Trade Agreements, EU Law, and Occupied Territories (2): The General Court Judgment in Frente Polisario v Council and the Protection of Fundamental Rights Abroad

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This is a follow-up to my July post on Action for Annulment Frente Polisario v Council (Case T-512/12), a case before the General Court of the European Union (GC) in which Frente Polisario – the National Liberation Movement for Western Sahara – seeks the Annulment of the EU Council decision adopting the 2010 EU-Morocco Agreement on agricultural, processed agricultural and fisheries products. The GC delivered its judgment yesterday, both recognizing the standing of Frente Polisario and granting the (partial) annulment of the decision, with implications for EU-Morocco relations and for EU external relations law more broadly.

(1) Standing of Frente Polisario under Article 263 TFEU

As regards standing, the most striking aspect of the judgment is that the Court accepted the Frente’s entitlement to plead as a ‘moral person’, with the ‘necessary autonomy’ to challenge a decision of the EU legislator (paras. 50-53), without reference to the sui generis character of Frente Polisario or to the unique situation of Western Sahara. This would seem to open the door for other ‘autonomous entities’, even those with no claim to international legal personality, to challenge EU decisions under Article 263 TFEU.

By the same token, the Court fell short of recognizing the Frente’s legal personality under international law. The preference for constitution under Sahrawi law (60) appears slightly at odds with the grounds used to determine its autonomous existence: participation in UN-sponsored negotiations, an agreement signed with Mauritania, and its status as a party to a dispute regarding the status of the non-self-governing territory of Western Sahara (54-59).

The Commission argued that the adopting act was not ‘of direct and individual concern’ to the claimant, because the 2010 Agreement did not specifically refer to Frente Polisario or Western Sahara. However, as the ‘sole other interlocutor’ participating in the UN-sponsored negotiations to determine the definitive status of Western Sahara (112-113), the Frente was ‘individually concerned’ by a decision which de facto applies to the territory over which it has a UN-recognized dispute with Morocco. Noting the existence of significant treaty practice under the Association Agreement with Morocco, the Court reproached the Commission and the Council’s attempt to look the other way. It noted:

…the EU institutions were conscious of the application, by the Moroccan authorities, of the provisions of the Association Agreement with Morocco to the part of Western Sahara controlled by Morocco, and did not oppose this application. On the contrary, the Commission cooperated, to a certain extent, with the Moroccan authorities in this application and recognized its results … (99). Their omission on this point demonstrates that they accept, at least implicitly, the interpretation of the Association Agreement with Morocco and of the agreement approved by the challenged decision, according to which these agreements apply also to the part of Western Sahara controlled by Morocco (102).

(2) Trade Agreements and the Duty to Protect Fundamental Rights Abroad

As regards the substantive issue of the legality of the challenged agreement, the Court found there is no ‘absolute prohibition’ for the EU Institutions to conclude treaties applied to disputed areas (146, 205). Under international law, the GC noted, the UN legal officer that examined the issue of Western Sahara in 2002 did not conclude that there was such an absolute prohibition either (210, 215). This would seem logical, given that there are very many disputed areas; the mere opposition to sovereignty of a state over an area cannot serve to preclude this state from entering into agreements concerning the area. The real question, then, concerns the extent to which EU Institutions must take into account the concrete situation in states with which they sign agreements.

The Court recognized to EU Institutions a broad power of appreciation (‘large pouvoir d’appréciation’) in signing international agreements. Only a ‘manifest error of appreciation’ could lead the Court to annul an agreement. The obligation of Institutions in this regard was ‘to examine, with impartiality, all the relevant elements in the case at hand, elements which support the conclusion drawn from them’ (225). This includes, in an agreement applicable to a non-self-governing territory, an assessment of its effects over the fundamental rights of the population of that territory.

