THE PRINCIPLE OF CONFERRAL
This principle is inherent to any legal person. It permits achievement of the objectives constituting the raison d’être of a legal person. In particular, it applies to international organizations or federal states.
The principle of conferral is defined in Article 5 (2) TEU in the following terms:
“Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States.”
Article 4 TFEU expressly states that “competences not conferred upon the Union in the Treaties remain within the Member States” and that the Union “shall respect [Member States’] essential State function, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. In particular, national security remains the sole responsibility of each Member State.”
The principle of conferral serves as both justification for an EU action, and as its legal basis. The principle is enforced, in the last resort, by the CJEU under Article 263 TFEU, which permits annulment of any measure adopted by EU institutions for lack of competence or infringement of essential procedural requirements.
Articles 2–6 TFEU identify three types of competences: exclusive, shared and supporting.
EXCLUSIVE COMPETENCES OF THE EU
If the EU enjoys exclusive competence in a particular area, Member States are prevented from acting unilaterally or collectively in that area, irrespective of whether or not the EU has already acted, unless the EU has explicitly authorized them to adopt legally binding acts or measures implementing acts adopted by EU institutions (Article 2(1) TFEU). The principle of subsidiarity does not apply to areas in which the EU enjoys exclusive competences but the principle of proportionality does. Article 3 TFEU identifies areas which are within the exclusive competence of the EU.
They are:
Under Article 3(1) TFEU:
– The Customs union;
– Those competition rules that govern the internal market;
– Monetary policy with regard to Member States that have adopted the euro;
– The conservation of marine biological resources under the common fisheries policy;
– The Common commercial policy.
Under Article 3(2) TFEU:
– The conclusion of an international agreement when this is within the framework of one of the Union’s legislative acts or when it is necessary to help it exercise an internal competence or if there is a possibility of the common rules being affected or of their range being changed.
– Article 3(2) TFEU endorses the peculiarity of external competences of the EU in that the EU enjoys not only express but also implied powers in respect of the conclusion of international agreements as specified in Title V of the TFEU. Under the ToL the EU was granted international personality enabling it to enter into international agreements with third States and international organizations.
EXPLICIT POWERS
Explicit powers are those which are clearly defined in Treaty provisions or specified in one of the Union’s legislative acts.
In external relations competences of the EU are expressly stated in the following articles:
– Article 207 TFEU on the Common Commercial Policy;
– Articles 132 and 219 TFEU on monetary policy of the EU;
– Article 186 TFEU on research;
– Article 191 TFEU on the protection of environment;
– Article 208 TFEU on development co-operation;
– Article 212 on economic and financial co-operation with third States;
– Article 217 TFEU on association agreements with one or more third States or international organizations.
IMPLIED POWERS
Powers which do not result directly and expressly from a provision or a number of provisions of Treaties but from global and general objectives lay down by the Treaties as interpreted by the ECJ are known as implied powers.
The doctrine of implied powers was recognized by the International Court of Justice in its Advisory Opinion on Reparation for Injuries Suffered in the Service of the United Nations, 125 and endorsed by the ECJ in Case 8/55 Fédération Charbonnière de Belgique v High Authority. 126 The ECJ has mainly applied it in relation to external competences of the Community, although the doctrine also has an internal dimension.
In the internal sphere the doctrine of implied powers relates to the powers of the EU institutions vis-à-vis Member States. In Joined Cases 281, 283–285 and 287/85 Germany and Others v Commission,127 the ECJ held that when the Commission is under an obligation to carry out a specific task assigned to it by the EC Treaty, the Treaty confers on the Commission the necessary powers to carry out that task.
In the external sphere, the conditions under which the Community can rely on the doctrine of implied powers were established in Case 22/70 Commission v Council (ERTA).128
THE FACTS WERE:
ERTA, a European agreement on the working practices of international road transport crews, was signed in Geneva on 19 January 1962. Amongst the signatories were five of the six original Member States. The agreement never came into force as it lacked sufficient ratifications.
Consequently, negotiations took place starting in 1967. Meanwhile, at Community level Regulation 543/69 of 25 March 1969 was adopted with regard to the areas covered by the ERTA failed agreement. On 20 March 1970 the Council discussed the attitude to be taken towards the ERTA negotiations and adopted a resolution setting out the position. Subsequently, Member States conducted and concluded ERTA negotiations on the basis of the Council proceedings of 20 March 1970.
The Commission submitted an application for annulment of the Council resolution of 20 March 1970 on the grounds that:
The adoption of Regulation 543/69 transferred the competence for a common transport policy to the Community and consequently the Community was empowered to negotiate and conclude the agreement in question; and the Council, as it had no competence to adopt the resolution of 20 March 1970, had breached Articles 75 and 228 and 235 of the EC Treaty concerning the distribution of powers between the Council and the Commission and consequently the rights of the Commission to negotiate the agreement.
Held:
The ECJ:
Endorsed the doctrine of parallelism under which the external competences of the Community derive not only from express provisions of the Treaty, but may also derive from other provisions of the Treaty and from internal measures adopted within the framework of those provisions. The ECJ held that in order to determine in a particular case the Community competence to enter into international agreements “regard must be had to the whole scheme of the Treaty no less than its substantive provisions.” As a result, the EC powers “arise 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.”
