Proposal for a Council Regulation on the negotiation of agreements on trade in services other than transport
Date: 2005-07-20
Institutions: European Commission
Subjects: negotiation of an agreement (EU), services contract, trade agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.7.2005 
COM(2005) 326 final 

2005/0132 (ACC) 

Proposal for a 

COUNCIL REGULATION 

on the negotiation of agreements on trade in services other than transport 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

In its Communication on relations between the Community and third countries in the field of 
air  transport  of  26  February  20031,  the  Commission  has  highlighted  certain  basic  principles 
for the negotiation and implementation of air service agreements between Member States and 
third  countries,  which  are  drawn  from  the  case  law  of  the  Court  of  Justice  of  the  European 
Communities2. 

Member States can indeed reduce the risk of conflict with their Treaty obligations and with 
Community law by following a number of basic principles: 

1. 

2. 

3. 

4. 

Under Article 10 of the Treaty, Member States shall take all appropriate measures to 
ensure  fulfilment  of  obligations  that  arise  from  the  Treaty,  i.e.  to  facilitate  the 
achievement of the Community's tasks and to abstain from any measure which could 
jeopardise  the  attainment  of  the  objectives  of  the  Treaty.  Member  States  must 
conduct their relations with third countries accordingly. 

Member  States'  actions  must  support  the  Community's  initiatives,  negotiations, 
policies and objectives. 

Member States must not enter into negotiations on matters of Community exclusive 
competence  or  which  are  the  subject  of  Community  negotiations  under  a  specific 
authorisation. 

With regard to bilateral agreements Member States must inform the Commission of 
all planned international negotiations and the outcome of such negotiations in order 
that  it  may  monitor  and  coordinate  approaches  to  third  countries  as  well  as  ensure 
that Community law is respected. 

In the field of air transport, those obligations have been articulated through the establishment 
of  an  information  exchange  system  in  Regulation  (EC)  No  847/2004  of  the  European 
Parliament and of the Council of 29 April 2004 on the negotiation and implementation of air 
service agreements between Member States and third countries3. 

In  the  field  of  trade  in  services  other  than  transport  there  are  good  reasons  not  only  for 
establishing  an  information  exchange  system  but  also  for  reinforcing  it.  The  underlying 
considerations  for  the  establishment  of  the  information  exchange  system4  in  the  field  of  air 

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COM (2003) 94 final. 
See in this respect the judgments in the following cases: C-62/98 Commission v Portugal [2000]ECR I-
5171),  C-466/98  Commission  v  the  United  Kingdom  [2002]ECR  I-9427,C-467/98  Commission  v 
Denmark [2002]ECR, I-9519,C-468/9 Commission v Sweden [2002]ECR I-9575,C-469/98 Commission 
v  Finland  [2002]  ECR,  I-9627,C-471/98  Commission  v  Belgium  [2002]ECR  I-9681,C-472/98 
Commission v Luxembourg [2002]ECR,I-9741,C-475/98 Commission v Austria [2002]ECR I-9797 and 
C-476/98  Commission  v  Germany  [2002]ECR,  I-9855,  and  the  opinions  1/78([1978]ECR  2151), 
2/91([1993]ECR I-1061) and 1/94([1994]ECRI- 5267) 
OJ L157, 30.4.2004, p. 7. Regulation as corrected and republished in OJ L195, 2.6.2004, p. 3.  
With the development of EC law, several matters now fall within the exclusive external competence of 
the  Community  by  application  of  the  AETR  case-law  (case  22/70  AETR[1971]  ECR  263).  Member 
States  might  Therefore  be  prevented  from  contracting  on  their  own  new  international  obligations. 
Member States might also be prevented from keeping such obligations in force in existing agreements if 
they fail to take account of Community law. In addition, where it is apparent that the subject-matter of 

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services  apply  mutatis  mutandis  to  the  negotiation  and  conclusion  of  all  international 
agreements. Furthermore, since the entry into force of the Treaty of Nice, the Community has 
a full-fledged competence, based on Article 133(5) EC to negotiate international agreements 
on  trade  in  services,  subject  to  the  provisions  of  paragraph  6  of  that  same  Article.  This 
competence  is  not  dependent  on  the  previous  exercise  of  existing  internal  powers,  as  this 
aspect only plays a role in determining the extent to which the Community external powers 
would be exclusive and in triggering or not unanimity voting. 

