The EU and Cyprus (Studies in Eu External Relations)

The EU and Cyprus: Principles and Strategies of Full Integration

Studies in EU External Relations Edited by

Marc Maresceau, Ghent University Editorial Board

Marise Cremona, European University Institute Günter Burghardt, former EU ambassador Washington Alan Dashwood, University of Cambridge Frank Hoffmeister, European Commission Pieter Jan Kuijper, University of Amsterdam

VOLUME 3

The EU and Cyprus: Principles and Strategies of Full Integration By

Stéphanie Laulhé Shaelou

LEIDEN • BOSTON 2010

This book is printed on acid-free paper. Library of Congress Cataloging-in-Publication Data Laulhé Shaelou, Stéphanie The EU and Cyprus : principles and strategies of full integration / by Stéphanie Laulhé Shaelou. p. cm. -- (Studies in EU external relations, 1875-0451 ; v. 3) Includes bibliographical references and index. ISBN 978-90-04-17619-5 (hardback : alk. paper) 1. European Union--Cyprus. I. Title. II. Series. KJE5092.C93L385 2010 341.2'9--dc22 2009036712

ISSN 1875-0451 ISBN 978 90 04 17619 5 Copyright 2010 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints BRILL, Hotei Publishing, IDC Publishers, Martinus Nijhoff Publishers and VSP. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. printed in the netherlands

CONTENTS Acknowledgements ................................................................................. xi Table of Abbreviations ............................................................................ xiii Introduction .............................................................................................

1

PART ONE

ELEMENTS OF INTEGRATION OF CYPRUS INTO THE EU Introduction to Part One........................................................................ 17 1. Aspects of Europeanisation of the EEC-Cyprus Association: The Economic Dimension ............................................................ I. EEC-Cyprus relations: the principles of a gradual approach ................................................................................... A. Legal framework of the association ...................................... 1. Legal basis of the association ........................................... 2. Legal nature of the association ........................................ B. Regulatory scope of the association ..................................... II. Interpretation by the Court of the principles of the EEC-Cyprus association: focus on the CCP ........................ A. Anastasiou I, a case of direct trade from the northern part of Cyprus to the EU ................................................... B. Legal implications of Anastasiou I: a precedent in Community law.................................................................. Concluding remarks................................................................................ 2. Aspects of Europeanisation of Cyprus: The Socio-legal Objectives of Accession ................................................................. I. From association to accession: the deepening and the widening of the integration process ...................................... A. Reinforced pre-accession strategies, the enlargement process and the accession negotiations ........................... 1. Preliminary remarks ......................................................... 2. Instruments of the (pre)accession strategy and of the enlargement process ..............................................

20 24 24 24 27 30 32 32 35 39

41 42 43 43 45

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contents

B. The external dimension of EU enlargement ....................... 1. Europeanisation ‘to the East’ ............................................ 2. Expansion towards Turkey ............................................... II. Judicial interpretation of the EC trading rules in the context of Cyprus’ accession: focus on the Internal Market ...................................................................................... A. Anastasiou II in the context of the triangular trading relationship between the EC/EU, a candidate country and an associated country ............ 1. A case of indirect trade to the EU through Turkey...... 2. Legal implications of Anastasiou II: a withdrawal from a Community precedent? .................................. B. Anastasiou III: towards a doctrinal principle on the eve of Cyprus’ accession to the EU........................... 1. A case of direct trade through the government controlled area of the RoC.......................................... 2. Legal implications of Anastasiou III: final countdown for an EU policy on direct trade from the northern part of Cyprus to the EU? ................... Concluding remarks...............................................................................

51 52 59

70

71 71 74 77 77

81 83

PART TWO

THE INSTITUTIONALISATION OF THE EUROPEANISATION OF CYPRUS: TOWARDS A DIFFERENTIATED INTEGRATION? Introduction to Part Two....................................................................... 87 3. The Governance of Enlargement: The Institutionalisation of the 2004 Enlargement .............................................................. 91 I. The substantive rules of the Treaty of Accession .................... 95 A. Legal nature of the 2003 Treaty of Accession ..................... 95 1. Composition, execution and entry into force in the Community legal order ........................................ 95 2. Legal structure .................................................................. 96 B. Derogations to Community obligations under Community law ..................................................... 102 1. Legal mechanisms of the differentiated regime in the 2003 Treaty of Accession ................................. 102 2. Legal mechanisms of differentiation contained in the Treaties ............................................. 106

contents

vii

II. Mechanisms of adjustments contained in the 2003 Treaty of Accession ................................................................. 109 A. Adjustments to the Treaties and/or substantive acts of the institutions............................................................... 109 B. Adjustments to the acts of the institutions on market regulation and related sectoral policies ............ 111 1. Technical adjustments and transitional measures ....... 111 2. General safeguard clause ................................................. 112 3. Specific safeguard clauses ................................................ 113 4. Additional transitional arrangements and infringements of pre-accession obligations.............. 118 Concluding remarks............................................................................... 125 4. The Re-institutionalisation of the Principle of Territorial Exclusion in Cyprus: A Component of Differentiated Integration? .................................................................................... 128 I. Legal status of the SBAs in Cyprus under Community law ...................................................................... 131 A. Legal framework .................................................................... 131 1. Initial international law perspective .............................. 131 2. The introduction of the Community law perspective .................................................................... 140 3. The intermingling of legal perspectives .........................142 B. Implications for the legal status of the SBAs under Community law................................................................. 143 1. Current legal status .......................................................... 143 2. Changes in the legal status .............................................. 148 II. Application of the acquis communautaire to the SBAs in Cyprus ................................................................................. 151 A. Territorial scope of application of the acquis .................... 151 B. Application of substantive provisions of Community law................................................................. 154 1. Selected areas of the acquis ........................................... 154 2. Principles of selection of the acquis to the SBAs .......... 158 C. Implementation of Protocol 3: bilateral type of ‘closer co-operation’? .................................................... 158 1. General provisions in Protocol 3: the need for deeper co-operation .................................................... 158 2. The Memorandum of Understanding as a form of institutionalised flexibility ............................ 160 Concluding remarks............................................................................... 171

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contents

5. The Institutionalisation of the Integration of Cyprus: Another Instance of Supranational Differentiation?................................ 172 I. Nature of Protocol 10 of the Act of Accession: relationship with other sources of Community law .......... 177 A. Political background of Protocol 10 .................................... 177 1. Supranational determination of the terms of accession of Cyprus ..................................................... 177 2. Socio-legal implications pertaining to the acquis ....... 179 B. Protocol 10 and the Treaties: political goals embodied in legal instruments of economic integration ............... 180 1. Applicability of the Treaty framework ........................... 181 2. Implementation of the rules of the Internal Market.... 183 II. The substantive principle of Protocol 10: the suspension of the acquis .......................................................................... 196 A. Underlying principles of the suspension of the acquis ..... 196 1. The exclusion of liability for the RoC ............................ 196 2. The non-extension of EU rules: the institutionalisation of a transitional regime set out by the Court of Justice? ........................................ 197 3. The limitations on judicial integration .......................... 198 B. Extent of the suspension of the acquis .............................. 225 1. Notions of ‘embedded acquis’, Europeanisation and socialisation .......................................................... 225 2. Socialisation and confidence building process ............. 226 C. Withdrawal of the suspension of the acquis...................... 230 1. Extent of the withdrawal of the suspension.................. 230 2. Legal implications for the acts of the institutions ........ 231 Concluding remarks............................................................................... 232 PART THREE

THE REREGULATORY REGIME IN CYPRUS: ELEMENTS OF DISINTEGRATION? Introduction to Part Three .................................................................... 237 6. The Re-regulatory Regime of a Reunified Cyprus: A Hypothetical Instance of ‘Full’ Integration? ........................... 242 I. Principles of adaptation beyond a settlement ......................... 242 A. Nature of the enabling clause ............................................... 243 1. Selected aspects of supranational adaptation ............... 243

contents

ix

2. Intergovernmental mechanism of derogation .............. 245 B. Implications of the enabling clause in the EU legal order ................................................................................... 247 1. Legal nature of the implementing instrument(s) ......... 247 2. The re-regulatory regime of a reunified Cyprus and soft governance ..................................................... 249 II. Derogatory re-regulatory regime of a reunified Cyprus ...................................................................................... 250 A. Derogations to the acquis communautaire ........................ 250 1. Adjustments with respect to the Internal Market ........ 250 2. Safeguard measures on the implementation of the Internal Market ................................................. 257 3. Derogation from the Union acquis............................... 258 B. Derogations to fundamental constitutional and institutional principles ..................................................... 258 1. Representation in the EU institutions ........................... 258 2. Turkish as EU language ................................................... 263 Concluding remarks............................................................................... 265 7. Market Regulation without Reunification: An Instance of (Dis)integration? ...................................................................... 266 I. Principles of market regulation in a divided Cyprus ............. 269 A. The establishment of a supranational re-regulatory regime ................................................................................. 270 1. Regime on the Green Line .............................................. 270 2. Regime beyond the Green Line ...................................... 274 B. Components of the re-regulatory regime ........................... 275 1. Principles of inclusion/exclusion ................................... 276 2. Substitution of the rules of the Internal Market .......... 279 3. Economic and financial support for the Areas ............. 282 II. Achievement of market integration in Cyprus: aspects of negative and positive integration ..................................... 286 A. Market-making policy in Cyprus ........................................ 287 1. Underlying mechanisms.................................................. 287 2. The removal of trade barriers in Cyprus ....................... 288 B. Market-correcting policy in Cyprus.................................... 304 1. Financial aid to the Areas ................................................ 305 2. Direct trade between the Areas and the rest of the EU ....................................................................... 313 Concluding remarks............................................................................... 320

x

contents

Conclusion: The State of the Union of Cyprus with the EU ............. 322 Bibliography ............................................................................................ 333 Index......................................................................................................... 355

ACKNOWLEDGEMENTS This book is the result of a PhD thesis defended at the Law Faculty of the University of Leicester in October 2007 and obtained without any corrections. It was a wonderful and fruitful adventure throughout, from the beginning of the PhD to the production of the book. This adventure would not have been possible without the continuous support and care of many people. I would like first to express my love and sincere gratitude to my family for having supported me throughout six years of hard work, to my husband, my daughter as well as to my newborn son for all the time I did not get to spend with them. I also would like to thank my colleagues at the University of Nicosia who have granted me the necessary time to work on my PhD and/or assisted me in particular, Rector Emeritus Van Coufoudakis, Rector Michalis Attalides, Dr Nicos Peristianis, Dr Emilios Solomou, Dean Andreas Sophocleous, Prof Andreas Theophanous and of course Prof Kanyie Ebeku as well as my other colleagues of the Law Department, the supporting staff of the University, the library and all the others whose name I have not mentioned. I would also like to express my deepest gratitude to all those people involved in academia or not who have sacrificed some of their valuable time to answer my questions and/or assist me in my thesis and/or in its publication, commencing of course with my thesis supervisor, Dr Adam Cygan, with the thesis examiners, Prof Takis Tridimas and Prof Mads Andenas (external and internal examiners respectively), as well as to the members of the Faculty of Law of Leicester, including Prof Robin White, Prof Panu Minkkinen, Prof Mark Bell and Dr. Alina Tryfonidou. I also wish to give very special thanks to Dr Constantinos Lycourgos of the Legal Services of the Republic of Cyprus and to Dr Frank Hoffmeister of the Legal Services of the Commission in Brussels for our long conversations over the years. Special thanks also go collectively to the Editorial Board of Studies in EU External Relations for having considered and accepted my book for publication and having provided me with valuable comments on earlier versions of this work. My appreciations finally go (in alphabetical order) to Ambassador Nicos Emiliou (thanks to the assistance of my friend Vassilis Demetriades), Prof Thomas Giegerich, Sir Francis Jacobs, Prof Joseph Joseph, Dr Adam Lazowski, Dr Romain

xii

acknowledgements

Pasquier, Mr Andrew Rasbash, Dr Stelios Stavridis, Mr Nicholas Skoutaris, Dr Sozos Theodoudou, Ambassador Hadelin de La TourDu-Pin, President George Vassiliou, and Georg Ziegler. Finally, I would need to thank my law students for their patience, attention and understanding, in particular Ms Lilit Kazandjian who assisted me in my research for two years. The usual disclaimers apply. Any errors or omissions remain my own. Stéphanie Laulhé Shaelou Nicosia, May 2009

TABLE OF ABBREVIATIONS All abbreviated references listed in this table appear in full citation the first time they are mentioned in the text of the book, followed by the abbreviated reference appearing in brackets in the corresponding footnote. Books and articles Agapiou & Rossetto

Amstrong Barnard & Scott

Bengoetxea

Boos & Forman Börzel (2006) Börzel & Cichowski

Brewin Brus, Akgün et al

Bulmer Chalmers

Agapiou-Josephides K & Rossetto J (eds), Chypre dans l’Union Européenne (Bruylant, Brussels, 2006) Amstrong K, Regulation, deregulation, reregulation (Kogan Page, London, 2000) Barnard C & Scott J (eds), The law of the Single European Market (Hart, Oxford, 2002) Bengoetxea J, The legal reasoning of the ECJ: towards a European jurisprudence (Clarendon Press, Oxford, 1993) Booss and Forman, ‘Enlargement: legal and procedural aspects’ (1995) 32 CMLRev 95 Börzel T (ed), The disparity of European integration (Routledge, Abingdon, 2006) Börzel T & Cichowski R (eds), The State of the EU: law, politics and society (vol 6, OUP, Oxford, 2003) Brewin C, The EU and Cyprus (Eothen Press, UK, 2000) Brus M, Akgün et al, A promise to keep: time to end the international isolation of the Turkish Cypriots (Foreign Policy Analysis Series No 7, Tesev Yayinlari, 2008) Bulmer S, ‘The governance of the EU: a new institutionalist approach’ (1994) 13 JPP 351 Chalmers et al, EU law (CUP, Cambridge, 2006)

xiv Christou (2004)

table of abbreviations

Christou G, The EU and enlargement. The case of Cyprus (Palgrave, UK, 2004) Christou (2006) Christou G, ‘The EU: what role in the Cyprus conflict?’ (2006) 2 The International Spectator 19 Chrysostomides (2000) Chrysostomides K, The Republic of Cyprus. A study in International Law (Martinus Nijhoff Publishers, Leiden, 2000) Chrysostomides (2006) Chrysostomides K, Cyprus, the way forward (Cyprus Institute for Political Research and European Affairs, Nicosia, 2006) Constantinou & Constantinou C & Richmond O, ‘The long Richmond mile of Empire: power, legitimation and the UK Bases in Cyprus’ (2005) 10(1) Mediterranean Politics 65 Cotterell (1995) Cotterell R, Law’s Community: legal theory in sociological perspective (Clarendon Press, Oxford, 1995) Craig & De Burca (1999) Craig P & De Burca G (eds), The evolution of EU law (OUP, Oxford, 1999) Craig & De Burca (2008) Craig P & De Burca G (eds), EU law (4th, OUP, Oxford, 2008) Cremona (1996) Cremona M, case note (1996) 33 CMLRev 125 Cremona (2003) Cremona M (ed), The enlargement of the EU (OUP, Oxford, 2003) De Burca & Scott De Burca G & Scott J (eds), Constitutional change in the EU (Hart, Oxford, 2000) Dehousse Dehousse R, The European Court of Justice (Macmillan, New York, 1998) Delcourt Delcourt C, ‘The acquis communautaire: has the concept had its day?’ (2001) 38 CMLRev 829 Diez Diez T (ed), The EU and the Cyprus conflict (University Press Manchester, London, 2002) Douglas-Scott (2006a) Douglas-Scott S, ‘A tale of two courts: Luxembourg, Strasbourg and the growing European human rights acquis’ (2006) 43 CMLRev 629

table of abbreviations Douglas-Scott (2006b) Ehlermann

Emiliou (1995) Emiliou (1996)

Featherstone & Radaelli

Garcia-Duran

Gialdino Giegerich

Graziano & Vink

Green Cowles & Smith

Haas

Hillion (2004a)

Hillion (2004b)

xv

Douglas-Scott S, case note (2006) 43 CMLRev 243 Elhermann D, ‘Différenciation accrue ou uniformité renforcée?’ (1995) 3 Revue du Marché Unique Européen 191 Emiliou N, ‘Cypriot import certificates: some hot potatoes’ (1995) 20 ELJ 202 Emiliou, ‘Knocking on the door of the EU: Cyprus’s strategy for accession’ in Axt H-J & Brey H (eds), Cyprus and the EU: new chances for solving an old conflict? (Südosteuropa Aktuell, 23, Möhnesse, 1996) Featherstone K & Radaelli C (eds), The politics of Europeanisation (OUP, Oxford, 2003) Garcia-Duran Huet P, ‘Le Traité d’Athènes, un traité d’adhésion comme les autres?’ [2004] Revue du Marché Commun de l’Union Européenne no 478 290 Gialdino C, ‘Some reflections on the acquis communautaire’ (1995) 32 CMLRev 1089 Giegerich T (ed), The EU accession of Cyprus – key to the political and legal solution of an ‘insoluble’ ethnic conflict?’ (ZERP, Nomos, Baden-Baden, 2006) Graziano P & Vink M (eds), Europeanisation, new research agendas (Palgrave, Basingstoke, 2007) Green Cowles M & Smith M (eds), The State of the EU: risk, reform, resistance, and revival (vol 5, OUP, Oxford, 2000) Haas E, The uniting of Europe: political, social and economic forces, 1950–1857 (3rd ed, University of Notre Dame Press, New York, 2004) Hillion C, ‘The EU is dead. Long live the EU … A commentary on the Treaty of Accession 2003’ (2004) 29(5) ELRev 588 Hillion C (ed), EU Enlargement, a legal approach (Hart, Oxford, 2004)

xvi

table of abbreviations

Hofmann Hoffmeister

Inglis (2000)

Inglis (2004)

Inglis & Ott (2005)

Joseph (2006)

Katselli Klebes-Pélissier

Kok Report

Koutrakos (2003) Koutrakos (2006) Lannon (2004)

Laulhé Shaelou (2005)

Hofmann H, ‘Agreements in EU law’ (2006) 31(6) ELRev 800 Hoffmeister F, Legal aspects of the Cyprus Problem. Annan Plan and EU accession (Martinus Nijhoff Publishers, Leiden, 2006) Inglis K, ‘The Europe Agreements compared in the light of their pre-accession reorientation’ (2000) 37 CMLRev 1173 Inglis K, ‘The Union’s fifth Accession Treaty: new means to make enlargement possible’ (2004) 41 CMLRev 937 Inglis K & Ott A (eds), The constitution for Europe and an enlarging Union: unity in divesity? (Groningen Europa law, Groningen, 2005) Joseph Joseph (ed), Turkey and the European Union (Palgrave Macmillan, Basingstoke, 2006) Katselli E, ‘The Ankara Agreement, Turkey and the EU’ (2006) 55(3) ICLQ 705 Klebes-Pélissier A, ‘L’adhésion de la République de Chypre à l’UE’ (2003) 39(3) Revue Trimestrielle de Droit Européen 441 Kok W, Enlarging the EU, achievements and challenges (Report to the Commission, EUI, Robert Schuman Centre for Advanced Studies, 26 March 2003) Koutrakos P, ‘Legal issues of EC-Cyprus trade relations’ (2003) 52 ICLQ 489 Koutrakos P, EU International Relations law (Hart, Oxford, 2006) Lannon E,‘Le Traité d’Adhésion d’Athènes. Les négociations, les conditions de l’admission et les principales adaptations des traités résultant de l’élargissement de l’UE à vinq-cinq Etats membres’ [2004] Cahiers de droit européen, nos 1–2 Laulhé Shaelou S,‘Recent strategies towards the membership of Cyprus to the EU: a case study on trade’ (2005) 17(2) The Cyprus Review 103

table of abbreviations Laulhé Shaelou (2007)

Laulhé Shaelou (2009)

Laurent & Maresceau

Lazowski (2009)

Lenaerts & Van Nuffel

Lenaerts & de Smijter

Lycourgos

Maresceau (1997) Maresceau (2006)

Maresceau & Lannon

Markides (2000)

Müller-Graff (1997)

xvii

Laulhé Shaelou S, ‘The European Court of Justice and the Anastasiou saga: principles of Europeanisation through economic governance’ (2007) 18(3) EBLR 619 Laulhé Shaelou S, ‘Back to reality’: the implications of EU membership in the constitutional legal order of Cyprus’ in Lazowski A (ed), Brave new world: application of EU law in the new Member States (TMC Asser Press, The Hague, 2009) Laurent P-H & Maresceau M (eds), The State of the EU: deepening and widening (vol 4, Lynne Rienner Pub, USA, 1998) Lazowski A (ed), Brave new world: application of EU law in the new Member States (TMC Asser Press, The Hague, 2009) Lenaerts K & Van Nuffel P, Constitutional Law of the EU (2nd ed, Thomson, London, 2005) Lenaerts K & de Smijter E, ‘The Charter and the role of the European courts’ (2001) 8(1) MJ 93 Lycourgos C, L’ association avec union douanière: un mode de relations entre la CEE et des Etats tiers (Puf, Paris, 1995) Maresceau M, Enlarging the EU (Longman, London, 1997) Maresceau M, Bilateral agreements concluded by the EC (Recueil des cours de l’Académie de droit international, vol 309 (2004), Martinus Nijhoff Publishers, Leiden, 2006) Maresceau M & Lannon E, The EU’s enlargement and Mediterranean strategies (Palgrave, Basingstoke, 2001) Markides A, ‘The Cyprus problem as a legal issue within Europe’ (2000) 12(4) Revue Européenne de Droit Public 1195 Müller-Graff (ed), East Central Europe and the EU: from Europe Agreements to a

xviii

Neuwahl (2004)

Ott & Inglis (2002)

Palley

Pinder Radaelli

Reed

Shaw & More Skoutaris (2008)

Stefanou Szyszcak & Cygan Talmon (2001) Talmon (2006)

Theodoulou

table of abbreviations member status (Nomos Verlagsgesellschaft, Baden-Baden, 1997) Neuwahl N (ed), EU enlargement, law and socio-economic changes (Themis, Montreal, 2004) Ott A & Inglis K, Handbook on European Enlargement (TMC Asser Press, The Hague, 2002) Palley C, An International Relations debacle – the UN Secretary-General’s mission of good offices in Cyprus, 1999–2004 (Hart, Oxford, 2005) Pinder J, ‘Positive integration and negative integration’ [1968] The World Today 88 Radaelli C, ‘Europeanisation: solution or problem?’(2004) 8(16) European Integration online Papers Reed J, Political review of the ECJ and its jurisprudence (Jean Monnet paper, New York, 1995) Shaw J & More G (eds), New legal dynamics of the EU (Clarendon Press, Oxford, 1995) Skoutaris N, ‘The application of the acquis communautaire in the areas not under the effective control of the RoC: the Green Line Regulation’ (2008) 45 CMLRev 727 Stefanou C (ed), Cyprus and the EU. The road to accession (Ashgate, Aldershot, 2005) Szyszcak E & Cygan A, Understanding EU law (Thomson, London, 2005) Talmon S, ‘The Cyprus Question before the ECJ’ (2001) 12 EJIL 727 Talmon S, ‘The EU-Turkey controversy over Cyprus or a tale of two Treaty declarations’ (2006) 5(3) Chinese JIL 579 Theodoulou S-C, Bases militaries en droit international: le cas de Chypre (Bibliopolis, Peleus, 2006)

table of abbreviations Theophanous (2004)

Thym (2006)

Thym (2008)

TMCA Instituut

Tocci (2004)

Tomuschat

Tridimas Tridimas & Nebbia

Tsadiras Tsardanidis

Uebe Urrutia & Lasagabaster

xix

Theophanous A, The Cyprus Question and the EU. The challenge and the promise (Intercollege Press, Nicosia, 2004) Thym D, ‘The political character of supranational differentiation’ (2006) 31(6) ELRev 781 Thym D, ‘Respect for private and family life under Article 8 ECHR in immigration cases: a human right to regularize illegal stay?’ (2008) 57(1) ICLQ 87 TMC Asser Instituut, The impact of EU accession on the legal orders of new EU Member States and (pre-)candidate countries: hopes and fears (TMC Asser Press, The Hague, 2006) Tocci N, EU accession dynamics and conflict resolution. Catalysing peace or consolidating partition in Cyprus? (Ashgate, Aldershot, 2004) Tomuschat C, ‘The accession of Cyprus to the EU’ in Häberle P, Morlok M & Skouris V (eds), Festschrift für Dimitris Tsatsos (Nomos, Baden-Baden, 2003) Tridimas T, The general principles of EU law (2nd ed, OUP, Oxford, 2006) Tridimas T and Nebbia P (eds), Challenges for EU law in the 21st Century (Vol I, Hart, Oxford, 2004) Tsadiras A, case note (2007) 44 CMLRev 1515 Tsardanidis C, ‘The EC-Cyprus Association Agreement: ten years of a troubled relationship, 1973–1983’ (1984) 22(4) JCMS 351 Uebe M, ‘Cyprus in the EU’ (2003) 46 German Ybk of International Law 375 Urrutia I & Lasagabaster I, ‘Language rights and Community law’ (2008) 12(4) European Integration online Papers, available at http:// eiop.or.at/eiop/texte/2008-004a.htm

xx Vandersanden Van Elsuwege

Vassiliou (2004)

Weatherill (2004)

Weiler (1991) Wiener (1998)

Wiener (2003)

Wincott

Ziegler

table of abbreviations Vandersanden G, case note (1989) 26 CMLRev 551 Van Elsuwege P, From Soviet Republics to EU Member States (vol 2, Studies in EU External Relations, Brill/Martinus Nijhoff Publishers, Leiden, 2008) Vassiliou G, Cyprus-EU. From the first steps to accession (Greek) (Kastaniotis, Athens, 2004) Weatherill S, ‘The Internal Market’ in Peers S & Ward A, The EU Charter of Fundamental Rights (Hart, Oxford, 2004) Weiler JHH, ‘The transformation of Europe’ (1991) 100 Yale L J 2403 Wiener A, ‘The embedded acquis communautaire: transmission belt and prism of new governance’ (1998) 4(3) ELJ 294 Wiener A, ‘Finality vs enlargement: constitutive practices and opposing rationales in the reconstruction of Europe’ in Weiler JHH & Wind M (eds), European constitutionalism beyond the State (Cambridge University Press, Cambridge, 2003) Wincott D, ‘The role of law or the rule of the Court of Justice? An institutional account of judicial politics in the EC’ (1995) 2(4) JEPP 583 Ziegler G, ‘The EU dimension of a future comprehensive settlement of the Cyprus problem’ (available at http://www.cypruspolicycenter.org/dosyalar/Georgziegler. doc, accessed on 12.5.09) Cases Cypriot courts

Constantinou Malachtou

Attorney General of the RoC v Costas Constantinou [2007] 3 CMLR 42 Malachtou v Armefti (1987) 1 CLR 207

table of abbreviations

xxi

ECJ Anastasiou I

Anastasiou II

Anastasiou III

Apostolides

AG Kokott’s Opinion Cassis Demirel Eman et Sevinger Jersey Potato

Karner

Keck Krombach LAISA Pupino Schmidberger

Case C-432/92, R v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd & others [1994] ECR I-3087 Case C-219/98, R v Minister for Agriculture, Fisheries & Food, ex parte SP Anastasiou (Pissouri) Ltd & others [2000] ECR I-5241 Case C-140/02, R v Minister for Agriculture, Fisheries & Food, ex parte SP Anastasiou (Pissouri) Ltd & Others [2003] ECR I-10635 Case C-420/07, Meletios Apostolides v David Charles and Linda Elizabeth Orams, 28 April 2009 (Grand Chamber) (nyr) Case C-420/07, Opinion of AG Kokott delivered on 18 December 2008 Case 120/78, Cassis de Dijon [1979] ECR 649 Case 12/86, Demirel [1987] ECR 3719 Case C-300/04, Eman et Sevinger [2007] 1 CMLR 4 C-293/02, Jersey Produce Marketing Organisation Ltd v State of Jersey and others [2005] ECR I-9543 Case C-71/02, Herbert Karner IndustrieAuktionen GmbH v Troostwijk GmbH [2004] ECR I-3025 Cases C-267 & 268/91, Keck and Mithouard [1993] ECR I-6097 Case C-7/98, Krombach v Bamberski [2000] ECR I-1935 Joined Cases 31–35/86, LAISA and Another v Council [1988] ECR 2285 Case C-105/03, Criminal proceedings against Pupino [2005] ECR I-5285 Case C-112/00, Schmidberger v Austria [2003] ECR I-5659

xxii Skoma-Lux Spain v UK Weidacher Walloon

table of abbreviations C-161/06, Skoma-Lux sro v Celni reditelstvi Olomouc [2007] ECR I-10841 C-145/04, Spain v UK [2006] ECR I-7917 Case C-179/00, Weidacher [2002] ECR I-501 Case C-212/06, Government of the French Community and Walloon Government v Flemish Government, 1 April 2008 (nyr) ECtHR

Bosphorus Cyprus v Turkey Loizidou

Matthews Slivenko v Latvia Xenides-Arestis

Bosphorus Airways v Ireland [2006] 42 EHRR 1 Cyprus v Turkey [2002] 35 EHRR 30 Loizidou v Turkey 23 March 1995 (preliminary objections) [1995] 20 EHRR 99; 18 December 1996 (Merits) [1997] EHRR 513 Matthews v UK [1999] 28 EHRR 361 Slivenko et al v Latvia (No 48321/99), judgment of 9 October 2003 (GC) Xenides-Arestis v Turkey 22 December 2005 (preliminary objections); 7 December 2006 (Just Satis-faction) [2007] 44 EHRR SE13 ICJ

Namibia

Namibia Opinion (1971) ICJ Reports 3 UK courts

Orams

Orams v Apostolides (QB) [2007] 1 WLR 241 International sources

Annan Plan

The Comprehensive Settlement of the Cyprus Problem, 31 March 2004, available at last accessed on 15.5.2009

table of abbreviations International Law Commission Report

World Bank Report (Volume I/II)

House of Common’s second report on Cyprus

xxiii

Report of the International Law Commission on the “Fragmentation of international law,” study group on fragmentation, Koskenniemi, last accessed on 12.12.2006 World Bank, Sustainability and sources of economic growth in the northern part of Cyprus (Volume I/II, Poverty Reduction and Economic Management Unit, Europe and Central Asia Region, 8 June 2006) last accessed on 5.6.2007 Second Report of the Foreign Affairs Committee on Cyprus of the House of Common, last accessed on 9.2.2007 Statutes Cyprus

Treaty of Establishment or ToE

Treaty of Establishment of the Republic of Cyprus UN Treaty Series (1960) vol 382, 10 European Community

Association Agreement (1972)

(Additional) 1977 Protocol

EEC-Cyprus Association Agreement signed on 19 December 1972 and annexed to Council Regulation 1246/73/EEC of 14 May 1973 [1973] OJ L 133/1, 21.5.1973 Council Regulation 2907/77/EC of 20 December 1977 on the conclusion of the Additional Protocol to the EEC-Cyprus Association Agreement concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation [1977] OJ L 339/1, 28.12.1977

xxiv

table of abbreviations

Ankara Agreement

Additional Protocol

Act of Accession (2003)

Brussels Regulation

FA Regulation

GL Regulation

Implementing Regulation

Agreement establishing an Association between the EEC and Turkey [1964] OJ L 217/3687, 29.12.1964 Additional Protocol and Financial Protocol to the Ankara Agreement [1972] OJ L 293/4, 29.12.1972 Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded [2003] OJ L 236/33, 23.9.2003 Council Regulation (EC) No 44/2001 on jurisdiction and enforcement of judgments in civil and commercial matters of 22 December 2000 [2001] OJ L 12/1, 16.1.2001 Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community and amending Council Regulation (EC) No 2667/2000 on the European Agency for Reconstruction [2006] OJ L 65/5, 7.3.2006 Council Regulation (EC) No 866/2004 of 29 April 2004 on a regime under Article 2 of Protocol 10 of the Act of Accession [2004] OJ L 161/128, 30.4.2004 as last amended by Council Regulation (EC) No 587/2008 [2008] OJ L 163/1, 24.6.2008 Commission Regulation (EC) No 1480/2004 of 10 August 2004 laying down specific rules concerning goods arriving from the Areas in the areas in which the Government exercises effective control [2004] OJ L 272/3, 20.8.2004

table of abbreviations Protocol 3

xxv

Protocol No 3 on the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus [2003] OJ L 236/940, 23.9.2003 Protocol No 10 on Cyprus [2003] OJ L 236/ 955, 23.9.2003 Treaty between the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland,the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland (Member States of the European Union) and the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia, the Slovak Republic, concerning the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic to the European Union [2003] OJ L 236/17, 23.9.2003

Protocol 10 Treaty of Accession (2003)

EU proposed legislation Draft Act of Adaptation or Draft A/A

Proposal for an Act of Adaptation of the terms of accession of the United Cyprus Republic to the EU COM(2004) 189 final, 7.4.2004

xxvi Direct Trade or DT Proposal

FA Proposal

GL Proposal

table of abbreviations Proposal for a Council Regulation on special conditions for trade with those Areas not under the effective control of the government of the Republic of Cyprus COM(2004) 466 final, 7.7.2004 Proposal for a Council Regulation establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community COM(2004) 465 final, 7.7.2004 Proposal for a Council Regulation on a regime under Article 2 of Protocol 10 COM(2004) 145 final, 2.3.2004 Germany

German Protocol on internal trade

German Protocol annexed to the EEC Treaty on German internal trade and connected problems of 25 March 1957 UK

Memorandum of Understanding or MoU

Memorandum of Understanding between the UK and the Republic of Cyprus concerning responsibility for the implementation of the Protocol on the UK Sovereign British Bases in Cyprus of 5 June 2003 Text

Areas

AG CA CAP CCP CEE CEECs CFI CIS

Areas not under the effective control of the government of the Republic of Cyprus/ occupied areas Advocate General Court of Appeal Common Agricultural Policy Common Commercial Policy Central and Eastern European Central and Eastern European Countries Court of First Instance Commonwealth of Independent States

table of abbreviations CFSP COREPER EA EAW ECJ ECHR EC

ECR ECtHR EEC EFTA EMU ENP EP EU FRG FYROM G/C GDR Green Line HL JHA MEP NPAA OCTs OJ ORs PCA QMV RoC SAA SBAs TAIEX T/C TCCoC ‘TRNC’

xxvii

Common Foreign and Security Policy Committee of Permanent Representatives Europe Agreement European Arrest Warrant European Court of Justice European Convention on Human Rights European Community; Treaty establishing the European Community, consolidated version European Court Report European Court of Human Rights European Economic Community European Free Trade Area Economic and Monetary Union European Neighbourhood policy European Parliament European Union; Treaty on European Union Federal Republic of Germany Former Yugoslav Republic of Macedonia Greek/Cypriot German Democratic Republic Line of demarcation that divides Cyprus House of Lords Justice and Home Affairs Member of European Parliament National Programme for the Adoption of the Acquis overseas countries and territories Official Journal of the European Communities outermost regions Partnership and Co-operation Agreement Qualified Majority Voting Republic of Cyprus Stabilisation and Association Agreement UK Sovereign British Bases in Cyprus Technical Assistance Information Exchange Turkish/Cypriot Turkish Cypriot Chamber of Commerce ‘Turkish Republic of Northern Cyprus’

xxviii

table of abbreviations

UK UN UNDP UNSCR Vienna Convention

United Kingdom of Great Britain and Northern Ireland United Nations United Nations Development Programme United Nations Security Council Resolutions Vienna Convention on the laws of Treaties

Various documents from the EU institutions Commission Communication (2003)

2004 Commission report on the implementation of the GL Regulation 2005 Commission report on the implementation of the GL Regulation 2006 Commission report on the implementation of the GL Regulation 2007 Commission report on the implementation of the GL Regulation 2006 Commission report on the implementation of the FA Regulation

Commission Communication to the Council and to the European Parliament as to the ways of promoting economic development in the northern part of Cyprus and of bringing it closer to the Union COM(2003) 0325 final, 3.6.2003 Commission’s yearly report on the implementation of the GL Regulation and the situation resulting from its application in 2004–2005 COM(2005) 320 final, 14.7.2005 Commission’s yearly report on the implementation of the GL Regulation and the situation resulting from its application in 2005–2006 COM(2006) 551 final, 25.9.2006 Commission Communication, Annual Report on the implementation of the GL Regulation and the situation resulting from its application COM(2007) 553 final, 21.9.2007 Commission Communication, Annual Report on the implementation of the GL Regulation and the situation resulting from its application COM(2008) 529 final, 27.8.2008 2006 Annual Report on the implementation of Community assistance under the FA Regulation COM(2007) 536 final, 18.9.2007

table of abbreviations 2007 Commission report on the implementation of the FA Regulation Commission Green Paper on OCTs

xxix

2007 Annual Report on the implementation of the FA Regulation COM(2008) 551 final, 15.9.2008 Commission’s Green Paper on the future relations between the EU and the OCTs COM(2008) 383 final, 25.6.2008

INTRODUCTION

This book proposes to examine the European integration of Cyprus1 as the outcome of a process commenced over thirty years ago within the context of the EC external trade relations, culminating with Cyprus’ accession to the EU in 2004 and still ongoing within the framework of the EU external relations five years after accession. The key research problem concerns the achievement of full integration for a country like Cyprus, undergoing a process of Europeanisation2 which gives rise to a specific instance of European governance. This process may lead to a new mode of European integration where the traditional parameters of economic, societal and political integration are re-formulated. Beyond the obvious academic interest of describing the process of European integration of Cyprus from a socio-legal perspective,3 which has never

1 The term ‘Cyprus’ will be used throughout this book to designate the country, the island of Cyprus, while the use of the term ‘RoC’ will be limited to the designation of the legal entity if and when necessary, with respect to the SBAs in particular or when the ‘government controlled area of the RoC’ and the ‘non-government controlled area of the RoC’ are referred to together expressly or implicitly. The latter area of the RoC is otherwise referred to on its own as the ‘northern part of Cyprus’ or the ‘areas not under the effective control of the RoC’ (with reference to the EU jargon) or the ‘occupied areas’ (in an international law context) and is abbreviated in this book as the ‘Areas’. 2 Europeanisation explores inter alia the domestic dimension of the European integration variable as a ‘set of model-building puzzles’ signifying the transformation of a variable at the transnational level. It is thus possible to consider a wide spectrum of uses of Europeanisation including in the context of political integration and political unification as shown by the renewed interest in the literature for concepts of political system formation such as ‘politicisation’ or ‘socialisation’ of relevance to this book; see Radaelli C, ‘Europeanisation: solution or problem?’ (2004) 8(16) European Integration online Papers (‘Radaelli’) 3; see also Olsen, ‘The many faces of Europeanisation’ (2002) 40(5) JCMS 921; and Radaelli C & Pasquier R, ‘Conceptual issues’ in Graziano P & Vink M (eds), Europeanisation, new research agendas (Palgrave, Basingstoke, 2007) (‘Graziano & Vink’) 42. For an application of the concept of Europeanisation to Cyprus, see Sepos A, The Europeanisation of Cyprus: polity, policies and politics (Palgrave Macmillan, Basingstoke, 2008). 3 Socio-legal scholarship is concerned with regulations socially speaking, which entails the consideration of the implementation and the formulation of a wider regulatory framework than the one considered in pure legal doctrine or policy-making. Cotterell provided a very useful definition of socio-legal studies as scholarship “… showing through systematic behavioural studies what law as institutionalised

2

introduction

been done before, the more general attraction for such a book is that it re-directs principles of differentiated integration towards new means and meanings. The comparison with other new Member States and/or with future Member States/candidate countries in particular is interesting since it puts Cyprus at the centre of the EU enlargement/EU integration process, which has only too rarely been done before in the literature.4 Like all the other new Member States who joined in 2004 (and in 2007), the process of integration is currently unfolding due to the numerous measures contained in the Treaty of Accession arguably leading to differentiated integration. Differentiated or flexible integration with respect to the latest enlargement (the fifth enlargement) is characterised a priori by the fact that the new Member States, including Cyprus, do not fully participate to all the EU policies and/or can be excluded from major policy areas such as the Internal Market, which is the applied focus of this book. The situation of Cyprus seems somehow different to doctrine means in the varied local contexts of social life, where its ultimate value and significance must be judged”, Cotterell R, Law’s Community: legal theory in sociological perspective (Clarendon Press, Oxford, 1995) (‘Cotterell (1995)’) 296. It is possible to find scholar work in favour of a socio-legal approach to the analysis of inter- or transnational political processes both in the law and in the international relations disciplines. See e.g. Bradney A, ‘Law as a parasitic discipline’ (1998) 25(1) J of L & Society 71 for the former and Wiener A, ‘Constructivism: the limits of bridging gaps’ (2003) 6(3) J of International Relations and Development 252 for the latter. 4 Peter Van Elsuwege conducted a similar exercise with respect to the Baltic States and presented a very comprehensive and in-depth analysis of their EU accession and integration process published as vol 2 in the same series as this book (SEUR). This group of countries may also have initially suffered to some extent from a ‘literature deficit’, even if their situation is not comparable with Cyprus. The Baltic States share with each other several basic characteristics which certainly trigger academic interest for comparative analysis from a legal, political, historical and/or social perspective, even if they did not always form a uniform front during the enlargement process. It is nevertheless interesting to note that Van Elsuwege’s findings with respect to their EU accession somehow echo the findings of this book. He notes in particular that the “examples of Estonia, Latvia and Lithuania illustrate that, in spite of their asymmetrical nature and limited scope, accession negotiations are extremely important to ensure the smooth integration of new Member States in the EU and to avoid negative socialeconomic consequences of enlargement in both the old and new Member States”. He also notes that “the negotiating process plays a key role in the Europeanisation of the national institutions and administrations of the acceding countries. It forms a final stage of a gradual process of preparing their public administrations to become full players in the multi-level system of EU policy- and decision-making.” See Van Elsuwege P, From Soviet Republics to EU Member States (vol 2, SEUR, Brill/Martinus Nijhoff Publishers, Leiden, 2008) (‘Van Elsuwege’) 309–10. Other points of similarities/differences in the accession/integration process of the Baltic States and of Cyprus will be outlined in this book if and when relevant.

introduction

3

the extent that, in addition to this alleged regime of differentiated integration, its integration is singled out in two distinctive Protocols annexed to the 2003 Act of Accession potentially hindering further its full integration into the EU. The key argument of this book is that Cyprus is on a different path towards European integration, which seems to be characterised by socio-political considerations distinct from the ones surrounding the 2004 enlargement mainly to the CEECs. Its path of European integration is embodied into the two Protocols on Cyprus, one on the British military bases and more importantly the other one addressing the de facto division of the island. Any legal analysis of the European integration of Cyprus without examining thoroughly these two Protocols, which arguably set out the extent and/or the depth of the alleged differentiated integration for Cyprus, would be misleading. The theoretical framework of this book is a combination of theories on EU enlargement and on European integration due to the fact that Cyprus still finds itself at the crossroads of enlargement and of European integration. Cyprus was indeed included in the largest wave of enlargement ever with all the implications and consequences this has for the new Member States but also for the EU constitutional and institutional legal order. On the other hand, it can be argued that the European integration of Cyprus remains incomplete since parts of the island are still excluded from the scope of the EU legal order. First of all, EU law is only applied in a selective manner on the territory of the British military bases in Cyprus in a type of differentiation at the EU supranational level deriving from international law and apparently accepted as such within the EU legal order. Secondly and more importantly, the territory of the Republic of Cyprus (‘RoC’), composed of the territory of Cyprus ‘minus’ the British bases, is itself split due to the fact that part of this territory is not controlled effectively by the government of the Republic. As a result, the rules of the Internal Market in particular, which constitute the core of EC/EU law, are not applicable on the whole territory of Cyprus. This situation arguably gives rise to a sui generis regulatory regime within the EU legal order which may resemble prima facie the enlargement process. Maresceau recalls that the latest enlargement process was presented at its launch in 1997 as a new era “finally putting an end to the divisions of the past”.5 Extending the European integration model “to encom5 See Maresceau M, ‘EU enlargement and EU common strategies on Russia and Ukraine: an ambiguous yet unavoidable connection’ in Hillion C (ed), EU Enlargement, a legal approach (Hart, Oxford, 2004) (‘Hillion (2004b)’) 192.

