Posts Tagged Legal basis
Hot on the heels of yesterday’s post on e-collars, a short note on yet another trade and animal welfare /biodiversity case. In  EWHC 2951 (Admin) Friends of Antique Cultural Treasures v Secretary of State for the environment, food and rural affairs, Justice Jay (‘Jay J’ even though correct might sound a bit too intimate) upheld the UK’s planned ban on ivory trade, stricter than anything in place elsewhere. As a general rule, the Act interdicts the sale of antique worked ivory, that is to say pre-1947 artefacts, unless one of limited exemptions is applicable.
The discussion engages CITES, pre-emption /exhaustion by harmonised EU law, the environmental guarantee of Article 193 TFEU (albeit not, oddly, the issue of notification to the EC), Article 34 TFEU, and A1P1 ECHR.
On uncertainty, Justice Jay refers to the precautionary principle: at 155: ‘we are in the realm of scientific and evidentiary uncertainty, and the need for a high level of protection. §3.1 of the Commission’s 2017 Guidance makes that explicit. Although the evidence bearing on the issues of indirect causation and demand in Far Eastern markets may be uncertain, statistically questionable, impressionistic and often anecdotal, I consider that these factors do not preclude the taking of bold and robust action in the light of the precautionary principle.’
Rosalind English has analysis here and refers even to Edmund de Waal’s novel The Hare with the Amber Eyes which has been on my reading list after my wife recommended it – this is a good reminder.
EU environmental law (with Leonie Reins), Edward Elgar, 2018, p.28 ff., and Chapter 17 (p.308 ff).
I reviewed Mengozzi AG’s Opinion in C-5/16 Poland v EP and Council here. The CJEU today confirmed his reading. Firstly (at 41), aim and content of the measure determines its legal basis. Not its actual effects after entry into force for that would require speculation. Further (at 43 ff) Article 191 TFEU mandates the EU to take measures to tackle climate change. The measures taken to that end necessarily affect the energy sector of Member States. A broad interpretation of point (c) of the first subparagraph of Article 192(2) TFEU would risk having the effect of making recourse to the special legislative procedure, which the Treaty FEU intended as an exception, into the general rule.
At 61: the MSR is a one-off intervention on the part of the legislature for the purpose of correcting a structural weakness of the ETS that could prevent the scheme from fulfilling its function of encouraging investment with a view to reducing carbon dioxide emissions in a cost-effective manner and being a driver of low-carbon innovation contributing to the fight against climate change. At 62 and in conclusion: it does not follow from the analysis of the aim and content of the contested decision that the first outcome pursued by that decision is significantly to affect a Member State’s choice between different energy sources and the general structure of its energy supply.
(In the remainder of the judgment the Court rejects arguments based on proportionality etc.).
This is an important day for the legal basis of EU environmental policy.
Others have studied the EU’s legal basis for energy policy much better than I have. Chiefly among them Dr Leonie Reins. e.g. for RECIEL here and in her Phd here. The impact of this discussion is high. The Lisbon Treaty introduced a formal energy Title in the EU Treaties. Whether so designed or not, the prospect of that Title’s requirement on unanimity for measures which ‘have a significant effect on a Member State’s choice between different energy sources’ looms heavily over the EU’s environment policy.
The EU’s emissions trading system – ETS is the prime candidate for falling victim to an extensive interpretation of Article 192(2)c TFEU, which harbours the unanimity requirement within the Treaty’s environment Title. [The energy Title, Article 194, has similar challenges].
In C-5/16 Poland v EP and Council Mengozzi AG Opined last week. At issue is Poland’s opposition to a MSR. MSR is a market stability reserve for the Union greenhouse gas emission trading scheme,. Essentially it is a long-term parking for surplus allowances to enable the ETS to safeguard collapse of prices in the event of excess supply. The resulting increase in the price of allowances was inter alia intended to encourage fuel switching and to discourage investments in coal-fired power stations (hence of course Poland’s interest).
