Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the International Sugar Council with respect to the extension of the International Sugar Agreement, 1992
Date: 2019-06-24
Institutions: Directorate-General for Agriculture and Rural Development, European Commission
Subjects: commodity agreement, international organisation, renewal of an agreement, sugar

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   EUROPEAN COMMISSION  Brussels, 24.6.2019  COM(2019) 286 final 2019/0139 (NLE)  Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the International Sugar Council with respect to the extension of the International Sugar Agreement, 1992  
 
 
EXPLANATORY MEMORANDUM 

1. 

SUBJECT MATTER OF THE PROPOSAL 

This proposal concerns a decision establishing the position to be taken on the Union's behalf 
in  the  International  Sugar  Council  in  connection  with  the  envisaged  adoption  of  a  decision 
extending of the International Sugar Agreement, 1992 until 31 December 2021. 

2. 

CONTEXT OF THE PROPOSAL 

2.1. 

The International Sugar Agreement, 1992 

The  International  Sugar  Agreement,  1992  (‘the  Agreement’)  aims  to  ensure  enhanced 
international cooperation in connection with world sugar matters and related issues, provide a 
forum for intergovernmental consultations on sugar and on ways to improve the world sugar 
economy,  to  facilitate  trade  by  collecting  and  providing  information  on  the  world  sugar 
market  and  other  sweeteners  and  to  encourage  increased  demand  for  sugar,  particularly  for 
non-traditional uses. 

The Agreement entered into force on 1 January 1993. 
The Union is a party to the Agreement.1 

2.2. 

The International Sugar Council 

The International Sugar Council is the responsible body for the performance of all functions 
necessary  to  carry  out  the  provisions  of  the  Agreement.  It  adopts  rules  and  regulations 
including  rules  of  procedure  for  the  Council  and  its  committees  and  the  financial  and  staff 
regulations of the International Sugar Organisation (‘ISO’). The Council keeps the necessary 
records and publishes an annual report and other information if deemed appropriate. 

Members to the Agreement hold 2000 votes in total. Each Member to the Agreement holds a 
specified  number  of  votes,  which  is  annually  adjusted  following  predefined  criteria  in  the 
Agreement.  All  decisions  of  the  Council  shall  be  taken  in  principle  by  consensus  unless 
stipulated otherwise in the Agreement. In the absence of consensus, decisions shall be made 
by simple majority vote unless the Agreement provides for a special vote.  

2.3. 

The envisaged act of the International Sugar Council 

The Agreement was concluded by Council Decision 92/580/EEC and entered into force on 1 
January 1993. It was concluded for a period of three years until 31 December 1995 and since 
then,  regularly  extended  for  further  periods  of  two  years,  as  foreseen  by  its  Article  45.  The 
Agreement  was  last  extended  in  December  2017  and  remains  in  force  until  31  December 
2019.   

On 19 July 2019,  during its fifty-fifth  session, the  International  Sugar Council is  to  adopt  a 
decision  regarding  the  extension  of  the  International  Sugar  Agreement  1992  by  another  2 
years (‘the envisaged act’). 

The purpose of the envisaged act is to enable the ISO to continue with its work. 

The envisaged act shall become binding on the parties in accordance with Article 45 (2) of the 
Agreement,  which  provides:  ‘The  Council  may,  by  special  vote,  extend  this  Agreement 
beyond 31 December 1995 for successive periods, not exceeding two years on each occasion. 
Any Member which does not accept any such extension of this Agreement shall so inform the 

1 

Council Decision (92/580/EEC) of 13/11/1992; OJ L 379 of 23/12/1992, p.15. 

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Council in writing and shall cease to be a Party to this Agreement from the beginning of the 
period of extension’.  

The extension of the Agreement will cover the period of 1 January 2020 - 31 December 2021. 

3. 

POSITION TO BE TAKEN ON THE UNION'S BEHALF 

The  International  Sugar  Agreement,  1992  was  concluded  by  the  Community  by  Decision 
92/580/EEC  and  entered  into  force  on  1  January  1993  for  a  period  of  three  years  until  31 
December  1995.  Since  then  it  has  been  regularly  extended  for  further  periods  of  two  years. 
The Agreement was  extended last time by decision of the  International  Sugar Council at its 
52nd session on 1 December 2017 and remains in force until 31 December 2019.  

The  Union  has  always  been  an  active  member  of  the  ISO  and  a  further  extension  of  the 
Agreement  by  up  to  two  years  is  in  the  interest  of  the  Union.  The  Union  is  a  major  sugar 
producer as well as a leading sugar-trading partner for many ISO Members. 

The  52  Members  of  the  ISO  have  a  total  number  of  2,000  votes.  The  EU  counts  as  one 
Member. Each vote has a weight of £653 for the 2019 administrative budget. For budgetary 
procedures (see Article 25 of the ISA 1992), i.e. for fixing the annual financial contributions 
of Members, the number of votes allocated to the Union is 552 and therefore the contribution 
due for 2019 amounts to £360,456. These numbers are adjusted on a yearly basis. 

