The boundaries of the development cooperation legal basis: What to make of the Court’s ‘centre of gravity’ test?

By Laurens Ankersmit

In Wednesday’s Grand Chamber judgment C-377/12 Commission v Council, the Court annulled the Council’s decision to sign the Partnership and Cooperation Agreement (PCA) between the European Union and the Republic of the Philippines because the Council had erroneously used a number of legal bases in addition to the development cooperation legal basis of article 209 TFEU and the common commercial policy legal basis of article 207 TFEU. While the outcome of the judgment is not that surprising, the Court’s reasoning is only partly helpful in shedding further light on the principle of conferral and the choice of the correct legal basis for the conclusion of international agreements when an agreement covers a number of policy areas. This is particularly true for agreements in the field of development cooperation, which traditionally covers cooperation in a multitude of fields not only directly linked to poverty reduction. This blogpost will discuss the two seemingly conflicting tests the Court applies when determining the correct legal basis of a measure and which now appear to have been merged into one test.

 The choice of the correct legal basis and the PCA with the Philippines

As is well-known, the principle of conferral holds that the EU can act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Practically speaking, this means that the EU can only act in a certain policy area to the extent that there is a legal basis granting the EU competence to act in that area. Measures in other policy areas need to be taken on the basis of other legal bases insofar as they exist. However, one of the main strands of case-law on this topic appears to make inroads on that principle. The Court has held that if examination of an EU measure reveals that it pursues a twofold purpose or that it has a twofold component, and if one of those is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, the measure must be founded on a single legal basis, namely, that required by the main or predominant purpose or component. Accordingly, other legal bases (again, if they exist) and their procedures must be ignored, and the measure must be adopted in accordance with and on the basis of the predominant purpose of the measure (the so-called ‘centre of gravity’ test). Only ‘exceptionally’ are multiple legal bases allowed, namely when no predominant component can be identified and when the components are ‘inseparably linked’.

While this is a practical approach, which is often not so politically controversial, it can become a bit more problematic if a secondary but important aspect of a measure does cover an entirely different area than the predominant component of the measure. Practice demonstrates that the legislator often opts for adopting the measure on a multitude of legal bases, even if the objectives are not inseparably linked and where the thrust of an agreement lies with one policy area.

In this case, the Court had to rule on this practice by the Council. The PCA in question contains 58 articles which cover cooperation in a wide variety of fields: political dialogue, trade and investment, justice and security, migration and maritime labour, and economic and development cooperation. To be sure, this PCA is not very different from other PCA’s, which often also cover cooperation on a diverse number of policy areas. It is also consistent with EU development cooperation policy, which according to article 208 TFEU takes place in the framework of EU external action. Nonetheless, the provisions in this PCA on the readmission of third-country nationals encompass obligations and thus go beyond mere cooperation in this field. For this reason, and because the Council thought that the PCA covered other areas than development cooperation, it added Articles 91 and 100 TFEU (transport), 79 (3) TFEU (readmission of third-country nationals), and 191 (4) TFEU (environmental protection) as additional legal bases to Articles 207 (Common Commercial Policy) and 209 TFEU. The Commission disagreed, considering that the PCA should have been signed on the legal bases of Articles 207 and 209 TFEU, and therefore brought an action for annulment before the Court. The main source of contention between the institutions, therefore, was whether a number of provisions fell within the scope of the policy of development cooperation.

Addressing the paradox in the Court’s case-law?

The Court starts its judgment by setting out its settled case law that a measure should be adopted on the basis of the predominant component of the measure on the basis of the aim and content of it (the ‘centre of gravity’ test, para 34). However, paradoxically, it continues by stating that

in this instance, it must be determined whether, among the provisions of the Framework Agreement, those relating to readmission of nationals of the contracting parties, to transport and to the environment also fall within development cooperation policy or whether they go beyond the framework of that policy and therefore require the contested decision to be founded on additional legal bases.(para 35)

These two positions seem to be in contradiction with each other. On the one hand, the Court suggests that a single legal basis is sufficient if the predominant component of the PCA is development cooperation, and on the other hand, it suggests that as soon as the PCA goes beyond the framework of development cooperation, the decision should be founded on an additional legal basis. To add to this confusion (not discussed by the parties nor the Court), the additional use of article 207 TFEU was apparently not a source of contention, suggesting that the commercial policy component and the development cooperation component were inseparably linked and neither was secondary and indirect in relation to the other.

