Andrés Delgado
Casteleiro, Lecturer at Durham Law School
Introduction
In last Thursday’s judgment on the Case
C-425/13, Commission v Council, the CJEU
was asked to determine the scope of the Council’s powers to issue negotiating
directives to the Commission and the role of the special committee overseeing
the Commission during the negotiations with Australia concerning the linking of
its emissions trading system with the EU. The case concerns the division of powers
between the Council and the Commission and the extent to which the former can
exercise some kind of control over how the latter is conducting international
negotiations.
Background
Between 2012 and 2013, the Commission negotiated an
agreement with Switzerland to link their emissions trading scheme to the EU’s. To be
better informed of the how the negotiations were being conducted, the Council
set up a special committee pursuant to Article 218 (4) TFEU (the Treaty clause
setting out rules on how the EU negotiates and concludes international
treaties). However, the Council was not completely satisfied on how the
Commission consulted this committee during the negotiations of the agreement.
Certain Member States argued that the information provided by the Commission
was scant. In fact, the Commission referred the Council to a website of the
Swiss Federal Office for the Environment when asked to provide an update on how
negotiations were going.
In light of what the Council regarded as the Commission’s failure to
effectively consult the special committee, when the Council adopted the
negotiating directives for the conclusion of a similar agreement with
Australia, it envisaged a greater involvement of the Council during the
negotiations through the special committee. The Decision of the Council of the
European Union of 13 May 2013 authorizing the opening of negotiations on
linking the EU emissions trading scheme with an emissions trading system in
Australia (Council Decision) establishes in the second sentence of Article 2 that
“the Commission shall report in writing
to the Council on the outcome of the negotiations after each negotiating
session and, in any event, at least quarterly.” Moreover, Article 1(2) of
the Decision states that the Commission shall conduct the negotiations in
accordance with the very detailed negotiating directives and procedures set out
in the Annex to the Council Decision. The annex provides, among other things,
that detailed negotiating positions of the Union shall be established within
the special committee.
Inasmuch as the Council Decision restricted the Commission’s scope of
maneuver when negotiating with Australia, the Commission brought an action against
it. The Commission’s plea boils down to two claims. First, the obligation to
report in writing after each negotiation session or at least quarterly
constitutes a breach of Article 13(2) TEU (role of the institutions), Article
218(2) to (4) TFEU (Treaty negotiation process), Article 295 TFEU (possibility
to conclude interinstitutional arrangements) and the principle of institutional
balance. Secondly, in so far as it provides that ‘detailed negotiating
positions of the Union shall be established’ by the special committee or the
Council, the Commission alleges a breach of Article 13(2) TEU, Article 218 TFEU
and the principle of institutional balance.
The Judgment of the CJEU
In relation to the Commission’s first claim, the Court
began by recalling the constitutional significance of Article 218 TFEU insofar
as it confers
specific powers on the EU institutions with a view to establishing a balance
between those institutions during the treaty-making procedure. In practice, Article
218 TFEU gives different roles to each institution. Even though the Treaties
have decided that the Commission is to act as the negotiator and to ensure the
EU’s external representation (in all those areas not covered by the CFSP, see article
17 (1) TEU), the Council is nonetheless entrusted with the power to sign and
conclude the agreement. According to the Court, in the context of those
functions, the Council and the Commission are required to comply with the
second sentence of Article 13(2) TEU, which states, “the institutions shall
practice mutual sincere cooperation.” Moreover, that cooperation becomes of
crucial importance for EU action at international level, as such action
triggers a closely circumscribed process of concerted action and consultation
between the EU institutions (para 64).
It is in this context of concerted action and consultation that article
13 (2) TEU triggers that article 218 (4) TFEU comes in, as the consultation and
cooperation between the Council and the Commission will be channeled through
the special committee. Consequently, what do the obligations of cooperation and
consultation amount to? For the Court, those obligations mean that the
Commission must provide the special committee with all the information
necessary for it to monitor the progress of the negotiations, such as, in
particular, the general aims announced and the positions taken by the other
parties throughout the negotiations. It is only in this way that the special
committee is in a position to formulate opinions and advice relating to the
negotiations (para 66).
In any event, the Court also reminds the Commission that regardless of
whether there is a special committee in place, it can be required to provide
that information to the Council as well. Given the role of the Council in the
treaty-making procedure, it should possess all the necessary information to
have clear knowledge of the ongoing negotiations concerning the preparation of
an agreement that will be submitted for its approval. Consequently, the Court
concludes that an obligation such as the one enshrined in Article 2 of the
Council decision which sets out the Commission’s obligation to report in
writing to the Council on the outcome of the negotiations after each
negotiating session and, in any event, at least quarterly’, is in conformity
with Article 218(2) and (4) TFEU (para 68).
