Manolis Perakis, Assistant Professor of EU Law, Law School, National and Kapodistrian University of Athens, Athens, Greece
In the context of promoting the rule of law as a fundamental value that must govern the action of the Union and its Member States, the CJEU delivered its judgment on appeal in Venezuela v Council case (C-872/19)1 concerning the EU’s foreign policy and, especially, the imposition of sanctions against a third State due to the continuing and serious violations of the democratic principle and human rights. With its ruling, the CJEU took a very important step regarding the judicial review of EU institutions, by granting, for the first time, locus standi to third states before the EU Courts. This study in two parts (see Part A) seeks, on the one hand, to present the aforementioned judgement and, on the other, to set out a criticisms concerning how the Court failed to consider the distinctiveness of judicial review in the EU’s foreign policy area.
After having presented the judgment itself, starting from the historical context and the analysis of the Court’s reasoning and its final ruling, this post identifies and analyses the weakness of the judgment, namely the failure to take into account the legal peculiarities of judicial review in the field of foreign policy, and includes the conclusions reached by the author.
The flaw in the CJEU’s legal approach
1. The limited judicial review of States’ action in external relations
Judicial review of acts or omissions of EU institutions, especially in the field of the Union’s external relations –which includes the chapter on sanctions imposed on third states for the promotion of the rule of law and the protection of human rights– presents significant particularities. These particularities are not inherent in the Union’s legal order, but have been identified for centuries in democratic States, and are based on the premise that, when pursuing their interests through foreign policy, the elected governments of States enjoy a wide discretionary power and a considerable lack of intervention from both the legislative and the judicial power.
Indeed, in the exercise of a State’s foreign policy, the legislature comes actively to the fore only at the final stage of an international agreement; namely when this, in its final form, is to be ratified by law. Similarly, the judge is involved only when it comes to the interpretation and application of the relevant implementing laws, and again, to the extent that the agreement itself does not exclude such jurisdiction. Notably, in cases where the exercise of foreign policy concerns unilateral actions that cover immediate needs, and safeguard or promote the State’s interests, the possibility of such control by the said powers is even more limited.
The flexibility and the wide discretionary power of a government in the external relations of a State is guaranteed by constitutional and legislative provisions, but it mainly derives from the fundamental principles of the separation of powers and the democratic functioning of the State. Accordingly, and fully embracing the need for self-restraint, the judges limit themselves by strictly remaining within their constitutional role.
It should be noted that this reasoning –namely that any restrictions imposed on the right to effective judicial protection may be found legitimate by reasons of a State’s independent action in the international environment– is consistently followed by the ECtHR in its case-law.2 Also, reference is made to the so called “political question doctrine” elaborated by the US Supreme Court in the famous case Baker v. Carr (1962), where the American judges pointed out the lack of “judicially discoverable and manageable criteria” to assess the legitimacy of government choices in this field.
Transferring the above examples to the constitutional framework of the Union’s legal order, one may observe that there are certain provisions both within the Treaties and in secondary EU law, which similarly attempt to ensure that the Union’s diplomacy and, in particular, the Council –as the competent institution– enjoy a minimum ‘freedom of manoeuvre’ in the exercise of the EU foreign policy. It should be noted that the term ‘minimum’ is employed due to the fact that, on matters of external action, the relevant control power of the EU judge is undoubtedly more enhanced than that of the national judge, while only the Treaties’ provisions explicitly excluding or limiting such jurisdiction3 –which are admittedly a few– may ensure some margin for manoeuvre to the Union.
2. The CJEU’s case law which was not taken into account in the judgment
The lack of clear and strict limits in the Treaties as regards the judicial review of the majority of foreign policy acts did not prevent the CJEU from taking, on its own initiative, into account the specific nature of foreign policy and the need to safeguard the Union’s interest in external action, and to limit itself in its case law by seeking a balance between the different stipulations.
The most representative and indicative series of judgments in this regard concern the direct effect (‘invocability’) of the international rules binding upon the Union; namely the conditions of locus standi for bringing an action for annulment against an EU act, on the grounds that the latter breaches an international agreement concluded between the EU with a third State.
More specifically, on the question whether a provision of an international agreement concluded between the Union and third States may be invoked in order to seek the annulment of an EU act infringing that provision, the CJEU has held that this is a matter that is, in principle, decided by the parties to that agreement and reflected in the content thereof.4 If, however, the will of the parties cannot be inferred from the text of the international agreement –as is usually the case5– the latter is reviewed in light of certain conditions laid down by the CJEU’s case law.