Given the absence of international recognition of Moroccan sovereignty over Western Sahara, and Morocco’s disregard for Article 73 of the UN Charter, which requires UN members administering territories to ‘promote to the utmost .. the well-being of the inhabitants’ of non-self-governing territories, the EU had special reason to ensure compliance with this obligation. In this regard, the Court rejected in strong terms the Council’s argument that the EU could not be responsible for actions committed by third states with which it merely signed an agreement:

… if the EU allows the export to its Member States of products originating from this other country that have been made or obtained in conditions that do not respect fundamental rights of the population of the territory from where they originate, it risks indirectly encouraging these violations or benefitting from them. (231)

…the Council … in the exercise of its broad power of appreciation … should itself ensure that there is no evidence of exploitation of the natural resources of the territory of Western Sahara under Moroccan control to the detriment of its inhabitants and violating their fundamental rights. It should not limit itself to considering that it is incumbent upon the Kingdom of Morocco to ensure that no exploitation of this nature has taken place. (241)

… the Council has violated its obligation to examine, before the adoption of the challenged decision, all the elements of the case at hand. As a consequence, the Court must grant the application and annul the contested decision insofar as it approves the application to Western Sahara of the agreement referred therein. (247)

This sequence includes a number of important elements. First, the EU is under an obligation to ensure respect for the fundamental rights of non-EU nationals in non-EU territory. Second, ‘entirely neutral’ agreements, which do not require the violation of fundamental rights, may still fail to conform to this obligation if they favour the occurrence of such a violation. Third, the fact that an agreement may ‘indirectly encourag[e]’ the violations of fundamental rights, or that the EU ‘benefit[s] from them’, is sufficient to trigger the duty to take into account the specific elements of the agreement. In other words, even if a violation of fundamental rights is not an object of the agreement, such a violation may be its consequence or an effect.

(3) The Judgment and EU-Morocco Relations

In terms of its effects on the case at hand, the judgment does not annul the 2010 Agreement in its entirety but solely insofar as it is applied in Western Sahara. Although the 2000 Association Agreement is not formally affected by the judgment, logic would seem to require that it have its applicability restricted in a similar manner. In fact, if the importation of goods made in non-self-governing territory in violation of their fundamental rights is really incompatible with the EU human rights obligations, it would make sense for the EU to suspend the application of the entirety of its trade agreements to Sahrawi territory, possibly including imports under WTO Most-Favoured Nation rules.

Given that Morocco itself does not distinguish between products made in Western Sahara and products made in non-Sahrawi Moroccan territory, implementing this decision may require the EU to take measures similar to those which it has recently determined with regard to Israeli goods originating from occupied Palestinian territory. In response, Israel threatened to bring a dispute to the WTO. Morocco could presumably do the same.

Besides the territorial argument, the EU could try to defend itself under GATT Article XX. But there is so far no WTO case law establishing the extent to which members may take trade-restrictive, otherwise WTO-inconsistent measures, and justify them with the aim of protecting individuals outside their own territory. Contrary to what occurs in EU law, under which the Institutions’ discretionary power of appreciation permits inconsistent foreign policy action (156, 164), GATT Article XX does not allow WTO members to arbitrarily discriminate between countries ‘where the same conditions prevail’.

(4) Obligations of EU Institutions: Will the Mountain Give Birth to a Mouse?

A second set of questions concerns the obligations of EU institutions in future (and perhaps current) trade agreements. The judgment could be interpreted as recognizing duties for EU Institutions entering into agreements with third states, both (i) a ‘weak’ duty to ensure that these agreements are not themselves the source of violations of fundamental rights and (ii) a ‘strong’ duty to ensure that agreements do not ‘indirectly encourage’ such violations, and that the EU does not ‘benefit’ from them.

Besides its implications for other disputed territories, the reasoning in the Frente Polisario judgment may be used to challenge other trade agreements, which cover non-disputed territories but which may facilitate production in ways that deny populations their rights under the Charter of Fundamental Rights – the Court makes a point of referring to eleven of these rights. Employing counterfactuals, economists would probably be able to demonstrate that EU trade agreements with states that have low labour standards or that overlook the use of child labour ‘indirectly encourage’ the multiplication of these practices.

