ARCHIVES HISTORIQUES 
DE LA COMMISSION 
 
 
 
COLLECTION RELIEE DES 
DOCUMENTS "COM" 
 
 
 
 
COM (86) 367 
 
 
 
Vol. 1986/0 164 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), t his file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februa r 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 v om 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION OF THE EUROPEAN COMMUNITIES
C 0 M C 8 6 )  3 6 7  final 
Brussels, 2 4  July 1 9 8 6
COMMISSION RECOMMENDATION TO THE COUNCIL
C a se for the defence of the C o m m u n ity  and its M e m b e r States w ith 
regard to the crisis affecting the International T in Council
C 0 M C 8 6 )  3 6 7  final

C om m ission R ecom m endation to the C ouncil
C a se for the defence of the C o m m u n ity  and its M e m b e r States 
with regard to the crisis affecting the International Tin C ouncil
1. T h e  International T in Council (ITC), established b y  the previous 
International Tin A greem ents, had its m em bership, pow ers an d  functions 
confirm ed b y  the Sixth A greem ent. It has legal personality in international 
law , and o n  the territory of the host G overnm ent - the United K in g d o m  -
has the privileges and im m unities governed b y  a  Headquarters A greem ent 
and b y  the International T in C ouncil (Im m unities and Privileges) O rder 
1972.
2. T h e  Sixth International T in A greem ent w a s signed b y  2 2  States (including 
the ten M e m b e r States w h ich  constituted the C o m m u n ity  at 3 1  D ecem b er 1 9 8 5 ) 
and b y  the E uropean E co n o m ic C o m m u n ity .
T h e  C o m m u n ity  is a  full m e m b e r of the I T C  under Article 5 6  of the A greem ent, 
w h ich  m entions it expressly and gives it the right to vote o n  all matters 
falling within its sphere of com petence. Decisions o n  the m an ag em en t of 
the buffer stock, as an  instrument of com m ercial policy, fall within this 
sphere of com petence, and the C o m m u n ity  has regularly exercised its pow ers 
in this respect.
3. T h e  m e m b e rs of the I T C  are responsible for its financing, and within 
the C o m m u n ity  it w a s agreed that this responsibility should lie w ith 
the M e m b e r States only. T h e y  have systematically paid to the I T C  all 
the C om m unity's contributions, w hich - in practice - w ere dem an d ed  of 
them  direct.

-  2 -
This arrangem ent seem s to b e contested b y  the creditors. It should b e 
pointed out in this connection that A n n e x  B  of the A greem ent - w h ich  
contains the distribution table - indicates a  specific percentage share 
of the expenditure for the C o m m u n ity , and this share is then broken 
d o w n  a m o n g  the ten M e m b e r States.
4. Since 2 4  O ctober 1 9 8 5  the I T C  has suspended paym ents for buffer stock 
operations, as its available funds are practically exhausted. Its debts 
to the banks and the L o n d o n  M etal E xchange brokers am o u n t to several 
million pounds sterling. O n e  creditor (the Standard Chartered B a n k )
has initiated legal proceedings before the H ig h  C ourt of Justice to 
have all the ITC's m em bers, including the E uropean C o m m u n ity , charged 
jointly w ith the IT C . This creditor w a s  given satisfaction b y  a  
settlement through w hich the I T C  placed the rem aining quantities of 
tin available at its disposal. O ther creditors have initiated legal 
and arbitration proceedings against the I T C  alone.
Since it is obvious that the I T C  will n o  longer b e able to honour an y  
of its debts, the banks o n  the one hand and the brokers o n  the other 
have form ed consortia to try and assign financial responsibility for 
the ITC's debts to the m em b ers of the IT C .
5. It is inevitable, given the C om m unity's legal position within the 
I T C  and also the advantage to b e gained b y  the creditors in assigning 
responsibility to yet another party in a  case of such proportions, 
that if the consortia decide to take the m em b ers of the I T C  to court
in Britain, they w ilL  follow the precedent set b y  the Standard Chartered 
B a n k  and take the M e m b e r States and the C o m m u n ity  to court.
6. S u c h  action w ould underm ine the com m ercial policy m easures taken 
in the form  of the I T C  operations o n  the tin m arket and o n  the capital 
m arket linked with the financing of the tin m arket - and these are m easures 
which, according to the creditors, w ere decided o n  b y  all the m e m b e rs 
responsible for the com m ercial policy applied b y  the IT C . A s  regards

