(3) TEU. The Commission acknowledged that renegotiation or denunciation of BITs were possible and would enable the Member States to comply with their EU law obligation. However, it argued that they would need to be carried out in accordance with the periods of time required under public international law. During such periods, the free movement provisions of the Agreements would be

47 Austria had concluded with China, Malaysia, Russia (originally with the Soviet Union), Korea, Turkey, and Cape Verde. Sweden 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 48 The Commission 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. 49 Such measures would be adopted ‘whilst endeavouring to achieve the objective of free movement of capital between Member States and third countries to the greatest extent possible and without prejudice to the other Chapters of the Treaties’ (Art 64(2) TFEU). 50 These provisions are discussed in Chapter 14.

336 Prior International Agreements enforced and the EU rules restricting such movement would be applied in a disuniform manner within the Union. In its judgments, the Grand Chamber of the Court of Justice accepted that the BITs in question were consistent with the wording of Article 63 TFEU on movement of capital. However, focusing on the restrictive measures which the Council may be called upon to adopt, it pointed out that [i]n order to ensure the effectiveness of those provisions, measures restricting the free movement of capital must be capable  … of being applied immediately with regard to the States to which they relate.51

It then held that the BITs in question would run counter to that objective in so far as, on the one hand, they contain no provision enabling the Member State concerned to exercise its rights and to fulfil its obligations as a member of the Union, and, on the other hand, there is no international law mechanism which makes that possible. As the former was common ground, the Court focused on the latter. It pointed out that neither a renegotiation of the agreement, nor suspension or denunciation would guarantee the effectiveness of Union’s action restricting the movement of capital to or from a third country: in relation to the possibility of suspension, ‘the period of time necessarily involved in any international negotiations which would be required in order to reopen discussion of the agreements at issue is inherently incompatible with the practical effectiveness of those measures’; as far as denunciation was concerned, ‘the possibility of relying on other mechanisms offered by international law … is too uncertain in its effects to guarantee that the measures adopted by the Council could be applied effectively’. An issue which arose in the context of the action against Austria was the latter’s intention to introduce a ‘regional economic integration organisation’ (REIO) clause. Introduced in future agreements, this clause would reserve certain rights to the Union and enable Austria to apply any measures restricting movement of capital and payments which may be adopted by the Council under Articles 64(2), 66, 75 and 215 TFEU. The Court accepted that such a clause ‘should, in principle,  … be considered capable of removing the established incompatibility’. However, it pointed out that Austria had taken no steps during the two-month period prescribed in the Commission’s reasoned opinion in order to eliminate the risk of conflict with the restrictive measures which the Council may adopt under the Treaties. In Case C-118/07 the Finnish government argued that the wording of the transfer clause laid down in most of its BITs52 enabled it to apply any restrictions on movement of capital which the Union might decide to impose. These clauses protected investment in each contracting party ‘within the limits authorised by its own laws and decrees and in conformity with international law’. The Court of Justice pointed out that, as any international treaty, the BITs concluded by Finland ought to be interpreted in the light of its objectives and, according to customary international law, 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.53 It then held that: 51 Case C-249/06 Commission v Sweden, n 44 above, para 37; C-205/06 Commission v Austria, n 45 above, para 36; and Case C-118/07 Commission v Finland, n 46 above, para 30. 52 In particular, its BITs with Belarus, China, Malaysia, Sri Lanka and Uzbekistan. 53 Reference is made to Art 31 of the 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

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In that context, it is, to say the least, debatable whether the provision which guarantees the protection of investments within the limits authorised by the laws of the Contracting Party contained in the bilateral agreements concerned would allow either party to limit payment entitlement pursuant to decisions—whether national or otherwise—taken after the entry into force of the agreements, especially as in some agreements it is also stated that each Contracting Party is required to act ‘in accordance with international law. 54

Finally, the Court pointed out that the incompatibilities with EU law raised by BITs are not limited to Austria, Sweden and Finland, and concluded as follows: [I]n accordance with the second paragraph of Article 307 EC [now Article 351 TFEU], where necessary, the Member States must assist each other with a view to eliminating the incompatibilities established and must adopt, where appropriate, a common attitude. In the context of its duty under Article 211 EC [now Article 19 TEU], to ensure that the provisions of the Treaty are applied, it is for the Commission to take any steps which may facilitate mutual assistance between the Member States concerned and their adoption of a common attitude.55

In essence, the BITs cases raise various questions: how wide is the scope of Article 351(2) TFEU? And how onerous are the duties imposed on the Member States. Does the Commission’s determination to tackle potential violations of secondary measures which are yet to be adopted constitute an unreasonable intrusion in the capacity of Member States to carry out their foreign policy? Does the approach of the Court of Justice make it exceedingly difficult to establish any scope for flexibility in how a Member State may strike the balance between its independent treaty-making preceding its EU membership and the obligations imposed under Article 351(2) TFEU? The implications of the cases discussed in this section caused alarm in national capitals. In Case C-118/07 Commission v Finland 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 307 EC [now 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 307 EC [now Article 351 TFEU].56

In its judgment, the Court dismissed such concerns and held that this judgment in no way prejudges the obligations of the Member States in other circumstances and merely holds, as stated earlier, that the exercise of the powers conferred on the Council in relation to the movement of capital might be hindered by the very existence of the bilateral agreements at issue and by the terms in which they are drafted.57

Organisations, and to Case C-268/99 Jany and Others [2001] ECR I-8615, para 35, and Case C-344/04 IATA and ELFAA [2006] ECR I-403, para 40. 54 Case C-118/07 Commission v Finland, n 46 above, para 41. 55 Case C-249/06 Commission v Sweden, n 44 above, para 44; C-205/06 Commission v Austria, n 45 above, para 44; and Case C-118/07 Commission v Finland, n 46 above, para 35. 56 Case C-118/07 Commission v Finland, n 46 above, para 46. 57 Case C-118/07 Commission v Finland, n 46 above, para 49.

338 Prior International Agreements The judgments of the Court are firmly anchored in the effectiveness of any secondary measures which the Union may choose to adopt in order to restrict the movement of capital to and from third countries.58 Exceptional measures adopted in this area have something in common: the speed with which they are to be 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. This point is also made by Advocate General Maduro who pointed 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 59 EC (now Article 66 TFEU).59 Indeed, all the possibilities available for adjusting the free movement provisions of a BIT to the new environment defined by EU law restrictions require time in order to come to fruition. For instance, the provisions of an international agreement may not be suspended or denounced instantly; instead, they may take place in accordance with the provisions of the agreement in question or the VCLT.60 Nevertheless the time factor was only mentioned in relation to the possibility of renegotiating the BITs in question; in relation to their suspension or denunciation, the Court referred to the uncertain effects of the latter to which it objected for their failure to guarantee that the measures adopted by the Council could be applied effectively. It is curious that the Court should have chosen the above formulation, as it is the period of time required under public international law which would undermine the effectiveness of the potential restrictive measures by the Council. There is merit in this argument. All the measures envisaged under Articles 64(2) TFEU, 66 TFEU and 215 TFEU are exceptional, in so far as they restrict the movement of capital or payments to or from a third country. Therefore, their effective application is paramount to enabling the Union to revert to a legal framework which would enhance the principle of free movement laid down in Article 63 TFEU. As Advocate General Sharpston put it in her Opinion in Case C-118/07 Commission v Finland, the Court in BITs ‘has effectively required a guarantee that restrictions to capital movements and to payments, as provided for in Articles 57(2), 59 and 60(1) EC, could if necessary be applied’.61 However, a qualification is also worth mentioning in relation to measures envisaged under Article 64(2) TFEU: the urgency of their application is less immediately apparent than that regarding measures adopted under the other provisions. In this respect, Advocate General Maduro is correct in his scepticism about this particular provision, in relation to which he states that ‘the loss of effectiveness is less clear’, although he concludes that ‘the fact remains that the agreements concluded by Austria and Sweden may prevent the immediate application of restrictions, and such application may be essential to the objectives of Community legislation’.62 58 In his Opinion in Case C-249/06 Commission v Sweden, n 44 above and C-205/06 Commission v Austria, n 45 above, AG Maduro suggested that the disputes were about the duty of cooperation and the Union’s competence rather than Art 351 TFEU. The Court did not follow this approach. For criticism of the AG Maduro’s view, see Koutrakos, n 43 above, 2066–67. 59 Para 52 of his Opinion in Case C-249/06 Commission v Sweden, n 44 above, and C-205/06 Commission v Austria, n 45 above. 60 See Art 42 VCLT. 61 Case C-118/07 Commission v Finland, n 46 above, para 32 of her Opinion. 62 n 45 above, para 53 of his Opinion.

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The above qualification is necessary because it is tied in with the need to circumscribe the application of the effectiveness rationale of the judgment. To apply the logic of effet utile to any measure that 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. Indeed, neither the tenor nor the wording of the two BITs judgments appear to support such a broad reading of Article 351 TFEU. Not only are they confined to the exceptional measures envisaged under Articles 64(2), 66, 75 and 215 TFEU and the vital significance of their immediate application, but the BITs judgments do not suggest that the possibility of a conflict with a potential EU measure would render a treaty concluded by a Member State incompatible with EU law; neither do they suggest that the effectiveness of EU measures envisaged under the Treaties should be assessed in abstracto in order to ascertain whether such incompatibility arises. Rather, what is important is the specific nature of the restrictive measures that the Council may be called upon to adopt under the specific Treaties’ legal bases discussed above. Therefore, a temptation to interpret the rulings in the BITs cases in broad terms should be resisted. A counter-argument to the Court’s approach may draw upon the position of a Member State which, as a matter of fact, finds itself torn between its obligation to comply with EU measures adopted under Articles 64(2), 66, 75 and 215 TFEU and its duty to respect the international law commitment which it has assumed pursuant to a bilateral treaty, and may choose to honour the former and violate the latter. And this choice raises no issues which the Court of Justice would have jurisdiction to review. However, this possibility, and any commitment to that effect which a Member State may make, however firm it is, would not disguise the fact that, in principle, the option of violating Union law would also be open. This state of uncertainty may not be tolerated under EU law. On the one hand, a similar argument made by the Portuguese government in the two cases about cargo-sharing clauses in maritime agreements in the late 1990s had been ignored by the Court.63 On the other hand, it has been a constant theme in the Court’s internal market case-law under Article 258 TFEU that ‘an ambiguous state of affairs’ and ‘a state of uncertainty’ resulting from the maintenance, but non-application, of national law contrary to EU law may not be tolerated.64 And although this line of reasoning was put forward in order to protect the individual by ensuring that there would be no doubt as to the existence of her Union law rights, it may also be extended to ensure the effectiveness of measures which the Union may be called upon to take in exceptional circumstances. What is rather curious is the cursory approach by the Court and Advocate General Maduro to public international law. In his Opinion, the Advocate General dealt with the argument put forward by the Swedish and Austrian governments about the principle clausula rebus sic stantibus: under Article 62 VCLT a party to an international 63 Case C-62/98 Commission v Portugal, n 17 above, para 13 and C-84/98 Commission v Portugal [2000] ECR I-5215, para 13. 64 Case 167/73 Commission v France [1974] ECR 359; Case 74/86 Commission v Germany [1988] ECR 2139, para 10, Case C-358/98 Commission v Italy [2000] ECR II-255, paras 16 and 17; Case C-160/99 Commission v France [2000] ECR I-6137, para 22; Case C-487/04 Commission v Italy ECLI:EU:C:2006:435, para 33; Case C-522/04 Commission v Belgium [2007] ECR I-5701, para 70; Case C-214/04 Commission v Italy ECLI:EU:C:2005:440.

340 Prior International Agreements government may terminate or withdraw from an agreement following a fundamental change of circumstances provided that, on the one hand, the existence of those circumstances constituted an essential basis of the consent of the parties to be bound by the treaty, and, on the other hand, the effect of the change is radically to transform the extent of obligations still to be performed under the treaty. Advocate General Maduro dismissed this argument merely by stating that the application of this principle ‘constitutes a controversial point of international law’.65 To support his conclusion, he, as well as Advocate General Sharpston in her Opinion in the Finnish BITs, relied upon the ruling in Case 812/79 Burgoa where the Court had held that ‘Article [351 TFEU] is of general scope and it applies to any international agreement  … which is capable of affecting the application of a Treaty’.66 However, this statement merely suggested that the subject-matter of the pre-accession agreement need not coincide with the competence of the Union, as it is only compatibility with EU law which is of relevance;67 it did not refer to the role of international law principles in rendering pre-accession agreements compatible with EU law, neither did it set any degree of certainty which such principles should be expected to meet. Viewed from this angle, this aspect of the BITs judgment appears to justify the criticism of the Article 351 TFEU case-law for the lack of reasoning in relation to the international law dimension of the disputes.68 In this vein, it is regrettable that the Court should choose to ignore the alternatives which its own case-law had suggested. A case in point is the judgment in Budvar where the Court of Justice had highlighted the role of national courts in avoiding a possible incompatibility between primary EU law and prior treaties concluded by Member States by way of interpretation.69 As pointed out above in this analysis, this duty of interpretation and the role of national courts which its application entails introduces a considerable variant in the application of Article of 351 TFEU: not only does it broaden the scope of possibilities open to the Member States in their effort to tackle incompatibilities between their prior agreements and EU law, but it also carves out a contribution for national courts in this process. This parameter is ignored by the Court, whereas Advocate General Maduro dismissed it by merely stating that ‘the obligation imposed by Article 351 TFEU on Member States to take all appropriate steps to eliminate [an incompatibility between a prior agreement and EC law] would serve no purpose’.70 This cursory approach is regrettable. It is true that the legal and procedural context in Budvar and the BITs rulings differ: the contribution of national courts and the possibility of consistent interpretation were introduced in the former in the context of a preliminary reference, where national courts are the Court’s interlocutors; on the other hand, the latter judgments were rendered in the context of direct enforcement procedures. 65 n 44 above, para 62 of his Opinion. He also states that the principle ‘is applied in very limited circumstances, and whether it can be applied to the present cases is a matter of controversy’ (para 61). 66 Case 812/79 Burgoa, n 7 above, para 6. See AG Sharpston in n 46 above, para 27. 67 See M Cremona, ‘Defending the Community Interest: The Duties of Cooperation and Compliance’ in M Cremona and B De Witte (eds), EU Foreign Relations (Oxford, Hart Publishing 2008) 125, 132. 68 J Klabbers, Treaty Conflict and the European Union (Cambridge, Cambridge University Press, 2009) ch 6. Klabbers views the Court’s approach to Art 351 TFEU as ‘Eurocentric’ (140), indicative of ‘the myopia of EU law’ when it comes to international law (142), and ‘worrisome’ as ‘it does aspire to build a fence around EU law, therewith running the risk of placing the EU outside international law’ (148). 69 Case C-216/01 Budvar, n 24 above. 70 n 44 above, para 57 of his Opinion.

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However, this distinction does not render the possibility of consistent interpretation de facto irrelevant, neither does it justify the Court’s silence on the matter. The above qualifications notwithstanding, the BITs judgments should be viewed as a justified application of Article 351 TFEU in the light of the very specific features of the measures which the Union may be called upon to take pursuant to exceptional provisions of the Treaties. Confined to this specific and narrow context, the judgments do not lend themselves to wider propositions about the duties which Article 351(2) TFEU imposes on Member States. There is, however, the interesting reminder in the concluding paragraphs of the judgments of the role that the Commission may play in the area. This is noteworthy for a number of reasons. First, it is interesting that the Court should have chosen to construe the role of the Commission with reference to Article 211 EC (replaced by Article 17 TEU), rather than Article 351 TFEU itself. After all, its contribution to the achievement of the objectives of the latter provision had already been seen as implied: it is recalled that in Burgoa the Court had pointed out that Article 351(1) TFEU ‘would not achieve its purpose if it did not imply a duty on the part of the institutions of the Community not to impede the performance of the obligations of Member States which stem from a prior agreement’.71 Second, any failure of the Commission to discharge of its role could not justify a failure by a Member State to comply with its duty as set out in Article 351(2) TFEU. In this vein, the Court held in International Maritime Organisation that the failure by the Commission to comply with its Article 4(3) TEU duty of cooperation in the context of EU external relations does not entitle a Member State to violate its own obligations as set out in the Treaties.72 Third, the reference in the BITs judgments to the role of the Commission is interesting. It reminds one of the way in which the Court referred to the duty of loyal cooperation in the context of mixed agreements in the 1990s: seeking to rebuff the Commission’s persistent claims to exclusivity by reference to practical difficulties to which the participation of Member States along with the Community would raise, the Court set out this duty at the end of its rulings, and merely pointed out that it applies both to the Community institutions and the Member States in the process of the negotiation, conclusion and application of mixed agreements.73 In the BITs judgments the reference to the role of the Commission is made following the conclusion that the incompatibility between BITs and Articles 64(2), 66, 75 and 215 TFEU is an issue of concern to more than one Member State. This suggests an emphasis on a concerted approach which is noteworthy in the light of the more recent practice, as there has been a steady effort on behalf of the EU to iron out incompatibilities between obligations assumed by Member States pursuant to bilateral agreements and EU law. This will be examined in the following sections.

71

Case 812/79 Burgoa, n 7 above, para 9. Case C-45/07 Commission v Greece [2009] ECR I-00701, paras 25–26 and the analysis in Chapter 5. See Opinion 2/91 [1993] ECR I-1061, paras 36–38; and Opinion 1/94 [1994] ECR I-5267, paras 107–09. That obligation was construed in more specific terms in judgments such as Case C-25/94 Commission v Council (Food and Agricultural Organisation) [1996] ECR I-1469; Case C-266/03 Commission v Luxembourg [2005] ECR I-4805; and Case C-459/03 Commission v Ireland (re: MOX Plant) [2006] ECR I-4635. 72 73

342 Prior International Agreements 4. THE EVOLVING CONTEXT OF THE APPLICATION OF ARTICLE 351 TFEU The Evolving Context of the Application of Article 351 TFEU

The above section illustrated how Article 351(2) TFEU has been gradually developed by the Court as the legal foundation of a Union law duty imposed on various national actors in order to ensure compliance with Union law whilst respecting the sanctity of international legal obligations towards non-member states. Striking the balance between those two interests is a delicate exercise. The management of the implications of the judgments in the Open Skies litigation illustrates the practical difficulties.74 The facts of the cases and the judgments of the Court were examined in detail in Chapter 3. For the purpose of this analysis, the Court sidestepped the issue of the applicability of Article 351 TFEU.75 There was considerable difference of opinion as to how the incompatibility between the bilateral air services agreements concluded by Member States and their obligations under Union law was to be remedied. The Commission made it clear quite early on that it deemed the denunciation of the agreements the appropriate remedy.76 The United States, in a rather combative tone, expressed dissatisfaction with this option. In a statement within three weeks after the judgments had been delivered, the State Department argued that: [T]he European Court of Justice’s decisions do not require the European Union Member Sates to denounce these agreements. The Court also ruled against the Commission’s assertion that Member States lacked competence to negotiate air services agreements at all. Instead, the Court found that our agreements are consistent with EU law, except in three areas. We see no utility in denunciation of our aviation agreements. The United States is prepared to discuss with the European Union Member States on a bilateral basis how to accommodate the European Court of Justice’s specific legal findings. Such discussions can occur without denunciation.77

Denunciation was unpopular with the Member States too.78 In practical terms, the determination of whether denunciation was the appropriate response was complicated by the existence of national competence over parts of the Open Skies Agreements and was also tied in with the question of the negotiating mandate which the Commission was seeking. It was this interaction between legal principle and practice which provided an answer: the Commission was granted a complex double negotiating mandate—for an Open Aviation Area Agreement with the United States and a ‘horizontal’ mandate for amendment of bilateral agreements so that entitlements will be available to any Union-controlled airline. 74 See Case C-467/98 Commission v Denmark [2002] ECR I-9519; Case C-468/98 Commission v Sweden [2002] ECR I-9575; Case C-469/98 Commission v Finland [2002] ECR I-9627; Case C-471/98 Commission v Belgium [2002] ECR I-9681; Case C-472/98 Commission v Luxembourg [2002] ECR I-9741; Case C-475/98 Commission v Austria [2002] ECR I-9797; Case C-476/98 Commission v Germany [2002] ECR I-9855. 75 See the criticism in CNK Franklin, ‘Flexibility vs Legal Certainty: Article 307 EC and Other Issues in the Aftermath of the Open Skies Cases’ (2005) 10 European Foreign Affairs Review 79 which also provides a detailed analysis of further developments. 76 See COM(2002)649 final, paras 65 and 67. 77 See House of Lords Select Committee on the European Union, ‘Open Skies’ or Open Markets? The Effect of the European Court of Justice Judgments on Aviation Relations between the European Union and the United States of America, Session 2002–03, 17th Report, 26–27. See also P Mendes de Leon, ‘Before and After the Tenth Anniversary of the Open Skies Agreement Netherlands–US of 1992’ (2002) 28 Air and Space Law 280, 300–01. 78 In relation to the UK, see HL Select Committee Report, ibid, where, pointing out that the Commission’s insistence on formal denunciation seems unnecessarily confrontational, it was stated that ‘we saw little value and possibly much harm’ in denunciation, and it was recommended that the British government ‘resist the Commission’s call for denunciation’ (para 52).

The Evolving Context of the Application of Article 351 TFEU 343 The EU–US Air Transport Agreement was signed in 2007 and provisionally applied from 30 March 2008.79 It was then amended by a Protocol, signed and provisionally applied on 24 June 2010.80 The bilateral agreements between Member States and the United States were not denounced and no further infraction proceedings were brought against the Member States. The remainder of this section will identify other ways in which the evolving international framework has interacted with the application of the principle set out in Article 351 TFEU.

4.1 Friendship, Navigation and Commerce and Telecommunications Procurement An example of the multifarious issues that the application of Article 351 TFEU may raise is provided by the serious dispute between Germany and the Commission about the approach adopted by the former to the Utilities Directive in the early 1990s. Directive 90/531 aimed at bringing the water, energy, transport and telecommunications sectors, until then excluded from the existing secondary legislation, within the scope of public procurement law.81 Aiming at ensuring free movement, it governed the publication of information about proposed contracts and provided for objective criteria and transparent procedures for their award. What made this set of rules controversial was the inclusion of the so-called rejection and preference clauses: the former allowed national authorities to reject tenders where the proportion of the products originating in third countries would exceed 50% of the total value of the products; the latter provided that, save in certain specified circumstances, in cases where two or more tenders were equivalent on the basis of the award criteria, the national award authorities should prefer the EC bid, that being considered equivalent even if it was up to 3% more expensive. These clauses were to apply only in cases where the third country concerned had not concluded an agreement with the Union granting comparable and effective access for EU undertakings to that country’s market.82 The German government maintained that those clauses were in conflict with a Friendship, Navigation and Commerce Agreement which it had concluded with the United States in 1954 and, in particular, with its prohibition of discrimination between the two contracting parties in the areas of public procurement.83 In the light of this interpreta-

79 [2007] OJ L134/4, concluded by Decision of the Council and the Representatives of the Governments of the Member states of the European Union, meeting within the Council 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 (2007/339/EC) [2007] OJ L134/1. 80 [2010] OJ L223/3, concluded by 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 between the United States of America, of the one part, and the European Community and its Member States, of the other part (2010/465/ EU) [2010] OJ L223/1. 81 [1990] OJ L297/1 consolidated by Dir 93/38 [1993] OJ L199/84 and followed by Dir 92/13 [1992] OJ L76/14 which introduced specific remedies in the area. 82 For a comment on Dir 90/531, see A Brown, ‘The Extension of the Community Public Procurement Rules to Utilities’ (1993) 30 Common Market Law Review 721. 83 Under Art 17(2) of the US–Germany Agreement, ‘each party shall accord to the nationals, companies and commerce of the other Party fair and equitable treatment, as compared with that accorded to the nationals, companies and commerce of any third country’.

344 Prior International Agreements tion, the German government invoked the Article 307(1) EC (now Article 351(1) TFEU) proviso and decided in June 1993, that is six months after its entry into force, not to apply the Utilities Directive to US tenders.84 This development gave rise to a confrontation with the European Commission. In order to appreciate the importance attached to this case by the Commission, two factors need to be highlighted: on the one hand, similar agreements had been concluded between the United States and six other Member States, namely Belgium, Denmark, Ireland, Italy, Greece and the Netherlands; on the other hand, following the adoption of the Utilities Directive, the United States administration had argued that its provisions were contrary to the rules laid down in the GATT. Following two years of negotiations with the Commission, a compromise was reached, albeit confined to the procurement of electrical goods;85 on EC bids on telecommunications equipment, US sanctions were imposed, to which the Community retaliated.86 In the light of these internal and external factors, the Commission became alarmed by the German position, all the more so in the light of the ongoing negotiations for the conclusion of the Government Procurement Agreement under the GATT umbrella. The case of public procurement in the area of telecommunications illustrates with stark clarity both the different, and often conflicting, interests underlying the application of Article 351 TFEU and, on the other hand, the dynamic process that renegotiation pursuant to this provision inevitably entails. Whilst compliance by a Member State with its pre-existing international law obligations is the uncontroversial objective of Article 351 TFEU, its application in practical terms may serve other functions of a more political nature. For instance, it may offer a Member State a legally acceptable disguise to deviate from rules of Union law adopted despite its opposition—it is noteworthy that the Utilities Directive had been adopted by qualified majority voting.87 In addition to undermining the effectiveness of Union legislation, undue reliance upon Article 351 TFEU might have very serious repercussions regarding the international posture of the Community on the economic arena. The application of Union rules to its external relations cannot be examined in isolation; instead, it should be viewed as intrinsically linked to the continuous effort of the Community to present a common stance and negotiate effectively in the context of the ongoing liberalisation of international trade. Viewed from this angle, reliance upon Article 351 TFEU by a Member State may seriously undermine the negotiating position of the European Union. Again, the example of telecommunications is interesting because the relevance of Article 351 TFEU arose whilst the Commission was seeking to enhance its negotiating position against, amongst others, the United States in relation to the Government Procurement Agreement.88 It is recalled that one of the legal bases of the Utilities Directive was Article 133 EC (now Article 207 TFEU): it was precisely in the context of the common commercial policy that the unitary representation

84 See JM Grimes, ‘Conflicts Between EC Law and International Treaty Obligations: A Case Study of the German Telecommunications Dispute’ (1994) 35 Harvard International Law Journal 535. 85 See Council Dec 93/323 [1993] OJ L125/1 and Council Dec 93/324 [1993] OJ L125/54. 86 See Council Reg 1461/93 [1993] OJ L146/1. 87 In the negotiations leading to the adoption of the Utilities Directive, Germany did not mention its view as to the conflict with its previous Agreement with the US: Grimes, n 84 above, 552. See P Eeckhout, The European Internal Market and International Trade: A Legal Analysis (Oxfordm Clarendon Press, 1994) 318. 88 See M Footer, ‘Public Procurement and EC External Relations: A Legal Framework’ in N Emiliou and D  O’Keeffe (eds), The European Union and World Trade Law—After the GATT Uruguay Round (Chichester, Wiley, 1996) 293, 301.

The Evolving Context of the Application of Article 351 TFEU 345 of the Union was deemed so important a function as to justify the exclusive nature of its competence.89 Excessive reliance upon Article 351 TFEU could call into question the extent to which Member States are prepared to accept the normative foundations of the external relations power of the Union. That is not to say that the principle behind Article 351 TFEU is detrimental to the conduct of EU international relations: quite the contrary, as international relations are carried out on the basis of both Union and national competence, it is vital not only that the main tenets of the international legal order should be complied with, but also that that should be apparent to the trading partners of the Union. However, the intrinsic link between Article 351 TFEU and the external action of the Union should make the Member States less willing to deviate from Union law and more prepared to adhere by the spirit of Article 351 TFEU. Again this is raised in the case of the Utilities Directive, as the other Member States with similar pre-existing agreements with the United States did not interpret the exclusion and preference clauses as being in conflict with their bilateral obligations. As it happened, the dispute between the Commission and Germany did not give rise to an action before the Court of Justice. Instead, the issue was resolved with the passage of time, as the Utilities Directive ceased to have effect following the adoption of the GATT Government Procurement Agreement.90

4.2 Preparing for Accession The Union institutions have since sought to avoid such legal tensions by addressing potential conflicts before they arise. An example is provided by the process which paved the way for the accession of Central and Eastern European countries to the European Union. In direct correlation to the scope of that enlargement, the process which led to the accession of the ten new Member States was extraordinary both in scope and intensity.91 Within this context, the new Member States had to adjust their international legal commitments in a way which would ensure compliance with the acquis communautaire. The Treaty of Accession 2003 made it clear that all the new Member States had to ‘withdraw from any trade agreements with third countries, including the Central European Free Trade Agreement’.92 As the negotiation and conclusion of free trade agreements fall within the exclusive competence of the Union, the retention of such agreements concluded unilaterally by Member States would be clearly contrary to Union law. However, what is most interesting is the process pursuant to which the new Member

89

See eg Opinion 1/75 [1975] ECR 1355 and the analysis in Chapter 1. It was replaced by Dir 98/4 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [1998] OJ L101/1. 91 For an analysis of the pre-accession process, see M Maresceau, ‘Pre-accession’ in M Cremona (ed), The Enlargement of the European Union (Oxford, Oxford University Pres, 2003) 9. For an analysis of the gradual developments which brought about the approximation of the legislation of the new Member States prior to their accession, see A Ott and K Inglys (eds), Handbook on European Enlargement—A Commentary on the Enlargement Process (The Hague, TMC Asser Press, 2002). 92 [2003] OJ L236/17, Art 6(10). See K Inglis, ‘The Union’s Fifth Accession Treaty: New Means to Make Enlargement Possible’ (2004) 41 Common Market Law Review 899, 940–45. 90

346 Prior International Agreements States gradually adjusted their external policies to those of the Union.93 The dynamic nature of this process was defined not only by the positions of the Central and Eastern European Countries, but also the development of the Union policies themselves. For instance, Slovenia had requested a ten-year-long transitional period in order to retain the asymmetric trade agreements it had concluded with Croatia, the Former Yugoslav Republic of Macedonia and Bosnia-Herzegovina.94 In doing so, it put forward a number of economic and political arguments, the latter relating to the disintegration of the former Socialist Federal Republic of Yugoslavia. As it happened, there was no need for such a transitional period, as the Union concluded free trade agreements with those countries. Another interesting feature of the 2003 Treaty of Accession is the detailed provision for specific areas of external relations. On the one hand, there is a general cooperation clause according to which the new Member States shall take appropriate measures, where necessary, to adjust their position in relation to international organisations, and to those international agreements to which the Union or to which other Member States are also parties, to the rights and obligations arising from their accession to the Union.95

As it clearly drew upon the precursor to Article 351(2) TFEU, this provision is more interesting for its position within the Act of Accession rather than its content:96 it is the last paragraph in a long Article dealing with external relations and its content is considerably more general than that of the provisions preceding it. This reflects accurately the intention of the Union institutions to deal with pre-existing international obligations of the new Member States in a way that would minimise the risk of legal tensions following accession. Indeed, what precedes Article 6(12) of the Act of Accession are various provisions dealing with very specific aspects of external relations. Following a general undertaking that the states accede to the mixed agreements concluded or applied provisionally by the present Member States and the Union,97 there are detailed provisions about a number of existing agreements and the ways in which they would apply to the new Member States.98 A similar pattern is followed in the 2005 Treaty of Accession for Bulgaria and Romania99 as well as the 2012 Treaty of Accession for Croatia.100 The considerable detail of the above provisions becomes all the more striking in the light of the Treaty concluded on the occasion of the accession by Austria, Sweden and Finland in 1994.101 In addition to a general provision reaffirming the principle of Article 351 TFEU, that Treaty referred only to the rule that the new Member States accede to the mixed agreements concluded at that time, with no reference to agreements provisionally applied, and included the general cooperation rule laid down in subsequent Accession Treaties. 93 See M Cremona, ‘The Impact of Enlargement: External Policy and External Relations’ in Cremona (ed), n 91 above, 161. 94 See Republic of Slovenia, Negotiating Positions of the Republic of Slovenia for Negotiations on Accession to the European Union (2000) 295, 297–98. 95 Art 6(12)(1). 96 Apart from an apparent glimpse, that is: did it not intend to refer to agreements to which the Community or to which the Community and other Member States are also parties? 97 Art 6(2) of the Accession Treaty. 98 Art 6(2)–(9) of the Accession Treaty. 99 [2005] OJ L157/4, Art 6, 100 [2012] OJ L112/10, Art 6. 101 [1994] OJ C241/1.

The Evolving Context of the Application of Article 351 TFEU 347 4.3 EU Negotiations with Third States Prior to Accession It was argued above that the structure of the recent Acts of Accession reflects a more active approach to managing the existing international obligations of the new Member States within the context of the EU international relations. Another facet of this dynamic process was highlighted, in the context of the 2004 enlargement, in the case of eight BITs between the Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovakia, Bulgaria and Romania, on the one hand, and the United States, on the other. These agreements had been negotiated after the fall of the Iron Curtain and had entered into force at various dates between 1992 and 2001. A main feature was the application of the national treatment principle and the Most-Favoured-Nation principle to undertakings of the contracting parties engaging in direct investment in the other contracting party. A number of their provisions raised serious legal questions as to their compatibility with the acquis communautaire. The Commission pointed out that the problem of incompatibility would be more acute in areas such as agriculture and audiovisual services. It was argued that, had the agreements remained unchanged, a number of EU provisions granting preferential treatment to EU operators would have been undermined, hence enabling US investors to benefit from Union subsidies or quotas for the broadcast of European works.102 These questions were addressed prior to accession in a multilateral negotiating context involving not only the US administration and the eight above-mentioned states but also the European Commission. This resulted in a Memorandum of Understanding (MoU) signed on 22 September 2003 in Brussels. On behalf of the Commission, it was signed by the Director General for Trade. In the MoU, the participants made it clear that their aim was to strike the balance between two main interests: on the one hand, the maintenance and enhancement of a positive framework for US investment in the eight accession and candidate countries; on the other hand, the full compliance and implementation of the acquis communautaire in the context of which express reference was made both to Article 307 EC (now Article 351 TFEU) and the 2004 Treaty of Accession. To that effect, the ten participants: (a) express their intention to address the matters identified [in the MoU] by relying on interpretations and specific amendments to Acceding and Candidate Countries’ [Bilateral Investment Treaties] with the US, including specific sectoral exceptions, as well as consultations where appropriate; (b) intend that making the interpretations and specific amendments outlined in this Understanding will eliminate incompatibilities between obligations of the Acceding and Candidate Countries that arise as a result of membership in the EU and their obligations in their BITs with the US; and (c) undertake the political commitment to make good faith efforts, as necessary, to seek to avoid or to remedy further incompatibilities.

The MoU referred to a number of areas which the participants deemed problematic, an important one being capital movements. The Commission was anxious to ensure respect for the right of the Council to impose restrictions on capital movements and payments 102 BITs concluded by older Member States (often called Investment Promotion and Protection Agreements) contained a clause ensuring that Community benefits would not be undermined by clauses on most-favourednation and national treatment: see eg Art 7(1) of the 1981 Agreement between the UK and Paraguay.

348 Prior International Agreements originating in or destined for third countries, either under exceptional circumstances involving serious difficulties in the operation of the economic and monetary union, or in order to implement a common position or a joint action adopted pursuant to the CFSP. It is recalled that it was this right that gave rise to the BITs litigation examined earlier in this chapter. The wording of the MoU was non-committal and provides for consultations between the US and the Commission, albeit without prejudice to the latter’s powers under the Union’s primary rules. An important area covered by the MoU was what the participants call ‘sensitive sectors or matters’. In essence, the acceding and candidate countries were allowed to deviate from the non-discrimination principle laid down in the investment agreements in order to meet EU obligations in areas including agriculture, audiovisual securities, investment services and other financial services, fisheries, air transport, inland waterways transport and maritime transport. In return, the US administration ensured that such deviations would not apply to existing US investments in the relevant sector for a considerable period of time.103 In addition, it was agreed that no exception should be defined in a way which would require divestment, in whole or in part, of an existing investment. An interesting clause included in the MoU was about future developments in EU law. The duty of the acceding states to adjust their pre-existing contractual obligations pursuant to Article 351 TFEU and the 2004 Act of Accession was acknowledged, along with the fact that the provisions of the Memorandum could not possibly envisage the content of future EU law adopted which might raise questions about its compatibility with the content of the investment treaties binding upon the acceding and candidate countries. In order to address this problem, a general provision for consultation was laid down involving the US administration and the Commission. This consultation would be carried out by established means, for instance informal contacts between the Commission and US officials, contacts through diplomatic channels, the US–EU Senior Level Coordinating Group; they would be pursued when EU measures affecting foreign investment are proposed and their purpose would be ‘to address, consistent with the objective of this Understanding, any incompatibility that would arise from the adoption of any such measure’. The views of the acceding and candidate countries, along with those of Member States with agreements with the USA that might be affected would be approached by the US Administration and the Commission ‘with a good faith effort to be take[n] into account’. In legal terms the MoU was not a judicially enforceable set of rules: in its very first paragraph, it was described as a ‘political understanding’ and the first of its concluding provisions defined it as a ‘political arrangement reflecting the participants’ intentions with regard to the matters it addresses and  … not an agreement binding under international law’. This non-binding document nevertheless set out a framework within which a number of states were to approach, and in certain cases, amend legally binding obligations. In substantive terms, the distinctly non-committal language used in the MoU was noticeable in the issue of the definition of a company or firm under Article 48 EC (now Article 54 TFEU). Apart from the specific sectors where the acceding and candidate countries could deviate from their bilateral commitments, the MoU set out, in essence, 103 That would be either 10 years from the date of the entry into force of the relevant EU or national measure or 20 years from the date of the entry into force of the investment treaty, whichever date was the later.

Conclusion

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a framework for consultation. This lay at the very core of what the participants viewed as the inevitable possibility of an eventual conflict between the duty of the acceding and candidate states to comply with EU law and their duty to implement the pre-existing agreement with the USA. This framework of consultation was construed widely: it involved the Commission and the US administration whenever the accession of new members raised questions concerning the implementation or application by the latter of EU measures that would affect US investments. The objective of the consultation would be the protection of existing investments. In so far as consultation lay at the very core of the modus operandi of the MoU, it might appear tempting to dismiss it as of merely rhetorical significance. After all, it is noteworthy that the right of the Commission, in the absence of a mutually satisfactory solution, to bring enforcement proceedings against any acceding country deemed to have violated Article 351 TFEU was acknowledged twice; so was the duty of the acceding countries to adjust their obligations laid down in the investment agreements pursuant to Article 351 TFEU and the 2004 Act of Accession. However, the MoU is an interesting document whose main tenor is consistent with other threads of EU external relations and whose implications may be directly relevant to the way in which the Union may manage the coordination of its external posture with that of its Member States. In this respect, its personal scope is noteworthy, as it involves, in effect, three parties, ie the contracting parties to the direct investment agreements and the Commission. Bringing them together in an effort to set up a common mechanism which would apply to all their agreements was noteworthy, all the more so as it took place prior to the enlargement itself. The role of the Commission is noteworthy. It is recalled that, in Burgoa, the Court had established ‘a duty on the part of the institutions of the Community not to impede the performance of the obligations of Member States which stem from a prior agreement’.104 In initiating and participating actively in the process which led to the adoption of the MoU, the Commission raised this duty to an entirely different level: it adopted a proactive approach in liaising with the third country whose pre-existing bilateral agreements might be affected by EU law and engaged in negotiation prior to accession involving even states whose prospect of accession was further apart in time. It intervened in the relationship between acceding and candidate countries and a third country and brought them together under a common umbrella rather than confining them to a set of individual processes regarding the different bilateral agreements. Far from preparing for yet another round of disputes, the Commission chose to engage the United States in a process which would otherwise be not only fraught with uncertainty but also quite time-consuming.

5. CONCLUSION Conclusion

The application of Article 351 TFEU should be placed within the broader context of EU external relations. The Union has exhibited a remarkable momentum in establishing frameworks of cooperation with third countries. The intensity of disputes about the application of Article 351 TFEU is in reverse correlation to the scope of and intensity with which the Union is linked to the outside world. This is the case irrespective of the 104

n 7 above, para 9.

350 Prior International Agreements expansion of the scope of the principles governing Article 351(2) TFEU as developed by the Court of Justice. The analysis in this chapter suggested that, viewed in its specific factual and legal context, this development does not broaden the scope of Article 351 TFEU unduly. It also suggested that the interpretation of this provision by the Court should be assessed along with the expansion and sophistication of processes originating in EU institutions and aiming at forestalling the difficulties of application of Article 351 TFEU. Viewed as complementary, the above developments indicate that the application of that provision is necessarily of a dynamic nature, ultimately dependent upon the extent to which a variety of actors may manage to comply with distinct, albeit interacting, Union law duties. Within this context, the nature and interrelationship of the functions imposed upon or assumed by the relevant Union and national institutions becomes clearer: the Commission appears increasingly willing to take initiatives and cooperate with acceding states and their international partners in order to address potential incompatibilities with Union law prior to accession; following accession, the national courts are to interpret pre-existing agreements between Member States and third countries in a manner consistent with Union law, albeit as far as possible and in full compliance with international law; the national executive and legislative authorities are to seek to renegotiate and adjust their agreements in cases where they are deemed to be incompatible with the Union legal order, failing which they should denounce them. It is the individual and cumulative effects of the above functions that define the multilevel and dynamic nature of the evolving construction of Article 351 TFEU.

Substantive Trade Law

10 Substantive Trade Law 1. INTRODUCTION Introduction

T

HIS BOOK HAS examined the CCP by focusing on its constitutional foundations and the normative principles introduced by the Court of Justice and developed over the years in its case-law. It has also examined the reform of the CCP introduced at Lisbon. The analysis so far has shown that, far from being sacrosanct doctrines, these principles have developed on a highly differentiated basis and account has been taken of the interactions between the Union institutions and the Member States and the evolving relationship of all of them with the outside world. Against this constitutional and deeply political setting, this chapter will explore the practice of specific aspects of the CCP. Rather than providing a comprehensive analysis of the substantive content of the policy, this chapter will provide an overview of the different ways in which the CCP is implemented by unilateral measures and with emphasis on anti-dumping law, the most popular trade instrument currently available. By doing so, it will highlight a number of issues of particular relevance to the broader themes analysed in this book.

2. AN OVERVIEW An Overview

The establishment of a customs union between the Member States has internal as well as external effects. In accordance with Article 30 TFEU, all customs duties on imports and exports and charges having equivalent effect are prohibited. In addition, duties on imports from third countries are imposed on the basis of a Common Customs Tariff decided by the Council by qualified majority voting under Article 31 TFEU. The relevant Regulation was adopted with effect from 1 July 1968, earlier than originally envisaged.1 The current regime is set out in Regulation 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff.2 The application of the Common Customs Tariff is subject to the Community Customs Code which is established in Council Regulation 450/2008.3 The Commission annually adopts a regulation reproducing the complete version of the Combined Nomenclature together with the applicable rates of duty. However, the Community Customs Code has been recast by the Union Customs Code which was adopted

1

Council Reg 950/68 [1968] OJ Spec Ed (I) 275, repealed by Council Reg 2658/87 [1987] OJ L256/1. [1987] OJ L256/1 3 [2008] OJ L145/1. For a detailed analysis, see L Gormley, EU Law of Free Movement of Goods and Customs Union (Oxford, Oxford University Press, 2009) chs 2–9; and T Lyons, EC Customs Law, 2nd edn (Oxford, Oxford University Press, 2008). 2

353

354 Substantive Trade Law by the Council and the Parliament in October 2013 as Regulation 952/2013.4 The Union Customs Code will enter into force once a number of Implementing and Delegated Acts have been adopted and no later than 2016. This development has been deemed necessary partly in the light of the Lisbon Treaty which changes the rules on implementing acts under Article 291(3) TFEU and which has an impact on the role of the Commission in the CCP. The impact of this amendment on anti-dumping law will be examined below in this chapter.

2.1 Imports and Exports In addition to the existence of a common nomenclature, the application of the Common Customs Tariff entails the adoption of common rules on the origin of the imported products and the customs arrangements to be applied by the customs authorities. Following the conclusion of the Uruguay Round, the EU rules on imports were laid down in Regulation 260/2009.5 After a considerable period of flexible, quota-dominated application of the CCP principles,6 this regime introduced the principle of free importation into the Union market, albeit subject to safeguard measures provided for under WTO law. In particular, it provides for a Union-wide information, consultation, investigation and surveillance procedure, and authorises the EU institutions to impose safeguard measures in cases of products imported in increased quantities or under such conditions as to threaten to cause serious injury to Union producers.7 Special rules apply to imports from non-market economy countries.8 Traditionally, a specific regime had been provided for certain textile products in the light of an arrangement drawn up within the WTO, namely the MultiFibre Agreement on Textiles and Clothing.9 On 1 January 2005 this arrangement expired and the textiles sector was fully integrated into the rules laid down in the GATT. As a result, imports from China into the United States and the Union increased considerably. This gave rise to protests by domestic producers, who urged the authorities to curb those imports.10 In the Union, in particular, the Commission was caught between these claims from the industry, supported by a number of governments, and the opposition of other Member States which considered any Union intervention unnecessarily protectionist. In June 2005, the Commission reached an agreement with the Chinese authorities whereby imports of ten product categories were limited until 2008.11

4

[2013] OJ L269/1. Council Reg 260/2009 on the common rules for imports [2009] OJ L84/1. 6 See the analysis in Chapter 2 above. 7 Arts 16 et seq of Reg 260/2009, n 5 above. 8 Reg 625/2009 [2009] OJ L185/1, last amended by Reg 517/2013 [2013] OJ L158/1. 9 Reg 3030/93 on common rules on imports of certain textile products from third countries [1993] OJ L275/1; Reg 517/94 [1994] OJ L67/1 covers imports of textiles from non-market economy countries with no special contractual relationship with the EU. 10 See J Mayer, ‘Not Totally Naked: Textiles and Clothing Trade in a Quota-free Environment’ (2005) 39 Journal of World Trade 393. 11 See Memorandum of Understanding Between the European Commission and the Ministry of Commerce of the People’s Republic of China on the Export of Certain Chinese Textile and Clothing Products to the European Union, agreed on 12 June 2005. For the amendment to the relevant rules, see Commission Reg 1084/2005 amending Annexes II, III and V to Council Reg (EEC) No 3030/93 on common rules for imports of certain textile products from third countries [2005] OJ L177/19, amended by Commission Reg 1478/2005 [2005] OJ L236/3. 5

An Overview

355

In addition, a set of rules governing exports to third countries has been adopted in the context of the CCP. Laid down in Regulation 1061/2009,12 these rules introduce the principle of free exportation and include an exceptional clause concerning public morality, public policy, public security, the protection of the health and life of humans, animals or plants, national cultural treasures and industrial and commercial property. Regulation 1061/2009 applies to all industrial and agricultural products, but not to products such as oil.13 Special rules apply to exports of dual-use goods, ie products which may be of both civil and military application.14 These rules will be examined in Chapter 14.

2.2 Trade Defence Instruments In order to ensure fair conditions of competition in its trade relations with third countries, the Union has adopted a variety of legal instruments. The most commonly used, namely anti-dumping measures, will be discussed in the following section. A separate legal regime targets subsidised products. First enacted during the transitional period and then amended a number of times, these provisions were given their current form following the completion of the Uruguay Round in order to reflect the content of the Agreement on Subsidies and Countervailing Measures. They are now laid down in Regulation 2026/97.15 Targeting imports whose subsidised nature is deemed to cause injury to the Union industry, this regime enables the Union to impose duties provided that three conditions are met. First, the subsidy must be specific and consist of any government provision of a financial contribution or any other form of income support which confers a benefit on the exporter. Secondly, the import sales must cause or threaten to cause damage to a substantial part of the Union industry; this includes a loss of market share, reduced prices for producers and resulting pressure on production, sales, profits or productivity. Thirdly, the imposition of the duties must serve the Union interests, a corollary of which is that its costs for the Union should not be disproportionate to the benefits anticipated.16 Another important part of the external trade policy of the EU is a set of rules aiming at eliminating trade barriers introduced or maintained by third countries. Laid down in Regulation 3286/94, this regime sets out a procedure which enables the Union industry to lodge a complaint with the Commission regarding trade barriers which third countries are alleged to maintain in order to restrict access to their markets.17 The function 12

Council Reg 1061/2009, [2009] OJ L291/1. See Reg 1934/82, [1982] OJ L211/1. This was the subject-matter of the dispute in Case 174/84 Bulk Oil [1986] ECR 559, analysed in Chapter 2. 14 Council Reg 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items [2009] OJ L134/1, last amended by Reg 599/2014 [2014] OJ L173/79. 15 Council Reg 597/2009 of 11  June 2009 on protection against subsidised imports from countries not members of the European Community [2009] OJ L188/93. 16 For a detailed analysis of this regime, see K Adamantopoulos and MJ Pereyra-Friedrichsen, EU AntiSubsidy Law and Practice (Bembridge, Palladian Law Publishing, 2001). 17 Council Reg 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 WTO [1994] OJ L349/71. This instrument was subsequently amended by Council Reg 456/95 [1995] OJ L47/3. This instrument was originally laid down in the so-called Commercial Policy Instrument adopted in 1984 (Council Reg 2641/84 on the strengthening of the common commercial policy with regard in particular to protection against illicit commercial practices [1984] OJ L252/1). 13

356 Substantive Trade Law of the Trade Barriers Regulation is distinct from the other trade policy instruments of the Union: rather than defending Union traders from the efforts of third-country traders to penetrate the EU market, it aims at assisting EU traders to penetrate third-country markets.18

2.3 Generalised Tariff Preferences and the ‘Everything but Arms’ Initiative An important part of the Union’s external trade policy is the Generalised Tariff Preferences scheme. This ensures that imports from developing countries are not subject to customs duties normally charged, hence facilitating trade with them. Originating in a recommendation by the United Nations Conference on Trade and Development in 1968, the current system is laid down in Council Regulation 978/2012 and is valid until 2023.19 The new regime provides more focus and transparency in the Union’s development cooperation and reduces the list of developing countries which benefit from the scheme. The main thrust of this system consists of a combination of preferential arrangements. The general arrangement, which is applicable to imports from all the beneficiary countries, consists of the complete or partial suspension or reduction of customs duties. Whether the duties are suspended or reduced depends on the sensitivity of the product in question, ie the extent to which its penetration of EU markets is bound to affect domestic industries. In addition, there are three special incentive schemes which aim at protecting labour rights and the environment, and at combating drug production and trafficking. Another special arrangement is related to the ‘everything but arms’ initiative. Adopted in 2001 by means of a Council Regulation upon a proposal by the Commission,20 this initiative granted duty-free access to imports of all products from least-developed countries and lifted any quantitative restrictions. There are two exceptions to this regime. As suggested by its title, the first consists of arms and munitions which are excluded in their entirety. The second exception refers to the special regime on imports of fresh bananas, rice and sugar and aims at their phased liberalisation.21 At the time of writing, 49 developing countries benefit from this initiative which is now part of the Generalised System Preferences Regulation.22 The success of the ‘everything but arms’ initiative is by no means automatic. It depends on a number of factors which, apart from the extension of its scope, are related to the ability of the least developed countries to respond, for instance by diversifying their exports.23 However, it constitutes a significant illustration of the interrelationship between trade and non-trade interests. In addition, it provides a snapshot of the ways in which the Union may adjust its trade policy in order to address non-trade concerns. The 18 For an elaborate analysis of the TBR, see R MacLean and B Volpi, EU Trade Barrier Regulation—Tackling Unfair Foreign Trade Practices (Bembridge, Palladian Law Publishing, 2000). 19 [2012] OJ L303/1. 20 Reg 416/2001 [2001] OJ L60/1. 21 See Commission Reg 1401/2002 laying down detailed rules for the opening and administration of the tariff quotas for rice, originating in the least developed countries [2002] OJ L203/42 and, for raw sugar cane, Commission Reg 1381/2002 [2002] OJ L200/14. 22 Art 17 of Reg 978/2012, n 19 above. 23 P Brenton, ‘Integrating the Least Developed Countries into the World Trading System: The Current Impact of European Union Preferences Under “Everything But Arms”’ (2003) 37 Journal of World Trade 623.

Anti-dumping Law—An Introduction 357 analysis in Chapter 14 will show how this power is linked to other spheres of activity in the EU legal order.

3. ANTI-DUMPING LAW—AN INTRODUCTION Anti-dumping Law—An Introduction

Anti-dumping is about duties imposed on imports of products whose price is considered to be lower than that at which they are being sold in the exporting country. There is a healthy debate about the function and objectives of anti-dumping policy. On the one hand, anti-dumping duties have a distinct protective intent which undermines the establishment of a competitive, rule-based international market.24 Put rather succinctly, ‘anti-dumping, as practiced today, is a witches’ brew of the worst of policy-making: power politics, bad economics, and shameful public administration’.25 On the other hand, anti-dumping policy is viewed as a ‘legitimate and perfectly normal instrument of trade policy’ which aims at ensuring conditions of fair competition on the international market.26 An elaborate examination of this debate is beyond the scope of this analysis. Instead, suffice it to point out that the imposition of anti-dumping duties is sanctioned under Article VI GATT 1994 pursuant to which a specific agreement has been concluded. First agreed upon at the Tokyo Round in the form of the Anti-Dumping Code and then clarified at the Uruguay Round, the Agreement on Implementation of Article VI of GATT 1994 (the ‘Anti-Dumping Agreement’) sets out the framework within which domestic authorities are to impose anti-dumping measures. Exercised within this context, antidumping measures have turned out to be one of the most popular instruments of trade policy on the international scene. As with all trade defence policies, anti-dumping rules are often applied in a heavily charged economic and political context. The diverse state of national economies in the Union, the different strength that industries have in different Member States, and the lobbying power of these industries may make the imposition of duties by the Union a contentious issue. This is further exacerbated by the different political economy philosophies prevailing in different Member States: for instance, the Scandinavian countries, the United Kingdom and the Netherlands are considered more liberal in their trade policies and in favour of a more sparing use of trade defence measures. On the other hand, France and the Mediterranean countries are considered to be rather keen to protect their industries by relying upon trade defence policies.27 These differences shape a heavily politicised environment for rules which are inherently very technical and which rely upon complex economic considerations for their application applied. This political dimension is an important factor of anti-dumping policy. As it falls within the scope of the CCP, anti-dumping law is covered by the Union’s

24 See R Boscheck, ‘The Governance of Global Market Relations: The Case of Substituting Antitrust for Antidumping’ (2001) 24 World Competition 41, esp 54–62. 25 JM Finger, ‘Reform’ in JM Finger (ed), Antidumping—How It Works and Who Gets Hurt (Ann Arbor, Michigan University Press, 1993) 57. 26 See the speech by Sir Leon Brittan, the then Trade Commissioner, at CEEC Anti-dumping Seminar, Brussels, 27 January 1997. 27 See the empirical analysis in J Ulff-Moeler Nielsen and G Tinggaard Svedsen, ‘EU Lobbying and AntiDumping Policy’ (2012) 46 Journal of World Trade 187.

358 Substantive Trade Law exclusive competence. The main instrument regulating the application of this policy is Regulation 1225/2009 (Basic Regulation).28 This sets out an elaborate procedure carried out under the supervision of the Commission, and provides for the interaction between a number of interested parties. Following the entry into force of the Lisbon Treaty, the decision-making procedure governing the trade defence instruments, including anti-dumping law, was amended drastically. Article 207(2) TFEU provides that the Council and the Parliament will adopt ‘the measures defining the framework for implementing the common commercial policy’. In the area of anti-dumping, the Basic Regulation is such a measure which needs to be implemented by further acts adopted by the Commission in accordance with Article 291(2) TFEU. The Lisbon Treaty amended the rules on implementing acts so that the Commission acts under the control of the Member States, rather than the Council and the Parliament. This amendment is laid down in Article 291(3) TFEU and necessitated a change in the legal regime pursuant to which the Commission exercises its implementing powers. This change was brought about by Regulation 182/2011.29 In January 2014, the Council extended the application of this system to the CCP by adopting Regulation 37/2014 (the ‘Omnibus I Regulation’).30 Anti-dumping law and policy is a highly technical and complex area of law whose intricacies and details may only be mastered through deep knowledge of legal practice.31 The following sections will summarise the various substantive and procedural aspects of EU anti-dumping law and will highlight the ways in which these are approached by the Union judiciary.

4. SUBSTANTIVE ISSUES OF ANTI-DUMPING LAW Substantive Issues of Anti-dumping Law

Anti-dumping duties are imposed by the Commission on a provisional basis or as a definitive measure. A decision on their imposition is dependent upon three conditions, namely the finding of dumping, the determination of injury to Union industry, and the assessment of the interest of the Union. Within the context of the Basic Regulation, the Commission is in consultation with a committee consisting of representatives of Member States and chaired by a representative of the Commission.

28

[2009] OJ L343/51 last amended by Council Reg 461/2004 [2004] OJ L77/12. Reg 182/2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers [2011] OJ L55/13. 30 Reg 37/2014 amending certain regulations relating to the common commercial policy as regards the procedures for the adoption of certain measures [2014] OJ L18/1. For similar amendments to the regime governing the exercise of delegated powers by the Commission, see Reg 38/2014 amending certain regulations relating to the common commercial policy as regards the granting of delegated and implementing powers for the adoption of certain measures [2014] OJ L18/52. 31 For a detailed analysis, see I van Bael and J-F Bellis, EU Anti-Dumping and Other Trade Defence Instruments, 5th edn (The Hague, Kluwer, 2004) chs 2–8; P Bentley and A Silberston, Anti-Dumping and Countervailing Action (Cheltenham, Edward Elgar Publishing, 2007); W Müller, N Khan and T Scharf, EC and WTO Anti-dumping Law—A Handbook (Oxford, Oxford University Press, 2009); C Stanbrook and P Bentley, Dumping and Subsidies, 3rd edn (The Hague, Kluwer, 2011); E Vermulst, EU Anti-dumping Law and Practice, 2nd edn (London, Sweet & Maxwell, 2010). 29

Substantive Issues of Anti-dumping Law 359 4.1 Dumping In order to determine whether an imported product has been ‘dumped’ in the Union market, a comparison is carried out between the export price and the normal value of the product: the former refers to the price charged in the Union market, whereas the latter refers to the price normally charged in the exporting country. The rule established under Article 2(1) of the Basic Regulation is that the normal value ‘shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’. However, there are cases where the normal value may be disregarded for a number of reasons: sales on the domestic market may be made between companies which are related or which have a compensatory arrangement with each other; imports may come from non-market economy countries; there may be no sales at all in the exporting country or the volume of sales may be insufficient, that is less than 5% of the sales volume of the product to EU. In those cases, the Commission assesses dumping on the basis of a constructed normal value. In any case, the determination of the normal value may not take into account sales at a loss, ie at a price below unit production costs including selling, general and administrative costs. These are not considered to occur in the ordinary course of trade if they arise in substantial quantities within an extended period of time and at prices not providing for the recovery of all costs within a reasonable time. The constructed price is determined under Article 2(3) of the Basic Regulation pursuant to two methods. The first is based on the cost of production in the country of origin, to which the Commission adds a reasonable amount for selling, general and administrative costs and for profits. The second method is based on the export prices to an appropriate third country in the ordinary course of trade, provided that these prices are representative. An interesting illustration of the steps followed by the Commission in order to establish the normal value of a product investigated for dumping in the Community market was set out in Commission Regulation 358/2002 imposing a provisional anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel, originating in the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia. In the preamble to the Regulation, the Commission’s approach is described as follows: As far as the determination of normal value is concerned, the Commission first established, for each exporting producer, whether its total domestic sales of TPFs [ie tube and pipe fittings] were representative in comparison with its total export sales to the Community. In accordance with Article 2(2) of the basic Regulation, domestic sales were considered representative when the total domestic sales volume of each exporting producer was at least 5% of its total export sales volume to the Community. The Commission subsequently identified those types of TPFs, sold domestically by the companies having representative domestic sales, that were identical or directly comparable with the types sold for export to the Community. For each type sold by the exporting producers on their domestic markets and found to be directly comparable to the type sold for export to the Community, it was established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular type of TPF were considered sufficiently representative when the total domestic sales volume of that type during the IP represented 5% or more of the total sales volume of the comparable type of TPF exported to the Community.

360 Substantive Trade Law An examination was also made as to whether the domestic sales of each type could be regarded as having been made in the ordinary course of trade, by establishing the proportion of profitable sales to independent customers of the type in question. In cases where the sales volume of TPFs, sold at a net sales price equal to or above the calculated cost of production, represented 80% or more of the total sales volume and where the weighted average price of that type was equal to or above the cost of production, normal value was based on the actual domestic price, calculated as a weighted average of the prices of all domestic sales made during the IP, irrespective of whether these sales were profitable or not. In cases where the weighted average price was below the cost of production or where the volume of profitable sales of TPFs represented less than 80% but 10% or more of the total sales volume, normal value was based on the actual domestic price, calculated as a weighted average of profitable sales only. In cases where the volume of profitable sales of any type of TPF represented less than 10% of the total sales volume, it was considered that this particular type was sold in insufficient quantities for the domestic price to provide an appropriate basis for the establishment of the normal value. Wherever domestic prices of a particular type sold by an exporting producer could not be used in order to establish normal value, another method had to be applied. In this regard, the Commission used the prices of the product concerned charged on the domestic market by another producer. In all cases where this was not possible, and in the absence of any other reasonable method, constructed normal value was used. In all cases where constructed normal value was used and in accordance with Article 2(3) of the basic Regulation, normal value was constructed by adding to the manufacturing costs of the exported types, adjusted where necessary, a reasonable percentage for selling, general and administrative expenses (‘SG  &  A’) and a reasonable margin of profit. To this end, the Commission examined whether the SG  &  A incurred and the profit realised by each of the producing exporters concerned on the domestic market constituted reliable data. Actual domestic SG  &  A expenses were considered reliable where the domestic sales volume of the company concerned could be regarded as representative. The domestic profit margin was determined on the basis of domestic sales made in the ordinary course of trade.32

The choice of the method pursuant to which the normal value is constructed as well as the determination of the criteria on the basis of which this assessment is made is an exercise often fraught with problems. For instance, not infrequently, the Commission has estimated the profit margin on the basis of profitable sales, without taking losses into account and, hence, without averaging profits and losses. As this may often lead to the inflation of the normal value, the final assessment by the Commission may be controversial. The export price is determined by the Commission under Article 2(8)–(9) of the Basic Regulation. This is the price actually paid or payable for the product when sold for export from the country under investigation to the Union. However, there are cases where no export price may be determined: the imported goods may be exchanged for other goods rather than sold at a price or the export price may be deemed unreliable because of an association or compensatory arrangement between the exporter and the importer. In those cases, the Commission is to determine a constructed export price. This is ascertained on the basis of the price at which the imported products are first resold to an independent buyer. However, if they are not resold, or at least not in the condition in which they were imported, then the constructed export price will be determined ‘on any reasonable basis’.33 32 33

[2002] OJ L56/4, paras 15–21. Art 8(9) of the Basic Reg.

Substantive Issues of Anti-dumping Law 361 In either case, adjustments are to be made for all costs incurred between exportation and resale, including duties and taxes, as well as for profits accruing. The normal value and the export price of the imported product are to be compared in accordance with Article 2(10) of the Basic Regulation which provides for the comparison to be ‘fair’. This refers to a comparison at the same level of trade and regarding sales made as nearly as possible at the same time. In addition, other differences which affect price comparability are to be taken into account. If the comparison may not be carried out on this basis, a number of adjustments will have to be made which may refer to a number of other factors. These include the physical characteristics of the product broadly construed which include its composition; import charges and indirect taxes; discounts, rebates and quantities; level of trade, including differences arising in Original Equipment Manufacturer sales; transport, insurance, handling, loading and ancillary costs; packing; credit; after-sales costs; commissions and currency conversions; as well as any other factors shown to affect price comparability. The dumping margin is determined in accordance with Article 2(11)–(12) of the Basic Regulation. The Commission may choose one of the following methods: a comparison of a weighted average normal value with a weighted average of prices of all export transactions to the Community; or a comparison of individual normal values and individual export prices to the Union on a transaction-by-transaction basis. A normal value established on a weighted average basis may be compared to prices of all individual export transactions to the Union if there is a pattern of export prices which differs significantly among different purchasers, regions or time periods.

4.2 Injury and Union Interest The imposition of anti-dumping duties is dependent upon the finding of injury suffered by the Union industry. The definition of the latter is provided in Article 4 of the Basic Regulation. The main principle is that Union industry refers to either all producers of the product under consideration or those whose production is a major proportion of the Union output of the product. This latter definition is explained in Article 5(4) of the Basic Regulation: in practice, Union producers who manufacture at least 25% of Union production may be considered as ‘Union industry’, unless other Union producers accounting for a larger share of such production oppose the complaint which gave rise to the Commission investigation. There are three deviations from the above principle. First, when Union producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, they may be excluded from the determination of Union industry. Secondly, where the territory of the Union market may be divided into two or more competitive markets, a regional market may be considered to be the Union market. Thirdly, when no separate identification of Union production is possible, that may be defined in terms broader than the characteristics of the imported product under investigation.34

34 For instance, if badger hair toothbrushes are alleged to be causing injury but there is no data on Union production of such goods, the Commission would have to assess injury perhaps in relation to all toothbrushes produced in the Union, ie including nylon, travel toothbrushes, etc.

362 Substantive Trade Law The definition of injury is laid down in Article 3 of the Basic Regulation with reference to material injury or threat of material industry or material retardation of the establishment of Union industry. However, no definition of ‘material injury’ is provided. Instead, it is stated that its determination should be based on ‘positive evidence’ and should involve examination of both the volume of the dumped imports and their effect on prices in the Union market for like products, as well as the consequent impact of those imports on the Union industry. Whilst vague, this provision highlights the central role of the establishment of a causal link between the dumped products and the material injury. Article 3(7) of the Basic Regulation refers to ‘known factors other than the dumped imports which at the same time are injuring the Union industry’. These should also be examined by the Commission which must ensure that injury caused by them is not attributed to the dumped products. The exporters of products alleged to be dumped in the Union rely upon this provision frequently and seek to point out various deficiencies of the Union industry which prevent it from competing with imported products. The determination of the Union interest is carried out in accordance with Article 21 of the Basic Regulation. The Commission is to take into account ‘all the various interests taken as a whole, including the interests of the domestic industry and users and consumers’. Two issues in particular are given special consideration: on the one hand, the need to eliminate the trade-distorting effects of injurious dumping, and, on the other hand, the need to restore effective competition. It is in the light of those considerations that the absence of any reference to the interests and views of the exporters in the Basic Regulation may be understood. During the anti-dumping investigation, and in cases where the Commission has determined provisionally that dumping and injury have occurred, it may accept undertakings by any exporter under investigation. Under Article 8 of the Basic Regulation, such undertakings may be to increase the price of the product or to cease selling exports at dumped prices. Once such undertakings have been accepted by the Commission, the exporter in question is not subject to the provisional or definitive duties imposed.

4.3 Non-market Economy Countries In assessing the conditions necessary for the imposition of anti-dumping duties, there is an assumption that state-controlled economies should be treated differently.35 This is not an assumption confined to the Union’s policy; the second interpretative note to Article VI of the GATT 1994 reads as follows: It is recognized that, in the case of imports from a country which has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State, special difficulties may exist in determining price comparability for the purposes of paragraph 1, and in such cases importing contracting parties may find it necessary to take into account the possibility that a strict comparison with domestic prices in such a country may not always be appropriate.

35 On the origins and development of the concept, see F Snyder, ‘The Origins of the “Nonmarket Economy”: Ideas, Pluralism and Power in EC Anti-dumping Law about China’ (2001) 7 European Law Journal 369.

Substantive Issues of Anti-dumping Law 363 To that effect, Article 2(7)(a) of the Basic Regulation provides that the normal value is to be determined on the basis of the price or constructed value in a ‘reference country’, that is a market economy third country, or the price of imports from such a third country to other countries or, if this is not possible, on any other reasonable basis. An appropriate market economy third country is to be selected in ‘a not unreasonable manner’.36 It is normally the case that reliance upon this methodology gives rise to higher dumping margins and, therefore, higher anti-dumping duties than under the methodology applied to market economy countries. At the time of writing, these countries include Azerbaijan, Belarus, North Korea, Tajikistan, Turkmenistan and Uzbekistan. A special case is made for countries which, while yet not fully functioning market economies, are considered to have made considerable progress to that end. At the time of writing, these include Kazakhstan, China and Vietnam. These are singled out, as the Basic Regulation enables the Commission to apply the rules about normal value if it is shown, on the basis of properly substantiated claims by one or more producers subject to the investigation, that market economy conditions prevail for this producer or these producers in respect of the manufacture and sale of the like product concerned. Such a claim would need to be made in writing and contain sufficient evidence that the producer operates under market economy conditions. The Basic Regulation sets out the type of evidence which would need to be provided in order for the exporting country to be treated as a market economy: — decisions of firms regarding prices, costs and inputs, including for instance raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand, and without significant State interference in this regard, and costs of major inputs substantially reflect market values, — firms have one clear set of basic accounting records which are independently audited in line with international accounting standards and are applied for all purposes, — the production costs and financial situation of firms are not subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts, — the firms concerned are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of firms, and — exchange rate conversions are carried out at the market rate.37

The Commission is to determine whether these criteria are met within three months of the initiation of the investigation. In this process, the Union industry must be given an opportunity to comment. The choice to treat a third country as a non-market economy has a strong political dimension. China has protested strongly against the use of this methodology by the Union. Some Member States have suggested that China be granted full market economy status.38 China’s protocol of accession to the WTO allows WTO members to treat China

36 37 38

Art 2(7)(a) second subpara of the Basic Regulation. Art 2(7)(c) of the Basic Regulation. For instance, the United Kingdom: see Financial Times, 6 July 2005, 12.

364 Substantive Trade Law as a ‘nonmarket economy’ until 11 December 2016. In 2008, the Commission concluded that, whilst China is a modern and increasingly market-based system  …, distortions prevail despite Chinese efforts to reduce state interference in the management of the economy. These distortions directly or indirectly affect the domestic cost and price structures which are the primary considerations for the purpose of [Trade Defence Instruments] investigations.39

In 2013, the then Trade Commissioner stated that Chine would receive market economy status in 2016.40

5. PROCEDURAL ISSUES OF ANTI-DUMPING LAW Procedural Issues of Anti-dumping Law

The assessment of whether anti-dumping duties should be imposed is carried out during a tightly regulated investigation period. In accordance with Article 5(1) of the Basic Regulation, the investigation may be initiated by a complaint lodged in writing with the Commission or a Member State by any natural or legal person or any association acting on behalf of a Community industry. In principle, the Commission has the right to initiate anti-dumping investigations on its own motion. However, in practice, this has rarely been the case. The Commission carries out a prima facie assessment of the information supplied to it within a period of 45 days. Once the information available has been deemed sufficiently credible to justify the initiation of proceedings, a notice of initiation is published in the Official Journal. Under Article 5(7) of the Basic Regulation, proceedings may not be initiated against countries whose imports represent a market share of below 1% unless such countries collectively account for 3% or more of Union consumption. In principle, antidumping investigations last for a year, and in no case for longer than 15 months. The Commission, in accordance with Article 5(11) of the Basic Regulation, is to inform a number of parties of the initiation of the proceedings. These include the exporters, importers and representative associations of importers or exporters known to it to be concerned, as well as representatives of the exporting country and the complainants. In order to collect information, the Commission produces questionnaires which it disseminates, both on its own initiative and upon request to known importers and exporters and to any other interested party which, then, have at least 30 days to reply. For the purposes of their interaction with the Commission, the interested parties pay particular attention to the notice of initiation as this set out the time limits within which those parties may make themselves known and submit information. In the past, the Commission was responsible for the imposition of provisional antidumping duties, whereas definitive duties were imposed by the Council on the basis of a proposal by the Commission. This division of power rendered the political dimension inherent in the application of trade defence policies all the more pronounced. However, 39 SEC(2008) 2503 final: Commission Staff Working Document on Progress by the People’s Republic of China Towards Graduation to Market Economy Status in Trade Defence Investigations (Brussels, 19 September 2008) 26. 40 Karel De Gucht, speech on ‘Modernisation of Trade Defence—Getting the Job Done’, Workshop on Trade Defence Instruments (TDI) Modernization (Brussels, 7 November 2013), http://trade.ec.europa.eu/doclib/ docs/2013/november/tradoc_151873.pdf.