The Court’s solution to this paradox, however, is to merge these two seemingly incompatible tests into one test. Later on in the judgement, after recalling the essential features of the EU’s development cooperation policy, the Court states that

In the light of all those considerations, it is necessary, for the purposes of the determination specified in paragraph 35 of the present judgment, to examine whether the provisions of the Framework Agreement relating to readmission of nationals of the contracting parties, to transport and to the environment also contribute to the pursuit of the objectives of development cooperation and, if so, whether those provisions do not nevertheless contain obligations so extensive that they constitute distinct objectives that are neither secondary nor indirect in relation to the objectives of development cooperation. (para 48)

Applying these considerations to the case at hand the Court, first, holds that the provisions relating to migration, environment and transport could contribute to the pursuit of the objectives of development cooperation (paras 49-55). Second, the Court rules that the extent of the obligations contained in the PCA are limited and require further implementation (paras 56-58). In particular, the obligations on the readmission of migrants are not detailed enough, also because the provision at issue contains a commitment to sign a readmission agreement very soon. Therefore, the objectives of these provisions on environmental, migration and transport cooperation could not ‘be considered to constitute objectives distinct from those of development cooperation that are neither secondary nor indirect in relation to the latter objectives’(para 59). The Court therefore concludes that the PCA could not be signed on the basis of the additional legal bases of Articles 79(3), 91, 100 and 191(4) TFEU and annulled the Council Decision. Articles 207 and 209 TFEU were therefore sufficient as legal bases to sign the PCA..

 Comment

While the outcome of the case is not too surprising (despite the fact that the obligations on readmission of migrants was considered to fall within the field of development cooperation), its significance lies with how the Court determines the choice of the correct legal basis. This case suggests that the two tests applied by the Court in determining the correct legal basis of a measure actually go hand in hand. As soon as the provisions of a measure can be separated from other provisions as pursuing ‘distinct objectives’ an additional legal basis is required. According to the Court, this makes them neither secondary nor indirect to the objectives of the predominant component. Alternatively, one could take from this case that as soon as an objective is not secondary or indirect, it is a distinct objective, requiring the addition of another legal basis.

Although the approach can be praised from a conferral of powers perspective, this conclusion seems a bit forced and problematic for two reasons. Firstly, the reasoning does away with much of the logic of the most often applied ‘centre of gravity’ test. If an agreement predominantly regulates trade, for instance, (let’s hypothetically consider an agreement of which 80% of the provisions deal with trade facilitation and regulation and a small but detailed part regulates migration), it seems that on the basis of the ‘centre of gravity test’ the measure should be adopted solely on the basis of article 207 TFEU, despite the fact that the migration part of the agreement can be seen as a distinct objective of the agreement. The Court’s reasoning in this case suggests that, nonetheless, recourse to multiple legal bases is necessary in that instance, even though it is clear that the migration part is secondary to the predominant component. Secondly, the Court has always stated that only ‘exceptionally’ recourse to multiple legal bases is possible. This is not only blatantly contrary to the practice of the legislator (opting for a ‘safe’ approach, citing all relevant legal bases), the new test definitely also opens up the possibilities for this ‘exception’.

All in all, despite the prominence of the principle of conferral in the Lisbon Treaty and the ‘constitutional significance’ the Court attaches to it, the Court’s most recent doctrine is not really clarifying how institutions should act when choosing the correct legal basis. Add to this the contention the choice of the correct legal basis usually provokes among the EU institutions, this story will no doubt be continued in the future.

One comment

  1. Pingback: The boundaries of the development cooperation l...

Leave a Reply