1 By its action, the European Commission is seeking the partial annulment of Council Decision (EU) 2019/1754 of 7 October 2019 on the accession of the European Union to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications (OJ 2019 L 271, p. 12; ‘the contested decision’).
2 The Convention for the Protection of Industrial Property was signed in Paris on 20 March 1883, last revised in Stockholm on 14 July 1967 and amended on 28 September 1979 (United Nations Treaties Series, Vol. 828, No 11851, p. 305; ‘the Paris Convention’). All Member States of the European Union are parties to that convention.
3 Article 1 of the Paris Convention provides in particular that the States to which the convention applies constitute a Union for the protection of industrial property, including patents, models, designs, trademarks, trade names and indications of source or appellations of origin, and the repression of unfair competition.
4 Under Article 19 of that convention, the States which are parties thereto reserve the right to make separately between themselves special agreements for the protection of industrial property.
5 The Lisbon Agreement for the Protection of Appellations of Origin and their International Registration was signed on 31 October 1958, revised in Stockholm on 14 July 1967 and amended on 28 September 1979 (United Nations Treaty Series, Vol. 828, No 13172, p. 205; ‘the Lisbon Agreement’). It constitutes a special agreement within the meaning of Article 19 of the Paris Convention and any State party to that convention may accede thereto.
6 Seven Member States of the European Union are parties to the Lisbon Agreement, namely the Republic of Bulgaria, the Czech Republic, the French Republic, the Italian Republic, Hungary, the Portuguese Republic and the Slovak Republic. However, the European Union is not a party to the agreement, to which only States can accede.
7 As provided in Article 1 of the Lisbon Agreement, the States to which the latter applies constitute a Special Union (‘the Special Union’) within the framework of the Union for the Protection of Industrial Property established by the Paris Convention and undertake to protect on their territories, in accordance with the terms of that agreement, the appellations of origin of products of the other States of the Special Union, recognised and protected as such in the country of origin and registered at the International Bureau of the World Intellectual Property Organization (WIPO).
8 Article 21 of the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications (OJ 2019 L 271, p. 15; ‘the Geneva Act’), entitled ‘Membership of the Lisbon Union’, provides: ‘The Contracting Parties shall be members of the same Special Union as the States party to the Lisbon Agreement [in its original version of 31 October 1958] or the [Lisbon Agreement, as revised at Stockholm on 14 July 1967 and amended on 28 September 1979], whether or not they are party to the Lisbon Agreement [in its original version of 31 October 1958] or the [Lisbon Agreement, as revised at Stockholm on 14 July 1967 and amended on 28 September 1979].’
9 Article 22 of the Geneva Act, entitled ‘Assembly of the Special Union’, provides, in paragraph 4 thereof: ‘[Taking Decisions in the Assembly] (a) The Assembly shall endeavour to take its decisions by consensus. (b) Where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. In such a case, (i) each Contracting Party that is a State shall have one vote and shall vote only in its own name; and (ii) any Contracting Party that is an intergovernmental organisation may vote, in place of its member States, with a number of votes equal to the number of its member States which are party to this Act. No such intergovernmental organisation shall participate in the vote if any one of its member States exercises its right to vote, and vice versa. …’
10 Article 28 of the Geneva Act, entitled ‘Becoming Party to This Act’, states, in paragraph 1 thereof: ‘[Eligibility] Subject to Article 29 and paragraphs (2) and (3) of the present Article, (i) any State which is party to the Paris Convention may sign and become party to this Act; (ii) … (iii) any intergovernmental organisation may sign and become party to this Act, provided that at least one member State of that intergovernmental organisation is party to the Paris Convention and provided that the intergovernmental organisation declares that it has been duly authorised, in accordance with its internal procedures, to become party to this Act and that, under the constituting treaty of the intergovernmental organisation, legislation applies under which regional titles of protection can be obtained in respect of geographical indications.’
11 According to recital 6 of the contested decision: ‘In order for the [European] Union to be able to properly exercise its exclusive competence for the areas covered by the Geneva Act and its functions in the context of its comprehensive protection systems for agricultural designations of origin and geographical indications, the [European] Union should accede to the Geneva Act and become a contracting party thereto.’
12 The first paragraph of Article 1 of the decision states: ‘The accession of the European Union to the [Geneva Act] is hereby approved on behalf of the [European] Union.’
13 Article 3 of that decision provides: ‘Member States which wish to do so, are hereby authorised to ratify or accede to, as appropriate, alongside the [European] Union, the Geneva Act in the interest of the [European] Union and in full respect of its exclusive competence.’
14 Article 4 of the same decision provides: ‘1. In the Special Union, the [European] Union and any Member States which ratifies or accedes to the Geneva Act pursuant to Article 3 of this Decision shall be represented by the Commission in accordance with Article 17(1) TEU. The [European] Union shall be responsible for ensuring the exercise of the rights and fulfillment of the obligations of the [European] Union and of the Member States which ratify or accede to the Geneva Act pursuant to Article 3 of this Decision. … 2. The [European] Union shall vote in the Assembly of the Special Union and the Member States which have ratified or acceded to the Geneva Act shall not exercise their right to vote.’
