CELEX: 52015PC0305
Language: en
Date: 2015-06-22
Title: Proposal for a COUNCIL DECISION on the ratification and accession by Member States on behalf of the Union to the Protocol of 2010 to the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea with regard to aspects related to judicial cooperation in civil matters

EUROPEAN
                             COMMISSION
                                                     Brussels, 22.6.2015
                                                     COM(2015) 305 final
                                                     2015/0136 (NLE)
                                        Proposal for a
                                   COUNCIL DECISION
     on the ratification and accession by Member States on behalf of the Union to the
    Protocol of 2010 to the International Convention on Liability and Compensation for
   Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea
           with regard to aspects related to judicial cooperation in civil matters
EN                                                                                     EN
 ---pagebreak---                             EXPLANATORY MEMORANDUM
   1.   CONTEXT OF THE PROPOSAL
   1.1. Introduction
        Liability and compensation for damages arising from specific types of shipping
        activities is regulated at international level with a series of International Maritime
        Organisation (hereinafter referred to as 'IMO') conventions, which rely on the same
        main principles. These principles are: strict liability of the shipowner, mandatory
        insurance to cover damages to third parties, a right of direct recourse of persons
        suffering damages against the insurer, limitation of liability and, in the case of oil
        and Hazardous and Noxious Substances (hereinafter referred to as 'HNS'), a special
        compensation fund that pays for damages when these exceed the liability limits of
        the shipowner.
        The International Convention on Liability and Compensation for Damage in
        connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996
        (hereinafter referred to as '1996 HNS Convention') is the last one of the IMO
        Conventions dealing with liability that is still awaiting ratification by States to enter
        into force. This is an important piece of the international maritime liability regime, in
        particular as the carriage of HNS by sea, including liquefied natural gas ('LNG') and
        liquefied petroleum gas ('LPG'), is a booming trade representing a significant share
        of the maritime transport sector.
        The Protocol of 2010 (hereinafter referred to as '2010 Protocol') to the 1996 HNS
        Convention contained necessary amendments to address problems identified in the
        1996 HNS Convention. The 2010 Protocol and the provisions of the Convention, as
        amended by the Protocol, are to be read, interpreted and applied together as one
        single instrument, as per Articles 2 and 18 of the Protocol. A consolidated text of the
        Protocol was produced by the IMO Secretariat and endorsed at IMO in 2011 at the
        98th Meeting of its Legal Committee, and is referred to as the '2010 HNS
        Convention'. The 2010 HNS Convention, as a single, consolidated instrument for the
        Convention, will take effect once the 2010 Protocol enters into force.
        State signature, ratification or acceptance of the 2010 Protocol nullifies any prior
        signature or ratification by that State of the 1996 HNS Convention, in accordance
        with Article 20(8) of the Protocol (Article 45(8) of the 2010 HNS Convention).
        Neither the 1996 HNS Convention, nor the 2010 Protocol to the HNS Convention
        has entered into force. The latter has no contracting parties to it to this day.
        It is important to note that an expression to be bound by the 2010 Protocol must be
        accompanied by the submission of data on the total quantity of contributing cargo
        received during the preceding calendar year, in accordance with Article 20(4) thereof
        (Article 45(4) of the 2010 HNS Convention). This prerequisite is the main reason
        why no State has ratified the Convention yet.
        Following the adoption of the 2010 Protocol to the HNS Convention at the IMO, a
        group of States with the assistance of the International Oil Pollution Compensation
        Funds (hereinafter 'IOPC Funds') Secretariat have produced a set of Guidelines on
        reporting of HNS contributing cargo. These Guidelines were endorsed by the IMO
EN                                              2                                                 EN
 ---pagebreak---           Legal Committee at its 100th Session on 19 April 20131, thereby addressing the main
          practical difficulty with ratification of the Convention.
          An HNS Correspondence Group was created at the 101st Session of the IMO Legal
          Committee to assist States with setting up the procedures for implementation of the
          Convention, in particular for the reporting of contributing HNS, in order to pave the
          way for ratification. A number of EU Member States and the European Commission
          are members to this Group.
   1.2.   EU competence and ramifications
        In accordance with the rules on the Union's external competence as laid down in
        Article 3(2) of the Treaty on the Functioning of the European Union ('TFEU'), the
        2010 Protocol, and in the future the 2010 HNS Convention, comes under Union
        exclusive competence as it affects common rules of the Union and alters their scope.
        As elaborated in Section 1.4 of this Memorandum, conclusion of the 2010 Protocol to
        the Convention would affect the scope and the rules of Directive 2004/35/EC on
        environmental liability with regard to the prevention and remedying of environmental
        damage2. In addition, for the reasons detailed in Section 1.5 below, conclusion of the
        2010 Protocol would affect the rules laid down in Regulation (EU) No 1215/2012 on
        jurisdiction and the recognition and enforcement of judgments in civil and commercial
        matters (recast Brussels I Regulation).3
        The latter overlap between the Convention rules, as amended, and the rules laid down
        in the Union regarding judicial cooperation in civil and commercial matters also
        formed the legal basis for Council Decision 2002/971/EC authorising Member States,
        in the interest of the Community, to ratify or accede to the 1996 HNS Convention4.
