International Legal Personality

Introduction

An entity which has international legal personality can be a subject of international law and then can be a regular member of international society. In international society, international legal relations are generally formed by treaties. Thus, from the legal point of view, the treaty-making power is one of the essential elements of international legal personality. In principle, only sovereign States have been qualified as entities which have full international legal personality. But as international law advances, respectively international organizations and individuals came to have limited international legal personality when they fulfill some legal conditions. It is generally accepted that whilst the treaty-making capacity varies from one organization to another, international organizations have a treaty-making power to some extent pursuant to their constituent instruments. Lord McNair, arguing for the treaty-making power of international organizations, wrote that “if fully sovereign States possess a treaty-making power, when acting alone, it is not surprising to find the same power attributed to an international organization which they have created and the members of which are usually sovereign States.” The question is to what extent international organizations can have a treaty-making power. Whereas a State possesses the totality of international rights and duties recognized by international law, the rights and duties of an entity such as an international organization must depend upon its purposes and functions as specified or implied in its constituent documents and developed in practice. Whilst there is an assertion that the treaty-making capacity of international organizations is confined to expressly stipulated powers in their constitutions, the generally agreed view is that international organizations can have expressly conferred and implied treaty-making power as well. The 1986 Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations seems to accommodate this view. Article 6 of the Convention affirms that the treaty-making power of an international organization is determined by “the rules of that organization”. In the preamble of the Convention, it is stipulated more specifically that the capacity of international organizations to conclude treaties are recognized to the extent that it is “necessary for the exercise of their functions and the fulfillment of their purposes” and the capacity “should be in accordance with their constituent instruments”.

In 1952, the European Coal and Steel Community (ECSC) emerged as an international organization dealing with the coal and steel industries in the six original Member States. Six years later, a more universal and comprehensive regional organization named the European Economic Community (EEC) was created by the Treaty of Rome. And following the conclusion of the Treaty of European Union, the EEC has been transformed into the European Community (EC). According to Article 2 of the EC Treaty, the EC has as its task “by establishing a common market and an economic and monetary union and by implementing the common policies or activities referred to in Articles 3 and 3a, to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States”. For the accomplishment of the task, the EC has many activities to conduct. Among them, at least two are related solely to its external relations, that is, provisions on a common commercial policy and on the association of the overseas countries and territories in order to increase trade and promote jointly economic and social development. In order to accomplish this objective, apart from its power to adopt unilateral measures, the EC needs its own capacity to create international relations with third countries. In this context, Article 113 of the EC Treaty makes a provision with regard to the conclusion of tariff and trade agreements. Where such agreements with third countries need to be negotiated, the Commission shall make recommendations to the Council which shall authorize the Commission to open the necessary negotiations which shall be conducted in consultation with a special committee appointed by the Council. In addition to Article 113, Article 238 stipulates the conclusion of association agreements. Furthermore, Article 228 provides a general treaty-making procedure of the EC and the effect of international agreements so concluded. Relevant parts of Article 228 state that:

1. Where this Treaty provides for the conclusion of agreements between the Community and one or more States or international organizations, the Commission shall make recommendations to the Council, which shall authorize the Commission to open the necessary negotiations. The Commission shall conduct these negotiations in consultation with special committees appointed by the Council to assist it in this task and within the framework of such directives as the Council may issue to it. …………

2. Subject to the powers vested in the Commission in this field, the agreements shall be concluded by the Council, acting by qualified majority on a proposal from the Commission. The Council shall act unanimously when the agreement covers field for which unanimity is required for the adoption of internal rules and for the agreements referred to in Article 238.

3. The Council shall conclude agreements after onsulting the European Parliament, except for the agreements referred to in Article 113 (3), including cases where the agreement covers a field for which the procedure referred to in Article 189b or that referred to in Article 189c is required for adoption of internal rules.

It is obvious that these Articles confer the express treaty-making power on the EC. But, the Council and the Commission have shown different views with respect to whether the EC has a treaty-making capacity expressly conferred on it , or whether it has not only the express power but also implied powers based on the in foro interno, in foro externo principle. To some extent, this problem was settled by the revolutionary judgment of the ECJ such as the ERTA case.

Under these circumstances, we will review the scope of the exclusive treaty-making power of the EC theoretically, compare the theory on that subject with the practice, and propose the solution of this intrinsic problem.

