Select Committee on European Scrutiny Twenty-Ninth Report


2  The Evidence

The views of the Commission and the Council Legal Service

11. We met representatives of the Commission and the Council Legal Service in Brussels on 1 February 2007 for an informal discussion of their understanding of Article 308. We agreed with them a note of the main points they made. The list of those we met is contained in the Annex to this Report. The text of the note is as follows.

a)  The Treaty of Rome included a provision (Article 235) which was identical to what is now Article 308 of the EC Treaty.

b)  The representatives of the Council Legal Service and Commission would see whether their records contained an explanation of the reasons why the authors of the Treaty of Rome had included in the Article the reference to "in the course of the operation of the common market". If such an explanation were discovered, they would tell the Committee what had been found.[5]

c)  The concept of the "common market" is wider than the "internal market". The "common market" was created to achieve all the objectives of the Treaty of Rome.

d)  The EC Treaty contains specific powers to authorise the adoption of measures to give effect to most of the objectives in Articles 2, 3 and 4 of the Treaty. The sole purpose of Article 308 is to fill the gap where no specific power has been provided to attain one or more of the Treaty's objectives.

e)  In 1957, most of the objectives of the EEC were concerned with creating an economic community. So, at the time of the Treaty of Rome, "in the course of the operation of the common market" imposed little or no constraint on the use of the Article and was not intended to do so. Since then, the Community has extended its objectives to include much that is not primarily concerned with the operation of the economic community. But the purpose of Article 308 remains unchanged: to provide a necessary power, when none is available elsewhere in the Treaty, to attain any Community objective.

f)  This "purposive interpretation" of Article 308 (formerly Article 235) is in accordance with the following passage from the Opinion of the European Court of Justice (ECJ) in case 2/94:

    "Article 235 is designed to fill the gap where no specific provision in the Treaty confers on the Community institutions express or implied powers to act, if such powers appear nevertheless to be necessary to enable the Community to carry out its functions with a view to attaining one or more objectives laid down by the Treaty."

    The Opinion makes no reference to "in the course of the operation of the common market".

g)  The Commission's and Council Legal Service's understanding of the proper interpretation of Article 308 is incorporated in Article I-18 of the draft Constitutional Treaty. That Article contains no mention of the operation of the common market.

h)  The representatives of the Commission and the Council Legal Service could not recall any case law in which the ECJ had ruled on the application of the reference to "in the course of the operation of the common market". But if they found any such case law, they would tell the Committee.[6]

i)  While the UK courts give a "literal construction" to Acts of the Westminster Parliament, the ECJ gives a "purposive construction" (teleological method of interpretation) to EC legislation. A purposive construction is essential in construing the EC Treaty because its terms are looser and in more general terms than the statutes of the Westminster Parliament.

j)  The European Communities Act 1972 requires the UK courts to follow the jurisprudence of the ECJ in interpreting Community law.

k)  Similarly, in advising their institutions, the Legal Services of the Commission and the Council are bound to follow the jurisprudence of the competent legal authority in the jurisdiction, namely, the ECJ.

l)  The representatives of the Commission and the Council Legal Service emphasised that Article 308 may be used only to attain a Community objective, that it cannot widen the scope of Community powers beyond the general framework created by the provisions of the Treaty as a whole and that it requires unanimity in the Council. The decisive point is that the act to be adopted under Article 308 must be within the competence and objectives of the Community.

The Foreign Secretary's evidence

12. We sent the Foreign Secretary, the Rt Hon Margaret Beckett MP, the note of the meeting and asked if her understanding of Article 308 was the same as, or different from, that of the Commission and the Council Legal Service.

13. In her reply of 23 March 2007,[7] the Foreign Secretary told us that the Government's view "matched" that of the Commission and Council Legal Service. She referred to the letter of 2 March 2004[8] which the then Foreign Secretary, the Rt Hon Jack Straw MP, had sent the Chairman of the previous Committee, Mr Jimmy Hood MP. She quoted the following passage from that letter:

    "I am advised that the accepted meaning of Article 308 and its predecessor, Article 235, which had identical wording, is that the two elements of the phrase "to attain, in the course of the operation of the common market, one of the objectives of the Community" should be read conjunctively and that "in the course of the operation of the common market" is used descriptively; the purposive part of the phrase is to attain … one of the objectives of the Community.

