Desktop version

Home arrow Law arrow Judicial decisions on the law of international organizations

Case 22/70, Commission v Council (European Road Transport Agreement), Court of Justice of the EC, [1971] ECR 263

Jan Klabbers

Relevance of the case

It is difficult to overstate the relevance of the ERTA case for the development of the EU. If Van Gend & Loos established that the EU was a new legal order whose acts could be directly effective in its member states, and Costa v ENEL established the supremacy of EU law over the law of the member states, ERTA marked the beginning of the EU’s role in global affairs by creating an almost unlimited power for the EU to act externally, regardless of the silence of the treaties in this matter, and often pre-empting the member states from taking individual action. Thus, ERTA (often referred to under its French acronym AETR) is generally considered as an essential component in the process of the development of the EU from intergovernmental organization to constitutional entity, and justifiably so.1

I. Facts

After attempts in the early 1960s to create a pan-European regime (extending beyond the EU) relating to road transportation had come to naught, the issue was picked up again in 1967, sponsored by the UN Economic Commission for Europe. In the meantime, the EU had adopted internal legislation on road transportation. After the Council had reached an agreement in March 1970 as to how the (then six) member states should behave in connection with the conclusion of the agreement, the Commission started proceedings against the Council, aiming to get the relevant Council proceedings annulled. In the Commission’s view, the power to conclude an agreement such as ERTA had come to rest exclusively with the EU: art. 75 of the EEC Treaty (as it then was) created a general transport power for the EU and had to be read so as to also encompass treaty-making powers in the field of transport. Hence, there would be no independent treaty-making power left for the member states, contrary to what the Council assumed when it adopted its proceedings in March 1970. The Council, on the other hand, claimed that the EU could only act on the basis of powers conferred upon it, and since the treaties contained no express provision on external transport policy, the matter was rightly left to the member states, acting on instructions from the Council. [1]

II. Legal question

Quite a few issues were raised by the case, including the legal status of Council proceedings and the question of the EU’s international legal personality. Technically, the legal question before the Court was whether or not the Council proceedings should be annulled, and the Court approached the matter in this way: as a request for annulment. It ended up dismissing the Commission’s application and rejecting its submissions. The main question, however, boiled down to this: does the Treaty endow the EU with the power to engage in external relations, including treatymaking, in the field of transport? And if so, does it do so at the exclusion of the member states?