Procedural Issues of Anti-dumping Law 365 following the reform of the decision-making procedures in the CCP and the entry into force of the Omnibus I Regulation in 2014,41 the role of the Commission in the area of anti-dumping has been enhanced. It is now responsible for the imposition of both provisional and definitive anti-dumping duties. The system governing the exercise of this power has also been reformed in order to subject the Commission to the control of the Member States (rather than the Council). This is achieved on the basis of the interactions between the Commission and the committee of the representatives of the Member States. There are three procedures which govern decision-making by the Commission in the area of anti-dumping and which are set out in Regulation 182/201142 and applied pursuant to the Omnibus I Regulation. The first is the advisory procedure.43 This involves decision-making by the Commission ‘taking the utmost account’ of the opinion of the committee, the latter acting by a simple majority of its members. This procedure applies to decisions on the acceptance of undertakings, initiation and non-initiation of expiry reviews, and adoption and extension of suspended measures (as well as reinstatement of measures following suspension). The second procedure is the examination procedure44 and applies to the most important decisions in the area, namely the termination of anti-dumping investigations, the adoption of definitive anti-dumping duties, the repeal or maintenance of anti-dumping measures following an expiry review, and anti-circumvention determinations. The Commission must adopt such decisions following an opinion of the committee. The latter may prevent the Commission from acting only by qualified majority vote determined on the basis of Treaty decision-making (Article 16(4) and (5) TEU and 238 TFEU). If such a negative opinion is adopted by the Member States, the Commission may either submit an amended version of its proposal to the committee or refer the matter to the appeal committee. The appeal committee also acts by qualified majority. Any of its members may suggest amendments to the Commission’s proposal and the chair ‘shall endeavour to find solutions which command the widest possible support within the appeal committee’.45 It is only if the appeal committee delivered a positive opinion or no opinion at all that the Commission could impose definitive duties. If the appeal committee delivered a negative opinion, that would be the end of the matter. The examination procedure makes it more difficult for the Commission’s assessment to be overruled by Member States keen to protect their national economic or political interests. The third procedure is for the adoption of immediately applicable implementing acts.46 It covers the adoption of provisional anti-dumping duties. The Commission may impose such duties and only later is it required to submit the relevant measure to the committee. The latter could adopt a negative opinion by qualified majority voting and

41 Reg 37/2014 amending certain regulations relating to the common commercial policy as regards the procedures for the adoption of certain measures [2014] OJ L18/1. 42 Reg 182/2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers [2011] OJ L55/13. 43 Ibid, Art 4, applied on the basis of Art 15(2) of the Basic Regulation, as amended by the Omnibus I Regulation (n 41 above). 44 Ibid, Art 5 applied on the basis of Art 15(3) of the Basic Regulation, as amended by the Omnibus I Regulation (n 41 above). 45 Ibid, Art 6(2) second subpara. 46 Ibid, Art 8, applied on the basis of Art 15(4) of the Basic Regulation, as amended by the Omnibus I Regulation (n 41 above).

366 Substantive Trade Law force the Commission immediately to repeal the measure. However, the Commission must consult or at least inform the committee before it adopts the relevant measure. The reformed procedure for decision-making in relation to trade defence measures streamlines the exercise by the Commission of implementing powers and brings together the implementing decision-making in internal and external policy.47 It also strengthens the role of the Commission and reduces the scope for politicising anti-dumping policy. The role of the Council and the Parliament is confined to scrutiny of the draft measures which the Commission puts forward under the above procedures. Article 6 of the Basic Regulation provides for a number of procedural rights to be enjoyed by interested parties. These may be summarised as follows. First, the interested parties which have made themselves known to the Commission have the right to be heard. In accordance with Article 6(5) of the Basic Regulation, in a written request submitted within the period defined in the notice of initiation, they must show that they are interested parties, that they are likely to be affected by the outcome of the proceedings and that there are particular reasons why they should be heard. Secondly, the right to request a meeting is laid down in Article 6(6) for the benefit of importers, exporters, representatives of the government of the exporting country and the complainants. A request for a meeting, which by no means imposes any duty to attend on any other party, must be submitted in writing. Any failure to attend such a meeting is not prejudicial to the case of the relevant party. It should be pointed out that the function of meetings is not superficial as it enables the parties not only further to familiarise themselves with the arguments of the other parties but also to rebut them. However, any oral information given is taken into account by the Commission only if subsequently confirmed in writing.48 Thirdly, complainants, importers and association of exporters, users and consumers who have made themselves known to the Commission may, upon a written request, inspect any non-confidential document submitted to the Commission by any party. Originally, there was no reference to associations of users and consumers in the Basic Regulation. In a judgment about the interpretation of a precursor to the current Basic Regulation, the Court of Justice ruled that, as practices attributable to consumers or their organisations do not constitute the target of anti-dumping investigations, these could not result in a measure adversely affecting them.49 The Court concluded that the Commission was under no duty to grant access to the non-confidential documents requested by the applicant. However, it added the following: [T]here is nothing in the wording of [the relevant provision] of the basic regulation to prevent the Commission from allowing persons who have a legitimate interest to inspect the nonconfidential file. It is for the Community legislature to consider whether the basic anti-dumping regulation should grant an association representing the interests of consumers the right to consult the non-confidential file.50 47 See C Dordi and A Forganni, ‘The Comitology Reform in the EU: Potential Effects on Trade Defence Instruments’ (2013) 47 Journal of World Trade 359. 48 See T Giannakopoulos, ‘The Right to Be Orally Heard by the Commission in Antitrust, Merger, Antidumping/Anti-subsidies and State Aid Community Procedures’ (2001) 24 World Competition 541, 558–61 and 564 et seq. 49 Case C-170/89 Bureau Européen des Unions de Consommateurs (BEUC) v Commission [1991] ECR I-5709. 50 Ibid, paras 29–30.

Judicial Review in Anti-dumping Law 367 It is an interesting illustration of the interactions between the judiciary and the legislature that the subsequent amendment of the Basic Regulation granted associations of consumers procedural rights.51 Fourthly, Article 20(2) of the Basic Regulation provides for the right of final disclosure. Granted to the complainants, importers, exporters and their representative associations, this denotes the right to be informed of the essential facts and considerations on the basis of which the Commission intends to recommend the imposition of definitive duties or the definitive collection of the amounts secured by way of provisional duties. Again, the exercise of this right depends upon a written request which should be submitted within one month following the publication of the imposition of the provisional duty.

6. JUDICIAL REVIEW IN ANTI-DUMPING LAW Judicial Review in Anti-dumping Law

The above overview of the substantive aspects of anti-dumping policy indicated that the assessment of its main elements is subject to a number of factors expressed in an openended manner. This raises two interrelated questions, namely about the extent to which the Union institutions enjoy discretion in their substantive assessment, and about the intensity of scrutiny that the Union’s judges are prepared to exercise in the review of that assessment.

6.1 Intensity of Review over Substantive Issues The Court of Justice has consistently pointed out that, in carrying out their function in accordance with the process laid down in the Basic Regulation, the Union institutions make policy choices of a complex economic nature. This entails the conferment of wide discretion. A number of examples illustrate this approach. In relation to the power to determine the constructed normal value the wide discretion enjoyed by the Commission has been sanctioned in no uncertain terms. In Nakajima the applicant was a Japanese producer of printers who attacked the precursor to the then Basic Regulation.52 Nakajima argued that its provision regarding the determination of the constructed value in cases where there are no sales in the exporting state was illegal due to lack of essential procedural requirements. In particular, it claimed that the Community institutions were allowed to discriminate against imports by constructing their normal value by reference to undertakings whose structure would not be comparable to that of the importer. For instance, Nakajima argued that it did not have any marketing structure for its products as its entire production output was sold at the ‘ex-factory’ stage to independent distributors. However, all of the reference undertakings considered by the Commission in order to construct the normal value had a vertically integrated structure designed to ensure distribution of their products within Japan. The Court held that ‘[the text of the then Basic Regulation] left full discretion to the Community authorities by providing for the calculation of SGA (Selling, General 51 On the interaction between the EU legislature and judiciary, see generally P Syrpis (ed), The Judiciary, the Legislature and the EU Internal Market (Cambridge, Cambridge University Press, 2012). 52 Case C-69/89 Nakajima All Precision v Council [1991] ECR I-2069.

368 Substantive Trade Law and Administrative) expenses and profits on a “reasonable basis”’.53 This was repeated in relation to the Council Regulation imposing definitive anti-dumping duties on Nakajima: the Court pointed out that it ‘has consistently held that [the provision according to which a reasonable amount for SGA expenses had to be included in the constructed normal value] allowed the Community institutions a wide margin of discretion in evaluating that amount’.54 The Court then described the objective of the constructed normal value, that is ‘to determine the selling price of a product as it would be if that product were sold in its country of origin and consequently, it is the expenses relating to the sales on the domestic markets which must be taken into account’.55 To that effect, it reached the conclusion that ‘normal value of a product must in all cases be constructed as if the product was intended for distribution and sale within the domestic market, regardless of whether or not the producer has, or has access to, a distribution structure’.56 A similar approach was also adopted in relation to the determination of the dumping margin. In a cases about ball-bearings, various Japanese companies challenged a Council Regulation imposing definitive anti-dumping duties on imports originating in Japan and Singapore.57 One of the arguments of the applicant was that the method of calculating the dumping margin adopted by the Commission was arbitrary and unlawful. In particular, it was argued that the transaction-by-transaction method adopted by the Commission to calculate the export price resulted in the export prices below the normal value being left out of account. According to the applicant, that method distorted the calculation of the dumping margin. The Court rejected this argument and ruled as follows: [T]he choice between the different methods of calculation  … requires an appraisal of complex economic situations. The Court must therefore  … limit its review of such an appraisal to verifying whether the relevant procedural rules have been complied with, whether the facts on which the choice is based have been accurately stated and whether there has been a manifest error of appraisal of a misuse of powers.58

The Court sanctioned the approach taken by the Union institutions. Similarly, in relation to the process of identifying the Union industry, the Court stated in Nakajima that: [I]t is for the Commission and the Council, in the exercise of their discretion, to determine whether they should exclude from the Community industry producers who are themselves importers of the dumped product. That discretion must be exercised on a caseby-case basis, by reference to all the relevant facts.59

The discretion enjoyed by the Commission extends to all substantive assessments which it is expected to make in the context of anti-dumping investigation, including the choice

53

Ibid, para 18. Ibid, para 63. Ibid, para 65. 56 Ibid. 57 Case 240/84 NTN Toyo Bearing Company Limited and Others v Council [1987] ECR 1809. 58 Ibid, para 19. In relation to the choice of a reference country, see Joined Cases 294/86 and 77/87 Technointorg v Commission and Council [1988] ECR 6077, para 29. In addition, see Case 255/84 Nachi Fujikoshi v Council [1987] ECR 1861, para 21; Case C-156/87 Gestetner Holdings v Council and Commission [1990] ECR I-781; and Case T-155/94 Climax Paper Converters Ltd v Council [1996] ECR II-873. 59 n 52 above, para 80. 54 55

Judicial Review in Anti-dumping Law 369 of a reference country60 and the assessment of whether market economy treatment should be granted to a producer from a non-market economy country.61 All in all, the discretion enjoyed by the Commission in anti-dumping policy is construed by the Court in quite wide terms.62 In fact, it is difficult for an applicant to substantiate a violation of EU law on substantive grounds in the light of the high threshold raised by the Court’s requirements. For instance, misuse of power was held to occur ‘only if [the contested decision] appears, on the basis of objective, relevant and consistent indications, to have been adopted in order to achieve purposes other than those for which it was intended’.63 In the same judgment, the argument of the applicant that anti-dumping duties had been imposed in order to protect mainly the interests of the French industry rather than those of the Union as a whole was dismissed rather summarily: the Court pointed out that a mere reference to the reasons underpinning the imposition of duties set out in contested measure was sufficient and noted that no specific argument had been produced in order to substantiate the claim of misuse of power. There has been a growing concern that review of a more intrusive nature should be considered. In his Opinion in Gao Yao Advocate General Lenz expressed his wish that the CFI, which at that time was about to assume jurisdiction in anti-dumping cases, would exercise a high degree of intensity in its review of such measures. He suggested that it was ‘desirable quite generally to investigate very thoroughly the Community institutions’ activities in the sphere of anti-dumping law whenever actions are brought’.64 More recent case-law suggests that the discretion granted to the Union institutions (and, in the light of the Omnibus I Regulation, the Commission in particular) is by no means unfettered. In fact, both the General Court and the Court of Justice have tested it and have also been keen to adjudicate on the conditions under which this discretion is exercised. This is illustrated by a number of cases about central issues of anti-dumping policy, such as the determination of dumping margin and normal value, as well as the treatment of non-market economies.65 In IKEA the Court ruled on the controversial practice of ‘zeroing’.66 This is one of the methods that the Commission uses in order to determine dumping margins: sales above the normal value are not calculated in order to offset sales below the normal value, and, instead, are disregarded. This is a controversial practice because it may inflate the dumping margin. The Commission’s approach was challenged in the light of WTO rules. In its judgment, the Court of Justice ruled that zeroing was not, in fact, mentioned in the Basic Regulation and was illegal as it did not facilitate a fair comparison between 60 Case C-16/90 Nölle v Hauptzollamt Bremen-Freihafen [1991] ECR I-5163; Case T-164/94 Ferchimex SA v Council [1995] ECR II-2681. 61 Case T-35/01 Shangai Teraoka Electronic v Council [2004] ECR II-3663. 62 See also Case C-156/87 Gestetner Holdings v Council and Comission [1990] ECR I-781; Case T-413/03 Shandong Reipu Biochemicals v Council [2006] ECR II-2243; Case C-535/06 P Moser Baer India Ltd v Council [2009] I-07051. 63 Case C-323/88 Sermes v Directeur des services des douanes de Strasbourg [1990] ECR I-3027, para 33. 64 Case C-75/92 Gao Yao (Hong Kong) Hua Fa Industrial Co. Ltd v Council [1994] ECR I-3141, para 95 of his Opinion. See also, for an initial assessment, P Vander Schueren, ‘New Anti-dumping Rules and Practice: Wide Discretion Held on a Tight Leash?’ (1996) 33 Common Market Law Review 271. 65 See also Case C-249/10 P Brosmann Footwear (HK) Ltd and Others v Council ECLI:EU:C:2012:53 in response to which the Council and the Parliament adopted Reg 1168/2012 amending the Basic Regulation [2012] OJ L344/1, and C-191/09  P Council and Commission v Interpipe Niko Tube and Interpipe NTRP ECLI:EU:C:2012:78. 66 Case C-351/04 IKEA [2007] ECR I-7723.

370 Substantive Trade Law the export price and the normal value. Therefore, in relying upon this method, the EU institutions had committed a manifest error of assessment with regard to EU law. The Court delivered its judgment following a ruling by the WTO Appellate Body in which the practice of zeroing applied by the EU had been deemed incompatible with the AntiDumping Agreement.67 However, its conclusion was not reached expressly in the light of the Appellate Body decision (even though its reasoning was followed very closely). After the Court’s judgment, the Commission has mainly compared weighted average normal value with weighted average export price.68 In GLS the Commission determined the normal value of imports of preserved mandarins from China on the basis of the prices paid or payable for like products in the EU.69 It did so because its efforts to use Thailand as a reference country had failed: it had contacted two companies there in order to get information and, as neither had responded to its approach, it concluded that it was impossible to determine the normal value on the basis of prices charged in a market economy third country. The Court held that, in choosing a reference country in order to determine the constructed value of a product exported from a non-market economy country, the Commission was under a duty to consider all available information. Such information is by no means confined to that submitted by the parties but covers any information it possesses, including statistics supplied by Eurostat. In this case, the failure of the Commission to do so amounted to a violation of Article 2(7)(a) of the Basic Regulation. In Xinanchem the Court held that the Commission should not assume that a company from China was not qualified to be granted market economy treatment merely because it was under significant state control.70 As Article 2(7)(c) of the Basic Regulation requires that ‘significant State interference’ be proven, the Commission is under a duty to assess all evidence submitted by the company.71 Similarly, the case-law of the CFI has engaged in closer examination of the facts of the cases brought before it.72 In a recent case, it has also questioned the Commission’s choice to rely upon the third-country market economy methodology. In Case T-512/09 Rusal Armenal the exporter of aluminium foil from Armenia challenged the provisional anti-dumping duties imposed by the Commission.73 It had asked the Commission for market economy treatment, but the Commission refused. Instead, Armenia was viewed as a non-market economy country and the Commission used Turkey as a reference country in order to calculate the normal value of the product. The applicant argued that Armenia was a WTO member the accession of which had not been subject to any cut-off date (as China’s had). It also argued that the Anti-Dumping Agreement did not enable the Commission to treat it as a non-market economy country. The General Court held as follows: [I]t is for the Court to examine whether, and if so under what conditions, the institutions may find that a WTO member country constitutes a non-market economy country and, 67

WT/DS141/AB/R of 1 March 2001 EC-Bed linen from India See Vermulst, n 31 above, 377. 69 Case C-338/10 Grünwald Logistik Service GmbH (GLS) v Hauptzollamt Hamburg-Stadt ECLI:EU:C:2012:158. 70 Case C-337/09 P Council v Zhejiang Xinan Chemical Industrial Group Co Ltd ECLI:EU:C:2012:471. 71 See B Nastoll, ‘EU Anti-Dumping Law, Imports from China and Treatment of Non-market Economy Countries: Brosmann, Grünwald and Zhejiang Xinan’ (2013) 50 Common Market Law Review 265. 72 See eg Case T-161/94 Sinochem Heilongjang v Council [1996] ECR II-695. 73 Case T-512/09 Rusal Armenal ECLI:EU:T:2013:571. 68

Judicial Review in Anti-dumping Law 371 consequently, apply a methodology for calculating normal value [by reference to data from Turkey]. In order to carry out that examination, the status of the Anti-Dumping Agreement in the European Union legal order must be considered and that agreement must be interpreted with regard to the extent to which it affords WTO members the possibility to derogate from the rules laid down in Article 2.1 and 2.2 thereof.

It then held that the Basic Regulation was adopted by the Union in order to satisfy its international obligations arising from the Anti-dumping Agreement and, in particular, Article 18(4). The General Court also referred specifically to Article 2 of the Basic Regulation (on determination of dumping) and held that it illustrated the Union’s intention to implement particular obligations created by Article 2 of the Anti-dumping Agreement, which also relates to the determination of whether there is dumping. The General Court then pointed out that the Anti-Duming Agreement allowed derogations from the normal value determination only in two cases: where the WTO accession protocol provides for it expressly, or where exceptions are laid down in the Agreement itself or in another WTO agreement. As the first condition was not met, attention was brought to the second and, in particular, the second supplementary provision to Article VI:1 GATT 1947. This allows states to deviate from the normal value determination method ‘in the case of imports from a country which has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State’. However, the Commission had not examined whether this test was met. Instead, it chose the third-country methodology merely by relying upon the inclusion of Armenia as a non-market economy in Article 2(7)(a) of the Basic Regulation. In the light of the above, the Court concluded that the Commission had violated the Anti-dumping Agreement, GATT 1994 and Article 2(1)–(6) of the Basic Regulation (on the determination of normal value). The judgment in Rusal Armasol is under appeal.74 It provides, however, an interesting illustration of more intensive review of a controversial issue. If not overruled, it would have considerable implications for imports from China, as it would suggest that reliance upon the non-market economy methodology would be dependent on the strict conditions set out in the second supplementary provision to paragraph 1 of Article VI GATT 1947. This subsection has highlighted the issues raised by judicial review of the substantive choices made by the European institutions and has illustrated the discretion granted by the EU judges. This approach needs to be examined in the context of the standards of judicial review in other areas of anti-dumping law. This will be set out in the following subsections.

6.2 Review of Procedural Issues The Court has adopted a strict approach to the requirement that the Union institutions comply with the procedural guarantees set out in the Basic Regulation. A clear illustration of this is provided by the judgment in Al-Jubail.75 The applicants challenged a Council 74 Case C-21/14 P Commission v Rusal Armasol. The application for interim relief was rejected by an Order by the ECJ Vice-President (Case C-21/14 P-R Commission v Rusal Armenal ECLI:EU:C:2014:1749). 75 Case 49/88 Al-Jubail Fertilizer Company and others v Council [1991] ECR 3187.

372 Substantive Trade Law Regulation imposing definitive anti-dumping duties on imports of urea originating in Libya and Saudi Arabia. In essence, the applicant’s main line of reasoning was centred around the alleged violation of their right to a fair hearing. One of the specific arguments was focused on the refusal by the Commission to take into account differences in levels of trade and quantities sold in Saudi Arabia and the Community. In particular, the applicant claimed that it had not been informed in advance of the reasons for the Commission’s approach. The Court first pointed out that, according to its well-established case-law, fundamental rights form an integral part of the general principles of law.76 Then, it ruled that, when interpreting the rights granted under the Basic Regulation, it is necessary to take account in particular of the requirements stemming from the right to a fair hearing, a principle whose fundamental character has been stressed on numerous occasions in the case-law of the Court. Those requirements must be observed not only in the course of proceedings which may result in the imposition of penalties, but also in investigative proceedings prior to the adoption of anti-dumping regulations which, despite their general scope, may directly and individually affect the undertakings concerned and entail adverse consequences for them.77

The Court then ruled as follows: It should be added that, with regard to the right to a fair hearing, any action taken by the Community institutions must be all the more scrupulous in view of the fact that, as they stand at present, the rules in question do not provide all the procedural guarantees for the protection of the individual which may exist in certain national legal systems. Consequently, in performing their duty to provide information, the Community institutions must act with all due diligence by seeking  … to provide the undertakings concerned, as far as compatible with the obligation not to disclose business secrets, with information relevant to the defence of their interests, choosing, if necessary on their own initiative, the appropriate means of providing such information. In any event, the undertakings concerned should have been placed in a position during the administrative procedure in which they could effectively make known their views on the correctness and relevance of the facts and circumstances alleged and on the evidence presented by the Commission in support of its allegation concerning the existence of dumping and the resultant injury.78

Applying these principles to the facts of the case, it concluded that there was nothing in the documents before the Court to show that the Community institutions discharged their duty to place at the applicants’ disposal all the information which would have enabled them to defend their interests effectively. The level of intensity applied by the Court in the exercise of its power of review is noteworthy. The Council had relied on an internal mission report after checks in Saudi Arabia and on the minutes of two meetings in Brussels with the representatives of the applicants. However, the information contained in those documents was not subsequently brought to the attention of the applicants. Whilst the Basic Regulation provides for the supply of information orally, the Court pointed out that ‘that possibility cannot release the EC authorities from their

76

See Case C-260/89 ERT [1991] ECR I-2925. n 75 above, para 15 with reference to Case 85/87 Dow Benelux v Commission [1989] ECR 3137. 78 Ibid, paras 16–17. 77

Judicial Review in Anti-dumping Law 373 obligation to ensure that they have evidence to prove that such information was actually communicated’.79 Another interesting indication of the scrutiny that the Court is prepared to apply in ensuring compliance with the right to a fair hearing was provided in relation to the applicant’s claim that the determination of the injury threshold and the calculation of the allowance for warehousing had been fraught with irregularities. A bone of contention was a letter from the Commission informing the applicant of the rationale and the method chosen to determine the injury threshold. Whilst the Commission claimed to have sent that letter, the applicant insisted that it had not been received. The Court pointed out that the letter had not been sent by registered post and ruled that that ‘cannot be regarded as a diligent method of discharging the obligation to provide information laid down in the basic regulation’.80 Another case where the right to a fair hearing was raised was Extramet.81 This was an annulment action brought against a Council Regulation imposing anti-dumping duties on the imports of calcium metal originating in China and the Soviet Union. The applicant was the largest importer of calcium metal, essentially from those two countries. These imports constituted the main source of its supplies from which it manufactured granules of pure calcium used primarily in the metallurgical industry. The anti-dumping procedure was brought about after a complaint by a trade organisation on behalf of Péchiney, the only producer of calcium metal in the Community and a direct competitor of Extramet. One of the issues which arose was the determination of injury. Extramet argued that the injury was suffered by Péchiney as a result of its refusal to sell to Extramet. Indeed, that was the reason it had already initiated proceedings before the French authorities. The only statement the Council made about that was in the preamble to the contested Regulation, wherein it merely stated that Péchiney had denied Extramet’s allegations. It then pointed out that no final judgment had been reached by the French authorities and noted that the anti-dumping procedure could be reviewed if a violation of the EC competition rules were found. The Court ruled that: [N]one of these statements shows that the Community institutions actually considered whether Péchiney itself contributed, by its refusal to sell, to the injury suffered and established that the injury on which they based their conclusions did not derive from the factors mentioned by Extramet. They did not therefore follow the proper procedure in determining the injury.82

Another aspect of the rigorous approach to procedural rights is provided by the interpretation of the duty of the institutions to state reasons. As this is enshrined in Article 293 TFEU, the Union Courts have interpreted this principle strictly. For instance, in relation to a failure by the Council to adopt the Commission’s proposal and impose definitive antidumping duties, a statement that the requisite majority could not be reached is deemed inadequate to satisfy the obligation to state reasons.83 All in all, the interpretation of the

79

Ibid, para 20. Ibid, para 22. 81 Case C-358/89 Extramet Industrie v Council [1991] ECR I-2501. 82 Ibid, para 19. 83 See Case C-76/01P Comité des industries du coton et des fibres connexes de l’Union européenne (Eurocoton) and Others v Council [2003] ECR I-10091, para 91; and Case T-192/98 Eurocoton v Council ECLI:EU:T:2005:104, paras 34–38. 80

374 Substantive Trade Law procedural provisions of the Basic Regulation may be seen as an attempt to counterbalance the liberal approach to the discretion enjoyed by the Union institutions. Another such indication is provided by the interpretation of the requirements for standing of private applicants to challenge EU measures as set out in EU primary law.

6.3 Locus Standi Article 263 second subparagraph TFEU provides for the annulment of Union measures ‘on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers’. In accordance with the fourth subparagraph of this provision, any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures.

In terms of the material scope of the annulment procedure, ie the definition of the reviewable acts, the approach followed consistently by the Union judiciary is functional: it is the nature of the measure rather than its label which determines the applicability of Article 263 TFEU.84 To that effect, a number of measures which might be adopted in the process of anti-dumping investigations are not reviewable. In general, any measure signifying merely the completion of one phase of the investigation is considered to be a preparatory act which is not reviewable under Article 263 TFEU. Instead, it is the act which signifies the completion of the final phase of the procedure which may be challenged, and it is against that measure that issues pertaining to the preparatory acts may be raised.85 As the Court put it in another context: [I]n the case of acts adopted by a procedure involving several stages, and particularly where they are the culmination of an internal procedure, it is in principle only those measures which definitively determine the position of the Commission or the Council upon the conclusion of that procedure which are open to challenge and not intermediate measures whose purpose is to prepare for the final decision.86

In the light of the above, a decision by the Commission to initiate an investigation, for instance, is considered a preparatory act and may not be challenged.87 The same applies to a decision by the Commission to reject an undertaking offered by a company in return for the termination of an anti-dumping investigation.88 On the other hand, this is not the case regarding a decision by the Commission to refuse a party access to the file: this is deemed to

84 See eg Case T-84/97 Bureau européen des unions des consommateurs (BEUC) v Commission [1998] ECR II-796. 85 See eg Case C-133/87 Nashua Corporation and others v Commission and Council [1990] ECR I-719. 86 Case C-147/96 Netherlands v Commission [2000] ECR I-4723, para 26. 87 For instance, see Case T-134/95 Dysan Magnetics Ltd and Review Magnetics (Macao) Ltd v Commission [1996] ECR II-181, and the Order of the CFI in Case T-267/97 Broome & Wellington v Commission [1998] ECR II-2191. 88 Case C-156/87 Gestetner Holdings v Council and Commission [1990] ECR I-781.

Judicial Review in Anti-dumping Law 375 Constitute  … not merely a communication but a decision which adversely affects the interests of the [applicant]. The Commission’s letter must therefore be regarded as an act adversely affecting the [applicant] which may be the subject of an action under Article [263 TFEU].89

Similarly, a Commission decision to terminate the anti-dumping procedure without imposing anti-dumping duties is reviewable.90 As for the personal scope of annulment proceedings, given that the acts adopted by the Commission in the area are regulations and not measures addressed to specific individuals, applicants may challenge them under Article 263(4) TFEU provided that they establish individual and direct concern.91 It is recalled that the former is determined on the basis of the notoriously difficult to meet and much criticised Plauman test: Persons are individually concerned if the measure affects them by reason of certain attributes which are peculiar to them or by reason of circumstances which distinguish them from all other persons, by virtue of which they are identified individually just as in the case of the person addressed.92

Over the years, the Union Courts have gradually accepted that a wide range of private and legal persons may challenge measures imposing anti-dumping duties. The private applicants granted standing include the exporters of dumped products. Initially, this was the case where they were named in the contested regulation,93 but soon afterwards standing was also granted to exporters who participate in subsequent the anti-dumping investigation.94 Other parties with an interest in the outcome of anti-dumping investigations are those who lodged a complaint with the Commission regarding the products under investigation. The question of their status was raised before the Court in an action brought by Timex, the leading manufacturer of mechanical watches in the Union at the time.95 The applicant sought to challenge a Council Regulation imposing definitive anti-dumping duties on the importation of mechanical watches originating in the Soviet Union on the ground that the duty imposed was too low. The Court explained in detail the particular interest of the applicant. The complaint which led to the opening of the investigation procedure owed its origin to complaints originally made by Timex. Indeed, the British Clock and Watch Manufacturers’ Association which lodged a complaint on behalf of a number of manufacturers, including Timex, took action because a complaint lodged by the latter itself had already been rejected by the Commission on the ground that it came from only one Community manufacturer. Furthermore, the preambles to both the Commission and the Council Regulations 89

Case C-170/89 Bureau Européen des Unions de Consommateurs v Commission [1991] ECR I-5709, para 11. Case C-76/01 Eurocoton and Others v Council [2003] ECR I-10091. Under the pre-Lisbon rules, applicants also had to establish that the regulation they wished to contest was, in fact, a decision. Over the years, the Court interpreted this requirement broadly in the area of anti-dumping. See A Arnull, ‘Challenging EC Antidumping Regulations: The Problem of Admissibility’ (1992) 13 European Competition Law Review 73 and R Greaves, ‘Locus standi under Article 173 EEC when Seeking Annulment of a Regulation’ (1986) 11 European Law Review 119. 92 Case 25/62 Plaumann and Co v Commission [1963] ECR 95. See P Craig and G de Búrca, EU Law, 5th edn (Oxford, Oxford University Press, 2011) 494 et seq. 93 Case 113/77 NTN Toyo Bearing v Council [1979] ECR 1185; Case 118/77 Import Standard Office v Council [1979] ECR 1277; Case 119/77 Nippon Seiko v Council [1979] ECR 1303; Case 120/77 Koyo Seiko v Council [1979] ECR 1337; Case 121/77 Nachi Fujikoshi v Council [1979] ECR 1363. 94 Joined Cases 239/82 and 275/82 Allied Corporation and others v Commission [1984] ECR 1005. 95 Case 264/82 Timex v Council and Commission [1985] ECR 849. 90 91

376 Substantive Trade Law referred to the fact that Timex’s views had been heard during the procedure. In addition, a number of other parameters were taken into account: Timex was the leading manufacturer of mechanical watches and watch movements in the Community and the only remaining manufacturer of those products in the United Kingdom; the preambles to the contested measures indicated that the conduct of the investigation procedure was largely determined by Timex’s observations and the anti-dumping duty was fixed in the light of the effect of the dumping on Timex. In the light of those considerations, the applicant was granted standing under Article 263(4) TFEU. The legal position of importers is more controversial. First, their standing was interpreted in strict terms: in one of the Japanese ball-bearing cases, for instance, standing was granted because, in the course of the anti-dumping investigations, the Commission had deemed them so closely related to the exporter that it had to construct the export price of the product on the basis of their resale price.96 And, whilst generally importers are not considered individually concerned by a regulation imposing anti-dumping duties in cases where they are not associated with an exporter,97 practice suggests that a more liberal approach may be adopted. The judgment in Extramet is a case in point.98 The anti-dumping procedure was brought about following a complaint by a trade organisation on behalf of the only producer of calcium metal in the Community who was also the direct competitor of Extramet. Extramet argued that it was individually concerned because it was the largest importer and was also involved in the anti-dumping procedure; in addition, it argued that it could be fully identified in the contested Regulation. The Court examined the preamble to that measure, which states that the ‘Community producer’ and ‘an independent importer’ had their views heard during the proceedings. It pointed out a number of factors which suggested that Extramet was individually concerned by the contested regulation: [Exramet] is the largest importer of the product forming the subject-matter of the anti-dumping measure and, at the same time, the end-user of the product. In addition, its business activities depend to a very large extent on those imports and are seriously affected by the contested regulation in view of the limited number of manufacturers of the product concerned and of the difficulties which it encounters in obtaining supplies from the sole Community producer, which, moreover, is its main competitor for the processed product.99

The judgment in Extramet provides for a more liberal reading of standing. However, this was applied on the basis of the very specific facts of the case. In doing so, the Court did not follow the Opinion of Advocate General Jacobs, who had argued for an assimilation of the standing criteria for producers, exporters, complainants and importers.100 In more general terms, it is important to place the interpretation of the requirements for standing to challenge anti-dumping measures within the broader context of the Court’s case-law. Prior to the expansion of its scope by the Lisbon Treaty, the locus standi for individuals was interpreted in notoriously strict terms and gave rise to

96 Case 118/77, n 93 above, para 15. See also Joined Cases 277/85 and 300/85 Canon v Council [1988] ECR 5731, para 8. 97 See K Lenaerts, I Maselis and K Gutman, EU Procedural Law (Oxford, Oxford University Press, 2014) 352–53. 98 Case C-358/89 Extramet, n 81 above. 99 Ibid, para 17. 100 Ibid, paras 55–66 of his Opinion.

The Efforts to Reform Trade Defence Instruments 377 considerable criticism, not least in the Court’s own quarters.101 Against this background, it is noteworthy that measures adopted in the area of anti-dumping policy are subject to review by actions brought by a broader range of parties than those envisaged under the prevailing interpretation of the relevant primary rules. Finally, an annulment action does not constitute the only way of contesting the legality of anti-dumping measures. Proceedings may be brought before national courts, which may then refer to the Court of Justice under the preliminary reference procedure in accordance with Article 267 TFEU.102 However, this indirect route of challenging the validity of a Union regulation through national courts is not merely a choice that the interested parties have. As the judgment in TWD made clear, if the applicant in the main proceedings clearly had standing to challenge the anti-dumping measure by an action for annulment pursuant to Article 263 (4) TFEU, an action before national courts aiming at having recourse to the Article 267 TFEU procedure would be inadmissible.103

7. THE EFFORTS TO REFORM TRADE DEFENCE INSTRUMENTS The Efforts to Reform Trade Defence Instruments

The reform of the Union’s defence trade instruments in general and anti-dumping law in particular have been subject to debate for some time. The analysis above examined the changes in decision-making introduced by the Omnibus Regulation I. An effort at substantive reform was undertaken by the Commission in 2006.104 On an initiative by the then Trade Commissioner, Peter Mandelson, it was suggested that the Union’s interests would be better served if the adoption and implementation of trade defence measures were based on a wider range of factors than the current rules allowed. In particular, it was suggested that the interests of EU traders who outsource to third countries should be taken into account. As they normally outsource to low-cost countries, trade defence measures would be used more sparingly. Similarly, reference was made to the interests of consumers which may be better served by more targeted reliance upon protective measures. These proposals were inspired by the liberal trade convictions of Peter Mandelson, which had not always been welcomed by the Member States. For instance, his clash with the then French President Nicolas Sarkozy, who accused him for sacrificing the interests of European citizens to the altar of global economic liberalism, is well documented.105 The Commission’s proposals were met with strong opposition from various EU industries and Member States, and were abandoned.106 Another attempt at reforming trade defence instruments was initiated by the

101 See eg the much-discussed Opinion of AG Jacobs in Case C-50/00 P Union de Pequeros Agricultores v Council [2002] ECR I-6677. On the Lisbon amendment, see P Craig, The Lisbon Treaty: Law, Politics, and Treaty Reform (Oxford, Oxford University Press, 2010) 129 et seq. 102 Case C-16/90 Nölle v Hauptzollamt Bremen-Freihafen [1991] ECR I-5163. 103 Case C-188/92 TWD/Bundesrepublik Deutschland [1994] ECR I-833. See also Case C-239/99 Nachi Europe GmbH v Hauptzollamt Krefeld [2001] ECR I-1197. 104 COM(2006) 763 final, Global Europe—Europe’s Trade Defence Instruments in a Changing Global Economy—A Green Paper for Public Consultation (Brussels, 28 November 2006). 105 Financial Times, 21 June 2008. 106 Evaluation of the Responses to the Public Consultation on Europe’s Trade Defence Instruments in a Changing Global Economy December 2006–March 2007 (Brussels, 19 November 2007).

378 Substantive Trade Law Commission in 2013.107 It envisages a reform ‘in a pragmatic and balanced way’ and focuses on the following areas: increasing transparency and predictability, dealing with the threat of retaliation, effectiveness and enforcement, facilitating cooperation with stakeholders, improving review practice, and codification of existing practice. At the time of writing, these proposals were under consultation.

8. CONCLUSION Conclusion

It is impossible to convey all the details and complexity of the Union’s external trade policies in general and the trade defence insturments in particular in a short chapter. This analysis sought to shed some light on the fundamentals of one of its most important instruments and the variety of issues they raise in terms of the powers of the Union’s institutions, the rights of private parties and the intensity of judicial control. Central to the interaction of those aspects is the open-ended meaning of a number of concepts upon the assessment of which the Commission determines whether the imposition of anti-dumping duties is necessary. It should not be forgotten that the inherently controversial role of the Commission in assessing broad and complex concepts in the process of anti-dumping investigations is not carried out in isolation. The definition of the relevant concepts, for instance that of the ‘like product’ in the WTO context, is not necessarily any more helpful.108 Finally, another factor that has an impact on the EU’s trade defence policy is the international context within which the Union operates as a trade actor. Countries which have been amongst the main targets of anti-dumping investigations and duties by the Union, such as China and India, have gradually become quite enthusiastic users of this instrument.109 And even though the 2008 financial crisis was not followed by a deluge of protectionist measures, the WTO has recently warned of creeping protectionism.110

107 COM(2013) 191 final, Modernisation of Trade Defence Instruments—Adapting Trade Defence Instruments to the Current Needs of the European Economy (Brussels, 10 April, 2013). 108 See M Bronckers and N McNelis, ‘Rethinking the “Like Product” Definition in WTO Antidumping Law’ (1999) 33 Journal of World Trade 73. 109 See eg COM(2014) 294 final, Report from the Commission to the European Parliament: Eleventh Report Overview of Third Country Trade Defence Actions Against the European Union for the Year 2013 (Brussels, 27 May 2014). 110 See WTO Report on G-20 Trade Measures (mid-November 2013 to mid-May 2014) (16 June 2014).

Links with Third Countries

11 Links with Third Countries 1. INTRODUCTION Introduction

T

HERE IS A steady proliferation in treaty-making by the European Union, either on its own or along with its Member States. Some of these treaties evolve over time and form the nucleus of broader and structured frameworks of cooperation. These mechanisms of interacting with the rest of the world are worth examining both for their diversity and the sophistication of their development. This chapter will provide an overview of the dynamic process defined by these developments. It will identify broad categories of agreements concluded by the Union, it will define their main function and, then, highlight the linkages established both between themselves and other Union policies. In doing so, it will not examine the Europe Agreements, ie the agreements on the basis of which the ‘big bang’ enlargement of 2004 was designed—their story was interesting at the time and was told in detail and well.1

2. A WIDE RANGE OF LINKS A Wide Range of Links

The Union has established contractual relations with the rest of the world in a variety of ways which have been usefully categorised by scholars.2 This section will provide a snapshot of such agreements, before turning our attention to the Union’s relations with its neighbours.

2.1 Trade Agreements Trade agreements are concluded in the context of the CCP. Governed by Article 207 TFEU, this was the only substantive policy for which the original Treaty of Rome conferred express external competence upon the Union’s precursor, the European Economic Community. The trade agreements concluded by the Union vary in their content: they may 1 See M Cremona (ed), The Enlargement of the European Union (Oxford, Oxford University Press, 2003); C Hillion (ed), EU Enlargement—A Legal Approach (Oxford: Hart Publishing, 2004); and A Ott, and K Inglis (eds), Handbook on European Enlargement—A Commentary on the Enlargement Process (The Hague, TMC Asser Institute, 2002). 2 For an account of the Community’s practice, see M Maresceau, ‘Bilateral Agreements Concluded by the European Community’ (2004) 309 Recueil des Cours de l’Academie de Droit International de la Haye 125; and S Peers, ‘EC Frameworks of International Relations: Co-operation, Partnership and Association’ in A Dashwood and C Hillion (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 160.

379

380 Links with Third Countries establish a customs union or a free trade area between the Union and third countries or groups of countries, and the degree and pace of liberalisation they introduce may vary too. An interesting development in the Union’s trade policy was the adoption in 2006 by the Commission of a Communication entitled Global Europe—Competing in the World.3 This document intended to refocus the Union’s external economic relations so as to stimulate growth and create jobs in Europe. In other words, it established a link between internal and external policies and suggested that this link should provide the Union with a compass in its external relations. In practice, it suggested the negotiation of Free Trade Agreements (FTAs) with third countries and organisations.4 The economic criteria for choosing the Union’s new FTA partners include market potential (economic size and growth), the level of protection against EU export interests (tariffs and non-tariff barriers), the potential partners’ negotiations with EU competitors, the likely impact of such negotiations on EU markets and economies, and the impact on the preferential access to EU markets currently enjoyed by the Union’s neighbouring and developing country partners. On the basis of these criteria, the document prioritises as potential FTA partners third countries such as South Korea, India and Russia, and international organisations such as the Association of Southeast Asian Nations (ASEAN), Mercosur and the Gulf Cooperation Council. China is also referred to as a potential partner but ‘requires special attention because of the opportunities and risks it presents’.5 The FTAs outlined in the 2006 document are more ambitious than traditional trade agreements. Rather than focusing on the more conventional trade restrictions (such as tariffs), they aim to reach the highest possible degree of liberalisation in areas such as services and investment, to cover intellectual property rights and competition as well as good governance in financial, tax and judicial areas, and to include provisions on labour and environmental standards. Accordingly, these competitiveness-driven agreements are known as ‘deep and comprehensive FTAs’ (DCFTAs). The Union has so far concluded such an agreement with South Korea6 which has been applied provisionally since 1 July 2011. This is considered to be the most ambitious trade agreement concluded by the Union to date.7 The Agreement was concluded as a mixed agreement as, in addition to trade, it also covered cultural cooperation.8 The industries most affected include cars, consumer electronics, pharmaceuticals and chemicals. Given its scope and implications, it is not surprising that the Agreement also offers some protection to the parties. In particular, it provides for a bilateral safeguard mechanism which enables a party to increase the rates of customs duties in cases where the implementation 3 COM(2006) 567 final, Global Europe—Competing in the World—A Contribution to the EU’s Growth and Jobs Strategy (Brussels, 4 October 2006). 4 See F Hoffmeister, ‘The Deep and Comprehensive Free Trade Agreements of the European Union— Concept and Challenges’ in M Cremona and T Takács (eds), Trade Liberalization and Standardisation—New Directions in the ‘Low Politics’ of EU Foreign Policy (2013) CLEER Working Paper 2013/6, 11. 5 COM(2006) 567 final, Global Europe, n 3 above, 11. 6 [2011] OJ L127/6, concluded pursuant to Council Dec 2011/265 [2011] OJ L127/1. 7 See the analysis in J Harrison (ed), The European Union and South Korea—The Legal Framework for Strengthening Trade, Economic and Political Relations (Edinburgh, Edinburgh University Press, 2013); and D-C Horng, ‘Reshaping the EU’s FTA Policy in a Globalizing Economy: The Case of the EU–Korea FTA’ (2012) 46 Journal of World Trade 301, 311 et seq. 8 See the comments by the then Trade Commissioner Karel De Ducht in his speech ‘The Implications of the Lisbon Treaty for Trade Policy’ (Oporto, 8 October 2010), http://trade.ec.europa.eu/doclib/docs/2010/october/ tradoc_146719.pdf.

A Wide Range of Links 381 of the DCFTA leads to such increased quantities of imports and under such conditions as to cause or threaten to cause serious injury to domestic producers.9 Such measures may be imposed for up to four years. The significance of the Agreement and the sensitivity of trade with Korea for certain industries is illustrated by a statement made by the Commission on the FTA implementation and attached to the Agreement. This provides that, amongst others, the Commission will share on a bi-monthly basis with EU businesses, the Member States and the European Parliament statistics relevant to cars, consumer electronics and textiles. As for the safeguard clause, the Union has established a procedure governing its application and which provides, amongst others, for the possibility to initiate a safeguard investigation or to introduce prior surveillance measures under certain conditions.10 Pursuant to this measure, the Commission publishes an annual report on the implementation of the EU–Korea DCFTA; according to the 2014 Report, no such request was received by the Commission.11 Negotiations with Canada for a Comprehensive Economic and Trade Agreement (CETA) were concluded in August 2014. Negotiations are also under way with India, Malaysia, Vietnam, Thailand and Japan, as well as ASEAN and Mercosur. The FTA with Singapore was initialled in September 2013. In 2012, the EU signed a comprehensive trade agreement with Colombia and Peru.12 Finally, in 2013, the EU and the United States started negotiating a Transatlantic Trade and Investment Partnership (TTIP). The scope and impact of the negotiations would make this a most important agreement. At the time of writing, however, the negotiations appeared to have stalled and Trade Commissioner De Gucht has expressed concern that there is not sufficient political will either in Washington or in Member States to see the deal through.13 The timing of the Commission’s initiative for more ambitious and competitivenessdriven DCFTAs is telling. In 2006, the Union had signed the Treaty Establishing a Constitution for Europe, was basking in the comfort which the establishment of the eurozone had conveyed, and was preparing for yet another round of enlargement. In other words, it was confident, it felt successful and it set out an ambitious vision. The intervening years have not been kind. The financial crisis has caused unprecedented problems for the future of the Union, with the possibility of sovereign default for at least one Member State, extraordinary economic, legal and political efforts to safeguard the euro, and the very existence of the eurozone put in doubt.

2.2 Association Agreements Other than trade, the only specific type of international agreement to which EU primary law has made reference since the establishment of the Communities is association agreements. These are governed by Article 217 TFEU, which reads as follows: 9

Art 3 EU–Korea FTA. See Reg 511/2011 implementing the bilateral safeguard clause of the Free Trade Agreement between the European Union and its Member States and the Republic of Korea [2011] OJ L145/19. 11 See COM(2014) final, Annual Report on the Implementation of the EU–Korea Free Trade Agreement (Brussels, 28 February 2014). 12 [2012] OJ L354/3, concluded pursuant to Council Dec 2012/735/EU [20120] OJ L354/1. The Agreement has been applied provisionally (since 1 August 2013 for Colombia and since 1 March 2013 for Peru). 13 The Financial Times, 25 September 2014. Issues of concern include the resolution of investment disputes pursuant to arbitration. 10

382 Links with Third Countries The Union 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.

The significance of this type of agreement is also illustrated by the procedure required for its adoption, namely unanimity in the Council (Article 218(8) subparagraph 2 TFEU) and the consent of the Parliament (Article 218(6)(a)(i) TFEU). Article 217 TFEU itself provides no specific criteria as to the definition of association agreements. Neither has the Court provided a comprehensive definition. In Case C-12/86 Demirel, dealing with the Association Agreement with Turkey, it held that association agreements are about ‘creating special privileged links with a non-member country which must, at least to a certain extent, take part in the Community system’.14 There is no suggestion that Article 217 TFEU and the references to ‘reciprocal rights and obligations’ would entail a relationship of equality between the EU and its partner countries or organisations.15 The practice of association agreements has left no doubt about this. In fact, there is no single form of association established between the Union and third countries.16 Therefore, a typology of such agreements may only be drawn up on the basis of existing practice.17 In previous chapters, reference was made to Association Agreements concluded with countries which were to become members of the European Union. Indeed, of the first countries with which Association Agreements were concluded, Greece became a Member in 1981 and Turkey started negotiations for membership in 2005.18 The Agreement establishing the European Economic Area is one of the most significant Association Agreements concluded by the Community and its Member States (and will examined in the following section). Another important association is the one established with 76 African, Caribbean and Pacific (ACP) countries, now regulated under the Cotonou Agreement: entitled the ‘Partnership Agreement’, it was concluded ‘in order to promote and expedite the economic, cultural and social development of the ACP States, with a view to contributing to peace and security and to promoting a stable and democratic political environment’.19 An Association Agreement has also been concluded with Chile and entered into force on 1 March 2005.20 The association agreements concluded with the Mediterranean countries and the countries in the West Balkans will be examined below. An interesting example of association under Article 217 TFEU is provided by the Union’s links with Switzerland. This is not based on a single Association Agreement but on a number of sectoral agreements concluded after Switzerland decided not to conclude the EEA Agreement. These Agreements were concluded in two instances. The first series, 14

Case C-12/86 Demirel [1987] ECR 3747, para 9. See Maresceau, n 2 above, 316. 16 See M-A Gaudissart, ‘Reflexions sur la nature et la portée du concept d’association à la lumière de sa mise en œuvre’ in M-FC Tchakaloff (ed), Le concept d’association dans les accords passés par la Communauté: essai de clarification (Brussels, Bruylant, 1999) 3. 17 See the analysis in Commentaire Mégret, vol 12: Relations Extérieures (Brussels, Editions de l’Université de Bruxelles, 2005) 293–324. 18 However, the negotiations have stalled. Turkey has refused to apply the Additional Protocol of the Ankara Association Agreement ([1972] OJ L293/3) to Cyprus. In response, the Union has decided that eight negotiation chapters will not be opened and that no chapter will be provisionally closed. 19 [2000] OJ L317/3, Art 1. See the analysis in O Babarinder and G Faber, ‘From Lomé to Cotonou: Business as Usual?’ (2004) 9 European Foreign Affairs Review 27. 20 [2002] OJ L352/3. 15

A Wide Range of Links 383 referred to as ‘Bilaterals I’, was signed in 1999 and covered seven specific sectors (free movement of persons, technical trade barriers, public procurement, agriculture, overland transport, air transport and research).21 These Agreements are intended to function as an indissoluble whole. This is illustrated by the guillotine clause which they contain: the termination of an Agreement would entail the termination of all other Agreements.22 The second series of Agreements (Bilaterals II) was signed in 2004 and covered nine sectors (taxation of savings income, cooperation in the fight against fraud, association of Switzerland to the Schengen acquis, participation of Switzerland in the EU regulations on asylum and electronic identification systems, trade in processed agricultural products, participation of Switzerland in the European Environmental Agency, statistical cooperation, participation of Switzerland in the EU programmes on training in the audiovisual sector, and the avoidance of double taxation for retired Union officials living in Switzerland).23 This complex structure is monitored by joint committees. Whilst these agreements are not described expressly as Association Agreements, they were adopted under Article 217 TFEU.24 In fact, there is no doubt as to the far-reaching implications of their application. In Case C-656/11 United Kingdom v Council, a dispute about the coordination of social security systems pursuant to the EU–Switzerland Agreement on the free movement of persons, the Court referred to Switzerland as an example of a third state which ‘has already been equated, under an agreement approved on the basis of Article 217 TFEU, with a Member State of the European Union’ for the purposes of free movement of persons.25 Therefore, an Association Agreement may be about the complete assimilation of the citizens of a third country with EU citizens. The Union’s relations with Switzerland have been tested following a referendum in February 2014 in which quotas for all immigrants, including from the EU, in the country were approved. Under the Swiss constitutional rules, the government must introduce legislation implementing this policy within three years of the referendum. Association Agreements have been concluded by the EU with its eastern and southern neighbours; these will be examined below in this chapter.

2.3 Neighbourhood Agreements At Lisbon, the Union’s primary rules introduced a new type of international agreement. This is governed by Article 8 TEU, which reads as follows: 1. The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation.

21

[2002] OJ L114/6. Art 25(4), [2002] OJ L114/6. See C Kaddous, ‘La place des Accords bilatéraux II dans l’ordre juridique de l’Union europeenne’ in C Kaddous and M Jametti-Greiner, Accords bilatéraux II Suisse—UE et autres accords récents (Bruxelles, Bruylant; Paris: LGDJ; Basel, Helbing and Lichtenhahn, 2005) 2; and A Lazowski, ‘Enhanced Multilateralism and Enhanced Bilateralism: Integration without Membership in the European Union’ (2008) 45 Common Market Law Review 1433. 24 For an examination of the conclusion of agreements which do not refer to an association under Art 217 TFEU, see Maresceau, n 2 above, 410-12. 25 Case C-656/11 United Kingdom v Council ECLI:EU:C:2014:97, para 65. 22 23

384 Links with Third Countries 2. For the purposes of paragraph  1, the Union may conclude specific agreements with the countries concerned. These agreements may contain reciprocal rights and obligations as well as the possibility of undertaking activities jointly. Their implementation shall be the subject of periodic consultation.

This new type of agreement was introduced in the light of the increasing focus of the Union on its relations with its eastern and southern neighbours, exemplified by the European Neighbourhood Policy (ENP). This dimension of the Union’s international relations will be examined below in this chapter. For the purposes of this analysis, suffice it to point out that the agreements envisaged in Article 8(2) TEU are shrouded in ambiguity both in terms of their position in TEU and their scope and implications. The provision of neighbourhood agreements is not part of the primary rules on external action (to be found in Part V TFEU), neither are they included in the general provisions on external action (to be found in Title V TEU). Instead, Article 8(2) TEU is part of the Title I TEU which sets out the common provisions of the Treaty. Whilst out of place in terms of its substance, the context of Article 8 TFEU reflects the significance that the Union attributes to its links with its neighbours. In addition, it separates this specific type of relationship from the accession process and the pre-accession character that Association Agreements have assumed in the previous enlargements.26 Finally, it highlights the broad scope of the ENP which straddles the whole range of Union’s activities (and which would be characterised as cross-pillar activities under the pre-Lisbon constitutional arrangements). As for the content of neighbourhood agreements, the wording of Article 8(2) TEU appears to draw on the description of Association Agreements laid down in Article 217 TFEU. On the other hand, this new type of agreement would apply to a narrower group of countries (the Union’s neighbours) and the wording of Article 8 TEU suggests that its scope may not be quite as wide as that of Association Agreements.27 Another curious feature of neighbourhood agreements is the absence of any reference in Article 8 TEU to the procedure for their negotiation and conclusion. Neither is there a reference to Article 8 TEU in Article 218 TFEU which sets out the procedure for the negotiation and conclusion of international agreements. This seems to suggest that, by default, the general procedure set out in the latter provision would apply (therefore, the agreement would be concluded by qualified majority in the Council, whereas Association Agreements are concluded unanimously).28 It is not only the context and wording of Article 8 TEU which raise questions about the position of neighbourhood agreements in the Union’s external relations armoury. It is also practice, as it suggests that its neighbours do not show any enthusiasm to conclude such agreements with the Union. For instance, Ukraine, Georgia and Moldova, which 26 See also N Ghazaryan, The European Neighbourhood Policy and the Democratic Values of the EU—A Legal Analysis (Oxfordm Hart Publishing, 2014) 61 et seq; and C Hillion, ‘The EU Mandate to Develop a “Special Relationship” with its (Southern) Neighbours’ in G Fernández Arribas, K Pieters and T Takács (eds), The European Union’s Relations with the Southern-Mediterranean in the Aftermath of the Arab Spring, CLEER Working Papers 2013/3 11. 27 See P Van Elsuwege and R Petrov, ‘Article 8 TEU: Towards a New Generation of Agreements with the Neighbouring Countries of the European Union?’ (2011) 36 European Law Review 688, 695. 28 Van Elsuwege and Petrov suggest that, given the congruence between Arts 8 TEU and 217 TFEU, the procedure for the conclusion of neighbourhood agreements may be that governing the conclusion of Association Agreements (ibid, 697). This view would run counter to the wording of Art 218(8) second subpara TFEU which renders unanimity the exception to the principle of qualified majority voting and, as such, should be interpreted narrowly.

European Economic Area

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have recently finalised new Association Agreements, did not wish to negotiate neighbourhood agreements instead, as they felt that that would suggest a less strong partnership. No such agreements have been negotiated or are envisaged at the time of writing.

3. EUROPEAN ECONOMIC AREA European Economic Area

The European Economic Area (EEA) consists of the European Union and its Member States, and Iceland, Norway and Liechtenstein. Austria, Finland and Sweden were also parties prior to their accession to the Union. Switzerland had signed the agreement but, following a negative vote in a referendum, did not conclude it. Instead, along with Iceland, Norway and Liechtenstein, it forms the European Free Trade Area (EFTA). The EEA Agreement29 was signed after prolonged negotiations which had led to the drafting of an agreement originally considered by the European Court of Justice to be incompatible with the EC Treaty.30 This was due to the establishment of an independent EEA Court the function of which was held to run counter to the exclusive jurisdiction of the Court of Justice to interpret Community law. The Agreement was amended following the ECJ ruling before being formally concluded by the EU. The EEA Agreement prescribes a degree of integration which is unique in EU external relations.31 The main objective of the EEA Agreement is ‘to promote a continuous and balanced strengthening of trade and economic relations between the Contracting Parties with equal conditions of competition, the respect of the same rules, with a view to creating a homogeneous European Economic Area’.32 This objective is served by an elaborate institutional structure (EEA Council, EEA Joint Committee, EEA Joint Parliamentary Committee). The main core of the Agreement is the extension of the rules on the free movement of goods, persons, services and capital to EFTA countries. In addition, it provides for a system ensuring undistorted competition in the EFTA countries and also the extension of a number of other policies such as social, consumer and environmental policy. The relevant EU measures which are applicable pursuant to the Agreement are reproduced in a number of annexes. The EEA Agreement does not provide for a common external trade policy. Therefore, rather than being based on a customs union, it provides for a considerably advanced free trade area. In the words of the Court of Justice, one of the principal aims of the Agreement ‘is to provide for the fullest possible realization 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’.33 In practical terms, this suggests that, in the area of movement of persons, for instance, ‘nationals of the EEA States  …

29

[1994] OJ L1/3. Opinion 1/91 [1991] ECR I-6079. 31 For detailed analyses, see T Blanchet, R Piipponen and M Westman-Clement, The Agreement on the European Economic Area (Oxford, Oxford University Press, 1994); P-C Müller-Graff and E Selvig (eds), EEA– EU Relations (Berlin, Berlin-Verlag Spitz, 1999); and S Norberg (ed), EEA Law—A Commentary on the EEA Agreement (Berlin, Springer Verlag, 1994). 32 Art 1 EEA. 33 Case C-452/01 Ospelt and Schloesse Weissenberg [2003] ECR I-9743, para 29. 30

386 Links with Third Countries benefit from the free movement of persons under the same social conditions as EU citizens’.34 Two main principles guide the application of the Agreement. The first is the principle of homogeneity, which ensures that the provisions of the EEA Agreement and those of EU legislation substantially reproduced therein are given ‘as uniform an interpretation as possible’.35 The second is the principle of dynamism, which ensures that the development of EU law within the areas covered by the Agreement is mirrored by the development of EEA law. The design and implementation of the EEA Agreement illustrates clearly the imbalance of rights and obligations between the parties which may characterise an association established under Article 217 TFEU. The EFTA countries are under a duty to adjust their legislation to EU law whilst having no input in the adoption of the latter. The application of these principles is monitored on the basis of a surveillance procedure laid down in the EEA Agreement. The EFTA Surveillance Authority is responsible for monitoring the implementation of the EEA Agreement and the EFTA Court for its interpretation in the EFTA countries. The latter has been instrumental in ensuring that the objectives of the Agreement are met.36 To that effect, it has produced a number of judgments the constitutional implications of which have attracted attention.37 A change in the EEA appeared imminent in the late 2000s. Iceland applied for EU membership in July 2009. Accession negotiations started soon thereafter and Iceland was far advanced in the application of the Union acquis due to its EEA membership. A source of tension was the fallout from the financial crisis which saw Icelandic banks collapse owing debts of billions of euros to EU citizens, particularly in the United Kingdom and the Netherlands. Negotiations were put on hold by the newly elected Icelandic government in May 2013. In May 2014, Iceland’s Foreign Minister stated that accession negotiations had been abandoned and that the formal notification to the Union would be made in the course of that year.

4. DEVELOPMENT COOPERATION Development Cooperation

The development policy of the EU is one of its most prominent and long-standing external relations policies. It was at Maastricht that the EC Treaty provided for the first time its development policy with a specific legal basis. In accordance with Article 4 TEU, the competence of the EU is shared with that of the Member States. As the EU is the world’s largest donor, the significance of this policy is felt not only by third states but also the Union’s institutions (such as the Commission, which administers the budget) and the Member States (it is interesting, for instance, that the coalition government that came to power in the United Kingdom in 2010 and introduced major spending cuts in

34

Case C-431/11 United Kingdom v Council ECLI:EU:C:2013:589, para 58. Art 105(1) EEA Agreement. 36 On the role of the EFTA Court, see C Baudenbacher, P Tresselt and Törlygsson (eds), The EFTA Court— Ten Years On (Oxford, Hart Publishing, 2005). 37 For instance, in the area of state liability, see Case E-9/97 Sveinbjörnsdóttir [1998] EFTA Ct Rep 95. For an analysis of the EFTA Court’s approach to the issue, see H. Haukeland Fredriksen, ‘State Liability in EU and EEA Law: The Same or Different?’ (2013) 38 European Law Review 884; and S Magnússon and ÓÍ Hannesson ‘State Liability in EEA Law: Towards Parallelism or Homogeneity?’ (2013) 38 European Law Review 167. 35

Development Cooperation

387

most policies and government departments singled out development cooperation as a policy whose budget would not be reduced).38 The Union’s development cooperation policy is covered by Articles 208–11 TFEU. Under Article 208(1) TFEU: 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 EU does not carry out its development policy in isolation. Article 208(2) TFEU states: 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 United Nations and other competent international organisations.

The importance of development policy and its objectives for EU external policies is illustrated by the prominent position in which it features in the Berlin Declaration signed on 25 March 2007 on the occasion of the fiftieth anniversary of the signing of the original Treaties establishing the then European Economic Community. In addition to development cooperation, the Nice Treaty added a new provision on Economic, Financial and Technical Cooperation with Third Countries to the primary law. Following Lisbon, this is Article 212 TFEU, which enables the EU to conclude cooperation agreements with non-developing third countries. The two most significant activities undertaken by the EU in the area of development cooperation are the conclusion and application of the Cotonou Agreement and the establishment of the Generalised System of Preferences. The latter was outlined in Chapter 10. Signed in Cotonou, Benin, on 23 June 2000, the Cotonou Agreement established a partnership between the then EC, its Member States and 79 ACP countries. It built upon the work achieved in the previous thirty years, and followed a number of previous agreements with ACP countries, namely the Yaoundé (1963–74) and Lomé (1975–99) Conventions. The Cotonou Agreement is an Association Agreement (concluded on behalf of the EU) and is intended to be valid for twenty years.39 It has been revised once, in 2005. At the core of the Agreement lies the interaction between trade, development and political relations. In Article 1, it states that its objective is to promote and expedite the economic, cultural and social development of the ACP States, with a view to contributing to peace and security and to promoting a stable and democratic political environment. The partnership shall be centred on the objective of reducing and eventually

38 For an analysis of the policy, see M Broberg, ‘From Colonial Powers to Human Rights Promoter: On the Legal Regulation of the European Union’s Relations with the Developing Countries’ (2013) 26 Cambridge Review of International Affairs 675; and B Van Cooren and RA Wessel, EU External Relations—Text, Cases and Materials (Cambridge, Cambridge University Press, 2014) ch 10. 39 [2000] OJ L317/3.

388 Links with Third Countries eradicating poverty consistent with the objectives of sustainable development and the gradual integration of the ACP countries into the world economy.

In addition, the Agreement aims to support individual rights, promote regional integration in order to foster ACP trade and private investment and enhance civil society and gender issues. An interesting feature of the Agreement is the provision for differentiation. According to Article 2: [C]ooperation arrangements and priorities shall vary according to a partner’s level of development, its needs, its performance and its long term development strategy. Particular emphasis shall be placed on the regional dimension. Special treatment shall be given to the least developed countries. The vulnerability of landlocked and island countries shall be taken into account.

The political dimension of the Cotonou Agreement is quite prominent. There is provision for political dialogue covering all the objectives of the Agreement. Respect for human rights, democratic principles and the rule of law constitutes an essential element of the Agreement; in other words, a violation of any of them may lead to the suspension of the entire Agreement. Furthermore, good governance is viewed as a ‘fundamental element’ of the partnership. Therefore, it is only in conditions of a functioning, democratic and accountable society that the economic objectives of the Agreement are intended to be met. This element of conditionality is a significant aspect of the EU–ACP relationship. In terms of trade, the Cotonou Agreement provides for non-reciprocal preferential trade arrangements (which had been provided for by the previous Conventions), thereby helping ACP imports to penetrate the EU market.40 These arrangements were valid until 31 December 2007. Since 2008, a series of agreements between the EU and the ACP countries envisaged to govern trade relations, called Economic Partnership Agreements (EPAs), has been negotiated. These are FTAs and are intended to render the EU–ACP relationship more symmetrical, in line with WTO rules. The aim of these FTAs is to foster the smooth and gradual integration of the ACP states into the world economy and to support the establishment of regional integration in order to contribute to reducing poverty in the ACP countries. Negotiation of these FTAs proved protracted and controversial. ACP countries accused the Union of imposing overly strict conditions and forcing reciprocity too abruptly. The agreements are negotiated between the EU and seven groups of ACP countries (the Caribbean, the Pacific, Eastern and Southern Africa, the Eastern African Community, Southern African Development Community, West Africa and Central Africa). So far, only the EPA with the Caribbean ACP countries has been concluded.41 In 2014, negotiations with the South African Development Community were finalised. In addition, several interim agreements with individual ACP countries have been negotiated. Quite apart from the politically charged context in which they have been negotiated, these agreements are interesting for some innovative provisions. For instance, the EPA between the EU and the Caribbean States (CARIFORUM) includes quite detailed provisions on sustainable development and investment. In doing so, the Agreement departs from past treaties and creates market-access obligations in relation to establishment in 40 See L Bartels, ‘The Trade and Development Policy of the European Union’ in M Cremona (ed), Developments in EU External Relations Law (Oxford, Oxford University Press, 2008) 128. 41 [2008] OJ L289/3.

Partnership and Cooperation Agreements

389

the services and non-services sectors and national treatment and most-favoured-nation treatment obligations in relation to establishment.42 The Cotonou Agreement establishes joint EU–ACP institutions which monitor its application, namely the Council of Ministers, the Committee of Ambassadors and the Joint Parliamentary Assembly. It also provides for a consultation procedure for cases where compliance with the essential elements of the Agreement is in dispute. The 2005 revision of the Agreement provides for more systematic and formal political dialogue in relation to these elements. The main instrument for the provision of financial aid to ACP countries is the European Development Fund (EDF) which finances projects, programmes and other forms of operations contributing to the achievement of the objectives of the Agreement. The EDF is financed directly by the Member States and is governed by its own rules, which are separate from the EU budgetary rules.43 Over the years, the scope of development cooperation has been construed widely by decision-makers, hence strengthening its linkages with other external policies. In legal terms, this development has raised questions of both procedural and substantive nature. These are examined in Chapter 14.

5. PARTNERSHIP AND COOPERATION AGREEMENTS Partnership and Cooperation Agreements

The countries of the ex-Soviet Union, now members of the Commonwealth of Independent States (CIS), concluded a series of agreements with the Community and its Member States in the mid-1990s. These agreements are known as Partnership and Cooperation Agreements (PCAs). The first PCA was concluded with Russia,44 to be followed by that with Ukraine,45 the latter entering into force only three months after the former. Following them, the Community concluded a PCA with Moldova,46 and then in quick succession with Kazakhstan,47 Kyrgizstan,48 Georgia,49 Uzbekistan,50 Armenia51 and Azerbaijan,52 all of which entered into force on 1 July 1999. The PCA with Tajikistan was signed in 2004 and entered into force on 1 January 2010.53 Of the other ex-Soviet Republics, PCAs were signed with Belarus in March 1995 and Turkmenistan in May 1998, but neither has yet come into force.54 All these agreements are mixed. The relevant decisions concluding them were adopted 42

However, investment protection is excluded from its scope. For the legal issues which this has raised, see the analysis in Chapter 5. 44 [1997] OJ L327/3 which entered into force on 1 December 1997. 45 [1998] OJ L49/3. 46 [1998] OJ L181/3 which entered into force on 1 July 1998. 47 [1999] OJ L196/3. 48 [1999] OJ L196/48. 49 [1999] OJ L205/3. 50 [1999] OJ L229/3. 51 [1999] OJ L239/3. 52 [1999] OJ L246/3. 53 [2009] OJ L350/3. 54 In the case of Belarus because of the authoritarian government of President Lukashenko; in the case of Turkmenistan because it has still not been ratified by all the Parties. An Interim Agreement with Turkmenistan on trade and trade-related matters was signed in November 1999 but, because of human rights concerns about the country, it was submitted to the Parliament for its opinion, which was rendered ten years later. The Agreement entered into force in August 2010 (see [2011] OJ L80/21). 43

390 Links with Third Countries by the Council as well as the Commission, as the PCAs were concluded not only by the EC but also the European Coal and Steel Community and the European Atomic Energy Community. As for their legal bases, they included a considerable number of EC Treaty provisions.55 These agreements with the countries of Eastern Europe and Central Asia were not concluded in a legal vacuum, as the Community and its Member States had signed a Trade and Cooperation Agreement with the Soviet Union in 1989.56 In this context, the new agreements were aimed at replacing that agreement by establishing separate frameworks of bilateral cooperation whilst offering those countries an alternative to accession to the EU.57 In relation to Russia and Ukraine in particular, there was an additional policy layer in the form of common strategies, ie CFSP instruments (abandoned by the Lisbon Treaty) which aimed to set out the Union’s overall approach to specific geographic areas.58 The duration of the PCAs was envisaged to be ten years. Since their conclusion, the geopolitical and economic environment in Europe has changed drastically. Whilst the PCAs are intended to be replaced by new agreements, some of which have actually been negotiated, progress has been difficult and unpredictable. The Union has negotiated an Association Agreement, including a DCFTA, with Ukraine, Moldova, Armenia and Georgia. These agreements were due to be initialled in Vilnius, Lithuania in November 2013. However, only the Agreements with Moldova and Georgia were initialled then (and then signed in June 2014).59 Armenia announced in September 2013 that it would not sign the Agreements as it had decided to join a customs union with Russia, Belarus and Kazakhstan instead. A few days before the Vilnius summit, Ukraine announced that it would suspend its negotiations with the EU. During the negotiations, the EU had insisted that Ukraine release from prison the former Prime Minister, Yulia Tymoshenko. The suspension of the negotiations was viewed as the outcome of heavy economic and political pressure exerted by Russia on Ukraine. Following the announcement by the Ukrainian President, demonstrations erupted in Ukraine protesting against what was viewed as the government’s turning away from Europe. The authorities’ violent response caused international consternation. An interim government took over and, pending national elections, Russian forces intervened and Crimea declared that it would secede and join Russia. At the time of writing, a violent conflict is taking place in the eastern part of Ukraine where separatist forces, supported by Russia, are active. In order to support the government in Ukraine, the Union speeded up the process of the application of parts of the Association Agreement: 55 These included Art 44(2) EC (now 50(2) TFEU), Art 55 EC (now Art 62 TFEU), Art 71 EC (now Art 91 TFEU), Art 80(2) EC (now Art 100(2) TFEU), Art 93 EC (now Art 113 TFEU), Art 94 EC (now Art 115 TFEU), Art 133 EC (now Art 207 TFEU) and Art 308 EC (now Art 352 TFEU). 56 [1989] OJ L68/3. 57 See C Hillion, ‘Partnership and Cooperation Agreements between the European Union and the New Independent States of the Ex-Soviet Union’ (1998) 3 European Foreign Affairs Review 399. 58 Common Strategy on Russia: [1999] OJ L157/1 (its duration was extended by Dec 2003/471/CFSP [2003] OJ L157/ 68 until 24 June 2004 and was not further prolonged). Common Strategy on Ukraine: [1999] OJ L331/1 (its duration extended by Dec 2003/897/CFSP [2003] OJ L333/96 until 23 December 2004). For an analysis of these instruments in the light of the 2004 enlargement, see M Maresceau, ‘EU Enlargement and EU Common Strategies on Russia and Ukraine: An Ambiguous Yet Unavoidable Connection’ in Hillion (ed), n 1 above, 181. 59 For the Commission’s proposals for the conclusion of the new Association Agreements, see COM(2014) 146 final (Brussels, 10 March 2014) (for Moldova) and COM(2014) 149 final (Brussels, 10 March 2014) (for Georgia).

Partnership and Cooperation Agreements

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its political provisions were signed in March 2014, and the Agreement in its entirety was signed three months later.60 The trade parts of the agreement were expected to be applied provisionally from the autumn 2014. However, the parties agreed to delay implementation until December 2015. During this period, Ukrainian business will have access to EU markets while the Ukrainian market will not be open to EU products. This development is widely seen as an effort to placate Russia, whose opposition to the EU–Ukraine agreement was vociferous. In fact, even after the delay was agreed, Russian President Putin wrote to the President of the Commission to ask for the negotiation of wholesale changes which would take into account Russian interests.61 As for Russia, negotiations for a comprehensive agreement were launched in June 2008. However, following the Russian invasion in Georgia in August 2008, the European Council decided at an extraordinary meeting on 1 September 2008 to postpone negotiations until the Russian troops withdrew to the positions held prior to 7 August. At that meeting, the Commission was asked to conduct an in-depth examination of various aspects of EU–Russia relations. On 5 November 2008, it suggested that the negotiations with Russia be resumed: [F]irst because this would allow the EU to pursue its own interests with Russia, and secondly because this is the best way to engage with Russia on the basis of a unified position. When the EU speaks with one voice, and acts as one, Russia takes notice and the EU is able to influence the course of events. The unanimously agreed mandate for the negotiations for the New EU– Russia Agreement provides us with an important instrument to pursue our objectives in a united way.