15 Article 11 of Regulation (EU) 2019/1753 of the European Parliament and of the Council of 23 October 2019 on the action of the [European] Union following its accession to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications (OJ 2019 L 271, p.1), entitled ‘Transitional provisions for appellations of origin originating in Member States already registered under the Lisbon Agreement’, provides, in paragraph 1 thereof: ‘In respect of each appellation of origin originating in a Member State which is party to the Lisbon Agreement, for a product that is protected under one of the Regulations referred to in Article 1 of this Regulation, the Member State concerned shall, on the basis of a request by a natural person or legal entity as referred to in point (ii) of Article 5(2) of the Geneva Act or a beneficiary as defined in point (xvii) of Article 1 of the Geneva Act, or on its own initiative, choose to request either: (a) the international registration of that appellation of origin under the Geneva Act, if the Member State concerned has ratified or acceded to the Geneva Act pursuant to the authorisation referred to in Article 3 of [the contested decision]; or (b) the cancellation of the registration of that appellation of origin in the International Register. …’
16 In September 2008, the Assembly of the Special Union formed a working group to prepare a revised version of the Lisbon Agreement intended to improve it and to render it more attractive while preserving its principles and objectives.
17 The delegations of the 28 States which are parties to the Lisbon Agreement and two ‘special’ delegations, including that of the European Union, and a number of ‘observer’ delegations were invited to attend a diplomatic conference convened in Geneva from 11 to 21 May 2015 for the purpose of examining and adopting the draft revised Lisbon Agreement prepared by that working group.
18 In view of the European Union’s participation in the aforesaid diplomatic conference, on 30 March 2015 the Commission adopted a recommendation for a decision from the Council of the European Union authorising the opening of negotiations on a revised Lisbon Agreement for the Protection of Appellations of Origin and Geographical Indications. In that recommendation, the Commission, amongst other things, invited the Council to base its decision on Article 207 TFEU and Article 218(3) and (4) TFEU, given the exclusive competence conferred on the European Union in the area of the common commercial policy by Article 3(1) TFEU.
19 On 7 May 2015, the Council adopted Decision 8512/15 authorising the opening of negotiations on a revised Lisbon Agreement on Appellations of Origin and Geographical Indications as regards matters falling within the competence of the European Union. Departing from what the Commission had recommended, that decision was based on Article 114 TFEU and Article 218(3) and (4) TFEU.
20 On 20 May 2015, the diplomatic conference mentioned in paragraph 17 above adopted the Geneva Act, which was open for signature the following day. Under Article 28(1)(iii) of that act, any intergovernmental organisation may sign and become party thereto.
21 By its judgment of 25 October 2017, Commission v Council (Revised Lisbon Agreement) (C‑389/15, EU:C:2017:798), the Court held that the negotiation of the Geneva Act fell within the exclusive competence conferred on the European Union by Article 3(1) TFEU in the field of the common commercial policy referred to in Article 207(1) TFEU. The Court, therefore, annulled Decision 8512/15, while maintaining the effects thereof until the entry into force, within a reasonable period which should not exceed six months from the date of delivery of that judgment, of a new Council decision based on Articles 207 and 218 TFEU.
22 On 5 March 2018, the Council gave effect to that judgment by adopting, on the basis of Article 207 TFEU, read in conjunction with Article 218(3) and (4) TFEU, Decision (EU) 2018/416 authorising the opening of negotiations for a revised Lisbon Agreement on Appellations of Origin and Geographical Indications (OJ 2018 L 75, p. 23).
23 On 27 July 2018, the Commission made a proposal for a Council Decision on the accession of the European Union to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications (document COM(2018) 350 final), on the basis of Article 207 TFEU and Article 218(6)(a) TFEU. In view of the European Union’s exclusive competence as regards the negotiation of that act, that proposal provided that the European Union alone would accede thereto.
24 On 15 March 2019, the Council sent the European Parliament a draft Council decision on the accession of the European Union to the Geneva Act, authorising all Member States which wished to do so to accede to that act alongside the European Union. On 16 April 2019, the Parliament approved the draft decision.
25 Since the Commission did not support that draft, the Council unanimously adopted the contested decision on 7 October 2019, in accordance with Article 293(1) TFEU.
26 In a statement entered in the Council minutes relating to the adoption of that decision, the Commission, on the one hand, objected to the possibility for all EU Member States which wish to do so to be authorised to ratify or accede to the Geneva Act alongside the European Union, and, on the other hand, stated that it would have been ready to agree that the seven Member States which had been parties to the Lisbon Agreement for a long time and had extensive intellectual property rights registered under that agreement could have been authorised to accede to the Geneva Act in the interest of the European Union.
27 The European Union acceded to the Geneva Act on 26 November 2019.
28 The Commission claims that the Court should: - annul Article 3 of the contested decision; - annul Article 4 of the contested decision to the extent that it contains references to the Member States, or, in the alternative, annul Article 4 entirely if references to the Member States cannot be severed from the rest of that article; - maintain the effects of the parts of the contested decision which have been annulled, in particular any use of the authorisation granted under Article 3, implemented before the date of the judgment by the Member States which are currently parties to the Lisbon Agreement, until the entry into force, within a reasonable period which should not exceed six months from the date of delivery of the judgment, of a decision of the Council; and - order the Council to pay the costs.