4

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pass the whole of the continent” was seen as “a pledge of future stability and prosperity within and beyond the new borders of the Union”.6 Nevertheless, until recently at least, he had seen no trace of a ‘serious’ EU study corroborating ‘the official EU approach’ in a convincing way. In this respect, it is argued that the extension of European integration to Cyprus, given the island’s specificities, could have consequences both for the widening and for the deepening of the model of European integration relevant to the above statements. It could come and confirm in particular the hypothesis that enlargement is a promoter of further European integration in the broad sense of Europeanisation,7 also extending beyond EU borders, therefore having implications for the EU external relations. Cremona has developed the existing literature arguing that enlargement is “both a cause and an effect of EU external policy”.8 She argues that as an effect of EU external policy, enlargement is ‘itself part of that external policy’ to the extent that it promotes the achievements of EU ‘foreign-policy goals’ in the region and it participates to the external policy activity influencing prospective membership.9 As a cause of EU external policy, it is quite clear also that the subsequent waves of enlargement have, and will continue to have, an influence on the future development of EU external policy. Cremona notes that “the sheer increase in size of the EC/EU has increased not only its influence and the reach of its external policies, both economic and political, but also the expectations of third countries”.10 Thus, the EU external policy is in fact pluralistic and should be referred to rather as EU external policies including EC economic policies and trade, EU foreign and security policy as well as other external policies such as border control or ‘other justice and home affairs’ issues like migration.11 6

Emphasis added. Within the context of the EU-Turkey relations, Joseph describes Europeanisation as a ‘challenge of Westernisation’ which leads to “reform of domestic structures, institutions and policies to meet the requirements of the systemic logic, political dynamics and administrative mechanisms of European integration”; see Joseph J, ‘Introduction: Turkey at the threshold of the EU’ in Joseph J (ed), Turkey and the European Union (Palgrave Macmillan, Basingstoke, 2006) (‘Joseph (2006)’) 2; see also Ulusoy K, ‘The Europeanisation of Turkey and its impact on the Cyprus problem’ (2008) 10(3) Journal of Balkan and Near East Studies 309. 8 See Cremona M, ‘Enlargement and external policy’ in Cremona M (ed), The enlargement of the EU (OUP, Oxford, 2003) (‘Cremona (2003)’) 184. 9 Ibid, 185. 10 Ibid. 11 Cremona in Cremona (2003) 207. 7

introduction

5

The Internal Market, which encompasses institutional, economic and political elements lying at the foundations of the process of European integration, also appears to be central to EU external policies through the respect of the four freedoms combined with horizontal policies of economic integration and flanking policies involving in particular non-economic objectives. This book promotes the idea that the Internal Market is a pluri-policy instrument of deeper integration including through its external dimension. The Internal Market as a policy instrument and a subject of supranational regulation is used as a tool of measurement of European integration, as it traditionally lies at the very core of the process of integration. As such, it most probably provides the best illustration of the problems, tensions and implications arising from the balancing between the underlying economic and non-economic values of the Community combined with the prevailing values of each Member State. In the postontological EU, the ‘progress of Europeanisation’ correspond inter alia to the ‘progress of (re)regulation’ at the EU level characterised by an increasing transfer of authority at the supranational level,12 the implications of which must be measured for Cyprus. On 1 May 2004, Cyprus acceded to the EU as a divided island. Although the process of accession was conducted in theory on behalf of the whole island and Cyprus joined as one country, the northern part of the island was largely left out of the process due to the ongoing de facto13 division of the island. The so-called ‘areas of Cyprus which do not fall under the authority of the government of the RoC’ have been subject since then to a special regime based on the suspension of the acquis communautaire, even if initiatives to assist these areas have been taken by the EU. It is argued that this ‘dual’ situation in Cyprus characterises the process of European integration of the island and as such has the potential of hampering its proper and full integration into the EU, if not addressed in a constructive way. It poses two immediate socio-legal challenges with respect to the EU fundamental freedoms, namely the

12

Levi-Faur D, ‘Regulatory governance’ in Graziano & Vink, 104. “The importance of the notion of de facto regime lies in its clarification that nonrecognition is not identical to the refusal to accept any position of the entity in question as a partial subject of international law. The notion makes it possible to draw the necessary consequences from a prolonged period in which a territory is governed by a non-recognised entity”, Jochen Abr Frowein, ‘De facto regime’ in Bernhardt R (ed), Encyclopedia of Public International Law (vol 10, Max Plant Institute, Heidelberg, 1992) 73. 13

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extent to which Cyprus’ EU membership can benefit the whole of the island and the nature of the applicable regime pending a solution to the Cyprus problem14 as well as beyond. The full integration of Cyprus into the EU should normally expand to all Cypriots and entail a complete application of the acquis, without necessarily meaning exhaustive (possibility of disparate integration due to the geographical, economic, social and/or exceptionally political characteristics of Cyprus) and fixed application (in terms of space, time and scope) in derogation to the acquis.15 The other partition of the island due to the existence of British territories in Cyprus would apparently fit into a pre-existing pattern of differentiated integration, which renders their analysis ‘less problematic’. It is quite clear that the full European integration of the island should also encompass some sort of pragmatic ‘solution’ to the Cyprus problem leading to the successful integration of the Turkish Cypriot community into the EU.16 A ‘solution’ in this book is considered in its socio-legal dimension to be addressed through its outcome at the

14

Sometimes also referred to as the ‘Cyprus issue’ or the ‘Cyprus conflict’, depending on the theoretical focus. See Diez’s argumentation in favour of using the term ‘Cyprus conflict’ to reflect the current situation in Diez T (ed), The EU and the Cyprus conflict (University Press Manchester, London, 2002) (‘Diez’) 5. This book shall not enter into this debate, which is beyond its scope. The expression ‘Cyprus problem’ will be used as the norm throughout this book, as it happens to be the most commonly found terminology in the literature. For initial scholarly contributions immediately following the birth of the RoC in 1960 and the invasion by the Turkish army in 1974, see e.g. Tornaritis C, Cyprus and its constitutional and other legal problem (2nd ed, Nicosia, 1980) for G/C views and Necatigil Z, The Cyprus conflict. A lawyer’s view (KEMA ltd, Nicosia, 1981) for T/C positions. For more recent contributions, see e.g. Duner B, ‘Cyprus: north is north and south is south’ (1999) 30(4) Security Dialogue 485, expressing views favouring T/C perceptions; Kareklas I, International law and the Turkish intervention of Cyprus (thesis, 2004) for G/C perceptions in international law. 15 In principle, “the provisions of Community law apply ab initio and in toto to new Member States, derogations being allowed only in so far as they are expressly laid down by transitional provisions”, ECJ, Case 258/81, Metallurgiki Halyps A E v Commission [1982] ECR 4261, para 8; Case C-233/97, KappAhl Oy [1988] ECR I-8069, para 15; repeated in Case C-420/07, Meletios Apostolides v David Charles and Linda Elizabeth Orams, 28 April 2009 (Grand Chamber) (nyr) (‘Apostolides’) para 33, concerning Protocol 10 on Cyprus (developed in Chap 5 of this book). 16 Within the context of the failure of the Annan Plan, of Cyprus’ EU membership and of the commencement of accession negotiations with Turkey, Joseph notes that “[s]ooner or later a momentum will emerge for the reunification of the island which is too small to remain divided, but big enough to accommodate its people as a reunited EU Member State”, in Joseph (2006) 10. The full text of the Comprehensive Settlement of the Cyprus Problem, 31 March 2004 (‘Annan Plan’) can be found at last accessed on 15.5.2009.

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transnational level17 promoted by European integration, as opposed to focusing mainly on its internal and/or international political aspects. As such, it is deemed to be less than a settlement, especially a comprehensive one.18 This ‘solution’ should lead to the enjoyment by the whole island of the benefits of EU membership and to the effective abolition of the allegedly particular regime of integration currently in force. It is argued that the key elements of the European integration of Cyprus available so far19 could support such a scenario. With respect to the economic integration of the Turkish Cypriot community, the World Bank notes that: [o]ne option that surprisingly remains on the table is that no fundamental change in course is needed until a political resolution to the Cyprus problem is found. Further opening of the economy or lifting of restrictions are seen as steps to be pursued either as part of final negotiations or after reunification. This view is shortsighted since without major reforms, the long-term welfare of [all] Cypriots’ is in jeopardy.20

It is argued that this pattern of traditional expectations linked to the political resolution of the conflict as a prerequisite to integration derives from the underlying assumptions of ‘state dependence, sovereignty and territorial integrity’21 commonly found in regional integration theories between States22 and applied to Cyprus.23 It is however debatable 17

The transnational level crosses throughout the supranational and the national

level. 18

Political terminology designating a total package of measures solving the Cyprus problem. 19 This book is deemed up to date up and until April 2009, i.e. 5 years after accession. For a general overview of the 5th EU enlargement 5 years after, see European Commission, Five years of an enlarged EU: economic achievements and challenges SEC (2009) 177; see also the accompanying Commission Communication COM (2009) 79, 20.2.2009. 20 World Bank, Sustainability and sources of economic growth in the northern part of Cyprus (Vol I, Poverty Reduction and Economic Management Unit, Europe and Central Asia Region, 8 June 2006) last accessed on 5.6.2007 (‘World Bank Report (Vol I)’) 60. 21 Tocci N, EU accession dynamics and conflict resolution. Catalysing peace or consolidating partition in Cyprus? (Ashgate, Aldershot, 2004) (‘Tocci (2004)’) 144. 22 See Haas E B, The uniting of Europe: political, social and economic forces, 1950– 1957 (Stanford University Press, 1958); see also Deutsch K et al, Political Community and the North Atlantic Treaty Area: International Organisation in the light of historical experience (Princeton University Press, 1957). 23 See e.g. Diez T, ‘The EU and the transformation of conflictual constitutional systems: the case of Cyprus’ in Giegerich T (ed), The EU accession of Cyprus – key to the political and legal solution of an ‘insoluble’ ethnic conflict? (ZERP, Nomos, Baden Baden, 2006) (‘Giegerich’) 225–9.

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whether traditional regional integration theories are adequate to address a conflict within one country, especially when this country is a Member State of the EU leading to the addition of a mandatory supranational dimension to the existing national/regional/international perspective. Europeanisation on the contrary allows to refocus the debate on the “importance of national variation for domestic outcomes of the integration process”.24 Traditional regional integration theories in political sciences and international relations have been found ill-suited to the study of the phenomenon of European integration.25 The neofunctionalist project supported by spillover was “from the outset a comparative exercise in regional integration theory” aimed at utilising the “pioneering European experience of integration to generate hypotheses for testing in other contexts”.26 The idea of spillover entailed an ‘automatic, expansive and irreversible process’ referring “to a situation in which a given action, related to a specific goal” creates the conditions under which “the original goal can be assured only by taking further actions, which in turn create a further condition and a need for more action, and so forth”.27 Following the re-direction of European integration towards intergovernmentalism in the 1960’s, it appeared that the concept of spillover had to take into account ‘disintegrative dynamics’, thereby decoupling the ideas of spillover and automaticity.28 With the concept of spillover, Neofunctionalism nevertheless uncovered a phenomenon a priori specific to European integration, of relevance to this book as reflected in its structure. The focus turned to the specific set of conditions triggering the effect of spillover leading to further integration or to disintegration. It introduced the idea of dynamism into European integration seen as an “instrumentally driven process that proceeded through the prosaic interactions of stakeholders whose perceptions, cognitions, values and loyalties might change in the course of that interaction”.29

24

Caporaso J, ‘The three worls of regional integration theory’ in Graziano & Vink, 30. 25 Haas E B, The uniting of Europe: political, social and economic forces, 1950–1957 (3rd ed, University of Notre Dame Press, New York, 2004) (‘Haas’). 26 Börzel T (ed), The disparity of European integration (Routledge, Abingdon, 2006) (‘Börzel (2006)’) 27. 27 Lindberg (1963) cited in Börzel (2006) 28. 28 Ibid, 29. 29 Rosamond B, ‘The uniting of Europe and the foundation of EU studies: revisiting the neofunctionalism of Ernst B Haas’ in Börzel (2006) 31.

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This book may appear prima facie a promoter of Neofunctionalism, although major differences remain. In the post-modern EU, European integration does not appear to be a linear process as elements of disintegration remain, present in particular in certain instances of exclusion and/or of differentiated integration in the EU, some of which will be studied in this book. As such, it is proposed to limit the idea of spillover specifically to the Internal Market as a (pluri-)policy instrument and subject of regulation to trigger full integration. To that intent, this book proposes an explanatory framework for the exercise of supranational powers at the transnational level as opposed to focusing merely on their origins at the intergovernmental or national level. It provides an applied analysis of the causal mechanisms of the dynamics of the process of European integration as opposed to theorising on the EU through a ‘selection on the dependent variable’ necessarily supporting functionalist views.30 By offering to promote its original goals of peace and security through economic welfare, the supranational perspective of European integration can provide a new framework to the situation in Cyprus allegedly deadlocked at the national, regional (involving Turkey) and international level (Cyprus is subject to UN security control).31 Talking about the economic rationale underlying the ‘catalyst’ effect of Cyprus’ EU membership, Diez has expressed doubts as to whether economic rationality can ever “pre-empt political or societal security concerns”.32 This book will not argue in favour of the ‘pre-emption’ of political and security concerns as these lie at the very foundation of the project of European integration. It will however promote a different relationship between law, politics and policy at the transnational level in an attempt to demonstrate that market integration is interconnected with societal

30 Moravcsik A, ‘The European constitutional compromise and the neofunctioanlist legacy’ in Börzel (2006) 147. 31 Cyprus’ accession would “increase security and prosperity” and help “bring the two communities together”. Cyprus’ integration with the Community “implies a peaceful, balanced and lasting settlement of the Cyprus question”, Commission’s Opinion of Cyprus’ EU membership COM(93) 313 final, 30.6.1993, 23–4. EC/EU membership has proved successful as a “subliminal backup stabiliser for newly democratic constitutions” in the case of Germany in the 1950s, of Greece, Portugal and Spain in the 1980s and of the CEECs with the latest enlargement, see Giegerich T, ‘The EU accession of Cyprus and the fate of the Annan Plan – concluding remarks’ in Giegerich, 258. 32 Diez T, ‘Last exit to paradise? The EU, the Cyprus conflict and the problematic ‘catalytic effect’’ in Diez, 149.

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integration and that as such, it can open the way for political integration in the EU.33 It is usually accepted that traditional legal theory alone cannot adequately grasp the concept of European integration either and that the European context implies a ‘reconceptualisation’ of the meaning of law towards a multidisciplinary approach of European integration (law appears as driven “as much by context as by content” in the EU).34 In the context of the enlargement to the CEECs, it has been noted that “in rapidly developing historical periods, the shaping of legal frameworks requires, in addition to the usual care, a prudent combination of stability and flexibility; besides some binding commitments there must be unilateral leeway”.35 This ‘general ambivalence of legal rules’ is reflected in the different steps of the enlargement process from association to accession, which also includes inter alia unilateral processes, acts or declarations, non-binding commitments, political instruments or instruments of ‘soft law’ made or taken both on the side of the EU and/ or of the candidate countries.36 Thus, in the post-ontological debate, new modes of governance37 have been created including with reference to the enlargement process.38 The role of law in the enlargement process can be said to be central but not self-sufficient. Müller-Graff writes that “law is only one element in the relations between the [EU], East Central Europe and the rest of Europe, but it is by no means an unimportant one. On the contrary, it is precisely the law which is expected to provide a permanent, peaceful and stable basis for the relations between States, peoples and individuals,

33 Socio-legal studies arguably offer an interesting method of analysis of issues relating to Cyprus in the EU, by providing consistency between law, politics and policy (Cyprus must now abide by a set of rules and norms that has long predated its accession) and a key towards understanding the European integration of a small State characterised by an unsolved ethnical conflict. 34 See e.g. Shaw J, ‘EU legal studies in crisis? Towards a new dynamic’ (1996) 16 OJLS 231, 238. 35 Müller-Graff P-C, ‘Legal framework for EU-CEEC relations’ in Maresceau M, Enlarging the EU (Longman, London, 1997) (‘Maresceau (1997)’) 29. 36 For a detailed analysis of the legal framework of the enlargement to the CEECs, see Müller-Graff in Maresceau (1997); see also Maresceau in Maresceau (1997) 15–22 for the transition from the ‘association dimension’ to the pre-accession framework; and Inglis K, ‘The Europe Agreements compared in the light of their pre-accession reorientation’ (2000) 37 CMLRev 1173 (‘Inglis (2000)’). 37 See e.g. Joerges C, ‘Integration through de-legalisation’ (2008) 33(3) ELRev 291. 38 Maresceau speaks about the ‘political reorientation’ of the EAs towards preaccession agreements following Copenhagen, in Maresceau (1997) 11.

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just as it does within the [EU] itself ”.39 With reference to the Europe Agreements, he notes that there were “originally devised by the Community as an alternative to a membership” and that they have been “changed and instrumentalised politically into a pre-basis for a possible future membership. Accession has in fact become a common political objective, even though the Agreements remain unchanged in their legal substance”.40 Referring to the different ‘modes of adjustment’ of a candidate state ‘to the status and the dynamics of integration’, Müller-Graff identifies three main modes, the strongest one being full membership, the second being “the association of non-member states within a member-like relations, and the third being various sorts of partial integration”.41 He adds that “[a]djustment of membership candidates … can basically be achieved in two ways: first, in the form of a preliminary adjustment, including various types of organisational, intermediate steps leading to full membership, and second, as a subsequent adjustment, coming into force after accession to the Union”.42 With respect to the Europe Agreements, Müller-Graff considers that “in the light of their political redefinition”, they form “a model of transition to complete integration” through preliminary adjustments.43 This hypothesis is largely verified following the 2004 enlargement, even though it can be said that there exist subsequent adjustments following accession, which are however largely connected to the continuation of the conditionality policy post accession. This alleged model of integration has been deemed “appropriate for promoting the aim of accession”, given the ‘considerable density of integration’ in that case.44 With respect to Cyprus, it is argued in this book that its association with the EC/EU also promotes a certain mode of transition to complete integration, not only through preliminary adjustments but also through subsequent adjustments, even if the ‘density of integration’ was initially less important than in the case of the Europe Agreements. Even though the socio-legal objectives of Cyprus’ accession to the EU can be said to

39

In Maresceau (1997) 28–9. Müller-Graff (ed), East Central Europe and the EU: from Europe Agreements to a member status (Nomos Verlagsgesellschaft, Baden-Baden, 1997) (‘Müller-Graff (1997)’) 17–8. 41 Ibid, 39. 42 Ibid. 43 Ibid. 44 Ibid. 40

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differ from the ones of the CEECs, many of the preliminary adjustments and, indeed, of the subsequent ones, can be said to address similar challenges common to all the candidate countries, even if these challenges take different forms. The most important difference as suggested in this book resides however in the fact that the mode of transition towards integration applicable to Cyprus may not lead to a completed process of integration within the meaning of the terminology used by Müller-Graff in the case of the CEECs,45 despite arguably tending towards ‘full’ integration (to be demonstrated in this book), in which case the mode of transition applicable to Cyprus could become a model of transition of a new type. It is argued that the integration of Cyprus into the EU provides a particular mode of Europeanisation and of governance of a small State in its quest towards full integration into the EU.46 The main research problem is to identify and discuss the various dimensions of the process of European integration of Cyprus, to ascertain its specificities and whether it has developed into a valid mode or model of European integration. The socio-legal approach is believed to be best suited to this exercise since the process of integration of Cyprus is highly dependent on specific socio-political interactions placing a unique burden on the mode/model of European integration of Cyprus.47 It is proposed to address the above research problem in three parts. Part One will set out the approach to European integration suitable to this book and will identify the elements leading to the integration of Cyprus into the EU. Chapter 1 will present the various elements of the Europeanisation of Cyprus within the framework of its association with the EEC. Chapter 2 will develop further the notion of Europeanisation applied to candidate counties, including Cyprus, with an

45

Müller-Graff refers to it as ‘full membership’, in Müller-Graff (1997) 39. For literature on small States in the EU, see e.g. Keohane R, ‘Lilliputians dilemmas: small States in international politics’ (1969) 23(2) International Organisation 291; see also Thorhallsson B, The role of small States in the EU (Ashgate, Aldershot, 2000); Archer C & Nugent N, ‘Introduction: does the size of Member States matter in the EU?’ (2006) 28(1) Journal of European Integration 3 and Thorhallsson B, ‘The size of States in the EU: theoretical and conceptual perspectives’ (2006) 28(1) Journal of European Integration 7.With respect more specifically to Cyprus as a small State, see Featherstone K, ‘Cyprus and the onset of Europeanisation: strategic use, structural transformation and institutional adaptation’ (2000) 5(2) South European Society and Politics 141. 47 The relevance of socio-legal studies to this book lies in the finding that law is a dynamic concept which includes certain social conventions beyond the legal sphere stricto sensu, which altogether form the basis of policy-making. 46

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emphasis on the EU external dimension, as the process of European integration deepens and widens through accession. Part Two will examine the finalisation and the institutionalisation of the Europeanisation of Cyprus into a specific process of integration encompassing several strategies. Chapter 3 will set out the specificities of the governance of the 2004 enlargement including Cyprus and examine its institutionalisation into the 2003 Treaty of Accession. Chapter 4 will look more specifically at one of the components of the specific process of integration for Cyprus, namely Protocol 3 annexed to the 2003 Act of Accession, as a strategy of ‘re-institutionalisation’ of the principle of territorial exclusion in Cyprus (such a principle was set out and embodied in the EC Treaty when the UK joined the EEC) and will identify to what extent this strategy participates to the integration of Cyprus. Chapter 5 will examine the remaining component of the specific process of integration for Cyprus in the context of the 2004 enlargement, namely Protocol 10 annexed to the 2003 Act of Accession, setting out the regulatory regime for the areas of the RoC affected by the de facto division of the island. This Chapter will assess whether and to what extent this component constitutes the main strategy in the specific process of integration for Cyprus, allegedly containing crucial ‘recipes’ for the full integration of Cyprus into the Union. Protocol 10 can be said to contain two alternative strategies which will be studied in Part Three with an emphasis on the elements promoting or hindering the integration of Cyprus (elements of (dis)integration). Chapter 6 will present the strategy deriving from Protocol 10 in the event of the reunification of the island prior to or upon accession and will consider whether the proposed strategy could have led to full integration or on the contrary to disintegration. Chapter 7, on the other hand, will examine the strategy deriving from Protocol 10 currently in force due to the ongoing de facto division of the island, allegedly setting out a regulatory regime of market integration of a divided Cyprus and to what extent this regime contains elements of (dis)integration. Finally, the Conclusion will consider the meaning and the implications of full integration for Cyprus as a member of the Union and whether and to what extent this leads to a particular mode/model of European integration.

PART ONE

ELEMENTS OF INTEGRATION OF CYPRUS INTO THE EU

INTRODUCTION TO PART ONE

The objective of this Part is to examine the foundations of the European integration of Cyprus through its Europeanisation. Very few studies have looked at the EU membership of Cyprus as a process within the wider context of European integration, envisaging the Cyprus problem as a component of such a process rather than as an outcome in itself.48 Even EU enlargement literature49 is seldom concerned with Cyprus more specifically.50 The ongoing Europeanisation of the island nevertheless points to a particular process of European integration,51 guided

48

See Vassiliou G, Cyprus-EU. From the first steps to accession (in Greek) (Kastaniotis, Athens, 2004) (‘Vassiliou (2004)’); Pieridis K, Europe in metamorphosis (in Greek) (AA Libani, Athens, 2001); Drevet J-F, Chypre en Europe (L’Harmattan, Paris, 2000); Vassiliou G, ‘EU Enlargement: implications for Europe, Cyprus and the Eastern Mediterranean’ (2002) 13 Mediterranean Quarterly 12 and ‘Towards a larger, yet more effective EU’ in Meritt G (ed), Should the EU be redesigned? (Philip Morris Institute, London, 1999); Schimmelfennig F et al, ‘Costs, Commitment and compliance: the impact of EU democratic conditionality on Latvia, Slovakia and Turkey’ (2003) 41(3) JCMS 495; Oguzlu T, ‘The EU membership of a loosely centralised “federal” Cyprus: a strategy of cooperation and conflict-mitigation’ (2002) The Turkish Yearbook of International Relations, no 33, 209; and also Richmond O, ‘A perilous catalyst? EU accession and the Cyprus problem’ (2001) 13(2) The Cyprus Review 123. 49 For an analysis of the literature review on the EU-Cyprus relations, see Laulhé Shaelou S, ‘Recent strategies towards the membership of Cyprus to the EU: a case study on trade’ (2005) 17(2) The Cyprus Review 103 (‘Laulhé Shaelou (2005)’); see also Nugent N, ‘A new look at the Cyprus problem’ (2003) 5 International Studies Review 245 and Demetriou O, EU and the Cyprus conflict (Working Papers Series in EU Border Conflicts Studies, No 5, Brussels, 2004). 50 For some exceptions, see Redmond J, The next enlargement of the European Community. Turkey, Cyprus and Malta? (Dartmouth, London, 1993); Maresceau M & Lannon E, The EU’s enlargement and Mediterranean strategies (Palgrave, Basingstoke, 2001) (‘Maresceau & Lannon’); Pace R, EU’s Mediterranean enlargement: Cyprus and Malta (Frank Cass, London, 2004). Additionally, some literature on the EU-Turkey relations covers to some extent the EU enlargement to Cyprus. For a detailed account of the EU-Turkey relations in light inter alia of Cyprus’ accession to the EU, see Joseph in Joseph (2006) 1–15; see also e.g. Suvarierol S, ‘The Cyprus obstacle on Turkey’s road to membership in the EU’ in Çarkoğlu A & Rubin B (eds), Turkey and the EU (Frank Cass, New York, 2003); and Brewin C & Bulent G (eds), ‘A changing Turkey: Europe’s dilemma’ (2003) 5(2) J of Southern Europe & the Balkans 133 (special issue). 51 Certain implications of the integration process have been considered in scholarly works of an empirical nature, including on the impact of the transposition of EU laws into certain areas of national policy; see Stefanou C (ed), Cyprus and the EU. The road to

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by issues arising out of an unsolved conflict within the EU, where economic governance through the rules of the Internal Market plays a central role.52 Theories on EU integration may be too focused on “vertical integration between EU and national level, the design effects of formal rules and the nature of national structures and processes”.53 But it may be so because traditional theories of European integration merely represent a ‘special case’ of integration based on ‘imposed convergence’. They seem less appropriate for areas of EU policy where there is a greater degree of national discretion, such as regulatory competition or negative integration.54 In the context of the Internal Market in particular, the strategic position of domestic actors is altered by liberalisation55 and by de-regulation, to the effect that regulatory competition and/or negative integration require a different theoretical and methodological framework. Adopting a more constructivist approach, it appears that integration can occur through any transnational process of ‘penetration’ or of Europeanisation to be illustrated in this book. Thus, Europeanisation raises some interesting challenges, as to whether in particular it creates new forms of governance or at least new opportunities for European governance.56 It also raises methodological accession (Ashgate, Aldershot, 2005) (‘Stefanou’); Nicolaides P, ‘Preparing for membership or the paradox of going beyond EU requirements’ (2003) 11(1) Hellenic Studies 111; Kranidiotis I et al, Cyprus-EC: development and prospect of the relations of Cyprus with the EC (Laiki Bank, Nicosia, 1994) (in Greek); Nicolaides P, ‘Cyprus and the EC: looking beyond 1992’ (1990) 1(1) The Cyprus Review 44. 52 For a detailed review of the theoretical framework of Europeanisation relevant to this book, see Laulhé Shaelou S, ‘The Europeanisation of Cyprus: European integration through economic governance’ (Paper No 2007/03, 1st Cyprus Spring School on the EU: Understanding, Interpreting and Evaluating the EU in 2007, chief editor: Stelios Stavridis, available at . 53 Vink & Graziano, ‘Challenges of a new research agenda’ in Graziano & Vink, 13. 54 Bulmer S, ‘Theorising Europeanisation’ in Graziano & Vink, 53. 55 Ibid. 56 With respect to Cyprus, the nature as well as the causality and/or any causal implications of the EU variable are usually – if at all – analysed in the literature as a unidirectional process, mainly from an international relations, political sciences or international law perspective, where the EU has traditionally been seen as a dependent variable; see e.g. Attalides M, Cyprus, nationalism and international politics (Q Press, UK, 1979) and Cyprus, nationalism and international politics (Peleus collection, Bibliopolis, Möhnesse, 2003); Special issue, ‘Cyprus, the EU and the referunda on the Annan Plan’ (2004) 16(2) The Cyprus Review, including T/C views by Bahcheli, ‘Saying Yes to EU accession: explaining the T/C referundum outcome’, 55; Anastasiou H, Nationalism and the Cyprus problem: an inquiry in conflict analysis and resolution (thesis, 2002). In some other scholar works, the theoretical focus of the integration of Cyprus

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issues pertaining to the demonstration that the ‘penetration’ at the national level is correlated or caused by Europeanisation and not by other variables; in other words, the establishment of the causality of Europeanisation.57 If it seems accurate that “Europeanisation does not require the formulation of EU policies”, processes of socialisation are not a ‘sufficient condition’ for Europeanisation since there may be ‘considerable socialisation’ without domestic ‘policy change’ and Europeanisation only occurs when socialisation is followed by domestic change.58 In the case of Cyprus, it could be argued that such domestic changes had not occurred despite socialisation and that the explicit formulation of the EU variable through the enlargement process offered a welcome alternative to the existing status quo. The Europeanisation of Cyprus may have appeared prima facie to be the product of rational behaviour as a response to EU ‘pressure’ and to ‘usage’ of Europe ex ante in order to integrate.59 But as the process of integration deepens, it is argued that the elements of Europeanisation of Cyprus examined in Chapter 1 in the context of the EEC-Cyprus association and in Chapter 2 in the context of EU accession may point to a more constructivist process of integration through the internalisation of European learning processes conveyed by economic governance in particular.

into the EU is not clearly set out; see Richmond O & Ker-Lindsay J (eds), The work of the UN in Cyprus (Palgrave, New York, 2001); Blanc P, La déchirure chypriote (L’Harmattan, Paris, 2001); Chrysostomides K, The Republic of Cyprus. A study in International Law (Martinus Nijhoff Publishers, Leiden, 2000) (‘Chrysostomides (2000)’); Joseph J, Cyprus ethnic conflict and international politics (McMillan Press Ltd, New York, 1997); and Necatigil Z, The Cyprus question & the Turkish position in int’l law (2nd ed, OUP, London, 1996). 57 See Haverland M, ‘Does the EU cause domestic developments? The problem of case selection in Europeanisation research’ (2005) 9(2) European Integration online Papers . It should be examined whether a regime required at the EU level and adopted in a Member State would have been introduced in that Member State anyway, albeit with some variations, in the absence of the EU requirement (the introduction of a regime required at the subnational level is normally shaped by an EU policy which determines the precise timing, speed and sequence). Europeanisation must normally precede the domestic change in order to produce it. 58 Radaelli, 10. 59 Ibid.

CHAPTER ONE

ASPECTS OF EUROPEANISATION OF THE EECCYPRUS ASSOCIATION: THE ECONOMIC DIMENSION

Europeanisation appears particularly well suited to address the relationship between the EU and each new Member State, the latter constituting a unit potentially subject to a different path of Europeanisation. Beyond association clearly driven by the logics of economic integration,60 the pre-accession strategy is initiated with an exercise of assimilation of EU norms and principles embodied in the accession acquis,61 where the rules of the Internal Market play a central role.62 The 1995 Commission’s White Paper on the preparation of the CEECs for integration into the Internal Market presented the legal integration of the acquis relating to the Internal Market as a ‘fundamental objective for a successful accession policy’.63 Müller-Graff recalls that the “alignment with the Internal Market must be distinguished from accession to the Union, which will involve acceptance of the acquis [] as a whole, even if it is obvious that Internal Market legislation constitutes the very core of the substantial law of this acquis”.64 As a result, Europeanisation is based on a largely market-driven assessment of the settings of each

60 See generally Maresceau M, ‘On association, partnership, pre-accession and accession’ in Maresceau (1997); see also Maresceau M, ‘Pre-accession’ in Cremona (2003). 61 The accession acquis following Copenhagen is a “whole body of rules, political principles and judicial decisions which new Member States must adhere to, in their entirety and from the beginning, when they become members of the Communities”, see Gialdino C, ‘Some reflections on the acquis communautaire’ (1995) 32 CMLRev 1089 (‘Gialdino’) 1090; see below for a discussion of the delimitations of the acquis relevant to this book. 62 The pre-accession strategy was officially launched at the 1994 Essen Europan Council in a Council paper annexed to its Conclusions. One of the priorities of the pre-accession strategy was the integration of the associated countries into the Internal Market including not only trade-related objectives but also institutional ones through legislative adaptations. There were also other priorities since it is at the Essen European Council that a new political condition of ‘bon voisinage’ was introduced, thereby combining the widening and the deepening of the EU. For a review of the pre-accession initiatives with respect in particular to the CEECs, see Maresceau in Cremona (2003) 18–24; see also Inglis (2000) 1178–83. 63 COM (95) 163 final. 64 Müller-Graff in Maresceau (1997) 38; see also Maresceau in Cremona (2003) 21.

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process and can trigger both vertical and horizontal forms of regulatory governance.65 The ECJ is traditionally seen as a main actor in negative integration, as it possesses the necessary legitimacy to create a link between the EU regime, which it interprets in the absence of an EU model, and the actors concerned at the transnational level. It is argued that within the context of Europeanisation, the Court is a privileged forum to explore the relationship between norms, politics and policies of the centre (supranational) and of the periphery (domestic), to consider their mutual implications and to suggest ways to combine these multi-levels of governance to lead to Europeanisation. In the case of Cyprus, it is submitted that the Court has proposed a mode or regulatory governance for trade in Cyprus, from which the principles of Europeanisation and of integration of Cyprus could be drawn using negative mechanisms of market integration.66 In the socio-legal context of the integration of Cyprus into the EU, it was previously said that it was important to take into consideration the wider regulatory framework surrounding its integration. Within this socio-legal environment, it is argued that the acquis communautaire deriving from the Court’s jurisprudence is a dynamic source of governance which should normally ‘crystallise’ during the process of institutionalisation of the principles of European integration. At this point, a few preliminary remarks on the delimitations of the acquis of relevance to this book are necessary. The acquis communautaire can be adequately described in socio-legal terms as the “shared political and legal properties of the EU”.67 But the concept of acquis communautaire has never been defined in legal texts, although the Maastricht Treaty places it ‘at the very core of the Union’s primary law’.68 It was described more precisely within the context of

65 The EU does not intervene in the economy ‘through ownership’; ‘traditional avenues of State intervention’ in the market are ‘closed off ’ and the EU primarily determines “the framework within which the market operates”, see Bulmer S,‘The governance of the EU: a new institutionalist approach’ (1994) 13 JPP 351 (‘Bulmer’) 376. 66 For the role of the ECJ in the socio-legal analysis of the Europeanisation of Cyprus, see Laulhé Shaelou S, ‘The European Court of Justice and the Anastasiou saga: principles of Europeanisation through economic governance’ (2007) 18(3) EBLR 619 (‘Laulhé Shaelou (2007)’). 67 Shaw J & Wiener A, ‘The paradox of the “European Polity”’in Green Cowles M & Smith M (eds), The State of the EU: risk, reform, resistance, and revival (vol 5, OUP, Oxford, 2000) (‘Green Cowles & Smith’) 64. 68 See Art 2(1) EU, 5th indent; Art 3(1) and Art 43(1)(e) EU.

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enlargement, in particular following the amendment of Article 49 EU by the Amsterdam Treaty, to the effect that a reference to the ‘political’ condition for accession is now included in this Article.69 Following the formulation of the Copenhagen criteria, there is also a direct reference to the “acceptance of the rights and obligations, actual and potential, of the Community system and its institutional framework as described by the Commission in its preparations for the last enlargement”.70 The concept was then further detailed in explanatory texts related to the enlargement process including in the various Commission’s Opinions on application to accede to the Community. Membership basically “presupposes full acceptance of the contents, principles and political objectives of the EU and the various Community Treaties, the Community legislation based on these Treaties, the case law of the Court of Justice (and [CFI]) as well as the resolutions and declarations adopted in the framework of these Treaties. Furthermore, agreements concluded with third States and agreements between Member States within the framework of the Community’s activities belong to the acquis communautaire”.71 As shown in the context of enlargement, the ‘systematic use’ of the terminology acquis communautaire ‘in the singular’ and ‘without further qualification’ could be misleading.72 Maresceau notes that “[t]he expression ‘acquis communautaire’ in the EU enlargement terminology is not always used in a strict legal way since it often implies also Second and Third Pillar acquis. From a strict legal point of view it is better therefore to use the expression ‘EU acquis’”.73 When considering the accession acquis or the EU acquis,74 there is no express mention of the judicial acquis. Referring to the ‘political’ part of the acquis, Gialdino argues that a specific reference to the case law would have been inappropriate, since it would effectively ‘freeze’ the case law, and legally incorrect, as the outcome of such a reference

69 Delcourt C, ‘The acquis communautaire: has the concept had its day?’ (2001) 38 CMLRev 829 (‘Delcourt’) 831. 70 See ‘Europe and the challenge of enlargement’, Bull EC, Supp 3/92, 12. 71 Maresceau (1997) 14–5; see also Maurer L, ‘Negotiations in progress’ in Ott A & Inglis K, Handbook on European Enlargement (TMC Asser Press, The Hague, 2002) (‘Ott & Inglis (2002)’) 116. 72 Delcourt, 835. 73 Maresceau in Cremona (2003) 11, fn 7. 74 Gialdino has distinguished two parts in the accession acquis, mainly the ‘normative part’, which “goes beyond the concept of Community law stricto sensu” not really negotiable, and a more genuine and open ‘political part’ comprised both of the Community acquis (Community pillar) and of the Union acquis (EU), in Gialdino, 1092–3.

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would mean that current Member States would be merely legally bound by the case law whereas judicial decisions would acquire a ‘normative character’ for applicant Member States. In any case, acceptance of the principles underlying the Community legal order, including its fundamental nature derived from the Court’s jurisprudence, flows ‘automatically’ from EU membership.75 As a result, case law which ‘structurally’, ‘materially’ or ‘substantially’ derives from the Court acting as a ‘catalyst’ of the European construction or as a ‘guarantor’ of the respect of the acquis, belongs to the wider political part of the acquis.76 Thus, the fundamental acquis dealing with the ‘internal constitution of the Community’ encompasses institutional ‘quadripartism’, incorporating a ‘judicial pole’,77 to the extent that the Court also participates to the creation of institutional norms embodied in the acquis. In the context of a socio-legal environment, Wiener proposes the concept of ‘embedded acquis communautaire’ which acts as a ‘guiding set of rules’ of European governance applicable to the accession of new members but also to the “continuously changing institutional terms which result from the constructive process of [integration]”.78 She conceptualises this link by distinguishing between ‘formal’ and ‘informal’ resources, both of which “construct the acquis” and as such “contribute to the substance of governance”79 even if it should be recalled that no comparison can be drawn in legal or political terms between the two.80 This implies that “the conditions of the meaning of the acquis are not fixed, but flexible, being dependent on constitutive practices”,81 which must be analysed, as evidenced in this book. In the context of the European integration of Cyprus, it is argued that in addition to the accession acquis, the wider ‘political agreement’ 75

Gialdino, 1098. Ibid, 1099. 77 Delcourt, 844. 78 Wiener A, ‘The embedded acquis communautaire: transmission belt and prism of new governance’ (1998) 4(3) ELJ 294 (‘Wiener (1998)’) 299. 79 Ibid, 299–300. 80 Only legal acts strictly speaking can be challenged on the basis of Art 226 EC. Political instruments such as Council conclusions which contain direct rules can also amount to legal acts since they produce legal effects in relation to third parties; see Case C-354/04 P, Gestoras Pro Amnistia, Olano and Errasti v Council [2007] ECR I-1579. 81 See Wiener (1998) 301. In her view, the ‘embedded’ structure of the acquis derives from informal resources such as ‘share values, ideas and world views’ as well as from the ‘routinisation of practices’ leading to agreed policy objectives. These processes subsequently determine the acquis’s formal resources, ibid. 76

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on Cyprus,82 mainly within the context of EU enlargement, should be considered.83 Part of the normative acquis of the EU, whether formal in the case of Court’s rulings delimiting the internal constitution of the Community, or more informal in the case of soft instruments of EU law84 or of social practices reflected – and thus ‘routinised’ – in the EC-Cyprus trade relations, is also deemed to be relevant in the case of Cyprus.85 It is argued that they form the foundations of the Europeanisation of Cyprus developing with the association of Cyprus to the EEC and deepening with its accession to the EU. It is proposed in this Chapter to identify the various elements of the Europeanisation of Cyprus in its association with the EEC. This will be achieved by examining the (‘embedded’) acquis communautaire on Cyprus as a source of governance leading to Europeanisation, which should hopefully crystallise in the process of institutionalisation of norms underlying the European integration of Cyprus to be studied in the next Part of this book. I. EEC-Cyprus relations: the principles of a gradual approach A. Legal framework of the association 1. Legal basis of the association Looking first at the initial association agreement between the EEC and Cyprus, the 1972 Association Agreement,86 the position of the EEC 82 Bulmer describes ‘political agreements’ as “trans-sectoral in nature and set out, in a manner analogous to soft law, as clarification of political conventions”, in Bulmer, 368. 83 For a review of the pre-accession strategies including political agreements within the framework of the 2004 enlargement, see e.g. Maresceau M, ‘The EU pre-accession strategies: a political and legal analysis’ in Maresceau & Lannon; see also Inglis (2000). 84 Including the various Council declarations and resolutions concerning inter alia Pillar 2 as per Art 5(3) 2003 Act of Accession, which provides that “[t]he new Member States are in the same situation as the present Member States in respect of declarations or resolutions of, or other positions taken up by, the European Council or the Council and in respect of those concerning the Community or the Union adopted by common agreement of the Member States; they will accordingly observe the principles and guidelines deriving from those declarations, resolutions or other positions and will take such measures as may be necessary to ensure their implementation”. 85 Laulhé Shaelou (2007) 623. 86 Signed on 19 December 1972 and annexed to Council Regulation 1246/73/EEC of 14 May 1973 [1973] OJ L 133/1, 21.5.1973.

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towards Cyprus clearly indicates that it comprises only economic objectives.87 The fact that this Agreement was concluded on the basis of Article 238 EC (association with a third country), and not on the basis of Article 113 EC (conclusion of tariff and trade agreements), has been said to evidence the modest approach taken by the EEC, which may not necessarily lead to membership, unlike the association agreements with Greece and Turkey.88 The association with Cyprus concerns mainly the elimination of trade obstacles through the gradual process of liberalisation of trade. Unlike the Europe Agreements (‘EAs’) also concluded under Article 238 EC, it does not extend to other areas such as the free movement of persons,89 competition or approximation of laws. EAs have been described as association agreements of the ‘new generation’ acting as ‘role model’ for the stabilisation and association agreements (‘SAAs’) signed or under preparation with the Western Balkans.90 EAs arguably provided an alternative to membership of the Communities at least at their creation.91 They aimed at an association “in the sense of the (asymmetrically evolving) establishing of an extended 92 free trade area for industrial goods between the Communities and the respective

87 For a detailed review of all the association agreements within the framework of the 2004 enlargement as well as other bilateral agreements with European countries, see Maresceau M, Bilateral agreements concluded by the EC (Recueil des cours de l’Académie de droit international, vol 309 (2004), Martinus Nijhoff Publishers, Leiden, 2006) (‘Maresceau (2006)’). 88 See e.g. Lycourgos C, L’association avec union douanière: un mode de relations entre la CEE et des Etats tiers (Puf, Paris, 1995) (‘Lycourgos’). 89 EAs do not establish free movement of persons either but merely contain provisions on the non-discrimination of workers from the CEECs legally employed in the Member States, see Maresceau (2006) 351–2. 90 Ott A, ‘Different forms of EC Agreements’ in Ott & Inglis (2002) 207. Croatia and the FYR of Macedonia are now candidate countries; Montenegro submitted its application for membership in 2009 and the Commission has been mandated to prepare an opinion; the SAA with Bosnia and Herzegovina was signed by the EU on 16 June 2008; the SAA with Albania was approved by the Council on 26 February 2009 and entered into force on 1 April 2009; Albania officially applied to join the EU on 18 April 2009. For more information on current Accession Partnerships and SAAs, see http://ec .europa.eu/enlargement/index_en.htm, last accessed on 9.05.09; see also Council Decision 2008/213/EC of 18 February 2008 on the principles, priorities and conditions contained in the European Partnership with Serbia including Kosovo as defined by UNSCR 1244 of 10 June 1999; and Council Conclusions on the Western Balkans with special reference to Bosnia and Herzegovina, 16.03.2009. 91 Müller-Graff in Maresceau (1997) 34; see also Müller-Graff (1997) 15–8 and Maresceau (2006) 347. 92 Emphasis added.