II. Exclusive Treaty-Making Power

1. Express Provisions on the Treaty-Making Power

Article 210 of the EC Treaty states that “The Community shall have legal personality”. This provision placed at the head of Part Six of the EC Treaty, means that in its external relations the Community enjoys the capacity to establish treaty relations with third countries over the whole field of the objectives defined in Part One of the EC Treaty, which Part Six supplements.

However, a few articles out of more than 300 articles of the EC Treaty are particularly devoted to prescribing and arranging the Community authority in relation to third countries or to international organizations. Articles which expressly mention the treaty-making of the EC are Articles 109, 113, 130r, 130y, 228 and 238. Article 109 is concerned with the conclusion of agreements on an exchange rate system of the ECU and monetary or foreign exchange regime matters. In this case, apart from Article 228 which provides the general treaty-making procedure, agreements on an exchange rate system of the ECU are concluded by the Council acting unanimously on a recommendation from the European Central Bank(ECB) or from the Commission after consulting the ECB and the European Parliament. And in case where agreements concerning monetary or foreign exchange regime matters need to be negotiated by the Community with one or more States or international organizations, the Council, acting by a qualified majority on a recommendation from the Commission and after consulting the ECB, decides the arrangements for the negotiation and for the conclusion of such agreements.

According to Article 113, the Council implements the Common Commercial Policy(CCP) which involves changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalization, export policy, and measures to protect trade such as those to be taken in case of dumping or subsidies, in accordance with the proposals from the Commission. Where agreements with third countries need to be negotiated under Article 113, the Commission shall make recommendations to the Council, which shall authorize the Commission to open the necessary negotiations; the Commission shall conduct these negotiations in consultation with a special committee appointed by the Council to assist the Commission in this task and within the framework of such directives as the Council may issue to it; finally the agreements shall be concluded by the Council on behalf of the Community.

Article 130r and Article 130y are concerned with the Community’s power respectively on the environmental cooperation and on the development cooperation with third countries or international organizations. The Community and the Member States may have concurrent powers concerning these fields. In the case where the Community and the Member States shares competence on an agreements concerning these fields, both of them may conclude it in the form of mixed agreements. But, when the Community competence covers all the subject-matter dealt with by the agreement, the Community alone may conclude it in accordance with Article 228.

Article 238 deals with an association agreement with one or more States or international organizations, which involves reciprocal rights and obligations, common action and special procedure. Before the amendment of the EEC Treaty by the Treaty on European Union, the procedure concluding association agreements was provided in Article 238. But, now the procedure is contained in Article 228 which stipulates the general treaty-making procedure. Under Article 228, the association agreements are concluded by the Council which shall act unanimously after the assent of the European Parliament has been obtained.

According to Article 228, where the EC Treaty provides for the conclusion of agreements between the Community and one or more States or international organizations, the Commission, with the authorization granted by the Council based on the Commission’s recommendations, shall conduct negotiations in consultation with special committees appointed by the Council to assist it in this task and within the framework of such directives as the Council may issue to it. And the Council shall conclude the agreements negotiated by the Commission, acting by a qualified majority or by unanimity on a proposal from the Commission. In concluding agreements, the Council shall consult the European Parliament or obtain the assent thereof. Although Article 228 (2) envisages the possibility of vesting the Commission with the powers to conclude agreements, agreements have been in all cases concluded by the Council.

As regards these treaty-making powers, apart from articles such as Articles 130r and 130y which expressly assume the possibility of joint participation of the Community and the Member States, there has been controversy whether these powers were exclusive of or concurrent with the competence of the Member States, despite of the fact that the treaty-making powers are manifestly stipulated in the EC Treaty. This legal problem was fortunately settled by the decisions of the European Court of Justice(ECJ) internally.

In Opinion 1/75, the ECJ made the following remarks on the exclusiveness of the express Community treaty-making power:

The provisions of Articles 113 and 114 concerning the conditions under which, according to the Treaty, agreements on commercial policy must be concluded show clearly that the exercise of concurrent powers by the Member States and the Community in this matter is impossible.

And in Opinion 1/78, the ECJ defined the scope the CCP which is provided in Article 113 on which the Community has the exclusive external relations power as follows:

Article 113 empowers the Community to formulate a commercial “policy”, based on “uniform” principles thus showing that the question of external trade must be governed from a wide point of view and not only having regard to the administration of precise systems such as customs and quantitative restrictions. The same conclusion may be deduced from the fact that the enumeration in Article 113 of the subjects coverd by commercial policy (changes in tariff rates, the conclusion of uniformity in measures of liberalization, export policy and measures to protect trade) is conceived as a non-exhaustive enumeration which must not, as such, close the door to the application in a Community context of any other process intended to regulate external trade.

