House of Lords - European Union

Select Committee on European Union Written Evidence

Memorandum by Dr Christina Eckes[23]

1. This submission addresses questions one, three, and five posed by the Committee in relation to a specific area of EC legislation: Community instruments imposing certain specific restrictive measures directed against certain persons and entities (individual sanctions). The submission seeks to describe the origin of Commission proposals to adopt individual sanctions and to identify the specific constraints imposed on the Commission's freedom of initiative by the Council of Ministers and the United Nations in this particular field. As will be shown, as a result of the special link in Article 301 EC between the first (Community) and the second (Common Foreign and Security Policy—CFSP) pillar, the Commission's freedom of initiative is considerably limited when the Community adopts individual sanctions. The Council predetermines under the second pillar when legislation is adopted and what the precise personal scope of this legal instrument will be.

2. There are in practice two different types of restrictive measures against certain persons and entities:

Proposals by the Commission leading to the adoption of Community instruments implementing these sanctions regimes are predetermined in their timing and in their content either by the relevant UN resolutions, in combination with the UN lists of terrorist suspects, or by a decision adopted by the Council under the second pillar.

TREATY ESTABLISHING THE EUROPEAN COMMUNITY

3. At present, both types of restrictive measures directed against certain persons and entities are adopted as regulations made under Articles 301, 60 and 308 EC.[26] The legality of this joint legal basis has been expressly confirmed by the Court of First Instance (CFI).[27] A two-tier adoption procedure is laid down in Article 301 EC. First, the Council takes a "strategic decision" in a CFSP common position that it is necessary to adopt Community sanctions. This common position is then implemented by a Community regulation, containing the actual operational measures, such as asset freezes and travel bans. By creating this close link between the second and the first pillar Article 301 EC is an exception to the general separation between the Community pillar (first pillar) and the Union pillars (second and third pillar). A Council decision under the CFSP is necessary in order to enable the Commission to initiate the adoption of restrictive measures.[28]

4. As regards the Commission's "exclusive" right to initiate legislation this exceptional link between the second and the first pillar reduces the Community's freedom to initiate legislation considerably in the area or restrictive measures (sanctions). Well before the adoption of individual sanctions scholars pointed out the risk that hybrid measures requiring actions under both the first and the second pillar would reduce the Community institutions' discretion[29] to the point of making them the subordinates of the Member States.[30] Individual sanctions are a new form of cross-pillar measure where this risk is exacerbated. Because individual sanctions are in practice fixed in advance and in great detail by the United Nations and/or by the Council acting under the second pillar, these bodies exercise substantial control over the Community institutions, including the Commission, than ever.

RESTRICTIVE MEASURES DIRECTED AGAINST CERTAIN PERSONS AND ENTITIES ASSOCIATED WITH USAMA BIN LADEN, THE AL-QAIDA NETWORK AND THE TALIBAN

5. In the case of implementation of UN lists of terrorist suspects the Community legal instruments, as well as the Union legal instruments are required to adhere strictly to the relevant UN measures. In 2005, in Kadi, the CFI found that the Community institutions were not authorised to set up any mechanism of examination or re-examination of these measures.[31] However, a number of appeals are pending before the European Court of Justice (ECJ) challenging the CFI's absolute deference to the United Nations.[32]

RESTRICTIVE MEASURES DIRECTED AGAINST CERTAIN PERSONS AND ENTITIES WITH A VIEW TO COMBATING TERRORISM

6. With regard to the Union's autonomous sanctions regime the CFI has acknowledged that the Community has discretion. In Sison, the Court ruled that "the Community does not act under the powers circumscribed by the will of the Union or by that of its Member States as it may be expressed in a common position adopted in the sphere of the CFSP".[33] The CFI considered the adoption of sanctions "the exercise of the Community's own powers, entailing a discretionary assessment by the Community".[34]

7. However, Article 301 EC restricts the Commission's independence and general right to initiate action in that it may only propose if and to the extent that it is provided for in a CFSP decision.[35] Even if CFSP instruments are in principle only binding on the Member States,[36] in the adoption procedure laid down in Article 301 EC CFSP decisions are not without legal effects on the European institutions. In Pupino the ECJ acknowledged that the principle of sincere cooperation referred to in Article 10 EC is applicable to Union law.[37] The ECJ has further read into Article 10 EC a general obligation of cooperation, which is not only addressed to the Member States but also to the European institutions.[38] As a consequence, even if CFSP instruments are not directly binding on the Community institutions in strict legal terms, they entail certain legal effects when they are used as part of the Article 301 EC adoption mechanism. The Commission is obliged to cooperate loyally and not to obstruct the effects of the common position. There is an additional argument that Article 3 TEU limits the Commission's discretion.[39]

8. CFSP decisions providing for the adoption of Community sanctions have shifted from being general decisions to adopt sanctions against states to become detailed prescriptions of those against whom sanctions are to be taken (individual sanctions); these decisions oblige the Community to act as "the Union's servant". In practice this situation is mitigated by the fact CFSP lists of terrorist suspects and EC lists of terrorist suspects are usually drawn up by the same people at the same meeting.[40] The Commission's standing invitation to take part in the Council meetings applies irrespective of the legal basis of the subject matter; and the Commission's representative can make active contributions to the debate.[41]

9. However, the legal constraints remain and there is no reason, why, if individual sanctions are to be adopted as Community measures, it should not also be for the Community to identify those sanctioned. The general political decision to fight terrorism could be taken in a CFSP common position and the list of persons suspected of financing terrorism could be drawn up in the Community pillar. This would reflect the division of competences in the Union reserving foreign policy decisions to the CFSP, while allowing only the Community to immediately change the legal position of individuals.

TREATY OF LISBON

10. The Treaty of Lisbon would introduce two specific legal bases for restrictive measures against private persons and entities as they are currently used to fight terrorism: Articles 75 and 215 of the Treaty on the Functioning of the European Union (TFEU). The sanctioning procedure in Article 215 TFEU is the same as the Article 301 EC procedure, save that it contains an explicit competence for sanctions "against natural or legal persons and groups or non-State entities".[42] It requires a decision pursuant to Article 25 TEU (CFSP decision) that provides for further action by the Union. Article 75 TFEU, on the other hand, differs from Article 60 EC considerably. While Article 60 EC allows for the adoption of "necessary urgent measures on the movement of capital and on payments as regards the third countries concerned" pursuant to the same procedure set out in Article 301 EC, Article 75 TFEU is a legal basis in its own right.[43] Since Articles 75 and 215 TFEU set out very different procedures the choice of the legal basis will be crucial for the competences of the institutions and the Member States respectively. While the concerns for the Commission's right to initiate legislation described above would apply equally to Article 215 TFEU, Article 75 TFEU requires the ordinary legislative procedure; the Commission will consequently be free to exercise its right of initiative.

21 April 2008