Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 654/2014 of the European Parliament and of the Council concerning the exercise of the Union's rights for the application and enforcement of international trade rules
Date: 2019-12-12
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: World Trade Organisation, common commercial policy, infringement of EU law, international agreement, international trade, settlement of disputes, third country, trade agreement (EU), trade dispute

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   EUROPEAN COMMISSION  Brussels, 12.12.2019  COM(2019) 623 final 2019/0273 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 654/2014 of the European Parliament and of the Council concerning the exercise of the Union's rights for the application and enforcement of international trade rules  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  present  proposal  concerns  an  amendment  of  Regulation  (EU)  No  654/2014  of  the 
European  Parliament  and  of  the  Council  of  15  May  2014  concerning  the  exercise  of  the 
Union's rights for the application and enforcement of international trade rules and amending 
Council Regulation (EC) No 3286/94 laying down Community procedures in the field of the 
common commercial policy in order to ensure the exercise of the Community's rights under 
international trade rules, in particular those established under the auspices of the World Trade 
Organization  (the  “Enforcement  Regulation”  or  “Regulation”)1.  The  objective  of  the 
amendment is the protection of the Union’s interests under international trade agreements in 
situations  when  third  countries  adopt  illegal  measures  and  simultaneously  block  a  dispute 
settlement process. The Regulation has not originally been designed to address such situations 
but  current  developments,  namely  blocking  of  dispute  settlement  under  the  World  Trade 
Organization (WTO) Agreement, require that the Union act as quickly as possible to protect 
its interests. 

The  proposal  is  in  line  with  the  Union’s  priority  to  enforce  effectively  the  Union’s  rights 
under  international  trade  agreements.  The  Political  Guidelines  for  the  Commission  set  out 
that: “we must ensure that we can enforce our rights, including through the use of sanctions, if 
others  block  the  resolution  of  a  trade  conflict”2  and  this  language  is  echoed  in  the  Mission 
Letter to the Commissioner for Trade.3 

The  proposed  amendment  extends  the  scope  of  the  Enforcement  Regulation  to  allow  for 
action in a situation of dispute settlement procedures that are blocked. It is necessary to have 
this  amendment  adopted  very  quickly  to  ensure  that  the  Union’s  rights  are  protected.  To 
facilitate a speedy adoption by the co-legislators, no other changes are proposed.  

– 

Blockage of dispute settlement  

For more than two  years, the WTO Dispute Settlement  Body  (DSB) has  been unable to  fill 
vacancies on the WTO Appellate Body. Due to the blockage of appointments there will only 
be one Appellate Body Member from 11 December 2019. Consequently, the Appellate Body 
will  be  unable  to  hear  new  appeals  as  from  that  date.  WTO  members  will  be  able  to  avoid 
binding  rulings  and  hence  escape  their  international  obligations  by  appealing  panel  reports. 
When a panel report is appealed but the Appellate Body cannot function, the dispute will be 
put into a legal void and will remain unresolved (this has been referred to as appealing “into 
the void”). This will mean that in those situations the WTO dispute settlement system will not 
be binding. Ultimately, the Union’s economic interests will be compromised if international 
trade rules cannot be effectively enforced. 

1 

2 

3 

Regulation  (EU)  No  654/2014  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 
concerning the exercise of the Union's rights for the application and enforcement of international trade 
rules  and  amending  Council  Regulation  (EC)  No 3286/94 laying  down  Community  procedures  in  the 
field of the common commercial policy in order to ensure the exercise of the Community's rights under 
international  trade  rules,  in  particular  those  established  under  the  auspices  of  the  World  Trade 
Organization (OJ L 189 27.6.2014, p. 50). 
Political guidelines for the next European Commission 2019-2024. 
https://ec.europa.eu/commission/sites/beta-political/files/political-guidelines-next-commission_en.pdf  
Mission Letter of 1 December 2019 from President von der Leyen to the Commissioner for Trade. 