A different reading of the decision may lead to the opposite impression. Paragraph 244 emphasizes that the Council should have ‘conducted an assessment’ of the situation in Western Sahara. The ‘manifest error of appreciation’ justifying the annulment was its failure ‘to examine’ the elements of the case (225, 247). Could the Council simply have requested a report on the situation in Western Sahara, appended it to its decision, and concluded the exact same agreement without having exceeded its ‘broad discretionary power of appreciation’? In this case, the decision would generate more paperwork without necessarily leading to any changes on the ground.

On the other hand, the judgment specifies that the Council’s examination must be ‘careful and impartial’, and the elements available must ‘support the conclusion drawn’ (225). In this case, the obligation of EU Institutions signing agreements with third states is still procedural: to conduct an assessment of the situation of fundamental rights and of the impact of the agreement. However, EU Courts are not limited to examining whether the assessment was conducted, but must ensure that it was conducted carefully and impartially, and that the elements presented in the assessment support the conclusion drawn. This means that EU courts will not conduct de novo review of the assessment, but may still establish that failure to conduct a careful and impartial assessment of the impact of the agreement on fundamental rights, or the signature of an agreement incompatible with the results of this assessment, justify the annulment – even if partial – of the decision adopting the agreement.

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December 11, 2015

In the present case and as a preliminarry remark I note that the admissibility of such action of annulment brought by polisario is simply a legal blunder.the GC has followed simplistically the reasonning posed by the SINOCHEM CASE (dated 11 july 1997).the court validated a biased contention and brought about a confusing interpretation of the private and the public law concepts related to legal capacity,legal personnality, direct and individual concern of the claimant.
Consequently the polisario front status was generously dealt with the flexibility and elasticity familiar to the litigation of legal standing of private entities or commercial companies.
By the same tocken the CG granted unduly the legal standing to an entity deprived of an incontested international personnality. certainly the GC is not the appropriate avenue to give an authoritative opinion on highly contentiuos judicial and political issues exclusivelly handeld by the UN and involving general international public law.
Furthermore the court outrepasses the scope of its competence and lend fortuitly the "REPRESENTATIVITY" to polisario . more importantly it denied in the same vein the fundamental rights of the populations in SAHARA since it is constant that other competing local, regional representative bodies dispute the polisario his representatif standing.
on the substance it is worthmentionning , at this stage ,that this jugment impenge on the legitimate rights of Morocco which is not party to the case . clearly this is a violation of the fairness of a jugment examining the respective arguments of both Parties.equally it is a violation of the MONETARY GOLD precedent.

It constitutes , for sure, an other opportunity to rengage the legal debate about the irrelevance of calling to the applicability of art.73 and its standards to the case of sahara since Morocco is not recognised, de jure, as an occupying power.there is no decision from the SC ,or GA of UN spelling out such qualification or its implied standards.
finally one should note the reliance of the court on the argument of erreur manifeste , a french legal creation applied in the extreme case of controling discretionnary power conducive to abus de pouvoir.the open question is if there is an avenue to contest the present jugment the erreur manifeste of its reasonning as well as its conclusions are well established.
We have to recognise that by such move of GC,the coherance of EU institutions and the campatibility with WTO of any restrictive mesures subsequent to the present jugment will be dramaticlly at stake.

Steve Peers says

December 11, 2015

There is certainly an appeal possible here to the Court of Justice. Presumably Morocco could ask to intervene?

Geraldo Vidigal says

December 11, 2015

Thanks for the comments. Steve, Morocco's strategy is anyone's guess, but from its point of view the CJEU is not an international court but rather a domestic court of the entity with which it signed the 2000 and 2010 Agreements. For this reason, Seddafi, there is no reason to apply the Monetary Gold principle, which precludes *international* courts from pronouncing on the rights and obligations of states unless they had a voice in the dispute. There is no more reason for an EU Court to pause when discussing cases like this than there would be for the US Supreme Court to pause in examining whether the US President has concluded an international agreement ultra vires. Determining this issue does not require it to hear Morocco.