Furthermore, the Court considers that an obligation of information as
the one recognized in Article 2 of the Council decision does not violate Article
13 (2) TFEU, insofar as the Council’s powers to lay down such an obligation of
information have been exercised with due regard to the Commission’s power to
negotiate international agreements (para 70).
Finally, in relation to Article 295 TFEU concerning the obligation to consult each other and by common
agreement make arrangements for their cooperation, the Court understands that
this obligation to conclude interinstitutional arrangements does not prevent the
Council from
being able to set out, in a decision authorizing negotiation, arrangements
relating to the information that the Commission must provide to it periodically
throughout the negotiating process (para 72). Hence, the Court dismissed the
Commission’s first claim.
In relation to the second claim, concerning the powers of the special
committee to establish detailed negotiating positions of the Union; the Court
conducts its analysis in two stages. First, it examines whether the Council has
the power to set up procedures pursuant to the first part of Article 218 (4)
TFEU, like the one enshrined in the annex of the Council decision. Secondly, it
focuses on the specific procedure set out in the annex to the Council decision
and more specifically the powers that were conferred upon the special
committee.
In the analysis of whether the Council has the power to set up a
procedure like the one drawn up in the annex of the Council Decision, the Court
examines the mandate of the special committee. In this regard, it considers
that the special committee designated by the Council has the mandate to follow
the conduct of the negotiations and guide the negotiator (para 76). In addition,
the Court argues that since the Council is empowered to designate a special
committee and the Commission is required to conduct the negotiations “in
consultation with” that committee, the Commission must inform the committee of
all aspects of the negotiations in order that it may be properly consulted
(para 77). Therefore, Article 218(4) TFEU generally allows the Council to set
out procedural arrangements governing the process for the provision of
information, for communication and for consultation between the special
committee and the Commission, as such rules meet the objective of ensuring
proper cooperation at the internal level (para 78).
However, when analyzing the minutiae of the annex to the Council
Decision, the CJEU considered that certain parts of that annex were not
designed to enhance the transfer of information and the consultation between
the special committee and the Commission. Instead, it argued that the
possibility for the special committee to establish detailed negotiating
positions as envisaged in the second sentence of the first paragraph of the
Annex seek to bind the Commission in contravention of article 218 (4) TFEU, Article
13 (2) TEU and the principle of institutional balance. For the Court, the power
to establish detailed negotiating procedures goes beyond the consultative
function assigned to the special committee. The annex has the effect of
imposing negotiating positions on the negotiator, i.e. the Commission (para
90). Therefore, the Court accepted the Commission’ second claim and partially annulled
the Council Decision.
Comment
To a certain extent, the EU’s
treaty-making procedure constitutes an example of the Principal – Agent
problem. The Council (Principal) authorizes the Commission (Agent) to negotiate
on its behalf, yet it does not completely trust the Commission. The Court understands that it is the
information asymmetry that fuels the Council’s lack of trust on the
Commission’s role as a negotiator. Consequently, anything in the Council
decision that might exceed the obligation to inform and consult would be a
breach of the principle of institutional balance, regardless of how badly the
Commission had previously complied with that obligation.
In this regard, a parallelism with Case C-658/12
European Parliament v Council (Mauritius, AKA Somali Pirates) (discussed here)
could be drawn. In that case the Court understood that by not informing the European
Parliament (EP) immediately and fully informed concerning the conclusion of an
extradition agreement with Mauritius, the Council had breached Article 218 (10)
TFEU. Inasmuch as that provision aimed as ensuring that the EP could
effectively exercise its powers in relation to the conclusion of international
agreements, the Council had breached the principle of institutional balance. In
the present case, the Court understands that an obligation to inform the
Council on on-going negotiations is an expression of that principle. The
Council also needs to be immediately and fully informed throughout the
negotiations of an agreement it will end up concluding.
Finally, in the last couple of years we have witnessed an increase in
the litigation between the different EU institutions concerning the exercise of
their powers and the delicate balance between them in the field of EU External
Relations. It appears that the EU institutions are still learning how to live
with each other after the Lisbon Reform. Yet within this learning process, it
appears, that the EU institutions seem to be moving away from cooperation
arrangements and are pushing for a rigid interpretation of their respective
powers. This is clearly seen in how the principle of institutional balance
figures prominently in the present case or in other cases such as Mauritius Island, Case C-409/13 (Council v Commission) concerning the Commission’s
right to withdraw proposals (discussed here), or Case C-28/12,
Commission v Council, (US Air Transport
Agreement). While in principle this is not per se a problem, it could signal that an
increasing institutional divide on the way the to conduct the EU’s external
representation after the Lisbon Treaty is emerging.
Barnard & Peers: chapter 24
Photo credit: carbonsolutionsglobal.com
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