Although the ECJ made efforts not to limit the scope of the CCP within the enumeration of Article 113, this opinion on the scope of the CCP is still open to interpretation because it did not define the concept and scope of the CCP in a positive way, thus leaving the question still unresolved. In spite of the fact that the Council and the Commission tried to define the scope of the CCP definitely, the ECJ hesitated to define the concept and scope of the CCP. Moreover, Opinion 1/78 affirms the exclusive nature of the Community’s power, in a somewhat controversial way that:

The question of the exclusive nature of the Community’s power depends in this case on the arrangements for financing the operations of the buffer stock which it is proposed to set up under that agreement. If the burden of financing the stock falls upon the Community budget the Community will have exclusive power. If on the other hand the charges are to be borne directly by the Member States, that will imply the participation of those States in the agreement together with the Community.

Although the practical reasons why the ECJ ruled in this way may be understood, this opinion is open to criticism from the legal point of view because it lacked consistency in its reasoning. Whereas the ECJ admitted that the CCP was under the exclusive power of the Community and the conclusion of the International Rubber Agreement fell under the scope of the CCP, nevertheless, the ECJ contradictorily made the exclusiveness of the Community power in this field contingent upon the budget-financing, which had no legal grounds. And the subsequent ECJ’s opinion confirmed that the budget-financing was irrelevant with the division of power between the Community and the Member States. In Opinion 1/94, the ECJ remarked that:

Given that the WTO is an international organization which will have only an operating budget and not a financial policy instrument, the fact that the Member States will bear some of its expenses cannot, on any view, of itself justify participation of the Member States in the conclusion of the WTO agreement.

In a similar way, Article 238 must be construed as giving the Community exclusive power to conclude association agreements. In practice, nevertheless, agreements concluded under Article 238 mostly have taken the form of mixed agreements. Particularly, in fact, all the association agreements such as the Association Agreements with Greece, Turkey, the African States and Madagascar, Tanzania, Uganda and Kenya, Malta, Cyprus and the four Lom Conventions were concluded in the form of mixed agreements. It appears that this tendency is due to the fact that because the association agreements deal with a wide variety of subject-matters including development, environment and financial support and so on, the Member States are very reluctant to lose all the control over the matters concerned.

And in spite of the opinions which declared that the external relations power in the field of the CCP belongs to the Community exclusively, many agreements which dealt with those subject-matters have also been concluded in the form of mixed agreements. According to the Bulk Oil case, a commercial policy of a national character is only permissible after the end of the transitional period with the specific authorization of the Community because full responsibility in the matter of commercial policy is transferred to the Community by means of Article 113 (1). And even on this basis, it must be open to the Community to authorize Member States on a provisional basis to take an independent action. Such action is not the assertion of a concurrent rival power with or against the Community. This position had been also recognized firmly in Opinion 1/75 as follows:

It can not therefore be accepted that, in a field such as that governed by the Understanding in question, which is covered by export policy and more generally by the common commercial policy, the Member States should exercise a power concurrent to that of the Community, in the Community sphere and in the international sphere…… To accept that the contrary were true would amount to recognizing that, in relations with third countries, Member States may adopt positions which differ from those which the Community intends to adopt, and would thereby distort institutional framework, call into question the mutual trust within the Community and prevent the latter from fulfilling its task in the defence of the common interest.

In this context, how can the practice be justified? It is doubtful whether the joint participation of the Community and its Member States and the lack of the Community’s objection on this point, may be regarded as a specific authorization expressed in the Bulk Oil case. This practice is availed of frequently to reflect the interests of the Member States directly who do not want to lose control over matters which were under their competence previously.

2. Implied Treaty-Making Power

It is an open question whether the Community might conclude agreements which deal with matters falling within its internal jurisdiction, but for which the EC Treaty has not expressly authorized it to enter into agreements with third States. Opinions are divided on this point, some commentators, on the one hand, drawing their inspirations from the principe d’attribution, and others, on the other hand, thinking that the competence in external matters should coextensive with the Community’s powers for internal purposes, which may be conveniently expressed by the in foro interno in foro externo principle. Generally the Council representing the interests of the Member States and the Member States themselves support the former opinion. The Commission, on the other hand, representing the interests of the Community upholds the latter view.

1) The Principe d’attribution

This is the view that the Community has external relations power on the matters which are expressly stipulated in the EC Treaty. In the ERTA case, the Council argued, although this argument was finally rejected by the ECJ, that the EEC Treaty does not confer on the Community treaty-making powers precisely coextensive with its internal authority, and that the power of the Community to promulgate legal measures was deliberately confined to unilateral measures, except where unequivocal provisions such as Articles 111, 113 and 238 have conferred authority on the Community to enter into international agreements.

