6 The EU and Moldova
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(35894)
7943/14
+ ADDs1-14
COM(14)157
(b)
(35895)
7944/14
+ ADDs 1-14
COM(14)146
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Draft Council Decision on the signing and provisional application of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States and Moldova
Draft Council Decision on the conclusion of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States and Moldova
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| Legal base
| Articles 217, 218(5), Article 218(7) and 218(8) TFEU; unanimity
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| Documents originated
| 10 March 2014
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| Deposited in Parliament
| 21 March 2014
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| Department
| Foreign and Commonwealth Office
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| Basis of consideration
| EM of 28 March 2014
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| Previous Committee Report
| None |
| Discussion in Council
| To be determined
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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
6.1 In his Explanatory Memorandum of
28 March 2014, the Minister for Europe (Mr David Lidington) explains
that relations between the EU and Moldova are currently based
on a Partnership and Cooperation Agreement that entered into effect
in July 1998.
6.2 He continues as follows:
"In January 2010, the EU and
Moldova began negotiations on an Association Agreement that would
deepen and broaden the political and economic relationship; in
January 2012, negotiations were launched on a Deep and Comprehensive
Free Trade Area (DCFTA) as a key part of the Association Agreement.
The Agreement process supports and encourages reform in Moldova
to bring it closer to EU norms, as well giving Moldova gradual
access to parts of the EU Internal Market. Similar Agreements
have been negotiated with Georgia and Ukraine.
"Negotiations with Moldova
were completed in June 2013 and the Agreement was initialled at
the Vilnius Summit in November 2013. In December 2013, the European
Council adopted Conclusions that confirmed the EU's readiness
to sign the Association Agreement 'as soon as possible and no
later than the end of August 2014'. This aim was confirmed in
a statement following the extraordinary European Council on 6
March 2014. On 21 March, the European Council adopted Conclusions
that 'confirmed our aim to sign the Association Agreements, including
the DCFTAs, no later than June 2014'. The Commission, Council
and European External Action Service are now working to ensure
the European Union meets this deadline."
The draft Council Decisions
6.3 The first draft Council Decision
is the legal instrument for authorising the signature and provisional
application of the Association Agreement (AA) between the European
Union and the European Atomic Energy Community,and their Member
States, and Moldova; the second is the legal instrument for authorising
the conclusion of the same Agreement.
6.4 The Minister notes that the AA is
at Addendum 1. He continues his explanation as follows:
POLITICAL DIALOGUE AND REFORM
"The section on Political Dialogue
and Reform includes dialogue and cooperation on domestic reform,
conflict prevention and crisis management, the fight against terrorism,
and dialogue on foreign and security policy. It also underlines
the Parties' commitment to a sustainable solution to the Transnistria
protracted conflict. The Justice, Freedom and Security section
has a strong focus on rule of law and the reinforcement of judicial
institutions and practices, as well as the fight against corruption.
It also covers migration and border management, readmission, and
cooperation on fighting crime and terrorism.
DEEP AND COMPREHENSIVE FREE TRADE AREA (DCFTA)
"Through the DCFTA, the Republic
of Moldova and the EU will eliminate duties on 99.2% and 99.9%
(in trade value), respectively, of their imports from the other
part. In addition, the DCFTA addresses technical barriers to trade,
creates opportunities for trade in services and e-commerce, opens
up public procurement markets, and allows for improved protection
of intellectual property rights.
ECONOMIC COOPERATION AND OTHER COOPERATION POLICIES
"The Economic and Sector Cooperation
section of the Agreement focuses on supporting core reforms to
aid economic recovery in areas such as governance, social development,
consumer protection, management of public finances, enterprise,
agriculture, maritime issues, energy, transport, environment,
tourism and health. The Agreement also includes sections on financial
cooperation and anti-fraud measures, as well as institutional
issues. The institutional issues section includes a provision
concerning areas of its territory over which Moldova does not
exercise effective control, i.e. Transnistria. This provision
makes clear that the Agreement shall commence, in relation to
those areas, once Moldova ensures the full implementation and
enforcement of this Agreement in those areas. The Agreement does
not contain any freedom of movement Articles, though the Schengen
countries are separately moving towards visa liberalisation with
Moldova."
6.5 The Minister then notes that:
— the contents of Addenda
2-14 are listed at the end of the AA: Addenda 3-5 contain the
technical details supporting the Trade and Economic Cooperation
sections; Addenda 12-14 contain the protocols to the Agreement;
— the AA attached to his Explanatory
Memorandum is the latest version of the English language text,
submitted to the Council Secretariat by the Commission on 10 March
2014 and circulated by the Council on 19 March 2014; the majority
of this text having been subject to a legal-linguistic scrub [sic]
by the Council Legal Service, whose purpose is to correct spelling
and grammatical errors and make sure there are no inconsistencies
between the different language versions; the Minister expects
the remainder to be finalised by the end of March, and will provide
the final versions to the Committee in due course; and
— both Council Decisions will
be submitted to the European Parliament.