In  a  context  of  parallelism  between  this  full-fledged  competence  and  a  right  for  Member 
States to maintain and  conclude agreements in so far as these comply with Community law 
and  other  relevant  international  agreements,  it  is  essential  that  the  Commission,  as  the 
guardian of the Treaty, keep under constant surveillance all existing agreements concluded by 
Member  States  with  third  countries  in  the  field  of  services  other  than  transport.  It  is  also 
essential  that  the  Commission  be  informed  about  any  planned  negotiation  of  new  services 
agreements.  The  fulfilment  of  the  obligation  to  inform  the  Commission  about  any  planned 
negotiation  of  services  agreements  does  not  only  serve  the  purpose  of  correcting 
inconsistencies  with  EC  law,  if  any,  but  also  the  overriding  objective  of  developing  a 
balanced and effective way of working at Community level that makes full use of the weight 
of  the  Community  to  further  the  interests  of  European  industry  and  consumers.  Even  if  the 
planned agreement does not encroach on areas of exclusive Community competence and does 
not  include  provisions  contrary  to  EC  law,  the  attainment  of  the  common  interest  might 
require an agreement between the Community and the third country concerned. In this regard, 
it is proposed that Member States planning to negotiate agreements with third countries in the 
field  of  trade  in  services  other  than  transport  observe  a  standstill  obligation  for  a  certain 
period  of  time  in  which  the  Commission  might  decide  to  propose  a  recommendation  to  the 
Council  to  negotiate  such  an  agreement  as  a  Community  agreement.  This  would  mirror 
similar  provisions  contained  in  Directive  98/34/EC  of  the  European  Parliament  and  of  the 
Council of 22 June 1998 laying down a procedure for the provision of information in the field 
of technical standards and regulations5. 

an agreement or convention falls partly within the exclusive competence of the Community and partly 
within that of its Member States, it is essential to ensure close cooperation between the Member States 
and the Community institutions, both in the process of negotiation and conclusion and in the fulfilment 
of the commitments entered into. That obligation to cooperate flows from the requirement of unity in 
the international representation of the Community. The Community institutions and the Member States 
must take all necessary steps to ensure the best possible cooperation in that regard 
OJ L 204, 21.7.1998, p. 37. Directive as last amended by the 2003 Act of Accession 

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2005/0132 (ACC) 

Proposal for a 

COUNCIL REGULATION 

on the negotiation of agreements on trade in services other than transport 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 133 thereof, 

Having regard to the proposal from the Commission6, 

Having regard to the opinion of the European Parliament7, 

Having regard to the opinion of the European Economic and Social Committee8, 

Having regard to the opinion of the Committee of the Regions9, 

Whereas: 

(1) 

All  existing  bilateral  agreements  between  Member  States  and  third  countries  or 
international organizations that contain provisions contrary to Community law should 
be  amended  or  replaced  by  agreements  that  are  wholly  compatible  with  Community 
law. 

(2)  Without  prejudice  to  the  provisions  of  the  Treaty,  and  in  particular  Articles  133  and 
226  thereof,  Member  States  may  wish  to  make  amendments  to  existing  agreements 
and make provision to manage their implementation until such time that an agreement 
concluded by the Community enters into force. 

(3) 

(4) 

For  that  purpose,  the  Commission  shall,  in  cooperation  with  Member  States,  keep 
under  constant  surveillance  any  agreement  on  trade  in  services  other  than  transport 
international 
services  concluded  by  Member  States  with 
organizations prior to the entry into force of this Regulation.  

third  countries  or 

It is essential to ensure that a Member State conducting negotiations takes account of 
Community  law,  broader  Community  interests  and  ongoing  or  planned  Community 
negotiations, in particular in the context of the WTO. 

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OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

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(5) 

(6) 

(7) 

(8) 

(9) 

To that effect an efficient and transparent verification procedure should be established. 
Within  such  a  procedure,  as  in  the  procedure  already  established  in  the  field  of  air 
transport  by  Regulation  (EC)  No  847/2004  of  the  European  Parliament  and  of  the 
Council  of  29  April  2004  on  the  negotiation  and  implementation  of  air  service 
agreements  between  Member  States  and  third  countries10,  the  Commission  and  the 
Member  States  should  be  allowed  sufficient  time  to  make  comments  regarding 
compliance  with  Community  law,  broader  Community  interests  and  ongoing  or 
planned  Community  negotiations.  The  Commission  should  also  have  the  option  of 
proposing  that  the  planned  agreement  be  negotiated  instead  by  the  Community  in 
accordance  with  the  provisions  of  Article  133  of  the  Treaty.  The  Member  State  in 
question  should,  pursuant  to  the  general  obligations  laid  down  in  Article  10  of  the 
Treaty, defer the initiation of the planned negotiations for a period sufficient to allow 
either  a  joint  examination  of  the  comments  or  the  preparation  of  a  Commission 
recommendation to negotiate a Community agreement. 

In reviewing agreements concluded prior to entry into force of this Regulation and in 
monitoring the negotiation and conclusion of agreements after the entry into force of 
this  Regulation,  the  Commission  shall  take  any  appropriate  action  to  ensure  full 
compliance of such agreements with Community law and policies.  

Pursuant  to  Article  284  of  the  Treaty,  the  Commission  may,  within  the  limits  and 
under the conditions laid down by the Council in accordance with the provisions of the 
Treaty, collect any information and carry out any checks required for the performance 
of the tasks entrusted to it. 

Any  Member  State  may  invoke  the  confidentiality  of  the  provisions  of  bilateral 
agreements it has negotiated and request the Commission not to share the information 
with other Member States. 