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State”.93 They also aimed at the provision of an ‘appropriate framework for the political dialogue’ and ‘close political relations’ between the Member States and the respective country.94 They even contained a reinforced human rights clause for these agreements signed after the end of the ‘first round’ of Europe Agreements.95 Nevertheless, they did not contain any clear reference to future accession either,96 unlike or perhaps as a result of the agreement with Turkey, which provided for accession;97 neither did they establish any customs union, again unlike the agreement with Turkey (see below). In the case of Cyprus, the political dimension as expressed in the text of the Association Agreement is very limited.98 Neither can it be derived from the various political instruments or from the intention of the parties that the ultimate goal of the Association Agreement is accession.99 At best, adopting a teleological interpretation of the Association Agreement in accordance with Articles 31(1) and 32 of the Vienna Convention, it can be said that a customs union was the ultimate objective of the Agreement.100 In any case, unlike the case of Greece and Turkey where it can be said that “a sort of legal obligation is created for

93 Müller-Graff in Maresceau (1997) 33; see also Inglis (2000) 1194–8 and MüllerGraff (1997) 24–30. 94 Müller-Graff in Maresceau (1997) 33; see also Maresceau (2006) 351. 95 EAs of the ‘first round’ were signed in 1991 with Hungary, Poland and the Czech and Slovak Federal Republic; EAs with the other countries including the Czech Republic and Slovakia were subsequently signed between 1993 and 1996, see Maresceau (2006) 343–54. 96 There was a reference to membership in the preamble of the EAs but ‘without any political or legal commitment by the EC to enlarge’. Even after Copenhagen, there was no mention of any ‘common’ objective of the associated countries and the EU, neither of accession but rather of ‘gradual integration’ into the EC/EU, to the effect that legally speaking, EAs are not pre-accession agreements. Since however the decision to enlarge to the CEECs had been taken ‘at the highest political level of the EU’, the ‘substantive’ provisions of the EAs became instrumental and the EAs “assumed the role of transitional bilateral instruments which aimed at preparing for membership”, see Maresceau (2006) 353–6; see also Maresceau in Cremona (2003) 15–6. 97 See Maresceau (2006) 352. The Ankara Agreement has led to substantial case law as far as the provisions of the association agreement on individuals were concerned. See Ott & Inglis (2002), Part III, Chapter 5.3 by Rogers N. 98 See Maresceau (2006) 340. 99 Contra Lycourgos who writes: « en optant pour l’association, Chypre voulait donc … confirmer son appartenance à l’Europe et donc sa vocation à devenir un jour membre de la Communauté », 35–36. In any case, this alleged political objective would remain a unilateral initiative on the part of Cyprus at that point in time. 100 The possibility of a customs union in the Association Agreement was only mentioned in the joint declaration by the contracting parties concerning Art 2 of the Agreement and in the preamble of the Agreement.

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the organs of the EU to examine, in a positive light, the applications for membership of such associated States”,101 there appears to be no such obligation deriving from the conclusion of a customs union, as the goal of accession and the objectives of a customs union are different in nature.102 Notwithstanding the above, the lack of any political objective of accession in the Association Agreement with Cyprus did not prevent the Commission from issuing a positive Opinion for membership in 1993, despite the de facto division of the island and its implications for the EC-Cyprus customs union as set out by the Court of Justice in the Anastasiou saga (see below).103 2. Legal nature of the association Unlike the Europe Agreements, which are mixed agreements104 as they contain provisions on political cooperation falling under Member States’ competence,105 the Association Agreement with Cyprus has been said to be ‘atypical’ since it only covers trade and is not a mixed agreement. The mutually binding nature of association agreements in the Community legal order as a ‘bilateral free trade association agreement’ is quite clear from the Court’s case law.106 As such, it should produce the same effect as EC law in the national legal order upon its entry into force internationally and internally.107

101 See Chrysostomides (2000) 451; see also Emiliou N, ‘Cyprus’ in Ott & Inglis (2002) 239. 102 For a discussion of Association Agreements accompanied by a customs union, see Lycourgos. 103 See Maresceau (2006) 340. 104 Mixed agreements are mentioned in Art 133(6) Treaty of Nice. See e.g. Neuwahl N, ‘Shared powers or combined competence’ (1996) CMLRev 667. 105 See Maresceau (1997) 31. The part of the EAs covered by the Communities’ exclusive competences was put into force earlier and pending the ratification process by so-called ‘Interim Agreements’, see Müller-Graff (1997) 15–6. 106 Case 181/73, Haegeman [1974] ECR 449; for the status of the association agreement in the EU legal order, see Tchakaloff M-F, (dir) Le concept d’association dans les accords passés par la Communauté: essai de clarification (Bruylant, Brussels, 1999) 250–5. See also Case C-53/96, Hermes [1998] ECR I-3603, where the ECJ extended its jurisdiction to parts of a mixed agreement falling under the competence of Member States “because the agreements have been concluded by the Community and the Member States without any allocation of their respective obligations towards the other contracting parties between them”, see Weiss W, ‘EC Agreements in the Member States’ in Ott & Inglis (2002) 203. 107 Under Art 300(7) EC, international agreements of the EC have a binding effect on Member States, which may resemble the binding effect of directives to the extent that they need to be implemented into national law. Like directives, international

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The EC-Cyprus Association Agreement was approved by the Council of Ministers of the RoC in accordance with Article 169(1) of the Cypriot Constitution; there was an exchange of ratification instruments between the parties (international ratification), but without prior parliamentary ratification.108 The reading a contrario of Article 169(3) of the Cypriot Constitution means that the Association Agreement cannot prevail over the Constitution,109 which remains the supreme law of the land (Article 179(1) ). The Association Agreement retains its nature as ‘part of international law’ in the national legal order and as such does not ‘technically’ repeal prior municipal law although it takes precedence in case of conflict.110 As an international treaty inferior to the Constitution, it is subject to judicial review by the constitutional court.111 The Association Agreement nevertheless provides for directly applicable provisions such as trade-related guarantees (Articles 4–6),112 which should be self-executing in the Cypriot legal order.113 Regarding the implications of the binding effect of the Association Agreement on the Community and/or its Member States,114 the ECJ has emphasised that an association agreement creates “special, privileged links with a non-member country which must, at least to a certain extent, take part in the Community system”115 but that “reciprocal rights and obligations do not mean equality of contractual obligations”.116 As a result of the Association Agreement, the relationship between the EC and Cyprus is clearly set out and rests on good cooperation, in particular at the institutional level represented by the Association

agreements may also become directly effective under certain circumstances, see Weiss in Ott & Inglis (2002) 202–4. 108 For the incorporation and transformation of international agreements in the national legal order, see Hoffmeister in Ott & Inglis (2002) 209–14. 109 The Constitution is not mentioned as forming part of the ‘municipal’ law over which an international treaty prevails. 110 See Emiliou in Ott & Inglis (2002) 239–50. 111 See Framespex Ltd v The RoC (2000) vol 3 Administrative 7, where the Supreme Court interpreted certain provisions of the 1977 Additional Protocol [1977] OJ L 339/1, 28.12.1977 (‘1977 Protocol’). 112 See ‘Accession to the EU’ in Ott & Inglis (2002) 214–7. 113 Provided “the rights vested or the obligations imposed thereby are comprehensively defined to the extent of making them, without further addition or modification, enforceable before a court of law” Pikis J in Malachtou v Armefti (1987) 1 CLR 207 (‘Malachtou’). 114 On the interpretation of Art 300(7) EC, see Weiss in Ott & Inglis (2002) 201–4. 115 Case 12/86, Demirel [1987] ECR 3719, para 9 (‘Demirel’). 116 Case 87/75, Bresciani [1976] ECR 129, para 22.

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Council. It is up to each contracting party to take appropriate measures of implementation of the various decisions of the Association Council; the Cypriot Parliament has on several occasions enacted legislation implementing these decisions.117 The Court of Justice has also shown its willingness to interpret certain provisions of Association Agreements and/or to grant them direct effect like in the Anastasiou saga,118 even if and when the Association Council was deemed to be the appropriate forum for such dispute and/or the latter had locus standi before the Court like in the Demirel case.119 Association Councils120 constitute forums for discussing and implementing further developments in the association and, as such, are deemed ‘institutional satellites’ of the EU,121 which can lead to an asymmetrical situation. It allows the EU, not yet ‘encumbered’ by the direct participation of the candidate countries to the EU institutions,122 to “continue to develop new regulatory policies, the content of which is then transposed to the applicant countries either by means of decisions of the Association Council or simply through their voluntary reception of the acquis”.123 They however played a central role in the pre-accession strategy for the CEECs following the ‘legal metamorphosis’ of the Europe Agreements resulting from Copenhagen and from the application for membership by the associated countries between 1994 and 1996.124

117 Although the ECJ has ruled that decisions of Association Councils may be selfexecuting within the European legal order if the criteria of clarity and unconditionality are met (Case C-192/89, Sevince v Staatssecretaris van Justitie [1990] ECR I-3461, paras 15–5); see ‘Accession to the EU’, Ott & Inglis (2002) 216–7. 118 Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd & others [1994] ECR I-3087, paras 23 and 24 (developed below). 119 For a review of the Court’s case law on the legal basis and the direct effect of Association Agreements, see Tchakaloff, n 106 above, 233–46. 120 For a detailed description of the institutional framework of the EAs, see MüllerGraff (1997) 31–2; and Maresceau in Cremona (2003) 17. 121 Following the Copenhagen European Council (June 1993) and the Essen European Council (December 1994), another ‘institutional link’ was established structuring further the relationship between the associated countries and the Union’s institutions through the continous involvement of associated countries into the ‘Union’s activities in areas of common interest’, including under the second and third Pillar; see Maresceau in Cremona (2003) 17. This additional institutional link does not a priori concern Cyprus since the Association Agreement is limited to trade related matters. 122 With a caveat regarding the Court’s competence in cases of direct actions brought within the framework of association agreements. 123 See De Witte, ‘The impact of enlargement on the Constitution of the EU’ in Cremona (2003) 242. 124 See Maresceau in Cremona (2003) 16–7.

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The EC-Cyprus Association Agreement contained an important nondiscrimination clause, preventing discrimination between the contracting parties as well as between their nationals or companies (Article 5). The Agreement was initially entered into on behalf of the whole of Cyprus and there was no problem of its application arising. The 1974 Turkish invasion of the island however led the EC to freeze any progress under the Agreement for a decade, to the effect that the second stage of the association only commenced in 1988,125 the Cypriot government indicating itself that it was not yet ready to grant free access to Community imports to Cyprus.126 Between the period running from 1974 to 1988, the EC, through the European Council and the European Commission, dismissed any progress on the association, on the ground that it could not benefit all the people of Cyprus and that the Agreement could not therefore be properly enforced. In particular, the proposals put forward by the Commission of improvement of the Agreement in 1976 were not supported by the Member States, “on the grounds that any development of the […] Agreement might accelerate the economic differences between the northern and southern part of the island”.127 The Member States even decided at this point to accept Turkish-Cypriot exports of citrus fruits grown on Greek-Cypriot land, “so long as they had movement certificates issued by [‘]local[’] Turkish-Cypriot [‘]authorities[’] or the [‘]local[’] Chamber of Commerce”.128 Overall, issues involving protectionist behaviours by individual Member States falling outside the ambit of the EC-Cyprus relations were at stake and had to be resolved so that the association could advance further.129

125 Council Regulation 2907/77/EC of 20 December 1977 on the conclusion of the Additional 1977 Protocol to the EEC-Cyprus Association Agreement provided for the extension of the first stage of the Agreement until the end of 1979 and for ‘supplementary concessions’ in favour of Cyprus, including improvement in the rules of origin; see Tsardanidis C, ‘The EC-Cyprus Association Agreement: ten years of a troubled relationship, 1973–1983’ (1984) 22(4) JCMS 351 (‘Tsardanidis’) 359. 126 Ibid. 127 Tsardanidis, 357. 128 Ibid. 129 See e.g. discussions with Member States as to what preferential treatment should be extended to imports of Cypriot agricultural produce to the Community in Tsardanidis, 360–1.

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The European ‘neutral’ attitude was however bound to change following the self-proclamation of independence by the ‘TRNC’, which served as a catalyst and precipitated the change of policy on Cyprus. Although the EC reiterated that the association should benefit the whole population of Cyprus since the Agreement covers the whole territory of the Republic,130 it added that this could only be done through the government of the RoC, thereby denying any legitimacy to the selfproclaimed government in the northern part, in line with the international consensus on the non-recognition of the ‘TRNC’.131 Greece in particular demanded the withdrawal of the preferential treatment for Turkish-Cypriot goods and the acceleration of the customs union process,132 followed by the Council of Ministers in December 1983,133 although certain Member States, including the UK, raised technical objections to the decision and delayed its implementation. The necessary conditions for the normalisation of the EC-Cyprus relations were nevertheless set, eventually leading to the signing of the 1987 Protocol establishing a customs union between Cyprus and the EC by the year 2002.134 The Customs Union Agreement, which took effect on 1 January 1988 through prior parliamentary ratification this time,135 provided for two phases, an initial ten-year phase for the gradual reduction of import duties on some agricultural and most industrial products, followed by a four to five year phase leading to the elimination of all trade obstacles between Cyprus and the EC.136 130 Commission, « Communication et recommandation de la Commission au Conseil relatives à la négociation d’un Protocol transitoire entre La Communauté et Chypre » COM(79) 434 final, 19.9.1979. 131 See UN Council Resolutions 541 (1983) and 550 (1984). For a recent legal appraisal of the issues of status and of recognition of the ‘TRNC’ in international law/ Community law, see e.g. D’Orsi C, ‘Les entités revendiquant la qualité d’Etat et non reconnues comme telles: analyse de la situation juridique de quelques-unes d’entre elles’ (2006) 84(3) Revue de Droit International de Sciences Diplomatiques et Politiques 259, 260–8 ; see also Brus M, Akgün et al, A promise to keep: time to end the international isolation of the Turkish Cypriots (Foreign Policy Analysis Series No 7, Tesev Yayinlari, 2008) (‘Brus, Akgün et al’). 132 Tsardanidis, 369. 133 Ibid. 134 [1987] OJ L 393/104, 31.12.87; for a comparison of the 1987 Protocol with the 1972 Association Agreement and a discussion of the credibility of reaching customs union through the Protocol, see Gaudissart M-A, ‘Cyprus and the EU: the long road to accession’ (1996) 8(1) The Cyprus Review 7, 16. 135 Law No 321/1987 (Official Gazette of 31.12.1987). 136 Emiliou, ‘Knocking on the door of the EU: Cyprus’s strategy for accession’ in Axt H-J & Brey H (eds), Cyprus and the EU: new chances for solving an old conflict? (Südosteuropa Aktuell, 23, Möhnesse, 1996) (‘Emiliou (1996)’) 129.

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The Customs Union Agreement however raised serious issues as to the application of the customs union in a territory where there was limited internal freedom of movement of goods and where the competent authorities did not exercise control over the whole territory, in particular all the ports and airports. More specifically, issues relating to the interpretation of the various provisions of the Agreements arose with respect to trade. The EC had to decide in particular whether or not to accept the import of goods produced in the part of Cyprus ‘not under the effective control of the government of the RoC’ and sometimes grown on dispossessed land. In this respect, questions pertaining to the interpretation of the primary instruments of the EC-Cyprus association and of its regulatory framework were brought to the Court of Justice through the preliminary reference mechanism. II. Interpretation by the Court of the principles of the EEC-Cyprus association: focus on the CCP A. Anastasiou I, a case of direct trade from the northern part of Cyprus to the EU The Anastasiou I case137 concerned the application of the principle of non-discrimination embodied in Article 5 of the Association Agreement to ‘the whole of Cyprus’ and the acceptance or not of certificates issued ‘by authorities other than those of the RoC’ by Member States in accordance with the 1977 Protocol regarding products originating from Cyprus. The High Court referred to the ECJ for a preliminary ruling138 under Article 234 EC and formulated five questions139 on the interpretation of the 1972 Association Agreement and of the Council Directive 77/93/ EEC140 on protective measures against the introduction into the Member States of organisms harmful to plants or plant products.141

137

Case C-432/92, The Queen v Minister of Agriculture, Fisheries and Food, ex parte SP Anastasiou (Pissouri) Ltd & others [1994] ECR I-3087 (‘Anastasiou I’). 138 Case C-432/92: reference for a preliminary ruling made by the High Court of Justice, Queen’s Bench Division, by order of that court dated 2 December 1992 in the case of Anastasiou I [1993] OJ C31/9. 139 Para 14, Anastasiou I. 140 of 21 December 1976 [1977] OJ L 26/20, 31.1.1977. 141 Para 1, Anastasiou I.

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Initially, proceedings were brought in the UK by producers and exporters of citrus fruits established in the government controlled area of the RoC (and the national marketing board for potatoes in Cyprus) against the UK Ministry of Agriculture, Fisheries and Food, in connection with the export to the UK of citrus fruits and potatoes from the northern part of Cyprus.142 The trade of citrus fruits and potatoes is regulated by the Association Agreement and therefore benefits from preferential arrangements arising under the Agreement. In accordance with Article 7, the rules of origin applicable in this case are those contained in the 1977 Protocol.143 Article 6(1) of the 1977 Protocol provides that evidence of the origin of a product is given through a movement certificate (EUR.1), to be issued by the ‘customs authorities of the exporting State’ (Articles 7(1) and 8(1) of the 1977 Protocol) and to be read in conjunction with Article 24 for subsequent verification of the authenticity of the document or of the accuracy of the information regarding the true origin of the goods in question. In parallel, the issue of phytosanitary certificates within the EC was governed at that time by Directive 77/93/EEC, in particular Article 12(1)(b) requiring the certificates to be issued on the basis of the laws or regulations of a non-contracting country, such as Cyprus.144 On this ground, the applicants demanded that the UK authorities no longer accepted imported citrus products or potatoes from the northern part of Cyprus, whenever they were not accompanied by the requested movement or phytosanitary certificates issued by the Cypriot authorities.145 The respondent replied that no certificates were issued by the ‘TRNC’ and therefore, that any import from Cyprus to the UK was in accordance with Community rules.146 After confirming the direct effect of the 1972 Association Agreement147 and of the 1977 Protocol,148 the ECJ rejected the arguments contended by the UK and the Commission that the de facto acceptance

142 Para 2, ibid. The UK and Cyprus had always had a traditional commercial link, which they retained when the UK joined the EEC and reinforced through the association of Cyprus with the EEC; see Maresceau (2006) 340. 143 Para 6, Anastasiou I. 144 Para 9. 145 Para 10. 146 Para 11. 147 Paras 23–4. 148 Para 27.

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of the certificates issued by authorities other than the competent authorities of the RoC was not tantamount to recognition of the ‘TRNC’ as a State, but represented “the necessary and justifiable corollary of the need to take the interests of the whole population of Cyprus into account”.149 The ECJ took the view that the interpretation of the fundamental principle of non-discrimination must be balanced as against the ‘proper operation’150 of the Agreement and ‘the need for uniformity in Community policy and practice’, based on the ‘principle of mutual reliance and cooperation between the competent authorities’.151 The rules of the 1977 Protocol therefore called for a strict interpretation with exclusive reference to the competent authorities of the RoC when exports to the Community were involved.152 Thus, the ECJ concluded that the Association Agreement precluded acceptance by the competent authorities of a Member State, upon importation of citrus fruits or potatoes from Cyprus, of movement and phytosanitary certificates issued by authorities other than the competent authorities of the RoC.153 It also made the point that the ‘special situation’ of Cyprus deriving from its de facto partition did not justify a deviation from the normal rules of Community law with regard to exports of products from its northern part.154 The Court applied the general principle of proportionality in the context of the association with Cyprus and confirmed that the emergency powers conferred upon Member States in the Treaty to intervene in trade related issues and/or in the Internal Market were not applicable in this instance.155 As a result, the Court confirmed the proportionality of the restrictions of the preferential treatment to the government controlled area of the RoC, if and when necessary (it gave instances whereby both communities had benefited from the provisions of the 1972 Association Agreement).156

149

Para 34. Para 43. 151 Para 38. 152 Para 54. 153 Paras 55 and 65. 154 Para 67. 155 Arts 296–298 EC; see Koutrakos P, ‘Is Article 297 a “reserve of sovereignty”?’ (2000) 37 CMLRev 1339. 156 Under Art 234 EC, the ECJ normally refers back to the national court the application of the proportionality test when it is applied to assess the compatibility of a national measure with the principle. The principle of proportionality is nevertheless a ‘flexible tool’ as it entails different ‘degrees of judicial scrutiny’ depending on the 150

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B. Legal implications of Anastasiou I: a precedent in Community law This judgment has been commented in several ways focusing on its alleged political dimension,157 on its international law perspective158 or on the importance of the rule of origin in a preferential trade regime.159 It is argued that the above focuses can be collectively addressed through the socio-legal analysis of European integration proposed in this book. Adopting a systematic method of interpretation previously used to ‘constitutionalise’ the Community legal order,160 the Court was able to rule exclusively by reference to Community law and to disregard the international legal order as not being applicable to a Community situation,161 in line with its established jurisprudence on the lack of direct applicability of international law in Community law.162 Moreover, in accordance with the principle of subsidiarity and in view of its lack of jurisdiction in matters of Common Foreign and Security Policy, the

interests at stake, which means that the Court gives more or less discretion to the national courts; it has traditionally left them a large margin of discretion regarding ‘measures restricting free trade in the interest of national security’, see Tridimas T, The general principles of EU law (2nd ed, OUP, Oxford, 2006) (‘Tridimas’) 173, 193s & 239; see also Tridimas T, ‘Proportionality in EC law: searching for the appropriate standard of scrutiny’ in Ellis E (ed), The principle of proportionality in the laws of Europe (Hart, Oxford, 1999) 77. 157 Koutrakos P, ‘Legal issues of EC-Cyprus trade relations’ (2003) 52 ICLQ 489 (‘Koutrakos (2003)’); see also Greenwood C, case note (1995) 54 CLJ 4. 158 See Emiliou N, ‘Cypriot import certificates: some hot potatoes’ (1995) 20 ELJ 202 (‘Emiliou (1995)’); Talmon S, The Cyprus Question before the ECJ’ (2001) 12 EJIL 727 (‘Talmon (2001)’); or Vedder & Folz, case note (1996) 7 EJIL 120. 159 Cremona M, case note (1996) 33 CMLRev 125 (‘Cremona (1996)’) 125. 160 The ECJ spoke of the EEC Treaty as a “basic constitutional charter” in Case 294/93, Parti Ecologiste ‘Les Verts’ v EP [1986] ECR 1339. Weiler argues that “the Treaties have been ‘constitutionalised’ and the Community has become an entity whose closest structural model is no longer an international organisation but a denser, yet non-unitary polity, principally the federal State. Put differently, the Community’s ‘operating system’ is no longer governed by general principles of public international law, but by a specified interstate governmental structure defined by a constitutional charter and constitutional principles”, in ‘The transformation of Europe’ (1991) 100 Yale LJ 2403 (‘Weiler (1991)’) 2407. This has been however a point of intense debate and controversy; see in particular Weiler JHH, The State “über alles”, demos, telos and the German Maastricht decision (Jean Monnet paper, New York, 1995); contra Schilling T et al, Who in the law is the ultimate judicial umpire of European Community competences? The Schilling-Weiler/Haltern debate (Jean Monnet paper, New York, 1996). 161 Para 49, Anastasiou I (reference to the Opinion of the ICJ on Namibia ( (1971) ICJ Reports 3) (‘Namibia’). 162 Case C-280/93, Germany v Council (Re Banana Regime) [1994] ECR I-4973; Case C-149/96, Portugal v Council [1998] ECR I-7379.

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Court did not take any political stand on the Cyprus problem, which is an internal issue, in line with its case law in other areas of trade, whenever an element of foreign policy was involved.163 It concentrated rather on trade issues, which fall within its competences wherever Community law is involved, in order to ensure the proper functioning of the CCP.164 The Court applied a teleological modus operandi of interpretation,165 whereby it could ‘rationalise’ every constitutional aspect of the Community legal order by reference to “the most elementary community goals set forth in the Preamble to the Treaty”166 rather than to specific provisions in the Treaty or Community secondary legislation. It committed itself to a strict interpretation of the 1977 Protocol167 and elevated the rule of origin requirement based on the Community principle of mutual reliance beyond the principle of non-discrimination embodied in the 1972 Association Agreement168 by granting direct effect to the relevant provisions of the Association Agreement. The rhetorical advantage of such a method of interpretation is that the analysis is shifted to “a more general level on which it is possible to assert common interests – the same common interests that led Member States into the

163

See Koutrakos (2003) 493. This section has appeared in an amended form in Laulhé Shaelou (2007) 626–7. 165 In accordance with Art 220 EC which seems to favour a ‘teleological interpretation of Community norms’, the Court can be said to rest on the necessary formal legitimacy to fully participate to European integration, while maintaining the institutional equilibrium. It is fundamental to comprehend the implications of the perception of ‘self-restraint’ of the Court to understand the socio-legal analysis of European integration presented here. Reflecting on the idea of rational constructivism, it could be that the Court is willing under certain circumstances to ‘defer’ to the choices of the Member States in economic and social matters, within the fundamental and substantive framework of the principles of non-discrimination and proportionality. See Arnull A, The EU and its Court of Justice (2nd ed, OUP, Oxford, 2006) 564. For the dual function of the principles of equality and of proportionality in the sphere of public law and of substantive law, see Tridimas, e.g. 7, 61; equality “is not only a constitutional necessity but also a keystone of integration”, ibid, 76; the “emancipation of [Art] 28 from the notion of discrimination elevated proportionality to the determining criterion of compatibility with Community law”, ibid, 142. 166 According to Judge Pescatore, the concepts employed in the teleological method include “concepts such as the customs union, equality of treatment and nondiscrimination, freedom of movement, mutual assistance and solidarity, economic interpretation and finally economic and legal unity as the supreme objective” in Dehousse R, The European Court of Justice (Macmillan, New York, 1998) (‘Dehousse’) 68. 167 Contra Talmon (2001) 730. 168 See Cremona (1996) 127. 164

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Community process in the first place”.169 This common interest extends to the relationship between the Community and a third country in an Association Agreement, where the Community has a duty of collaboration, which implies that it ought to eliminate any practice within the Community that would jeopardise the uniform position of the Community in its external trade policy.170 The Court reinforced its teleological approach to the case by emphasising the ‘undesirable consequences’171 of the approach of the Member States towards the acceptance of certificates from the northern part of Cyprus, which was not uniform throughout the Community and created uncertainty unacceptable in the area of CCP.172 The Court may have been referring implicitly to previous attempts to condemn such practices, which failed mainly on procedural grounds.173 It may have been expressing its dissatisfaction vis-à-vis the stance adopted by the EU institutions and the Member States with respect to Turkish Cypriot import certificates, as it lacked uniformity.174 This seems to indicate that until 1994 at least, the EU did not appear to have an ‘integrated common policy’ on the Cyprus problem,175 which impacted in turn on the Community external trade policy and on the functioning of the Association Agreement.

169

See Dehousse, 69. Express mention of the Community obligations towards Cyprus can be found in paras 46, 53 and 63, Anastasiou I; this section has appeared in an amended version in Laulhé Shaelou (2007) 626. 171 Bengoetxea J, The legal reasoning of the ECJ: towards a European jurisprudence (Clarendon Press, Oxford, 1993) (‘Bengoetxea’) 252. 172 Para 53, Anastasiou I. 173 Case C-60/90, Sunzest [1991] ECR I-2917; for an appraisal of the case, see Laulhé Shaelou (2007) 627–8. 174 In the case of Cassis (Case 120/78, Cassis de Dijon [1979] ECR 649), already the Court may have been ‘forced into judicial activism’ for the sake of the Internal Market, perhaps to its dissatisfaction (“In the absence of common rules relating to the production and marketing of alcohol”, see Reed J, Political review of the ECJ and its jurisprudence (Jean Monnet paper, New York, 1995) (‘Reed’) 6). Within the context of European integration, it is likely that there will be instances whereby the Court will at some point concur with a particular Member State, especially a large one. In the case of Cassis, it can be contended that the interests of all parties were convergent in view of the revival of the Internal Market. This created a timely opportunity for the Court’s case law to develop a political impact, especially at a time where the Commission was allegedly looking for a new approach to harmonisation. See e.g. Alter K & Meunier S, ‘Judicial politics in the EU: European integration and the pathbreaking Cassis de Dijon decision’ (1994) 26 Comparative Political Studies 536, 554. 175 See Emiliou (1995) 206; see also Tocci (2004) 133. 170

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The substance of the matter is that some Member States felt ‘in private’ quite uncomfortable with the fact that the representatives of a significant proportion of the population of Cyprus were ignored, especially in the EU institutions, and that they were not taking part to the accession negotiations, as they seemed to be opposed to the accession of the whole island to the EU.176 These ideas are based on considerations of a moral nature and cannot be supported by legal considerations. But with reference to the socio-legal analysis of this research, they could amount to social practices, which may have been ‘routinised’ and could be formalised in due course.177 Despite the absence of an ‘explicit’ mandate to deal with the conflict, observers from both the Commission and the Council were appointed successively to monitor the developments on the Cyprus problem and enter into consultations with the two sides. The mandate of the Commission’s Delegation to Cyprus extended to the adjustment of the accession acquis in the northern part of Cyprus prior to accession.178 Even if contacts with the Turkish Cypriot officials were kept to a minimum due to concerns over recognition,179 the Commission tried to ‘sell Europe’ to the business community as well as to the opposition leaders.180 Turkish Cypriot trade unionists and politicians were never prevented from crossing the Green Line even during the total prohibition of crossings in December 1997;181 the restrictions were then partially lifted by the ‘authorities’ in the north of Cyprus in 2003. In view of the above, the Court may appear prima facie as a ‘purposeful opportunist’, eager to ‘test the waters’ as it develops new legal 176 Nugent N, ‘EU Enlargement and the Cyprus Problem’ (2000) 38(1) JCMS 131, 137; for a detailed analysis of the role of the EU institutions on the Cyprus conflict, see Tocci (2004) 133–8. 177 The Commission and the Member States, through their permanent ambassadors in Brussels, were allowed “to collude in continued trade with the ‘unrecognised’ Turkish-Cypriot administration” and the Coreper on 22.7.1977 agreed to a ‘gentleman’s agreement’, to the effect that trade from the northern part of Cyprus could continue under the 1977 Protocol, see Brewin C, The EU and Cyprus (Eothen Press, UK, 2000) (‘Brewin’) 51–61. 178 This triggered reaction against the Delegation in the northern part of Cyprus, see Tocci (2004) 136. 179 Ibid. 180 Producers and exporters of citrus fruits on both sides of the divide met under the auspices of the Commission’s Permanent Representation last accessed on 5.10.2004. 181 See Bertrand G, ‘L’adhésion de Chypre à l’Union Européenne : un déblocage du conflit par le bas?’ [2001] Politique Européenne no 3, 118, 134.

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doctrines.182 The Court will however have the opportunity in the future to come back to the principles promoted in Anastasiou I, which arguably uses the Community external trade policy as a form of market integration to set out the conditions for trading between the Turkish Cypriot community and the EEC/EU. The ECJ can be said to have used policy arguments183 to adopt a coherent and strict approach to the application of the principles underlying the CCP in Cyprus, bringing to an end any uncertainty as to the impact of the Cyprus problem on the CCP of the Community. The Court has gone through a process of counter-balancing of argumentation to reach a collective principle, which appears to be in line with the EU overall strategy towards Cyprus. Thus, it would seem that this ruling has the potential of influencing and interacting with the European integration of Cyprus.184 Concluding remarks The confirmation by the Court that the Association Agreement applies to the whole of Cyprus could only serve the wider purpose of Cyprus’ accession to the EU by providing in particular a base for the accession negotiations conducted on behalf of the whole of Cyprus, despite partition.185 As a result, the EU institutions could likewise ‘re-weigh’ the balance between Community general principles and technical requirements leading to the adaptation of Community rules in the Treaty of Accession. The ECJ could also interpret the provisions of the Treaty of Accession in such a manner as to give priority to the four fundamental 182 Certains scholars have identified the Court as developing various behavioural models, which have been characterised in the literature as ‘activist’, ‘mediating’ or ‘opportunist’ depending on the underlying theoretical approach. More recently, however, instances of judicial ‘self-restraint’ can be found in the Court’s case law with the cases of Keck and Mithouard for the Internal Market (Cases C-267 & 268/91 [1993] ECR I-6097 (‘Keck’) ). The view that the Court is in fact a ‘purposeful opportunist’, promoting certain priorities or ‘preferences’ on its agenda, has been developed as a result, reflecting on the dynamic character of the integration process. This arguably occurred in view of the mass development of judicial politics (almost any issue can be considered from a European angle and thus potentially end up before the ECJ). See e.g. Wincott D, ‘The role of law or the rule of the Court of Justice? An institutional account of judicial politics in the EC’ (1995) 2(4) JEPP 583 (‘Wincott’) 584; see also Dehousse. 183 Policy arguments have been described as ‘dynamic criteria’, which intend to establish a ‘collective goal’ and are similar to teleological arguments, see Bengoetxea, 260. 184 This section has appeared in an amended version in Laulhé Shaelou (2007) 628. 185 Chrysostomides (2000) 477; see also Emiliou in Ott & Inglis (2002) 250.

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freedoms of movement, as against the ‘requirements of mere administrative uniformity’ in Cyprus.186 As a result of this ruling, the High Court declared that the UK could no longer accept movement and phytosanitary certificates other than the ones issued by the competent authorities of the RoC.187 It was also a clear signal to all Member States to apply uniformly the Community’s external trade policy. The effects of the prohibition on the exports of Turkish Cypriot goods not accompanied by the right certificates may have been comparable to the ones of an ‘embargo’.188 But the issue here only related to the lack of administrative co-operation between the two sides in the implementation of the relevant Community principles, which meant that Turkish Cypriot goods had to be treated as goods originating from a third country and therefore subject to import duties if imported into the EEC/EU. Cyprus was however getting ready for the transition from association to the demands of accession, where compliance with the Community principles pertaining inter alia to the Internal Market became mandatory and where there was usually very little room for flexibility with respect to these rules. In its Opinion on Cyprus’ application for membership,189 the Commission concluded that the application posed no real difficulties, other than the ones associated with the Cyprus problem, being an obstacle in particular to the respect of the four fundamental freedoms of movement.190 It thereby emphasised the impact of the Cyprus problem on the very core of Community law, the Internal Market, and the need to deal with this issue during the accession process.

186

See Brewin, 85. R v MAFF, ex parte SP Anastasiou (Pissouri) Ltd (No.2) (QBD)[1995] COD 339. 188 The term has been used by Talmon (2001) 736; see also Brus, Akgün et al who provide figures showing a dramatic drop in the EU share in total Turkish Cypriot exports from 77,9 % in 1990 to 14,8% in 2006 (source: TCCoC) 29; see also Vassiliou (2004) for an analysis of the ‘lemon trade’ in Cyprus, 83; contra Emiliou who argues that the Court’s judgment does not impose an embargo, but merely restricts the preferential treatment granted under the Association Agreement, in Emiliou (1995) 210. 189 Commission’s Opinion of Cyprus’ EU membership COM(93) 313 final, 30.6.1993. The application was submitted in 1990 on behalf of the whole island by the government of the RoC. 190 Para 10, ibid. 187

CHAPTER TWO

ASPECTS OF EUROPEANISATION OF CYPRUS: THE SOCIOLEGAL OBJECTIVES OF ACCESSION

It has been argued that beyond the difficulties linked to trade issues, the Association Agreement was mainly considered as a “complicated political question with far-reaching effects on the Community’s relations with Cyprus”.191 There are no provisions in the Treaties for “cases where the territory of a Member State or a State applying for membership has been divided by force or otherwise and the State is prevented from exercising its sovereignty throughout its territory”,192 as this runs against the very idea of European construction. This most probably explains why the attitude of the Community in the early stages of accession was “almost always conformed with the Community’s general policy on the Cyprus conflict”, who has “moderated its ambitions to play a leading role in the Cyprus dispute”.193 The Community was lacking competence and initiative in matters of foreign and security policy until the creation of the second pillar in the Treaty of Maastricht; the Court therefore played a leading role through negative market integration, as illustrated in Chapter 1 with respect to the EEC-Cyprus association. Although the application for EU membership was in principle made for the whole of the island, the difficulties associated with the partition of the island resulted in the accession negotiations being conducted in practice solely with the government of the RoC, and the harmonisation process being implemented only in the RoC. As a result, there was no implementation of the freedoms of movement in the northern part of Cyprus, in particular in relation to goods. The question of the legal status of goods originating from the northern part of Cyprus was therefore open to the interpretation of the Court. In the meantime, within the framework created by the amending Treaties, the relative lack of competence of the political institutions

191 192 193

Tsardanidis, 356. Chrysostomides (2000) 463. Ibid.

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was gradually remedied by the progression of the enlargement process, which brought Cyprus fully into the realm of EU law and norms through the accession negotiations.194 Cyprus was nevertheless well aware of the fact that some Member States were not convinced by its EU membership bid given the specificity of its integration process developed initially in the context of association and subsequently deepening with the accession negotiations. The objectives of Cyprus’ accession to the EU encompassed a particularly strong and specific external dimension in the context of the ongoing deepening and widening of European integration, including to third countries having an interest in the Cyprus problem and/or in the broader region.195 I. From association to accession: the deepening and the widening of the integration process The purpose of this Part, which is of great significance to the whole book, is to set out the socio-legal context of the 2004 enlargement process leading to accession through an analysis of its political and legal framework and to place Cyprus in this context. It will be shown in this Part that the concept of differentiation was relevant to the enlargement process very early on, when the objectives of accession were determined for each associated country, including in the case of Cyprus taking into account its own socio-legal specificities associated primarily to its geo-political location and to the Cyprus problem.

194 For a review of the mechanisms of the accession negotiations in accordance with the Copenhagen criteria, see Xanthaki, ‘The route to EU accession’ in Stefanou 11–24; see also Van Elsuwege, 307–54. For the history of the accession negotiations with Cyprus, see last accessed on 8.05.09. 195 For a study of the Cyprus problem within the wider context of peace and security in the broader region, see e.g. Papacosma SV et al (eds), EU enlargment & new security challenges in the Eastern Mediterranean (Intercollege Press, Nicosia, 2004); Fouskas VK & Richter HA (eds), Cyprus & Europe: the long way back (Peleus vol 22, Bibliopolis, Möhnesse, 2003); Theophanous A, ‘The Cyprus Problem: accession to the EU and broader implications’ (2003) 14(1) Mediterranean Quarterly 42; Varvaroussis P, ‘Der Beitritt Zyperns zur EU’ (2003) 43(3) Südosteuropa 60; and Xenakis D, ‘EuroMediterranean formation and the emerging European system: the case of Cyprus’ (1999) 11(1) The Cyprus Review 59.

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A. Reinforced pre-accession strategies, the enlargement process and the accession negotiations 1. Preliminary remarks From a socio-legal perspective, EU enlargement is characterised by a process of compliance with internationally established principles and by a policy of conditionality involving the obedience of rules “without the possibility of reasoned change”.196 The problem arising out of compliance with the accession acquis is that norms may not be ‘properly specified’,197 in particular since the EU is a dynamic polity undergoing a process of ‘constitutionalisation’.198 The accession process, on the other hand, requires clear rules and procedures, contained mainly in the ‘status quo’ of the 1993 Copenhagen criteria.199 Thus, the EU acquis can sometimes appear as an inadequate tool of analysis of EU enlargement, in particular when the level of compliance with the acquis is ‘low’,200 hence the relevance of the ‘embedded’ acquis developed in Chapter 1. The initial stage of the enlargement process is limited to the compliance with internationally agreed principles and their negotiations and, as such, does not appear to produce any social interaction.201 But as accession approaches, the focus switches to the internal practice of compliance with EU rules and norms, thereby requiring an interdisciplinary approach to study the interaction between the candidate countries, the Member States and the EU in the enlargement process.

196 Wiener A, ‘Finality vs enlargement: constitutive practices and opposing rationales in the reconstruction of Europe’ in Weiler JHH & Wind M, European constitutionalism beyond the State (Cambridge University Press, Cambridge, 2003) (‘Wiener (2003)’) 158. 197 Ibid. 198 Weiler argues that “the combination of the ‘constitutionalisation’ and the system of judicial remedies to a large extent nationalised Community obligations and introduced on the Community level the habit of obedience and the respect for the rule of law which traditionally is less associated with international obligations than national ones”, in Weiler (1991) 2422. The Court has arguably gained federal-type prerogatives through the ‘constitutionalisation’ of the European legal order; see Case 26/62, Van Gend en Loos [1963] ECR 1; see Timmermans C, ‘The constitutionalisation of the EU’ (2002) 21 YEL 1; see also Case C-224/01, Köbler [2003] ECR I-10239, which supports the idea of the application of an appellate procedure ‘like in a federal system’, “but one that operates by the force of circumstances rather than due to established hierarchy”, in Komarek J, ‘Federal elements in the Community judicial system: building coherence in the Community legal order’ (2005) 42 CMLRev 9, 15. 199 Wiener (2003) 159. 200 Ibid, 160. 201 Wiener (2003) 163.

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The enlargement process can be seen from this angle as a manifestation of the impact or ‘resonance’ of compliance with norms in the particular context of candidate countries, the societal conditions.202 The societal approach explains the phenomenon of compliance as a “strategic choice at one point in time”, indicating not only the interest of the candidate country for EU membership, but also the expected return or impact of such an accession.203 It also envisages the production of an outcome on EU rules and principles, through a process of ‘crystallisation’ of general norms and rules. This seems to be confirmed by the outcome of the 2007 enlargement,204 to the extent that the policy of conditionality was arguably used as “a resource to slow down future enlargement processes”.205 Such findings are of high relevance to Turkey’s accession, which is probably the most framed enlargement process of all,206 and could explain the intense phase of negotiations Turkey engaged into prior to the actual start of the accession negotiations in 2006.207 The importance of early crystallisation is further outlined by the fact that as compliance with the accession negotiations progresses and the prospects of EU membership get closer, the compliance rationale may be taken less seriously 202

Ibid, 173. Contra the behavioural approach, which merely identifies “the reasons for actors’ interest in compliance with norms” and which, therefore, does not go far enough, in Wiener (2003) 173. 204 See Lazowski A, ‘And then they were twenty-seven … a legal appraisal of the Sixth Accession Treaty’ (2007) 44 CMLRev 401, 405. 205 Wiener also gives the example of “the redefinition of the interpretation of minority rights”, in Wiener (2003) 174. 206 Under the Negotiating Framework, Turkey may request limited transitional measures only in strictly defined cases; Member States may on the other hand request potentially extensive safeguard measures. Joseph talks about the accession negotiations with Turkey as an ‘open-ended process’ the outcome of which cannot be guaranteed beforehand. He also notes that although accession is not expected until at least 2014 (based on the 2004 Commission Recommendation on Turkey’s progress towards accession issued together with the 2004 Progress Report, 6.10.04), Turkey remains in political terms “at the threshold of the EU”, in Joseph (2006) 3–5. See also Uğur M & Canefe N (eds), Turkey and European integration (Routledge, Abingdon, 2004); Akcali E, ‘Turkey’s harmonisation with EU norms: progress or regress?’ in Sperling J et al (eds), Turkey and Europe: high stakes, uncertain prospects (University of Nicosia Press, Nicosia, 2008); and Onis Z, ‘Domestic politics, international norms and challenges to the State: Turkey-EU relations in the post-Helsinki era’ in Çarkoğlu A & Rubin B (eds), Turkey and the EU (Frank Cass, New York, 2003). 207 The Negotiating Framework reflects the idea that the negotiations may result in something else than full membership, as reference is made to the ‘absorption capacity’ of the EU in addition to the traditional Copenhagen criteria in para 2, also referred to in the literature as ‘escape clause’. 203

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and ‘societal contestation’ may arise in order to establish the validity of norms.208 Thus, an early determination of norms underlining the EU policy is crucial, so that no deviation is possible in the future. This is particularly true of the Cyprus-Turkey relations within the EU so as to reach the normalisation of their relationship and this is reflected in the various instruments advancing and/or consolidating the enlargement process to Cyprus and/or to Turkey. 2. Instruments of the (pre)accession strategy and of the enlargement process (a) Pre-accession strategy Even if the 1995 Commission’s White Paper on the preparation of the CEECs for integration into the Internal Market can be said to have created “a framework for the preparation of and transition to membership”, it left “a certain leeway to both sides in an extremely dynamic period of development”.209 It represented the ‘authoritative position’ of the Union recommending to the associated countries to take approximation measures “to improve their chances of fulfilling one of the general criteria for accession to the Union, namely the so-called market criterion”.210 In particular, it was shaped ‘more concretely’ than the market criterion formulated in Copenhagen. It remained however a ‘purely unilateral act’ on the side of the Union, was not part of the negotiations for accession as such and was not legally binding on the associated countries. Nevertheless, it can be said to have eased the way to the ‘fifth step’ of the enlargement process, namely negotiating the terms of membership in the Union, as far as the CEECs are concerned.211 With respect to Cyprus, the EU strategy at that time was not based on the above logic of economic integration, but rather on a functional logic of political inclusion; the objectives of economic integration not being the main target. The EU was hoping that all the parties involved in the accession process, in particular the ‘intransigent’ ones, “would realise the benefits of such a process, and move towards a more

208

See Wiener (2003) 181–2. See Müller-Graff in Maresceau (1997) 39. 210 Ibid, 32–3. 211 For a review of the other instruments of the pre-accession strategy, see Maresceau in Cremona (2003) 17–29; see also Inglis (2000) 1179–83. 209

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conciliatory stance on the Cyprus issues”.212 The focus of the EU strategy towards Cyprus shifted gradually to the multidisciplinary process of accession following the Council of General Affairs meeting on 6 March 1995,213 where the Council committed itself to adopting concrete proposals for a specific strategy in preparation for accession. Among others, measures facilitating a structured dialogue were adopted214 as well as specific provisions tending to, inter alia, “the continuation of efforts to familiarise the Cypriot administration with the acquis communautaire and harmonise Cypriot legislation” or to Cyprus’ participation to certain EU programmes and actions.215 The EC-Cyprus Association Council adopted the above mentioned Council’s decisions on 12 June 1995,216 thereby making them prima facie a legally binding commitment on the contracting parties.217 The decision whether to open accession negotiations remains however primarily a political one taken at the highest level of the EU218 which entails major socio-legal implications for the EU, candidate countries and/or the associated countries. In Agenda 2000 published in July 1997,219 the European Commission presented its views as to the impact of enlargement on the EU as well as on membership through ten individual Opinions on pending applications for membership. It recommended that accession negotiations be open with only five of the CEECs220 as the others were not deemed to satisfy the basic requirements set in Copenhagen.221 It also associated Cyprus to the five selected 212 Christou G, The EU and enlargement. The case of Cyprus (Palgrave, UK, 2004) (‘Christou (2004)’) 74. 213 The discussions at this Council of Ministers’ meeting were concerning mainly Turkey. Greece agreed not to use its veto against further EU enlargement in exchange for an EU commitment on Cyprus; see e.g. Vassiliou (2004) 71; Theophanous A, The Cyprus question and the EU. The challenge and the promise (Intercollege Press, Nicosia, 2004) (‘Theophanous (2004)’) 33. 214 Including the ‘participation of the Cypriot Head of State in special meetings held on the occasion of European Council summits’ and ‘the expansion of the existing political dialogue between Cyprus and the Union on CFSP issues’, in Emiliou (1996) 133. 215 Ibid. 216 Common Resolution on the establishment of a structured dialogue between the EU and Cyprus and certain elements of the strategy to prepare for Cyprus’ accession to the EU. 217 See Emiliou (1996) 130. 218 See Maresceau in Cremona (1993) 26. 219 “Agenda 2000: For a stronger and wider Union” COM(97) 2000. 220 Namely Poland, Hungary, the Czech Republic, Slovenia and Estonia; see Maresceau in Cremona (2003) 25. 221 Ibid, 25–6.