III. Excerpts

  • 12 In the absence of specific provisions of the Treaty relating to the negotiation and conclusion of international agreements in the sphere of transport policy—a category into which, essentially, the AETR falls—one must turn to the general system of Community law in the sphere of relations with third countries.
  • 13 Article 210 provides that ‘The Community shall have legal personality’.
  • 14 This provision, placed at the head of Part Six of the Treaty, devoted to ‘General and Final Provisions’, means that in its external relations the Community enjoys the capacity to establish contractual links with third countries over the whole field of objectives defined in Part One of the Treaty, which Part Six supplements.
  • 15 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.
  • 16 Such authority arises not only from an express conferment by the Treaty—as is the case with Articles 113 and 114 for tariff and trade agreements and with Article 238 for association agreements—but may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions.
  • 17 In particular, each time the Community, with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form these may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules.
  • 18 As and when such common rules come into being, the Community alone is in a position to assume and carry out contractual obligations towards third countries affecting the whole sphere of application of the Community legal system.
  • 19 With regard to the implementation of the provisions of the Treaty the system of internal Community measures may not therefore be separated from that of external relations.
  • 20 Under Article 3 (e), the adoption of a common policy in the sphere of transport is specially mentioned amongst the objectives of the Community.
  • 21 Under Article 5, the Member States are required on the one hand to take all appropriate measures to ensure fulfilment of the obligations arising out of the Treaty or resulting from action taken by the institutions and, on the other, hand, to abstain from any measure which might jeopardize the attainment of the objectives of the Treaty.
  • 22 If these two provisions are read in conjunction, it follows that to the extent to which Community rules are promulgated for the attainment of the objectives of the Treaty, the Member States cannot, outside the framework of the Community institutions, assume obligations which might affect those rules or alter their scope.
  • 23 According to Article 74, the objectives of the Treaty in matters of transport are to be pursued within the framework of a common policy.
  • 24 With this in view, Article 75 (1) directs the Council to lay down common rules and, in addition, ‘any other appropriate provisions’.
  • 25 By the terms of subparagraph (a) of the same provision, those common rules are applicable ‘to international transport to or from the territory of a Member State or passing across the territory of one or more Member States’.
  • 26 This provision is equally concerned with transport from or to third countries, as regards that part of the journey which takes place on Community territory.
  • 27 It thus assumes that the powers of the Community extend to relationships arising from international law, and hence involve the need in the sphere in question for agreements with the third countries concerned.
  • 28 Although it is true that Articles 74 and 75 do not expressly confer on the Community authority to enter into international agreements, nevertheless the bringing into force, on 25 March 1969, of Regulation No 543/69 of the Council on the harmonization of certain social legislation relating to road transport (OJ L 77, p. 49) necessarily vested in the Community power to enter into any agreements with third countries relating to the subject-matter governed by that regulation.
  • 29 This grant of power is moreover expressly recognized by Article 3 of the said regulation which prescribes that: ‘The Community shall enter into any negotiations with third countries which may prove necessary for the purpose of implementing this regulation’.
  • 30 Since the subject-matter of the AETR falls within the scope of Regulation No 543/69, the Community has been empowered to negotiate and conclude the agreement in question since the entry into force of the said regulation.
  • 31 These Community powers exclude the possibility of concurrent powers on the part of Member States, since any steps taken outside the framework of the Community institutions would be incompatible with the unity of the Common Market and the uniform application of Community law.

[...]

