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Max Planck Encyclopedia of Public International Law [MPEPIL]

European (Economic) Community

Ana Maria Guerra Martins

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 20 May 2019

Tariffs — Developing countries

Published under the auspices of the Max Planck Foundation for International Peace and the Rule of Law under the direction of Rüdiger Wolfrum.

A.  Historical Background

The European Economic Community (‘EEC’), which, after the entry into force of the Treaty on European Union of 7 February 1992, became the European Community (‘EC’) (European Union, Historical Evolution), was preceded by several European international organizations and treaties. As a matter of fact, after World War II, many supported the idea of a new model of political cooperation helping European countries face the Cold War (1947–91) and the severe post-war economic problems. In 1947, the US announced the Marshall Plan (European Recovery Program), which intended to provide financial aid for Europe, requiring an organization to administer the programme. This became, in 1948, the Organization for Economic Co-operation and Development (OECD). In the same year France, the UK, and the three Benelux countries signed the Brussels Treaty (Treaty for Collaboration in Economic, Social and Cultural Matters and for Collective Self-defence [signed 17 March 1948, entered into force 25 August 1948] 19 UNTS 51) which inspired the Western European Union (WEU), created in 1954. The North Atlantic Treaty Organization (NATO) was created in 1949.

Regarding political matters, the ‘Congress of Europe’, which took place in The Hague in 1948, was convened to draw up proposals for European unity in a federal way. However, what emerged was the Statute of the Council of Europe (COE) ([signed 5 May 1949, entered into force 3 August 1949] CETS No 1), which at the insistence of the UK did not compromise State sovereignty. Despite its intergovernmental organizational nature, the Council of Europe became involved in many cultural, economic, and scientific activities, its most well-known achievement probably being the adoption of the European Convention for the Protection of Human Rights and Fundamental Freedoms (1950), which was signed in 1950 and came into force in 1953 (Regional Co-operation and Organization: European States).

In order to prevent the resistance of the UK to participation in the movement towards European integration, the French foreign affairs minister, Robert Schuman, on 9 May 1950, proposed a plan to begin pooling Franco–German coal and steel resources under a single High Authority, with the option for other European States to participate. The idea was, in reality, conceived by Jean Monnet. Apparently inspired by economic cooperation aims, the main purpose of the plan was to normalize relations between France and Germany after the war in a peaceful Europe.

Belgium, Italy, Luxembourg, and the Netherlands adhered to Schuman’s proposal and together with France and Germany, on 18 April 1951, they signed in Paris the Treaty establishing the European Coal and Steel Community (ECSC) for a period of 50 years, which expired on 23 July 2002. This was the first significant step towards European integration beyond intergovernmentalism, which had previously taken place within the Council of Europe. For the first time in the history of international relations a supranational authority provided by independent institutions had the power to bind both its constituent Member States and coal and steel undertakings (Supranational Law).

The success of the ECSC led the Member States to initiate active international consultations with a view to transfer powers in political matters, such as defence and foreign policy. On 27 May 1952 the ECSC Member States signed the Treaty Constituting the European Defence Community (‘EDC’) (159 BFSP 516), which enabled a military structure to be put in place in continental Europe. This Community was based on a plan elaborated by René Pleven, the French Minister of Defence. Prior to the entry into force of the EDC Treaty, the Common Assembly of the ESCS—meeting as the ‘Ad Hoc Assembly’—proposed the creation of a European Political Community (‘EPC’) with the aim of coordinating Member States’ foreign policy and establishing a common market. Both the EDC and the EPC were supposed to have a supranational character. The whole plan failed when, on 29 August 1954, the French National Assembly voted to postpone sine die the ratification of the EDC Treaty.

B.  Establishment

Following the failure of the EDC, the supporters of European integration switched on to an economic and social approach. On 2 June 1955, the Member States signed the Resolution of Messina, by which they agreed on moving in the direction of economic integration and charged an intergovernmental committee, chaired by Paul-Henry Spaak, the Belgian Foreign Minister, with presenting a plan to reach this aim. The Spaak Report contained the basic plan for what became the European Atomic Energy Community (Euratom) and the European Economic Community (‘EEC’) (Intergovernmental Committee on European Integration ‘Report of the Heads of Delegation to the Ministers of Foreign Affairs’ [Brussels 1956]). The treaties establishing the EEC and Euratom were both signed on 25 March 1957 in Rome and entered into force on 1 January 1958. The aim of Euratom was to create the conditions necessary for the speedy establishment and growth of nuclear industries. Although these treaties had been motivated by political reasons, the focus was specifically economic.

During its 50 years’ life, the EEC Treaty was amended several times, namely by the Single European Act signed in February 1986 and the Treaty on European Union (‘TEU’; ‘Treaty of Maastricht’) signed on 10 December 1991 in Maastricht. The latter has already been amended three times: firstly by the Treaty of Amsterdam signed on 2 October 1997, secondly by the Treaty of Nice signed on 26 February 2001, and lastly by the Treaty of Lisbon signed on 13 December 2007.

The Treaty of Maastricht—one of the most important turning points in European integration until now—included detailed commitments on economic and monetary union (Monetary Law, European) and a deep and wide institutional change, establishing the ‘three-pillar’ structure for what was henceforth to be the European Union (‘EU’), composed of the Communities (EEC, ECSC, and Euratom) as the first pillar, Common Foreign and Security Policy (‘CFSP’) as the second pillar, and Justice and Home Affairs (‘JHA’) as the third pillar. The EEC Treaty was officially renamed European Community (‘EC’) Treaty.

In spite of amending and restructuring the second and third pillars, and adding a new Title on closer/enhanced cooperation between Member States, the Amsterdam and Nice Treaties left the basic structure of the Union largely intact. By contrast, the Treaty of Lisbon deletes this tripartite structure (see below para. 16)

10  Taking the lack of a catalogue of rights and freedoms into consideration, the European Council of Cologne (3–4 June 1999) launched an initiative to draft a Charter of Fundamental Rights of the European Union (2000), which was supposed to be included in the Treaty of Nice. The Charter was elaborated by a Convention composed of representatives of the European Parliament, the national parliaments, the national governments, and the Commission, which configured a more open and participative procedure and consequently conferred to the Convention a more democratic legitimacy than almost any previous EC or EU initiative. In spite of being drafted ‘as if’ it were to have full legal effect, the question of its legal status and its possible integration into the Treaty was postponed and placed on the political agenda by the Nice and Laeken Declarations, to be decided ultimately by the Intergovernmental Conference in 2004, as it indeed happened. At the Nice European Council Summit in December 2000, the Charter was solemnly proclaimed by the Commission, Parliament, and Council, and was politically approved by the Member States.

11  Although the Charter was not included in the Treaty in Nice, that did not mean it was without any legal influence or effect. As a matter of fact, the mandate given by the European Council to the Convention was to consolidate and render visible the EU’s existing obligations to respect fundamental rights rather than to create anything new. So the main aims of the Charter were the legal security and the protection of the citizens.

12  The problem of the legal status of the Charter would have been definitively solved if the Treaty Establishing a Constitution for Europe signed in Rome on 29 October 2004 by the Heads of States and Governments of the former 25 Member States of the European Union had entered into force (see Art. 9 (1) EU Constitution, which provides that ‘the Union shall recognize the rights, freedoms and principles set out in the Charter of Fundamental Rights which constitutes Part II’).

13  The Treaty Establishing a Constitution for Europe was the outcome of both the European Convention, which was convened by the European Council of Laeken (December 2001) in order to ensure that the preparation of the forthcoming IGC would be as broadly-based and transparent as possible, as well as the 2004 IGC itself. As a matter of fact, a deep and wide debate occurred during the European Convention and the IGC 2004.