29 By way of a separate document lodged at the Court Registry on 15 April 2020, the Council raised a plea of inadmissibility pursuant to Article 151(1) of the Rules of Procedure of the Court of Justice.
30 The Commission submitted its observations on that plea on 18 May 2020.
31 By decision of the Court of 6 October 2020, the decision on that plea was reserved until its ruling on the substance of the case.
32 The Council contends that the Court should: - dismiss the action as inadmissible in its entirety; - in the alternative, dismiss the action as unfounded in its entirety; - order the Commission to bear the costs.
33 By decisions of the President of the Court of Justice of 17 December 2020, the Kingdom of Belgium, the Czech Republic, the Hellenic Republic, the French Republic, the Republic of Croatia, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria and the Portuguese Republic were granted leave to intervene in the dispute in support of the form of order sought by the Council.
34 In support of its plea of inadmissibility, with which, in essence, the intervening Member States concur, the Council recalls that partial annulment of an EU act is possible only if the elements whose annulment is sought can be severed from the remainder of the act.
35 As regards, in the first place, the application for annulment of Article 3 of the contested decision, the Council submits that that article cannot be severed from the remainder of that decision without altering its substance. First, Article 3, read in conjunction with Article 1 of that decision, which approves the accession of the European Union to the Geneva Act, seeks to ensure that the European Union can properly exercise its exclusive external competence for the areas covered by that act, by allowing it to have voting rights in the Assembly of the Special Union. Since, in accordance with Article 22(4)(b)(ii) of the Geneva Act, any intergovernmental organisation which is a party to that act may only have as many votes as the number of its Member States which are parties to that act, the Council argues that annulment of Article 3 of the contested decision would deprive the European Union of the right to vote in that assembly and, therefore, of any possibility of properly exercising its exclusive competence for the areas covered by the Geneva Act, which would result in the residual content of that decision being incompatible with its stated aim and purpose.
36 Secondly, the Council argues that in so far as Article 3 of the contested decision allows the seven Member States of the European Union which are contracting parties to the Lisbon Agreement to become contracting parties to the Geneva Act, that article guarantees the seniority and continuity of the protection of appellations of origin already registered in those Member States under the Lisbon Agreement.
37 Furthermore, the Council considers that the Commission’s claim that the effects of the parts of that decision which have been annulled should be maintained as regards those Member States demonstrates that Article 3 of that decision cannot be dissociated from the remainder thereof.
38 As regards, in the second place, the claim that the elements of Article 4 of the contested decision referring to the Member States should be annulled, the Council considers that those elements form a non-severable whole with Article 3 of that decision and that, consequently, that claim is inadmissible, for the same reasons as those set out in relation to the claim that Article 3 should be annulled.
39 In support of the Council’s plea of inadmissibility, the Italian Republic adds that, contrary to the requirements set out in Article 21 of the Statute of the Court of Justice of the European Union, the action is not directed against the Parliament and the Council, but only against the latter, even though, in accordance with Article 218(6)(a)(iii) TFEU, the Parliament approved the contested decision, as is clear from its preamble. The procedure laid down in Article 218(6) TFEU effectively amounts to co-decision between the Council and the Parliament, since, without the Parliament’s approval, the Council cannot deliberate or adopt a decision.
40 The Commission disputes those arguments and contends that its action is admissible.
41 In order to rule on the Council’s plea of inadmissibility, it is necessary to examine at the outset the argument put forward by the Italian Republic that the Commission’s action is inadmissible on the ground that it is directed against the Council alone.
42 In that regard, it must be borne in mind that actions for annulment under Article 263 TFEU must be brought against the institution which adopted the contested act and such actions are inadmissible in so far as they are directed against another institution (judgment of 11 September 2003, Austria v Council, C‑445/00, EU:C:2003:445, paragraph 32 and the case-law cited).
43 In the present case, it is apparent from the very title of the contested decision that it was adopted by the Council and it is, moreover, common ground that that decision, in so far as it concludes an international agreement, was adopted on the basis of Article 218(6) TFEU.
44 According to that provision, the Council alone is empowered to adopt a decision concluding an international agreement. As the Advocate General observed, in essence, in point 48 of his Opinion, the fact that the second subparagraph, under (a), of Article 218(6) TFEU provides that, in certain cases, the Council is to adopt such a decision after obtaining the consent of the Parliament is not such as to call into question that finding, since such consent is not to be confused with the concluding act itself, which is to be adopted by the Council alone in accordance with the first subparagraph of Article 218(6) TFEU.
45 In those circumstances, in accordance with the first subparagraph of Article 297(2) TFEU - under which non-legislative acts which do not specify to whom they are addressed are to be signed by the President of the institution which adopted them - the contested decision was correctly signed by the President of the Council alone, that signature thus identifying the author of that decision.
46 Consequently, the argument of the Italian Republic must be rejected.
47 As regards the Council’s argument, it should be borne in mind that, according to the settled case-law of the Court, the partial annulment of an EU act is possible only in so far as the elements whose annulment is sought may be severed from the remainder of the act. That requirement is not satisfied where the partial annulment of an act would have the effect of altering its substance. Review of whether the contested provisions are severable requires consideration of their scope, in order to be able to assess whether their annulment would alter the spirit and substance of the act at issue (judgments of 16 July 2015, Commission v Council, C‑425/13, EU:C:2015:483, paragraph 94 and the case-law cited, and of 9 November 2017, SolarWorld v Council, C‑205/16 P, EU:C:2017:840, paragraphs 38 and 39 and the case-law cited).
