Cathleen Berg, doctoral student, University of Bayreuth

Advocate General (‘AG’) Szpunar’s November 25, 2021, opinion regarding a legal challenge from the European Commission against the European Council (Case C-161/20) highlights the contrasting interests between the European Union (‘EU’) and its Member States. This disagreement centers around how they exercise their authority within the International Maritime Organization (‘IMO’), an organization where the EU currently holds neither membership nor observer status. If the Court of Justice sides with AG Szpunar’s analysis, this case could significantly impact how the EU interest is represented within IMO committees, potentially shifting power from the Commission to the Member States. Furthermore, it might strengthen the Commission’s resolve to push for modifications in IMO’s legal framework, allowing the EU to gain full membership or at least observer status.

Background

The core issue raised by the Commission revolves around who has the authority to submit proposals to committees within international organizations where the EU lacks full membership or observer status. Since the IMO Convention only grants membership to states, the EU cannot directly join. Typically, in such situations where the EU cannot directly exercise its authority, the Member States act collectively to represent the EU’s interests (para 64 of the Opinion; cf. also Opinion 2/91). It’s crucial for Member States to refrain from presenting national proposals to international committees if those proposals might contradict established common rules (see Case C-45/07).

Despite opposition from some Member States regarding granting the European Community observer status within the IMO, the European Commission secured observer status in 1974 through a Cooperation Agreement with the IMO (cf. Article 66 of the IMO Convention). This observer role allows the Commission to participate in IMO activities and committee work. However, unlike Member States with full membership privileges, the Commission lacks voting rights. This limitation doesn’t negate the Commission’s role as the Union’s representative, as stated in Article 17(1) TEU: ‘With the exception of the common foreign and security policy, and other cases provided for in the Treaties, it [the Commission] shall ensure the Union’s external representation.’ Consequently, the Commission actively works to align the Member States’ positions when the EU’s external competence is relevant, aiming to present a unified stance in IMO committees. However, there are instances where Member States deviate from this common position in practice.

The Commission’s action: The Commission wants the EU interest to be included and the Member States to be excluded

In the current case, the IMO’s Marine Environment Protection Committee (‘MEPC’) tasked the Intersessional Working Group on Reduction of GHG Emissions from Ships with formulating guidelines for life cycle greenhouse gas (‘GHG’)/carbon intensity. These guidelines would apply to all pertinent fuel types. In 2019, the Intersessional Working Group “invited interested Member States and international organizations to cooperate and submit proposals for draft guidelines on life cycle GHG/carbon intensity for all relevant types of fuels” (para 29). These proposals were intended to inform the development of future guidelines, which the MEPC viewed as a foundation for implementing a program promoting the use of alternative low-carbon and zero-carbon fuels. In February 2020, the Permanent Representatives Committee (Coreper) approved a submission on behalf of both the Member States and the European Commission in response to this request. This joint submission was subsequently relayed to the Intersessional Working Group by the Council’s Presidency. However, this action disregarded the Commission’s suggestion to present a proposal “by the Commission on behalf of the European Union,” thereby excluding the Member States. The Commission’s rationale was that the proposal largely fell under existing EU common rules, thus invoking the EU’s exclusive external competence as per Article 3(2) TFEU (‘ERTA doctrine’). The Commission argued that a proposal presented solely “on behalf of the Member States” wouldn’t adequately reflect their alignment with the Union’s interests.

Case C-161/20 sees the Commission challenging the Council’s decision to endorse the joint submission on two primary grounds. Firstly, they contend that the proposal was put forth in violation of the EU’s exclusive competence outlined in Article 3(2) TFEU, advocating for a submission “by the European Commission on behalf of the European Union.” The Council, however, argues that the submission only partially falls under exclusive EU competence, with the remainder subject to shared competence between the EU and its Member States. Secondly, the Commission alleges a violation of its institutional prerogatives under Article 17(1) TEU, as the Council’s decision assigned the responsibility of transmitting the proposal to the Council Presidency.

What might seem trivial is actually quite significant. While the submission itself did not constitute a binding agreement on the Union’s position within the meaning of Article 218(9) TFEU, this case brings to light the fundamental differences between international legal frameworks and those of the European Union. In his Opinion, AG Szpunar first addressed the alleged infringement upon Article 17(1) TEU before examining the nature of EU competence regarding the proposal.

Infringement of Article 17(1) TEU: EU interest vs. obligation to exercise EU external competence in observance of international law

Representing the Union’s interest within the IMO is complex due to the Commission’s dual role. Article 17(1) TEU primarily focuses on the Commission’s authority as an EU institution. However, the Commission also functions as an IMO observer, a role that doesn’t automatically equate to being the EU’s official representative.

