A report from the oral hearing in Case C-72/15 (Rosneft)

Snow over the CJEU as it hears the Rosneft case.

Snow over the CJEU as it hears the Rosneft case.

This week I attended the hearing at the Court of Justice of the European Union (CJEU) in case C-71/15 (Rosneft). This is one of several cases brought by the Russian energy company Rosneft against the EU sanctions regime established following the Russian military intervention in Crimea. The case has its basis in a request for preliminary ruling by the High Court of Justice (England & Wales), Queen’s Bench Division. In the reference, the High Court of Justice asks the CJEU to determine the validity of several provisions of the EU economic sanctions against Russia.

As the legal issues in play in this case are very closely connected with the precise legal nature of the sanctions challenged, it is necessary to first describe the contested parts of the EU sanctions regime in some detail. Then I will go through the submissions of the parties, and offer some preliminary analysis of the arguments presented. My focus is the same as that of the oral hearing; on the issue of the jurisdiction of the CJEU to review sanctions adopted under the EU’s Common Foreign and Security Policy (CFSP). Before we start I must also add a small disclaimer: this report is based on my own notes and recollections, and there may thus be inaccuracies, misunderstandings, or plain errors.

The contested parts of the EU sanctions regime

The contested parts of the EU sanctions regime in this case are the measures “targeting sectoral cooperation and exchanges with Russia” – which I will refer to as the sectoral measures. These sectoral measures are laid down in Council decision 2014/512/CFSP and Council regulation 2014/833/EU (links to latest consolidated versions). Essentially, these provisions prohibit EU persons, natural or legal, from engaging in contractual relations with certain Russian state-owned companies and banks, and from providing such companies and banks access to financial markets.

Sectoral measures may be contrasted with the targeted sanctions laid down in Council decision 2014/145/CFSP and Council regulation 2014/269/EU (links to latest consolidated versions). Such targeted sanctions directly affect named Russian natural and legal persons (not including Rosneft) by inter alia obliging European financial institutions to freeze their assets. With regard to the sectoral measures, on the other hand, Rosneft primarily feels the sting of them through the lack of access to European suppliers, consultants, credit institutions, etc.

This distinction between targeted and sectoral sanctions is also reflected in TFEU article 215. According to that provision the Union may in the form of a regulation adopt measures providing for ” the interruption or reduction, in part or completely, of economic and financial relations with one or more third countries” (i.e. sectoral measures) or “restrictive measures […] against natural or legal persons” (i.e. targeted sanctions). Since sectoral measures are formulated as prohibitions on EU citizens and undertakings from engaging in such activities, they only seems to affect Rosneft indirectly; it is their EU partners that are now prohibited from doing business with Rosneft. Note the use of the word seems in the previous sentence. Rosneft argues that it is also directly affected by the sectoral measures, and that they should be regarded as targeted sanctions. Still, the following summary of the hearing more or less presupposes that the sanctions are sectoral measures – which was also generally presupposed during the hearing.

A final peculiarity concerning CFSP sanctions regimes is that they are enacted through the use of two separate legal instruments. First, by a Council decision under TEU article 29. Second, and following such a decision, the sanctions are implemented within the internal market by means of a Council regulation under just-mentioned TFEU article 215. In the present case the relevant instruments are Council decision 2014/512/CFSP and Council regulation 2014/833/EU, which I will refer to in the following as “the CFSP decision” and “the regulation”, respectively. The relationship between the regulation and the CFSP decision was a key factor in relation to many of the issues discussed during the oral hearing in Rosneft.

The CFSP decision is adopted under a provision in the CFSP chapter of the TEU, namely article 29. This has certain consequences. First, legislative acts are precluded under the CFSP, see TEU article 31(1) i.f. Second, being adopted under the CFSP chapter the jurisdiction of the CJEU to review the decision is generally excluded according to TFEU article 275(1). Third, while the EU member states “shall ensure that their national policies conform to” the CFSP decision, the decision is not binding upon persons (natural or legal).

The regulation adopted under TFEU article 215 implements the CFSP decision within the internal market. That regulation is not a CFSP measure. This means that it is binding in its entirety, also on natural or legal persons, and directly applicable within the legal system of the EU member states (TFEU article 288(2)). Moreover, the general jurisdiction of the CJEU to review acts of the Union institution should therefore apply. (But see the Commission’s arguments to the contrary discussed below.)

What kind of provisions the two instruments should contain when the Union imposes sanctions is less clear. The only guidance we seem to get from the constituent treaties is that (a) legislative acts cannot be enacted in the form of CFSP decisions, and that (b) when a CFSP decision “provides for the interruption or reduction, in part or completely, of economic and financial relations with one or more third countries” the Council shall adopt “the necessary measures” in the form of a regulation under TFEU article 215. In practice, the wording of the CFSP decision and the regulation is more or less identical. This is also the case here. The provisions Rosneft is challenging are almost word-for-word identical in the CFSP decision and the regulation.