  • 69 The Commission claims that in view of the powers vested in the Community under Article 75, the AETR should have been negotiated and concluded by the Community in accordance with the Community procedure defined by Article 228 (1).
  • 70 Although the Council may, by virtue of these provisions, decide in each case whether it is expedient to enter into an agreement with third countries, it does not enjoy a discretion to decide whether to proceed through intergovernmental or Community channels.
  • 71 By deciding to proceed through inter-governmental channels it made it impossible for the Commission to perform the task which the Treaty entrusted to it in the sphere of negotiations with third countries.
  • 72 In the absence of specific provisions in the Treaty applicable to the negotiation and implementation of the agreement under discussion, the appropriate rules must be inferred from the general tenor of those articles of the Treaty which relate to the negotiations undertaken on the AETR.
  • 73 The distribution of powers between the Community institutions to negotiate and implement the AETR must be determined with due regard both to the provisions relating to the common transport policy and to those governing the conclusion of agreements by the Community.
  • 74 By the terms of Article 75 (1), it is a matter for the Council, acting on a proposal from the Commission and after consulting the Economic and Social Committee and the Assembly, to lay down the appropriate provisions, whether by regulation or otherwise, for the purpose of implementing the common transport policy.
  • 75 According to Article 228 (1), where agreements have to be concluded with one or more third countries or an international organization, such agreements are to be negotiated by the Commission and concluded by the Council, subject to any more extensive powers which may have been vested in the Commission.
  • 76 As a subsidiary point, since the negotiations took place under the auspices of the United Nations Economic Commission for Europe, the first paragraph of Article 116 has also to be taken into account. By the terms of that paragraph, from the end of the transitional period onwards, Member States shall ‘proceed within the framework of international organizations of an economic character only by common action’, the implementation of such common action being within the powers of the Council, basing its decisions on proposals submitted by the Commission.
  • 77 If these various provisions are read in conjunction, it is clear that wherever a matter forms the subject of a common policy, the Member States are bound in every case to act jointly in defence of the interests of the Community.
  • 78 This requirement of joint action was in fact respected by the proceedings of 20 March 1970, which cannot give rise to any criticism in this respect.
  • 79 Moreover, it follows from these provisions taken as a whole, and particularly from Article 228 (1), that the right to conclude the agreement was vested in the Council.
  • 80 The Commission for its part was required to act in two ways, first by exercising its right to make proposals, which arises from Article 75 (1) and the first paragraph of Article 116, and, secondly, in its capacity as negotiator by the terms of the first subparagraph of Article 228 (1).
  • 81 However, this distribution of powers between institutions would only have been required where negotiations were undertaken at a time when the vesting of powers in the Community had taken effect, either by virtue of the Treaty itself or by virtue of measures taken by the institutions.
  • 82 In this connexion it must be borne in mind that an earlier version of the AETR had been drawn up in 1962, at a period when, because the common transport policy was not yet sufficiently developed, power to conclude this agreement was vested in the Member States.
  • 83 The stage of negotiations of which the proceedings in question formed part was not aimed at working out a new agreement, but simply at introducing into the version drawn up in 1962 such modifications as were necessary to enable all the contracting parties to ratify it.
  • 84 The negotiations on the AETR are thus characterized by the fact that their origin and a considerable part of the work carried out under the auspices of the Economic Commission for Europe took place before powers were conferred on the Community as a result of Regulation No 543/69.
  • 85 It appears therefore that on 20 March 1970 the Council acted in a situation where it no longer enjoyed complete freedom of action in its relations with the third countries taking part in the same negotiations.
  • 86 At that stage of the negotiations, to have suggested to the third countries concerned that there was now a new distribution of powers within the Community might well have jeopardized the successful outcome of the negotiations, as was indeed recognized by the Commission’s representative in the course of the Council’s deliberations.
  • 87 In such a situation it was for the two institutions whose powers were directly concerned, namely, the Council and the Commission, to reach agreement, in accordance with Article 15 of the Treaty of April 1965 establishing a Single Council and a Single Commission of the European Communities, on the appropriate methods of cooperation with a view to ensuring most effectively the defence of the interests of the Community.
  • 88 It is clear from the minutes of the meeting of 20 March 1970 that the Commission made no formal use of the right to submit proposals open to it under Articles 75 and 116.
  • 89 Nor did it demand the simple application of Article 228 (1) in regard to its right of negotiation.
  • 90 It may therefore be accepted that, in carrying on the negotiations and concluding the agreement simultaneously in the manner decided on by the Council, the Member States acted, and continue to act, in the interest and on behalf of the Community in accordance with their obligations under Article 5 of the Treaty.
  • 91 Hence, in deciding in these circumstances on joint action by the Member States, the Council has not failed in its obligations arising from Articles 75 and 228.
  • 92 For these reasons, the submission must be rejected.

IV. Commentary

ERTA is a strange and puzzling decision,[2] for a variety of reasons. There is, first, the technical point: the Court dismissed all the Commission’s submissions, finding in the end that no violation of art. 75 by the Council had occurred. Yet, this is not why the case is so often invoked, discussed, and analyzed. Instead, people refer to ERTA as support for the proposition that the EU has certain external powers granted by implication which, curiously enough, would seem to suggest that the Council actually did do something contrary to art. 75 when it adopted its proceedings in March 1970.

This seeming contradiction is solved by the court in twofold fashion. First, it stipulates that art. 75 still leaves a considerable role for the Council, albeit not for the individual member states. The point is made with great subtlety, but is really vital: the Court distinguishes the Council from its members (the member states). The member states cannot act individually any more, but the Council can. To the extent that the Council took a decision (instructing the member states how to act), it had done nothing wrong. Second, to quell all remaining doubts, the Court introduces a temporal element: when the ERTA negotiations first started, in the early 1960s, the matter clearly fell within the Council’s jurisdiction. The later negotiations were presented as continuations of those earlier ones (paras 82-5); therefore there was no new agreement, and therefore all that had happened was that in the meantime the Council’s freedom had been hemmed in by means of internal legislation (Regulation No 543/69). This was, in a sense, dictated by circumstances: it would have been awkward, to say the least, to present the prospective treaty partners with the situation in which their negotiating partners (the Six) had all been replaced by the EU.[3]