AG Szpunar addressed the conflict between the IMO regulations, which restrict the EU’s direct participation, and the internal rules outlined in Treaties regarding the division and exercise of external powers. He referenced the Court of Justice’s case-law, emphasizing the Union’s obligation to operate within the confines of international law (para 64; see Antarctica Cases). The AG then considered whether the contested submission could have been presented as a formal act of the Union, represented by the Commission, in line with IMO regulations (para 72 et seq). However, he ultimately rejected this possibility, interpreting the IMO’s rules as strictly limiting the Commission to its role as an observer. He refuted the Commission’s argument suggesting that the Lisbon Treaty’s substitution of the European Community with the EU implicitly grants the Commission, as an observer, the status of an EU organ, thereby enabling proposals made in the Commission’s name to be considered proposals of the EU (para 74 et seq). The AG argued that the Intersessional Working Group’s invitation to submit proposals was not extended to international organizations lacking specific rights within the IMO. In essence, the invitation necessitated an ability to actively contribute to the Working Group, a capability the EU currently lacks (para 78).

As the proposal could not be submitted on behalf of the EU, the wording of Article 17(1) TEU suggests it is inapplicable if the EU cannot act in its own capacity (para 81 et seq). AG Szpunar highlighted the crucial difference between Member States acting in the Union’s interest under their own names versus acting as official EU representatives (cf. Article 7 of the Vienna Convention on the Law of Treaties) (para 84). When Member States act under their own names, they can choose whom to entrust with transmitting the proposal (in this instance, the Council Presidency rather than the Commission) (para 85).

The AG noted, however, that the principles of sincere cooperation (see Article 4(3) TEU) and good faith obligate the Member States to inform involved third parties that their actions are aligned with the Union’s interests (para 88). This arises because Member States do not have complete autonomy when representing the Union’s interests (para 88). This obligation to act in the Union’s interest does not extend to requiring the Member States to include “on behalf of the EU” in the proposal’s heading, especially since external parties might reject such a submission (para 89). It is sufficient for these external parties to discern from the context that the Member States are representing the Union’s interest (para 90).

AG Szpunar’s reasoning mirrors the Court’s findings in the Antarctica Cases. In those cases, the Court ruled that the EU’s status within the Antarctic Treaty was not fully autonomous, requiring the involvement of Member States when submitting proposals within the Canberra Convention framework. However, unlike the Antarctica Cases, AG Szpunar aims to limit the scope of the Member States’ actions rather than restrict the exercise of the EU’s external competence. The Court’s approach in the Antarctica Cases seems to be evolving into a broader standard, applicable beyond the specific context of those cases (contrary to what many scholars hoped for). This standard is also not necessarily limited to favoring the Member States and could be applied to benefit the EU (cf. recent Opinion 1/19, where the potential for international liability did not prevent the Union from exercising its competence without unanimous consent from all Member States). The current case centers around the conflict between safeguarding the EU interest and the obligation to exercise EU external competences while adhering to international law. Both principles are central to exercising the EU’s external competences. The AG prioritized adherence to international law over the protection of the EU interest (cf. para 92). Therefore, in this context, observing international law meant the proposal could not be submitted on behalf of the EU.

The (im)possibility to act on behalf of the EU does not depend on the nature of EU competence

The AG proposed that determining whether the EU’s competence was exclusive or shared with Member States was irrelevant to deciding whether the EU could submit the proposal independently (paras 50, 97). Consequently, the issue of whether a proposal can be submitted on behalf of the EU is not about competence but rather about correctly framing the submission to the Intersessional Working Group. This framing needs to reconcile IMO rules with those established by the Treaties. AG Szpunar dismissed the possibility of an “ERTA effect.” He argued that there was no risk of common rules being compromised merely by the prospect of future guidelines influencing the EU to modify these rules (para 153 et seq). He also did not find grounds for assuming exclusive competence under Article 3(2) TFEU’s second part (para 158 et seq). Therefore, he rejected the Commission’s claim of a breach of exclusive EU competence under Article 3(2) TFEU.

The AG’s conclusion: Rather let the Member States represent the EU interest than the Commission?

The AG implied that the Union’s competence in the area addressed by the disputed submission is shared, without specifying the legal basis for this shared competence (para 164). Citing established case law, he concluded that the Union is capable of exercising shared competence independently (para 164; see C-600/14). However, he also stated that “the Commission’s weaker status compared to that of the EU Member States in the IMO constitutes an argument in favor of the participation of the Member States in the exercise of the Union’s external competence,” which seems contradictory (para 164). He drew a parallel to the Antarctica Cases, where the Court determined that the Union couldn’t submit a proposal within the Canberra Convention framework without involving the Member States. This was due to the unique obligations and responsibilities of specific Member States as parties to the Antarctic Treaty. However, comparing the status of Member States within the IMO to their status in the Antarctic Treaty appears questionable. In the Antarctica Cases, the EU had formally joined the Canberra Convention, whereas it cannot become a member of the IMO. Moreover, one could argue that the Commission’s lack of voting rights in the IMO inherently limits its ability to exercise EU competence single-handedly within that organization.

AG Szpunar’s opinion likely disappointed the Commission, which had hoped to assume sole responsibility for representing the Union’s interests within the IMO. This opinion might further weaken the Commission’s position within the IMO. Ultimately, the Court of Justice must now determine who will represent the EU’s interests within the IMO in the future.

Barnard & Peers: chapter 24

Photo credit: Tagishsimon, via Wikicommons