Inspection of SPS standards by ricochet. The CJEU on extra-EU enforcement of process standards in BRF v EC.

The CJEU (General Court) held in Case T-429/18 BRF SA et al v European Commission  this week.  I need to think a bit more about the implications of the judgment, particularly as I am keen to submit a research grant somewhere to investigate how, practically speaking, the EU may enforce EU process standards on production taking place abroad.

The GC refers to this challenge at 79 in fine where  it says ‘neither the Commission nor the Member States have enforcement powers in respect of establishments outside the European Union or countries not directly subject to obligations imposed by EU law.’ In the case at issue, Regulation 854/2004 provides that the possibility for third country establishments to export products of animal origin (for BRF: poultry) to the EU market requires, first, the country in question and, second, the establishment concerned be included on the lists provided for in those provisions.

The Court held that the Commission is within its rights to establish the reliability threshold of the guarantees provided by the competent authorities of a third country at a particularly high level and may thus go so far as to require, by reference to essential parameters, practically irreproachable performance on the part of the competent authorities of third countries (at 80). As far as its duty to state reasons is concerned, at 84:

The Commission stated, in recitals 4 and 5 of the contested implementing regulation, that the Brazilian authorities had been requested to take the necessary corrective actions to remedy the serious and repeated cases of non-compliance with EU requirements due to the presence of salmonella in poultry meat and poultry meat preparations. It is apparent from the information provided by those authorities and from the results of the official controls carried out at the borders of the European Union, however, that the necessary actions had not been taken, so the placing on the market of the products from the establishments concerned constituted a risk for public health. Those reasons relate to the 10 establishments belonging to the applicants and set out in the second table of the annex to that implementing regulation.

At 88: detailed reasons per establishment, for removal from the list, are not required.

More can be said about the judgment however at this stage I jus want to point out the somewhat messy implications of lack of extraterritorial enforcement powers. It puts foreign establishments at the mercy of their own food and feed inspection authorities. For  while EU law requires that some level of tailor-made information be available at individual establishment level, ultimately lack of diligent inspection by the local authorities will ricochet unto individual corporations’ export opportunities.

Geert.

 

 

 

The French Constitutional Court on exporting environmental pollution and health hazards.

I seem to be having my environment cap firmly on this week so I am happy to thank Le Monde for flagging the judgment of the French Constitutional Court 2019-823 of 31 January in which it sanctioned (against the wishes of applicants, the Union des industries de la protection des plantes, essentially Bayer, Syngenta, BASF)  the Government’s ban on the manufacturing of and exportation of pesticides banned for use in France but hitherto available for export, mostly to Africa.

The case I would suggest is one that is also very suited to a business ethics class. Interestingly the Act also mentions that it applies to the degree it is not incompatible with WTO rules – the WTO is not addressed in the judgment.

Applicants’ case is grounded on the freedom of ‘enterprise’ or ‘commerce’, as expressed in the 1789 Déclaration des droits de l’homme et du citoyen – but also the Decret d’Allarde 1791. To the mix of objectives to be balanced, the Court adds the protection of public health (Constitutional recital, 1946) and the Environment Charter 2004, from which the court deduces that environmental protection, as common heritage of mankind, is a Constitutionally ringfenced objective.

At 6 the Court without much ado posits that the French Government in pursuing environmental policy, justifiably may take into account the extraterritorial environmental consequences of activities on French soil.

Having referred to the EU ban on the use of the substances at issue, based on scientific considerations discussed at length in the run-up to the EU law at issue, the Court at 9-10 refers to the principle that it should not overzealous in second-guessing the exercise by Parliament of its balancing exercise. At 11, it notes that the 3-year transitionary period gives corporations ample transitionary time in line with their freedom of commerce.

To the Court, it’s all very much self-evident. For environmental policy and extraterritoriality, its findings are quite relevant.

Geert.