14  The failure of that Treaty, due to the negative referenda in France and in the Netherlands in May and June 2005, had led the European Union into a constitutional crisis. After two years of uncertainty over the future of the Union’s and the European Communities’ Treaties reform process, the Brussels European Council of 21 and 22 June 2007 agreed to convene an Intergovernmental Conference and invited the incoming Presidency to take the necessary steps in accordance with Art. 48 TEU, with the objective to complete the reform as quickly as possible. The Presidency Conclusions contained relatively detailed terms of the mandate for reforming the Treaties (see Annex I).

15  The reform of the EU Treaty was approved at the Lisbon European Council of 18 and 19 October 2007 and the Treaty was signed at 13 December 2007 in Lisbon. The negative Irish referendum postponed the entry into force of the Treaty, which was supposed to have been on 1 January 2009. Nevertheless, on 2 October 2009 Irish voters returned to the ballot box and this time endorsed the Treaty. A last political difficulty came from the Czech Republic. In order to be able to ratify the Treaty, its President requested the same exemption as Poland and the United Kingdom from Protocol 30 in Lisbon Treaty’s Charter of Fundamental Rights. This was accepted by the Brussels European Council from 3 November 2009, and consequently the Czech President ratified the Treaty on 4 November 2009. Therefore, the Treaty of Lisbon was ready to enter into force on 1 December 2009.

16  The Treaty of Lisbon is composed of the TEU, the Treaty on the Functioning of the Union (‘TFEU’), 37 protocols, and 65 declarations. According to Art. 6 (1) TEU, the Charter of Fundamental Rights of the European Union has the same value as the Treaties. Despite the lack of the word ‘constitution’ and the abandonment of the constitutional terminology (laws and framework-laws, Union Minister for Foreign Affairs, the symbols of the Union—the flag, the anthem, and the motto—the primacy clause, etc.), the main innovations introduced into the Treaty resulted from the IGC 2004 (for example, the unitary structure—the European Union—that succeeds to the European Communities and to the intergovernmental pillars [Art. 1 TEU]), the explicit indication of the values that founded the Union (human dignity, freedom, democracy, equality, the rule of law, and respect for human rights, including the rights of persons that belong to minorities [Art. 2 TEU]), the express acquisition of legal personality by the European Union (Art. 47 TEU), the extension of the European Court of Justice jurisdiction to some matters that had before been excluded or submitted to limitations—namely some parts of the area of freedom, security, and justice—and the extension of the access of individuals to the European Courts, stating that any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against a regulatory act which is of direct concern to them and does not entail implementing measures (Art. 263 (4) TFEU) (see also European Union, Court of Justice and General Court).

C.  Main Purposes and Fields of Activities

1.  Main Purposes

17  The main purposes and fields of activities of the EEC were enunciated in the preamble, as well as in Arts 2 and 3, and developed throughout the EEC Treaty.

18  The main aims were to establish a common market, to approximate the economic policies of the Member States, to promote harmonious development of economic activities throughout the Community, to increase stability and raise the standard of living, and to promote closer relations between the Member States. The subsequent amendments of the EEC Treaty had changed the aims of the European Community. Although the Single European Act conferred new competences on the Community, it did not amend Art. 2. By contrast, the Treaty on European Union enlarged the Community’s aims to include other than economic matters. Currently, Art. 2 EC Treaty reads:

‘The Community shall have as its task, by establishing a common market and an economic monetary union and by implementing common policies or activities referred to in Arts 3 and 4, to promote throughout the Community a harmonious balanced and sustainable development of economic activities, a high level of employment and social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high degree of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.’

19  With the Treaty of Lisbon, as the EU replaces and succeeds the EC, the main purposes of the latter were transferred to the former. As regards Art. 3 TEU the aims of the European Union are:

  1. a)  The promotion of peace, its values and the well-being of its peoples;

  2. b)  The offer to its citizens of an area of freedom, security, and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration, and the prevention and combating of crime;

  3. c)  The establishment of an internal market, which shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, a high level of protection and improvement of the quality of the environment and promoting scientific and technological advance;

  4. d)  The fight against social exclusion and discrimination, and promotion of social justice and protection, equality between women and men, solidarity between generations, and protection of the rights of the child;

  5. e)  The promotion of economic, social, and territorial cohesion, and solidarity among Member States;

  6. f)  The respect of European rich cultural and linguistic diversity, and the ensurance that Europe’s cultural heritage is safeguarded and enhanced;

  7. g)  The establishment of an economic and monetary union whose currency is the euro;

  8. h)  In its relations with the wider world, the Union shall uphold and promote its values and interests and contribute to the protection of its citizens. It shall contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child, as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.

2.  Fields of Activities

20  In order to achieve these aims, Art. 3 EEC Treaty listed the fields of activities of the Community. The establishment of a common market not only included the abolishment of barriers to trade, ie the free movement of goods, but also the free movement of persons, services, and capital (including payments). Moreover, Art. 3 EEC Treaty provided the approximation of the laws of Member States to the extent required for the proper functioning of the common market (Unification and Harmonization of Laws), the establishment of a common customs tariff, and of a common commercial policy towards third countries. In order to prevent undertakings and Member States from frustrating the common market, free competition was secured. Furthermore, the adoption of common policies in the spheres of agriculture and transport was previewed. Lastly, Art. 3 EEC Treaty provided for the coordination of Member States’ economic policies.

21  The subsequent amendments of the Treaty had enlarged the fields of activities of the European Community. Without changing Art. 3 EEC Treaty, the Single European Act extended the Community competence with regard to social policy, economic and social cohesion, research and technological development, and the environment. On the contrary, the Treaty on European Union changed Art. 3 EEC Treaty, enlarging the Community competence to European citizenship, common policy on visas, economic and monetary policy, education, culture, public health, consumer protection, trans-European networks, industry, and development cooperation. In addition, the TEU extended the powers of the Community to the above-mentioned fields added by the Single European Act.

22  After the Treaty of Lisbon, for the first time in the European integration history, the Treaties establish EU competences. Arts 2–6 TFEU distinguish between exclusive competence in a specific area (Art. 2 (1) and Art. 3 TFEU), shared competence with the Member States (Art. 2 (2) and Art. 4 TFEU), coordination competence of the economic and employment policies of the Member States (Art. 2 (3) and Art. 5 TFEU), competence to carry out actions to support, coordinate, or supplement the actions of the Member States, without thereby superseding their competence in these areas (Art. 2 (5) and Art. 6 TFEU), and lastly competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy (Art. 2 (4) and Arts 21–46 TEU).

D.  Legal Status and Membership

1.  Legal Status

23  The legal status of the EC has always been somewhat controversial. After the entry into force of the Treaty of Maastricht it became even more complex, because the EC was a component (the first pillar) of the European Union. It must therefore share the EU legal nature.

24  The scholarly literature mainly oscillated between the internationalist and the federalist approach. For the first one, as long as the EC was formally created by an international treaty concluded between sovereign States (Sovereignty), it should be governed by international law and included in the category of international organization. Some went even further, arguing that the EC had a supranational nature. In contrast, for the second approach, a broad concept of federalism, which referred not only to a State’s structure—the federal State—but also to every interdependent structure of authority, could accommodate the EC. In my opinion, none of them were able to explain the phenomenon of the EC.