Indeed, as a matter of fact, the Court could have stopped at Regulation No 543/69. In the case at hand, a regulation had been adopted which gave the EU the power to conclude transport agreements with third states—end of story. The Court, however, must have sensed that the issue was of greater relevance than the mere circumstance of a road transport agreement, and must have felt the need to make a statement of principle about the powers of the EU.[4] Moreover, stopping at Regulation No 543/69 would have been difficult to reconcile with the idea that the Council had gradually lost some of its powers; it would have suggested that after 1969, the Council actually had done something wrong, and this was a conclusion the Court wanted to avoid.

Hence, the Court needed to express itself in more general terms, and could not base its position on a transport regulation alone. And thus the Court set out to launch its own version of the implied powers doctrine.

The implied powers doctrine has been recognized as being of relevance to international organizations since the Permanent Court of International Justice (PCIJ) first made reference to it in the 1920s, in a case involving the exchange of Greek and Turkish populations.[5] In this early decision, the PCIJ opted for a narrow approach to implied powers: an implied power, so it suggested, is a power that is necessary to give effect to an expressly granted power. Simply put: the power to take the dog for a walk would necessarily have to include the power to put the dog on a leash, since otherwise the power to walk the dog could not be realized. In this limited version, the implied powers doctrine is beyond controversy, and has a long pedigree in federal thought.

Two decades later, the ICJ greatly expanded the scope of the implied powers doctrine by suggesting that powers can be implied not only if needed to give effect to express powers, but can also be implied if needed to secure the functioning of the organization.[6] In Reparation for Injuries, it felt that the UN had the power to bring a claim on behalf of its employees because otherwise the UN would not be able to function properly. Apart from the hyperbole involved in the finding (surely the UN can achieve a lot even without being allowed to act on behalf of its employees), this was a considerable stretching of the notion, way beyond the PCIJ’s version of the doctrine. Accordingly, it came with a word of warning from one of its dissenting judges (not coincidentally perhaps the US judge on the bench, who had been steeped in federal thought during his forty years in the US administration): too broad a notion of the implied powers may be unjustifiable, and may result in the organization losing legitimacy in the eyes of its member states.[7]

In ERTA, the CJEU devised yet another version, arguably even more far-reaching than the Reparation version: it held that the EU’s power to conclude external agreement was implied because it was necessary not so much to allow the EU to function properly, but in order to safeguard ‘the unity of the Common Market and the uniform application of Community law’ (para. 31).

In order to reach this conclusion, the Court took five distinct but related steps. First, it observed that the treaties were silent on the role of the EU in the conclusion of agreements on transport policy with third states. Since the treaties were silent, it was imperative to look at the general system of the EU’s law on external relations (para. 12).

Second, the Court started by assigning international legal personality to what was at the time still the EEC. This, so the Court claimed, followed from the terse statement in what was then art. 210 EEC, according to which the ‘Community shall have legal personality’. It followed from this personality that the EU would have the general capacity to conclude treaties (paras 13-14). Curiously though, any type of argument is missing: there is no reference to any concept of legal personality under international law, or how international legal personality is usually created or established. Much less is there any discussion about the circumstance that art. 211 further specifies the scope of the EU’s personality under the laws of its member states, and thus art. 210 could just as easily have been interpreted as a general grant of domestic (as opposed to international) legal personality.[8]

Having just established that the EU has international legal personality and thus also a general treaty-making capacity under international law, the Court’s third step, in para. 15, is to lay down a method for determining whether a specific treaty-making power has been granted. This, so the Court holds, depends on the entire scheme of the Treaty as well as on its substantive provisions.

This paved the way for its fourth step: internal EU measures cannot be separated from external action (para. 19). Whatever the EU can do internally, it can also do externally: in foro interno, in foro externo, as it is sometimes put.