2) The Theory of Parallelism

The theory of parallelism is that the external competence of the Community develops in parallel with its internal ability. Being different from the Euratom Treaty, the EC Treaty does not expressly grant a treaty-making power to the extent of its corresponding internal Community power. Even though, since the EEC Treaty which was replaced by the EC Treaty, there has been a progressive widening of internal powers of the Community as a result of the development of common policies in various sectors, as there is no provision accommodating a corresponding increase in external powers, the inconsistent situations have continuously existed in which the Community has acquired full internal capacity in certain areas of economic activity, yet the Member States arguably retain the ability to conduct their external powers in these same areas. The fact that two entities share a power, one internally and the other externally, may involve contradictory decision making in each field. In a series of decisions upholding the theory of parallelism, however, this problem was to a certain degree resolved by the ECJ.

3) The Jurisprudence of the ECJ

In the ERTA case, the ECJ, for the first time, ruled on the implied treaty-making power of the Community and its exclusive nature. The ECJ held that:

Such authority arises not only from an express conferment by the Treaty -as is the case with Article 113 and 114 for tariff and trade agreements and with Article 238 for association agreements- but may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions. In particular, each time the Community, with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form these may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules. As and when such common rules come into being, the Community alone is in a position to assume and carry out contractual obligations towards third countries affecting the whole sphere of application of the Community legal system. (italics added)

And in the Kramer case, the reasoning on the treaty-making power of the Community went further than that of the ERTA case. In the Kramer case, the referring national courts, in particular, asked the ECJ to rule ‘on the international level, whether the Community alone has authority to enter into commitments’ such as undertakings made under the 1959 North-East Atlantic Fisheries Convention. This question arose within the framework of criminal prosecutions brought against certain Dutch fishermen who were accused of having infringed certain provisions enacted during 1975 by the authorities of their State based on the recommendation issued by the North-East Atlantic Fisheries Commission established by the above-mentioned convention of which provisions were aimed at ensuring the conservation of the stocks of sole and plaice in the North-East Atlantic. The ECJ remarked in this case that:

To establish in a particular case whether the Community has authority to enter into international commitments, regard must be had to the whole scheme of Community law no less than to its substantive provisions. Such authority arises not only from an express conferment by the Treaty, but may equally flow implicitly from other provisions of the Treaty, from the Act of Accession and measures adopted, within the framework of those provisions, by the Community institutions. (italics added)

Although the ERTA judgment the ECJ ruled that the prior use of internal competence adopting ‘common rules’ is a necessary condition for the origin of the respective external power, this was not the case in the Kramer case. According to the Kramer judgment, it is implied that even if no common rule is adopted at the level of the Community, the Community may have a treaty-making power which flows implicitly from other provisions of the EC Treaty. And finally, Opinion 1/76 confirmed that the implied treaty-making power may flow from the provisions creating internal powers. The ECJ ruled in the Opinion that:

Whenever Community law has created for the institutions of the Community powers within its internal system for the purpose of attaining a specific objective, the Community has authority to enter into the international commitments necessary for the attainment of that objective even in the absence of an express provision in that connexion. This is particularly so in all cases in which internal power has already been used in order to adopt measures which come within the attainment of common policies. It is, however, not limited to that eventuality. Although the internal Community measures are only adopted when the international agreement is concluded and made enforceable, ……. [t]he power to bind the Community vis- -vis third countries nevertheless flows by implication from the provisions of the Treaty creating the internal power and in so far as the participation of the Community in the international agreement is necessary for the attainment of one of the objectives of the Community. (italics added)

In Opinion 1/92, the ECJ recognized the implied treaty-making power of the Community again. In the Opinion, the ECJ acknowledged that “the Community is empowered, under the competition rules in the EEC Treaty and measures implementing those rules, to conclude international agreements in this field”.

