External Competence of the EU
1. Introductory remarks
The progress of approximation of private law by the Union sheds new light on the role of the EU as an actor in international legal unification itself. The EU is an international organization that was equipped with international legal personality by its Member States (Art 47 EU/281 EC). As a legal subject it is able to enter into legal relations with other international legal subjects independently from its Member States. Most notably, the EU has the capacity to enter into treaties and thus can, within its competences (see 2. and 3. below), acquire rights and be obligated by international agreements. In addition, the EU may itself become a member of international organizations involved in the harmonization of private law. With the entry into force of the Lisbon Treaty the EC as the predecessor of the EU has ceased to exist as a legal person. The European Union—explicitly enjoying legal personality according to Art 47 EU—has succeeded into the EC’s rights and duties under international law.
2. Typology of competences
The EU only has the competences conferred on it by the Member States (Art 5(1) EU/5(1) EC). This principle of attributed powers also applies to the competence to conclude agreements with third States. External competences have been explicitly transferred to the Union by Arts 219, 207, 186(2), 191(4), 211, 220, 352, 217 TFEU/111, 133, 170 (2), 174(4), 181, 302–304, 308 and 310 EC. In addition, the ECJ (European Court of Justice) has developed so-called implicit external competences in its ruling in the ERTA-case (ECJ Case 22/70 – ERTA [1971] ECR 263) and the subsequent case law. In the field of private law, implicit competences prove to be of utmost significance since the scope of explicit competences is limited (but see Art 207(4)(II) TFEU/133(5)(6) EC on intellectual property).
Apart from the just mentioned distinction between explicit and implicit competences, legal scholarship has developed further types of external competences: exclusive, parallel, concurrent, shared and mixed competences. But caution is recommended: the understanding of these terms often varies among authors. It is undisputed that some explicit external competences are exclusive by virtue of the Treaty itself, examples under the jurisprudence of the ECJ being competences in the field of common commercial policy, fishery management as well as association agreements. Therefore, this category has little relevance for private law. But also implicit concurrent competences—as most competences in the field of private law—may become exclusive in nature. If competences are concurrent, Member States are allowed to conclude agreements as long as the Union has not passed legislation in this field. The term ‘exclusivity’ is also used in this regard to describe the effect of preemption once the Union has passed legislation. Apart from these general principles, many details remain unsettled, as will be explained later (see 3. below). In the case of parallel competences, which we find, for example, in Art 191(4) TFEU/174(4) EU Member States are not barred from concluding treaties despite internal legislation which has been passed or treaties which have been concluded by the Union; nevertheless, the duty of loyalty arising from Art 4(3) EU/10 EC will still limit the exercise of these parallel competences.
Mixed or shared competences are of major practical importance. Both terms are generally used as equivalent by legal authors. The ECJ, however, sometimes seems to speak of shared competences when referring to concurrent competences in the above-mentioned sense. Also, the Treaty establishing a Constitution for Europe (TCE) as well as the TFEU use this term in the latter sense (Art 11(2) TCE with Art 2(2) TFEU). If an agreement is mixed, its subject matter is only partly covered by (exclusive) competences of the Union. Therefore, Member States will (have to) participate in the agreement alongside the Union. If not all the Member States take part in the treaty, ‘mixity’ is incomplete.
An important exception to the division of competences as just explained can be found in Art 351 TFEU/307 EC. According to this provision the obligations of a Member State towards third states resulting from agreements concluded before the entry into force of the TFEU for that respective Member State shall not be affected by the TFEU. Moreover, some authors argue in favour of an analogous application of this provision to obligations arising from agreements Member States legally entered into because the EU had not exercised its concurrent external competence at the time of their conclusion. But according to Art 351 s 2 TFEU/307 s 2 EC, Member States are obliged in any event to eliminate these incompatibilities so that they will ultimately have to denounce the agreement or at least take steps which make an accession by the EU possible.
Even if the EU’s external competence has turned into exclusiveness, Member States may under certain circumstances be allowed to conclude agreements if the EU as a matter of international law cannot participate in this treaty. In such a case, the Council will authorize the Member States by decision or regulation to conclude this treaty in the interest and on behalf of the Union (see ECJ Opinion 2/91 – Convention No 170 of the International Labour Organization [1993] ECR I-1061). Though this is not an exception to the division of competences in the strict sense, since with regard to procedure the conclusion of the agreement is dependent on a decision of the respective Union organs, the difficulties concerning the implementation of the agreement make clear that authorization in the interest of the Union is not a real alternative to the participation of the Union. In 2009, the Community adopted two regulations (Regulations (EC) No. 662/2009 and 664/2009) establishing a procedure by which external competences may be transferred back as far as certain bilateral or regional agreements in the field of private international law are concerned. Though the consent of the Commission is required, an agreement would be concluded by the respective Member State in its own name and would not become part of the Union legal order. The principles on the division of external competences equally apply to the conclusion of agreements and membership in international organizations. In addition, special norms such as Arts 167(3), 180, 191(4), 211 TFEU/151(3), 164, 174(4), 181(1) EC authorize as well as oblige the Union to cooperate with international organizations.