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CEEC applicants, recommending that the accession negotiations with Cyprus ‘could start before a political settlement is reached’.222 The Commission confirmed the commencement of the accession negotiations with the government of the RoC, ‘as the only authority recognised by international law’ in the absence of a political settlement.223 Some disagreement nevertheless occurred among Member States including France and Greece on the link between Cyprus’ EU membership and a political settlement,224 to the effect that the ‘threat of suspension’ was still present, even if it was more implicit and less pressing on Cyprus.225 The logic of ‘power of attraction’ exercised by the prospects of EU membership for Cyprus leading to a solution and ideally “absolving [the EU] of any difficult decision once the accession negotiations with Cyprus had been finalised”226 was however quite strong. It was also hoped that such a move would create “political and economic advantages for the Turkish Cypriots”.227 Turkey’s reaction to such developments was however negative, as the Commission had recommended in its July 1997 report that Turkey be excluded from the first wave of applicant countries for ‘technical reasons’,228 and confirmed it in Agenda 2000. Maresceau suggests that “Turkey’s extremely bitter reaction towards its exclusion from the enlargement process would eventually considerably affect the enhanced pre-accession strategy”.229 (b) ‘Enhanced pre-accession strategy’ The above strategy was launched at the 1997 Luxembourg European Council and commenced in March 1998. It aimed at enabling all the ten CEEC applicants to become members of the EU, while taking into account their individual progress towards membership, thereby constituting a turning point in the EU strategy towards the enlargement to

222

Italics added; see Maresceau in Maresceau & Lannon, 5. In Agenda 2000, see n 219 above. 224 An agreement was reached amongst the Member States in September 1997 on the need for Turkish Cypriot participation, see Tocci (2004) 129. 225 See Christou (2004) 81. 226 Ibid, 75. 227 Maresceau in Maresceau & Lannon, 5. 228 European Commission, ‘Communication on the further development of relations with Turkey’ COM(97) 394 final. 229 See Maresceau in Cremona (2003) 26. For an appraisal of Cyprus’ membership course and Ankara’s reactions between 1990 and 2004, see Bahcheli T, ‘Turkey’s quest for EU membership and the Cyprus problem’ in Joseph (2006) 161–6. 223

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the CEECs through the alleged creation of an accession process beside that of accession negotiations.230 The EU also committed to a strategy to prepare Turkey for accession ‘by bringing it closer to the [EU] in every field’.231 The enhanced strategy is formulated in three ‘new key instruments’, namely the Accession Partnerships, the annual assessment of the progress achieved by the candidate countries and the increased pre-accession aid.232 Accession Partnerships are unilateral acts based on Regulation 622/98,233 implemented in specific Decisions234 taken for each CEEC candidate respectively containing the general conditions and principles for each Accession Partnership as well as the priorities and objectives relating to the adoption of the EU acquis, and are regularly updated.235 As far as Cyprus was concerned, a different pre-accession strategy was originally envisaged as Cyprus was not subjected to the same logic of economic integration than the CEEC candidate given its good economic performances. The political considerations associated to the Cyprus problem were not the object of the proposed pre-accession strategy either. Eventually, the EU decided to extend the Accession Partnership to Cyprus through a Regulation,236 which focused mainly on “certain aspects of justice and home affairs and on judicial and administrative capacity to cope with the EU acquis”, on certain forms of technical assistance as well as on the participation of Cyprus in Community programmes and agencies.237 The inclusion of Cyprus,

230

See Maresceau in Maresceau & Lannon, 6. Ibid. 232 See Maresceau in Cremona (2003) 31–37. For a legal appraisal of the instruments of the enhanced pre-accession strategy, see Inglis K, ‘The pre-accession strategy and the Accession Partnerships’ in Ott & Inglis (2002) 103 s. 233 Council Regulation 622/98/EC of 16 March 1998 on the assistance to the applicant States in the framework of the pre-accession strategy and in particular on the establishment of the Accession Partnerships [1998] OJ L 85/1, 20.3.1998. 234 of 30 March 1998. 235 See Maresceau in Cremona (2003) 31; see also Inglis in Ott & Inglis (2002) 103–10. 236 Council Regulation 555/2000/EC of 13 March 2000 on the implementation of operations in the framework of the pre-accession strategy for the RoC and the Republic of Malta [2000] OJ L 68/3; for implementing measures for Cyprus, see Council Decision 2000/248/EC on the principles, priorities, intermediate objectives, and conditions contained in the Accession Partnership with the RoC [2000] OJ L 78/10. 237 See Maresceau in Cremona (2003) 37; see also Lannon E, ‘Le Traité d’Adhésion d’Athènes. Les négociations, les conditions de l’admission et les principales adaptations des traités résultant de l’élargissement de l’UE à vinq-cinq Etats membres’ [2004] Cahiers de droit européen, nos 1–2 (‘Lannon (2004)’) 26. 231

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Malta and Turkey238 in the ‘enhanced pre-accession strategy’ also meant that a specific pre-accession financial assistance was allocated to these countries in addition to the pre-accession aid granted to the CEEC countries.239 In the case of Cyprus, this assistance aimed in particular at promoting bi-communal projects in an effort of socialisation of the Turkish Cypriot community in particular. (c) Enlargement negotiations The opening session of the ‘real’ accession negotiations between the EU on the one hand and the selected CEECs and Cyprus on the other hand was held on 31 March 1998240 where the accession negotiations with the five most advanced CEECs plus Cyprus (the ‘5+1 formula’241) were officially open. Within the framework of the ‘enhanced pre-accession strategy’, the Commission’s Regular Reports played a central role, in identifying in particular the narrowing of the gap mainly at the political level between the candidate countries of the first group that had started the accession negotiations, as they were ‘eligible’ for admission, and countries of the second group that had not, as they were not ‘admissible’ yet on economic or political grounds.242 This led to the ‘reclassification’ of the candidate countries by the Commission in October 1999 and to the opening of the accession negotiations with all the CEECs and Malta, even if some of the applicant countries did not fully meet the economic criteria.243 This change in ‘accession methodology’, based according to Maresceau “on the need for a new momentum in the enlargement process in particular after the Balkan crisis”, was endorsed at the 1999 Helsinki European Council.244 It resulted in the introduction of a greater degree of differentiation among candidates 238 Following the Helsinki European Council, Turkey qualified as a “candidate State destined to join the Union on the basis of the same criteria as applied to other candidate States” and “like other States, will benefit from a pre-accession strategy to stimulate and support its reforms”; see Maresceau in Cremona (2003) 38–40. 239 See Maresceau in Cremona (2003) 34–37; see also Inglis in Ott & Inglis (2002) 111–2. 240 For a detailed account of the accession negotiations, see e.g. Maresceau in Maresceau and Lannon, 9–12; Inglis (2000); Maurer L, ‘Negotiations in progress’ and ‘Progress of the negotiations’ in Ott & Inglis (2002) 113–30; see also Nicolaides P et al, A guide to the enlargement of the EU (II) (EIPA, Maastricht, 1999). 241 For an analysis of the ‘5+1 formula’, see Jovanovic M, ‘Enlargement of the EU: economic dimension’, in Theophanous A et al (eds), Cyprus and the EU (Intercollege Press, Nicosia, 1999). 242 See Hillion C, ‘The Copenhagen criteria and their progency’ in Hillion (2004b) 19–21. 243 See Maresceau in Maresceau & Lannon, 9. 244 Ibid.

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due to the ‘parallelism’ between the negotiations and the concrete implementation of EU law.245 With respect to Cyprus,246 the accession negotiations were actually officially opened in March 1998, but without the participation of the Turkish Cypriots, who were nevertheless invited to join at any point in time.247 From then on, the Commission concentrated its efforts on the usual package of short-term economic, social and legal issues in accession negotiations.248 Cyprus on its part had engaged into a twofold strategy by following ‘a consistent line on the national issue in close cooperation with the UN’ as well as by negotiating successfully with the EU so as to ensure full harmonisation with the acquis. In this respect, it implemented a strategy of ‘deeper’ transposition of EU law249 avoiding any major ‘hiccups’250 and displayed its strong adherence to the ‘parallelism’ identified in the case of the CEECs, even if subject to a separate legal instrument.251 The various progress reports issued by the Commission between 1998 and 2003 identified certain difficulties in the implementation of the acquis, in particular with respect to the Internal Market (eg ‘old’ sectoral legislation on the free movement of goods), but the screening process overall was deemed satisfactory.252 245 See Nice Presidency Conclusions, 7–9.12.2000, pt 5, which reiterates the Union’s commitment to differentiation ‘based on the merit of each candidate country’ and on the possibility of ‘rattrapage’. This implies “a detailed account of each candidate’s progress in the preparation for membership”, while the conclusion of the accession negotiations will be done ‘on a case-by-case basis’, see Maresceau in Maresceau & Lannon, 9. Inglis also refers to the two ‘guiding objectives’ of the enhanced pre-accession strategy, namely the adoption of the acquis and capacity building, in Ott & Inglis (2002) 104. 246 For a detailed review of the accession negotiations with Cyprus, see Stefanou; see also Vassiliou (2004). 247 The German Presidency insisted in October 1998 that President Clerides’ invitation had to remain open throughout, see Tocci (2004) 130. 248 Tocci argues that the Commission overplayed the importance of economic integration, to the detriment of a ‘federal culture’ of the Union as one of the main advantage of membership, in Tocci (2004) 135. 249 Xanthaki recalls that “the aim of accession negotiations is to achieve the highest possible compliance of the national law of the applicant country with the Community acquis. Complete transposition must not be limited to the incorporation of the acquis to the national law of the applicant country. Implementation and enforceability of the acquis upon accession is an equally important part of transposition and indeed one which is often neglected by the applicant countries”, in Stefanou, 12. 250 Forward by President Vassiliou in Stefanou, xii. 251 Inglis argues that despite the degree of differentiation present in the reinforced pre-accession strategy, “the coherence and inclusive nature [of the strategy] is evident in the legal regime that underpins it”, in Ott & Inglis (2002) 107. 252 See e.g. COM(2002) 700 final and SEC(2002) 1401, 9.10.2002.

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At the Copenhagen summit of December 2002 concluding the accession negotiations with ten of the candidate countries including Cyprus,253 the European Council reiterated the EU preference for the accession of a united Cyprus and referred itself to the UN process of negotiation of a settlement. The EU also confirmed its willingness to accommodate the terms of a settlement in the Treaty of Accession in line with the principles on which the EU is founded, including through a suspension of the aquis in the northern part of Cyprus. The Commission was also asked to propose a package of measures aiming at promoting the economic development of this part of Cyprus through the granting of financial assistance and the creation of measures promoting trade between this territory and the rest of the EU. The sociolegal environment surrounding Cyprus’ accession to the EU was nearing maturity but could not be finalised without addressing its external dimension with respect to the south-east of Europe and to Turkey in particular. B. The external dimension of EU enlargement With the 2004 enlargement, the external frontiers of the EU shifted more than 500 km east.254 The EU acquired a new border with five States, namely Croatia, Serbia, Romania, Ukraine and Belarus, it extended its border with Russia of which it ‘enclosed a part’ towards the Baltic Sea (the Oblast of Kaliningrad) and it acquired ‘new presences’ in the Southern Mediterranean (Malta) and in the Eastern Mediterranean (Cyprus) from which it also got closer to Turkey.255 With the 2007 enlargement to Bulgaria and Romania, the Black Sea region became even more strategic due to its proximity inter alia with Russia, Ukraine and Turkey. As a result, the EU neighbouring policy was reshaped to focus on these ‘new neighbours’.256 It arguably acquired a new external 253 Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic and Slovenia. For a review of the 2004 enlargement process, see e.g. ‘The 2004 enlargement: the challenge of a 25-member EU’ last accessed on 24.06.08; see also Vassiliou G (ed), The accession story: the EU from 15 to 25 countries (OUP, Oxford, 2007). 254 For a discussion of the theoretical framework of boundary governance, see Chap 3 of this book. 255 See Kok W, Enlarging the EU, achievements and challenges (Report to the Commission, EUI, Robert Schuman Centre for Advanced Studies, 26 March 2003) (‘Kok Report’) 64. 256 The EU-Ukraine (European Neighbourhood) Action Plan endorsed by the EUUkraine Cooperation Council on 21.02.05 recognises that since the EU and Ukraine

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dimension of Europeanisation enhancing the EU strategic role in the region as an expanding polity, thereby potentially blurring the line between its enlargement policy (policy of inclusion) and its ‘proximity’ policy (policy of regional cooperation). As far as further enlargement is concerned, Ukraine is certainly a ‘European State’ within the meaning of Article 49 EU.257 Thus, provided the other conditions of that Article are met one day, it could apply for membership. This is currently reflected in the political framework of the negotiations of the new EU-Ukraine Agreement, which has been upgraded to the status of ‘association’ as opposed to ‘partnership’.258 On the other hand, even if Russia seems to satisfy the geo-political criterion of the ‘European State’ within the meaning given to Article 49 EU at the 1999 Helsinki European Council with respect to Turkey, it is difficult to imagine at present how such a large country could satisfy the remaining criteria for membership as set out in Article 49 EU and in the Copenhagen European Council conclusion. In any case, Russia has ‘unequivocally’ expressed the view that it does not envisage applying for EU membership.259 Certainly, when and if Turkey and/or Ukraine join the EU one day, it will have major implications for the EU-Russia bilateral relations, which will need to be reframed. 1. Europeanisation ‘to the East’ The phenomenon of Europeanisation is evidenced in the deepening and the widening of the bilateral relations between the EU and most neighbouring countries in the region. A distinction should be made between the co-operation agreements that provide for the possibility of now share a border, they will now as ‘direct neighbours’, reinforce their political and economic interdependence through the furthering of the strategic partnership. More generally, see De Bardeleben J (ed), The boundaries of EU enlargement: finding a place for neighbours (Palgrave Macmillan, Basingstoke, 2008). 257 In the Joint Declaration on the EU-Ukraine Association Agreement of 9 September 2008 (Doc 12812/08 (Presse 247) ), the President of France (holding the Presidency of the EU in the second half of 2007), the President of Ukraine and the President of the Commission “recognised that Ukraine as a European country shares a common history and common values with the countries of the [EU]”. 258 In the same Joint Declaration, the Presidents state that “[t]hey are pleased that the new agreement between the [EU] and Ukraine will be an association agreement, which leaves open the way for further progressive developments in EU-Ukraine relations. The EU acknowledges the European aspirations of Ukraine and welcomes its European choice”, ibid, 3. 259 See Maresceau M, ‘EU enlargement and EU common strategies on Russia and Ukraine: an ambiguous yet unavoidable connection’ in Hillion (2004b) 186.

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accession to the EU (Stabilisation and Cooperation Agreements or ‘SAAs’) and those for which this possibility is more remote or does not exist (Partnership and Cooperation Agreements or ‘PCAs’). By the end of the 2004 enlargement process, the EU had established a ‘more co-ordinated and comprehensive approach’ embodied in a new type of bilateral relations with the Western Balkans and South East European region,260 the SAA.261 SAAs are comparable to Europe Agreements in substance and from an institutional point of view. They are also mixed agreements and as a result constitute ‘a fundamental bilateral political and legal framework’ for the development of mutual relations between the EU and these countries. It should be noted however that, unlike the Europe Agreements, they do not contain a reference to EU accession as an ‘ultimate objective’ of the association but do refer explicitly in the preamble to the associated country’s status as ‘a potential candidate for EU membership’ as a common objective, thereby transforming them into proper pre-accession agreements.262 Most countries in the region were until recently characterised by a serious lack of democracy, political stability and market economy.263 The EU therefore needed to develop “a neighbourhood policy that spreads prosperity and good governance to the surrounding countries, to create a ‘ring’ of stability and safety”.264 As a result and due to their low level of economic development, ‘the arrival of the enlarged EU at their borders’ created practical problems such as frontier controls.265 The prospects of accession – through the ‘conditionality’ policy in particular – could be used as a catalyst of change in these countries, even though it is quite clear that this policy cannot be strechted much further for the sake of cohesion in the EU; the candidate countries themselves must adpat.266 The role of the EU neighbouring policy in 260 Composed of the territory of the ex-Yogoslavia minus Slovenia plus Albania. One of the initial objectives of the EU policy was to concentrate on stability and good neighbouring relations. For a review of the bilateral relations with these territories in the 1990’s; see Maresceau (2006) 360–5. 261 Communication from the Commission to the Council and the EP on the stabilisation and association process for countries of South-Eastern Europe – Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia, former Yugoslav Republic of Macedonia and Albania, COM(99) 235 final. 262 For a legal appraisal of the SAAs, see Maresceau (2006) 365–77. 263 See e.g. Waechter M et al, ‘Enjeux balkaniques – entre construction des nations et europeanisation’ (2008) 49 L’Europe en formation, no 349–350. 264 Kok Report, 64. 265 Ibid. 266 Ibid.

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this case therefore consists in insisting “on satisfactory preparation for membership by those countries which may join the EU in coming years” and in developing “its partnership with all the neighbouring countries, whether they will join or not”.267 EU enlargement must therefore be considered within the broader framework formulated in its external dimension. By definition, this framework is dynamic and is as a result strongly influenced by current developments.268 This approach to the EU enlargement strategy has been recently confirmed by the European Council endorsing the GAERC conclusions of 10 December 2007 that “the renewed consensus on enlargement, based on consolidation of commitments, fair and rigorous conditionality and better communication, together with the capacity to integrate new members, continues to form the basis of the EU’s enlargement strategy”. Foreign ministers added that 2008 “is crucial to further consolidate and implement the EU’s enlargement strategy and support the transition process in the Western Balkans” and that the pace of the negotiations “depends notably on the negotiating countries’ progress in addressing opening and closing benchmarks as well as the requirements of the Negotiating Frameworks, including the implementation of the Accession Partnerships”.269 As a sign of increasing Europeanisation, the European Council meeting in Brussels in June 2008 referred to the ‘ultimate goal’ of EU membership in its Conclusions on the Western Balkans and welcomed the successful launching of the dialogue on visa liberalisation with Serbia, FYROM, Montenegro, Albania and Bosnia and Herzegovina.270 In its Declaration on the Western Balkans annexed to the Conclusions, the Council referred to the Commission’s Communication ‘Western Balkans: enhancing the European perspective’ and set out the main objectives of its policy in the Western Balkans, namely to ‘extend Community policies and enhance regional cooperation’, to ‘facilitate the people-to-people contacts and the development of civil society’ and

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Kok Report, 64–5. The unilateral independence of the Kosovo province in February 2008, the 2008 democratic presidential elections in Serbia or the international call for a peaceful election campaign in FYROM constituting the ‘ninth criterion’ before the country can undertake negotiations are only a few instances of recent developments having an impact of the EU enlargement policy. See Enlargement Newletter, 2.06.08 accessed on 3.06.08. 269 Enlargement Newsletter, 21.12.07 accessed on 7.01.08. 270 Doc 11018/08, 20/06/08, paras 52–4. 268

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to promote ‘economic and social development and strengthen good governance’.271 To that intent, the Commission opened in June 2008 negotiations on a treaty establishing a Transport Community with the Western Balkans to be concluded in 2009.272 Finally, in the same Conclusions, the European Council welcomed the proposals for developing the eastern dimension of the European Neighbourhood Policy (‘ENP’) aiming at enhancing EU policy towards eastern ENP partners in bilateral and multilateral formats.273 Although the study of PCAs274 falls outside the scope of this book, they provide a good example of the ‘considerable legal ramifications’ EU enlargement can have for mixed agreements between the EC and third countries.275 As mixed agreements, PCAs had to be extended to the new Member States by means of protocols between the EC and the PCA partners.276 For the first time in the history of EU enlargement, the Council was given the power to conclude accession protocols on behalf of all the new Member States within the limits set out in the Treaty of Accession.277 This certainly provided an advantage in view of the difficult political and legal relations between some of new Member States and third 271

Annex to Doc 11018/08. IP/08/997, 24.06.08. 273 See n 270 above, para 68; see also the Joint Declaration of the Prague Eastern Partnership Summit, 7.05.09, Doc 8435/09 (Presse 78) where it was stated that the Eastern Partnership will be developed in parallel with the bilateral cooperation between the EU and third States. For a legal analysis of the ENP, see e.g. Palmer J, Beyond EU Enlargement – creating a United European Commonwealth (SEI Working Paper No 105, 2008); and Hillion C & Mayhew A, The Eastern Partnership – something new or window-dressing (SEI Working Paper No 109, 2009) available at http://www.sussex.ac .uk/sei/1-4-10-1.html. 274 Several PCAs exist and have entered or will enter into force respectively with Russia, Ukraine, Belarus, Moldova as well as with the NIS of the Caucasus and Central Asia. For a legal appraisal of the PCAs between the EU and Russia and Ukraine respectively, see Maresceau (2006) 423–44; see also Maresceau in Hillion (2004b) 188–98 for a review of the EU-Russia bilateral relations within the framework of EU enlargement. 275 Maresceau (2006) 435; see also Cremona in Cremona (2003) and Van Elsuwege, 313–8. 276 See Art 6 paras (2) and (6) 2003 Act of Accession; see Cremona in Cremona (2003) 177. 277 Art 6(2) 2nd para provides that the “[t]he Commission shall negotiate these protocols on behalf of the Member States on the basis of negotiating directives approved by the Council, acting by unanimity, and in consultation with a committee comprised of the representatives of the Member States. It shall submit a draft of the protocols for conclusion to the Council”. This procedure is “without prejudice to the Community’s own competences and does not affect the allocation of powers between the Community and the Member States as regards the conclusion of such agreements in the future or any other amendments not related to accession”. 272

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countries associated to the EU, for example between the Baltic States and Russia278 or between Cyprus and Turkey (see below).279 This procedure, seen from the Community side as a ‘technical’ or ‘quasi-automatic’ operation under the Treaty of Accession,280 was not however a mere ‘formality’ for Russia (and for Turkey albeit for different reasons). This was so with respect to Russia due inter alia to the alleged discriminatory treatment of Russian-speaking minorities in the Baltic States arguably resulting in the non-respect of the PCA,281 in light in particular of the fact that visa regimes for Russia borderland residents were introduced as a result of enlargement. The extension of the EU-Russia PCA to the new Member States could therefore have been put on the ‘negotiating agenda’ given that two of the ten new Member States had a very considerable Russian-speaking minority.282 The extension of a mixed agreement between the EC and a third country as a result of EU enlargement does not however usually lead to renegotiations other than the necessary adjustments to the Treaties.283 In the case of Russia, a last minute ‘compromise’ was reached in the form of a Protocol ‘taking account’ of the accession of the ten new Member States,284 which was later ratified by the parties to it. Simultaneously 278

See Van Elsuwege, 317–9. The border dispute between Slovenia and Croatia could also be mentioned as an example of uneasy bilateral relations within the framework of the accession negotiations which can lead to some delay in the enlargement process; see Enlargement Newsletter
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with the signature of the Protocol, a Joint Statement on EU enlargement and EU-Russia relations was also signed, indicating that Russia ‘came to terms’ with EU enlargement.285 Although not a bilateral agreement in legal terms, the Statement “goes through the various outstanding bilateral issues” such as trade or Kaliningrad286 and also refers to a mutual commitment to establish common spaces.287

take account of the accession of the 10 new Member States, 27.04.04; see Maresceau (2006) 436. 285 For a comprehensive political and legal analysis of the PCA extension, see Van Elsuwege, 399–420; see also Maresceau (2006) 436. 286 The Kaliningrad issue provides an instance where EU enlargement has adversely affected Russian interests. Maresceau adequately summarises the situation by writing that “enlargement cannot simply be presented as a pure blessing for Russia since it creates very serious obstacles for, among other things, movement of persons from Kaliningrad to mainland Russia and vice versa”. After lengthy negotiations over the years, Russia finally accepted the principle of ‘Facilitated Transit Document’ and ‘Facilitated Rail Travel Document’ for Russian citizens travelling between Kaliningrad and other parts of Russia by land. She also accepted that the transit regime ‘will not infringe upon the sovereign right of the Republic of Lithuania to exercise the necessary controls and to refuse entry into its territory’. Russia ‘for its part’ obtained that Lithuania’s national border controls ‘be applied in a flexible manner in order not to disrupt the traditional flow of transit passengers by rail’. Russia also accepted to put in place a readmission agreement with Lithuania before 30 June 2003 and met her commitments on time. The readmission agreement “lays down the conditions and procedure of admission and return of not only citizens of the Contracting Parties but also of Third States”, the cost of which is supported by the EU. See Commission’s Communication, ‘The EU and Kaliningrad’ COM(2001) final, 18.01.01; for a full account of the issue, see Van Elsuwege, 335–4; see also Maresceau in Hillion (2004b) 196–8. Kaliningrad benefits from important socio-economic advantages compared to the rest of Russia, thereby bringing it closer to its neighbours in the EU and reinforcing its Europeanisation. The further development of Kaliningrad remains an EU priority to ensure border crossing, the freedom of transit and socio-economic development with a view to promote ‘harmonious, sustainable development between Kaliningrad and neighbouring EU regions’. This is reflected in the special legal regime currently granted to Kaliningrad under the 2003 Treaty of Accession through Protocol 5. Protocol 5 transformed the political guarantees contained in the Joint Statement on Kaliningrad ‘into a legally binding document’. For a legal analysis of Protocol 5, see Van Elsuwege, 344–6 and 356. 287 Another instance of Europeanisation resides in the establishment of four ‘common spaces’ within the framework of the Partnership, namely a common economic space, a common space of freedom, security and justice, a space of co-operation in the field of external security as well as a space of research and education, including cultural aspects; see the EU-Russia Common Spaces Progress Report 2007 available at , last accessed on 4.06.08. With respect to the common space of freedom, security and justice, the EU and Russia concluded an agreement on the visa facilitation and a readmission agreement, thereby easing the mobility of persons between the two territories and increasing the impact of Europeanisation. This is also true of the common space on research, education and culture where the numerous initiatives taken to date greatly benefit the socialisation of key categories of people in the socialisation process. See the EU-Russia Common Spaces Progress Report 2007 available at , last accessed on 4.06.08. The argument of socialisation will be developed in Chap 5 with respect to the Turkish Cypriot community in Cyprus. It has

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As far as Ukraine is concerned, things were not always easy but nevertheless happened more smoothly with respect to to extension of the application of the partnership agreement to the new EU Member States.288 An initial protocol to the PCA between the EU and Ukraine was signed on 30 March 2004 with respect to the 10 new Member States; a further protocol to the PCA extending its application to Bulgaria and Romania was signed on 27 March 2007 and entered provisionally into force on that day.289 For Ukraine, the context of its external relations appears very different. Within the past few years, the country has shown great progress in implementing democratic reforms at home (parliamentary elections in September 2007) but also political, social and economic reforms necessary on the international scene (the negotiations with the EU on political cooperation and Justice, Freedom and Security under the new enhanced agreement are almost finalised; Ukraine joined the WTO in 2008).290 Initially, Ukraine nevertheless had to terminate its free trade arrangements with the Baltic States as a result of the EU accession negotiations, which shows that certain adverse consequences of enlargement can lead to positive developments under the right circumstances.291 The above examples illustrate the importance of the socio-legal approach which outlines the extension of the phenomenon of Europeanisation beyond EU boundaries. The wider consequences of enlargement must therefore be taken into consideration as they may affect advertly the new EU neighbours, as illustrated above with respect to Russia and Ukraine and below with respect to Turkey.292 also been touched upon by Joseph with respect to Turkey. He notes that as the role of the civil society is moving ‘to the centre of the political stage in the EU’, it can also ‘make a difference’ in Turkey’s Europeanisation process. In this regard, he writes that “the strengthening of civil society in Turkey is a major objective of the EU pre-accession strategy”, in Joseph (2006) 8; see also Diez T et al, ‘File: Turkey, Europeanisation and civil society’ (2005) 10(1) South European Society and Politics 1. 288 For a review of the external relations between the Baltic States and Ukraine, see Van Elsuwege, 313–7. 289 See http://ec.europa.eu/external_relations/ukraine/index_en.htm, last accessed on 11.09.08. 290 See ‘Deepening EU-Ukraine cooperation’, EU-Ukraine Summit, Paris, 9.09.08 (Doc 12812/08 (Presse 247) 5–8); see also Linkevicius L, ‘The EU Neighbourhood Policy towards Ukraine’ (2008) 21 Lithuanian Foreign Policy Review 62. 291 This is confirmed by Van Elsuwege who notes with respect to Russia that the ‘remaining tensions’ between the Baltic States “do not necessarily have a negative impact” on the evolution of the EU-Russia Strategic Partnership, in Van Elsuwege, 483. 292 The boundary governance approach relevant to these findings will be developed in Chap 3 of this book.

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2. Expansion towards Turkey (a) The EU-Turkey-Cyprus triangular relations (i) Preliminary remarks. Some authors in the literature have insisted on the strong relationship between Cyprus’ and Turkey’s application for membership,293 in particular on the impact which the Cyprus problem could have on Turkey’s application,294 and point to the flexibility of the EU conditionality policy.295 Smith writes that “Cyprus was apparently put on fast track to membership, even though there are serious doubts that it meets all the conditions. Politics have so far prevailed over the objective application of membership conditionality”.296 In her opinion, “conditionality has not been applied consistently with respect to the [RoC], as good neighbourliness has been ignored. The EU seems to be hoping that the carrot will be enough to spark a solution [,] … has declined to use its leverage openly and explicitly, never threatening to use the stick with respect to the [RoC] … [and instead] … has put pressure on Turkey”.297 Whether Cyprus’ EU membership has in fact acted as a positive catalyst on the Cyprus problem is highly debated among scholars, their 293 See e.g. Constandinides S & Joseph J, ‘The fifth EU enlargement: revisiting the triangle of Cyprus, Greece and Turkey’ (2003) 11(1) Hellenic Studies 5–126 and Constandinides S & Joseph J, ‘Cyprus and the EU: beyond accession’ (2003) 11(2) Hellenic Studies 5–192; see also Theophanous (2004). For a detailed review of the literature on this point, see the methodology section in Laulhé Shaelou (2005) 104–7. 294 See e.g. Dundas G, ‘Cyprus from 1960 to EU accession: the case of non-territorial autonomy’ (2004) 50(1) Australian J of Politics and History 86, 90; see also Bourne A, ‘European integration and conflict resolution in the Basque Country, Northern Ireland and Cyprus’ (2003) 4(3) Perspectives on European Politics and Society 391; Tocci N, ‘Cyprus and the EU accession process: inspiration for peace or incentive for crisis’ (2002) 3(2) Turkish Studies 104; Kyriacou A, A viable solution to the Cyprus Problem (Intercollege Press, Nicosia, 2003), ‘A viable solution to the Cyprus problem in the context of EU accession’ (2000) 12(1) The Cyprus Review 35 and ‘An ethnically based federal and bicameral system. The case of Cyprus’ (2000) 20 International Review of Law and Economics 251; Neuwahl N, Cyprus, which way? – In pursuit of a confederal solution in Europe (Harvard Jean Monnet Working paper, No 4/00); Bahcheli T, ‘The EU options and resolving ethnic conflict in Cyprus’ in Theophanous A et al (eds), Cyprus and the EU (Intercollege Press, Nicosia, 1999) (chap 6) for T/C views and Baier-Allen S, Looking into the future of Cyprus-EU relations (Nomos Verlagsgesellschaft, BadenBaden, 1999); see also Sugden J, ‘Leverage in theory and practice: human rights and Turkey’s EU candidacy’ in Uğur M & Canefe N (eds), Turkey and European integration (Routledge, Abingdon, 2004). 295 Van Westering J, ‘Conditionality and EU membership: the cases of Turkey and Cyprus’ (2000) 5 European Foreign Affairs Review 95, 140. 296 Smith K, ‘EU membership conditionality’ in Cremona (2003) 132. 297 Ibid, 131.

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positions being largely determined by their underlying assumptions.298 In any case, it is argued that the relevance of the catalyst effect of EU membership for Cyprus became more remote following the 1999 conclusions of the Helsinki Summit,299 where the link between a solution to the Cyprus problem and Cyprus’ EU membership was effectively ‘lost’300 to the benefit of a ‘no carrot no stick’ approach on the part of the EU towards the RoC.301 The ‘catalyst effect’ of EU membership however remains of some relevance to study the ‘exogenous interests and needs’ surrounding Cyprus’ EU membership, in particular with respect to Turkey.302 Following Cyprus’ accession to the EU, the EU executive hoped to achieve the ultimate political goal of the recognition of the RoC and the normalisation of the Cyprus-Turkey relations through the satisfaction of legal requirements, deriving in particular from the Ankara Agreement303 and its Additional Protocol304 extended to all the new Member States as a result of the 2004 enlargement. Instead of putting added political pressure on Turkey to grant recognition to the RoC through diplomacy, the EU appears to have opted for a technocratic approach, based on the satisfaction by Turkey of technical requirements deriving from binding instruments of Community law. Turkey was for instance promised the start of the accession negotiations

298 See Baier-Allen S (ed) Exploring the linkage between EU accession & conflict resolution: the case of Cyprus (Nomos Verlagsgesellschaft, Baden-Baden, 2003) 113–145: Baier-Allen provides a detailed analysis of the ‘strategies’ and ‘resources’ of the EU assisting towards the settlement of the Cyprus conflict. With reference to T/C views, Yesilada and Sözen have also provided a game theoric analysis of “how the candidacy of Cyprus for EU membership presents an important challenge for both the Union’s eastern enlargement plans and current international efforts aimed at resolving the Cyprus problem” in ‘Negotiating a resolution to the Cyprus problem: is potential EU membership a blessing or a curse?’ (2002) 7 International Negotiation 261, 261. For a review of the literature, see Laulhé Shaelou (2005); see also Joseph (2006). 299 For a review of the EU-Turkey relations leading to the Helsinki European Council, see Maresceau in Maresceau & Lannon, 12–4. He describes the wording of the Helsinki Conclusions on Turkey as a ‘masterpiece in diplomatic formulation’. 300 See Laulhé Shaelou (2005) 105. 301 The Helsinki European Council nevertheless added a ‘good neighbour’ criterion to the list of accession conditions, which arguably already existed in the context of the Greek accession to the EU vis-à-vis Turkey, see Hillion in Hillion (2004b) 17. But it was not conceived as a ‘full fledge condition’, see Drevet J-F, L’ élargissement de l’UE, jusqu’où? (L’Harmattan, Paris, 2001) 132. 302 See e.g. Melakopides C, Unfair play: Cyprus, Turkey, Greece, the UK and the EU (Martello Papers 29, Kingston, Ontario, 2006). 303 Agreement establishing an Association between the EEC and Turkey [1964] OJ L 217/3687, 29.12.1964. 304 Additional Protocol and Financial Protocol [1972] OJ L 293/4, 29.12.1972.

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in 2005 provided it would ensure the enactment of six pieces of legislation reforming the constitutional and penal system and introducing a ‘zero tolerance’ policy for the violation of fundamental and human rights.305 The Commission has clarified that efforts to resolve the Cyprus problem ‘form part of the enhanced political dialogue’ between the EU and Turkey and that “[t]he absence of a settlement could become a serious obstacle306 to Turkey’s EU aspirations”,307 to the effect that the settlement of the ‘Cyprus problem’ has arguably become part of the accession conditionality applied to Turkey.308 (ii) Objectives of the EC-Turkey association. Article 28 of the Ankara Agreement refers to the concept of integration and of accession of Turkey to the EC/EU, while the Additional Protocol deals with the conditions, arrangements and the transitional measures necessary for the customs union without any mention of the ultimate political objective of the association.309 In its 1989 negative Opinion on Turkey’s EC membership, the Commission referred to Turkey’s ‘eligibility’ for membership on the basis of the Ankara Agreement but also underlined more importantly “the political will shown at the time of the signing of the Ankara Treaty” on the “road towards increased interdependence and integration” between Cyprus and Turkey.310 Their respective process of integration did indeed deepen but through different routes and whereas Turkey was included in the ‘enhanced pre-accession strategy’, it still had to satisfy the Copenhagen criteria, in particular the political one.311

305 European Council Conclusions, 16-17.12.04. See Editorial, ‘Turkey’s quest for membership of the EU’ (2005) 42 CMLRev 1561, 1562; see also Laulhé Shaelou (2005) 106 (fn 17). See generally Commission’s 2007 Progress Report on Turkey available at , last accessed on 8.09.08, 5–10. 306 Emphasis added. 307 Commission’s 2003 Progress Report on Turkey available at , last accessed on 27.06.08, 40. 308 Hillion in Hillion (2004b) 19; see also Turkey’s 2007 Progress Report, n 305 above, conclusions on Cyprus, 24–5. 309 For a legal appraisal of the Ankara Agreement and its Additional Protocol, a comparative analysis with the Athens Agreement and a review of the EC-Turkey relations over the decades, see Maresceau (2006) 325–44. 310 See Maresceau (2006) 331. 311 Ibid, 335.

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When the accession negotiations were closed with ten of the candidate countries in Copenhagen in 2002, the European Council asked the Commission to submit a new evaluation on Turkey at the December 2004 Summit, so that in the event that Turkey was found to satisfy the Copenhagen political criteria, the EU would open accession negotiations with Turkey ‘without delay’.312 On 6 October 2004, the Commission presented a positive assessment of Turkey’s progress towards accession, even if it identified problem areas.313 The Brussels European Council of 16–17 December 2004 endorsed the Commission’s recommendations after lengthy negotiations and requested the Council to agree on a negotiating framework proposed by the Commission ‘with a view to opening accession negotiations on 3 October 2005’.314 (b) Impact of the 2004 enlargement on the political and legal framework of the EC-Turkey association (i) Extension of the Ankara Agreement to the new member states. In its December 2004 Conclusions, the Council “welcomed Turkey’s decision to sign the Protocol regarding the adaptation of the Ankara Agreement, taking account of the accession of the ten new Member States”.315 Unlike the 1995 enlargement characterised by “a de facto and de jure association” between the acceding States and Turkey,316 the 2003 Act of Accession expressly provided for the accession of new Member States to the Ankara Agreement in Article 6(2) and (6). Even if this obligation is addressed to the new Member States through supranational mechanisms of decision-making contained in the Act of Accession, it is clear that it also has implications for the third country concerned since its approval is needed. In the case of Turkey, it could be argued that it also adds pressure of a technical nature to achieve the 312

See Commission’s Communication, ‘Recommendation of the European Commission on Turkey’s progress towards accession’ COM(2004) 0656 final, para 1. 313 Ibid. 314 Presidential Conclusions on Turkey, 16–17.12.2004, available at last accessed on 27.06.08. 315 The Turkish government had confirmed that it was ready to sign the Protocol on the adaptation of the Ankara Agreement “prior to the actual start of accession negotiations and after reaching agreement on and finalising the adaptations which are necessary in view of the current membership of the EU”, Ibid. 316 See Talmon S, ‘The EU-Turkey controversy over Cyprus or a tale of two Treaty declarations’ (2006) 5(3) Chinese JIL 579 (‘Talmon (2006)’) 587 & 591–6; see also Tezcan, ‘Reconnaissance de la République de Chypre par la Turquie’ (2005) RMCUE no 489, 376.

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recognition of the RoC. Even if the status of the Ankara Agreement and a fortiori of the extended Additional Protocol vis-à-vis ordinary Turkish law remains uncertain as there is no clear principle of supremacy of international treaties in Turkish law, the first sentence of Article 90(5) of the Turkish Constitution nevertheless gives force of law to international agreements in the Turkish legal order. The Turkish courts have also used the second sentence of Article 90(5) to grant to certain international treaties supremacy over statutes by rejecting the review of their constitutionality as a legal ground.317 It is clear that while it is possible to ‘theorise’ about the nature and the consequences of non-recognition under international law,318 such a conduct amounts prima facie to a breach of the acquis under Community law.319 Turkey’s obligations under the Association Agreement and its Additional Protocol, in particular those pertaining to the EC-Turkey customs union, constitute legal conditions per se to be fulfilled for the smooth running of the accession negotiations. The restrictions associated to the free movement of goods and products from Cyprus to Turkey appear to be contrary to Decision No 1/95 of the EC-Turkey Association Council implementing the customs union with Turkey (Article 5).320 As Maresceau explains: 317 Hoffmeister F, ‘Changing requirements for membership’ in Ott & Inglis (2002) 213. 318 The issue of recognition of a State is a complex one in international law and falls outside the scope of the present book unless otherwise indicated; see Grant T, The recognition of States (Praeger, USA, 1999); see also Talmon S, Recognition of governments in international law: with particular reference to governments in exile (Clarendon Press, London, 1998). For an up-to-date consideration of the issue of recognition with respect to the RoC, see Katselli E, ‘The Ankara Agreement, Turkey and the EU’ (2006) 55(3) ICLQ 705 (‘Katselli’) 712–6; see also Hakki M, ‘Legal interpretation of statehood in Cyprus’ (2002) 10(3) Tilburg Foreign Law Review 256. Compare with Van Elsuwege with respect to the international legal status of the Baltic States (principle of State continuity/State sucession; Russia’s non-recognition of the Baltic thesis on State continuity), where he demonstrates the importance inter alia of their international legal status in order to comprehend their accession to the EU, see Van Elsuwege, 59–92. 319 The issue of the recognition of a State as a result of the application of Community law will be addressed in the last part of this book in order to draw conclusions from the prospects of the economic integration of the Turkish Cypriot community. For basic reading, see Crawford J et al, Opinion: Republic of Cyprus: eligibility for EU Membership, 24 September 1997; Crawford J et al, Further Opinion: the eligibility of the Republic for EU Membership, 17 November 2001; and Bermann G et al, Opinion: implications of Membership in the EU for a constitutional settlement in Cyprus, 29 March 2001; all in Markides A (ed), Cyprus and EU membership: important legal documents (PIO, Nicosia 2002); contra Mendelson M QC, Why Cyprus entry into the EU would be illegal: Legal Opinion (Office of the London Representative of the TRNC, London, 2001). 320 [1996] OJ L 35/1, 13.2.1996.