        However, as established in the Introduction, the 2010 Protocol amended the 1996
        HNS Convention, and the 2010 HNS Convention is the consolidated instrument
        stemming from this amendment. Hence, the effect of the 2010 HNS Convention on
        EU rules needs to be assessed in the light of the developments in the Union legal order
        since Council Decision 2002/971/EC was adopted.
        The Union's exclusive competence for the conclusion of the 2010 Protocol cannot be
        exercised by the Union itself as separate legal entity, in the absence of a REIO
        (Regional Economic Integration Organisation) clause in the text of the Convention or
        in the Protocol. This leaves the Member States subject to the obligation to conclude
        this international agreement on behalf of the Union. As the 2010 Protocol concerns
        matters of exclusive EU competence, Member States cannot decide autonomously on
        the signature and ratification of this Protocol. They can only do this, on behalf of the
        Union, after the authorisation of the Council and the consent of the European
        Parliament upon a proposal by the Commission, in accordance with Article 218 (6) (a)
        TFEU.
   1
        IMO LEG 100th Session, LEG 100/14, "Report of the Legal Committee on the work of its one
        hundredth session", pp. 5-6; LEG 100/3, submission by Canada on "Monitoring the Implementation of
        the HNS Protocol, 2010", Annex 2 "Reporting guidelines on the submission of HNS contributing
        cargo".
   2
        OJ L 143, 30.4.2004, p. 56 .
   3
        OJ L 351, 20.12.2012, p. 1 .
   4
        Council Decision 2002/971/EC of 18 November 2002 authorising the Member States, in the interest of
        the Community, to ratify or accede to the International Convention on Liability and Compensation for
        Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (the HNS
        Convention), OJ L 337, 13.12.2002, p. 55.
EN                                                    3                                                      EN
 ---pagebreak---    1.3.   Details of the Convention
        The 2010 Protocol, and thereby the consolidated 2010 HNS Convention, will enter
        into force 18 months after the date on which at least 12 States, 4 of which with no less
        than 2 million units of gross tonnage each, have ratified it, and the relevant data on
        contributing cargo have been submitted to the IMO Secretary-General as appropriate
        showing no less than 40 million tonnes of cargo contributing to the general HNS
        account received in total in those States during the preceding calendar year. The
        conditions for entry into force were the same in the 1996 HNS Convention.
        The main changes from the 1996 HNS Convention to the 2010 HNS Convention are:
          (a)    excluding packaged HNS from the definition of contributing cargo to the HNS
                 Fund, while damage caused by packaged HNS remains covered by the two-tier
                 system of compensation established in the Convention (Article 1 (10) 2010
                 HNS Convention);
          (b)    increasing the liability limits of the shipowner for ships carrying packaged
                 HNS in order to accommodate better the exclusion of packaged HNS as
                 contributing cargo to the HNS Fund (Article 9 (1)(b) 2010 HNS Convention);
          (c)    making the physical receiver of LNG the responsible party for payment of the
                 relevant contributions to the HNS Fund, unless there is a different agreement
                 between the titleholder and the receiver (Article 19 (1bis) 2010 HNS
                 Convention);
          (d)    making payment of compensation by the HNS Fund in case of a covered
                 incident conditional upon the fulfilment by the State concerned of its obligation
                 to submit reports on contributing cargoes for all years prior to the incident
                 (Article 21bis (2) 2010 HNS Convention.
        These changes lift the main obstacles that blocked the process of ratification of the
        1996 HNS Convention.
        Scope: The 2010 HNS Convention applies to claims for damage arising from the
        carriage of HNS by sea, except for claims arising under a contract for the carriage of
        goods or passengers. Damage covered by the Convention includes any damage to the
        territory – including the territorial sea – of a State Party, environmental damage
        caused in the EEZ of a State Party, any damage – other than environmental damage –
        caused outside the territory and territorial sea of a State Party by a ship registered in a
        State Party, as well as any preventive measures taken to minimise the aforementioned
        types of damage. Warships or other State-owned or State-operated ships used for non-
        commercial purposes are excluded from the scope of the Convention, unless the State
        concerned decides otherwise. In addition, a State may exclude from the scope of this
        Convention ships below 200 gross tonnes, which carry HNS exclusively in packaged
        form, while these are engaged in voyages between ports or facilities of that State. The
        latter exemption may also apply between two neighbouring States upon explicit
        agreement of both States. Such exemptions concerning one or two neighbouring States
        must be notified to the IMO as appropriate.
        Main aspects of liability and compensation: The 2010 HNS Convention establishes
        strict liability of the owner of the ship carrying HNS for any damage resulting from an
        incident in connection with the carriage of HNS by sea on board that ship. There are
        limited exceptions to the strict liability of the owner, and for these to apply the burden
        of proof lies with the owner.
EN                                                4                                                 EN
 ---pagebreak---         Strict liability is coupled with the obligation of the owner to take out insurance or
        other financial security to cover his liability for damage under the Convention. State
        Parties must certify the presence of such insurance or financial security in line with the
        Convention.