The Government's view
6.6 The Minister comments as follows:
POLICY IMPLICATIONS
"Moldova remains the poorest
country in Europe, with a per capita GDP of just over US $2,000.
Many of its population of around three million people face daily
hardship, and corruption is still endemic in many areas. Moldova
is home to one of Europe's protracted conflicts in Transnistria,
with little progress towards a political settlement made in the
past twenty years. Russian troops remain in the breakaway region
as part of a tri-partite peacekeeping force. Moldova stands at
the cross-roads of European cultures, and this is reflected in
its linguistic and ethnic diversity. This diversity is one of
the country's strengths, with increasing numbers of European companies,
for example in the IT sector, basing themselves in Moldova to
take advantage of the multi-lingual and well educated populace.
"The reforms supported by the
Association Agreement will, if implemented, help Moldova become
an increasingly prosperous free-market economy, underpinned by
democracy and rule of law. The reforms will also help to tackle
corruption in the country. The DCFTA will reduce some tariff and
non-tariff barriers to trade, as well as harmonise some Moldovan
regulations and standards with those of the EU. The DCFTA contains
specific, time-bound transitional periods for sensitive products
and issues, which will allow Moldova time to adjust its legislation
and for companies to become competitive.
"Moldova's government, a three
party coalition (formed of the Liberal Democrats, the Democrats,
and the Liberal Reformers) have consistently demonstrated their
readiness to press forward with the reforms required under the
Association Agreement. Implementation has been sporadic, partly
because Moldova's institutional capacity is still weak. Political
crises have also had an effect. The previous pro-Europe coalition,
in power from 2009, fell in February 2013 following months of
infighting. A general election is due in November 2014.
"Moldova's Government has been
clear. It wishes to go ahead with signature of the Association
Agreement as soon as possible, particularly in light of events
in Ukraine. The Government believes the EU should take very seriously
this call from the Moldovan Government, and therefore supports
signature as soon as possible, while remaining alert to the possible
regional consequences.
"A stable, prosperous and more
democratic Moldova is in the UK's interests. We might expect lower
migration from Moldova to the European Union, as well as a stable
reliable partner on the edge of the Union, with improved ability
to tackle organised crime and smuggling. Moldova also matters
a great deal to some major European partners, particularly Romania.
JUSTICE AND HOME AFFAIRS AND PROTOCOL NO.21 TO THE
TREATIES
"The Agreement touches on a
number of JHA policy areas that could trigger the UK's JHA opt-in
provided for in Protocol No.21 to the Treaties. The preamble of
the Agreement notes that the provisions of the Agreement that
fall within the scope of Part III, Title V of the Treaty on the
Functioning of the European Union bind the United Kingdom and
Ireland as separate Contracting Parties, and not as part of the
European Union, unless the United Kingdom or Ireland have chosen
(in accordance with Protocol No.21 to the Treaties) to opt in
to those provisions.
"The Agreement is a mixed agreement,
i.e. it is an agreement between the Republic of Moldova on one
part and of the European Union, the European Atomic Energy Community
and their Member States on the other. As such, the Agreement
contains obligations that will be entered into by the EU and some
that will be entered into by Member States. The Government is
currently analysing the Agreement to determine which obligations
will be assumed by whom; this analysis will inform Government's
analysis of the applicability of Protocol No.21 and our JHA opt-in.
"Article 15 of the Agreement
on Movement of Persons includes a JHA obligation to be entered
into by the EU in the form of a commitment to ensure full implementation
of an existing re-admission agreement from 2008 (Article 15(1)
(a)). The UK opted into the 2008 re-admission agreement between
the EU and the Republic of Moldova. We will push for the citation
of the relevant Title V legal base (Article 79(3) TFEU) in respect
of Article 15(1) (a) of the Agreement.
"In considering our opt-in
decision regarding Article 15(1) (a) we will take into account
that the UK is already participating in the underlying readmission
agreement. Article 15(1) (b) contains a JHA obligation related
to the issuance of visas; we consider this to be a provision related
to the Schengen acquis that the UK does not participate in.
"In parallel, we will also
push for the splitting of the Council Decisions into decisions
that separate out the JHA obligations from the other obligations
(as has now become the standard practice for EU-Third Country
agreements).
"The Title III of the Agreement
contains a number of other JHA provisions: Article 12 on Rule
of Law; Article 14 on Cooperation on Migration, Asylum and Border
Management; Article 16 on Preventing and Combating Organised Crime,
Corruption and other Illegal Activities; Article 17 on Tackling
Illicit Drugs; Article 18 on Money Laundering and Terrorism Financing;
Article 19 on Combating Terrorism; Article 20 on Legal Cooperation.
