Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the International Grains Council with respect to amending the Rules of Procedure under the Grains Trade Convention, 1995 as regards external auditor’s contract period
Date: 2022-08-25
Institutions: Directorate-General for Agriculture and Rural Development, European Commission
Subjects: accountant, cereals, commodity agreement, international convention, international organisation, rules of procedure, trade agreement

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   EUROPEAN COMMISSION  Brussels, 25.8.2022  COM(2022) 420 final 2022/0246 (NLE)  Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the International Grains Council with respect to amending the Rules of Procedure under the Grains Trade Convention, 1995 as regards external auditor’s contract period  
 
EXPLANATORY MEMORANDUM 

1. 

SUBJECT MATTER OF THE PROPOSAL 

This proposal concerns the decision establishing the position to be taken on the Union's behalf 
in the International Grains Council in connection with the envisaged amendment of the Rules 
of  Procedure  under  the  Grains  Trade  Convention,  1995  (‘the  Convention’)  as  regards  the 
contract terms of the external auditor.  

2. 

CONTEXT OF THE PROPOSAL 

2.1. 

The Grains Trade Convention, 1995 

The Convention aims to further international co-operation in all aspects of trade in grains, to 
promote the expansion of international trade in grains and to secure the freest possible flow of 
this trade. In addition, the Convention intends to contribute to the fullest extent possible to the 
stability of international grain markets in the interests of all members, to enhance world food 
security  and  to  provide  a  forum  for  exchange  of  information  and  discussion  of  members’ 
concerns regarding trade in grains. 

The Convention entered into force on 1 July 1995. The Union is  a party  to the Convention. 
The Convention was concluded by the European Union by Council Decision 96/88/EC.1 

The Convention was concluded for a period of three years, until 30 June 1998 and, since then, 
has been regularly extended by the  International  Grains Council (‘IGC’). On each occasion, 
the Convention is extended for a maximum period of two years in accordance with Article 33 
of the Convention. It was last extended by decision of the IGC on 7 June 2021 and remains in 
force until 30 June 2023.  

2.2. 

The International Grains Council 

The IGC is an intergovernmental organisation that seeks to meet the objectives laid down by 
Article 1 of the Convention. In particular, the IGC aims at: 

 

 

 

furthering international cooperation in all aspects of trade in grains; 

promoting  expansion,  openness  and  fairness  of  the  international  trade  in  the  grains 
sector; 

contributing to stability of international grain market, enhancing world food security 
and  contributing  to  the  development  of  countries  whose  economies  depend  on 
commercial sales of grain. 

These objectives are sought by improving market transparency through information-sharing, 
analysis and consultation on market and policy developments. 

The IGC has 30 members, including many of the world’s largest cereals producers as well as 
importers. Besides the Union, its members are, among others, Argentina, Australia, Canada, 
Egypt, India, Japan, Russia, Ukraine, the United Kingdom and the USA. However, China and 
Brazil are not members.  

The 30 members of the IGC have a total number of 2,000 votes.  

For  budgetary  procedures  (see  Article  11  of  the  Convention),  i.e.  for  fixing  the  annual 
financial contributions of members, the Union has 369 votes in 2021/222.  

1 

OJ L 21, 27.1.1996, p. 47. 

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For decision-making, i.e. where votes are held (see Article 12 of the Convention), 1,000 votes 
are  allocated  to  the  11  exporting  members  (including  the  Union  with  245  votes)  and  1,000 
votes  to  the  19  importing  members.  It  needs  to  be  emphasized  that  in  principle,  the  IGC 
operates on the basis of consensus and it is very rare that voting is actually held. 

At the meetings of the IGC, the Union is represented by the European Commission. Member 
States can attend the IGC meetings, in particular the IGC Council Sessions. 

The envisaged act of the International Grains Council 

2.3. 
On 14 April 2022, the IGC Secretariat circulated a formal proposal3 to amend Rule 31(a) of 
the Rules of Procedure under the Convention.  

In  line  with  earlier  discussions  within  the  IGC,  the  IGC  Secretariat  proposed  to  extend  the 
possible  contracting  term  of  the  external  auditor.  The  Administrative  Committee  currently 
designates  an  independent  auditor  for  a  period  of  three  years,  which  may  be  renewed  only 
once for two more years.  

According to  the proposal,  the designation could be for five  years, renewable only once for 
maximum three more years.  

The  objective  of  the  proposed  extension  of  the  possible  contractual  period  for  the  external 
auditor is to negotiate a better price with the potential candidates. 

At  its meeting  of  10  May  2022,  the  Administrative  Committee  considered  the  proposal  and 
agreed to recommend it to the IGC for its consideration4. At that meeting the Union requested 
that the decision of the IGC be made by postal ballot (i.e. written procedure) with a deadline 
of 30 November 2022. This would allow the Union to complete its internal procedures.  