However, following the Russian military intervention in Ukraine in 2014, the European Council decided to freeze negotiations for the successor agreement to the PCA. Following the EU–Russia Summit of 24 November 2006, the Finnish Presidency of the EU stated that until the conclusion of new agreements, the existing PCAs will remain in force. The PCAs are renewed automatically every year until new arrangements enter into force.62 In the light of the above, it is worth setting out the main features of the existing Agreements. All PCAs define the objectives of the partnership in broadly similar terms in their first Article. The one with Moldova, for instance, formulates them as follows: — to provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations, — to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development, — to provide a basis for legislative, economic, social, financial, and cultural cooperation,

60 [2014] OJ L161/3, pursuant to Council Dec 2014/295/EU [2014] OJ L161/1. The political parts of the Agreement which have been provisionally applied are its general principles, political dialogue and reform, political association, cooperation and convergence in the field of foreign and security policy, and its institutional, general, and final provisions. 61 Financial Times, 25 September 2014. President Barroso rejected this request, rather predictably, and expressed ‘strong concerns’ about the Russian demands and threats of retaliation (Financial Times, 1 October 2014). 62 See eg Art 101 of EU–Ukraine PCA.

392 Links with Third Countries — to support efforts of the Republic of Moldova to consolidate its democracy and to develop its economy and to complete the transition into a market economy.

Although similar to the objectives laid down in the other PCAs, the above formulation is by no means identical to them. For instance, Article 1 of the PCA with Ukraine refers to the development of ‘close’ political relations, an adjective that is not to be found in any other PCA with the exception of that with Russia which, whilst referring to them as ‘close’, does not qualify those relations as ‘political’. In addition, the cooperation for which the Agreement is to provide a basis is defined as ‘mutually advantageous’, a qualification absent from all the other PCAs, again with the exception of that with Russia where the requirement for mutuality could not have been overstated: economic, social, financial and cultural cooperation is to be ‘founded on the principles of mutual advantage, mutual responsibility and mutual support’.63 The above examples provide but one indication of the distinct nature of the PCAs, first, with Russia and, then, with Ukraine. In its Article 1, the former sets out the longest list of objectives to be found in any of the PCAs; in addition to those mentioned above, it includes strengthening political and economic relations, promoting activities of joint interest, providing an appropriate framework for gradual integration between Russia and a wider area of cooperation in Europe and, most importantly, creating the necessary conditions for the future establishment of a free trade area. To a certain extent, Article 1 of the PCA with Russia is indicative of the fact that it was the first agreement to be negotiated with a CIS country and, therefore, its provisions had not yet been streamlined. However, it also illustrates the unique position of Russia in Europe in general and drastic change of the geopolitical environment surrounding the Union at the time. The provision for the possibility of establishing a FTA, for instance (the so-called evolutionary clause), is only included in the PCAs with Russia, Ukraine and Moldova.64 This distinguishes them from the other PCAs concluded with the Caucasian and Central Asian countries.65 Therefore, there is no single definition of partnership within the context of the PCAs. This is also illustrated by the Agreements with Uzbekistan and Tajikistan which are the only ones including in their objectives support for their independence and sovereignty. Integration into the Union structures is not an objective of PCAs. Instead, as regards their substantive content, they include provisions on political dialogue, trade in goods, provisions affecting business and investment, cross-border supply of services including provisions affecting the establishment and operation of companies, cross-border supply of services, current payments and capital and intellectual property protection, legislative cooperation and economic cooperation whose scope ranges from transport and environment to small and medium-sized enterprises and tourism. Again, there is a variation: the agreements with Uzbekistan, Armenia, Azerbaijan and Tajikistan, for instance, include, in addition to the Title on Political Dialogue, one on Cooperation on Matters Relating to Democracy and Human Rights.66 Finally, all PCAs provide for an institutional framework whose bodies, namely a Cooperation Council, a Cooperation Committee and a 63

Art 1. Art 3 (PCA with Russia), Art 4 (PCA with Ukraine and Moldova). 65 For an analysis of the PCAs with the Central Asian countries, see B Berdiyev, ‘The EU and Former Soviet Central Asia: An Analysis of the Partnership and Cooperation Agreements’ (2003) 22 Yearbook of European Law 463. 66 Art 68 (PCA with Armenia and Uzbekistan), Art 71 (PCA with Azerbaidjan) and Art 66 (PCA with Tajikistan). 64

Stabilisation and Association Agreements (SAAs)

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Parliamentary Cooperation Committee, are entrusted with the smooth application of the Agreement. At the time of writing, no Association Agreement concluded by the EU has replaced the existing PCAs. However, it is worth pointing out the main features of the EU– Ukraine Association Agreement, which was signed in June 2014. According to the European External Action Service, the Agreement is a ‘pioneering document’ due to its wide scope.67 Its two main features are the establishment of a political association as well as economic integration. Similarly to the pre-existing PCA, the Association Agreement does not offer Ukraine the prospect of membership. Instead, it ‘not[es] the importance Ukraine attaches to its European identity’ and ‘confirm[s] that the European Union acknowledges the European aspirations of Ukraine and welcomes its European choice, including its commitment to building a deep and sustainable democracy and a market economy’.68 The agreement lists the ‘gradual rapprochement between the Parties’ and ‘Ukraine’s gradual integration in the EU internal market’ amongst its objectives.69 The DCFTA is to be established within ten years of the entry into force of the Agreement. In addition to its provisions on political dialogue and association, and the establishment of a DCFTA, the Agreement also covers economic and sector cooperation (in areas such as energy, taxation, environment, transport, company law, agriculture, fisheries and social policy), justice, freedom and security, and financial cooperation (including anti-fraud cooperation). There is a strong conditionality element in the Association Agreement. For instance, there is provision for law approximation: Ukraine undertakes to carry out reforms in a number of areas in exchange for which the Union would grant access to its internal market. It is the pace of these reforms which would determine the progress towards the achievement of the objectives set out in the Agreement. This form of conditionality is a theme in the ways in which the Union carries out its relations with its neighbours. This will be explored further in the remainder of this chapter.

6. STABILISATION AND ASSOCIATION AGREEMENTS (SAAs) Stabilisation and Association Agreements (SAAs)

Certain Association Agreements have been concluded with countries in the West Balkans, namely the Former Yugoslav Republic of Macedonia (FYROM),70Albania,71 Serbia72 and Montenegro.73 The SAA with Bosnia-Herzegovina was signed in 2008 and, pending its entry into force, an interim agreement on trade has been applied.74 Finally, negotiations for a SAA with Kosovo started in October 2013. This was an interesting development, as Kosovo is not recognised as an independent state by all EU Member

67

http://eeas.europa.eu/top_stories/2012/140912_ukraine_en.htm. 4th and 6th paras of the preamble to the EU–Ukraine Agreement. 69 Art. 1(2) EU–Ukraine Agreement. 70 [2004] OJ L84/13. 71 [2009] OJ L107/166. 72 [2013] OJ L278/16. 73 [2010] OJ L108/3. 74 [2008] OJ L169/13. 68

394 Links with Third Countries States. An Agreement had also been concluded with Croatia75 and applied prior to its accession to the Union. The very term used for the agreements in question highlights the unique geopolitical situation in the Balkans in the light of the war and instability in the associated states. The SAAs cover a range of areas including political dialogue, regional cooperation, free movement of goods, workers, services and capital, the approximation of law and law enforcement, justice and home affairs, cooperation policies and financial cooperation.76 They provide for the establishment of a FTA and also include a conditionality clause. In the Agreement with FYROM, this is set out as follows: Respect for the democratic principles and human rights as proclaimed in the Universal Declaration of Human Rights and as defined in the Helsinki Final Act and the Charter of Paris for a New Europe, respect for international law principles and the rule of law as well as the principles of market economy as reflected in the Document of the CSCE Bonn Conference on Economic Cooperation, shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement.77

The conclusion of the SAAs was envisaged as one aspect of a broader framework which would govern the Union’s relationship with the Western Balkans. This framework was called the Stabilisation and Association Process (SAP), and was the culmination of previous efforts of the Union to structure its approach to the Western Balkans and bring together different stands of its policies pertaining to the region. Originally, this effort took the form of the so-called Regional Approach: introduced in the aftermath of the civil war and the Dayton Peace Agreement, that programme aimed at consolidating the EU approach to the region by focusing on financial assistance, trade preferences and cooperation agreements between the Community and the Balkan countries.78 In 1999, the Union launched the Stability Pact for South Eastern Europe.79 It was within this context that a closer relationship between the Union and the Balkan countries, with the clear objective of broadening its scope beyond trade relations and financial assistance, was developed.80 It was against this background that the Feira European Council in June 2000 expressly referred to the prospect of closer integration into EU membership. Therefore, the genesis and development of the SAP drew upon an evolving body of political and legal initiatives. The SAP was proposed by the Commission in 199981 and articulated subsequently in the Final Declaration of the Zagreb Summit in November 2000. With the participation of the Heads of State or Government of the Member States and the five countries of the region, along with a representative of Slovenia and other officials, such as the Commission President and the CFSP High Representative,82 the main aspects of this process 75

[2005] OJ L26/3. See D Phinnemore, ‘Stabilisation and Association Agreements: Europe Agreements for the Western Balkans?’ (2003) 8 European Foreign Affairs Review 77. 77 Art 2, n 70 above. 78 See C Pippan, ‘The Rocky Road to Europe: The EU’s Stabilisation and Association Process for the Western Balkans and the Principle of Conditionality’ (2004) 9 European Foreign Affairs Review 219, 221–29. 79 Common Position 1999/345/CFSP [1999] OJ L133/1. 80 See M Cremona, ‘Creating the New Europe: The Stability Pact for South-Eastern Europe in the Context of EU–SEE Relations’ (1999) 2 Cambridge Yearbook of European Legal Studies 463. 81 COM(99)235 final. 82 See Joint Action 2000/717/CFSP on the holding of a meeting of Heads of State or of Government in Zagreb (Zagreb Summit) [2000] OJ L290/54. 76

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were spelled out. On the one hand, EU membership was defined as the objective for the countries of the Western Balkans; on the other hand, these countries would have to meet a number of conditions related to democratic, economic and institutional reforms. The perspective of membership is clearly expressed in Stabilisation and Association Agreements. For instance, in the Agreement with FYROM, [The contracting parties recall]  … the European Union’s readiness to integrate to the fullest possible extent the [Balkan country in question] into the political and economic mainstream of Europe and its status as a potential candidate for EU membership on the basis of the Treaty on European Union and fulfillment of the criteria defined by the European Council in June 1993, subject to successful implementation of this Agreement, notably regarding regional cooperation.83

Of the countries in the Western Balkans, Croatia acceded to the EU on 1 July 2013; Albania, Serbia, Montenegro and FYROM have been recognised as candidate countries; and Bosnia-Herzegovina and Kosovo as potential candidates. Following the 2003 Thessaloniki European Council, the SAAs with these countries became the core of their contractual relations with the EU. The process of the negotiation and conclusion of SAAs was accompanied by the provision of considerable assistance in the form of CARDS, ie the Community Assistance for Reconstruction, Development and Stabilisation programme.84 This was later replaced by the Instrument for Pre-Accession Assistance (IPA), the scope of which is wider as it covers all candidates for accession, including Turkey.85 The Union’s approach to the Western Balkans is characterised by a number of interesting features. The first one is its intense formalisation: it is based on a sophisticated system of various legal instruments and institutional mechanisms established gradually since the Kosovo crisis and covering interlinked areas of activities, all aiming at eventual membership. The negotiation and conclusion of SAAs, whilst a cornerstone of the SAP, is also the objective of a formal procedure. A brief overview of the case of Bosnia-Herzegovina will make this point clear. In 2000, the EU adopted a ‘Road Map’ in which 18 specific steps were identified as essential for the country before the Commission assessed whether Bosnia-Herzegovina was prepared to commence negotiations for an SAA with the then Community and its Member States. Three years later, and having concluded that those steps had been substantially completed, the Commission issued a feasibility study where it assessed the country’s capacity to meet the obligations of an SAA.86 This document had two main functions: on the one hand, it pointed out the considerable progress made by Bosnia-Herzegovina in the areas identified in the 2000 Road Map; on the other hand, it identified a number of areas where further progress was required prior to the commencement of negotiations for a SAA. These included

83

Last para of the preamble to SAAs with FYROM, n 70 above. Paras 5–6 of the preamble to Council Reg 2666/2000 [2000] OJ L306/1; its most recent amendment was by Council Reg 2257/2004 [2004] OJ L389/1. 85 For the period 2007–13, see Council Reg 1085/2006 [2006] OJ L210/82. For the period starting on 1/1/2014, see Reg 231/2014 [2014] OJ L77/11, accompanied by a measure implementing all external financial instruments (Reg 236/2014 [2014] OJ L77/95) and an implementing Regulation adopted by the Commission (Reg 447/14 [2014] OJ L132/32). 86 COM(2003)692 final, Report from the Commission to the Council on the preparedness of Bosnia and Herzegovina to negotiate a Stabilisation and Association Agreement with the European Union (Brussels, 18 November 2003). 84

396 Links with Third Countries compliance with international obligations, in particular by cooperating with the International Criminal Tribunal, more effective governance and public administration, effective human rights provisions and judiciary, tackling organised crime and managing asylum and immigration, customs and taxation reforms, trade and energy policy and others. Negotiations started in the end of 2005 and the Agreement was signed in 2008. However, other layers were added to the relationship between the EU and the Western Balkan countries. In 2003, the Commission recommended the introduction of European Integration Partnerships: Inspired by the pre-accession process, these partnerships would identify priorities for action in supporting efforts to move closer to the European Union. The purpose of these Partnerships would be to identify short and medium-term reforms which the countries need to carry out, to serve as a checklist against which to measure progress, and to provide guidance for assistance under the CARDS programme. They would reflect the particular stage of development of each country and be tailored to its specific needs.87

When the Thessaloniki European Council signalled the reorientation of the Union’s relationship with the West Balkans in June 2003 and adopted the Thessaloniki agenda for the Western Balkans, it endorsed the Commission’s recommendation about the adoption of such partnerships. These were described as follows: The European partnerships shall provide a framework covering the priorities resulting from the analysis of Partners’ different situations, on which preparations for further integration into the European Union must concentrate in the light of the criteria defined by the European Council, and the progress made in implementing the stabilisation and association process including stabilisation and association agreements, where appropriate, and in particular regional cooperation.88

The European partnerships are based on Council Decisions adopted by qualified majority and pursuant to a proposal by the Commission.89 A second significant feature of the EU approach to the Balkans is the promotion of regional cooperation. This became apparent quite early on. In the Zagreb Declaration, for instance: [T]he Heads of State or Government of the five countries concerned undertake to establish between their countries regional cooperation conventions providing for a political dialogue, a regional free trade area and close cooperation in the field of justice and home affairs, in particular for the reinforcement of justice and the independence thereof, for combating organized crime, corruption, money laundering, illegal immigration, trafficking in human beings and all other forms of trafficking. These conventions will be incorporated in the stabilization and association agreements as they are concluded with the European Union. The Heads of State or Government of the five countries concerned have declared the importance they attach to the training of police officers and magistrates and to the strengthening of border controls.

In practical terms, the conclusion of bilateral trade agreements between the Balkan countries is an important aspect of the SAP in general and its regional approach in particular. 87

COM(2003)285 final, The Western Balkans and European Integration (Brussels, 21 May 2013). Council Reg 533/2004 [2004] OJ L86/1, Art 1. For the most recent version of the partnerships, see Council Dec 2008/211/EC [2008] OJ L80/18 (Bosnia and Herzegovina); Council Dec 2008/213/EC [2008] OJ L80/46 (Serbia and Montenegro including Kosovo as defined by the UN Security Council Resolution 1244); Council Dec 2008/212/EC [2008] OJ L80/32 (FYROM); Council Dec 2008/210/EC [2008] OJ L80/1 (Albania). 88 89

Euro–Mediterranean Agreements

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Under the framework of the Stability Pact and drawing upon a Memorandum of Understanding on Trade Liberalisation and Facilitation signed by these countries, along with Romania, Bulgaria and Moldova, a process of negotiation, conclusion and application of FTAs was set in motion. Evolving in parallel to the SAP, this formalised mechanism of regional integration is of a broad scope and covers energy liberalisation, refugee return, migration, freedom of movement and the fight against organised crime. The significance of regional cooperation for the relationship between the EU and the Balkan states and the membership perspective of the latter is illustrated by the reference to it in the SAAs. Furthermore, it is repeated in all relevant EU documents. In its first annual report on the SAP, the Commission pointed out that ‘integration with the EU is only possible if future members can demonstrate that they are willing and able to interact with their neighbours as EU Member States do’.90 Furthermore, in its 2003 proposals, the Commission referred to regional cooperation as ‘an integral part of the preparation for integration into European structures’.91 This emphasis on the regional element is one of the features of the SAAs that distinguishes them from the association agreements which had been concluded with countries in Eastern Europe in the 1990s: on the one hand, they further illustrate the very particular context within which they have been conceived and the needs of which the multilevel SAP is aimed at addressing; on the other hand, they increase the intensity of obligations imposed upon the West Balkan countries. The Union’s approach to the Western Balkans as summarised in this section is as evolving in its outlook as it is multilayered in its content: consisting of a variety of legal, economic and political components whose interaction is managed in a highly formalised framework, the SAP illustrates an interesting way in which the Union asserts its identity on the international scene. The emphasis on the ‘stabilisation’ component of its evolving relationship with the region highlights the distinct foreign policy function of the Union’s approach. It was in that region where, in 1994, the then newly born European Union sought to contribute to the security environment by taking over the administration of the city of Mostar. Having been provided with assistance by the Western European Union pursuant to a most interesting legal document entitled ‘Memorandum of Understanding on the European Union Administration of Mostar’, the Union successfully carried out that task.92 Whilst not spectacular in terms of its media coverage, that role was nonetheless effective, useful and constituted an original contribution of the EU in the crisis in the Balkans. It is within that context that the structure and implementation of the SAP should be examined and their implications assessed: in addition to exporting the acquis communautaire,93 the Union carries out a foreign policy function too.

7. EURO–MEDITERRANEAN AGREEMENTS Euro–Mediterranean Agreements

A number of Association Agreements have been concluded between the Union and the Member States, on the one hand, and a number of Mediterranean countries, on 90 COM(2002)163 final, The Stabilisation and Association Process for South East Europe: First Annual Report (Brussels, 3 April 2002). 91 n 87 above, 6. 92 See J Monar, ‘Mostar: Three Lessons for the European Union’ (1997) 2 European Foreign Affairs Review 1. 93 See A Björkdahl, ‘Norm-maker and Norm-taker: Exploring the Normative Influence of the EU in Macedonia’ (2005) 10 European Foreign Affairs Review 257.

398 Links with Third Countries the other hand. These include Egypt,94 Israel,95 Jordan,96 Morocco,97 Tunisia,98 Algeria99 and Lebanon.100 The one with Syria was initialled in October 2004 but has not yet been ratified. Finally, a Euro–Mediterranean Interim Association Agreement on trade and cooperation was concluded with the Palestine Liberation Organisation (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip.101 This Agreement was seen as paving the way for the negotiation of an Association Agreement.102 Libya is the only country in the Mediterranean region with which the Union has not signed an international agreement. As for Turkey, it was never included in the Barcelona processes and was recognised as a candidate country by the Helsinki European Council in December 1999. Accession negotiations started in October 2005 but have stalled. The Euro–Mediterranean Agreements (EMAs) are Association Agreements which have replaced a number of Cooperation Agreements concluded between the Community and Mediterranean countries in the 1970s.103 They are mixed agreements, concluded by both the Community and its Member States,104 and cover a wide range of areas. In the trade and economic sphere, they provide for the establishment over a period of a FTA of varying duration; they also include provisions about political dialogue, intellectual property rights, services, public procurement, competition rules, state aids and monopolies, economic cooperation in various sectors, cooperation relating to social affairs and migration, including readmission of illegal immigrants and cultural cooperation. In terms of respect for human rights, they include the following clause: Relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect of democratic principles and fundamental human rights as set out in the universal declaration on human rights, which guides their internal and international policy and constitutes an essential element of this Agreement.105

The EMAs constitute the cornerstone of a wider process known as the Euro–Mediterranean Partnership, the origin of which may be found in a meeting of the Ministers of Foreign Affairs of the Euro–Mediterranean countries in Barcelona in November 1995.106 This launched the Barcelona Process, which is a framework of cooperation between the parties whose main tenets were laid down in the Barcelona Declaration107 and covered

94

[2004] OJ L304/39. [2000] OJ L147/3. 96 [2002] OJ L129/3. 97 [2000] OJ L70/2. 98 [1998] OJ L97/2. 99 [2005] OJ L265/2. 100 OJ L [2006] OJ L143/2. 101 [1997] OJ L187/3. 102 See Council Dec 97/430 [1997] OJ L187/1. 103 See I Macleod, ID Hendry and S Hyett, The External Relations of the European Communities (Oxford, Clarendon Press, 1996) 383–84. 104 This is not the case regarding the Interim Agreement with the Palestinian Authority which has been concluded by the Community alone. 105 Art 2 of Agreement with Jordan (n 96 above). 106 For a concise outline of the development of the EU’s approach, see M Pace, ‘The European Union and the Mediterranean’ in J-U Wunderlich and DJ Bailey (eds), The European Union and Global Governance–A Handbook (London, Routledge, 2011) 304. 107 See G Edwards and E Philippart, ‘The Euro–Mediterranean Partnership: Fragmentation and Reconstruction’ (1997) 2 European Foreign Affairs Review 465. 95

Euro–Mediterranean Agreements

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political and security, economic and financial, and social and cultural policies. At the very core of the Process was the establishment of a Euro–Mediterranean FTA by 2010. Within this context, the EMAs play an important function which is accompanied by a series of parallel initiatives. In the economic sphere, for instance, the Union adopts unilateral measures in order to provide financial and technical assistance.108 Central to the functioning of the Euro–Mediterranean Partnership is its regional dimension to which the EMAs refer expressly: The Parties will encourage operations having a regional impact or associating other countries of the region, with a view to promoting regional cooperation. Such operations may include: — — — — — —

trade at intra-regional level, environmental issues, development of economic infrastructures, scientific and technological research, cultural matters, customs matters.109

An interesting feature of the Euro–Mediterranean Partnership, which distinguished it to a certain extent from the SAP, was the degree of multilateral institutionalisation upon which it is based. For instance, the Ministers of Foreign Affairs of all the Euro–Mediterranean countries meet regularly at Euro–Mediterranean conferences; there are other regular sectoral meetings at ministerial level, as well as regular meetings of government experts and representatives of civil society. In addition, there is the Euro–Mediterranean Committee for the Barcelona Process: meeting on a quarterly basis at senior official level, it is chaired by the EU Presidency and acts as an overall steering body for the regional process with the right to initiate activities to be financed pursuant to the Mediterranean Cooperation Investment Programme (MEDA) and the role of preparing for all the other formal meetings. Another layer of cooperation governing relations between the EU and the Mediterranean countries is the Union for the Mediterranean (UfM). This was launched on 13 July 2008 in Paris on the initiative of the then French President, Nicolas Sarkozy. It had been conceived of, originally, as a partnership among the Mediterranean countries. However, this was met with considerable opposition from other Member States, in particular Germany. It was for this reason that this association evolved into its current form, in which all Member States participate, along with the Commission and the other members and observers of the Barcelona Process, and the other Mediterranean coastal states (Bosnia-Herzegovina, Montenegro and Monaco). The logic of this initiative is set out in a 2008 document by the Commission according to which its objectives are ‘to enhance multilateral relations, increase co-ownership of the process and make it more visible to citizens’.110 Its aim is to inject momentum into the Barcelona Process ‘in at least three ways: 108 Originally adopted under the MEDA programme (Council Reg 1488/96 [1996] OJ L189/1, amended for the last time by Council Reg 2112/05 [2005] OJ L344/23 and subsequently repealed). See P Holden, ‘The European Community’s MEDA Aid Programme: A Strategic Instrument of Civilian Power?’ (2003) 8 European Foreign Affairs Review 347. 109 Art 63 EMA with Jordan (n 96 above). 110 COM(2008) 319 final, Barcelona Process: Union for the Mediterranean (Brussels, 20 May 2008).

400 Links with Third Countries — by upgrading the political level of the EU’s relationship with its Mediterranean partners; — by providing more co-ownership to our multilateral relations; and — by making these relations more concrete and visible through additional regional and subregional projects, relevant for the citizens of the region.

The UfM is designed to complement the existing frameworks governing the EU’s bilateral relations with its Mediterranean partners. In relation to the Barcelona Process in particular, its three chapters on cooperation (Political Dialogue, Economic Cooperation and Free Trade, and Human, Social and Cultural Dialogue) still form the backbone of Euro–Mediterranean relations.111 The UfM has its own institutional structure, with the Presidency shared between an EU Member State and a partner country, a permanent secretariat based in Barcelona, Parliamentary, Regional and Local Assemblies, and a meeting between the Heads of Governments or State every two years. The UfM has not been a spectacular success. This is acknowledged by the EU institutions themselves: in March 2011, the Commission and the High Representative published a communication entitled A Partnership for Democracy and Shared Prosperity with the Southern Mediterranean in which it is stated that, while the ‘idea behind the establishment of the Union for the Mediterranean was a positive one  … we have to recognise that its implementation did not deliver the results we expected’.112 It then suggested that the process needed to be reformed ‘bringing States, International Financial Institutions and the private sector together around concrete projects generating the jobs, innovation and growth that are so badly needed in the region’. This document was adopted in response to criticism of the EU for having tolerated autocratic regimes in its southern Mediterranean partners and for having failed to emerge as a credible actor during the ‘Arab Spring’. The issues raised by the events commonly referred to as the ‘Arab Spring’ will be examined in the following section. At this juncture, suffice it to make two points. First, the Union’s approach to its Mediterranean neighbours is centred on the Association Agreements it has negotiated with them, and to which further legal, economic and political instruments have been added over the years. These agreements still constitute the main nucleus of their relationship. Secondly, this relationship is carried out on the basis of a multiplicity of actors, instruments, procedures and frameworks which operate at both unilateral and bilateral levels. What emerges is a complex, heavily proceduralised and often clunky structure that risks substituting process for policy.

8. THE EUROPEAN NEIGHBOURHOOD POLICY The European Neighbourhood Policy

The analysis so far has examined the bilateral links which the Union has developed with its neighbours and the structured frameworks which it introduced and within which

111 See Joint Declaration of the Paris Summit for the Mediterranean Union (13 July 2008; available at www. ue2008.fr/webdav/site/PFUE/shared/ import/07/0713_declaration_de_paris/Joint_declaration_of_the_ Paris_ summit_for_the_Mediterranean-EN.pdf ). For an assessment of UfM, see JM Cortés Martín and G Fernández Arribas, ‘The Union for the Mediterranean: Challenges and Prospects’ in Fernández Arribas, Pieters and Takács (eds), n 26 above, 61. 112 COM(2011) 200 final (Brussels, 8 March 2011) 11.

The European Neighbourhood Policy 401 these links evolve.113 This section will examine the European Neighbourhood Policy (ENP), ie the overall framework which covers the Union’s relationships with almost all its neighbours. The ENP initiative has its origin in the enlargement process. The genesis of the process is in the so-called ‘Wider Europe’ initiative. According to the Council, that initiative is ‘based on the conviction that the EU’s enlargement  … presents a unique opportunity to strengthen co-operation and interdependence with those countries that will soon find themselves at the Union’s frontiers’.114 Building on this, Chris Patten, the then Commissioner responsible for external relations, and the then High Representative for the Common Foreign and Security Policy, Javier Solana, produced a joint letter in 2002 entitled ‘Wider Europe’. This divided the EU neighbours into three regional groups, namely the Mediterranean countries, the Western Balkans and the Western Newly Independent States, ie Ukraine, Moldova and Belarus.115 It is recalled that the EU relations with these three groups had been carried out on the basis of the structured frameworks described above in this chapter, namely the Barcelona Process, the SAP and the PCAs, respectively. Solana and Patten argued for an opportunity to develop ‘a more coherent and durable basis for relations with our immediate neighbours … the scope and intensity [of which] will have to be flexible’. In particular, they identified five areas in which concrete measures should be adopted: reinforced political dialogue, economic cooperation and closer trade links, cooperation on justice and home affairs, including border management and migrations issues, financial assistance and integration into EU policies. These ideas were fed into a wider initiative which was given the rather cosy, albeit meaningless, name, ‘Neighbourhood Policy’. In a communication submitted in March 2003, the Commission sought to articulate this new policy more clearly. It is intended to be based on a wide range of incentives, such as extension of the internal market and regulatory structures, preferential trading relations and market opening, perspectives for lawful migration and movement of persons, intensified cooperation to prevent and combat common security threats, greater EU political involvement in conflict prevention and crisis management, greater efforts to promote human rights, further cultural cooperation and enhanced mutual understanding, integration into transport, energy and telecommunications networks and the European research area, new instruments for investment promotion and protection, support for integration into the global trading system, enhanced assistance and new sources of finance. The Council116 and the European Council117 then endorsed the ENP. Admittedly, some of initiatives mentioned above appear to be open-ended—and they are being set out under the title ‘a new vision and a new offer’. Whilst the word ‘vision’ is disconcertingly vague and capable of sending a chill down one’s spine, the wide scope of the initiative is noteworthy. As it straddles political, economic, trade and social policies, it sought to transcend the legal divisions which char-

113 See also the comprehensive analysis in S Blockmans and A Lazowski (eds), The European Union and Its Neighbours—A Legal appraisal of the EU’s Policies of Stabilization, Partnership and Integration (The Hague, TMC Asser Press, 2006). 114 General Affairs and External Relations Council, Conclusions, 14 April 2003. 115 COM(2003)104 final, Wider Europe—Neighbourhood: A New Framework for Relations with our Eastern and Southern Neighbours (Brussels, 11 March 2003). 116 General Affairs and External Relations Council, Conclusions, 16 June 2003. 117 See Thessaloniki European Council Conclusions, 12–20 June 2003.

402 Links with Third Countries acterised the Union constitutional order at the time and was, thus, defined as a genuine cross-pillar policy. In the light of the broad scope of the activities it encompasses, the security function of ENP should not be underestimated. At the time of its genesis, the Union was developing its European Security Strategy, endorsed by the European Council in December 2003. This refers expressly to the Union’s ambition to ‘make a particular contribution to stability and good governance in our immediate neighbourhood’ and ‘promote a ring of well governed countries to the East of the European Union and on the borders of the Mediterranean with whom we can enjoy close and cooperative relations’.118 The ENP was designed as a flexible policy which would apply in a differentiated manner. Quite early on, reference was made to the need for a ‘differentiated, progressive, and benchmarked approach’.119 Tied in with flexibility is the notion of joint ownership: rather than being required to follow objectives imposed on a top-down basis from the Union, the neighbourhood partners would define the objectives to be followed along with the Union. The Council described this aspect of the Policy as follows: The Council confirmed that the privileged relationship with neighbours covered by the ENP will be based on joint ownership. It will build on commitments to common values, including democracy, the rule of law, good governance and respect for human rights, and to the principles of market economy, free trade and sustainable development, as well as poverty reduction. Consistent commitments will also be sought on certain essential concerns of the EU’s external action including the fight against terrorism, non-proliferation of weapons of mass destruction and efforts towards the peaceful resolution of regional conflicts as well as cooperation in justice and home affairs matters. The level of ambition of the relationship with each neighbour will depend on the degree of the partner’s commitment to common values as well as its capacity to implement jointly agreed priorities. The pace of progress of the relationship with each neighbour will acknowledge fully its efforts and concrete achievements in meeting those commitments.120

In practical terms, this flexibility is illustrated by the specific ways in which the ENP was designed to be implemented, namely through individual Action Plans agreed jointly between the Union and the partner states. Their minimum duration was set to be three years and they could be renewed by mutual consent. In terms of their content, the Action Plans, whilst based on common principles, were envisaged to be differentiated in order to reflect the particular circumstances of the partner country. The starting point for these documents are the country reports prepared by the Commission. The Action Plans are at the core of the emerging Policy and were not envisaged to be rhetorical statements. Explaining their role quite early on, the Commission pointed out that: Individual priorities identified in the Action Plan aim to be both ambitious and realistic, and formulated in a manner as precise and specific as possible so as to allow concrete follow-up and monitoring of the commitments taken by both sides.121

The Action Plans are soft law instruments. This is yet another innovative feature:

118 A Secure Europe in a Better World—The European Security Strategy, European Council of Thessaloniki, 20 June 2003, 8. 119 COM(2003) 104 final, n 115 above, 15. 120 Council Conclusions, 17–18 June 2004. It also recalled the unwillingness expressed by the Russian government to participate in the policy, content with developing its relations with the EU on a bilateral basis. 121 See COM(2004)795 final, On the Commission Proposals for Action Plans under the European Neighbourhood Policy (Brussels, 9 December 2004) 3.

The European Neighbourhood Policy 403 non-binding measures, designed to be agreed upon with the partner countries and to reflect their different circumstances and priorities, are a central feature of the ENP.122 The ENP was designed to draw upon, and yet be distinct from, existing forms of cooperation. In its conclusions in June 2005, the Council pointed out that the ENP ‘will bring added value, going beyond existing cooperation, both to partner countries and to the EU’. The interaction between the emerging policy and the existing frameworks of cooperation is illustrated in various ways. For instance, the Action Plans are to be endorsed by the councils set up under the Association or Partnership and Cooperation Agreements. As for their implementation, it is monitored by the joint bodies set up under these Agreements. Finally, there is a strong financial element in the ENP. Initially, and until 2006, such assistance was provided on the basis of a number of specific Neighbourhood Programmes which incorporated specific financial mechanisms.123 During the period 2006–13, the European Neighbourhood and Partnership Instrument was the mechanism through which the Union provided financial assistance. This has now been replaced by the European Neighbourhood Instrument which entered into force in 2014 and which will be applied until 2020.124 This covers six main areas of activity:  human rights and fundamental freedoms, the rule of law, equality, sustainable democracy, good governance and a thriving civil society;  progressive integration into the EU internal market and enhanced cooperation including through legislative approximation and regulatory convergence, institution building and investments;  well-managed mobility of people and promotion of people-to-people contacts;  development, poverty reduction, internal economic, social and territorial cohesion, rural development, climate action and disaster resilience;  confidence building and other measures contributing to security and the prevention and settlement of conflicts;  sub-regional, regional and neighbourhood-wide collaboration as well as cross-border cooperation. From the above short overview, the ENP emerges as an initiative which aims to bring together different aspects of the Union’s policies on the basis of a differentiated and flexible approach and relying upon a combination of soft and hard law instruments. Its innovative features and broad scope singled it out amongst the EU external relations initiatives125 and attracted considerable scholarly attention.126 In order to manage these 122 See B Van Vooren, ‘Soft Law in EU External Relations: The European Neighbourhood Policy’ (2009) 34 European Law Review 696. 123 These included the Community initiatives concerning trans-European cooperation (INTERREG), the Technical Assistance to the Commonwealth of Independent States Programme (TACIS), the Community Assistance for Reconstruction, Development and Stabilisation Programme (CARDS), the Mediterranean Cooperation Investment Programme (MEDA), and the pre-accession instrument aimed at providing cross-border cooperation (PHARE CBC). See COM(2003) 393 final, Paving the Way for a New Neighbourhood Instrument (Brussels, 1 July 2003). 124 Reg 232/2014 [2014] OJ L77/27. 125 See B Van Vooren, EU External Relations Law and the European Neighbourhood Policy—A Paradigm for Coherence (London, Routledge, 2012). 126 See eg M Cremona, ‘The European Neighbourhood Policy: More than a Partnership?’ in M Cremona (ed), Developments in EU External Relations Law (Oxford, Oxford University Press, 2008) 244; M Cremona and G Meloni, The European Neighbourhood Policy: A Framework for Modernisation? (2007) EUI Working

404 Links with Third Countries features, the EU has set up a heavily proceduralised framework. This is by no means unique, given the formalisation illustrated by the SAP and the Euro–Mediterranean Partnership (and later the UfM). In fact, the design of the ENP adds yet another layer of dense formalisation in an increasingly regionally based conception of international relations.127 Viewed from this angle, the emergence of the ENP illustrates clearly the evolving nature of EU international relations: drawing upon traditional cooperation agreements, the Union formed more advanced forms of contractual relations with its immediate neighbours which were placed within a broader formalised process of wide scope.128 However, the addition of this structured overall approach to the already formalised individual policies is bound to raise questions of overlapping functions with legal and practical implications.129 It also gives rise to a structure of considerable complexity. In an editorial in 2007, the Financial Times pointed out that, ‘not for the first time, the European Union created a muddle and called it a policy, the European Neighbourhood Policy … which is a mix of jumble and evasion’.130 The ENP has been reviewed three times so far by the Commission. The first review was in December 2006, following the first 18 months of its implementation.131 This review identified as the ENP’s main strengths the integration of the whole range of issues between the EU and each ENP partner within a single framework, the joint ownership it provided, the concreteness of its objectives and the better use of funds. However, several shortcomings were also identified. First, in relation to trade and integration, the ENP should offer all ENP partners ‘a clear perspective of deep trade and economic integration with the EU’ and ‘include within our liberalization offers improved access in all areas of economic potential and interest for our partners’ which ‘should include products of most importance to them’.132 Secondly, in relation to mobility and migration, ‘the ENP has not yet allowed significant progress on improving the movement of partner country citizens to the EU’ as, for instance, ‘the length and cost of procedures for short-term visas  … is a highly “visible” disincentive to partner countries, and an obstacle to many of the ENP’s underlying objectives’.133 Thirdly, in relation to regional conflicts, the ENP has achieved little in supporting the resolution of frozen or open conflicts in the region, notwithstanding certain specific achievements (eg in relation to border management in Moldova and the Palestinian Territories). The EU needs to be more active, and more present, in regional or multilateral conflict-resolution mechanisms and in peace-monitoring or peacekeeping efforts.134 Paper 2007/21; C Hillion and M Cremona, L’ Union Fait La Force? Potential and Limitations of the European Neighbourhood Policy as an Integrated EU Foreign and Security Policy (2006) EUI Law Working Paper 2006/39. 127 For the regional-based element, see M Cremona, ‘The Union as a Global Actor: Roles, Models and Identity’ (2004) 41 Common Market Law Review 553, 561–62. 128 See B Van Vooren, ‘The European Union as an International Actor and Progressive Experimentation in its Neighbourhood’ in P Koutrakos (ed), European Foreign Policy—Legal and Political Perspectives (Cheltenham, Edward Elgar Publishing, 2011) 147. 129 The Council points out that, in order to ensure that the ENP brings added value, ‘it will be essential to maintain the coherence and unity of this policy, in its content, instruments and final goals’ (Council Conclusions, 17–18 June 2004). 130 Financial Times, 4 September 2007. 131 COM(2006) 726 final, On strengthening the European Neighbourhood Policy (Brussels, 4 December 2004). 132 Ibid, 3. 133 Ibid, 3–4. 134 Ibid, 4.

The European Neighbourhood Policy 405 The Commission then suggested ways of addressing the above shortcomings. For instance, in the area of trade, investment and economic integration, it suggested the adoption of a ‘deep and comprehensive Free Trade Area’ approach for all ENP partners which would include so-called ‘behind the border’ issues, namely non-tariff barriers and progress in regulatory areas such as technical norms and standards and trade facilitation; in the area of mobility, it suggested measures for visa facilitation which would remove obstacles to legitimate travel. A second assessment of the ENP was carried out in 2007.135 This, again, singled out mobility of citizens as an area where progress was overdue. It also suggested that the Union should do more in relation to the political, economic and legal issues relevant to regional conflicts, as this would enable it to foster greater social inclusion and contribute to confidence building. It identified a number of areas to be addressed in the future, such as energy security and safety, climate change, transport, employment and social development. The third assessment of the ENP was carried out in the light of the political events that began in late 2010 and are known as the ‘Arab Spring’. In December 2010 and the first months of 2011, demonstrations and protests were organised in a number of countries in northern Africa and Middle East. These led, amongst others, to regime change in Tunisia, Egypt and Libya (as well as in Yemen), a violent civil war in Syria, and bloody clashes in Bahrain. The European Union was criticised widely for having tolerated the autocratic regimes ruling these countries and for having failed to engage with the changes in a constructive way.136 Indicative of this criticism was the title of an editorial in the Financial Times: ‘Monstrous in Size, Feeble in Action: Arab Tumult Exposes the Ineptitude of EU Foreign Policy’.137 The Union was also criticised for its approach during the events. The Member States were left largely stunned and unable to follow the pace of the unfolding change (France, for instance, was criticised heavily for appearing to offer support to the Tunisian regime in the first days of the crisis and for having its then Defence Minister go to this country for her holiday), while the Union itself seemed irrelevant. The Union’s stature did not improve during the Libyan crisis. In March 2011 a coalition of various states initiated a military operation against Libya under the authorisation of UN Security Council Resolution (2011) 1973. This operation consisted of air strikes against Libyan army forces plus the enforcement of a no-fly zone and a naval blockade. The operation was carried out not by the European Union, but by a number of individual states, most European, led by the United Kingdom and France, with the United States content to play a background role. The operation was not without problems. Germany abstained at the UN Security Council, siding with China and Russia. Furthermore, it transpired subsequently that the European states did not have the necessary capabilities to carry out the mission on their own for some time. This led the outgoing US Defense Secretary Robert Gates to warn, in a speech on NATO’s future, of ‘the very real possibility of collective military irrelevance’.138 In order to articulate its response to the unfolding crisis, the Union engaged in a 135

COM(2007) 774 final, A Strong European Neighbourhood Policy (Brussels, 5 December 2007). See eg R Hollis, ‘No Friend of Democratization: Europe’s Role in the Genesis of the “Arab Spring”’ (2012) 88 International Affairs 81. 137 Financial Times, 24 February 2011, 12. 138 More on this in Chapter 13 below. 136

406 Links with Third Countries review of its ENP. In May 2011 the European Commission, which is responsible for the ENP, and the High Representative of the Union for Foreign Affairs and Security Policy issued a joint Communication entitled A New Response to a Changing Neighbourhood.139 Its starting point is the set of changes marked by events in the Union’s southern neighbours. It acknowledges that: Recent events and the results of [the ENP] review have shown that EU support to political reforms in neighbouring countries has met with limited results. There is for example a need for greater flexibility and more tailored responses in dealing with rapidly evolving partners and reform needs—whether they are experiencing fast regime change or a prolonged process of reform and democratic consolidation.140

This initiative identifies four areas in need of reform: 1. Support for progress towards deep democracy. It is interesting that this area should be first in the list of the proposed reforms. Reference is made to greater cooperation with civil society and greater use of the political and security means available to the Union (eg common security and defence missions) towards institution building. 2. Support for sustainable economic and social development, including the negotiation of DCFTAs and gradual visa facilitation and liberalisation programmes. It is recalled that this is not the first time that mobility of citizens is viewed as an area where the Union’s approach is found to be wanting. 3. Building effective regional partnerships within the ENP, with an emphasis on developing links with the eastern and southern groups of neighbours. 4. A simplified and coherent policy and programme framework: the Union’s approach in general, and the ENP Action Plans in particular, need to be focused on a smaller number of priorities and to set more precise benchmarks. This proposal is accompanied by considerable increase in the financial assistance which the Union plans to make available. The Union’s response141 is firmly based on its existing legal and political framework; it is the specific way in which this framework is to be used that purports to make a difference. For instance, the flexible, tailor-made approach on which the ENP has been designed since its establishment is maintained, but its focus is intended to become sharper. However, this approach has been criticised for perpetuating the pathologies of the ENP and for failing to give rise to effective pressure on authoritative regimes.142 It is interesting how the ENP should have bred further formalisation within its own heavily formalised framework. Another layer of cooperation between the Union and some of its neighbours is the Eastern Partnership (EaP). This is a distinct process of cooperation between the EU and the Eastern Europe and South Caucasus countries addressed by the ENP, namely Armenia, Azerbaijan, Belarus, Georgia, Moldova and

139

COM(2011) 303 final (Brussels, 25 May 2011). Ibid, 1. 141 On the EU’s response to the Arab Spring, see I Tommel, ‘The New Neighbourhood Policy of the EU: An Appropriate Response to the Arab Spring?’ (2013) 9 Democracy and Security 19; and J Wouters and S Duquet, ‘The Arab Uprising and the European Union: In Search of a Comprehensive Strategy’ (2013) Yearbook of European Law 1. 142 See S Blockmans, ‘The ENP and “More for More” Conditionality: plus que ça change ...’ in Fernández Arribas, Pieters and Takács (eds), n 26 above, 53. 140

Conclusion

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Ukraine. The EaP process was launched in May 2009 in Prague143 and its raison d’être is described as follows: [The] guiding principle should be to offer the maximum possible, taking into account political and economic realities and the state of reforms of the partner concerned, bringing visible benefits for the citizens of each country. An essential component of the EaP will be a commitment from the EU to accompany more intensively partners’ individual reform efforts.  … The EaP will be based on mutual commitments to the rule of law, good governance, respect for human rights, respect for and protection of minorities, and the principles of the market economy and sustainable development.144

In addition, the goals of the EaP are designed to be achieved on the basis of bilateral and multilateral initiatives. The former consist of the conclusion of new association agreements, the establishment of a DCFTA with each of the partner countries, once they have joined the WTO, ultimately leading to the creation of a network of bilateral agreements among the partners, progressive visa liberalisation, deeper cooperation on energy, and support for economic and social policies. The multilateral initiatives aim to focus on four areas: democracy, good governance and stability, economic integration and convergence with EU policies, energy security, and contacts between people. Progress in these areas may be facilitated by initiatives funded by various donors and investment from the private sector, such as a Small- and Medium-sized Enterprise Facility. On the one hand, this underlines further the differentiation that governs the ENP. On the other hand, it illustrates the increasing tendency in the EU’s international action to formalise relations with groups of third countries on the basis of diverse and heavily proceduralised sets of policies and initiatives.

9. CONCLUSION Conclusion

This chapter offered a snapshot of the links which the Union has developed with the rest of the world, with emphasis on the gradual development of its relationships with its immediate neighbours. It has focused on the evolution of these relationships into increasingly structured frameworks of cooperation and their development within an evolving system of legal and political links which has emerged from the ENP. Wide in scope and ambitious in their objectives, the Union’s policies give rise to multilayered initiatives with a strong regional dimension and a heavily proceduralised structure. Exemplifying this approach, the ENP is also characterised by the heavy proceduralisation and the multiplicity of related initiatives which sometimes pass for an effective policy. And whilst the security function of the ENP is inescapable, the events in northern Africa, the Middle East and the Caucasus have seriously questioned the ability of the Union to deliver on that front. The following chapters will examine the foreign policy and security and defence frameworks within which the Union seeks to shape its identity as an international political actor.

143 The Joint Declaration of the Prague EaP Summit is available at: www. consilium.europa.eu/ uedocs/ cms_data/docs/ pressdata/en/er/107589.pdf. 144 COM(2008) 823 final, Eastern Partnership (Brussels, 3 December 2008).

Common Foreign and Security Policy

12 Common Foreign and Security Policy 1. INTRODUCTION Introduction

T

HE COMMON FOREIGN and Security Policy (CFSP) of the European Union is shaped in a policy context distinct from that within which external economic or social policies are carried out. This is an area of high politics where states are the dominant actors and national governments are loath to relinquish control. This quality of foreign policy underpins both what the Union does in the world and how it does it. This chapter will examine the legal framework governing the conduct of the CFSP and will highlight its distinct normative and policy features.1

2. THE HISTORICAL BACKGROUND The Historical Background

The rules on the Union’s CFSP were not laid down in a legal and political vacuum. Instead, a considerable body of rules, principles and customs had accumulated since the early days of European integration. Indeed, it was in the area of high politics that the first, albeit doomed, attempt at integration was made: the establishment of the European Defence Community, whilst agreed upon by the original signatories of the European Coal and Steel Community in May 1952, was rejected by the French Parliament in 1954.2 A detailed analysis of the development of the CFSP, from the genesis of its precursor to the evolution of the legal framework from Maastricht and Amsterdam to Nice, is beyond the scope of this chapter.3 Instead, a brief overview will be offered as a necessary prerequisite to a proper understanding of the legal and political context in which the Member States and the Union institutions seek to shape the Union’s role as a political actor on the international scene. The failed attempt of establishing a Defence Community was followed by a period of relative stagnation until the beginning of 1970s when the first signs of a collective effort to introduce cooperation in the area of high politics became apparent. This period lasted until the adoption of the Single European Act (SEA) in 1986. The Member States of the then European Economic Community sought to develop a culture of cooperation on the basis of procedures set out in three reports presented by their Ministers of Foreign Affairs to the Heads of State and Government. These reports, presented in Luxembourg 1 The analysis in this chapter draws on P Koutrakos, The EU Common Security and Defence Policy (Oxford, Oxford University Press, 2013) ch 2. 2 Ibid, 5–9. 3 See E Denza, The Intergovernmental Pillars of the European Union (Oxford, Oxford University Press, 2002) ch 2.

411

412 Common Foreign and Security Policy (October 1970), Copenhagen (July 1973) and London (October 1981),4 constituted the foundation of the precursor to the CFSP, namely European Political Cooperation (EPC),5 and sought to set out the objectives and the institutional framework under which the Member States attempted to formulate their stance on the international scene. It is not only for historical reasons that this informal phase of European foreign policy is interesting: when examined properly, it reveals the presence of a number of political and legal factors which are still central to the conduct of the CFSP. The three Reports formalised to a considerable extent various ad hoc arrangements, some of which had already been carried out by national officials as a matter of practice. Therefore, the emerging EPC was incremental in nature, a fact acknowledged by the European Council itself, when it referred to the ‘vocation of the Union to deal with aspects of foreign and security policy, in accordance with a sustained evolutionary process and in a unitary manner’.6 Another interesting feature of that phase of EPC development was the acknowledgement that security policy had not only political but also economic aspects, and that it was not possible completely to dissociate the former from the latter.7 Inevitably, this gave rise to the question of how to ensure the creative interaction of those elements without undermining their distinct legal characteristics. The Copenhagen Report acknowledged this by pointing out that the development of EPC ‘should keep in mind  … the implications for and the effects of, in the field of international politics, Community policies under construction’.8 The Member States were acutely aware of this tension and did their utmost to ensure that the intergovernmental character of EPC would not be undermined by the existence of Community institutions and the implementation of Community policies method. Whilst their sensitivity was understandable in the light of the embryonic development of European foreign policy, it did reach considerable levels of absurdity: it is reported that, in 1973, having met in the morning in Copenhagen under the Danish Presidency in order to discuss EPC matters, the Foreign Affairs Ministers were prevented from discussing EEC issues in the Danish capital; instead, the French Minister insisted that they all flew to Brussels so that they could discuss these issues as the Council of the European Communities in the afternoon of the same day.9 Thirty years later, this incident appears amusing. In terms of our understanding of CFSP, it is also instructive in a twofold manner: on the one hand, it makes it clear that in the area of foreign and security policy semantics matter and national governments are keen to stress to their domestic audience that they remain at the core of decision-making; on the other hand, the formulation of foreign policy pursuant to common rules would not only need to take into account the constitutional particularities underpinning the structure of European integration but 4 These Reports may be found in European Political Co-operation (EPC), 5th edn (Bonn, Press and Information Office of the Federal Government, 1988) 24 et seq, 34 et seq and 61 et seq, respectively. 5 On EPC in general, see D Allen, R Rummel, and W Wessels (eds), European Political Cooperation: Towards a Foreign Policy for Western Europe (London, Butterworths, 1982); M Holland (ed), The Future of European Political Cooperation: Essays on Theory and Practice (London, Macmillan, 1991); P Ifestos, European Political Cooperation—Towards a Framework of Supranational Diplomacy? (Aldershot, Avebury, 1987); S Nuttall, European Political Cooperation (Oxford, Clarendon Press, 1992); P de Schoutheete de Tervarent, La Coopération Politique Européenne, 2nd edn (Brussels, Editions Labor, 1986). 6 Conclusions of the Rome European Council of Dec [1990] Bull EC 12–1990, 7. 7 This became apparent in the London Report, n 4 above. 8 Art 12(b), n 4 above, 34 et seq. 9 E Stein, ‘European Political Cooperation (EPC) as a Component of the European Foreign Affairs System’ (1983) 43 ZaöRV 49, n 14.

The Historical Background 413 would also have to address them in a convincing manner. Therefore, the effectiveness of foreign policy becomes only one of the aims of the relevant legal rules. The regulation and management of decision-making pursuant to common rules turns out to be as much about the internal constitutional balance as about external action. This inward preoccupation, apparent in the conduct of foreign policy at European level, inevitably produced an equally inward preoccupation regarding the choice of legal rules. In other words, procedural and institutional preoccupations became at least as important as matters of substance. The above characteristics of foreign policy were also apparent in the next stage of the development of foreign policy cooperation which was marked by the attribution of Treaty status to the EPC. The SEA laid down a set of rules in its Article 30 which sought to formalise the existing legal arrangements.10 In doing so, the drafters of the Treaty were keen to stress the inherently limited nature of the commitments undertaken by the Member States. Article 30(1) SEA, for instance, provided that ‘the High Contracting Parties shall endeavour to jointly formulate and implement a European foreign policy’ and that ‘the determination of common policies shall constitute a point of reference for the policies of the High Contracting Parties’. Distinctly non-committal, this wording indicates that the subject-matter of EPC as formalised in Title III SEA was the establishment of a culture of cooperation amongst the Member States rather than the definition of a set of specific legal duties. In yet another indication of the significance of semantics in that area of decision-making, Article 30 SEA referred to ‘the High Contracting Parties’ rather than the ‘Member States’. Furthermore, the provisions of the entire Title were expressly excluded from the jurisdiction of the Court of Justice.11 It becomes apparent from the above that the then emerging EPC framework, whilst incorporated into the Treaty structure, in fact retained its distinctive character. In its preamble, for instance, the SEA provided that the European Union would be implemented ‘on the basis, firstly, of the Communities operating in accordance with their own rules and, secondly, of European Political Co-operation among the Signatory States in the sphere of foreign policy’.12 Following the establishment of the pillar structure at Maastricht, its consolidation at Amsterdam and Nice and its proposed abolition in the Treaty establishing a Constitution for Europe and the Lisbon Treaty, this arrangement may appear uncontroversial in terms of its implications for the role of the Member States as fully sovereign subjects of international law. However, the formalisation of EPC in the 1980s was far from uncontroversial as it gave rise to an action against the process of ratification in Ireland before the Supreme Court.13 10 See S Nuttall, ‘European Political Co-operation and the Single European Act’ (1985) 5 Yearbook of European Law 203; S Perrakis, ‘L’incidence de l’Acte Unique Européen sur la Coopération des Douze en Matière de Politique Etrangère’ (1988) XXXIV Annuaire Français de Droit International 807. On the legal effect of those provisions, see C Bosco, ‘Commentaire de l’Acte Unique Européen des 17–28 Fevrier 1987’ (1987) XXIII Cahiers de Droit Européen 355, 381; J-P Jacqué, ‘L’Acte unique européen’ (1986) 22 Revue Trimestrielle de Droit Européen 575, 611. 11 See Art 31 SEA. 12 Second recital. 13 See Crotty v An Taoiseach and Others [1987] 2 CMLR 666; for an analysis, see JP McCutcheon, ‘The Irish Supreme Court, European Political Co-operation and the Single European Act’ (1988) 2 Legal Issues of Economic Integration 93; F Murphy and A Gras, ‘L’Affaire Crotty: La Cour Supréme d’Irlande Rejette l’Acte Unique Européen’ (1988) 24 Cahiers de Droit Européen 276; J Temple Lang, ‘The Irish Court Case which delayed the Single European Act: Crotty v An Taoiseach and Others’ (1987) 24 Common Market Law Review 709.

414 Common Foreign and Security Policy The establishment of the European Union at Maastricht marked the transformation of EPC into a new legal regime which, whilst retaining its distinct legal characteristics, provided for tighter legal duties. The new legal framework was called the CFSP. This tighter legal framework was accommodated within the new constitutional structure of the newly established European Union. This was the pillar structure which became a constant until the entry into force of the Lisbon Treaty on 1 December 2009. It divided the activities of the Union in three distinct sets of rules, the European Community, the CFSP, and the Justice and Home Affairs (the latter succeeded later by the Police and Judicial Cooperation in Criminal Matters framework). At the core of the CFSP rules, as laid down at Maastricht, was the provision that the Member States ‘shall support the Union’s external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity’14. This wording was in stark contrast to the SEA reference to the ‘endeavour’ of Member States, which had been deemed to be so broad and weak as to be of a declaratory nature.15 Central to the pillar structure was the organisation of the CFSP framework on the basis of essentially intergovernmental principles. To that effect, the unique normative features of the Community legal order, which had shaped its sui generis nature and in the light of which the Court of Justice had pronounced it ‘a new legal order of international law for the benefit of which the Member States have limited their sovereign rights, albeit within limited fields’,16 were absent from the CFSP. The Commission did not enjoy the exclusive right to initiate legislation, but shared it with the Member States. The Court of Justice was expressly excluded; the nomenclature of Community instruments (regulations, directives, decisions) was not applicable and CFSP-specific measures were introduced (common positions, joint actions and, later, common strategies);17 decisionmaking by qualified majority was initially not provided at all, and subsequently was possible only exceptionally; rather than being part of the co-legislature, the European Parliament was merely to be consulted; a distinct CFSP-specific administrative infrastructure was set up (eg the Political and Security Committee comprising representatives of Member States at ambassadorial level), which operated alongside bodies, such as the Committee of Permanent Representatives, which had been central to the functioning of the Community legal order.18 Primacy in the strong form developed under European Community case-law as well as uniform rules on direct effect did not apply to binding instruments adopted under the second and third pillars. Therefore, whilst a considerable innovation compared to the pre-existing set of rules, the CFSP pillar was designed as a fundamentally distinct framework within the Union’s structure. And yet, this separation in institutional and legal terms could not ignore the interactions between the areas of activities covered by the different pillars which were necessitated as a matter of fact: economic and political relations were all combined to

14

Art J.1(2) TEU. See J-P Jacqué, ‘L’Acte unique européen’ (1986) 22 Revue Trimestrielle de Droit Européen 575, 611. 16 Case 26/62 Van Gend en Loos [1963] ECR 1, 12. Less than thirty years later, the Court held that the Member States had limited their sovereign rights ‘within ever wider fields’: Opinion 1/91 (re: Draft EEA Agreement) [1991] ECR I-6079, para 21. 17 The various legal instruments of the CFSP as originally designed are distinguished in E Denza, The Intergovernmental Pillars of the European Union (Oxford, Oxford University Press, 2002) 134–55. 18 See G De Baere, Constitutional Principles of EU External Relations (Oxford, Oxford University Press, 2008) ch 4. 15

The Historical Background 415 define the international role of the Union, and it was not always easy to distinguish between them. In the words of Advocate General Jacobs: Many measures of commercial policy may have a more general foreign policy or security dimension. When for example the Community concludes a trade agreement with Russia, it is obvious that the agreement cannot be dissociated from the broader political context of the relations between the European Union, and its Member States and Russia.19

This fact was reflected by the provision of legal links between the otherwise distinct pillars: on the one hand, the Union was served by a single institutional framework, hence enabling the same institutions to carry out different functions and exercise different powers depending on the legal framework within which they acted; on the other hand, the Council and the Commission were required to ensure the consistency of the Union’s external activities in the context of its external relations, security, and economic and development policies.20 It will become apparent from the analysis in this section that the legal rules pursuant to which the Union sought to carry out its foreign and security policy have evolved considerably over the years. This evolution reflected a considerable tension that has been at the core of the Union’s international role as a political actor: on the one hand, the legal rules governing the EU’s foreign and security policy drew inspiration from the model of foreign policy traditionally carried out by states; on the other hand, they were so keen to rule out any possibility of encroachment upon the dominant role of the Member States as the ultimate authority of such policy that they were preoccupied with stressing the limits of that policy. In practical terms, this paradox became apparent at various instances: during the war in the former Yugoslavia in the beginning of the 1990s, for instance, the Member States were mainly preoccupied with the issue of state recognition, ie a public international law tool normally relied upon by states. In the process of instrumentalising state recognition, they also introduced a procedural element to it: in December 1991, a Declaration on the Guidelines on the Recognition of New States in Eastern Europe and in the Soviet Union was adopted, in which ‘the Community and the Member States’ set out conditions pursuant to which new entities would be recognised. These conditions included, amongst others, respect for the Charter of the United Nations, guarantees for the protection of the rights of ethnic and national groups and minorities and respect for the inviolability of borders; entities seeking recognition ought to apply in writing to the Arbitration Committee established by and operated under the auspices of the Community.21 It is in the light of this experience that the criticism against the Community was often expressed: the failure of the Member States to implement a common position as to how to recognise the new Balkan states and the unilateral recognition of some of them by Germany were seen as indicative of the Community’s perceived failure to intervene effectively in the Yugoslav crisis. The tension between state-inspired common foreign policy and the continuing need 19 Case C-124/95 The Queen, ex parte Centro-Com Srl vv HM Treasury and Bank of England [1997] ECR I-81, para 41. 20 See Art 3 TEU (Nice). 21 See DH Bearce, ‘Institutional Breakdown and International Cooperation: The European Agreement to Recognize Croatia and Slovenia’ (2002) 8 European Journal of International Relations 471; R Kherad, ‘La Reconnaissance des Etats Issus de la Dissolution de la République Socialiste de Yugoslavie par les Membres de l’Union Européenne’ (1997) 101 Revue General de Droit International Public 663; and D McGoldrick, ‘Yugoslavia—The Responses of the International Community and of International Law’ (1996) 49 Current Legal Problems 375.

416 Common Foreign and Security Policy for Member States to assert their position as the only effective locus for such policy entailed the development of the CFSP on the basis of a continuing paradox.22 This was succinctly expressed in the EPC context as the achievement by the Member States of ‘collective foreign policy harmony together with virtual domestic autonomy’.23 This paradox has given rise to the oft-quoted phenomenon of a ‘capabilities–expectations gap’.24 It was this paradox that the EU sought to manage within the pillar structure preceding the Lisbon Treaty. The logic of the pillar structure was deceptively simple: the Member States want to cooperate in a wide range of areas (economic, political, social, criminal), albeit at a differing pace, following different models of integration, decision-making and judicial control, all depending on the political sensitivity of the subject-matter in question. Viewed from this angle, the pillar structure conveyed this reality clearly. However, the coexistence of different sets of rules made the Union legal system complex and, to outside observers, puzzling. It was in order to address these problems that the Union’s constitutional order was restructured at Lisbon. These changes will be explained in the following section. At this juncture, it is worth summarising the genesis and development of the CFSP by pointing out that the DNA of the policy is characterised by two main features. The first is its dynamic and incremental development, shaped by practical considerations, emerging informally and then formalised and consolidated to adjust to any considerable amendment of the Union’s constitutional structure. The second feature is its distinct position in the EU’s legal order. Defined in clearly intergovernmental terms, reflected notably by its exclusion from the jurisdiction of the Court of Justice and the dominant role of unanimous voting, the CFSP was carried out over the years on the basis of legal rules and procedures which differed from those governing the other strands of the Union’s activities.

3. THE POSITION OF THE CFSP IN THE EU’S CONSTITUTIONAL ORDER The Position of the CFSP in the EU’s Constitutional Order

One of the main innovations of the Lisbon Treaty and, earlier, the Constitutional Treaty, is considered to be the abolition of the pillar structure. The Lisbon Treaty subsumes all three legal frameworks (EC, CFSP, Police and Judicial Cooperation in Criminal Matters) in the EU, which is now based on a single and unitary structure. Article 47 TEU endows the Union with express legal personality. Therefore, the de-pillarisation25 introduced by the Lisbon Treaty is considered one of the main positive features of the current constitutional arrangements. In the words of Sir Francis Jacobs, the Lisbon Treaty removed ‘a patchwork system  … widely regarded as opaque, incoherent and generally unsatisfactory’.26 Reflecting this view, in a report to the European Council, the Presidency of the Convention on the Future of Europe, which drafted the precursor to the Lisbon 22 See P Koutrakos, Trade, Foreign Policy and Defence in EU Constitutional Law (Oxford, Hart Publishing 2001) 14–18. 23 M Holland, ‘Three Approaches for Understanding European Political Cooperation: A Case Study of EC South African Policy’ (1987) 25 Journal of Common Market Studies 295, 303. 24 C Hill, ‘The Capabilities–Expectations Gap, or Conceptualising the European International Role’ (1993) 31 Journal of Common Market Studies 305. 25 See Editorial, ‘The CFSP under the EU Constitutional Treaty—Issues of Depillarization’ (2005) 42 Common Market Law Review 325. 26 House of Lords Tenth Report, The Treaty of Lisbon: An Impact Assessment (2007–08) S148.

The Position of the CFSP in the EU’s Constitutional Order 417 Treaty, argued that the abolition of the pillars would respond to the requirements of clarity and simplification.27 The abolition of the pillars is also seen as establishing a unified system of external policies. By placing the CFSP, along with CSDP, within a common set of rules, the Lisbon Treaty appears to establish a unified legal system whose external policies are not governed by disparate sets of principles and rules. However, a closer look at the relevant provisions of the Lisbon Treaty tells a somewhat different story. The nature of the competence which the Union enjoys in the area of CFSP is defined in terms that leave no doubt as to its distinct status. It is recalled that one of the main objectives of the Treatyamending process, which started with the Laeken Declaration, was the clear delimitation of competences. Article 2 TFEU distinguishes between exclusive, shared, coordinating, and supporting, coordinating and supplementing competence.28 However, the Union’s competence in the area of the CFSP falls within none of these categories, and, instead, is listed separately.29 Article 2(4) TFEU does not elaborate on the nature of the competence to carry out the CFSP; it merely provides that the Union ‘shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy’. While the idea that this competence might be shared has been mooted,30 the choice of the drafters of the Treaties to refuse to categorise it must be taken as corroboration of the distinct nature of the Union’s competence in the area.31 This conclusion is also supported by the introduction in the Treaties of distinct legal mechanisms for the exercise, management and enforcement of this competence, which will be examined further in this chapter. In this vein, Article 24(1) subparagraph 2 TEU states that the CFSP ‘is subject to specific rule and procedures’. This clear indication of distinctiveness is reinforced by other features of the CFSP rules. First, despite doing away with the special nomenclature of instruments in force under the previous constitutional arrangements, the following section will show that the Lisbon amendments still maintain, in substance, the distinct nature of the CFSP measures. In addition, Declaration 41 attached to the Lisbon Treaty states that legislative acts may not be adopted in the CFSP area.32 Second, in terms of legal effect, Article 40 TEU elevates the normative differences between the CFSP and the other EU policies to a constitutional principle. It reads as follows:

27

CONV 851/03, para 7. For an analysis, see R Schütze, ‘Lisbon and the Federal Order of Competences: A Prospective Analysis’ (2008) 33 European Law Review 709. 29 ‘The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy’ (Art 2(4) TFEU). For earlier criticism of the failure to provide clarity, see E Denza, ‘Lines in the Sand: Between Common Foreign Policy and Single Foreign Policy’ in T Tridimas and P Nebbia (eds), EU Law for the 21st Century (Oxford, Hart Publishing, 2004) 259, 266–67. 30 See eg R Gosalbo Bono, ‘Some Reflections on the CFSP Legal Order’ (2006) 43 Common Market Law Review 337, 364. 31 Cremona defines this competence as sui generis: M. Cremona, ‘The Draft Constitutional Treaty: External Relations and External Action’ (2003) 40 Common Market Law Review 1347, 1354. 32 Declaration on Art 352 TFEU. 28

418 Common Foreign and Security Policy 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.

This reflects a similar provision laid down in the precursor to the Lisbon Treaty in ex Article 46 TEU. The Lisbon Treaty adds another provision: 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 legal implications of this addition for the EU constitutional order, the role of its institutions and the jurisdiction of the Court of Justice are examined elsewhere in this book.33 At this juncture, suffice it to point out that Article 40 TEU cements the distinctive nature of the CFSP and highlights the presentational character of the appearance of integration which the Lisbon Treaty seeks to convey. Third, the endowment of the Union with express legal personality under Article 47 TEU should be put in context. On the one hand, the issue of legal personality had been addressed as a matter of practice prior to the entry into force of the Lisbon Treaty, as the agreements concluded by the Union in the areas of CFSP and Police and Judicial Cooperation in Criminal Matters suggested—at least to many European lawyers—that the Union had been endowed with implied legal personality.34 Therefore, the provision of Article 47 TEU may be viewed as a welcome clarification of the Union’s status. However, the provision for express legal personality, and its exercise by the Union, by no means affect the complex issues which underpin the relationship between the Union and the Member States in their conduct of foreign affairs in the area of foreign policy, security and defence. In the light of the above, a paradox emerges: while the Lisbon Treaty was praised on the basis of the rhetoric of unity of the Union’s structure and the integration of foreign, security and defence policy in its constitutional architecture, in legal terms only the appearance of unity has been achieved. The CFSP framework retains its distinct characteristics, albeit within a constitutional context which lacks obvious signs of division. Put differently, the CFSP and CSDP constitute a distinct pillar of the Union’s structure in all but name.35 The reluctance of the drafters of the Lisbon Treaty to do away with the substance of the pillar structure, as well as its appearance, is in itself neither indicative of constitutional timidity, nor necessarily detrimental to the Union’s external action. This is because, for all its notoriety and complexity, the pillar structure illustrated in legal terms

33 See Chapter 14 below. See also P Eeckhout, EU External Relations, 2nd edn (Oxford, Oxford University Press, 2011) 478–83. 34 For an indication of the diverse analyses of the position, see U Khaliq, ‘Treaty Conflict and the European Union, or Conflicting Perspectives on the European Union?’ (2012) European Law Review 495, 498–99; and A Sari, ‘The Conclusion of International Agreements in the Context of the ESDP’ (2008) 57 International & Comparative Law Quarterly 53. 35 See also P Craig, The Lisbon Treaty—Law, Politics, and Treaty Reform (Oxford, Oxford University Press, 2010) 40, 49–54. Cf M Cremona, ‘The Two (or Three) Treaty Solution: The New Treaty Structure of the EU’ in A Biondi, P Eeckhout and S Ripley (eds), EU Law After Lisbon (Oxford, Oxford University Press, 2012) 3, who argues that the distinct position of CFSP under the Lisbon arrangements is based on differences in procedures and institutional powers, rather than the more profound separation of legal orders, which existed within the previous pillar structure.

Scope and Objectives 419 a self-evident fact: while Member States are determined to broaden the scope of their cooperation in areas deemed to be closer to the functions traditionally carried out by states, and while they thought it sensible to rely upon institutions and processes of what used to be the Community legal order, they wish to do so at a different pace, in accordance with a different model of integration, in order to achieve qualitatively different objectives, and without compromising the ultimate independence in the conduct of foreign policy, which is the key characteristic of independent sovereign statehood. This differentiation is central to the organisation of the Union’s constitutional structure in general and external action in particular. This is what the much-maligned pillar structure was intended to safeguard, and this is what the Lisbon arrangements about the distinctive legal features of the CFSP and CSDP, as outlined, also acknowledge. The difference is that, by removing the external manifestations of this fact, the Lisbon Treaty has succeeded in rendering the EU legal order to appear less complex. However, the removal of the appearance of complexity does not necessarily render the ensuing legal framework any less complex to manage in substance.

4. SCOPE AND OBJECTIVES Scope and Objectives

The above section explained the distinct position which the CFSP set of rules occupies within the unified legal framework which the Lisbon Treaty has shaped. This distinctiveness is not the only legal characteristic of the CFSP, as the Union’s primary law also suggests a degree of integration between this and the other strands of the EU’s external actions. It is recalled that one of the innovations introduced in the Lisbon Treaty in the area of external relations is the reorganisation of the relevant provisions and the articulation of an overarching set of values, principles and objectives which governs the entire spectrum of the Union’s external action, including the CFSP. This is the case the distinct position of the CFSP and CSDP in the TEU notwithstanding. These were examined in Chapter 1. In substantive terms, the formulation of the political and security objectives set out in Article 21(2) TEU is noteworthy in terms of their content as well as the extent to which they build upon pre-existing primary provisions. For instance, there is no reference to ‘common values’—the Union now has ‘its values’. This suggests a shift of focus from the aggregate of the values, which all the Member States share, to those that the Union itself possesses. While there is no ensuing change in substance, the removal of any reference to the constituent Member States denotes a new emphasis on the autonomy of the Union as an international actor.36 Furthermore, in Article 21(2)(c) TEU, for the first time, conflict prevention is added to the preservation of peace and the strengthening of international security, in acknowledgement of the wider scope of security and defence policy. Finally, in Article 21(2)(h) TEU, the Nice objective of promoting international cooperation becomes more focused in its direction, as it now refers to the promotion of an international system with reference to multilateralism and global good governance. This formalises the thread that has underpinned the Union’s international policies quite

36 Art 11 TEU (Nice) already referred to the fundamental interests, independence, and integrity of the Union, as well as its security, which would be strengthened ‘in all ways’.