48 The Court has also stated that the question whether partial annulment would alter the substance of the act at issue is an objective criterion, and not a subjective criterion linked to the political intention of the institution which adopted that act (judgment of 26 April 2022, Poland v Parliament and Council, C‑401/19, EU:C:2022:297, paragraph 19 and the case-law cited).
49 In the present case, as the Advocate General observed in point 39 of his Opinion, the substance of the contested decision consists of the accession of the European Union to the Geneva Act, approved on behalf of the European Union pursuant to Article 1 of that decision.
50 Recital 6 of that decision states that ‘in order for the [European] Union to be able to properly exercise its exclusive competence for the areas covered by the Geneva Act and its functions in the context of its comprehensive protection systems for agricultural designations of origin and geographical indications, the [European] Union should accede to the Geneva Act and become a contracting party thereto’.
51 Articles 2 and 5 of that decision make practical arrangements for the said accession.
52 As the Council itself acknowledges, it is only in order to resolve certain issues which, in its view, might result from accession, that Article 3 of the contested decision authorises Member States which wish to do so to ratify or accede to the Geneva Act. Article 4 of that decision provides clarification concerning the representation in the Special Union of the European Union and of the Member States which ratify or accede to that act, and concerning the European Union’s responsibilities in relation to the exercise of the rights and fulfilment of the obligations of the European Union and of any such Member States arising from that act.
53 Thus, those Articles 3 and 4 are intended to enable Member States which wish to do so to ratify or accede to the Geneva Act alongside the European Union. It follows from the optional nature of any such accession or ratification that Article 1 of the contested decision is capable of producing its effects in the situation where no Member State exercises the option laid down in Articles 3 and 4.
54 Even if, as the Council submits, such a situation were to have consequences for the European Union’s ability to vote in the Assembly of the Special Union and for the guarantee of seniority and continuity of the protection of appellations of origin registered in the Member States under the Lisbon Agreement, it would not affect the legal scope of Article 1 of the contested decision nor would it call into question the accession of the European Union to the Geneva Act which, as has been pointed out in paragraph 49 above, constitutes the substance of that decision.
55 It follows that the provisions of the contested decision which the Commission seeks to have annulled can be severed from the remainder of that decision.
56 Contrary to the Council’s contention, that conclusion is not called into question by the fact that the Commission claimed that the effects of the parts of the contested decision which it seeks to have annulled should be maintained as regards the Member States which are parties to the Lisbon Agreement. This has no bearing on the severability of the provisions of that decision whose annulment is sought and, therefore, on the admissibility of the action.
57 In the light of the foregoing, the plea of inadmissibility raised by the Council must be rejected.
58 In support of its action, the Commission puts forward two pleas in law.
59 The first plea is based on an infringement of Article 218(6) and of Article 293(1) TFEU, of the principle of conferral of powers laid down in Article 13(2) TEU, of the principle of institutional balance and of the Commission’s right of initiative.
60 The Commission submits, in the first place, that it neither proposed nor in any event agreed to authorise Member States to ratify or accede to the Geneva Act, but that it merely proposed the European Union’s accession thereto. Even if, under Article 293(1) TFEU, the Council may amend a proposal from the Commission by acting unanimously, the Commission argues that, in the present case, there was no proposal seeking to authorise Member States to ratify or accede to the Geneva Act and therefore no proposal that could be amended. To hold otherwise would imply that the Council could, by acting unanimously, add anything to any proposal from the Commission regardless of the subject matter of such addition. Case-law requires that any amendment to a proposal from the Commission must be tested against the ‘subject matter’ and the ‘objective’ of the proposal. In reality, by adding to the accession by the European Union a general authorisation for accession by Member States, the Council adopted, in the same ‘formal’ act, a second, separate decision which was not included in the proposal from the Commission.
61 In the second place, the Commission disputes, in its reply, the reasons put forward by the Council to justify the amendment of the proposal from the Commission, namely the need to ensure that the European Union has voting rights in the Assembly of the Special Union and to preserve the seniority and continuity of the protection of appellations of origin registered under the Lisbon Agreement in the seven Member States which were already parties thereto.
62 It argues, first, that to authorise Member States to ratify or accede to the Geneva Act does not guarantee that that option will be exercised or, consequently, that the European Union will have voting rights in the Assembly of the Special Union. In any event, the importance of those voting rights should not be overestimated. The Assembly of the Special Union rules only on administrative matters and, in most cases, by consensus.
63 Secondly, as regards the seniority and continuity of the protection of appellations of origin registered under the Lisbon Agreement, the applicable rules could be interpreted in such a way as to allow those appellations of origin to be taken into account. In any event, since this is a matter which concerns only the seven Member States which are parties to the Lisbon Agreement, it would be sufficient that they do not adhere to the Geneva Act for the Lisbon Agreement to continue to apply to them and for that seniority and that continuity to be guaranteed.