25  On the one hand, since the birth of the E(E)C, the content of the Treaty had contained some innovations that revealed a new entity acting in international context. The EC possessed independent institutions from the Member States, such as the Commission, the Parliament, and the ECJ. The European Parliament was even directly elected by the peoples of the States brought together in the Community. The decision-making process of the Community had a high level of autonomy vis-à-vis the Member States. The Council might take decisions by majority, yet they would bind all the Member States. The implementation of Community law was mainly a duty of the Member States under the supervision of the institutions of the EC. Community law had its own procedures for determining infringements and imposing sanctions therefore. The jurisdiction of the ECJ was compulsory and its judgments were binding throughout all the Community subjects. The law created by the Community institutions might be directly applied to individuals (see also Individuals in International Law). The relations between Member States within the field of application of the Community law and the relations between Member States and the Community were not governed by international law, but by Community law (European Community and Union Law and International Law).

26  On the other hand, federalism without a State is a rather stimulating concept, but all the federal historical examples were qualified as States. The EC would have been the first and unique exception to this rule. In spite of the differences between the federations, there were some common features: the State character of the federation, the formal birth by a constitution, the organizational structure of the federal State must mirror its State character and must respect the individual States, and the possibility to amend the constitution by a qualified majority. Honestly speaking, the EC did not possess any of these features. It was created by a treaty, it could hardly be characterized as a State, its competences were not so developed as the ones of a federal State, and the Treaty was generally revised by unanimity.

27  To sum up, the EC could neither be characterized as federal State nor as an international organization (International Organizations or Institutions, General Aspects), even a supranational one.

28  Therefore, some scholars recognized the impossibility of including the EC in the ordinary categories, drawing attention to the sui generis character of the EC. This has also been accentuated since the first years of European integration by the case-law of the ECJ that established the basic principles of ‘direct effect’ and the Community law supremacy over the law of the Member States (European Community and Union Law and Domestic [Municipal] Law). The ECJ established those basic principles in 1963 and 1964.

29  The doctrine of ‘direct effect’ was for the first time applicable to the EC Treaties provisions. In the Van Gend & Loos Case, the Court held that as Community law imposes obligations on individuals, it also confers upon them rights ‘which become part of their legal heritage’. The wording of former Art. 12 EEC Treaty contains a clear and unconditional prohibition which is not a positive but a negative obligation. According to the spirit, the general scheme, and the wording of the Treaty, former Art. 12 EEC Treaty must be interpreted as producing direct effects and creating individual rights which national courts must protect. Afterwards, the Court repeatedly ruled on whether provisions of the EC Treaty have ‘direct effect’ or not (see Reyners, Defrenne II).

30  The ‘direct effect’ of international agreements is more problematic. It relates to the capacity of such agreements to be directly invoked and enforced not only within the legal orders and courts of the Member States, but also within the legal order of the EU before the ECJ. In International Fruit Company, the Court considered that various aspects of the General Agreement on Tariffs and Trade (1947 and 1994) (‘GATT’), including the great flexibility of its clauses, the possibilities of derogation, and the power of unilateral withdrawal from its obligations, prevent it from conferring on citizens of the Community rights which they can invoke before the courts. This reasoning would later be extended to the World Trade Organization (WTO) agreement (Marrakesh Agreement Establishing the World Trade Organization [adopted 15 April 1994, entered into force 1 January 1995] 1867 UNTS 154) (Portuguese Republic v Council).

31  The ‘direct effect’ of EC directives is most complex of all. They may be invoked by individuals against a Member State (that means every State body) which either failed to implement the directive within the prescribed time limit or implemented it incorrectly. In Van Duyn the Court held that ‘it would be incompatible with the binding effect attributed to a directive by Art. 189 to exclude, in principle, the possibility that the obligation which it imposes may be invoked by those concerned’ (para. 2). The obligation imposed was clear, precise, and legally complete. The Court repeated this judgment several times (see eg Ratti). In Marshall, the ECJ held that ‘a directive may not of itself impose obligations on an individual and that a provision of a directive may not be relied upon against such a person’ (para. 5). That means the directive may have vertical but not horizontal direct effect.

32  However, the Court has developed a number of Community law principles, in order to clarify the legal position of the authorities or individuals concerned when a directive has not been correctly implemented. Thus, the national courts must interpret domestic law, as far as possible, in conformity with directives (Von Colson and Marleasing), which is known as indirect effect. Moreover, the national courts must, in principle, give the directive precedence over the national rules. Finally, in case of the non-transposition of the directive, an individual can bring proceedings for damages against the Member State (Francovich and Bonifaci).

33  In Mangold, the ECJ held that the national court must set ‘aside any provision of national law which may conflict with Community law, even where the period prescribed for transposition of that directive has not yet expired’ (para. 4). Later on, in Adeneler the Court abandoned this reasoning and ruled that ‘where a directive is transposed belatedly, the general obligation owed by the national court to interpret domestic law in conformity with the directive exists only once the period for its transposition has expired’ (para. 5). More recently, in Kucükdeveci and Birgit Bartsch, the Court retakes Mangold case-law.

34  The principle of supremacy (or primacy) of Community law, like the doctrine of direct effect, was developed by the ECJ. Firstly, in Costa v ENEL, it held that

the law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic provisions, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question (para. 3).

The Court derived the supremacy of Community law from the specific nature of the Community legal order, the principle of sincere cooperation set out in Art. 10 Treaty Establishing the European Community (‘ECT’), the prohibition of discrimination contained in Art. 12 ECT, and the direct applicability of regulations (Treaties, Direct Applicability). In the Internationale Handelsgesellschaft Case the Court added that

the validity of a Community measure or its effect within a Member State cannot be affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of that State or the principles of a national constitutional structure (para. 3).

Some years later, in Simmenthal, the Court held that

in accordance with the principle of the precedence of Community law, the relationship between provisions of the Treaty and directly applicable measures of the institutions on the one hand and the national law of the Member States on the other hand is such that those provisions and measures not only by their entry into force render automatically inapplicable any conflicting provision of current national law but—in so far as they are an integral part of, and take precedence in, the legal order applicable in the territory of each Member State—also preclude the valid adoption of new national legislative measures to the extent to which they would be incompatible with Community provisions (para. 3).

And the Court added

every national court must, in a case within its jurisdiction, apply Community law in its entirety and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it, whether prior or subsequent to the Community rule (para. 21).

The Court went further in Factortame and ruled that

the full effectiveness of Community law would be just as much impaired if a rule of national law could prevent a court seised of a dispute governed by Community law from granting interim relief in order to ensure the full effectiveness of the judgment to be given on the existence of the rights claimed under Community law. It follows that a court which in those circumstances would grant interim relief, if it were not for a rule of national law, is obliged to set aside that rule.

The Court completed this framework in its Francovich judgment (see above). It held that

the full effectiveness of Community rules would be impaired and the protection of the rights which they grant would be weakened if individuals were unable to obtain redress when their rights are infringed by a breach of Community law for which a Member State can be held responsible. (para. 33)

According to the Court, the principle of liability of the Member States for damages arising out of a breach of Community law ‘is inherent in the system of the Treaty’.

35  To conclude, if the EC’s legal nature was hard to determine at the very beginning of European integration, its dynamism, the subsequent amendments of the Treaty, and the consequent development of the ECJ’s case-law have not contributed to the clarification of this issue. In my opinion, the EC, being a component—more precisely the first pillar—of the EU, must share its legal nature which might not fit into the traditional categories of international or constitutional law. As it constitutes something in-between, a new category ought to be created in order to explain the EC and EU legal nature. In my view, this category is a union of States and citizens in a process of constitutionalization. As the EU replaces and succeeds the EC, this qualification may also apply to the EU after the Treaty of Lisbon.

2.  Membership

36  Art. 237 EEC Treaty governed the accession of States to the European Economic Community. This provision was repealed by Art. 49 TEU, which provides that ‘any European State which respects the principles set out in Art. 6 (1) may apply to become a member of the Union’. That means membership implies acceptance of the principles of liberty, democracy, respect of human rights and fundamental freedoms, and the rule of law. In addition, the would-be Member State has to accept the acquis communautaire, ie the body of Community Law built up over the years.