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In the face of this emerging situation, the Union has been working intensively on two strands: 
i)  making  proposals  to  address  the  concerns  raised  by  the  WTO  Member  blocking  the 
appointments  and  subsequent  engagement  with  the  WTO  Membership4,  and  ii)  developing 
contingency  measures  in  the  form  of  an  interim  arrangement,  which  aims  at  replicating  the 
WTO  appellate  mechanism  until  it  is  restored,  through  arbitration  under  Article  25  of  the 
WTO  Dispute  Settlement  Understanding  (DSU)5.  Such  an  interim  appeal  arrangement 
maintains  appellate  review  and  therefore  produces  not  only  a  final  ruling  after  the  full 
completion of the WTO adjudicative process that is composed of two stages, but also a ruling 
which can be enforced under WTO rules. It is a stop-gap solution intended to function in the 
period before resumption of the operation of the Appellate Body. The interim arrangement is 
however  not  an  automatic  mechanism  and  will  require  the  individual  agreement  of  other 
WTO Members. 

There is also a risk that dispute settlement concerning other international trade agreements of 
the  Union,  including  bilateral  and  regional,  particularly  older  agreements,  can  be  stymied 
when a third country does not cooperate, as necessary, for dispute settlement to function. For 
example,  the  third  country  may  fail  to  appoint  an  arbitrator  and  there  is  no  fall-back 
mechanism  foreseen  for  dispute  settlement  to  nevertheless  be  able  to  proceed.  In  this 
situation, the Union’s economic interests will be compromised and will require protection in 
the same manner as outlined above. This  situation gains  additional relevance in  the light of 
the  Union’s  increasing  focus  on  enforcement.  A  greater  use  of  dispute  settlement  under  the 
Union’s  bilateral  and  regional  free  trade  agreements  is  also  expected  as  more  of  these 
agreements become applicable and provide for WTO plus obligations. Indeed the Union has 
recently initiated the first three such cases. 

– 

The Enforcement Regulation 

Following  the  Treaty  of  Lisbon,  the  European  Parliament  and  the  Council  adopted  the 
Enforcement  Regulation  as  a  common  legislative  framework  for  the  enforcement  of  the 
Union’s rights under international trade agreements, based on clear and predictable rules for 
action  by  the  Commission.  The  co-legislators  gave  the  Commission  the  power  to  adopt 
implementing  acts  in  accordance  with  Article  291  of  the  Treaty  on  the  Functioning  of  the 
European Union (TFEU), in a prompt manner, within the scope established by the Regulation 
and within the limits and in accordance with the criteria expressly set out. 

Under the Regulation, the Commission may adopt the following types of commercial policy 
measures:  customs  duties,  quantitative  restrictions  on  imports  or  exports  of  goods,  and 
measures in the area of public procurement. Such measures should be selected and designed 
on  the  basis  of  objective  criteria,  including  the  effectiveness  of  the  measures  in  inducing 
compliance of third countries with international trade rules, their potential to provide relief to 
economic  operators  within  the  Union  affected  by  the  third  countries’  measures,  and  aim  at 
minimising negative economic impacts on the Union, including with regard to essential raw 
materials. 

The  scope  of  the  Regulation  extends  to  the  adoption,  suspension,  modification  and 
termination of implementing acts with regard to: 

4 

5 

The process is led by Ambassador Walker of New Zealand, current Chairperson of the WTO Dispute 
Settlement Body. 
The initiative was endorsed by the Council of the European Union on 27 May 2019 and 15 July 2019. 
The European Parliament adopted a resolution supporting it on 28 November 2019. 

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(a) 

(b) 

(c) 

Enforcement  of  the  Union's  rights  under  binding  multilateral  and  bilateral  dispute 
settlement rules; 

Rebalancing measures under multilateral and bilateral safeguard rules; and 

Rebalancing measures in cases of modifications by a third country of its concessions 
under Article XXVIII of GATT 1994. 

In particular with regard to the enforcement of the Union’s rights under binding multilateral 
and  bilateral  dispute  settlement  the  Commission  has  the  power  to  introduce  commercial 
policy  measures  in  the  case  of  an  illegal  measure  maintained  by  a  third  country,  notably  to 
induce compliance by the third country in protection of the Union’s interests. Such measures 
are  however  only  possible  on  the  basis  of  successful  completion  of  dispute  settlement 
procedures with regard to the third country’s measure. 

The  Regulation  does  not  therefore  provide  powers  for  situations  in  which  the  dispute 
settlement  procedures  do  not  function  and  therefore  cannot  be  completed,  such  as  the 
situations  of  blockage  of  dispute  settlement  mechanisms.  The  present  proposal  for  an 
amendment  of  the  Enforcement  Regulation  remedies  this  gap  through  an  extension  of  the 
triggers for action under the Enforcement Regulation to such situations. 

