Steve Peers
Only a few Member States produce
good wine; but it is quaffed enthusiastically in all of them. That simple fact
lies at the heart of today’s judgment in Germany v Council, in which the CJEU, consistently with a string of recent
judgments, significantly strengthened the EU’s role in external relations.
Background
In particular, this case
concerned the situation where Member States are ‘trustees’ of the EU’s external
competence. This occurs where (as is often the case), the EU is not able to
sign up to a treaty or participate in an international organisation, even
though it has external competence as regards the subject-matter of that organisation
or treaty. In that case, as established in prior case law, Member States must
act on the EU’s behalf.
However, the Treaties don’t
regulate this situation directly, and before today, there was little case law
regulating the details of such ‘trusteeship’. So the exercise of the EU’s powers
in such scenarios can be awkward. For instance, earlier this year the Council
could not agree on a Commission proposal to coordinate Member States’ positions
on behalf of the EU as regards possible new ILO measures regarding forced
labour (see further my blog post on this issue).
Today’s judgment concerned
the International Organisation of Vine and Wine (OIV), an international
organisation which was originally set up back in 1924, but which was
reconstituted with a new name in 2001. Its membership includes 21 Member
States, including some (such as Finland) which are not known for their quality
of wine production, although the scope of the OIV also extends to grapes and (unfortunately for small children) raisins.
In practice, the main focus
of the OIV is drafting technical resolutions on wine production and quality. These
resolutions don’t bind the members as such, so essentially constitute ‘soft law’.
The OIV adopts these measures at a lengthy annual conference held each summer
in a rather pleasant location. There are probably many opportunities for
delegates to sample all the latest fine wines. In short, OIV membership appears
to be a little-known – but doubtless much-loved – perk for agriculture
ministers and their officials.
But after 90 years of such
genteel wine-tasting, this classy organisation was dragged into the mud of an
arcane EU inter-institutional dispute. This began when the EU legislation
establishing a common market organisation for wine was amended in 2008, in
order to make the organisation’s resolutions binding as regards EU law. The
Commission promptly proposed that the EU become a member of the organisation, alongside
its Member States.
There was not enough support
among Member States for the Council to adopt this proposal. Instead, the
individual Member States coordinated their voting in the OIV’s annual meeting. The
Commission then threatened those Member States with infringement actions if
they continued to vote in the OIV to adopt measures which affected the EU
acquis. So as a compromise, the Council agreed to adopt a Decision which would
coordinate their position on behalf of the EU as a whole.
The Council acted on the
basis of Article 218(9) TFEU, which provides as follows:
The Council, on a proposal from the Commission or the High
Representative of the Union for Foreign Affairs and Security Policy, shall
adopt a decision suspending application of an agreement and establishing the
positions to be adopted on the Union’s behalf in a body set up by an agreement,
when that body is called upon to adopt acts having legal effects, with the
exception of acts supplementing or amending the institutional framework of the
agreement
Germany, supported by
several other Member States, then challenged this Decision on two grounds.
First, it argued that Article 218(9) TFEU only permits the Council to establish
the position of the EU as such, as
distinct from the action of its Member
States. Secondly, it argued that Article 218(9) TFEU only applies where the
measures in question are binding as a matter of international law, rather than as a matter of EU law.
The
judgment
The Advocate-General’s
opinion agreed with Germany on both points, but the Court’s judgment rejected
them both. First of all, as regards the scope of Article 218(9), the Court pointed
out that the words ‘on the Union’s behalf’ did not specifically limit
themselves to cases where the Union was party to the agreement in question. The
Court did agree that the previous provisions of the external relations Title of
the Treaty only referred to treaties signed by the EU. So did the reference to
suspending a treaty, set out in Article 218(9) itself.
However, when it came to a
decision adopted by a body established by an agreement, the word ‘agreement’
had a different, wider meaning, applying not only to treaties which the EU was
a party to, but also to treaties which only the Member States (or some of them)
were party to. The Court justified this distinction on the grounds that the Treaty rules
on the negotiation, conclusion or suspension of agreements only applied to the EU itself, whereas the EU does not have to
be a party to an agreement in order to control Member States’ actions as
regards implementing measures.
On the second point, the
Court described the soft-law decision-making process of the OIV, and then noted
that due to the link with OIV measures made by EU law, those measures ‘were
capable of decisively influencing the content’ of EU legislation. Therefore
those measures had ‘legal effect’, and the Council could rightly adopt a
Decision establishing the EU’s position on what they should be.
Comments
The Court’s judgment means
that the EU is in a strong position to coordinate its Member States’ action in
international organisations, where the Member States are trustees of the Union’s
external competence. In fact, as the Advocate-General’s opinion pointed out, there
is now no real difference between the EU being a party to the OIV and not being a
party to it.
First of all, there can now be
no doubt that the EU has such a coordination power, on the basis of Article 218(9) TFEU.
Secondly, since the scope of that power is linked to the existence and nature
of the EU’s external competences, the Court’s recent judgment in the
broadcasting rights case, giving a generous interpretation of the EU’s
exclusive external powers after the Treaty of Lisbon, is relevant here.