3. Case law concerning the implicit external competences
As has been mentioned above, the Union’s implicit external competences have been developed by the ECJ in its ERTA-judgment and the subsequent case law. Though many questions remain unclear, the Member States have implicitly confirmed this jurisprudence in Declaration No 10 of the Maastricht Treaty. In addition, Arts 3(2), 216(1) TFEU seek to codify the ECJ’s jurisprudence on the implicit external competences.
In paras 15 to 17 of the ERTA-judgment the ECJ formulated the so-called ERTA-doctrine, constituting the first pillar of the jurisprudence on external competences: ‘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. Such authority arises not only from an express conferment by the Treaty … but may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions. In particular, each time the Community … adopts provisions laying down common rules … the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules.’ In these paragraphs, however, the ECJ discussed two different questions: the question of the competences’ existence as well as of their exclusivity. But the ‘[i]n particular’ sentence made it doubtful whether the adoption of an internal act of legislation by the Union should be necessary for the ‘existence question’ or only for the ‘exclusivity question’.
The second pillar of the ECJ’s jurisprudence on external competences is the Opinion 1/76 (ECJ Opinion 1/76 – Laying-up fund for inland waterway vessels [1977] ECR 741). In para 4 of that opinion the ECJ confirmed its ERTA-judgment and explained further: ‘Although the internal Community measures are only adopted when the international agreement is concluded and made enforceable, … 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 … necessary for the attainment of that one of the objectives of the Community.’
Even 30 years after these judgments have been rendered, the correct understanding of them is disputed in legal writing. Is internal legislation needed for the existence of external competences? If not, is it nonetheless the case that only internal legislation will result in the exclusivity of external competences such that the mere conclusion of an agreement by the Union would still leave a parallel right to participation of the Member States? And finally, how is the transformation of concurrent competences into exclusivity best interpreted? Is it merely an aspect of Union law’s primacy that bars action by the Member States in those instances where action would be incompatible with rules adopted by the Union and would consequently ‘affect those rules’ in the sense excluded by the ECJ? Or is Member State action preempted irrespective of that fact?
Most scholars agree on a parallelism of internal and external competences and thus limit Opinion 1/76’s relevance to the exclusivity question. This understanding was buttressed by the ECJ’s jurisprudence (see Opinion 2/92 – OECD [1995] ECR I-521 and Opinion 2/91 on ILO Convention No 170, supra). Doubts came up after the Opinion 1/94 (ECJ Opinion 1/94 – WTO [1994] ECR I-5267) as well as the so-called ‘open skies’ judgments (see ECJ Case C-467/98 – Commission/Denmark [2002] ECR I-9519). However, for the first time the ECJ stated explicitly in its Mox Plant judgment (ECJ Case C-459/03 – Mox Plant [2006] ECR I-4635) 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 in question and liable to be affected if Member States were to take part, within the terms of paragraph 17 of the AETR judgment’. This judgment thus clearly supports the theory of parallelism, though other explanations are still possible. For example, some authors draw a distinction according to the ‘direction’ of the authorizing norm. For example, Art 91 TFEU/71 EC—referring to the ‘international transport … passing across the territory of one or more Member States’—clearly has an external dimension and thus would suffice to create external competences according to Opinion 1/76 even without internal legislation. On the other hand, the approximation of laws according to Art 114 TFEU/ 95 EC for the promotion of the internal market is only directed towards the internal plane. Thus, internal legislation would be needed in order to allow the Union to act externally.
In spite of this dispute regarding the relevance of internal legislation for the existence of external competences, its significance for the question of exclusivity is uncontested. Whether external competences are exclusive or not has, according to the ERTA-judgment, to be determined by asking whether the conclusion of an agreement by the Member States is likely to affect common rules. The assessment whether the conclusion of an agreement is likely to affect common rules has, however, to be understood in an abstract-theoretical fashion. A concrete conflict between internal legislation and an international agreement concluded by the Member States is not necessary (see ILO-opinion and open skies). This result is not rebutted by the reasoning of the ECJ in its Opinion 1/03 (ECJ Opinion 1/03 – Lugano Convention [2006] ECR I-1145), though it stressed the necessity of a specific analysis of the relation between Union law and the envisaged agreement in order to determine the competences’ exclusivity. However, it held the scope, nature and content of the internal legislation to be decisive; the analysis of the agreement could only confirm a conclusion already made. Following this reasoning in Opinion 1/03, a disconnection clause in the envisaged agreement giving priority to Union law was held to have no relevance.
