Jed Odermatt

In July 2019, seven European citizens filed a European Citizens’ Initiative (ECI) entitled “Ensuring Common Commercial Policy conformity with EU Treaties and compliance with international law”. The European Citizens’ Initiative is a procedure, introduced in the Lisbon Treaty, to allow EU citizens to participate directly in the development of EU law and policy. Article 11(4) Treaty on European Union allows EU citizens to submit “any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties.” The ECI proposal must fall within the powers of the European Commission. The Regulation on the European citizens’ initiative (ECI regulation) sets out the main parameters for the procedure. The Commission may register an initiative if “none of the parts of the initiative manifestly falls outside the framework of the Commission’s powers to submit a proposal for a legal act of the Union for the purpose of implementing the Treaties” (Article 6).

The aim of the 2019 ECI is to prevent entities in the EU from importing products that originate in illegal settlements in occupied territories, in order to protect fundamental rights, and to ensure that the EU does not aid or assist the maintenance of an unlawful situation. The proposal refers to two main grounds under EU law. The first is Article 215 TFEU, which deals with EU restrictive measures, including  the “interruption or reduction, in part or completely, of economic and financial relations with one or more third countries”. The decision to adopt restrictive measures falls within the EU’s Common Foreign and Security Policy (CFSP). Decisions to interrupt economic relations with a country are taken by the Council. The second ground refers to Article 207(2) TFEU, which deals with the EU’s Common Commercial Policy, a field of competence of the European Commission.

Article 207 TFEU was the legal basis for an EU regulation imposing a system of export controls to prevent trade in goods that may be used for the purpose of torture and other cruel, inhuman or degrading treatment or punishment. That regulation sets out that respect for human rights and fundamental freedoms is “an essential element of [the Union’s] relations with third countries”. The EU’s trade and cooperation agreements also include essential elements clauses that seek to protect democratic principles, human rights and fundamental freedoms, and the rule of law in the EU’s trade with third countries.

It is clear the EU’s Common Commercial Policy may include measures designed to ensure compliance with human rights and international law. An ECI calling upon the European Commission to adopt measures to regulate trade with occupied territories would have a similar aim: the ensure that the Union complies with international law. The EU Court of Justice has long held that the Union “institutions must respect international law in the exercise of its powers”, and the EU Treaties oblige the Union to contribute to the “the strict observance and the development of international law” (Art 3(5) TEU).

In September 2019, the European Commission refused to register the Initiative on the grounds that it “manifestly falls outside the framework of the Commission’s powers to submit a proposal for a legal act of the Union.” The decision states that the legal basis for the proposed citizens’ initiative could be Article 215 TEU (restrictive measures), but does refer to Article 207 TFEU (Common Commercial Policy). Given the title of the initiative, and the many references to Common Commercial Policy, one might expect the Commission to explain why it felt the proposal fell outside the scope of Article 207 TFEU. Indeed, under EU law, EU institutions have an obligation to state reasons for their decisions. Under Article 41 of the EU Charter of Fundamental Rights, the right to good administration includes the obligation of the administration to give reasons for its decisions.

The ECI’s authors challenged the Commission Decision before the EU General Court. They based their action for annulment on four grounds, arguing that the Commission had failed to give adequate reasons to refuse to register the Initiative. On 12 May 2021, the General Court annulled the Commission decision on the grounds that the latter failed to give sufficient information to enable the applicants to know the justifications for the refusal to register the ECI proposal. While the European Commission is not required to refer to every element in the proposal, the fact that there were numerous explicit references to Article 207 TFEU meant that the Commission was obliged to explain why the subject matter fell outside the Common Commercial Policy. The General Court also found that the Commission’s statement of reasons should be assessed in the light of the EU Treaties and the ECI Regulation, which aims to enhance “the democratic functioning of the Union through the participation of citizens in its democratic and political life.” European citizens should have enough information to know and understand why the proposal was refused.

The General Court judgment does not address the question whether the proposed initiative falls within the powers of the European Commission, as the case only dealt with the Commission’s failure to give adequate reasons. In making a new decision, the Commission must explain why the ECI manifestly falls outside the Commissions powers (see Art 4(2)(b) ECI Regulation). The Commission might argue that the ECI is essentially about EU foreign policy and is thus outside its powers. The regulation concerning trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment, for example,  applies to a certain range of goods, irrespective of their origin. The ECI proposal would apply with respect to goods originating in certain territories, and thus may be viewed as closer to a measure falling within the EU’s CFSP. However, this would miss the point of the initiative. An EU regulation that regulates trade in goods produced in occupied territories would not fall only within the field of foreign policy and restrictive measures; it would also have the aim of ensuring that EU law and policy complies with international law.

In recent years, the EU Court of Justice has been faced with legal questions related to the EU’s relationship with occupied territories. However, in these cases, the Court never addressed the question directly. Cases touching on issues related to occupied territories such as Front Polisario v Council, Western Sahara Campaign UK, and Brita addressed territorial scope of trade agreements concluded between the EU and a third country and the standing of applicants. In these cases, the Court avoided discussing whether, and to which extent, the EU’s economic engagement with occupied territories recognises as lawful a situation created through a serious breach of peremptory norm of international law, or whether the EU’s action aids or assists the maintenance of such illegal situation.

I have argued that by focusing on procedural issues and territorial scope, the EU Court has been able to avoid these more difficult legal questions (and their political fallout), while at the same time maintaining the EU’s respect for international law. In a case currently before the EU Court, Front Polisario has argued that the EU’s 2020 Association Agreement with Morocco, inter alia “endorses serious violations of international law committed by the Moroccan occupying forces against the Sahrawi people and renders aid and assistance in maintaining the situation created by those violations.”

By equating the ECI proposal with restrictive measures, rather than falling within the EU’s Common Commercial Policy, the Commission also avoids addressing the legal and political issues that the Court itself has avoided. The Commission’s reasoning may be based on technical arguments alluded to above. It may again decide to refuse to register the ECI, but will need to explain to European citizens why the ECI falls outside the EU’s Common Commercial Policy.

See, J. Odermatt, The EU’s Economic Engagement with Western Sahara: the Front Polisario and Western Sahara Campaign UK cases in A. Duval and E. Kassoti The Legality of Economic Activities in Occupied Territories: International, EU Law and Business and Human Rights Perspectives (Routledge, 2020).