37  Currently, Art. 49 TEU, as amended by the Treaty of Lisbon, establishes that ‘any European State which respects the values referred to in Art. 2 and is committed to promoting them may apply to become a member of the Union.’ The values mentioned in Art. 2 TEU are ‘respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities’, which ‘are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail’.

E.  Structures

1.  Main Organs of the Organization and their Powers

(a)  Original Structure under the EEC Treaty

38  The institutional structure of the EEC was inspired by the ECSC, but the parallel with the ECSC Treaty was restricted to the organizational level. According to Art. 4 EEC Treaty, the main organs of the EEC were the Assembly, the Council, the Commission, and the ECJ. The Assembly was composed of delegates designated by the national parliaments among their members. On 20 September 1976, the Council adopted a Decision which provided for the election of the representatives of the Assembly by direct universal suffrage (Council Decision 76/787/ECSC, EEC [1976] OJ L278/1). The Assembly had a modest consultative and supervisory role. The Council consisted of representatives of the Member States and was conceived as the centre of the decision-making process. The Commission comprised independent members from the States, its tasks being restrained to making proposals, implementing legislation, and supervising compliance with Community law. The ECJ was composed of judges assisted by advocates general and a registrar. It ensured that, within its jurisdiction, in the interpretation and application of the Treaties the law is observed.

(b)  Institutional Framework after the Treaty of Maastricht

(i)  Preliminary Remarks

39  The original institutional structure of the EEC had been deeply altered due to, on the one hand, the successive enlargements firstly of the Communities and afterwards the EU, and, on the other hand, the several amendments of the Treaty, especially by the EU Treaty signed in Maastricht. Therefore, the evolution of each institution’s composition, powers, operation, and internal organization has been rather significant.

40  The creation of the European Union founded on the European Communities and supplemented by policies and forms of cooperation established by the EU Treaty imposed a modification of the institutional structure of the EC, indeed. Under Art. 3 (1) TEU, the Union was served by a single institutional framework ‘which shall ensure the consistency and the continuity of the activities carried out in order to attain its objectives while respecting and building upon the acquis communautaire’. In fact, the institutions of the Union were the institutions and bodies established by or in virtue of the EC Treaty in addition to the European Council. The main organizational structure of the EC was imported from the EEC, with some exceptions, such as the Assembly that changed its title to become the European Parliament, and the Court of Auditors that acquired the legal status of main institution.

41  The Treaty of Lisbon introduced considerable changes into the institutional framework. As regards Art. 13 (1) TEU, the Union has an institutional framework which aims to promote its values, advance its objectives, serve its interests (those of its citizens and those of the Member States), and ensure the consistency, effectiveness, and continuity of its policies and actions. The main institutions of the EU are the European Parliament, the European Council, the Council, the European Commission, the Court of Justice of the EU, the European Central Bank and the Court of Auditors.

(ii)  European Parliament

42  Prior to the Treaty of Lisbon, under the terms of Art. 189 (1) ECT the European Parliament consisted of ‘representatives of the peoples of the States brought together in the Community’. Since 1979, the Members of the European Parliament have been elected by direct universal suffrage, giving the institution democratic legitimacy. Since the entry into force of the TEU and the subsequent amendments introduced by the Treaties of Amsterdam and Nice, the European Parliament’s powers had been progressively enlarged. They included the power to advise on any question concerning the Community and to adopt resolutions; the power to participate in the decision-making process ‘under the procedures laid down in Art. 251 [co-decision], Art. 252 [cooperation] and by giving its assent or delivering advisory opinions’ (Art. 192 (1) ECT); the power to pronounce upon certain external relations matters by giving its assent or its advisory opinion, notably in the case of international agreements; the power to adopt the EU budget in cooperation with the Council; and, finally, the power to supervise other institutions and bodies of the Union. The Commission was politically answerable to the European Parliament, but not to the Council. The European Parliament had even the right to pass a motion of censure on the activities of the Commission. According to Art. 193 (1) ECT, the European Parliament had the right to hold enquiries into alleged breaches of Community law or maladministration.

43  The Treaty of Lisbon slightly modifies the main provisions of the Treaties concerning the European Parliament. However, some relevant innovations were introduced. Just to mention three of them: With regard to Art. 14 (2) TEU, the European Parliament shall be composed of representatives of the Union’s citizens; under the terms of Art. 14 (1) TEU, the European Parliament shall, jointly with the Council, exercise legislative and budgetary functions, in addition to exercising functions of political control and consultation. That means that for the first time in the history of European integration, the founding Treaty qualifies the functions of the institutions according to a terminology imported from the State Theory. Moreover, taking into consideration that the decision-making process of the EU has been submitted to important developments (cf Art. 289 (1)–(2) and Arts 293 et seq TFEU), the European Parliament intervention follows them.

(iii)  Council

44  Under the terms of Art. 203 (1) ECT, the Council was composed of one representative of each Member State at ministerial level, authorized to commit the government of that State. That means it could meet in different configurations, depending on the subject-matter under discussion. The Treaty of Lisbon refers to the composition of the Council in the same terms (Art. 16 (2) TEU. The Presidency of the Council used to be exercised in rotation for a period of six months by each Member (Art. 203 (2) ECT). After the Treaty of Lisbon, in regard to Art. 16 (9) TEU, the Presidency of Council configurations, other than of Foreign Affairs, shall be held by Member States Representatives in the Council, on the basis of equal rotation, in accordance with Art. 236 TFEU. Prior to the Treaty of Lisbon, the powers of the Council were provided for in Art. 202 ECT; they were the coordination of national economic policies, the decision-making, and the implementation of tasks carried out in order to attain the objectives set out in the Treaty. After the Treaty of Lisbon, the powers of the Council remain similar, but Art. 16 (2) TEU expressly mentions that the Council shall exercise legislative and budgetary functions.

45  Although it is not directly elected by the citizens of Europe, as is the case with the European Parliament, the Council makes the main policy choices in order to attain the objectives set out in the Treaties. It has for decades been the ‘quasi’ exclusive legislator of the Community, acting by unanimity of its members. Furthermore, in spite of conferring implementing powers in principle on the Commission, the EC Treaty allows the Council in ‘specific cases’ to exercise implementing powers itself. That means the legislative authority coincides in those cases with the executive one. Taking this scenario into account, commentators have long debated the Community’s democratic legitimacy and its ‘democratic deficit’.

46  Since the entry into force of the Treaty of Maastricht, the Community decision-making process has changed profoundly. The ‘co-decision procedure’ (Art. 251 ECT), introduced by the EU Treaty, relies on the Council, as representing national interests and intergovernmental perspective, and the European Parliament, as representing the interests of the peoples of Europe. Before the Treaty of Lisbon, this procedure was the rule. The Council decision was taken by a qualified majority of votes and the acts were adopted by the Parliament and the Council on the basis of a Commission proposal. In other words, the Council was a co-legislator and the decisions of the Council requiring unanimity had become the exception which contributed to increasing its democratic legitimacy. Nevertheless, in those areas most connected to State sovereignty, Council decisions remained unanimous. After the Treaty of Lisbon, the co-decision procedure was replaced by the ordinary legislative procedure provided for by Art. 289 (1) TFEU.

(iv)  Commission

47  The Commission used to be composed by one national of each Member State (Art. 231 (1) second subpara. ECT). Under the terms of Art. 4 Protocol on the Enlargement of the European Union ([2001] OJ C80/49), by the time the Union consists of 27 Member States (which had been the case in 2004), the Council may alter the number of Commissioners by unanimous vote, in order to introduce a system whereby the number of Commissioners will be smaller than the number of Member States, according to a rotation system based on the principle of equality. This first applied to the Commission that took up its functions on 22 November 2004; before that date the rule was at least one national of each Member State and no more than two nationals of any Member State. In practice, the ‘Big Five’ (Britain, France, Germany, Italy, and Spain) were entitled to two members each and the medium-sized and small countries to one.