In order to assume exclusivity, it is by no means necessary to completely harmonize the respective area of the law. In its opinion regarding the ILO-Convention No 170 and in the open skies judgments, the ECJ was satisfied if the subject matter governed by the agreement was largely covered by Union legislation. Thus, it is necessary to determine in each single case the congruence of scope between the international agreement and Union legislation. In general, even the adoption of directives by the Union will entail exclusivity and thus prohibit Member States’ action on the international plane, even if directives require the Member States to act on the internal plane. Only in the opinion on the ILO-Convention No 170 did the ECJ deny the possibility of its affecting Union law even in the abstract sense because Union legislation as well as the convention only aimed at minimum harmonization.
In exceptional cases, as described by Opinion 1/76, external competences may become exclusive without the antecedent adoption of common rules before the international agreement is concluded and made enforceable. But the conclusion has to be—as the ECJ clarified in its Opinion 1/94—inextricably linked to the attainment of the objectives of the Union that cannot be achieved by the establishment of autonomous common rules.
But even if competences remain for the Member States, the duty of cooperation arising from Art 4(3) TEU (2007)/10 EC can limit the Member States’ freedom of action within these competences: The duty of cooperation requires the Member States to abstain from any measure which could interfere with Union law, be it primary or secondary.
Articles 3(2), 216(1) TFEU correspond to the rules provided by the TCE. While Art 3(2) TFEU addresses exclusivity, the latter provision determines in which cases the EU shall have external competences. According to Art 216(1) TFEU, the EU may conclude agreements ‘where the Treaties so provide or where the conclusion of an agreement is necessary in order to achieve … one of the objectives referred to in the Treaties, or is provided for in a legally binding Union act or is likely to affect common rules or alter their scope’. Because the wording of Art 3(2) TFEU is nearly equivalent, one may wonder whether there can still be external competences that are non-exclusive, ie shared according to Art 4(1), after the Treaty of Lisbon. Despite the slight differences in the wording (‘necessary in order to achieve … one of the objectives’ compared to ‘necessary to enable the Union to exercise its internal competence’) it is questionable whether a different legal treatment is justified. The necessity of achieving the objectives of the Union is hardly a legal criterion worth mentioning explicitly; it already follows from the principles of subsidiarity and proportionality. It thus seems that the criterion of necessity in Art 216(1) TFEU has to be interpreted—just like Art 3(2) TFEU—in light of Opinion 1/94. Despite the fact that the wording of Art 216(1) TFEU suggests a freedom of external action, the Union would be able to conclude treaties without prior internal legislation only in limited cases circumscribed by Opinion 1/94.
4. The procedure for the conclusion of treaties
The procedure for the conclusion of treaties is governed by Art 218 TFEU/300 EC unless special rules apply (eg Arts 219, 207(3)–(5), 352 TFEU/ 111, 133, 308 EC; 111, 133(3)–(7), 308 EG). As far as pure Union agreements are concerned, the Commission has the right of initiative. Following a recommendation by the Commission to the Council according to Art 218(2) TFEU/300(1) EC, the Council will authorize the Commission to negotiate the agreement. The authorization will generally contain guidelines for the Commission. Once a final version is adopted by the negotiating parties, the Council will upon recommendation of the Commission decide whether to sign the agreement. This decision is normally to be made by qualified majority. A Council representative or the Commission authorized by the Council then will sign the agreement. After the signature of the agreement, consultation of the European Parliament according to Art 218(6) TFEU/300(3) will follow, which however has in general no binding effect. The agreement will then become part of Union law after another Council decision. The instrument of ratification will be signed by a Council representative and the agreement will be published in the Official Journal.
Concerning mixed agreements, the EC treaty does not provide clear guidelines. The ECJ derives from Art 4(3) TEU/10 EC a duty of close cooperation between the institutions of the Union and the Member States both in the process of negotiation and conclusion as well as in the fulfilment of the obligations entered into, these resulting from the requirement of unity in the international representation of the Union (eg ECJ Case C-25/94 – FAO Fishery Agreement [1996] ECR I-1469). Nevertheless, determining the composition of the delegation for the negotiations has already proven difficult; in this regard several different solutions have evolved in practice. Contrary to some opinions in legal writing, previous experience does not seem to support the necessity of ratification by all Member States before the Union is allowed to ratify the agreement (but see Art 102 EURATOM). However, the decision to ratify an agreement generally contains a provision according to which Member States and the Union should deposit their instruments of ratification together, if feasible, so that the agreement enters into force simultaneously for Member States and the Union. This alone shows that the conclusion of mixed agreements is connected with much difficulty.