64 The Italian Republic objects at the outset that the first plea in law is unfounded, on the ground that Article 293(1) TFEU is not applicable to the procedure governed by Article 218 TFEU. It claims that it is clear from the latter article that the procedure provided for therein is based on a Council decision, adopted on the basis of a ‘recommendation’ from the Commission, which, in accordance with Article 288 TFEU, is a non-binding act. The Council would thus have broad powers to accept, reject or amend any recommendation from the Commission concerning the negotiation and, subsequently, the conclusion of an agreement. In particular, a decision concluding an agreement is governed by Article 218(6) TFEU, which provides that the Council is to adopt such a decision ‘on a proposal by the negotiator’. The Commission intervenes in that procedure for concluding an agreement not as such, but only as negotiator of the agreement. Thus, a proposal from the Commission in the context of that procedure, which is adapted to the particular nature of international agreements, is not equivalent to that provided for in Article 293(1) TFEU.
65 According to the Council, in the first place, the Court, in its case-law, has recognised one procedural and one substantive condition with which the Council must comply when amending a proposal from the Commission under Article 293(1) TFEU.
66 As regards the procedural condition, where the Commission does not accept an amendment made by the Council, the latter is required to act unanimously. In the present case, the Council complied with that procedural requirement by amending unanimously the proposal from the Commission.
67 As regards the substantive condition, the Council should not prevent achievement of the objectives pursued by the proposal from the Commission. In particular, amendments to a proposal must remain within the scope of that proposal as determined by the Commission. That is the case when the Council respects the intentions of the Commission and alters neither the subject matter nor the objective of the proposal.
68 The Council notes that, in the present case, in the explanatory memorandum to its proposal, referred to in paragraph 23 above, the Commission stated that, ‘in order for the [European] Union to properly exercise its exclusive competence for the Geneva Act … and its functions in the context of its exhaustive protection systems for agricultural geographical indications, the [European Union] should become a contracting party’. It also notes that recital 6 of the contested decision states that, ‘in order for the [European] Union to be able to properly exercise its exclusive competence for the areas covered by the Geneva Act and its functions in the context of its comprehensive protection systems for agricultural designations of origin and geographical indications, the [European] Union should accede to the Geneva Act and become a contracting party thereto’.
69 Thus, the Council stayed within the bounds of the stated aim of the Commission’s proposal. According to the Council, if that proposal had not been amended, it would have failed to achieve that objective in two respects: (i) the European Union would not have had any voting rights in the Assembly of the Special Union and (ii) the seniority of the geographical indications registered under the Lisbon Agreement by the seven Member States which are parties to that agreement would have been disrupted following the ex novo registration by the European Union, as a new contracting party to the Special Union, of geographical indications under the Geneva Act.
70 In the second place, the Council submits that, if the Commission’s argument, set out in paragraph 60 above, that the adoption of a Council decision amending the Commission’s proposal is tantamount to the absence of a proposal were accepted, this would render the right of amendment given to the Council by Article 293(1) TFEU nugatory, as it would deny its effet utile.
71 In the third place, the Council observes that, contrary to the Commission’s assertion, it did not adopt two decisions by means of the same ‘formal act’, one of which was based on the Commission’s proposal and the other not. According to the Council, the aim of its amendment to Article 3 of the contested decision is not to authorise Member States to accede to the Geneva Act in order for them to exercise their competences, but to give full effect to the subject matter and objective of the proposal, so that the European Union may act within the Assembly of the Special Union effectively and protect the interests of the Member States. In that context, the Council recalls that the authorisation given to Member States is granted subject to ‘full respect of [the European Union’s] exclusive competence’. Furthermore, in order to ensure unity in the international representation of the European Union and its Member States, the Council entrusted the Commission with the representation of the European Union and that of any Member State wishing to avail itself of that authorisation.
72 In that regard, the Republic of Austria observes that authorising Member States to accede to the Geneva Act in strict compliance with the exclusive competence of the European Union, but without any accession by the European Union, would be meaningless. Under Article 4 of the contested decision, it is the European Union which is responsible for ensuring the exercise of the rights and fulfilment of the obligations of the European Union and of the Member States which ratify or accede to the Geneva Act, and the European Union alone votes in the Assembly of the Special Union, since the Member States which have ratified or acceded to the Geneva Act cannot exercise their right to vote.
73 In the fourth place, the Council considers that the Commission’s statement, referred to in paragraph 26 above, that it would have been ready to agree that the seven Member States which were parties to the Lisbon Agreement and had extensive intellectual property rights registered under that agreement could have been authorised to accede to the Geneva Act in the interests of the European Union, is important in at least three respects. In its view, first, by that statement, the Commission acknowledges that the authorisation given by the Council to Member States, or at least some of them, is in the interests of the European Union. Secondly, the Commission implicitly agrees that the Council can give effect to that authorisation by amending the Commission’s proposal. Thirdly, the Commission agrees that such an authorisation is possible in an area falling within the exclusive competence of the European Union.