The Government is considering whether it is the EU or its Member
States that are entering into these provisions. I will update
the Scrutiny Committees regarding that analysis as soon as possible.
That analysis will also determine whether there is a need for
the citation of other Title V legal bases.
"Articles 214 to 218 in Title
V of the Agreement (read in conjunction with the market access
schedules at Annexes XXVII-C and D) contain trade provisions that
fall within exclusive EU competence. The Government's position
is that these Mode 4 provisions on the temporary movement
of skilled personnel (which concern the admission of third country
nationals onto the territory of the United Kingdom) in the
Agreement fall within the scope of the United Kingdom's JHA opt-in.
"In considering whether to
opt-into those provisions for which Protocol No.21 applies, the
Government will take into account factors including the impact
on our domestic judicial system, the impact on the control of
immigration, and the impact on our wider work to ensure the security
of the UK.
PROVISIONAL APPLICATION
"As with the similar Ukraine
AA, the Government will seek to reduce the scope of provisional
application significantly through negotiations in the Council
Working Group. We will also consider entering Minute Statements
as necessary to further clarify the UK position. I will write
to the Committees again once the position on provisional application
has become clearer."
LEGAL AND PROCEDURAL ISSUES
6.7 TheMinister notes that the Commission's
Proposal cites Article217 TFEU in conjunction with Article 218(5),
the second subparagraph of Article 218(8) and Article 218(7),
and says:
"The Government is currently
considering the appropriateness of these legal bases and whether
any further substantive legal bases ought to be cited, but as
indicated above we will likely seek the addition of articles 77(2)
and 79(3) TFEU. "
6.8 The Minister also notes that, as
this is a mixed agreement, it will require specification as an
EU Treaty in accordance with Article 1(3) of the European Communities
Act, 1972, and says:"No additional implementation measures
are envisaged".
6.9 The Minister then continues thus:
"The preamble of the Association
Agreement confirms that provisions of the Agreement that fall
within the scope of Part III, Title V of the Treaty on the Functioning
of the European Union bind the UK and Ireland as separate Contracting
Parties. The proposed Council Decision on signature and provisional
application provides for the provisional application, as between
the EU and Moldova, of parts of the Agreement including matters
relating to CFSP, JHA, trade matters, and a wider range of economic
and other sector cooperation. The Government is now considering
its position in relation to the division of competences; however
the proposed scope of provisional application certainly goes further
than in other similar agreements, such as the EU-Ukraine Association
Agreement. The UK is negotiating within working groups in Brussels
to ensure that the final scope of provisional application is consistent
with HMG policy to avoid competence creep, and in line with the
agreement reached on Ukraine in 2013."
FINANCIAL IMPLICATIONS
6.10 The Minister notes that the EU
provides funding to Moldova under the European Neighbourhood Instrument
and that, on current Commission planning, the indicative allocation
foreseen for Moldova for 2014 to 2020 is between €610-€746million,
continuing:
"In the first period (2014-2017),
the indicative allocation of between €335m and €410m
is foreseen to support public administration reform (30%), agriculture
and rural development (30%), police reform and border management
(20%), and complementary support for capacity development and
civil society (20%). Projects throughout these areas will focus
on encouraging dialogue between the Chisinau government and the
de facto authorities in Transnistria."
TIMETABLE
6.11 The Minister says:
"In light of Russian actions
in Ukraine, the Government of Moldova is keen to proceed with
signature of its Association Agreement as soon as possible. As
outlined, the 21 March European Council Conclusions called for
signature by June. Discussions are under way within the Commission,
Council and individual Member States about how best to handle
this timeline. This is sooner than the timetable outlined in my
letter of 21 January 2014.
"Negotiations, including on
provisional application and the legal bases, will continue over
the intervening weeks and I will provide further updates to the
Committees as negotiations progress.
"It is not yet known exactly
when the last language versions of these documents will be published,
but it is likely to be towards the end of May. Given the current
timeframes outlined for signing this Association Agreement, and
in the spirit of the JHA Code of Practice, I would ask that the
Committees consider this English language version and EM triggers
the start of the eight week period to opine on the Government
opt-in. The date by which the Committees should express their
opinions on the Government's opt-in would therefore be 29 May
2014.
"It is likely the Government
will wish to take its JHA opt-in decision before the end of the
usual three month opt-in window. As such, while I am of course
respectful of the Committees eight week period to consider the
Government's opt-in, I would encourage the Committees to issue
their opinions as soon as they are able.
"I will of course provide timely
updates as negotiations proceed in Brussels on provisional application
and legal bases. Moreover, I can reassure the Committees that
we will be guided by the agreement reached on Ukraine and the
opinions the Committees expressed during that process."