Indeed, in order to examine whether a provision of an international agreement binding upon the Union produces a direct effect, the CJEU has set out two stages of control.6 The first stage examines, in general terms, ‘the letter, spirit and general scheme’ of the international agreement, while the second one investigates whether the provision under review is legally sound, precise and unconditional. In other words, it is an examination of two elements: a general (international agreement); and a specific (individual provision). Importantly, the said conditions must be met irrespective of whether it is an individual or a Member State bringing the action for annulment of an EU act under Article 263 TFEU,7 while they even apply in the context of a reference for a preliminary ruling, where the CJEU conducts an interlocutory review of the validity of such an act.
Among the aforementioned conditions of invocability, particular interest arises from the one concerning the ‘spirit’ and the ‘general scheme’ of the international agreement, which is even directly related to the judgment in question. Indeed, the general and abstract terms ‘spirit’ and ‘general scheme’ have been interpreted by the CJEU in an intertemporal manner, with the implicit yet clear purpose of ensuring that the Union shall not be placed in a weak position vis-à-vis its international counterparts as a result of the broadly applied principle of effective judicial review, which allows for judicial review even of EU acts concerning its external action.8
Indeed, already at an early stage in its relevant case law, it became apparent that the CJEU has tended to recognize the ‘spirit’ and the ‘general scheme’ of certain international agreements –where the Union was the strong party and the need for ensuring diplomatic flexibility was accordingly of minor importance,9 such as, for example, the Association Agreements10– as suitable for their provisions to produce direct effect.
On the other hand, a striking example of the Court’s opposite position arises from its firmly negative answer to the question whether the provisions of the General Agreement on Tariffs and Trade (GATT), and those of its ‘successor’, namely the World Trade Organization (WTO) Agreements, may produce a direct effect. Indeed, the CJEU has, to date, continued to hold that the spirit and the general scheme of those agreements are not appropriate for producing “invocability”, despite their development over time,11 relying on an number of arguments, and underlining, inter alia, the remarkable flexibility of their provisions, especially of those relating to the possibility of a temporary derogation from the agreements, the measures that may be taken in the event of exceptional difficulties, and the settlement of disputes between the parties.
However, the most important element with regard to the topic under discussion in this study is that the CJEU, in all of its relevant judgments, has emphasized that the principle of negotiation, as well as the principle of reciprocity and mutual benefits are characteristic features that govern not only those agreements, but any relations arising in the context of international law12. With respect to the above principles, the Court did not fail to stress that:
“[…] to accept that the [EU] Courts have the direct responsibility for ensuring that [EU] law complies with the WTO rules would deprive the [EU’s] legislative or executive bodies of the discretion which the equivalent bodies of the [EU’s] commercial partners enjoy. It is not in dispute that some of the contracting parties, which are amongst the most important commercial partners of the [EU], have concluded from the subject-matter and purpose of the WTO agreements that they are not among the rules applicable by their courts when reviewing the legality of their rules of domestic law. Such lack of reciprocity, if admitted, would risk introducing an anomaly in the application of the WTO rules.”13
As is clear from the above reasoning of the CJEU, the unconditional recognition of locus standi to individuals and Member States to seek the annulment of EU acts on the basis that they breach an international agreement or a judgment issued by a judicial body established by the former,14 would run counter both to the application of the principle of reciprocity, which is fundamental in international law, and to the need to ensure that EU institutions have a scope –albeit limited– for the exercise of diplomacy and foreign policy when the Union is confronted with actions by other States which are unconventional or detrimental to its interests15. It should be further noted that the relevant case law has been extended from actions for annulment to those seeking damages on the grounds of non-contractual liability of the Union.16
It is clear that the CJEU developed the above reasoning with regard to international agreements such as the WTO, where the Union operates in a highly competitive contractual environment in which the instruments and means available for exercising foreign policy is a necessary tool for safeguarding its interests and diplomatic survival, while it is on this very basis that the Court found that the procedural limitation imposed on the subjects of the EU legal order is justified and lawful17. On the contrary, it is incomprehensible why the CJEU did not apply the same reasoning to a case like the one in question, where the applicable framework is not even that of an international agreement, but it arises from the arena of international relations, where the Union’s external action seeks to safeguard not its commercial interests but the rule of law and fundamental rights, and where the procedural limitation under consideration does not even concern subjects of the EU legal order, but third States lying outside and beyond it.
It is indeed inexplicable as to why the CJEU has chosen to shift its position abruptly and without convincing legal arguments against the need to ensure an undisturbed framework for the Union’s foreign policy. More importantly, it has started to do so, not from a case relating to an international agreement, which is an area where it had previously structured all of its relevant case law, as described above, but within a domain where –in view of the international balance– the burden and the restrictions imposed by its judgment on the Union are unprecedented in the context of international relations and, if anything, unbearable.