        In order for the strict liability and mandatory insurance requirements to be supported
        by the industry concerned, the Convention also provides for a right of limitation of
        liability of the owner up to 100 million units of account for HNS carried in bulk form
        and 115 million units of account for packaged HNS, respectively. In addition, as is the
        case with all maritime liability conventions, there is a clause prohibiting recourse
        against the shipowner for damage falling under the 2010 HNS Convention "otherwise
        than in accordance with this Convention".
        The biggest contribution of this Convention to the international regime covering
        liability and compensation for accidents caused by shipping activities and, in
        particular, by HNS trade by sea is the establishment of a specialised compensation
        fund. The HNS Fund aims at paying compensation to any person suffering damage in
        connection with the carriage of HNS by sea to the extent that such person has been
        unable to obtain full and adequate compensation for the damage from the shipowner
        and its insurer. The latter failure may arise due to different circumstances, namely the
        absence of liability on the part of the shipowner, the financial incapability of the
        shipowner and its insurer to fully satisfy claims, or the damage exceeding the liability
        limits of the shipowner.
        The total amount for compensation available under this two-tier system is 250 million
        units of account (approximately 310 million euros in today's monetary exchange
        rates). In order for this amount to be available, an elaborate system of contributions
        paid to the HNS Fund by persons receiving HNS in each State Party is set up under the
        2010 HNS Convention. State Parties are in turn responsible for the accuracy,
        timeliness and regularity of the reporting of contributing cargo to the HNS Fund;
        whereas, a State may also decide to pay the contributions due to the Fund itself instead
        of the HNS receiver.
        Claims and actions before courts of a State Party: The 2010 HNS Convention
        contains rules on jurisdiction of courts of State Parties over claims made by persons
        suffering damage covered by the Convention against the owner or its insurer, or
        against the HNS Fund. Recognition and enforcement of judgments by courts in State
        Parties is also covered by the Convention. These elements, which remain un-changed
        from the 1996 HNS Convention, aim at ensuring that victims of accidents covered by
        the Convention can benefit from clear procedural rules and legal certainty, to make
        their claims more effective.
   1.4.   Implications for Directive 2004/35/EC
        Since 2004, Directive 2004/35/EC is the applicable law in the EU on the liability of
        operators of occupational activities, including shipping, with regard to the prevention
        and remedying of environmental damage in the territory and waters under the
        jurisdiction of Member States.
        Both the 1996 and the 2010 HNS Conventions overlap in scope with the Directive, in
        so far as (i) environmental damage caused to the territory, including the territorial sea,
        of a State Party (Article 3 (a) 2010 HNS Convention), (ii) damage by contamination of
        the environment caused in the EEZ or equivalent area (up to 200 nautical miles from
        baselines) of a State Party (Article 3(b) 2010 HNS Convention), and (iii) 'preventive
EN                                               5                                                 EN
 ---pagebreak---         measures, wherever taken, to prevent or minimise such damage' (Article 3 (d) 2010
        HNS Convention) are concerned. The corresponding provisions of the Directive are
        Article 2(1) on the definition of 'environmental damage' and Article 2(10) on the
        definition of 'preventive measures' thereof, in combination with Article 3(1)(a) of
        Directive 2008/56/EC establishing a framework for community action in the field of
        marine environmental policy5, and Article 1(1) of the Birds Directive 79/409/EEC6
        and Article 2(1) of the Habitats Directive 92/43/EEC7, as referred to in the
        'Commission Guidelines for the establishment of the Natura 2000 network in the
        marine environment - Application of the Habitats and Birds Directives'8. The
        definition of 'environmental damage' in the Convention and Directive 2004/35/EC,
        albeit largely overlapping, is not identical. However, in practice, it is expected that the
        Convention should aim for equally high standards of environmental damage
        remediation as in the Directive.
        Due to the overlap in the scope of Directive 2004/35/EC and the 2010 HNS
        Convention, it is clear that the conclusion of the 2010 Protocol, amending the 1996
        HNS Convention and resulting in a new legal text (i.e. the 2010 HNS Convention),
        affects existing Union rules.
        More to the point, Directive 2004/35/EC explicitly refers to the 1996 HNS Convention
        excluding any damage arising from an incident that is covered by that Convention, and
        any future amendments thereof, from the scope of the Directive, provided that the
        Convention is in force in the Member State concerned (Article 4 (2) and Annex IV of
        Directive 2004/35/EC). This is to allow specialised international regimes that cover
        civil liability from specific occupational activities to prevail over the Directive, as
        these were deemed more effective in granting prompt and adequate compensation for
        environmental damage and better suited to the nature of such occupational activities.
        The 2010 Protocol as an amendment to the 1996 HNS Convention is covered by that
        exemption to Directive 2004/35/EC; thus, making it clear that ratification or accession
        to the Convention will affect the scope of existing EU rules.