74 The Czech Republic and the Portuguese Republic dispute the Commission’s assertion that the Lisbon Agreement would continue to apply to the seven Member States which are contracting parties thereto if they do not adhere to the Geneva Act, thus ensuring continuity in the protection of the geographical indications already registered. In their view, Article 11 of Regulation 2019/1753, relating to the transitional provisions for appellations of origin originating in Member States already registered under the Lisbon Agreement, provides for the international registration of those appellations of origin under the Geneva Act, if the Member State concerned has ratified or acceded to the Geneva Act pursuant to the authorisation referred to in Article 3 of the contested decision.
75 By its first plea in law, the Commission submits, in essence, that, in amending the Commission’s proposal by adding a provision authorising the Member States which wish to do so to ratify or accede to the Geneva Act, the Council acted outside any Commission initiative, thereby infringing Article 218(6) and Article 293(1) TFEU, and distorting the institutional balance established by Article 13(2) TEU.
76 As a preliminary point, it is necessary to examine the argument put forward by the Italian Republic that Article 293(1) TFEU is not applicable to a decision such as the contested decision, adopted on the basis of Article 218(6) TFEU, because Article 293(1) applies only to the adoption of acts relating to the internal action of the European Union.
77 It is apparent from the very wording of Article 293(1) TFEU that, where, pursuant to the Treaties, the Council acts on a proposal from the Commission, it may amend the proposal only by acting unanimously, except in the cases referred to in certain provisions of the FEU Treaty mentioned in the said Article 293(1).
78 First, Article 218 TFEU is not one of those provisions.
79 Secondly, as the Advocate General observed, in essence, in point 61 of his Opinion, Article 293(1) TFEU is intended to apply to all legal acts of the European Union for the adoption of which the Council acts on a proposal from the Commission, irrespective of whether those acts fall within the scope of the internal action of the European Union or its external action. In particular, there is nothing in the wording of that provision to preclude its applicability to the procedure for adopting a decision based on Article 218(6) TFEU, provided that, when the Council adopts such a decision, it acts on a proposal from the Commission.
80 It is true that, in accordance with Article 218(6) TFEU, the Council is to adopt the decision concluding the agreement on a proposal by the negotiator.
81 However, since, pursuant to Article 218(3) TFEU, the Council designated the Commission as negotiator, it necessarily acts on a proposal from the Commission in order to adopt that decision.
82 It follows that Article 293(1) TFEU is applicable where the Council, acting on a proposal from the Commission, adopts a decision based on Article 218(6) TFEU. Accordingly, the Italian Republic’s argument must be rejected.
83 In order to determine whether, in the present case, the Council infringed Article 293(1) TFEU, it should be recalled that that provision must be read in the light of Article 13(2) TEU, according to which each EU institution is to act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them. That provision reflects the principle of institutional balance, characteristic of the institutional structure of the European Union, a principle which requires that each of the institutions must exercise its powers with due regard for the powers of the other institutions (judgment of 2 September 2021, EPSU v Commission, C‑928/19 P, EU:C:2021:656, paragraph 48 and the case-law cited).
84 Article 13(2) TEU provides, in addition, that the EU institutions are to practice mutual sincere cooperation.
85 In that context, it should be noted that, under the second sentence of Article 17(2) TEU, EU acts other than legislative acts are adopted on the basis of a Commission proposal where the Treaties so provide.
86 As noted in paragraphs 80 and 81 above, it follows from Article 218(3) and (6) TFEU that the decision concluding the international agreement at issue is adopted on a proposal from the Commission as designated negotiator.
87 The Court has already made it clear that the Commission’s power of initiative under the second sentence of Article 17(2) TEU does not come down to submitting a proposal. By virtue of that power, it is, as a rule, for the Commission - which, in accordance with Article 17(1) TEU, is to promote the general interest of the European Union and take appropriate initiatives to that end - to decide whether or not to submit a proposal and, as the case may be, to determine its subject matter, objective and content, and, as long as the Council has not acted, to alter its proposal or even, if need be, withdraw it (see, to that effect, judgment of 14 April 2015, Council v Commission, C‑409/13, EU:C:2015:217, paragraphs 70 and 74).
88 The Commission’s exercise of its power of initiative is thus inextricably linked to the task, entrusted to it by Article 17(1) TEU, of promoting the general interest.
89 Article 293 TFEU couples that power of initiative with a twofold safeguard.
90 First, as noted in paragraph 77 above, Article 293(1) TFEU provides that, except in the cases referred to in the provisions of the FEU Treaty mentioned therein, where, pursuant to the Treaties, the Council acts on a proposal from the Commission, it may amend that proposal only by acting unanimously.
91 Secondly, Article 293(2) TFEU states that, as long as the Council has not acted, the Commission may alter its proposal at any time during the procedures leading to the adoption of an EU act.
92 Article 293 TFEU thus ensures observance of the principle of institutional balance by weighing, inter alia, the Commission’s powers under Article 17(2) TEU against those of the Council provided for in Article 16(1) TEU, which, as has been pointed out in paragraph 83 above, requires that each of the institutions must exercise its powers with due regard for the powers of the other institutions.
93 It follows, in particular, that the Council’s power of amendment cannot extend to enabling it to distort the Commission’s proposal in a manner which would prevent the objectives pursued by the proposal from being achieved and which, therefore, would deprive it of its raison d’être (see, concerning the withdrawal of a proposal for a legislative act, judgment of 14 April 2015, Council v Commission, C‑409/13, EU:C:2015:217, paragraph 83).