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New paper: The Reinterpretation of TFEU Article 344 in Opinion 2/13 and Its Potential Consequences

My first proper journal article was just published in the German Law Journal. Here is the abstract:

On 18 December 2014 the Court of Justice of the European Union (CJEU) delivered Opinion 2/13, and stunned the legal world by declaring that the Draft Agreement on the Accession of the EU to the European Convention on Human Rights was incompatible with the constituent treaties of the Union. In this contribution note I will focus on only one aspect of Opinion 2/13: the CJEU’s interpretation and application of the TFEU article 344. Specifically, I will compare the approach taken in Opinion 2/13 with that of the CJEU’s earlier case-law. I will argue that the reasoning and conclusion concerning TFEU article 344 in Opinion 2/13 is clearly at odds with this earlier case-law, notably the leading MOX Plant case. I will also demonstrate how the approach to the issue in Opinion 2/13 – if it indeed reflects lex lata – seriously affects numerous treaties that have already been concluded by the Union.

German Law Journal is an online open access journal, so you can download the full contribution by following this link.

Opinion 2/13: A bag of coal from the CJEU

CJEU - Grand Hall of JusticeJust in time for Christmas, on 18 December 2014, the Court of Justice of the European Union (CJEU) handed down its Opinion 2/13 on the Union’s planned accession to the European Convention on Human Rights (ECHR). To the surprise of most, the CJEU found the draft agreement on the accession of the Union to the ECHR incompatible with the Union’s primary (read: constitutional) law.

Not only did the CJEU find the accession agreement incompatible with the Union’s constituent treaties. Its Opinion reads like a direct and unequivocal attack on the accession agreement and, as I will come back to, it seems to be very difficult to satisfy the CJEU’s objections by way of amending the accession agreement. Instead of the expected Christmas present of a signable accession agreement, the Court brought the negotiators a bag of coal.

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Some thoughts on the ECJ hearing on the Draft EU-ECHR Accession Agreement (Part 2 of 2)

I was in Luxembourg 5-6 May 2014, attending the hearing at the European Court of Justice concerning the Draft Agreement for the Accession of the European Union to the European Convention on Human Rights. In these two posts (click here for part 1) I summarize the main arguments presented at the hearing, and provide some initial analysis and thoughts. Finally, I would not be a lawyer if I did not point out that some caveats apply: I am writing based on my own notes and recollection, and thus there might be inaccuracies, omissions and misattributions. If you come across any, feel free to point them out in the comments section below. I would also greatly appreciate any other comments or thoughts you might have in relation to this case.

The second and final day of oral argument at the ECJ in the case concerning the validity of the Draft Agreement for the Accession of the EU to the ECHR (hereinafter: the DAA) focused on the questions put to the parties by the judges yesterday. Those questions are summarized at the end of yesterday’s blog post. Moreover, some of the judges, as well as the Advocate General, asked further questions towards the end of the hearing.

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Some thoughts on the ECJ hearing on the Draft EU-ECHR accession agreement (Part 1 of 2)

I was in Luxembourg 5-6 May 2014, attending the hearing at the European Court of Justice concerning the Draft Agreement for the Accession of the European Union to the European Convention on Human Rights. In these two posts (click here for part 2) I summarize the main arguments presented at the hearing, and provide some initial analysis and thoughts. Finally, I would not be a lawyer if I did not point out that some caveats apply: I am writing based on my own notes and recollection, and thus there might be inaccuracies, omissions and misattributions. If you come across any, feel free to point them out in the comments section below. I would also greatly appreciate any other comments or thoughts you might have in relation to this case.

Monday May 5th was the opening day for the case concerning the Draft Agreement for the Accession of the EU to the European Convention of Human Rights (hereinafter: the DAA). The case is brought under the procedure provided for in TFEU article 218(11) by the Commission, which is asking the European Court of Justice (ECJ) the question of whether the DAA is compatible with the constituent treaties of the European Union. Much could be (and has been) written about this question, this case, and the spectacle that is an ECJ hearing before the full court. In these couple of posts I will, however, focus on the submissions of the parties. I will give you what I perceived as the highlights of the hearing, and provide some initial commentary.
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Pensumrelevant artikkel: den internasjonale rettens påvirkning på norsk rett

Studentmagasine Pacta kontaktet meg for noen uker siden, da de ønsket en artikkel om folkerettens innvirkning på norsk rett — et tema som er meget pensumrelevant for studenter på andre studieår. Resultatet finner du i siste nummer av Pacta (nr. 23), og på SSRN.

Iran har en «umistelig rett» til å anrike uran

Har Iran har en rett til å anrike uran eller ikke? Dette er en av de store uløste spørsmålene i de pågående forhandlingene mellom Iran, på den ene side, og vetomaktene i FNs sikkerhetsråd samt Tyskland, på den annen side.