        Apart from the significant overlap between the rules of the Convention and the
        Directive, there is also a key conflict that defines the effect of the Convention's
        provisions on Union rules. Article 7(4) of the HNS Convention (common in both the
        1996 and the 2010 text of the Convention) precludes any claims for damage against
        the owner of the ship in any other way – or forum – than that prescribed under the
        Convention. This means that the Directive cannot apply in addition to the Convention,
        in so far as the shipowner's liability for HNS damage is concerned; hence, the scope of
        the Directive is limited by the Convention, and this is relevant for the purposes of the
        conclusion by Member States of the 2010 Protocol.
   1.5.   Implications for Regulation (EU) No 1215/2012 (recast of Regulation (EC) No
          44/2001 – 'Brussels I')
        Chapter IV of the 2010 HNS Convention lays down the rules of procedure applicable
        to claims and actions under the Convention before courts of State Parties. In particular,
        Articles 38, 39 and 40 of the Convention lay down the rules on jurisdiction of courts,
        and recognition and enforcement of judgments. These Articles are identical to Articles
   5
        OJ L 164, 25.6.2008, p. 19.
   6
        Council Directive 79/409/EEC on the conservation of wild birds, OJ L 103, 25.4.1979, p. 1.
   7
        Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora, OJ L
        206, 22.7.1992, p. 7.
   8
        http://ec.europa.eu/environment/nature/natura2000/marine/docs/marine_guidelines.pdf
EN                                                    6                                                       EN
 ---pagebreak---         38, 39 and 40 in the 1996 HNS Convention, which were the legal basis of the
        Community's exclusive competence justifying Council Decision 2002/971/EC.
        Regulation (EU) No 1215/2012 sets out rules on jurisdiction and the recognition and
        enforcement of judgments in civil and commercial matters between the EU Member
        States and the above-mentioned provisions of the Convention – should this enter into
        force – would affect the rules of the Regulation. The 'Proposal for a Council Decision
        authorizing the Member States to ratify in the interest of the European Community the
        International Convention on Liability and Compensation for Damage in Connection
        with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (the 'HNS
        Convention')', COM (2001) 674 final9, contains a detailed overview and explanations
        of the overlap between Chapter IV of the Convention and the Brussels I Regulation
        (Regulation (EC) No 44/200110).
        In addition to the above, Articles 37, 41 and 42 in Chapter IV of the 2010 HNS
        Convention are of an ancillary nature, and, as such, they cannot stand alone or be
        applied separately from other provisions of the Convention. Hence, exclusive Union
        competence covers Chapter IV of the Convention as a whole.
        The special position of Denmark as regards Chapter IV of the Convention needs to be
        addressed separately, in accordance with Protocol No 2211 on the position of Denmark
        annexed to the Treaties. Denmark is exempted from the application of Title V of Part
        Three TFEU and, as a result, it does not take part in the adoption of the proposed
        Council Decision on the ratification and accession by Member States on behalf of the
        Union to the Protocol of 2010 to the International Convention on Liability and
        Compensation for Damage in connection with the Carriage of Hazardous and Noxious
        Substances by Sea with regard to aspects related to judicial cooperation in civil
        matters.
   1.6.   Conclusions
        The adoption and entry into force of international rules on liability for non-contractual
        damages arising from the carriage of HNS by sea is crucial in view of the significant
        share HNS cargo represents in maritime freight transport worldwide.
        Having gained experience with similar international regimes governing liability for
        damages arising from other shipping activities, such as oil carriage by tankers, the
        IMO adopted this international agreement, as amended by the 2010 HNS Protocol, to
        complement the system of maritime liability conventions with a specialised instrument
        establishing also a new compensation fund targeting HNS damage.
        On the basis of Council Decision 2002/971/EC, Member States were authorised to
        proceed with ratification of the 1996 HNS Convention. The 2010 Protocol amending
        the Convention also needs to form the subject of a new Council Decision, in
        accordance with the Treaties and taking into account the developments in Union law
        since 2002. The 2010 Protocol leads to the constitution of a new international
        agreement (see in particular Article 45(8) in the consolidated text of the 2010 HNS
        Convention). As a consequence, by ratifying or acceding to the 2010 Protocol, the
        Union is authorising its Member States to apply the 2010 HNS Convention not only in
        relation to matters covered by the Protocol, but also in relation to all the other matters
        covered by the amended text of the 2010 HNS Convention.'
   9
        OJ C 51E, 26.2.2002, p. 370.
   10
        OJ L 12, 16.1.2001, p. 1.
   11
        OJ C 326, 26.10.2002, p. 299.
EN                                             7                                                   EN
 ---pagebreak---       In the light of the above, the Commission proposes the adoption of two separate
      Council Decisions on the ratification of and accession to the 2010 Protocol by
      Member States on behalf of the Union to ensure that the objectives of the Treaties as
      enshrined in Directive 2004/35/EC and Regulation (EU) No 1215/2012 are attained
      and that the provisions of Protocol 22 are complied with. In relation to the
      aforementioned Regulation, and in particular with regards to rules concerning
      recognition and enforcement of judgments given by a court of a Member State,
      Member States are required to issue the appropriate declaration, as that is laid down in
      the Annex to the proposed Council Decision, when ratifying or acceding to the 2010
      Protocol, which would ensure a continued application of rules concerning recognition
      and enforcement of judgments of Regulation (EU) No 1215/2012 when it comes to
      recognition and enforcement of judgments given by a court of a Member State in
      another Member State. The declaration should also cover other relevant rules of the
      Union on the subject, notably, the Lugano Convention on jurisdiction and the
      recognition and enforcement of judgments in civil and commercial matters of 30
      October 200712.
