Steve Peers

While only a handful of EU countries excel in wine production, it’s enjoyed throughout the Union. This simple truth underpins the recent Germany v Council ruling, where the Court of Justice of the European Union (CJEU) bolstered the EU’s foreign relations authority, aligning with several previous decisions.

Background

This case centers on instances where Member States act as ’trustees’ of the EU’s external competence. This situation arises when the EU, despite having authority over a subject, cannot join a treaty or international organization dealing with it (a frequent occurrence). Established case law dictates that Member States must act on the EU’s behalf in such situations.

However, the EU Treaties lack direct regulation for this ’trusteeship’, and until recently, case law offered little guidance. This ambiguity complicates the EU’s exercise of power in these scenarios. For instance, earlier this year, the Council failed to agree on a Commission proposal for coordinating Member States’ positions, acting for the EU, on new International Labour Organization (ILO) measures concerning forced labor (more on this in my blog post).

The current judgment revolves around the International Organisation of Vine and Wine (OIV), an international organization established in 1924 and renamed in 2001. Its membership includes 21 EU countries, including some, like Finland, not renowned for winemaking. The OIV’s scope encompasses grapes and (regrettably for some) raisins.

The OIV primarily focuses on creating technical resolutions for wine production and quality. These non-binding resolutions essentially constitute ‘soft law’. This process unfolds during lengthy annual conferences held in pleasant locations each summer, offering ample opportunities for delegates to savor fine wines. It seems OIV membership is a little-known but undoubtedly appreciated perk for agriculture ministers and officials.

After 90 years of refined wine tasting, this esteemed organization became embroiled in a complex EU legal dispute. The issue arose when the EU law establishing a common market for wine was modified in 2008 to give binding legal effect within the EU to OIV resolutions. The Commission then proposed the EU join the organization alongside its Member States.

Lacking sufficient support from Member States, the Council couldn’t adopt the proposal. Instead, individual Member States coordinated their votes during the OIV’s annual meeting. The Commission responded by threatening infringement actions against Member States if they continued voting for measures impacting EU law. This led to a compromise: the Council agreed to a Decision to coordinate their stance on behalf of the EU.

The Council based its action on Article 218(9) of the Treaty on the Functioning of the European Union (TFEU), which states:

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, backed by several Member States, contested this Decision on two grounds. They argued Article 218(9) only allows the Council to define the position of the EU itself, not the actions of individual Member States. They also argued Article 218(9) only applies when measures are binding under international law, not just EU law.

The judgment

While the Advocate-General’s opinion sided with Germany on both points, the CJEU’s judgment rejected both. Regarding the scope of Article 218(9), the court highlighted that the phrase ‘on the Union’s behalf’ isn’t restricted to situations where the EU is a party to the agreement. They acknowledged that previous provisions in the Treaty’s external relations Title only mentioned treaties signed by the EU, as does the reference to suspending treaties in Article 218(9) itself.

However, concerning decisions made by a body established by an agreement, the court broadened the definition of ‘agreement’. It applies not just to treaties with the EU as a party, but also to those involving only Member States (or some). The court reasoned that while EU rules on negotiating, concluding, or suspending agreements apply only to the EU itself, the EU needn’t be a party to an agreement to oversee how Member States implement measures.

Addressing the second point, the court described the OIV’s soft-law decision-making process. They noted that due to EU law linking to OIV measures, these measures “were capable of decisively influencing the content” of EU legislation. Therefore, these measures held “legal effect,” justifying the Council’s Decision to establish the EU’s stance on them.

Comments

This judgment empowers the EU to coordinate Member States’ actions within international organizations where they act as trustees of its external competence. As the Advocate-General noted, there’s practically no difference now between the EU being a party to the OIV and not.

Firstly, there’s no doubt the EU holds this coordinating power under Article 218(9). Secondly, as this power hinges on the existence and nature of the EU’s external competences, the CJEU’s recent judgment in the broadcasting rights case, broadly interpreting EU exclusive external powers post-Lisbon Treaty, becomes relevant.

The recent judgment is relevant by analogy when interpreting the requirement for planned acts to have “legal effects.” This applies, as clarified by the judgment, when EU legislation explicitly links to measures an international organization might adopt. However, the court didn’t restrict “legal effects” to these instances. This concept might also apply when there’s merely an indirect potential impact on EU law (similar to the broadcasting rights case), or when the measure affects only third parties or the internal workings of the international organization.

