Documents considered by the Committee on 12 March 2014 - European Scrutiny Committee Contents


8 EU-Philippines relations

(35680)

18055/13

COM(13) 925

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Council Decision on the conclusion of the Framework Agreement on Partnership and Cooperation between the European Union and its Member States and the Republic of the Philippines

Annex to the draft Council Decision

Legal base Articles 207 and 209 conjunction with Article 218(6)(a) TFEU); QMV
Document originated 18 December 2013
Deposited in Parliament 24 December 2013
Department Foreign and Commonwealth Office
Basis of consideration EM of 20 January 2014
Previous Committee Report None; but see (31949) 13615/10 and (32472) —: HC HC 428-xxviii (2010-12), chapter 3 (24 May 2011) and (31949) 13615/10 and (32472) —: HC 428-xvii (2010-11), chapter 5 (16 February 2011) and HC 428-xvi (2010-11), chapter 6 (9 February 2011)
Discussion in Council To be determined
Committee's assessment Legally and politically important
Committee's decision Not cleared; further information requested

Background

8.1 In November 2004, the Council authorised the negotiation of individual Framework Agreements on Partnership and Cooperation (PCA) with several countries in South-East Asia, including the Philippines. Negotiations with the Philippines were launched in February 2009 and concluded with the initialling of the PCA by both sides on 25 June 2010.

8.2 The agreement is the second of its kind in South East Asia, following the PCA with Indonesia, which was signed in November 2009, and the first-ever bilateral agreement with the Philippines. As the Commission noted, the PCA contains legally binding commitments which it describes as central to the EU's foreign policy, including provisions on human rights, non-proliferation, counter-terrorism, the International Criminal Court, migration and taxation, as well as "areas of current interest such as the peace process and disaster risk management". The Commission further noted that the Agreement:

—  broadens considerably the scope for mutual engagement in the economic and trade domain as well as justice and home affairs, and provides opportunities for cooperation in areas such as the environment and climate change, energy, and science and technology, as well as maritime and air transport;

—   addresses money laundering and terrorist financing, illicit drugs, organised crime and corruption;

—   has an important development component, including, for the first time, strict provisions for the protection of the EU's financial interests; and

—   also has an important trade cooperation section, which should facilitate free trade agreement (FTA) negotiations in accordance with EU policy to conclude FTAs with ASEAN countries.

8.3 Politically, the Commission described the PCA as marking an important step towards strengthening the EU's role in South-East Asia, based on shared universal values such as democracy and human rights, and as paving the way for enhancing political, regional and global cooperation between two like-minded partners; and as a basis for the promotion of the EU's broader political and economic interests in a region that is traditionally oriented towards China and the United States.

8.4 In an Explanatory Memorandum of 31 January 2011, the Minister for Europe (Mr David Lidington) described the PCA as key to strengthening the EU's relationship with the Philippines and more widely the EU's role in South-East Asia. He highlighted the prospect of cooperation on market access and the Agreement being a necessary precursor to an eventual EU Free Trade Agreement with the Philippines. He also noted that it establishes cooperation in the areas of: migration and maritime labour; promoting public sector reform, particularly in the area of public finance management to improve the delivery of social services; and reducing the impact and managing the consequences of climate change: and that it contains a legally binding commitment by the Philippines to respect human rights as well as obligations in the areas of Counter Terrorism and WMD, and on combating terrorism and transnational crimes. He also drew attention to the endorsement of the Philippines by the Foreign Secretary and the National Security Council as "an emerging power for enhanced UK engagement".

Council Decision No. 2012/272/EU[15]

8.5 The draft of this Council Decision,[16] which we considered at our meeting on 25 May 2011, authorised the High Representative of the Union for Foreign Affairs and Security Policy (HR; Baroness Ashton) to sign the PCA on behalf of the European Union. The text of the Agreement was attached to the Decision. It was deposited earlier in 2011 because it had superseded an earlier version, both of which we had considered at earlier meetings in 2011, and had retained under scrutiny.[17]

8.6 The Committee had noted that, because several provisions of the agreement contained content that falls within the scope of Title V (Area of Freedom, Justice and Security) of the TFEU, it had important legal implications. The Minister had asserted that as the agreement was a mixed agreement (i.e. between the Philippines and the EU and its Member States) it was open to the UK to participate in these elements of the agreement in its own right rather than to opt-in and participate in them as part of the EU; that this could be accomplished via appropriate recitals to both the Council Decision and the PCA; and that a Title V legal base was not required.[18]

8.7 We had no questions to raise about agreement per se, which we felt was plainly to be welcomed. However, we were unclear about the appropriateness of the legal basis upon which the Government said that it was proposing to exercise the right not to opt into certain provisions.