- 3  -
intra-C om m unity relations, the C o m m u n ity  should therefore assum e its 
responsibilities in order to cope with the consequences of the com m ercial 
policy m easures involved. G iven the political arrangements governing 
co m m o d ity  agreements, this responsibility m u st b e borne b y  stating in a  
single voice a  c o m m o n  position for the C o m m u n ity  an d  its M e m b e r States.
T h e  fact that the legal proceedings w o u ld  implicate at the sa m e  level, 
within the context of a  co m m o d ity  agreement, the C om m unity's finances 
and also those of its M e m b e r States is another argum ent for adopting 
this course of action.
7. A part from  this legal an d  political aspect - w hich is fundam ental 
as regards intra-Com m unity relations in the sphere of co m m o d ity  agreem ents 
- there is decidedly a  distinct advantage to b e draw n from  organizing 
joint action against the claims m a d e  b y  ITC's creditors. T h e  creditors 
are preparing to call into question a  n u m b er of fundam ental principles, 
w hich m u st inevitably b e defended o n  a  c o m m o n  basis, as folio· s:
(i) the sovereign or functional im m unity of the States;
(ii) the sovereign or functional im m unity of the C o m m u n ity ;
(iii) the limited or unlimited financial responsibility of m em b ers of 
international organizations;
(iv) the right of creditors to b e subrogated to the international 
organization in order to claim from  its m e m b e rs the resources 
w hich it requires in order to pursue its aim s.
If just one of the defendants w ere to b e defeated o n  one of these points 
this w ould have detrimental consequences for the C o m m u n ity  as a  w hole 
and for all its M e m b e r States.
F o r exam ple, if it w a s decided not to recognize the C om m unity's sovereign 
im m unity, this could ultimately call into question the C om m unity's Budget.

- 4  -
8. In order to express effectively and rapidly the c o m m o n  position 
of the C o m m u n ity  and of its M e m b e r States in the relatively short 
tim e (15 days for the C o m m u n ity ) allowed under the legal procedure, 
the C om m ission recom m ends that the Council decide o n  the principle 
of d esig n atin g  a  single legal representative (a solicitor together 
with a barrister) representing the C o m m u n ity  and its M e m b e r States.
U n d er the political arrangement governing com m odity agreements, the 
M e m b e r States w hich so w ish m a y  of course be represented b y  a  
second legal representative w h o se statements - w hich will concern 
any aspects peculiar to the M e m b e r State in question - will rem ain 
strictly within the fram ew ork of the c o m m o n  position and will b e 
intended to back up, and expand on, this position and will b e 
m a d e  in agreem ent with the legal representative of the C o m m u n ity  
and all its M e m b e r States.
*
*  *
T h e  C om m ission therefore requests the Council to decide:
(i) that a  single solicitor together with a  barrister represent 
and defend the C o m m u n ity  and all its M e m b e r States, o n  the 
basis of a  c o m m o n  position, in the court cases w hich m ight 
be brought against them  b y  creditors of the International 
T in Council;
(ii) that the M e m b e r States w hich so w ish m a y  be assisted and 
represented, as regards the aspects peculiar to them , b y  
a  second legal representative, w hose statements shall 
rem ain strictly within the fram ew ork of the c o m m o n  position, 
shall be designed to back up, and expand on, that position, 
and shall be m a d e  with the agreement of the legal 
representative of the C o m m u n ity  and all its M e m b e r States.