Since the objectives of this Regulation, namely the co-ordination of negotiations with 
third countries with a view to concluding agreements in the field of trade in services 
other than transport services, the necessity to guarantee a harmonised approach in the 
implementation  and  application  of  those  agreements  and  the  verification  of  their 
compliance  with  Community  law,  cannot  be  sufficiently  achieved  by  the  Member 
States  and  can  therefore,  by  the  reason  of  the  Community-wide  scope  of  this 
Regulation,  be  better  achieved  at  Community  level,  the  Community  may  adopt 
measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the 
Treaty. In accordance with the principle of proportionality, as set out in that Article, 
this Regulation does not go beyond what is necessary to achieve those objectives. 

HAS ADOPTED THIS REGULATION: 

Article 1 

Notification to the Commission of existing agreements 

Member States shall inform the Commission of any agreements on trade in services other than 
transport services that they have negotiated with third countries or international organizations 

10 

OJ L 157, 30.4.2004, p. 7. Regulation as corrected and republished in OJ L 195, 2.6.2004, p. 3. 

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prior to the entry into force of this Regulation, except where these have already been notified 
to the Commission pursuant to other provisions of Community law. This information shall be 
provided within three months from the entry into force of this Regulation. 

1. 

2. 

1. 

2. 

Article 2 

Notification to the Commission of planned agreements 

Where  a  Member  State  intends  to  enter  into  negotiations  with  third  countries  or 
international  organizations  concerning  a  new  agreement  on  trade  in  services  other 
than  transport  services  or  the  amendment  of  an  existing  agreement  on  trade  in 
services  other  than  transport  services,  its  Annexes  or  any  other  related  bilateral  or 
multilateral arrangement, it shall notify the Commission of its intentions in writing. 
This  notification  shall  include  a  copy  of  the  existing  agreement,  if  available,  other 
relevant  documentation  and  an  indication  of  the  provisions  to  be  addressed  in  the 
negotiations,  the  objectives  of  the  negotiations  and  any  other  relevant  information. 
The  Commission  shall  make  the  notification  and,  on  request,  the  accompanying 
documentation,  available  to  other  Member  States,  subject  to  the  requirements  of 
confidentiality 

The  information  shall  be  transmitted  at  least  four  calendar  months  before  formal 
negotiations  are  scheduled  to  commence  with  the  third  countries  or  international 
organizations concerned. 

Article 3 

Article Review of planned agreements 

The  Commission  and  Member  States  may  make  comments  to  the  Member  State 
which has notified its intention to enter into negotiations in accordance with Article 
2. That Member State shall take such comments into account as far as possible in the 
course of the negotiations. 

Member  States  shall  postpone  the  initiation  of  formal  negotiations  with  the  third 
countries or international organizations for six months from the date of receipt of the 
notification  referred  to  in  Article  2,  if,  within  three  months  from  that  date,  the 
Commission  or  another  Member  State  delivers  a  detailed  opinion  to  the  effect  that 
the  negotiations  are  likely  to  lead  to  an  agreement  which  is  incompatible  with 
Community  law  and  informs  the  Member  State  concerned  accordingly.  Detailed 
opinions shall also be communicated to the Committee referred to in Article 133 of 
the  EC  Treaty.  The  Member  State  concerned  shall,  before  the  expiration  of  the  six 
months  period,  inform  the  Commission  and  the  other  Member  States  of  the  steps 
which  it  has  taken  or  intends  to  take  to  comply  with  the  detailed  opinion  or  to 
communicate  them  a  reasoned  submission  as  to  why  the  agreement  will  not  be 
incompatible with Community law. 

3. 

Member  States  shall  postpone  the  initiation  of  formal  negotiations  with  the  third 
countries  or  international  organizations  for nine  months  from  the  date  of  receipt  of 
the  notification  referred  to  in  Article  2,  if,  within  three  months  from  that  date,  the 

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Commission  gives  notice  to  the  Committee  referred  to  in  Article  133  of  the  EC 
Treaty of its intention to make a recommendation for the negotiation of a Community 
agreement  covering  the  same  subject  with  the  same  party  or  parties.  If,  within  this 
nine  month  period,  the  Commission  presents  its  proposal,  Member  States  shall 
renounce to initiate negotiations with the third country. 

Article 4 

Article Conclusion of agreements 

1. 

Upon  signature  of  an  agreement,  the  Member  State  concerned  shall  notify  the 
Commission  of  the  outcome  of  the  negotiations  together  with  any  relevant 
documentation.  The  Commission  shall  make  the  notification  and,  on  request,  the 
accompanying  documentation,  available  to  other  Member  States,  subject  to  the 
requirements of confidentiality. 

Article 5 

Confidentiality 

In notifying the Commission of negotiations and their outcome as envisaged in Articles 2 and 
4,  Member  States  shall  clearly  inform  the  Commission  if  any  information  therein  is  to  be 
considered  confidential  and  whether  it  can  be  shared  with  other  Member  States.  The 
Commission and Member States shall ensure that any information identified as confidential is 
treated in accordance with Article 4(1)(a) of Regulation (EC) No 1049/2001 of the European 
Parliament and of the Council11. 

Article 6 

Entry into force 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the Council 
The President 

11 

OJ L 145, 31.5.2001, p.43. 

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