– 

Policy considerations 

The main focus of the proposed amendment is to cater for situations where, after the Union 
has  succeeded  in  obtaining  a  favourable  ruling  from  a  WTO  dispute  settlement  panel,  the 
process  is blocked because the other party  appeals a WTO panel  report “into  the void” and 
has  not  agreed  to  interim  appeal  arbitration  under  Article  25  of  the  WTO  DSU.  In  such  a 
situation, there will be no binding outcome of the dispute settlement process.  

In addition, the proposed amendment caters for similar situations that may arise under other 
international  trade  agreements,  in  particular  regional  or  bilateral  agreements,  when  a  third 
country does not cooperate, as necessary, for dispute settlement to function. For example, the 
third  country  may  fail  to  appoint  an  arbitrator  and  there  is  no  fall-back  mechanism  for 
arbitration provided to nevertheless be able to proceed. 

The proposal covers the two situations together for reasons of coherence and efficiency. Both 
situations  share  the  same  root  causes  and  bring  the  same  negative  consequences  for  the 
Union’s economic interests. The common feature is that the Union should be able to enforce 
its  rights,  that  this  should  be  done  to  the  utmost  extent  possible  through  independent 
adjudication.  Where  this  is  not  possible  and  the  other  party  is  responsible  for  blocking  the 
operation  of  binding  independent  adjudication,  the  Union  should  nevertheless  be  able  to 
enforce its rights.  

The present proposal ensures that the Union is equipped with the necessary tools to protect its 
economic  interests,  should  that  prove  necessary.  The  course  of  action  is  a  reflection  of  the 
Union’s commitment to multilateralism and binding independent adjudication. 

If  the  Union  opted  for  not  taking  this  action,  the  consequence  in  the  situations  of  blocked 
dispute settlement  described above would be that the Union could  not  protect  its rights  in  a 
timely fashion. This could even create an incentive for third countries to thwart adjudication 
when  the  Union  has  rights  under  an  international  agreement,  which  the  third  country 
infringes. 

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Working on the framework that already exists in the form of the Regulation would secure an 
ability  of  the  Union  to  act  expeditiously.  Speed  of  action  is  vital.  This  course  of  action,  as 
with  the  logic  of  the  Regulation  itself,  is  therefore  preferable  to  envisaging  an  ordinary 
legislative  procedure  for  the  enactment  of  trade  policy  measures  in  each  individual  case  in 
which a third country maintains a measure of the type that routinely goes to dispute settlement 
but blocks the adjudication procedure. 

The commercial policy measures taken under the Regulation notably serve to induce a third 
country to terminate a breach of a trade agreement of the Union after the Union’s successful 
recourse to dispute settlement. The proposed amendment creates a possibility for the Union to 
impose measures under the Regulation in particular to induce the termination of a breach also 
without full recourse to an adjudicative dispute settlement procedure where the third country 
prevents that recourse.  

The envisaged measures would be compatible with the international obligations of the Union. 
general public international law allows, under certain conditions such as proportionality and 
prior  notice,  the  imposition  of  countermeasures,  i.e.  of  measures  that  would  otherwise  be 
contrary to the international obligations of an injured party vis-à-vis the country responsible 
for a breach of international  law, and that are aimed at procuring cessation of the breach or 
reparation for it. This customary international law has been codified by the International Law 
Commission,  a  United  Nations  body,  in  its  Draft  Articles  on  Responsibility  of  States  for 
Internationally  Wrongful  Acts6.  In  principle,  a  party  taking  countermeasures  is  not  relieved 
from  fulfilling  its  obligations  under  any  applicable  dispute  settlement  procedure7.  Those 
provisions constitute lex specialis in relation to the provisions of general international law on 
countermeasures8. However, where the responsible party fails to cooperate in good faith in the 
dispute  settlement  procedures,  thereby  preventing  the  injured  party  from  completing  such 
procedures, the possibility to resort to countermeasures in accordance with the requirements 
of  general  public  international  law  necessarily  revives.  The  International  Law  Commission 
notes that the revival of that possibility arises when one Party “fails to implement the dispute 
settlement  procedures  in  good  faith”  or  “where  a  State  party  fails  to  cooperate  in  the 
establishment  of  the  relevant  tribunal”.9  These  are  the  situations  in  which  the  current 
amendment would operate. 