94 The Court has held that that is not the case where the Council’s amendments to a Commission proposal do not depart from the subject matter of the proposal and do not alter its objective (see, to that effect, judgments of 30 May 1989, Commission v Council, 355/87, EU:C:1989:220, paragraph 44, and of 11 November 1997, Eurotunnel and Others, C‑408/95, EU:C:1997:532, paragraph 39).
95 It is therefore necessary to ascertain whether the amendment, made by the Council acting unanimously, to the proposal from the Commission referred to in paragraph 23 above, introducing a provision authorising the Member States which wish to do so to ratify or accede to the Geneva Act, has distorted the subject matter or the objective of that proposal in a manner which would prevent the objectives pursued by the proposal from being achieved.
96 To that end, it is important to recall that the subject matter of that proposal was the accession of the European Union alone to the Geneva Act and that the objective of that proposal was, as is apparent from the explanatory memorandum thereto, referred to in paragraph 68 above, to enable the European Union to exercise properly its exclusive competence in the areas covered by that act.
97 In that respect, it must be noted, first, that Article 3(1)(e) TFEU confers on the European Union exclusive competence in the area of the common commercial policy. In accordance with Article 207(1) TFEU, the common commercial policy is to be based on uniform principles, in particular with regard to the commercial aspects of intellectual property, and is to be conducted in the context of the principles and objectives of the European Union’s external action.
98 The Court has already had occasion to state, in essence, that the Geneva Act, first, is essentially intended to facilitate and govern trade between the European Union and third States and, secondly, is such as to have direct and immediate effects on such trade, so that the negotiation thereof falls within that exclusive competence (see, to that effect, judgment of 25 October 2017, Commission v Council (Revised Lisbon Agreement), C‑389/15, EU:C:2017:798, paragraph 74).
99 Secondly, under Article 2(1) TFEU, when the Treaties confer on the European Union exclusive competence in a specific area, only the European Union may legislate and adopt legally binding acts.
100 That provision nevertheless adds that the Member States may, inter alia, legislate and adopt legally binding acts in such an area only if so empowered by the European Union.
101 In that regard, it follows from the Court’s case-law that the principle of conferral of powers, referred to in Article 4(1) and Article 5(1) and (2) TEU, and the institutional framework defined in Articles 13 to 19 TEU to enable the European Union to exercise the powers conferred on it by the Treaties, are specific characteristics of the European Union and of its law relating to the constitutional structure of the European Union (see, to that effect, Opinion 2/13 (Accession of the European Union to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraphs 165).
102 The decision to empower Member States in that way affects the modalities for the exercise of the exclusive competence conferred on the European Union by the Treaties, in so far as it allows Member States to exercise a competence which the Treaties have conferred exclusively on the European Union and which the latter should, in principle, exercise alone.
103 It follows that such a decision expresses a specific political choice between two alternatives, namely, on the one hand, that the European Union alone exercises an exclusive competence conferred on it by the Treaties in a specific area and, on the other hand, that the Member States are empowered to exercise that competence.
104 Such a choice forms part of the Commission’s assessment of the general interest of the European Union with a view to defining the most appropriate initiatives to promote that interest, an assessment to which, as stated in paragraph 88 above, the power of initiative entrusted to that institution by Article 17(2) TEU is inextricably linked.
105 Therefore, an amendment by the Council seeking to empower Member States to exercise an exclusive competence of the European Union would distort the very purpose of a Commission proposal reflecting the choice according to which the European Union alone should exercise that competence.
106 In the present case, the Commission’s proposal sought precisely to enable the European Union to accede to the Geneva Act, which, in essence, made it possible for the European Union to become a member of the Special Union - whereas the Lisbon Agreement allowed only States to accede - and thus enabled the European Union to exercise its exclusive competence alone in the areas covered by the Geneva Act. Not only did that proposal not intend to authorise Member States which wish to do so to ratify or accede to the Geneva Act, but, during the negotiations, the Commission had clearly stated that it objected to such a general authorisation, although, as is apparent from the statement referred to in paragraph 26 above, it did not object to the accession of seven Member States.
107 The Council’s amendment led to the adoption of Article 3 of the contested decision, which authorises Member States which wish to do so to ratify or accede to the Geneva Act.
108 It must therefore be found that that amendment distorts the subject matter and objective of the proposal from the Commission.
109 Contrary to the Council’s contention, this cannot be called into question by the fact that the authorisation provided for in Article 3 of the contested decision is granted subject to ‘full respect of the [European Union’s] exclusive competence’ and that, in accordance with Article 4 of that decision, in order to ensure unity in the international representation of the European Union and its Member States, the Council entrusted the Commission with the representation of the European Union and that of any Member State wishing to avail itself of that authorisation.
110 Despite the fact that the contested decision provides a framework for the exercise, by the Member States which have ratified or acceded to the Geneva Act, of the rights which those Member States would derive from that act, the fact remains that, by availing themselves of that authorisation, those Member States, as independent subjects of international law alongside the European Union, would exercise an exclusive competence of the latter, precluding it from exercising that competence alone.
111 The Council’s arguments set out in paragraphs 61 to 63 above, relating to the need to ensure that the European Union has voting rights in the Assembly of the Special Union and to preserve the seniority and continuity of the protection of appellations of origin registered under the Lisbon Agreement in the seven Member States which were already parties thereto, cannot justify the Council’s amendment either.