    "On this advice, Article 308 does not therefore require that every proposal using it as a legal base should relate in a narrow and restrictive sense to the operation of the common market."

Margaret Beckett told us that this remained the Government's position and corresponded to the view of the Commission and Council Legal Service.

14. We were grateful for the Foreign Secretary's evidence. We noted, however, that the representatives of the Commission and the Council Legal Service had made it plain that it is their understanding that the words "in the course of the operation of the common market" are, in effect, redundant; and that the test for the use of the Article is whether it needs to be exercised in order to attain a Community objective for which there is not a legal base elsewhere in the EC Treaty. But Mr Straw's letter said that "Article 308 does not … require that every proposal using it as a legal base should relate in a narrow or restrictive sense to the operation of the common market". This seemed to us to create a doubt whether the Government's understanding was indeed the same as that of the Commission and the Council Legal service, because it appeared from Mr Straw's letter that the Government considered that some substantive connection with the operation of the common market is a necessary condition for the use of the Article. For the avoidance of doubt on the point, we asked Margaret Beckett for her comments.

15. The Foreign Secretary replied on 27 April 2007.[9] She confirmed that:

    "there is no substantive difference between the Government and the Commission and Council Legal Service interpretations of Article 308. My previous letter set out the relevant passage of Jack Straw's letter of 2 March 2004. The Government views the phrase 'in the course of the operation of the common market' to be descriptive and not intended to impose any restriction."

Professor Dashwood's written evidence

16. In his written evidence,[10] Professor Dashwood CBE, of Sidney Sussex College, Cambridge, comments on the expansion of the Community's objectives since the Treaty of Rome was signed in 1957 and observes that:

    "A fairly convincing case can be made that Article 308 ought to be interpreted in an 'evolutionary' way, reflecting the change in the nature of the Community; at this time of day, it should be understood as authorising the creation of supplementary powers perceived as necessary not just for the purposes of the common market (whatever that now means) but over the whole range of policy areas in which the Treaty allows action to be taken by the Community … For convenience, I shall refer to this as 'the whole Treaty thesis' of the scope of Article 308."

17. Professor Dashwood refers not only to the Opinion of the European Court of Justice in case 2/94 (see paragraph (f) of the note of the meeting with the Commission and Council Legal service) but also to two other cases:

    "Recently, the scope of Article 308 was considered by the Court of First Instance in the Yusuf and Kadi cases, which are now on appeal to the Court of Justice.[11] The cases concern Regulation (EC) No. 881/2002 freezing the assets of certain named individuals believed to be associated with international terrorism. A special mechanism is provided for by Article 60 and Article 301 EC making it possible for the necessary legal steps to be taken under the EC Treaty, in order to implement a decision of the Union's common foreign and security policy (CFSP) imposing financial or economic sanctions on a third country. Since those Articles do not explicitly authorise so-called 'smart sanctions' aimed at individuals, Regulation 881/2002 was given Article 308 as an additional legal base. In holding this was a proper use of Article 308, the Court of First Instance made no attempt to establish any connection with 'the course of the operation of the common market'. That is a further indication of the acceptance of the European judicature of the whole Treaty thesis of the scope of Article 308."

18. Later in his evidence, Professor Dashwood adds that:

    "Extending the Council's power under Articles 60 and 301 EC, from the imposition of economic and financial sanctions against third countries, to the imposition of sanctions against individuals, enabled the EU to fulfil its international obligations in line with the evolving practice of the UN Security Council. This … can be regarded as orthodox recourse to Article 308, if the whole Treaty thesis is accepted, which it appears to have been by the European Courts."


5   The Commission subsequently told us that it no longer has a record of the preparatory documents for the Treaty of Rome. Back

6   The Commission subsequently confirmed that it had been unable to find any case law in which the European Court of Justice had ruled on the application of the reference in Article 308 to the operation of the common market. Back

7   Ev 1. Back

8   Ev 2. Back

9   Ev 2. Back

10   Ev 3. Back

11   Case T-306/01, Yusuf v Council and Commission [2005] and Case T-315/01, Kadi v Council and Commission [2005]  Back


 
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