In addition to the above criticism, which touches upon profound democratic concepts such as the separation of powers, and coming back to a purely legal debate, it cannot be overlooked that the CJEU, in a long series of judgments dealing with ‘invocability’, has interpreted the Treaties’ provisions in respect of judicial review of EU institutions (such as Articles 263 and 340 TFEU) always bearing in mind the specific nature of the Union’s competence and objectives in the field of external action. That said, one may observe that the Court appears to be inconsistent in this judgment, given that, contrary to its previous considerations, it rejected the arguments put forward by the Council and certain Member States concerning the need to respect those specificities, and insisted on interpreting Article 263 TFEU based solely on the principle of the rule of law and the right to effective judicial protection, as if it were dealing with a dispute of an exclusively internal nature.
There is no doubt that the consequences of this judgment will be decisive both for the Union’s external action in terms of the protection of fundamental rights and the rule of law, and for its international relations altogether. Indeed, those may even become unmanageable unless a relevant clarifying and –preferably– restrictive case law follows. In this judgment, the CJEU has found itself competent to rule on the legality of EU acts which constitute an exercise of official authority (acta jure imperii)18 and concern foreign policy, following an appeal by a third State affected by those acts, as if it were a dispute arising from the application of an international agreement or the performance of administrative acts (acta jure gestionis), adjudicated by any international and not the ‘constitutional’ court, as is the CJEU. Truly, could other states being indirectly affected by the EU sanctions also have their locus standi recognized by the Court?
It is true that the direct practical implications of the CJEU’s judgment on appeal do not entail that the sanctions imposed against Venezuela be overturned in their entirety, since even the annulment of Regulation 2017/2063 will not affect the validity of Decisions 2017/2074 and 2018/1656 nor will it relieve Member States of their obligation to ensure, under Article 29 TEU,19 the compatibility of their national policies with the restrictive measures imposed by virtue of them.
However, this judgment places considerable restrictions and obstacles on the Union’s exercise of policy, especially in an area where it is necessary –as is for any State– to enjoy a significant degree of freedom in determining the way and the means most appropriate for pursuing the interests of its citizens, and by doing so, it places the EU in a harder and weaker position vis-à-vis its international competitors. Worse still, it puts a ‘judicial landmine’ on the foundations of the long-standing and long-suffering effort to formulate a single and uniform foreign policy at EU level, even providing the ‘centrifugal forces’ in the Union with yet another argument in favour of avoiding any common commitments and pursuing their own independent foreign policy, which, if anything, undermines the formation of the coveted common foreign policy.20
Nevertheless, the weakest point of this judgment is not its political implications but its flimsy legal foundations which makes it even more detrimental. First of all, it contains a rationale which is ultimately disproportionate as being too ‘plethoric’ in relation to its purpose. Indeed, it is not clear why the CJEU did not consider it sufficient, for the purposes of safeguarding the rule of law, that any individuals adversely affected by EU sanctions are expressly granted locus standi to bring an action for annulment of such measures, but rather found it necessary to interpretively deduce the existence of that exceptional and, by international law standards, unprecedented privilege to third States as well, even trying to persuade that this was the intention of the EU’s constitutional legislature from the outset. Similarly, it is inexplicable as to what that principle of international law is, which binds the EU, governs its non-contractual relations with third countries, and eventually obliges it to recognise this privilege. The Court’s approach makes lawyers wonder what comes next: do the third states as applicants before EU Courts also enjoy the right to an effective remedy (art. 47 of the Charter), even though art. 51 of the Charter does not mention them at all? Could the CJEU consider a dispute settlement system contractually agreed upon between the EU and a third state as violating this right and allow the third state to appeal before the EU Courts instead?
In other words, a reader and analyst of the CJEU’s judgment in the case C-872/19 P is left with questions and a certain feeling of dissatisfaction, since the Court has gaps in its reasoning, does not convincingly respond to the arguments brough forward by the Council and other Member States and, above all, appears to ignore or disregard its very case law and reasoning to date on fundamental issues of interpretation and approach to EU rules. This is a rare and not brilliant moment for the CJEU, but one whose consequences will probably prove to be more serious than its length.
1 CJEU C-872/19 Ρ, judgment of 22.06.2021, Venezuela v Council, ECLI:EU:C:2021:507.
2 Inter alia, ECtHR, judgment of 14.12.2006, Markovic and Others v Italy, (application no. 1398/03); ECtHR, judgment of 16.4.2009, Vlastos v Greece (application no. 28803/07); ECtHR, judgment of 12.12.2002, Kalogeropoulou and Others v Greece (application no. 59021/00).