5. International agreements as part of Union law
Apart from their binding force under international law, by virtue of Union law, agreements concluded by the Union also assume binding force on the Union’s institutions and its Member States (Art 216(2) TFEU/300(7) EC). Upon the entry into force of an agreement it becomes an integral part of Union law (ECJ Case 181/73 – Haegeman [1974] ECR 449) and thus assumes the primacy of Union law. In addition, the courts of the Union are competent to rule on the interpretation of the agreement. Its rank is between primary and secondary law (ECJ Case 21-24/72 – International Fruit Company [1972] ECR 1219). However, the agreement is only directly applicable if ‘regard being had to the wording, purpose and nature of the agreement, it may be concluded that the provision contains a clear, precise and unconditional obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’ (ECJ Joined Cases C-300/98 and 392/98 – Dior [2000] ECR I-11307, para 42). The concrete application of these criteria by the ECJ regarding the GATT has led to some criticism in legal writing.
If the Union and Member States become parties to an agreement, the scope of obligations under international law has generally to be determined irrespectively of the internal distribution of competences, unless the agreement itself refers explicitly or implicitly to the international distribution. Yet it remains unsettled to which extent a mixed agreement becomes an integral part of Union law. The jurisprudence of the ECJ thus far has not provided clarity in this regard.
6. Consequences for the area of private law
The European Union is so far only party to few conventions that cover private law issues – mostly on transportation or intellectual property law. But the Member States have also concluded some agreements which were drafted under the auspices of the International Maritime Organization as well as the Hague Conference on Private International Law in the interest and on behalf of the Union. In 2007 the EC became a member of The Hague Conference. Additionally, the activity of the WTO, of which the EC is a member, covers private law issues in the field of intellectual property. Reasons for the minimal participation of the Union can surely be seen in its still limited (exclusive) external competences being dependent on internal legislation. At this point of time international civil procedure, especially the laws on jurisdiction and the recognition and enforcement of judgments (see Opinion 1/03), private international law as well as intellectual property law are to a large extent within Union competence. However, even though the EU has largely acquired exclusive external competences in the field of private international law, the EU has not established a network of bilateral relations based on special regional ties with third states. Therefore, the above-mentioned Regulations (EC) No 662 and 664/2009 allow for a conclusion of certain bilateral or regional agreements by the Member States in the scope of the Rome Regulations and the Regulations (EC) No 2201/2003 and 4/2009.
Agreements that also deal with issues not covered by Union competence will generally necessitate a participation of the Member States. Apart from the problem of the Union competences, the limited participation has to be explained by the assumption still prevailing in public international law that the participation of non-state actors requires explicit rules in that agreement. Nonetheless, a consciousness in the international legal community is slowly developing with the result of an increasing willingness to afford the EC an opportunity to participate in international private law treaties. Reasons for third states not to do so are surely the complexity of rules needed to cope with mixed competences on the part of the Union.
Literature
Jean Groux and Philippe Manin, The European Communities in the International Order (1984); I Macleod, ID Hendry and Stephen Hyett, The External Relations of the European Communities (1996); Rudolf Geiger, ‘External Competences of the European Union and the Treaty-making Power of its Member States’ (1997) 14 Arizona Journal of International and Comparative Law 319; Alan Dashwood and Christophe Hillion (eds), The General Law of E.C. External Relations (2000); Jürgen Basedow, ‘Die Europäische Gemeinschaft als Partei von Übereinkommen des einheitlichen Privatrechts’ in Festschrift Peter Schlechtriem (2003) 165; Michael Wilderspin and Anne-Marie Rouchaud-Joet, ‘La compétence externe de la Communauté européenne en droit international privé’ (2004) 93 Rev crit dr int priv 1-48; Delano Verwey, The European Community, the European Union and the International Law of Treaties (2004); Fausto Pocar (ed), The External Competence of the European Union and Private International Law (2007); Jan P Hix, ‘Mixed Agreements in the Field of Judicial Cooperation in Civil Matters: Treaty-Making and Legal Effects’ in Bernd Martenczuk and Servaas van Thiel (eds), Justice, liberty, security (2008) 210-255; Jan Asmus Bischoff, ‘Die Europäische Gemeinschaft und die Haager Konferenz für internationales Privatrecht’ (2008) 16 ZEuP 334; Jan Asmus Bischoff, Die Europäische Gemeinschaft und die Konventionen des einheitlichen Privatrechts (2010); Piet Eeckhout, EU External Relations Law (2nd edn, 2011).