• 

Consistency with existing policy provisions in the policy area 

The  proposal  is  in  line  with  the  Union’s  priority  to  enforce  effectively  the  Union’s  rights 
under international trade agreements, in the interest of securing jobs and promoting growth in 
the Union. It adapts the existing common legislative framework to this new situation.  

• 

Consistency with other Union policies 

The proposal is in line with other Union policies and it reaffirms the Union’s commitment to 
multilateralism  and  independent  adjudication.  The  proposal  is  to  amend  the  existing 
Enforcement Regulation which was already consistent with other Union policies.  

6 

7 
8 
9 

See  International  Law  Commission, Draft  Articles  on  Responsibility  of  States  for  Internationally 
Wrongful Acts, November 2001, General Assembly,  Official Records, Fifty-fifth  Session, Supplement 
No. 10 (A/56/10), chp.IV.E.1, Chapter II and, in particular, introductory commentary (1).  
Ibid., Article 50.2(a). 
Ibid, Article 55. 
Ibid., Articles 52(3)(b) and 52(4) and commentaries (2), (8) and (9). 

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2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The main objective and content of the envisaged act relate to the common commercial policy 
because  of  the  nature  of  the  measures  adopted  and  because  of  their  purpose  which  is  the 
enforcement  of  the  Union’s  international  trade  agreements.  Therefore,  the  substantive  legal 
basis of the proposed amendment is Article 207 TFEU. 

• 

Subsidiarity (for non-exclusive competence)  

Not applicable. The common commercial policy is an area of Union’s exclusive competence. 
The subsidiarity principle does not apply in areas of exclusive competence. 

• 

Proportionality 

The objective of swift protection of the Union’s interests under international trade agreements 
in situations when third countries adopt illegal measures and simultaneously prevent a dispute 
settlement process is optimally achieved through the proposed amendment of the Enforcement 
Regulation.  The  amendment  is  limited  to  introducing  two  new  triggers  for  the  Union  to  act 
and does not go beyond what is necessary to achieve its objective. Also, the measures adopted 
under  the  Regulation  must  themselves  be  proportionate.  For  the  cases  where  this  does  not 
follow  from  provisions  of  the  international  agreement  in  question,  the  amendment  adds  an 
explicit provision  to that effect.  This  is  in  line with  the requirement of general  international 
law that countermeasures be proportionate.  

• 

Choice of the instrument 

The Commission considers this legislative amendment suitable because it amends an existing 
Regulation already adopted on the basis of Article 207 TFEU. 

3. 

• 

RESULTS OF CONSULTATIONS AND IMPACT ASSESSMENTS 

Ex-post evaluations/fitness checks of existing legislation 

Not applicable. 

• 

Stakeholder consultations 

No  public  consultation  has  been  carried  out  for  this  initiative.  The  proposed  amendments 
would only insert new triggers for use of the Regulation with respect to the emergency arising 
in the WTO. 

For the adoption of any commercial policy measure under the regulation, the Commission is 
already  under  an  obligation  to  carry  out  an  information  gathering  exercise  and  follow  an 
implementing act procedure in  each individual case of application. Through the information 
gathering  exercise  the  Commission  will  seek  and  obtain  information  and  views  from 
stakeholders  regarding  the  Union’s  economic  interests  in  specific  sectors  in  which 
countermeasures might  be contemplated. The Commission must take the input into account. 
The Committee established by Regulation (EU) 2015/184310 will assist the Commission in the 

10 

Regulation (EU) 2015/1843 of the European Parliament and of the Council of 6 October 2015 laying 
down Union procedures in the field of the common commercial policy in order to ensure the exercise of 
the Union’s rights under international trade  rules, in particular those established under the auspices of 
the World Trade Organization (codification) (OJ L 272, 16.10.2015, p. 1). 

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application of the Enforcement Regulation. The Committee consists of representatives of the 
Union’s Member States.  

• 

Collection and use of expertise 

Not applicable. Relevant details are provided below. 