   2.   RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND
        IMPACT ASSESSMENTS
      No formal Impact Assessment is required at this stage of the process where the scope
      for the EU action is already limited by negotiations over the international instrument
      being concluded.
      However, several options have been examined and weighed:
        (1)   No action
      Currently, the HNS Convention not having entered into force, Directive 2004/35/EC
      applies to environmental liability arising out of any accident caused by a ship carrying
      HNS at sea in the EU. This means that the definition of environmental damage
      established in the Directive applies, coupled with the right of the shipowner to limit
      his liability in accordance with the International Convention on Limitation of Liability
      for Maritime Claims 1976 as amended (hereinafter referred to as 'LLMC'), as per
      Article 4(3) of the Directive. The right of the shipowner to limit his liability up to the
      general limits established in LLMC has limited exceptions, namely intent to cause
      such damage or recklessness. The limits of liability under the LLMC are lower than
      those established in Article 9 of the 2010 HNS Convention. In the absence of a
      compensation fund such as that established in Chapter III of the 2010 HNS
      Convention, there is presently nothing under the Directive to provide for
      compensation of victims (eg. fishermen, local communities) of HNS pollution at sea in
      excess of the limits of the shipowner's liability. Furthermore, the existing legal
      framework lacks a mandatory insurance requirement, whereas Article 12 of the 2010
      HNS Convention specifically establishes this obligation for shipowners coupled with a
      right of claimants for direct action against the insurer (Article 12(8)). Finally, in
      Directive 2004/35/EC, the EU co-legislators have chosen to provide for an exemption
      in favour of the international liability regime for shipping activities for all relevant
      conventions, including the HNS Convention and to exempt incidents falling under the
      international conventions from the scope of the Directive. Should no action be taken at
      EU level to allow Member States to ratify or accede to the 2010 HNS Protocol for the
      last IMO liability convention to enter into force, a discrepancy in the international –
   12
      OJ L 339, 21.12.2007, p. 3.
EN                                             8                                                 EN
 ---pagebreak---    and EU – liability regime for shipping activities will be crystallised at the expense of
   legal certainty and homogeneity of norms applicable to, inter alia, environmental
   damage arising from the carriage of HNS at sea.
     (2)   Alignment of the HNS Convention with the Union acquis
   Directive 2004/35/EC does not fully overlap with the 2010 HNS Convention in so far
   as the definition of environmental damage is concerned. Namely, the definition in the
   Directive is broader and encompasses more types of remediation, including primary
   restoration of damaged natural resources to their baseline, including if necessary,
   taking complementary and compensatory measures if the resources cannot be brought
   back to their baseline condition, and respectively compensation for the interim loss of
   resources (such measures never consist of monetary compensation but always of
   measures to improve natural resources at the damaged site or a site close by). Hence,
   one could advocate in favour of the possibility of an amendment of the Convention to
   tally with the provisions of the Directive.
   However, it is highly unlikely to achieve sufficient support among State Parties to the
   IMO, in particular in view of the difficulties that had to be addressed before the
   current version of the Convention could be agreed upon. Also, the definition of
   pollution damage under the Convention has been carefully established in line with
   other existing regimes on liability for accidents at sea from different types of shipping
   activities (e.g. 1992 International Convention on Civil Liability for Oil Pollution
   Damage, 2001 International Convention on Civil Liability for Bunker Oil Pollution
   Damage). Amending that definition in the 2010 HNS Convention would seriously
   disrupt the balance among the different sectors of shipping and would meet
   widespread resistance at the IMO.
     (3)   Inserting a 'disconnection-clause' in the HNS Convention and the consequential
           amendment of Directive 2004/35/EC
   One could potentially explore also the possibility of amending the Convention to
   insert a 'disconnection' clause in order to ensure that when Member States become
   party to the Convention the rules of Union law will continue to govern the special
   relationship between the EU and its Member States. In relation to third states, the
   obligations under the Convention would remain unchanged.
   By accepting such a 'disconnection-clause', all Parties to the Convention (including
   non-EU States) would agree that the EU and its Member States shall apply EU law in
   their relations between themselves insofar as it also governs the subject matter of the
   Convention. Yet, the same rationale as developed above applies to this possibility,
   meaning that this is not a realistic option for Member States on behalf of the Union to
   engage with at the IMO.
   In addition, such a clause would require the amendment of Directive 2004/35/EC in
   order to alleviate the exemption that applies to damage arising from incidents falling
   under the scope of the HNS Convention from the scope of the Directive. However, the
   Directive treats all of the maritime liability conventions listed in Annex IV thereof on
   par. Thus, introducing a different regime for one of the conventions would go against
   the spirit of the Directive itself, in particular where all IMO liability conventions have
   been construed on the same principles to establish a strict liability framework for the
   shipowner coupled with mandatory insurance and the availability of sufficient funds
   for compensation for pollution damage resulting from a shipping incident.