420 Common Foreign and Security Policy distinctly in the last ten years and has been formulated in numerous policy documents.37 As far as the foreign and security policy objectives in particular are concerned, they appear vague and anodyne. It would be difficult to imagine any international actor that would not proclaim to adhere by them and would not include them in any of its mission statements. This vagueness further underlines the central role of the institutional players endowed with powers under Title V TEU and, ultimately, the Member States themselves, which are in control of the pace of developments in this area. As Article 21 TEU aims to bring clarity to the Union’s international action, to give it a commonality of purpose, and formalise threads that have already underpinned it as a matter of policy, it is couched in the language of integration, bringing the CFSP and CSDP rules closer to the other strands of EU external action. Put differently, the articulation of a set of common principles and objectives may appear to normalise foreign and security policy: it seeks to remove that policy from the special position which its sensitive nature appeared to justify and its prior status in the pillar structure conveyed, and to render it an integral part of the diverse, albeit indivisible, whole, which the totality of the Union’s external policies form. However, the legal implications of this integration are far from clear. In particular, a question is raised as to how the CFSP/CSDP relate to these broad objectives. The Treaty itself, and in particular Title V TEU, provides two pointers: on the one hand, Article 23 TEU provides that the Union’s activities in the area ‘shall pursue the objectives’ set out in Article 21(2) TEU; on the other hand, under Article 24(1) TEU, the Union’s competence in matters of common foreign and security policy shall cover all areas of foreign policy and all questions relating to the Union’s security, including the progressive framing of a common defence policy that might lead to a common defence.

In the light of this, may the Union rely upon CFSP rules in order to adopt measures pursuing the entire range of objectives set out in Article 21(2) TEU? Or is there an inherent limit on the scope of these rules? Put differently, does Article 24(1) TEU confer on the Union the power to act ‘in all areas of foreign policy and all questions relating to the Union’s security’ in accordance with the rules laid down in Title V TEU, and does it also include the economic and social objectives laid down in Article 21(2) TEU? The answer to this question should be negative. First, the wording and context of the Lisbon Treaty leave no doubt as to the distinct normative position of the CFSP and CSDP in the EU constitutional framework. The competence conferred upon the Union is qualitatively different from the competences covering the other areas of Union activity. Article 2(4) TFEU refers to the competence to carry out the CFSP as if it was a standalone competence, and the Lisbon Treaty maintains similarly distinct legal mechanisms for the exercise, management and enforcement of this competence. Secondly, in historical terms, the pre-existing constitutional arrangements, from Maastricht to Amsterdam to Nice were clear as to the distinct nature of the CFSP within the Union’s constitutional configuration, and the history and content of the Lisbon Treaty provide no indication of a rupture in this respect. In fact, the contrary is the case. Article 40 TEU suggests that the implementation of neither the CFSP nor the other policies covered by the Union’s other competences should affect each other. By elevating the CFSP to the special status and protection that the Community legal order was granted 37 See eg European Security Strategy—A Secure Europe in a Better World (Brussels, 12 December 2003) 9 et seq, and Report on the Implementation of the European Security Strategy (Brussels, 11 December 2008).

Scope and Objectives 421 under the previous constitutional arrangements, the Lisbon Treaty stresses the distinct nature of the two types of policies and the competence which covers them. Thirdly, the discussions at the European Convention, which preceded the drafting of the Treaty Establishing a Constitution for Europe, on which the Lisbon Treaty was based, suggest that the rationale of Article 21 TEU was not to render the CFSP competence of unlimited scope. Instead, it aimed to provide the Union’s international role with a sharper focus, and facilitate the substantive consistency of its external policies.38 It is for this reason, for instance, that Article 21(3) TEU refers expressly to the consistency not only between the different areas of the Union’s external action, but also between these and the Union’s other policies. Fourthly, the terms ‘foreign policy’ and security, used in Article 24(1) TEU, are so broad, that, if interpreted literally, they would render the external policies governed by Part Five TFEU devoid of any substance, and the procedures for their implementation irrelevant. This is even more so in the light of the intense securitisation which has characterised the conduct of the Union’s external policies recently.39 In the light of the above, the scope of the CFSP, and consequently of the CSDP, must be understood as inherently limited to the pursuit of the political and security objectives laid down in Article 21(2) TEU.40 However, this conclusion must be viewed against a consideration of a practical nature. As the globalised international environment renders the economic and social objectives of external relations increasingly linked to political and security objectives, the interactions between measures pursuing these objectives are considerable, and there is a growing tendency in the Union, as well as other international players, to frame external policies in broad terms. Therefore, it must be accepted that, while the CFSP competence may only be used in order to pursue the political and security objectives laid down in Article 21(2) TEU, a rigid distinction between them and the other objectives laid down therein may be not only difficult to draw but also, in certain cases, impractical to maintain. The multiplicity of objectives is not only a matter of a fact, but also seems to be accepted by the architecture and wording of Article 21 TEU. However, this by no means suggests that all these objectives may carry the same weight in relation to a Union measure: a CFSP measure is required to have a different degree of congruence with its security and political objectives than with the economic and social ones. The question is: how is this to be established, and how is the complex process to be monitored?

38 See, to this effect, G Grevi, ‘The Institutional Framework of External Action’ in G Amato, H Bribosia and B De Witte (eds), Genesis and destiny of the European Constitution (Bruxelles, Bruylant, 2007) 773, 784–85. 39 See the analysis in Koutrakos, n 1 above, ch 4. 40 As Eeckhout puts it, ‘there should be a footnote to Article 24(1) TEU stating that this provision applies only insofar as there is no other EU external competence’: P Eeckhout, ‘The EU’s Common Foreign and Security Policy after Lisbon: From Pillar Talk to Constitutionalism’, in Biondi, Eeckhout and Ripley (eds), n 35 above, 290. 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, 45–46; and A Dashwood, ‘Article 47 TEU and the Relationship between First and Second Pillar Competences’ in ibid, 70, 102.

422 Common Foreign and Security Policy 5. DUTIES AND INSTRUMENTS Duties and Instruments

Member States have three main obligations with respect to the CFSP. The first is a general loyalty obligation set out in Article 24(3) TEU, which reads: The Member States shall support the Union’s external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity and shall comply with the Union’s action in this area.

This provision suggests a twofold duty: a positive duty to take action in accordance with the Union’s policy, and a negative duty not to engage in behaviour that would run counter to the Union’s action. The reference to ‘political solidarity’ is noteworthy, and raises the question whether its definition is as imprecise as might appear at first sight. In its second subparagraph, Article 24(3) TEU deals not with the definition of the term, but rather its development: The Member States shall work together to enhance and develop their mutual solidarity. They shall refrain from any action which is contrary to the interests of the Union or likely to impair its effectiveness as a cohesive force in international relations.

Compliance with these principles is for the High Representative of the Union for Foreign Affairs and Security Policy and the Council to ensure. The second indent of the provision appears to be in the wrong place: it belongs rather to the first subparagraph of Article 24(3) TEU as it highlights the negative dimension of the general obligation, which EU law imposes on Member States in the area of foreign and security policy. As for the reference to mutual solidarity, the duty imposed by Article 24(3) subparagraph 2 TEU (‘shall’) is at best irrelevant and at worst superfluous. It is difficult to envisage how political solidarity may be developed pursuant to a legally binding obligation imposed by primary law. Involving a community of states, each of which may have differing foreign policy interests but all of which are committed to respecting these interests and finding common ground for action, political solidarity is unlikely to emerge from the application of legal obligations. Rather, it is the outcome of a constantly evolving process of understanding and osmosis, which is brought about gradually, incrementally, and often indirectly and imperceptibly. What legal rules and procedures, such as these set out in Title V TEU, may do is to contribute to a culture of cooperation among Member States, which is central to the development of political solidarity. The second obligation imposed on Member States is also general in its scope and is about consultation. It is set out in Article 32 TEU, which reads as follows: Member States shall consult one another within the European Council and the Council on any matter of foreign and security policy of general interest in order to determine a common approach. Before undertaking any action on the international scene or entering into any commitment which could affect the Union’s interests, each Member State shall consult the others within the European Council or the Council. Member States shall ensure, through the convergence of their actions, that the Union is able to assert its interests and values on the international scene. Member States shall show mutual solidarity.

The provision for a duty to consult may appear unnecessary in the context of Title V TEU. After all, consultation is an essential component of the duty of Member States to support the Union’s external policy and, as such, it follows from Article 24(3) TEU. However, the specific provision for consultation is explained by two considerations. First,

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historically, since the very first efforts to formalise its conduct, consultation was central to European foreign policy. Indeed, the European Political Cooperation Reports set out principles about consultation, and the very first elaboration of foreign policy rules in primary law, namely the SEA, had a specific provision on the matter.41 Therefore, specific reference to cooperation is explained in historical terms. Secondly, this provision of Article 32 TEU acknowledges that EU foreign policy may not replace national foreign policies, and that a common policy does not amount to a single policy. In essence, what underpins these distinctions is the existence of distinct national interests in the foreign policy sphere—as a common policy cannot replace them, the Treaty sets a forum within which consultation would either achieve their convergence, or manage their differences. In this respect, the wording of Article 32 TEU is noteworthy: it is ‘the convergence of [the Member States’] actions’ which will make the Union ‘able to assert its interests and values on the international scene’. This makes consultation all the more significant. Viewed from this angle, by articulating consultation as a distinct duty, the Treaty acknowledges that the definition of the CFSP is the outcome of a continuous, and incrementally evolving process of establishing a culture of cooperation between Member States with different, and therefore at times differing, foreign policy interests. What is noteworthy, nonetheless, is the broad wording of Article 32 TEU, which, if applied literally, could be seen as imposing a considerable constraint on independent action by the Member States.42 The third duty imposed on Member States is specific and relates to CFSP instruments. Article 28(2) TEU provides that decisions defining actions to be undertaken by the Union ‘shall commit the Member States in the positions they adopt and in the conduct of their activity’. As for decisions defining the approach of the Union to a particular matter of a geographical or thematic nature, Member States ‘shall ensure that their national policies conform to the Union positions’.43 In addition to the above, the Treaty also refers expressly to the diplomatic missions of the Member States in third countries and at international organisations: along with the Union delegations, they ‘shall cooperate and shall contribute to formulating and implementing the common approach’.44 Title V TEU provides for a set of formal CFSP-specific instruments, each of which is designed to carry out a specific function. Article 25(a) TEU refers to the definition of the Union’s general guidelines, the adoption of decisions, and the strengthening of systematic cooperation between Member States in the conduct of policy. As far as the general guidelines are concerned, these are further implemented by means of Council decisions adopted under Article 26(2) TEU. An example of such a measure is provided by Council Decision 2012/421/CFSP in support of the Biological and Toxin Weapons Convention (BTWC), in the framework of the EU Strategy against Proliferation of Weapons of Mass Destruction.45 41 The SEA provided that the ‘High Contracting Parties undertake to inform and consult each other on any foreign policy matters of general interest so as to ensure that their combined influence is exercised as effectively as possible through co-ordination, the convergence of their positions and the implementation of joint action’ (Art 30(2)). See the analysis in Chapter 1. 42 See E Denza, ‘Lines in the Sand: Between Common Foreign Policy and Single Foreign Policy’ in Tridimas and Nebbia (eds), n 29 above, 269–70. 43 Art 29 TEU. 44 Art 32, subpara 3 TEU. 45 [2012] OJ L196/61.

424 Common Foreign and Security Policy Article 25 TEU, then, distinguishes between three types of decisions. The first defines an action to be undertaken by the Union. These are measures of an operational character: the Union expresses its intention to act in a specific manner in order to tackle a specific situation that has arisen, and the Council adopts the relevant measures under Article 28 TEU. Such measures lay down the objectives, scope and Union means, as well as the duration and conditions for their implementation; should a change in circumstances having a substantial impact on the subject-matter of such action occur, the Council may review the principles and objectives of the decision in question. An example of such a measure is provided by Council Decision 2012/422/CFSP in support of a process leading to the establishment of a zone free of nuclear weapons and all other weapons of mass destruction in the Middle East.46 Another example is the establishment and functioning of the European Union Institute for Security Studies.47 Significantly, the measures establishing the Union’s CSDP missions are also such measures and are adopted on the basis of Article 28 TEU.48 In the context of decisions on actions, Article 26(2) TEU also provides that the Council shall take decisions in order to define and implement the CFSP on the basis of the general guidelines and strategic lines defined by the European Council. An example of such instrument is provided by Council Decision 2012/281/CFSP in the framework of the European Security Strategy in support of the Union proposal for an international Code of Conduct on outer-space activities.49 Secondly, the Union may adopt decisions defining its position on a particular matter. These are not of an operational character and apply the general guidelines, as defined by the European Council, to a particular matter of a geographical or thematic nature.50 Measures imposing restrictions on third countries are adopted in this form under Article 29 TEU. An example of such a measure is provided by the Union’s reaction to the Russian operation in Ukraine in early 2014.51 Another example is the Union’s position on the International Criminal Court.52 Thirdly, the Union may adopt decisions defining arrangements for the implementation of decisions on an action to be undertaken or a position to be taken by the Union. As it is also used for all the other activities carried out by the Union,53 the term ‘decision’ was introduced by the EU in the CFSP context in order to replace the CFSPspecific instruments which had been adopted in the post-Maastricht era and until the entry into force of the Lisbon Treaty. The removal of these instruments and their replacement with ‘decisions’ was viewed as ‘a major terminological simplification’.54 However, while the title of the CFSP instruments was assimilated to that of measures relied upon

46

[2012] OJ L196/67. Council Dec 2014/75/CFSP [2014] OJ L41/13. 48 See the analysis in Chapter 13. 49 [2012] OJ L140/68, amended by Council Dec 2014/42/CFSP [2014] OJ L26/42. 50 Art 29 TEU. 51 See Council Dec 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L78/16. 52 Council Dec 2011/168/CFSP [2011] OJ L76/56. 53 See Art 288 TFEU. 54 B De Witte, ‘Legal Instruments and Law-Making in the Lisbon Treaty’ in S Griller and J Ziller (eds), The Lisbon Treaty—EU Constitutionalism without a Constitutional Treaty? (Wien, New York, Springer Verlag, 2008) 79, 90. 47

Institutions and Administrative Bodies 425 in the other EU activities, the set of formal instruments currently available in this area is identical to that laid down in the precursors to the Lisbon Treaty in all but name. This raises the question: what was the purpose of the rebranding exercise that the Lisbon Treaty undertook concerning the CFSP instruments? It is recalled that one of the objectives of the long process that led to the drafting of the Constitutional Treaty, as well as that of the Lisbon Treaty, was the simplification of the Union’s primary rules.55 Along with the abolition of the pillar structure, the abolition of CFSP-specific instruments appears to serve this objective. It also appears to bring the CFSP machinery closer to the rules governing the other EU external activities, hence suggesting the convergence of the different strands of EU external action. However, just as the abolition of the pillar structure removed the appearance of complexity, while in reality merely submerging that complexity, so does the introduction of decisions in the CFSP framework. Similarly, the formal integration of sets of rules by no means ensures the substantive convergence of their legal effects. The EU may also conclude international agreements in the areas covered by the CFSP. This is expressly provided for in Article 37 TEU. A considerable number has been concluded in the area of the CSDP. These are examined in Chapter 13. Finally, and in addition to the formal CFSP instruments outlined above, there are some others not identified in the Treaties. For instance, the High Representative of the Union for Foreign Affairs and Security Policy, like foreign ministers of Member States, issues declarations and démarches regularly in order to express the position of the Union on a specific development in the world, but without seeking to produce binding legal effects.56

6. INSTITUTIONS AND ADMINISTRATIVE BODIES Institutions and Administrative Bodies

The institutional machinery of the CFSP has been modified substantially by the Lisbon Treaty. In fact, the changes it introduces are viewed as being among its most significant achievements.

6.1 The European Council Over the years, the role of the European Council has become more prominent in the Union’s constitutional architecture. Once considered a political actor, potentially unsettling the institutional balance and the carefully calibrated decision-making principles of the Union,57 it has now become deeply embedded in the institutional life of the EU.58 The financial crisis facing the Union in the last few years has raised its profile, the general

55 See the Declaration on the Future of the Union Annexed to the Nice Treaty, as well as the Laeken Declaration in Conclusions of the Laeken European Council (14–15 December 2001) annex I, 2. 56 See eg the Declaration on behalf of the European Union on the presidential elections in Egypt (Brussels, 5 June 2014) 10649/1/14 REV 1, PRESSE 330. 57 See the concerns expressed early in A Dashwood, ‘Decision-making at the Summit’ (2000) 3 Cambridge Yearbook of European Legal Studies 79. 58 See European Council Dec. 2009/882/EU of 1 December 2009 adopting its Rules of Procedure [2009] OJ L315/51.

426 Common Foreign and Security Policy expectation for its more active involvement in tackling the problems of the eurozone, and its real and overarching powers. The Lisbon Treaty has underlined further the significance of the European Council for the Union’s external action in general and the CFSP/CSDP in particular.59 Article 22(1) TEU reads as follows: On the basis of the principles and objectives set out in Article 21, the European Council shall identify the strategic interests and objectives of the Union. Decisions of the European Council on the strategic interests and objectives of the Union shall relate to the common foreign and security policy and to other areas of the external action of the Union. Such decisions may concern the relations of the Union with a specific country or region or may be thematic in approach. They shall define their duration, and the means to be made available by the Union and the Member States. The European Council shall act unanimously on a recommendation from the Council, adopted by the latter under the arrangements laid down for each area. Decisions of the European Council shall be implemented in accordance with the procedures provided for in the Treaties.

This provision endows the European Council expressly with decision-making power. In doing so, it provides for the adoption of a measure under the generic title ‘decision’ which, however, is neither a legislative nor an implementing act.60 In fact, such decisions may carry out the function of common strategies, a CFSP instrument provided for in the pillar-based legal order61 to which the characteristics set out in Article 22(1) subparagraph 3 allude. Another feature illustrating the central role of the European Council is the introduction of the post of the President of the European Council. He is elected by the latter by qualified majority for a term of two and a half years, renewable once, in accordance with Article 15(5) TEU. In the light of the significant role of the European Council in the CFSP, the relevance of the post of its President to the CSDP becomes immediately apparent. The introduction of this post was proposed by the UK government, which was keen on the idea of strengthening the intergovernmental part of the EU at the expense of its supranational one.62 To his general duties, which Article 15(6) TEU sets out (to chair the European Council and drive forward its work, to ensure the preparation and continuity of its work, to facilitate cohesion and consensus within it, to present a report to the European Parliament after each of its meetings), there is one function that is particularly pertinent: The President of the European Council shall, at his level and in that capacity, ensure the external representation of the Union on issues concerning its common foreign and security policy, without prejudice to the powers of the High Representative of the Union for Foreign Affairs and Security Policy.

The introduction of this post sought to address the growing need for the EU to be represented by a recognisable figure which would not change every six months, ie every time the Presidency rotates among Member States. In his autobiography, former British Prime 59 See Y Devuyst, ‘The European Council and the CFSP after the Lisbon Treaty’ (2012) 17 European Foreign Affairs Review 327. 60 See Craig, n 35 above, 384. 61 See Art 13(2) TEU (Nice). 62 See J Powell, The New Machiavelli: How to Wield Power in the Modern World (London, Vintage, 2011) 257.

Institutions and Administrative Bodies 427 Minister Tony Blair describes the failure of the then US President George W Bush to recognise the then Belgian Prime Minister Guy Verhofstedt at a G8 meeting. Once Blair explained to Bush who he was, he had to address Bush’s query as to whether Belgium was a member of G8. When he heard that Verhofstedt represented the EU because Belgium held the Presidency, Bush responded by shaking his head and wondering aloud ‘You got the Belgians running Europe?’63 Quite apart from shedding light on the subtle way of thinking of the former US President, this episode illustrates the power of personification for international actors such as the Union, an issue that will also be discussed in relation to the High Representative. The provision of Article 15(6) TEU is quite opaque and raises serious questions about the scope of the functions of the President of the European Council, as well as his impact on the management of the Union’s affairs. In fact, the Treaty on European Union in general, and this provision in particular, merely set out the canvas on which the Union’s leaders are expected to define the job description of this post and, therefore, to shape the extent to which its holder may influence the conduct of the EU’s foreign affairs. This issue will be explored in relation to the High Representative. The first President was Herman Van Rompuy—he had been the Prime Minister of Belgium for nine months. His term as the President of the European Council was renewed in March 2012. In August 2014, and after considerable wrangling, the European Council elected Donalde Tusk, until then Prime Minister of Poland, as its new President.64

6.2 The High Representative of the Union for Foreign Affairs and Security Policy One main innovation of the Lisbon Treaty is the establishment of a post specifically catering for the Union’s foreign and security policy, namely that of the High Representative of the Union for Foreign Affairs and Security Policy. This is, in all but name, the post of the Foreign Affairs Minister established under the Constitutional Treaty. The choice of the rather inelegant title at Lisbon is due to the effort by the drafters of the Treaty to remove from the successor of the Constitutional Treaty any remnants of the constitutional nature of the document and, more importantly, any suggestion that its innovations would seek to duplicate functions of a sovereign state in a Union context. The term ‘Foreign Minister’ had connotations of aspiration towards statehood, which some Member States found intolerable, all the more so in the light of the negative referenda in France and the Netherlands. Once again, the drafters of the Treaty followed a pattern in dealing with what had proved to be controversial, namely by stripping it of its façade while maintaining its substance. The new post was not created in a legal and policy vacuum. The Amsterdam Treaty introduced the post of High Representative for the CFSP who was also the Secretary General of the Council.65 This role was considerably more clearly confined than that which was introduced at Lisbon. However, during the decade he was in office,66 its first and only holder, Javier Solana, worked with enthusiasm, imagination and dynamism. His 63

T Blair, A Journey (London, Hutchinson 2010) 557. European Council Decision 2014/638/EU of 30 August 2014 electing the President of the European Council [2014] OJ L262/5. 65 Art 26 TEU (Amsterdam). 66 From October 1999 until December 2009. 64

428 Common Foreign and Security Policy previous role as the Secretary General of NATO had given him considerable experience in international affairs as well as access to the highest level of government internationally.67 Under the Lisbon Treaty, the High Representative is appointed by the European Council by a qualified majority, and his term may end by the same procedure.68 His position in the Union’s institutional constellation is unique: on the one hand, he is a Vice-President of the European Commission,69 and, on the other hand, he presides over the Foreign Affairs Council.70 The mandate of the High Representative reflects the dual institutional status of the post: he ‘shall conduct the Union’s common foreign and security policy’71 and he is responsible within the Commission for ‘external relations and for coordinating other aspects of the Union’s external action’.72 In essence, the introduction of the post of High Representative aims to achieve two main objectives. The first objective is external: it is to provide the Union’s international role with a face, hence facilitating the contacts of the Union with its international partners, and ultimately raising its profile. The second objective is internal: it is about ensuring greater coherence in external policy, being responsible for bringing together the different threads which underpin the different strands of the Union’s external policies.73 In relation to CFSP responsibilities, the brief is broad. First, the High Representative enjoys the right of initiative: either on his own, or with the Commission’s support, he74 may submit to the Council initiatives or proposals.75 This is a significant power because, to a certain extent, it enables the High Representative to shape the agenda. It is recalled that this right has rendered the European Commission a central player in policy-making in the Union legal order. However, there is no genuine parallel between these two contexts: the Commission’s power is exclusive and accompanied by procedural devices, which entrench its contribution to the legislative outcome,76 whereas the High Representative shares the right of initiative with all Member States and his contribution to the Council’s decision is dependent entirely upon the willingness of the latter to accept his proposals. His position as permanent Chair of the Foreign Affairs Council, however, may place him in a strategic position to steer the Council in the direction he wishes. Secondly, the High Representative enjoys executive powers, as he is entrusted with the implementation of the CFSP. He carries out the policy as mandated by the Council, whose decisions, along with those of the European Council, he is responsible for implementing using national and Union resources.77 An important aspect of the job is to be 67

See ‘Javier Solana: Europe’s Diplomat-in-Chief ’, The Economist, 8 April 2000, 58. Art 18(1) TEU. 69 Art 18(4) TEU. This explains the involvement of the Commission’s President in his appointment: Art 18(4) TEU stipulates that it is with the latter’s agreement that the High Representative is appointed by the European Council. 70 Art 18(3) TEU. 71 Art 18(2) TEU. 72 Art 18(4) TEU. 73 On coherence on the basis of the Lisbon arrangements, see M Cremona, ‘Coherence in EU Foreign Relations Law’ and S Duke, ‘Consistency, Coherence and EU External Action: The Path to Lisbon and Beyond’ in P Koutrakos, European Foreign Policy—Legal and Political Perspectives (Cheltenham, Edward Elgar Publishing, 2011) 55 and 15, respectively. 74 The Treaty uses ‘he’ throughout in relation to post holders. 75 Art 30(1) TEU. This is a right which he shares with any Member State. This right is also set out in the context of the CSDP (Art 42(4) TEU). 76 See Art 17(2) TEU. Under Art 294(9) TFEU, the Commission’s negative opinion on proposals by the European Parliament in the context of the ordinary legislative procedure may be bypassed by the Council only unanimously. 77 Art 26(3) TEU. 68

Institutions and Administrative Bodies 429 involved in the ways in which Member States choose to discharge their duties under Title V TEU. The High Representative coordinates with the Ministers for Foreign Affairs of the Member States within the Council in relation to a common approach adopted by the latter,78 and is responsible for the organisation of the coordination of Member States’ action in international organisations and at international conferences.79 He is also kept informed of any matter of common interest by Member States represented in international organisations or international conferences where not all Member States participate.80 Thirdly, the High Representative is responsible for the international representation of the Union. He carries out political dialogue with third countries and international organisations on the Union’s behalf and expresses the Union’s position in international organisations and at international conferences.81 Furthermore, in cases where the EU has defined a position on a subject to be discussed at the UN Security Council, the High Representative is invited by those Member States which sit on it to present the Union’s position.82 Fourthly, the High Representative is responsible for the management of the Union’s foreign and security policy. He has the power, of his own motion, or at the request of a Member State, to convene an extraordinary Council meeting in cases requiring a rapid decision within 48 hours or, in an emergency, within a shorter period.83 It is his proposal which triggers the process of the appointment of a special representative by the Council in relation to a particular policy issue and it is under his authority that such representatives act.84 In cases where a decision by qualified majority at the Council is not possible because a Member State invokes vital and stated reasons of national policy, he will search for a solution acceptable to that Member State.85 In discharging of the responsibilities outlined above, the High Representative is assisted by the European External Action Service (EEAS).86 This is examined in Section 6.3 below. Crucially, the High Representative is mandated with monitoring the application of the principles which constitute a conditio sine qua non for the Union’s foreign and security policy. He is responsible for ensuring that the Member States comply with their duties under Title V TEU, mainly ‘to support the Union’s external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity’ and ‘to refrain from any action which is contrary to the interests of the Union or likely to impair its effectiveness as a cohesive force in international relations’.87 He is also responsible for ensuring ‘the unity, consistency, and effectiveness of action by the Union’.88 In relation to both of these, he shares his responsibilities with the Council. The introduction of the post of High Representative was heralded as an innovation 78

Art Art 80 Art Council. 81 Art 82 Art 83 Art 84 Art 85 Art 86 Art 87 Art 88 Art 79

32 TEU. 34(1) TEU. 34(2) TEU, which also refers specifically to Member States which participate in the UN Security 27(2) TEU. 34(2) third subpara TEU. 30(2) TEU. 33 TEU. 31(2) subpara 2 TEU. 27(3) TEU. 24(3) TEU. 26(2) subpara 2 TEU.

430 Common Foreign and Security Policy central to the effectiveness of EU foreign policy. A former Commissioner, Günter Verheugen, referring to the post of Foreign Minister, which had been provided for by the Constitutional Treaty, argued that its holder ‘may not yet provide the proverbial single telephone number for European foreign policy, but the office is exceedingly powerful. … The position is so strong that individual Member States will find it very difficult to resist the pressure.’89 The influence resulting from the chairmanship of the Foreign Affairs Council is also an important element in policy formation. It was in part the need for the personification of the Union’s international role which led to the introduction of the new post and the enhancement of its powers. As for the various institutional hats of the High Representative, they were viewed as contributing to enhancing the coherence of the Union’s actions. In the words of the then British Foreign Secretary David Miliband, ‘the double-hatting, or the merger of the two posts into a single post, is a worthwhile reform  … two people doing one job is not a very sensible way of proceeding. [The new post is] therefore  … a sensible rationalisation.’90 The expectations from the introduction of the new post were high. For instance, in August 2008, the then French President Nicolas Sarkozy argued during the Russia–Georgia war that, had the Lisbon Treaty been in force, the Union would have had the institutions and tools which would have enabled it to act decisively and exert its influence.91 This innovation does appear to clarify the somewhat opaque institutional and legal framework of the CFSP: it seeks to bring together different strands of EU external relations, to define their common threads, to streamline the process of policy-shaping and to bring clarity to the international representation of the Union. Viewed from this angle, the provision for a High Representative is potentially a constructive suggestion. However, to some extent the revamping of the post was more about the façade of clarity and less about substantive, policy-oriented changes aiming to render the different strands of the Union’s foreign policy into a cohesive whole. There are a number of reasons which justify this scepticism. First, while construing the High Representative’s mandate in broad terms, there is very little in Title V TEU about its scope. For instance, when the Treaty entered into force, it was not clear whether, in addition to his function in the CFSP area, the High Representative would also be expected to take over all the responsibilities previously held by the external relations Commissioner. This is determined in practice in the light of various considerations, not least practical (the portfolio of the High Representative must be manageable by one holder of the post) and political (the understanding of the Member States and the President of the Commission). The latter factors are in themselves subject to continuous redefinition, as they reflect shifts in political power in both the EU institutions and the Member States. Another significant factor is also the personality of the post holder: a dynamic, energetic and independent-minded High Representative would gradually render the post a focal point for the overall EU external action, whereas a timid and cautious one would contribute to its narrow construction and, over time, its

89 Mentioned in J Rogers, ‘From “Civilian Power” to “Global Power”: Explicating the European Union’s “Grand Strategy” Through the Articulation of Discourse Theory’ (2009) 47 Journal of Common Market Studies 831, 854. 90 UK House of Commons Select Committee on Foreign Affairs (2007–08) Third Report, Foreign Policy Aspects of the Lisbon Treaty, Question 506. 91 Le Figaro, 18 August 2008.

Institutions and Administrative Bodies 431 diminishing stature.92 In August 2014, during negotiations for the appointment of a new High Representative, the Financial Times published an editorial in which it urged the EU leaders to appoint a heavy hitter who would bolster the Union’s international role at a time of considerable political instability in Europe’s neighbourhood.93 All in all, the legal provisions setting out this purportedly central innovation leave its construction subject to inherently indeterminate factors to be settled by political agreement and by practice. Secondly, the institutional affiliations of the High Representative raise questions of both institutional loyalty and substantive efficiency. In this respect, it is worth recalling the difficulties that may arise regarding the authorisation for the negotiation of an international agreement pursuant to Article 218(3) TFEU which were described in Chapter 4. Thirdly, in relation to the international representation of the EU, the High Representative shares the stage with a number of other actors, the most important being the President of the European Council. Given the opacity of the Treaty provisions setting out the functions of both, their definition is bound to be subject to a range of mainly political and practical considerations.94 Indeed, prior to the appointment of the first President of the European Council, a protracted debate took place as to the type of job which the Member States wanted. The then French President Sarkozy stated that: ‘[T]here are two different theories out there: should we choose a strong and charismatic president, or a president who facilitates the search for a consensus position, and who organises the work of the Council?’95 In relation to CSDP in particular, there appears to be no clear dividing line between the functions of the President of the European Council and the High Representative. Indeed, the wording of Article 15(6) TEU suggests that the international representation of the Union is still not envisaged to be the responsibility of just one actor. Therefore, far from endowing the EU’s external action with clarity and ensuring its coherence, the post of the High Representative as set out in the Treaty on European Union is but work in progress. Its precise terms are left to be determined as a matter of practice by its holder and the various actors with whom the post holder interacts and competes for power and influence. The latter should not be underestimated: the choice of person for each post is bound to have an impact on the effectiveness of the other, and the relationship of their holders would have profound implications for the character of both posts.96 In other words, it is their ability and willingness to delineate their role in the area of foreign policy which would assess the genuine contribution of the post to the effectiveness and coherence of EU foreign policy. Viewed from this angle, primary law merely sets out the legal framework in broad terms within which the political actors are expected to put flesh on an arrangement, which would reflect their understanding of managing foreign policy. While indicative of acute political awareness on behalf of the drafters of the Treaty, this approach can by no means justify any grand claims about the 92 For a sobering analysis of Baroness Ashton’s record, see A Rettman, ‘From Solana to Mogherini: What Did Ashton Really Do?’, www.euobserver.com/foreign/126734. 93 ‘Europe’s Next Foreign Policy Chief ’, Financial Times, 28 August 2014, 8. 94 In addition, Declaration 6 on Arts 15(5) and (6), 17(6) and (7), and 18 TEU provides that, in the process of choosing the holders of the posts of the European Council President, the Commission President and the High Representative, due account should be taken of the need to respect the geographical and demographic diversity of the Union and its Member States. 95 Interview in Le Figaro, 15 October 2009. 96 ‘[I]f the president is a big-hitter whose name opens doors in Beijing and Washington, he will surely overshadow his rival’: The Economist, 10 October 2009, 56.

432 Common Foreign and Security Policy introduction of the post of the High Representative and its implications for the effectiveness of the Union’s foreign policy. As if the uncertainty and the scope for inter-institutional wrangling are not enough, there is also a third actor which may compete for a role, namely the President of the Commission. 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 Union’s external representation.’ As the dividing line between the CFSP and other policies has become increasingly blurred, a dynamic and ambitious Commission President may find it difficult to resist turf wars with his Vice-President, whose allegiances also lie with the Council. Furthermore, it must be stressed that the rotating Presidency chairs all Council meetings, except for those of the Foreign Affairs Council, which are chaired by the High Representative, and as well as the Council Working Groups, which in reality resolve all but the most intractable differences. In practice, therefore, the Presidency retains an important influence in external policy-making. All in all, the conviction that the introduction of the new post would give the Union a single voice is at best questionable and at worst bizarre. This is all the more so in the light of the extraordinary complexity in which the function of this post is shrouded. Menon wonders: ‘Who really believes that particularly the larger member states would call this individual prior to dealing with Washington or Beijing?’97 In this vein, it is telling that following Russia’s intervention in eastern Ukraine and its annexation of Crimea, the Union’s foreign policy response was led and articulated decidedly by the national governments rather than by the High Representative The scepticism about the grand claims made in relation to the institutional innovation at Lisbon has not been dissipated in practice. The first holder of the post of High Representative was Baroness Catherine Ashton.98 Prior to her appointment, she had been Trade Commissioner for a year and had started her political career in the United Kingdom as the head of a Regional Health Authority. Given her lack of experience in international affairs, low profile, and the public horse-trading between the Member States and the European Parliament, which preceded her appointment, the latter appeared rather underwhelming. During her tenure, and in particular in its first couple of years, Baroness Ashton was attacked over what was perceived as her lack of enthusiasm and low profile. She also argued with national governments about her proposal for a 5.8% increase in the budget of the EEAS for 2012.99 Her performance illustrated the point made above in this analysis about the mark which the first incumbent of the High Representative was effectively invited to make on the post. For instance, Baroness Ashton was particularly interested in Iran and the Union was a leading interlocutor during the various phases of the negotiations with the West on the country’s nuclear capabilities. In contrast, she did not exhibit notable enthusiasm for defence. On the other hand, an objective assessment of the performance of the first High Representative should not ignore the heavy task of setting up the EEAS and the impact which it had on her effort to, effectively, define her job.

97

A Menon, Europe—The State of the Union (London, Atlantic Books, 2008) 195. European Council Dec 2009/880/EU [2009] OJ L315/49. 99 This was described by the UK Minister for Europe David Lidington as ‘somewhat ludicrous’: Financial Times, 24 May 2011, 8. 98

Institutions and Administrative Bodies 433 In August 2014, the Italian Foreign Affairs Minister Federica Mogherini was appointed by the European Council as the Union’s second High Representative.100 It is worth pointing out that the relationship between the High Representative and the European Council President, as well as the Commission President, with all the uncertainty and problems to which the opacity of the relevant Treaty provisions give rise, is essentially dynamic in nature. The balance of powers established by the appointment of their first holders by the European Council is far from static: the performance of the relevant actors, the changing dynamics in political power in Europe, the direction of the Union, and the international geopolitical developments, can all be reviewed and assessed in ways which may entail a different institutional constellation in the governance of the Union’s foreign affairs.

6.3 The European External Action Service The establishment of the EEAS was viewed at the time as ‘one of the most significant changes introduced by the Treaty of Lisbon’.101 Aiming to assist the High Representative by working in cooperation with the diplomatic services of the Member States, the EEAS consists of Commission and Council officials, as well as diplomats seconded from the Member States.102 The introduction of the EEAS was not uncontroversial—in the United Kingdom, for instance, the then Conservative Shadow Foreign Secretary William Hague saw it as yet another illustration of ‘a power grab by the EU’.103 In some circles, the establishment of the EEAS was vilified as likely to reduce national embassies to irrelevance and foreshadow their closure.104 In order to dispel such scepticism, the establishment of the EEAS was mentioned in Declaration 13 on the CFSP as one of the developments which ‘do not affect the responsibilities of the Member States, as they currently exist, for the formulation and conduct of their foreign policy nor of their national representation in third countries and international organisations’. In essence, the idea of the EEAS is eminently sensible, as it is intended to provide a focal point for the EU as an international actor, to make coordination easier, and to foster a culture of cooperation between officials from Member States and the EU institutions.105 Its benefits may be both tangible (to facilitate the gathering of information, streamline the conduct of different external activities, enhance coordination between both the EU services and national administrations and coherence between the relevant policies)106 and intangible (to foster a culture of cooperation between officials from Member States and the EU institutions, establish a framework within which a common language will be gradually developed and shared). However, not for the first time, the Lisbon Treaty was silent on the specifics about 100 European Council Dec 2014/639/EU of 30 August 2014 appointing the High Representative of the Union for Foreign Affairs and Security Policy [2014] OJ L262/6. 101 Council Conclusions of 26 April 2010 (8967/10) 8. 102 Art 27(3) TEU. 103 Daily Telegraph, 3 May 2008. 104 See eg the debate at the House of Lords on 30 April 2009: HL Deb, 30 April 2009, c326 et seq. 105 See, amongst others, B Van Vooren, ‘A Legal-Institutional Perspective on the European External Action Service’ (2011) 48 Common Market Law Review 475. 106 See S Duke, ‘The European External Action Service: Antidote against Incoherence?’ (2012) 17 European Foreign Affairs Review 45.

434 Common Foreign and Security Policy the Service’s function: the distribution of posts among the Council, the Commission and the Member States; the scope of the policies it oversees; the definition of the lines of authority between the Union institutions involved; and its precise role in the conduct of the Union’s foreign affairs were all left for subsequent resolution among the Member States and the institutions. Against this blank canvas, the organisation and management of the EEAS provided the playground for the kind of inter-institutional disputes that its establishment had purported to address. Quite how broad the scope for the EU’s actors and the Member States to shape the EEAS was became apparent by the early and intensive work in which they engaged even before the Lisbon Treaty was ratified.107 In fact, it had already started, following the conclusion of the Constitutional Treaty. After the Commission established a steering group, the High Representative and the Commission President presented a joint progress report.108 The European Parliament repeatedly asked for clarification of the Service’s function, suggesting that it be part of the Commission, and that joint training programmes be organised.109 In addition, various non-papers were circulated by different countries expressing different views on the establishment and role of the service: the Benelux countries suggested it should have a separate legal personality, a broad scope for its activities, funding from the EU budget, and a sui generis nature which would ensure its association with both the Council and the Commission without being part of either;110 Poland argued for the status of an executive agency, half the personnel of which would come from Member States, and which, at some point, would even become a common visa application centre.111 Two particularly controversial issues arose at a later stage of the negotiations. The first was about development cooperation and the various financing instruments which it covers, such as the Development Cooperation Instrument and the European Development Fund: should it be integrated in the tasks entrusted to the EEAS, or should it become a distinct and autonomous policy within the Union’s external action? The Commission was hostile to the former, as it felt that it would undermine its powers as set out in Article 17(1) TEU: these include the Union’s external representation, with the exception of the CFSP, the execution of the budget and the management of programmes, and the exercise of coordinating executive and management functions as laid down in the Treaties. These are sensitive matters: their resolution touches upon issues of efficiency and effectiveness, practical considerations (the development budget is very considerable), as well as institutional powers deeply entrenched through successive rounds of Treaty amendments. The proposal made by the High Representative in March 2010 suggested the integration of development policy in the functions of the EEAS, and turned out to be controversial.112 Most non-governmental organisations viewed it as a Trojan horse, which would under107 This was provided for in Declaration 15 on Art 27 TEU which provide that, ‘as soon as the Treaty of Lisbon is signed, the Secretary-General of the Council, High Representative for the common foreign and security policy, the Commission and the Member States should begin preparatory work on the European External Action Service’. 108 Doc 9956/05, CAB 24, RELEX 304 of 9 June 2005. 109 See eg P6_TA(2005)0205 [2006] OJ C 117E/232. 110 The document, entitled ‘Mise en œuvre du traité de Lisbonne’ was probably leaked and became available online (see eg http://bruxelles2.over-blog.com/article-37152063.html). 111 The two-page-long paper was dated 5 October 2009 (http://euobserver.com/9/28851) (last accessed 25 October 2012). See also Financial Times, 9 October 2009, 8. 112 8029/10 (Brussels, 25 March 2010).

Institutions and Administrative Bodies 435 mine both the integrity of development policy and the powers of the Commission.113 The Parliament, on the other hand, was keen not only to avoid the contamination of the Community (now Union) method, which governs development cooperation, by the intergovernmental features of the EEAS, but was also keen to increase its leverage in the conduct of the EU’s external action by intervening directly on the funding of the Service, and the appointment of Heads of Delegation. The input of the Parliament turned out to be the second controversial issue as the only directly elected Union institution was keen to underline the political accountability of EEAS and ensure that the latter would not be diluted by the management structure of the Service. One of the issues about which it felt strongly was to ensure that the person deputising for the High Representative before the Parliament would be politically accountable, and not an official. In order to appreciate its role in the establishment of the EEAS, it must be stressed that, while required only to be consulted on the establishment of the Service,114 the Parliament was responsible for giving its consent to the amendments of the Staff and Financial Regulations, which were necessary for the EEAS to become operational. Therefore, not for the first time following the introduction of the Lisbon Treaty, the Parliament was in a position to flex its muscles.115 After intense inter-institutional haggling, the final outcome, set out in Decision 2010/427/EU establishing the organisation and functioning of the EEAS,116 follows the logic of integrating development within the EEAS functions. However, it does so through a very delicate and complex balancing exercise. The High Representative is responsible for the coordination between all the EU financial instruments, but the management of these programmes remains under the responsibility of the Commission,117 and the EEAS shall ‘contribute to the programming and management cycle’ of these instruments, and shall be responsible for ‘preparing Commission decisions on the strategic, multi-annual steps within the programming cycle’.118 All proposals are to be prepared following Commission procedures, and the role of the Commissioner responsible for development is pronounced; for instance, in relation to the European Development Fund and the Development Cooperation Instrument in particular, ie the programmes involving the majority of the development policy budget, both the EEAS and the Commission are to make any proposals under the supervision of the Development Commissioner.119 Furthermore, the High Representative adopted a Declaration on political accountability in which she set out the practicalities of her interactions with the Parliament.120 These include an exchange of views with newly appointed Heads of Delegations to countries and organisations which the Parliament considers strategically important (while the 113 See eg the press statement of 26 April 2010 issued by CIDSE, Oxfam International, APRODEV, CONCORD, EUROSTEP, and One International (www.concordeurope.org/Files/media/0_internetdocumentsENG/5_Press/1_Press_releases/5_Press_releases_2010/MEDIA-STATEMENT-on-EEAS--26-04-2010---EN. pdf). 114 Art 27(3) TEU. 115 See its rejection of the EU–US SWIFT Agreement in February 2010, as well as its attack against the Anti-Counterfeiting Trade Agreement (ACTA), which led the Commission to refer its legality to the Court of Justice under Art 218(11) TFEU in February 2012 (Opinion 1/12, pending). ACTA was rejected nonetheless by the Parliament on 4 July 2012. 116 [2010] OJ L201/30. 117 Ibid, Art 9(1) and (2). 118 Ibid, Art 9(3). 119 Ibid, Art (4). 120 [2010] OJ C210/1, and [2010] OJ C217/12.

436 Common Foreign and Security Policy latter had argued originally, and rather unrealistically, for exchanges with all Heads of Delegations). It also provides for the person who would deputise for the High Representative before the Parliament, namely a Commissioner or a minister from the rotating Presidency (or the trio Presidencies, ie the previous, incumbent and next Presidencies at a given time) depending on the subject matter of discussion. Couched in vague language and based on complex arrangements, this compromise seeks to strike a balance between competing claims to influence by interacting Union institutions.121 While understandable for practical reasons and political expediency, this compromise cannot hide the fact that its success in practice depends on too many variables: the willingness of the Union institutions to take a leap of faith and cooperate in order to make the policies in which the EEAS participates truly coherent; and the personality of the relevant post holders and their ability to navigate their way through the compromises enshrined in Decision 2010/427/EU. Another consideration to be taken into account is the response of diplomats of Member States. Both Article 27(3) TEU and the Decision refer to the cooperation of the EEAS with the diplomatic services of the Member States. How easy will it be for the missions of the big Member States to share information, given that their foreign policy stature depends on it, and that the Lisbon provisions on the CFSP enable them to retain their foreign policy role? Is it not likely that the big Member States would view the new Service as a potential rival, whereas the small Member States would see themselves as overshadowed by the big ones, given the influence of the latter in shaping foreign policy?122 The effective functioning of the EEAS is a process that is bound to take time and constant adjustment.123 However, the legal and policy issues, which its functioning raises within the multilayered system of foreign affairs set out in the Union’s primary rules, are formidable.124 Following the first two years of its operation, and in accordance with Council Decision 2010/470/EU,125 Baroness Ashton, carried out a review of the Service and, in July 2013, made a number of short- and medium-term recommendations, some of which are a matter of administrative practice while others require a broader amendment of existing legal rules.126

6.4 The European Parliament The role of the European Parliament in the CFSP is limited. Article 36 TEU sets it out as follows:

121 See S Duke, ‘A Difficult Birth: The Early Days of the European External Action Service’ in P Koutrakos (ed), The European Union’s External Relations a Year after Lisbon, 2011/3 CLEER Working Papers 69. 122 See M Kluth and J Pilegaard, ‘The Making of the EU’s External Action Service: A Neorealist Interpretation’ (2012) 17 European Foreign Affairs Review 303. 123 See S Blockmans, The European External Action Service One Year On: First Signs of Strengths and Weaknesses, CLEER Working Papers 2012/12, 37. 124 For a negative assessment, see AE Juncos and K Pomorska, ‘Manufacturing Esprit de Corps: The Case of the European External Action Service’ (2014) 52 Journal of Common Market Studies 302. 125 Art 13(3) Council Dec 2010/428/EU. 126 See EEAS Review, July 2013, http://eeas.europa.eu/library/publications/2013/3/2013_eeas_review_en.pdf. See also S Blockmans and C Hillion (eds), EEAS 2.0 (Stockholm, SIEPS, 2013) www.sieps.se/sites/default/files/ EEAS%202%200%20.pdf; and S Duke, ‘Reflections on the EEAS Review’ (2014) 19 European Foreign Affairs Review 23.

Institutions and Administrative Bodies 437 The High Representative of the Union for Foreign Affairs and Security Policy shall regularly consult the European Parliament on the main aspects and the basic choices of the common foreign and security policy and the common security and defence policy and inform it of how those policies evolve. He shall ensure that the views of the European Parliament are duly taken into consideration. Special representatives may be involved in briefing the European Parliament. The European Parliament may address questions or make recommendations to the Council or the High Representative. Twice a year it shall hold a debate on progress in implementing the common foreign and security policy, including the common security and defence policy.

It follows from the above that the Parliament does not have an automatic right for consultation on all CFSP measures adopted by the Council. This limited formal input has to be viewed in the light of three considerations. First, the Parliament has been one of the big winners in the constitutional reordering introduced by the Lisbon Treaty. Its powers in the area of EU external action have been increased considerably, along with its confidence and its willingness to flex its new muscle.127 Secondly, the assertive approach of the Parliament to foreign affairs also became apparent in the process of the establishment of the EEAS and is illustrated by the Declaration by the High Representative on political accountability annexed to Council Decision 2010/427/EU, which sets out the practicalities of the interactions between the High Representative and the European Parliament.128 Among others, these include an exchange of views prior to the adoption of mandates and strategies, enhanced and more regular briefings about missions funded by the EU budget, and the need for beefed-up arrangements for access to and handling of confidential information, not least related to CSDP missions. Thirdly, the limited powers bestowed on it in the CFSP area notwithstanding, the Parliament has one strong instrument through which to exercise pressure in the area and ensure that its views are heard by the decision-making-institutions. This is its role in the budget of the EU and, therefore, the financing of CFSP (and CSDP) activities. It is no coincidence that that should have a prominent position in the Declaration by the High Representative on Political Accountability.

6.5 The Council and Commission The role of the European Commission in the CFSP, in stark contrast to its rights in other areas of EU activities, illustrate further the distinct nature of this policy within the Union’s constitutional architecture. On the one hand, it is involved in the functioning of the EEAS, as it contributes one-third of the latter’s personnel.129 On the other hand, it is referred to in Article 30 TEU, according to which the High Representative may refer any CFSP question to the Council either on his own or ‘with the Commission’s support’.

127 See R Passos, ‘The European Union’s External Relations a Year after Lisbon: A First Evaluation from the European Parliament’ in Koutrakos (ed), n 121 above, 49. For the role of the Parliament in EU international relations more generally, see Chapter 4. 128 [2010] OJ C210/1 (and corrigenda in [2010] OJ C217/12). 129 Under Art 27(3) TEU, the Commission’s consent was also required for the Council measure establishing the EEAS.

438 Common Foreign and Security Policy Other than these, Title V TEU provides for no direct involvement of the European Commission in the shaping and conduct of the CFSP. However, to assume from the paucity of references in primary law that the role of the Commission is negligible would be tantamount to ignoring the realities of foreign policy in the Union’s complex constitutional order. For instance, the Commission is responsible for the implementation of the Union budget.130 This enables it, along with the Parliament, to have an impact which would not be immediately apparent from the wording of the CFSP provisions. Most importantly, however, the indirect impact of the Commission is felt in the light of its prominent role in policy areas such as development cooperation, the conduct of which has become increasingly central to CFSP and CSDP activities over the years. Given the gradual widening of the notion of security and the emergence of substantive links between it and other fields of external action, the role of the Commission in the latter is bound to have an impact on the conduct of the Union’s foreign policy.131 As for the Council, it is the main decision-making actor in the area. Along with the European Council, it is entrusted with the definition and implementation of the CFSP.132 Article 26(2) TEU provides that it ‘shall frame the common foreign and security policy and take the decisions necessary for defining and implementing it on the basis of the general guidelines and strategic lines defined by the European Council’. In addition, and along with the High Representative, the European Council is responsible for ensuring ‘the unity, consistency and effectiveness of action by the Union’.133 The significance of this role may not be overstated. Given that foreign and security policy touch upon the core of national sovereignty, the contribution of the institution which expresses the interests of the Member States is essential to both the effectiveness and consistency of what the Union does in the world. It is its decision-making powers which illustrate the centrality of the Council’s role in the CFSP. These are examined in the following section.

7. DECISION-MAKING Decision-making

In the area of the CFSP the rule of unanimity prevails in accordance with Article 31(1) TEU. However, Article 31(1)–(3) TEU also provides for certain exceptions. These may be divided into three cases. The first is about implementation: a Council measure may be adopted by a qualified majority if it is related to another measure which has already been agreed upon unanimously.134 To that effect, the following situations are envisaged: a decision defining a Union action or position on the basis of a European Council decision relating to the EU’s strategic interests and objectives; a decision defining a Union action or position pursuant to a proposal by the High Representative, which has been sub-

130

See Art 137 TFEU. The links between the different strands of EU external actions are explored in Chapter 14. 132 Art 24(1) TEU. 133 Art 26(2) subpara 2 TEU. 134 This is not a novelty introduced at Lisbon: the Maastricht Treaty which established the EU enabled the Council to define the aspects of a joint action, which could be implemented by measures adopted by qualified majority (Art J.3(2)TEU), and permitted measures implementing common strategies to be adopted by qualified majority in the Council. 131

Decision-making

439

mitted upon a specific request from the European Council; and a decision implementing another decision defining a Union action or position. The second exception is about special representatives who are appointed by qualified majority.135 The third exception, which is set out in Article 31(1) TEU, provides for constructive abstention: any Member State may abstain, and may even qualify its abstention by making a formal declaration, the effect of which would be to exempt the State in question from the requirement to apply the decision, while accepting its binding effects on the Union.136 However, if a large number of Member States make such declaration (one-third of the Member States representing one-third of the Union population), the decision may not be adopted. There has been one case of abstention so far, namely by Cyprus in relation to the adoption of the CSDP measure setting up the EU mission in Kosovo in 2008.137 Whilst the Treaty provides for the above exceptions to the principle of unanimity, there is also an ‘emergency brake’ on their application: in cases where a Member State relies upon ‘vital and stated reasons of national policy’ and expresses its intention to oppose the adoption of a decision under that procedure, a vote shall not be taken.138 This provision originates in the Treaty of Amsterdam139 and the Treaty of Nice.140 However, the Lisbon provision differs from the previous Treaties in two respects. First, by requiring reliance upon ‘vital and stated’, rather than ‘important and stated’, reasons of national policy, it appears to set the bar higher for the use of the emergency brake. Secondly, it provides a more elaborate procedure for the ensuing impasse to be addressed: the High Representative is to search for a solution acceptable to the Member State involved and in close consultation with it; in case this does not prove to be fruitful, the Council may decide by qualified majority to refer the matter to the European Council for a unanimous decision. Article 31(2) subparagraph 2 TEU clearly suggests that a derogation from the qualified majority exception should be construed narrowly, and that every effort should be made to find a mutually agreeable solution. However, neither the tighter wording, nor the procedural framework set out therein can prevent a Member State from abusing it. The foreign policy nature of the decisions involved, the inherently exceptional circumstances in which a State would deem reliance upon it politically convenient, and the domestic political reflexes, which the loss of veto in foreign policy invariably provokes, all suggest that no effective mechanism for regulating the use of an emergency brake is set out in the Treaty. And no such mechanism may be set out in primary law, other than a political framework within which the institutional actors of the Union may reach a compromise. Viewed from this angle, the wording of Article 31(2) subparagraph 2 TEU is significant in terms of semantics, rather than substance: it conveys the message 135

Art 31(2) TEU with reference to Art 33 TEU. Art 31(1) TEU also provides that: ‘In a spirit of mutual solidarity, the Member State concerned shall refrain from any action likely to conflict with or impede Union action based on that decision, and the other Member States shall respect its position. If the members of the Council qualifying their abstention in this way represent at least one third of the Member States comprising at least one third of the population of the Union, the decision shall not be adopted.’ 137 Council Joint Action 2008/124/CFSP on the European Union Rule of Law Mission in Kosovo, EULEX KOSOVO [2008] OJ L42/92. 138 Art 31(2) subpara 2 TEU. 139 Art J.3(2) TEU (Amsterdam). 140 Art 23(2) TEU (Nice). 136

440 Common Foreign and Security Policy that the exceptional provisions for qualified majority voting should not be riddled with further unnecessary exceptions. In a step further towards the use of qualified majority, the Lisbon Treaty views the above exceptions from the unanimity rule as non-exhaustive: under Article 31(3) TEU, the European Council may decide that the Council shall act by a qualified majority in cases other than those referred to in Article 31(2) TEU. However, there is a serious caveat, as the European Council’s decision is to be adopted unanimously. In other words, this provision illustrates that, whilst it is possible for the Member States to increase the pace of developments in the CFSP sphere, it is entirely for them to decide where to do so, and each one of them may block this path. The exceptions to the unanimity rule set out in this section are not relevant to the CSDP. In accordance with Article 31(4) TEU, the exceptions regarding implementing measures, the appointment of special representatives, and the possibility of extension of qualified majority decision-making by the European Council ‘shall not apply to decisions having military or defence implications’. On the other hand, the rule about constructive abstention set out in Article 31(1) TEU does apply. The exceptions to the principle of unanimity, introduced at Lisbon, are of limited significance. This is not because of the ‘emergency brake’ set out in Article 31(2) TEU. It is partly because their exercise depends on the prior adoption of a unanimous CFSP measure and partly because they are entirely consistent with the logic of the pre-existing exceptions. The prevailing role of unanimity and the limited function of qualified majority voting may be viewed as undermining the ability of the Union to act effectively and swiftly and, therefore, may be considered difficult to reconcile with one of the objectives of the Union, namely to ‘reinforc[e] the European identity and its independence in order to promote peace, security and progress in Europe and in the world’.141 In this vein, it is worth pointing out that decision-making procedures are central to the pace of integration achieved in other areas of EU action. It is often recalled, for instance, that a major factor in the success of the establishment of the internal market was the introduction of qualified majority voting for the adoption of harmonising legislation by the SEA.142 However, while important, the decision-making rules laid down in Title V TEU ought to be placed in their proper political context. As CFSP activities are carried out in the sphere of high politics, law is only one of the factors that determine policy—and quite often, it is not even the most important factor. There is an inherent limit to what procedural rules may contribute: they may facilitate the adoption of efficient action but they cannot substitute for substantive policies in areas at the core of national sovereignty where it is notoriously difficult to attract broad agreement. Put differently, decisionmaking rules reflect the political realities within which the Union may choose to act and the dominant role of Member States in international policy-making. They also reflect the weight which the Union’s action would have if backed up by all its Member States and, in particular the big States. The limits of such roles are further explored in the following section.

141 142

TEU preamble, 11th recital. Art 114 TFEU.

Rules Challenged 441 8. RULES CHALLENGED Rules Challenged

The detailed study of the legal rules underpinning the conduct of the CFSP enables a proper understanding of the functioning of the Union legal order, the dynamics of European integration and the mechanisms of decision-making. However, high politics are not confined by legal rules and procedures and there have been various instances where the CFPS has been viewed as weak, if not irrelevant. The Iraq crisis in the early 2000s and the effort of the international community to decide how to deal with the regime of Saddam Hussein challenged fundamentally the function of the CFSP. As the Member States appeared seriously divided, a host of questions was raised: was it the rule of unanimity which prevented the Union from asserting its identity on the international scene? Had the procedural framework been different, would the outcome have also been different? Ultimately, did the CFSP fail? On 27 January 2003, the General Affairs and External Relations Council expressed its ‘deep concern’ about the situation in Iraq, ‘urge[d] the Iraqi authorities to engage in full and active cooperation’ with the UN inspectors and ‘reaffirm[ed] the role of the UNS[ecurity] C[ouncil] in the implementation of UNSCR 1441’, concluding that ‘[t] he responsibility of the UNSC in maintaining international peace and security must be respected’.143 On 30 January 2003, the leaders of five EU Member States (the United Kingdom, Spain, Italy, Portugal and Denmark) and three then candidate states (the Czech Republic, Poland and Hungary) issued a statement on ‘the real bond between the United States and Europe’ which was viewed as ‘a guarantee of our freedom’ and stated that ‘Resolution 1441 is Saddam Hussein’s last chance to disarm using peaceful means.’ On the same day, the European Parliament declared its opposition to any kind of preventive war or unilateral military action, and insisted that the EU speak with one voice on the basis of a common position.144 Finally, at an extraordinary meeting in Brussels on 17 January 2003, the European Council ‘recognis[ed] that the primary responsibility for dealing with Iraqi disarmament lies with the Security Council’.145 The then President of the Commission, Romano Prodi, ‘regret[ed] that it [had] not been possible to agree on a common European Union position’ and stated that ‘[w]e must all work together to reduce potential long-term damage to … our efforts to build a Common Foreign and Security Policy for the Union’.146 In a statement on 20 March 2003, ie the date the war began, President Prodi stated that ‘[w]hatever the outcome of the war, there can be no denying this is a bad time for the Common Foreign and Security Policy, for the European Union as a whole’ and pointed out the following: These difficult circumstances also show it is time to draw the lessons from this crisis. Europe can make an effective contribution to peace in the world only if its nations pull together within the European Union. We all agree that we owe our wealth and prosperity to the Union. It is not in our interest to continue relying on others when it comes to defending our values militarily.147

There can be no doubt that the war in Iraq seriously tested not only the procedural rules of the TEU but also the culture of cooperation fostered by the development of the 143

Conclusions, 5396/03, 14. Agence Europe, 31 January 2003, 4. 145 Conclusions, POLGEN 7, 6466/03, 1. 146 Statement of 20 March 2003. 147 IP/03/419. 144

442 Common Foreign and Security Policy CFSP framework. The failure, for instance, of the Member States holding a permanent seat at the UN Security Council to carry out systematic and meaningful discussions of the Iraq crisis in the Council was highly regrettable.148 However, to argue that the Iraq crisis signified the failure of the CFSP was not only overly dramatic but also indicative of a very selective reading of the CFSP framework. After all, that crisis challenged all the structures of international cooperation which had dominated the post-World War II arena: not only were the United Nations marginalised and NATO seriously split, but also very considerable opposition was expressed within most individual states; it is recalled, for instance, that there were serious demonstrations in Continental Europe and considerable parliamentary disquiet in the United Kingdom, whilst Turkey, a traditional ally of the United States, refused to cooperate as required by the American administration. In other words, the Iraq conflict was so profound in its implications that it challenged the entire system of international cooperation. To expect the Union to succeed where the United Nations and the Western powers, both individually and collectively, failed is as unrealistic as it would be to disregard the CFSP idiosyncrasies. The rules laid down in Title V TEU and the acquis politique formed after years of practice and experience had by no means produced a framework strictly confined to legal principles and procedures. On the contrary, in the process of asserting its identity on the international scene, the Union has tolerated considerable deviations from the model of ‘togetherness’ advocated in the TEU as ad hoc coalitions of varying membership, albeit mainly representing the big Member States, have been frequent. This raises the question of decision-making procedures and their role in the effective conduct of foreign policy. There appears to be a widely shared assumption that the rule of unanimity which prevails under Title V TEU is both unjustified and unduly restrictive of the ability of the Union to meet its objectives. This view of unanimity did not change in the light of the reform of the TEU rules: it was argued, for instance, that that Treaty ‘continues to provide … far too many “sensitive” issues to be decided upon by unanimity and accordingly does not allow the Union to adequately face the challenges of our times and to be taken seriously, in particular by the USA, its foremost partner’.149 However, to argue that it is the requirement for unanimity which prevents the Union from taking its well-deserved place at the centre of the international arena is to ignore not only the prevailing political realities but also the history, development and idiosyncrasies of the CFSP. The peculiarities and tensions inherent in a polity seeking to define a common rather than a single policy determine both the strengths and the limitations of the CFSP. What the Iraqi crisis revealed was that there was an inherent limit to the potential of legal rules in the case of the sui generis policies of the Union: to argue that the Union would have adopted a different approach had there been a requirement for majority 148 The then Director for External Relations at the Council Secretariat later wrote that ‘there was intermittent superficial discussion and the occasional minimalist declaration to show that the EU was at least aware that there was an Iraqi problem. But  … the UK and France made sure that the subject was reserved for handling only in New York at the UN. The other Member States connived at their own irrelevance (and impotence) partly out of respect for the primacy of UN over EU obligations for Britain and France, but more particularly because they knew that any attempt to forge a common EU position on Iraq would be more damaging than helpful to a still fragile CFSP which was making real progress in other areas, notably the Balkans and even the Middle East’: B Crowe, ‘A Common Foreign policy After Iraq?’ in M Holland (ed), Common Foreign and Security Policy—The First Ten Years, 2nd edn (London, Continuum, 2004) 28, 30. 149 D von Kyaw, ‘The EU after the Agreement on a Constitutional Treaty’ (2004) 9 European Foreign Affairs Review 455, 456.

Judicial Review 443 voting is to ignore not only the ability of the states to rely upon ingenious arrangements when the core of their sovereignty is impinged upon in the area of high politics, but also the capacity of the Union framework to accommodate and absorb such deviations. In any case, even in policy terms, majority voting is far from a panacea for the cohesiveness of the Union and the effectiveness of its foreign policy: as Denza puts it succinctly, ‘in foreign relations, the power to shoot from the hip is not always an advantage’.150 The Iraq crisis was by no means the only instance to question the function and effectiveness of the CFSP. The crisis in Ukraine in 2014, the annexation of Crimea by Russia and the Russian intervention in eastern Ukraine is another case where the Union has been criticised for its slow response and its timidity.151 In essence, the Union’s response has been led by national governments, in particular those of the big Member States, rather than the EU institutions. It has also been confined to the economic sphere and the gradual adoption of a combination of restrictive measures.152 Related issues about the effectiveness of the Union’s security and defence policy will be examined in Chapter 13.

9. JUDICIAL REVIEW Judicial Review

The activities of the Union under the CFSP have been traditionally excluded from the jurisdiction of the Court of Justice. Since its genesis, this set of rules has been assumed to govern an area of high politics which is not amenable to judicial review.153 This assumption underpins the current constitutional arrangements too. This is expressly provided in Article 24(1) subparagraph 2 TEU, ie the provision which also points out, amongst others, the specific nature of the CFSP rules and procedures, the central role of the European Council and the Council, and the exclusion of legislative acts. In other words, this provision illustrates in legal terms what is different about the CFSP. However, whilst maintaining the rule of the exclusion of CFSP measures from the jurisdiction of the Court, Article 24(1) subparagraph 2 TEU introduces for the first time two exceptions: the first is the Court’s ‘jurisdiction to monitor compliance with Article 40 of this Treaty’; the second is ‘to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the Treaty on the Functioning of the European Union’. 150

n 3 above, 121. Blockmans refers to ‘the lethargy in EU decision-making’ and ‘failed diplomacy’: S Blockmans, ‘How Should the EU Respond to Russia’s War in Ukraine?’ [2014] CEPS Commentary, 3 September 2014, 2. 152 See Council Dec 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L78/16, amended a number of times, recently by Council Dec 2014/508/CFSP [2014] OJ L226/23; Council Reg 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L78/6, amended by Council Reg 811/2014 [2014] OJ L221/11; Council Reg 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine [2014] OJ L220/1; Council Dec 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine [2014] OJ L229/3; Council Dec 2014/386/CFSP concerning restrictions on goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol [2014] OJ L183/70 amended by Council Dec. 2014/507/CFSP [2014] OJ L226/20; Council Reg 692/2014 concerning restrictions on the import into the Union of goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol [2014] OJ L183/9 amended by Council Reg 825/2014 [2014] OJ L226/2. 153 See A Hinarejos, Judicial Control in the European Union—Reforming Jurisdiction in the Intergovernmental Pillars (Oxford, Oxford University Press, 2009). 151

444 Common Foreign and Security Policy The first of these exceptions is about monitoring competence. It is recalled that Article 40 TEU aims to ensure that the conduct of the CFSP does not undermine the powers and procedures which govern the conduct of the EU policies. Similarly, it provides that the conduct of the latter policies does not undermine the powers and procedures which govern the CFSP and which are set out in Title V TEU. The second exception is about the rights of individuals. Article 275 TFEU, to which Article 24(1) TEU refers expressly, reads as follows: The Court of Justice of the European Union shall 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. However, the Court shall have jurisdiction to monitor compliance with Article 40 of the Treaty on European Union and to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing 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 Treaty on European Union.

Whilst significant, neither of the above extensions of the jurisdiction of the Court of Justice alter fundamentally the main premise of the role of the Court in the CFSP. As far as the first exception is concerned, it merely states what would have been the case even in its absence. In other words, it is for the Court to ascertain whether an EU measure is adopted under the appropriate rules and procedures, as these are laid down in primary law. After all, even in the pre-Lisbon constitutional constellation, the delimitation between the pillars was part of the Court’s jurisdiction.154 The relevant case-law is examined in Chapter 14. As for the second exception, whilst it extends the types of measures subject to the Court’s jurisdiction, it follows the logic of the jurisdiction which the Court previously exercised in the area of economic sanctions targeting individuals when these were adopted under European Community powers pursuant to prior CFSP measures under the legal basess laid down in Articles 60 and 301 EC. As far as international agreements concluded under Title V TEU are concerned, the Court held in Case C-658/11 European Parliament v Council that they were covered by its jurisdiction given that they were adopted under Article 218 TFEU.155 This case was about the transfer agreement between the EU and Mauritius and the input of the European Parliament in its conclusion. The Court pointed out that the exclusion of jurisdiction from CFSP acts, laid down in Articles 24(1) second subparagraph TEU and in Article 275 TFEU, should be construed narrowly as they introduce an exception from the rule of the general jurisdiction which is bestowed upon the Court under Article 19 TEU. In addition, the procedural rules set out in Article 218 TFEU are provisions of general application and apply to all international agreements negotiated and concluded by the EU. These include CFSP agreements for which the Treaty does not provide a special 154 See Case C-417/96 Commission v Council (re: Airport Transit Visas) [1998] ECR I-2763; Case C-176/03 Commission v Council (re: criminal law and environmental protection) [2005] ECR I-7879; Joined Cases C-317/04 and C-318/04 Parliament v Council (re: Passenger Name Record Agreement) [2006] I-4721; Case C-440/05 Commission v Council (criminal environmental sanctions) [2007] ECR I-9097; Case C-403/05 Parliament v Commission (re: border support to Philippines) [2007] ECR I-9045; Case C-91/05 Commission v Council (re: small arms and light weapons) [2006] ECR I-1145. 155 Case C-658/11 European Parliament v Council ECLI:EU:C:2014:2025.

Conclusion

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procedure. The EU has concluded a significant number of agreements in the area of the CSDP—these are examined in Chapter 13. In areas with a CFSP dimension, the role of the Court of Justice emerges in the context of substantive links between the CFSP and other strands of external action, such as development cooperation policy. These cases, along with judicial review of sanctions, are examined in Chapter 14.

10. CONCLUSION Conclusion

This chapter has provided an overview of the rules and procedures that govern the conduct of the Union’s CFSP. Two main themes emerged from the analysis. The first is the distinctiveness of the applicable legal framework, the substance of which has been maintained in the different changes of the Union’s constitutional arrangements. It is only its form that has changed without concealing the different nature of the set of rules that govern the CFSP. The second theme is the realisation that, its distinct nature notwithstanding, the CFSP is intrinsically linked with the other strands of the Union’s external action. This has led to constant institutional adjustments designed to facilitate these linkages and ensure the coherence of the EU’s international role. However, no matter how drastic these innovations are, it is the Member States that are at the core of any development in the area. These themes are also prominent in the gradual development of the Union’s security and defence policy, which is examined in the following chapter.

Common Security and Defence Policy

13 Common Security and Defence Policy 1. INTRODUCTION Introduction

T

HE PREVIOUS CHAPTER examined the rules and procedures that govern the Common Foreign and Security Policy (CFSP). Within this framework, security and defence policy has developed gradually into a distinct policy strand. This development is illustrated by the rules laid down in the Lisbon Treaty. The change of name of the policy to the Common Security and Defence Policy (preLisbon it was known as the European Security and Defence Policy (ESDP)) suggests commonality of purpose. It also illustrates the higher status of the policy within the Union’s constitutional architecture, as the new name recalls that of the CFSP within which it emerged and grew over the years. There is also more emphasis on the CSDP in Lisbon Treaty than in any previous Treaty. Article 42(1) TEU states that ‘[t]he common security and defence policy shall be an integrated part of the common foreign and security policy’. There is also a considerable increase of Treaty provisions on the CSDP. Whereas the precursor to the Lisbon Treaty covered security and defence policy in a single article,1 the Lisbon Treaty dedicates a distinct section to it in Title V TEU, consisting of five articles (Articles 42–46 TEU). Therefore, both the semantics of CSDP and its position in the Treaty scheme illustrate the increasingly prominent place that this policy is granted in the international relations system set out at Lisbon. This chapter will examine these rules and will place them in their political context and the Union’s practice in the area.

