5 Bilateral Agreements
| (30334) 5147/09 COM(08) 893
| Draft Regulation establishing a procedure for the Negotiation and Conclusion of Bilateral Agreements Between Member States and Third Countries concerning sectoral matters and covering applicable law in contractual and non — contractual obligations
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| Legal base | Articles 61, 65 and 67(5) EC Treaty; unanimity; consultation.
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| Document originated | 23 December 2008
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| Deposited in Parliament | 14 January 2009
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| Department | Ministry of Justice
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| Basis of consideration | EM of 22 January 2009
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| Previous Committee Report | None
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| To be discussed in Council | No date fixed
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared. Further information requested
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Background
5.1 The external competence of the Community is its capacity to
act separately from Member States internationally, in particular
to negotiate and conclude binding international agreements and
to belong to, and participate in, international organisations.
The Community's external competence may be either exclusive or
shared. Where the Community has exclusive external competence,
Member States have no further power to act internationally in
respect of that subject-matter. The European Court of Justice
has established that the Community's external competence will
normally be exclusive if an agreement falls into an area of law
which, internally, is already largely covered by Community rather
than national law, or if the effectiveness or purpose of Community's
internal rules may be adversely affected or undermined by an international
agreement concluded by Member States. The Community's external
competence may thus be exclusive in areas of law where it only
has shared internal competence.
The document
5.2 The purpose of this proposal is to establish a procedure to
enable Member States in future to negotiate and conclude bilateral
agreements with third countries in certain areas of the choice
of law concerning non-contractual and contractual obligations.
Subject to the satisfaction of certain conditions, this procedure
would enable the Commission to authorise such negotiations and
their conclusion.
5.3 These subject areas have recently been covered
by Community legislation, respectively by EC Regulation No. 864/2007
("Rome II") and EC Regulation No. 593/2008 ("Rome
I"). The consequence of this Community legislation is to
establish exclusive external Community competence in these areas.
This has had the result that in principle Member States are prevented
from entering into bilateral agreements which fall within the
scope of this legislation. Concerns were raised by some Member
States during the negotiations on Rome II that the consequent
extension of external competence in this area might prove too
restrictive in some circumstances, for example in the context
of cross-border infrastructure projects involving third countries,
such as airports or tunnels, where it might be desirable to put
in place special choice of law regimes which departed from the
terms of the relevant Community legislation.
The Government's view
5.4 In his Explanatory Memorandum of 22 January 2009
the Parliamentary Under-Secretary at the Ministry of Justice (Lord
Bach) outlines the Government's position in the following terms:
"The Government is in principle supportive of
the underlying aim of this proposal which is to introduce some
degree of flexibility into the rigidity of the doctrine of external
Community competence. The effect of this doctrine is generally
to prevent individual Member States from entering into bilateral
agreements with third countries in those areas that are subject
to such competence. This is likely to be particularly problematic
for those Member States, such as the United Kingdom, which have
a significant number of bilateral agreements with third countries
with which they have important historical and cultural links.
The problem will be acute in those cases where the Community as
a whole has no sufficient interest in entering into an agreement
with a particular third country.
"While the Government welcomes the proposal,
as the United Kingdom does not have bilateral agreements in the
area of choice of law there will be limited value for us as it
stands. The value of the proposal would be increased if the scope
was extended to the recognition and enforcement of judgments.
This is an area where the United Kingdom has many bilateral agreements,
mostly with Commonwealth countries, in accordance with the Administration
of Justice Act 1920 and the Foreign Judgments (Reciprocal Enforcement)
Act 1933. In the light of this the Government will seek to widen
the scope of the proposal during the course of the negotiations.
"Article 4 lays down the conditions under which
the Commission may authorise a Member State to pursue negotiations
with a third country. One of these conditions is likely to be
of particular importance. This is the requirement under Article
4(2)(b) that the proposed agreement should be 'of limited
impact on the uniform and consistent application of the Community
rules in place and on the proper functioning of the system established
by those rules'. The Government will seek clarification of the
meaning of 'limited' in this context. If what is meant here is
any impact that is of more than minimal significance then that
would be likely to diminish significantly the utility of this
proposal. On the other hand, if it is intended that only agreements
which would clearly have a significant impact on the acquis
communautaire should be excluded from the proposed procedure,
then the utility of the proposal would be correspondingly increased."
Conclusion
5.5 We thank the Minister for his helpful comments
and share the Government's support for the underlying aim of the
proposal, which would allow Members States to retain shared external
competence in the area of choice of law concerning contractual
and non-contractual obligations. We ask the Minister if on this
basis the Government intends to 'opt in' to the proposal.
5.6 We agree with the Minister that the value
of the proposal would be considerably enhanced if its scope were
extended to the recognition and enforcement of judgments. We encourage
the Government to argue the case for appropriate amendments during
the course of negotiations.
5.7 We share the Government's concern about the
ambiguity of some of the conditions attached to the exercise of
Member State competence in this area. We in particular urge the
Government to seek an appropriate clarification of the meaning
of "limited" in Article 4(2)(b) which seeks to ensure
compatibility of any bilateral agreement with the functioning
of the intra-EU and EEA conflict of laws rules. We shall hold
the document under scrutiny until the publication of a new revised
proposal or until we have had further word from the Minister.
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