     (4)   Ratification of the 2010 HNS Protocol
EN                                            9                                               EN
 ---pagebreak---       Conclusion of the 2010 Protocol to the HNS Convention will ensure uniform
      application of rules on liability and compensation in connection with accidents caused
      by ships carrying HNS at sea across the EU. In addition, it will ensure availability of
      sufficient funds for compensation of victims of such accidents. Using an international
      regime rather than regional solutions for these purposes better suits the nature of
      shipping as a global business and the cross-boundary impact such accidents are likely
      to have.
      It was therefore concluded that the present draft decision authorising Member States to
      ratify the 2010 HNS Protocol and, thus, accepting to be bound by the consolidated text
      of the 2010 HNS Convention, is the best course of action.
   3.   LEGAL ELEMENTS OF THE PROPOSAL
      As already mentioned in the Introduction, State signature, ratification or acceptance of
      the 2010 Protocol nullifies any prior signature or ratification by that State of the 1996
      HNS Convention. States ratifying the Protocol express their consent to be bound by
      the consolidated text of the 2010 HNS Convention, as a single, consolidated
      instrument for the Convention, which will take effect once the 2010 Protocol enters
      into force.
      The proposed Council Decisions will therefore authorise Member States to ratify, or
      accede to, on behalf of the Union, to the 2010 HNS Protocol and, as a consequence, be
      bound by the rules of the 2010 HNS Convention.
      The proposed Council Decisions are based on Article 218(6) TFEU in conjunction
      with, on the one hand Article 81 TFEU, which provides the main legal basis for EU
      legislation on judicial cooperation in civil matters relevant to the rules of procedure
      applicable to claims and actions under Chapter IV of the 2010 HNS Convention, and
      on the other hand Article 192 TFEU, which provides the main legal basis for EU
      legislation on protection of the environment.
      The 2010 HNS Convention pursues objectives which are inseparably linked without
      one being secondary and indirect in relation to the other. A single decision cannot be
      adopted on a dual legal basis where the procedures required by each legal basis are
      incompatible with each other.13 Such is the case here in view of the fact that matters
      related to judicial cooperation in civil matters do not bind Denmark, which leads to
      diverging voting rights in the Council. Consequently, two separate Council decisions
      are required.
      The two decisions are built up similarly. Their Article 1 authorises Member States to
      ratify or accede to the 2010 Protocol to the HNS Convention on behalf of the Union,
      due to the impossibility for the EU to become a party to such Convention.
      Common Article 2 requires Member States to agree to be bound by the 2010 Protocol
      within two-year period from the entry into force of this Decision. Early adherence to
      the 2010 Protocol by all EU Member States will allow the threshold for entry into
      force concerning both the number of IMO Member States and aggregate fleet required
      (12 States including 4 with not less than 2 million units of gross tonnage each) to be
      attained. More importantly, ratification within a specified timeframe will prevent any
      competitive advantage being gained by Member States who delay their accession to
      the 2010 Protocol and, thus, the 2010 HNS Convention, at the expense of equal
   13
      See recent ECJ, judgment of 11 June 2014, Case C-377/12, para 34.
EN                                                10                                            EN
 ---pagebreak---       remedies being available to parties suffering damages from HNS incidents at sea.
      Exchange of information and best practices will be particularly beneficial to the
      process of ratification or accession, especially as regards the reporting of contributing
      cargo under the Convention.
      Article 3 in the proposed Council Decision excluding aspects related to judicial
      cooperation in civil matters requires Member States to make reference, in writing, to
      both Council Decisions when depositing their instrument of ratification or accession to
      the 2010 Protocol.
      Article 3 in the proposed Council Decision concerning aspects related to judicial
      cooperation in civil matters refers to the declaration Member States are required to
      make when agreeing to be bound by the 2010 Protocol, on the subject of recognition
      and enforcement of judgments, on account of the Union exclusive competence on
      these matters. The declaration is similar to the declaration included in Article 2 of
      Council Decision 2002/971/EC.
      Common Article 4 determines the date of entry into force of the proposed Council
      Decisions.
      In common Article 5 it is made clear that, as the purpose of the Decisions is to
      authorise the Member States to be bound by the 2010 Protocol on behalf of the Union,
      the Decisions are addressed to them in accordance with the Treaties.
   4.   BUDGETARY IMPLICATION
      None
EN                                            11                                                EN
 ---pagebreak---                                                                  2015/0136 (NLE)
                                                 Proposal for a
                                          COUNCIL DECISION
        on the ratification and accession by Member States on behalf of the Union to the
      Protocol of 2010 to the International Convention on Liability and Compensation for
     Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea
               with regard to aspects related to judicial cooperation in civil matters
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union ('TFEU'), and in
   particular Article 81, in conjunction with Article 218(6)(a)(v) thereof,
   Having regard to the proposal from the European Commission,
   Having regard to the consent of the European Parliament14,Whereas:
   (1)     The International Convention on Liability and Compensation for Damage in
           Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996
           (hereinafter referred to as the '1996 HNS Convention') was aimed at ensuring
           adequate, prompt and effective compensation of persons who suffer damage caused by
           spills of hazardous and noxious substances, when carried by sea. The 1996 HNS
           Convention filled a significant gap in the international regulation of marine pollution
           liability.