2. ORIGIN AND DEVELOPMENT Origin and Development

The Union’s security and defence policy originates in a failure.2 In 1952, the founding six Member States of European integration, namely Germany, France, Italy, Belgium, the Netherlands, and Luxembourg, signed the Treaty establishing the ambitious and ultimately doomed European Defence Community (EDC).3 Drawing upon the model of 1

Art 17 TEU (Nice). For an analysis of the genesis and development of the CSDP, see P Koutrakos, The EU Common Security and Defence Policy (Oxford, Oxford University Press, 2013) ch 1. 3 See E Fursdon, The European Defence Community—A History (London: Macmillan, 1980); D Scannell, ‘Third Time Lucky: The Pre-history of the Common Security and Defence Policy’ 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) 565; M Trybus, ‘The vision of the European Defence Community and a Common Defence for the European Union’ in M Trybus and N White (eds), European Security Law (Oxford, Oxford University Press, 2007) 13. 2

447

448 Common Security and Defence Policy the European Coal and Steel Community, the EDC aimed to integrate the defence of Member States. Its Article 1 sets the tone with a starkness and succinctness not often associated with European treaty-making: ‘[T]he High Contracting Parties institute among themselves a European Defense Community, supranational in character, consisting of common institutions, common armed Forces and a common budget.’4 However, it was rejected by the French Parliament on 30 August 1954. Since the early death of the EDC, security and defence was not part of the European integration language and structures until the emergence of the European Political Cooperation (EPC). References to it in the Single European Act were vague and the tighter framework provided for the CFSP at Maastricht did not provide for a firmer legal basis. Security and defence started attracting greater attention following the meeting between the British Prime Minister, Tony Blair, and French President, Jacques Chirac, at St Malo in 1998. The two leaders expressed their wish that a stronger European presence in the area of security and defence policy be forged.5 The momentum that this incident was to bring was illustrated by the reference to the British–French initiative by President Chirac as the ‘Franco-British motor’,6 a statement all the more striking in the light of the traditional relationship between France and Germany at the very core of Union integration. Within six months, the stakes had been raised and the initiative was undertaken at EU level. In June 1999, the Cologne European Council signalled the first step of an ongoing process which has not yet been completed. A Declaration on Strengthening the Common European Policy on Security and Defence annexed to the Presidency Conclusions started with the following grand statement: We, the members of the European Council, are resolved that the European Union shall play its full role on the international stage. To that end, we intend to give the European Union the necessary means and capabilities to assume its responsibilities regarding a common European policy on security and defence.7

Following this initiative, an intensive process unfolded in the 2000s: the Presidency would regularly draw up reports on the objectives and modalities of the emerging policy and the European Council would adopt them in its Conclusions. The specific objective of the emerging policy, the ESDP, became clearer in 1999 at the Helsinki European Council, which stated that the Union should be able to agree to deploy rapidly and then sustain forces capable of the full range of Petersberg tasks as set out in the Amsterdam Treaty, including the most demanding, in operations of up to corps level (up to 15 brigades or 50,000–60,000 persons). These forces should be militarily self-sustaining with the necessary command, control and intelligence capabilities, logistics, other combat support services and additionally, as appropriate air and naval elements. Member States should be able to deploy in full at this level within 60 days, and within this to provide smaller rapid response elements available and deployable at very high readiness. They must be able to sustain such a deployment for at least one year. This will require an additional pool of

4 For an unofficial translation of the EDC Treaty in English, see http://aei.pitt.edu/5201/1/5201.pdf (accessed 26 October 2012). 5 See Agence Europe, 7–8 December 1998, 4. See the analysis in J Howorth, ‘Britain, NATO and CESDP: Fixed Strategy, Changing Tactics’ (2000) 3 European Foreign Affairs Review 1. 6 Financial Times, 26 December 1999, 1. 7 Para 1, Annex 3 to Presidency Conclusions.

Origin and Development 449 deployable units (and supporting elements) at lower readiness to provide replacements for the initial forces.8

These became known as the ‘Helsinki Headline Goals’, and the deadline for achieving them was set for 2003. This deadline passed without the goals having been achieved. This was also the fate of the Headline Goal 2010, endorsed by the European Council in June 2004. These goals were quite specific: for instance, they included the availability of an aircraft carrier with its associated air wing and escort by 2008 and the implementation by 2005 of EU strategic lift joint coordination, with a view to achieving by 2010 the necessary capacity and full efficiency in strategic lift in support of anticipated air, land and sea operations. A couple of features of the genesis and early development of the Union’s security and defence policy are noteworthy. First, there was an unmistaken emphasis on what the ESDP was not to be, namely the foundation of a European army responsible for the defence of the Member States. By repeating this negative definition, the EU underlined the existing role of NATO and sought to assuage any concerns shared by the more Atlanticist of its Members as well as the United States. To that effect, the Helsinki European Council stressed that ‘NATO remains the foundation of the collective defence of its members, and will continue to have an important role in crisis management’.9 Secondly, all related developments were accompanied by the official assurance that any ESDP initiative, rather than entailing the application of supranational methods, would be based upon the existence and maintenance of national sovereignty. The Helsinki European Council, for instance, pointed out that ‘the commitment of national assets by Member States to such operations will be based on their sovereign decision’.10 Against this background of intense preparatory work and institutional engagement in the late 1990s and early 2000s, security and defence became one of the policy areas which attracted considerable attention during the constitutional journey of the Union in the 2000s. It is recalled that the Laeken Declaration, which was adopted by the European Council in December 2001 and initiated the process leading to the drafting, discussion and rejection of the Constitutional Treaty and the drafting, adjustment and entry into force of the Lisbon Treaty, singled out the international role of the Union as a main priority. Another policy dimension of security and defence against which the rules laid down at Lisbon should be assessed is illustrated by the European Security Strategy.11 Drawn up by the then High Representative for the Common Foreign and Security Policy Javier Solana and endorsed by the European Council in December 2003, it identifies the main threads of how the Union understands its security and defence role. Prepared against the backdrop of the terrorist attacks in New York and Washington of September 11, 2001, the European Security Strategy was given a name reminiscent of the National Security Strategy adopted by the US administration in order to out the security challenges facing the country. This suggests the ambition and stature which the EU seeks to project.

8 Progress Report by the Finnish Presidency on Strengthening the Common European Policy on Security and Defence, submitted to the Helsinki European Council in Dec 1999 and annexed to the Presidency Conclusions. 9 Ibid. 10 Ibid. 11 A Secure Europe in a Better World—European Security Strategy (Brussels, 12 December 2003).

450 Common Security and Defence Policy Several characteristics of the European Security Strategy are noteworthy.12 First, it construes security in broad terms. The key threads for the EU which it identifies are terrorism, the proliferation of weapons of mass destruction, regional conflicts, state failure and organised crime. These threads have diverse sources, as they do not necessarily originate in individual powers or states, and vary in their characteristics. Secondly, the Strategy is based on the idea that the Union has responsibility for international security. On its very first page, the Strategy points out that ‘Europe should be ready to share in the responsibility for global security and in building a better world’.13 This was entirely consistent with the vision of the Union articulated in the Laeken Declaration, which had stated: Now that the Cold War is over and we are living in a globalized, yet also highly fragmented world, Europe needs to shoulder its responsibilities in the governance of globalization.

Thirdly, the European Security Strategy sets out what is the added value of the European contribution in international security and highlights what the EU institutions view as a distinctly European approach: this is the constant combination of economic, political, cultural, development and security instruments which are available to the Union and enable it to ‘match [its] potential’.14 The capacity to rely upon the combination of such diverse instruments is central to the ability of the Union to deal with the unique security challenges of the twenty-first century: In contrast to the massive visible threat in the Cold War, none of the new threats is purely military; nor can any be tackled by purely military means. Each requires a mixture of instruments. Proliferation may be contained through export controls and attacked through political, economic and other pressures while the underlying political causes are also tackled. Dealing with terrorism may require a mixture of intelligence, police, judicial, military and other means. In failed states, military instruments may be needed to restore order, humanitarian means to tackle the immediate crisis. Regional conflicts need political solutions but military assets and effective policing may be needed in the post conflict phase. Economic instruments serve reconstruction, and civilian crisis management helps restore civil government. The European Union is particularly well equipped to respond to such multi-faceted situations.15

It was within this policy context that the legal provisions on security and defence were drafted first in the Constitutional Treaty and, then, in the Lisbon Treaty.

3. SCOPE AND ACTIVITIES Scope and Activities

The CSDP does not apply to all Member States in a uniform manner. Denmark has a permanent opt-out under Protocol 22 which provides that it ‘does not participate in the elaboration and the implementation of decisions and actions of the Union which have defence implications’.16 In fact, Denmark has always had an opt-out from the security and defence policy of the Union. The scope of the CSDP is defined in Article 42(2) TEU as follows: 12 13 14 15 16

See the analysis in Koutrakos, n 2 above, ch 4. n 11 above, 1. Ibid, 11. Ibid, 7. Art 5, Protocol 22 on the position of Denmark.

Scope and Activities

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The common security and defence policy shall include the progressive framing of a common Union defence policy. This will lead to a common defence, when the European Council, acting unanimously, so decides. It shall in that case recommend to the Member States the adoption of such a decision in accordance with their respective constitutional requirements.

Compared to the precursors to the Lisbon Treaty, this provides a considerably tighter formulation which reflects the increasing significance that the Member States place on the role of the policy and confidence in its construction. These are suggested in a number of ways: the tone is decidedly more committal (note that the Nice Treaty provided that the ESDP ‘might’ lead to a common defence), the wording is firmer (the Nice qualification ‘should the European Council … so decide’ is replaced by ‘when’), and the emphasis on the Union nature of the new policy inescapable (whereas at Nice reference was made generally to a ‘common defence policy’). However, the temptation to read too much into the semantics of the evolution of the wording of primary law should not be indulged without qualification: in its preamble, the Treaty on European Union maintains the lesscommittal Nice formulation, a discrepancy that appears in all language versions of the Treaty.17 However, this is not to suggest either that the emerging policy should be viewed in isolation, or that the national policies will be ignored. This is illustrated by the second subparagraph of Article 42(2) TEU, which reads as follows: The policy of the Union in accordance with this Section shall not prejudice the specific character of the security and defence policy of certain Member States and shall respect the obligations of certain Member States, which see their common defence realized in the North Atlantic Treaty Organisation (NATO), under the North Atlantic Treaty and be compatible with the common security and defence policy established within that framework.

Six EU Member States are not NATO members, namely Austria, Finland, Sweden, Ireland, Malta and Cyprus.18 However, it is not just their special status that Article 42(2) TEU seeks to protect. The broad wording of this provision suggests a ‘catch-all clause’19 aiming to accommodate the security and defence considerations prevailing in different Member States. In fact, these qualifications are significant because they tell us something about the general tenor of the CSDP, ie its inherently limited function, its narrow reach, and the centrality of the Member States whose right to make the fundamental choices about their defence is not called into doubt. This central aspect of the character of the policy is underlined further by the, largely repetitive, wording of Declarations 13 and 14, concerning the CFSP annexed to the Lisbon Treaty. The objectives of the CSDP are outlined in Article 42(1) TEU as ‘peace-keeping, conflict prevention and strengthening international security in accordance with the principles of the United Nations Charter’. This provision also refers specifically to ‘missions 17 The French version states that CFSP ‘conduira à une défense commune’ (Art 42(2)), while in the preamble it provides that is stated it ‘pourrait conduire à une défense commune’. The same discrepancy appears in the Greek version of the Treaty. 18 Following the adoption of the Nice Treaty, the Irish Constitution was amended in order to include the following clause: ‘The State shall not adopt a decision taken by the European Council to establish a common defence pursuant to Article 1.2 of the [Nice] Treaty  … where that common defence would include the State’ (Art 29.4.9). On the origins and differences of the neutral status of these countries, see E Denza, The Intergovernmental Pillars of the European Union (Oxford, Oxford University Press, 2002), 347–50. 19 B Tonra and P Keatinge, European Security and Defence Policy and the Lisbon Treaty (The Institute of International and European Affairs, 2009), para 28.

452 Common Security and Defence Policy outside the Union’. The operations carried out by the EU prior to the entry into force of the Lisbon Treaty had all been carried out outside the Union, many in far-flung places.20 Protection of the territories of the Member States is seen as the primary responsibility of NATO. The tasks pursuant to which the EU carries out its CDSP objectives are set out in Article 43(1) TEU, and cover     

joint disarmament operations; humanitarian and rescue tasks; military advice and assistance tasks; conflict prevention and peacekeeping tasks; tasks of combat forces in crisis management, including peace-making and postconflict stabilisation.

Not only is this a non-exhaustive list, as Article 43(1) TEU provides that the CSDP ‘shall include’ these tasks, but it also covers activities which are mentioned in primary law for the first time. The Nice Treaty referred to humanitarian and rescue tasks, peace-keeping tasks and tasks of combat forces in crisis management, including peace-making.21 These were known as the Petersberg tasks since they were adopted by the Western European Union in June 1992 at the Hotel Petersberg, near Bonn.22 Therefore, the references to conflict prevention and the strengthening of international security are new, as are the provisions for joint disarmament operations, military advice and assistance tasks, conflict prevention, and post-conflict stabilisation. However, Article 41(3) TEU merely formalises past practice, as the Brussels European Council in 2004 had already extended the original Petersberg tasks.23 The scope of the tasks laid down in Article 43(1) TEU is quite wide and ranges from the softer end of the spectrum (such as joint disarmament operations and humanitarian tasks) to the harder end of security, which would include the engagement of combat forces.24 However, the definitions are quite vague and ambiguous.25 This makes the different tasks both challenging to distinguish with any degree of accuracy, and inherently malleable so as to grant Member States considerable flexibility when they consider how to act in a given situation. As for crisis management, it denotes the ‘the organisation, regulation, procedural frameworks and arrangements to contain a crisis and shape its future course while resolution is sought’, and post-conflict stabilisation refers to ‘actions meant to address the root causes of crises that have been resolved’.26 The introduction of Article 42(1) TEU follows the pattern of previous amendments of the Treaties in the 20 The Aceh Monitoring Mission was carried out in Indonesia (Council Joint Action 2005/643/CFSP [2005] OJ L234/13). 21 Art 17(2) TEU (Nice). 22 Petersberg Declaration by WEU Council of Ministers (Bonn, 19 June 1992) (www.weu.int/ documents/920619peten.pdf) (accessed 25 October 2012). The WEU ceased to exist on 30 June 2011. 23 Presidency Conclusions, Brussels European Council (17–18 June 2004). 24 See S Graf Von Kielmansegg, ‘The Meaning of Petersberg: Some Considerations on the Legal Scope of ESDP Operations’ (2007) 44 Common Market Law Review 629. 25 See S Duke and Aurélie Courtier, ‘EU Peacebuilding: Concepts, Players and Instruments’ in S Blockmans, J Wouters and T Ruys (eds), The European Union and Peacebuilding—Policy and Legal Aspects (The Hague: TMC Asser Press, 2010) 15, 21–30. 26 See S Blockmans and R Wessel, ‘The European Union and Crisis Management: Will the Lisbon Treaty Make the EU More Effective?’ (2009) 14 Journal of Conflict and Security Law 265, 269, who also point out that ‘crisis management’ means, in the EU context, a catch-all phrase for both military and civilian ESDP

Scope and Activities

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area of foreign and security policy, which have formalised existing arrangements already relied upon by the relevant actors. This underlines further the heavy policy focus and the unique nature of the challenges in the area, which lead the EU institutions and Member States to act on the basis of pragmatic considerations and arrangements irrespective of whether they are enshrined in primary legal rules. A further indication of the wider construction of the CSDP under Lisbon is provided by the linkage between all the above tasks and terrorism: under Article 43(1) TEU, ‘[a]ll these tasks may contribute to the fight against terrorism, including by supporting third countries in combating terrorism in their territories’. This reference broadens further the scope of activities which the Union may carry out under its CSDP umbrella. From a policy point of view, the anti-terrorism dimension has been a central feature of the Union’s external policies since the terrorist attacks of September 11, 2001. The European Security Strategy mentions it first in the list of ‘key threats’ facing the Union, which are ‘more diverse, less visible and less predictable’.27 As one of the tenets of this document is the multiplicity of instruments which the Union must use in order to tackle these threads,28 the European Security Strategy states that: As we increase capabilities in the different areas, we should think in terms of a wider spectrum of missions. This might include joint disarmament operations, support for third countries in combating terrorism and security sector reform. The last of these would be part of broader institution building.29

Furthermore, in the 2008 Report on the Implementation of the European Security Strategy, terrorism features prominently as a global challenge and key threat, and the Union’s security and defence policy are referred to as a considerable tool in the Union’s armoury.30 Therefore, the wording of Article 43(1) TEU formalises a link that had been acknowledged as a matter of policy for some time. Viewed in more general terms, the broad wording of the CSDP objectives in Article 42(1) TEU and the CSDP tasks in Article 43(1) TEU not only suggests a more ambitious and confident security and defence policy for the Union, but also acknowledges the central role of the Member States in the definition of this policy. These provisions of the Lisbon Treaty appear to set out a broad canvas on which the Member States may draw the policy they want the Union to carry out, define its reach, and stress its limitations. Whichever way they decide to proceed, they may shift the focus of the policy in order to be able to tackle different challenges while taking into account their own interests. After all, the wording in which the CSDP objectives and tasks are expressed suggests a security and defence policy that is not confined by strict categorisation.

operations, whether they are deployed to prevent the conflict from bursting into crisis, assist in enforcing the peace, keep the peace or build the peace’ (270). 27

n 11 above, 3. In relation to terrorism in particular, it points out that it ‘may require a mixture of intelligence, police, judicial, military and other means’ (ibid, 7). 29 n 11 above, 12. The acknowledgement of a counter-terrorism dimension has by no means been confined to security and defence: see CC Murphy, EU Counter-Terrorism Law—Pre-Emption and the Rule of Law (Oxford, Hart Publishing, 2012). 30 Report on the Implementation of the European Security Strategy—Providing Security in a Changing World (S407/08, Brussels, 11 December 2008). 28

454 Common Security and Defence Policy 4. MEANS Means

CSDP activities are carried out on the basis of resources provided by the Member States. This is mentioned twice, first in Article 42(1) TEU where the CSDP tasks are first outlined, and then in Article 42(3) TEU, which refers to both civilian and military capabilities. It is not only this emphasis on national resources which is noteworthy, but also the wording the Treaty drafters chose: the CSDP tasks ‘shall’ be undertaken pursuant to national capabilities, and Member States ‘shall’ make the latter available to the Union. This duty imposed on the Member States is in contrast to their position in the context of establishing multinational forces—under Article 42(3) TEU, the latter ‘may also make them available to the common security and defence policy’. The duty on Member States to provide the Union with capabilities is accompanied by another related duty, namely to ‘undertake progressively to improve their military capabilities’.31 In addition, it imposes a duty on Member States to ‘make civilian and military capabilities available to the Union for the implementation of the common security and defence policy, to contribute to the objectives defined by the Council’.32 However, this provision ought to be examined in its proper context. On the one hand, while suggesting a degree of impetus in this area, the duty imposed on Member States is vague in its scope, and unclear in its implications. Most importantly, it needs to be considered in the light of the numerous reminders in the Treaty and its attached Declarations that the Member States remain responsible for the organisation of their defence.33 Viewed from this angle, the provision of Article 42(3) subparagraph 2 TEU is more interesting at the level of semantics, rather than substance.

5. ADMINISTRATIVE STRUCTURE AND PLANNING OF CSDP OPERATIONS Administrative Structure and Planning of CSDP Operations

A distinct administrative structure has developed for the design and conduct of the CSDP and the significance of this structure has increased over the years. The Political and Security Committee (PSC), established under Article 38 TEU, comprises ambassadors representing the Member States, along with representatives of the European Commission, the Council Secretariat and the European Military Committee.34 Its function is quite broad. On the one hand, it acts as the eyes and ears of the Union’s foreign policy institutions: it monitors international developments; delivers opinions to the Council, at the request of the latter or of the High Representative or on its own initiative; and monitors the implementation of agreed policies. On the other hand, it is responsible for the political control and strategic direction of the operations and missions carried out under Article 43 TEU. In this context, it acts under the direction of the Council and of the High Representative. The Council may authorise the PSC to take the necessary decisions for the purpose of and throughout the duration of a crisis management operation, such as the reappointment or replacement of the Operation Commander. The European Military Committee (EUMC) is the highest military body established

31

Art 42(3) subpara 2 TEU. Art 42(3) subpara 2 TEU. 33 See eg Declarations 13 and 14 concerning the CFSP. 34 The PSC was set up under Council Dec 2001/78/CFSP [2001] OJ L27/1. 32

Administrative Structure and Planning of CSDP Operations 455 within the Council.35 Its purpose is to give military advice and make recommendations to the Political and Security Committee, and to provide military supervision of the European Union Military Staff. It is composed of the Member States’ Chiefs of Defence, who may be represented by military alternates, and it meets as and when necessary. Its Chairman attends meetings of the Council when defence issues are discussed. The EUMC also exercises its responsibility for the military direction of the mission through the EU Operation Commander—ie an officer appointed in the first instance by the Council who is responsible for the proper execution of the mission and is answerable to the EUMC to which he reports regularly. The Military Staff of the European Union consists of military personnel seconded from the Member States, and is part of the General Secretariat of the Council.36 Its function is to perform early warning, situation assessment and strategic planning for CSDP missions and tasks. In doing so, it is involved in the implementation of decisions by the EUMC. Its tasks are multiple: it is responsible for intelligence gathering and input; it is active in the area of defence capabilities;37 and it is responsible for liaison and coordination with NATO. There are two units within the European External Action Service (EEAS), which are responsible for the CSDP in particular. The Crisis Management and Planning Directorate carries out the political-strategic planning and review of CSDP civilian missions and military operations, and the Civilian Planning and Conduct Capability is responsible in particular for civilian missions. Decision-making by the Union institutions in the area of the CSDP draws upon the constant interactions among these bodies38 and reflects the deep institutionalisation of the conduct of the policy.39 Given the sensitive nature of security and defence policy and the early preoccupation of Member States to avoid even the appearance of allowing the European integration to impinge on national security, it is quite remarkable that one should come across so many officials in military uniform milling around the Justus Lipsius building in Brussels. While military bodies consist of national officials, their common background and shared esprit de corps are instrumental in establishing a culture of cooperation in CSDP planning. Empirical work carried out on the EUMC, for instance, suggests that it functions as a cohesive body that has developed informal working methods and aims to provide pragmatic solutions to planning issues.40 The deep institutionalisation of the CSDP and the development of a culture of cooperation between its administrative bodies comprising national officials highlight the organisational autonomy of the policy. On the one hand, it has grown organically from the CFSP of which it is an integral part, as the Treaty of Lisbon expressly affirms for the

35

Council Dec 2001/79/CFSP [2001] OJ L27/4. Council Dec 2001/80/CFSP [2001] OJ L27/7, amended by Council Dec 2005/395/CFSP L 132/17. The rules applicable to the officers seconded from the Member States are set out in Council Dec 2001/496/CFSP [2001] OJ L181/11 amended by Council Dec 2002/34/EC [2002] OJ L15/29. 37 It contributes to the elaboration, assessment and review of the capabilities, goals, and works in close coordination with the European Defence Agency in identifying and listing European national and multinational forces for EU-led operations. 38 See Koutrakos, n 2 above, 65–67. 39 See S Duke, ‘Peculiarities in the Institutionalisation of CFSP and ESDP’ in S Blockmans (ed), The European Union and Crisis Management—Policy and Legal Aspects (The Hague: TMC Asser Press, 2008) 75. 40 Mai’a K Cross, Cooperation by Committee: the EU Military Committee and the Committee for Civilian Crisis Management (Paris, The Institute for Security Studies: Occasional Paper 2010) 82. 36

456 Common Security and Defence Policy first time.41 On the other hand, it has become more visible as a distinct component of the CFSP, a feature reflected by its autonomous administrative structure and the development of its working methods. This adds a different dimension to the fundamentally intergovernmental character of the policy.42 There is no doubt that the latter is determined by the political will of the Member States and their own interests, which are expressed pursuant to intergovernmental mechanisms. The intense proceduralisation of the legal and political space within which these interests are expressed and the culture of cooperation which it generates introduce a degree of subtle and gradual convergence in decision-making. The distinct role of the CSDP is also reflected in the unique manner in which its design has developed over the years. This has been based on Presidency Conclusions following European Council summits, which have articulated the main tenets, concepts, goals and administrative functioning of the policy. Finally, Article 42(3) second subparagraph TEU establishes an intergovernmental body responsible specifically for military capabilities. This is the European Defence Agency (EDA), which operates in the area of defence capabilities, development, research, acquisition and armaments.43

6. MUTUAL ASSISTANCE CLAUSE Mutual Assistance Clause

For the first time in the Union’s constitutional history, the Lisbon Treaty introduces a mutual assistance clause. This is laid down in Article 42(7) TEU, and reads as follows: If a Member State is the victim of armed aggression on its territory, the other Member States shall have towards it an obligation of aid and assistance by all the means in their power, in accordance with Article 51 of the United Nations Charter. This shall not prejudice the specific character of the security and defence policy of certain Member States. Commitments and cooperation in this area shall be consistent with commitments under the North Atlantic Treaty Organisation, which, for those States which are members of it, remains the foundation of their collective defence and the forum for its implementation.

This clause imposes a duty on Member States, the scope of which appears to be very broad: ‘by all the means in their power’, therefore envisaging military support by way of collective self-defence. The caveats which are set out are broad too, as they relate to compliance with international law,44 the neutrality of certain Member States, and the fundamental choices about security and defence made by Member States in relation to NATO. This formulation of the mutual assistance clause is entirely consistent with 41

Art 42(1) TEU. See also D Thym, ‘The Intergovernmental Constitution of the EU’s Foreign, Security and Defence Executive’ (2011) 7 European Constitutional Law Review 453. 43 See also Art 45 TEU. The EDA is examined in Chapter 9. 44 According to Art 51 UN Charter: ‘Nothing in the present Charter shall impair the inherent right of individual or collective self-defence if an armed attack occurs against a Member of the United Nations, until the Security Council has taken measures necessary to maintain international peace and security. Measures taken by Members in the exercise of this right of self-defence shall be immediately reported to the Security Council and shall not in any way affect the authority and responsibility of the Security Council under the present Charter to take at any time such action as it deems necessary in order to maintain or restore international peace and security.’ 42

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the tenor of the CSDP, and the balance that it seeks to strike between the security and defence choices made by the individual Member States and the common policy which it envisages for the Union.45 However, Article 42(7) TEU raises some questions: how far are Member States required to go in order to comply with their duty of solidarity, and might there be a question of enforcement of this duty? Its wording implies that military means constitute merely one option open to a Member State when it examines how to comply with its duty. It also suggests that compliance with the mutual assistance clause depends on the subjective assessment of a Member State as to how best it may assist another Member State, which is a victim of armed aggression on its territory. This assessment is subject to multiple considerations, including those of a political and economic nature. Such inherently indeterminate criteria do not lend themselves to a mechanism of verification or control. There can be no agreed assessment mechanism as to whether, for instance, military means should be relied upon by all Member States. After all, the EU is not a military alliance, and the mutual assistance clause does not render it one.46 Therefore, comparisons between Article 42(7) TEU and the mutual defence clauses laid down in Article V of the Brussels Treaty47 or Article 5 of the NATO Charter48 are misplaced.49 This is not to imply that the provision of Article 42(7) TEU is not significant. On the one hand, it is a specific illustration of political solidarity, one of the main pillars of the CFSP as laid down in Article 24(3) TEU. As such, it may appear merely to state the obvious. However, when it comes to the Union’s foreign policy, the obvious often needs to be stated. It is recalled that when Greece claimed that its territorial integrity was undermined by Turkey in the Imia incident in December 1995, and Spain made a similar claim regarding Morocco concerning the Leila incident in July 2002, their fellow Member States failed woefully to provide any substantial support in terms of political solidarity, let alone assurances about military assistance.50 It is against this background that the mutual assistance clause must be understood. On the other hand, the interpretation of the mutual assistance clause is subject to continuous redefinition: the development of 45

See eg Art 42(2) subpara 2 TEU. See also J-C Piris, The Lisbon Treaty—A Legal and Political Analysis (Cambridge, Cambridge University Press, 2010) 275. See also P Koutrakos, ‘The law in Common Security and Defence Policy: functions, limitations, and understandings’ in P Koutrakos (ed), The Foreign Policy of the European Union—Legal and Political Aspects (London, Edward Elgar Publishing, 2011) 235. 47 This provided that: ‘If any of the High Contracting Parties should be the object of an armed attack in Europe, the other High Contracting Parties will, in accordance with the provisions of Article 51 of the Charter of the United Nations, afford the Party so attacked all the military and other aid and assistance in their power.’ The Treaty was terminated (after a long period of near-death) in 2010, with effect on 30 June 2011. 48 This reads as follows: ‘The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defence recognised by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area. Any such armed attack and all measures taken as a result thereof shall immediately be reported to the Security Council. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security.’ The clause was formally invoked for the first time in response to the terrorist attacks of September 2001 against the US. 49 But see the statement to the contrary by Open Europe in the House of Lords Select Committee Twelfth Report, The Treaty of Lisbon: An Impact Assessment (HL 62-II) C35. 50 See J Monar, ‘The CFSP and the Leila/Perejil Island Incident: The Nemesis of Solidarity and Leadership’ (2002) 7 European Foreign Affairs Review 251. 46

458 Common Security and Defence Policy the CSDP and political solidarity in general, and of common structures of military capabilities in particular, is bound to have an impact on how far Member States would be prepared to go in order to assist a Member State under attack. There is another function of the mutual assistance clause that is noteworthy: against the various CSDP missions, which are carried out in far-flung places and export EU values to third parties, it renders the CSDP relevant to the Union’s citizens in a more direct manner. In other words, it bolsters a sense of belonging by reaffirming the solidarity between Member States. However, its practical significance should a crisis occur is another matter altogether. In addition to the mutual assistance clause set out in Article 42(7) TEU, there is a new solidarity clause in Article 222 TFEU. Its first paragraph reads as follows: The Union and its Member States shall act jointly in a spirit of solidarity if a Member State is the object of a terrorist attack or the victim of a natural or man-made disaster. The Union shall mobilise all the instruments at its disposal, including the military resources made available by the Member States, to: (a) —prevent the terrorist threat in the territory of the Member States; —protect democratic institutions and the civilian population from any terrorist attack; —assist a Member State in its territory, at the request of its political authorities, in the event of a terrorist attack; (b) assist a Member State in its territory, at the request of its political authorities, in the event of a natural or man-made disaster.

In addition to the Union, the other Member States are also required to assist a Member State under terrorist attack or a victim of a natural or man-made disaster if so requested by its political authorities.51 The threats facing the Union are assessed regularly by the European Council in order to ensure that both the Union and its Member States can take effective action.52 The solidarity clause has a clear security and defence dimension. This is apparent from the reference to the military resources of the Member States, and is acknowledged by its procedural provisions: according to Article 222(3) TFEU, the Council decides on the arrangements for the implementation of the clause following a joint proposal by both the Commission and the High Representative; where this decision has defence implications, it will be adopted by unanimity in accordance with Article 31(1) TEU, with the European Parliament being kept informed;53 and the Council is assisted by the Political and Security Committee, along with the CSDP structures including the EUMC and the EU Military Staff.54 The core of the solidarity clause could well have been placed in Title V TEU. In fact, it is striking that there is no reference to terrorism in the mutual assistance clause in Article 42(7) TEU. After all, it is recalled that terrorism features prominently in the

51

Art 222(2) TFEU. Art 222(4) TFEU. 53 This implies that, in the absence of defence implications, decisions are adopted by a qualified majority. 54 A standing committee provided for in Art 71 TFEU will also participate, if necessary by submitting joint proposals with the Political and Security Committee. The former aims ‘to ensure that operational cooperation on internal security is promoted and strengthened within the Union’ and ‘facilitate coordination of the action of the Member States’ competent authorities’. Its proceedings may involve representatives of the Union bodies, offices and agencies, and the Parliament and national Parliaments must be kept informed of them. 52

Flexibility 459 European Security Strategy55 as well as in the 2008 Report on its implementation.56 On the other hand, the reference to Article 222 TFEU illustrates the broader understanding of security, which now informs the Union’s activities, and establishes a link with the European Security Strategy as the latter, even when the Union was based on the tripartite pillar structure, emphasised the need for a combination of a broad range of instruments.57 The significance of the reference to terrorism, as well as the solidarity clause itself, is illustrated by the European Council’s Declaration on Combating Terrorism. Adopted in response to the terrorist attack in Madrid in March 2004, the Declaration refers expressly to the precursor to Article 222 TFEU in the Constitutional Treaty.58 It refers to the spirit of that provision and sets out the commitment of the Member States, and of the acceding states, to act jointly in case one of them becomes the victim of a terrorist attack. There is also the following clarification: ‘It shall be for each Member State or acceding State to the Union to choose the most appropriate means to comply with this solidarity commitment towards the affected State.’ In terms of its CSDP links, another noteworthy feature of the solidarity clause is its broad scope. The action it envisages is not confined to response to terrorist attacks. It is also about prevention and protection, as well as assistance. Finally, it is worth noting that, in their Decision on the Concerns of the Irish People on the Lisbon Treaty, the Heads of State or Government of the European Union stated that: [It] will be for Member States—including Ireland, acting in a spirit of solidarity and without prejudice to its traditional policy of military neutrality—to determine the nature of aid or assistance to be provided to a Member State which is the object of a terrorist attack or the victim of armed aggression on its territory.59

7. FLEXIBILITY Flexibility

One of the innovations introduced at Lisbon is the formalisation of flexibility, ie the establishment of mechanisms that would authorise an ad hoc group of Member States to undertake CSDP actions on behalf of the Union. There are two such mechanisms.

7.1 Member States Acting on Behalf of the EU According to Article 42(5) TEU, the ‘Council may entrust the execution of a task, within the Union framework, to a group of Member States in order to protect the Union’s values and serve its interests’. This would be done in accordance with the standard voting

55

n 11 above. n 11 above. 57 The ESS points out that, ‘in contrast to the massive visible threat in the Cold War, none of the new threats is purely military, nor can any be tackled by purely military means. Each requires a mixture of instruments’ (n 11 above, 7). 58 Namely, Art 42 of the Constitutional Treaty. 59 Decision of the Heads of State or Government of the 27 Member States of the EU, meeting within the European Council, on the Concerns of the Irish People on the Treaty of Lisbon. 56

460 Common Security and Defence Policy requirement, namely unanimity, pursuant to Article 42(4) TEU, and following a proposal by the High Representative or an initiative by a Member State. The delegation of this role is governed by Article 44 TEU, which reads as follows: 1. Within the framework of the decisions adopted in accordance with Article 43, the Council may entrust the implementation of a task to a group of Member States which are willing and have the necessary capability for such a task. Those Member States, in association with the High Representative of the Union for Foreign Affairs and Security Policy, shall agree among themselves on the management of the task. 2. Member States participating in the task shall keep the Council regularly informed of its progress on their own initiative or at the request of another Member State. Those States shall inform the Council immediately should the completion of the task entail major consequences or require amendment of the objective, scope and conditions determined for the task in the decisions referred to in paragraph 1. In such cases, the Council shall adopt the necessary decisions.

It follows from this that there are two substantive conditions which need to be met: the first is subjective and requires that the Member States involved are willing to implement the task in question; the second condition is objective, and requires that the Member States involved have the necessary capability for such a task. The wording of Article 44(1) TEU makes it clear that these conditions must be met cumulatively. The management of the task is for the relevant Member States to agree among themselves in association with the High Representative. It is not clear what the role of the High Representative is in this context. As the Member States act in order to protect the Union’s interest, they may not decline to consult with the High Representative. In any case, the expertise of the latter (assisted by the resources of the EEAS) on the management of CSDP tasks would make his advice invaluable for the Member States concerned. However, the High Representative may not dictate how a task should be managed under Article 44 TEU. The above provision suggests a degree of close interaction between Member States and EU institutional bodies in the context of actions undertaken by Member States on behalf of the Union. In fact, there is a reasonably tight framework, which provides for adequate supervision. In any case, the subject-matter of such actions distinguishes the legal and policy context set out in Article 44 TEU from other areas of EU law where Member States act as trustees of the Union’s interests.60 The applicable criteria for assessing the effectiveness of the procedures governing management and accountability for tasks delegated to Member States allow room for political flexibility and independent action by those actually involved.

7.2 Permanent Structured Cooperation The Treaty provides a mechanism for permanent structured cooperation. In accordance with Article 42(6) TEU, this is open to Member States ‘whose military capabilities fulfil higher criteria and which have made more binding commitments to one another in this area with a view to the most demanding missions’. However, rather than merely outlining 60

See Chapter 5 above.

Flexibility 461 the relevant criteria, the drafters of the Treaty define them in quite precise terms. In a Protocol attached to the Lisbon Treaty, the commitments on military capabilities are set out in detail. In Article 1, a Member State wishing to participate in a structured cooperation mechanism is required to (a) proceed more intensively to develop its defence capacities through the development of its national contributions and participation, where appropriate, in multinational forces, in the main European equipment programmes, and in the activity of the Agency in the field of defence capabilities development, research, acquisition and armaments (European Defence Agency), and (b) have the capacity to supply by 2010 at the latest, either at national level or as a component of multinational force groups, targeted combat units for the missions planned, structured at a tactical level as a battle group, with support elements including transport and logistics, capable of carrying out the tasks referred to in Article 28 B of the Treaty on European Union, within a period of 5 to 30 days, in particular in response to requests from the United Nations Organisation, and which can be sustained for an initial period of 30 days and be extended up to at least 120 days.

Article 2 of the Protocol requires the participating Member States to: (a) cooperate, as from the entry into force of the Treaty of Lisbon, with a view to achieving approved objectives concerning the level of investment expenditure on defence equipment, and regularly review these objectives, in the light of the security environment and of the Union’s international responsibilities; (b) bring their defence apparatus into line with each other as far as possible, particularly by harmonising the identification of their military needs, by pooling and, where appropriate, specialising their defence means and capabilities, and by encouraging cooperation in the fields of training and logistics; (c) take concrete measures to enhance the availability, interoperability, flexibility and deployability of their forces, in particular by identifying common objectives regarding the commitment of forces, including possibly reviewing their national decision-making procedures; (d) work together to ensure that they take the necessary measures to make good, including through multinational approaches, and without prejudice to undertakings in this regard within the North Atlantic Treaty Organisation, the shortfalls perceived in the framework of the ‘Capability Development Mechanism’; (e) take part, where appropriate, in the development of major joint or European equipment programmes in the framework of the European Defence Agency.

Member States fulfilling the criteria and having made the above commitments may notify their intention to engage in permanent structured cooperation to the Council and the High Representative. In accordance with Article 46(2) TEU, the decision to establish such cooperation rests with the Council, which is expected to take it within three months, following notification by a qualified majority and following consultation with the High Representative. In terms of its management, any decision and recommendation by the Council within the context of permanent structured cooperation is taken unanimously on the basis of the votes of the representatives of the participating Member States under Article 46(6) TEU, unless otherwise provided for in Article 46 TEU.

462 Common Security and Defence Policy There are certain principles which appear to govern the permanent structured cooperation mechanism. First, the principle of openness: provided that the criteria and requirements set out in Article 46 (1) TEU and Articles 1 and 2 of the Protocol are met, any Member State may participate in the mechanism, either ab  initio or at a later stage. In the latter case, following a notification from the relevant Member State to the Council and the High Representative, the former will adopt the decision confirming the participation of the Member State by qualified majority of the participating Member States and after consulting the latter.61 The second principle is that of continuity: every participating Member State must fulfil the criteria and make the necessary commitments throughout their participation. According to Article 46(4) TEU, if at any point they cease to do so, the Council may suspend the participation of the Member State concerned by a qualified majority of the members representing the participating Member States, with the exception of the Member State in question. In this respect, Article 3 of the Protocol on Permanent Structured Cooperation provides for the involvement of the EDA. In accordance with this provision, the role of EDA is broad: it contributes to the regular assessment of participating Member States’ contributions regarding capabilities in general, and in particular these made in accordance with the criteria elaborated upon on the basis of, among others, Article 2 of the Protocol. However, its impact is limited, at least as matter of law: while it is entrusted with reporting at least once a year, its assessment ‘may serve as a basis for Council recommendations and decisions adopted in accordance with Article 46 of the Treaty on European Union’.62 Third, the free will of the Member States is an essential precondition for their participation: any participating Member State may withdraw by notifying its intention to do so to the Council. The latter has no power to approve or to veto this. In accordance with Article 46 (5) TEU, it can only ‘take note that the Member State in question has ceased to participate’. Fourth, the definition of the capabilities criteria mentioned in Article 46(1) TEU and set out in Article 2 of the Protocol on Permanent Structured Cooperation is subject to a dynamic, incrementally evolving process. Both Articles 2 and 3 of the Protocol suggest that they need to be further elaborated and defined in greater detail. This is realistic given that requirements related to military capabilities may vary depending on factors as diverse as technical and operational needs, geopolitical environment, activities of international security organisations, financial conditions, and political commitment. Treaties are unsuited to defining with any degree of precision such requirements. On the other hand, the vagueness of the relevant provisions is such as to render their application entirely a matter to be determined on the basis of factors as inherently fluid as political will, and as constantly evolving as economic realities. The vagueness of the legal rules on permanent structured cooperation reflects the vagueness of the Lisbon Treaty provisions introducing institutional innovations. Viewed as a way of enabling the Union to shape its security and defence identity more efficiently, one might have hoped that the mechanism for permanent structured cooperation would have provided a clearer yardstick as to quite how the Member States might rely upon it. As they both stand, the relevant legal provisions appear to acknowledge that their 61 62

Art 46(3) subpara 2 TEU. Art 3 of Protocol on Permanent Structured Cooperation.

Financing 463 contribution to the Union’s foreign affairs is merely to set out the broad parameters within which the Member States and the Union’s institutional actors may determine how to proceed, at what pace, and in which direction. In this respect, there has been some discussion among Member States during the Belgian Presidency in the latter part of 2010, and a German–Swedish proposal for closer military cooperation.63 However, all these developments have been proposed by Member States, rather than the Union institutions, and are more geared towards the rationalisation of military cooperation.

8. FINANCING Financing

The rules governing the financing of CSDP activities are laid down in Article 41 TEU. This makes a distinction between two types of expenditure: administrative and operational. Both are, in principle, charged to the Union budget. However, there are two exceptions in relation to operational expenditure, namely in cases where it arises from operations having military or defence implications and in cases where the Council decides otherwise unanimously. In both these exceptional cases, expenditure is charged to the Member States in accordance with the gross national product scale, unless the Council decides unanimously otherwise.64 As far as operations with military or defence implications in particular are concerned, Member States which have abstained from voting in the Council and have made a formal declaration under Article 31(1) subparagraph 2 TEU are under no obligation to contribute to their financing. These rules reproduce the arrangements already in place under the Nice Treaty, and adjust them to the post-pillar EU structure.65 The financing arrangements are no mere detail in the CSDP framework. They are significant not only because to control the budget is to influence the substance and, ultimately, the effectiveness of the Union’s action in this field, but also because their application relies upon various institutional interactions within the EU legal order. In terms of the operations funded by the Union budget, the active involvement of the Parliament, which participates in decision-making, enables it to have a say over the conduct of the Union’s foreign affairs, a fact that the Council does not view with much sympathy. The interaction between the two institutions complicates the conduct of security and defence missions in the light of certain practical considerations: on the one hand, the distinction between operational and administrative expenses is not always clear, as is also the case regarding the specific nature of an operation and whether it has security and defence implications. An operation may often have both civil and military implications. For an effective operation, time is usually of the essence, and issues regarding confidentiality may also arise. As with national operations, Parliamentary involvement may inhibit swift and effective deployment of resources. For expenditure from the Union budget, the Union institutions drew up an

63 For a discussion of these developments, see S Biscop and J Coelmont, ‘CSDP and the “Ghent Framework”: The Indirect Approach to Permanent Structured Cooperation?’ (2011) 16 European Foreign Affairs Review 149. 64 Art 41(2) subpara 2 TEU. 65 On the criticism which the precursor to these rules attracted, see F Fink-Hooijer, ‘The Common Foreign and Security Policy of the European Union’ (1994) 5 European Journal of International Law 173, 184–85. See also J Monar, ‘The Finances of the Union’s Intergovernmental Pillars: Tortuous Experiments with the Community Budget’ (1997) 35 Journal of Common Market Studies 57, and id, ‘The Financial Dimension of the CFSP’ in M Holland (ed), Common Foreign and Security Policy—The Record and Reforms (London: Pinter, 1997) 34.

464 Common Security and Defence Policy Interinstitutional Agreement in 2006, which sets out certain procedures to avoid protracted disputes and to maintain instant channels of communication between the Parliament and the Council.66 As far as operations with military and defence implications are concerned, while the cost is borne by the Member States, the Council decided in 2003 that certain common costs should be administered by a separate financing mechanism. Such costs cover transport, infrastructure and medical services. This mechanism is called ATHENA and was originally set out in Council Decision 2004/197/CFSP.67 Its objective is to allow the Union flexibility to meet specific operational challenges and facilitate the rapid deployment of forces while ensuring that Member States would always be in control of its implementation. The ATHENA mechanism is managed under the authority of a Special Committee, in which all Member States except Denmark participate, by an administrator, the commander of the relevant operation and an accountant. These efforts notwithstanding, financing of security and defence operations has given rise to considerable controversy. An interesting innovation introduced at Lisbon is the provision for rapid disbursement of funds. Pointing out the need for the urgent financing of preparatory activities for CSDP tasks, Article 41(3) TEU introduces two methods. First, for activities to be funded by the EU, and having no military or defence implications, the Council adopts a decision, following consultation with the Parliament, establishing the specific procedures ‘for guaranteeing rapid access to appropriations in the Union budget’. Second, for preparatory activities for CSDP tasks with military and defence implications, a start-up fund is made up of contributions from Member States. The specific issues about the start-up fund (the procedures for its setting up, financing, administration and financial control) are set out in a Council decision adopted by a qualified majority on a proposal from the High Representative. The use of this fund for a specific CSDP task is entrusted to the High Representative following an authorisation by the Council to which the former must also report on this remit.68 This provision acknowledges the significance of practical considerations, such as urgency and the ability to provide funding for the preparation of tasks for the effective conduct of security and defence policy. While the main tenets underpinning financing CFSP operations are left unchanged, the provisions of Article 41(3) TEU illustrate a welcome shift to the practical issues which are likely to be critical on the ground. The importance of this aspect of security and defence policy is illustrated by the provision for qualified majority voting for the adoption of the relevant Council measures. Furthermore, by endowing the High Representative with the power to manage the start-up fund, subject to authorisation by the Council, it strengthens this post in a meaningful way. After all, rather than the rhetoric about the EU’s foreign affairs in which the EU leaders

66 Arts 42–3 of Interinstitutional Agreement between the European Parliament, the Council, and the Commission on budgetary discipline and sound financial management [2006] OJ C 139/1. This has been amended, more recently by Dec 2012/5/EU [2012] OJ L4/12. 67 Council Dec 2004/197/CFSP [2004] OJ L63/68, last codified in Council Dec 2011/871/CFSP [2011] OJ L343/35. The mechanism and its rationale are explained in the explanatory memorandum set out in Council Doc 13668/2003 of 16 October 2003 (http://register.consilium.europa.eu/pdf/en/03/st13/st13668.en03.pdf) (accessed 25 October 2012). See also D Scannell, ‘Financing ESDP Military Operations’ (2004) 9 European Foreign Affairs Review 529. 68 No such fund has been set up yet: see Council Doc 12643/12 of 13 July 2012 on the Summary record of the meeting of the European Parliament Subcommittee on Security and Defence.

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have indulged, it is the capacity to deal with the practical issues of security and defence which enhances the role of the Union’s institutions.

9. CSDP PRACTICE CSDP Practice

In the context of the CSDP, the Union has acted over the years in Europe, Asia and Africa. A detailed analysis is beyond the scope of this chapter. Instead, this section will provide an overview of the CFSP initiatives and will highlight their main characteristics.

9.1 Military Operations The EU has carried out the following military operations:69  in the Former Yugoslav Republic of Macedonia (EUFOR Concordia) in 2003;70  in the Democratic Republic of Congo (Operation Artemis) in 200371 and then in 2006 (EUFOR RD Congo);72  in Bosnia-Herzegovina (EUFOR ALTHEA) since 2004;73  in Darfur in Western Sudan (EU Support to AMIS Action) (2005–07);74  in Chad and Central African Republic (EUFOR Tchad/RCA) (2008–09)75 and, more recently, in Central African Republic (EUFOR RCA) since 2014;76  off the coast of Somalia (EUNAVFOR Somalia—Operation Atalanta) since 2008;77  in Somalia (EUTM Somalia) (since 2010);78  in Libya (EUFOR Libya) (decided in 2011 but never deployed);79  in Mali (EUTM Mali) since 2013.80 Whilst the range and territorial scope of the Union’s activities is broad, the overall size of the operations is rather small. Writing in 2008, Nick Witney, the first Chief Executive of the EDA, estimated that ‘the total number of troops deployed today  … constitutes less than one third of one percent of European military manpower’.81 Things have

69 See the analysis in Koutrakos, n 2 above, ch 6. See also S Blockmans (ed), The European Union and Crisis Management—Policy and Legal Aspects (The Hague, TMC Asser Press, 2008). 70 Joint Actions 2003/202/CFSP [2003] OJ L76/43 and 2003/563/CFSP [2003] OJ L190/20. 71 Joint Action 2003/423/CFSP [2003] OJ L143/50. 72 Joint Action 2006/319/CFSP [2003] OJ L116/98. 73 Joint Action 2004/570/CFSP [2004] OJ L252/10 74 Joint Actions 2005/557/CFSP [2005] OJ L188/46, 2007/245/CFSP [2007] OJ L106/65 and 2007/887/ CFSP]2007] OJ L346/28. 75 Joint Actions 2007/677/CFSP [2007] OJ L279/21, 2008/101/CFSP [2008] OJ L34/39 and 2009/795/CFSP [2009] OJ L283/61 76 Council Dec 2014/73/CFSP [2014] OJ L40/59. 77 Joint Action 2008/851/CFSP [2008] OJ L301/33, Council Dec 2010/766/CFSP [2010] OJ L327/49, Council Dec 2012/174/CFSP [2012] OJ L89/69, 2013/725/CFSP [2013] OJ L329/40. 78 Council Dec 2010/96/CFSP [2010] OJ L44/16 amended by Council Dec 2013/44/CFSP [2013] OJ L20/57. Council Dec 2010/197/CFSP [2010] OJ L87/33, Council Dec 2011/484/CFSP [2011] OJ L198/37. 79 Council Dec 2011/210/CFSP [2011] OJ L89/17, Council Dec 2011/764/CFSP [2011] OJ L314/35. 80 Council Dec 2013/34/CFSP [2013] OJ L14/19, Council Dec 2013/87/CFSP [2013] OJ L46/27, Council Dec 2013/729/CFSP [2013] OJ L332/18. 81 N Witney, Re-energising Europe’s Security and Defence Policy (London, European Council on Foreign Relations, 2008) 7.

466 Common Security and Defence Policy not changed. A characteristic all these military operations share is the unwillingness of the Member States to provide the troops necessary for deployment. It is by no means uncommon for the number of troops actually deployed to be lower than that originally envisaged by the EU bodies as necessary and, hence to undermine the conduct of the operation (in Operation Artemis, for instance, there was no reserve force even though the Political and Security Committee had deemed one necessary). In relation to the capabilities upon which the operations rely on the ground, there have been consistent shortfalls and problems. It is noteworthy, for instance, that, in its military operation in Chad, the EU relied on Russian helicopters and Ukrainian aircraft. Finally, the mandate of the operations and missions is narrow and the terrain in which they are deployed largely safe. In the operation in Congo (EUFOR RD Congo), for instance, a force of fewer than 1,000 troops was based in Kinshasa, most of the troops committed by the Member States being stationed in Gabon, a two-hour flight from Kinshasa with a reserve force stationed in Germany and France. In general, the hard security questions have already been addressed prior to EU deployment by either NATO or the United Nations. The EU operations have a limited and clearly defined task to perform which, whilst worthwhile and useful in itself, constitutes only a small part of a wide and complex problem. An operation which has attracted considerable interest and attention is EUNAVFOR Atalanta. This was the first maritime operation for the Union and was deployed at a time when piracy at sea was a major security problem, as the presence of forces from other countries (United States, China, India, Russia, Japan) illustrate. The mandate of the Union’s operation is, amongst others, to protect vessels chartered by the World Food Programme, including by providing armed units on board, to protect merchant vessels. In March 2012, the mandate was extended to cover Somali coastal territory and internal waters. A main feature of the operation is the establishment of the Maritime Security Centre-Horn of Africa which provides a secure web portal enabling all merchant vessels intending to sail in the zone of operation of EUNAVFOR to register in advance.82 The operation has been successful as it has contributed to a considerable reduction in the number of episodes of piracy in the area.83 It has functioned as an important component in the Union’s effort to place anti-piracy initiatives within a broad and comprehensive strategy which would cover security and development cooperation policies.84 It has also become the nucleus for a number for other operations (EUTM Somalia) and missions (EUCAP Nestor) in the Horn of Africa.85

82

Its website is www.mschoa.eu (accessed 2 August 2014). See the Report of UN Secretary-General on the situation with respect to piracy and armed robbery at sea off the coast of Somalia, S/2013/623 (21 October 2013) paras 3 and 38. According to The Economist, 12 July 2014, 15 incidents were reported off Somalia’s coast in 2013, down from 75 in 2012 and 237 in 2011. 84 See R Gosalbo Bono and S Bolaert, ‘The European Union’s Comprehensive Approach to Combating Piracy at Sea’ in P Koutrakos and A Skordas, The Law and Practice of Piracy at Sea—EU and International Perspectives (Oxford, Hart Publishing, 2014) 81. 85 See also Council Dec 2012/173/CFSP on the activation of the EU Operations Centre for the Common Security and Defence Policy missions and operation in the Horn of Africa [2012] OJ L89/66, amended by Council Dec 2013/725/CFSP [2013] OJ L329/39. 83

CSDP Practice

467

9.2 Civilian Missions Civilian missions have a common feature, ie the absence of military objectives and instruments. However, they are not defined in an exhaustive manner. In relation to the civilian dimension of crisis management, the European Security Strategy merely states that ‘civilian crisis management helps restore civil government’.86 This section will provide a short overview of the civilian missions which the EU has carried out so far.87 These include:  Police missions which are about monitoring, mentoring, training and advising law enforcement, including border police, in the host countries. So far, the EU has carried out such missions: – in Bosnia-Herzegovina (EUPM BiH) (2003–12);88 – in FYROM (EUPOL Proxima) (2003–05)89 and EUPAT FYROM) (2005–06);90 – in the Democratic Republic of Congo (EUPOL Kinshasa) (2005–07),91 and then EUPOL RD Congo since 2007;92 – in the Palestinian territories (EUPOL COPPS) since 2006;93 – in Afghanistan (EUPOL AFGHANISTAN) since 2007.94  Security sector reform missions: – In the Democratic Republic of Congo (EUSEC RD CONGO) since 2005;95 – in Guinea-Bissau (EU SSR GUINEA-BISSAU) (2008–10).96 These are small missions which focus on providing training and assistance to all forces responsible for security, namely defence, law enforcement, intelligence services and the judicial sector responsible for border management, customs and civil emergencies. The mission in Congo was about the management and administration of the DRC Armed Forces, and that in Guinea-Bissau focused on the implementation of the national security sector reform strategy.  Monitoring missions in areas of conflict where the Union is entrusted with compliance with peace arrangements:

86

European Security Strategy, n 11 above, 7. For a detailed analysis, see Koutrakos, n 2 above, ch 6. 88 Joint Action 2002/210/CFSP [2002] OJ L70/1, amended a number of times, finally by Council Dec 2010/755/CFSP [2010] OJ L320/10. 89 Joint Actions 2003/681/CFSP [2003] OJ L249/66, 2004/87/CFSP [2004] OJ L21/31 and 2004/789/CFSP [2004] OJ L348/40. 90 Council Joint Action 2005/826/CFSP [2005] OJ L307/61 91 Joint Action 2004/847/CFSP [2004] OJ L367/30, amended a number of times, finally by Joint Action 2006/868/CFSP [2006] OJ L335/50. 92 Joint Action 2007/405/CFSP [2007] OJ L151/46, amended a number of times, more recently by Council Dec 2013/467/CFSP [2013] OJ L252/27. 93 Joint Action 2005/797/CFSP [2005] OJ L300/65 amended a number of times, more recently by Council Dec 2014/447/CFSP [2014] OJ L 201/28. 94 Joint Action 2007/369/CFSP [2007] OJ L139/33, amended more recently by Council Dec 2012/391/CFSP [2012] OJ L187/47. 95 Council Joint Action 2005/355/CFSP [2005] OJ L112/20, amended a number of times, more recently by Council Dec 2013/468/CFSP L 252/29. 96 Council Joint Action 2008/112/CFSP [2008] OJ L40/11, amended a number of times, more recently by Council Dec 2010/298/CFSP [2010] OJ L127/16. 87

468 Common Security and Defence Policy – in Aceh, Indonesia (AMM) (2005–06);97 – in Georgia (EUMM CEORGIA) since 2008.98  Rule-of-law missions: – in Georgia (EUJUST THEMIS) (2004–05);99 – in Iraq (EUJUST LEX) (2005–13);100 – in Kosovo (EULEX KOSOVO) since 2008.101 These missions are about strengthening the rule of law in the host state through educating, training, monitoring and advising the host’s law enforcement authorities. The missions may also provide EU personnel who would substitute for the local judiciary or other officials of the domestic legal system. The objective of such missions is ‘to provide for complete and sustainable judiciary and penitentiary systems under local ownership and meeting rule of law and human rights standards in the mission area and to improve these systems’ capacities in accordance with the demands of a democratic society’.102 The mission in Kosovo is the largest civilian mission launched under the CSDP and its personnel carry out executive functions. For example, ULEX KOSOVO judges and prosecutors join Kosovo judges and prosecutors in mixed panels. They can also take over in criminal proceedings in order to avoid a miscarriage of justice due to the particular complexity or nature of the case.103  Other missions The EU has carried out border missions at the Rafah Crossing Point (EUBAM RAFAH) since 2005104 and in Libya (EUBAM Libya) since 2013.105 Furthermore, the EU has carried out other missions: – in South Sudan (EUNAVSEC—South Sudan) since 2012, strengthening security at Juba International Airport by training, mentoring and providing assistance to security services in the area of aviation;106 – in Niger (EUCAP Sahel Niger) since 2012, providing advice and mentoring in the area of counter-terrorism and organised crime;107 – in the Horn of Africa (EUCAP NESTOR) since 2012, providing assistance in

97 Council Joint Action 2005/643/CFSP [2005] OJ L234/13, amended a number of times, finally by Council Joint Action 2006/607/CFSP [2006] OJ L246/16. 98 Joint Action 2008/760/CFSP [2008] OJ L259/16 amended a number of times, more recently by Council Dec 2013/446/CFSP [2013] OJ L240/21. 99 Joint Action 2004/523/CFSP [2003] OJ L228/21, amended by Joint Action 2004/638/CFSP [2004] OJ L291/7. 100 Joint Action 2006/413/CFSP [2006] OJ L163/17, amended a number of times, finally by Dec 2012/372/ CFSP [2012] OJ L179/22. 101 Joint Action 2008/124/CFSP [2008] OJ 42/92 amended a number of times, more recently by Council Dec 2014/349/CFSP [2014] OJ L174/42. 102 14513/02 PESC 510 Comprehensive EU concept for missions in the field of Rule of Law in crisis management (Brussels, 19 November 2002) 10. 103 See the analysis in S Keukeleire, A Kalaja and A Collacu, ‘The European Union’s policy on Kosovo’ in Koutrakos (ed), n 46 above, 172. 104 Council Joint Action 2005/889/CFSP [2005] OJ L327/28, amended a number of times, more recently by Council Dec 2014/430/CFSP [2014] OJ L197/75. 105 Council Dec 2013/233/CFSP [2013] OJ L138/15. 106 Council Decision 2012/312/CFSP [2012] OJ L158/17. 107 Council Decision 2012/392/CFSP [2012] OJ L187/48 amended by Council Dec 2014/482/CFSP [2014] OJ L217/31.

Rules Challenged? 469 building up the maritime capacities of five countries in the Horn of Africa and the western Indian Ocean, namely Djibouti, Kenya, Somalia, Seychelles and Tanzania;108 – in Mali (EUCAP Sahel Mali) since 2014, delivering strategic advice and training for the internal security forces in Mali.109 Both military and civilian missions are carried out in a dense institutional and policy context where other international actors are present and, at times, in parallel with other EU initiatives. In practice, considerable time and energy is spent in coordination and turf wars between the personnel deployed in CSDP operations and missions and other EU actors both on the ground and in Brussels. This is partly due to the interdependence between security and defence policy and other external policies, in particular development policy. These interactions may give rise to disputes not only regarding the legal basis pursuant to which the relevant legal acts are adopted but also policy issues on the ground. The analysis in Chapter 14 will examine the interactions between the CSDP and other strands of the EU’s external action.

10. RULES CHALLENGED? Rules Challenged?

The CSDP record so far appears somewhat lacking in ambition. This, in itself, may not be necessarily problematic. After all, the problems that the EU seeks to address have been complex, long-standing and serious and no international actor on its own has managed to solve them. However, the lack of ambition is striking in the light of the very considerable ambition which oozes from every statement made by EU officials in the area and which has shaped the drafting of the relevant primary rules. It is also striking in the light of the density of the evolving legal framework which governs the CSDP. The CSDP record ought to be assessed against the divergent views of Member States about the reach of the CSDP. This becomes apparent not only by the lack of progress regarding the practical underpinnings of defence, but also by what Member States do beyond the Union framework. In the context of the CFSP, the war against Iraq was examined as a case which challenged the Union’s foreign policy framework. In the context of the CSDP, an episode worth examining is the Union’s approach to Libya. In March 2011, a coalition of various states initiated a military operation against Libya under the authorisation of UN Security Council Resolution (2011) 1973. This operation consisted of the enforcement of a no-fly zone and a naval blockade and led, controversially but inevitably, to strikes against forces remaining loyal to Gaddafi. The operation was not carried out by the EU, but a number of individual states, most of which were European, led by the United Kingdom and France, whilst the United States was for political reasons content to play second fiddle. It is worth noting that Germany abstained at the UN Security Council vote on Resolution 1973, in the company of China and Russia. It is also interesting that, in relation to this operation, British Prime Minister David Cameron, US President Barack Obama and French President Nicolas Sarkozy wrote an article in The Times110 in which there was no reference to the Union at all. 108 Council Dec 2012/389/CFSP [2012] OJ L187/40 amended by Council Dec 2014/485/CFSP [2014] OJ L217/39. 109 Council Dec 2014/219/CFSP [2014] OJ L113/21. 110 The Times, 15 April 2011, 25.

470 Common Security and Defence Policy This episode is interesting for various reasons. First, it suggests the differing political assessment amongst Member States of what may be done by the EU, the CSDP legal framework notwithstanding. Secondly, it highlighted the considerable capabilities shortfalls even of the most serious defence actors amongst the Member States. The United Kingdom, for instance, contributed about a dozen fighter aircraft, a couple of frigates and a submarine, and yet its military chiefs suggested that no more was possible and that they would have had serious problems had the operation lasted into the autumn. France faced similar problems.111 And, even though the operation was not US-led, the United States provided 70% of all air support sorties. Thirdly, these shortfalls did not go unnoticed. In a speech he gave in June 2011, the then outgoing US Defense Secretary Gates highlighted the perilous state of European military capability with brutal honesty.112 Fourthly, the Union’s contribution was confined to planning an operation the scope of which was envisaged to be narrow (support for humanitarian assistance) and its duration quite short, approximately four months.113 This operation was never launched. All in all, this episode suggests clearly that the relevance of the rules and procedures set out in Title V TEU depend entirely on the political, economic and practical factors on the basis of which Member States shape their security and defence policy.

11. CSDP AGREEMENTS CSDP Agreements

The Union has concluded over 80 international agreements with third countries in the context of its security and defence policy.114 The procedure for the negotiation and conclusion of such agreements is analysed in Chapter 4. The practice of the EU covers a range of areas.

11.1 Participation of Third States in Specific CSDP Missions Most of the international agreements concluded by the Union are about the participation of third countries in specific CSDP operations. At the time of writing, the agreements which have become available were with the following countries: CSDP operation

Third country

EUNAVFOR Atalanta EULEX Kosovo

Montenegro,115 Croatia116 Croatia,117 USA,118 Switzerland119

111

The Financial Times, 25 March 2011, 13. Speech delivered on 10 June: http://blogs.wsj.com/washwire/2011/06/10/transcript-of-defense-secretarygatess-speech-on-natos-future/ (accessed 26 January 2012). 113 Council Decision 2011/210/CFSP of 1 April 2011 on a European Union military operation in support of humanitarian assistance operations in response to the crisis situation in Libya (EUFOR Libya) [2011] OJ L89/17, repealed by Council Dec 2011/764/CFSP of 28 November 2011 [2011] OJ L314/35. 114 See the analysis in Koutrakos, n 2 above, ch 7 on which the following section draws. 115 [2010] OJ L88/3, concluded by Council Dec 2010/199/CFSP [2010] OJ L88/1. 116 [2009] OJ L202/84, concluded by Council Dec 2009/597/CFSP [2009] OJ L202/81 (the latter also providing for the provisional application of the Agreement). 117 [2008] OJ L317/20, concluded by Council Dec 2008/887/CFSP [2008] OJ L317/19. 118 [2008] OJ L282/33, concluded by Council Dec 2008/814/CFSP [2008] OJ L282/32. 119 [2008] OJ L217/24, concluded by Council Dec 2008/666/CFSP [2008] OJ L217/23. 112

CSDP Agreements EUFOR Chad/RCA EUPOL Afghanistan EUFOR RD Congo EUFOR ALTHEA AMM Aceh EUPOL Proxima CONCORDIA EUPM Bosnia-Herzegovina

EUBAM Libya EUTM Mali 120

471

Russia,120 Croatia,121 Albania122 Croatia,123 New Zealand124 Switzerland125 FYROM,126 Chile,127 Argentine,128 New Zealand,129 Albania,130 Morocco,131 Switzerland132 Switzerland,133 Brunei134 Singapore,135 Malaysia,136 Thailand,137 and the Philippines138 Switzerland,139 Ukraine,140 Norway,141 Turkey142 Slovakia,143 Romania,144 Latvia,145 Poland,146 Lithuania,147 Turkey,148 Estonia,149 the Czech Republic150 Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Iceland, Latvia, Lithuania, Norway, Romania, Slovakia, Slovenia, Switzerland, Turkey, and Ukraine,151 Russia,152 Poland153 Switzerland154 Switzerland155

[2008] OJ L307/16, concluded by Council Dec 2008/868/CFSP [2008] OJ L307/15. [2008] OJ L268/33, concluded by Council Dec 2008/783/CFSP [2008] OJ L268/32. 122 [2008] OJ L217/19, concluded by Council Dec 2008/665/CFSP [2008] OJ L217/18. 123 [2007] OJ L270/28, concluded by Council Dec 2007/665/CFSP [2007] OJ L270/72. 124 [2007] OJ L274/18, concluded by Council Dec 2007/670/CFSP [2007] OJ L274/17. 125 [2006] OJ L276/111, concluded by Council Dec 2006/676/CFSP [2006] OJ L276/10 (exchange of letters). 126 [2006] OJ L203/12, concluded by Council Dec 2006/477/CFSP [2006] OJ L203/11. 127 [2005] OJ L202/40, concluded by Council Dec 2005/593/CFSP [2005] OJ L202/49. 128 [2005] OJ L156/22, concluded by Council Dec 2005/447/CFSP [2005] OJ L156/21. 129 [2005] OJ L127/28, concluded by Council Dec 2005/386/CFSP [2005] OJ L127/27. 130 [2005] OJ L65/35, concluded by Council Dec 2005/199/CFSP [2005] OJ L65/34. 131 [2005] OJ L34/47, concluded by Council Dec 2005/109/CFSP [2005] OJ L34/46. 132 [2004] OJ L2042, concluded by Council Dec 2005/44/CFSP [2005] OJ L20/41. 133 [2005] OJ L349/31, concluded by Council Dec 2005/966/CFSP [2005] OJ L349/30. 134 [2007] OJ L183/52, concluded by Council Dec 2005/495/CFSP [2007] OJ L273/8. 135 [2007[OJ L183/58, concluded by Council Dec 2005/495/CFSP. 136 [2007] OJ L183/64, concluded by Council Dec 2005/495/CFSP. 137 [2007] OJ L183/70, concluded by Council Dec 2005/495/CFSP. 138 [2007] OJ L183/76, concluded by Council Dec 2005/495/CFSP. 139 [2004] OJ L354/78, concluded by Council Dec 2004/809/CFSP [2004] OJ L354/77. 140 [2004] OJ L354/82, concluded by Council Dec 2004/810/CFSP [2004] OJ L354/81. 141 [2004] OJ L354/86, concluded by Council Dec 2004/811/CFSP [2004] OJ L354/85. 142 [2004] OJ L354/90, concluded by Council Dec 2004/812/CFSP [2004] OJ L354/89. 143 [2004] OJ L12/54, concluded by Council Dec 2004/61/CFSP [2004] OJ L12/53. 144 [2004] OJ L120/62, concluded by Council Dec 2004/392/CFSP [2004] OJ L120/61. 145 [2003] OJ L313/79, concluded by Council Dec 2003/832/CFSP [2003] OJ L313/78. 146 [2003] OJ L285/44, concluded by Council Dec 2003/781/CFSP [2003] OJ L285/43. 147 [2003] OJ L234/19, concluded by Council Dec 2003/661/CFSP [2003] OJ L234/18. 148 [2003] OJ L234/23, concluded by Council Dec 2003/662/CFSP [2003] OJ L234/22. 149 [2003] OJ L216/61, concluded by Council Dec 2003/624/CFSP [2003] OJ L216/60. 150 [2003] OJ L229/39, concluded by Council Dec 2003/650/CFSP [2003] OJ L229/38. 151 [2003] OJ L239/2 (Cyprus), [2003] OJ L239/5 (Iceland), [2003] OJ L239/8 (Czech Republic), [2003] OJ L239/11 (Lithuania), [2003] OJ L239/14 (Switzerland), [2003] OJ L239/17 (Latvia), [2003] OJ L239/20 (Hungary), [2003] OJ L239/23 (Romania), [2003] OJ L239/26 (Estonia), [2003] OJ L239/29 (Slovenia), [2003] OJ L239/32 (Norway), [2003] OJ L239/35 (Turkey), [2003] OJ L239/38 (Ukraine), [2003] OJ L239/41 (Bulgaria), [2003] OJ L239/44 (Slovakia), all concluded by Council Dec 2003/663/CFSP [2003] OJ L239/1. 152 [2003] OJ L197/38, concluded by Council Dec 2003/582/CFSP [2003] OJ L197/37. 153 [2003] OJ L64/38, concluded by Council Dec 2003/157/CFSP [2003] OJL 64/37. 154 [2014] OJ L205/3, concluded by Council Dec 2014/451/CFSP [2014] OJ L205/2. 155 [2014] OJ L151/18, concluded by Council Dec 2014/293/CFSP [2014] OJ L151/16. 121

472 Common Security and Defence Policy This list is not exhaustive, as a small number of agreements have not been published in the Official Journal.156 Most of these are formal agreements which are attached to the Council Decision which concluded them. A small number of them are in the form of an Exchange of Letters.157 All these agreements refer to the same issues which arise in the context of the participation of third countries in CSDP operations. However, the degree of detail in their drafting may vary considerably, and neither their structure, nor their content is identical. The participation of third countries in CSDP missions is envisaged in the measure pursuant to which each mission is carried out (ie the Joint Action, prior to the entry into force of the Lisbon Treaty, and, since 1 December 2009, the Council Decision). The agreements set out the main parameters of the participation of the third country in the CSDP operation, the status of the forces and personnel of that country, the chain of command, the treatment of classified information, the financial aspects of participation, and the possibility of terminating that participation. Some agreements set out the specific contribution in forces and/or personnel of the participating country—for instance, the one with Cyprus about the latter’s participation in the EUPM in Bosnia-Herzegovina refers to four seconded officers.158 Most agreements, however, either include a general reference to a contingent to be determined at the Force General Conference, or are silent on the matter. A principle that underlies all participation agreements is respect for the decisionmaking autonomy of the Union. This is stressed in the agreements which also point out that the personnel of the participating country would act in conformity with the documents setting out the parameters of the mission, namely the Joint Action setting up the mission, along with any amendments to it, the Operation Plan, and any implementing measures. The third country is responsible for exercising jurisdiction over its forces and personnel. Some agreements include provisions about disciplinary control over personnel for which the Head of Mission is responsible, but in relation to which action is taken by the national authority concerned. Others are silent on this.159 In relation to responsibility, this falls on the participating country as far as claims which concern any of its forces or personnel. It is the participating country which is responsible for bringing any action, whether civil, criminal, or disciplinary, against any of its forces and personnel, in accordance with its own laws and regulations. All in all, while the main policy issues raised by the participation agreements are predictably similar, the degree of detail in which they are covered varies. In some cases, it varies quite considerably, suggesting that the drafting of such agreements is guided by a degree of differentiation which is applied on the basis of the weight of the participating country and its role in the operation. Furthermore, negotiators for larger countries have experience of negotiating status of forces or other similar agreements and use their own 156 See Art 17(1)(h) of Council Dec 2004/338/EC adopting the Council’s Rules of Procedure [2004] OJ L106/22 which refers to the exception from the principle of publication as laid down in Arts 4 and 9 of Council Reg 1049/2001 regarding public access to documents [2001] OJ L145/43. 157 For instance, the Agreement about the participation of Switzerland in EUFOR RD Congo (n 125 above). 158 Council Dec 2003/663/CFSP [2003] OJ L239/1, Art 2(1). 159 See, for instance, the Agreement about the participation of Slovakia in the EU-led Forces in FYROM (n 143 above).

