Documents considered by the Committee on 16 July 2014 - European Scrutiny Committee Contents


13 The EU and Ukraine

Committee's assessment Legally and politically important
Committee's decisionCleared from scrutiny; further information required
Document detailsTwo Council Decisions on the signature and provisional application of the EU-Ukraine Association Agreement
Legal base(a) Articles 217 and 218(5), (7) and (8) TFEU; unanimity; (b) Articles 79(2)(b) and 218(5); unanimity
DepartmentForeign and Commonwealth Office

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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