   (2)     In 2002 the Council adopted Council Decision 2002/971/EC15 authorising Member
           States, in the interest of the Community, to ratify or accede to the 1996 HNS
           Convention. Decision 2002/971/EC obliged Member States to take the necessary steps
           to ratify or accede to the 1996 HNS Convention before 30 June 2006. Four Member
           States have subsequently ratified that Convention. The 1996 HNS Convention has
           never entered into force.
   (3)     The 1996 HNS Convention has been amended by the Protocol of 2010. Pursuant to
           Articles 2 and 18(1) of the Protocol of 2010, the Protocol of 2010 and the 1996 HNS
           Convention are to be read, interpreted and applied together as one, single instrument,
           as between the parties to the Protocol of 2010.
   (4)     A consolidated text of the Protocol of 2010 and the 1996 HNS Convention was
           prepared by the International Maritime Organisation ('IMO') Secretariat and approved
           by the IMO Legal Committee at its 98th meeting(hereinafter referred to as the '2010
           HNS Convention'). The 2010 HNS Convention is not an instrument open to signature
           or ratification. The 2010 HNS Convention will take effect once the Protocol of 2010
           enters into force in Member States.
   14
           OJ C326, 26.10.2012, p.47.
   15
           Council Decision 2002/971/EC of 18 November 2002 authorising the Member States, in the interest of
           the Community, to ratify or accede to the International Convention on Liability and Compensation for
           Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (the HNS
           Convention), (OJ L 337,13.12.2002, p.55).
EN                                                      12                                                      EN
 ---pagebreak---    (5)  The expression of consent by a State to be bound by the Protocol of 2010 nullifies any
        prior expression of consent by that State to the 1996 HNS Convention, in accordance
        with Article 20(8) of the Protocol (Article 45(8) of the 2010 HNS Convention). As a
        result, States that are Contracting Parties to the 1996 HNS Convention will cease to be
        so the moment they express their consent to be bound by the Protocol of 2010 in
        accordance with Article 20 of that Protocol, and in particular paragraphs (2), (3) and
        (4) thereof.
   (6)  The 2010 HNS Convention, as was the case with its predecessor, is particularly
        important for the interests of the Union and its Member States, as it provides for
        improved protection of the environment and of the victims of HNS pollution damage
        at sea under international rules on marine pollution liability, in line with the 1982
        United Nations Convention on the Law of the Sea.
   (7)  In order for States to become Contracting Parties to the Protocol of 2010, and thereby
        to the 2010 HNS Convention, they have to submit to the Secretary General of the
        IMO, at the same time as their instrument of consent, relevant data on the total
        quantities of contributing cargo under the 2010 HNS Convention during the preceding
        calendar year, in accordance with Article 20(4) thereof. For this purpose, States are
        required to set up a system for the reporting of contributing cargo prior to expressing
        their consent to be bound by the Protocol of 2010.
   (8)  Articles 38, 39 and 40 of the 2010 HNS Convention affect Union secondary legislation
        on jurisdiction and the recognition and enforcement of judgments in civil and
        commercial matters, as laid down in Regulation (EU) No 1215/2012 of the European
        Parliament and of the Council16 (recast Brussels I Regulation).
   (9)  The Union therefore has exclusive competence in relation to Articles 38, 39 and 40 of
        the 2010 HNS Convention inasmuch as that Convention affects the rules laid down in
        Regulation (EU) No 1215/2012. In addition, Articles 37, 41 and 42 under Chapter IV
        of the 2010 HNS Convention are ancillary to the substantive rules of the Convention,
        meaning they cannot stand alone or be separated from other provisions of the
        Convention. Hence, exclusive Union competence covers Chapter IV of the Convention
        as a whole.
   (10) Exchange of information and best practices among Member States on the procedures
        leading up to ratification or accession to the Protocol of 2010 can facilitate the
        Member States' efforts in setting up a functional reporting system for HNS
        contributing cargo under the 2010 HNS Convention.
   (11) As it was the case with the 1996 HNS Convention, only sovereign States may be party
        to the Protocol of 2010, in the absence of a regional economic integration organization
        ('REIO') clause. Therefore, it is not possible for the Union to ratify or accede to the
        Protocol of 2010, and thereby to the 2010 HNS Convention, for the time being.
        However, the principle of sincere cooperation binds the Member States and the Union
        under the Treaties, for the attainment of the Union's objectives in the areas of
        environmental protection and civil justice cooperation. In this case, it requires the
        Member States to aim at and use their best efforts to achieve the accession of the
        Union to this Convention.
   16
        Regulation (EU) No 1215/2012 of the European Parliament and of the Council on jurisdiction and the
        recognition and enforcement of judgments in civil and commercial matters (recast), (OJ L 351,
        20.12.2012, p. 1).