Conclusion
6.12 We look forward to seeing the
results of the Government's analysis of which obligations under
the Association Agreement (AA) are assumed by which party.
6.13 We support the Government's
intention to seek legal bases from Title V of Part III TFEU (concerning
JHA) in respect of the JHA provisions of the Agreement in respect
of those matters for which the EU is exercising competence. This
would make it clear that the UK opt-in under Protocol 21 applies
to such provisions.
6.14 In respect of such provisions,
we ask the Minister to provide a more detailed analysis of the
factors affecting the exercise of the UK opt-in.
6.15 Should the Government be successful
in securing Title V legal bases for these proposals, we agree
with the Minister that they should be split, so that proposals
to which the UK has opted in are treated separately to those to
which it has not.
6.16 We note that the Government
considers that the UK opt-in also applies to the provisions of
the AA on Mode 4 services i.e. the provision of services which
entail the admission of third country nationals onto the territory
of the United Kingdom. The Government appears to accept that these
provisions fall within the exclusive competence of the EU for
trade and therefore cannot be covered by a Title V legal basis.
We ask the Minister to confirm that this is the case.
6.17 Should the Government not be
successful in securing appropriate Title V legal bases, the question
arises whether the UK opt-in applies in relation to the those
parts of the AA falling within this Title. We have previously
made clear our view that the opt-in only applies to measures which
cite a Title V legal basis. We have also made it clear that the
Government should review its policy in the light of three recent
judgments of the Court of Justice which cast serious doubt on
its current assertion that the opt-in does apply.[33]
6.18 We note the Government's aim
of reducing the scope of provisional application of the AA and
look forward to the promised further clarification. Among other
things, this should address whether it would be consistent with
Article 464 (3) of the AA for the EU to specify provisional application
of those parts of the Agreement in respect of which Member States
are exercising competence.
6.19 Politically, as with the similar
proposal to accelerate the signature and provisional application
of a new AA with Georgia in the aftermath of the crisis in Ukraine,[34]
the position of both the government of Moldova and of our own
Government is clearly stated. However, we are again bound to
note that not all Members or informed external commentators share
the Government's view on the wisdom of having pursued, and continuing
to pursue, a "reform" agenda and a new-style AA in Ukraine.
The same basic question thus arises about this sort of AA with
Moldova — "home to one of Europe's protracted conflicts…
with little progress towards a political settlement made in the
past twenty years [and where] Russian troops remain in the breakaway
region".
6.20 As with the proposed AA with
Georgia, we would accordingly like the Minister to provide immediate
clarification concerning those elements of the section on Political
Dialogue and Reform regarding dialogue and cooperation on domestic
reform, conflict prevention and crisis management, the fight against
terrorism, and foreign and security policy. The Moldova AA, the
Minister says, also underlines the Parties' commitment to a sustainable
and peaceful solution to the Transnistria protracted conflicts:
how does he envisage this commitment being pursued? What does
he mean by supporting early signature and provisional application
but also "remaining alert to the possible regional consequences"?
Is he convinced that pressing ahead will not provide Russia with
a further pretext for arguing that this Agreement is in essence
anti-Russian: and if so, why?
6.21 With regard to the AA with Ukraine,
the Minister assured us as follows:
"provisions in the relevant
Title II of the AA are not some kind of defence or military cooperation
treaty. The provisions on military training and exercises referred
to in the treaty relate to EU CSDP missions: this is about allowing
Ukraine to participate in CSDP missions/training and in doing
so helping to improve Ukraine's defence and security capacity,
doctrine (based on NATO standards) and inter-operability. There
are no specific provisions or obligation for military exercises
in Ukraine. 'Live' military exercises are a matter for EU
Member States. These provisions are in line with other third
state CSDP partnerships."
6.22 What form will cooperation in
the Moldova AA on conflict prevention and crisis management and
on foreign and security policy take? Can he provide the House
with similar assurances to those in the Ukraine AA?
6.23 In the meantime, we shall retain
the documents under scrutiny.
33 Case C-431/11 concerning amendments to the social
security provisions of the EEA agreement , reported in HC 83-xxvi
(2013-14), chapter 7 (8 January 2014); Case C-137/12 concerning
EU accession to the Council of Europe Convention on the legal
protection of conditional access services, reported in HC 83-xxxiv
(2013-14), chapter 4 (26 February 2014); and Case C-656/11 concerning
amendments to the social security provisions of the EU-Switzerland
Agreement on the free movement of persons, reported in HC 83-xl
(2013-14), chapter 4 (2 April 2014). Back
34
See (35897) 7941/14 and (35898) 7942/14 at chapter 7 of this Report. Back
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