8.8 The Minster's earlier Explanatory Memorandum said that Articles 10, 11, and 23-27 of the agreement fall within the scope of Title V, yet the Title V legal base in the draft Council Decision is limited to Article 79(3), which concerns readmission agreements. In informal correspondence with the Minister's officials we were told that this was because the obligation on the Philippines to readmit its nationals in Article 26(3) was the exception to the general terms of the agreement, in that it set out a "clear commitment". But, we noted, Article 10(2) d) requires the EU Member States and the Philippines to cooperate "by exchanging information on terrorist groups and their support networks in accordance with international and national law". This struck us as an equally clear (and extremely sensitive) commitment and we asked the Minister to explain why the relevant legal base, Article 87 TFEU, had not been cited.

8.9 In the absence of the citation of other Title V legal bases we also asked the Minister to explain:

i)  where in Title V the legal bases for Articles 11 — cooperation in public administration, 24 — protection of personal data and 27 — maritime labour, education and training are to be found; and

ii)  why he said the opt-in did not apply to Articles 21 — cooperation in combating illicit drugs and 22 — cooperation in combating money laundering and terrorism financing, the legal bases for which, conversely, are to be found in Title V.

8.10 In the same correspondence we were also told that the Government's position on the opt-in Protocol (No. 21) is that it was engaged whenever a measure covers a matter which falls within the JHA field, but that this was not dependent on the citation of a Title V legal base. We were surprised by this. By virtue of Article 2 of the opt-in Protocol "no provision of any international agreement concluded by the Union pursuant to that Title [V]" can be binding on the UK unless it opts into it. From this we drew the logical inference that the Decision to conclude the agreement has to state on its face that some of its provisions are concluded pursuant to Title V, otherwise those concerned by it are left unsure as to its precise legal effect in the UK (and Ireland and Denmark) — as indeed were we in trying to scrutinise the legal effects of this agreement. Additionally, as we noted, the Court of Justice:

—   has been clear on the requirement to state a legal base: "explicit reference [to the legal base] was indispensable where, in its absence, the parties concerned and the Court are left uncertain as to the precise legal basis";[19]

—  has also held that the requirement of legal certainty means that "the binding nature of any act intended to have legal effects must be derived from a provision of Community law which prescribes the legal form to be taken by that act and which must be expressly indicated therein as its legal basis".[20]

8.11 Thus, without further explanation, we were unable to agree with the Government's assertion that a Title V legal base was unnecessary for it to assert that the opt-in Protocol applies to provisions of an international agreement. Rather, we concluded that the source of the power in EU law not to be bound by a provision of an EU international agreement has to be clearly stated.

8.12 We also noted that the agreement contains obligations that fall within the remit of the Common Foreign and Security Policy (CFSP) as opposed to development cooperation — for example Article 7 on the International Criminal Court, for which the EU's mandate to act was contained in a CFSP common position, or Article 8 on countering the proliferation of Weapons of Mass Destruction. Again, we asked the Minister to say why the CFSP legal base, Article 37 TEU, has not been cited.

THE MINISTER'S LETTER OF 15 FEBRUARY 2011

8.13 The Minister said that he was writing to address the questions raised by the Committee, which he did as follows:

    "The Committee asks why the Explanatory Memorandum states that Articles 10, 11, and 23-27 of the agreement fall within the scope of Title V. We have reviewed the EM and, in agreement with the Committee, found this statement in the EM to be an error.

    "The proposed agreement is a mixed agreement containing elements which remain within Member State competence as well as matters falling within the EU's competence. The proposed Council Decision on signature only covers the elements of the agreement for which the EU is assuming responsibility. The Member States will also sign the agreement in their own right. The provisions of Title 2 of the PCA (Articles 5-11) are political commitments which are being entered into by the Member States in their own right and so do not need to be covered by the Council Decision. Hence no legal bases covering these particular provisions are cited. In any event Article 10 makes it clear that any sharing of information should be pursuant to existing international and domestic law commitments and does not therefore amount to the creation of any new information sharing channels.

    "The Committee asks specifically why no Title V legal base has been cited in order to cover the obligations set out in Article 10 of the PCA. This is because these commitments are being entered into by Member States rather than by the EU acting on their behalf. As stated above there is only a need to cite legal bases in the Council Decision in respect of the measures in the agreement which the EU is proposing to sign up to in its own right — there is no need for a Title V legal base to be cited where it is the Member States who are assuming the commitments or obligations under the agreement with a Third Country in their own right.

    "The Articles of the agreement which do fall within the scope of Title V are Articles 15, 20, 21, 22, 23, 25 and 26. Nevertheless, the nature and particular commitments contained in these provisions need to be carefully examined when the choice of legal basis is made. The position of the EU Institutions is that it will only be necessary to add a corresponding legal basis where a specific obligation or substantial commitment is made. Accordingly, commitments which provide for specific obligations or which involve provision or funding by the Union or the participation of third countries in EU programmes may serve as criteria in such an examination. Conversely commitments providing simply for consultation do not in themselves require the use of a specific legal basis. With the exception of Article 26(3) of the agreement most of the provisions in Titles IV and V of the Agreement are formulated in general terms that are not particularly binding. This is why the EU Institutions have proposed that Article 79(3) TFEU is the only Title V legal base that needs to be cited in the agreement.

    "As stated above, we agree with the Committee that Articles 11, 24 and 27 do not fall within the scope of Title V.

    "As stated above, we agree with the Committee that Articles 21 and 22 do fall within the scope of Title V but for the reasons stated they do not require a legal basis to be cited.

    "The Committee has commented that it is surprised by the Government's view that whenever a measure covers a matter which falls within the JHA field the Title V opt-in is applicable and that this is not dependent on the citation of a Title V legal base. Our view is that in light of the purpose of the Protocol — namely to ensure that the UK and Ireland can decide whether they wish to participate in EU action on justice and home affairs — the words 'no provision of any international agreement concluded by the EU pursuant to that Title [V]' must be interpreted as meaning that the Protocol applies to any measure including Title V content. In support of this point I would echo the following comments made by my colleague, Minister for Employment Relations, Consumer & Postal Affairs, Edward Davey, in a letter to the European Scrutiny Committee on this same issue on 11 October 2010:

    "As regards consistency with the terms of the Title V Protocol, my view is that the wording of Article 2 of the Title V Protocol supports the interpretation that the UK opt-in applies to the provisions of international agreements which fall within the scope of Title V even where the relevant Council Decision to sign and conclude does not cite a Title V legal base. Importantly Article 2 refers to a separable "provision" of an international agreement not being binding on the UK in the absence of an opt-in, rather to a "measure" not binding the UK in its entirety. In my view this indicates that the crucial question in assessing whether the protocol applies is whether a specific provision of an international agreement falls within the scope of Title V rather than whether the agreement taken as a whole justifies the inclusion of Title V legal base in the Council Decision to sign and conclude.

    "I would also argue that this interpretation of the terms of Article 2 is the one which is most consistent with the intention behind the Title V Protocol. In contrast, interpreting the Protocol so as to make the application of the UK's opt-in conditional on the citation of a Title V legal base would shift the focus from whether the content of a provision of an international agreement falls within the scope of Title V to a formalistic consideration of whether a decision has been taken to include a particular legal base.'

    "We agree with the Committee that for clarity the EU should cite Title V legal bases where possible, but it is clear from the ECJ's case-law that legal bases will not be cited in respect of every different provision in an Agreement.

    "Regarding the question raised by the Committee, Articles 7 and 8 of the Agreement fall within Member State competence for the purposes of the Agreement. As they do not fall within the EU part of the Agreement the Council Decision does not refer to an EU legal base for these Articles."

Our assessment

8.14 The Minister's letter of 15 February did not, we felt, answer our concerns; rather, it contained assertions that did not appear to be borne out by a reading of either the draft Council Decision or the agreement, or an understanding of the role of EU institutions in the operation of Partnership and Cooperation Agreements (of which, as the Minister noted in his EM, this is one of seven at various stages of negotiation with South East Asian countries).

8.15 Whilst we had no wish to hold up the adoption of the agreement, we felt that there was sufficient legal uncertainty surrounding it that we were unable to clear it from scrutiny.

8.16 In light of our concerns with the letter, we concluded that further correspondence with the Minister would not assist us. Instead, we asked the Minister to come in to explain in oral evidence the Government's approach to this agreement — that evidence to concentrate on the points raised in our previous Report on this agreement and his replies in the letter of 15 February. In this connection, we noted that, as well as the other PCAs being negotiated, there are other international agreements on which the Government's assertion of its right to opt-out was, we judged, legally uncertain; the Minister's explanation and justification of the Government's policy in this regard would thus be useful for wider scrutiny purposes.

8.17 We did, however, clear the first text of the Council Decision,[21] as this had been overtaken by the revised text[22] which remained under scrutiny.

The Minister for Europe's evidence

8.18 The Minister gave evidence to us on 27 April. In our Report[23] on his evidence, we drew the following conclusions on opting into provisions of international agreements:

·  that there were several difficulties with the Government's approach to when the opt-in Protocol applies. Of greatest concern to the Committee was that a unilateral subjective assessment of the content and legal effect of a provision of a multilateral agreement would lead to legal uncertainty, if not litigation. We thought the Minister's legal adviser was right when he said the Government agreed that the better practice was for a Title V legal base to be cited in an international agreement because "it achieves the greatest level of legal certainty, because in those circumstances it is clear on the face of the legislation that there is a JHA content in the provision and the opt-in is engaged."[24] These, we suggested, were all the reasons why a legal base must, rather than may, be cited;

·  a further difficulty was the consequence of the Government's approach for Denmark and Ireland. A unilateral assessment by the UK that a provision in an international agreement is made pursuant to Title V would mean that Ireland would have to opt into the provision in order to be bound by it, and Denmark would be excluded. Given such consequences, it was hardly probable that the legal base need not identify the applicable Treaty Article in Title V;

·  it transpired that Ireland and the Commission take a different view to the UK of whether a legal base in Title V should be cited. In the case of Ireland, this would lead to the unfortunate situation of the only other beneficiary State to the opt-in Protocol taking the contrary view of when the opt-in applies. In the case of the Commission, we thought there was also a risk that it might bring an action in the ECJ should the UK assert that it can opt out of a binding provision in an international agreement without the need for a Title V legal base;

·  a Regulation or Directive would always cite a Title V legal base if the opt-in was considered to be engaged. The Government's approach to EU international agreements therefore had the consequence of placing them in a category sui generis, for which the Committee failed to find any justification in the EU Treaties; and

·  in addition, the Government's approach could set an unhelpful precedent in a multilateral system of law based on transparency, consistency and predictability: other EU Member States may wish to take a similar approach to Treaty obligations they would prefer not to be bound by.

8.19 In all, it seemed to us that the Government was in a minority of one in arguing that its interpretation of Title V was correct: were this not the case other Member States (particularly Ireland and Denmark) and the EU institutions could be expected to agree to the citation of a Title V legal base. We thought this approach was based more on wishful thinking than reasonable legal interpretation. More importantly, however, there was a risk that it might lead to the consequences listed above. We therefore asked the Government to reconsider its policy on the application of Title V to EU international agreements.

Our further assessment

8.20 We were led to understand that there was some pressure in Brussels to arrange a signing ceremony for the Agreement, to coincide with a visit of the Foreign Minister of the Philippines.