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chapter two [a] customs union between two parties implies that they have the same system and set of rules on free movement of goods, as well as the same customs tariff and commercial policy. … The problem with a third country like Turkey, in forming a customs union with the EC is that the whole exercise is one-way traffic. … In the end, it means quite simply a total alignment of Turkish law to EC law in the field of elimination of customs duties and charges having equivalent effect (Art 4), elimination of quantitative restrictions or measures having equivalent effect (Arts 5–11) and the application by Turkey of Community in the field of commercial policy.321

The exclusion of Cypriot vessels and aircrafts from Turkish ports and airports therefore contravenes Article 58 of the Additional Protocol to the extent that the free movement of goods within the customs union is affected on the ground of indirect discrimination (‘wholesale restrictions on access to means of transportation’). The ECJ has indeed confirmed that the principle of free movement of goods requires that Member States guarantee and maintain communication links with other Member States open.322 In brief, the Turkish restrictions violate basic Community commercial principles such as the freedom of navigation, freedom of transit, freedom of access to ports and harbours as well as equality of treatment as embodied in particular in Council Regulations 4055/86/EEC and 4058/86/EEC.323 (ii) Implications for the legal and political instruments of the association. The Association Agreement constitutes the primary legal basis in the bilateral relations between the EU/EC and Turkey up and until accession.324 It has been described as “a very unique agreement, positioned at the top level of the ‘ladder’ of bilateral association agreements” in view of its ‘far-reaching’ political objective, “the anticipation of the establishment of a customs union and the clear and

321

See Maresceau (2006) 338. Case C-112/00, Schmidberger v Austria [2003] ECR I 5659 (‘Schmidberger’); see Talmon (2006) 613. 323 Council Regulation 4055/86/EEC of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries [1986] OJ L 378/1 and Council Regulation 4058/86/EEC of 22 December 1986 concerning coordinated action to safeguard free access to cargoes in ocean trades [1986] OJ L 378/21. 324 Although the Ankara Agreement is technically a mixed agreement, it is widely recognised as a bilateral agreement imposing rights and obligations on the EU and Turkey respectively following the Demirel case, para 9; see Inglis in Ott & Inglis (2002) 103. 322

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unconditional formulation of [its] implementing acts and of the nondiscrimination principle for Turkish workers legally employed in Member States”.325 In addition to the Ankara Agreement, the legal and financial instruments of the pre-accession strategy, framed by political instruments transforming the aim of association into one of accession, run “in a parallel and mutually complementary manner”.326 All the instruments of the reinforced EU pre-accession strategy towards Turkey expressly reiterate the obligations of Turkey vis-à-vis the Union as set out in the Ankara Agreement and extend them to its Member States including Cyprus. The Negotiating Framework with Turkey adopted unanimously by the European Council before the start of the accession negotiations in October 2005 lays down in section 6 the guiding principles and the procedures for the accession negotiations with Turkey including with express reference to Cyprus in hyphen 3.327 After Turkey signed the Additional Protocol with the 10 new Member States on 30 June 2005, it issued a unilateral Statement on 29 July 2005 reaffirming its long-standing policy on Cyprus and in particular that “the signature, ratification and implementation of this Protocol neither amount to any form of recognition of the [RoC] referred to in the Protocol”.328 The EU addressed the legal implications of this unilateral Statement, in particular whether it affected the proper fulfilment of Turkey’s obligations under the Ankara Agreement and its Additional Protocol, in a ‘counter-declaration’ to Turkey adopted by the Council on 21 September 2005.329 This political declaration includes a ‘revision clause’, whereby the Council reiterates that Turkey’s failure to implement its obligations in full will affect the “overall progress in the negotiations”.330 But these two political declarations did not prevent the opening of the accession negotiations.331

325

See Maresceau (2006) 339. See Inglis in Ott & Inglis (2002) 104. 327 Available at http://ec.europa.eu/enlargement/candidate-countries/turkey/key_ documents_en.htm, last accessed on 27.05.09. 328 , last accessed on 15.9.2005. 329 Declaration by the EC and its Member States on Turkey Doc 12541/05 (Press 243); see Joint Opinion by Brownie et al on Turkey’s signature of the Protocol, Declaration and Exchange of Letters, 22 August 2005: some of the provisions of the Declaration purport “to modify the application of the Protocol” as they amount to ‘reservations’ in international law, 5; see also Katselli, 596–608. 330 Para 3, Declaration, ibid. 331 See Maresceau (2006) 342–3. 326

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As a result of Turkey’s unilateral declaration, the requirement regarding the normalisation of the bilateral relations between Turkey and the RoC was expressly referred to for the first time in the legally binding Accession Partnership, as amended.332 Accession Partnerships are nevertheless ‘autonomous’ instruments passed by the Council on the basis of the Commission’s annual evaluation for each candidate country and must therefore be examined in light of the country’s commitment to it in its National Programme for the Adoption of the Acquis (NPAAs), the amended version of which has just been approved by Turkey.333 Finally, the various Council meetings whether at the ministerial or at the head of State level reflect and draw conclusions from the above framework of obligations. On the basis of the Commission’s recommendations of 29 November 2006,334 the GAERC noted that “Turkey has not fulfilled its obligations of full non-discriminatory implementation of the Additional Protocol to the Association Agreement”.335 As a result, the Council agreed to the freezing of negotiations on eight chapters covering policy areas relevant to Turkey’s restrictions towards Cyprus.336 The opening and closing of these chapters will therefore not be decided by the Member States “until the Commission verifies that Turkey has fulfilled its commitment related to the Additional Protocol”,337 thereby effectively imposing a preliminary step to be taken at the supranational level before the intergovernmental mechanisms of decisionmaking set out in Turkey’s Negotiating Framework can be triggered. Thus, even if the EU ‘counter-declaration’ fell short of making the recognition of the RoC a pre-condition for the accession negotiations,338 it could provide Cyprus inter alia with a ‘justification’ for exercising its

332 Council Decision (EC) No 235/2001 of 8 March 2001 on the principles, priorities and conditions contained in the Accession Partnership with the Republic of Turkey [2001] OJ L 85/13, as amended by Council Decision (EC) No 398/2003 of 19 May 2003 [2003] OJ L 145/40, by Council Decision (EC) No 35/2006 of 23 January 2006 [2006] OJ L22/34 and by Council Decision (EC) No 157/2008 of 26 February 2008. 333 Inglis in Ott & Inglis (2002) 104. Turkey adopted the NPAA on 31.12.2008, see 47th meeting of the EC-Turkey Association Council, 19.05.09 (Doc 10074/09 (Presse 140) ). 334 Doc IP/06/1652. 335 Brussels meeting conclusions, 11.12.06, 8. 336 Namely Free movement of goods (chap 1), Right of establishment and freedom to provide services (3), Financial services (9), Agricultural and rural development (11), Fisheries (13), Transport policy (14), Customs union (29) and External relations (30). 337 See n 335 above, 9. 338 See Laulhé Shaelou (2005) 106.

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veto at any time during the accession process,339 subject to a ‘benchmark’ in the hands of the EU for chapters directly or indirectly associated with the implementation of the customs union.340 With respect to the remaining chapters, three chapters were officially opened at the third meeting of the Accession Conference at ministerial level with Turkey.341 They all contain a number of so-called ‘closing benchmarks’, including the fulfilment of Turkey’s obligation of non-discriminatory implementation of the Additional Protocol.342 In the meantime, only one chapter remains provisionally closed.343 When presenting its road map for EU accession in April 2007 and with reference to the freezing of the chapters linked to Cyprus, Turkey’s chief negotiator had indicated the government’s intention “to separate the process of negotiations from the domestic efforts of Turkey” and not to wait, but to ‘speed ahead’ the reform process unilaterally.344 At the Brussels European Council of 16–17 December 2007 endorsing the GAERC conclusions of 10 December 2007 on the Enlargement Strategy, the Council noted the major political and constitutional developments currently taking place in Turkey345 and established a list of priority reforms in other areas such as judicial reform, the fight against corruption, minority rights and the strengthening of civil rights. It reminded Turkey’s commitment towards good neighbourly relations and to the peaceful settlement of disputes and that it expected to see ‘swift progress’ on the issues of the full non-discriminatory implementation of the Additional Protocol and of the normalisation of its relations with the RoC on which Turkey had made no progress.346 339

See Talmon (2006) 602. Joseph describes these benchmarks for the provisional closure and/or the opening of each chapter as a mechanism whereby “Turkey will be requested to indicate its position in relation to the acquis and to report on its progress in meeting the benchmarks. Turkey’s correct transposition and implementation of the acquis, including effective and efficient application through appropriate administrative and judicial structures, will determine the pace of negotiations”, in Joseph (2006) 7. 341 Enterprise and Industrial Policy, Statistics and Financial Control, Doc 11233/07 (Press 154) 26.6.07. 342 Second meeting of the Accession Conference at deputy level with Turkey, Doc 8031/07 (Press 68) 29.3.07. 343 Chapter on Science and Research, EU Council, 12.6.06. 344 Enlargement Newsletter 25.10.06, http://ec.europa.eu/enlargement/press_corner/ newsletter/index_en.htm, accessed on 26.4.07. 345 In particular the conduct of parliamentary and presidential elections ‘in full respect of democratic standards and the rule of law’. 346 On the basis of the Agreement of 8th July 2006 between the late President of the RoC Mr Tassos Papadopoulos and the Turkish Cypriot leader Mr Mehmet Ali Talat, see accessed on 27.06.08. 340

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As a result, two more chapters were open at the fourth meeting of the Accession Conference at ministerial level with Turkey on 19 December 2007.347 Both chapters contain closing benchmarks to be met by Turkey so as to ensure the fulfilment of its obligations of full non-discriminatory implementation of the Additional Protocol. Two more chapters were open for negotiations at the fifth meeting of the Accession Conference at ministerial level with Turkey on 17 June 2008 with specific closing benchmarks in addition to the now ‘routine’ requirement that Turkey has to fulfil its obligation of full non-discriminatory implementation of the Additional Protocol to the Ankara Agreement.348 The same procedure was followed at the sixth meeting of the Accession Conference on 19 December 2008 with respect to an additional two chapters, which are getting closer to the substance of the Internal Market.349 Since the start of the negotiations, ten chapters have been opened, of which one has been provisionally closed. Olli Rehn stated that in order to open further chapters for negotiations in 2009, Turkey will have “to meet criteria in fiscal, social policy, environment or competitiveness matters”. He added that “fully implementing the Ankara Protocol could give new impetus to the negotiations”.350 (c) Implications of the EC-Cyprus-Turkey relations on the Cyprus Problem It derives from the above that the issue of the recognition of the RoC351 is to be addressed during the course of the accession negotiations and not only through the course of diplomatic negotiations on the Cyprus problem.352 The EU is waiting to see in particular the ratification of the 347 Trans-European Networks and Consumer and Health Protection, see Doc 16734/07 (Presse 302) 19.12.07. 348 Company law and Intellectual property law, see Doc 10727/08 (Presse 178), 17.06.08. 349 Free movement of capital and Information society and media, see Doc 17519/08 (Presse 381) 19.12.08. 350 See Enlargement Newsletter, http://ec.europa.eu/enlargement/press_corner/ newsletter/index_en.htm, 13.01.09, accessed on 15.01.09. 351 Kabaalioğlu distinguishes between the issue of recognition of the government of the RoC and of its constitutional legitimacy which, in his view, is lacking under the 1960 Cypriot Constitution “to act for the whole of Cyprus with regard to the island’s permanent integration in the [EU]” and indicates that the European Commission confused the two in its 1993 Avis on Cyprus’ EU membership, see Kabaalioğlu H, ‘Lessons to be learned from the Greek Cypriot rejection of the Annan Plan’ in Giegerich, 233. 352 See Laulhé Shaelou (2005) 107.

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Additional Protocol extended to the new Member States by the Turkish Parliament as a step forward.353 It is however questionable whether the recognition of the current government of the RoC can be derived from this ratification since the acquis is suspended in part of the territory of the RoC.354 So whereas Turkey recognises in theory the RoC, in accordance with treaty law which it regards as still binding in its unilateral declaration,355 the recognition of the current government of the RoC requires the effective implementation of the Additional Protocol pending political recognition. In the meantime, Turkey has reiterated that it will not recognise the government of the RoC in the absence of a comprehensive settlement within the framework of the United Nations, thereby indicating a clear linkage on its part of the issue of recognition to a settlement of the Cyprus problem. Following the 2008 presidential elections in the RoC, there were renewed talks between the leaders of the two communities under the auspices of the UN. They have already met on numerous occasions.356 Full-fledged negotiations were commenced on 3 September 2008 under the good offices mission of the UN Secretary-General and for this purpose, Working Groups357 and Technical Committees358 have 353 Art 14 Additional Protocol provides for its entry into force upon any necessary ratification or approval in Turkey, in the Member States and by the EP, which might take years. As a result, the extended Protocol is deemed applicable ‘provisionally’ as of 1 May 2004 pending its official entry into force. But the Protocol requires the consent of the Turkish Parliament, see Talmon (2006) 608. 354 Ibid, 596. 355 See Katselli, 712. 356 See Statement of the two leaders read by Michael Moller, Special Representative of the Secretary-General and Chief of Mission of UNFICYP following the meeting on 21 March 2008 and Joint Statement by G/C leader Demetris Christofias and T/C leader Mehmet Ali Talat of 23 May 2008 where they agreed on the basic parameters of a united Cyprus as a ‘bi-zonal, bi-communal federation with political equality’ in accordance with UN resolutions. For more information, see , last accessed on 27.06.08. As a result of the meeting on 21 march 2008, a series of technical committees were set up, including the Committee on economic and commercial matters which already decided that cars rented in the northern part of Cyprus can now enter the government controlled areas of the RoC through the Green Line; see the 2007 Commission report on the implementation of the GL Regulation COM(2008) 529 final, 27.8.08 (the ‘2007 Commission report on the implementation of the GL Regulation’). 357 The six Working Groups are ‘Governance and power sharing’, ‘EU matters’, ‘Security and guarantees’, ‘Territory’, ‘Property’ and ‘Economic matters’; see n 356 above. 358 The titles of the Technical Committees are ‘Crime and Criminal matters’, ‘Economic and commercial matters’, ‘Cultural heritage’, ‘Crisis management’, ‘Humanitarian matters’, ‘Health matters’ and ‘Environment’, ibid.

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been set up to assist in the negotiations.359 Enlargement Commissioner Olli Rehn stated that the Commission is ready to assist the UN settlement process with its expertise “in matters of EU relevance” and that “[t]he EU can accept any solution agreed by the two communities, as long as a united Cyprus respects the Union’s founding principles of liberty, democracy and the rule of law, and is able to carry the obligations of EU membership”.360 The Commission also invited Turkey once more to “fully contribute to a solution” under a renewed UN process and to “fully support both communities on the island to make the necessary compromises”.361 It could be said about the EU pre-accession strategy towards Turkey that the process of ‘crystallisation’ of general norms and rules with respect to Turkey’s accession is still ongoing as its suffers from the absence of political consensus. This could perhaps explain the certain degree of latitude given to Turkey, a priori incompatible with the legal theory of the preemption of EU law, which would require a strict and unequivocal commitment as well as actual adherence by Turkey to EU rules and principles at this stage of the accession negotiations. In the meantime, the wider socio-legal framework proposed in this book would appear to resolve several outstanding issues, as evidenced in the Court’s case law interpreting the EC-Cyprus-Turkey trade relations. II. Judicial interpretation of the EC trading rules in the context of cyprus’ accession: focus on the Internal Market As the European integration of Cyprus deepened and within the evolving context of the Internal Market including through its external dimension towards Turkey, the ECJ can be said to have developed gradually the rules regarding the conditions of Turkish Cypriot trade with the EC/EU through mechanisms of negative integration. The Court initially interpreted the EC trading rules relevant to the exchange

359 The ‘parliamentary elections’ in the northern part of Cyprus in April 2009 could however alter the pace of the negotiations between the two sides. 360 Enlargement Newletter 26.09.08, accessed on 29.09.08. 361 Speech in the EP of EU Commissioner for Enlargement Olli Rehn, 21 May 2008; see Enlargement Newsletter 2.06.08, accessed on 4.06.08.

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of goods originating from the northern part of Cyprus in the context of the EC-Cyprus association, where the rules of the Internal Market played a role through their external dimension present inter alia in the CCP. The Court considered this issue again in the context of Cyprus’ accession to the EU, which meant that the rules of the Internal Market were fully applicable this time. It is also important to situate the Anastasiou saga within the broader context of the evolution of the Internal Market as set out in this book (including external policies), as this context actually appears to form the legal background to the case. From an EC/EU internal perspective, the Court initially looked at the Internal Market within the context of its launch and eventually again once it was well established and functioning. The consideration of EC trading rules also required the thorough examination of the external dimension of the Internal Market through the legal framework of the EC-Turkey association in particular, as the trading of Turkish Cypriot goods to the rest of the EU involved the Turkish territory and/or authorities. A. Anastasiou II 362 in the context of the triangular trading relationship between the EC/EU, a candidate country and an associated country 1. A case of indirect trade to the EU through Turkey Following Anastasiou I, traders were accused of bypassing the prohibition of Turkish Cypriot imports not accompanied by the required certificates issued by the competent authorities of the RoC by importing the goods via Turkey, where the required certificates were issued as the ship carrying the goods would stop for one day at most. The appellants therefore sought an order from the UK courts to restrain the import of citrus fruits and potatoes produced in the northern part of Cyprus. The application was granted with respect to potatoes,363 but not citrus fruits, and this was upheld by the Court of Appeal.364 The appellants filed an appeal

362 Case C-219/98, R v Minister for Agriculture, Fisheries & Food, ex parte SP Anastasiou (Pissouri) Ltd & others [2000] ECR I-5241 (‘Anastasiou II’). 363 At that time, Cyprus had not obtained as yet the EU clearing with respect to the disease of brown rot, which therefore meant that the certificates requested under the Directive had to be issued at the place of origin. 364 R v MAFF ex parte SP Anastasiou (Pissouri) Ltd and Others, 2 April 1996, transcript of Bernal S (FC3 96/5419/D) 1–22; see also R v MAFF ex parte SP Anastasiou (Pissouri) Ltd (No 3) [1999] 3 CMLR 469 HL.

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to the House of Lords with respect to the citrus fruits and also the phytosanitary certificates, as the shipments to Turkey were made outside the scope of the EC-Cyprus Association Agreement (thus, the EUR.1 movement certificates were not concerned). The House of Lords decided to refer to the ECJ365 five questions with respect mainly to the interpretation of Directive 77/93/EEC as amended,366 regarding the procedure to be followed in case the goods originate from outside the Community (through their import) and also on the cooperation between the importing State and the State of origin, when the former is a third country. With respect to the first main issue, the Court ruled that Directive 77/93/EEC permitted the importation of plants which were accompanied by phytosanitary certificates from a consignor country, provided the plants (i) had been imported into that country prior to import into the Community, (ii) had been there for such time and under such conditions that proper checks could be carried out, and that (iii) they were not subject to special requirements which could be satisfied only in their place of origin.367 On the cooperation between the importing and the exporting States, the Court ruled that it is not for Member States to impose further conditions on the importer who has resorted to such a procedure,368 as this would imply the taking into consideration of the reasons for which the requested certificate has not been issued by the country of origin.369 Although the Court initially relies on its ruling in Anastasiou I to reach these conclusions, it immediately qualifies its findings by stating that the Directive does not preclude a Member State from admitting into its territory produce accompanied only by a certificate issued by a non-member consignor country instead of a phytosanitary certificate from the country of its origin.370 The Court justifies its approach

365 Case C-219/98: reference for a preliminary ruling by the HL, by order of that court of 20 May 1998, in the case of R v MAFF ex parte SP Anastasiou (Pissouri) Ltd and Others [1998] OJ C 258/27. 366 By Council Directive 91/683/EEC and Commission Directive 92/103/EEC, to the effect that special requirements are imposed on a group of products (including citrus fruits) originating from a non-Member State, for which a phytosanitary certificate must be issued in the country of origin, save “to the extent that the special requirements can be fulfilled also at places other than that of origin” (Art 9(1) Directive 77/93/ EEC as amended). 367 Para 38, Anastasiou II. 368 Para 40. 369 Para 42. 370 Para 24.

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through a very detailed and technical description and interpretation of the corresponding statutory provisions, namely Articles 9(1), 12(1)(b) and of Annex V to the Directive, as amended by Directive 92/103/EC respectively. This kind of structured approach appears to be in line with the Court’s jurisdiction under Article 220 EC, allegedly to create ‘constitutional doctrine by the common law method’,371 based in particular on the consideration first of the ‘ordinary’ or ‘special meaning’ of the wording and secondly of the “subjective intention of the legislature and the function of a rule at the time it was adopted”.372 The Court appears to have looked at the prevailing context and to have analysed the ‘schematic relationship’ between the various provisions “in such a way that it has a reasonable and effective meaning”.373 In this respect, the Court contends that the non-exclusive capacity of issuing phytosanitary certificates by the competent authorities of the country of origin can be implied from the reading of Article 12(1)(b) (this omission could not be regarded as ‘accidental’)374 and is expressly referred in the Annex (issue by the ‘consignor’ country). Article 9(1) must contain a fortiori the exception to the issue of the certificate by the country of origin, provided the special requirements can be met elsewhere (including in the consignor’s country, since there would be no reason otherwise to have an exception to the general rule). In line with a structured interpretation method where the purpose of the rule ‘may’ be taken into consideration either in isolation or within a system of rules,375 the Court refers to the objective of the Directive in question and uses it to confirm that this objective can be achieved “without requiring plants originating outside the Community to undergo a certification procedure in their country of origin”.376 Despite the rejection of any political dimension by the Court,377 this case has led to certain misunderstandings as to the Court’s position in international law in view of the triangular relationship at stake.378 Any 371

Tridimas, 20. Bengoetxea, 229. 373 Bengoetxea, 229; this section has appeared in an amended form in Laulhé Shaelou (2007) 628–30. 374 Para 26, Anastasiou II. 375 Ibid. 376 Para 26. 377 Para 42. 378 For Talmon, the country exporting to the EU being Turkey, an internationally recognised non-member country which recognises the exporting entity, there is no difficulty of ‘indirect imports’ since the ECJ has never established a principle of cooperation (and therefore recognition) between the non-Member State from which the 372

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reasoning in international law could appear prima facie to reflect the structured method of interpretation allegedly adopted by the ECJ in this case, where elements of comparative law can be considered of relevance.379 But the real focus should be on the impact of this ruling on the Court’s jurisprudence in the context of European integration, as it arguably concerns the external dimension of the Internal Market. In fact, the Court appears to be concerned with the level of safety to be required from products originating from outside the Internal Market, thereby effectively widening the regulatory boundaries of the EU as a spillover effect of the Internal Market requiring that the principle of mutual reliance and co-operation also extend ‘as far as possible’ to EC trading partners. Whereas ‘structured’ reasonings can normally constitute ‘topoi’ or ‘general orientations’ in the creation of the doctrinal principle,380 granting a normative status to such a technical interpretation of the Internal Market focusing mainly on instruments of secondary legislation would not be appropriate and would definitely prevent the reconciliation of this ruling with Anastasiou I. On the other hand, it is quite clear that the line of argumentation in this case is different from the teleological approach used by the Court in Anastasiou I and that an alternative method of interpretation of the Court’s approach is needed, in an attempt to reconcile the two rulings.381 2. Legal implications of Anastasiou II: a withdrawal from a Community precedent? This ruling seems prima facie in contradiction with Anastasiou I, as argued by Advocate General Fennelly, who focused his attention on two of the special requirements to be reported on the phytosanitary certificate, namely that the produce be free from stalks and that its packaging bear an appropriate mark of origin.382 In view of the questions asked in the preliminary reference and in accordance with the

goods originated and the importing State. In his view, “international law does not preclude administrative cooperation with officials of an unrecognised State” and in principle, the EU and its Member States are “free to decide”, in Talmon (2001) 741–9. 379 Bengoetxea, 229. 380 Ibid. 381 Laulhé Shaelou (2007) 631. 382 Para 49 of AG Fennelly’s Opinion delivered on 24 February 2000 [2000] 3 CMLR 339; for a legal appraisal of the AG’s Opinion, see Laulhé Shaelou (2007) 631–2.

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previous argument that Anastasiou II is an instance of spillover effect of the Internal Market, the Court could however merely assume that compliance with these two special requirements could be checked in the importing State, on the basis of the shipping documents, and that the certificates were in fact issued by the Turkish authorities. As a result, the Court could avoid any problem of non-recognition of the issuing authorities arising in Anastasiou I, to the effect that the two cases may not be so contradictory after all.383 This was rendered possible by the fact that the House of Lords did not expressly request a preliminary ruling on whether these two special requirements could be satisfied outside the country of origin, thereby leaving the question for the national court to address. The Court did not have as a result to enter into the artificial and complex considerations of ‘direct’ and ‘indirect’ reliance on the certification proposed by Advocate General Fennelly, which could lead to considerations of a political nature. It could be argued that this case should have been treated no differently than Anastasiou I, as the issues raised therein are interconnected. But beyond mere procedural considerations, the method of interpretation of Community law used by the Court has led the case away from the previous one. Without granting to the ruling any political dimension as this would be ultra vires the Court’s competences, it is proposed to consider the wider socio-legal implications of this case for the parties involved, in order to grant to the ruling all the merits it deserves. Had this case been linked back to Anastasiou I, it would have carried the inherent dangers of the ECJ being perceived as imposing indirect economic sanctions on Member States for the non-enforcement of Anastasiou I,384 as well as putting obstacles to the development of the economy of the northern part of Cyprus, thereby impairing the chance of any positive progress towards a solution of the Cyprus problem. To the extent that this ruling participates to the effort towards Cyprus’ accession as a unified island, the ECJ intervention in Anastasiou II seems to be in conformity with the more general EU policy on Cyprus, and therefore with an implicit teleological interpretation of Community norms. The level of legitimacy of the Court in the present case if taken in isolation from the wider socio-legal context would

383 This however constitutes a ‘mechanical’ application of Anastasiou I, see Koutrakos (2003) 496. 384 Koutrakos (2003) 497.

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otherwise be quite low. Although the Court is not bound by its previous rulings in theory, it seems that it did not want to be seen as withdrawing from the principles established in Anastasiou I, which can be qualified as ‘fundamental’. This could explain the high level of technicality in the Court’s approach in this case, as opposed to the generality of the approach in Anastasiou I. It is argued that Anastasiou II should be seen as a dispute based on certain technicalities of the Internal Market rather than on general principles, thereby avoiding the qualification of the latter ruling as an exception to the former but rather as an explanatory case reinforcing legal certainty.385 This could be illustrated by Bengoetxea’s alternative classification of ‘structured’ rulings into ‘criteria of interpretation’ operating “in a weakly normative way, as directives or guidelines”,386 and subsequently reformulated by the Court into a doctrinal principle. This is also reflected in the ‘rational constructivist’ approach to the construction of the doctrinal principle previously suggested, whereby it is assumed that the Court tries to design a long-term strategy, the ultimate goal of which could be the establishment of the principle on the handling of such type of unprecedented trade disputes and that this case may only be one piece of the puzzle.387 The more flexible approach of the Court in this ruling nevertheless seems to indicate the willingness on the part of the EU to accept a certain degree of trade from the northern part of Cyprus to the rest of Europe – through an indirect mean at least. If so, this could entail the practical recognition of this territory as an economic entity and/or a trade partner of the EU.388 From ‘indirect trade’ to ‘direct trade’ to the EU, there is only one step, which the Court could take should it turn a blind eye on certain issues pertaining to certification while constructing its doctrinal principle. Issues of certification however lie at the very core of the Internal Market and are therefore deemed of prime importance. The question of the certification of goods originating from the northern part of Cyprus was subsequently referred to the Court in a third preliminary reference, allowing the Court to complete the puzzle 385 This section has appeared in an amended version in Laulhé Shaelou (2007) 632–3. 386 Bengoetxea, 230. 387 Weiler uses ‘rational constructivism’ referred to in Chap 1 to criticise the ‘purposeful opportunism’ approach to the Court, which can lead to flawed assumptions of generalisation in the Court’s jurisprudence in Reed, 9. 388 Laulhé Shaelou (2007) 633.

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through the establishment of rules governing direct trade between this part of Cyprus, the RoC and the EU. Such rules were actually in the process of being formalised at the political level during the final phase of the accession negotiations with Cyprus, bringing the matter into the political arena of EU decision-making. B. Anastasiou III:389 towards a doctrinal principle on the eve of Cyprus’ accession to the EU 1. A case of direct trade through the government controlled area of the RoC Following Anastasiou II, the House of Lords had to give its judgment on the case, including on the fulfilment of the two special requirements for citrus fruits outside of the place of origin.390 In the meantime, however, Directive 77/93/EEC was further amended by Directive 98/2/ EC391 and then became Directive 2000/29/EC.392 The appellants sought to rely on item 16.1 of Annex IV, Part A of Directive 77/93/EEC, as amended, in conjunction with items 16.2, 16.3 and 16.3(a) of the Annex, which were also modified by Directive 98/2/EC. As a result of these amendments, there was an additional special requirement with respect to citrus fruits originating in third countries where certain diseases had occurred, that an official Statement “that the fruits originate in areas known to be free from the relevant [harmful] organism” be affixed or, alternatively, that no symptoms had been shown at the place of production during the period prescribed or that they have been subject to testing. Directive 98/2/EC was enacted shortly before the Court’s ruling in Anastasiou II and, therefore, had not been taken into consideration. The House of Lords accepted the new line of argumentation and considered that the arguments were relevant to the main proceedings.393 Lord Slynn of Hadley argued that the official Statement requested under items 16.2 et seq could only be effectively provided in the

389 Case C-140/02, R v Minister for Agriculture, Fisheries & Food, ex parte SP Anastasiou (Pissouri) Ltd & Others [2003] ECR I-10635 (‘Anastasiou III’). 390 R v MAFF, ex parte SP Anastasiou (Pissouri) Ltd (No 4) [2001] UKHL 71. 391 [1998] OJ L 15/34, 21.1.1998. 392 [2000] OJ L 169/1, 10.7.2000. 393 See Opinion of the Lord of Appeal in the Cause Lord Slynn of Hadley in the judgment of the HL, n 390 above.

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country of origin and referred to the Advocate General’s Opinion in Anastasiou II.394 Thus, there was a difference of interpretation of item 16.1 between the Lords and the UK Ministry, which was of essence to the proper application of the subsequent items of the Annex, in particular because items 16.2 to 16.4 of Directive 98/2EC concerned a wider range of goods than citrus fruits. The Lords therefore found it necessary to make a further reference to the ECJ under Article 234 EC on the interpretation of the special requirement of item 16.1, in the event that citrus fruits originating from a third country have been shipped to another third country, and on the place where the official statement as requested under items 16.2 to 16.4 must be made.395 The Full Court accepted competence to answer the preliminary references made by the House of Lords and gave its third ruling in this saga. On the interpretation of Directive 77/93/EEC, the Court ruled that “the special requirement that an appropriate origin mark be affixed to the plants’ packaging, laid down in item 16.1, can be fulfilled only in the country of origin of the plants concerned” and that “[t]he amendments which Directive 98/2/EC made to items 16.2 and 16.3 of Directive 77/93/EEC do not affect that interpretation”. The Court concluded that “the phytosanitary certificate required in order to bring those plants into the Community must, therefore, be issued in their country of origin by, or under the supervision of,396 the competent authorities of that country”.397 Combining several ‘dynamic criteria’ of justification including the ‘clear’ text of legal provisions398 and ‘substantive reasoning’ to reach a ‘coherent, mutually supporting structure’ in the final decision,399 it is argued that the Court retreats from its interpretation in Anastasiou II 394

Para 31 Lord Slynn’s Opinion, ibid. Paras 34, 36 and 62 of the Lords’ Opinions in the judgment of the HL, ibid; see Case C-140/02: Reference for a preliminary ruling by the HL, by order of that court date 17 December 2001, in the case of Regina v Minister for Agriculture, Fisheries & Food, ex parte SP Anastasiou (Pissouri) Ltd & Others [2002] OJ C144/23. 396 Emphasis added. 397 Para 75, Anastasiou III; this para was reproduced as such in the judgment order of the HL R v Minister of Agriculture, Fisheries and Food (Respondent) ex parte SP Anastasiou (Pissouri) Ltd & others (Appellants) 15 July 2004, Lords Journal (2003–4) 631. 398 The objectives of Directive 77/93/EC (para 75); Art 9(1) Directive securing an additional level of protection, identical throughout the territory of the Member States, for certain categories of plants (para 49); and items 16.1 to 16.4 Annex concerning the requirement to affix an appropriate origin mark (para 56). 399 Bengoetxea, 229–30. 395

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in view of the very specific requirements applicable in this case. It emphasises in particular the importance of the examination of the second special requirement relating to the affixing of an appropriate origin mark to the packaging, in order to satisfy the requirements of items 16.2 to 16.4,400 since the first one can be satisfied through visual inspection.401 Applying ‘substantive reasoning’, the Court admits that “it would be paradoxical if such a mark, which is intended to certify the origin of products, could be issued outside the country of origin, after the plants have been exported”.402 It also states that “the fact that the affixing of the mark exempts exporters from the requirements for an official Statement laid down in items 16.2 to 16.4 precludes the mark from being affixed by the producer of the plants alone, without any possible involvement of the authorities empowered to make those official statements”.403 The Court therefore argues in favour of a strict interpretation of the ‘problematised text’, i.e. Directive 77/93/EC, as amended, to the extent that this is necessary to the satisfaction of the special requirements under the Directive (as amended) for the sake of the Internal Market. Using socio-legal ‘topoi’ or arguments, the Court refers to the exclusive competence of the country of origin in order to issue the requested certificates and to the legitimacy of the authorities legally authorised to carry out this task, in accordance with the principles established in Anastasiou I. Ultimately, the Court appears to have achieved the construction of a doctrinal principle, the technical aspects of which were addressed in Anastasiou II with respect to the external dimension of the Internal Market. It is argued that through this latest reference for preliminary ruling, the Court was able to develop the internal aspects of the Internal Market applicable to specific goods normally subject to the full requirements of the acquis in the context of the closing accession negotiations with Cyprus. Given that the Internal Market is now well established and fully functioning as opposed to nearing completion in Anastasiou I, Anastasiou III is placed in a different context. As a result, Anastasiou III cannot be said to close the door to trade with the northern part of Cyprus as it appears that some flexibility can be afforded in the 400 401 402 403

Para 59, Anastasiou III. Para 58. Para 60. Para 61.

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application of the technical rules of the Internal Market. It seems that the judgment is based on the specific nature of the produce itself, which justifies the satisfaction of special requirements and their strict interpretation under the Directive in view of the precautionary principle. It remains to be seen whether all the produce exported from the northern part of Cyprus to Europe can be subjected to this special approach in an attempt of generalisation to their overall trading relationship, which could be underlying the doctrinal principle. There can nevertheless be consolidation of these various rulings on the Internal Market at a more fundamental level, as previously suggested through a ‘rationalist constructivist’ approach. In line with the principles underlying the Internal Market, the Court acknowledges the exclusive competence of the home State, emphasises the role of the national authorities in this process and as a result, encourages the parties to search for trade links within the country of origin. This has particular implications in this case, since it means that the Court closes the door to ‘indirect trade’ through Turkey, which does not promote the general principle of co-operation and mutual reliance underlying the Internal Market, in addition to not complying with the specific technical requirements in this case. Thus, the principle of mutual reliance and co-operation referred to in Anatasiou I in the context of association becomes applicable to intra-state trade relations in the context of accession, in addition to its usual application to inter-state trade relations within the Community. This finding can be said to contribute to the further development of the principle of EU regulatory governance through the Internal Market and is arguably one of the main contributions of the Anastasiou saga following accession. Through its doctrinal reasoning, the Court appears to have established the judicial foundations necessary to the normalisation of the trading relationship between the northern part of Cyprus, the RoC and the EU within the existing EU political framework and in accordance with the principles of the Internal Market. By requiring that the competent authorities within the country of origin be involved either themselves or through supervision, the Court has reminded all the parties that the regulatory framework of the Internal Market involves delegation and supervision between authorities not only at the supranational level, but also at the national level. In fact, the possibility for Member States to delegate to authorities of their choice within the framework of Community law has always existed and has been reinforced with the formalisation of the principle of subsidiarity. National delegation or co-operation must however meet the requirements of the Internal

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Market and, as such, may involve mechanisms of supranational decision-making.404 2. Legal implications of Anastasiou III: final countdown for an EU policy on direct trade from the northern part of Cyprus to the EU? At the time of the ruling, the competent authorities to issue the certificates required for import into Europe were exclusively the ones authorised to do so by the RoC and have remained so up to today. But for the sake of the Internal Market and with respect to internal trade only, the Turkish Cypriot Chamber of Commerce (‘TCCoC’) has been authorised by the European Commission to issue the necessary documents accompanying the goods crossing the Green Line to the government controlled area of the RoC.405 With respect to direct trade between the northern part of Cyprus and the EU, the Commission has made another proposal – which it apparently deems comparable to the first one regarding intra-state trade – regulating the imports of goods in the rest of the Community, but without involving the competent authorities of the RoC.406 The intra-state trade regime in Cyprus appears founded on the rules of the Internal Market, as it facilitates the freedom of movement within a Member State. It is however questionable whether the DT Proposal in its current form can be rooted in the rules of the Internal Market in view of the suspension of the acquis in the northern part of Cyprus decided by the Council. The Commission avoids this question by relying on the CCP to justify the proposed regime under Community law.407 But in view of the regulatory powers vested in the supranational institutions vis-à-vis goods entering the Community territory from a non-EU trade partner (external trade relations) and subsequently circulating within the Community (free movement of goods) and as demonstrated in the Anastasiou saga, the CCP should be seen as forming the external dimension of the Internal Market.408 It would appear rather

404

This section has appeared in an amended form in Laulhé Shaelou (2007) 635. Decision of 7 July 2004 [2004] OJ L 272/12, 20.8.2004. 406 Proposal for a Council Regulation on special conditions for trade with those areas not under the effective control of the government of the RoC, COM(2004) 466 final, 7.7.2004 (‘DT Proposal’). 407 Explanatory Memorandum, DT Proposal. 408 With respect to the CCP and its relationship with the Internal Market, see Koutrakos P, EU International Relations law (Hart, Oxford, 2006) (‘Koutrakos (2006)’) 13–7. 405

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that the Commission has extrapolated the rules of the Internal Market, relying on the alleged spillover effect identified in the Court’s case law as a form of regulatory authority in its favour, which may not be justified. It is debatable whether the Court was actually being ‘tactical’409 and purported to introduce the principle of direct reliance on the certification by an entity in the northern part of Cyprus in this case. Contrary to the Commission’s alleged reading of the case, it is more likely that the ECJ ruling in Anastasiou III develops the foundations of the rules governing trade between the northern part of Cyprus and the EU previously established and places it within a more normative framework. In favour of the Court’s ‘tactical’ behaviour, however, it can be said that the Court could indeed show a certain amount of initiative, as the Anastasiou saga was based on three successive – and to a certain extent foreseeable – preliminary references based on interrelated legal issues. Another argument in favour of such an analysis of the Court’s approach is that, in parallel, the same policy was undergoing a process of formalisation at the decision-making level of the EU.410 But that would be perhaps overstating the political power of the Court and/or undermining the judicial independence of its judges. Such a scenario may actually remind of the Cassis jurisprudence, whereby the Commission had arguably relied on its own interpretation of the Court’s ruling in order to create the principle of mutual recognition in the Internal Market.411 It was however debatable whether the Court actually had intended to create such a principle of Community law. 409 The Court “introduces a new doctrine gradually: in the first case that comes before it, the Court will establish the doctrine as a general principle but suggest that it is subject to various qualifications; the Court may even find some reason why it should not be applied to the particular facts of the case. The principle, however, is now established. If there are not too many protests, it will be re-affirmed in later cases; the qualifications can then be whittled away and the full extent of the doctrine revealed”; see Wincott, 586. 410 Skoutaris argues that a Court decision that would have “upheld the [T/C] practice would have equated an ‘upgrade’ of the status of the regime in the [n]orth. At a time, when the negotiations of the Annan Plan were taking place, that would have been far from constructive. In the aftermath of the Anastasiou saga and the rejection of the Annan Plan, it was a matter for the Union political institutions to lift the economic isolation of the [T/C]”, in Skoutaris N, ‘The application of the acquis communautaire in the areas not under the effective control of the [RoC]: the Green Line Regulation’ (2008) 45 CMLRev 727 (‘Skoutaris (2008)’) 743. 411 Mutual recognition was actually the ‘backbone’ of its 1984 White Paper on Completing the Internal Market, see Szyszcak E & Cygan A, Understanding EU law (Thomson, London, 2005) (‘Szyszczak & Cygan’) 92.

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It remains that the EU, both at the judicial and political level, has now accepted to consider the socio-legal implications of Cyprus’ accession to the EU separately for territories not under the effective control of the government of RoC if and when necessary. This finding appears justified by the principles of the Internal Market only to the extent that they are placed within the wider socio-legal context of European integration.412 Concluding remarks Whereas the traditional ‘catalyst proposition’ applied to Cyprus has failed to establish the causal importance of the EU in the Cyprus problem, this book claims that the European integration of Cyprus could promote a framework for a ‘solution’ through the Europeanisation of Cyprus. So far, the potential partial ‘solution’ offered by the European integration of Cyprus through negative integration appears to be better than the status quo which was in force before EU membership. There is always the question of what would have happened without EU membership; in particular whether economic integration in Cyprus would have been feasible without the involvement of the EU through the process of Europeanisation. There were signs that a limited economic integration was feasible between the two sides. But at the very least, the EU variable through the Anastasiou saga in particular could be granted the merit of having accelerated, if not facilitated, economic integration; there is at least Europeanisation in that sense. Beyond accession, it is argued that the Anastasiou saga continues to participate to the ongoing movement of Europeanisation extending also to the EU neighbouring countries. Within the context of the enlargement entailing inter alia a greater degree of diversity at the economic level, the Anastasiou saga outlines the growing need to adopt a ‘more systematic approach’ to the requirements of the EC’s external economic policy lying at the core of the CCP. Cremona argues that “[u]nlike development cooperation policy or the common foreign and security policy, external economic policy lacks any treaty-based binding statement of principles. This applies to the fundamental principles of the [CCP], including uniformity, liberalisation, and non-

412

This section has appeared in an amended version in Laulhé Shaelou (2007) 637.

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discrimination”.413 Thus, any interpretation by the Court of these principles relating to the CCP in particular is significant as it contributes to formulating “an explicit position on how much uniformity in external policy is required”.414 Anastasiou I in particular appears to draw a strict limit on the scope of the principle of non-discrimination in the name of economic rights promoted by the CCP,415 perhaps announcing what was going to follow in the Court’s case law in the new millenium.416 Beyond economic integration and trade measures, it is argued that the Anastasiou saga belongs to these instances of Europeanisation through EU external policies as previously defined in this book, which extends beyond Member States towards the EU immediate neighbours through the spillover effect of EC rules (Internal Market in particular). It remains to be seen how the various elements of the Europeanisation of Cyprus have crystallised in the process of institutionalisation of norms underlying its process of European integration. The extent of the process of European integration of Cyprus is largely dependent on the proper institutionalisation of its Europeanisation to be studied next.

413

In Cremona (2003) 206. Ibid. 415 This will be addressed further in Chap 5 where fundamental rights within the EU legal order will be examined. 416 See in particular the Schmidberger case where the Court considered the conflict arising out of two legal interests ‘of equal weight’, namely one of the fundamental freedoms enshrined in the EC Treaty (freedom of movement of goods) and the freedom of expression and assembly protected as a fundamental human right within the EU legal order, both of which may be restricted ‘in pursuit of other general interest’ within the EU, paras 70–7; see also Case C-36/02, Omega Spielhallen [2004] ECR I-9609, paras 34–8. 414

PART TWO

THE INSTITUTIONALISATION OF THE EUROPEANISATION OF CYPRUS: TOWARDS A DIFFERENTIATED INTEGRATION?

INTRODUCTION TO PART TWO

This Part is concerned with the crystallisation of the various aspects of the Europeanisation of Cyprus in a process of institutionalisation of norms underlying its process of European integration. It will be argued that the deepening and the widening of EU policies towards Cyprus leading to its Europeanisation identified in Chapter 2 is accelerated and completed through the formalisation of the acquis at the decisionmaking and political level through a process of institutionalisation of the Europeanisation of Cyprus. As the process of European integration deepens, more parameters ought to be taken into consideration in the institutionalisation process. This Part will primarily consider the institutionalisation of the acquis, previously identified as a source of governance, through an analysis of the various instruments of Community primary legislation and other decisions of the Council forming the governance framework of the 2004 enlargement, including to Cyprus. The relevant mode of governance derives from the EU decisionmaking mechanism applicable to a specific measure. Generally speaking, EU decisions with an external dimension (enlargement, foreign policy) are normally subject to the rules of intergovernmentalism as the usual pattern for an international organisation.417 On the other hand, decisions on the internal mechanisms of the EU, given the accrued number and scope of EU competences, trigger rather the rules of supranationalism. In the latter case, the decision-making takes place at a “new and higher level” than that of the Member States themselves and “such decisions replace or override national rules”.418 The distinction between the various mechanisms of decisionmaking may be however increasingly blurred, due in particular to the spillover effects of EU policies, evidenced in particular by the successful completion and the furthering of the Internal Market as envisaged by the ECJ and the Commission,419 but also with 417

Foster on EU Law (OUP, Oxford, 2006) 16. Ibid. 419 See the label of ‘competence creep’ by Weatherill S, ‘Why harmonise?’ in Tridimas T & Nebbia P (eds), Challenges for EU law in the 21st Century (Vol I, Hart, Oxford, 2004) (‘Tridimas & Nebbia’). 418

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enlargement,420 which lead to the increased supremacy of soft governance. In areas of policy subject to a ‘supranational-centralised’ mode of governance, decisions are made by organisations like the ECJ and the Commission “without depending on the agreement of individual member governments, of the Council, or of the European Parliament”.421 This mode of governance concerns mainly areas of policy that have been Europeanised, in the sense that the causal importance of the EU can be demonstrated, and include instruments of soft governance. At the bottom, however, there must be an ‘intergovernmental agreement’ on the Europeanisation of the policy area leading to the grant of ‘substantive authority’. This agreement may “formulate a basic policy choice and then delegate its further specification and enforcement to a supranational institution that is allowed to exercise its discretion without the further participation of national governments”, the so-called ‘procedural authority’.422 This ‘two-structure’ approach may justify a priori the powers of interpretation and of enforcement delegated to the Commission in certain areas of policy, spelled out either in substantive provisions of the Treaty (Article 133 EC for the CCP) or in procedural rules taken on the basis of an intergovernmental agreement in the case of the accession negotiations.423 It however denies any fundamental role to the institutions in EU governance. In particular, it ignores the fact that such an agreement is strongly influenced by the EU variable and that it would not have been taken without the independent variable that is EU membership; in other words, that a certain degree of Europeanisation exists in intergovernmentalist agreements

420 See Laurent P H & M Maresceau (eds), The State of the EU: deepening and widening (vol 4, Lynne Rienner Pub, USA, 1998) (‘Laurent & Maresceau’) 44; see also Van Elsuwege who writes that the “results of negotiations with one country provoked a kind of spill-over effect on the negotiations with other countries”, in Van Elsuwege, 393. 421 Börzel T & Cichowski R (eds), The State of the EU: law, politics and society (vol 6, OUP, Oxford, 2003) (‘Börzel & Chichowski’) 82. 422 Scharpf, ‘Legitimate diversity: the new challenge of European integration’ in Börzel & Chichowski, 82. 423 See Council’s decision on internal procedures of 9 December 1997, quoted in Agence Europe, 9.12.1997: “No 2: The Council will determine the common positions of the [EU] on all problems posed by the accession negotiations. No 3: In order to determine the common positions of the [EU], the Commission is invited to make proposals on all the problems posed by the accession negotiations in those areas which relate to the Treaties establishing the European Communities”, see Hoffmeister in Ott & Inglis (2002) 99.

