49 Inland waterways: freight
| Committee's assessment
| Legally and politically important |
| Committee's decision | Cleared from scrutiny
|
| Document details | Proposal for a Council Decision to allow Austria, Belgium and Poland to participate in a convention about contract law for inland waterways freight
|
| Legal base | Articles 2(1), 81(2) and 218(6) (a) TFEU; QMV
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| Department
Document numbers
| Transport
(36582), 17025/14 + ADD 1, COM(14) 721
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Summary and Committee's conclusions
49.1 This proposal, now adopted, provides authorisation for Austria,
Belgium and Poland to join ten other Member States (not including
the UK) to accede to the Budapest Convention on the Carriage of
Goods by Inland Waterways. Although the EU cannot itself accede,
because the Convention is limited to state parties, its provisions
on the choice of law applicable to contracts falling under the
Convention is a matter of exclusive EU competence. Therefore these
Member States require EU authorisation.
49.2 This matter does not have any significant UK
policy implications, but does raise legal issues:
· as
to whether the UK opt-in is engaged; [ 362]
and
· the
appropriate legal base.
49.3 Because the UK Government has sought to opt-in,
the fact that the other Member States supported the Commission's
contention that the UK opt-in is not engaged (and therefore the
UK is automatically bound by the Decision) creates no practical
difficulty. Having failed to secure recitals to the Decision which
acknowledge that the UK's opt-in is engaged, we therefore support
the Government's approach of abstaining and tabling a minute statement
asserting that the UK opt-in is engaged whenever an EU legal instrument
uses a legal base from Title V of part Three TFEU concerning the
Area of Freedom, Security and Justice.
49.4 We remain unconvinced by the Minister's explanation
as to why he considers Article 218 (6) TFEU to be an appropriate
legal basis for the EU to authorise Member States to enter into
an international agreement, when it cannot itself become a party.
We consider that the judgment of the Court of Justice in case
C-399/12 indicates otherwise. However, we note that no other Member
State has questioned this legal base so litigation to resolve
this issue is unlikely until a future similar case with sufficient
interests at stake arises.
49.5 As the proposal has now been adopted we formally
clear it from scrutiny.
Full
details of the documents:
Draft Council Decision authorising Austria, Belgium and Poland
to ratify, or to accede to, the Budapest Convention on the Contract
for the Carriage of Goods by Inland Waterways (CMNI): (36582),
17025/14 + ADD 1, COM(14) 721.
Background
49.6 The Budapest Convention on the Contract for
the Carriage of Goods by Inland Waterways (CMNI) is intended to
harmonize contractual and navigational standards on inland waterways
in European countries. Article 29 of the Convention contains provisions
on the choice of law by the parties to a contract for carriage
falling under the Convention. These provisions affect the rules
laid down in Regulation 593/2008 on the law applicable to contractual
obligations (the Rome I Regulation), and therefore this is a matter
for which the EU has exclusive competence.[ 363]
As a consequence Member States cannot now lawfully ratify or accede
to this part of the Convention without EU authorization.
49.7 The proposed Decision to give such authorisation
includes a legal basis found in Title V TFEU which would ordinarily
engage the UK opt-in. However the Commission and the Council Legal
Service take the view that as the UK has opted in to the Rome
I Regulation giving rise to exclusive EU competence over this
international agreement the opt-in no longer applies to any decision
relating to it. The Government, with the support of our predecessor
Committee, disagree and therefore sought recitals recognising
that the UK opt-in is engaged.
49.8 The legal base issue involves Article 218(6)
TFEU. This provision sets out the procedure for the Council to
conclude an international agreement. The question is whether this
also applies to any decision authorising Member States to enter
into an international agreement. This matter has not been directly
considered by the Court of Justice, but in case C-399/12, it decided
that Article 218(9) TFEU — the procedure to establish an
EU position with a body created by an international agreement
— was an appropriate legal base for the EU to authorise
Member States to take a position where the EU could not accede
to the international agreement and therefore was not itself a
member of the body. In doing so, at paragraph 54 of its judgment,
it contrasted Article 218(9) with the preceding provisions of
Article 218 which "have as their object the negotiation and
conclusion of agreements by the European Union".
The Minister's letter of 8 July 2015
49.9 The Minister's letter confirms that the Decision
was adopted at the Justice and Home Affairs Council of 15-16 June
2015, with the UK abstaining. On the issue of the legal base he
indicates:
"This Government is not persuaded that the
Court would uphold a challenge to the use of Article 218(6) TFEU
as the legal basis of the Council Decision. I maintain the view
expressed by my predecessor (in his letter of 19 March 2015) that
it is likely the Court would find that Article 218(6) has application
in situations where the European Union is not a party to the agreement
in question in cases where EU has exclusive external competence.
I do not believe that the judgment of the Court of Justice of
the European Union in Case C-399/12 contradicts that view. I consider
the Court's comments in paragraph 54, although ambiguously phrased,
are not so much concerned with distinguishing Article 218(9) from
other paragraphs in article 218, but are focussed on rebutting
the narrower argument made by the German government about interpreting
Article 218(9) in light of other provisions in Article 218."
49.10 On the subject of the UK opt-in he reports:
"As you will recall, the EU institutions
do not accept that the UK Government has the right to engage its
opt-in in cases when the Commission states it has exclusive competence,
even though a Title V Justice and Home Affairs legal base is being
used. Throughout negotiations we sought an amendment to the language
of the recitals to the proposed Decision in order to reaffirm
the UK's opt-in, but this has not been forthcoming.
"At the JHA Council meeting the UK abstained
from the vote because we did not consider that it would be appropriate
to override the Parliamentary scrutiny reserve on a matter that
has little importance to the UK. However, we tabled a Minute Statement
reaffirming our position that we are entitled to use the opt-in
whenever a Title V legal base is used. As you will know, this
is consistent with the UK approach on such proposals where we
are unable to secure the desired outcome."
Previous Committee Reports
Thirty-ninth Report HC 219-xxxvii (2014-15) chapter
7 (24 March 2015); Thirty-third Report HC 219-xxxii (2014-15),
chapter 2 (11 February 2015); Twenty-ninth Report HC 219-xxviii
(2014-15), chapter 5 (14 January 2015).
362 Protocol 21 on the Position of the United Kingdom
and Ireland in Respect of the Area of Freedom, Security and Justice. Back
363 Article 3 (2) TFEU. Back
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