Case C-233/02

French Republic

v

Commission of the European Communities

(Guidelines on regulatory cooperation and transparency concluded with the United States of America – Non-binding character)

Summary of the Judgment

1. Acts of the institutions – Guidelines on regulatory cooperation and transparency agreed upon with the United States of America – Institution competent to adopt such a measure – Account to be taken of the division of powers and the institutional balance established by the Treaty in the field of the common commercial policy – Non-binding effect of the Guidelines – Irrelevant

(Arts 133 EC and 300 EC)

(Art. 300 EC)

1. The fact that a measure, such as the Guidelines on regulatory cooperation and transparency agreed upon with the United States of America, is not binding is not sufficient to confer on the Commission the competence to adopt it. Determining the conditions under which such a measure may be adopted requires that the division of powers and the institutional balance established by the Treaty in the field of the common commercial policy be duly taken into account, since in this case the measure seeks to reduce the risk of conflict related to the existence of technical barriers to trade in goods.

(see para. 40)

2. For the purpose of determining whether or not a measure, such as the guidelines on regulatory cooperation and transparency agreed upon with the United States of America, is binding, the intention of the parties must in principle be the decisive criterion. In the present case, that intention is clearly expressed in the text of the Guidelines itself, paragraph 7 of which specifies that the purpose of the document is to establish guidelines which regulators of the United States Federal Government and the services of the Commission ‘intend to apply on a voluntary basis’. On the basis of that information, it is apparent that the parties had no intention of entering into legally binding commitments when they concluded those guidelines. Consequently, those guidelines do not constitute a binding agreement and therefore do not fall within the scope of Article 300 EC.

Since they are devoid of binding effect, those guidelines cannot impose obligations on the Commission in carrying out its role of initiating legislation in the context of the Community legislative process. Therefore, the mere fact that a measure such as those guidelines provides for the possibility of engaging in prior consultation and gathering all necessary information before submitting appropriate proposals cannot undermine the Commission’s power of initiative.

(see paras 42-43, 45, 50-51)

JUDGMENT OF THE COURT (Full Court) 23 March 2004 (1)

(Guidelines on regulatory cooperation and transparency concluded with the United States of America – Non-binding character)

In Case C-233/02,

applicant,

v

defendant, defendant, supported by

APPLICATION for annulment of the decision by which the Commission concluded an agreement with the United States of America on Guidelines on Regulatory Cooperation and Transparency,

THE COURT (Full Court),,

composed of: V. Skouris, President, P. Jann, C.W.A. Timmermans (Rapporteur), C. Gulmann and J.N. Cunha Rodrigues (Presidents of Chambers), A. La Pergola, J.-P. Puissochet, R. Schintgen, F. Macken, N. Colneric and S. von Bahr, Judges,

Advocate General: S. Alber,

after hearing the Opinion of the Advocate General at the sitting on 25 September 2003,

gives the following

‘1. The common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies.

2. The Commission shall submit proposals to the Council for implementing the common commercial policy.

3. Where agreements with one or more States or international organisations need to be negotiated, the Commission shall make recommendations to the Council, which shall authorise 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.

The relevant provisions of Article 300 shall apply.

4. In exercising the powers conferred upon it by this Article, the Council shall act by a qualified majority.’

‘1. Where this Treaty provides for the conclusion of agreements between the Community and one or more States or international organisations, the Commission shall make recommendations to the Council, which shall authorise 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.

In exercising the powers conferred upon it by this paragraph, the Council shall act by a qualified majority, except in the cases where the first subparagraph of paragraph 2 provides that the Council shall act unanimously.

2. Subject to the powers vested in the Commission in this field, the signing, which may be accompanied by a decision on provisional application before entry into force, and the conclusion of the agreements shall be decided on by the Council, acting by a qualified majority on a proposal from the Commission. The Council shall act unanimously when the agreement covers a field for which unanimity is required for the adoption of internal rules and for the agreements referred to in Article 310.

…

3. The Council shall conclude agreements after consulting the European Parliament, except for the agreements referred to in Article 133(3), including cases where the agreement covers a field for which the procedure referred to in Article 251 or that referred to in Article 252 is required for the adoption of internal rules. …’

Negotiation of the Guidelines

The memorandum of 9 April 2002 from the Commission’s services concerning the Guidelines

‘The Action Plan decided on under the Transatlantic Economic Partnership (TEP) provides for bilateral development with the United States administration of guidelines on regulatory cooperation and transparency. We have been negotiating those guidelines since the end of 1999. Several times in the past, and most recently in January 2000, we informed you of the progress of those negotiations. I am today pleased to inform you that we have reached agreement with the United States Trade Representative on the attached text, at the expert level.’

Text of the Guidelines

Arguments of the parties

Findings of the Court

On those grounds,

THE COURT

hereby:

2. Orders the French Republic to pay the costs.

Skouris

Jann

Timmermans

Gulmann

Cunha Rodrigues

La Pergola

Puissochet

Schintgen

Macken

Colneric

von Bahr

Delivered in open court in Luxembourg on 23 March 2004.

R. Grass

V. Skouris

Registrar

President