The European Commission may authorise the negotiation and conclusion of bilateral agreements between Member States and third countries concerning certain areas of civil law – if the acquis communautaire is not undermined

The Justice and Home Affairs Council recently agreed on new procedures for negotiating and concluding bilateral agreements between Member States and third countries. Such procedures concern jurisdiction, recognition and enforcement of judgments and decisions in matrimonial matters, parental responsibility and maintenance obligations and applicable law in contractual and non-contractual obligations.

It is important to recall that the Community’s external competence, its capacity to negotiate and conclude binding international agreements, may be either exclusive or shared. According to the European Court of Justice case law external competence derives from the existence of explicit internal competence hence the Community has exclusive external competence, if an international agreement concluded by Member States belongs to an area which is already covered by Community law, or if the effectiveness of Community's internal rules may be affected by that agreement. Thus, the Community may have exclusive external competence in areas of law where it only has shared internal competence.

The EU Member States used to be able to conclude agreements with third countries on the abovementioned areas of civil law however in nowadays they have limited competence since the Community has progressively taken over exclusive competence. These areas of law have been covered by Community legislation: Regulation 2201/200 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, Regulation 4/2009 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, Regulation 864/2007 on the law applicable to non-contractual obligations (Rome II) and Regulation 593/2008 on the law applicable to contractual obligations (Rome I). This Community legislation has established the Community’s exclusive external competence in these areas consequently Member States are not allowed to conclude bilateral agreements which fall within the scope of these Regulations.

The aim of the two regulations recently agreed by the Council is to allow EU Member States to amend an existing agreement or to negotiate and conclude new agreements with third countries in certain areas of civil law where they have not been authorised to do so while ensuring that the "acquis communautaire" is safeguarded. However, such Regulations will not apply if the Community has already concluded an agreement with the third country or third countries concerned on the same subject-matter.

According to the Parliamentary Under-Secretary at the Ministry of Justice, Lord Bach, the Government supports both proposals and has decided to opt in to both Regulations under the UK Title IV Protocol. The UK takes part in the adoption and application of these Regulations, in so far as it took part in the adoption and application of the Regulations covered by them.

The proposal for a regulation establishing a procedure for the negotiation and conclusion of agreements on matters concerning applicable law in contractual and non-contractual obligations will allow Member States to conclude bilateral agreements with third countries in certain areas of the choice of law concerning non-contractual and contractual obligations.

Lord Bach has explained to the European Scrutiny Committee that this proposal has limited value as the UK “does not have bilateral agreements in the area of choice of law.” However, the UK has many bilateral agreements in the area of recognition and enforcement of judgments, manly with Commonwealth countries, therefore, the proposal would have more value if its scope was extended to the recognition and enforcement of judgments in civil and commercial matters. The Government has sought to widen the scope of the proposal during the course of the negotiations however the Commission was strongly against to such extension and there was no general support on this issue among the other Member States. Consequently, the proposal would have no practical utility for the UK.

Under the second regulation Member States will be allow to conclude agreements covering jurisdiction, recognition and enforcement of judgments and decisions in matrimonial matters, parental responsibility and maintenance obligations, and applicable law in matters relating to maintenance obligations. It is important to mention that the applicable law rules for maintenance payments do not apply to the UK.

Both regulations establish a procedure for the negotiation and conclusion of bilateral agreements between Member States and third countries concerning the abovementioned matters. Unsurprisingly, the Commission will ensure that the acquis communautaire is not undermined by agreements concluded by Member States. The Regulations lay down the conditions under which the Commission may authorise a Member State to pursue negotiations with a third country.

Member States will be obliged to inform the Commission of their intentions before the envisaged opening of formal negotiations then the Commission will assess if the planned agreements are compatible with Community law, before authorising negotiation or conclusion.

The Commission will first cheque if there is a negotiating mandate with a view to a Community agreement with the third country within the next 24 months. Then, the Commission assesses if the proposed agreement would undermine the proper functioning of Community law and if that is the case the Commission would not authorise the Member State to open formal negotiations on the agreement.

Both proposals provide for the Commission to be fully informed during the negotiation process and to be allowed to participate as an observer as far as matters falling within the scope of these Regulations are concerned.

Moreover, under both regulations Member States are required to full or partially denounce their agreement in the event of a subsequent agreement between the EC and the same third country on the same subject matter.

The two Regulations are of limited duration. Eight years after the adoption of the regulations the Commission will present a report on their application considering whether they should expire or should be replaced by new ones three years after the Commission's report.

The UK Government was not even able to keep a provision providing for the possibility of extending the scope of the proposal dealing with choice law issues to cover the recognition and enforcement of judgments in civil and commercial matters, to be considered as part of the Commission’s review of the regulation. The only thing the UK was able to get was a Council’s statement inviting the Commission to consider the possibility of such an extension.

Both Regulations will be adopted at a later Council meeting.