A formal decision about the extension of the Agreement up to 31 December 2021 is scheduled 
for the 55th session of the International Sugar Council to be held on 19 July 2019 in Cairns, 
Australia. 

Since 2015 the Union has been seeking to open a discussion among the ISO membership on 
starting  a  process  of  modernisation  of  the  Agreement,  under  which  votes  are  still  allocated 
based on the world  sugar situation as it was in  1992, with  the result that the distribution of 
votes no longer reflects  the realities of the  global  sugar market.  Consequently, the financial 
contribution of the Union no longer reflects its relative position in the global sugar market. On 
23  November  2017,  the  Council  adopted  “Council  Decision  authorising  the  opening  of 
negotiations to amend the International Sugar Agreement 1992”2 (‘the Decision’) with a view 
to  remedying  this  situation.  In  the  context  of  these  negotiations,  the  Commission  has  put 
forward proposals for an amendment of the Agreement, which are under discussion with other 
ISO Members. The vote on the extension of the Agreement will take place in the same session 
as  the  vote  on  the  amendment  of  the  Agreement.  The  vote  on  the  amendment  of  the 
Agreement is on the agenda before the vote on the extension of the Agreement.  

The  purpose  of  this  proposal  is  to  seek  the  Council’s  authorisation  for  the  Commission  to 
vote, on the Union’s behalf, in favour of the extension of the Agreement up to 31 December 
2021  in  the  International  Sugar  Council.  However,  this  position  should  be  subject  to  the 
favourable decision of the ISO Council on the proposal to amend the Agreement. Should that 
not be case, then the Union should prevent a decision from being taken by consensus on the 
extension, abstain from a subsequent vote on that matter and consult again with the Council. 
If there are not enough Members present to reach the majority required for a special vote, the 
Union’s abstention would mean that the extension would not be agreed on that occasion and 
the matter would most likely be postponed to the next session in November 2019. If majority 
is  reached,  the  extension  would  be  voted  and  the  Union  would  be  bound  by  the  decision. 
Abstention should nevertheless  be preferred over a negative vote, as it would  send a strong 
political message while allowing the extension of the Agreement; the EU would still have the 

2 

Council  Decision  of  23  November  2017  authorising  the  opening  of  negotiations  to  amend  the 
International Sugar Agreement 1992, not published (Council document 14282/17). 

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possibility to withdraw from the Agreement. In order to leave the agreement the Union would 
need then to inform in writing the ISO of its intention to leave the agreement, as provided in 
Article 45(2) of the Agreement. To do this a new Council Decision would be required.   

4. 

LEGAL BASIS  

4.1. 

Procedural legal basis 

4.1.1.  Principles 

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for 
decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by 
an  agreement,  when  that  body  is  called  upon  to  adopt  acts  having  legal  effects,  with  the 
exception of acts supplementing or amending the institutional framework of the agreement.’ 

The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the 
rules of international law governing the body in question. It also includes instruments that do 
not  have  a  binding  effect  under  international  law,  but  that  are  ‘capable  of  decisively 
influencing the content of the legislation adopted by the EU legislature’3. 

4.1.2.  Application to the present case 

The envisaged act of the International Sugar Council has the effect of extending the validity 
of the Agreement, which is an international agreement binding the Union. The envisaged act 
has therefore legal effects.  

The  envisaged  act  does  not  supplement  or  amend  the  institutional  framework  of  the 
Agreement. 

Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU. 

4.2. 

Substantive legal basis 

4.2.1.  Principles 

The  substantive  legal  basis  for  a  decision  under  Article  218(9)  TFEU  depends  primarily  on 
the objective and content of the envisaged act in respect of which a position is taken on the 
Union's behalf.  If the  envisaged act  pursues two  aims or has two components  and if one of 
those  aims  or  components  is  identifiable  as  the  main  one,  whereas  the  other  is  merely 
incidental, the decision under Article 218(9) TFEU must be founded on a single substantive 
legal basis, namely that required by the main or predominant aim or component. 

4.2.2.  Application to the present case 

The  main  objective  and  content  of  the  envisaged  act  relate  to  common  commercial  policy 
(trade in agricultural products).  

Therefore, the substantive legal basis of the proposed decision is Article 207 TFEU. 

4.3. 

Conclusion 

The  legal  basis  of  the  proposed  decision  should  be  Article  207  TFEU,  in  conjunction  with 
Article 218(9) TFEU. 

3 

Judgment  of 
ECLI:EU:C:2014:2258, paragraphs 61 to 64.  

the  Court  of  Justice  of  7  October  2014,  Germany  v  Council,  C-399/12, 

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5. 

PUBLICATION OF THE ENVISAGED ACT 

As the act of the International Sugar Council will amend the Agreement, it is appropriate to 
publish it in the Official Journal of the European Union after its adoption. 