 

 

The mooted Flemish ban on fireworks displays. A concise primer (with referral) on exhaustion, property rights (ECHR) and the internal market (TFEU).

Update 18 December 2020 the Decree saw the light but was annulled by the Constitutional Court yesterday for reasons of internal devolution in Belgium (infringement of the federal head of power for product standards).

Anyone short of exam essay Qs, consider the planned Flemish ban (with room for local, event-related exceptions) on fireworks displays. Akin to the issues in Ivory Ban or pet collars, at the core of the legal analysis is the legality of use restrictions on goods lawfully marketed in other Member States (see also my brief review of Amsterdam’s booze bikes here).

The exhaustive effect or not of EU secondary law will have to be discussed, as will Article 34 TFEU (including consultation and commissioned research issues and of course proportionality), and indeed A1P1 (Article 1, first Protocol) ECHR.

(For a recent more locally relevant issue, see the Supreme Court’s (Raad van State) December 2019 annulment of an Antwerp highway code rule banning the use of quads and introducing a strict exemption policy).

Geert.

 

 

The UK ban on e-collars. High Court finds decision does not breach property rights (ECHR) or internal market (TFEU).

Update 11 May 2021 the Court of Appeal has upheld the decision: [2021] EWCA Civ 666, only succinctly engaging with the A1P1 issue and hardly with the A34 TFEU arguments.

Update 30 September 2020 for a similar judgment at the Belgian Constitutional Court, see here. This judgment engaged with A1P1 ECHR,  as well as alleged discrimination, particularly viz dog therapists where use may be continued; and viz electric cattle prods. Re e-collars for dogs the point is made that the danger to the animal’s welfare lies with its inappropriate use by the owner, something which the drafters of the statute is not the case with farmers; I do not think that is a correct assumption). The legality of the device in other Member States was not discussed.

I tweeted the judgment the day it was issued, apologies for late succinct review. I wrote a few years back on the legality of use restrictions on goods lawfully marketed in other Member States, and see also my brief review of Amsterdam’s booze bikes here. In [2019] EWHC 2813 (Admin) The Electronic Collar Manufacturers Association v Secretary of State for Environment, Food and Rural Affairs, Morris J upheld the UK Government’s ban on e-collars (a hand-held remote-controlled (not automated: a distinction that matters as Rosalind English points out) e-collar device for cats and dogs, used particularly in dogs for training purposes).

His analysis engages all the right issues in discussing the lawfulness of a ban at 204 ff under Article 34 TFEU (including consultation and commissioned research issues and of course proportionality), less focused than I would have expected perhaps on the fact that these items are lawfully marketed elsewhere in the EU, and indeed A1P1 (Article 1, first Protocol) ECHR. The remainder of the judgment discusses internal UK judicial review. An excellent primer on trade and animal welfare under EU and ECHR law.

Geert.

 

 

Request for consultations under the Trade and Sustainable Development chapter of the EU-Korea FTA.

Update 25 January 2021 the Report was issued today and found Korea to be in breach. For the EC press release see here.

Update 23 January 2020 for the EC’s first written submission see here.

Update 20 September 2019 the US too have now requested environment consultations under KORUS, their FTA with Korea.

Update 5 July 2019 Ditto for the Korea issue. Update 21 June 2019 the EU /Ukraine issue, below, has now led to a formal request for establishment of panel.

Update 10 April 2019 see USTR for their report on having successfully resolved a timber management issue under the US /Peru FTA.

Update 19 March 2019 see Quentin Decleve here for the US following suit, related to rule of law /due process/ hearing rights issues before the Korean competition authority.

Update 16 January 2019 the first such trigger was quickly followed by a second: the EU have requested consultations with Ukraine over the country’s ban on the export of unprocessed woods. Update December 2020 the Report is out and found in favour of the Ukraine.

This is a short posting for completeness and filing purposes. The EU have requested consultations with South Korea under the Trade and Sustainable Development chapter of the EU-Korea FTA. Labour rights are at the heart of the request. The request is a first trigger of the ‘Trade and’ consultations chapters under recent EU FTAs. I am not in a position to say more at this stage.