For its part, Morocco would perhaps prefer to keep the dispute on the international plane, invoking the responsibility of the EU or demanding reparations for what it sees as a breach of the agreement, rather than submitting to the jurisdiction of a foreign court on a matter that is probably the most sensitive international political question it faces - one which led it to leave the African Union 30 years ago and never to return, after the then OAU admitted the Sahrawi Arab Democratic Republic (established by Frente Polisario and recognized by 45-odd states, none of which in the EU) as a full member.

Momchil Milanov says

December 11, 2015

The decision somehow seems to me like an exercise of a federal court in the implicit defense of the EU legal order combined with a flavour of judicial activism and the necessary instrumentalization of international law (par.90 where the Court states the obvious – the agreement is concluded between two subjects of PIL and its interpretation has to be operated under the VCLT rules, not only articles 31 and 34. However it could have made a reference to article 29 which is as relevant as 31 and can also be considered as an expression of customary international law). But that would go against the line of reasoning which the Court adopted – to equal the silence of the institutions towards the application of the agreement to an implicit recognition and approval of this application.
1) Standing: I agree with Geraldo – the sui generis character of Polisario was not really taken into account, naturally the Court did not want to go into the uncomfortable discussion on NLM and tried to fit Polisario into another box. It did so by using case law that was not particularly relevant and it wasn’t because the situation of a trade union or agence de voyage is simply not comparable. Moreover, in par.52 it puzzles me how the Union, in its “acts or actions treats the entity in question as a distinct subject which has its own rights or can have obligations or restrictions”? This is precisely the question to which the court had to provide an answer. Polisario certainly has an international legal personality which may or may not result from the fact that it is one of the two sides on a long peace-building process (57). From what I understand, it seems that Polisario has an individual interest/it is individually concerned by the decision although it does not fall precisely in any of the categories of article 263 and did court did not discuss its NLM status.
2) On the substance, the reasoning that leads to declare that Council has committed a “manifest error of appreciation” seems rather teleological mainly because the decision to conclude such an agreement is political and involves a “large pouvoir d’appréciation” which is precisely the manifestation of this political discretion. The fact that Western Sahara is administered by Morocco without a UN mandate combined with the findings that there is no general prohibition of the conclusion of treaties regarding a disputed territory and the lack of recognition by the EU Member States of Polisario raises the question how exactly is the EU supposed to “make sure that the resources of Western Sahara are not used to the detriment of its population”? What is the origin of this positive obligation? The Court accepts the reasoning of Council that the conclusion of an agreement with a third country cannot make in its turn the EU responsible for actions eventually taken by this third State […] (par.230) How can this be reconciled with the apparent existence of an obligation of effort? The fact that Morocco is not under any obligation imposed by a UN mandate and is thus not accountable, and that it is de facto administering Western Sahara without this being recognized by anyone is not is not in itself a sufficient reason to recognize the existence of such an obligation. In par.208 the Court quotes the letter of the SG legal advisor and the conclusion he reached was that “if the resources are exploited in such a way as to benefit the population of these territories or in consultation with their representatives, this exploitation is considered compatible with the obligation of the administering powers according to the UN Charter, the UNGA resolutions and the principle of permanent sovereignty over the natural resources”. This means that the Court found an international obligation that the EU institutions have not fulfilled even though the opinion juris did not say anything in this direction, nor on issue of the burden of proof. This goes beyond the limits of the interpretation in good faith in article 31 VCLT.

Pierre d'Argent says

December 12, 2015

Geraldo -- Thanks for this interesting post on this important judgement.

The Monetary Gold principle is indeed irrelevant from the perspective of the General Court: the judgement relates to the Council's decision, by which the agreement was concluded, not to the rights and obligations under the agreement. The annulment prevents the agreement from producing its effects in the EU legal order, to the extent of the annulment. But the rights that Morocco derives from the agreement under international law are left untouched by the judgement. The conditions set out in Article 46 of the VCLT (be it 1969 or 1986 VCLT) are not met, and the judgement does not rule that the agreement is invalid for breach of a jus cogens norm. Besides, the ECJ has no jurisdiction to rule on the international validity of the agreement, an issue which would indeed require Morocco's consent.