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too.424 Even in areas which remain largely ‘untouched’ by EU policymaking including taxation, fiscal policy or defense, Member States must adopt a ‘European line’ of conduct.425 Applying the concept of governance to enlargement, it should be noted that the final agreement leading to the entry of candidate countries into the EU is the culmination of an intergovernmental process, involving all the Member States and the applicant States during the negotiation (even if through a mandate to the Commission), the accession conference and the ratification phase.426 A single Accession Treaty is usually drawn up for all applicant countries, who undertake to become members of the EU subject to the conditions set out in an Act of Accession annexed to the Treaty.427 In the case of the 2004 enlargement, the Treaty of Accession concerned ten new members, including Cyprus, with the hope that the ratification of the historic eastern enlargement would happen smoothly.428 The final agreement is deemed to contain the “conditions of admission and the adjustments to the Treaties on which the Union is founded which such admission entails”,429 including adjustments to the Community secondary legislation agreed by the Member States upon accession as per the interpretation of the Court in LAISA.430 Such adaptations to the Treaties upon accession have been said to provide some flexibility within the Community legal order, distinct from any flexibility or differentiation inherent in the EU constitutional and institutional system.431

424 With reference in particular to the Commission’s power to induce governments to agree on additional legislation advancing further economic integration, see Scharpf in Börzel & Chichowski, 83. 425 Moravcsik gives a – too – large account of the areas where the EU policy plays a ‘subordinate’ role arguably minimising the phenomena of ‘cross-pillarisation’ and of ‘communitarisation’ in Börzel (2006) 149. 426 For the accession procedure applied to previous enlargements, see Laurent & Maresceau; see also Booss and Forman, ‘Enlargement: legal and procedural aspects’ (1995) 32 CMLRev 95 (‘Booss & Forman’). For the accession procedure applied to the latest enlargement, see e.g. Ott & Inglis (2002); Cremona (2003); Hillion (2004b); and Maresceau (2006). 427 Art 49(2) EU; see Lenaerts K & Van Nuffel P, Constitutional law of the EU (2nd ed, Thomson, London, 2005) (‘Lenaerts & Van Nuffel’) 361. 428 Tocci (2004) 131. 429 Art 49(2) EU. 430 Joined Cases 31–35/86 [1988] ECR 2285, paras 9–12 (‘LAISA’). 431 Müller-Graff writes: “it is evident that the basic constitutional framework of European integration must, in principle, be accepted and realised by all members in the same way. Otherwise, the Union could not exist as a political, economic and legal Community of equally entitled and equally obliged members. Nevertheless, the question

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It is not argued here that differentiation constitutes a separate fundamental principle of Community law, but rather an outcome of the application of the relevant Community rules and principles in a broader socio-legal context, taking into account certain specificities of Member States with a view to a successful integration.432 Indeed, European integration may require elements of differentiation, to be examined in this Part, or even of ‘disintegration’, to be examined in the next and final Part of this book. In this context, this Part will be devoted to analysing the adaptations to the Treaties which were deemed necessary for the accession of Cyprus to the EU, in comparison with the other new Member States. Adopting a governance approach of enlargement in the socio-legal context of this book, this Part will set out the principles of integration of Cyprus into the EU and assess the extent to which differentiation, if any, was and is necessary in the case of Cyprus. To that intent, Chapter 3 will examine the foundations of the 2003 Treaty of Accession433 from the perspective of the governance of enlargement to all the new Member States. The principle of territorial exclusion contained in Protocol No 3 annexed to the 2003 Act of Accession434 specifically concerning Cyprus will be the focus of Chapter 4, whereas the derogations from Community law contained in Protocol No 10 annexed to the 2003 Act of Accession435 also applying to Cyprus will form the core of Chapter 5.

remains: must all provisions in the Treaties that constitute the Union be rated within a basic – constitutional – framework? In principle, this question should be answered in the positive. Otherwise the construction of the Union would have to provide for distinctions in the quality of membership and in the participation in decisions and would therefore be threatened by the possibility of incoherent policies. Hence, the idea of a minimal socle of membership seems to contain more problems than solutions”, in Maresceau (1997) 36. 432 For a brief literature review on flexibility, see Inglis K & Ott A (eds), The constitution for Europe and an enlarging Union: unity in diversity? (Groningen Europa law, Groningen, 2005) (‘Inglis & Ott (2005)’) 105. 433 [2003] OJ L236/17, 23.9.2003 (‘(2003) Treaty of Accession’). 434 [2003] OJ L236/940, 23.9.2003 (‘Protocol 3’). 435 [2003] OJ L236/955, 23.9.2003 (‘Protocol 10’).

CHAPTER THREE

THE GOVERNANCE OF ENLARGEMENT: THE INSTITUTIONALISATION OF THE 2004 ENLARGEMENT

The perspectives of Europeanisation and governance, to the extent that they both illustrate policy outcomes of European integration, associated to the framework of enlargement lead to the consideration of the issue of boundaries in the EU. The allegedly ‘malleable nature’ of the EU boundaries allows the EU “to strengthen, change, or move boundaries as a means to extend governance to non-members”.436 In this respect, Wallace notes that “the lines between the more shallow and the more deep forms of integration have not entirely coincided with the boundary between EU members and non-members”, taking Finland and Sweden in the late 1990’s as an example.437 Friis and Murphy have identified the most ‘salient’ boundaries of the EU as being “institutional, legal, transactional, geopolitical, and political cultural”.438 Of great significance to this study are the boundaries which do not correspond to the EU realm as a way to explain the flexibility of certain principles of European integration. It is argued that a governance approach to the EU boundaries in the context of enlargement allows to grasp the raison d’être of the foundations of the 2003 Treaty of Accession and of any special regime granted thereunder. It is quite clear that the legal boundary of the EU, representing the EU legal order, extends beyond the territory of the EU, due in particular to the “external dimension of its policies and voluntary imitation or assumption of EU legislation by non-members”.439 It is important to note that “the EU can alter this boundary through negotiations with

436

Friis & Murphy, ‘Enlargement: a complex juggling act’ in Green Cowles & Smith,

189. 437

Ibid, 160. Friis & Murphy in Green Cowles & Smith, 190; see also Wallace’s explanation of the ‘interconnectedness’ of Europe, namely ‘functional, territorial, and affiliational’ from a socio-economic perspective, in Wallace H, ‘EU enlargement: a neglected subject’, in Green Cowles & Smith, 153–6. 439 Friis & Murphy in Green Cowles & Smith, 190. 438

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outsiders on mutual undertakings concerning the reach of EU legal acts in the absence of accession and full access to EU legal remedies”.440 By virtue of the same rationale, the ‘transactional’ boundary, setting out the rules of market regulation within the EU and between the EU and non-members, does not correspond to the territory of the EU since boundaries can be manipulated “through, for example, agreeing preferential trade regimes or opening access to EU funds and research programs”.441 It has been argued that the capacity of the EU to manipulate its geopolitical boundary is more limited.442 It is however submitted that there could be a certain degree of flexibility in the geopolitical boundaries of the EU too, due in particular to the fundamental vocation of the EU to welcome any ‘European’ State.443 The term ‘European’ in this context could be understood as encompassing other dimensions, such as ‘historical-political’ and/or ‘cultural’. Friis & Murphy themselves address the issue of ‘European’ State not as a geopolitical boundary, but as a ‘political cultural’ boundary of the EU.444 Indeed, purely geographical considerations would certainly not determine on their own the fate of a third country associated to the EU, as shown by the example of Russia for which qualifying as a ‘European’ State following the post-Helsinki reading of Article 49 EU would not be the biggest challenge.445 The example of Turkey, “whose territory lies only partially on the European continent”, is perhaps the best illustration of this vocation so far.446 With respect to the EU policy vis-à-vis Turkey given the national preferences of Member States such as Greece, Wallace notes that “wherever the boundary of the EU has been set, it has raised issues about the relationship of the insiders with the next set of outsiders and vice 440

Ibid. Ibid. 442 With respect to a line to the east, the cold war “drew a rigid geopolitical boundary around the EC”, ibid; see also Dorau, ‘Die öffnung der Europäischen Union für Europäische Staaten’ (1999) 34 EuR 736. It is also clear that the Mediterranean Sea is a natural border to the south; hence, the rejection of the application of Morocco on legal grounds by the Council in 1987, see Lenaerts & Van Nuffel, 358. 443 Art O EU, as amended by the Amsterdam Treaty (Art 49 EU). 444 Friis & Murphy in Green Cowles & Smith, 191; for a summary of the various argumentations made in connection with the other dimensions of the term, see Hoffmeister in Ott & Inglis (2002) 92. 445 See Chap 2, I.B above; see also Maresceau in Hillion (2004b) 186. 446 The preamble and Art 28 Ankara Agreement “already opened the door to accession, affirming that the country is ‘European’ in the sense of Article 237 EC”, see Hoffmeister in Ott & Inglis (2002) 92. 441

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versa”,447 thereby promoting the idea that the geographical lines of the EU territory are interconnected. With respect to the ‘insiders’ currently located within the geographical boundary of the EU, there are numerous examples of European territories beyond the scope of the Treaties448 and/or benefiting from a specific status within the EU,449 to the effect that they may fall outside the scope of other EU boundaries, such as the legal or transactional one,450 including territories situated in Cyprus.451 Thus, the boundary terminology can provide a theoretical framework to enlargement, which extends to European integration with the accession of the candidate countries to the EU and beyond. With respect to the 5th enlargement,452 it is clear 447

Wallace in Green Cowles & Smith, 154. The Treaties expressly include territories for whose external relations a Member State is responsible (Art 299(4) EC); see however the status of the Channel Islands and of the Isle of Man under Art 299(6)(c); of the Åland Islands under Art 299(5) EC or of the Faeroe Islands under Art 299(6)(a) EC. 449 Whereby only certain provisions of the EC Treaty are applicable to specific territories such as Gibraltar under Art 28 and Annex I(I) 1972 Act of Accession of the UK [1972] OJ L 73/1; see also Art 299(3) EC regarding the overseas countries and territories (‘OCTs’) having special relations with certain Member States as set out in Annex II to the EC Treaty to which Pt Four EC Treaty applies (1st sentence) and the ones not included in the said Annex having special relations with the UK only (2nd sentence). 450 The provisions of the EC Treaty normally apply to the outermost regions (‘ORs’) of Member States such as the French Overseas Départements, the Azores, Madeira and the Canary Islands although the Council may adopt specific measures making the application of the EC Treaty subject to certain conditions in view of the structural economic and social situation of those areas (Art 299(2) EC). Pt Four EC Treaty (Arts 182–8 EC) also introduced special association arrangements for the OCTs listed in Annex II EC Treaty (Art 299(3) 1st sentence). The fundamental difference between the ORs under Art 299(2) EC and the OCTs under Art 299 (3) EC is that “[u]nlike the OCTs, the [ORs] not only are constitutionally linked to a Member State, but also form an integral part of the Community and are bound in principle by the entirety of the Community acquis”, see the Commission’s Green Paper on the future relations between the EU and the OCTs COM(2008) 383 final, 25.6.2008 (the ‘Commission Green Paper on OCTs’) 3; see also Communication from the Commission on “The [ORs]: an asset for Europe” COM(2008) 642 final, 17.10.2008. 451 Art 299(6)(b) EC was amended by Protocol No 3 2003 Act of Accession, to the effect that the EC Treaty applies to the SBAs in Cyprus “only to the extent necessary to ensure the implementation of the exceptional arrangements set out in that protocol”. 452 The 5th enlargement is composed of the 2004 and of the 2007 waves of enlargement which complete the big political project of eastern unification. Each wave nevertheless has its own specificities due in particular to the fact that for Bulgaria and Romania, it was rather a ‘dream come true’ scenario. Reference in this book will be made primarily to the 2004 ‘big bang’ enlargement, which included Cyprus, in particular since very little comparison can be drawn a priori between the accession of Cyprus and the one of Bulgaria and Romania, concerned mainly with issues of legal and economic ‘preparedness’, or from the mechanisms of differentiation deriving from the 448

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that by requiring that “candidates fulfil and enforce the acquis in almost all areas before they actually joined the Union … the EU strategy was to shift its legal and transactional boundaries before its institutional one”,453 thereby effectively placing the burden of adjustments on the applicants. Adopting a neo-liberal institutionalist approach, Smith has developed the theories of ‘exclusion’ and ‘inclusion’ of the EU, claiming that the EU has now shifted from a policy of ‘exclusion’ based on ‘monolithic methods of linear development’ of the EU with clear boundaries towards the outside world, to a policy of ‘inclusion’ of the EU, characterised by “a sense of greater flexibility and inclusivity through the erosion of rigid versions of the ‘Community method’ and the linkages between market-driven and socially-shaped policy agendas”.454 Such a shift has led in his view to “tensions and divergence between the (relatively unchanging) legal order of the EU and the (relatively dynamic) institutional framework”,455 thereby redefining boundaries of the EU. Smith wonders whether such a redefinition of the EU boundaries could create “either new channels for accession, or a desire to reassert the purity of the EU’s legal method”.456 It would seem that the first option has materialised, not necessarily to the detriment of the EU’s legal method. It led to an intensification of the degree of differentiation in the EU in the past decade and affected the enlargement process, including to outsiders,457 as well as European integration overall. It is proposed in this Chapter to examine how the issue of boundary governance was addressed in the 2004 enlargement and to what extent the principles of European integration had to be adjusted or adapted in the 2003 Treaty of Accession, arguably introducing some major elements of differentiated integration in the 2004 enlargement.

2005 Treaty of Accession. For an appraisal of the 2007 enlargement, see Lazowski A, ‘And then they were twenty-seven … a legal appraisal of the Sixth Accession Treaty’ (2007) 44 CMLRev 401. 453 Friis & Murphys in Green Cowles & Smith, 193. 454 Smith M, ‘The EU and a changing Europe: establishing the boundaries of order’ (1996) 34(1) JCMS 5, 20. 455 Ibid, 22. 456 Ibid. 457 With respect to Russia and Ukraine, Van Elsuwege found that the accession negotiations “increased the legal and transactional boundaries between new EU Member States and outsider States”, 394 (emphasis added).

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i. The substantive rules of the Treaty of Accession Most observers would agree with the statement that “while partly imitating previous enlargement practice, the Treaty of Athens nevertheless contains more elaborate arrangements than earlier Accession Treaties, both quantitatively and qualitatively”.458 This part will consider the relationship between the Treaty of Accession with the rest of the Community legal order. A. Legal nature of the 2003 Treaty of Accession 1. Composition, execution and entry into force in the Community legal order The Treaty of Accession comprises three complementary elements, two of which are deemed relevant to this book, namely the Treaty of Accession itself and the Act of Accession459 with all attachments. The Final Act,460 which contains declarations adopted by the Member States as an intergovernmental conference but also unilateral declarations, is considered to be outside the scope of this book, unless stated otherwise, as it is commonly agreed that such declarations are not legally binding.461 The Treaty of Accession is an international treaty which requires ratification on the part of all signatories,462 even if it secures its entry into force without the ratification of all the acceding States, provided all current Member States have ratified it and a procedure of adjustment of the provisions of the Treaty through a unanimous decision of the

458 Hillion C, ‘The EU is dead. Long live the EU … A commentary on the Treaty of Accession 2003’ (2004) 29(5) ELRev 588 (‘Hillion (2004a)’) 538; for equally pertinent legal analyses, see Inglis K, ‘The Union’s fifth Accession Treaty: new means to make enlargement possible’ (2004) 41 CMLRev 937 (‘Inglis (2004)’); Lannon (2004); and De Witte in Cremona (2003). 459 [2003] OJ L 236/33, 23.9.2003 (‘(2003) Act of Accession’). 460 [2003] OJ L 236/957, 23.9.2003. 461 See in this respect Greneral Joint Declaration No 21, Final Act, 2003 Treaty of Accession which states that “[t]he present Member States underline that the Declarations attached to this Final Act cannot be interpreted or applied in a way contrary to the obligations of the Member States arising from the Treaty and Act of Accession. The present Member States note that the Commission subscribed fully to the above”. For the interpretative effect of the declarations signed by all the Member States before the ECJ, see Lenaerts & Van Nuffel, 709–10; for a discussion of the uncertainty which surrounds the legal effect of such declarations, see Hillion (2004a) 587–8. 462 Art 2 2003 Treaty of Accession.

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Council is complied with.463 Common agreement on the admission of the ten new Member States was formalised at the General Affairs Council on 14 April 2003464 prior to the signature of the Accession Treaty by all twenty five countries on 16 April 2003 in Athens. Upon ratification, the Treaty was set to enter into force on 1 May 2004.465 2. Legal structure The legal structure of the 2003 Treaty of Accession can be found in its Article 1(2), which indicates that the necessary conditions of admission and adjustments to the Treaties are set out in the Act annexed to this Treaty which forms an integral part of the Treaty. It can be said that there is an increasing tendency for precision in the formulation of the conditions and adjustments in the successive waves of enlargements.466 (a) Basic terminology and scope of application Article 237 EEC initially referred to both conditions of admission and adjustments to the Treaty. The conditions of admission would be described as “based primarily on legal, political, geographical and even economic criteria with which the acceding State must comply”.467 The adjustments to the Treaty, on the other hand, would involve adjustments ‘of an institutional nature’ and adjustments ‘relating to the applicability of the original Treaties’,468 which would mean that they did not a priori concern amendments to the acts of Community institutions.469 By virtue of Articles 7 and 230 EC, acts of the institutions are based on one of the Community Treaties and as such constitute a secondary source

463 This procedure is referred to as the ‘Norvegian clause’ and was used in 1972 and in 1994 when Norway rejected EU membership; see Lannon (2004) 37 and Hillion (2004a) 584. 464 IP 8220/03 (Press 105). 465 Art 2(2) 2003 Treaty of Accession. 466 Maresceau in Maresceau (1997) 20. 467 See Vandersanden G, case note (1989) 26 CMLRev 551 (‘Vandersanden’) 555. 468 Ibid. 469 Contra the Commission’s argument that adjustments could go beyond mere technical adjustments in Communication to the Council (supplementing its Communication of 20.4.1978 (1978) EC Bull Suppl 1) “Enlargement of the Community – Transitional period and institutional implications” (1978) EC Bull Suppl 2, pts 30–53. But the various Accession Treaties, including the 2003 Treaty of Accession, have “confined the institutional amendments to an appropriate representation of the new Member States in the institutions and bodies of the Communities”; see Lenaerts & Van Nuffel, 362.

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of Community law, as opposed to substantive acts taken by the institutions on another legal basis than Article 249 EC, for instance, legally binding inter-institutional agreements by virtue of Article 10 EC.470 In LAISA, the Court however gave a very broad interpretation of the conditions of admission which are said to concern “the application to the new Member State of the entire body of Community law in force at the time of accession and form the essential subject-matter of the Act”.471 The Court appears to have blurred the line between conditions of admission and adjustments to the Treaties by including in the conditions of admission certain adjustments to the acts of the institutions, as may be deemed necessary in the accession process.472 Following the disappearance of Article 237 EEC and its relocation in Article O EU (Article 49 EU after Amsterdam),473 it is still difficult to claim that Article 49 EU encompasses acts of secondary legislation, since this Article also refers to “the conditions of admission and the adjustments to the Treaties on which the Union is founded” and to the requirement of ratification of the agreement containing such principles. Thus, these provisions should normally be repealed, suspended or amended in accordance with the procedure set out in Article 48 EU.474 It remains however that many provisions concern transitional arrangements or technical adjustments including to acts of secondary legislation.475 Thus, it may be difficult to distinguish formally between the conditions of accession and the adjustments to the Treaties, as both set of provisions may result in the creation of transitional or safeguard measures, whose object or effect may be derogatory and whose scope varies.476 470 Inter-institutional agreements are a special category of sub-constitutional and secondary law rules imposing obligations on the EU institutions; for a discussion of the legal force of inter-institutional agreements, see Lenaerts & Van Nuffel, 790–2. 471 Paras 9–12, LAISA. 472 Contra AG Lenz in LAISA arguing that adjustments to acts of the Community institutions take place “in a kind of grey area which is not clearly governed by Art 237 EEC”. 473 For the relationship between Arts 237 and 238 EEC, see Benyon F, ‘Community Association Agreements: from the 60’s to the 90’s’ in Konstandinidis S, The legal regulation of the EC’s external relations after the completion of the internal market (Dartmouth, Aldershot, 1996). 474 See Case C-259/95, Parliament v Council [1997] ECR I-5303, para 27; and Case C-445/00, Austria v Council [2003] ECR I-8549, para 62. 475 See Hillion (2004a) 584; see also Inglis K, ‘The Accession Treaty and its transitional arrangements: a twilight zone for the new Member States of the Union’ in Hillion (2004b) 85–94; and Van Elsuwege, 357. 476 See joint cases C-63/90 and 67/90, Portugese Republic and Kingdom of Spain v Council of the EC [1992] ECR I-05073, where the Court reminded that “the accession

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The first Part of the Act of Accession on ‘Principles’ in particular has been said to contain transitional arrangements “relevant to the smooth insertion of the new Member States in the period immediately preceding accession”, even if not expressly labeled as such.477 It appears that the key feature of the 2003 Treaty of Accession is the concept of differentiation or flexibility rather than the interpretation of Article 49 EU.478 As such, some provisions of the Treaty of Accession seem to address weaknesses of the new Member States through transitional measures, whereas other more substantial provisions address, sometimes implicitly, the capacity of the new Member States to cope with existing differentiation in the EU, such as their participation to the EMU or to Schengen.479 Thus, the issue at stake concerns rather the mechanisms of differentiation available in the 2003 Treaty of Accession and their relationship with existing systems of flexibility available in the Treaties. (b) Differentiation in Accession Treaties Differentiation deriving from Accession Treaties is usually described as temporary, “especially when involving the core part of the Community acquis”, but may also be of a more permanent nature, “when involving marginal matters”480 to be agreed upon by the Member States as the treaty makers.481 The usual flexible tools are found in “temporary derogations, temporary provisions, safeguard clauses and transitional regimes” falling into two groups: “one group is motivated by technical, financial or practical reasons; the other is imposed for political reasons”,482 although it is debatable whether the two groups can be independent from each other.

of new Member States to the Community is carried out by means of acts which have the status of primary law and can change pre-existing situations in any area of Community law whatsoever, the maintenance in force of existing Community rules being the course generally followed”, para 49. 477 See Hillion (2004a) 86–7. 478 See Inglis (2004) 947–960. 479 See Garcia-Duran Huet P, ‘Le Traité d’Athènes, un traité d’adhésion comme les autres?’ [2004] RMCUE no 478, 290 (‘Garcia-Duran’). 480 Ott A, ‘The ‘principle’ of differentiation in an enlarged EU: unity in diversity?’ in Inglis & Ott (2005) 112. 481 For the 2003 Act of Accession, see Protocol 6 on Malta who negotiated a permanent derogatory measure regarding the acquisition of secondary residences given the size of the country. 482 Ott in Inglis & Ott, 112.

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At the very least, political objectives on their own – if it is possible to isolate them – should not normally lead to permanent pre-empted deviations from the acquis,483 as it would amount to an ex ante rejection of certain principles of Community law on political grounds. This would seem difficult to justify in the light of Community fundamental principles such as non-discrimination and sincere co-operation and to reconcile with the ‘basic constitutional framework of European integration’.484 In practice though, some transitional arrangements with a certain political dimension resulting from successive enlargements have been put in place on a more permanent basis, thereby potentially leading to a ‘quasi-permanent’ derogatory status. With respect to the 2003 Treaty of Accession, suffice to say here that there exist potentially long-lasting derogatory arrangements arguably taken partly or wholly on political grounds, to be studied within the course of this book. They concern in particular Cyprus through Protocol 3, Protocol 10 and/or the Schengen provisions under Article 3 of the Act of Accession (Cyprus remains the only country not to have joined the Schengen space in 2008; there were however other difficult cases).485 But they may also concern the new Member States overall through certain innovative derogatory mechanisms embodied in the Treaty (see below). In any case, it appears that the Member States and the Commission have opted for a ‘minimum standard of consistent and efficient application of the acquis’ built around the EU fundamental and constitutional legal order.486 This minimum standard is then supplemented by other provisions determining the extent of the flexibility granted in the 2003 Treaty of Accession. 483 Elhermann C D, ‘Différenciation accrue ou uniformité renforcée?’ (1995) 3 RMUE 191 (‘Ehlermann’) 195. 484 Müller-Graff (1997) 18. 485 Lithuania benefited from the provisions of Protocol 5 which provided that the Kaliningrad question could not “delay or prevent its full participation to the Schengen acquis”, even if these provisions need to be qualified. Van Elsuwege argues that the Declaration 12 of the EU15 with respect to Protocol 5 reveals that even though the objective was “to include Lithuania in the first group of Member States to participate fully in Schengen”, this decision depended on an ‘objective evaluation’ of the situation and that Lithuania did not benefit from any ‘legal guarantee’ to that effect but from a mere “political commitment on the part of the EU to assist Lithuania with the implementation of the required legislation”, in Van Elsuwege, 358. 486 Ott in Inglis & Ott (2005) 123. Müller-Graff warns against the problems raised by the ‘idea of a minimal core of membership’ as the construction of the Union could be threatened by the possibility of incoherent policies deriving from the provision of distinctions in the quality of membership and in the participation of decisions, in Maresceau (1997) 36.

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Commentators however seem divided as to whether EU fundamental principles restrict changes introduced by Accession Treaties,487 especially since the Treaty is silent as to the “legal status fundamental constitutional principles acquire in the constitutional legal order of the EU”.488 On the basis of Article 220 EC, the ECJ seems to indicate that a ‘presumption of legislative intention’ applies, to the effect that it will not recognise a fundamental constitutional change unless it is clearly expressed.489 The idea of ‘untouchable’ core issues is present in the constitutions of some Member States and in the notion of jus cogens in international law.490 In any case, it is reasonable to assume that this alleged ‘hard core’ of EU law, which would not be changed by way of a new Treaty (including an Accession Treaty) unless clearly intended, touches upon the fundamental and constitutional principles of the EU as a ‘quasi-constitution’ and not upon the implementation of the Internal Market.491 In this respect and regarding Amending Treaties, promoting in principle a different type of differentiation,492 Müller-Graff has argued that an ‘accession model with clauses for adjustment periods’ is preferable.493 He recalls the example of social policy with Britain ‘abstaining’ from the Agreement on Social Policy entered into between all the other Member States, which should of course remain an exception.494 He compares it to the situation with the EMU for which only a few Member States initially qualified in 1999 though, in this case, all the Member 487 See Manin P, ‘Flexibilité et élargissement’ in Ehlermann C D (ed), Multi-speed Europe – the legal framework of variable geometry in the EU (ERA, Trier, 1999); see also Müller-Graff in Maresceau (1997) 36. 488 Ott in Inglis & Ott (2005) 123–4. 489 Opinion 1/91, Draft Agreement relating to the creation of the EEA [1991] ECR I-6079; see Tridimas, 56. 490 Under Art 79(3) German Basic law, the principle of human dignity and certain principles of State organisation cannot be modified. In France, “the Republican principle is ‘untouchable’ according to Art 89(5) French Constitution”, see Hoffmeister F, Legal aspects of the Cyprus Problem. Annan Plan and EU accession (Martinus Nijhoff Publishers, Leiden, 2006) (‘Hoffmeister’) 131. 491 Hoffmeister, 131. 492 “[C]ontrairement à la différenciation résultant des périodes transitoires, les différenciations [dans les Traités] n’ont jamais resulté directement des élargissements. Ce n’est en effet jamais à l’occasion de leur entrée et sur le fondement des accords d’adhésion que des Etats ont pu obtenir des situations dérogatoires. Ceci s’explique notamment par le fait que l’Etat qui est candidat à l’adhésion est dans la situation de demandeur et est en fait obligé d’accepter le principe de l’acquis communautaire », Manin in Ehlermann, see n 487 above, 146. 493 Müller-Graff (1997) 18. 494 Ibid, 18–9.

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States agreed in principle ‘to the basic terms’;495 with a caveat however for the UK (derogation in a third stage not accompanied by the raft of essential legal obligations fully accepted by the other Member States benefiting from a derogation) and Denmark (derogation in a third stage to be abrogated only at Denmark’s request) covered by special protocols.496 He concludes that “[a]lthough this model [in the case of the EMU] of generally accepted terms with the legal option of development at different rates seems preferable to the option of concentric circles as shown in the case of social policy, it could result in a permanent situation of different sorts of participation and turn into a de facto situation of concentric circles around an inner core of the most developed States”.497 Within the framework of the socio-legal analysis of European integration promoted by this book, the governance approach outlined above constitutes a good tool of analysis of the provisions of the Treaty of Accession. It enables to adapt the scope of the analysis to take into consideration the differentiated application of principles of European integration, including when embodied into certain legal acts of the institutions within the core framework of the constitutional and fundamental principles of EC/EU law, as opposed to the mere framework of enlargement.498 In the case of Cyprus, it appears that Protocol 3, albeit permanently derogatory, does not derive from the accession of Cyprus to the EU but from the founding Treaties,499 while Protocol 10, albeit arguably derogating from the core of the acquis, constitutes a transitional arrangement deriving from accession.500 The two Protocols would therefore a priori fit within the core framework of the constitutional 495

Ibid. Protocol (No 25) annexed to the EC Treaty on certain provisions relating to the UK and Northern Ireland; Protocol (No 26) annexed to the EC Treaty on certain provisions relating to Denmark. For a legal appraisal of these two protocols, see Lenaerts & Van Nuffel, 297. 497 Müller-Graff (1997) 19. 498 “[I]f the amendments to secondary legislation are necessarily tied to the obligation of the acceding States respecting the entire body of Community law, it is, however, only as a consequence of the accession itself and cannot be assimilated, either to a condition of admission, or to an adjustment to the Treaty, within the meaning of [Art] 237 EEC”, in Vandersanden, 556. 499 Although it remains that Art 299 (6) (b) EC on the territorial application of the Treaty, excluding the British bases in Cyprus from its scope, was initially amended as a result of the UK accession to the EEC and then further amended upon Cyprus’ accession. 500 This was confirmed by the ECJ in the Apostolides case, “based on the exceptional situation prevailing in Cyprus”, para 34. 496

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and fundamental principles of EC/EU law as described above. But it remains to be clarified to what extent and how the acquis has been stretched in order to accommodate these two Protocols into the realm of Community law. This requires a preliminary analysis of the legal mechanisms of differentiation underlying the 2003 Treaty of Accession and EU law more generally. B. Derogations to Community obligations under Community law 1. Legal mechanisms of the differentiated regime in the 2003 Treaty of Accession The Act of Accession provides that the new Member States will be bound, from the date of accession,501 by the original Treaties and the acts adopted by the European institutions and the European Central Bank before accession.502 Article 10 of the Act of Accession introduces flexibility by providing the legal basis for derogating to the Treaties and to the acts of the institutions in the form of ‘transitional measures’. (a) Legislative scope of the derogatory mechanisms All types of amending measures are considered in Articles 7, 8 and 9 Act of Accession. It is clear that any amendment to the Treaty of Accession itself should comply with Article 48 EU by virtue of Article 7 Act of Accession, as “no provision in the treaty of accession or in the act accompanying can be construed as validating measures whatever their form, which are incompatible with the Treaties establishing the Communities”.503 With respect to the acts of the institutions, Article 8 provides that the derogatory measures in the form of transitional provisions will not affect the legal status of the original acts; in particular, the procedures for amending those acts remain applicable. On the other hand, Article 9 Act of Accession states that derogatory measures not in the form of transitional measures shall have the same legal status as the provisions they derogate from and shall be subject to the same rules. Thus, all types of adaptations appear a priori to be covered, be they primary or secondary legislation, transitional or permanent in nature, either under Article 8 or residually under Article 9.

501 502 503

Art 54 2003 Act of Accession. Art 2 ibid. ECJ, Case 185/74, Hauptzollambt Bielefeld v OHG König [1974] ECR 607, para 3.

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Given that the derogatory measures to the acts of the institutions contained in the various Annexes of the Treaty concern mainly instruments of secondary legislation taken on the basis of Article 249 EC, Article 8 should be understood as safeguarding the nature and the scope of the acts of the institutions concerned, including any amendment thereto. This is important given that the Treaty of Accession and all parts thereof, including the adjustments to the Treaties and the transitional measures,504 are deemed instruments of primary legislation,505 and as such, have a superior legal status to the original acts of the institution to which they are derogating.506 A contrario, it could be argued that this does not seem to be the case for measures falling under Article 9 if derogating from legal acts of secondary legislation; they should retain the same legal status and are subject to the same provisions as the original act. Interpreting Articles 8 and 9 Act of Accession as mere ancillary provisions to the principle set out in Article 7 would mean that the rules of intergovernmentalism would be applicable per se to the original acts of the institutions, whereas many of these acts fall under centralised or joint-decision supranational modes of governance pursuant to the EC Treaty. It is clear that following accession, these acts can be modified unilaterally by the competent Community institution(s) in accordance with the procedures laid down for amendment to secondary legislation.507 As such, the purpose of Articles 8 and 9 certainly appears to be ‘procedural’ to the extent that they introduce an important limitation to the principle laid down in Article 7 Act of Accession.508 This is especially the case for Article 9, as the purpose appears to be “to avoid that the provisions of the act of accession, which are neither adjustments to the Treaties, nor transitional measures, can only be amended in the future via the procedure for revising the treaties”.509 But it cannot be solely ‘procedural’, as such an interpretation would ignore the ‘substantive’

504

Art 60 2003 Act of Accession. Contrary to the Association Agreements, the EC is not a party to a Treaty of Accession. As an international agreement legally binding on all the Member States of the EU, it is however a Community act having the legal status of primary law equivalent to the founding Treaties, see Lenaerts & Van Nuffel, 709. 506 Ibid, 740. 507 Vandersanden, 556. 508 Ibid, 557. 509 Puissochet J-P, L’ élargissement des Communautés Européennes (Paris, 1974) 200. 505

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issues arising out of the consideration of EU supranational modes of governance, very important for acts of secondary legislation. Such considerations have implications in particular on the institutional balance of powers and on the principle of legal certainty in the Community legal order. It would indeed be paradoxical to argue that an instrument of secondary legislation has primary force of law as far as an amendment made under a Treaty of Accession is concerned; in particular since an institution cannot modify unilaterally primary legislation.510 (b) Judicial scope of the derogatory measures The extent to which differentiation in primary law and/or in secondary law is permitted in the Treaties is very much connected to the issue of judicial review; i.e. to what extent pre-empted differentiation agreed upon accession is opened to legal review by the courts. Even if the Treaty of Accession and all parts thereof are subject to the jurisdiction of the ECJ,511 it is only in order to “examine whether [the] validity [of acts of the institutions] may be affected by reason of the fact that they are contrary to a rule of international law”.512 As such, “the Court can declare acts of the institutions unlawful if they contradict its provisions.513 It can also interpret the latter following preliminary references from Member States’ courts,514 but it cannot declare them invalid considering their primary law nature”.515 It is well established that the Court of Justice has no power to consider the legality of the Treaties and amendments thereto, since they do not constitute acts of the institutions.516 As a result, the provisions constituting an integral part of the Acts of Accession are not subject either to judicial review of the Court,517 but on the contrary form the basis for review, and this must be true for the entire provision and not parts thereof, for the sake of legal certainty.

510

Vandersanden, 557. Case C-27/96, Danisco Sugar AB [1997] ECR I-6653; Case C-30/00, William Hinton & Sons Lda [2001] ECR I-7511. 512 Joined Cases 21–24/72, International Fruit Company [1972] ECR 1219, para 6. 513 [out of quote] It did so in Case C-445/00, Austria v Council [2003] ECR I-8549 and in Case C-206/97, Sweden v Council [1999] ECR I-3885. 514 [within the quote] ECJ, Case C-171/96, Rui Alberto Pereira Roque [1998] ECR I-4607. 515 Hillion (2004a) 587. 516 Para 12, LAISA. 517 Paras 13–18, LAISA; for more case law on this issue, see Lenaerts & Van Nuffel, 706. 511

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This should not however be the case for provisions deriving from legal acts of secondary legislation by virtue of Article 9 Act of Accession, which should retain all the characteristics of secondary legislation, including a priori the capacity of judicial review by the ECJ. In this case, the Court’s primacy of judicial control could be invoked “when the amendment to the regulatory act, as a result of the Act of Accession itself, is considered as irregular”.518 To avoid such considerations, the Court concluded in LAISA that the scope of a similar provision to Article 9 of the 2003 Act of Accession was limited to provisions which only affected “the procedure for the permanent (and perpetual) amendments of acts of secondary legislation”,519 thereby restricting the legal mechanism available in Article 9 Act of Accession and ensuring the Act of Accession’s ‘entrenched value’ in all instances.520 This ‘judicial gap’ has been justified by the ‘intention of the authors’ to express in the Act of Accession the ‘outcome of political negotiations’ and a “certain balance of powers which the Court was keen not to disturb”.521 It remains nonetheless that the legal review under Article 230 EC of acts on the grounds of Treaty infringement, including the Accession Treaties, should be opened ‘in limited circumstances’; “if the act of accession has been infringed or secondary law has been modified with respect to the act of accession”.522 This instance of alleged limited review has also been extended to the “concrete application of safeguard clauses in the accession treaty523”, but the Court in this case gave the Commission a ‘broad scope of application’ in line with its “general reluctance to scrutinise measures concerning common policies and external relations”.524 The above discussion has outlined the importance of the legal status of amending measures when looking at mechanisms of derogation to Community obligations contained in the 2003 Treaty of Accession in

518

Vandersanden, 558. Ibid, 559. 520 Tridimas, 54. 521 Ibid. 522 Ott in Inglis & Ott (2005) 129; Contra Hoffmeister, 130. 523 [within the quote] ECJ, Case 11/82, SA Piraiki-Patrakai and others v Commission [1985] ECR 207; [out of quote] in Case 258/81, Metallurgiki Halyps v Commission [1982] ECR 4261, the Court characterised the conditions as precise in substance and procedure. 524 Ott in Inglis & Ott (2005) 129. 519

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the light in particular of the institutional balance.525 Inglis & Ott conclude that: Accession treaties and acts of accession are characterised by their double legal nature: firstly, they are considered international agreements among the Member States and the incoming State526 and secondly, they also form EU primary law because they modify primary law.527 With these legal measures a line has to be drawn between the legal nature of the instrument in which the differentiated regime is manifested and the legal instruments installed in the EC Treaty to monitor infringements of secondary or primary law.528, 529

In order to fully appreciate the nature and the scope of such amending measures, a brief rehearsal of the mechanics of the derogation system, as set out in the EC Treaty, is necessary. 2. Legal mechanisms of differentiation contained in the Treaties This section seeks to identify the legal bases for derogation to Community obligations available in the founding Treaties and the scope of such derogations. Several mechanisms are available to the Member States depending on the scope of the derogation sought. (a) Derogations from substantive provisions of Community law in favour of existing Member States The EC Treaty contains express legal bases which act as safeguard clauses for Member States to obtain derogations of a substantive nature, whereby they are authorised by the Commission temporarily not to comply in full with their Treaty provisions relating to the Common Market530 or to deviate from their general Community obligations on the ground of

525 “[T]he sole fact of including – without objective criterion or distinction – the amendment in Annex I to the Act of Accession does not affect its real nature, i.e. an act of secondary legislation effectively decided upon by the Council of Ministers” acting in the place of the competent Community institutions, in Vandersanden, 560. 526 See the wording of [Art] 49 EU. 527 See the case law: ECJ, Case 185/73, Hauptzollamt Bielefeld v OHG König [1974] ECR 607; ECJ, Joined Cases 194/85 and 241/85, Commission v Greece [1988] ECR 1037. 528 Hoffmeister, ‘Changing requirements for membership’, in Ott and Inglis […], 201. 529 Ott in Inglis & Ott (2005) 128. 530 See Art 95(6) EC for approximation of laws; Art 119(3) EC for monetary policy; Art 134 EC 1st and 2nd paras for CCP; and Art 298 EC 1st para for the consequences of Arts 296 and 297 EC on the Common Market; see Lenaerts and Van Nuffel, 365.

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internal or external security.531 Due to their exceptional nature, the Court of Justice promotes a strict interpretation of such derogations.532 (b) Derogation from accession obligations in favour of old and/or new Member States The original Rome Treaty initially provided for transitional derogations during the period following accession to the EEC.533 It entitled a new Member State “to apply to the Commission for authorisation to take protective measures if difficulties arose which were serious and liable to persist in any sector of the economy or which could bring about serious deterioration in the economic situation of a given area”.534 It is from this legal basis that are derived the protective measures provided for in each Treaty of Accession. In the 2003 Treaty of Accession, such a measure can be found in Article 37 Act of Accession, as a general economic safeguard clause modelled on old Article 226 EEC. This provision has however been supplemented in the 2003 Treaty of Accession by another Internal Market safeguard clause in favour of the old Member States, the nature and the scope of which will be examined in the second Part. This additional safeguard clause warrants special attention, as it could be argued that from a technical point of view, the derogatory mechanisms available in the EC Treaty, in particular through Article 30 associated with Article 95(10), could be deemed sufficient to tackle accession obligations or any ‘serious non-economic consequences’ of enlargement.535 The introduction of a specific Internal Market safeguard clause was nevertheless recommended by the Commission “as a precautionary measure”.536 (c) Substantive or territorial limitations in favour of old and/or new Member States With respect to the substantive scope of the acquis, it is useful to recall here that the EU Treaty introduced the famous opt-out clause from the third stage of EMU in favour of Denmark and the UK. As previously indicated, permanent derogations were also granted to the same countries regarding Title IV EC, Title V EU for Denmark and the chapter on 531

Arts 296–298 EC. See also Case C-13/68, Salgoil [1968] ECR 453, 463. 533 Art 226(1) EEC. 534 Lenaerts & Van Nuffel, 367–8. 535 Hillion (2004a) 603. 536 Strategy Paper, “Towards the Enlarged Union” COM(2002) 700 final, 9.10.2002, 26; point also made by Hillion (2004a) ibid. 532

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‘social policy’ for the UK.537 Derogations from the territorial scope of the acquis also form an important part of the differentiation in place in the EU and will constitute the theoretical framework of Chapter 4 dealing with the principle of territorial exclusion/derogation from the acquis. With reference to the discussion on the geographical boundaries of the EU applied to the 2003 Treaty, the substantive and/or territorial scope of the acquis appears to be affected inter alia by Protocol 3, which will be examined in Chapter 4. This Protocol provides for the application, albeit limited, of Community law to the British bases in Cyprus apparently in favour of Community law since this territory was previously completely outside its reach. (d) Suspension of Community obligations against existing Member States Finally, the Treaty provides for the suspension of Community rights and obligations as a sanction in case a Member State fails to fulfill its Treaty obligations. As a preliminary step, a Member State can be brought before the Court of Justice and fined under Articles 226–8 EC. The failure to implement the relevant Treaty obligations by the Member State may nonetheless persist, without being justifiable by any derogatory system provided in the Treaty. In that case, the Member State commits a ‘serious and persistent breach’ of the principles mentioned in Article 6(1) EU, which entitles the Council acting by qualified majority to suspend certain of its Community rights by virtue of Article 7 EU and Article 309 EC.538 Such disciplinary provisions are not usually reproduced in the Treaties of Accession, for the obvious reason that the new Member States are bound by the Treaties once they join the EU and the system is therefore applicable per se. Nonetheless, it should be noted that a similar language can be found in Article 38 of the 2003 Act of Accession regarding the functioning of the Internal Market, which allows the Commission to take ‘appropriate measures’, thereby arguably “imposing sanctions on action or inaction by the new Members under their pre-determined transitional measures and under their pre-accession commitments made in December 2002”539 and extending the scope of disciplinary action beyond accession. 537

See Lenaerts & Van Nuffel, 368–70. Lenaerts & Van Nuffel, 378. 539 For the sake of legal certainty, six of the new Member States had aimed ‘to restrict’ the scope of Art 38 Act of Accession to failures to fulfill Treaty obligations, ‘in the same way as under Art 226 EC’ but the Commission gave ‘no such guarantees’ as appears from Declaration 43 Final Act; see Inglis (2004) 959. Art 226 EC on the one hand and 538

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It goes without saying that in order to suspend specific Treaty obligations in a Member State, the corresponding acquis should have been applicable in this Member State in the first place. With respect to the 2003 Treaty of Accession, the issue as to whether Protocol 10 in particular is an application or derives in any manner from the above mentioned Treaty provisions on the suspension of the acquis appears a priori quite theoretical and therefore requires an analysis of the said Protocol from a different angle. It is proposed to analyse below the various mechanisms for differentiation available in the 2003 Treaty of Accession by focusing on the measures deviating from the legal boundary of the EU (the Treaties and/or substantive acts of the institutions) on the one hand, and from the regulatory boundary of the EU (acts of the institutions on market regulation and related sectoral policies) on the other hand. II. Mechanisms of adjustments contained in the  Treaty of Accession It is not intended in this part to provide an exhaustive analysis of the various adjustments (in the broad sense) provided for in the Treaty, but rather to consider from a governance and boundary perspective certain mechanisms employed, with a view to deriving the rationale underlying the principles of European integration as set out in the Treaty of Accession, including towards Cyprus to be examined in the next Chapters. A. Adjustments to the Treaties and/or substantive acts of the institutions Like previous Treaties of Accession, the 2003 Treaty of Accession does not appear to have revolutionised the founding Treaties as far as substantive adjustments are concerned.540 Substantive adjustments541 are

Art 38 Act of Accession on the other hand trigger different mechanisms of safeguard of Community law. While Art 226 EC catches any failure to comply with Community law obligations by a Member State, Art 38 2003 Act of Accession can be used ex ante, “as a tool of prevention anticipating potential problems of compliance and implementation”, in Van Elsuwege, 363–4. Both provisions nevertheless have in common the wide discretion enjoyed by the Commission to trigger their mechanisms (their scope in time may differ, as discussed below). 540 See Art 1(3) Treaty of Accession. 541 For a detailed review of the substantive arrangements of the 2003 Treaty of Accession, see Hillion (2004a) 588–96; Inglis in Hillion (2004b) 85–7; Inglis (2004) 945–50; and Lannon (2004) 41s.