Relevant to future reference is especially the AG’s view at 25, which I include in full:
‘as a derogation, Article 192(2)(c) TFEU is to be interpreted strictly, especially since an efficient modern environment policy cannot ignore energy questions. I share the fears expressed by the defendants and the interveners that the applicant’s proposed interpretation of Article 192(2)(c) TFEU and the conclusions which it draws from that interpretation for the examination of the legal basis of the contested decision would effectively block any legislative initiative by recognising a right of veto for Member States, as the Union would adopt measures inviting them only to rationalise their CO2-consuming activities. Furthermore, such an interpretation would doom the ETS to failure as it would prevent the EU legislature from correcting its structural deficiencies. In addition, although I would point out that the goal of introducing the MSR is not to form the price of allowances but simply to ensure the efficiency of the ETS, in any event, an operator’s choice of a certain energy source or production technology cannot depend on that price alone, which does not in itself define the production costs, which are determined by a variety of factors. Even with the introduction of the MSR, the choice of technology still remains in the hands of operators and is not dictated by the European Union.’
I am not sure to what degree the Court’s judgment will enable us to draw criteria with wider impact than just the current case – but it would certainly be helpful.
Mengozzi AG firstly emphasises strict interpretation of the ‘energy mix’ exception. Further, in the paras preceeding the aforecited one, he links amendments to existing laws largely to the legal basis of that initial instrument. He also supports the Institutions and Spain, France and Sweden (intervening; the position of Germany, also intervening, was not made clear) in their warning against veto power in the energy /climate change context. Finally he further dilutes the exception by looking at policies as they work in practice, not just in theory. On this point, the AG looks at the ETS specifically however his view has broader appeal: it would essentially mean that when Member States’ and individuals’ /undertakings’ behaviour is determined by regulatory intervention, some of which clearly based on a legal basis other than Article 192(2)c TFEU, the latter is not determinant in deciding proper legal basis.
This is an important case for the future of EU environment and energy policy.
How ‘trade related’ is the Agreement on Trade-Related Aspects of Intellectual Property Rights? The ECJ in Daiichi Sankyo v Demo
In Daiichi Sankyo v Demo (most likely ‘Demo’ in shorthand), the Court of Justice held last Thursday, 18 July. One of the main issues was the extent of Article 207 TFEU on the EU’s common commercial policy, vis-a-vis the TRIPS Agreement. Article 207 grants the EU exclusive competence (and the European Commission a very strong hand) in ‘common commercial policy’.
By its first question, the referring Greek court asked essentially whether Article 27 of the TRIPs Agreement falls within a field for which the Member States have primary competence and, if so, whether the national courts may accord that provision direct effect subject to the conditions laid down by national law. The TRIPs Agreement was concluded by the Community and its Member States by virtue of shared competence. At the time, for the EU to be able to exercise exclusive jurisdiction pre Lisbon, under the in foro interno, in foro externo principle, it would have had to have exercised its powers in the field of patents, or, more precisely, of patentability: roll-out of its internal powers on patentability, would have als led to exclusive power externally. The European Commission however suggested that the mixed agreement discussion (and the exercise, or not, of its internal powers), was no longer relevant, given that the Lisbon Treaty has now given it exclusive competence in the entire common commercial policy, including for intellectual property rights. Under the old Article 113 EC Treaty (later updated to Article 133 – many of us still speak of the ‘Article 113 Committee, which surely dates us!), intellectual property rights did not feature in the common commercial policy.
The ECJ conceded that of the rules adopted by the European Union in the field of intellectual property, only those with a specific link to international trade are capable of falling within the concept of ‘commercial aspects of intellectual property’ in Article 207(1) TFEU and hence the field of the common commercial policy. However it emphatically [and contrary to the view of Cruz Villalon AG] held that such is indeed the case for the TRIPS Agreement: ‘Although those rules do not relate to the details, as regards customs or otherwise, of operations of international trade as such, they have a specific link with international trade. The TRIPs Agreement is an integral part of the WTO system and is one of the principal multilateral agreements on which that system is based.’ (para 53).
Member States cannot therefore grant direct effect to the provisions of TRIPS, in accordance with national law. It is up to the ECJ to hold on such direct effect – or not, and in the absence of such direct effect, to interpret the provisions of EU law in line with the provisions of the TRIPS Agreement.
The judgment also reviews a number of substantial aspects of intellectual property law which I feel less entitled to comment on, I fear.