• 

Impact assessment 

No  impact  assessment  has  been  carried  out  for  this  initiative  in  view  of  the  nature  of  the 
subject that is enforcement and implementation of rights under international trade agreements. 
The present proposal does not have a direct economic, social or environmental impact and the 
nature  of  the  measures  that  may  be  adopted  (on  a  case-by-case  basis)  does  not  in  any  case 
allow an ex-ante evaluation. 

As explained above, for the adoption of any commercial policy measure, the Commission is 
already  under  an  obligation  to  carry  out  an  information  gathering  exercise  and  follow  a 
procedure in each individual case of application. Through the information gathering exercise 
the Commission will seek and obtain information and views from stakeholders regarding the 
Union’s economic interests in specific sectors.  

The proposal renews the Commission’s obligation to review the scope of the Regulation after 
a certain period of time. Therefore, the Commission will be able to examine the impact of the 
amendment accordingly.  

Furthermore, the present proposal  addresses an urgent situation and therefore  requires rapid 
action. 

• 

Regulatory fitness and simplification 

Not applicable. 

• 

Fundamental rights 

Not applicable. 

4. 

BUDGETARY IMPLICATIONS 

None. 

The proposed amendment provides a mechanism to enforce the Union’s rights. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Not applicable. 

• 

Detailed explanation of the specific provisions of the proposal 

The proposal is limited to the introduction of a limited number of amendments to the existing 
Enforcement Regulation.  

The new provisions are as follows: 

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– 

– 

– 

In  Article  3  (Scope),  points  (aa)  and  (bb)  are  added  to  allow  the  Union  to  take 
measures  in  the  situations  when  a  dispute  settlement  procedure  cannot  be  pursued 
due  to  the  non-cooperation  of  the  other  party,  in  a  trade  dispute  under  either  the 
WTO  Agreement  or  other  regional  or  bilateral  international  trade  agreements, 
respectively. As far as disputes under the WTO Agreement are concerned, this will 
require the Union having obtained a ruling from a WTO panel confirming the EU’s 
right  of  action  and  absent  agreement  on  an  interim  arrangement  for  appeal 
arbitration.  

In  Article  4,  point  (bb)  is  added  to  set  out  the  requirement  that  the  Union’s 
countermeasures in such situations not exceed the nullification or impairment caused 
by a measure of the third country. This is already in place in the existing framework 
by  virtue  of  the  respective  rules  of  dispute  settlement,  and  it  is  in  line  with  the 
general public international law requirement that countermeasures be commensurate 
to the breach that they respond to. 

Article  10  is  amended  so  as  to  renew  the  Commission’s  obligation  to  review  the 
scope  of  the  Regulation,  including  a  review  obligation  with  regard  to  the  proposed 
amendment, after a period of five years. 

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2019/0273 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 654/2014 of the European Parliament and of the Council 
concerning the exercise of the Union's rights for the application and enforcement of 
international trade rules 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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Regulation  (EU)  No  654/2014  of  the  European  Parliament  and  of  the  Council11 
establishes  a  common  legislative  framework  for  exercising  the  Union’s  rights  under 
international trade agreements in certain specific situations. 

One  of  those  situations  relates  to  the  dispute  settlement  mechanisms  set  up  by  the 
Agreement  establishing  the  World  Trade  Organization  (‘WTO’)  and  by  other 
international trade agreements, including regional or bilateral agreements. Regulation 
(EU) No 654/2014  enables the Union to  suspend obligations after dispute settlement 
proceedings are concluded. 

That Regulation however does not address a situation where the Union has a right of 
action in response to a measure maintained by a third country, but dispute settlement 
through  adjudication  is  blocked  or  otherwise  not  available  for  reasons  of  non-
cooperation of the third country having adopted that measure. 

The WTO Dispute Settlement Body has been unable to fill the outstanding vacancies 
on the Appellate Body. The Appellate Body is no longer able to fulfil its function from 
the moment when there are fewer than three Appellate Body Members left. Until this 
situation is resolved and in order to preserve the essential principles and features of the 
WTO  dispute  settlement  system  and  the  Union’s  procedural  rights  in  ongoing  and 
future  disputes,  the  Union  has  sought  to  agree  interim  arrangements  for  appeal 
arbitration pursuant to Article 25 of the WTO Understanding on Rules and Procedures 
Governing  the  Settlement  of  Disputes  (“WTO  Dispute  Settlement  Understanding”). 
This  approach  has  been  endorsed  by  the  Council  of  the European Union  on 27 May 
2019 and 15 July 2019 and supported in a resolution of the European Parliament on 28 

Regulation  (EU)  No  654/2014  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 
concerning the exercise of the Union's rights for the application and enforcement of international trade 
rules and amending  Council  Regulation (EC) No 3286/94 laying down Community procedures in the 
field of the common commercial policy in order to ensure the exercise of the Community's rights under 
international  trade  rules,  in  particular  those  established  under  the  auspices  of  the  World  Trade 
Organization (OJ L 189 27.6.2014, p. 50). 