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2019/0139 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken on behalf of the European Union in the International Sugar 
Council with respect to the extension of the International Sugar Agreement, 1992 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207, in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

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The  International  Sugar  Agreement,  1992  (‘the  Agreement’)  was  concluded  by 
Council  Decision  92/580/EEC4  and  entered  into  force  on  1  January  1993.  The 
Agreement  was  concluded  for  a  period  of  three  years  until  31  December  1995  and 
since  then,  regularly  extended  for  further  periods  of  two  years.  The  Agreement  was 
last extended by decision of the  International  Sugar Council in  December 20175 and 
remains in force until 31 December 2019.  

Pursuant  to  Article  45(2)  of  the  Agreement,  the  International  Sugar  Council  may 
extend  the  Agreement  for  successive  periods,  not  exceeding  two  years  on  each 
occasion.  
The International Sugar Council, during its 55th session to be held on 19 July 2019 is 
set to decide on the extension of the Agreement up to 31 December 2021.     

Before  the  decision  on  the  extension  of  the  Agreement,  the  International  Sugar 
Council, during its 55th session will also vote on a proposal submitted by the Union to 
amend  the  Agreement.  That  proposal  is  the  result  of  negotiations  conducted  by  the 
Commission  in  line  with  an  authorisation  by  the  Council  to  open  negotiations,  on 
behalf of the  Union, to  amend the Agreement, set  out  in  the Council Decision of 23 
November  2017  authorising  the  opening  of  negotiations  to  amend  the  International 
Sugar Agreement 19926.  

A  possible  rejection  of  the  proposal  to  amend  the  Agreement  would  go  against  the 
Union’s  objectives  of  modernising  the  Agreement  and  thus  put  the  benefits  of  the 
extension of the Agreement into question.  

It is appropriate to establish the position to be taken on the Union's behalf in relation to 
the  extension  of  the  Agreement.  The  extension  of  the  Agreement,  should  the 
amendment to the Agreement also be agreed, is in the interest of the Union,  

Council Decision 92/580/EEC of 13 November 1992 on the signing and conclusion of the International 
Sugar Agreement 1992 (OJ L 379, 23.12.1992, p. 15). 
Information concerning the extension of the International Sugar Agreement (1992) (OJ L 12, 17.1.2018, 
p. 1). 
Council  Decision  of  23  November  2017  authorising  the  opening  of  negotiations  to  amend  the 
International Sugar Agreement 1992, not published (Council document 14282/17). 

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HAS ADOPTED THIS DECISION: 

Article 1 

The position to be taken by the Commission on behalf of the Union shall be to vote in favour 
of the extension of the International Sugar Agreement, 1992 for a further period of up to two 
years, up to 31 December 2021. 

However, the Commission shall prevent a decision from being taken by consensus concerning 
the extension of the International Sugar Agreement, 1992 and shall abstain from a  subsequent 
vote on that matter in case the International Sugar Council will not first vote in favour of the 
proposal to amend the Agreement.  

This Decision is addressed to the Commission. 

Article 2 

Done at Brussels, 

For the Council 
The President 

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FINANCIAL STATEMENT 

BUDGET HEADING: 
Chapter 05 06 INTERNATIONAL ASPECTS OF ‘AGRICULTURE AND 
RURAL DEVELOPMENT’ POLICY AREA 
05 06 01 International agricultural agreements 

FinancSt/10/PS/pl/ 
agri.ddg3.g.4(2019)12
78657 
6.221.2019.1 

DATE: 08.05.2019 

APPROPRIATIONS: 
B2019  6 300 000 
EUR 

TITLE: 
Proposal for a Council Decision on the position to be taken on behalf of the European Union in the 
International Sugar Council with respect to the extension of the International Sugar Agreement, 1992. 

LEGAL BASIS: Article 207 in conjunction with Article 218 (9) of the Treaty on the Functioning of the 
European Union 

AIMS: 
Extension of the existing International Sugar Agreement by two more years (1.1.2020 to 31.12.2021). 

1. 

2. 

3. 

4. 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR 
2019 
(EUR million) 

FOLLOWING 
FINANCIAL 
YEAR 
2020 
(EUR million) 
0.52 

5. 

FINANCIAL IMPLICATIONS 

5.0 

5.1 

CHARGED TO THE EU BUDGET 

NATIONAL AUTHORITIES 
OTHER 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 
REVENUE 
- 
(LEVIES/CUSTOMS DUTIES) 
NATIONAL 
- 

OWN RESOURCES OF THE EU  

2021              

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: Based on assumptions on an estimated number of votes of the EU 

(EUR million) 
0.48 

(varies each year), on an estimated amount to be paid per vote in GBP. 

6.0 

6.1 

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 
RELEVANT CHAPTER OF THE CURRENT BUDGET? 

CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE 
CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 
OBSERVATIONS: 

YES  

- 

- 

YES  

The amount to be effectively paid can vary depending on the final number of votes the EU gets attributed to, the 
amount to be paid per vote in GBP and on the exchange rate EUR/ GBP.  

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