CSDP Agreements

473

precedents. It is interesting, for instance, that the agreement about the participation of Russia in EUFOR Chad is quite detailed in certain aspects, and enhances the role of the participating country in the mission. In relation to the chain of command, it reserves a special role for the Russian contingent. It provides for ‘full coordination’ between the Operation Commander and the Russian Senior Military Representatives in cases of air task orders or any other decisions with implication for the Russian military contingent.160 Its heavy emphasis on parity, on maintaining the autonomy of the Russian participation is also reflected in its provision about the rules of engagement and the exchange of classified information.

11.2 Status of Force and Status of Mission Agreements The legal rights and duties of the forces and personnel which the European Union sends to a third country in the context of a CSDP operation are set out in an international agreement concluded between the Union and that country. These are status of force agreements (SOFAs) which apply to military missions or status of mission agreements (SOMAs) which apply to civilian missions. Over the years, many such agreements have been concluded by the EU.161 EUNAVFOR Atalanta EUMM Georgia EU SSR Guinea-Bissau AMM Aceh EUFOR Chad/RCA EUFOR RD Congo EUPOL Kinshasa EUPOL Afghanistan EUJUST THEMIS

160

Seychelles,162 Djibouti,163 Somalia164 Georgia165 Guinea Bissau166 Indonesia167 Chad,168 Central African Republic,169 Cameroon170 Gabon171 Democratic Republic of Congo172 Afghanistan173 Georgia174

Art 4(2) (n 35). In addition to SOFAs with third countries, there is an internal EU SOFA, concluded by the Representatives of the Governments of the Member States meeting within the Council in 2003 ([2003] OJ C321/6). This covers military and civilian staff seconded to the EU institutions, the headquarters and forces which may be available to the Union in the context of the preparation and execution of the CSDP tasks, and the military and civilian staff of the Member States put at the disposal of the European Union to act in the CSDP context. 162 [2009] OJ L323/14, concluded by Council Dec 2009/916/CFSP [2009] OJ L323/12. 163 [2009] OJ L33/43, concluded by Council Dec 2009/88/CFSP [2009] 33/41. 164 [2009] OJ L10/29, concluded by Council Dec 2009/29/CFSP [2009] OJ 10/27. 165 [2008] OJ L310/31, concluded by Council Dec 2008/877/CFSP [2008] OJ L310/30. 166 [2008] OJ L219/66, concluded by Council Dec 2008/669/CFSP [2008] OJ L219/65. 167 [2005] OJ L288/60, concluded by Council Dec 2005/765/CFSP [2005] OJ L288/59 and extended three times ([2006] OJ L71/55 by Council Dec 2006/201/CFSP [2006] OJ L71/53; [2006] OJ L176/108 by Council Dec 2006/448/CFSP [2006] OJ L176/107, and [2006] OJ L273/9 by Council Dec 2006/666/CFSP [2006] OJ L273/8). 168 [2008] OJ L83/40, concluded by Council Dec 2008/266/CFSP [2008] OJ L83/39. 169 [2008] OJ L136/46, concluded by Council Dec 2008/389/CFSP [2008] OJ L136/45. 170 [2008] OJ L57/31, concluded by Council Dec 2008/178/CFSP [2008] OJ L57/30. 171 [2006] OJ L187/43, concluded by Council Dec 2006/475/CFSP [2006] OJ L187/42. 172 [2005] OJ L256/58, concluded by Council Dec 2005/680/CFSP [2005] OJ L256/57. 173 [2010] OJ L294/2, concluded by Council Dec 2010/686/CFSP [2010] OJ L294/1. 174 [2004] OJ L389/42, concluded by Council Dec 2004/924/CFSP [2004] OJ L389/41. 161

474 Common Security and Defence Policy EUPOL PROXIMA CONCORDI EUPM in BiH EUTM Somalia EUFOR RCA EUTM Mali EUCAP Niger

FYROM175 FYROM176 Bosnia-Herzegovina177 Uganda178 Central African Republic179 Mali180 Niger181

As in the other agreements, one may detect progressive development in the structure and substance from the first SOFA, with Bosnia-Herzegovina on the activities of the EU Police Mission in that country, to the later ones. The SOFAs set out the general duties imposed on the EU: to respect the laws and regulations of the host state, to refrain from any action or activity incompatible with the impartial and international nature of the operation, and to notify the host state of the details of the mission’s headquarters and personnel. Under many of the agreements, the CSDP mission enjoys the status of a diplomatic mission under the 1961 Vienna Convention on Diplomatic Relations (hereinafter the Vienna Convention). This entails the principle of inviolability of mission property, funds and other assets, as well as its premises, archives and documents.182 Similarly, the CSDP personnel are given all privileges and immunities granted to diplomatic agents under the Vienna Convention. The jurisdiction of the state of nationality takes precedence both during and after the end of the mission in relation to official acts performed in its exercise. The conferment of privileges and immunities equivalent to those enjoyed by diplomatic personnel upon all members of CSDP missions has been viewed as ‘unusual’183 and has raised questions as to its appropriateness even within the Union.184 This practice must be viewed in the light of the wider context of the Union’s security and defence missions. As the Union made a leap from the economic and social activities which it had been pursuing since the 1950s, relying upon the resources of its Member States whose commitment to and ideas about its CSDP varied widely, lacking a clear vision of the kind of security player it envisages itself to be, and always careful to organise its actions pursuant to legal and practical compromises which would reflect its highly idiosyncratic constitutional status, it is hardly surprising that it has sought as enhanced 175

[2004] OJ L16/66, concluded by Council Dec 2004/75/CFSP [2004] OJ L16/65. [2003] OJ L82/46, concluded by Council Dec 2003/222/CFSP [2003] OJ L82/45. 177 [2002] OJ L293/2, concluded by Council Dec 2002/845/CFSP [2002] OJ L293/1. 178 [2010] OJ 221/2, concluded by Council Dec 2010/464/CFSP [2010] OJ L221/1. 179 [2014] OJ L98/3, concluded by Council Dec 2014/181/CFSP [2014] OJ L98/1. 180 [2013] OJ L106/2, concluded by Council Dec 2013/178/CFSP [2013] OJ L106/1. 181 [2013] OJ L242/2, concluded by Council Dec 2013/450/CFSP [2013] OJ L242/1. 182 Notice the emphatic wording of Art 5(3) of the EU–Afghanistan SOMA: ‘EUPOL AFGHANISTAN, its property and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of legal process.’ 183 See F Naert, International Law Aspects of the EU’s and Security and Defence Policy, with a Particular Focus on the Law of Armed Conflict and Human Rights (Antwerp, Intersentia, 2010) 250. See also R Wessel, ‘The EU as a Party to International Agreements: Shared Competences, Mixed Responsibilities’ in A Dashwood and M Maresceau (eds), Law and Practice of EU External Relations (Cambridge, Cambridge University Press, 2008) 152, 165. 184 See A Sari, ‘Status of Forces and Status of Mission Agreements under the ESDP: The EU’s Evolving Practice’ (2008) 19 European Journal of International Law 67, 78–79. 176

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a protection as possible for its mission personnel. The planning and execution of CSDP missions must meet so many legal, political and practical challenges internally, ie within the Union’s structure, that the natural reflex of its institutions is to minimise the legal problems which may arise externally. Furthermore, the Union intervenes in states where the legal structures are either embryonic or in such decay that scepticism about submitting EU personnel to local jurisdictions is understandable.185 Finally, at the beginning, the negotiators from the third states had no considerable experience in negotiating such agreements and were reluctant to challenge the Union’s demands. On the other hand, it is noteworthy that a number of recent agreements provide for the possibility of a waiver by the sending state, even though this would be possible without express provision for it.186 One of the interesting aspects of the agreements is that they provide no indication as to whether responsibility is to be borne by the Union or the Member States.187 This is entirely consistent with the fact that it is the Union which is one of the contracting parties. Their provisions of the agreements on dispute settlement refer to the Union exclusively. The absence of any reference to the division of responsibility between the Union and its Member States also follows from one of the main tenets of the system of EU external relations, namely the internal division of competence between the Union and the Member States. It is recalled that in the late 1970s, the Court of Justice held that: [I]t is not necessary to set out and determine, as regards other parties to the Convention, the division of powers  … 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.188

This extract is from a ruling rendered in the context of the European Atomic Energy Community,189 and it is about competence, rather than responsibility. However, its logic, namely the internal character of the arrangements implied by the Union’s idiosyncratic constitutional configuration, is the same. This is not to say that the Union’s interlocutors have been untroubled by the ambiguity, which often characterises the determination of responsibility and its allocation within the complex system of EU external relations.190

11.3 Agreements on Security Procedures for the Exchange of Classified Information The conduct of the security and defence policy requires the production, handling, transfer and storage of sensitive information. The Council has adopted internal security

185

See Naert, n 183 above, 250. See eg Art 6(3) of the EU–Georgia Agreement (EUMM) (n 165 above). 187 See Wessel, n 183 above, 164 et seq. 188 Ruling 1/78 [1978] ECR 2151, para 35. 189 The ruling addressed the question as to whether the conclusion of the Draft Convention of the International Atomic Energy on the Physical Protection of Nuclear Materials, Facilities and Transports was compatible with the EAEC. 190 See the analysis in Chapter 5. 186

476 Common Security and Defence Policy regulations aiming to ensure a degree of confidentiality.191 This measure refers specifically to the CSDP in the context of which the confidentiality of classified information is particularly relevant. The effective conduct of CSDP missions requires the provision of information to third states which participate in specific missions, as well as the handling of information supplied by them. In order to facilitate this exchange by ensuring the confidentiality of classified information, the EU has negotiated and concluded specific agreements with fifteen third states, and three international organisations. These are, in chronological order: NATO,192 Norway,193 FYROM,194 Ukraine,195 Iceland,196 United States,197 Switzerland,198 European Space Agency,199 Russia,200 Israel,201 Australia,202 Liechtenstein,203 Montenegro,204 Serbia,205 and the Organisation for Joint Armaments Cooperation206 (as well as Bulgaria,207 Romania,208 and Croatia prior to their accession to the EU).209 These agreements were concluded under ex Articles 24 TEU and 38 TEU,210 except for the one with NATO which was concluded solely under Article 24 TEU. They have common structure and content. Their objectives are set out in the vaguest and most cursory terms: there is no reference to the CSDP, nor to the possibility of the participation of the third states in question in its missions. Instead, the conclusion of the agreements was deemed necessary in the context of ‘the need to develop cooperation between the Parties on matters of common interest, especially in the sphere of security’.211 The agreement with NATO is more detailed in its objectives. This is hardly surprising in the light of the defence nature of the organisation and the mutual defence commitment of its members, as well as a host of European Council Conclusions which refer to the need for increased cooperation between the two organisations.212 The preamble to the EU–NATO

191 Council Dec 2011/292/EU on the security rules for protecting EU classified information [2011] OJ L141/17. This repeals Council Decision 2001/264/EC adopting the Council’s security regulations [2001] OJ L101/1. 192 [2003] OJ L80/36, concluded by Council Dec 2003/211/CFSP [2003] OJ L80/35. 193 [2004] OJ L362/29, concluded by Council Dec 2004/843/CFSP [2004] OJ L362/28. 194 [2005] OJ L94/39, concluded by Council Dec 2005/296/CFSP/JHA [2005] OJ L94/38, 195 [2005] OJ L172/84, concluded by Council Dec 2005/481/CFSP [2005] OJ L172/83. 196 [2006] OJ L184/35, concluded by Council Dec 2006/467/CFSP [2006] OJ L184/34. 197 [2007] OJ L115/30, concluded by Council Dec 2007/274/JHA [2007] OJ L115/29. 198 [2008] OJ L181/58, concluded by Council Dec 2008/568/CFSP [2008] OJ L181/57. 199 [2008] OJ L219/59, concluded by Council Dec 2008/667/JHA [2008] OJ L219/58. 200 [2009] OJ L155/57, concluded by Council Dec 2010/348/EC [2010] OJ L155/56. 201 [2009] OJ L192/63, concluded by Council Dec 2009/558/CFSP [2009] OJ L192/63. 202 [2010] OJ L26/31, concluded by Council Dec 2010/53/CFSP [2010] OJ L26/30. 203 [2010] OJ L187/2, concluded by Council Dec 2010/404/CFSP [2010] OJ L187/1. 204 [2010] OJ L260/2, concluded by Council Dec 2010/587/CFSP [2010] OJ L260/1. 205 [2011] OJ L216/2, concluded by Council Dec 2011/514/CFSP [2011] OJ L216/1. 206 [2012] OJ L229/2, concluded by Council Dec 2012/486/CFSP [2012] OJ L229/1. 207 [2005] OJ L118/53, concluded by Council Dec 2005/365/CFSP [2005] OJ L118/52. 208 [2005] OJ L118/48, concluded by Council Dec 2005/364/CFSP [2005] OJ L118/47. 209 [2006] OJ L116/74, concluded by Council Dec 2006/317/CFSP [2006] OJ L116/73. 210 However, the Council Decisions concluding them refer only to the CFSP, except for the one concluding the EU–FYROM Agreement which refers both to the CFSP and JHA (n 194 above), and the one concluding the EU–USA Agreement which refers only to JHA (n 197 above). Rather bizarrely, the measure concluding the agreement with Russia refers to the EC (n 200 above). 211 This is a phrase which appears in the preamble to all Agreements examined in this section. 212 The preamble to the EU–NATO Agreement refers to Feira, Nice, Gothenburg and Laeken European Council conclusions.

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Agreement states that the EU objectives in the area of military capabilities and those regarding NATO’s defence capabilities are mutually reinforcing.213 Whilst varying in their content, the Agreements impose four main obligations on the parties:  to protect and safeguard classified information;  to ensure that classified information provided or exchanged keeps the security classification given to it by the providing party in accordance with the security regulations of the receiving party;  not to use such classified information for purposes other than those established by the originator and those for which the information is provided or exchanged;  not to disclose such information to third parties (including any other EU institution or entity other than the three mentioned above) without the prior consent of the originator. Responsibility for overseeing the implementation of the agreements falls, for the EU side, on the Secretaries-General of the Council and the Commission

11.4 Framework Participation Agreements The European Union has concluded framework agreements with fifteen countries (in chronological order: Ukraine,214 Canada,215 Bulgaria,216 Iceland, Norway and Romania,217 Turkey,218 Montenegro,219 United States of America,220 Serbia,221 New Zealand,222 Albania,223 Georgia,224 Chile225 and South Korea226). These agreements aim to govern the participation of these countries in any civilian or military operations in which the Union invites them to participate. The conclusion of such agreements was deemed necessary in order to tackle the practical difficulties which the negotiation of separate agreements relating to specific operations raise, including delays which may have an impact on the effectiveness of the mission.227

213 The issue of defence capabilities and the various initiatives for their development is examined in Chapter 9. 214 [2005] OJ L182/29, concluded by Council Dec 2005/495/CFSP [2005] OJ L182/28. 215 [2005] OJ L315/21, concluded by Council Dec 2005/851/CFSP [2005] OJ L315/20. 216 [2005] OJ L46/50, concluded by Council Dec 2005/134/CFSP [2005] OJ L46/49. 217 [2005] OJ L67/2 (Iceland), [2005] OJ L67/8 (Norway), [2005] OJ L67/14 (Romania), all concluded by Council Dec 2005/191/CFSP [2005] OJ L67/1 218 [2006] OJ L189/17, concluded by Council Dec 2006/482/CFSP [2006] OJ L89/16. 219 [2011] OJ L57/2, concluded by Council Dec 2011/133/CFSP [2011] OJ L57/1. 220 [2011] OJ L143/2, concluded by Council Dec 2011/318/CFSP [2011] OJ L143/1. 221 [2011] OJ L163/2, concluded by Council Dec 2011/361/CFSP [2011] OJ L163/1. 222 [2012] OJ L160/2, concluded by Council Dec 2012/315/CFSP [2012] OJ L160/1. 223 [2012] OJ L169/2, concluded by Council Dec 2012/344/CFSP [2012] OJ L169/1. 224 [2014] OJ L14/2, concluded by Council Dec 2014/15/CFSP [2014] OJ L14/1. 225 [2014] OJ L40/2, concluded by Council Dec 2014/71/CFSP [2014] OJ L40/1. 226 [2014] OJ L166/3, concluded by Council Dec 2014/326/CFSP [2014] OJ L166/1. 227 See Council Doc 6040/04 (6 February 2004) which points out that ‘the negotiations with all third states each time separately are very time consuming and difficult to finalise in time, in particular during operations of short duration’. See Sari, n 184 above, 60–61.

478 Common Security and Defence Policy 11.5 Transfer Agreements Finally, in the context of Operation ATALANTA, the Union has concluded transfer agreements with Kenya,228 Seychelles,229 Mauritius230 and Tanzania,231 while the agreements on the participation of Croatia and Montenegro have an annex attached to them laying down a set of provisions about transfer of persons.232 It is also negotiating an agreement with Tanzania. These agreements are about the conditions of transfer of suspected pirates and associated seized property from the EU force to the partner country, as well as the conditions of detention of suspected pirates after transfer. Their conclusion is deemed necessary on political grounds: the Member States are not keen to bear responsibility for suspected pirates during their trial and also later on, as they suspect that it would be highly unlikely that they would be able to send them back successfully. The problem of dealing with suspected pirates is so acute for the international community, that the proposal of the establishment of a special international tribunal has been mooted, but has not received enthusiastic response.233 The question has arisen as to whether the transfer agreements outlined in this chapter should have been concluded as exclusively CFSP agreements. This is examined in Chapter 14. The central issue in the transfer agreement is the treatment of the suspects by the third country. All agreements contain detailed provisions about the prohibition of torture, and cruel and inhumane and degrading treatment or punishment, the prohibition of arbitrary detention, and the requirement to conduct a fair trial. In the most recent agreement, with Mauritius, these are accompanied by references to international human rights law, including the 1966 International Covenant on Civil and Political Rights, and the 1984 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. The concern about compliance with fundamental human rights is also illustrated by other provisions, such as the right of national and international humanitarian agencies to be allowed to visit, at their request, persons transferred under the Agreement.234 There are also detailed provisions about the assistance to be given by the EUNAVFOR authorities to the country to which suspected pirates are transferred. This includes various practical aspects of both the pre-trial and trial processes, such as processing of evidence, production of witness statements, and provision of interpreters. In the case of Seychelles, it also includes the provision of technical and financial support for various

228 [2009] OJ L79/51, concluded by Council Dec 2009/293/CFSP [2009] OJ L79/47. Kenya has terminated the Agreement, but this does not seem to have made much different in practice, as it is still cooperating with the EU on the matter. 229 [2009] OJ L323/14, concluded by Council Dec 2009/916/CFSP [2009] OJ L323/12. 230 [2011] OJ L254/3, concluded by Council Dec 2011/640/CFSP [2011] OJ L254/1. 231 [2014] OJ L108/3, concluded by Council Dec 2014/198/CFSP [2014] OJ LOJ L108/1. 232 For a detailed analysis, see D Thym, ‘Piracy and Transfer Agreements concluded by the EU’ in Koutrakos and Skordas (eds), n 84 above, 167. See also R Geiss and A Petrig, Piracy and Armed Robbery at Sea: The Legal Framework for Counter-Piracy Operations in Somalia and the Gulf of Aden (Oxford, Oxford University Press, 2011) 199–206. 233 On the problems of prosecuting pirates, see E Kontorovich, ‘A Guantanamo on the Sea: The Difficulty of Prosecuting Pirates and Terrorists’ (2010) 98 California Law Review 243. 234 Art 6(6) of the Agreement with Seychelles.

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aspects of the criminal system of the third country, such as the training of investigators and prosecutors.235 The practical implications of these agreements and the burden which the Union’s partner country undertakes are substantial. For instance, the government of Seychelles has stated that its prison capacity is so small that it would not be able to detain more than fifty Somali pirates.236 This reality has been accepted by the main international actors who have sought to address this problem in different ways. For instance, following the London Conference on Somalia of February 2012, it was agreed that Seychelles could further transfer convicted Somali pirates to the breakaway region of Somaliland, where they would serve out their sentences in a special prison funded by the UN Development Programme.

12. THE ECONOMIC ASPECTS OF DEFENCE The Economic Aspects of Defence

The analysis above examined the duty on Member States ‘to undertake progressively to improve their military capabilities’ as set out in Article 42(3) TEU. This is not the only reference to military capabilities in primary law. The application of the mechanism for permanent structured cooperation in Article 42(6) TEU also draws upon the work of the European Defence Agency (EDA). In fact, the Lisbon Treaty is the first set of primary rules which provides for this organisation. Article 42(3) subparagraph 2 TEU provides that the EDA shall identify operational requirements, shall promote measures to satisfy those requirements, shall contribute to identifying and, where appropriate, implementing any measure needed to strengthen the industrial and technological base of the defence sector, shall participate in defining a European capabilities and armaments policy, and shall assist the Council in evaluating the improvement of military capabilities.

However, as it happens not infrequently in the history of European integration, the law may follow and merely formalise existing practice. In fact, the EDA had been established before the Constitutional Treaty was even signed, in July 2004.237 The objective of the Agency is ‘to support the Council and the Member States in their effort to improve the EU’s defence capabilities in the field of crisis management and to sustain the ESDP as it stands now and develops in the future’ without prejudice to either the competences of the Community (now Union) or those of the Member States in defence matters.238 The tasks carried out by the EDA are in the areas of defence capabilities development, armaments cooperation, European Defence Technological and Industrial Base and defence equipment market, and research and technology. Whilst limited in scope, the work of the EDA has not been without controversy.239 The 235

Art 7(3). www.somaliareport.com/index.php/post/3182. 237 Joint Action 2004/551/CFSP [2004] OJ LL245/17. 238 Ibid, Arts 1(2), 2(1) and (2). 239 See the analysis in A de Nève, L’Agence Européenne de défense et la coopération dans le domaine capacitaire (Paris, L’Harmattan, 2010); A Georgopoulos, ‘The New European Defence Agency: Major Development or Fig Leaf?’ (2005) 14 Public Procurement Law Review 103; M Trybus, ‘The New European Defence Agency: A  Contribution to a Common European Security and Defence Policy or a Challenge to the Community Acquis?’ (2006) 43 Common Market Law Review 667. 236

480 Common Security and Defence Policy determination of its budget has been a constant source of disagreement, as the United Kingdom has refused to agree on a three-year budget. The specific outcomes of the EDA’s work include the adoption of a voluntary code on defence procurement in November 2005. Having entered into force on 1 July 2006, this applies to contracts worth more than €1 million and sets out to establish a single online portal, provided by the EDA, which would publicise procurement opportunities. The provisions in primary law on military capabilities reflect a growing awareness of the link between the effectiveness of the Union’s security and defence policy, the military capabilities of the Member States and the state of the Union’s national defence industries. The role of Member States in this context is central: the Union relies upon national capabilities for its CSDP initiatives and their success is dependent on the Member States’ choice to commit them, their willingness to deploy them and their ability to pay for them, account being taken of the political capital which such choices would entail for the government of the day. It was mentioned in Section 10 above that Member States are distinctly reluctant to deploy their capabilities in such operations. This is partly due to the serious challenges which defence industries have faced in their effort to adjust, first, to the post-Cold War era and, more recently, to the considerable defence cuts which states have imposed in the wake of the economic crisis. These problems have accentuated considerable and chronic structural difficulties, including duplication and fragmentation, excess production capability, failure to engage in increasingly costly research, lack of strategic thinking in terms of interoperability, structures and programmes. The lack of interoperability between Member States has also undermined the ability of the Union to meet its grand CSDP ambitions. The approach of the Union institutions and the Member States to what may be called ‘the economic aspects of security and defence’ over the years has been, at best, ambivalent and fragmented. In addition to the political and economic reasons related to the reluctance of the Member States to engage in the consolidation of strategic industries, there are also legal reasons for this state of affairs. Defence industries were widely held to be entirely beyond the scope of the EU legal framework.240 This view was based upon a broad reading of the only provision on defence which has been part of EU primary law since the Treaty of Rome, namely Article 346 TFEU. This ‘wholly exceptional’ provision241 was seen as enabling Member States to deviate from the entire body of EU law in order to protect the essential interests of their security by taking measures relating to the production of or trade in materiel.242 In the light of this view, the Member States were reluctant to engage in any formalised effort of coordinating the management of their defence industries; instead, the existing attempts to consolidate have been market-led, fragmented in nature and limited in scope. It was the European Commission, ie one of the least powerful institutions in the CFSP sphere, which was the main advocate of a different approach. In order to address the

240

See eg the Commission Answer to Written Questions E-1568/04 and E-1569/04, [2006] OJ C125. See Case 222/84 Marguerite Johnson v Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651, para 27 and the Opinion of Jacobs AG in Case C-120/94 Commission v Greece (FYROM) [1996] ECR I-1513, para 46. 242 For a different reading of that provision, see P Koutrakos, Trade, Foreign Policy and Defence in EU Constitutional Law (Oxford, Hart Publishing, 2001) 182–97. See also M Trybus, ‘The EC Treaty as an Instrument of Defence Integration: Judicial Scrutiny of Defence and Security Exceptions’ (2002) 39 Common Market Law Review 1347. 241

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economic problems of national defence industries, it articulated in the late 1990s a comprehensive approach to their restructuring and consolidation.243 This was comprehensive in scope and covered areas such as public procurement, defence and technological development, standardisation and technical harmonisation, competition policy, structural funds, export policies and import duties on military equipment. This was the first serious attempt by an EU actor to define a common approach to what had been perceived to be the unmanageable sum of disparate national units. The policies suggested by the Commission were based on a wide range of legal measures whose legal foundation varied: they included EC instruments, CFSP measures and even measures beyond the EU framework the adoption of which would require close coordination between EU and other international organisations. This initiative was met with silence by the Member States. Five years later, the Commission responded to a request by the European Parliament and revisited these issues. In 2003, it reiterated the need for a coherent cross-pillar approach to the legal regulation of defence industries with special emphasis on standardisation, intra-Community transfers, competition, procurement, exports of dual-use goods and research.244 However, more recently two developments have introduced some change. The first is the Commission’s statement that it intends strictly to enforce the proper interpretation of Article 296 EC (Article 346 TFEU). This was put forward in a 2006 document which, whilst acknowledging the wide discretion granted to a Member State to determine whether its essential security interests ought to be protected by deviating from EU law, makes it clear that that discretion is not unfettered. Instead, the application of Article 346 TFEU is confined to security interests—any other interests, such as industrial or economic, cannot justify recourse to that provision even if they are connected with the production of and trade in materiel.245 This strict interpretation followed a number of judgments by the EU Courts where Article 346 TFEU was interpreted strictly and Member States’ attempts to rely upon it in order to evade EU law were thwarted.246 The second important initiative in the area of armaments was the adoption of certain legislative measures. In 2009, the Council and the Parliament adopted Directive 2009/81/ EC on defence procurement,247 and Directive 2009/43/EC on intra-EU transfers of

243 COM(96)10 final, The Challenges facing the European Defence-Related Industry. A Contribution for Action at European Level (Brussels, 24 January 1996) and COM(97)583 final, Implementing European Union Strategy on Defence Related Industries (Brussels, 12 November 1997). 244 COM(2003)113 final, European Defence—Industrial and Market Issues. Towards an EU Defence Equipment Policy (adopted on 11 Mar 2003). 245 COM(2006) 779 final, Interpretative Communication on the application of Article 296 of the Treaty in the field of defence procurement (Brussels, 7 December 2006). 246 Case C-414/97 Commission v Spain [1999] ECR I-5585; Case T-26/01 Fiocchi [2003] ECR II-3951; Case C-337/05 Commission v Italy [2008] ECR I-2173; Case C-157/06 Commission v Italy [2008] ECR I-7313. Following the adoption of COM(2006) 779 final, the Court also rendered its judgments in Case C-284/05 Commission v Finland [2009] ECR I-11705; Case C-294/05 Commission v Sweden [2009] ECR I-11777; Case C-372/05 Commission v Germany [2009] ECR I-11801; Case C-409/05 Commission v Greece [2009] ECR I-11859; Case C-461/05 Commission v Denmark [2009] ECR I-11887; Case C-378/05 Commission v Italy [2009] ECR I-11831; and Case C-239/06 Commission v Italy [2009] ECR I-11913; Case C-615/10 Insinööritoimisto InsTiimi Oy, ECLI:EU:C:2012:324. See the analysis in Koutrakos, n 2 above, 257–64. 247 Dir 2009/81/EC on the coordination of procedures for the award of certain works contracts, supply contracts, and service contracts by contracting authorities or entities in the field of defence and security, and amending Directives 2004/17/EC and 2004/18/EC [2009] OJ L216/76. See M Trybus, ‘The Tailor-Made EU Defence and Security Procurement Directive: Limitation, Flexibility, Descriptiveness and Substitution’ (2013) 38 European Law Review 3.

482 Common Security and Defence Policy defence products.248 These cover areas of considerable significance for the development of defence industries. For instance, a study carried out in 2003 concluded that opening up the EU defence market to competition would produce annual savings of at least 9% in defence equipment procurement.249 When the Commission submitted its proposals, the defence procurement market accounted for a large share of EU public procurement (it was estimated at about €80  billion out of a combined state defence budget of €170 billion).250 Whilst demystifying the position of armaments within the single market, the above initiatives have not had a marked impact on the reliance of the Union on national military capabilities. In this respect, it is recalled that CSDP operations have been hampered considerably. A number of cooperation initiatives amongst Member States in the context of structured cooperation have not gone far.251 Whilst no tangible outcome has yet to be produced, there has been some movement. In December 2010, France, Germany and Poland sent a letter (which has become known as the ‘Weimar letter’) to the High Representative in which they called for a fresh impetus for the CSDP based on the need to strengthen cooperation between Member States on the basis of ‘pooling and sharing’ which aims ‘to preserve and enhance national operational capabilities—with improved effect, sustainability, interoperability and cost efficiency as a result’. This was welcomed by the Council which has since on a number of occasions emphasised the significance of polling and sharing of military capabilities of the effectiveness of the CSDP.252 Finally, the Commission put forward a number of proposals about the state of defence industries.253 These focused on improving the competitiveness and efficiency of the sector by creating an internal market for defence with emphasis on developing CSDP-related research and an industrial policy in the area. Three points are worth making about the state of military capabilities and their impact on the effectiveness of the CSDP. First, it is noteworthy that considerable momentum has be given by the institution least involved in the CSDP, ie the Commission. The narrow focus of its proposals and their market-oriented flavour make them more palatable to the Member States. Secondly, whilst the financial crisis and the ensuing budget cuts have had a considerable impact on the state of European defence industries, the ominous security developments in the Union’s neighbourhood (not least the Ukraine crisis in 2013 and Russian aggression in annexing Crimea) and the emerging role of NATO are bound to underline the significance of improving military capabilities and the development 248 Dir 2009/43/EC simplifying terms and conditions of transfers of defence-related products within the Community [2009] OJ L146/1, amended by Directive 2012/10/EU [2012] OJ L85/3. See H Ingel, ‘The Intra-EU Defence Trade Directive: Positive Goals’, in AJK Bailes and S Depauw (eds), The EU Defence Market: Balancing Effectiveness with Responsibility—Conference Report (Belgium, Flemish Peace Institute, 2011) 61; and S Depauw, ‘Risks of the ICT-directive in Terms of Transparency and Export Control’, ibid, 67. 249 See K Hartley, ‘The Future of European Defence Policy: An Economic Perspective’ [2003] Defence and Peace Economics 14, 112. 250 See debate at the European Parliament on 19 June 2007 on Oral Question 0-0022/2007. 251 See Section 7 above. 252 Foreign Affairs Council Conclusions on CSDP (Brussels, 31 January 2011), Council Conclusions on polling and sharing of military capabilities (Brussels, 22 and 23 March 2012), Foreign Affairs Council Conclusions on CSDP (Brussels, 19 November 2012), Council Conclusions on CSDP (Brussels, 25 November 2013). 253 COM (2013) 542 final, Towards a more competitive and efficient defence and security sector (Brussels, 24 July 2013), accompanied by SWD(2013) 279 final, Commission Staff Working Document On Defence (Brussels, 24 July 2013), and COM(2014) 387 final, A New Deal for European Defence—Implementation Roadmap for Communication COM(2013) 542; Towards a more competitive and efficient defence and security sector (Brussels, 24 June 2014).

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of military cooperation amongst Member States. Thirdly, no matter how strongly the economic and security case for cooperation is made, it is entirely for the Member States to determine both whether and how to proceed in the area.

13. CONCLUSION Conclusion

This chapter has examined the set of rules and procedures which govern the Union’s security and defence policy and highlighted the more prominent position that these occupy in the Union’s legal order. It also highlighted the role of the Member States at the very core of any development in the area. Ultimately, any assessment of the way in which the EU carries out its CSDP relies not only on the legal framework set out in the TEU, but also to factors the impact of which may not be captured by legal provisions, such as political developments within Member States, in particular the important defence actors such as the United Kingdom, France and Germany; the geopolitical environment and the approach of other actors, in particular the United States, to international security; and economic exigencies. After all, the analysis of the military operations and civilian missions undertaken by the Union suggests that political, financial and practical considerations have a direct impact on the conduct of the CSDP. Be that as it may, security is a broad concept which has been construed increasingly broadly in the last few years. As such, its objectives may be achieved on the basis of a range of policy instruments, with CSDP operations and missions being but a part of this. The following chapter will examine the linkages between different strands of the Union’s external action and will focus on the interactions between the CSDP and development cooperation.

Links Between External Policies

14 Links Between External Policies: Trade and Foreign Policy, Development and Defence 1. INTRODUCTION Introduction

T

HE ANALYSIS SO far has shown that the law governing the European Union’s international relations has evolved along two paths. The CCP and the external economic, environmental, development and other policies have been construed on the basis of the principles introduced by the European Court of Justice and the rules and procedures set out in primary law, both of which have been of a clear supranational flavour. The CFSP and the CSDP have developed organically on the basis of informal arrangements subsequently introduced in primary law pursuant to rules and procedures of a clearly intergovernmental nature. The relationship between these two paths has also evolved over the years. For a long time, its emphasis was on the distinct character of the respective legal frameworks, a phenomenon illustrated clearly by the much-maligned pillar structure. More recently, the emphasis has been on what these different strands of the Union’s external action have in common—this is illustrated by the constitutional reconfiguration of the EU’s structure introduced by the abolition of the pillars and the development of common principles and objectives designed to govern whatever it is that the Union does in the world. However, the relationship between the political and other external policies has always been fluid. Even in the pre-Lisbon days, it was accepted that, their different legal frameworks notwithstanding, these areas would interact as a matter of practice and that legal and procedural mechanisms were required in order to manage these interactions. To that effect, the principle of coherence was highlighted and it was made clear that all external policies would be carried out within a single institutional framework. Conversely, the entry into force of the Lisbon Treaty by no means rendered the different legal characteristics of the various strands of the Union’s external action irrelevant. The analysis in Chapters 12 and 13 highlighted the distinct position of the CFSP and CSDP within the EU constitutional order. Therefore, the relationship between these policies has been both symbiotic and potentially conflictual. This chapter will examine how the relationship between the CFSP/CSDP and other external policies has developed over the years and what kind of legal and policy problems it raises. It will focus on two categories of interactions, namely between the CFSP and trade, and between the CSDP and development cooperation.1 1 The analysis draws on P Koutrakos, The EU Common Security and Defence Policy (Oxford, Oxford University Press, 2013) ch 8.

485

486 Links Between External Policies 2. EXPORTS OF DUAL-USE GOODS Exports of Dual-use Goods

Dual-use goods are products which may be of both civil and military application. As such, the regulation of their export appears to be a matter of trade as well as foreign and security policy. An overview of their legal regime is interesting, not only in terms of the legal questions that it raises about the relationship between trade and foreign policy rules, but also in terms of the ingenuity to which the Union institutions and the Member States have had recourse in order to address politically sensitive issues by what they deem to be legally convenient formulas. The term ‘dual-use’ might appear to apply to a vast range of products covering a desk used by an army commander or the pairs of boots worn by soldiers. Such an interpretation would render it of potentially unlimited scope; however, due to the special nature of such products, the legal regime applicable to exports of dual-use goods is exceptional in legal terms and, as such, should be interpreted strictly. Accordingly, such a broad interpretation of the notion should be rejected. Indeed, the common rules on exports of dual-use goods, whilst originally controversial in legal terms, clearly confined their scope to products enumerated in an exhaustive manner. The legal regulation of exports of dual-use goods touches upon the long-standing debate about the scope of the CCP. Export measures have been referred to expressly in the non-exhaustive list of activities of Article 207 TFEU (and in all previous Treaties) and common rules on exports were adopted as early as of 1969.2 The exclusive competence of the Community over the CCP, as introduced by the Court in early 1970s and articulated and refined in later case-law, would appear to preclude any role for individual Member States in determining the legal regime of exports of dual-use goods. However, the very notion of ‘dual-use’ attached to those products illustrated their special nature: this was all the more so given that military products had long been presumed to lie either in a twilight zone between Community law and national law or beyond the sphere of Community law altogether.3 In any case, exports of such products were seen to be so intrinsically linked to the conduct of foreign policy as to be subsumed by the legal rules governing the latter; and as the latter fell within national sovereignty, the right of Member States to restrict exports of dual-use goods was argued to be entirely within their sovereignty too. The nature of these products and the practical and political implications of their regulation raised questions about their legal regime: if their trade character was deemed predominant, it would render them within the scope of the CCP and the Member States would be able to adopt unilateral measures only pursuant to a specific EU law authorisation;4 if their foreign policy character prevailed, it would render their regulation beyond the scope of the CCP and firmly within that of national sovereignty.

2

Council Reg 2603/69 [1969] OJ L324/25, subsequently amended by Reg 3918/91 [1991] OJ L372/31. Whether this view is justified in legal terms is a different question altogether: see P Koutrakos, Trade, Foreign Policy and Defence in EU Constitutional Law (Oxford, Hart Publishing, 2002) ch 8. 4 Case 41/76 Suzanne Criel, née Donckerwolcke and Henri Schou v Procureur de la République au Tribunal de Grande Instance, Lille and Director General of Customs [1976] ECR 1921. 3

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2.1 The Genesis of the Current Rules Before the Union institutions agreed on how to regulate exports of dual-use goods, the Court of Justice had the opportunity to rule on the compatibility of national restrictions on such exports in Richardt.5 In that preliminary reference from Luxembourg, criminal proceedings were brought against a company established in France which had drawn up a contract with the then Soviet central purchasing agency. Richardt had agreed to sell a unit for the production of bubble memory circuits consisting of a number of machines. Once the relevant export formalities had been complied with, it transpired that the flight from Paris which had been booked in order to transport the goods to Moscow has been cancelled. The goods were then transported to Luxembourg by road and then loaded on to another flight to Moscow. However, customs checks in Luxembourg revealed that one of the machines fell within a category of goods which Luxembourg legislation subjected to a special transit licensing procedure due to its potentially strategic nature. As the machine in question had not been accompanied by such licence, the national authorities initiated proceedings against Richardt for violation of the national transit legislation. The question which arose was whether the special licensing requirement imposed under Luxembourg legislation on the transit of products deemed to be of a strategic nature was contrary to Community law on transit. The relevant secondary measure, that is the so-called Export Regulation, required that the transit permit granted in one Member State be recognised as valid by the competent authorities in the other Member States.6 Two views were put before the Court: on the one hand, four Member States and, rather surprisingly, the Commission argued that a Member State should be free to require that strategic products be subject to a special authorising licence in addition to the general one provided under Regulation 222/77; on the other hand, Richard argued that such an additional requirement would be contrary to Community law as the nature of the products in transit should be irrelevant. The Court started off by pointing out that, whilst the Community rules on transit applied in principle to all products, Article 10 of Regulation 222/77 did not preclude Member States from imposing restrictive measures in so far as such measures were compatible with the EC Treaty. What was crucial, therefore, was whether the national requirement for special authorisation was consistent with primary law on free movement of goods, and in particular Article 30 EC (now Article 36 TFEU) which enables Member States to deviate from free movement in order to protect certain clearly defined interests. The Court pointed out that, whilst the interests laid down in the latter provision enable the Member States to deviate from the rules on free movement of goods, they do not reserve the protection of those interests to their exclusive jurisdiction. Instead, Article 30 EC (now Article 36 TFEU) constitutes an exception to the rule of free movement, and as such it should be interpreted strictly so as to ensure that the national measures under review are such as to serve the interests laid down therein and ‘they do not restrict intraCommunity trade more than is absolutely necessary’.7 The Court then examined whether the Luxembourg measures were justifiable in order 5 Case C-367/89 Criminal Proceedings against Aimé Richard and Les Accessoires Scientifiques SNC [1991] ECR I–4621. 6 Council Reg 222/77 on Community transit [1977] OJ L38/1. 7 Para 20 (n 5 above). See also Case 72/83 Campus Oil Ltd v Minister for Industry and Energy [1984] ECR 2727, paras 32–37.

488 Links Between External Policies to protect public security. It held that the notion of public security referred to both the internal and external security of the Member States. As there was no doubt that the importation, exportation and transit of products capable of being used for strategic purposes might affect the public security of a state, the national measures were justifiable. The question whether they were actually justified depended on their compliance with the principle of proportionality. This was central to the reference before the Court, because it had been argued that the penalty prescribed under national law, namely confiscation and the initiation of criminal proceedings, was disproportionate to the aim that the deviation from Community law had purported to serve. The Court concluded that compliance with the principle of proportionality was a matter for the referring court which ought to apply it by taking account of all the elements of each case, such as the nature of the goods capable of endangering the security of the State, the circumstances in which the breach was committed and whether or not the trader seeking to effect the transit and holding documents for that purpose issued by another Member State was acting in good faith.8

The judgment in Richardt provided an early indication of the Court’s approach to national measures on dual-use goods as within the system of EU law.9 In particular, three points may be identified in the judgment which would define not only subsequent case-law but also the subsequent approach taken by the Union institutions. The first was about the status of such measures: the right of the Member States to define and protect their security did not render the EU legal framework redundant; on the contrary, it was within that framework that national authorities would be expected to act. The second point was about the limits that that framework placed upon the right of the Member States to protect their security by means of export restrictions: the broad construction of the notion of security and the central role of the referring court defined a liberal approach which appeared to take into account the concerns of the Member State. Finally, the role of the national court was central in the judgment. Following the judgment in Richart, it became apparent that any attempt to regulate exports of dual-use goods could not ignore the CCP. The establishment of a separate set of rules at Maastricht aiming at the conduct of a common foreign policy offered the Member States and the Union institutions a third way: instead of addressing the question of the appropriate legal framework by making a choice between Community competence and national sovereignty, the Union actors decided to involve both. Therefore, common rules on exports of dual-use goods were adopted, whereby certain issues were governed by Community law and certain others by CFSP rules: Council Regulation 3381/94 laid down the rules pursuant to which such exports were to be regulated10 and Council Decision 94/942/CFSP set out the list of products to which the common rules would apply and would determine the application of those rules.11 8

Ibid, para 25. For a comment, see I Govaere and P Eeckhout, ‘On Dual Use Goods and Dualist Case Law: The Aimé Richardt Judgment and Export Controls’ (1992) 29 Common Market Law Review 941. 10 [1994] OJ L367/1. 11 [1994] OJ L367/8. This was amended a number of times by the following Council measures: Dec 95/127/ CFSP [1995] OJ L90/2; Dec 95/128/CFSP [1995] OJ L90/3; Dec 96/423/CFSP [1996] OJ L176/1; Dec 96/613/ CFSP [1996] OJ L278/1; Dec 97/100/CFSP [1997] OJ L34/1; Dec 97/419/CFSP [1997] OJ L178/1; Dec 97/633/ CFSP [1997] OJ L266/1; Dec 98/106/CFSP [1998] OJ L32/1; Dec 98/232/CFSP [1998] OJ L92/1; Dec 99/54/ CFSP [1999] OJ L18/1; Dec 2000/243/CFSP [2000] OJ L82/1. 9

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A detailed examination of the substantive content of Regulation 3381/94 and Decision 94/942/CFSP is of historic significance only, as the system laid down therein has now been abolished.12 For the purposes of this analysis, suffice it to point out that it set out a mutual recognition system whereby the state of exportation was responsible for granting an authorisation provided that certain conditions were met. Whilst the rules governing the authorisation regime were set out in a CCP Regulation, the criteria on the basis of which licences were set out in a CFSP measure. This was a flawed legal formula which was reversed later in the light of two judgments of the Court of Justice. In Werner13 and Leifer,14 delivered on the same day, the Court dealt directly with the relationship between the CCP and the right of Member States to protect their public security. Both cases were references from German courts enquiring about the legality of a German requirement that exports of certain products be subject to an export licence. This requirement had been imposed in order to guarantee the security of Germany, prevent disturbance to the peaceful coexistence of nations and prevent the external relations of Germany from being seriously disrupted. In Werner the plaintiff was an exporter who had agreed to supply a number of industrial products to Libya. His application for an export licence in 1991 had been rejected on the ground that the supply of those goods would seriously jeopardise public security as defined in the above law. In Leifer criminal proceedings had been initiated against an exporter for having delivered certain products, including chemical ones, to Iraq over a period of four years without having applied for the necessary export licences. In both cases, the Community rules in question were laid down in secondary legislation adopted within the framework of the CCP. The Export Regulation15 prohibited the imposition of quantitative restrictions, hence introducing the principle of free exportation subject to the exceptions specifically provided therein. Such an exception was laid down in Article 11 of the Export Regulation: Member States were allowed to impose quantitative restrictions on exports in order to protect a number of specific non-trade interests, namely public morality, public policy, public security, the health and life of humans, animals or plants, national treasures possessing artistic, historic or archaeological value, industrial and commercial property. The first issue raised before the Court was whether the framework within which the EC export rules had been adopted was broad enough to cover export measures with foreign policy implications. Drawing upon the dicta of its case-law in the 1970s about the non-restrictive interpretation of the scope of the CCP,16 the Court pointed out that a national measure whose effect was to prevent or restrict the export of certain products did not fall beyond the scope of the CCP on the ground that its objectives were related to foreign and security policy: The specific subject-matter of commercial policy, which concerns trade with non-member countries and, according to [ex] Article 113 [now Article 207 TFEU] is based on the concept of a common policy, requires that a Member State should not be able to restrict its scope by freely 12 See the analysis in P Koutrakos, ‘Exports of Dual-Use Goods under the Law of the European Union’ (1998) 23 European Law Review 235. 13 Case C-70/94 Fritz Werner Industrie-Ausruestüngen GmbH v Germany [1995] ECR I-3189. 14 Case C-83/94 Criminal Proceedings against Peter Leifer and Others [1995] ECR I-3231. 15 Council Regulation 3918/92 [1991] OJ L372/31 amending Council Reg 2603/69 [1969] OJ Spec Ed (II) 590. 16 See Opinion 1/78 (re: Agreement on Natural Rubber) [1979] ECR 2871, para 45.

490 Links Between External Policies deciding, in the light of its own foreign policy or security requirements, whether a measure is covered by [ex] Article 113.17

Having approached the German requirement for export licensing as within the scope of the CCP, the Court pointed out that the Export Regulation and the principle of free exportation applied to the facts of the two cases. This also entailed the application of the other central principle of the CCP, namely the exclusive nature of Community competence: according to its oft-repeated formulation, national measures of commercial policy are legal only if adopted pursuant to a specific Community law authorisation.18 The Court accepted that the exceptional clause laid down in Article 11 of the Export Regulation amounted to such an authorisation and went on to assess whether the German rule was justifiable. Whilst national security fell undoubtedly within the scope of public security as laid down in Article 11 of the Export Regulation, the position of the prevention of a serious disturbance to foreign relations or protection of the peaceful coexistence of nations was less clear. The Court drew upon the wide construction of public security in Richardt and opined that the foreign policy considerations underpinning the objectives of the German measure should fall within the scope of public security: not only was it difficult to distinguish the former from security policy considerations but also the interdependent international environment had made it less possible to assess the security of a state separately from that of the international community. Having concluded that the German measure deviating from the Export Regulation was justifiable, the Court left it to the referring court to decide whether it was in fact justified, ie both necessary and proportionate in order to protect its stated objective. However, the Court relied once more upon its earlier judgment in Richardt and made it clear that the exportation of goods capable of being used for military purposes to a country at war with another country might affect the public security of a Member State.19 In Leifer the Court went further to examine whether the principle of proportionality was met by the legal conditions under which the German measure was applied. In particular, it dealt with the question whether it was consistent with EC law for the national measure to impose on applicants for an export licence the burden of proving that dual-use goods were, in fact, for civil use; it also examined whether it was problematic, from the point of view of EC law, that the competent national authorities could refuse a licence if the products in question were objectively suitable for military use. Whilst it left it for the referring court to assess the compatibility of those provisions with the principle of proportionality, the Court referred to the general nature of the role of national authorities: [D]epending on the circumstances, the competent national authorities have a certain degree of discretion when adopting measures which they consider to be necessary in order to guarantee public security in a Member State.  … When the export of dual-use goods involves a threat to the public security of a Member State, those measures may include a requirement that an applicant for an export licence show that the goods are for civil use and also, having regard to

17 18

Case C-70/94 Fritz Werner, n 13 above, para 11. See Case 41/76 Donckerwolcke [1976] ECR 1921, para 32 and Case 174/84 Bulk Oil [1986] ECR 559, para

31. 19

Para 28 of Case C-70/94 Fritz Werner, n 13 above and para 29 of Case C-83/94 Peter Leifer, n 14 above.

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specific circumstances such as inter alia the political situation in the country of destination, that a licence be reused if those goods are objectively suitable for military use.20

It was also for the national court to determine whether the initiation of criminal proceedings constituted a sanction proportionate to the public security objective that the national measure purported to serve: the only guidance provided by the Court was to repeat the parameters already stated in Richardt within which the national court ought to carry out its assessment, namely to take into account all the elements of each case, such as the nature of the goods capable of endangering the security of the state, the circumstances in which the breach was committed and whether the exporter had acted in good faith. The judgments in both Werner and Leifer made it clear that the foreign policy implications of a trade measure could not render it beyond the scope of the Community legal order.21 This conclusion is significant in two respects. In terms of the CCP, it shed further light on the long-standing debate about its scope: indeed, the early statement of the Court that a broad construction of the CCP was necessary for a worthwhile external trade policy22 is particularly apt in the case of trade policy measures with foreign implications. To allow Member States to determine the types of measures which would fall beyond the scope of the CCP in the light of their specific political dimension would be tantamount to introducing an inherently indeterminate criterion capable of eroding the coherence of the external trade policies of the Community and undermining the jurisdiction of the Court of Justice. This is all the more so in the light of the intrinsically intertwined nature of trade and foreign policy: as Advocate General Jacobs pointed out in a subsequent case: Many measures of commercial policy may have a more general foreign policy or security dimension. When for example the Community concludes a trade agreement with Russia, it is obvious that the agreement cannot be dissociated from the broader political context of the relations between the European Union, and its Member States and Russia.23

In terms of the regulation of trade measures with foreign policy implications, the judgments in Werner and Leifer suggested that the Community legal order was capable of accommodating national concerns: not only was the right of the Member States to define their security acknowledged but also their discretion to assess how best to protect it was guaranteed. The limits to the exercise of that discretion, as set out in the context of the principle of proportionality, would be ensured by the national courts. All in all, the pragmatic interpretation put forward by the Court of Justice indicated that, far from constituting two strictly separate spheres of activity, trade and foreign policy were in fact interlinked.

2.2 The Current Rules In the light of the above judgments, the legal rules on dual-use goods were replaced by a purely CCP measure which referred expressly to the case-law of the Court of 20

n 13 above, para 35. For a comment on the judgments, see N Emiliou, annotation in (1997) 22 European Law Review 68. 22 n 16 above. 23 Case C-124/95 The Queen, ex parte Centro-Com Srl v HM Treasury and Bank of England [1997] ECR I-81, para 41 of his Opinion. 21

492 Links Between External Policies Justice.24 After various amendments, this is now Regulation 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items.25 The brokering of dual-use goods covers the negotiation or arrangement of transactions for the purchase, sale or supply of dual-use items from a third country to any other third country, or  the selling or buying of dual-use items that are located in third countries for their transfer to another third country. The material scope of the common rules is defined in a list of products annexed to the Regulation itself. This list covers ten categories of products which include the following: nuclear materials, facilities and equipment; special materials and related equipment; materials processing; electronics; computers; telecommunications and ‘information security’; sensors and lasers; navigation and avionics; marine; aerospace and propulsion. This list is updated on the basis of the relevant obligations and commitments that Member States have accepted as members of the international non-proliferation regimes and export control arrangements, or by ratification of relevant international treaties.26 Since July 2014, it is for the Commission to update this list by exercising delegated powers.27 Regulation 428/2009 provides for a Union general export authorisation which covers exports of those products exhaustively defined in a list annexed to it to a limited number of countries, namely the United States, Canada, Japan, Australia, New Zealand, Switzerland, including Liechtenstein, and Norway. In addition, three other types of authorisation are provided: an individual authorisation which applies to one exporter and covers a transaction to one end-user; a global authorisation which may be granted to a specific exporter and applies to a specified type or category of dual-use goods and is valid for exports to one more specified countries; and finally, a national general export authorisation which may exist in individual Member States. As to the criteria pursuant to which national authorities are to decide whether to grant an export authorisation, Article 12 of Regulation 428/2009 provides a list which appears indicative in nature; the Member States are to take into account ‘all relevant considerations’, including: (a) the obligations and commitments they have each accepted as members of the relevant international non-proliferation regimes and export control arrangements, or by ratification of relevant international treaties; (b) their obligations under sanctions imposed by a decision or a common position adopted by the Council or by a decision of the OSCE or by a binding resolution of the Security Council of the United Nations; (c) considerations of national foreign and security policy, including those covered by Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment;

24 See preamble to Council Dec 2000/402/CFSP [2000] OJ L159/218. For a different view on the judgments, see A Dashwood, ‘Dual-use Goods: (Mis)Understanding Werner and Leifer’ in A Arnull, P Eeckhout and T  Tridimas (eds), Continuity and Change in EU Law—Essays in Honour of Sir Francis Jacobs (Oxford, Oxford University Press, 2008) 354. 25 [2009] OJ L134/1, amended by Reg 1232/11 [2011] OJ L326/26, Reg 388/12 [2012] OJ L129/12 and Reg 599/2014 [2014] OJ L174/79. See A Wetter, Enforcing European Union Law on Exports of Dual-use Goods (Oxford, Oxford University Press, 2009). 26 Art 15(1) of Regulation 428/2009, n 25 above. 27 Reg 599/2014 [2014] OJ L174/79.

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(d) considerations about intended end use and the risk of diversion.

At the core of the system established under the common rules on exports is the principle of mutual recognition, which had underpinned the content of the previous regimes too: in principle, an export authorisation granted by the authorities in one Member State is recognised as valid in all Member States. In rendering this fundamental principle of the establishment of the internal market the foundation of the common rules on exports of dual-use goods, the Council amplified its application in two ways. On the one hand, there is considerable scope for Member States to determine whether their security should be protected by restricting exports of dual-use products. This is ensured in a number of ways. For instance, there is a catch-all clause which allows Member States to adopt or maintain national legislation imposing an authorisation requirement on the export of dual-use goods items not covered by the list annexed to the Regulation. This would be the case provided that the exporter had grounds for suspecting that those items were or might be intended, in their entirety or in part, for use in connection with the development, production, handling, operation, maintenance, storage, detection, identification or dissemination of chemical, biological or nuclear weapons or other nuclear explosive devices or the development, production, maintenance or storage of missiles capable of delivering such weapons.28 They may also impose such restrictions in cases where the the product is or may be intended for military end-use and the country of destination is subject to an arms embargo by the EU or the Organisation for Security and Cooperation in Europe or the UN Security Council.29 Moreover, Member States may prohibit or impose an authorisation requirement on the export of goods not listed in the Annex for reasons of public security or human rights considerations, provided that such measures are notified to the Commission which then publishes them.30 Under Regulation 428/2009 the substantive and procedural duties imposed upon the Member State do not prejudice their right to take unilateral measures under the exceptional clause laid down in the Export Regulation.31 In addition, in cases where a Member State concludes that an export of dual-use goods to be authorised by the authorities of another Member State might prejudice its essential security interests, it may request the latter not to grant an export authorisation or, accordingly, to annul, suspend, modify or revoke it. In these cases, the Regulation imposes a duty of immediate consultation upon the authorities of the exporting Member State:32 this is of a non-binding nature and is to be terminated within ten working days. Finally, it is for the Member States to lay down the penalties to be imposed for any violation of the common rules.33 The considerable role with which national administrations are endowed illustrates in a concrete manner that the establishment of common rules solely within the framework of the CCP by no means entails the marginalisation of the Member States in the application of EU law. The acknowledgement of their role de lege lata may be viewed as the

28

Art 4(5) and (1) of Reg 428/2009, n 25 above. Art 4(2) of Reg 428/2009, n 25 above. 30 Art 8(1); as for a list of national measures published by the Commission, see the latest Information Note in [2012] OJ C283/5. 31 Art 4(8) of Reg 428/2009, n 25 above. 32 Ibid, Art 11(2). 33 Ibid, Art 24. 29

494 Links Between External Policies substantive equivalent of the wide discretion which Member States are deemed to enjoy in terms of the protection of their security pursuant to the judgments in Werner and Leifer. Another feature of the common rules is the formalisation of the continuous interaction between the competent authorities of the Member State of exportation and the Commission and the authorities of the other Member States. For instance, in cases where the authorities of the exporting state refuse to grant an export authorisation or annul, suspend, modify or revoke one already granted, they are under a duty to inform both the competent authorities of the other Member States and the Commission and exchange the relevant information with them.34 In cases where a Member State is about to authorise the export of products for which authorisation has been denied by another Member State within the previous three years, the authorities of the former are bound to consult the authorities of the latter; if, this consultation notwithstanding, the authorities of the exporting state decided to grant the relevant export authorisation, they would be under a duty to inform both the other Member States and the Commission and provide them with all the relevant information to explain the decision.35 In addition to the principle of mutual recognition, the proceduralisation introduced by Regulation 428/2009 and the ensuing establishment of formal channels of communication between national administrations and the Commission are further illustrations of the effect that internal market principles may have on the formulation of external policies. Indeed, the duty of notification and the establishment of consultation procedures between national administration and the Member States has been a central feature of the new approach to technical harmonisation.36 It is interesting that the regulation of such a controversial area should provide the terrain where the main principles underpinning the establishment and management of the internal market and those aiming at addressing the security concerns of the Member States interact within the framework of the CCP. The export, transit and brokering of dual-use goods has attracted considerable attention from policy-makers. In a Joint Statement, the Council the Commission and the Parliament acknowledge the issues regarding the export of technologies  … that can be used in connection to undermine the EU’s security, particularly for monitoring, tracking, tracing and censoring, as well

certain information and communication with human rights violations as well as technologies used for mass-surveillance, as for software vulnerabilities.37

They also expressed their commitment to strengthen the regime both by reviewing the effectiveness of the existing rules and by become more active in multilateral fora. In

34

Ibid, 13(1) of Reg 428/2009, n 25 above. Art 13(5). See also COM(2013) 710 final, Report to the Council and the European Parliament on the implementation of Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (Brussels, 16 October 2013). 36 An example is provided by Council Dir 83/189 [1983] OJ L109/8 amended various times, most significantly by Dir 98/48 [1998] OJ L217/18; for a detailed analysis of its content, see S Weatherill, ‘Compulsory Notification of Draft Technical Regulations: the Contribution of Directive 83/189 to the Management of the Internal Market’ (1996) 16 Yearbook of European Law 129. See also P Koutrakos, ‘The Elusive Quest for Uniformity in EC External Relations’ (2002) 4 Cambridge Yearbook of European Legal Studies 243. 37 [2014] OJ 173/82. 35

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2014, the Commission suggested the reform of the rules on exports of dual-use goods in the light of the dispersal of security threats and rapid technological innovation.38

3. SANCTIONS AGAINST THIRD COUNTRIES Sanctions against Third Countries

Economic sanctions against third countries is another example of the interaction between trade and foreign policy whose regulation has raised legal questions similar to those examined above. In terms of their effectiveness, there has been a long-standing debate in international relations and political science literature.39 Within that context, quantitative criteria have been developed on the basis of which specific regimes may be assessed.40 For the purpose of their legal analysis, suffice it to point out that sanctions constitute an instrument of foreign policy the popularity of which with both states and international organisations has not waned.41 EU law endows the Union with express competence to impose sanctions on both states and individuals and legal persons in Articles 215 TFEU (for economic sanctions) and 71 TFEU (for financial sanctions). This section will focus on sanctions on states. They are imposed on the basis of a two-step procedure: first, the Council adopts a CFSP Decision in which it expresses its wish for relations with a third country to be interrupted or reduced; secondly, the Council adopts a Regulation in which it sets out in detail the rules governing the sanctions. This two-step formula reflects the dual nature of sanctions: they are economic measures which are adopted in order to pursue a foreign policy objective. This section will, first, outline the historical development of sanctions under EU law and the Court’s approach over the years, and then analyse the current provisions.

3.1 The Genesis and Development of Sanctions Law In the context of European integration, the regulation of sanctions against third countries may be examined in the framework of three distinct phases.42 The first one was in the late 1960s and 1970s when the Member States were required to implement United Nations Security Council Resolutions by imposing sanctions on Rhodesia. They did so by adopting national measures, their rationale being that the foreign policy nature

38 COM(2014) 244, final The Review of export control policy: ensuring security and competitiveness in a changing world (Brussels, 24 April 2014). 39 See eg D Baldwin, Economic Statecraft (Princeton, NJ, Princeton University Press, 1985); PAG van Bergeijk, Economic Diplomacy, Trade and Commercial Policy—Positive and Negative Sanctions in a New World Order (Aldershot, Edward Elgar Publishing, 1995); MP Doxey, International Sanctions in Contemporary Perspective (Basingstoke, Macmillan 1996); DW Drezner, The Sanctions Paradox: Economic Statecraft and International Relations (Cambridge, Cambridge University Press, 1999). On EU sanctions in particular, see C Portela, European Union Sanctions and Foreign Policy—When and Why Do They Work? (Abingdon, Routledge, 2010). 40 See GC Hufbaer, JS Scott and KA Elliot, Economic Sanctions Reconsidered, 2nd edn (Washington, DC, Institute for International Economics, 1992). For a critique of existing literature, see DW Drezner, ‘The Hidden Hand of Economic Coercion’ (2003) 57 International Organization 643. See also N Marinov, ‘Do Sanctions Help Democracy? The US and EU’s Record 1997–2004’ (2004) Stanford Institute for International Studies, Center for Democracy, Development and the Rule of Law Working Paper No 28. 41 For a comprehensive legal analysis of unilateral and multilateral sanctions, see L Picchio Forlati and LA Sicilianos (eds), Les sanctions économiques en droit international (Leiden/Boston, MA, Martinus Nijhoff, 2004). 42 See Koutrakos, n 3 above, 58–66.

496 Links Between External Policies of sanctions rendered them beyond the Community legal framework. This argument, now known as the ‘Rhodesia doctrine’, justified any deviation from Community law that such unilateral measures had entailed on the basis of what is now Article 347 TFEU (ex Article 297 EC). One of the most obscure provisions of the EC Treaty, this badly drafted rule enables Member States to deviate from the entire body of Community law provided that certain truly extraordinary circumstances occur. However, the implementation of those sanctions by means of disparate national measures proved to be fraught with problems, especially regarding the lack of uniformity in terms of the content of the national regimes and the time of their imposition.43 It was for that reason that another solution was soon found within the framework of the CCP. This was considered capable of guaranteeing a degree of uniformity and, hence, effectiveness of sanctions, However, their political dimension, along with the ongoing debate about the scope of the CCP between the Commission, the Council and the Member States had rendered reliance upon the CCP controversial. Therefore, a legal formula was devised whereby economic sanctions were imposed by means of a Council Regulation adopted under the CCP rules only following the adoption of a decision by the Member States within the framework of European Political Cooperation (EPC): the latter expressed the political will of the Member States to rely upon the Community legal framework in order to impose sanctions upon specific third states, whereas the former actually laid down the rules governing those sanctions. This combination of Community and non-Community measures was first relied upon following the declaration of martial law in Poland in December 1981 and underpinned the imposition of sanctions on third countries until the establishment of the European Union at Maastricht.44 From a legal point of view, the compromise illustrated by the dual system of a CCP act and a non-Community measure was significant: it indicated that the EPC, a framework of political cooperation launched in a non-formalised manner and developed incrementally over the years until its incorporation into the EC Treaty, had matured sufficiently to be treated by the Member States as their most important forum for consultation in the area of foreign policy. On the other hand, it was precisely this political genesis CCP measures which rendered sanctions a somewhat distinct area within the CCP. It was not only the wording of the relevant instruments which made this clear;45 it was also their scope which was articulated as if the long-standing debate about the scope of the CCP had been irrelevant: for instance, sanctions covered services and transport.46 Therefore, their non-Community political genesis and practical implications defined sanctions as a distinct area within the scope of the CCP. The above was confirmed by the Treaty on European Union at Maastricht which formalised the above formula. A specific legal basis was introduced (Article 301 EC) which provided for the adoption by the Council by qualified majority of a regulation 43 See PJ Kuyper, ‘Sanctions against Rhodesia, the EEC and the Implementation of General International Legal Rules’ (1975) 12 Common Market Law Review 231; and P Willaert, ‘Les sanctions économiques contre la Rhodésie (1965–1979)’ (1985) 18 Revue Belge de Droit International 216. 44 See PJ Kuyper, ‘Trade Sanctions, Security and Human Rights and Commercial Policy’ in M Maresceau (ed), The European Community’s Commercial Policy after 1992: The Legal Dimension (Dordrecht, Martinus Nijhoff, 1993) 395; and P Sturma, ‘La participation de la Communauté européenne à des “sanctions” internationales’ [1993] Revue du Marche Commun et de l’Union Europeene 250. 45 See eg Council Reg 2340/90 preventing trade by the Community as regards Iraq and Kuwait [1990] OJ L213/1. 46 Ibid, and 3155/90 [1990] OJ L304/1.

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imposing sanctions on third countries following a CFSP measure to that effect. A similar rule was provided for financial sanctions in Article 60 EC which is the precursor to the current legal basis. In formalising the two-step formula for sanctions, the Maastricht Treaty acknowledged that sanctions were, indeed, a distinct area within the sphere of EC external relations: despite the procedural similarities with the CCP (the provision for a Council Regulation, qualified majority voting), the removal of sanctions from the purview of the latter clearly illustrated the idiosyncratic way in which the CCP had applied to them de lege lata. This is confirmed by the wording of Article 301 EC which referred to ‘economic sanctions’, hence indicating that the scope of the measures envisaged was broader than that of the CCP.47 The new legal basis also illustrated the maturity of the foreign policy rules of the Union, so much so that they were formally construed as an essential requirement for the imposition of sanctions.

3.2 The Approach of the Court of Justice In a number of cases about the interpretation and application of sanctions based on the pre-Maastricht formula, ie the combination of a CCP regulation and with an EPC decision, the Court elaborated on the legal regulation of trade measures with foreign policy implications. 3.2.1 Asserting Jurisdiction The first such judgment was in Bosphorus,48 a reference from the Irish Supreme Court. In that case, a Turkish air charterer and travel organiser had leased for a period of four years two aircraft owned by the Yugoslav national airline. Under the lease agreement, the latter retained ownership of the aircraft for the period of the lease, whereas Bosphorus had complete control of their day-to-day management. The problem was that the lease agreement was concluded after sanctions had been imposed on the Federal Republic of Yugoslavia pursuant to Community secondary legislation implementing the relevant UN Security Council Resolutions. In particular, Article 18 of Regulation 990/93 provided that all vessels in which a majority or controlling interest was held by a person or undertaking in or operating from Serbia and Montenegro should be impounded by the authorities of the Member States.49 In essence, two issues were raised before the Court of Justice: the first dealt with the application of the above provision of the Regulation against an undertaking which, whilst leasing the vessels in question, was neither their owner nor established or operating in Serbia and Montenegro; the second issue was whether such an interpretation of Regulation 990/93 would run counter to fundamental rights and the principle of proportionality. The Court answered the first question in the affirmative: the wording of Article 8 of Regulation 990/93 made no distinction between ownership of an aircraft and its 47 See Koutrakos, n 3 above, at 68–72. For the relationship between Art 301 EC and other EC Treaty provisions, see ibid, 79 et seq. 48 Case C-84/95 Bosphorus Hava Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and Communications and others [1996] ECR I-3953. 49 Council Reg 990/93 concerning trade between EEC and FRY (Serbia and Montenegro) [1993] OJ L102/14.

498 Links Between External Policies day-to-day operation and control; in addition, to render the latter the decisive criterion for the application of the sanctions imposed under that Regulation ‘would jeopardize the effectiveness of the strengthening of the sanctions, which consist in impounding all means of transport of [Serbia and Montenegro] and its nationals  … in order further to increase the pressure on that republic’.50 In reaching this conclusion, the Court expressly took into account the text and aim of the UN Resolutions which both the EPC Decision and Regulation 990/93 implemented. As to whether a broad construction of the prohibition laid down in Regulation 990/93 was contrary to fundamental human rights and to the principle of proportionality, the Court replied in the negative. It pointed out that the specific rights invoked by the plaintiff in the main proceedings, namely the right to peaceful enjoyment of property and the freedom to pursue a commercial activity, were not absolute: instead, they were subject to restrictions justified by objectives of general interest pursued by the Community.51 It was, then, pointed out that the imposition of any sanctions impinges upon the rights of persons who are not responsible for the situation which had led to their adoption. It then added that the importance of the aims pursued by such regimes was such as to justify negative consequences ‘even of a substantial nature’ for some operators.52 To that effect, the Court made detailed reference to the objectives of the sanctions regime as expressed in the preamble to Regulation 990/93 and reached the following conclusion: [A]s compared with an objective of general interest so fundamental for the international community, which consists of 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.53

In terms of legal reasoning, the method followed by the Court appears somewhat curious in so far as the wording of the requirement in the UN Council Resolution that aircraft be impounded was identical to that in Article 8 of Regulation 990/93. And yet, the Court chose to rely upon the former in order to substantiate the broad definition of the terms of the Sanctions Regulation. It is in terms of judicial principle that this route may be understood. In interpreting an international instrument54 which a non-Community measure undertakes to implement by means of Community legislation, the Court makes it clear that the interaction between different measures adopted pursuant to different sets of rules by no means undermine its intention to exercise fully its jurisdiction. Viewed from this angle, the approach of the Court constitutes a statement aimed at affirming its jurisdiction within the multi-level legal context within which sanctions are implemented by the Member States following a UN Resolution. It is noteworthy that the substantive conclusion of the exercise of its jurisdiction was to sanction as broad a scope of the embargo as the wording of the Sanctions Regulation and the UN Security Council 50

n 48 above, para 18. Ibid, para 21 of the judgment with reference to Case 44/79 Hauer v Land Rheinland-Pfalz [1979] ECR 3727; Case 5/88 Wachauf v Bundesamt für Ernährung und Forstwirtschaft [1989] ECR 2609; and Case C–280/93 Germany v Council [1994] ECR I–4973. 52 n 48 above, para 23. 53 Ibid, para 26. 54 See the comments in N Burrows, ‘Caught in the Cross-Fire’ (1997) 22 European Law Review 170. 51

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Resolution could possibly carry. In other words, the exercise of the Court’s jurisdiction also conveyed the message that the effet utile of the sanctions regimes would be ensured. It was against this background that the judgment in Bosphorus illustrated a strict approach to the human rights defence upon which the plaintiff sought to rely in the main proceedings. The Court did not engage in a detailed assessment of the specific restriction entailed by the application of the sanctions rules— instead, it gave precedence to the objectives pursued by the Regulation in a rather automatic manner, assuming that the application of any sanctions regime would entail restrictions on the legal position of trade operators. In relation to the criticism which this approach has attracted,55 two points may be made. First, the sweeping scope of this part of the judgment appears to suggest that the Court would be unwilling to be drawn into a detailed substantive analysis of the specific ways in which the legal position of traders would be affected by EU sanctions and the extent to which the latter would meet the requirement of proportionality. However, should this be correct, it would also be qualified in so far as it would apply only to rights invoked before the Court which were not absolute in nature.56 Put in another way, the effet utile interpretation of rules on exports is directly related to the intensity of judicial control over the repercussions of such rules for the legal position of individual traders. Secondly, in a way, the position assumed by the Court in Bosphorus is not dissimilar to that of national courts as envisaged in the judgments in Werner and Leifer: instead of assessing the right of Member States to deviate from Community law in order to protect their public security, it examines the right of Member States to rely upon Community law in order to pursue collectively a foreign policy objective. Whilst it was in the context of the former that the Court recognised the exercise of wide discretion, it is also in the context of the latter that, rather than questioning, it actually supported the quest of the Member States to achieve as effective an application of the relevant rules as possible.57 3.2.2 Discouraging Deviations In Centro-Com58 the Full Court dealt with the extent to which a Member State could legally deviate from Community rules laying down sanctions against third countries. In this reference from the English High Court, the plaintiff was a company exporting pharmaceutical products from Italy to Montenegro. The relevant Community measure, namely Regulation 1432/92,59 prohibited the export of all commodities and products originating in or coming from the Community. However, in implementing the rules laid down in UN Security Council Resolution 757 (1992), it also provided for an exception

55 See 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) 35 Common Market Law Review 137. 56 See, similarly, the analysis in Case 112/00 Schmidberger [2003] ECR I-5659. 57 Bosphorus, then, challenged the implementation of the sanctions regime by the Irish government before national courts. In a unanimous judgment, the Grand Chamber of the European Court of Human Rights ruled that there was no manifest deficiency in the protection of the applicant’s ECHR rights by the Court of Justice in Case C-84/95 Bosphorus: see Bosphorus Hava Yollari v Ireland, App No 45036/98, judgment of 30 June 2005. 58 Case C-124/95, n 23 above. 59 Council Reg 1432/92 prohibiting trade between the EEC and the Republics of Serbia and Montenegro [1992] OJ L151/4.