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contained in the Act of Accession to ensure the smooth transition towards the full integration of the new Member States into the EU, including their insertion into the EMU (Article 4),542 the full implementation of the Schengen acquis (Article 3)543 and their full endorsement of Community commitments towards third States (Article 6(1)–(12) ).544 Substantive adjustments also ensure the transition towards the new Member States’ full participation to all the Community policies, including the budget, the institutions545 and the financial instruments (Articles 25 to 36).546 As will be argued below, some of these adjustments, such as the provisions on the participation of the new Member States to the EMU or to Schengen, may prove to be more substantial than initially envisaged, as they may amount to ‘implicit safeguard clauses’ applicable in practice on a longer period of time than the express safeguard clauses of the Treaty of Accession themselves.547 Notwithstanding the above, it can be said that the novelty of the 2003 Treaty of Accession lies mainly with the so-called regulatory adjustments, encompassing also legal acts of secondary legislation, as reflected in particular in the specific safeguard clauses. 542 When the new Member States joined the EU, they entered directly the third phase of the EMU. They benefit as a result from a derogation as defined in Art 122(3) EC, which entails in particular that their voting rights are suspended with respect to a series of provisions including the EU excessive government deficit procedure (they are exempted from measures in case of failure to comply as per Art 104(9) and (11) EC), the EU monetary policy including their rights and obligations within the ESCB (Arts 105(1), (2), (3) and (5), 106, 110, 111, 112(2)(b) EC); see Lannon (2004) 45–6. 543 This Art sets out the principle of immediate binding effect of most provisions of the Schengen acquis (under the Schengen Protocol and the ‘acts building upon it or otherwise related to it’ listed in Annex I Act of Accession) on the new Member States (para 1) and of conditional application of the rest of the Schengen acquis in the new Member States upon the taking of a Council decision (para 2), to the effect that the entry of the new Member States into the Schengen area is deferred while EU policies on visas, asylum and immigration, on entry/residence of third country nationals or on EU external border control are applicable; see Lannon (2004) 43–5. 544 See Art 6(6) in particular which provides the legal basis for the additional protocols with Russia, Turkey or Ukraine inter alia as studied in Chap 2; more generally, see Cremona in Cremona (2003) 161s; Inglis (2004) 940–5 and Lannon (2004) 47–55. 545 Most institutional changes were agreed upon by the old Member States in Nice and were contained in the Protocol on Enlargement [2002] OJ C 325/163, 24.12.2002. The Act of Accession however amends the Nice Protocol, to adjust to the total number of Member States after the 2004 enlargement, i.e. 25 and not 27 as envisaged in Nice; see Lannon (2004) 55–63. 546 Transition Facility (Art 34 Act of Accession); Schengen Facility (Art 35 Act of Accession). 547 See Garcia-Duran, 292; see also Lannon (2004) 46, with respect to the EMU.

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B. Adjustments to the acts of the institutions on market regulation and related sectoral policies 1. Technical adjustments and transitional measures Adjustments take mainly the form of derogations to the acquis on the Internal Market and in sectoral policies where the Internal Market is affected.548 The rationale here is obviously that such derogations effectively disrupt the proper functioning of the Common Market and as such, should be kept to a minimum in the form of technical adjustments and ‘exceptionally’ to transitional measures, “limited in time and scope, and accompanied by a plan with clearly defined stages for application of the acquis”.549 The treatment of transitional arrangements during the last enlargement was organised in an efficient and almost ‘mechanical’ manner.550 Unlike previous enlargements, however, such a treatment continued after accession to the EU, as the new Member States were requested to keep the momentum of enlargement by complying at all times with the acquis upon accession and were warned that the Commission would monitor them.551 The 2003 Act of Accession clearly sets out the powers of the Commission in this respect, in addition to the mechanisms traditionally available in the Treaty (considered above). Thus, the new Member States are under an obligation to comply with the acquis in full, save only the transitional measures concerning 15 chapters agreed at the closing of the accession negotiations in December 2002552 and save also any additional transitional measure, taken in 548 Art 37 Act of Accession relates to ‘any sector of the economy’ in any new or old Member State, which could be affected by difficulties in a new Member State; Art 38 covers any “serious breach of the functioning of the internal market, including any commitments in all sectoral policies which concern economic activities with crossborder effect”; and Art 39 extends to the area of Justice and Home Affairs (‘JHA’). 549 2000 Enlargement Strategy Paper, Report on progress towards accession by each of the candidate countries last accessed on 9.2.2007, 26. 550 For a detailed description, see Inglis in Hillion (2004b) 83–109; see also Lannon (2004) 64–94. 551 11th Recital of the Commission’s final Opinion of membership dated 19 February 2003 COM(2003) 79 final, 19.2.2003, 3. Van Elsuwege argues that the safeguard clauses are instruments of ‘post-accession conditionality’ which operate “as a kind of stick behind the door for the Commission in addition to [Art] 226 EC”, in Van Elsuwege, 393. 552 Annexes V to XIV to Art 24 Act of Accession; these are deemed temporary in nature as per Art 24 Act of Accession. Annex VII relates to Cyprus with transitional measures in 9 chapters and one appendix. For a legal appraisal of the various transitional measures per chapters, see Lannon (2004) 74–94.

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particular under Article 57 of the Act of Accession for the sake of the proper implementation of the existing technical adaptations. But the 2003 Treaty of Accession also provides for the possibility of creating other regulatory adjustments than the above-mentioned ‘predetermined’ transitional measures. In order to “continue the conditionality of the pre-accession period”, some innovative provisions were inserted into the Treaty,553 namely additional safeguard clauses (Articles 37, 38 and 39 of the Act of Accession) as well as the possibility of introducing new transitional arrangements in certain sectoral policies for the purpose of adapting the Treaty of Accession to the continuous requirements of the acquis (Articles 40, 41, 42 and 55).554 2. General safeguard clause Article 37 of the Act of Accession provides a general safeguard clause of an economic nature,555 which could be invoked both by the old and the new Member States (this is arguably not the case for the special safeguard clauses considered below). This clause was valid for a period of three years556 following accession in case of serious disturbances at the macro-economic level or affecting competitiveness in the new Member States, including in instances of crossborder disturbances between old and new Member States, to be evaluated and remedied by the Commission.557 In case the difficulties arising were deemed “serious and liable to persist in any sector of the economy or […] could bring about serious deterioration in the economic situation of a given area”, the new Member State concerned could be allowed by the Commission to take protective measures to remedy its internal economic situation. Old Member States could also be permitted to take protective measures with regard to the new Member State(s) concerned. The measures authorised by 553

Inglis in Hillion (2004b) 99. For a detailed analysis, see Inglis (2004) 963–5. 555 The 2nd para of Declaration 43 Final Act provides that Art 37 also applies to agriculture. 556 In the Treaty of Accession for Austria, Finland and Sweden, the general economic safeguard clause only lasted for one year (Art 152). The economic and legal situation of these three former EFTA countries was however much more favourable to accession than in the case of the 2004 enlargement; see Van Elsuwege, 361. 557 Art 37(1) and (2) Act of Accession, subject to the 1st para of Declaration 43 Final Act: the Commission should hear and take into account the views and positions of the Member States potentially directly affected by the proposed measures; for a legal appraisal of Art 37 Act of Accession, see Lannon (2004) 65–7. 554

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the Commission under Article 37(2) could be derogatory in nature and would be subject to the principle of proportionality.558 3. Specific safeguard clauses (a) Article 38 of the Act of Accession Article 38 is of particular relevance to this book, as it concerns preaccession commitments to the Internal Market. It enabled the Commission to take ‘appropriate measures’ against a new Member State to address any threat to the Internal Market arising as a result of a failure or potential failure to meet its commitments given during the negotiations. Such measures would enter into force upon accession and could potentially extend to excluding the new Member State “or its citizens and economic operators from the benefits of certain Internal Market legislation and from the benefits of membership in specific areas, in order to protect the integrity of the Internal Market and damage to others”,559 with respect in particular to any sanitary risk or potential food crisis originating from the new Member States.560 The safeguard clauses of the 2003 Treaty of Accession, including Article 38, grant substantial discretionary powers to the Commission, not only to evaluate the failure by a new Member State to comply with its commitments arising out of accession (in the case of Article 38), but also to design the proper remedy to the alleged violation and to decide if and when the safeguard measure can then be lifted as a result.561 With respect to Article 38, the discretionary powers of sanction of the Commission could entail the exclusion of products from the Internal Market or the suspension of the participation of the Member State concerned from Community funds.562 The role of the Council in this procedure is limited to a consultative one in the event of the revocation of the safeguard measures.563 The drafting of this safeguard clause caused some concern among the new Member States, who thought it necessary to clarify their 558

Art 37(3) Act of Accession. See Comprehensive Monitoring Report (November 2003) http://ec.europa.eu/ enlargement/archives/key_documents/reports_2003_en.htm, last accessed on 27.05.09, 18. 560 Lannon (2004) 69. 561 For a detailed legal analysis of this provision, see Hillion (2004a) 603–5; see also Lannon (2004) 67–9 with respect to Art 38 Act of Accession. 562 Inglis (2004) 955. 563 Art 38 Act of Accession, 2nd para, last sentence. 559

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understanding of the clause in the Treaty of Accession, indicating that the triggering of the clause should be limited to alleged violations of the obligations arising from the original Treaties and not from the negotiations.564 The Commission initially downplayed the impact of this safeguard clause by indicating that it should not normally be triggered after accession, as it effectively set a two-tiered monitoring system imposing a bigger burden on new Member States than on old ones.565 But in its 2003 comprehensive report, the Commission nevertheless indicated the far-reaching implications of Article 38 of the Act of Accession, even beyond the Internal Market since it may concern related sectoral policies, and confirmed that it would use it if need arose.566 Eventually, the Commission only committed in the Treaty of Accession to hearing the views of all the Member States concerned before triggering the safeguard clause under Article 38.567 In principle, the old Member States may request the Commission to trigger this provision, which arguably distinguishes between remedies available to them and those available to the new Member States to tackle failures to implement a commitment under the Treaty of Athens.568 Article 38 however contains several mechanisms ensuring in theory the respect of the principles of proportionality569 and of nondiscrimination.570 The measures taken under Article 38 would normally only last for three years from the time of accession, although they could be extended if necessary, i.e. if the relevant commitments had not been implemented within the three year period. In that case, the Commission had the power to ‘adapt’ the measures as appropriate “[i]n response to progress made by the new Member State concerned”.571 564

Joint Declaration 22 to Final Act. The same monitoring mechanisms shall be applied to all Member States after enlargement, see the Commission’s Guide to the Negotiations, 31.12.2002 last accessed on 27.05.09, 22; and Inglis (2004) 956. 566 Comprehensive Monitoring Report (2003), see n 559 above, 14–22. 567 Declaration 43 to Final Act. 568 Hillion (2004a) 604. 569 “Measures shall be proportional and priority shall be given to measures, which disturb least the functioning of the internal market and, where appropriate, to the application of the existing sectoral safeguard mechanisms. … The measures shall be maintained no longer than strictly necessary, and, in any case, will be lifted when the relevant commitment is implemented”, Art 38, 2nd para. 570 “Such safeguard measures shall not be invoked as a means of arbitrary discrimination or a disguised restriction on trade between Member States”, Art 38, 2nd para, 2nd sentence. 571 Art 38, 2nd para. 565

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Within this framework, the old Member States could be expected to trigger this provision, especially in areas of the Internal Market if and where no specific safeguards are provided for in secondary legislation and/or in the event that an action is pending before the Court of Justice under Article 226 EC for failure by a new Member State to meet its Treaty obligation.572 The safeguard clause should however be used as a last resort. (b) Article 39 of the Act of Accession The principle of mutual recognition of judicial decisions in civil and criminal matters became an EU priority following the Amsterdam Treaty.573 It is difficult to see how this principle could be subject to derogations within the context of accession. This position is reflected in the 2003 Treaty of Accession which grants no derogations in the area of Freedom, Security and Justice other than in relation to the Schengen acquis, due mainly to difficulties relating to external border control, which have already been outlined. Article 39 of the Act of Accession nevertheless provides a sui generis type of safeguard clause in case of “serious shortcomings or any imminent risks of such shortcomings in the transposition, state of implementation, or the application of the framework decisions or any other relevant commitments, instruments of cooperation and decisions relating to mutual recognition in the area of criminal matters under Title VI [EU] and Directives and Regulations relating to mutual recognition in civil matters under Title IV [EC] in a new Member State”.574 The power to trigger the safeguard clause lies with the Member States and/or with the Commission, in which case the latter would consult the Member States before it would take ‘appropriate measures’ and specify the “conditions and modalities under which these measures are put into effect”.575 The measures could take the form of “temporary suspension of the application of relevant provisions and decisions in the relations between a new Member State and any other Member State or Member States, without prejudice to the continuation of close judicial cooperation”.576

572

For a legal analysis of the triggering of this provision, see Inglis (2004) 957. See inter alia the Tampere European Council conclusions, October 1999. 574 Art 39 Act of Accession, 1st para. 575 Ibid. This provision reflects the shared competence of the Member States and of the Community in this matter. 576 Art 39 Act of Accession, 1st para, last sentence. 573

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It seemed reasonable to assume that only the old Member States would rely on this clause and submit a ‘motivated request’ to the Commission to adopt safeguarding measures in the new Member States, reflecting a certain lack of trust in the judicial and/or administrative system of one or more new Member States.577 On the other hand, in the event that the Commission used its power to adopt such measures on its own initiative, it had to consult with all the Member States, given the limited EU competence in matters falling under Title VI EU in principle.578 In that case, the use of the specific safeguard clause under Article 39 of the Act of Accession could appear quite limited, as delays were likely to arise in the delivery of the requested opinion by the addressee(s) of the process.579 In any case, this clause could only be invoked for a period of three years following accession, while the safeguard measures could be maintained beyond this threshold and/or adapted by the Commission (after consulting the Member States) until the shortcomings were remedied.580 Unlike in Article 38, there is no mention of the principles of proportionality and non-discrimination in Article 39; the role of the Council remains purely consultative. It is quite clear from the above that “the [EU] ensures a strict postaccession monitoring system that creates a complicated web of differentiation between current and new Member States and new forms of potential application of specific institutional enabling clause to deviate from the acquis”.581 In particular, it appears that border controls could be reintroduced between the old and the new Member States as a result of the triggering of one of the specific safeguard clauses.582 The Commission has clearly gained enormous power to ensure the proper functioning of the Internal Market vis-à-vis certain Member States as opposed to others,583 especially in the light of the standstill clauses and Community preference principle present jointly in the Treaty of

577 Art 37 Act of Accession expressly refers to the ‘present’ Member States. Like Art 38, Art 39 fails to distinguish between the old and the new Member States, potentially creating some doubt as to which Member States could invoke the clause. For Lannon, the specific safeguard clauses cannot be invoked by the new Member States, see table in Lannon (2004) 72; see also Hillion (2004a) 605. 578 See Hillion (2004a); see also Inglis (2004) 960. 579 See Hillion (2004a) 606. 580 Art 39 Act of Accession, 2nd para. 581 Ott in Inglis & Ott (2005) 119. 582 Lannon (2004) 73. 583 Ibid.

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Accession.584 This power is of course subject to judicial review under Article 230 EC, where the Court will no doubt make use of its case law developed in the context of Articles 95 and 30 EC, in particular of the proportionality test.585 As previously indicated, these discretionary powers granted to the Commission were however limited in time and/or in scope. With respect to the express safeguard measures as set out in Articles 37, 38 and 39 of the Act of Accession, it must be noted that they were not used within the initial three-year period following accession and cannot therefore be triggered beyond this time limit. On the other hand, the provisions on Schengen and on the EMU, which constitute principles of accession under Part I of the 2003 Act of Accession and must therefore be applied, have been found to constitute ‘implicit’ safeguard clauses even if they grant a more limited role to the Commission. These safeguarding provisions appear to be still currently in use, both with respect to Schengen (Cyprus has not joined the Schengen area yet) and to the EMU (only four of the ten new Member States who joined in 2004 actually entered the Eurozone as of 2009).586 At the very least, they can be said to have lasted longer than the initial three year-period envisaged in the specific safeguard clauses, since the new Member States who joined in 2004 only entered the Schengen area in 2008, i.e. four years into accession (apart from Cyprus).587 The time restrain as outlined above could give a preliminary explanation as to why the issue of the implementation of the Internal Market in the non-government controlled area of the RoC had to be addressed separately in Protocol 10, as no life span can be given to the adaptation – albeit deemed temporary – of the rules of the Internal Market there. This is not to say however that the provisions of the Treaty of Accession, including the safeguard clauses and the transitional

584 See para 14 of the Annexes to Art 24 Act of Accession apart from Cyprus (Annex VII) and Malta (Annex XI). 585 Hillion (2004a) 605. 586 Slovenia joined in 2007, Cyprus and Malta joined in 2008 and Slovakia adopted the euro on 1 January 2009. For more details on the subject, see for Slovenia accessed on 1.10.08; for Cyprus and Malta http://ec.europa.eu/economy_finance/thematic_articles/ article12417_en.htm> accessed on 12.05.09; and for Slovakia http://ec.europa.eu/ economy_finance/the_euro/your_country_euro9157_en.htm accessed on 12.05.09. 587 See Council conclusions on the Schengen evaluation of the new Member States in accordance with Art 3(2) of the 2003 Act of Accession, JHA Council meeting, Brussels, 8–9.11.07 (Doc 14283/07).

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arrangements including any additional one, are not applicable to Cyprus, who is bound from the date of accession by Treaty obligations, like all the other new Member States. 4. Additional transitional arrangements and infringements of pre-accession obligations As already mentioned, Articles 41 and 42 of the 2003 Act of Accession provide for the possibility of introducing additional transitional arrangements in specific fields, i.e. agriculture and veterinary and sanitary rules.588 The triggering by the Commission of Article 41 with respect to the common organisation of the markets in the CAP led to litigation both at the supranational and at the national level in the new Member States, including Cyprus, regarding sugar and certain other agricultural produce.589 (a) The ‘sugar trade’ cases The sugar trade litigation before the courts both at the supranational and at the national level in Cyprus are a clear illustration of the disputes which can arise as a result of the triggering of Article 41.590 Cyprus undertook in the Treaty of Accession, like all the new Member States, to prevent the stockpiling of agricultural commodities in excess of usual imports immediately before and after joining the EU.591 As is usual with every enlargement, the Commission had issued regulations specifically aiming at preventing speculation in the sugar market in the new

588

For a legal appraisal of Art 42 Act of Accession, see Chap 5, Part I-B 2(b)(ii) below. 589 See Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets in the sugar sector [2001] OJ L 178/1, 30.06.2001 which was in force at that time. With respect to delegation by the Community institutions to the Member States for the common organisation of the market in sugar, see Case 23/75, Rey Soda v Cassa Conguaglio Zucchero [1975] ECR 1279. Under the common organisation of the markets in the sugar sector, overall allocation is made to the Member States in the form of basic quotas, save in Greece and Finland where quotas were set directly for individual undertakings in the context of accession. It is then incumbent on the authorities of the Member States specifically to allocate the quotas to the respective undertakings; see Opinion of AG Kokott in Case C-441/05, Roquette Frères v Ministre de l’Agriculture [2007] ECR I-1993. 590 See Laulhé Shaelou S, ‘Back to reality’: the implications of EU membership in the constitutional legal order of Cyprus’ in Lazowski A (ed), Brave new world: application of EU law in the new Member States (TMC Asser Press, The Hague, 2009) (‘Laulhé Shaelou (2009)’). 591 Annex IV to Art 22 Act of Accession, Chap 4, para 2.

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Member States on or upon accession,592 which Cyprus together with four other new Member States was found in breach of by the Commission.593 The Cypriot government brought two legal actions before the CFI for the annulment of the contested Regulations.594 The Cypriot government claims firstly that the Commission lacked the power to adopt the said Regulations under Article 41 of the 2003 Act of Accession.595 Article 41 empowers the Commission to adopt transitional measures if they are necessary to ‘facilitate’ the transition from the existing regime in the new Member States to that resulting from the application of the CAP as set out in the 2003 Treaty of Accession.596 But the Cypriot government contends that the necessity of the measures was not established, that such measures should not be a burden to the new Member States within the meaning of Article 41,597

592 Commission Regulation No 651/2005/EC of 28 April 2005 amending Regulation No 60/2004/EC laying down transitional measures in the sugar sector by reason of the accession of the 10 new Member States [2005] OJ L 108/3 (the initial Commission Regulation No 60/2004/EC of 14 January 2004 laying down transitional measures in the sugar sector by reason of the accession of the 10 new Member States [2004] OJ L 009/8 had been issued prior to enlargement in accordance with the powers granted to the institutions to trigger inter alia Art 41 Act of Accession ex ante); and Commission Regulation No 832/2005/EC of 31 May 2005 on the determination of surplus quantities of sugar, isoglucose and fructose for the 10 new Member States [2005] OJ L 138/3. 593 ‘Commission charges five Member States for failure to prevent built-up of surplus sugar stocks’, 13.11.2006 (IP/06/1551). Cyprus was fined € 20 m, Estonia was charged the highest fine with € 45 m, while the fines for Latvia, Malta and Slovakia ranged between € 1 m and € 5 m. 594 Case T-300/05, Republic of Cyprus v Commission, action brought on 21 July 2005 for the annulment of Regulation No 651/2005/EC [2005] OJ C 271/19; and Case T-316/05, Republic of Cyprus v Commission, action brought on 12 August 2005 for the annulment of Regulation No 832/2005/EC [2005] OJ C 271/23. Latvia supports Cyprus in both actions, while Estonia supports Cyprus in the second one. 595 See Rapport d’audience, Affaires Jointes T-300/05 et T-316/05, obtained from the Press and Information Office of the European Courts, April 2009, paras 50–7. 596 See in this respect Case C-179/00, Weidacher [2002] ECR I-501 (‘Weidacher’) where in the context of Austria’s accession, the ECJ rejected a claim based inter alia on the principles of legitimate expectations and of proportionality to review the validity of a Commission Regulation imposing fines on an olive oil importer as a result of the application of the provisions on the CAP as embodied in the Act of Accession of Austria, which led to the insolvency of the importer. The Court based its reasoning on the broad discretion enjoyed by the Community institutions, in particular the Commission, when adopting measures for the implementation of the CAP with a view to preventing the disruption of the proper functioning of the common organisation of the markets, while at the same time facilitating the transition of the new Member States to this organisation (paras 19–22). 597 The Cypriot government argues that in the case of the accession of Austria, Finland and Sweden, the Court did not rule against the idea that transitional measures

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nor should they have a retroactive effect (they concerned quantities which had been accumulated lawfully before their entry into force).598 In this respect, the Cypriot government questions the nature of acts based on Article 41 Act of Accession as opposed to mechanisms usually found in previous Treaties of Accession, especially since such acts provide for sanctions.599 The Cypriot government also claims that the Commission failed to explain the grounds leading to the adoption of such measures, which include the imposition of a financial burden on individuals in the new Member States and a power of sanction on individuals and their Member States in the event that the initial obligation of elimination is not complied with.600 As a result, the Cypriot government contends that there is a breach of the principle of proportionality as the above measures go beyond what is strictly necessary in this context.601 Acknowledging the wide discretionary power of the Commission in the CAP, the Cypriot government argues that the Commission failed to demonstrate the necessity of such measures or, at the very least, in what way the elimination of surpluses was the most adapted strategy to the situation characterised by a ‘high risk’ of disturbance of the sugar market.602 In this respect, the Cypriot government outlines that Cyprus imported more than 99% of its sugar surplus from the rest of the EU, especially during the run-up should favour the new Member States. The 1995 Act of Accession did not contain anyway similar provisions regarding the elimination of sugar surpluses at the new Member States’ costs. This would confirm in the Cypriot government’s opinion that the measures adopted by the Commission, which would contain such an obligation, would constitute a burden for the new Member States, Rapport d’audience, see n 595, para 51. 598 For the argumentation on the principle of the non-retroactivity of laws, see Rapport d’audience, ibid, paras 90–5. 599 This may appear prima facie against the principle of legitimate expectations but the ECJ clarified in the similar context arising in Weidacher that the principle, which may only be invoked as against the Community rules when the Community itself has previously created a situation potentially giving rise to a legitimate expectation, cannot apply in the event that the Community has not, ‘by act or omission’ given a different impression and the importer ‘like any normally diligent economic operator’, ought to have known, since in this case there had been publication in the OJ that under Art 149(1) Act of Accession, the Commission was empowered to adopt transitional measures facilitating the transition and that such measures “might, in some circumstances, have repercussions on surplus stocks” (paras 30–35). 600 Rapport d’audience, see n 595 above, paras 61–6. 601 With respect to the argumentation on the breach of the principle of proportionality within the context of the broad discretion of the Commission arising out of the application of the CAP, the Court rejected it in Weidacher on the ground that the Commission did not exceed the bounds of its discretion granted under the Act of Accession (paras 26–29). 602 Rapport d’audience, see n 595 above, paras 67–75.

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period to accession. The Commission therefore failed to prevent the creation of such surpluses by acting ex ante, for example by discouraging such exports from the old Member States towards Cyprus. In any case, the pecuniary sanction imposed on the new Member States for actions that ought to have been taken by exporters/importers of sugar is disproportionate. Finally, the Cypriot government outlines the potential breach of the principle of equal treatment and of non-discrimination by arguing that the contested Regulations provide a different treatment of undertakings in the new and in the old Member States as well as among new and old Member States in a similar situation.603 Since the old Member States and their undertakings contributed to the accumulation of sugar surpluses in Cyprus, they should also take their share of the blame resulting in pecuniary sanctions being imposed on them as well.604 At the time of writing, both actions were pending before the Court of First Instance (they were eventually rejected by the court on 2 October 2009). They were joined in March 2009, at which time a hearing took place. With respect to the procedure, the Commission argues in the first case (T-300/05) that the action in annulment must be rejected as it falls outside the 2 month time limit to challenge the contested act in accordance with Article 230(5) EC.605 According to the Commission, Regulation 651/2005 is a mere amendment of the initial Regulation 60/2004606 and does not produce legally binding obligations on the RoC that may affect its legal situation, which would allegedly render the act reviewable under Article 230 EC. The RoC should have initially challenged Regulation 60/2004 within the deadline set out in Article 230(5) EC.607 The Cypriot government opposes to this argument that there was no possibility of judicial review before the European Courts prior to the accession of Cyprus and that the two month deadline to challenge this Regulation pursuant to Article 230(5) had expired in March 2004, i.e. prior to Cyprus joining the EU.608 If the Commission recognises that Cyprus lacked the status of privileged applicant under Article 603

Rapport d’audience, ibid, paras 98–9. See paras 49–52, Weidacher, where the Court ruled that importers from Austria were not in a situation comparable to the operators in the Community of Twelve with respect to imports from outside the Community (from Tunisia). 605 The Commission also developed a whole range of arguments on the substance of the cases which are deemed too technical for inclusion in this book. 606 See n 592 above. 607 See Rapport d’audience, n 595 above, paras 36–8. 608 Rapport d’audience, ibid, para 45. 604

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230(2) EC prior to accession, it contends that it was nevertheless open to Cyprus to challenge the measure under Article 230(4) EC as a nonprivileged applicant609 or under Article 241 EC through a plea of illegality in the course of proceedings initiated for a different principal reason.610 In the meantime, at the national level, legal proceedings have been brought by Cypriot importers before the Supreme Court of Cyprus to challenge the validity of the decision of the Ministry of Trade, Industry and Tourism setting out surplus stocks for each undertaking importing sugar in Cyprus and/or in the event of non-compliance with the first decision, of the decision of the Ministry to impose penalties on these importers as a result. They argue that these decisions violate Law 40(I)/2005 implementing the provisions of Community law on the transitional measures regarding the trade of agricultural products on account of the accession of the Republic of Cyprus and of the other Member States to the EU.611 Despite the delivery of a judgment by Judge Hadjihambis in one case,612 it was decided that all these actions should be brought before the Full Chamber of the Supreme Court.613 The proceedings are pending.614

609 Provided the RoC could prove locus standi. In this respect, the Cypriot government argues that Regulation 651/2005 is a reviewable act which modifies its legal situation within the meaning of Art 230 EC. It relies in particular on Case T-330/94, Salt Union Ltd v Commission [1996] ECR II-1475; see Rapport d’audience, ibid, paras 46–8. 610 Rapport d’audience, see n 595 above, para 44. It should be noted with respect to the second action (T-316/05) that it is based both on Art 241 EC (plea of illegality of Regulation 60/2004 as amended by Regulation 651/2005) and on Art 230 EC (annullment of Regulation 832/2005); see Rapport d’audience, ibid, paras 102–186. 611 Official Gazette No 3981, 15.04.2005. Law 40(I)/2005 implements Commission Regulation 1972/2003, as amended, and Commission Regulation 60/2004 (see n 592 above). 612 Morphis Morphy & Associates Ltd v Republic of Cyprus through the Ministry of Trade, Industry and Tourism, No 1200/2005, 16 July 2007. 613 A total of 52 actions were brought before the Supreme Court for judicial review. In a nutshell, the applicants are challenging the legality of Law 40(I)/2005, the constitutionality of the two decisions of the Ministry of Trade and/or the validity of Regulation 1972/2003 and/or other instruments of Community law. Judge Hadjihambis in his judgment in the above decision merely proceeded with a review of the mechanisms for evaluation of the surplus stocks of the importer and of the charges imposed on the importer, as contained in Law 40(I)/2005 in accordance with the relevant provisions of Community law (Regulations 1972/2003, 60/2004, 651/2005 and 832/2005), and rejected the application for judicial review. 614 With respect to the obligations imposed on individuals in the new Member States, especially those whose official language was introduced in 2004 following

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(b) Other agricultural produce More fines have been contemplated against the new Member States, including Cyprus, for stockpiling of various agricultural produce, and have given rise to litigation at the national and/or supranational level in several Member States.615 In Cyprus, the Supreme Court has recently given judgment616 on the application in Cyprus of Regulation (EC) No 1972/2003, as amended by Regulation (EC) No 230/2004,617 with respect to the calculation of the charge to be levied in the new Member

enlargement, special regard should be paid to Art 58 2003 Act of Accession and to its interpretation by the ECJ in Case C-161/06, Skoma-Lux sro v Celni reditelstvi Olomouc [2007] ECR I-10841 (‘Skoma Lux’). The Court ruled that Art 58 precludes the obligations contained in Community legislation which has not been published in the OJ in the language of a new Member State, where that language is an official language of the EU, from being imposed on individuals in that State, even though those persons could have learned of that legislation by other means (paras 33–37); see Lasinski-Sulecki K & Morawski W, ‘Late publication of EC law in languages of new Member States and its effects: obligations on individuals following the court’s judgment in Skoma-Lux’ (2008) 45(3) CMLRev 705; see also Case C-345/06, Gottfried Heinrich, 10 March 2009 (nyr). Of course, Greek has long been an official language of the EU and hence, such a line of argumentation is less relevant for obligations imposed on individuals in Cyprus as a result of EU accession. 615 For a review of the litigation in the new Member States, see Albi A, ‘Ironies in Human Rights protection in the EU: pre-accession conditionality and post-accession conundrums’ (2009) 15(1) European Law Journal 46, 52–7. For direct actions before the ECJ with respect to Regulation 1972/2003 (trade in agricultural produce), see Case T-257/04, Poland v Commission, 10 June 2009 (nyr). For direct actions before the ECJ in the sugar sector, see also Case T-258/04, Poland v Commission, 10 June 2009 (Order) with respect to Regulation 60/2004; and Case T-324/05, Estonia v Commission [2005] OJ C 271/48 with respect to Regulation 832/2005 (all pending). These actions present similar grounds of review as the actions brought by Cyprus. With respect to the sugar sector, Poland also argues a breach of the principle of solidarity and good faith arising under Art 10 EC between the Member States and the Community institutions, by imposing on Poland obligations “with which it is in practice not possible to comply” and by refusing to cooperate “with a view to overcoming difficulties which have arisen”, see Case T-258/04. Estonia also focuses on the impact of the measures on private households through a breach of the right to property and of proportionality and a breach of the principle of sound administration (Estonia was charged the highest fine by the Commission, which claims that it could not separate the amount of sugar meant for private consumption from the amount destined for commercial purposes). For a legal appraisal of the litigation in Estonia, see Van Elsuwege, 367–70. 616 Cooperative company ESEL-SKOLP Ltd v Republic of Cyprus through the Ministry of Trade, Industry and Tourism, No 1041/2007, 15 January 2009. 617 Commission Regulation (EC) No 230/2004 of 10 February 2004 amending Regulation (EC) No 1972/2003 on transitional measures to be adopted in respect of trade in agricultural products on account of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia [2004] OJ L 39/13.

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States on holders of rice surplus stocks as set out in the Commission Decision (EC) No 2007/361.618 In this case, Judge Hadjihambis addressed the issue of the publication of the various instruments of Community law in Cyprus and of the way they were brought to the knowledge of the importers.619 With respect to Regulation 1972/2003 (which was implemented into Law 40(I)/2005), Judge Hadjihambis noted that the competent authority, the Ministry of Trade, Industry and Tourism, arranged for an announcement to be placed in the local press shortly following the publication of the Regulation in the Official Journal of the EU. It was addressed to the rice importers and informed them of their obligations under the Regulation. This was followed up by a letter addressed to the importers, including the applicant, referring once more to the Regulation and to its various mechanisms and requesting the addressee to provide the necessary information for the purpose of the calculation of the surplus. Upon receipt of the information, the Ministry requested the assistance of the Customs Services since there were discrepancies between the official figures and the ones submitted. Judge Hadjihambis deemed satisfactory and in compliance with Community law the procedure and the methodology followed by the Ministry of Trade in order to determine the charge to be levied on the applicant, including as regards the time frame for the publication of the obligations on the importers deriving from the application of Community law and the implementation of Regulation 1972/2003 itself into national law. As a result, he rejected the application for judicial review. It is argued that the legal proceedings arising both at the supranational and the national level in the new Member States reflect the normal and smooth application of the rules of the Treaty of Accession to the new Member States.620 At the supranational level, they may however raise unusual difficulties in law with respect in particular to the potential difference of treatment between the new and the old Member States. 618 Of 4 May 2007 on the determination of surplus stocks of agricultural products other than sugar and the financial consequences of their elimination in relation to the accession of the 10 new Member States [2007] OJ L 138/14. 619 See in this respect Case C-345/06, Gottfried Heinrich, 10 March 2009 (nyr) where the Court ruled that the Member States must publish not only the national legislation at issue but also the Community regulation which forces the Member States to take the measures imposing obligations on individuals (para 47). 620 For a legal appraisal of the sugar trade cases throughout the new Member States, see Lazowski A (ed), Brave new world: application of EU law in the new Member States (T.M.C. Asser Press, The Hague, 2009) (‘Lazowski (2009)’).

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Although this argument has been rejected by the EU Courts with respect to previous enlargements on the basis that the situation of the new and old Member States is not comparable,621 at the time of writing the Courts had not yet had the opportunity to review the legality of an act of secondary legislation deriving from the differentiated regime embodied in the 2003 Treaty of Accession. In Skoma-Lux, the ECJ was merely interpreting Community law for the purposes of Art 234 EC as opposed to reviewing the validity of this measure. The sugar trade cases, on the other hand, are direct actions relying on the Court’s primacy of judicial control, which may be invoked when the amendment to the regulatory act, as a result of the Act of Accession itself, is considered as irregular, in accordance with the previous findings of this book (the very recent CFI’s decisions on sugar trade in Poland and Cyprus would seem to indicate prima facie that the existing line of jurisprudence is applicable mutatis mutandis to the fifth enlargement too).622 At the national level, these proceedings raise constitutional issues relating to the protection of the fundamental rights of freedoms of individuals inter alia to property, to trade, to non-discrimination or to legitimate expectations.623 Concluding remarks In legal terms, it may appear that the main provisions of the Treaty of Accession are sufficient for the implementation in Cyprus of the Internal Market and related sectoral policies, including ‘horizontal’ or ‘flanked’ policies supporting the four freedoms. One immediate implication of this is the application of the wide range of powers granted to the Commission under the Treaty of Accession to Cyprus. Irrespective of the regime of the Accession Treaty, the rules pertaining to the implementation of the four freedoms of the Treaty supported by horizontal policies624 and by the flanking policies now deemed distinct ‘Community law disciplines’,625 trigger primarily centralised and/or joined-decision 621 See Cases C-87/03 & C-100/03, Kingdom of Spain v Council of the EU [2006] ECR I-02915 (paras 48–54). 622 Decisions of the CFI can be appealed before the ECJ on points of law. 623 This section has appeared in an amended version in Laulhé Shaelou (2009). 624 Competition law or CAP. The CCP constituting the external dimension of the Internal Market, it would not be deemed exclusively a horizontal policy. 625 These include inter alia private law, consumer law; environmental law, social policy law, labour law, health care law and family law; see Szyszcak & Cygan, 89; see also Oliver P, ‘Competition and free movement’ in Tridimas and Nebbia, 160–6.

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modes of governance. So the Commission would in any case be entitled to seek to exercise its competences deriving from the EC Treaty regarding the Internal Market and related policies in Cyprus, except in the areas of the Republic where these supranational rules cannot apply as a result of the non-approximation of the laws with the acquis during the accession negotiations. The Commission could in that case seek to use its exclusive competence under the CCP should it consider that the circulation of goods from within these areas falls under the EC external trade policy. An important difficulty would nevertheless remain with respect to the circulation of persons also approached through its external dimension of immigration and asylum, which still remains to a certain extent outside the reach of EU policies. In fact, the non-application of the aqcuis in the non-government controlled areas of the Republic derives from an intergovernmental decision recorded in Protocol 10 to the Act of Accession. As such, it is quite clear that Protocol 10 does not provide a general legal basis for centralised powers to be exercised by the Commission alone. Given that the intergovernmental mechanisms allowing for the creation of Protocol 10 must be placed within the overall context of a settlement to the Cyprus problem, they would have sat uneasily with the remaining provisions of the Act of Accession and with the more general provisions of the EC Treaty, had they not been placed in a separate document.626 The use of a Protocol in that case marks the special status of these mechanisms deriving mainly from social-legal considerations underlying the implementation of the Internal Market and related policies in Cyprus, in view of the current political situation. This remark also extends to Protocol 3 to the Act of Accession, even if the intergovernmental mechanisms triggered in this case differ as they are based on different socio-legal considerations. They acknowledge a pre-existing situation in international law, previously addressed at the EU intergovernmental level on the occasion of the accession of the UK, which required adaptation in view of Cyprus’ accession to the EU. In this case, the 2003 Treaty of Accession is not applicable per se to the British military bases in Cyprus, but only to the extent provided in Protocol 3. Having considered above the principles of integration underlying the 2004 enlargement, it appears that the integration of Cyprus into the EU is very much dependent on the adequate interpretation of Protocol 10 and of Protocol 3 to the Act of Accession, with reference in particular 626

For the use of protocols, see Booss & Forman, 111.

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to their socio-legal implications for mobility in Cyprus. It remains true of every accession that certain parts of territory of acceding States are excluded from the geographical coverage of the Treaties and/or are granted a special status.627 Cyprus’ accession to the EU seems to cumulate both attributes, which Neuwahl summarises as follows: The Treaty of Accession of 16 April 2003 provides four different territorial zones: i) the whole island is under the jurisdiction of the EC and the Union; ii) the zones which are under UK sovereignty enjoy a privileged status in the sense that not all EC rules apply there; iii) the demarcation line of the UN peacekeeping forces will also have a special derogation regime; iv) finally, the [‘]TRNC[’] is exempted in the sense that the application of the Community acquis is suspended as long as the Cyprus problem has not received a comprehensive settlement.628

It is true that the territory of Cyprus has been partitioned under Community law due to its current internal situation. But the approach commonly found in the literature emphasises the intrinsic division of the island, whereas such a situation is deemed temporary (save for the British bases) and that mobility throughout the island is the principle, not the exception. This approach is promoted to the detriment of a more constructivist approach based on the integration of Cyprus into a supranational entity through its Europeanisation, which allows the ‘de-politicisation’ of the debate. Rather, it is the multi-dimensional mode of European integration of Cyprus that remains to be determined, as it cannot be denied that the full integration of Cyprus into the EU will not happen at once. Thus, there may be various stages or components on Cyprus’ path towards integration, which must be identified. But this is true anyway of all the new Member States, as it was previously demonstrated that the 2003 Treaty of Accession is based on a certain idea of differentiated integration, sometimes qualified as the ‘all or nothing’ attitude. The delimitation of the various specific components of integration is therefore a crucial exercise so that the puzzle of integration can be completed for one or more Member States, should they share common specificities. This requires a comparative analysis of the alleged differentiated path of integration for Cyprus, as an instance of application of core principles of European integration to a specific instance of integration.

627

Booss & Forman, 115. Axt H-J & Neuwahl N, ‘The Cyprus ouverture’ in Neuwahl N (ed), EU enlargement, law and socio-economic changes (Themis, Montreal, 2004) (‘Neuwahl 2004’) 20. 628

CHAPTER FOUR

THE REINSTITUTIONALISATION OF THE PRINCIPLE OF TERRITORIAL EXCLUSION IN CYPRUS: A COMPONENT OF DIFFERENTIATED INTEGRATION?

Under international law, the Treaties apply “to all areas which are under the sovereignty or within the jurisdiction of the Member States”,629 whereas each Community Treaty normally determines its scope of application.630 The Treaties are therefore applicable in theory to all the territories of the Member States, including overseas or dependent territories, as well as airspace and maritime waters falling under the sovereignty or within the jurisdiction of the Member States,631 unless expressly provided otherwise in the Treaties leading to the setting out of a principle of territorial exclusion for specific territories. The creation of Protocol 3 appears a priori to derive from the application of the principle of territorial exclusion in Community law to the SBAs in Cyprus, previously established in intergovernmental agreements following the accession of the UK to the EC in 1973.632 A Joint declaration on the SBAs of the UK in Cyprus was annexed to the Final Act of the Treaty, to the effect that “the arrangements applicable to relations between the [EEC] and the [SBAs] will be defined within the context of any agreement between the Community and the [RoC]”.633 As previously seen, such declarations do not normally have binding force although they have strong interpretative effect.634 Protocol 3 would therefore appear to be the reflection of a process of ‘re-institutionalisation’ of the principle of territorial exclusion in view of Cyprus’ accession to the EU rather than of institutionalisation of this principle, which already took place at the international and Community level.