Although the Convention does not lay down specific rules on the postal ballot procedure (or 
written  procedure),  Article  14  of  the  Convention concerning  the  decisions  of  the  IGC,  does 
not require that such decisions are taken at an IGC Council Session. 
On 6 June 2022, at the 56th IGC Council Session, members agreed to the Union’s request and 
decided  to  follow  the  written  procedure  for  deciding  on  the  proposed  amendment  with  the 
deadline set for 30 November 2022.5 

POSITION TO BE TAKEN ON THE UNION'S BEHALF 

3. 
The Union is the 2nd largest contributor to the IGC budget, following the USA.  

In  order  to  improve  the  financial  sustainability  of  the  IGC  and  to  avoid  an  unnecessary 
increase  of  member  contributions,  it  is  in  the  Union’s  interest  to  support  the  proposed 
amendment to the Rules of Procedure.  

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 proposed amendment to the Rules of Procedure.  

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5 

The International Grains Council operates on a fiscal year basis, which runs from 1 July to 30 June. 
IGC document AC (21/22)2/6 of 14 04 2022. 
IGC document GC 56/6 of 16 05 2022. 
IGC document GEN (21/22) 6 of 9 06 2022. 

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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’6. 

4.1.2.  Application to the present case 

The envisaged act of the IGC has the effect of amending the Rules of Procedure by amending 
the  existing  Rule  with  respect  to  the  contract  period  of  the  external  auditor.  The  Rules  of 
Procedure  provide  for  detailed  rules  for  the  management  of  the  Convention,  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 
Convention. 

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 
European 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 trade in agricultural products.  

Therefore, the substantive legal basis of the proposed decision is Article 207(4) TFEU. 

4.3. 

Conclusion 

The legal basis of the proposed decision should be Article 207(4) TFEU, in conjunction with 
Article 218(9) TFEU. 

5. 

PUBLICATION OF THE ENVISAGED ACT 

The  proposed  acts  of  the  International  Grains  Council  will  amend  the  Rules  of  Procedure 
under  the  Convention  and  it  is  therefore  appropriate  to  publish  the  Council  Decision  in  the 
Official Journal of the European Union after its adoption. 

6 

Judgment  of  the  Court  of  Justice  of  7  October  2014,  Germany  v  Council,  C-399/12,  ECLI:EU: 
C:2014:2258, paragraphs 63 and 64. 

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2022/0246 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken on behalf of the European Union in the International Grains 
Council with respect to amending the Rules of Procedure under the Grains Trade 
Convention, 1995 as regards external auditor’s contract period 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(4), in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The Grains Trade Convention, 1995 (‘the Convention’) was concluded by the Union 
by means of Council Decision 96/88/EC7 and entered into force on 1 July 1995. The 
Convention  was  initially  concluded  for  a  period  of  three  years  and  has  since  been 
regularly extended. 

The  Rules  of  Procedure  under  the  Convention  were  approved  by  the  International 
Grains Council on 6 July 1995. 

Rule 31, point (a), of the Rules of Procedure under the Convention lays down that an 
independent  external  auditor  shall  be  designated  for  three  years,  which  may  be 
renewed only once, for a maximum of two years. 

On  14  April  2022,  the  Secretariat  of  the  International  Grains  Council  proposed  to 
amend  Rule  31,  point  (a),  with  a  view  to  increase  the  period  of  designation  of  the 
independent external auditor from three to five years, which may be renewed once, for 
a  maximum  of  three  years.  The  objective  of  the  amendment  is  to  offer  a  longer 
contract period for the potential auditors, who would in return offer more competitive 
prices for their services8. 

It  is  appropriate  to  establish  the  position  to  be  taken  on  the  Union's  behalf  in  the 
International Grains Council with respect to the amendment of the Rules of Procedure 
under  the  Convention  concerning  the  contract  period  of  the  external  auditor.  The 
proposed amendment aims at improving the financial sustainability of the International 
Grains Council and is therefore in the interest of the Union, 

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8 

Council Decision 96/88/EC of 19 December 1995 concerning the approval by the European Community 
of  the  Grains  Trade  Convention  and  the  Food  Aid  Convention,  constituting  the  International  Grains 
Agreement 1995 (OJ L 21, 27.1.1996, p. 47). 
International Grains Council, AC(21/22)Misc.1 of 14 April 2022. 

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HAS ADOPTED THIS DECISION: 

Article 1 

The position to be taken on the Union’s behalf in the International Grains Council shall be to 
vote  in  favour  of  amending  Rule  31,  point  (a),  of  the  Rules  of  Procedure  under  the  Grains 
Trade Convention, 1995, in accordance with the proposal submitted by the Secretariat of the 
International  Grains  Council  on  14  April  2022,  with  the  objective  to  increase  the  contract 
period of the external auditor. 

This Decision is addressed to the Commission. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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