500 Links Between External Policies regarding those commodities and products intended for strictly medical purposes; such exports would be deemed legal once notified to the Sanctions Committee set up under UN Security Council Resolution 724 (1991) and also granted an export authorisation by the competent national authorities. Having complied with both requirements, CentroCom exported from Italy a number of consignments of pharmaceutical products and blood-testing equipment to two wholesalers in Montenegro whose bank account held by the National Bank of Yugoslavia with Barclays Bank would be debited. The latter was subject to authorisation by the Bank of England and, as a matter of course, was granted for exports authorised by the Sanctions Committee and the national authorities of the exporting state, irrespective of whether that State was the United Kingdom or another Member State. Indeed, of the total number of consignments meeting those requirements, a considerable number were paid for following authorisation by the Bank of England. However, the Treasury changed its policy of automatic authorisation following reports of abuse of the above authorisation procedure. Instead, it decided to authorise payment from bank accounts held in Britain only for exempt products exported from United Kingdom and authorised by the British competent authorities. The reference to the Court of Justice was about the compatibility of the British deviation from the rules of the Sanctions Regulation with the CCP in general and the sanctions rules adopted thereunder in particular. In its judgment, the Full Court addressed directly the relationship between Community competence over trade and national sovereignty in the area of foreign policy. The starting point for its analysis was to acknowledge the latter: indeed, the Court pointed out that it was precisely in the exercise of their sovereignty in that area that sanctions against Serbia and Montenegro had been adopted, as Regulation 1432/92 had been adopted following a decision of the Member States within the framework of ECP to impose sanctions upon those Balkan states. However, the power of the Member States should be exercised in accordance with Community law; having repeated the Werner dictum that the export measures adopted by Member States may not be viewed as beyond the scope of the CCP because of their foreign policy objective, the Court concluded as follows: [W]hile it is for Member States to adopt measures of foreign and security policy in the exercise of their national competence, those measures must nevertheless respect the provisions adopted by the Community in the field of the common commercial policy provided for by Article 133 of the [EC] Treaty [now Article 207 TFEU].60

Having asserted the applicability of CCP rules to the reference before it and, consequently, the existence of its own jurisdiction over the interpretation and application of the relevant measures, the Court went on to assess the validity of the British measure. It pointed out that, as the export prohibition constituted an exception to the rules laid down in the Export Regulation, the latter would still apply to those exports which were not prohibited under the former. It is recalled that the Export Regulation introduced the principle of free exportation and only allowed Member States to impose restrictions in order to protect some exhaustively defined interests such as public security. Drawing upon the broad construction of public security first in Richardt and then in Werner and Leifer, the Court had no difficulty in concluding that

60

n 23 above, para 27.

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a measure intended to apply sanctions imposed by a resolution of the United Nations Security in order to achieve a peaceful solution to the situation in Bosnia-Herzegovina, which forms a threat to international peace and security,  … falls within the exception provided for in Article 11 of the Export Regulation.61

However, whilst the British restriction was justifiable, it was held not to be justified as Community rules were already in existence in order to ensure that the interest which the national restriction purported to protect had already been protected at Community level. In other words, the effective application of sanctions, that is the interest purported to be served by the British restriction, could be ensured by the authorisation procedures applied by other Member States and, in particular, the competent authorities of the state of exportation. The Court held that the Member States should place trust in each other in relation to checks made by the authorities of the exporting state and pointed out that there was nothing regarding the authorisation granted by the Italian authorities to suggest that the system provided under the Sanctions Regulation had not functioned properly.62 The line of reasoning followed by the Court in Centro-Com leaves no doubt as to its implications: the political genesis of a Union trade measure beyond the Union legal framework would in no way impinge on the effectiveness of the latter. As a matter of fact, the references in the judgment to the political choice made by the Member States to have recourse to EC law suggest that the opposite is the case: its integrity is all the more reinforced as recourse to EC law is the outcome of the political will of the Member States to deal with an international issue of particular seriousness. As if the message had not already been brought home, the Court concluded that part of its judgment as follows: [E]ven where measures such as those in issue in the main proceedings have been adopted in the exercise of national competence in matters of foreign and security policy, they must respect the Community rules adopted under the common commercial policy.63

The conclusion that, in the exercise of their sovereignty, Member States may not undermine Union law is not unique in the area of the interface between trade and foreign policy. It has been the starting point for the Court’s case law in other areas of activity which, whilst diverse in scope, are closely related to the core of what states deem to be their sovereign functions, such as direct taxation,64 criminal legislation65 social policy66 and health care.67 In defining the Community legal order as a limit in compliance with 61

Ibid, para 45. The Court also dismissed the argument of the British government that the contested restriction was necessary under Art 307 EC (now 351 TFEU): see para 60 of the judgment and the analysis in Chapter 6 above. 63 Ibid, para 30. 64 See eg Case C-80/94 Wielockx [1995] ECR I-2493, para 16; Case C-107/94 Asscher [1996] ECR I-3089, para 36; Case C-264/96 ICI v Colmer [1998] ECR I-4695, para 19; Case C-311/97 Royal Bank of Scotland [1999] ECR I-2651, para 17; Joined Cases C-397/98 and C-410/98 Metallgesellschaft and Others [2001] ECR I-1727, para 37; Case C-324/00 Lankhorst-Hohorst GmbH v Finanzamt Steinfurt [2002] ECR I-11779, para 26; Case C-319/02 Manninen [2004] ECR I-7477, para 19; Case C-334/02 Commission v France [2004] ECR I-2229, para 21; Case C-446/03 Marks & Spencer [2005] ECR I-10837, para 29; and Case C-524/04 Test Claimants in the Thin Cap Group litigation [2007] ECR I-2107, para 25. 65 See Cases 299/86 Drexl [1988] ECR 1213, at para 17. 66 C-438/05 The International Transport Workers’ Federation and The Finnish Seamen’s Union [2007] ECR I-10779, para 40. 67 See C-120/95 Nicolas Decker v Caisse de maladie des employs privs [1998] ECR I-1831, para 23; Case C-158/96 Raymond Kohll v Union des caisses de maladie [1998] ECR I-1931, para 19; and Case C-157/99 BSM Geraets-Smits and HTM Peerbooms v Stichting Ziekenfonds VGZ and Stichting CZ Groep Zorgverzekeringen 62

502 Links Between External Policies which Member States may exercise their powers, the Court also asserts the wide scope of its jurisdiction. In relation to the substance of the case, two points are worth making. First, by deviating from the Sanctions Regulation, rather than protecting national security, the British authorities acted in complete disregard for the existing legal framework. In relation to the proportionality of the British measure, the Court pointed out that, as it amounted to a requirement that all goods exempt from the sanctions rules be exported only from its own territory, it constituted a disproportionate restriction on the principle of exportation. Instead, had there been concerns about the effectiveness of the sanctions due to specific aspects of the application of the authorisation procedure by the Italian authorities, the British authorities should have relied upon the collaboration procedures between national administrative authorities established under secondary Community legislation.68 All in all, the arguments put forward before the Court seeking to justify the national deviation had precisely the same objective as the strict interpretation adopted by the Court, namely the effective application of the Community rules on sanctions. It was the question of the choice of the appropriate legal means which was approached differently by the Court. Secondly, whilst the intensity of judicial control in Centro-Com was considerable, the overall tone of that judgment was not dissimilar to that in Bosphorus in so far as the effet utile of the Community rules setting out sanctions was ensured, in both cases, by strict compliance with the letter of the relevant legislation. 3.2.3 Highlighting the Role of National Courts Whilst in Bosphorus and Centro-Com the Court asserted the wide scope of its jurisdiction, demonstrated the intensity of its control and ensured the effet utile of Community rules on sanctions, in the subsequent judgment in Ebony Maritime it also highlighted the significance of national courts in the application of those rules.69 This reference from the Italian highest administrative court (Consiglio di Stato) was, again, about the interpretation and application of Regulation 990/93 on trade between the Community and the Federal Republic of Yugoslavia.70 This time the focus was on the prohibition on maritime trade: the Regulation prohibited the entry into the territorial sea of the Federal Republic of Yugoslavia by all commercial traffic, and it required that all vessels, aircraft and cargoes suspected of having violated, or being in violation of, the above prohibition be detained by the competent authorities of the Member States pending investigations. A tanker owned by one of the plaintiffs in the main proceedings had been carrying a cargo of petroleum products belonging to the other plaintiff. It left the Italian port of Brindisi to set sail for the Croatian port of Rijeka. During its journey, the vessel started taking [2001] ECR I-5473, para 46. See also Case C-221/89 Factortame and Others [1991] ECR I-3905, para 14 (in relation to registration of vessels); Case C-475/98 Commission v Austria [2002] ECR I-9797, para 132 (in the field of services liberalisation). 68 Reference was made to Council Reg 1468/81 on mutual assistance between the administrative authorities of the Member States and the cooperation between the latter and the Commission to ensure the correct application of the law on customs or agricultural matters [1981] OJ L144/1. 69 Case C-177/95 Ebony Maritime SA and Loten Navigation Co Ltd v Prefetto della Provincia di Brindisi and others [1997] ECR I-1111. For a comment, see N Burrows, ‘Reinforcing International Law’ (1998) 23 European Law Review 79; and C Vedder and H-P, Folz, annotation on Centro-Com and Ebony Maritime (1998) 35 Common Market Law Review 209. 70 n 49 above.

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on water and its master sent out distress signals indicating that he had to change course towards the nearest coastline of Montenegro, his declared intention being to run the vessel aground. However, a helicopter from the NATO/Western European Union (WEU) forces landed on the vessel’s deck before the latter had even entered Yugoslav territorial waters. A Dutch military squad took control of the vessel, which was then towed back into Brindisi where it was handed over to the Italian authorities. The case referred to the Court originated in the action brought by the two plaintiffs against the decision of the Italian authorities to impound their vessel and confiscate their cargo. What made their case controversial was the fact that their vessel had been in international waters flying the flag of a non-Member State and belonging, along with its cargo, to non-Community companies. Being asked to assess the applicability of Regulation 990/93 in that context, the Court adopted a broad and effet utile-oriented approach to the prohibition contained therein: in terms of its material scope, it opined that neither the wording of the Regulation nor the wording and purpose of the relevant UN Security Council Resolution made any distinction, hence indicating that the vessel’s flag and owner were irrelevant. The same conclusion applied to the territorial scope of the prohibition which was construed broadly enough to cover international waters: not only actual but also attempted entries into Yugoslav territorial waters were covered by the prohibition on all commercial traffic for ‘any other interpretation would risk rendering the prohibition ineffective’.71 Finally, a domestic provision prescribing confiscation of the cargo in case of infringement of the prohibition was not ruled out by Regulation 990/93. A final point was made in relation to the remedies imposed by Italian legislation. The plaintiffs in the main proceedings had argued that these amounted to a system of strict liability and were contrary to the principle of proportionality. However, the Court responded that, in the absence of a Community provision, it was for the Member States to choose the penalties they deem necessary for a violation of Community law. In doing so, they should ensure that the substantive and procedural conditions under which infringements of Community law are penalised are analogous to those applicable for national law of a similar nature and significance. In addition, the Member States should ensure that the penalties they choose are effective, proportionate and dissuasive. It was for the national court to ascertain whether national law met those conditions. In interpreting the terms of the Sanctions Regulation as widely as possible in Ebony Maritime, the Court renders its effet utile approach a theme underpinning its case law on sanctions. What is noteworthy in its judgment, though, is its construction of the principle of proportionality. The significance of this principle in terms of the interface between foreign policy and external trade was highlighted above in the context of exports of dual-use goods. It is recalled, for instance, that in Richardt compliance with the national deviation from the EC transit rules was left for the national court to determine, albeit within the parameters set out in the judgment. In Ebony Maritime, it was also left for the referring court to ascertain whether the penalties for the violation of the EU sanctions were proportionate. However, not only did the Court point out that a system of strict liability penalising breach of a regulation had already been held to be consistent with Community law, but it also repeated the parameters within which the assessment of the principle of proportionality ought to be carried out by the referring court: it referred to the objective of Regulation 990/93, that is to bring to an 71

n 69 above, para 25.

504 Links Between External Policies end the state of war in the Balkans and the violations of human rights and humanitarian international law in Bosnia-Herzegovina and stressed that, as such, that was of fundamental general interest for the international community.72 Finding its place in the concluding paragraph of the judgment, following the acknowledgment of the role of the referring court, this statement, short of absolving national courts of that role, is as close to a substantive assessment of the issue of proportionality as the Court could make. This becomes another thread in the case law on the interactions between foreign policy and trade: by indicating clearly how the test of proportionality should be applied by national courts, the Court of Justice renders it a judicial tool in striking the balance between the effective application of Community law and the gradual development of a symbiotic relationship with national administrations. This instrumentalisation of the principle of proportionality enables the Court of Justice to define a normative space where national concerns about foreign policy and national security would be received sympathetically, albeit not unreservedly.

3.3 The Current Rules Sanctions are governed by Article 215 TFEU, which reads as follows: 1. Where a decision, adopted in accordance with Chapter 2 of Title V of the Treaty on European Union, provides for the interruption or reduction, in part or completely, of economic and financial relations with one or more third countries, the Council, acting by a qualified majority on a joint proposal from the High Representative of the Union for Foreign Affairs and Security Policy and the Commission, shall adopt the necessary measures. It shall inform the European Parliament thereof. 2. Where a decision adopted in accordance with Chapter 2 of Title V of the Treaty on European Union so provides, the Council may adopt restrictive measures under the procedure referred to in paragraph 1 against natural or legal persons and groups or non-State entities. 3. The acts referred to in this Article shall include necessary provisions on legal safeguards.

The scope of sanctions provided for in Article 215 TFEU is broad: the term ‘economic and financial relations’ covers trade, investment, the transfer of certain or any financial assets or the freezing of the assets of the target state, and transport sanctions, including the prohibition on flights between the target state and the Member States. As for the target of sanctions, Article 215(1) TFEU refers to ‘one or more third countries’. This was also the formulation of its precursor (Article 301 EC). The provision of Article 215(2) TFEU which refers to ‘natural or legal persons and groups or non-State entities’ was added at Lisbon. So were the provisions in Article 75 TFEU about ‘capital movements and payments, such as the freezing of funds, financial assets or economic gains belonging to, or owned or held by, natural or legal persons, groups or non-State entities’. These were in the light of the much-discussed Kadi litigation and the increasing number of EU measures freezing assets of individuals suspected of financing terrorism after the 9/11 attacks. One of the questions raised before the Court was whether the Union had the competence to impose such sanctions, given that Article 301 EC referred only to

72

Ibid, para 38 with reference to Case C-84/95 Bosphorus, n 48 above, para 26.

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states. Both the General Court (then the CFI)73 and the Court of Justice74 answered this question in the affirmative. They held that the provision about ‘third countries’ covered both the governing regime of that country and individuals linked to that regime (in that case, al-Qaeda, which financed the Taliban when they ruled in Afghanistan). In the absence of any link with the governing regime of a third country, financial sanctions could have been imposed on the basis of a combination of the EC sanctions provisions and Article 308 EC (now Article 352 TFEU). The latter conclusion was reached by both the CFI and the Court of Justice, albeit on the basis of a different line of reasoning. The entry into force of the Lisbon Treaty has rendered this debate of historical significance and this analysis will not examine the convoluted line of reasoning which underpinned the conclusion by the Court of Justice. Suffice it to point that Article 215 TFEU is relied upon regularly by the Union in order to freeze assets of ruling elites of third countries.75 In principle, it is the CFSP measure adopted by the Council which expresses the will of the Union to have recourse to a regulation, ie a legislative measure, in order to impose sanctions on third countries. The Decision performs a twofold function: on the one hand, it refers to the legal and political context which rendered the imposition of sanctions necessary; on the other hand, it refers to the thrust of the regime to be adopted by the Council in a regulation. This function of the CFSP measure is further strengthened in the light of Article 24(1) second subparagraph TEU which prohibits the adoption of legislative acts in the CFSP, a provision added at Lisbon. However, over the years, the CFSP Decisions which precede Sanctions Regulations may include considerable detail.76 An important aspect of the sanctions regimes imposed by the EU is the scope for independent action left to the Member States: indeed, the competent national authorities are allowed to authorise activities which fall within the scope of the various deviations provided for in the relevant Council Regulations provided that certain conditions are met. In addition, it is for the Member States to determine the penalties for any violation of the Union rules on sanctions. Furthermore, there is a cooperation procedure established under the sanctions regulations which provides for exchange of information between the Member States and the Commission. The existence of Article 215 TFEU and the adoption of sanctions following a CFSP decision raises the question whether other Treaty legal bases may be used for sanctions in the absence of a CFSP decision. For instance, is it possible for Member States to impose trade sanctions pursuant to a CCP measure? If this question was answered in the affirmative,77 the nature of Article 215 TFEU as lex specialis would be undermined, as would the logic of the sanctions system which requires a political choice expressed in legal terms under the CFSP procedures.78 In cases where there is no consensus under

73

Case T-306/01 Yusuf and Al Al Barakaat v Council and Commission [2005] ECR II-3649. Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundations [2008] ECR I-6351 75 See eg Council Reg 153/2014 amending Regulation (EC) No 314/2004 concerning certain restrictive measures in respect of Zimbabwe [2014] OJ L50/1, Council Reg 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine [2014] OJ L78/6, amended by Council Reg 811/2014 [2014] OJ L221/11. 76 See eg Council Dec 2010/413 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP [2010] OJ L195/39 and the criticism in P Eeckhout, EU External Relations, 2nd edn (Oxford, Oxford University Press, 2011) 510–11. 77 See K Lenaerts and P Van Nuffel, European Union Law, 3rd edn (London, Sweet & Maxwell, 2011) 1013. 78 See also Koutrakos, n 3 above, 78–79. 74

506 Links Between External Policies these rules, Member States are still bound by the existing EU rules which govern their economic relations with third countries and may deviate from them pursuant to the exceptions laid down therein. In the case of trade, for instance, a Member State may impose unilateral restrictions on imports from or exports to a third country in order to protect its public security under Article 24(2) of the Imports Regulation79 or Article 10 of the Exports Regulation.80 In doing so, its legislation needs to comply with EU law, in accordance with the judgments in Werner and Leifer,81 including the principles of necessity and proportionality, in itself is an assessment carried out under EU law. There is also the question whether Member States may impose sanctions on third counties pursuant to Article 347 TFEU. It is recalled that the precursor to this procedure provided the legal basis for the Member States to impose sanctions in the 1960s, before they chose to have recourse to the CCP, and then the introduction of a specific sanctions provision in primary law. Article 347 TFEU reads as follows: 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.

This provision has not changed since the Treaty of Rome. It has been described by the Court as ‘wholly exceptional’82 for two reasons: on the one hand, there is no limit to the type of measure which a Member State may adopt and, on the other hand, in adopting such a measure, the Member State in question may deviate from the entire body of EU law. Reliance upon Article 347 TFEU is subject to three sets of conditions which the Member States must meet. The first is substantive: it is only in the circumstances laid down therein that a Member State may deviate from EU law. The second is procedural: the Member State which would deem it necessary to act in such circumstances should consult with other Member States in order to adopt a common approach aiming to protect the internal market. The third involves the Commission, which is responsible for examining, along with the Member State concerned, how the national measures deviating from EU law can be adjusted to the rules laid down in the Treaties.83 Finally, the application of Article 347 TFEU is subject to the jurisdiction of the Court pursuant to the exceptional procedure laid down in Article 348 TFEU. The practice under Article 347 TFEU is very limited and there has only been one action brought against a Member State under Article 348 TFEU. This was Case C-120/94 Commission v Greece, the subject-matter of which was the embargo imposed by Greece against the Former Yugoslav Republic of Macedonia (FYROM).84 The Court delivered no judgment on this case, as the embargo was lifted and the Commission withdrew the action early enough. However, Advocate General Jacobs delivered an Opinion which provides the only authority on the interpretation of Article 347 TFEU. 79

Reg 260/2009 [2009] OJ L84/1. Reg 1061/2009 [2009] OJ L291/1. 81 Case C-70/94 Werner, n 13 above, and Case C-83/94 Leifer, n 14 above. 82 Case 222/84 Marguerite Johnston v Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651, para 27. 83 Art 348 TFEU. 84 Case C-120/94 Commission v Greece [1996] ECR I-1513. 80

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Whilst he affirmed the existence of the role of both Commission supervision and judicial review by the Court, he pointed out that the ‘scope and intensity of the review that can be exercised by the Court is … severely limited on account of the nature of the issues raised’, and continued as follows: There is a paucity of judicially applicable criteria that would permit this Court, or any other court, to determine whether serious international tension exists and whether such tension constitutes a threat of war. The nature of the problem is encapsulated in remarks made by an English judge in a rather different context: ‘there are  … no judicial or manageable standards by which to judge these issues, or to adopt another phrase  … the court would be in a judicial no-man’s land’.85

Therefore, given ‘the extremely limited nature of the judicial review that may be carried out in this area’,86 he confined it, in essence, to determining whether reliance upon Article 347 TFEU involves manifest errors or abuse of power. He argued that ‘the question must be judged from the point of view of the Member State concerned’, and elaborated as follows: Because of differences of geography and history each of the Member States has its own specific problems and preoccupations in the field of foreign and security policy. Each Member State is better placed than the Community institutions or the other Member States when it is a question of weighing up the dangers posed for it by the conduct of a third State. Security is, moreover, a matter of perception rather than hard fact. What one Member State perceives as an immediate threat to its external security may strike another Member State as relatively harmless.87

Examining whether ‘in the light of all the circumstances, including the geopolitical and historical background, Greece could have had some basis for considering, from its own subjective point of view, that the strained relations between itself and FYROM could degenerate into armed conflict’,88 he concluded as follows: I do not think that it can be said that Greece is acting wholly unreasonably  … even if [the threat of war] may be long-term and remote.89

The careful wording of this conclusion is noteworthy;90 so is the absence of any reference to the procedural aspects of Article 347 TFEU and the failure by Greece to comply with them.91 All in all, regular recourse to economic sanctions against third countries under Article 347 TFEU must be discouraged, as it would undermine the system set up under

85

Ibid, para 50. Ibid, para 60. Ibid, para 54. 88 Ibid. 89 Ibid, para 56. 90 Further in his Opinion, AG Jacobs pointed out that ‘what matters is not so much that Greece’s fears may be unfounded but rather that those fears appear to be genuinely and firmly held by the Greek Government and, it would appear, by the bulk of the Greek people. Where a government and a people are fervently convinced that a foreign State is usurping a part of their cultural patrimony and has long-term designs on a part of their national territory, it would be difficult to say that war is such an unlikely hypothesis that the threat of war can be excluded altogether. If such matters were to be judged exclusively by what external observers regarded as reasonable behaviour, wars might never occur’ (para 58). 91 See the criticism in P Koutrakos, ‘Is Article 297 EC a “Reserve of Sovereignty”?’ (2000) 37 Common Market Law Review 1339, 1356–59. 86 87

508 Links Between External Policies Article 215 TFEU. In any case, the relevant national measures must comply with both the substantive and procedural conditions set out in Article 347 TFEU.92 As far as the EU practice is concerned, the Council has approved a set of guidelines on implementation and evaluation of sanctions in the framework of the CFSP.93 Rather than containing political statements and oft-repeated platitudes about the role of sanctions in promoting the Union values on the world stage, they explore specific ways that would streamline various aspects of the regulation of sanction regimes and contribute to the enhancement of their effectiveness. The Guidelines cover the entire process from designing and implementing sanctions to enforcing and monitoring them. They set out the main principles underpinning issues such as targeted measures, exemptions, expiration or review of sanctions, implementation of UN Security Council Resolutions and jurisdiction, and they also make recommendations for working methods for autonomous EU sanctions. Throughout the Guidelines, the approach adopted is practical. A standard wording is suggested for various issues such as different types of sanctions measures and products, exception clauses or sanctions to be taken in cases of infringement. The Guidelines also deal with the reference in the CFSP Decision to the Union measures required in order to impose sanctions. As a matter of practice, the former mentions that ‘further action by the Union is needed to implement certain measures’. The Guidelines suggest that where ‘precision is needed to ensure that all measures are implemented in time, the CFSP instrument should indicate expressly how each measure or part of measure will be implemented’.94 A central feature of the Guidelines is their focus on the management of sanctions rather than the overall process leading to their adoption. To that effect, they make it very clear that the political process leading to the decision to impose or repeal sanctions is not addressed at all.95 Instead, the process of monitoring and evaluating sanctions is quite prominent. Since 2004, the Foreign Relations Counsellors Working Party has met regularly in a specific sanctions formation (it is now part of the European External Action Service (EEAS)), at times reinforced by experts from Member States. Its main function being to exchange experience and develop best practice in the implementation and application of sanctions, this Council body has its mandate defined in terms of specific, practical aspects of sanctions management: these include collecting all information available on alleged circumventions of EU sanctions and other international sanctions regimes, exchanging information and experience, including with third states and international organisations, on the implementation of international sanctions regimes, assisting in evaluating the results and difficulties in the implementation of sanctions and examining all relevant technical issues relating to the implementation of EU sanctions. All in all, the Guidelines focus on the management of EU sanctions and seek to address specific issues with practical, standardised solutions.96 92

See also Koutrakos, n 3 above, 79-86. For the more recent version, see Doc 11205/12 PESC 716 (Brussels, 15 June 2012). This the fourth version of the Guidelines (they were first adopted in 2003). See also Doc 9068/13 PESC 475 Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy—new elements (Brussels, 30 April 2013). 94 Ibid, para 49. 95 Ibid, para 1. See Doc 10198/1/04 Basic Principles on the Use of Restrictive Measures (Sanctions) (Brussels, 7 June 2004). 96 See also Doc 8666/1/2008 REV 1 Update of the EU Best Practices for the effective implementation of restrictive measures (Brussels, 24 April 2008). 93

Arms Embargoes 509 4. ARMS EMBARGOES Arms Embargoes

Arms embargoes are imposed on the basis of a CFSP Decision adopted under Article 29 TEU.97 They are not accompanied by a more detailed Council Regulation and are implemented by means of national legislation. An example of such sanctions is provided by Council Decision 2014/449/CFSP on South Sudan which provides as follows: The sale, supply, transfer or export of arms and related materiel of all types, including weapons and ammunition, military vehicles and equipment, paramilitary equipment and spare parts for the aforementioned to South Sudan by nationals of Member States or from the territories of Member States, or using their flag vessels or aircraft, shall be prohibited whether originating or not in their territories.98

Arms embargoes are often accompanied by restrictions on the provision of certain services, such as brokering or services related to the provision, manufacture, maintenance and use of banned items. Like economic sanctions, they often provide for exemptions: for instance, the arms embargo on Liberia did not apply to non-lethal military equipment intended solely for humanitarian or protective use, and related technical assistance and training.99 In addition to such sanctions regimes, there are common criteria which Member States are required to take into account when they authorise exports of armaments. These have been introduced in the light of the increasing concern of the international community that exports of armaments should be contained.100 Initially, the criteria were set out in a document entitled ‘EU Code of Conduct on Arms Exports’. The non-legal nature of that instrument illustrated the sensitive nature of its subject-matter and the limited effectiveness of its application. In 2008, the Union upgraded the legal status of the criteria by setting them in Common Position 2008/944/CFSP in order to set high common standards which shall be regarded as the minimum for the management of, and restraint in, transfers of military technology and equipment by all Member States, and to strengthen the exchange of relevant information with a view to achieving greater transparency.101

These criteria apply to a list of arms and related products drawn up by the Council which constitutes the Common Military List of the European Union and has been updated a number of times.102 97 See eg Council Dec 2013/798/CFSP concerning restrictive measures against the Central African Republic [2013] OJ L352/51; Council Dec 2013/183/CFSP concerning restrictive measures against the Democratic People’s Republic of Korea and repealing Dec 2010/800/CFSP [2013] OJ L111/52 98 [2014] OJ L2003/100, Art 1. Art 8(3) provides for the annual assessment of its implementation by the Council. For the more recent Council’s Report, see [2011] OJ C382/1. 99 Council Dec amending Common Position 2008/109/CFSP concerning restrictive measures imposed against Liberia [2014] OJ L176/45. 100 See eg the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies which require that the participating states exchange information and exercise their discretion in accordance with a number of agreed procedures and criteria (last amended in 2014). The participating states are Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, the UK and the USA. 101 [2008] OJ L335/99, para 3 of preamble. The Common Position originates in a Code of Conduct adopted by the Council in 1998. 102 For the more recent version, see [2014] OJ C18/1.

510 Links Between External Policies The criteria set out in Common Position 2008/944/CFSP include:  respect for the international obligations and commitments of Member States, in particular the sanctions adopted by the UN Security Council or the European Union, agreements on non-proliferation and other subjects, as well as other international obligations;  respect for human rights in the country of final destination as well as respect by that country of international humanitarian law;  the internal situation in the country of final destination, as a function of the existence of tensions or armed conflicts;  preservation of regional peace, security and stability;  the national security of the Member States and of territories whose external relations are the responsibility of a Member State, as well as that of friendly and allied countries;  the behaviour of the buyer country with regard to the international community, as regards in particular its attitude to terrorism, the nature of its alliances and respect for international law;  the existence of a risk that the military technology or equipment will be diverted within the buyer country or re-exported under undesirable conditions;  the compatibility of the exports of the military technology or equipment with the technical and economic capacity of the recipient country, taking into account the desirability that states should meet their legitimate security and defence needs with the least diversion of human and economic resources for armaments. The higher legal status of these guidelines notwithstanding, their effectiveness relies upon the willingness of the Member states to abide by them. The best-known and most controversial case of arms embargo concerns China. Following the violent suppression of demonstrations in Tiananmen Square in Beijing in June 1989, the European Council issued a declaration in which ‘it strongly condemns the brutal repression taking place in China’ and asked the Member States to halt all programmes of military cooperation and impose an embargo on trade in arms with China. As the years went by, a number of Member States, with France and the United Kingdom quite active amongst them, formed the view that the embargo should be lifted. To the various reservations to this proposal expressed by the United States, the response by European officials was that the lifting of the embargo would be accompanied by a considerable tightening of the rules laid down in the Code of Conduct. In the light of the increasingly hostile reaction by the United States, this proposal was temporarily shelved.103 For the purposes of this analysis, the terms in which the various actors expressed their positions were noteworthy: the proponents of the embargo seriously doubted that any meaningful control of arms exports could be maintained on the basis of the Code of Conduct; in a similar vein, the advocates of lifting the embargo focused mainly on the symbolic significance of this gesture, rather than its substantive effect.104 This episode suggested that neither the precursor to

103

See Financial Times, 15 April 2005, 8. See the interview by the French Defence Minister in the International Herald Tribune, 9 March 2005, in which she suggested that the retention of the embargo would in fact facilitate the development of defence industries in China. 104

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Common Position 2008/944/CFSP nor the embargo regime itself was deemed sufficiently tight to pursue effectively their stated objectives.105

5. SMART SANCTIONS Smart Sanctions

Smart sanctions target specific individuals or groups of persons or legal entities, as opposed to entire countries. As their target is narrower, they aim to minimise the economic and other consequences they may have for the wider population of a third country. They began in the early 1990s and have become popular following the 9/11 terrorist attacks. As mentioned above in this chapter, in the pre-Lisbon days such sanctions were imposed pursuant to a combination of legal bases, namely Articles 301 EC and 60 EC (now Article 215 TFEU) and Article 308 EC (now Article 351 TFEU).

5.1 The Current Rules The Lisbon Treaty introduces two legal bases for smart sanctions. The first is in Article 215(2) TFEU, which reads as follows: Where a decision adopted in accordance with Chapter 2 of Title V of the Treaty on European Union so provides, the Council may adopt restrictive measures under the procedure referred to in paragraph 1 against natural or legal persons and groups or non-State entities.

The second legal basis is laid down in Article 75 TFEU and reads as follows: Where necessary to achieve the objectives set out in Article 67, as regards preventing and combating terrorism and related activities, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall define a framework for administrative measures with regard to capital movements and payments, such as the freezing of funds, financial assets or economic gains belonging to, or owned or held by, natural or legal persons, groups or non-State entities. The Council, on a proposal from the Commission, shall adopt measures to implement the framework referred to in the first paragraph.

Both Articles 215 and 75 TFEU provide that any act adopted thereunder ‘shall include necessary provisions on legal safeguards’. Article 75 TFEU is part of the general provisions of Title V TFEU on the area of freedom, security and justice (AFSJ). Its context is not the only feature which distinguishes it from Article 215(2) TFEU (which is part of the TFEU provisions on external action). First, its objective is narrower than the latter, as it aims to prevent and combat terrorism and related activities, as opposed to the broader objectives covered by the CFSP pursuant to which a Council Regulation may be adopted under Article 215 TFEU. Secondly, rather than the two-step process envisaged in the latter provision, Article 75 TFEU provides for the procedure governing the adoption of most internal EU measures, 105 See also JL Erickson, ‘Market Imperative Meets Normative Power: Human Rights and European Arms Transfer Policy’ (2013) 19 European Journal of International Relations 209. For an assessment of EU arms embargoes more generally, see JL Erickson, ‘Stopping the Legal Flow of Weapons: Compliance with Arms Embargoes, 1981−2004’ (2013) 50 Journal of Peace Research 159.

512 Links Between External Policies ie the ordinary legislative procedure. This has implications for the Parliament: it is not involved under Article 215 TFEU, but it is the co-legislature under Article 75 TFEU. The above contextual, substantive and procedural differences notwithstanding, the similar subject-matter of the two provisions has raised questions about their applicability and has given rise to inter-institutional disputes. In Case C-130/10 European Parliament v Council the Court of Justice ruled on the relationship between Articles 215 and 75 TFEU.106 The Parliament challenged the legality of Council Regulation  1286/2009 amending Regulation No  881/2002 freezing financial assets of individuals suspected of financing international terrorism.107 It argued that the fight against terrorism was an objective of Article 75 TFEU and, therefore, the contested Regulation should have been adopted under that provision. This suggests that no CFSP decision would be necessary as a prerequisite for such sanctions and that the Parliament should have been involved in the adoption of the relevant rules. The Grand Chamber of the Court did not share this view. In essence, it made three points. The first was about the possibility that Articles 215(2) and 75 TFEU could be relied upon as joint legal basis. This was rejected: [E]ven if the contested regulation does pursue several objectives at the same time or have several components indissociably linked, without one’s being secondary to the other, the differences in the procedures applicable under Articles 75 TFEU and 215(2) TFEU mean that it is not possible for the two provisions to be cumulated, one with the other, in order to serve as a twofold legal basis for a measure such as the contested regulation.108

The second point was about the different objectives of the two provisions and their different legal context. While the Court acknowledged that terrorism may well be an AFSJ objective, it held that Article 75 TFEU may not be viewed as a lex specialis to Article 215(2) TFEU. The Court referred to the objectives of the Union’s external action under Article 21(2) TEU, as well as the broad scope of CFSP under Article 24(1) TEU, and held that: Given that terrorism constitutes a threat to peace and international security, the object of actions undertaken by the Union in the sphere of the CFSP, and the measures taken in order to give effect to that policy in the Union’s external actions, in particular, restrictive measures for the purpose of Article 215(2) TFEU, can be to combat terrorism. That assertion is borne out by, in particular, the tenor of Article  43(1) TEU, which makes it clear that all the tasks covered by the common security and defence policy ‘may contribute to the fight against terrorism, including by supporting third countries in combating terrorism in their territories’.109

Instead, Article 75 TFEU is confined to its specific legal context: Incorporated in Part Three of the FEU Treaty on Union policies and internal actions, and more specifically in Title V thereof, entitled ‘Area of freedom, security and justice’, that article simply refers to the definition, for the purpose of preventing terrorism and related activities and combating the same, of a framework for administrative measures with regard to capital

106

Case C-130/10 European Parliament v Council ECLI:EU:C:2012:472. [2009] OJ L346/42. 108 Ibid, para 49. See also the Opinion of AG Bot, para 69. 109 Ibid, paras 63–64. 107

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movements and payments, when this is necessary to achieve the objectives set out in Article 67 TFEU. 110

This was the case irrespective of the links between internal and external security and the difficulties of distinguishing between them. The third point was about the impact that reliance upon Article 75 TFEU, rather than Article 215(2) TFEU, would have on the rights of the Parliament given that there is no provision for its involvement in the procedure laid down in the latter TFEU provision. While it acknowledged the Parliament’s role, it held that: Nevertheless, the difference between Article 75 TFEU and Article 215 TFEU, so far as the Parliament’s involvement is concerned, is the result of the choice made by the framers of the Treaty of Lisbon conferring a more limited role on the Parliament with regard to the Union’s action under the CFSP.111

Therefore, smart sanctions under Article 75 TFEU are confined to measures that aim to achieve AFSJ objectives, whereas sanctions under Article 215(2) TFEU are imposed in the context of the Union’s external action in general and the CFSP in particular.

5.2 The Case-law The analysis in Section 3 in this chapter examined the case-law of the Court of Justice on sanctions against third countries. It highlighted the determination of the Court to establish its jurisdiction and the paramount role of the effectiveness of sanctions in the interpretation of the relevant measures. In the last few years, a rich case-law on smart sanctions has also emerged. This includes the Kadi litigation which has now assumed an almost emblematic role for both the relationship between EU and international law and the protection of fundamental human rights in the Union legal order. This case-law has given rise to a number of EU international relations issues, including the competence of the EU to impose smart sanctions (outlined above in this chapter), the relationship between EU and UN law and the scope of the jurisdiction of the Court of Justice (examined in Chapters 6 and 7 above), and the rights that individuals targeted by such sanctions should enjoy. It is the latter that this section will examine. (i) The Kadi Case-law The facts of the Kadi litigation were set out in section 4 of Chapter 6. It is recalled that in Kadi I the CFI confined its review of the contested EU Regulation to whether it complied with jus cogens. The applicant argued that a number of their fundamental rights had been violated, specifically the right to make use of his property, the right to a fair hearing, and the right to an effective judicial remedy. The CFI rejected these claims. In relation to the applicant’s right to make use of his property, it held that freezing funds was justified in the light of the importance of the fight against international terrorism. It only affected the use rather than the substance of the right and, in any case, was reviewable following procedures set out in UN measures. In relation to the right to a fair hearing, the absence 110 111

Ibid, para 54. Ibid, para 82.

514 Links Between External Policies of the right to be heard directly by the authorising Sanctions Committee was viewed as a legitimate restriction, all the more so given that individuals targeted by the contested measures could seek to be heard indirectly, through the authorities of the state of their nationality or residence. In relation to the right to an effective judicial remedy, the CFI deemed the existing scheme under the Resolution, which authorised the Sanctions Committee to review cases on request, sufficient. The judgment attracted attention and criticism. The internationalist stance of the CFI was viewed to be at odds with the idea of the Union as a legal order based on the rule of law.112 When Advocate General Maduro rendered his Opinion in appeal in Kadi in which he argued against every point made by the CFI, The Economist published a two-page article about the case entitled ‘Coming Up Trumps’.113 In his forceful and concise Opinion, Advocate General Maduro argued that the Court cannot, in deference to the views of … institutions [such as the UN Security Council], turn its back on the fundamental values that lie at the basis of the Community legal order and which it has the duty to protect.114

He also suggested that had there been a genuine and effective mechanism of judicial control by an independent tribunal at the level of the United Nations, then this might have released the Community from the obligation to provide for judicial control of implementing measures that apply within the Community legal order.115

In the absence of such mechanism, ‘Community institutions cannot dispense with proper judicial review proceedings when implementing the Security Council resolutions in question’,116 which would require that the relevant authorities ‘justify such measures and demonstrate their proportionality, not merely in the abstract, but in the concrete circumstances of a given case’.117 The Court of Justice reversed the main threads of the judgment of the CFI. Having accepted that a UN Security Council Resolution may not undermine the constitutional fundamentals of the Community legal order (including the principle of respect for fundamental human rights), it held that:118 [T]he Community judicature must, in accordance with the powers conferred on it by the EC Treaty, ensure the review, in principle the full review, of the lawfulness of all Community acts in the light of the fundamental rights forming an integral part of the general principles of Community law, including review of Community measures which, like the contested regulation, are designed to give effect to the resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations. 112 See eg J D’Aspremont and F Dopagne, ‘Kadi: The ECJ’s Reminder of the Elementary Divide between Legal Orders’ (2008) 5 International Organizations Law Review 371; L van den Herik, ‘The Security Council’s Targeted Sanctions Regimes: In Need for Better Protection of the Individual’ (2007) 20 Leiden Journal of International Law 797; W Vlcek, ‘Acts to Combat the Financing of Terrorism: Common Foreign and Security Policy at the European Court of Justice’ (2006) 11 European Foreign Affairs Review 491. For a different view, see C Tomuschat, ‘Annotation on Case T-306/01, Ahmed Ali Yusuf’ (2006) 43 Common Market Law Review 537  113 The Economist, 2 February 2008, 65. 114 n 74 above, para 44. 115 Ibid, para 54. 116 Ibid. 117 Ibid, para 47. 118 Ibid, para 326.

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The Court concluded that Regulation 881/2002 violated the right to defence, in particular the right to be heard, the right to effective judicial review, and the right to property. The first two rights were held to have been ‘patently not respected’.119 The individuals were afforded no opportunity to hear the grounds for their inclusion in the lists, and so were not in a position to defend their rights in the best possible conditions and to decide whether there was any point in their applying to the Union Courts. The Court accepted that certain conditions must be met on grounds of effectiveness and security: for instance, the EU authorities would not be required to communicate the grounds for inclusion in the list before the name of a person or entity was entered on that list for the first time; similarly, they would not be required to hear the appellants before their names were included for the first time on the list. However, the Council did not communicate with the appellants within a reasonable time after the contested measures were enacted. In relation to the right to property, the Court accepted that it was subject to restrictions and that the freezing measures constituted a temporary precautionary measure not designed to deprive the appellants of their property. Furthermore, it pointed out that the fight against the threats to international peace and security posed by acts of terrorism was an objective of general interest so fundamental to the international community that the freezing of funds could not per  se be inappropriate or disproportionate. However, the contested measures did not contain any guarantee enabling the appellants to put their case to the competent authorities in a situation in which the restriction on their property must be regarded as significant. This is what made the restriction on their property unjustified. While it annulled Regulation 881/2002, the Court did not do so with immediate effect. It held that immediate annulment would be capable of seriously and irreversibly prejudicing the effectiveness of the restrictive measures imposed by the regulation and which the Community is required to implement, because in the interval preceding its replacement by a new regulation Mr Kadi and Al Barakaat might take steps seeking to prevent measures freezing funds from being applied to them again.120

For these reasons, it held that the Regulation could be valid for three months from the date of delivery of the judgment. Prior to the expiry of this three-month period, the Commission aadopted Regulation 1109/2008, amending Regulation 881/2002, which provided that the Commission ‘will communicate the grounds on which this Regulation is based to the individuals concerned, provide them with the opportunity to comment on these grounds and review this Regulation in view of the comments and possible available additional information’.121 In addition, the French Representative at the UN (France held the Presidency of the EU at the time) requested that the Sanctions Committee make available the summary of reasons for Mr Kadi’s inclusion in the list. This summary set out a number of allegations (including that Mr Kadi was a founding trustee of a foundation linked to Bin Laden and providing financial support for anti-terrorist activities). Having received this summary, the European Commission attached it to a letter it 119

Ibid, para 334. Ibid, para 373. In addition, ‘it cannot be excluded that, on the merits of the case, the imposition of those measures on the appellants may … prove to be justified’ (para 374). 121 [2008] OJ L299/23. 120

516 Links Between External Policies sent Mr Kadi, to which it invited him to respond. Mr Kadi requested that the Commission disclose the evidence supporting the allegations made against him in the summary of reasons as well as the relevant documents in the Commission’s file. The Commission argued that, following the Court’s judgment in Kadi, it was not under the duty to do so, and adopted Regulation 1190/2008 which amended Regulation 881/2002 and which maintained Mr Kadi’s name in the list of people whose funds should be frozen.122 This last measure was challenged by Mr Kadi in Case T-85/09 Kadi v Commission (Kadi II). He argued that it should be annulled on various grounds: its adoption lacked a sufficient legal basis; it violated his rights of defence and to effective judicial protection; it did not state reasons; and it violated the principle of proportionality. The General Court began its analysis by taking the extraordinary step of setting out in detail the criticism which the judgment in Kadi I by the Court of Justice had attracted, and pointed out that ‘those criticisms are not entirely without foundation’.123 It then addressed the issue of the appropriate standard of judicial review. The main argument of the Commission was that it was not for the Union to review the decisions of the Sanctions Committee or the evidence maintained exclusively in New York: that was a role for the United Nations itself, as it is endowed with responsibility for the maintenance of international security. Therefore, the Commission argued, the role of the Union’s Courts must be similarly limited to a review of wholly manifest errors of fact or assessment (such as the identity of the person listed). A wider role would undermine the effectiveness of the UN system. Relying extensively upon the case-law of both the European Court of Human Rights and national courts, the General Court rejected this argument: 123. If the intensity and extent of judicial review were limited in the way advocated by the Commission and the intervening governments  … and by the Council  …, there would be no effective judicial review of the kind required by the Court of Justice in Kadi but rather a simulacrum thereof. That would amount, in fact, to following the same approach as that taken by this Court in its own judgment in Kadi, which was held by the Court of Justice on appeal to be vitiated by an error of law. The General Court considers that in principle it falls not to it but to the Court of Justice to reverse precedent in that way, if it were to consider this to be justified in light, in particular, of the serious difficulties to which the institutions and intervening governments have referred. … 126. The General Court therefore concludes that, in circumstances such as those of this case, its task is to ensure—as the Court of Justice held at paragraphs 326 and 327 of Kadi—‘in principle the full review’ of the lawfulness of the contested regulation in the light of fundamental rights, without affording the regulation any immunity from jurisdiction on the ground that it gives effect to resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations. … 127. That must remain the case, at the very least, so long as the re-examination procedure operated by the Sanctions Committee clearly fails to offer guarantees of effective judicial protection, as the Court of Justice considered to be the case at paragraph 322 of Kadi.124

In the light of the above considerations, the General Court concluded that ‘the review carried out by the Community judicature of Community measures to freeze funds can 122

[2008] OJ L322/25. Case T-85/09 Kadi v Commission [2010] ECR II-05177, para 121. 124 Ibid, paras 123, 126–27. 123

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be regarded as effective only if it concerns, indirectly, the substantive assessments of the Sanctions Committee itself and the evidence underlying them’.125 The General Court then concluded that the contested Regulation amounted to an infringement of the right of the defence and of the right to effective judicial protection because the applicant’s rights were observed ‘only in the most formal and superficial sense’.126 Finally, it concluded that the Commission’s conduct violated the principle of proportionality, as no real safeguards were introduced to enable the applicant to put his case to the competent authorities. The Commission, the Council, and the United Kingdom appealed against the judgment of the General Court.127 The significance of the case is illustrated by the fact that the governments of fourteen Member States intervened. It is also interesting, and quite surprising, that the Council and Ireland asked the Court expressly to reconsider the principles set out in Kadi I. As for Mr Kadi, his name had been removed from the UN list before the judgment was rendered. In his Opinion, Advocate General Bot sided with the appellants. He argued that the intensity of judicial review sanctioned by the General Court would be inappropriate in the light of the preventative nature and political dimension of the sanctions, and the primary role of the United Nations in the maintenance of international security. He also argued that the increasing improvement of the review procedure before the Sanctions Committee should create a presumption that listings are based on sufficient evidence and information. He then made a distinction between the external and the internal lawfulness of the listing Regulation. The former is about the procedure governing listings and Advocate General Bot proposed that the Court exercise full review; the latter is about the substantive merits of the listing and he suggested that limited review be exercised. As it should not be for the Union’s authorities to examine the evidence and information held by the Sanctions Committee, the right of defence and right to effective judicial protection would be met if a sufficiently detailed statement of reasons was communicated to him. The Court did not follow the advice of its Advocate General. Its judgment began by examining whether the General Court ought to have ruled that the EU measures listing Mr Kadi should be immune from jurisdiction. This claim, made by the appellants, was rejected and the Court reaffirmed its position that without the primacy of a Security Council resolution at the international level thereby being called into question, the requirement that the European Union institutions should pay due regard to the institutions of the United Nations must not result in there being no review of the lawfulness of such European Union measures, in the light of the fundamental rights which are an integral part of the general principles of European Union law.128

The Court then examined the issue of the intensity of judicial review and the interpretation of the rights of the defence, the right to effective judicial protection and the principle of proportionality. It accepted that the rights of the defence and the right to effective judicial protection were subject to limitations under the EU’s Charter of Fundamental 125

Ibid, para 129. Ibid, para 171. Joined Cases C-583/10 P, C-593/10 P and C-595/10 P, Kadi II ECLI:EU:C:2012:638. 128 Ibid, para 67. See also Joined Cases C-399/06  P and C-403/06  P Hassan and Ayadi v Council and Commission [2009] ECR I-11393, paras 69–75; and Case C-548/09 P Bank Melli Iran v Council [2011] ECR I-0000, para 105. 126 127

518 Links Between External Policies Rights, provided that certain conditions were met. It also accepted that the Commission had passed on to Mr Kadi all the information which it had received from the UN Sanctions Committee, namely the summary of reasons on the basis of which he had been listed. However, the Court pointed out that it is for the EU authorities to assess on a caseby-case basis whether it would be necessary for the EU institutions to liaise with the Sanctions Committee and, through it, the UN Member which proposed the listing of the individual concerned, in order to obtain, in that spirit of effective cooperation which, under Article 220(1) TFEU, must govern relations between the Union and the organs of the United Nations in the fight against international terrorism, the disclosure of information or evidence, confidential or not, to enable it to discharge its duty of careful and impartial examination.129

As to the intensity of judicial review, the Court held that: The effectiveness of the judicial review guaranteed by Article 47 of the Charter also requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to list or to maintain the listing of a given person in Annex I to Regulation No 881/2002 (the Kadi judgment, paragraph 336), the Courts of the European Union are to ensure that that decision, which affects that person individually  … is taken on a sufficiently solid factual basis.  … That entails a verification of the allegations factored in the summary of reasons underpinning that decision …, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or, at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated. To that end, it is for the Courts of the European Union, in order to carry out that examination, to request the competent European Union authority, when necessary, to produce information or evidence, confidential or not, relevant to such an examination.130

The above does not suggest that the EU authorities would be required to produce before the Court all the information and evidence related to the summary provided by the Sanctions Committee. However, it is ‘necessary that the information or evidence produced should support the reasons relied on against the person concerned’.131 Having construed the intensity of its review in broad terms, the Court of Justice went on to acknowledge the security considerations that underpin judicial review in such cases: Admittedly, overriding considerations to do with the security of the European Union or of its Member States or with the conduct of their international relations may preclude the disclosure of some information or some evidence to the person concerned. In such circumstances, it is none the less the task of the Courts of the European Union, before whom the secrecy or confidentiality of that information or evidence is no valid objection, to apply, in the course of the judicial review to be carried out, techniques which accommodate, on the one hand, legitimate security considerations about the nature and sources of information taken into account in the adoption of the act concerned and, on the other, the need sufficiently to

129

n 127 above, para 11. Ibid, paras 119–20 (references omitted). 131 Ibid, para 122. 130

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guarantee to an individual respect for his procedural rights, such as the right to be heard and the requirement for an adversarial process.132

The judgment explains what it considers the minimum threshold that needs to be met by the EU authorities: Having regard to the preventive nature of the restrictive measures at issue, if, in the course of its review of the lawfulness of the contested decision  …, the Courts of the European Union consider that, at the very least, one of the reasons mentioned in the summary provided by the Sanctions Committee is sufficiently detailed and specific, that it is substantiated and that it constitutes in itself sufficient basis to support that decision, the fact that the same cannot be said of other such reasons cannot justify the annulment of that decision. In the absence of one such reason, the Courts of the European Union will annul the contested decision.133

This high-intensity review is justified on the basis of two considerations. The first is the requirement for protection of fundamental rights: Such a judicial review is indispensable to ensure a fair balance between the maintenance of international peace and security and the protection of the fundamental rights and freedoms of the person concerned … those being shared values of the UN and the European Union.134

The second consideration is the deficiency of the review system set out in the context of the UN Sanctions Committee which, whilst improved, does not provide for retroactive annulment of the listing of an individual: The essence of effective judicial protection must be that it should enable the person concerned to obtain a declaration from a court, by means of a judgment ordering annulment whereby the contested measure is retroactively erased from the legal order and is deemed never to have existed, that the listing of his name, or the continued listing of his name, on the list concerned was vitiated by illegality, the recognition of which may reestablish the reputation of that person or constitute for him a form of reparation for the non-material harm he has suffered.135

The Court then dealt with the judgment of the General Court. It is recalled that the latter had found that the failure of the EU institutions to ask the Sanctions Committee for all the information pertaining to the summary with which it had been provided was in violation of its duty to provide reasons. The Court of Justice rejected that conclusion and held that, in that respect, the General Court had erred in law. Instead, it should have examined the substance of the reasons actually adduced by the EU institutions. In fact, this is what the Court of Justice did. It examined all the reasons provided by the Commission and concluded that they were vague and unsubstantiated. For that reason, it rejected the appeal. The intensity of judicial review exercised in Kadi II is high. It is not confined to procedural issues but also covers the substance of the information provided by the EU institutions (ie ‘whether the reasons relied on are sufficiently detailed and specific’).136 Not only was it in marked contrast to the Opinion of Advocate General Bot, but it also did not engage with the review and delisting procedures set out in the UN context. This is striking, given the considerable improvements which were introduced following the 132

Ibid, Ibid, 134 Ibid, 135 Ibid, 136 Ibid, 133

para para para para para

125 (references omitted). 130. 131. 134 (references omitted). 118.

520 Links Between External Policies Kadi I judgment. These followed from the appointment of an Ombudsperson responsible for reviewing requests from individuals and groups to be removed from the al-Qaeda sanctions list.137 The Ombudsperson has had considerable success in the cases she has taken up with the Sanctions Committee. And yet, the Court of Justice does not address this issue, other than to point out that the outcome of this procedure may not lead to the retroactive annulment of the listing measure. The judgment in Kadi II does not strengthen the position of the Ombudsperson in the UN system. In fact, it may be seen to undermine her authority. When it rendered the Kadi I judgment, the Court was viewed as exercising pressure on the United Nations to reform a deeply problematic and widely discredited regime. It was argued that that judgment carried out a ‘bridge function’ which established comity between the EU and UN legal systems as it enabled their institutions to engage in a silent dialogue which entailed the gradual improvement of the UN Sanctions Committee mechanism without undermining the sanctions regime.138 Viewed from that angle, the judgment in Kadi II might be seen curiously disinterested in the UN developments.139 In terms of substance, it is noteworthy that the principle of full review which underpins the judgment is accompanied by a pragmatic acknowledgement of how it could be applied as a matter of fact. While it construes its jurisdiction widely, the Court accepts that just one reason properly detailed and substantiated would be sufficient to render a listing decision valid, even in a case where all the other reasons adduced by the EU institutions were deemed inadequate. This may be seen as a conciliatory gesture to the EU institutions, as they are now required to interact with the UN Sanctions Committee and assess the information provided by the latter. (ii) Other Principles on Smart Sanctions In cases where legal persons are targeted by sanctions, the personal scope of the latter is construed widely. In Case C-380  P Melli Bank plc the Grand Chamber held that subsidiaries of companies targeted by Regulation 423/2007 imposing sanctions on Iran were also covered simply because they were wholly owned by the parent company.140 Similarly, in Case C-348/12 P Kala Naft Article 7(2) of the above Regulation was construed as suggesting that any company which traded in oil or gas in Iran was capable of supporting the nuclear activities of that state and, therefore, was covered by the sanctions.141 This was held not to be contrary to the principle of proportionality, given the numerous reports of the IAEA, the large number of resolutions of the Security Council, and the various measures taken by the European Union. The restrictive measures adopted both 137

See the website of the Office of the Ombudsperson: www.un.org/en/sc/ombudsperson/ See A Skordas, ‘Völkerrechtsfreundlichkeit as Comity and the Disquiet of Neoformalism: A Response to Jan Klabbers’ in P Koutrakos (ed), European Foreign Policy—Legal and Political Perspectives (Cheltenham, Edward Elgar Publishing, 2011) 115, 140–42. 139 Whilst the case was still pending, AG Kokott, writing in an extra-judicial capacity, also advocated an approach which would engage with the Sanctions Committee Procedure: J Kokott and C Sobotta, ‘The Kadi Case—Constitutional Core Values and International Law—Finding the Balance?’ (2012) 23 European Journal of International Law 1015. 140 Case C-380/09 P Melli Bank plc, para 81. In Case T-493/10 Persia International Bank plc, the General Court held that a 60% share-holding is sufficient to constitute a reason given to the targeted company for listing, but not evidence (paras 76 and 106). 141 Case C-348/12 P Kala Naft, para 83. 138

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by the Security Council and by the European Union are progressive and justified by the lack of success of the measures adopted previously. It follows from that approach, which is based on the progressive impairment of rights according to the effectiveness of the measures, that the proportionality of those measures is established.142

The Grand Chamber held that an individual is not presumed to cease to have an interest in the annulment of sanctions measures following her delisting.143 The moral opprobrium accompanying the freezing of her assets is such that she should have the right to bring proceedings in order to clear her name. In C-314/13 Vladimir Peftiev, a preliminary reference from a Lithuanian administrative court, the Court held that a provision which allows exceptionally the release of funds for legal services should enable an individual to bring an action against the legality of the EU measure before the appropriate court. In doing so, the Court relied upon Article 47(2) of the Charter.144 The freezing of assets is not considered to be a criminal penalty. In T-256/11 Ezz et al and in relation to the freezing of assets of individuals involved in misappropriation of Egyptian state funds, the General Court held that no provision of EU law conferred a criminal-law aspect on the freezing of assets established under secondary law. It pointed out that: [T]he provisions establishing the scheme for that asset-freezing seek neither to punish, nor to prevent the repetition of any conduct. Their sole purpose is to preserve the assets held by the persons, entities and bodies referred to in [the contested measure].145

The Court also stressed that the effects of the freezing are limited in time and reversible. Finally, an interesting dimension of smart sanctions regimes was highlighted in Case C-376/10  P Tay Za v Council.146 The applicant was a son of a successful businessman from Myanmar. A Council Regulation freezing the funds of members of the Myanmar government or persons associated with it had included his name. He challenged the Regulation, arguing that his family connection should not justify his listing and, therefore, the freezing of his assets. The Grand Chamber held that it was unlawful for the EU institutions to include natural persons on a sanctions list in cases where the ground for the inclusion was merely their family connection with persons associated with the leaders of the country targeted by the sanctions. Instead, the listing of an individual should be justified on the basis of ‘precise, concrete evidence which would have enabled [the EU institutions] to have established that the appellant benefits from the economic policies of the leaders of the [country in question]’.147 (iii) Autonomous Smart Sanctions The Kadi litigation arose in the context of EU measures implementing sanctions which had been imposed under a UN Security Council Resolution. The Union may also impose 142

Ibid, para 126. C-239/12 P Abdulrahim ECLI:EU:C:2013:331, paras 70 and 80 144 C-314/13 Vladimir Peftiev ECLI:EU:C:2014:1645. 145 T-256/11 Ezz et al ECLI:EU:T:2014:93, para 78. Reference is made to Case T-47/03 Sison v Council [2007] ECR II-73 para 101; and Case T-49/07 Fahas v Council [2010] ECR II-5555, para 67. 146 C-376/10 P Tay Za v Council ECLI:EU:C:2012:138. 147 Ibid, para 70. 143

522 Links Between External Policies autonomous sanctions the application of which raises similar questions about procedural propriety and fundamental human rights. Such sanctions are part of a system whereby assets of a specific individual are frozen by means of a Council regulation in cases where a decision has already been taken against that individual by a competent authority in a Member State to instigate investigation or prosecution for terrorist activities.148 The CFI recognised quite early on, prior to the Kadi I judgment of the Court of Justice, that, in the absence of a UN Security Council Resolution, judicial review over the EU instruments imposing smart sanctions should be complete.149 This was because, in such cases, it was for the EU institutions both to determine the procedure for naming the individuals whose assets would be frozen and actually to name them. In doing so, the institutions enjoyed discretion and, therefore, there was nothing to prevent the Union’s judges from exercising their jurisdiction over the exercise of this discretion. In OMPI I the CFI annulled the contested Decision naming Modjahedines as a terrorist organisation: it was held that, in drawing it up, the Council had violated the applicant’s right to effective judicial protection and had failed to state the reasons for which the applicant had been named as a terrorist organisation. In Case T-47/03 Sison the CFI annulled a Council Decision implementing a Regulation which froze the assets of the applicant because it contained no statement of reasons and used ‘general and formulaic wording’ which prevented the applicant from making good use of his right of judicial review.150 The applicant, residing in the Netherlands, was not made aware that decisions of the competent national authority (the Netherlands Council of State and the Hague District Court) against him had been used as incriminating evidence justifying the Community measure freezing his funds. In its judgment, the CFI made it clear that the annulled measures did not provide sufficient information to enable it to exercise effective judicial review of the actual grounds on which the contested decision was based, and that the Council and the intervening governments failed to provide such information even at the hearing. In Stichting Al-Aqsa the Court of Justice pointed out that the freezing assets of individuals suspected of financing international terrorism was necessary, as alternative and less restrictive measures (such as a system of prior authorisation or an obligation to justify, a posteriori, how the funds transferred were used) are not as effective in combating the financing of terrorism.151

6. DEVELOPMENT COOPERATION AND COMMON SECURITY AND DEFENCE POLICY Development Cooperation and Common Security and Defence Policy

Development cooperation is one of the most important external policies of the European

148 See eg Art 4 of Common Position 2001/931 on specific measures to combat terrorism [2001] OJ L344/93. This defines as ‘competent authority’ a judicial authority, or, where judicial authorities have no competence in the area covered by this paragraph, an equivalent competent authority in that area. 149 Case T-228/02 Modjahedines v Council [2006] ECR II-4665. See also Case T-256/07 OMPI v Council [2008] ECR II-3019 (where the competent authority was in the UK) and Case T-284/08 PMOI v Council (where the competent authority was in France) [2008] ECR II-3487. An appeal against the latter by France was dismissed by the Grand Chamber (Case C-27/09 P France v OMPI ECLI:EU:C:2011:853. 150 Case T-47/03 Sison, n 145 above, para 216. 151 Joined Cases C-539/10 P and 550/10 P Stichting Al-Aqsa ECLI:EU:C:2012:711.

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Union as the latter provides over half of all development aid worldwide.152 Since the Maastricht Treaty, the competence to carry it out has been express, and Article 4(4) TFEU describes it as shared. This provision also adds that its exercise by the Union ‘shall not result in Member States being prevented from exercising theirs’. The primary rules governing the conduct of development cooperation are laid down in Articles 208–11 TFEU. Article 208(1) TFEU provides that the policy will be carried out ‘within the framework of the principles and objectives of the Union’s external action’.153 However, Article 208(1) subparagraph 2 TFEU adds another layer to the relationship between development cooperation policy and the objectives of the Union’s external action: 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 first limb of the above subparagraph is significant in so far as it identifies an objective envisaged by Article 21(2) TEU to govern the entire range of the Union’s external action, and singles it out as the ‘primary’ objective of development cooperation. In doing so, it suggests that the other objectives set out in Article 21(2) TEU may be pursued by development cooperation measures, but only in so far as these are secondary, or, to use the term often used by the Court of Justice in its legal basis case-law, ‘incidental’.154 Put differently, in setting out the objectives of the Union’s development cooperation policy, Article 208(1) TFEU carries out a twofold function: on the one hand, this is inclusive, as it establishes a bridge between development cooperation and the objectives governing all the other external policies of the Union; on the other hand, it is exclusive, as it rules out reliance upon Articles 208–11 TFEU for measures mainly concerned with objectives other than the fight against poverty. Neither of these functions should be underestimated. The former reflects a pragmatic understanding of the multifarious components of development, and their continuous interactions in an increasingly globalised international environment. Therefore, it puts forward a broad understanding of development policy. By placing it within the broader framework of the principles and objectives of the EU’s external action, it also seeks to ensure the consistency of the latter. The exclusionary function of Article 208(1) TFEU suggests that the scope of development cooperation is not unlimited, and that its broad understanding should not amount to reliance upon its rules and procedures to pursue the primary objectives of other EU policies. This latter point becomes of acute significance in the case of the CFSP and CSDP, as they have a distinct position in the Union constitutional order.155 The formulation adopted at Lisbon in relation to development cooperation has also been adopted in order to place the other Union’s external policies within the framework of its overall external action. While all are to be conducted ‘in the 152 http://ec.europa.eu/europeaid/what/development-policies/european-consensus/index_en.htm (accessed 30 August 2014). 153 Art 208(1) subpara 1 TFEU. 154 See Case C-91/05 Commission v Council (re: ECOWAS) [2008] ECR I-3651, para 73. See also Opinion 2/00 (re: Cartagena Protocol on Biodiversity) [2001] ECR I-9713, Case C-281/01 Commission v Council (Re: Energy Star Agreement) [2002] ECR I-12049, and Case C-94/03 Commission v Council (re: Rotterdam Convention) [2006] ECR I-1. 155 See the analysis in Chapters 12 and 13 above.

524 Links Between External Policies context of the principles and objectives of the Union’s external action’,156 each has its own specific objectives defined therein. Humanitarian aid, for instance, ‘shall be intended to provide ad hoc assistance and relief and protection for people in third countries who are victims of natural or man-made disasters, in order to meet the humanitarian needs resulting from these different situations’.157 The analysis of the CSDP in Chapter 13 suggested that the Union’s understanding of security in an increasingly interdependent international environment is removed from the traditional associations with protecting territorial integrity. Instead, it is understood broadly and in close links with other policies. Development features prominently in the European Security Strategy which states that security ‘is a precondition of development’ and points out that: ‘Conflict not only destroys infrastructure, including social infrastructure; it also encourages criminality, deters investment and makes normal economic activity impossible. A number of countries and regions are caught in a cycle of conflict, insecurity and poverty.’158 The Strategy then defines the instruments for crisis management and conflict prevention at the Union’s disposal as covering political, diplomatic, military and civilian, trade and development activities.159 Given the close linkages between security and development policy, the Union expresses its determination to combine them in order to attribute added value to its international role: The challenge now is to bring together the different instruments and capabilities: European assistance programmes and the European Development Fund, military and civilian capabilities from Member States and other instruments. All of these can have an impact on our security and on that of third countries.160

This raises the question of the coherence of the manner in which the Union relied upon these instruments: ‘Diplomatic efforts, development, trade and environmental policies, should follow the same agenda. In a crisis there is no substitute for unity of command.’161 The same focus appears in the 2008 Report on the Implementation of the European Security Strategy where the emphasis on the nexus of security and development is even more pronounced. Among others, it states the following: Conflict is often linked to state fragility. Countries like Somalia are caught in a vicious cycle of weak governance and recurring conflict. We have sought to break this, both through development assistance and measures to ensure better security. Security Sector Reform and Disarmament, Demobilisation and Reintegration are a key part of postconflict stabilisation and reconstruction, and have been a focus of our missions in Guinea-Bissau or DR Congo. This is most successful when done in partnership with the international community and local stakeholders.162

The more the Union designs its security policy as a long-term instrument, the more pronounced the linkage between CSDP and development cooperation becomes. The 2008

156 The term ‘in the context of ’ is also used in relation to the Common Commercial policy: see Art 207(1) TFEU. 157 Art 214(1) TFEU. 158 A Secure Europe in a Better World-European Security Strategy (Brussels, 12 December 2003), 2. This is reinforced further below where it is stated that security ‘is the first condition for development’ (13). 159 Ibid, 11. 160 Ibid, 13. 161 Ibid. 162 Ibid, 8.

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Report states that: ‘Preventing threats from becoming sources of conflict early on must be at the heart of our approach. Peace-building and long-term poverty reduction are essential to this.’ The same focus on the nexus between security and development underpins the foundational policy documents of development cooperation, albeit with a different point of emphasis. The European Consensus on Development was drawn up by the Council, the Commission and the European Parliament, as well as the representatives of the governments of the Member States meeting within the Council.163 It sets out the main parameters of development policy and places it within the broader context of the Union’s other policies. It acknowledges that security and development ‘are important and complementary aspects of EU relations with third countries’, views conflict prevention and state fragility as central aspects of development policy, and refers specifically to nonproliferation, and the multidimensional aspects of poverty eradication. Therefore, the EU institutions and Member States construe both security and defence, and development policies broadly and set out a relationship which works both ways: security is a precondition for development, and development is essential for security. This is apparent in other documents, such as the EU Strategy for Africa: not only does this include numerous references to security and the CSDP, but it also views support for peace operations in Africa as essential for the attainment of the Millennium Development Goals.164

6.1 Development–CSDP Links in Practice It follows from the above that both security and development policy-makers share the conviction that the linkages between the two areas are inherent as well as deep. This is also illustrated in the practice of the two policies. A case in point is the Union’s external financing mechanism. Since 2006, the Union finances its external activities on the basis of a number of instruments165 of which the Instrument for Stability (IfS) is of interest for the purposes of this analysis. This instrument was established under Regulation

163

[2006] OJ C46/1. See also COM(2005) 489 final, EU Strategy for Africa: Towards a Euro-African Pact to accelerate Africa’s development (Brussels, 12 October 2005). 165 These are the European Neighbourhood and Partnership Instrument (Reg 1638/2006 [2006] OJ L310/1), the Instrument for Pre-accession Assistance (Reg 1085/2006 [2006] OJ L210/82), the Instrument for Development Co-operation (Reg 1905/2006 [2006] OJ L378/41), the Instrument with Industrialised Countries (Reg 1934/2006 [2006] OJ L405/41, the Instrument for Nuclear Safety Cooperation (Reg 300/2007 [2007] OJ L81/1), and the European Instrument for Democracy and Human Rights (Reg 1889/2006 [2006] OJ L386/1). In addition, there is the Peace Facility for Africa which was established in 2004 (Decision 3/2003 of the ACP–EC Council of Ministers on the use of resources from the long-term development envelope of the ninth EDF for the creation of a Peace Facility for Africa [2003] OJ L345/108. These were applicable for the 2006–13 financial framework. For the 2014–20 financial framework, see Reg 236/2014 of the European Parliament and of the Council laying down common rules and procedures for the implementation of the Union’s instruments for financing external action [2014] OJ L77/95. Accordingly, the new measures governing the instruments are as follows: Reg 233/2014 establishing a financing instrument for development cooperation for the period 2014–2020 [2014] OJ L77/44; Reg 235/2014 establishing a financing instrument for democracy and human rights worldwide [2014] OJ L77/85; Reg 232/2104 establishing a European Neighbourhood Instrument [2014] OJ L77/27; Reg 230/2014 establishing an instrument contributing to stability and peace [2014] OJ L77/1; Reg 231/2014 establishing an Instrument for Pre-accession Assistance (IPA II) [2014] OJ L77/11; and Reg 234/2014 establishing a Partnership Instrument for cooperation with third countries [2014] OJ L77/77. 164

526 Links Between External Policies 1717/2006,166 and was launched on 1 January 2007. Its aim is to ‘undertake development cooperation measures, as well as financial, economic, and technical cooperation measures with third countries’.167 Its legal bases are the Treaty provisions on development cooperation and economic, financial and technical cooperation with third countries.168 The IfS provides assistance which is either short term (in a crisis or emerging crisis) or long term (in a context of stable conditions for the implementation of EU cooperation policies in third countries). It is of residual application and only funds measures in cases where other EU financing instruments are not applicable. In addition, it applies on the basis of the principle of complementarity: it funds measures which complement the CFSP and Police and Judicial Cooperation in Criminal Matters, as well as other EU instruments for external assistance.169 It is for the Commission to ensure the consistency between IfS assistance and other EU policies and measures. Therefore, close coordination is important and, to that effect, provision is made for a system of exchange of information between the Member States and the Commission. The specific objectives of the IfS which may attract funding illustrate clearly the link between the Instrument and the Union’s security and defence policy. As far as shortterm, ie crisis-related, assistance is concerned, it may be provided in a situation of urgency, crisis or emerging crisis, a situation posing a threat to democracy, law and order, the protection of human rights and fundamental freedoms, or the security and safety of individuals, or a situation threatening to escalate into armed conflict or severely to destabilise the third country or countries concerned.170

The specific activities which may be covered include, amongst others, institutionbuilding, the promotion of mediation, dialogue and reconciliation, civilian measures related to the demobilisation and reintegration of former combatants into civil society, measures mitigating the social effects of restructuring of the armed forces, and measures addressing the socioeconomic impact on the civilian population of anti-personnel landmines. As for the long-term component of the IfS, it covers three types of activities: those aiming to address threats to law and order, to the security and safety of individuals, to critical infrastructure, and to public health; targeting biological, radiological, and nuclear materials or agents; and, pre- and post-crisis capacity building, including early warning, confidence-building and reconciliation.171 There is, therefore, a clear security flavour in a number of the activities covered by the IfS. However, there is no reference to military activities. This reflects the concerns of the Council and the Member States that the scope of IfS should not impinge upon the scope of the CFSP and the respective powers of the institutions in that area. In any case, in terms of substance, there is considerable congruence between a number of the activities covered by the IfS and those undertaken by CSDP operations and missions. For instance, the demobilisation and reintegration of former combatants into civil society, which is 166 [2006] OJ L327/1. As this analysis focuses on the application of the Instrument, it focuses on the practice up until 2013. 167 Ibid, Art 1(1). 168 Arts 179(1) and 181a EC, now Arts 209(1) and 212 TFEU. 169 The IfS–CSDP complementarity is also acknowledged as a matter of fact at policy level: see eg Council Conclusions on ESDP (Brussels, 17 November 2009) para 127. 170 n 166 above, Art 3(1). 171 Art 4. Such activities are funded through multiannual strategy papers and annual action programmes.