Et juridisk spørsmål
USA har som sitt klare utgangspunkt at ingen land ut over de som i dag har atomprogrammer har rett til å anrike uran. Iran mener på sin side at alle land har en slik rett. Vi står her altså overfor en uenighet om et juridisk spørsmål. Et spørsmål om stater har rett til å anrike uran, eller om de ikke har noen slik rett.

Den folkerettslige hovedregelen er at statene er suverene innenfor eget territorium. Overført på den konkrete saken betyr dette at alle stater i verden (også Iran) som utgangspunkt står fritt til å anrike uran. Unntak fra dette utgangspunktet må skje ved positiv folkerett, for eksempel ved traktat.

Stormaktenes forvridde utgangspunkt
Med dette utgangspunktet klarlagt kan vi ta for oss stormaktenes argumentasjon. USA påstår at the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), som Iran og 189 av verdens øvrige stater er part til, ikke gir Iran noen rett til å anrike uran.

Merk hvordan dette spørsmålet er stilt på helt gal måte. Utgangspunktet er, som vi har sett, at Iran har rett til å anrike uran. Det avgjørende er altså ikke om NPT artikkel IV gir dem en slik rett. Om NPT ikke skulle gi Iran rett til anrikning, så er det helt uproblematisk: Iran har allerede denne retten.

Om USA skal finne støtte sin påstand om manglende rett på anrikning i NPT må det i så fall være i form av et forbud. Altså at NPT innebærer et innhugg i Irans rett til å anrike uran – et unntak fra hovedregelen.

NPT forplikter alle partene (inkludert Iran) til å unnlate å bidra til spredning av atomvåpen. Her er artikkel IV interessant, fordi den slår fast at NPT ikke skal være til hinder for statenes «inalienable right» (umistelige rett) til å forske på, produsere, og bruke atomenergi for fredelige formål. Samtidig forbyr NPT artikkel I og II andre stater enn de nåværende atommaktene å anskaffe eller produsere atomvåpen.

Samlet må dette innebære en rett til å anrike uran i den grad der er nødvendig for produksjon av atomenergi. Den politisk, men ikke rettslig bindende avtalen inngått mellom stormaktene og Iran i Geneve forrige helg synes også bekrefte dette, da den åpner for at Iran kan anrike uran til en grad som er tilstrekkelig for fredelig bruk i atomkraftverk.

Når det er sagt, så er det et poeng at Irans rett til anrikning kan være tilsidesatt av resolusjoner fra FNs sikkerhetsråd. Disse er i henhold til FN-charteret artikkel 25 bindende for alle FNs medlemsstater,og går i følge artikkel 103 foran andre folkerettslige regler.

Sikkerhetsrådet har i en rekke resolusjoner fordømt Irans atomprogram, og iverksatt sanksjoner. Men disse sanksjonene er av en midlertidig karakter. De har blitt iverksatt hovedsakelig på grunn av Irans manglende respekt for internasjonale regler om inspeksjon av atomanlegg. Om Iran overholder disse reglene i fremtiden vil sanksjonene måtte oppheves.

Juridisk spørsmål – rettslig avgjørelse?
Siden spørsmålet om rett til anrikning er rent juridisk kan det tenkes løst via fredelige, rettslige tvisteløsningsmekanismer. FNs Generalforsamling kunne for eksempel anmodet ICJ, den internasjonale domstolen i Haag, om en rådgivende (men autoritativ) uttalelse om hvor vidt stater har en rett til anrike uran, NPT tatt i betraktning.

Dette krever imidlertid et flertallsvedtak i FNs generalforsamling. Men, siden jussen ser ut til å være på Irans side, synes det ikke å være i stormaktenes interesser å anmode ICJ om en rådgivende uttalelse. Det vil også være vanskelig for Iran å skaffe flertall for en slik anmodning. Dessuten kan det tenkes at Iran ikke vil ta den risikoen for tap som alltid er til stede ved en rettslig prosess.

Grunnlag for et varig kompromiss?
Begge parter ser det med andre ord som mest fornuftig å beholde kontroll over konflikten og fortsette forhandlingene. Samtidig synes begge parter å opprettholde sine uforenelige standpunkter.

Utfordringen i forhandlingene blir å finne et kompromiss som verken anerkjenner eller underkjenner Irans rett til å anrike uran. Om et slikt kompromiss skulle finnes, er det langt fra klart at det vil kunne være varig. Et kompromiss vil skyve den manglende enigheten under teppet for nå, men faren er stor for at tvisten vil blusse opp igjen på et senere tidspunkt.

Om en varig løsning skal oppnås bør stormaktene innrømme det åpenbare: Iran har en «umistelig rett» til å anrike uran for fredelige formål. Innrømmelsen trenger ikke komme gratis: bruk den som en brekkstang for å få inn strenge begrensninger og kontrolltiltak i en endelig avtale. Slik vil man kunne oppnå det samme som man realistisk kan forvente av et slikt umulig kompromiss som skissert i forrige avsnitt, men antagelig i en mer robust og varig form.