48  After the Treaty of Lisbon, the Commission appointed between the date of entry into force of this Treaty and 31 October 2014 shall consist of one national of each Member State, including its President and the High Representative of the Union for Foreign Affairs and Security Policy who shall be one of its Vice- Presidents. As from 1 November 2014, the Commission shall consist of a number of members, including its President and the High Representative of the Union for Foreign Affairs and Security Policy, corresponding to two thirds of the number of Member States, unless the European Council, acting unanimously, decides to alter this number.

49  Since the Treaty of Nice, the Commissioners used to be appointed by the Council, by a qualified majority vote. Before, they were appointed by the Member State governments by common accord. The Council, meeting in the composition of Heads of State or Government, and acting by qualified majority, nominated the person it intended to appoint as President of the Commission. This nomination had to be approved by the European Parliament. Then, the Council, in its normal composition, adopted the list of the other persons whom it intended to appoint as Commissioners. The President and the other members of the Commission were put to a vote of approval by the European Parliament, and afterwards they are appointed by the Council acting by a qualified majority (Art. 214 (2) ECT).

50  Since the Treaty of Lisbon, this procedure has been modified in the following terms: Taking into account the elections to the European Parliament and after having held the appropriate consultations, the European Council, acting by a qualified majority, shall propose to the European Parliament a candidate for President of the Commission. This candidate shall be elected by the European Parliament by a majority of its component members. If he or she does not obtain the required majority, the European Council, acting by a qualified majority, shall within one month propose a new candidate who shall be elected by the European Parliament following the same procedure. The Council, by common accord with the President-elect, shall adopt the list of the other persons whom it proposes for appointment as members of the Commission. The President, the High Representative of the Union for Foreign Affairs and Security Policy and the other members of the Commission shall be subject as a body to a vote of consent by the European Parliament. On the basis of this consent the Commission shall be appointed by the European Council, acting by a qualified majority (Art. 17 (7) TFEU). The term of office of the Commissioners is five years (renewable) which coincides with the term of office of the European Parliament members (former Arts 214 (1); Art. 190 (3) ECT, current Art. 17 (3) TEU).

51  As ‘guardian of the Treaties’, the Commission supervised the fulfilment of Community law. As the ‘executive power’ of the Community, the Commission had extensive powers of implementation of the measures adopted by the Council (Art. 211 ECT). Furthermore, the Commission had an exclusive right to submit ‘legislative’ proposals to the European Parliament and to the Council. The EC Treaty also empowered the Commission to formulate recommendations or deliver opinions on Treaty matters if expressly provided for in the Treaty or if the Commission considered it necessary (Art. 211 ECT). Finally, the Commission represented the Community in legal transactions within each Member State and also in international transactions (Art. 282 ECT). The Treaty of Lisbon does not significantly amend the powers of the Commission.

(v)  Court of Justice

52  The Court of Justice of the European Communities, currently the Court of Justice of the European Union, which has its seat in Luxembourg, consists of three courts: the Court of Justice, the Court of First Instance (‘CFI’, created in 1988), renamed General Court (‘GC’) by the Treaty of Lisbon, and the Civil Service Tribunal (created in 2004). It was the Single European Act which conferred to the Council the power to create another court within the EEC. This second court, the CFI, started to function on 1 September 1989. The Treaty of Nice considerably altered the jurisdiction of the ECJ and the CFI and made it possible for the Council to attach judicial panels to the second one to exercise judicial competence in certain specific areas (Art. 225a (1) ECT, currently Art. 257 TFEU). This legal basis was used to create the Civil Service Tribunal which is a judicial panel to hear disputes involving the EU Civil Service (see Art. 1 Council Decision 2004/752/EC, Euratom of 2 November Establishing the European Union Civil Service Tribunal [2004] OJ L333/7).

53  The ECJ is composed of one Judge for each Member State assisted by eight Advocates-General (Art. 222 (1) ECT, current Art. 19 (2) TEU)) and a Registrar. The Advocates-General, ‘acting with complete impartiality and independence’, assist the ECJ by making in open court reasoned submissions prior to the Court deliberations (Art. 222 (2) ECT, current Art. 252 (2) TFEU). The CFI (current GC) has at least one Judge for each Member State and a Registrar. The Judges and Advocates-General of the ECJ and the Judges of the CFI (GC) are appointed by common accord of the national governments for a six-year term (Arts 223, 224 ECT, currently Arts 253, 254 TFEU). After the Treaty of Lisbon, the panel provided for in Art. 255 TFEU shall be consulted. Both Courts elect their President and sit in chambers. Both Courts sit in chambers of three or five judges or in a Grand Chamber of 13 judges, and only exceptionally in a full court. The CFI may be constituted by one single Judge. There is a right of appeal to the ECJ against decisions of the CFI (GC) restricted to points of law.

(vi)  Court of Auditors

54  The Court of Auditors was instituted by the Treaty Amending Certain Financial Provisions of the Treaties Establishing the European Economic Communities and of the Treaty Establishing a Single Council and a Single Commission of the European Communities ([signed 22 July 1975, entered into force 1 June 1977] 1453 UNTS 245), but, as mentioned above, it only acquired the status of main institution when the EU Treaty entered into force. Its composition and function was governed by Arts 246–48 EC Treaty (current Arts. 285–87 TFEU). The Court of Auditors is composed of one national from each Member State appointed by the Council by a qualified majority vote after consulting the European Parliament for a renewable six-year term (Art. 247 (3) ECT, current Art. 286 (3) TFEU). Members of the Court of Auditors have to be completely independent in the performance of their duties in the general interest of the Community. In accordance with Art. 248 ECT (current Art. 287 TFEU), the Court of Auditors has the power to examine the accounts of all revenue and expenditure of the Community (currently the Union), as well as the accounts of all revenue and expenditure of all bodies set up by the Community (currently the Union), except when the relevant constituent instrument precludes such examination; to draw up an annual report after the close of each financial year, which shall be forwarded to all institutions of the Community (currently the Union) and published; to submit observations, particularly in the form of special reports, on specific questions and deliver opinions at the request of one of the other institutions of the Community; and to assist the European Parliament and the Council in exercising their powers of control over the implementation of the budget.

2.  Decision-Making Process

(a)  Preliminary Remarks

55  The decision-making power of the Community has always been rather complex. Although there was a distinction between acts of a legislative nature and implementing acts, the Treaty did not set up separate legislative and executive institutions. On the contrary, the legislative power was spread over three institutions: the Council, the European Parliament, and the Commission and the executive power over two of them: the Council and the Commission. Moreover, the form of an act did not say much about its legislative or implementing nature. The main criterion was the legal basis of the act intended to be adopted.

(b)  Legislative Process

56  The original version of the EC Treaty conferred the legislative power almost exclusively to the Council, which acted by unanimity, on the proposal of the Commission and after obtaining the opinion of the European Parliament (Art. 250 ECT). This procedure was known as ‘consultation procedure’. It still remains in force after the Treaty of Lisbon in areas closely linked to the sovereignty of the Member States under the hat of the specific legislative procedures. The successive amendments to the EC Treaty had introduced some other procedures which attempted to overcome the democratic deficit of the Community. In fact, since its direct election the Parliament claimed a greater role in the legislative process.