And if this was not yet enough, any remaining gaps in the argument would be closed with the help of the fifth step. The Court invoked the EU’s very own deus ex machina, the principle of fidelity (Gemeinschaftstreue), at the time laid down in art. 5 EEC: the member states must abstain from any measure which might jeopardize the attainment of the EU’s objectives. These five steps together inexorably lead to the conclusion that the EU has an implied power to conclude agreements in the field of transport and, what is more, the member states are pre-empted from acting: not only had they transferred a legislative internal power to the EU, this also affected their external prerogatives. And even if this were too radical an interpretation of the treaties, there was always art. 5 to fall back on: any individual member state action would necessarily run afoul of the principle of fidelity.

Viewing the case from the perspective that ERTA was meant to safeguard EU law rather than be ‘merely’ concerned with the division of powers between the EU and its member states also helps to make sense of the otherwise curious circumstance that the Court did not resort to the general ‘additional power’ clause of what was art. 235 EEC: if necessary for the attainment of the objectives of the EU, the Council can unanimously agree on new powers. This was the designated route for the creation of powers additional to those already created in the treaties, and was the preferred solution in the eyes of Advocate-General Dutheillet de Lamothe: if the EU wants to conclude external transport agreements, it can do so on the basis of art. 235 EEC.[9] The fact that the Court paid little attention to this possibility suggests that at its heart ERTA is not so much about a conflict concerning powers, but a conflict concerning the integrity and unity of EU law—and for this art. 235 offers no solace.

Given that ERTA marks the emergence of the EU as a player on the international scene, and given its tacit reliance on general concepts of international law, it is astonishing that the entire judgment makes no reference to international law whatsoever. There is no discussion of what international legal personality means in international law: whether it can indeed be derived from a terse and not very explicit treaty provision, or whether it can indeed serve, as the Court seems to suggest, as a threshold condition for legal capacity under international law. It is not even the case that there is a flawed discussion—there is no discussion whatsoever. Likewise, despite its pedigree in international law, there is no discussion of the implied powers doctrine as established by the PCIJ or developed by the ICJ; there is, indeed, nothing about the very notion of powers of international organizations. All this signifies, it would seem, a reluctance on the part of the EU to be seen as somehow being captured by international law: if Van Gend & Loos rubber-stamped the existence of a new legal order, then ERTA continues it: the EU is neither international organization nor state and, importantly, therewith also not directly subjected to international law. The EU has always been happiest straddling this fence: it is neither a classic international organization nor a state. It is not a regular creature of international law, and can thus pick and choose its own preferred elements of international law.[10]

The ERTA decision has proved to be immensely influential, in two ways. One, it is still seen as the basis for well-nigh the entire external relations edifice of the EU: ERTA solved (if that is the word to use) most relevant legal issues simply by proclaiming that when in doubt, powers accrue to the EU. Second, there is what may be referred to as the spirit (not to say ghost) of ERTA: ERTA pioneered the use of the principle of fidelity, and it is this principle that has come to play an influential role also in cases not involving strict delimitations of competences. Thus, in the Open Skies cases, addressing powers in the field of air transport agreements with third states, the Court consistently upheld the position that even if it would be difficult to ascribe powers to the EU, the exercise of powers by member states would be irreconcilable with the principle of fidelity. Likewise, in cases involving investment treaties concluded by member states, even a merely potential, hypothetical disharmony between such treaties and EU law would mean that the member states act in violation of the principle of fidelity.

In the end, the Court skillfully found a middle ground between international law and domestic law by, essentially, ignoring both. The judgment has a high Munchhausen content: the Court creates the edifice of EU law by pulling itself up by its own bootstraps. Put differently, the EU has implied powers in the field of external relations under EU law because otherwise EU law could not be EU law. There is no explicit attempt to connect the implied powers doctrine to its counterpart in international law; nor is there any explicit attempt to justify it, or the concomitant idea of pre-emption, in terms of domestic (federal) thought.11