Geert.

 

WTO examiners: at ease! Canadian Supreme Court holds in R. v. Comeau (New Brunswick restrictions on alcohol trade).

Fellow faculty about to examine students on the Law of the World Trade Organisation, have their exam sorted (especially if it is an oral exam). In 2018 SCC 15 R v Comeau the Canadian Supreme Court held last week. At issue is New Brunswick’s restrictive regime on the import and sale of alcoholic beverages. Greg Tereposky and Daniel Hohnstein have background to the case.

Despite the Province’s regime having clear trade impact, the SC held that it was not illegal under Canada’s internal free trade rules – with occasional reference to GATT and WTO. For comparative and exam purposes, the interesting angle is clear: has the Supreme Court adopted the kind of aims and effects test which the WTO is no fan of?

Copy of the judgment. 15 mins prep. And Bob’s your (oral exam) uncle.

Geert.

(Handbook of) The law of the World Trade Organisation, forthcoming at OUP with Demeester, Coppens, Wouters and Van Calster.

Trading Together For Strong and Democratically Legitimized EU International Agreements

I am happy to post here the link to the statement which I signed together with 62 colleagues from various walks of (trade) life, on the EU’s modus operandi for the signature of trade agreements.  Post-CETA, we strongly believe that current procedures, when properly implemented, ensure democratic legitimacy for the EU’s international agreements at multiple levels. The statement is available in English, French and German: EU noblesse oblige.

Geert.

 

Is it me, or is it getting chilly? The EC and endocrine disruptors.

Do the newly negotiated EU rules on endocrine disruptors illustrate regulatory chill /the ‘freezing effect’ of international trade law?

The new European Commission proposals on endoctrine disruptors are, of course’ ‘science based’. It has been reported (EurActiv, 12 December 2016 and last consulted by me on 13 December) that publication of the proposals was followed by a closed door meeting (minutes of which were released only after a freedom of information request) between the EC and a select number of countries (US, Canada, Argentina, Brazil and Uruguay on 13 July this year). Discussion centered around the potential WTO incompatibility of parts of the EC proposal, particularly those surrounding the tolerance levels for endocrine disruptors present in imported substances (food and feed in particularly). The EC reportedly are prepared to replace “negligible exposure” with “negligible risk from exposure”. The EC defend the latter, arguing it might even ban more, rather than less imported substances: for even if there is only negligible exposure, that exposure may still be a risk. Opponents suggest that the insertion of a risk approach has sacrified precaution on the altar of science.

A few comments.

Firstly, the report (and potentially even the EC itself) repeats the misleading assertion that the debate concerns either science or precaution. Precaution is NOT unscientific. The very trigger of the precautionary approach is science.

Next, the case is reported at a time a lot of people are getting jittery about the regulatory co-operation mechanisms in free trade agreements such as CETA and TTIP. The meeting and the subsequent EC reaction to our trading partners’ comments, would then represent an example of the ‘freezing effect’ in international trade: with our trading partners flying the flag of WTO incompatibility, the EU would then have caved in to threats of litigation in Geneva. Yet in reality WTO input by fellow WTO Members is at least as old as the WTO itself, indeed it predates it. The 1978 Tokyo Standards Code already obliged the then GATT Contracting Parties to notify their draft standards to the GATT Secretariat. The very point of notification and transparency is that the issues raised are being discussed and may indeed lead to the draft standard being adopted. Changes made to REACH, to name but one example, reflected concerns of fellow WTO Members and REACH can hardly be said to pander to industry’s demands.

However there needs to be one core appreciation in this process: just as notification serves transparency (anyone can consult the TBT notification gateway to review draft measures that have been notified), so too should the process of review after reception of the comments, be conducted in a transparent manner. This clearly has not happened here. By conducting these meetings in private, and by refusing to release the minutes until prompted to do so, EC services have given the impression that there is more than meets the eye. In times where even CETA has not yet been ratified, that is most definitely the wrong approach.