That recent judgment is arguably
also relevant by analogy to the interpretation of the condition that the
planned acts must have ‘legal effects’. This condition applies, as today’s judgment
makes clear, whenever EU legislation has made an express link to the measures
which an international organisation might adopt. But the Court did not limit
the notion of ‘legal effects’ to such cases. The concept might therefore also
apply where there is merely an indirect potential impact upon EU legislation
(cf the broadcasting rights case), or where the measure in question has effect
only upon third parties, or within the international organisation itself.
What does this mean in
practice? Where the EU has exclusive external powers, Member States can’t act
to affect EU law, even if the EU is not a member of the international
organisation (see the Commission v Greece
judgment, as regards the IMO). The Council Decisions coordinating Member State
positions have to include a substantive legal base, so the nature of the EU’s
competence is clear (CITES judgment).
Even where the EU and the Member States share competence, and the EU has not
regulated the issue in question, the existence of an EU strategy might prevent
Member States from acting alone (see by analogy Commission v Sweden, although that case concerned a treaty which
both the EU and its Member States were parties to).
Of course, the obligation of
Member States to act as trustees in the EU’s interest does not mean that they
will necessarily agree on a proposed Council Decision to coordinate their
action (for instance, see the example of the ILO forced labour measures, referred
to above).
The Court’s judgment
necessarily does not directly touch upon the question of the process by which
the EU authorises its Member States to sign
or conclude treaties (as distinct from acting within an international organisation) as trustees of EU competence. But if
the judgment is read literally, it will have a significant impact on that
process. For although the judgment states that Article 218(1) to (8) TFEU only
applies to the negotiation and conclusion of agreements by the EU, the EU practice until now is to use these provisions
also to approve the negotiation and conclusion of treaties by the Member States, acting as trustees of
the EU’s interest. (See for instance, the Council Decision concerning the
domestic workers convention, based on Article 218(6) and (8)).
Oddly, there was no real discussion
in this litigation of the possible alternative route of using the EU’s internal legislative powers to regulate
Member States’ behaviour within international organisations. The
Advocate-General briefly (and bizarrely) mentioned the possible use of Article
352 TFEU, the ‘residual powers’ clause in the Treaties, but why not simply use
Article 43 TFEU, the power relating to the common agricultural policy?
This would entail the adoption
of a legislative act. While it might be argued that this is too cumbersome a
process to use every time the OIV holds an annual meeting, it might instead be
possible to adopt only one legislative measure, which sets out a general
framework for coordinating Member States’ action as regards all future OIV meetings.
Adopting a legislative act in
relation to an international treaty might seem odd at first sight, but it isn’t
really. It was, of course, a legislative act that first gave legal effect to
OIV soft law in the EU legal order in the first place. More broadly, the EU often
adopts legislative acts to coordinate
Member States’ treaty-making competence, in areas subject either to EU
exclusive competence (cf investment agreements) or to shared competence, where
there is a large EU role (cf air transport treaties).
And if the Court really meant
to say that Article 218(1) to (8) can no longer be used to allow Member States
to sign and ratify international treaties as trustees of EU competence, then
legislative acts will have to be used in this context too. So it would have
made more sense for the Court to rule that EU internal legislative powers must
be used to regulate all aspects of Member States’ trusteeship.
Some final thoughts on the
role of the other EU institutions, and the position of non-participating Member
States, following this judgment. First, the European Parliament (EP). It didn’t
participate in the proceedings, but perhaps it should have done. As the
Advocate-General pointed out, the judgment is the worst-case outcome for the
EP, since it did not have the opportunity to approve EU membership in the OIV,
and nor can it control the Council’s adoption of measures which impact ultimately
upon the interpretation of EU legislation. In future, the EP would have the
opportunity to address such issues when the EU legislation making such a link
to international measures is adopted. But in this case, the legislation was
adopted before the Treaty of Lisbon, when the EP was only consulted upon
agricultural legislation. At least, as the Advocate-General pointed out, the EP
must be ‘immediately and fully informed’ of the Council Decisions relating to
Member States’ trusteeship pursuant to Article 218(10) TFEU, which the CJEU has
recently interpreted broadly.
As for the CJEU, it has
special jurisdiction relating to envisaged international treaties pursuant to Article
218(11) TFEU. If Article 218(9) applies to Member States’ trusteeship, then surely
so does Article 218(11). Indeed, as the Advocate-General pointed out, the Court
has already ruled as much. In fact, it will imminently be ruling again on such
a case (Opinion 1/13, on the Hague
Convention on child abduction). So we will be able in a week’s time to see how the
two judgments fit together.
Finally, what about the
position of Member States which are not members of the OIV? Actually, the operative
part of the Court’s ruling makes no reference to this issue, and the judgment
is logically equally applicable whether some or all Member States are party to
the international agreement in question.
But in the particular
context of the OIV, the Court’s confirmation that the Council has the power to
coordinate Member States’ positions in the EU’s interests makes obvious sense. Due
to the link between OIV resolutions and EU law, those resolutions impact all Member
States, because they affect the quality and price of wine drunk in every Member
State. Furthermore, they affect the operation of the common market in wine,
which is paid for by all EU taxpayers, whether they are teetotallers or
exclusively drink beer or even (inexplicably) whisky. In this light, the decision of the UK (not a
member of the OIV) to intervene, with other Member States, in support of
Germany, rather than the EU institutions, is simply Pavlovian.
Barnard & Peers: chapter
24
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