In other words, the judgement does not affect the validity, nor the binding character, of the agreement under international law and it does not terminate it: for reasons specific to the EU legal order, the judgement annuls, to a certain extent, the act by which the Council concluded the agreement, and such annulment produces legal effects in the EU legal order only. Therefore, the EU is still bound by the agreement vis-à-vis Morocco, but it cannot implement it within the EU legal order to the extent of the judgement. Internationally, Morocco could theoretically claim that the non-implementation by the EU of its obligations under the agreement are a breach of the latter, which is left untouched by the judgement and remains internationally binding.

To bridge such gap, it seems the Council has three options: 1) to renegotiate the agreement with Morocco so as to exclude from its scope products originating from Western Sahara;
2) to terminate the agreement in accordance to its terms or the law of treaties;
3) to comply with the requirements expressed by the judgement and therefore assess by itself if importing the products are entailing the breaches to be prevented. If the Council concludes that it is not the case, it could theoretically take a new decision of conclusion correcting the one partially quashed; if the Council concludes that it is the case, it would be left with options 1 and 2.


December 12, 2015

The judicial implications of the case polisario v council will have serious bearing on the european legal order in general.
Firstly with regard to the stability and the harmonious working of EU institutions: The Court recognised the large appreciation power of the Commission to conclude treaties with tierce Parties on the solid ground of its large pouvoir discretonnaire.but at the same time the Court questions and in fine deny the same very large appreciation power of the Commission when it comes to the non recognition of the international status of polisario by the EU.It is disturbing by the Court to grant the legal standing and a kind of full fledged Personnality to polisario and avoid excplicitly the core question of the very nature of this movment: is it a separatist or national mouvment, it is really autonomous in its decision power or infeoded to foreign actors.,is it effectif enough to claim protection of rights and assume internatonal obligations.
This legal asymetry shown by the Court in its reasonning on the register of the pouvoir of appreciation (pouvoir discretionnaire) of the Commission to conduct its foreign policy by treaties and to recognise an international mouvment) . This duality and double standard are detrimental to the stability and previsibility of the EU in its strategic relations with its Partners.
Secondly in view of the eventuality of annulment of the treaty of the EU with Morocco ,one should expect that the maroccan entities ( private entreprises, local and regional bodies ) with direct interest challenge legally the EU for indemnisation of prejudice subsequent to the breach of its international obligations. Furthermore other legal options can be explored.
Finally the Court creates a unique precedent by denaturing and reversing the international hierarchy of norms mainly the preeminence of UN rules ,practices, opinion juris,and their prevalence on those touched on by the regional organisations .in the present case the Court contradicts or expands the scope of UN norms and UN positions : this is valid for the normally limited and foncionnel legal personnality of polisario,the sui generis legal situation of SAHARA, the absence of any de jury mandate on Morocco in administring the territory, the irrelevence of art73, the extent of the obligation to protect the interests and the fundamental rights of the local populations in the Sahara.
The interpretation provided by the Court of this set of concepts and principles are not on the same line of the UN perspective.
We should expect that the appeal Court will focus and clarify the cardinal principle of interpretation in good faith of international treaties as required by the CVLT.

GlobalTrust Research Project says

December 15, 2015

A new post by Prof. Benvenisti analyzing the judgment:

Elvira Dominguez Redondo says

December 16, 2015

The European Court has failed to reach a conclusion based on the right to self-determination of the Saharawi people, which is undisputed under international law (alghought not realised in practice). The Court uses 'potential' human rights violations that are not clearly involved in the case, but avoids to apply recognised international law applicable to this scenario, because, in my opinion, it confuses the political dimension of 'recognition' and the legal aspects of the case. My colleague Nadia Bernaz and I have posted about this here: