13 The EU and Ukraine
| Committee's assessment
| Legally and politically important |
| Committee's decision | Cleared from scrutiny; further information required
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| Document details | Two Council Decisions on the signature and provisional application of the EU-Ukraine Association Agreement
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| Legal base | (a) Articles 217 and 218(5), (7) and (8) TFEU; unanimity; (b) Articles 79(2)(b) and 218(5); unanimity
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| Department | Foreign and Commonwealth Office
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Summary and Committee's conclusions
13.1 The Association Agreement with Ukraine is intended to support
and encourage reform in Ukraine to bring it closer to EU norms,
as well as to give Ukraine gradual access to parts of the EU Internal
Market, and includes a Deep and Comprehensive Free Trade Area.
The Agreement would be the first of its kind; similar Agreements
are being negotiated with Moldova, Georgia, Armenia and Azerbaijan.
13.2 In November 2013, four decisions authorising
the EU to sign and provisionally apply the Association Agreement
between the EU and Ukraine, and subsequently to conclude (ratify)
it, were cleared from scrutiny by debate in European Committee
B on 11 November 2013, and by resolution of the House the following
day. This was in anticipation of the Agreement being signed at
the Vilnius summit later that month. In the event the Agreement
was not signed as planned.
13.3 However, following the subsequent events in
Ukraine, on 21 March 2014 the EU Council and the new Ukraine authorities
signed certain core political chapters and the EU decided to provisionally
apply them — although, in accordance with Article 486 of
the Agreement provisional application does not actually take effect
until the Ukraine has ratified the Agreement. This was done,
on the back of the scrutiny clearance of November 2013 by means
of two Decisions enabling the EU to sign and provisionally apply
the Association Agreement and two Decisions to conclude. The
original two Decisions were each split in order to create separate
Decisions relating to certain aspects of the Association Agreement
which fell within the ambit to Title V TFEU, concerning an area
of freedom security and justice, to which the UK opt-in applied.
13.4 Following the election of President Poroshenko
on 25 May 2014, both he and the Council wanted to press ahead
with the signature and provisional application of the other elements
of the Agreement: Title III - Freedom, Justice and Security; Title
IV - Trade and Trade-related Matters; Title V - Economic and Sector
Cooperation; Title VI - Financial Cooperation, with Anti-fraud
Provisions; and Title VII - Institutional, General and Final Provisions.
13.5 In the light of a letter from the Minister for
Europe (Mr David Lidington) dated 16 June, the Committee, agreed
to waive scrutiny clearance for the purposes of agreeing the Decisions
at the Foreign Affairs Council on 23 June. The Committee accepted
that these Decisions may add nothing to those cleared in November
last year, but given their political and legal importance asked
for the Minister to deposit the texts agreed at the June 23 Council
and also those agreed in March with all associated statements
and declarations, in order to provide a complete picture. We
reminded the Minister that we remained concerned to identify clearly
those provisions in respect of which the EU is exercising competence
to sign the Agreement or provisionally apply it where that competence
is not exclusive and asked for the Minister to identify
where this is not the case.
13.6 Like the Decisions relating to the Georgia
and Moldova Agreements, these Decisions give rise to concerns
relating to EU competence. This is why we asked the Minister
for identification of those matters where the EU was acting —
either by signing and concluding the Agreement, or by provisionally
applying it — where its competence was not exclusive. We
have not received this, although it could be inferred from the
Explanatory Memorandum that the EU was only provisionally applying
it to the extent that it has exclusive competence, save for provisions
covered by declarations. Whilst we acknowledge the extent to
which the Government has sought to circumscribe the exercise of
competence by the EU, nevertheless it is clear that the UK has,
contrary to usual practice, acquiesced in the exercise by the
EU of shared competence in respect of the provisions of the Agreement
where such declarations have been made. In any event declarations,
which are not legally binding, can only alleviate, not remove,
competence concerns.
13.7 This issue may cover a considerable area
of the Agreement, given that the UK Statement provided by the
Minister seeks to avoid creating a precedent in respect of "the
provisional application of those areas of the previously unexercised
shared competence within the trade elements of the Association
Agreement." The "trade elements" form a very significant
part of the Agreement.
13.8 We note that the Government, having failed
to secure a Title V legal basis for readmission, has nevertheless
sought to opt into the main Decision. In accordance with our
consistent previously expressed view, which we maintain, we do
not consider that the UK opt-in is engaged in these circumstances
and the Decision applies automatically to the UK.
13.9 As these Decisions have now been adopted
we clear them from scrutiny. In doing so we draw the attention
of the House to their legal and political importance, and ask
the Minister, in future such cases to:
·
identify clearly from the outset those elements of the international
agreement in question where the EU has exclusive competence,
and
· provide
a clear explanation of areas where competence is shared and in
which the EU is acting and a clear explanation of the Government's
position.
Full details of
the documents: (a)
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
Ukraine, as regards Title III (with the exception of the provisions
relating to the treatment of third-country nationals legally employed
as workers in the territory of the other party) and Titles IV,
V, VI and VII thereof, as well as related Annexes and protocols:
(36158), —; (b) 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 Ukraine, as regards the provisions relating
to the treatment of third-country nationals legally employed as
workers in the territory of the other Party : (36159), —.
Background
13.10 These Council Decisions authorise the signature
and provisional application by the EU of those part of the Association
Agreement between the EU and Ukraine which the EU has not already
been authorised to sign and provisionally apply by virtue of what
is now Council Decision 2014/295 of 17 March 2014. Under the
Agreement provisional application cannot take effect until the
Ukraine has ratified the Agreement. The full background is set
out in our earlier Reports of July and October 2013, and 18 June
2014.[37]
The Explanatory Memorandum of 2 July 2014
13.11 In his Explanatory Memorandum of 2 July 2014
the Minster reiterates the importance of the Agreement:
"Ukraine matters: its resource base, pre-eminently
in energy and agriculture, has potential to contribute powerfully
to the development of a European region resilient to 21st century
threats to its stability, prosperity and competitiveness. If Ukraine
continues on its current course, it will not fulfil this potential.
Nor will it do so if it yields to Russian pressure to join the
Eurasian Customs Union, which would risk loss of sovereignty and
independence. We judge that a closer relationship with the European
Union that holds open the prospect of eventual membership is the
best way to encourage an independent, successful Ukraine. The
Association Agreement, including a Deep and Comprehensive Free
Trade Area, is an essential milestone on this path.
"The reforms supported by the Association
Agreement will, if implemented, help Ukraine become a free-market
economy underpinned by democracy and rule of law. Under President
Yanukovych we saw worrying democratic back-sliding; his decision
not to sign the Association Agreement in November 2013 resulted
in demonstrations that he violently repressed before fleeing the
country on 22 February. Under an interim president, the Ukrainian
government began a process of seeking to reunite the country underpinned
by the international community, particularly through the OSCE-mediated
National Dialogue. The Foreign Secretary visited Kyiv on 3 March
to underline the UK's support for interim President Turchynov
and his government, and encourage them to create inclusive mechanisms
to address the issues in the east and south of the country. He
visited again on 6-7 May, as the crisis in the east worsened,
to reinforce these messages and offer to help the Kyiv Government
develop a strategy to demonstrate commitment to working inclusively
with all communities and interest groups and building a better
future for all. President Poroshenko's decisive victory in the
25 May elections gives him a strong mandate to move ahead. His
proposed peace plan has been an important step forward and we
will continue to support him in its implementation.
"There is a risk that Russia will seek to
punish Ukraine for signing the Association Agreement. Our firm
position is that Russia should not be allowed to have a veto over
Ukraine's future. Signing the Association Agreement will not come
at the expense of dialogue with Russia, and the UK will continue
to urge Russia and Ukraine to engage constructively to de-escalate
the tensions in the east of the country. The UK government will
also continue to encourage President Poroshenko to continue to
engage with the whole country in an inclusive dialogue, and ensure
that any security operations remain measured and respect the safety
and security of non-combatants. I shall repeat these messages
when I visit Ukraine on 8-10 July. It is clear that in addition
to the volatile situation in the east and south of Ukraine, the
government also has many other issues to resolve. I remain convinced
that the Association Agreement provides the best support framework
for Ukraine to take forward the reforms that are essential to
build a stable, prosperous, democratic country. Tackling corruption
and developing strong institutions will form a key part of this."
13.12 After noting the split in the Decision in respect
of certain Title V TFEU matters the Minister explains the Government
position as regards the UK opt-in as follows:
"In my letter of 2 September 2013, I confirmed
that the UK Government considered that the Justice and Home Affairs
opt-in was engaged. The UK informed the Presidency on 3 September
2013 that the UK would opt-in to the original proposed Council
Decisions insofar as they related to Mode 4 trade in services
and readmission. The Government's position is that the 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 Title V opt-in. The UK also opted-in to
the readmission provision: this related to an existing 2007 EU-Ukraine
readmission agreement and required the parties to commit to implementing
it.
"The government considered that the UK's
Justice and Home Affairs opt-in was re-triggered when the new
Decisions were brought forward in June 2014, even though the content
of the Agreement had not changed. The UK informed the Presidency
on 20 June 2014 that the UK would opt-in to the proposed Council
Decisions insofar as they related to Mode 4 trade in services
and readmission. The UK has not opted into the new Council Decision
with JHA content as regards the provisions relating to the treatment
of third-country nationals legally employed as workers in the
territory of the other party. The Council Decision brought forward
in March for signature of the political chapters of the Agreement
did not include provisions pursuant to Title V of the TFEU and
therefore did not trigger the UK's opt in. I set this out in my
Written Ministerial Statement of 26 June 2014."
13.13 In relation to competence the Minister explains:
"As noted in previous Explanatory Memorandums,
the originally proposed Council Decision on signature and provisional
application provided for the provisional application, as between
the EU and Ukraine, of a large part of the Agreement including
matters relating to CFSP, JHA, Intellectual Property, Maritime
Transport and Energy. Intensive UK lobbying in working groups
in Brussels and bilaterally with the EU institutions, Lithuanian
Presidency and other Member States reduced the scope significantly;
the Decisions adopted on 23 June 2014 were limited to the previously
agreed scope. Although we were unable to exclude entirely provisions
of concern to the UK we secured a Council, Commission and High
Representative Statement that defined the limits of the EU's scope
to act; that Statement was previously submitted to the Committees
with my Explanatory Memorandum of 9 October 2013. We also entered
Minute Statements when the Decisions were adopted further to clarify
the UK position.
"Where the competence lies with Member States
we have been very clear that those elements cannot be provisionally
applied by the EU. Where competence is shared between the Member
States and the EU we have been equally clear that the EU should
not provisionally apply any of the elements where the EU has not
previously exercised that shared competence. However, there are
some elements covered by shared competence where the UK Government
judged it was in our interests for them to be provisionally applied.
We therefore agreed to that provisional application. As outlined
in my previous letters and the debate, we have agreed a joint
declaration on those areas of each Agreement where the Government
had concerns about the division of competence."
The Letter from the Minister of 2 July 2014
13.14 In his accompanying letter the Minister provided
a number of texts, which include (a) the draft Decision on the
signing and provisional application of the core political chapters
(which was adopted as Decision 2014/295), (b) a set of statements
and declarations which accompanied the adoption of this Decision,
(c) two draft Decisions enabling the EU to conclude the Agreement,
one in respect of Article 17 of the Agreement (to which the UK
opt-in applies) and one in respect of the rest, and (d) the draft
Final Act of the conference of 27 June 2014.
13.15 The letter notes the limited extent of the
signature and provisional application of the Agreement in March
this year and draws attention to the statements and declarations
as follows:
"In March, Portugal lodged a minute statement
regarding competence of Member States in relation to the Council
Decisions to approve signature and provisional application of
the political chapters mentioned above. In respect of the signature
and provisional application of the remaining parts of the Association
Agreement, we secured a joint statement on the part of the Council,
the European Commission and the High Representative on competence
relating to the provisional application of Article 2 (Title I
- General Principles) and Article 14 (Title III - Justice, Freedom
and Security). The UK also lodged minute statements relating to
exercise of competence on free trade areas and traditional knowledge,
and the Justice and Home Affairs opt-in. In addition, Austria,
Italy, Romania and the Czech Republic lodged minute statements
to register their view that a Title V legal base did not need
to be cited to cover the provisions relating to the treatment
of third-country nationals legally employed as workers in the
territory of the other Party therefore leading to split Decisions."
13.16 The first paragraph of the UK statement mentioned
by the Minister reads:
"The provisional application of those areas
of previously unexercised shared competence within the trade elements
of the Association Agreement shall not prejudice the discretion
of Member States within the council to determine areas for provisional
application within future trade agreements with third parties
entered into by the European Union."
13.17 The letter notes that two Decisions for the
conclusion of the Agreement were also agreed at the 23 June Council
meeting, the split reflecting that in the Decisions for signature
and provisional application currently under consideration. They
have also been updated to reflect the fact that certain provisions
of the Agreement had already been signed. These will be sent
to the European Parliament for its consent. They are treated
as cleared from scrutiny by the November 2013 debate.
13.18 Finally the letter points out that the Final
Act makes it clear that "the [Signatories agree that the]
Agreement shall apply to the entire territory of Ukraine as recognised
under international law and shall engage in consultations with
a view to determine the effects of the Agreement with regard to
the illegally annexed territory of the Autonomous Republic of
Crimea and of the City of Sevastopol in which the Ukrainian Government
currently does not exercise effective control."
Previous Committee Reports
Third Report HC 219-iii (2014-15), chapter 10 (18
June 2014); see also Nineteenth Report HC 83-xviii (2013-14),
chapter 5 (23 October 2013); (35880), — and (35881), —:
Forty-fourth Report HC 83-xxxix (2013-14), chapter 3 (26 March
2014).
37 See (35362), -, (35363), -, (35364), -, and (35365),
-: Third Report HC 219-iii (2014-15), chapter 10 (18 June 2014);
(34969), 9706/13, and (35029), 9856/13: Seventeenth Report HC
83-xvi (2013-14), chapter 7 (9 October 2013) and Twelfth Report
HC 83-xii (2013-14), chapter 7 (17 July 2013). Back
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