Geert.

 

Essent 2.0. The CJEU surprisingly does distinguish. Support for renewable, ‘green’ energy not entirely carte blanche.

Excuse the attempt at pun in the title (which readers may have even missed. ‘Green’ v carte ‘Blanche’. It’s Thursday, and these are busy weeks). Apologies also to the readers who are new to the debate. The legality of support schemes for renewable energy  EU law has occupied mine and others’ mind for a little while now. One may want to refer eg to my paper on the Vindkraft et al judgment or to various postings on this blog. Specifically, for the latter, my post on the AG’s Opinion in Essent 2.0, case C-492/14., judgment issued today.

Bot AG had opined, very very reluctantly, that the Court’s case-law meant that Flanders could indeed reserve the benefit of the free distribution of electricity produced from renewable energy sources solely to generating installations directly connected to the distribution systems located in Flanders, thereby excluding generating installations located in other Member States.

The Court itself has now distinguished its own case-law: the EU has not harmonised the national support schemes for green electricity; this means that it is possible in principle for Member States to limit access to such schemes to green electricity production located in their territory. However the Court’s sympathy is now limited to schemes that support producers only. Green energy support schemes, whose production costs seem to be still quite high as compared with the costs of electricity produced from non-renewable energy sources, are inherently designed in particular to foster, from a long-term perspective, investment in new installations, by giving producers certain guarantees about the future marketing of their green electricity (at 110, with reference to Vindkraft).

However it is not the purpose of the Flemish scheme to give direct support to producers of green electricity. Rather, the free distribution of green electricity constitutes a financial advantage conferred primarily on the supplier of such electricity, which may, in certain circumstances, depending notably on the sale price which the consumer is charged by the supplier for his electricity, to a certain extent and indirectly also benefit the consumer (at 112).

Such a support mechanism offers no certainty that the economic advantage thus obtained for suppliers will ultimately actually and essentially be required to benefit producers of green electricity, particularly the smallest local generating installations which the Flemish Region claims to have wanted to support, which are not both producers and suppliers (at 113).

The Court is not game to assist the AG with his call for an explicit recognition of the potential to use discriminatory measures within the context of mandatory requirements (the implications of Cassis de Dijon). That is a pity, but not a surprise.

Overall, the Court’s judgment is a welcome safeguard to its more open-ended sympathy for renewable energy support schemes. Those who challenge such schemes in future, know what to do. They need to show that there is no certainty that the economic advantage obtained for suppliers will ultimately actually and essentially be required to benefit producers of green electricity, as opposed to distributors or consumers.

Next-up: a reversal of T-351/02 Deutsche Bahn?

Geert.

 

Neither extraterritoriality questions nor WTO concerns unsettle the CJEU. Animal testing ban applies outside EU.

The last part of this title is a bit of a stretch, apologies: soundbite beats nuance. I reported earlier on the High Court’s referral to the CJEU in the Cosmetics Regulation case, C-592/14 . The Court held last week, 21 September. Much like in C-366/10, the emissions trading /aviation case, the Court was unimpressed with accusations of extraterritoriality (‘territory’ is not discussed in the judgment) and does not even flag WTO concerns (Bobek AG had, and simply suggested this is an issue that solely lies with the WTO itself to resolve).

Referring to the need to interpret the Regulation with a view to its object and purpose, the Court insists that in particular to avoid easy circumvention of the Regulation, data obtained from animal testing carried out outside the EU, cannot be employed for the marketing of cosmetics in the EU, even if those tests had to be performed so as to meet the regulatory requirements of third countries.

Of course in WTO jargon, this recalls the discussion of non-product incorporated production processes and -methods (n-PR PPMs) however the Court is more concerned with regulatory efficiency.

Geert.