SOURCE: Monthly Case-law Digest – May 2021
Law governing the institutions – European citizens’ initiative – Trade with territories under military occupation – Refusal of registration – Manifest lack of powers of the Commission – Article 4(2)(b) of Regulation (EU) No 211/2011 – Common commercial policy – Article 207 TFEU – Common foreign and security policy – Article 215 TFEU – Obligation to state reasons – Article 4(3) of Regulation No 211/2011
On 5 July 2019 Mr Tom Moerenhout and six other citizens communicated to the European Commission, in accordance with the regulation on the citizens’ initiative, a proposed citizens’ initiative entitled ‘Ensuring Common Commercial Policy conformity with EU Treaties and compliance with international law’ (‘the proposed ECI’).
In accordance with the requirements laid down in that regulation, 8 the subject matter and the objectives of the proposed initiative, along with the provisions of the Treaties considered relevant by the citizens for the proposed action, were provided. In accordance with its subject matter, the proposed initiative sought the adoption of provisions regulating commercial transactions with an Occupant’s entities based or operating in occupied territories by withholding products originating from there from entering the EU market.
In that regard, the applicants referred to various provisions of the Treaties, the Charter of Fundamental Rights of the European Union, several regulations and Court of Justice judgments, and provisions and sources of international law. By decision of 4 September 2019 (‘the contested decision’), the Commission refused to register the proposed ECI. The reason it gave for that refusal was that a legal act covering the subject matter of the proposed ECI could be adopted only on the basis of Article 215 TFEU, which requires that a decision be adopted which provides for the interruption or reduction, in part or completely, of economic and financial relations with the third country concerned. However, the Commission found that it did not have the power to submit a proposal for a legal act on that basis. By its judgment, delivered in extended composition, the General Court annuls the contested decision because it does not contain enough information to make it possible for the applicants to know the reasons for the refusal to register the proposed ECI and for the General Court to exercise its power of review of the lawfulness of that refusal. That decision does not comply with the duty to state reasons arising from the Treaty and the regulation on the citizens’ initiative. The General Court accordingly explains the extent of the Commission’s duty to state reasons when it refuses to register a proposed ECI which has been submitted under that regulation.
The General Court’s assessment
The General Court notes that the objectives of the regulation on the citizens’ initiative are to reinforce European citizenship, enhance the democratic functioning of the European Union, encourage the participation of citizens in democratic life, and make the European Union more accessible. It states that the attainment of those objectives would be seriously compromised if a decision refusing a proposed ECI does not have a full statement of reasons. Under that regulation, a proposed citizens’ initiative is to be registered by the Commission provided that that proposed initiative does not manifestly fall outside the framework of the Commission’s powers to submit a proposal for a legal act of the European Union for the purpose of implementing the Treaties.
In the present case, the General Court finds that the contested decision does not state sufficient reasons for the Commission’s lack of competence to submit a proposal able to respond to the subject matter and objectives of the proposed ECI. After reiterating the principles of the duty to state reasons for acts of the institutions, the General Court describes the factors which had to be taken into consideration in order for the contested decision to have an sufficient statement of reasons concerning the Commission’s lack of competence for the purpose of the regulation on the citizens’ initiative.
In the first place, the General Court observes that simply referring to Article 215 TFEU, on restrictive measures, does not make it possible to understand why the Commission considered that the proposed action came exclusively within the scope of the Common Foreign and Security Policy (CFSP). The Commission did not explain why it considered that the measure envisaged by the proposed ECI had to be categorised as aiming at an act providing for the interruption or reduction of commercial relations with one or more third countries for the purposes of Article 215(1) TFEU.
In the second place, it observes that the assessment of whether the statement of reasons is sufficient must take account of the relevant context. In their proposed ECI, the applicants referred, explicitly and repeatedly, to the common commercial policy and to provisions relating to that area, such as Article 207 TFEU. In the present case, it was therefore for the Commission to explain the reasons which led it to conclude, implicitly in the contested decision, that the measure aimed at by the proposed ECI, in the light of its subject matter and objectives, did not fall within the scope of the common commercial policy and could not, therefore, be adopted on the basis of Article 207 TFEU. That assessment was of fundamental importance in the Commission decision refusing to register the proposed ECI since, unlike the CFSP, the common commercial policy is an area in which the Commission has the power to draw up a proposal for an EU act on the basis of Article 207 TFEU. In the third place, the General Court states that the adequacy or otherwise of the statement of reasons for the contested decision must also be assessed in the light of the objectives of the provisions of the Treaties 13 and the regulation on the citizens’ initiative, consisting in encouraging the participation of citizens in democratic life and making the European Union more accessible. On account of those objectives, the Commission was obliged to make clear the reasons justifying the refusal to register the proposed ECI. In the absence of a full statement of reasons, the Commission’s objections to the admissibility of the proposed ECI could seriously compromise the possible submission of a new proposed ECI. Consequently, the General Court annuls the contested decision owing to an inadequate statement of reasons.