57  Therefore, the Single European Act added the so-called ‘cooperation procedure’ (Art. 252 ECT). Similarly to the ‘consultation procedure’, the Council acted on the initiative of the Commission and the Parliament delivers an opinion; diversely, the Council acted by a qualified majority vote, unless the Parliament rejected its common position. If it did so, the Council must adopt the act by a unanimous vote. Although under the cooperation procedure the Parliament’s influence in the legislative process had increased, it could neither prevent the adoption of an act nor adopt any act itself. The Amsterdam Treaty replaced this procedure by the ‘co-decision procedure’, except in the provisions governing the Economic Monetary Union. This procedure was deleted by the Treaty of Lisbon.

58  The ‘co-decision procedure’ (Art. 251 ECT) was introduced in order to give the Parliament truly legislative power, enabling a direct dialogue between the Council and the European Parliament with the adoption of an act depending upon the approval of both institutions. As mentioned above, the Treaty of Lisbon replaces this procedure, introducing the ordinary legislative procedure.

59  Finally, the ‘assent procedure’, which was introduced in some provisions of the EC Treaty by the Single European Act, means that the Parliament must give its assent to the act. In other words, it has a veto right. Prior to the Treaty of Lisbon, this procedure mainly applied to international agreements (European Community and Union, Decision-Making and Competences on International Law Issues). At present, this procedure still remains in force as one of the specific legislative procedures (cf Arts 19 (1) 86 (1) 311 (4), 312 (2) 352 (1) TFEU).

(c)  Implementing of Legislation

60  As a rule, Community law (currently, European Union Law) is implemented by the Member States, which are the administration communautaire indirecte (indirect Community administration). Art. 10 ECT (current Art. 4 (3) TEU and Art. 291 (1) TFEU) read: ‘Member States shall take all appropriate measures, whether general or particular, to ensure fulfillment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community’. The Member States carry out this task in accordance with their own national law and under the supervision of the Commission which may bring an action under Art. 226 ECT (current Art. 258 TFEU) against a Member State that fails to fulfil its duty to implement Community law (currently, European Union Law).

61  In some areas the Treaty expressly conferred upon the Community institutions the task of implementing Community law (European Administrative Law). These were the cases of administration communautaire directe (direct Community administration). According to Art. 202 ECT, the Council was to ‘confer on the Commission, in the acts which the Council adopts, powers for the implementation of the rules which the Council lays down’ and ‘may impose certain requirements in respect of the exercise of these powers’. Consequently, the Commission was in principle the executive organ of the Community, but in some cases must comply with the principles and rules laid down by the Council (or the Council and the European Parliament) in the ‘Comitology Decision’ (Council Decision 1999/468/EC of 28 June 1999 Laying down the Procedures for the Exercise of Implementing Powers Conferred on the Commission [1999] OJ L184/23, amended by Council Decision 2006/512/EC of 17 July 2006 [2006] OJ L 200). In addition, with regard to Art. 202 ECT, the Council ‘may also reserve the right, in specific cases, to exercise directly implementing powers itself’. After the Treaty of Lisbon, the acts of implementation of the European Union Law were adopted, at the level of the Union, by the Commission. In exceptional cases, the Council shall exercise this power (Art. 291 (3) TFEU). The Comitology Decision was repealed by Regulation (EU) 182/2011 of the Parliament and of the Council of 16 February 2011 ([2011] OJ L 55).

3.  Finances

62  The budget of the EC has been entitled since 1994 ‘general budget of the European Union’. The budget was done in accordance with specific provisions of the EC Treaty (Arts 268–80) and with the Financial Regulation adopted by the Council under Art. 279 ECT. After the Treaty of Lisbon the budget was elaborated regarding Arts 310–25 TFEU. The budget authorities were, and continue to be, the Council and the European Parliament. Art. 272 ECT (current Art. 314 TFEU) governed budgetary procedure, which was somewhat complex.

63  According to Art. 268 (1) ECT (current Art. 310 (1), TFEU), all items of revenue and expenditure of the Community (currently, the Union) shall be included in estimates to be drawn up for each financial year and shall be shown in the budget. In contrast to most international organizations (International Organizations or Institutions, Financing of), which are financed by their Member States, the budget shall be financed wholly from its own resources (Art. 269 (1) ECT, current Art. 311 (1), (2) TFEU), which are levies and import duties established within the framework of the common agricultural policy and the common organization of the market of sugar; Common Customs Tariff duties in respect of trade with non-member countries and anti-dumping duties; the application of a uniform rate to the VAT assessment base, not exceeding 50% of the Gross National Product (‘GNP’) of each Member State; and the application of a rate to be determined pursuant to the budgetary procedure to the sum of all the Member States’ GNP. The Community expenditure could be compulsory or non-compulsory. Compulsory expenditure resulted from the Treaties or from acts adopted in accordance therewith. All other expenditure was non-compulsory. The European Parliament only had the last word on the latter. The Treaty of Lisbon deleted this distinction. As a consequence, the Parliament increased its budgetary power (Art. 314 TFEU).

F.  External Relations

64  Pursuant to Art. 281 ECT the European Community has legal personality, meaning it has the capacity to exercise rights and to enter into obligations within the international legal order over the whole field of its objectives (European Community and Union, Party to International Agreements). It can enter into agreements, incur liability, and perform other acts that change its legal position. However, as a non-State, the Community is not entitled to bring proceedings in the International Court of Justice (ICJ). After the Treaty of Lisbon, the legal personality belongs to the European Union, which replaces and succeeds the European Community (Art. 47 TEU).

65  As a matter of fact, the original version of the EC Treaty was rather laconic concerning the international capacity of the European Community. Apart from providing for a general procedure for concluding international agreements (former Art. 300 ECT), the EC Treaty expressly mentioned the specific area of the common commercial policy (former Art. 133 ECT) and the association agreements (former Art. 310 ECT) (European Community and Union, Association Agreements). By contrast, the EC Treaty expressly conferred upon the Community powers to conclude agreements in a large number of cases, such as free movement of capital (Art. 60 (1) ECT), monetary union (Art. 111 (1) ECT), research and technological development (Art. 170 (2) ECT), environmental policy (Art. 174 (4) ECT), development cooperation and humanitarian aid (Art. 181 ECT), and economic, financial, and technical cooperation with non-member countries (Art. 181a ECT). The Treaty of Lisbon extends the power of the Union to conclude international agreements.

66  To sum up, the Community had an explicit capacity to conclude agreements, including agreements establishing an international organization provided it permits the accession of non-States (European Community and Union, Membership in International Organizations or Institutions).

67  In addition to the explicit treaty-making power provided by the Treaty, the capacity of the Community to enter into international commitments might also flow implicitly from the Treaty provisions (International Organizations or Institutions, Implied Powers). According to the case-law of the ECJ, whenever Community law created for the institutions of the Community powers within its internal system for a specific objective, the Community had the authority to enter into international commitments necessary for the attainment of that objective even in the absence of an express provision in that connection. In the ERTA Case, the Court held that where the Community had adopted common rules in a given area, it had the exclusive power to enter into international agreements that might affect those rules or later their scope. In Kramer the ECJ went further and held that the EC possessed implied external powers even though it had not taken internal measures to implement the relevant policy; and in Opinion 1/76 it even accepted that the EC could have exclusive external competence, when it had not exercised its internal powers. In Opinion 1/94, the Court showed more flexibility by admitting that certain issues covered by the General Agreement on Trade in Services (1994) ([‘GATS’] 1869 UNTS 183) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (1994) ([‘TRIPS’] 1869 UNTS 299) were not included in the scope of the common commercial policy. More recently, in Opinion 1/03 on the Lugano Convention (Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters [done 16 September 1988, entered into force 1 January 1992] OJ L319/9), the ECJ reaffirmed that implied external competences might be exclusive or shared. However, whenever the competence was needed to ‘preserve the effectiveness of Community law and the proper functioning of the systems established by its rules’ it should be exclusive.