Established that implied external powers are within the exclusive competence of the Community. The ECJ stated that where the Community had adopted Community rules within the framework of a common policy, the Member States are not allowed, individually or collectively, to enter into agreements with third states in the areas affected by those rules. The Court held that: “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.”
The two main facets of the ERTA judgment have been further explained in subsequent cases.
THE DOCTRINE OF PARALLELISM
The doctrine of parallelism means the internal competences of the Community should be matched by the external competences which may be conveniently expressed by the in foro interno in foro externo principle, that is, if the EC has powers in particular internal areas it should be entitled to extend them to external relations in those areas. Implied powers may be based on the provisions of the Treaty or upon measures adopted by Community institutions within the ambit of those provisions. In Opinion 2/91 [Re ILO Convention 170],129 the ECJ held that implied external powers may flow even from measures adopted under Article 308 EC [Article 352 TFEU].
The most controversial issue in relation to implied powers is whether the EU is empowered to exercise external powers in the absence of any internal measures. In this respect the ECJ has mitigated the ERTA principle according to which the Community cannot use an implied external competence in the absence of internal measures adopted in respect of a common policy. In Opinion 1/76 [Re Rhine Navigation Case],130 the ECJ decided that when EC law has created powers for the Community within its internal system in order to attain a specific objective, the EC has authority to enter into international agreements necessary for the attainment of that objective, even in the absence of any internal measure. The Court stated that internal measures can be adopted on the occasion of the conclusion and implementation of an international agreement.131
As a result, the participation of the EC in external relations based on implied powers is conditional upon the necessity to achieve a “specific objective” that cannot be attained without the participation of third states, and not on the existence of internal measures.
THE NATURE OF IMPLIED POWERS: EXCLUSIVE OR SHARED?
In the ERTA case the ECJ did not hesitate to state that external implied powers of the Community were exclusive. The implication of this statement is very important given that when the Community has exclusive powers, the Member States have no right, acting individually or even collectively, to undertake obligations with third countries which affect Community rules. In the 1970s the ECJ did not make any distinction between the existence and the nature of an external competence. Once the Court decided that the Community had implied competence, such a competence was automatically exclusive in nature. Since then, the ECJ has changed its approach. Now, the Court determines:
– First, whether the Community has competence in the relevant area, and if so, whether the competence is explicit or implied;
– Second, if the ECJ finds that the Community has implied competence, it determines its nature, that is, whether the relevant competence is exclusive or shared between the Community and the Member States.
This determination of the nature of a competence is decided on a case-by-case basis. In Opinion 1/03 relating to Competence of the Community to conclude the forthcoming Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters,132 the ECJ held that account must be taken of:
1. Whether the relevant area is covered by the Community rules and also by the provisions of the intended agreement;
2. The nature and content of those rules and those provisions with a view to ensuring that the agreement is not capable of undermining the uniform and consistent application of the Community rules and the proper functioning of the system which they establish;
The current state of Community law in the area in question as well as its future development, in so far as that is foreseeable at the time of the judgment.133
On the basis of the above criteria an implied competence will be classified as exclusive in nature in the following situations:
1. Where internal EU rules are part of common rules, that is, where internal rules govern the entirety of the area in which the EU intends to conclude an international agreement.
In such a situation only the EU is entitled to conclude an international agreement, otherwise the unity and the uniform application of EU law will be affected. The difficulty here is to decide whether or not the internal rules are part of common rules. This task is left to the ECJ.
2. Where the EU has achieved a complete harmonization in the area in which the EU intends to conclude an international agreement. Any agreement in this area will necessarily affect the EU rules within the meaning of the ERTA judgment and, thus, only the EU has competence to conclude an international agreement. If the harmonization is not complete, the ECJ will take account of the extent and the importance of harmonizing rules. Thus, if harmonization is limited to the establishment of a minimum standard in a particular area, the competence is shared with the Member States. However, if the relevant area is largely covered by EU rules with a view to achieving complete harmonization, the Member States may not enter into international commitments outside the framework of the EU institutions, even if there is no contradiction between those commitments and the common rules.134
3. Where an internal legislative act has conferred on the EU exclusive external competence. This is a specific situation where “the Community has included in its internal legislative acts provisions relating to the treatment of nationals of non-member countries or expressly conferred on its institutions powers to negotiate with non-member countries, it acquires an exclusive external competence in the spheres covered by those acts.”135
125. (1949) ICJ Rep.174.
126. [1954–1956] ECR 292.
127. [1987] ECR 3203.
128. [1971] ECR 263.
129. [1993] ECR I-1061.
130. [1977] ECR 741.
131. “Open Skies” judgments: Case C-467/98 Commission v Denmark [2002] ECR I-9519; Case C-468/98 Commission v Sweden [2002] ECR I-9575; Case C-469/98 Commission v Finland [2002] ECR I-9627; Case C-471/98 Commission v Belgium [2002] ECR I-9681; Case C-472/98 Commission v Luxembourg [2002] ECR I-9741; Case C-475/98 Commission v Austria [2002] ECR I-9797; and Case C-476/98 Commission v Germany [2002] ECR I-9855).
132. [2006] ECR I-1145.
133. Opinion 2/91 [Re ILO Convention 170] [1993] ECR I-1061.
134. Opinion 2/91 [Re ILO Convention 170] [1993] ECR I-1061.
135. Opinion 1/94 [Re WTO Agreement] [1994] ECR I-5267; Opinion 2/92 [Re OECD National Treatment Instrument] [1995] ECR I-521.