In later cases and opinions, the Court has time and again fallen back on its ERTA doctrine; it is still considered the basis of the EU’s external implied powers. The EU’s political taskmasters have attempted to codify the doctrine in Lisbon, but have done so in a less than fully systematic manner. Article 3 TFEU and art. 216 TFEU both refer, albeit in slightly different terms, to the exclusive treaty-making competences of the EU. Article 216 specifies that these may be explicitly mentioned in the treaties, something art. 3 omits. Both articles suggests that exclusive treaty-making competences can be derived from internal legislation or the necessity to exercise an internal competence, or when the conclusion of an external agreement by the EU can come to affect EU law (art. 3(2) TFEU). This latter point is unfortunate, in that it departs from the ERTA situation: in ERTA, the prospect of affecting EU law came from treaties concluded by member states, not by the EU itself.

In international law terms, ERTA has been less influential: its peculiar rendition of the implied powers doctrine has not been much followed in other international organizations, and understandably so: the decision is premised on the unique nature of EU law, and its logic can thus not easily be transplanted to different settings/2 This however takes nothing away from its constitutional significance in the development of EU law. [11] [12]

  • [1] Seminal is E. Stein, ‘Lawyers, Judges, and the Making of a Transnational Constitution’, (1981) 75American Journal of International Law 1-27.
  • [2] See for example the critical comments by P. Koutrakos, EU International Relations Law (Oxford,Hart 2006) pp. 77-88.
  • [3] The point is well made by P.J. Kuijper, ‘Raad/Commissie (AETR)’, in T.W.B. Beukers, H.J. vanHarten, and S. Prechal (eds), Het recht van de Europese Unie in 50 klassieke arresten (The Hague, Boom2010), pp. 44-51, at 48, note 16.
  • [4] Few provisions in secondary legislation could be expected to be as to-the-point as art. 3 of Reg. No.543/69. As much is suggested by A.G. Dutheillet de Lamothe, at 291.
  • [5] Interpretation of the Greco-Turkish Agreement of 1 December 1926, Advisory Opinion, [1928] Publ.PCIJ, Series B, no. 16. See generally J. Klabbers, An Introduction to International Organizations Law (2ndedn, Cambridge, Cambridge University Press 2015), p. 57.
  • [6] Reparation for Injuries Suffered in the Service of the United Nations, [1949] ICJ Rep 174. See generallyalso J. Klabbers, An Introduction (n. 5), 56-63.
  • [7] See Reparation (n. 6), per Hackworth J., at 198.
  • [8] See similarly F.G. Jacobs, ‘Direct Effect and Interpretation of International Agreements in the RecentCase Law of the European Court of Justice’, in A. Dashwood and M. Maresceau (eds), Law and Practiceof EU External Relations: Salient Features of a Changing Landscape (Cambridge, Cambridge UniversityPress 2008), pp. 13-33, at 13 (noting that art. 210 EEC was concerned with domestic personality, and thatit ‘would have been uncharacteristically presumptuous of the Treaty to purport to confer internationallegal personality on the Community’.)
  • [9] See ERTA, per AG Dutheillet de Lamothe, at 293: ‘Article 235 exists precisely to vest in theCommunity whatever powers it may need.’ Article 235 EEC is currently art. 352 TFEU.
  • [10] See generally J. Klabbers, ‘Straddling the Fence: The EU and International Law’, in A. Arnull andD. Chalmers (eds), Oxford Handbook of EU Law (Oxford, Oxford University Press, 2015) pp. 52-71.
  • [11] Kuijper suggests that the Court follows the ICJ’s methodology in Reparation for Injuries to a largeextent and borrowed the idea of pre-emption from federal thought, but acknowledges with respect to theformer that there is no explicit reference. See P.J. Kuijper, ‘Raad/Commissie (AETR)’ (n. 3), at 45.
  • [12] See for example V. Engstrom, Constructing the Powers of International Institutions (Leiden, MartinusNijhoff 2012), who discusses ERTA but, justifiably, does not pay it a huge amount of attention.
 
Source
< Prev   CONTENTS   Source   Next >

Related topics