68  The Treaty of Lisbon incorporates this case-law into the primary European Union Law. Art. 216 (1) TFEU reads: ‘The Union may conclude an agreement with one or more third countries or international organisations where the Treaties so provide or where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union’s policies, 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.’

69  To conclude, the ECJ applied the implied powers interpretation to the external relations of the Community, accepting a parallelism between internal and external powers. The Community had another additional power to conclude treaties under Art. 308 ECT. This power remains in Art. 352 TFEU.

70  According to Art. 300 (7) ECT (current Art. 216 (2) TFEU), international agreements concluded by the Community are binding on the institutions of the Community and on the Member States. As in other matters, the case-law of the ECJ has contributed to developing the legal effect of international agreements in the EC legal order. Thus, a Community measure is invalid if it is contrary to a directly effective provision of an agreement binding the Community. The Court therefore adopts a monist approach to international treaties.

71  The Community was obviously bound by the agreements that were concluded by itself but also, at least in one case (GATT), by agreements concluded by the Member States alone prior to the EC Treaty. All Member States were party to the GATT that preceded the EC Treaty. However, the Community had never signed the GATT. In accordance with Art. 307 ECT (current Art. 351 TFEU), the agreements concluded by the Member States prior to the EC Treaty or prior to their accession to the Community will not be affected by the EC Treaty. Nevertheless, it did not mean that the Community was bound by such an agreement. In contrast, it solely signifies that the Community did not prevent a Member State from carrying out its obligations, except if they were contrary to the EC Treaty. Under the terms of Art. 307 (2) ‘to the extent that such agreements are not compatible with the EC Treaty, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established’.

72  In the International Fruit Company judgment (see above para. 28), the ECJ pointed out that the matters covered by the GATT—tariffs and trade—are part of the common commercial policy, a field falling within the exclusive jurisdiction of the Community (Art. 133 ECT). By conferring those powers on the Community, the Member States showed their wish to bind it by the obligations entered into under the GATT. The Court concluded that the GATT has become binding to the Community. It succeeded their Member States. This problem is now overcome, since the GATT has been replaced by the WTO Agreement to which the Community is a party alongside the Member States.

73  One has to draw attention to the fact that the Community did not succeed to its Member States in other international organizations and international treaties, such as the Council of Europe and its European Convention for the Protection of Human Rights and Fundamental Freedoms (1950) (‘ECHR’). In this case, using the same premises, the Court reached a different decision. In Opinion 2/94, the Court said that in the stage of the European Law at that time the Community had no competence to accede to the ECHR which meant, in my viewpoint, that the Community did not have any jurisdiction to succeed their Member States in this area. According to the Court the accession of the Community to the Union was dependent on the amendment of the Treaties, which solely occurred with the Treaty of Lisbon. Under the terms of Art. 6 (2) TEU, ‘The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Such accession shall not affect the Union’s competences as defined in the Treaties.’

74  As many external powers are shared between the Member States and the Community (currently, the European Union), it might only conclude the agreements together with the Member States (European Community and Union, Mixed Agreements). The Community has been rather often celebrating mixed agreements, such as the EC-Turkey Agreement (Agreement Establishing an Association between the European Economic Community and Turkey, [signed 12 September 1963, entered into force 1 December 1964] [1977] OJ L 361/29). Given that the Treaty of Lisbon still previews many shared external powers between the European Union and the Member States, the Union will continue to celebrate mixed agreements.

75  Finally, one should mention that customary international law may also be applied in order to challenge the validity of a Community act. Just to give an example, in the judgment in Racke, the Court accepted that although the Community is not party to the Vienna Convention on the Law of Treaties (1969), in restricted circumstances, the doctrine of rebus sic stantibus (based on Art. 62 Vienna Convention on the Law of Treaties) is generally recognized as expressing customary international law.

G.  Settlement of Disputes

1.  General Principles

76  The system of settlement of disputes provided for in the EC Treaty was based on two main ideas:

  1. a)  decentralization, given that the enforcement of Community law was left to the national courts, and

  2. b)  the binding character of ECJ jurisdiction because the Member States should submit their disputes concerning the interpretation or application of the Treaty to the methods of settlement provided for in the Treaty. These two principles still remain in force after the Treaty of Lisbon.

2.  Jurisdiction of the Two Courts

77  Since 31 October 1989 part of the jurisdiction of the European Court of Justice has been transferred to the Court of First Instance. Until the Treaty of Nice all actions brought by natural or legal persons against Community institutions or bodies had to be brought in the CFI. The Treaty of Nice extended the jurisdiction of the CFI to actions or proceedings referred to in Arts 230, 232, 235, 236, and 238 ECT, with the exception of those assigned to a judicial panel and those reserved in the ECJ Statute. Art. 51 ECJ Statute provided that jurisdiction should be reserved to the ECJ in case of actions for annulment and actions for failure to act when they were brought by a Member State against an act of, or failure to act by, the European Parliament or the Council, by both organs acting jointly or by the Commission under Art. 11a ECT, and when they were brought by one Community institution or the European Central Bank (ECB) against another Community institution or the ECB. Furthermore, the CFI had jurisdiction to hear and determine actions or proceedings brought against decisions of the judicial panels set up under Art. 225a ECT. Finally, the CFI had jurisdiction to hear and determine questions referred for a preliminary ruling under Art. 234 ECT, in specific areas laid down by the Statute, unless it considered that the case required a decision of principle likely to affect the unity or consistency of Community law, when it might refer the case to the ECJ for a ruling.

78  This legal framework does not significantly change with the entry into force of the Treaty of Lisbon. According to Art. 256 (1) TFEU, the General Court (former Court of First Instance) shall have jurisdiction to hear and determine at first instance actions or proceedings referred to in Arts 263, 265, 268, 270, and 272 with the exception of those assigned to a specialized court set up under Art. 257 and those reserved in the Statute for the Court of Justice. The Statute may provide for the General Court to have jurisdiction for other classes of action or proceeding. These decisions may be subject to a right of appeal to the Court of Justice on points of law only. The General Court also has jurisdiction to hear and determine actions or proceedings brought against decisions of the specialized courts (Art. 256 (2) TFEU). Finally, the General Court has jurisdiction to hear and determine questions referred for a preliminary ruling under Art. 267, in specific areas laid down by the Statute (Art. 256 (3) TFEU). Where the General Court considers that the case requires a decision of principle likely to affect the unity or consistency of Union law, it may refer the case to the Court of Justice for a ruling. Decisions given by the General Court on questions referred for a preliminary ruling may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Union law being affected (Art. 256 (3) TFEU).

3.  Proceedings

79  The ECJ (lato sensu—currently, the CJEU) is one of the courts in the world with the most extensive jurisdiction. The EC Treaty enabled the Court to decide in cases of enforcement actions against Member States (Arts. 226 and 227 ECT). It established four procedures, in order to permit the ECJ to review the legality of measures adopted by the Community institutions: the action for annulment (Art. 230 ECT), the action for failure to act (Art. 232 ECT), the plea of illegality (Art. 241 ECT), and the preliminary rulings as a mechanism to contest the legality of the Community measures (Art. 234 (1) (b) ECT allowed national courts to refer questions to the ECJ concerning the ‘validity and interpretation of acts of the institutions of the Community’). The ECJ had jurisdiction to give preliminary rulings concerning the interpretation of the Treaty, the validity and the interpretation of the acts of the institutions of the Community and of the ECB and the interpretation of the statutes of bodies established by an act of the Council (Art. 234 (1) ECT). Since the Treaty of Amsterdam, the EC Treaty contained another type of preliminary ruling in the context of ‘Visas, Asylum, Immigration and Other Policies Concerning the Free Movement of Persons’ (Art. 68 (1) ECT).