EN                                               13                                                        EN
 ---pagebreak---    (12)   The ratification of the Protocol of 2010 by all Member States within a fixed timeframe
          should ensure a level playing field for all actors concerned by the application of the
          2010 HNS Convention and prevent any competitive advantage being gained by
          delaying accession to it,
   (13)   Member States should, therefore, be authorised to ratify or accede to the Protocol of
          2010 with regard to the aspects related to judicial cooperation in civil matters. The
          provisions of the Convention falling within the competence conferred upon the Union
          other than the provisions related to judicial cooperation in civil matters will be subject
          to a Decision adopted in parallel to this Decision17.
   (14)   When ratifying or acceding to the Protocol of 2010, Member States should make a
          declaration on the recognition and enforcement of judgments falling under the scope
          of the 2010 HNS Convention.
   (15)   The United Kingdom and Ireland are bound by Regulation (EU) No 1215/2012 and
          are therefore fully taking part in the adoption and application of this Decision.
   (16)   In accordance with Articles 1 and 2 of the Protocol on the position of Denmark18,
          annexed to the Treaty on European Union and to the Treaty on the Functioning of the
          European Union, Denmark is not taking part in the adoption of this Decision and is not
          bound by this Decision or subject to its application.
   HAS ADOPTED THIS DECISION:
                                                  Article 1
   Member States are hereby authorised to ratify or accede to, as appropriate, the Protocol of
   2010 on behalf of the Union with regard to aspects related to judicial cooperation in civil
   matters, subject to the conditions laid down in Articles 2, 3 and 4 of this Decision.
                                                  Article 2
   1.       Member States shall take the necessary steps to deposit the instruments of ratification
            of, or accession to, the Protocol of 2010 without delay, and in any case no later than
            two years from the date of entry into force of this Decision.
   2.       Member States shall inform the Council and the Commission, within one year from
            the date of entry into force of this Decision, of the prospective date of finalisation of
            their ratification or accession procedures.
   3.       Member States shall seek to exchange information on the state of their ratification or
            accession procedures, in particular by setting up a system for the reporting of
            contributing cargo under the Protocol of 2010.
                                                  Article 3
   When ratifying or acceding to the Protocol of 2010, Member States shall also deposit the
   Declaration set out in the Annex to this Decision.
   17
          OJ L
   18
          Protocol No 22 on the position of Denmark, (OJ C 326, 26.10.2012, p. 299).
EN                                                    14                                              EN
 ---pagebreak---                                               Article 4
   This Decision shall enter into force on the day following that of its publication in the Official
   Journal of the European Union.
                                              Article 5
   This Decision is addressed to the Member States in accordance with the Treaties.
   Done at Brussels,
                                                For the Council
                                                The President
EN                                               15                                                  EN
 ---documentbreak---                              EUROPEAN
                             COMMISSION
                                                    Brussels, 22.6.2015
                                                    COM(2015) 305 final
                                                    ANNEX 1
                                          ANNEX
                                            to the
                               Proposal for a Council Decision
     on the ratification and accession by Member States on behalf of the Union to the
    Protocol of 2010 to the International Convention on Liability and Compensation for
   Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea
           with regard to aspects related to judicial cooperation in civil matters.
EN                                                                                     EN
 ---pagebreak---                                                   ANNEX
                                                    to the
                                      Proposal for a Council Decision
       on the ratification and accession by Member States on behalf of the Union to the
      Protocol of 2010 to the International Convention on Liability and Compensation for
     Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea
             with regard to aspects related to judicial cooperation in civil matters.
   Declaration to be deposited by Member States when ratifying or acceding to the Protocol of
   2010, within the meaning of Article 3 of the Council Decision:
   "Judgments on matters covered by the Convention as amended by the Protocol of 2010, when
   given by a court of [...1], shall be recognised and enforced in [...2] according to the relevant
   European Union rules on the subject3.
   Judgments on matters covered by the Convention as amended by the Protocol of 2010, when
   given by a court of the Kingdom of Denmark, shall be recognised and enforced in [...4] in
   accordance with the 2005 Agreement between the European Community and the Kingdom of
   Denmark on jurisdiction and the recognition and enforcement of judgments in civil and
   commercial matters5.
   Judgments on matters covered by the Convention as amended by the Protocol of 2010, when
   given by a court of a third State bound by the Lugano Convention on jurisdiction and the
   recognition and enforcement of judgments in civil and commercial matters of 30 October
   20076, shall be recognised and enforced in [...7] in accordance with that Convention."
   1
          All the Member States of the European Union, with the exception of the Member State making the
          Declaration and Denmark.
   2
          The Member State making the Declaration.
   3
          At present, these rules are laid down in Regulation (EU) No 1215/2012 on jurisdiction and the
          recognition and enforcement of judgments in civil and commercial matters, OJ L 351, 20.12.2012, p. 1.
   4
          The Member State making the Declaration.
   5
          OJ L 299, 16.11.2005, p. 62.
   6
          OJ L 339, 21.12.2007, p. 3.
   7
          The Member State making the Declaration.
EN                                                     2                                                        EN