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(5) 

(6) 

(7) 

(8) 

November  2019.  If  a  WTO  Member  refuses  to  enter  into  such  an  arrangement,  and 
files  an  appeal  to  a  non-functioning  Appellate  Body,  the  resolution  of  the  dispute  is 
effectively blocked. 

In  the  same  vein,  a  similar  situation  may  arise  under  other  international  trade 
agreements, in particular regional or bilateral agreements, where a third country  does 
not  cooperate,  as  necessary,  for  the  dispute  settlement  to  function,  for  example  by 
failing to appoint an arbitrator and where there is no mechanism foreseen to secure the 
functioning of dispute settlement in this situation. 

In  the  face  of  blockage  of  dispute  settlement,  the  Union  will  be  unable  to  enforce 
international  trade  agreements.  Therefore,  it  is  appropriate  to  extend  the  scope  of 
Regulation (EU) No 654/2014 to such situations.  

To  this  end,  the  Union  should  be  able  to  expeditiously  suspend  obligations  under 
international  trade  agreements,  including  regional  or  bilateral  agreements,  when 
effective recourse to a binding dispute settlement mechanism is not possible because 
the third country has rendered it impossible for the Union to do so. 

It is also appropriate to set out that where measures are taken to restrict the trade with 
a third country in the situations at stake, such measures should be commensurate to the 
nullification  or  impairment  of  the  Union’s  commercial  interests  caused  by  the 
measures of that third country, in line with the Union’s obligations under international 
law. 

(9) 

Finally,  the  review  clause  of  Regulation  (EU)  No  654/2014  should  be  renewed  for 
another five-year period and should cover the application of the proposed amendment. 

(10)  Regulation (EU) No 654/2014 should therefore be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Regulation (EU) No 654/2014 is amended as follows: 

(1) 

Article 3 is amended as follows: 

(a) 

the following point (aa) is inserted: 

“(aa) following the circulation of a WTO panel report upholding, in whole or 
in  part,  the  claims  brought  by  the  European  Union,  if  an  appeal  under 
Article  17  of  the  WTO  Dispute  Settlement  Understanding  cannot  be 
completed  and  if  the  third  country  has  not  agreed  to  interim  appeal 
arbitration  under  Article  25  of 
the  WTO  Dispute  Settlement 
Understanding;” 

(b) 

the following point (bb) is inserted: 

“(bb) in  trade  disputes  relating  to  other  international  trade  agreements, 
including regional or bilateral agreements, if adjudication is not possible 
because the third country is not taking the steps that are necessary for a 
dispute settlement procedure to function;” 

(2) 

In Article 4 (2), the following point (bb) is inserted: 

“(bb) where measures are taken to restrict the trade with a third country in situations 
under Article 3(aa) or Article 3(bb), such measures shall be commensurate to 

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the nullification or impairment of the Union’s commercial interests caused by 
the measures of that third country;” 

(3) 

Article 10 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

“By 1 March 2025 at the latest, the Commission shall review the scope of this 
Regulation,  taking  into  account  in  particular  the  amendments  to  the  scope 
having  effect  from  [date of  entry into force of  this  amending  Regulation], the 
its 
commercial  policy  measures 
implementation, and shall report its findings to the European Parliament and 
the Council.” 

that  may  be  adopted,  as  well  as 

(b)  paragraph 2 is amended as follows: 

(i) 

in the first subparagraph of paragraph 2 the first sentence is replaced by 
the following: 

“In  acting  pursuant  to  paragraph  1,  the  Commission  shall  undertake  a 
review aimed at envisaging under this Regulation additional commercial 
policy measures suspending concessions or other obligations in the field 
of trade in services”. 

(ii) 

the second subparagraph is deleted.  

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

Article 2 

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

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  EN