80  The Treaty of Lisbon extends the jurisdiction of the CJEU to the former intergovernmental pillars with some important exceptions. As a matter of fact, concerning the common foreign and security policy, Art. 275 (1) TFEU establishes that the Court does not have jurisdiction with respect to these provisions nor with respect to acts adopted on the basis of them. However, Art. 275 (2) TFEU excepts that the Court has jurisdiction to monitor compliance with Art. 40 Treaty on European Union and to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Art. 263 of this Treaty, reviewing the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the Treaty on European Union. By contrast, relating to the area of freedom, security, and justice, the rule is that the Court solely does not have jurisdiction in two cases: the review the validity or proportionality of operations carried out by the police or other law-enforcement services of a Member State and the exercise of the responsibilities incumbent upon Member States with regard to the maintenance of law and order and the safeguarding of internal security (Art. 276 TFEU).

81  Likewise the former ECT, the Treaty of Lisbon provides for the enforcement actions against Member States (Arts 258–60 TFEU), the review of legality of measures adopted by the Union institutions: action for annulment (Arts 230–31 TFEU), action for failure to act (Art. 265 TFEU), plea of illegality (Art. 277 TFEU), preliminary rulings as a mechanism to contest the legality of the Community measures (Art. 267 (1) (b) TFEU) and the preliminary rulings concerning the interpretation of the Treaties, the validity and the interpretation of the acts of the institutions, bodies, offices, or agencies of the Union (Art. 267 (1) (a) (b) in fine TFEU).

82  The ECJ also had jurisdiction to determine damages claims brought against the Community (Arts 235, 288 ECT), disputes between the Community and its servants (Art. 236 ECT), and disputes submitted to it founded on an arbitration clause contained in a contract concluded by or on behalf of the Community (Art. 238 ECT). The Treaty of Lisbon provides for these jurisdictional means in Arts 235, 340, 270, and 272 TFEU respectively. In fact, any developed legal system must provide for mechanisms whereby losses caused by governmental acts may be recovered by an individual.

H.  The Impact of the Organizations in the Field of International Relations

83  The European Community had played an important role in the field of international relations (European Community and Union, Actor in International Relations). Ever since its establishment the European Community had been taking part in international trade agreements according to its competences. Formerly in the context of the GATT where the Community took the place of the Member States. Afterwards, the Community had been playing an important role in the context of the WTO as well. As an ‘economic giant’, the Community had trade relations with most countries in the world and deeply influenced international affairs, having concluded trade agreements with the European Free Trade Association (EFTA) countries and with a number of other (mainly developing) countries, free trade agreements, ‘cooperation agreements’ that go beyond the commercial policy, and association agreements, on the basis of Art. 310 ECT (current Art. 217 TFEU), with African, Caribbean and Pacific (‘ACP’) States, most of the Mediterranean countries (Algeria, Morocco, Tunisia, Egypt, Jordan, Lebanon, and Israel), and the countries belonging to the European Economic Area (EEA). The Treaty of Nice agreements on economic, financial, and technical cooperation may also be concluded under the terms of Art. 181a ECT (current Art. 212 TFEU).

84  The European Community had been concluding international agreements with the ACP States, in order to promote and expedite the economic, cultural, and social development of those countries, with the aim of contributing to peace and security and promoting a stable and democratic political environment. The first ACP–EC Partnership agreement was known as Yaoundé Convention and was concluded in 1963 and 1969; in 1975, it was followed by the Lomé Convention, to be renewed every five years. Lastly, a new ACP–EC Convention was concluded at Cotonou on 23 June 2000 for a 20-year period, starting on 1 March 2000.

85  The Community had been pursuing a developing policy for considerable time. In accordance with Art. 177 ECT (current Art. 208 TFEU), the Community policy in the sphere of development cooperation shall foster the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them, the smooth and gradual integration of the developing countries into the world economy, the campaign against poverty in the developing countries. Community policy in this area should contribute to the general objective of developing and consolidating democracy and the rule of law, and to that of respecting human rights and fundamental freedoms. In pursuance of these aims, the Community provided, for instance, humanitarian aid, food aid, and aid for rehabilitation and reconstruction operations for developing countries.

86  The Community had the capacity to conclude treaties establishing an international organization, as well as to accede to such a treaty. The latter concerned not only the case of the above-mentioned WTO, but also the case of the Food and Agriculture Organization of the United Nations (FAO). The statutes of some international organizations do not allow non-States actors to join them. So was the case of the Council of Europe, before the ratification of Protocol No 14 to the Convention for the Protection of Human Rights and Fundamental Freedoms, Amending the Control System of the Convention [done 13 May 2004] CETS No 194), which modified Art. 59 ECHR in the sense of accepting the Union as a member.

87  Both the Community and the Member States were members of the WTO, because some matters within its scope fell within the competence of the Member States (GATS and TRIPS), whereas others concerned the exclusive competence of the EC.

88  The EC Treaty also provided for the establishment of relations with ‘all international organizations’ (Art. 302 (2), current Art. 220 (1) TFEU). It expressly mentioned the United Nations and its specialized agencies (United Nations, Specialized Agencies), the Council of Europe and the Organization for Economic Co-operation and Development (OECD) (Arts 302, 303, and 304). Otherwise, the powers of the EC concerning the European Economic and Monetary Union, education, culture, public health, and environment issues deeply stimulated the relations with international organizations on these issues. The Community had played an important role in all these areas, indeed.

89  After the Treaty of Lisbon, the international powers of the European Community were transferred to the European Union, because the latter replaced and succeeded the former (Art. 1 (3) in fine TEU).

I.  Evaluation

90  The degree of integration attained by the European Community has no parallel anywhere in the world. In fact, the EC Treaty foresaw several legal instruments to attain the economic and the political aims of the European Community which have been fully achieved in the last 50 years. Economically, Europe is a space of prosperity and richness that attracts migrants from all over the world. Politically, the existence of the EC may have prevented another war between European States and even a world war, which is remarkable. As after the Treaty of Lisbon, the European Union exercises all the tasks of the European Community, the same rationale applies to the European Union.

91  However, the European Community also experienced difficult times, such as a ‘quasi’ institutional paralysis between 1965 and 1985 (chair vide [empty chair] crisis), the refusal of Denmark to ratify the Maastricht Treaty, the difficult IGC 2000 negotiations which led to an insufficient institutional reform, the refusal of France and the Netherlands to ratify the European Constitutional Treaty due to negative referenda in both Member States, and, more recently, as a result of the first referendum in Ireland and the opposition of the Czech President, the ratification of the Treaty of Lisbon was postponed to November 2009 and its entry into force to 1 December 2009 (see above para. 15).

92  Some of the difficulties mentioned above were overcome with the aid of the ECJ’s case-law which contributed to develop and to deepen the Community law, sometimes anticipating the most innovative legal solutions.

93  The enlargement of the Union—which without a doubt must be seen as a positive factor—from a practical point of view does not facilitate the action of the Community. While the political, economic, and social position of the founding fathers of the Community was rather homogeneous, the current 28 Member States have somewhat different historical, political, economic, and social backgrounds. This will increase the difficulty to agree on further steps.

94  In addition, the current global financial, economic, and social crisis that has already lasted for some years contributes to increasing the self-centredness both of the citizens and of the States. Consequently, the solid axiological traditional basis of Europe that included values, such as human dignity, freedom, democracy, equality, the rule of law, and respect for human rights, including the rights of persons belonging to minorities (Art. 2 TEU), may be jeopardized in the future. The image of justice, tolerance, and openness that the European Union has been exporting in the last 50 years all over the world must be preserved and even developed.

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