8.21 As we had said before, we would not ordinarily stand in the way of the conclusion of an agreement, on the contents of which we had no further comment. But the Government's application of the opt-in Protocol to this and other international agreements was, in our view, a matter of legal importance, and so came fully within the Committee's mandate. As we stated (see above), we judged this policy to be misguided — we saw no short-term gain for the UK but several long-term difficulties of wider concern — and, if pursued, as capable of undermining the rule of law in the EU. Given the strength of these reservations, we continued to be unable to clear the agreement from scrutiny.[25]

The further Council Decision

8.22 In his Explanatory Memorandum of 20 January 2014, the Minister for Europe notes that the PCA was signed in Phnom Penh on 11 July 2012 at the ASEAN Regional Forum ministerial meeting, and also in Brussels on the same date by Baroness Ashton and the Foreign Minister of the Republic of the Philippines, Albert del Rosario. Following signature, Member States are proceeding with implementation and ratification of the agreement.

The Government's view

8.23 The Minister describes the agreement in the same terms as before and notes again that the Philippines has been endorsed by the Foreign Secretary and the NSC as an emerging power for enhanced UK engagement. He continues as follows:

"The US remains uniquely influential in the Philippines, and Japan and Australia have strong presences backed by big aid programmes, whilst China and Korea are increasingly influential as trade and investment partners. However the UK is the largest EU investor in the Philippines and our credentials are further reinforced as members of the International Contact Group (together with Japan, Turkey and Saudi Arabia) assisting peace talks to end the separatist conflict in the Muslim majority areas of Mindanao. As such we are well placed to benefit from improved commercial cooperation and market access. Mention our contribution to Haiyan disaster relief and how that has cemented our position.

"Our vision for the UK relationship with the Philippines is to secure maximum benefit for the UK and British business from the development of the Philippines as a stable democracy and high-growth economy in East Asia, and as a progressive partner for the UK in ASEAN and internationally. This PCA paves the way for an EU Free Trade Agreement with the Philippines which is desirable to create a more open environment and level playing field for foreign business.

"The PCA will provide an additional channel through which we can pursue UK objectives on human rights, which are protected in the Philippines' law but not always upheld."

JUSTICE AND HOME AFFAIRS AND PROTOCOL 21 TO THE TREATIES

8.24 The Minister deals with the legal aspects of the PCA as follows:

"This Council Decision on conclusion follows Council Decision No.2012/272/EU on the signature of the PCA with the Philippines. The latter Council Decision was adopted under Articles 91, 100, 79(3), 191(4), 207 and 209 in conjunction with Article 218(5) of the Treaty on the Functioning of the European Union. This choice of a range of legal bases is consistent with the Agreement which contains obligations in the fields of the environment, transport, migration, trade and development cooperation.

"Council Decision No.2012/272/EU was subject to Parliamentary scrutiny in the usual manner. The UK did not opt-into the JHA provision on re-admission and participated in that provision in its own right.

"The nature of the Agreement has not changed, and the Agreement that will be concluded under the proposed Council Decision contains the same obligations.

"The agreement is a mixed agreement, i.e., it is an agreement between the Philippines and the EU and its Member States. As such, it contains some provisions that relate to the exercise of EU competence and some provisions that relate to the exercise of Member State competence.

"Article 26 (3) of the PCA on re-admission includes a JHA obligation to be exercised by the EU; therefore Protocol 21 applies to that provision and it is therefore open to the UK to opt-into the provision and participate as part of the EU or to participate in this obligation in its own right. In line with the approach taken for the Council Decision on signature of this agreement, the Government is minded not to opt-in to the re-admission provision of this agreement and the UK will therefore participate in this provision in its own right. The preamble to the Agreement notes the applicability of Protocol 21 to the Agreement in relation to the UK, Ireland and Denmark's participation in JHA provisions of the Agreement. In relation to Articles 10 (Cooperation in Combating Terrorism), Article 20, (Legal Cooperation), Article 21 (Cooperation in Combating Illicit Drugs), Article 22 (Cooperation in Combating Money Laundering and Terrorism Financing), Article 23 (Combating Organised Crime and Corruption), Article 26 (Refugees and Internally Displaced Persons, and Cooperation on Migration and Development), the Government considers that these will either be entered into by the Member States in their own right or they are not of a nature such as to engage Protocol 21. There is, therefore, no need to cite Title V legal bases for those provisions.