What are the practical implications? When the EU has exclusive external powers, Member States cannot act in ways that affect EU law, even if the EU isn’t part of the specific international organization (see the Commission v Greece judgment regarding the IMO). Council Decisions coordinating Member State positions require a substantive legal basis to clarify the EU’s competence (CITES judgment). Even with shared competence between the EU and Member States, where the EU hasn’t regulated the specific issue, an existing EU strategy may prevent individual Member State action (see Commission v Sweden, although this case involved a treaty with both the EU and its Member States as parties).

However, the obligation of Member States to act as trustees in the EU’s best interest doesn’t guarantee agreement on a proposed Council Decision to synchronize their actions (for example, the ILO forced labor measures mentioned earlier).

It’s worth noting that the court’s judgment doesn’t directly address how the EU authorizes Member States to sign or conclude treaties (as opposed to acting within an existing international organization) as trustees of EU competence. However, a literal reading of the judgment suggests a significant impact on this process. Although the judgment states that Article 218(1) to (8) only apply to the EU negotiating and concluding agreements, the EU currently uses these provisions to approve Member States negotiating and concluding treaties as trustees of EU interests. (For instance, the Council Decision on the domestic workers convention, based on Article 218(6) and (8)).

Curiously, this litigation lacked any substantial discussion about using the EU’s internal legislative powers to regulate Member State behavior within international organizations. The Advocate-General briefly (and oddly) mentioned Article 352 TFEU, the ‘residual powers’ clause, but why not utilize Article 43 TFEU, the power related to the common agricultural policy?

This would involve adopting a legislative act. While some might argue this is too cumbersome for every OIV annual meeting, a single act establishing a general framework for coordinating Member States’ actions across all future meetings might be feasible.

Though adopting a legislative act for an international treaty might seem unusual, it’s not unprecedented. A legislative act initially gave legal weight to OIV soft law within the EU. More broadly, the EU frequently adopts legislative acts to coordinate Member States’ treaty-making powers in areas of exclusive EU competence (e.g., investment agreements) or shared competence with a significant EU role (e.g., air transport treaties).

If the court intended to say Article 218(1) to (8) are no longer applicable for Member States signing and ratifying international treaties as trustees, then legislative acts are necessary in this context too. Therefore, it would have been clearer for the court to rule that EU internal legislative powers must govern all aspects of Member State trusteeship.

Finally, let’s consider the roles of other EU institutions and non-participating Member States following this judgment. The European Parliament (EP) didn’t partake in these proceedings, but perhaps it should have. The Advocate-General noted that the judgment represents the worst-case scenario for the EP. It had no say in approving EU membership in the OIV and cannot control the Council’s adoption of measures ultimately influencing the interpretation of EU law. In the future, the EP can address such issues when adopting EU legislation linking to international measures. However, in this instance, the relevant legislation predates the Lisbon Treaty, when the EP was merely consulted on agricultural legislation. As the Advocate-General highlighted, the EP must be “immediately and fully informed” about Council Decisions concerning Member State trusteeship under Article 218(10) TFEU, a provision the CJEU recently interpreted broadly.

The CJEU holds special jurisdiction regarding planned international treaties under Article 218(11) TFEU. If Article 218(9) applies to Member State trusteeship, then logically, so does Article 218(11). The Advocate-General pointed out that the court has already ruled on this. In fact, it’s set to rule again shortly on a similar case (Opinion 1/13, concerning the Hague Convention on child abduction). In a week’s time, we’ll see how these judgments align.

Lastly, what about Member States outside the OIV? The court’s ruling doesn’t explicitly address this, and logically, the judgment applies whether some or all Member States are party to the agreement.

In the specific context of the OIV, the court affirming the Council’s power to coordinate Member States’ positions in the EU’s interest makes sense. Because of the link between OIV resolutions and EU law, these resolutions affect all Member States, influencing the quality and price of wine consumed throughout the EU. Additionally, they impact the functioning of the single market for wine, funded by all EU taxpayers, regardless of their beverage preferences. Therefore, the UK’s decision (not an OIV member) to intervene alongside other Member States in support of Germany, rather than the EU institutions, seems like a knee-jerk reaction.

Barnard & Peers: chapter 24