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mentioned in Article 3(2)(f) of Regulation 1717/2006, was one of the activities of the Aceh Monitoring Mission which the Union carried out in Indonesia within the CSDP context.172 Furthermore, in the context of the long-term component of IfS, reference is made to ‘strengthening the capacity of law enforcement and judicial and civil authorities involved in the fight against terrorism and organised crime’.173 And yet, this objective has been central to a number of civilian missions carried out within the CSDP framework, such as the Police Missions in Bosnia-Herzegovina174 or the FYROM.175 The interactions between financing development cooperation and the CSDP emerge in different ways. At a general level, they may have an impact on the Union’s ability to carry out a CSDP mission. This is the case in relation to projects funded by the IfS which are focused on areas upon which CSDP civilian missions may draw. For instance, for the period between 2008 and 2011, the IfS funded the training of 1,894 police officers from different Member States in response to the eruption of a crisis in a third country.176 IfS measures may also have an indirect impact on specific CSDP initiatives. For instance, the former include a project jointly organised by the EU and the UN Office on Drugs and Crime supporting the judicial system in countries such as Kenya and the Seychelles. This is viewed as helpful for the Union in its negotiation with countries in the region of transfer agreements, which are a central component of the conduct of EUNAVFOR ATALANTA.177 There are also IfS projects that are linked to specific CSDP missions in a direct manner. There are numerous such examples,178 one of which is the Union’s approach to Afghanistan. Initiatives funded by the IfS may be carried out in parallel to CSDP missions. In Afghanistan, the IfS provided urgent support for the government in order to draw up and implement a reform programme for the Supreme Court and the Attorney General’s Office, covering issues such as recruitment and personnel systems, and pay and grading for judges and prosecutors. In addition, it aimed to provide support for the development of a national legal aid system in the Ministry of Justice. As for the CSDP mission, the IfS and the other EU measures ‘in the justice sector are designed to dovetail with the [C]SDP police mission, especially with regard to the interface between the police and the criminal justice system’.179 The IfS may fund initiatives which either predate a CSDP mission or follow its completion. Beyond the context of financing CFSP initiatives, the linkages between the CSDP and development co-operation raise questions about the interactions between the EU institutions when they act in the context of different policies. Their coordination on the ground is often problematic. For instance, in the context of the Union’s police mission in Afghanistan, there appeared to be some confusion between the EUPOL staff and 172

Established under Council Joint Action 2005/643/CFSP [2005] OJ L234/13. n 166 above, Art 4(1)(a) Reg 1717/2006. 174 Established under Joint Action 2005/824/CFSP [2005] OJ L307/55. 175 Established under Council Joint Action 2003/681/CFSP [2003] OJ L249/66. 176 See EEAS, ARES (2011) 1466618 Lessons and best practices for CSDP from the European Union Police Force Training (EUPFT) 2008–2010 (Brussels, 12 December 2011). This project was mentioned in External Affairs Council Conclusions of 17 November 2009, para 96. 177 See COM(2012) 405 final, 2011 Annual Report on the Instrument for Stability (Brussels, 24 July 2012) 8. See also Council Conclusions on ESDP (Brussels, 17 November 2009) para 25. On transfer agreements, see Chapter 13. 178 See Koutrakos, n 1 above, 219–21. 179 SEC(2009) 932 Commission Staff Working Paper Accompanying Annual report from the European Commission on the Instrument for Stability in 2008. COM(2009) 341, 7. 173

528 Links Between External Policies the Commission’s staff active in the area as there was no clear allocation of functions and strategic policy planning between them. These problems were compounded by the striking discrepancy between the considerable funds managed by the Commission and the inability of EUPOL to finance even minor renovation work in the field in which it was deployed.

6.2 The Requirement of Coherence The picture of the interactions between development cooperation and CSDP operations and missions which emerges is one of considerable congruence. These substantive linkages are so close and deep that, while they aim to strengthen the Union’s approach to a crisis, they also have the potential to give rise to cacophony. On the one hand, substantive conflicts may emerge by producing policy results which are contradictory. On the other hand, given the different institutional actors involved, these may find it difficult not to succumb to the temptation of determining individually what they deem the right course of action without due account for other factors, possibly extraneous to their expertise but relevant to the area in question. There are policy, institutional, economic and legal factors which render the need for the nexus between the CSDP and development to be coherent all the more imperative. First, both these policies have been construed widely by the Union institutions. It is difficult to envisage a meaningful security policy without a development dimension and, similarly, it is almost impossible to carry out an effective development cooperation policy if this does not address security considerations. The more intrinsically linked these policies are, the greater the potential for conflict. Secondly, each of these areas is organised within the Union’s legal architecture on the basis of different principles, rules and procedures. As the analysis in Chapter 13 illustrated, there is a strong intergovernmental dimension in the framework governing the CSDP, with the Council being the central institution deciding matters mainly on the basis of unanimity, while the jurisdiction of the Court of Justice is expressly excluded. On the other hand, development cooperation is carried out on the basis of the traditional integration method, the Commission is endowed with central powers in the process of planning and implementation, and the European Parliament participates in decisionmaking actively pursuant to the ordinary legislative procedure. Thirdly, the different powers with which different institutions are endowed encourage turf wars between them. Therefore, policy choices are not only about what is the best course of action under the circumstances, but are also underpinned by considerations about the power and control to be exercised by Union institutions. This additional layer characterising policy-making in areas straddling security and development has the potential to slow down decision-making, complicate policy choices and undermine the effectiveness of the Union’s actions. Fourthly, the budget for the Union’s development policy is very considerable and the Commission has control over it. To recall that the power to control the budget is to exercise power over decision-making is to state the obvious. The combined effect of these factors renders the issue of coherence in the Union’s management of the security–development nexus of paramount significance. In fact, this

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is a more general problem, which the Union faces in relation to the entire spectrum of its external action. As Timothy Garton Ash wrote in 2005: Europe has a hundred left hands and none of them knows what the right hand is doing. Trade, development, aid, immigration policy, education, cultural exchange, classic diplomacy, arms sales and anti-proliferation measures, counter-terrorism, the fight against drugs and organized crime: each European policy has an impact, but the effects are fragmented and often self-contradictory.180

At the level of rhetoric, the Union institutions appear to be aware of the need for coherence. A number of documents originating in different actors give this a prominent position. The need for the Union’s action to be coherent is one of the main tenets of the European Security Strategy and the 2008 Report on the Implementation of the European Security Strategy. Similarly, the European Consensus on Development puts considerable emphasis on this issue with particular stress on the linkages between security and defence.181 In 2007 the Council adopted Conclusions on Security and Development.182 Having reaffirmed the close links between the two areas and acknowledged their differences, this document dispenses with the type of grand statements that the EU institutions are in the habit of laying down in abundance in official documents. It approaches coherence in two ways. First, it acknowledges that ‘[i]ncreasing coherence between security and development, both at a policy and an operational level, is a process that requires short-term improvements and longer term action’.183 Secondly, they identify certain areas where pragmatic action is possible and desirable: strategic planning, security sector reform, partnerships with regional and subregional organisations, humanitarian aid and security. In relation to each of them, it proposes such action, mostly couched in rather general terms and focusing on procedural improvements. In fact, seeking to enhance coherence by focusing on institutional involvement and administrative restructuring is a central feature of the Union’s overall approach. A case in point is the role of the EEAS in the implementation of the IfS. The story of the establishment of the EEAS was told in Chapter 12. The arrangements laid down in Council Decision 2010/427/EU establishing its organisation and functioning184 are couched in considerably vague terms and are strikingly complex.185 The first signs of their implementation were not overly promising. In early 2012, the Commission and the High Representative reached an understanding as to how to interact daily as a matter of practice. They did so on the basis of an inter-service agreement which appears to maintain the control of the Commission over the financing of external action and illustrates a system which is by no means less cumbersome in its functioning than the vague

180

T Garton-Ash, Free World (London, Penguin Books, 2005) 218. In 2005 the Commission had been instructed by the Council to produce a biannual report documenting progress on policy coherence on development: see Council Conclusions (Brussels, 24 May 2005). For the latest report, see SEC(2011) 1627 final, EU 2011 Report on Policy Coherence for Development (Brussels, 15 December 2011). 182 15097/07 Council Conclusions (Brussels, 20 November 2007). 183 15097/07 Council Conclusions (Brussels, 20 November 2007) para 6. 184 [2010] OJ L201/30. 185 See H Merket, ‘The European External Action Service and the Nexus between CSDP/CSDP and Development Cooperation’ (2012) 17 European Foreign Affairs Review 625. 181

530 Links Between External Policies provisions of Article 9 of Decision 2010/427/EU.186 This system has reportedly made the Head of an EU delegation state the following: We were told: ‘You have the mike, but we have the money. You can make statements and say whatever you like, but we control the money’  … I don’t mind having so many bosses [taking instructions from various commissioners], but what’s important to me is that they act as a team. I don’t think they talk to each other.187

The compromise which Council Decision 2010/427/EU reflects seeks to address a real problem, namely the coherence of the Union’s external action, with institutional tweaking and administrative ingenuity. As far as the nexus of the CSDP and development cooperation is concerned, this suggests a narrow understanding of coherence which is deeply process-oriented. Viewed from this angle, there is a symmetry between the overall approach of the Union institutions to security and defence policy and their recipe for enhancing its effectiveness: both appear to be less about substance, and more about process.

7. THE DIVIDING LINE BETWEEN DIFFERENT POLICIES AND THE ROLE OF THE COURT OF JUSTICE The Dividing Line between Different Policies

The analysis has focused on the linkages between different strands of the Union’s external action and the legal and policy mechanisms that have been established in order to manage these linkages consistently with EU primary law. These interactions are defined by the different legal characteristics of the policies. After all, the CFSP and the CSDP still remain, in all but name, distinct pillars within the EU constitutional order. At a normative level, the Treaties acknowledge that the coexistence of sets of rules of such different legal qualities may give rise to problems. This is illustrated by Article 40 TEU, which reads as follows: 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 first paragraph above has been part of primary law since the establishment of the Union. Originally, its aim was to ensure that the intergovernmental logic of the second and third pillars and the rules adopted under their rules would not impinge upon the Community method and the acquis communautaire. However, the Lisbon Treaty removed the pillars and added the second paragraph in Article 40 TEU: neither the CFSP/CSDP nor the other external policies (eg economic, social, development) would impinge upon each other’s legal characteristics. The addition of this provision confirmed what the

186 187

See http://euobserver.com/institutional/115145. Ibid.

The Dividing Line between Different Policies 531 content, context and position of CFSP/CSDP rules suggested, namely that they formed a distinct set of rules within the Treaties. The reasons mentioned above which make the requirement for coherence in EU external action imperative also make the choice of legal basis difficult. The osmosis between the CFSP/CSDP and other policies, the increasingly interdependent nature of the external challenges that the Union faces, and the wide definition of concepts such as security and development cooperation make the dividing lines between the underlying policies difficult to distinguish and enforce. And yet, in the light of their distinct normative characteristics and, not least, Article 40 TEU, it is important that this dividing line should be observed. In the early days of the Union, the Court of Justice made it clear that this task fell squarely within its jurisdiction. In the Airport Transit Visa case the Commission challenged the adoption of a Joint Action adopted under the then third pillar on airport transit arrangements.188 The measure in question introduced common rules on issuing visas for transit through the international areas of the airports of the Member States. The Commission argued that it ought to have been adopted under EC law instead.189 The first issue which was raised was the very existence of the jurisdiction of the Court. The British government, which supported the Council before the Court, argued that the annulment of acts adopted beyond the Community legal order was excluded from the jurisdiction of the Court pursuant to ex Article 46 TEU (now Article 40 TEU). Therefore, it claimed, the action brought by the Commission should be declared inadmissible. The Court rejected that argument. It held that its jurisdiction extended to ex Article 47 TEU and concluded as follows: It is therefore the task of the Court to ensure that acts which, according to the Council, fall within the scope of [then] Article K.3(2) of the Treaty of the European Union do not encroach upon the powers conferred by the EC Treaty on the Community. It follows that the Court has jurisdiction to review the content of the [Joint Action] in the light of Article 100c of the EC Treaty in order to ascertain whether the Act affects the powers of the Community under that provision and to annul the [Joint Action] if it appears that it should have been based on Article 100c of the EC Treaty.190

As is often the case in the history of European integration, the party losing the war won the battle: the Court went on to dismiss the annulment action. However, the principles introduced in the judgment are fundamental for the functioning of the Union legal order: first, whilst the CFSP/CSDP are excluded from its jurisdiction, it is for the Court to determine where the dividing line between these and the other external policies lies; secondly, the provisions of Article 40 TEU do not constitute statements of merely rhetorical significance but are legal provisions the application of which is for the Court of Justice to ensure. These principles were applied with somewhat spectacular effects in Case C-91/05

188 Case C-170/96 Commission v Council [1998] ECR I-2763; the measure challenged was Joint Action 96/197 [1996] OJ L63/8. 189 In particular, under Art 100c EC (pre-Amsterdam) according to that provision it was for the Council to adopt rules on the third countries whose nationals ought to be in possession of a visa when crossing the external borders of the Member States and, from January 1996, it should have done so by qualified majority. 190 n 188 above, paras 16–17.

532 Links Between External Policies Commission v Council (re: ECOWAS).191 The judgment was rendered in May 2008, ie when the constitutional order of the Union was still governed by the Nice Treaty (and therefore, the second paragraph of Article 40 TEU had not yet been introduced). However, a number of the issues it raises are still relevant under the current constitutional arrangements. The case was about non-proliferation of small arms and light weapons in Africa. The European Union has been an active player in the field of non-proliferation of weapons in general, as well as the small arms and light weapons in particular.192 In Joint Action 2002/589/CFSP193 it set out a number of principles and measures in order to prevent the further destabilising accumulation of small arms, including the provision of financial and technical assistance by the Union to projects which make a direct contribution to non-proliferation. In order to implement this Joint Action, the Council adopted Decision 2004/833/ CFSP,194 which provided for financial and technical assistance to the Economic Organisation of West African States (ECOWAS). The latter had adopted a Moratorium on Small Arms and Light Weapons, and the EU’s assistance would aim to enable ECOWAS to set up a Light Weapons Unit and turn the Moratorium into a Convention. This Decision was based on Article 3 of Joint Action 2002/589/CFSP and ex Article 23(2) TEU. The Commission challenged both Joint Action 2002/589/CFSP and Council Decision 2004/833/CFSP before the Court of Justice, the former under ex Article 230 EC (now Article 263 TFEU), and the latter under ex Article 241 EC (now Article 277 TFEU). Supported by the Parliament, it argued that both measures were illegal, because they violated the Community’s competence in the area, which it enjoyed under ex Article 177 EC (now Article 208 TFEU). The assistance to ECOWAS, they argued, should have been provided under the latter provisions. This argument viewed ex Article 47 TEU (now Article 40 TEU) as establishing a fixed boundary: the Union should not do what the Community could do, even if the competence of the latter was shared and had not been exercised. The Commission also argued that development policy necessarily encompassed the combating of the proliferation of small arms and light weapons, as cooperation in this area presupposes a minimum degree of stability. To that effect, it relied upon the Cotonou Agreement, Article 11(3) of which refers specifically to activities addressing an excessive and uncontrolled spread, illegal trafficking, and accumulation of small arms and light weapons.195 On the other hand, the Council, supported by six Member States, argued that ex Article 47 TEU carried out a different function: it protected the balance of powers established by primary law and, therefore, could not be interpreted in a way which would be detrimental to the competences enjoyed by the Union. It suggested that the assessment as to whether the Community competence had been affected in the meaning of ex Article 47 TEU should also take into account the nature of that competence, and pointed out that, in the case of development cooperation, that competence was shared with the 191

Case C-91/05 Commission v Council (re: ECOWAS) [2008] ECR I-3651. See P Koutrakos, ‘The Non-Proliferation Policy of the European Union’ in M Evans and P Koutrakos (eds), Beyond the Established Legal Orders—Policy Interconnections Between the European Union and the Rest of the World (Oxford, Hart Publishing, 2010) 249. 193 [2002] OJ L191/1. For the most recent report on its implementation, see Ninth Annual Report on the implementation of the Council Joint Action of 12 July 2002 on the European Union’s contribution to combating the destabilising accumulation and spread of small arms and light weapons (2002/589/CFSP) [2010] OJ C198/1. 194 [2004] OJ L359/65. 195 [2000] OJ L317/3. 192

The Dividing Line between Different Policies 533 Member States. As for the scope of development cooperation, the Council argued that both non-proliferation of small arms and light weapons, and the more general objective of preserving peace and strengthening security, were CFSP objectives which might only incidentally affect the prospects for sustainable development. A broader interpretation of development cooperation would render the Community’s competence unlimited, and deprive the CFSP of any practical effect. The Court first reaffirmed its jurisdiction, and held ruled that: It is … the task of the Court to ensure that acts which … fall within the scope of Title V of the Treaty on European Union and which, by their nature, are capable of having legal effects, do not encroach upon the powers conferred by the EC Treaty on the Community.196

The substantive part of the judgment commences with the proper interpretation of ex Article 47 TEU. The Court adopted the interpretation suggested by the Commission and held that: [A] measure having legal effects adopted under Title V of the EU Treaty affects the provisions of the EC Treaty within the meaning of Article 47 EU whenever it could have been adopted on the basis of the EC Treaty, it being unnecessary to examine whether the measure prevents or limits the exercise by the Community of its competences.197

Therefore, it was important to examine the aim and content of the CFSP measure. Before it engaged in this, the Court elaborated on the dividing line between development cooperation policy and the CFSP. In relation to the former, it sought to strike a balance: on the one hand, the scope of development cooperation is broad, as, in addition to the sustainable economic and social development, the smooth and gradual integration into the world economy and the campaign against poverty, it encompasses the development and consolidation of democracy and the rule of law, respect for human rights and fundamental freedoms, and compliance with UN and other international commitments. On the other hand, it is necessary that any measure adopted under this policy should contribute to the pursuit of that policy’s economic and social development objectives. 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 developing countries. However, in the light of their aim and content, such measures would fall beyond the scope of development cooperation if they had as their main purpose the implementation of the CFSP. Relying on its earlier case-law as a legal basis, the Court then pointed out that, if a measure pursued both CFSP and development cooperation objectives, it should be ascertained which is the main one and which is incidental, as the former would dictate the appropriate legal basis.198 If, however, the measure pursued both development and CFSP objectives simultaneously without either being incidental to the other, a joint legal basis would be precluded under ex Article 47 196 C-91/05 Commission v Council (re: ECOWAS), n 191 above, para 33, with reference to Case C-170/96 Commission v Council (re: airport transit visas) [1998] ECR I-2763, para 16; Case C-176/03 Commission v Council (re: environmental crimes) [2005] ECR I-78879, para 39; Case C-440/05 Commission v Council (re: ship-source pollution) [2007] ECR I-9097, para 53. 197 n 191 above, para 60. 198 Reference is made to Case C-211/01 Commission v Council [2003] ECR I-8913, para 39; Case C-338/01 Commission v Council [2004] ECR I-4829, para 55; and Case C-94/03 Commission v Council [2006] ECR I-1, para 35; in relation to ex Article 47 EU, reference is made to Case C-176/03 Commission v Council, paras 51–53; and Case C-440/05 Commission v Council, paras 71–73.

534 Links Between External Policies TEU. It was for this reason that ‘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’.199 The Court then focused on Decision 2004/833/CFSP and Joint Action 2002/589/CFSP which the former implemented. It pointed out that the pursuit of non-proliferation objectives by the latter does not necessarily entail the adoption of measures which pursue CFSP objectives, such as the preservation of peace and the strengthening of international security, rather than development cooperation objectives. This was suggested by the wording of the Joint Action itself: for instance, its preamble made the link between non-proliferation of small arms and light weapons and the prospects of sustainable development. The adoption of development measures is also corroborated by the general approach of the Union’s institutions in various documents, such as the Council Resolution on small arms,200 the EU Strategy to combat illicit accumulation and trafficking of small arms and light weapons,201 as well as the Joint Statement on Development Cooperation.202 In the light of the above, since the measure falling within the CFSP which the contested decisions is intended to implement does not exclude the possibility that its objectives can be achieved by measures adopted by the Community on the basis of its competences in the field of development cooperation, it is necessary to examine whether the contested decisions, as such, must be regarded as a measure which pursues objectives falling within Community development cooperation.203

Having examined its preamble, the Court concluded that it pursued both the CFSP objective of tackling a threat to peace and security, and the development cooperation objective of eliminating or reducing obstacles to the sustainable development of cooperating developing countries. It stated that neither was incidental to the other: the preamble mentioned sustainable development in its first paragraph; and, while measures such as the grant of political support for a moratorium or even the collection and destruction of weapons were clearly CFSP-related, the provision of technical and financial assistance was generally viewed as a typical development cooperation measure.204 The Court concluded without ruling on the plea of illegality pursuant to which the Commission had attacked the adoption of Joint Action 2004/589/CFSP: it held that this was not necessary because Decision 2005/833/CFSP was annulled because of its own defects. An analysis of the ECOWAS judgment should be preceded by a reminder that it was

199

n 191 above, para 77. Council Resolution on combating the excessive and uncontrolled accumulation and spread of small arms and light weapons as part of the EU’s emergency aid, reconstruction, and development programmes, adopted on 21 May 1999. 201 Council Doc 5319/06 EU Strategy to combat illicit accumulation and trafficking of SALW and their ammunition (Brussels, 13 January 2006). 202 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 [2006] OJ C46/01. 203 n 191 above, para 92. 204 It is pointed out that: ‘While there may be some measures, such as the grant of political support for a moratorium or even the collection and destruction of weapons, which fall rather within action to preserve peace and strengthen international security or to promote international cooperation, being CFSP objectives stated in Article 11(1) EU, the decision to make funds available and to give technical assistance to a group of developing countries in order to draft a convention is capable of falling both under development cooperation policy and the CFSP’ (ibid, para 105). 200

The Dividing Line between Different Policies 535 rendered under a constitutional arrangement distinct from the one set out at Lisbon. Under the Nice Treaty, the Community legal order was afforded special protection: it was upon it that the process of European integration was founded, and it was ‘supplemented by the policies and forms of cooperation established by [the] Treaty [on European Union]’;205 no CFSP action should encroach upon it;206 and the EU was not only to ‘respect’ but also ‘build upon the acquis communautaire’.207 There are three main tenets which emerge from the line of reasoning followed by the Court. The first tenet is the strict approach to the dividing line between the security and defence and development cooperation policies. The Court’s interpretation of the term ‘affect’ under ex Article 47 TEU suggests that considerations of effectiveness, complementarity and practicality are irrelevant, as is the nature of the specific policy which the measure in question pursues. Instead, non-CFSP/CSDP policies would be ‘affected’ in the meaning of that provision if a measure which could be adopted under the rules governing them was adopted under CFSP rules. This approach appears formalistic and lacking in reasoning. There was no consideration of the specific implications of the Union’s action for the potential exercise of Community competence. The Court construed the competence of the Community as exclusive a priori, Union action being ruled out in the light of merely the possibility of Community action in the area. Furthermore, there was no explanation as to why the nature of the development cooperation competence was of no relevance. After all, given the existence of concurrent competence,208 the provision of financial and technical assistance to ECOWAS by the Member States individually or collectively (eg by having recourse to the Union structures) does not prevent the Community from engaging in similar action. The starting point for the strict construction of ex Article 47 TEU in ECOWAS is the previous case-law in Environmental Crimes209 and Maritime Pollution.210 However, again, these judgments were rendered in a different context, as the Community had been prevented from adopting measures such as those set out in the Framework Decisions annulled by the Court. In ECOWAS the Community was not prevented from providing further financial assistance to the ECOWAS Member States. To use Dashwood’s words, the former cases involved the direct substitution of a TEU measure for an EC one, whereas the latter was a case of interaction between EC and EU competences.211 This distinction is not reflected in the strict reading of the dividing line between security and defence, and development cooperation policies which the Court adopted pursuant to Article 47 TEU (Nice). The second main tenet of the judgment in ECOWAS is the broad construction of both security and defence, and development cooperation policies. This is suggested by the 205

Art 1 subpara 3 TEU (Nice). Art 47 TEU (Nice). 207 Art 3 subpara 2 (Nice). 208 Case C-316/91 Parliament v Council [1994] ECR 625, para 26. Similarly, on humanitarian aid, see Joined Cases C-181/91 and C-248/91 Parliament v Council [1993] ECR I-3685, para 16. See also Art 4(4) TFEU and Art208(1) TEU. 209 Case C-176/03 Commission v Council [2005] ECR I-7879. 210 Case C-440/05 Commission v Council [2007] ECR I-9097. 211 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 of a Changing Landscape (Cambridge, Cambridge University Press, 2008) 70, 82 et seq. 206

536 Links Between External Policies ample reference to policy documents adopted by the Union institutions, and the Member States. However, there are two issues with the line of reasoning in the judgment. On the one hand, the reliance upon documents such as The European Consensus on Development may be problematic if it does not take into account the specific context within which they were adopted. Rather than delineating competences, these were policy documents aiming to adjust the Union’s international role to a rapidly evolving environment by introducing strategic coherence.212 On the other hand, the Court’s conclusion that neither the security nor the development objectives of the provision of financial and technical assistance for the non-proliferation of small arms and light weapons is incidental to the other is problematic. The analysis of the content of the contested Decision is confined to presenting the provision of technical and financial assistance as a typical development cooperation measure. However, this overly instrumental logic renders the scope of development cooperation very broad, and, similarly, confines security and defence policy to a core of the most fundamental security actions, easily recognisable and categorised as such. The Court refers expressly to the grant of political support for a moratorium, or the collection and destruction of weapons, as measures which would aim, primarily, to preserve peace and strengthen international security.213 However, this type of categorisation is too tidy and schematic, and fails to engage with the intricacies of the multifarious dimensions of security and defence policy. Furthermore, it is one of the paradoxes of the judgment that what appears to be a broad understanding of distinct but interacting policies ends up being applied in a narrow manner. In fact, this approach suggests that, while in strategic and policy terms, security and defence is understood broadly, in its implementation, it is construed narrowly. The tension between a broad understanding of the interactions between development cooperation and security, and defence policies, and a narrow interpretation of the latter is not the only one in the ECOWAS judgment. In legal terms, the Court’s understanding of EU external relations, in general, and the links between development cooperation, and security and defence policies, in particular, suggests a degree of flexibility: CFSP objectives may well be pursued by development cooperation measures, and development cooperation objectives may be pursued by CFSP measures. Is there a tension between the strict approach to the dividing line between security and defence, and development cooperation policies, and the broad approach to the scope of each of these policies? The judgment in ECOWAS suggests that no such tension exists because a strict monitoring of the choice of legal basis is warranted in order to ascertain whether there is a correspondence between the predominant objective of the measure in question and its legal basis. This is the third tenet of the judgment. The judgment suggests that a close reading of the objectives and substantive provisions of Union measures is necessary in order to ensure that these are adopted pursuant to the correct legal basis. This is all the more so as a joint legal basis is deemed unacceptable, even though the Court’s analysis is striking in its absence of any arguments explaining this. Therefore, what the Union’s institutions need to do is to identify the primary objective of the measure they intend to adopt, as this would determine its legal basis. 212 See B Van Vooren, ‘The Small Arms Judgment in an Age of Constitutional Turmoil’ (2009) 14 European Foreign Affairs Review 231, 235. See also J Heliskoski, ‘Small Arms and Light Weapons within the Union’s Pillar Structure: An Analysis of Article 47 of the EU Treaty’ (2008) 33 European Law Review 898, 909–10 where he notices a tension between the reliance upon such policy documents and previous case law which states that institutional practice is irrelevant to the choice of the correct legal basis. 213 Case C-440/05 Commission v Council, n 196 above, para 105.

The Dividing Line between Different Policies 537 This position is reminiscent of the broad, albeit not unlimited, interpretation of development cooperation agreements given by the Court of Justice in the 1990s. It is recalled that, in Case C-267/94 Portugal v Council, the Court had held that an agreement setting out a broad framework for cooperation could include specific clauses which felt beyond the scope of development cooperation if they were of a broad nature and entailed no specific measures.214 The logic of the principal/secondary objective which underpins the judgment in ECOWAS is consistent with the logic of specific actions/broad objectives which emerges from the India Co-operation Agreement judgment.215 However, such exercise is fraught with problems. Far from being an exact science, the identification of the weight which a Union measure attaches to the various objectives it pursues is bound to be fraught with ambiguities. In the light of the broad construction of development cooperation, and security and defence policies, to ascertain whether a given objective is the main component of a measure, or whether it is incidental, or whether it is indissolubly linked to other objectives, is more often than not far from clear. Furthermore, the difficulties inherent in the strict monitoring of the choice of legal basis suggested by the Court are bound to whet the already healthy appetite of the Union institutions for legal disputes. This slows down the decision-making process, and takes away energy and time which the EU institutions would put to much better use if focused on the effectiveness of the Union’s international action, and the monitoring of the consistency of its activities. It also disrupts the process of establishing a culture of cooperation between the Union institutions in an area which requires it the most. In the light of the above, the role of the Court of Justice in this area is bound to become more pronounced. This in itself may not appear controversial, or surprising in the light of the pivotal role of the case-law in the genesis and development of the law of EU external relations. However, it risks politicising further a matter of inherent political repercussions and renders the Court directly at the centre of a most controversial arena. Having analysed the main threads and implications of the ECOWAS judgment, it is now time to place it in the post-Lisbon constitutional constellation. How is it affected by the addition of the second paragraph in Article 40 TEU and the equal status which it affords to the CFSP? It is now clear that the predominance granted to non-CFSP policies under the previous dispensation and which was given effect by the Court in the judgment would be contrary to the wording and rationale of Article 40 TEU. The main tenet of the judgment is applicable: a Union measure pursuing security and defence objectives may be implemented by development cooperation measures, adopted under Article 208 TFEU, or CFSP and CSDP measures under Title V TEU, provided that the predominant objective of the former would be related to development, and those of the latter to security and defence.216 However, in cases where neither objective is predominant, uncertainty creeps in. The reason for this is that both the CSDP and development cooperation pursue the same objectives and are subject to the same principles set out in Article 21 TEU. Different views have been put forward as to how to address this problem. Reliance upon a joint legal basis might be a possibility, given the equal footing on which Article 40 TEU places the CFSP/CSDP and the other strands of the Union’s

214

Case 268/94 Portugal v Council (re: India Agreement) [1996] ECR I-6177. See the analysis in Chapter 5. See also Van Vooren, n 212 above, 237 et seq. 216 See also V Kronenberger, ‘Coherence and Consistency of the EU’s Action in International Crisis Management: The Role of the European Court of Justice’ in S Blockmans (ed), The European Union and Crisis Management—Policy and Legal Aspects (The Hague, TMC Asser Press, 2008) 199. 215

538 Links Between External Policies external action.217 It has also been argued that the Court may give greater weight to factors which are prominent in other strands of EU external relations case-law, such as the role of the European Parliament in the decision-making procedure and the degree of judicial protection afforded to citizens.218 Another possibility might be to introduce a very strict separation whereby CFSP and development cooperation objectives would be pursued by different CFSP and development instruments.219 In Case C-130/10 European Parliament v Council the Grand Chamber of the Court of Justice appears to reject both the possibility of a dual legal basis and the reliance upon the role of the European Parliament.220 The judgment was examined above, in Section 5.1 of this chapter, in the context of the relationship between Articles 75 and 205(2) TFEU. The very first point made in the judgment is this: [E]ven if the contested regulation does pursue several objectives at the same time or have several components indissociably linked, without one’s being secondary to the other, the differences in the procedures applicable under Articles 75 TFEU and 215(2) TFEU mean that it is not possible for the two provisions to be cumulated, one with the other, in order to serve as a twofold legal basis for a measure such as the contested regulation.221

As for the argument that the choice of legal basis along these lines would impinge upon the Parliament’s prerogatives, the Court accepted it, but held that: Nevertheless, the difference between Article 75 TFEU and Article 215 TFEU, so far as the Parliament’s involvement is concerned, is the result of the choice made by the framers of the Treaty of Lisbon conferring a more limited role on the Parliament with regard to the Union’s action under the CFSP.222

In the light of the ECOWAS judgment, four points are worth making. First, the determination of the paramount objective of a Union measure in the areas affected by the CSDP–development nexus is bound to be shrouded in ever-greater ambiguity given the reorganisation of the Union’s external action at Lisbon. And yet, its significance will be as considerable as ever. Secondly, in this process, draftsmanship is central, since clear language of the preamble and substantive content of a Union measure regarding its objectives would reduce the scope for inter-institutional disputes. Thirdly, the development of a culture of cooperation between the Union institutions and administrative bodies is more important than ever in order to reduce the scope for turf wars and manage the increasing interactions between the two policies effectively. Finally, the Court of Justice becomes all the more prominent in this area. It is ironic that, while its jurisdiction over Title V TEU is, for the most part, expressly excluded, its role should become more central in the light of the broad definition of security and development cooperation and the increasing interactions between the two policies. At the time of writing, there is another case pending where the Parliament challenged 217 See M Cremona, ‘Coherence in European Union Foreign Relations Law’ in Koutrakos (ed), n 138 above, 55, 88; and P Eeckhout, EU External Relations Law, 2nd edn (Oxford, Oxford University Press, 2011) 185. For a joint legal basis in international agreements, see R Wessel, ‘Cross-Pillar Mixity: Combining Competences in the Conclusion of EU International Agreements’ in C Hillion and P Koutrakos (eds), Mixed Agreements Revisited—The EU and its Member States in the World (Oxford, Hart Publishing, 2010) 30. 218 See C Hillion and RA Wessel, ‘Competence Distribution in EU External Relations after ECOWAS: Clarification or Continued Fuzziness’ (2009) 46 Common Market Law Review 551, 584. 219 See Heliskoski, n 212 above, 911. 220 Case C-130/10 European Parliament v Council ECLI:EU:C:2012:427. 221 Ibid, para 49. See also the Opinion of Advocate General Bot, para 69. 222 Ibid, para 82.

The Dividing Line between Different Policies 539 the adoption of the EU–Tanzania Transfer Agreement as a CFSP agreement and argued that the latter should have been adopted jointly under Articles 37 TEU (CFSP), 82 TFEU (judicial cooperation in criminal matters) and 87 TFEU (police cooperation).223 Another case where the nexus between the CFSP and development was brought to the Court’s attention was the Philippines Borders.224 In this case, the Parliament challenged the legality of a Commission Decision not published in the Official Journal which approved a project about the security of the Philippines borders. This Decision was adopted pursuant to Council Regulation 443/92 on financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America.225 The Regulation bestows upon the Commission the authority to administer such assistance. In exercising this power, the Commission approved the Philippines Border Management Project which, among others, would fund programmes promoting international border management standards, the development of information technology for sharing intelligence information between border management authorities, and training activities of border management authorities. The contested measure referred specifically to the fight against terrorism and international crime. The Parliament challenged the legality of the Decision as, it argued, the Commission lacked the power to adopt it. In particular, Regulation 443/92 does not refer to the fight against terrorism and international crime, ie the objectives of the contested Decision and, in any case, these were not Community objectives. The Court acknowledged the broad nature of development cooperation under the Treaty and pointed out that, rather than being confined to economic and social objectives, it also pursues political objectives. However, it then observed that Regulation 443/92, ie the authority for the Commission’s power to adopt the contested Decision, contained no express reference to the fight against terrorism and international crime. The Court then examined whether the contribution of the Philippines Border Management programme towards strengthening institutional capacity in the country rendered the Decision within the scope of Regulation 443/92. It answered in the negative. The latter does not refer to institutional building as an objective and, instead, is an instrument for enhancing the capacity of developing countries to administer the development policies and projects to which Regulation 443/92 refers expressly, such as food, security, and environmental protection. Neither does it refer to internal stability and security, which would be increased by border management. And even though institutional strengthening would contribute to an environment favourable to investment and development, there should be a direct link between the funded programme and the aim of strengthening investment and development. In the case of the border management project, ‘there is nothing in the contested decision to indicate how the objective pursued by the project could contribute effectively to making the environment more conducive to investment and economic development’.226 The context within which the judgment in the Philippines Borders case was rendered 223 Case C-263/14 European Parliament v Council, pending. In Case C-658/11 European Parliament v Council ECLI:EU:C:2014:2025, the Parliament accepted that the EU–Mauritius Transfer Agreement had been correctly concluded as a CFSP measure, but argued that the Parliament should still have given its consent in the light of its non-CFSP dimensions (development cooperation, judicial cooperation in criminal matters, police cooperation). The Court rejected this view (see the analysis in Chapter 4). 224 Case C-403/05 Parliament v Commission [2007] ECR I-9045. 225 [1992] OJ L52/1, amended by Council Reg 807/2003 [2003] OJ L122/36. 226 Case C-403/05 Parliament v Commission, n 224 above, para 67.

540 Links Between External Policies was quite specific, and distinct from that in ECOWAS. Here, the dispute is not about the linkages between security and development policies, but the exercise of implementing powers by the Commission in accordance with EU secondary law.227 However, the case illustrates with stark clarity the legal problems which the interactions between security and defence policy, and development cooperation may raise for the Union’s institutions.

8. CONCLUSION Conclusion

The analysis of the interactions between the CFSP/CSDP and the other strands of the Union’s external action in this chapter has shown that a formalistic distinction between them is impossible to maintain, in practical terms, and defend, in legal terms. The challenge for the EU’s institutions is twofold: how to construe a legal framework which would govern these interactions in a workable manner and manage them as a matter of fact without indulging their customary appetite for inter-institutional disputes. So far, the approach of the Union appears to be heavily process-oriented and the institutions spend too much time and energy protecting their prerogatives. The Court of Justice emerges as a central player in this area. As far as the interface between foreign policy and trade is concerned, its approach is pragmatic and illustrates distaste for formalism: an understanding of foreign policy and trade as strictly separate areas of activity is treated as unrealistic; a construction of distinct sets of rules aimed at regulating these areas separately is viewed as unworkable; a line of reasoning excluding the Court of Justice ipso facto from the exercise of its jurisdiction in areas where the EU legal order is involved or affected is flatly rejected. Instead, the Court defines its jurisdiction in functional terms whilst making it clear that the intensity of control exercised both by EU courts and national judges would not undermine the substantive choices of foreign policy as expressed by the Member States in the exercise of their powers as sovereign subjects of international law. The emergence of this functional approach has had implications for both exports of dual-use goods and economic sanctions: as the main questions of their legal regulation have now been answered in a legally sensible and politically realistic manner, the emphasis has turned to the management of the interface between trade and foreign policy. The interface between the CSDP and development cooperation, on the other hand, is a more recent terrain on which the Court can exercise its role, and it has done so in a manner that has proved somewhat controversial. The increasing osmosis between these policies and the fact that they are to be carried out on the basis of common principles and objectives under Article 21 TEU will render the dividing line between them more difficult to discern and the role of the Court of Justice more prominent. It is somewhat ironic that, whilst it aimed to construe a normative whole where different strands of the Union’s external action would be conducted as a coherent policy, the reform of primary law at Lisbon should neither clarify the limits of these strands, not limit the processcentred reflexes of the Union’s institutions and the Member States.

227 See M Cremona, ‘Comment on Case C-403/05 European Parliament v Commission (Philippines Border Management Project)’ (2008) 45 Common Market Law Review 1727.

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Index Index

Index telecommunications procurement, 344–45 Bilateral Investment Treaties, 334–41 denouncing pre-existing agreements, 324–28, 332–34, 342 denunciation, 342–43 interpretation, 322–24, 328–31 Budvar case, 328–30 national courts’ roles, 330–31 importance of international law 331 mutual rights and obligations, 321 Open Skies litigation 342–43 Treaty of Accession, 345–46 violations of EU law, 334–41 Ankara Agreement (EU-Turkey Association), 236–39, 276, 278 anti-dumping law, 357–58 adoption of implementing acts, 365 Anti-Dumping Agreement, 370–71 assessment, 364 advisory procedure, 365 dumping: constructed price, 359 determining normal value, 359–60 dumping margin, 361, 368 export prices, 360–61 EU interest, 362 examination procedure, 365 injury to EU industry, 361–62 determining, 373–74 interested parties: procedural rights, 366 investigations, 362, 375 legal position of importers, 376 judicial review, 367 annulment procedures, 374–75, 377 discretion, 367–69, 371 locus standi, 374–77 procedural issues, 371–74 right to a fair trial, 373 substantive issues, 367–71 ‘zeroing’, 369–70 non-market economy countries, 362–64 procedural issues, 364–67 provisional anti-dumping duties, 364–65 substantive issues, 359–64 undertakings, 362, 365 judicial review, 367, 372 armaments export, 509–11 economic aspects of defence, 479–82 arms embargos, 509–11 association agreements: conclusion: Council’s role, 148 European Parliament’s role, 150

AETR principle, 77–79, 82–84 application, 81–82, 102–04 construction, 105–07 Cornelis Kramer and others, 87–89 criticisms of the judgment, 84–86 duty of solidarity, 81 exclusivity principle, 79–81, 127 existence and nature, 79–81, 127–28 external competence, 127–28, 177 implied competence, 77–86 Member States as a medium for the EU, 199 Open Skies judgment, 116–18 Opinion 1/94, 101–02, 109–11 application of AETR principle, 102–04 duty of cooperation, 110–11 exclusivity, 105 necessity doctrine, 109 principle of implied powers in external actions, 77–79 existence and nature of competence distinguished, 79 structure of the judgment, 84 Agreement on the Application of Sanitary and Phytosanitary Measures, 37 direct effect, 285, 292 Agreement on Technical Barriers to Trade, 37 direct effect, 288 legal protection of biotechnological innovations, 308 Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), 36, 42–46, 154 direct effect, 285, 288 ECJ interpretation, 240–43, 246–48 international agreements: indirect enforcement, 308–11 interpretation of mixed agreements, 252 cooperation of national courts, 253–54 mixity, 165, 201, 203 Opinion 1/94, 101–10, 118 trade mark rights, 285 agreements concluded by Member States prior to their accession to EU, 321–22, 349–50 ‘all appropriate steps’: adjustment, 324–28 denunciation, 324–28, 332–34 interpretation, 328–31 renegotiation, 324–28 accession: negotiations with third states, 347–49 preparation, 345–46 application, 342–43 Friendship, Navigation and Commerce Agreement, 343–44

569

570 Index association agreements – continued conditionality, 393 third countries, 381–83 Bilaterals II, 383 EEA, 382 Switzerland, 383 see also stabilisation and association agreements (SAAs) Athens Agreement (EU-Greece Association), 210, 236, 276 Berne Convention (for the Protection of Literary and Artistic Works), 202, 243–45 Bilateral Investment Treaties (BITs): Balkan countries, 396–97 Bilaterals II, 383 direct foreign investment, 47–50 stabilisation and association process, 396–97 Cartagena Protocol on Biosafety, 55–63, 166, 205 CJEU jurisdiction, 234 declarations of competence, 176 Chicago Convention (Convention on International Civil Aviation): whether binding on the EU, 216–17 choice of legal basis: CCP, 52–71 difficulties, 53–54 implications, 53 Energy Star Agreement judgment, 59–61 environmental policy v CCP, 54–58 dynamic interpretation, 59 environmental protection, 59 legitimate practical problems, 58 Mox Plant judgment, 65–66 Rotterdam Convention judgment, 64–65 UNCLOS, 65–66 Common Agricultural Policy (CAP), 37, 289 Common Commercial Policy (CCP), 10, 17, 29–30 absence of uniformity, 23–27 anti-dumping law, 357–58, 364–65 Art. 207(6) TFEU, 51–52 background, 17–19 Bulk Oil judgment, 26–27 common market, 20–21, 22 choice of legal basis, 52–53 development cooperation, 68–71 difficulties, 53–54 environmental policy or CCP, 54–67 implications, 53 customs union, 18 decision-making, 19, 133–37 development cooperation, 68–69 EC-India Cooperation judgment, 69–71 Philippines Agreement, 71 diversity prevailing, 23–27 Donekwerwolcke judgment, 25–26 drug abuse control, 69 dual-use goods, 486, 488–91 ECJ, 31–36 criticisms, 72–74

Energy Star Agreement judgment, 59–61 establishing the CCP, 27–29 exclusivity of EU competence, 19 construction of exclusivity, 21 foundation, 21 origins, 20–22 external economic policies, 67–71 financing arrangements, 21–22 foreign direct investment, 18 human rights, 67–68 Mox Plant judgment, 65–66 ‘no circumvention rule’, 51–52 Rotterdam Convention judgment, 64–65 sanctions law, 496–97, 500 scope, 19, 30, 213, 216 anti-dumping law, 357–58 CJEU, 31–36 Commission, 32–33 Council, 33 defining scope, 31–36 difficulties defining scope, 52–53 Treaty provisions, 30 TRIPS, 106, 118 UNCLOS, 65–66 uniform principles, 23–27 see also anti-dumping law Common Customs Tariff, 18, 353–54 application, 21, 354 Common Foreign and Security Policy (CFSP), 10, 445 action to be undertaken by the EU, 424 arms embargoes, 509–11 background, 411–16 European Political Cooperation, 412–14 pillar structure of the EU, 414–16 Single European Act, 411, 413 CJEU, 443–45 monitoring competence and compliance, 443, 444 rights of individuals, 443, 444 decision-making: qualified majority, 438–40 rule of unanimity, 438 exceptions, 438–40 decisions defining arrangements for the implementation of decisions, 424–25 decisions defining EU’s position on particular matters, 424 distinct nature, 416–21 duties and obligations: duty to consult, 422–23 duty to ensure that national policies conform, 423 general loyalty obligation, 422 effectiveness, 441–43 exclusion of CFSP measures from CJEU, 443 exceptions, 443–45 institutional machinery: Council, 437–38 EEAS, 433–36 European Commission, 437–38 European Council, 425–27, 437–38

Index European Parliament, 436–37 High Representative of the Union for Foreign Affairs and Security Policy, 427–33 instruments, 423–25 Iraq war, 441–43 judicial review, 443–45 negotiation of international agreements, 138–46 role in the EU’s constitutional order: de-pillarisation, 416–17 distinct nature, 416–19 legal effect, 417–18 legal personality of the EU, 418–19 scope and objectives, 419–21 Common Security and Defence Policy (CSDP), 10, 447, 483 administrative structure: cooperation between bodies, 455–56 EEAS, 455 European Military Committee, 454–55 Political and Security Committee, 454 civilian missions, 467–69 development cooperation, 525–28 coherence, 528–30 economic aspects, 479–83 effectiveness, 469–70 European Security Strategy, 449–50 financing: expenditure from EU budget, 463–64 rapid disbursement of funds, 464–65 rules, 463–65 flexibility, 459–63 international agreements, 470 exchange of classified information, 475–77 framework participation agreements, 477 participation of third countries, 470–73 status of force and status of mission agreements, 473–75 transfer agreements, 478–79 Member States acting on behalf of the EU, 459–60 military operations, 465–66 mutual assistance clause, 456–59 objectives, 451–52 origins, 447–49 permanent structured cooperation, 460–61 capabilities criteria, 462 continuity principle, 462 free will of Member States, 462 governing principles, 462 legal rules, 462–63 openness principle, 462 political solidarity, 457 scope, 450–51, 452–53 security and development nexus, 524–25 solidarity clause, 458–59 Constitutional Treaty (Treaty Establishing a Constitution for Europe), 7, 9, 44, 416–17, 425, 427, 430, 449–50, 459 Convention on International Trade in

571

Endangered Species of Wild Fauna and Flora (CITES), 156–57 Cotonou Agreement, 387–89, 532 political dimension, 388 non-reciprocal preferential trade arrangements, 388 Council: CFSP, 437–38 international agreements: accession of EU to ECHR, 148–49 association agreements, 148 candidates for accession, 148 unanimity requirement, 147–48 Court of First Instance (CFI), 214, 370 GATT, 291 imposition of sanctions, 504–05 smart sanctions, 513–14, 522 primacy of international agreements, 219–22 WTO law, 291–94 indirect enforcement, 305–06 see also General Court customary international law, 159, 309 binding effect, 226–28 enforcement, 311–19 CFI, 312 good faith principle, 217, 336 pacta sunt servanda principle, 209 customs duties, 25 abolition, 261, 267–68, 271, 273–75, 353 EEA, 312 Generalised Tariff Preferences scheme, 356 US increases in, 292 decision-making, 133, 160 CPP: qualified majority voting, 133–34 unanimous voting, 134–37 international agreements, 137 conclusion of, 147–54 modification, 154–55 negotiation, 138–46 provisional application, 146–47 signing, 146 suspension, 155 qualified majority voting, 133–34 exceptions, 134–37 significance of procedures, 158–60 unanimous voting: commercial aspects of intellectual property, 134–35 foreign direct investment, 134–35 trade in cultural and audiovisual services, 135–36 trade in services agreements, 134–35 trade in social, education and health services, 136–37 see also international agreements declarations of competence, 53, 175–77 Cartagena Protocol on Biosafety, 176 EU exclusive competence, 178 European Atomic Energy Community, 175

572 Index declarations of competence – continued Hague Convention on Private International Law, 176–77 Rotterdam Convention judgment, 65–66 UNCLOS, 190 defence: economic aspects: armaments, 481–82 EDA, 479–80 European Commission, 480–81 impact on CSDP, 482–83 see also CSDP development cooperation, 68–69 Cotonou Agreement, 387–89 CSDP, 525–28 coherence, 528–30 EC-India Cooperation judgment, 69–71 exercise of national competence, 167 European Development Fund case, 167–70 Generalised System of Preferences, 387 Nice Treaty, 387 Philippines Agreement case, 71 primary rules, 523–24 third countries, 386–89 direct effect principle: application of principle, 267–70 interpretation of directly effective provisions, 271–75 significance of context, 275–78 association agreements, 267–69, 278–80 FTA provisions, 262–63, 268–69, 271–75 GATT, 263 Kyoto Protocol, 263–64 precondition, 259–67 two tier test, 260, 265 UNCLOS, 263 WTO law, 280, 283–90 CJEU approach, 295–301 GATT, 280–83 liability for lawful acts, 293–95 liability for unlawful acts, 290–93 doctrine of necessity, 99–100 AETR principle, 105 express external competence, 126–27, 128 Open Skies judgments, 114, 116–17 Opinion 1/76, 102, 104, 107–08, 123 Opinion 1/94, 109 proportionality, 275, 506 dual-use goods’ exports, 486–95 ‘all relevant considerations’, 492–93 authorisations, 493 common rules, 492–94 definition, 486 interaction between Member States and Commission, 494 legal regulation, 486 current rules, 491–95 origins, 487–91 national administrations’ roles, 493–94 Regulation 428/2009, 492–95 Richardt case, 488–91 foreign policy implications, 487–91

mutual recognition, 493, 494 duty of cooperation, 81, 105, 110–11, 324, 335, 341 binding agreements, 217–18 impact on Member States, 182–96 implied competence: joint EU and Member State competence, 97–98 Member States as a medium for the EU, 197–98, 199 mixed agreements, 182–84 Mox Plant case, 184–91 PFOs case, 191–96 Opinion 2/91, 98, 101 scope, 197–99 shared competence, 166, 171, 174, 180–81 duty of solidarity, 81, 255, 457–58 solidarity clause, 458–59 spirit of loyalty and mutual solidarity, 422–23, 429 economic sanctions against third countries, 495–508 arms embargos, 509–11 CCP, 495–97 ECJ approach, 497 asserting jurisdiction, 497–99 Bosphorus case, 497–99 Centro Com case, 499–502 discouraging deviations, 499–502 Ebony Maritime case, 502–04 human rights, 499 national courts’ roles, 502–04 proportionality, 502, 503–04 EU Guidelines, 508 independent action of Member States, 505 judicial review, 506–07 origins, 495 scope, 504 targets, 504–05 enforcement of international law: direct effect: application of principle, 267–78 association agreements, 278–80 precondition, 259–67 two tier test, 260 WTO law, 280–311 enforcement by individuals, 257–58 environmental policies and trade law, 54–58 dynamic interpretation, 59 Energy Star Agreement judgment, 59–61 environmental protection, 59 legitimate practical problems, 58 Mox Plant judgment, 65–66 Rotterdam Convention judgment, 64–65 UNCLOS, 65–66 Euro-Mediterranean Agreements, 397–400 Euro-Mediterranean Partnerships, 398–99 Stabilisation and Association Process distinguished, 399 European Atomic Energy Community, 14 competence, 475

Index declaration of competence, 175 international agreements, 230 mixed agreements, 163–64, 174 PCAs, 390 European Commission: CFSP, 437–38 CSDP representation, 454 ENP, 406 ESM, 168 Utilities Directive, 344 European Convention on Human Rights (ECHR): direct effect, 269 EU accession to, 148–49 implied competence, 123–25 mixed agreements, 201 European Council, 7–9 CFSP, 424–27, 437–40, 445 CSDP, 448–49 ENP, 401 EPC, 412 European Security Strategy, 402 Fiera European Council, 394 Helsinki European Council 398 High Representative, 428, 431, 433 Thessaloniki European Council, 395–96 European Court of Justice (ECJ): Cartagena Protocol on Biosafety, 234 CCP, 31–36 criticisms, 72–74 direct effect principle: WTO law, 295–301 establishing broad jurisdiction, 239–43 enforcement actions, 243–46 exclusion of CFSP measures, 443 exceptions, 443–45 external trade policies, 530–40 arms trade, 531–34 ECOWAS judgment, 535–37 jurisdiction, 531 Philippines Borders case, 539–40 foreign direct investment, 46–47 implied competence: lack of clarity, 92–93 intellectual property rights, 45–46 international agreements, 229–56 interpretation of mixed agreements, 229–34, 255–56 cooperation of national courts, 250–54 interpretation of TRIPS, 240–43, 246–48 jurisdiction under preliminary reference procedure, 235 lack of clarity, 236–39 preliminary reference procedure, 235 primacy of international agreements, 222–26 TRIPS, 240–43, 246–48 WTO law, 295–301 European Defence Agency (EDA), 456, 461, 479–80 European Development Fund (EDF), 167, 389, 434–35

573

European Economic Area (EEA), 150, 190, 243, 312, 385–86 association agreements, 382 European External Action Service (EEAS), 433–36 establishment, 433 organisation and functioning, 435–46 European Free Trade Area (EFTA), 385–86 dynamism principle, 386 homogeneity principle, 386 Surveillance Authority, 386 European Integration Partnerships, 396 European Neighbourhood Policy (ENP), 278, 384, 400–07 Action Plans: content, 402 duration, 402 role, 402–03 areas of activity, 403 Commission assessments, 404–05 Eastern Partnership, 406–07 financial element, 403 flexibility, 402 need for reform, 406 origins, 401 European Parliament: CFSP, 436–37 international agreements, 149–54 accession of EU to ECHR, 150 agreements with budgetary implications, 151–52 association agreements, 150 cooperation procedures, 150 European Political Cooperation (EPC), 411–12, 423, 448, 496 European Security and Defence Policy (ESDP), 447–49, 479 European Security Strategy, 8–9 CSDP, 449–50 European Stability Mechanism (ESM), 168–69 European Union, 7–8, 15–16 depillarisation, 416–17 external action, 9–11 common principles, 11–12 common objectives, 12–14 competences, 10–11 international role, 8–9 legal personality, 14–15 members of international organisations, 161–62 pillar structure: CFSP, 414–16 exclusivity principle: CCP: construction of exclusivity, 21 exclusivity of EU competence, 19 foundation, 21 origins, 20–22 implied competence principle, 79–80 implications, 80, 81 source of the existence, 80–81 Open Skies judgments, 118–19

574 Index exclusivity principle – continued trade in goods, 37 trade in intellectual property rights, 42 export policy: third countries, to, 355 external competence: confusion between existence and nature, 127, 128–29 express external competence, 126 international agreements, 126–29 necessity doctrine, 126–27, 128 external trade: arms embargoes, 509–11 CSDP, 524–25 coherence, 528–30 links with development cooperation, 525–28 development cooperation, 522–24 coherence, 528–30 links with CSDP, 525–28 dual-use goods, 486–95 economic sanctions against third countries, 495–508 policies and the CJEU, 530–40 arms trade, 531–34 ECOWAS judgment, 535–37 jurisdiction, 531 Philippines Borders case, 539–40 smart sanctions, 511–22 ‘everything but arms’ initiative, 356–57 Food and Agriculture Organisations (FAO), 63, 161 mixed agreements, 178–82 foreign direct investment: BITs, 47–50 CCP, 18 ECJ definition, 46–47 portfolio investment distinguished, 47 scope, 48 lack of clarity, 48 foreign policy: arms embargoes, 509–11 development cooperation and CSDP, 522–40 dual-use goods, 486–95 external trade, 485–540 sanctions, 495–508 smart sanctions, 511–22 free trade agreements (FTA): Balkan States, 346 Canada, 50 Central Europe, 345 direct effect principle, 267–68 interpretation 271–75 non-reciprocal preferential trade arrangements, 388 Portugal, 211, 219, 260, 267 South Korea, 258 third countries, 380 Generalised System of Preferences, 387

Generalised Tariff Preferences scheme, 35–36, 43, 356 General Agreement on Tariffs and Trade (GATT), 36, 165 anti-dumping law, 357 direct effect, 259–60, 263, 280–83, 285–86 EU liability for breach, 291 indirect enforcement, 307–08 Fediol case, 301–03 Nakajima case, 303–07 mixity, 203 whether binding on the EU, 212–13 General Agreement on Trade in Services (GATS), 36, 38–42 AETR principle, 102, 105 Opinion 1/76 principle, 107–08 Opinion 1/94, 101–02, 110, 118 General Court of the European Union, 214, 505 anti-dumping law, 369–71 smart sanctions, 516–17, 519–21 Geneva Convention: whether binding on the EU, 218–19 goods, see trade in goods harmonisation, 52, 105–07, 240, 272–74, 391 agreement on Technical Barriers to Trade, 37 CCP, 17, 32, 35, 41, 51 ‘common rules’, 80 culture, 52 education and vocational training, 52 identification of military needs, 461 Opinion 2/91, 99 public health, 52 road transport, 77 SEA, 440 technical harmonisation, 481, 494 TRIPS, 42–46, 104 High Representative of the Union for Foreign Affairs and Security Policy: appointment, 428 creation of post, 427, 429–30 President of the European Council, 431–33 role, 427–29 executive powers, 428–29 international representation of the EU, 429 management of EU foreign and security policy, 429 scepticism about role, 430–32 human rights: Balkan States, 504 banking law, 153–54 CCP, 67–69 CJEU approach, 498–99 Common Position, 509–10 Cotonou Agreement, 388 CSDP, 468 export of goods not listed, 493, 494 transfer agreements, 478 EMAs, 398 ENP, 401–03 freezing assets, 322 German national constitutional law, 85

Index implied competence, 123–25 international agreements, 153–55 primacy of international agreements, 223–24 smart sanctions, 513, 514, 521–22 TRIPS, 154 see also European Convention on Human Rights humanitarian aid, 9–11, 134 CFSP, 139 CSDP, 524, 529 implied competence, 75–77, 129–30 AETR principle, 77–79, 82–84 application, 81–82 criticisms of the judgment, 84–86 existence and nature, 79–81 CJEU: lack of clarity, 92–93 clarification, 93, 98–99 construction of principle: AETR principle, 77–86, 105–07 Opinion 1/76, 89–93, 107–09 Cornelis Kramer and others, 87–89 doctrine of necessity, 99–100 duty of cooperation, 98 joint EU and Member State competence, 97–98 exclusivity principle, 79–80, 83, 95, 98–99 pre-emptive exclusivity, 99 existence and nature, 79–81, 94–95 exclusivity principle, 79–80, 95 external competence: confusion between existence and nature, 127, 128–29 express external competence, 126 international agreements, 126–29 necessity doctrine, 126–27, 128 human rights, 123–25 ILO (International Labor Organisation): application to, 95–96 exclusive competence of EC, 96 implied competence of EC, 95–96 joint EU and Member State competence, 97–98 international agreements and external competence, 126–29 limits, 123–25 negotiating and concluding international agreements, 75 Open Skies judgments, 111–20 Opinion 1/03, 120–23 Opinion 1/76, 89–93 Opinion 1/94, 101–02, 109–11 application of AETR principle, 102–4 duty of cooperation, 110–11 exclusivity, 105 necessity doctrine, 109 Opinion 2/91, 93–101 reinforcing the principle, 89–93 shared competence, 97–98, 101 substantive issues, 94–95

575

import policy: free importation principle, 354 non-market economy countries, 354 subsidised imports, 355 trade defence measures, 355–56 reform, 377–78 Instrument for Stability (IfS), 525–26 objectives, 526 specific CSDP missions, 527 intellectual property rights, see trade in intellectual property rights international agreements, 137, 155–57 Art. 218(11) TFEU, 230–34 Art. 267 TFEU, 235 Ankara Agreement, 236–39 assertion of jurisdiction by Court of Justice, 242–43 Athens Agreement, 236 broad construction of jurisdiction, 239–43 enforcement actions, 243 - 46 International Fruit Company case, 235 trade in goods and tariffs, 235 TRIPS Agreement, 240 binding effect, 259–60 agreements concluded by EU, 209–12 agreements not concluded by EU, 212–19 concluded by Member States before membership of EU, 321–50 conclusion of, 147–54 accession of EU to ECHR, 148–49, 150 agreements with budgetary implications, 151–52 association agreements, 148, 150 candidates for accession, 148 cooperation procedures, 150 Council’s role, 147–49 European Parliament’s role, 149–54 unanimity requirement, 147–48 consistent interpretation, 217 CSDP, 470 exchange of classified information, 475–77 framework participation agreements, 477 participation of third countries, 470–73 status of force and status of mission agreements, 473–75 transfer agreements, 478–79 direct effect: application of principle, 267–78 association agreements, 278–80 precondition, 259–67 two tier test, 260 WTO law, 280–311 ECJ interpretation, 229–56 enforcement, 319 by individuals, 257–58 indirect enforcement interpretation, 307–11 legality under TFEU, 230–34 mixed agreements, 146 modification, 154–55 negotiation, 138–46 CFSP, 138–46

576 Index international agreements, negotiation – continued method, 142–46 negotiators, 140–42 proposals, 138–40 obligations on Member States, 211–12 primacy, 219–26 provisional application, 146–47 significance of procedures, 158–60 signing, 146–47 suspension, 155 see also agreements concluded by Member States prior to their accession to EU; association agreements; mixed agreements international commitments, 161–206 International Court of Justice, 312–13 customary international law, 227–28 legal personality of international organisations, 15 mixed agreements, 200 International Labour Organization, 93 Convention No. 170, 93–96, 231 duty of cooperation, 98 exclusivity, 96–97 Opinion 2/91, 98–100 shared competence, 97–98 exclusive competence of EC, 96 implied competence of EC, 95–96 joint EU and Member State competence, 97–98 Member States as a medium for the EU, 196 international organisations: EU membership, 161–62 Iraq war: CFSP, 440–43 CSDP, 468, 469 dual-use goods, 489 judicial review: anti-dumping law, 367 annulment procedures, 374–75, 377 discretion, 367–69, 371 locus standi, 374–77 procedural issues, 371–74 right to a fair trial, 373 substantive issues, 367–71 ‘zeroing’, 369–70 CFSP, 443–45 economic sanctions against third countries, 506–07 see also international agreements Laeken Declaration, 7, 8, 75, 417, 449–50 legal personality, 87, 158, 199, 200, 416, 418 AETR principle, 77, 79 Costa judgment, 14 implications, 14 powers, 15 Lisbon Treaty, 7–8, 153 anti-terrorism objectives, 335 CCP reforms, 17–19, 71 Art. 207(6) TFEU, 51–52

scope, 30–36, 52–53 CFSP, 413–14, 416–21, 424–25, 437 CSDP, 447, 451–52, 453, 472 cultural exception, 135 EEAS, 434–35 exceptions from unanimity rule, 440 High Representative, 162, 427–28, implied competence, 75 concluding international agreements, 75–76 international agreements, 137, 142–46, 164 conclusion, 75–76 mixed agreements, 170, 204 mutual assistance clause, 456–59 pillar structure, 413–14, 530 smart sanctions, 511 trade defence instruments, 358 Lomé Conventions, 167–68 direct effect, 277, 281 Lugano Convention (on jurisdiction and the enforcement of judgments in civil and commercial matters), 177 implied competence, 120–23 ERTA principle, 121 MARPOL (International Convention for the Prevention of Pollution from Ships): direct effect, 263 whether binding on the EU, 213–14, 217 mixed agreements: allocation of competence, 165–66 conclusion of mixed agreements, 174 declarations of competence, 175–77 disconnection clauses, 177 entry into force, 174–75 duty of cooperation, 182–84 Mox Plant case, 184–91 PFOs case, 191–96 ECJ interpretation, 229–56 cooperation of national courts, 250–54 establishing broad jurisdiction, 239–43 enforcement actions, 243–46 EU position: FAO, 178–82 exercise of national competence, 167–70 international responsibility, 200–04 application of mixed agreements, 202 ARIO, 200–01 coexistence of EU and national competence, 202–03 context of mixed agreements, 201–02 division of competence, 204 GATT, 203 TRIPS, 203 interpretation: lack of clarity, 246–50 jurisdiction under preliminary reference procedure, 235 lack of clarity, 236–39 negotiation, 170–74 PROBA 20, 171–73 UNCLOS, 173–74

Index participation in, 178–82 preliminary reference procedure, 235 primacy, 222–26 procedural integration and cooperation, 254–55 role, 204–05 shared competence, 166–70 see also international agreements mixity, 161, 204–06 CFSP/TFEU mixity 164–65 ‘cross-pillar mixity’, 164 definitions, 162–64 Member States as a medium for the EU, 196–200 duty of cooperation, 197–98, 199 national action in an international organisation, 199 practicalities, 199–200 purpose, 164 participation in international organisations, 161–62 see also mixed agreements Mox Plant case: duty of cooperation: mixed agreements, 184–91 implications of judgment, 189–91 national courts: international agreements, 250–52 mixed agreements, 252–54 necessity doctrine: AETR principle, 105 express external competence, 126–27, 128 Open Skies judgments, 114, 116–17 Opinion 1/76, 102, 104, 107–08, 123 Opinion 1/94, 109 proportionality, 275, 506 Open Skies Agreements, 113–14 Open Skies judgments, 111–12, 114–16 application of AETR principle, 118 confusion between existence and nature of external competence 116–18 developments following, 119–20 distortions of competition 115–16 EU competence, 114–17 exclusivity, 118–19 features of Open Skies Agreements, 113–14 illegality of national action, 119 impact, 119–20 legal background, 112–14 national competence, 119 necessity doctrine, 114, 116–17 relationship between internal and external competence, 117–18 summary of law, 115 third countries, 116 ‘third package’, 112–13, 114 Opinion 1/94, 101–02 application of AETR principle, 102–04 application of general clauses of Article 95 and 308 EC, 105

577

application of necessity principle pursuant to Opinion 1/76, 104 construction of AETR principle, 105–07 duty of cooperation, 110–11 exclusivity, 105 GATS, 38–42, 101–11 harmonisation of national laws, 106–07 necessity doctrine, 109 transport rules, 50 TRIPS, 42–46, 101–11 Opinion 2/00, 53–55 approach of Court of Justice choice of legal basis, 53–54 Cartagena Protocol on Biosafety, 55 objectives, 55–56 expansive view of CCP, 55 marginalisation of commodity agreements, 59 Vienna Convention on Law of Treaties, 56 pacta sunt servanda principle, 209, 212, 313, 321 Partnership and Cooperation Agreements (PCAs), 389–93 distinct nature, 392 duration of PCAs, 390 mixed nature, 389–90 objectives of partnership, 391–92 pre-existing PCAs, 395 Russia, 390–91 PFOs case: criticisms of the judgment, 194–96 mixed agreements: duty of cooperation, 191–96 portfolio investment: foreign direct investment distinguished, 47 recognition and enforcement of judgments, see Lugano Convention Rotterdam Convention on the Prior Informed Consent Procedure, 61–65 interpretation, 63–64 Rotterdam Convention judgment, 64–65 sanctions against third countries: arms embargos, 509–11 economic, 495–508 smart sanctions, 511–22 services, see trade in services shared competence: duty of cooperation, 166, 171, 174, 180–81 implied competence, 97–98, 101 ILO: Convention No. 170, 97–98 mixed agreements, 166–70 Single European Act (SEA), 124, 163, 190–91 association agreements, 150 European Political Cooperation, 448 smart sanctions, 511–22 Art. 215(2) TFEU, 511 Art. 75 TFEU, 511 asset freezing, 513–21 autonomous smart sanctions, 521–22

578 Index smart sanctions – continued Kadi case, 513–20 objectives of provisions, 512–13 proportionality principle, 520–21 reliance on Art. 75, 513 Stabilisation and Association Agreements (SAAs): EU relationship with Western Balkans, 393–94, 395–96 Stability Pact for South Eastern Europe, 394 subsidiarity principle, 75, 176–77 subsidies, 520 anti-dumping law, 302 CCP, 30, 31 trade defence instruments, 355 Thessaloniki European Council, 396 third countries, 379, 407 association agreements, 381–83 Bilaterals II, 383 EEA, 382 Switzerland, 383 economic sanctions against third countries, 495–508 ENP, 384, 400–07 Euro-Mediterranean Agreements, 397–400 FTAs, 379–81 Canada, 381 South Korea, 381 neighbourhood agreements, 383–85 ENP, 384 PCAs, 389–93 SAAs, 393–97 trade agreements: third countries, 379–81 see also free trade agreements; export policy; import policy; trade in goods; trade in intellectual property rights; trade in services Trade Barriers Regulation, 355–56 trade in goods, 36–37 CAP, 37 exclusive nature of EU, 37 GATS, 36 GATT 36 sanitary and phytosanitary measures, 37 technical barriers to trade, 37 TRIPS, 36 trade in intellectual property rights, 42–46 CCP, 43–44 commercial aspects of intellectual property, 44 CJEU, 45–46 scope, 44–46 lack of exclusivity, 42 third country agreements, 43 TRIPS, 42 disparities, 43 objectives, 42–3 trade in services, 38–42 concept of services, 40–42 GATS, 38–40

inclusion in CCP, 38 trade law, 353, 378 Common Customs Tariff, 353–54 ‘Everything but Arms’ initiative, 356–57 exports, 355 Generalised Tariff Preferences, 356 imports, 354 Trade Barriers Regulation, 355–56 trade defence instruments, 355 reform, 377–78 see also anti-dumping law; Common Commercial Policy (CCP) TRIPS, see Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) UN Charter: whether binding on the EU, 214 see also under smart sanctions UN Convention on the Law of the Sea (UNCLOS), 65–66 direct effect, 263 see also under Mox Plant case Union for the Mediterranean (UiM), 399–400 Vienna Convention on the Law of Treaties (VCLT) binding nature of treaties, 209–10 voting: qualified majority voting, 133–34 exceptions, 134–37 unanimous voting: commercial aspects of intellectual property, 134–35 foreign direct investment, 134–35 trade in cultural and audiovisual services, 135–36 trade in services agreements, 134–35 trade in social, education and health services, 136–37 Warsaw Convention (Convention for the Unification of certain rules relating to international carriage by air): whether binding on the EU, 213 West Balkans: association agreements, 382, 393 SAAs, 393, 396–97 World Trade Organisation (WTO): Appellate Body, 203, 283, 288, 291–92, 295, 370 CJEU and: assessment of CJEU approach, 295–301 consistent interpretation principle, 306 implementation principle, 303–07 judicial reciprocity, 264, 297–98 non-contractual liability of EU for lawful Acts, 293–95 non contractual liability of EU for unlawful Acts, 290–93 special damage, 293–94 substantive reciprocity, 297–98 unusual damage, 293–95

Index Code of Conduct, 204–05 direct effect, 280, 285–90 GATT, 280–83 non-contractual liability of EU for lawful Acts, 293–95 non contractual liability of EU for unlawful Acts, 290–93 Dispute Settlement Body, 283 dispute settlement rules, 283 Dispute Settlement Understanding, 283–84 enforcement of international law: direct effect, 280–311 indirect enforcement, 301–07 GATS, 38–39, 41 GATT, 36

579

direct effect, 280–83 implementation principle, 303–07 indirect enforcement of WTO law: Fediol case, 301–03 implementation principle, 303–07 Nakajima case, 303–07 transparency, 306–07 interpretation of mixed agreements , 252–54 cooperation of national courts, 253–54 mixity, 253–54 TRIPS disputes, 44, 45, 240 Yaoundé Convention, 387 direct effect principle, 260–61, 267