112 Any difficulty which the European Union may encounter at international level in the exercise of its exclusive competence or the consequences of that exercise on the international commitments of the Member States would not, as such, authorise the Council to amend a Commission proposal to the point that it distorts its subject matter or objective, thereby infringing the institutional balance which Article 293 TFEU seeks to ensure.
113 In the light of the foregoing considerations, it must be found that the contested decision was adopted in breach of Article 293(1) TFEU, read in conjunction with Article 13(2) TEU, with the result that the first plea in law must be upheld.
114 The second plea in law is based on an infringement of Article 2(1) and Article 207 TFEU and the duty to state reasons.
115 Since that plea was put forward by the Commission only in the alternative and since the first plea in law must be upheld, there is no need to rule on the second plea in law.
116 In the light of all the foregoing, the action must be upheld and the contested decision annulled in part, in accordance with the form of order sought by the Commission. As regards, in particular, Article 4 of the contested decision, that article, in accordance with the principal form of order sought by the Commission, must be annulled only to the extent that it contains references to the Member States, since those references can be severed from the rest of that article.
117 Under the first paragraph of Article 264 TFEU, if the action is well founded, the Court is to declare the act concerned to be void.
118 Pursuant to the first paragraph of Article 266 TFEU, the institution whose act has been declared void has the task of taking the necessary measures to comply with the Court’s judgment.
119 Nonetheless, as provided in the second paragraph of Article 264 TFEU, the Court may, if it considers this necessary, state which of the effects of the act which it has declared void are to be considered definitive.
120 That power may be exercised, on grounds of legal certainty, in particular where the annulment of a decision adopted by the Council, in the context of the procedure laid down in Article 218 TFEU for negotiating and concluding international agreements, is such as to call into question the participation of the European Union in the international agreement concerned or its implementation, even though there is no doubt as to the competence of the European Union for that purpose (see, by analogy, judgment of 25 October 2017, Commission v Council (Revised Lisbon Agreement), C‑389/15, EU:C:2017:798, paragraph 81 and the case-law cited).
121 The Commission claims that the Court should apply the second paragraph of Article 264 TFEU in order to mitigate the effects of the partial annulment of the contested decision. In that regard, the Commission states that it could exceptionally accept a compromise whereby the seven Member States which are existing parties to the Lisbon Agreement accede to the Geneva Act, in order to avoid problems relating to the continuity of rights. Furthermore, according to the Commission, to the extent that Article 4 of the contested decision also covers other aspects which are not contested as such, and are crucial for the proper implementation of the Geneva Act by the European Union, it is important to maintain its effects until it is replaced by a new provision.
122 Consequently, as stated in paragraph 28 above, the Commission claims that the Court should maintain the effects of the parts of the contested decision which have been annulled, in particular any use of the authorisation granted under Article 3 thereof, implemented before the date of the judgment by the Member States which are currently parties to the Lisbon Agreement, until the entry into force, within a reasonable period which should not exceed six months from the date of delivery of the judgment, of a decision of the Council replacing the contested decision.
123 The French Government supports this claim which, in its view, is based on the existence of significant grounds of legal certainty, since challenging participation in the Geneva Act by the Member States which are parties to the Lisbon Agreement could have serious negative consequences for the holders of appellations of origin registered by those States under the Lisbon Agreement.
124 The Council considers that that claim is inadmissible on the ground that, thereby, the Commission is in fact seeking not only to have the effects of the contested decision maintained but also to have that decision altered.
125 In that regard, it should be noted that, by its claim, the Commission is seeking the temporary maintenance of the effects of the parts of the contested decision which have been annulled.
126 While it is true that to uphold that claim would, in practice, amount to altering temporarily the scope of the effects of that decision, such a consequence is inherent in the exercise by the Court of its jurisdiction under the second paragraph of Article 264 TFEU.
127 It follows that a claim that the effects of the parts of the contested act which have been annulled should be maintained is admissible.
128 As to the substance, it must be acknowledged that preservation of the seniority and continuity of the protection of appellations of origin registered under the Lisbon Agreement in the seven Member States which are already parties to that agreement is necessary, in particular, in accordance with the principle of sincere cooperation between the European Union and the Member States set out in Article 4(3) TEU, in order to protect acquired rights derived from those national registrations.
129 Consequently, the effects of the parts of the contested decision which have been annulled are to be maintained only in so far as they relate to Member States which, on the date of delivery of the present judgment, have already availed themselves of the authorisation under Article 3 of that decision to ratify or accede to the Geneva Act, alongside the European Union, until the entry into force, within a reasonable period which should not exceed six months from that date, of a new Council decision.
130 Article 138(1) of the Rules of Procedure of the Court of Justice provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
131 In the present case, since the Commission has applied for costs and the Council has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by the Commission.
132 In addition, under Article 140(1) of the Rules of Procedure, the Member States which have intervened in the proceedings are to bear their own costs.
133 Therefore, the Kingdom of Belgium, the Czech Republic, the Hellenic Republic, the French Republic, the Republic of Croatia, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria and the Portuguese Republic are to bear their own costs.