3 The most characteristic is that of Article 24(1) TEU, under the chapter ‘Common Foreign and Security Policy’, which, inter alia, reads that: “[t]he Court of Justice of the European Union shall not have jurisdiction with respect to these provisions, with the exception of its jurisdiction to monitor compliance with Article 40 of this Treaty and to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the Treaty on the Functioning of the European Union.”
4 ECJ 104/81, judgment of 26.10.1982, Hauptzollamt Mainz v Kupferberg & Cie., ECLI:EU:C:1982:362, para. 17.
5 A rare example where the contracting parties had agreed on the issue regarding the direct effect can be found in European Convention for the Protection of Animals Kept for Farming Purposes; see respectively, ECJ C-1/96, judgment of 19.03.1998, The Queen v Minister of Agriculture, Fisheries and Food, ex parte Compassion in World Farming, ECLI:EU:C:1998:113, para. 35.
6 Indicatively, ECJ 21-24/72, judgment of 12/12/1972, International Fruit Company and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, and ECJ 12/86, judgment of 30/9/1987, Demirel v Stadt Schwäbisch Gmünd, ECLI:EU:C:1987:400, para. 14.
7 ECJ C-280/93, judgment of 05.10.1994, Germany v Council, ECLI:EU:C:1994:367.
8 See O. Tsymbrivska, “WTO DSB Decisions in the EC Legal Order: Approach of the Community Courts”, LIEI, Vol. 37 (2010), p. 196.
9 F. Berrod speaks of circumstances of ‘asymmetric relations’ between the parties and in favour of the Union. (See F. Berrod, “La Cour de justice refuse l’invocabilité des accords OMC: essai de régulation de la mondialisation”, 36 Revue trimestrielle de droit européen (2000) p. 429).
10 ECJ C-268/99, judgment of 20.11.2001, Jany and Others, ECLI:EU:C:2001:616, paras. 26-28; C-235/99, judgment of 27.09.2001, Kondova, ECLI:EU:C:2001:489, paras. 30-39; ECJ C-37/98, judgment of 11.05.2000, Savas, ECLI:EU:C:2000:224, paras. 41-55; ECJ C-432/92, judgment of 05.07.1994, The Queen v Minister of Agriculture, Fisheries and Food ex parte Anastasiou, ECLI:EU:C:1994:277; ECJ 17/81, judgment of 29.04.1982, Pabst & Richarz KG v Hauptzollamt Oldenburg, ECLI:EU:C:1982:129.
11 For GATT see, inter alia, ECJ 21-24/72, judgment of 12/12/1972, InternationalFruitCompanyandothers v ProduktschapvoorGroentenenFruit, ECLI:EU:C:1972:115, esp. para. 21. For WTO see, inter alia, ECJ C-149/96, judgment of 23.11.1999, Portugal v Council, ECLI:EU:C:1999:574.
12 See also S. Princen, “EC Compliance with WTO Law: The Interplay of Law and Politics”, EJIL, Vol. 15 (2004), p. 555.
13 ECJ C-377/02, judgment of 01.03.2005, Van Parys, ECLI:EU:C:2005:121, para. 53.
14 ECJ C-93/02Ρ, judgment of 30.09.2003, Biret International v Council, ECLI:EU:C:2003:517.
15 P. Koutrakos interestingly calls this reasoning “a balance-of-power” argument and he considers the position of the Court to be indicative of “taking into account the specific dynamics that underlie the international economic arena”. See P. Koutrakos, EU International Relations Law (Hart Publishing 2006) pp. 270 and 280.
16 ECJ C-120-121/06 Ρ, judgment of 09.09.2008, FIAMM and FIAMM Technologies v Council and Commission, ECLI:EU:C:2008:476, para. 176.
17 For the same stance adopted by the US courts see D. Sloss, “United States”, The Role of Domestic Courts in Treaty Enforcement (ed. D. Sloss), Cambridge University Press 2009, p. 504.
18 This concept must be interpreted on the basis of EU, and not of international, law. (CJEU C‑226/13, C‑245/13, C‑245/13, C‑247/13, C‑578/13, C‑578/13, judgment of 11.06.2015, Fahnenbrock and Others v Greece, ECLI:EU:C:2015:383.
19 CJEU C-72/15, judgment of 28.03.2017, Rosneft, ECLI:EU:C:2017:236, para. 56.
20 Especially in a field of the CFSP which has been developing both in terms of legal technique and political action in recent years, such as the imposition of proportionate, effective and fair sanctions; cf. Council Decision (CFSP) of 07.12.2020 concerning restrictive measures against serious human rights violations and abuses (OJ L 410I of 7.12.2020, p. 13-19) and the corresponding Council Regulation (EU) 2020/1998 (OJ L 410I of 7.12.2020, p. 1).