"In order to maintain consistency with Council Decision No.2012/272/EU, the Government will push for the citation of all substantive legal bases in the Decision for Conclusion.

"Parliament will wish to be aware that all language versions of the proposed Council Decision were published on 19 December 2013, and as such the Government has until 19 March 2014 to notify the Council of its decision under Protocol 21 to the Treaties.

"It is important to note that Council Decision No. 2012/272/EU on the signature of the PCA is currently under consideration by the Courts of Justice of the EU (Court Case C-377/12). The Commission has asked the Court to annul that decision in so far as the Council added the legal bases relating to readmission (Article 79(3) TFEU), transport (Articles 91 and 100 TFEU), and the environment (Article 191(4) TFEU). The UK intervened in support of the Council, along with Germany, Austria, Ireland and Greece; the Court is not expected to rule on this case until later this year. The Commission has stated in its Explanatory Memorandum accompanying the proposed Council Decision that "as long as this case is pending, the procedure for conclusion of this Agreement cannot be finalised".

SUBSIDIARITY

"The PCA is a mixed agreement. It has been signed by the EU and the Philippines. Member States are proceeding with implementation and ratification of this document. The proposed Decision is in line with the earlier Council Decision No. 2012/272/EU which provides a legal framework for EU-Philippines relations. It covers issues including political dialogue, trade relations, development assistance, science and technology, justice, migration and asylum.

IMPACT ON UK LAW

"As this is a mixed agreement, it will require specification as an EU Treaty in accordance with section 1(3) of the European Communities Act, 1972. A draft specification order has been drafted and is currently before the Joint Committee on Statutory Instruments (JCSI) for pre-clearance. No additional implementation measures are envisaged."

Conclusion

8.25 We have expressed on many occasions our disagreement with the Government's policy on the application of the opt-in protocol to EU international agreements in the absence of Title V legal bases; not only in the context of the Council Decision on the signature of this Partnership and Cooperation Agreement, but also in relation to other Framework Agreements including those proposed with Ukraine, Kozovo and Azerbaijan.

8.26 There seems little to be gained from rehearsing our objections, particularly as we have already pressed the Government recently to reconsider its policy following recent adverse ECJ rulings in the Conditional Access and EEA Agreement cases. We note also that the Government's policy has been further undermined by the ECJ's ruling on 27 February where the Court held in the EU/Switzerland Agreement on Free Movement of Persons that Article 48 TFEU was the correct legal base for the corresponding Council Decision, not Article 79(2)(b) TFEU.

8.27 Given that a Title V legal base is absent, we do not comment on the Government's opt-in decision.

8.28 As the procedure for the EU's conclusion of this PCA cannot be completed until the resolution of the challenge before the ECJ in respect of the Council Decision on the signature of the agreement, we see no immediate need to clear this document. Instead, we ask the Government for its view on the outcome of the case once it is known, and indeed its view of the recent ruling on the EU/Switzerland agreement referred to above.

8.29 The document therefore remains under scrutiny.



15   The full text is available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:134:0003:0003:EN:PDF. Back

16   See headnote: (32472) -. Back

17   See headnote: (31949) 13615/10 and (32472) -: HC 428-xvii (2010-11), chapter 5 (16 February 2011) and HC 428-xvi (2010-11), chapter 6 (9 February 2011). Back

18   For full details, see our earlier Report under reference: (31949) 13615/10 and (32472) -: HC 428-xxviii (2010-12), chapter 3 (24 May 2011). Back

19   C-45/86, para 9. Back

20   C-325/91, para 26. Back

21   (31949) 13615/10. Back

22   32472) -. Back

23   See Thirtieth Report of Session 2010-12, Opting into international agreements and enhanced Parliamentary scrutiny of opt-in decisions, HC 955-I, 18 May 2011. Back

24   See Thirtieth Report of Session 2010-12, Opting into international agreements and enhanced Parliamentary scrutiny of opt-in decisions HC 955-II, Q 40, 18 May 2011. Back

25   See headnote: (31949) 13615/10 and (32472) -: HC 428-xxviii (2010-12), chapter 3 (24 May 2011). Back


 
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