In Opinion 2/91, the ECJ first accepted the joint or mixed competence of the Community and the Member States in concluding treaties in relation to social policy as to which several directives has been adopted in order to ensure a uniform standard in the Community on a pure jurisdictional basis. In the Opinion, the Commission has sought the ECJ opinion on the Community’s competence to conclude Convention No. 170 of the ILO concerning safety in the use of chemicals at work and consequences which this would have for the Member States. Convention No. 170 covered the field concerning the social provisions of the EC Treaty which constitute Chapter 1 of Title III on social policy. It was accepted that the Community enjoyed an internal legislative competence in the area of social policy under Article 118a of the EC Treaty according to which Member States are required to pay special attention to encouraging improvements, especially in the working environment, as regards the health and safety of workers, and to set as their objective the harmonization of conditions in this area, while maintaining the improvements made. To this end, the Council has the power to adopt minimum requirements by means of directives. In fact, several directives have been adopted to deal with the subject matter of Convention No. 170 in the Community. The ECJ accepted that the Community has competence over the field of social policy which does not amount to a common policy of the Community and in relation to which certain directives were adopted. But, the ECJ did not agree that Convention No. 170 fell under the exclusive power of the Community based on several reasons. First of all, the ECJ believed that as under Articles 100 and 118a of the EC Treaty, the Community can adopt a minimum standard, the provisions of Convention No. 170 does not affect rules adopted in accordance with Articles 100 and 118a. Secondly, the ECJ also believed that although Part III of Convention No. 170 dealing with the classification of chemical products and laying down rules governing their transport, labelling and marketing, the preparation of chemical safety data sheets and the responsibilities of suppliers in these areas falls under the exclusive power of the Community, the scope of Convention No. 170 is wider than that of the relevant directives. Thirdly, the consultation system between the representative organizations of employers and workers contemplated in Convention No. 170 needs to be considered. The ECJ pointed out that although the Community has some competence in this area under Article 118b of the EC Treaty which states that the Commission is required to endeavor to develop the dialogue between management and labour at European level, ‘social policy and in particular cooperation between both sides of industry are matters which fall predominantly within the competence of the Member States.’

As regards the exclusive nature of the Community’s treaty-making power, the ERTA case took a clear position, that is, the Community has an exclusive power after the adoption of a common rule. But even though the Kramer case extended the scope of the implied treaty-making power of the Community, it mentioned nothing further on the exclusive nature of the Community’s implied treaty-making power than the ERTA case. It is likely that the ERTA case and the Kramer case have the same position on the exclusiveness of the Community’s treaty-making power, because the Kramer case was related to a common rule, which, although it did not deal with an identical field with that of the ERTA case, was concerned with the common fisheries policy in general. In Opinion 1/76, it was still a question whether the implied power was an exclusive or concurrent power of the Community because the relevant treaty-making power was not derived from the adoption of a common rule but the very existence of a provision creating internal power. In this respect, the ECJ implied that it was an exclusive power, when it stated that:

[t]he participation of the Member States is justified by the second paragraph of Article 234 of the Treaty and can not therefore be regarded as encroaching on the external power of the Community.

The relevant subject-matter in this case had already been regulated by two other agreements, the 1868 Mannheim Convention and the 1956 Luxembourg Convention to which all or some of Member States who signed this mixed agreements were parties. And there was a potential conflict between this new agreement and two earlier conventions. Under these circumstances, six Member States who were already parties to either or both of earlier conventions, were allowed to participate in the agreement based on the second paragraph of Article 234. They committed themselves to make necessary amendments to those two Conventions in the new agreement. The participation of six Member States must be considered as being solely for this purpose and not as necessary for the attainment of other features of the system. Consequently, in a hypothetical situation where if the Community entered into new international relations concerned with the same subject-matter which had not been dealt with by Member States before the establishment of the Community, and if the conclusion of an agreement on the matter were necessary for the attainment of one of the objectives of the Community, the Community could have exclusive competence on that matter. Therefore, if the convention was negotiated initially after the establishment of the Community, the Member States had no right to participate in the contemplated convention and the mixed procedure would be ruled out in principle. However, in order to exercise exclusively the Opinion 1/76 power, two pre-conditions must be met:

an action by the institutions pursuant to an internal competence is “necessary” to comply with the obligations incumbent on the institutions to realize the objectives of the Community the instrument of international agreement is “necessary to arrive at effective and equitable results”

The dividing line between the competence of the Community and the jurisdiction of the Member States is not clear-cut due to the ambiguity of the conditions, especially due to ambiguous meaning of necessity. It could cause legal uncertainty. Therefore third States may be reluctant to conclude agreements which fall under the category of the implied power of the Community because they might be placed in a very uncertain situation. However, it seems that the case where the most appropriate method of implementing a common policy is not in first making internal common rules and then concluding an agreement, but in proceeding directly to the conclusion of a treaty designed to settle the entire problem through the treaty with the non-member States, falls within the scope of the “necessity’ requirement in Opinion 1/76. T