629

Lenaerts & Van Nuffel, 351. The EU does not specify its territorial scope of application; the three pillars of the Union are not applicable to the same territories of the Union, see Ziller J, ‘Flexibility in the geographical scope of EU law’ in De Burca G & Scott J (eds), Constitutional change in the EU (Hart, Oxford, 2000) (‘De Burca & Scott’) 115. 631 Ibid. 632 Treaty of Accession of Denmark, Ireland and the UK [1973] OJ L 2, 1.1.1973. 633 1st Recital, Protocol 3. 634 See Hillion (2004a) 587 (eg fn 32 and 33). 630

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The existence of the SBAs in Cyprus goes back to the independence of the RoC in 1960,635 to the effect that it precedes EU membership of both the UK and Cyprus. This is very important when considering the legitimacy of the SBAs from an international law perspective in light of the Vienna Convention636 and the position deriving as a result under Community law by virtue of Article 307 EC. Within the military context of the SBAs in Cyprus, one stated objective is to achieve “the protection of the interests of those resident or working” in the SBAs and, to that intent, to grant them, “to the extent possible, the same treatment as those resident or working in the RoC”.637 This objective also encompasses certain customs arrangements between the SBAs and the RoC, as set out in particular in Annex F to the Treaty of Establishment,638 by virtue of which the UK undertook “not to create customs posts or other frontier barriers between the [SBAs] and the [RoC]”.639 The arrangements made by the parties in the Treaty of Establishment also provide that the authorities of the RoC are responsible for the administration ‘of a wide range of public services’ in the SBAs, including in the fields of agriculture, customs and taxation.640 The Treaty of Establishment constitutes the foundation of the 1960 Cyprus Constitution.641 The Cyprus Constitution was described as standing “as the centerpiece of an intricate network of international agreements and undertakings, delicately but inextricably interwoven with one another and with the Constitution itself ”.642 The Treaty of Guarantee and the Treaty of Alliance, which are annexed to the

635 There are provisions on the SBAs in the ToE as well as in the associated Exchanges of Notes dated 16 August 1960, 2nd Recital, Protocol 3. 636 Art 4 Vienna Convention provides that international agreements preceding the entry into force of the Convention are outside its scope and that its provisions are applicable in that case only to the extent that they are representative of international customary law; see Theodoulou S-C, Bases militaries en droit international: le cas de Chypre (Bibliopolis, Peleus, 2006) (‘Theodoulou’) 60. 637 Declaration by the UK government concerning the administration of the SBAs attached to the Exchange of Notes dated 16 August 1960, 3rd Recital Protocol 3. 638 4th Recital, Protocol 3. 639 5th Recital, ibid. 640 As set out in the ToE and the associated Exchange of Notes dated 16 August 1960. 641 Papasavvas gives five attributes to the 1960 Constitution, namely ‘imposed, rigid, complex, anti-democratic and dividing’ in Justice constitutionnelle à Chypre (Economica, Cyprus, 1998) 258. 642 De Smith S A, The new Commonwealth and its Constitutions (Stevens, UK, 1964) 285.

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Constitution (Annexes I and II respectively), have been given constitutional force by virtue of Article 181 of the Constitution. In view of the Treaty of Establishment and of the UK Accession Treaty, it would be legitimate to expect that the accession of Cyprus to the EU “should not affect the rights and obligations of the parties to the Treaty of Establishment”,643 as long as this international agreement is in force. On the other hand, it is quite clear that certain obligations derive from Cyprus’ EU accession. The 2003 Treaty of Accession contains substantial provisions on the EC conventional acquis having implications for the Union’s external policy.644 New Member States are required in particular to re-negotiate their international conventions with third countries in light of Community law principles and in accordance with the relevant provisions of the Treaties,645 and this should occur without any transitional arrangements.646 There is however no express provision regarding the case of an international agreement entered between an old Member State, a new Member State and third parties. Protocol 3 therefore addresses this situation and recognises “the need to apply certain provisions of the [EC] Treaty and related EC law to the [SBAs] and to make special arrangements regarding the implementation of these provisions in the [SBAs]”.647 Thus, a preliminary analysis of the principle of territorial exclusion in Cyprus reveals the mixed legal status of the SBAs in Cyprus, whereby international, national and Community law provisions interact, prima facie within the framework of the fundamental and constitutional principles of EC and EU law. Protocol 3 sets out the mixed regime applicable to the SBAs in Cyprus including the necessary adaptations to Community law, which do not require a priori to be supplemented by any secondary legislation, as it is a situation deriving from intergovernmental agreements

643

6th Recital, Protocol 3. Arts 3(3), 5(3) and 6 Act of Accession; see Cremona in Cremona (2003) 161s; and Inglis (2004) 940–5. 645 Especially under Art 307 EC. 646 Blumann however argues that this requirement is in fact flexible following the Court’s Opinion 1/94, Competence of the Community to conclude international agreements concerning services and the protection of intellectual property [1994] ECR I-05267, introducing a principle of shared competences in many areas of external relations, see Blumann C, ‘L’ adaptation de Chypre aux politiques de l’UE’ in Agapiou-Josephides K & Rossetto J (eds), Chypre dans l’Union Européenne (Bruylant, Brussels, 2006) (‘Agapiou & Rossetto’) 124. 647 7th Recital, Protocol 3. 644

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pre-existing Cyprus’ accession to the EU and, as such, takes precedence over subsequent secondary legislation. Whereas the issues arising out of the status of the SBAs in international law have been explored at length,648 Cyprus’ accession to the EU also raises the question of the relationship of the SBAs with the principles of Community law, which warrants special attention, as this specific application of Community law forms part of the principles of the European integration of Cyprus. I. Legal status of the SBAs in Cyprus under Community law A. Legal framework 1. Initial international law perspective (a) International agreements in the international legal order The legal status of the SBAs in international law is derived from the Treaty of Establishment,649 which entered into force on 16 August 1960, as well as from the two international agreements annexed to it, namely the Treaty of Guarantee650 and the Treaty of Alliance.651 These three agreements collectively provided, inter alia, for Greece, Turkey and the UK guaranteeing the independence, territorial integrity and security of the Republic, the establishment of Greek and Turkish military contingents in Cyprus and the preservation of two British sovereign military bases in Cyprus. Under the Treaty of Establishment, the two SBAs, namely Dhekelia and Akrotiri, remained part of the UK when Cyprus became independent in 1960 (Article 1) and there is an obligation on the RoC to fully cooperate so as to ensure their security and their effective operation (Article 2(2) ).652 The Treaty of Establishment has a total of 22 appendices, including the two international Treaties of Alliance and Guarantee.653 Theodoulou argues that even if the UK rejects the idea that the Appendices form

648

See e.g. Chrysostomides (2000); Theodoulou. UN Treaty Series (1960) vol 382, 10; see also Cmnd 1093 (1960) London Her Majesty’s Stationary Office, Appendix A, 13s. 650 Between the RoC and Greece, the UK and Turkey of 19 February 1959, UN Treaty Series (1960) vol 382, 4. 651 Between the RoC, Greece and Turkey of 19 February 1959, ibid. 652 Theodoulou, 45. 653 Ibid. 649

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part of the Treaty of Establishment, such Appendices constitute international agreements within the meaning of Article 2(1)(a) and Article 31(2)(a) of the Vienna Convention. As a result, Appendix R in particular should be treated as a constitutional agreement (‘part and parcel’ of the Treaty of Establishment) and read in conjunction with Articles 48 and 52 of the Vienna Convention, to the effect that mistake or the absence of genuine consent could be argued on the part of the RoC when signing the 1960 agreements.654 (b) International agreements in the UK legal order In accordance with the principle of parliamentary sovereignty to which British law adheres, international agreements obtain their legal force from Acts of Parliament.655 As a result, the status of the ‘colony’ of Cyprus and of the independent sovereign RoC (part of the ‘colony’ remained “within Her Majesty’s sovereignty and jurisdiction”)656 was also regulated through an Act of Parliament, to the effect that the above international agreements were incorporated into the British national legal order and therefore became legally binding in UK law.657 Subsequently, the EC Treaties were incorporated into UK law by the European Communities Act 1972,658 to the effect that Community law became directly applicable in the British national system and could therefore form the basis of rights and obligations enforceable by individuals before the national courts.659 Given that the European Communities Act 1972 reflects all the Community Treaties, including the UK Treaty of Accession to the European Communities, it is quite clear that its enactment in UK law pre-supposed its compliance with national law, including with international agreements previously incorporated into domestic law.660 654

Theodoulou, 62–3. “[T]he legislature is subject to no limitation, apart from its inability to restrict its own sovereignty”, Lenaerts & Van Nuffel, 689. 656 Theodoulou, 46. 657 The Cyprus Act 1960 (1960) c 52, concerning the status of Cyprus was enacted in the UK, Art 2 of this Act reflecting the contents of Art 1 ToE, see Theodoulou, 45. 658 Art 2 1972 EC Act (1972) c 68. 659 See Pickstone v Freemans Plc [1989] AC 66; see also Duke v Reliance Systems Ltd [1988] AC 618 and Macarthy’s Ltd v Smith [1979] 3 All ER 325 and the Factortame litigation which denotes the increasing readiness of the courts to disapply national law in case of a conflict with directly enforceable Community law. 660 The UK courts in particular presume that the intention of the Parliament is not to legislate against Community law. The High Court has considered recently that the 1972 EC Act is a “constitutional statute that cannot be impliedly repealed” (Thoburn v Sunderland City Council [2003] QB 151); see Lenaerts & Van Nuffel, 689–90. 655

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(c) International legal agreements in the Cypriot legal order (i) Initial legislative action in the context of accession. Cyprus being a monist country, treaties, conventions and international conventions merely need to be ratified by the relevant authorities of the Republic in accordance with Article 169 of the 1960 Constitution; the 1960 Constitution remaining the supreme law of the Republic. Nevertheless, it is recognised that Community law, which is based on international treaties, is to form “a distinct legal system which is capable of creating directly effective rights for those subject to it”, which must be regarded as “independent of national laws” and “superior to them”.661 To this end, there were voices recommending amending the Constitution, pointing to the fact that Article 179 is not a basic provision of the Constitution and can therefore be amended under the procedure set out in Article 182 of the Constitution.662 As a result, Article 169 of the Constitution (also a non-basic provision) would need to be amended as well.663 The necessary amendments would reflect “the actual accession of the Republic to the Union as well as the transfer of the exercise of national executive, legislative and treatymaking powers to the EU institutions, thus pre-empting the potential problems posed by Articles 54(1), 61(1), 136, 152 and 169 of the Constitution”,664 thereby safeguarding the supremacy of Community law over the Constitution. The express reference to EU law supremacy should have been decided by the House of Representatives on the basis of Articles 182(2) and (3) of the Constitution but the Attorney General’s office issued an

661 Eracleous v Municipality of Limassol (Appeal No 5793) judgment of the Supreme Court of 14 December 1993; see Emiliou in TMC Asser Instituut, The impact of EU accession on the legal orders of new EU Member States and (pre-)candidate countries: hopes and fears (TMCA Press, The Hague, 2006) (‘TMCA Instituut’) 305; see also Hoffmeister, 205. 662 See Markides A, “The constitutional impact of Cyprus’ accession to the EU” (speech, 21 May 2001, Nicosia) 6; see also Emiliou in TMCA Instituut, 307; Contra Chrysostomides K, “Issues under constitutional and international law in the path of Cyprus towards accession to the EU” (speech, 29–30 June 2001, Nicosia) 5, as quoted in Hoffmeister 205; see also Hoffmeister, 150. 663 The example of the Irish Constitution (Art 29.4.10), whereby the principle of EU/ EC law supremacy is incorporated into the Constitution was brought forward in Bermann G et al, Opinion: implications of Membership in the EU for a constitutional settlement in Cyprus, 29 March 2001 in Markides A (ed), Cyprus and EU membership: important legal documents (PIO, Nicosia, 2002) para 44 and was said to provide a good precedent for Cyprus; see Emiliou in TMCA Instituut, 306. 664 Emiliou in TMCA Instituut, 307.

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opinion confirming that no amendment to the Constitution was necessary prior to the ratification of the Treaty.665 The House of Representatives therefore ratified the Treaty of Accession on the basis of Article 169 of the Constitution,666 thereby creating in theory a principle of tacit acceptance of the supremacy of Community law or, at least, a principle of non-conflict between the two sets of legal norms. As a result of legislative inertia, the interpretation of the supremacy of Community law was left at the judicial scrutiny of the courts;667 it was only a matter of time until the issue would be raised before the highest constitutional court. (ii) Judicial action in the context of membership. The Supreme Court of Cyprus could only uphold the supremacy of the Cypriot Constitution over Community law on the first occasion provided by the challenge of the constitutionality of the European arrest warrant668 under Cypriot law.669 As the measure challenged in this case was a Framework Decision relating to the Third Pillar taken on the basis of Article 34 EU, this case seems a priori unlikely to shake the foundations of the principle of supremacy of Community law adopted on the basis of the EC Treaty falling mainly under the First Pillar. Such an argument could be made given the intergovernmental nature of the Third Pillar, combined to the fact that the measure at stake did not even concern Community law rights, which would not have been directly effective anyway, but rather obligations imposed upon Member States to comply with a Framework Decision in criminal justice (the surrender of one of its nationals to another Member State in response to a European arrest warrant) arising under EU law. 665

Ibid. Ratifying Law 35(III)/2003 (Official Gazette No 3740 of 25.7.2003). It should be noted that in all the new Member States with the exception of Cyprus, ratification of the 2003 Treaty of Accession was ‘linked to the outcome of a popular referendum’; see Van Elsuwege, 370–91 for the ‘referendum experience’ in the Baltic States. 667 The Cypriot courts have indicated through their case law that an international treaty, being inferior to the Constitution, is subject to judicial review to the extent that the constitutional provisions prevail in case of conflict, see Emiliou in TMCA Instituut, 307. 668 Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States. 669 Attorney General of the RoC v Costas Constantinou No 294/2005 [2007] 3 CMLR 42 (‘Constantinou’); see case note by Tsadiras A (2007) 44 CMLRev 1515 (‘Tsadiras’). The case was brought before the Supreme Court on appeal lodged by the Attorney General of the Republic against a decision of the District Court of Limassol at first instance. 666

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The legal obligation of compliance by the Member States and of adaptation of their national laws to Framework Decisions nevertheless remains, by virtue of Article 11(2) EU. Following the Pupino case,670 it has been argued that “the duty of loyalty owed by Member States is freely exportable between EC and EU pillars under the current Treaty arrangements [and that] then presumably the cargo of developments that floats on the raft of Article 10 [EC] must come with it”.671 As a result, the traditional substantive principles of interpretation of Community law applicable during the judicial process at national level should also stand with respect to measures falling under the Third Pillar, including the competence of the Court of Justice to hear such references by virtue of Article 35 EU in the name of Community law effectiveness.672 However, Cyprus at that time had not submitted yet to the jurisdiction of the Court regarding acts of the institutions in the area of police cooperation in criminal matters, to the effect that preliminary references under Article 35 EU could be brought before the Court of Justice for the purpose of the interpretation of such instruments of EU law.673 Any attempt of judicial dialogue between the Supreme Court of Cyprus and the Court of Justice in this case was therefore impossible. Even if the Supreme Court could have engaged into a process of preliminary reference with the ECJ for the sake of the uniform application of EU constitutional law, it may not have done so for several reasons. First of all, the issue of constitutionality at stake is internal to the national legal order. Like in the other Member States, the Cypriot House of Representatives had to enact a law adopting the Framework Decision,674 which is in any case subject to the Constitution. Any dispute arising before the national courts should be based on this transposing law, which was ruled to be anti-constitutional, as Article 11 of the Cypriot Constitution does not provide for arrest with a view to the

670

ECJ, Case C-105/03 [2005] ECR I-5285 (‘Pupino’). Ross M, ‘Effectiveness in the European legal order(s): beyond supremacy to constitutional proportionality’ (2006) 31(4) ELRev 476, 483. 672 “[J]urisdiction [under Art 35 EU] would be deprived of most of its useful effect if individuals were not entitled to invoke framework decisions in order to obtain a conforming interpretation of national law before the courts of the Member States”, para 38, Pupino. 673 See para 9 of the ECJ’s Guidance on References by National Courts for Preliminary Rulings [2005] OJ C143/1. 674 Law 133(1)/2004 (Official Gazette No 3850 of 30.4.2004). 671

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execution of a European arrest warrant. This appears clearly in all the judgments of highest courts of Member States relating to the European arrest warrant,675 including in the new Member States, where the constitutionality of the instrument in the national legal order was challenged and where contradictory judgments were delivered.676 Irrespective of the conclusions reached by the Supreme Courts in the various Member States which arguably derive from and form part of national constitutional laws, the legality of this instrument of EU law at the supranational level has recently been confirmed by the ECJ rejecting any idea of violation of human rights and of abuse of powers under Article 34 EU.677 The review of the above national case law however clearly illustrates a certain degree of reluctance among Member States, including Cyprus, to accept the supremacy of EC/EU law unconditionally, in particular when fundamental rights of a national nature and/or with a particular meaning in the national system are involved. In any case, the position of the Court of Justice on the issue of supremacy of EC law is very clear: it enjoys supremacy over national law,678 675

See e.g. Case no 591/2005, Areios Pagos (Greek Supreme Court) 8 March 2005, where the Court ruled that the EAW did not violate any provision in the Greek Constitution; see also case 2 B v R, No 2236/04, Federal Constitutional Court of Germany (2nd Chamber) 18 July 2005, where the Court rejected the EAW as it violated an article of the Basic Law (the provisions of the Act by virtue of which the EAW was incorporated into the legal system of Germany failed to take adequately into account the conditions and the requirements laid down in the article of the German Federal Constitution and, consequently did not comply with it). For a detailed legal review of the adoption of the framework decision in Member States, see Alegre and Leaf M, ‘Mutual recognition in European judicial co-operation: a step too far too soon? Case study – the EAW’ (2004) 10 European Law Journal 200. 676 The Polish Constitutional Court held in a judgment of 27 April 2005 (Case P 1/05 [2006] 1 CMLR 36) that Art 607t(1) of the Code on criminal procedure was incompatible with Art 55(1) of the Constitution to the extent that it authorised the surrender of a Polish national to the authorities of another Member State in response to a European arrest warrant. The Polish Constitution however prohibits the extradition of Polish nationals to another country. See Lazowski A, case note (2005) 1 EurCLR 569. On the contrary, the Czech Constitutional Court decided on 3 May 2006 to dismiss an action for unconstitutionality brought by a group of senators and members of Parliament contesting the law transposing the Framework Decision on the alleged ground that it authorised the surrender of Czech nationals and abolished the protection inherent in the double criminality rule with reference to the ECHR (Re constitutionality of Framework Dir-ective on the EAW, Ustavni Soud Ceske Republiky, 3 May 2006 [2007] 3 CMLR 24). For a review of the relevant case law of national supreme courts, see the various contributions in Lazowski (2009). 677 Case C-303/05, Advocaten voor de Wereld VZW v Leden van de Ministerraad [2007] ECR I-3633; see Geyer F, case note (2008) 4(1) EurCLR 149. 678 Case 6/64, Costa v ENEL [1964] ECR 585; Case 106/77, Simmenthal (No 2) [1978] ECR 629.

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including constitutional law as the internal hierarchy of national law cannot jeopardise the need for uniformity of EC law.679 On the other hand, the duty of consistent interpretation imported from the First Pillar to the Third Pillar by the Court in Pupino remains subject to the national court being able to interpret national law in accordance with Framework Decisions.680 As a result, the main argument before the national courts in this series of cases relating to the European arrest warrant is not one of supremacy of EU law but one of mere constitutionality of the Framework Decision within the national legal order.681 In this respect, the Cypriot Supreme Court concluded that no provision in the Act promulgated by the House of Representatives could be interpreted “in such a way so as to prevail and to be applied as regards the nationals of the Republic”.682 (iii) Legislative reaction in the context of membership. Whatever the merits of this decision of the Supreme Court may be, it did trigger a legislative reaction in Cyprus to the effect that certain amendments to the Cyprus Constitution were finally tabled before and voted by the House of Representatives with a clear objective to remove the potential conflict between EC/EU law and Cypriot constitutional law.683 To that intent, Article 1A was added,684 to the effect that the supremacy 679 Case 11/70, Internationale Handelsgesellschaft [1970] ECR 1125, para 3; Case C-473/93, Commission v Luxembourg [1996] ECR I-3207, para 38. For a detailed review of the supremacy from the perspective of the Member States, see e.g. Craig & De Burca, EU Law (4th ed, OUP, Oxford, 2008) (‘Craig & De Burca (2008)’) 353–77. 680 The Court in Pupino did not address the issue of EU law supremacy. Craig & De Burca argue that “this should not be taken as an implicit indication that measures enacted under the Third Pillar do not have primacy over national law. The ECJ was willing to apply principles such as loyal co-operation from the Community Pillar to the Third Pillar, and there is much in its reasoning that sits comfortably with the precepts underpinning the Costa case”, in Craig & De Burca (2008) 352. 681 In Constantinou (para 21), the Supreme Court of Cyprus however considers this point as follows: “Thus, the main issue concerning the present case that remains to be discussed is the submission put forward by the [AG], namely that the Act which incorporated the [EAW] into the legal system of our country ranks higher than the Constitution and, consequently, it must be applied” (translation provided by Westlaw UK); see Tsadiras’ review of the Supreme Court’s ruling, in Tsadiras, 1524–6. 682 Para 24, Constantinou. 683 Fifth Amendment to the Constitution Law 127(I)/2006 (Official Gazette No 4090 of 28.7.2006). 684 Art 1A reads as follows: “No provision of this Constitution will be deemed to annul laws that are enacted, acts that are carried out or measures that are introduced by the Republic which are necessary by reason of its obligations as a Member State of the [EU] or prevent Regulations, Directives or other acts or binding legislative measures that are adopted by the [EU] or the [EC] or their institutions or their competent bodies

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of EU law over the Constitution is prima facie established. In addition to Article 11 of the Constitution, which needed to be supplemented for the purpose of the European arrest warrant,685 Articles 140,686 169,687 and 179688 of the Constitution were also amended and/or supplemented in order to give full effect to new Article 1A of the Constitution. The precise ‘effect’ of Article 1A nevertheless remains unclear. In particular, while Article 179(1) refers to Article 1A, it does provide that the Constitution ‘remains the supreme law of the Republic’. As a result, no direct reference to the supremacy of EC/EU law is made in the amendments, arguably so as to avoid addressing the very difficult question of what law prevails over the Constitution, i.e. EC law or EU law. Should it be EU law, then Cyprus would be considered at the forefront of European integration by recognising such supremacy even before the ECJ.689 Should it be merely EC law, then the conflict between the European arrest warrant and the relevant provisions of the Constitution would have remained intact. As a result, the option was taken to deal with the supremacy issue only in an indirect way by providing that no provision of the Constitution could be an obstacle to Cyprus complying with its obligations as a Member State of the EU.690 Thus, without expressly providing so, Article 1A sets out the principle

on the basis of the [EC] Treaty or the [EU] from producing legal effect in the Republic”. Translation provided by the author; see also translation by Tsadiras, 1526 (fn 21). 685 Art 11(2)(f) was replaced with a new subpara (f). 686 The phrase “deemed contrary to or in violation of the Law of the EC or of the EU” was inserted in paras (1) and (3) of Art 140. 687 A new para (4) was inserted, to the effect that the RoC commits to act upon all the provisions deriving from EC and EU law, including when they amend national law. 688 Reference to Art 1A was made in para (1); para (2) refers to the obligations on the RoC arising out of EU membership. 689 For a discussion on the need for explicit recognition of the supremacy of EU law and the situation in the national constitutions of Ireland and of the Baltic States, see Van Elsuwege, 386–8. 690 It is clear from Art 4 of Law 35(III)/2003 that the rights and obligations of the Republic arising out of the Treaty of Accession prevail against contrary national rules and regulations. With reference to the Cypriot Constitution and to the traditional debate relating to the perception of the supremacy doctrine in the Member States, the argument could be made also with respect to Cyprus that the supremacy accorded to EC/EU law would be placed ‘under the authority of the national legal order’, as opposed to deriving from the ‘inherent nature of Community law’ as promoted by the ECJ. For an overview of the debate, see e.g. De Witte B, ‘Direct effect, supremacy and the nature of the legal order’ in Craig & De Burca (eds), The evolution of EU law (OUP, Oxford, 1999) (‘Craig & De Burca (1999)’).

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of supremacy not only of EC law as per the ECJ’s jurisprudence, but also of EU law,691 possibly reflecting on the current ‘depillarisation’ of the Union construct by treating the Community and intergovernmental spheres ‘uniformly’.692 This very broad provision of Article 1A originates mainly from the difficulty of amending the Cyprus Constitution, as all amendments are currently made under the doctrine of necessity,693 which is an exercise to be repeated as little as possible.694 The legislative objective of removing the potential conflict between EC/EU law and the Constitution appears a priori achieved; it will however no doubt face the judicial scrutiny of the Cypriot courts through cases on the enforcement of Community law rights in Cyprus. In the light of the case law of the Court of Justice on the effectiveness of Community law, Cypriot courts should normally evaluate on the merits of each case whether national law, including the Constitution as amended, provides effective remedy and as a result allows for the full implementation and enforcement of EC law and EU law rights in

691

Burgorgue-Larsen describes Art 1A as a « véritable profession de foi juridique européenne » in ‘Jurisprudence européenne comparée’ [2006] 4 Revue du Droit Public 1099, 1121. 692 See Tsadiras, 1527. 693 In constitutional law, ‘necessity’ justifies acts done or proceedings taken under legislations passed in violation of a constitutional provision due to the occurrence of ‘necessitous’ circumstances. The doctrine of necessity justifies the enforcement of an otherwise invalid and unlawful law. The beginnings of the application of the doctrine of necessity in constitutional law are traditionally presented as emanating from A-G for Cyprus v Mustafa Ibrahim & others (1964) Cyprus Law Reports 195. Mustafa was detained under the Administration of Justice (Miscellaneous Provisions) Law of 1964. This law had been passed in the Cyprus parliament during a boycott of the parliament by the Turkish Cypriot members, thereby denying parliament a quorum. Mustafa challenged the constitutionality of his detention but the State argued that the boycott of parliament constituted a ‘legislative paralysis’ which justified the need to legislate in an amended form until the boycott of parliament is terminated. This measure is therefore deemed temporary and shall continue ‘so long as the necessitating conditions persist’. The court concluded that “with the doctrine of necessity, in this well balanced form, I reach the conclusion that in the conditions prevailing at the material time, the enactment of the… Law was legally justified, notwithstanding the provisions of Articles… of the Constitution”, 214–215; see Marasinghe L, Constitutionalism confused: the doctrine of necessity v Kelsen’s pure theory (Daily News, 5.5.2004) available at http://www .dailynews.lk/2004/05/05/fea01.html, accessed on 27.02.09. See also Özersay K, ‘The excuse of State necessity and its implications on the Cyprus conflict’, Perceptions, winter 2004–2005, 31, 48–64. 694 Procedural changes to national constitutional frameworks as may be required under EU law are likely to be complicated in a number of new Member States due to the presence in particular of ‘safeguards’ against ‘further steps in the process of European integration’; for the Baltic States, see Van Elsuwege, 390 & 511–8.

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Cyprus. It is quite clear that the doctrine of necessity still plays a key role in this exercise, for as long as it remains in force.695 In any case, the courts in Cyprus have long recognised the principle of indirect interpretation of national law in the light of international treaty provisions, at least as far as the treaties concerned show an intention of promoting the “values and the protection of human rights”.696 It seems that the amendments made to the Cyprus Constitution to expressly introduce the European dimension clearly emphasise the fundamental rights associated to the concept of European citizenship as well as other rights granted under EC/EU law, to the extent that even the indirect interpretation of the national legislation in the light of EC/ EU law would be possible in case of uncertainty.697 It is clear from the above that the introduction of the EC/EU law dimension created new challenges to the internal legal systems both in the UK and in Cyprus, which needed to be addressed upon the successive accession of these two countries, for the purpose of legal certainty and for their proper integration into the EU. 2. The introduction of the Community law perspective When the UK became a member of the EC in 1972, Article 299(6) (b) was inserted into the EEC Treaty setting out the principle of full territorial exclusion of the SBAs under Community law, to the effect that the SBAs were out of the geographical, political, legal and transactional borders of the EU, and merely fell within the jurisdiction of the UK. This situation derived from the continuing provision under international law for two military bases negotiated by the UK at the time of the independence of Cyprus.698 Despite the sovereignty of Cyprus as a State in international law, the British position that the military bases were just non negotiable was strongly reiterated during the negotiations for

695 The decision of the ECtHR in Aziz v Cyprus [2005] 41 EHRR 11 should be mentioned in this respect. The ECtHR ruled that the doctrine of necessity in the case of Aziz had to be exercised in Cyprus in a manner that would not violate fundamental rights including the principle of equality; for a legal appraisal of the case, see Özersay K, ‘The excuse of State necessity and its implications on the Cyprus conflict’, Perceptions, winter 2004–2005, 31, 65–8. An amended version of this section appears in Laulhé Shaelou (2009). 696 Shipowners Union v The Registrar of Trademarks (1988) 3 CLR 457. 697 For a legal appraisal of the duty of indirect interpretation in Cyprus, see Laulhé Shaelou (2009). 698 Green P, Embracing Cyprus (IB Taurus, London, 2003) 57.

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UK membership of the EC699 and led to the intergovernmental recognition of the special status of the SBAs within the Community legal order in line with the position adopted in international law. Cyprus’ entry to the EU was however the occasion to redefine the geographical territory of Cyprus and end one of the last instances of imperial power in Europe,700 as there was no doubt that, at the very least, the violation of the principle of self-determination of a Member State is against the acquis communautaire. The SBAs were therefore a topic of discussions between the EU institutions, in particular the Commission, Cyprus and the UK. The result of the negotiations, run in parallel to the official accession negotiations, was that the UK not only managed to maintain the base regime in Cyprus, but also ensured their continuing legitimacy under Community law, as the SBAs became the subject of a fresh and distinct instrument of primary law annexed to the Treaty of Accession, Protocol 3, supplementing Article 299(6) (b) EC.701 The intrinsic intergovernmental nature of Protocol 3, which led to the setting of very detailed provisions having force of primary law and excluding a priori any recourse to instruments of secondary Community legislation for implementing purposes, can only confirm the political success of the UK, which managed to maintain the recognition in Community law of a situation arising out of international law, albeit potentially based on conflicting norms, and hence, to impose the necessary adaptations of the rule of law in the EU through an amendment of the Treaties.702 As a result, there was no fundamental re-consideration of the base regime under Protocol 3, which confirms the principle of territorial exclusion of the SBAs from the EU territory, even if the SBAs are partly brought into the substantive realm of Community law through their partial insertion into the legal and transactional borders of the EU as a result of Cyprus’ accession to the EU. It has been argued in particular that Protocol 3 merely “seeks to modify the perception of the bases,

699

Brewin, 220. Ibid; see also Constantinou C & Richmond O, ‘The long mile of Empire: power, legitimation and the UK Bases in Cyprus’ (2005) 10(1) Mediterranean Politics 65 (‘Constantinou & Richmond’) 79; and Theodoulou, 71. 701 Theodoulou, 71. 702 A change in the territorial field of application of the Treaties itself does not necessarily require an amendment of the Treaties in order to be adjusted, following a change of the status of a territory under the sovereignty of a Member State, see Lenaerts & Van Nuffel, 356. 700

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from that of an imperial matter to an exceptional arrangement within and between EU partner States”, thereby raising the crucial issue of the legal status of the SBAs in the Community legal order.703 3. The intermingling of legal perspectives The question of the relationship between the Treaty of Establishment and its Annexes, involving inter alia two Member States of the EU on the one hand, and Community law on the other hand (in particular the 2003 Treaty of Accession), arises to the extent that they promote a priori conflicting norms. Since old Article 299(6) (b) EC placed the SBAs beyond the realm of Community law, it meant that the only legal obligations upon the UK vis-à-vis Cyprus derived from international law by virtue of the Treaty of Establishment.704 The introduction of the Community law perspective triggered by Cyprus’ accession to the EU nevertheless meant that the UK had to find a compromise between obligations owed to another party under an international agreement and obligations towards another Member State deriving from Community law. A pragmatic approach was therefore favoured by all parties, leading to a compromise solution, as it appeared that only the practical implications on the ground mattered in the context of these negotiations.705 This view is confirmed by the fact that there was very little local pressure for the overall re-consideration of the legal status of the SBAs under Community law, in particular its inclusion into the European territory.706 Thus, “it was felt that allowing for the partial application of the acquis on the [SBAs] would minimise the need to adopt practical changes on the ground” and that “the correct way to implement this goal was to modify Article 299 (6) EC”.707 New Article 299(6) (b) EC thus reflects this pragmatic approach and provides that the EC Treaty shall not apply to the SBAs “except to the extent necessary to ensure the implementation of the arrangements set out in Protocol [3]”, to the effect that the SBAs are now partially subject

703

Constantinou & Richmond, 79. Hoffmeister, 221. 705 Ibid. 706 Constantinou & Richmond, 67; see also Catsiapis J & Del Valle A, ‘Chypre : demain la reunification? Entretien avec Tassos Papadopoulos’ [2006] Politique Internationale no 111, 299, 308. 707 Hoffmeister, 221. 704

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to Community law. The scope of application of Community law being determined in Protocol 3, it appears that the sole purpose of the general provision set out in new Article 299(6) (b) is to introduce Protocol 3 as the special legal basis in this respect, thereby confirming the exceptional nature of the regime granted to the SBAs as derogatory lex specialis under Community law. The concept of lex specialis applied to Protocol 3 seems to be quite straight forward, as it derives from a situation in international law, the implications of which are known. On the other hand, a detailed description of this concept and of its implications will be necessary in Chapter 5 with respect to Protocol 10, as it is argued that it applies in the latter case to a sui generis situation in Community law. B. Implications for the legal status of the SBAs under Community law 1. Current legal status (a) In international law Numerous scholars have pointed out to the inconsistencies of the legal status of the SBAs in international law.708 A review of the legal status of the SBAs in international law however is beyond the scope of the present book. It seems sufficient to indicate here that despite a certain degree of sovereignty granted to the UK under the Treaty of Establishment, the SBAs are certainly not a State neither a colony of the UK in international law.709 On the other hand, the sovereignty of the UK over the SBAs appears to be limited since it cannot assign their ownership to any third State, except the RoC, and it is bound to use the territory exclusively for military purposes.710 The SBAs have been most ably described as a ‘quasi-colony’ with limited sovereignty leading to a sui generis regime in international law.711 (b) In Community law It was argued above that the fundamental principles applying to the SBAs in international law were transposed into the Community legal order ‘as far as possible’ and required as such derogatory adaptations

708 For a very detailed analysis of the SBAs in international law, see Theodolou; see also Chrysostomides (2000) and Chrysostomides K, Cyprus, the way forward (Cyprus Institute for Political Research and European Affairs, Nicosia, 2006) (‘Chrysostomides (2006)’). 709 Chrysostomides (2006) 75. 710 Ibid; see also Theodoulou, 48. 711 Theodoulou, 45–8.

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to the principles of Community law. The legal status of the SBAs in Community law has been said to be special and, to that extent, it may create a unique and/or sui generis regime under Community law. (i) Treaty provisions on differentiated territorial inclusion/exclusion. Although there are other examples of overseas or independent territories in Europe, which have been given a special status under Community law,712 it is argued that the status of the SBAs can only be distinguished from the one of these territories. This is partly due to the fact that under international law, the legal status of these other territories has been clarified as being equivalent either to sovereign or to independent entities vis-à-vis a Member State or not, which is not the case of the SBAs vis-à-vis the UK. The UK in particular has socalled ‘self-governing colonies’, such as the Falkland Islands or Gibraltar, and ‘dependencies’, such as the South Sandwich Islands, whose status is nevertheless different from the one of the SBAs both in international law713 and under Community law. Under Community law, the status of overseas countries and territories associated to Member States is addressed in Part Four of the EC Treaty.714 The purpose of Part Four is clearly stated in Article 182 EC as being “to associate with the Community the non-European countries and territories which have special relations” with certain Member States, including the UK, for the promotion of their economic, social and cultural development as well as “to establish close economic relations between them and the Community as a whole”.715

712

See n 448, 449 and 450 above. The UK is responsible for these territories; the UK must report regularly to the UN on its relationship with these territories by virtue of Art 73 UN Charter; see Theodoulou, 46. 714 Arts 182–188 EC. 715 For the OCTs listed in Annex II EC Treaty, the Commission notes that despite huge differences in terms of degree of autonomy vis-à-vis the Member States to which they are linked and also in economic, social, geographical and environmental terms, “they do share common characteristics: none of them is a sovereign country, they are all parliamentary democracies, they are all islands, the size of their populations is very small and their ecological richness is extraordinary compared to continental Europe. They are relatively vulnerable to external shocks and are in general dependent on a narrow economic base that mostly revolves around services. They are also heavily reliant on imports of goods and energy. In general, exports of goods from the OCTs to the EU or within their respective geographical regions remain limited”, see Commission Green Paper on OCTs, 3. 713

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The first paragraph of Article 299(3) EC provides a list of the associated territories to which the special arrangements of Part Four shall apply (Annex II) and the second paragraph excludes the applicability of the Treaty to the other overseas territories having ‘special relations’ with the UK, not listed in Annex II. Article 299(6) (b) then expressly excludes the SBAs from the scope of the Treaty, thereby indicating that the relationship between the UK and the SBAs does not fall either in the category of ‘special relations’ of Article 299(3), and as such, is unique. As a result, the status of the SBAs is dealt with distinctly and separately in Part Six of the EC Treaty, containing various final provisions to the Treaty, even if it appears that the status of other territories is also residually addressed in Article 299 EC,716 which establishes the territorial scope of application of the Treaty.717 The specificity of the treatment of the SBAs under Community law is further confirmed and reinforced by the fact that the SBAs are now subject to the lex specialis of Protocol 3 annexed to the 2003 Act of Accession, in derogation to the principles of Community law contained in primary legislation. Although this is not a unique phenomenon,718 European and non-European territories associated with the Community, especially the ones concerned by Part Four of the EC Treaty, are normally subject to instruments of secondary legislation,719 which merely provide for the necessary adaptations to the principles contained in the Treaties. The provision of adaptations to Community principles through mechanisms of joint or centralised decision-making in the EU and contained in secondary legislation could indicate a lesser degree of differentiation of these territories than the regime granted to the SBAs.720

716

For the UK, see Art 299(3) and (6)(c) EC. For a detailed analysis of the territorial scope of application of the Treaties under Art 299, see Ziller in De Burca & Scott, 113–31. 718 The Åland Islands are also the subject of a Protocol to the Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden by virtue of Art 299(5) EC; see also the Protocol on the Netherlands Antilles [1964] OJ 150, 1.10.1964. 719 Such territories are listed in Annex I of Council Decision 86/283/EEC of 30 June 1986 on the association of the OCTs with the EEC [1986] OJ L 175/1, 1.7.1986 which does not contain any reference to the SBAs. 720 « Lorsque le concept à ‘plusieurs vitesses’ est compatible avec les principes fondamentaux du droit communautaire, il peut être utilisé dans les textes du droit communautaire derivé. S’il dépasse ces limites, il faut qu’existe une autorisation spéciale prévue par le Traité », in Ehlermann, 195. 717

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The alleged unique and/or sui generis nature of the SBAs under Community law therefore derives from a permanent derogation to the principle of territorial applicability of Community law granted through mechanisms of intergovernmental decision-making, based primarily on international agreements binding upon Member States, rather than on economic, geographical or even demographic considerations normally taken into account in such cases.721 Such an analysis can only outline the very exceptional and limited status of the SBAs. This is confirmed in Article 8 Protocol 3 which excludes the possibility of extending the arrangements reached for the SBAs to any other territory of the Community and of using it as a precedent, in whole or in part, for any other special arrangements, existing or future, falling under Article 299 EC. (ii) Principles of differentiated integration in Protocol 3. As it was previously contended regarding differentiation deriving from Accession Treaties, constitutional and institutional flexibility following accession is also normally based on economic and social considerations, provided they are applied in a proportionate manner to a specific situation, and not merely on political grounds.722 Although some economic and social justifications have been brought forward by the UK for the existence of SBAs in Cyprus, it is quite clear that such considerations cannot stand any longer now that both countries are in the Internal Market; the SBAs are rather an anomaly to the rules of the Internal Market as their very existence impedes the freedom of movement and the principle of mutual recognition in Cyprus. The justification for the SBAs in Cyprus therefore lies elsewhere. It is argued that the socio-legal analysis of the European integration of Cyprus promoted in this book could provide the necessary explanatory background. Any analysis of the SBAs should however be conducted on the basis of a strict interpretation of Community principles, as it is the case whenever there is an exception to these principles.

721 Even Art 299(2) EC takes into consideration the “structural social and economic situation of the French overseas departments, the Azores, Madeira and the Canary Islands” in order to determine the scope of application of the Treaty. 722 « Des différences d’ordre économique et social (ces deux termes étant pris dans leur sens le plus large) peuvent en principe justifier une différentiation; des phénomènes purement politiques ne le peuvent pas. La différence de traitement doit par ailleurs être proportionnée aux différences constatées dans les situations factuelles (objectives) », in Ehlermann, 195.

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It is clear from the above that the current status of the SBAs in Cyprus under Community law deserves a differentiated treatment on the ground of geographical exclusion; what is at stake is rather the extent of this differentiation both in terms of scope and time. Indeed, differentiation should not be a ‘goal’ in itself but rather an ‘instrument of last resort’, as it derogates to Community principles and, as such, should normally be discussed in relation to specific objectives common to all the Member States.723 Individual type constitutional or institutional flexibility within the Treaty should only be envisaged on the basis of very specific and strong considerations for a Member State or a group thereof, provided they satisfy the requirements of the principle of proportionality.724 As a result of the application of the principle of proportionality to the differentiated situation of the SBAs, it is quite clear that the UK had no other choice but to agree to the partial application of the acquis communautaire on these territories, as the objectives on the ground required it in view of the integration of Cyprus into the Internal Market.725 Thus, the regime applicable to the SBAs as of 1 May 2004 is based on a more limited – albeit a priori still permanent – derogation to the acquis, whereby some existing instruments of secondary legislation are deemed applicable to the SBAs by virtue of Protocol 3. The fate of the legal status of the SBAs remains however very much subject to intergovernmental mechanisms of decision-making in the Community and, as such, would also need to be reviewed through intergovernmental mechanisms triggered by a unanimous decision of the Council,726 should the objectives on the ground require a more extensive application of the acquis in the SBAs (a lesser application not being an option). In this respect, the UK and the RoC will normally be consulted by the Commission on any revision of the provisions of the Protocol.727

723

Ehlermann, 205. The principle is deemed to comprise two tests, one of ‘suitability’ and one of ‘necessity’; see Tridimas, 139. 725 In particular since the UK had agreed under the ToE that the RoC would administer a wide range of public services in the SBAs. 726 Art 6 Protocol 3 provides that the Council acting unanimously can “in order to ensure effective implementation of the objectives” of the Protocol amend Arts 2 to 5 plus the Annex or extend the scope of application of Community to the SBAs “on such terms and conditions as it may specify”. 727 Art 6 Protocol 3, last sentence. 724

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There seems however to be an alternative route as far as the implementation of Protocol 3 is concerned, to the extent that the UK and the RoC can conclude further bilateral arrangements on the delegation of the implementation of the provisions of Protocol 3,728 copy of which should be submitted to the Commission. The very specific nature of this differentiation under Community law is once more singled out by the fact that the SBAs are subject to a hybrid legal regime resulting from the interaction between bilateral and/or international agreements and Community law (see below). 2. Changes in the legal status The legal status of the SBAs derives mainly from political considerations, which could vary in the future. Given the sovereignty of Member States in matters of external relations and due to the fact that the EU has in any case already recognised the SBAs as an exception to the rules and principles of the Community, changes to the legal status of the SBAs are unlikely to occur unless triggered by the parties themselves, to the effect that the relevant international agreements shall be amended or terminated. It seems difficult to see why the UK, who has achieved so much with respect to the SBAs in Cyprus, would initiative any change to their status.729 On the other hand, it is argued that a solution to the Cyprus problem could trigger new forces, which might lead to the reconsideration of the current situation, in particular since there would be in theory no more military needs on the island, assuming that such needs previously existed. Article IV(2) of the Treaty of Guarantee allows for unilateral military intervention of each Guarantor power to restore the constitutional order of Cyprus and as a result, indirectly legitimises the continuing presence of the SBAs since the integrity of the UK territory in Cyprus is a guarantee to the non-partition of the Cypriot territory at the initiative of Greece or Turkey.730 Whereas the situation of Turkey is somehow different since Turkey is not bound by the EU accession of Cyprus

728 Art 7(4) Protocol 3 relates to the implementation of any provisions referred to in Arts 2 to 5. 729 Appendix P of the ToE relating to the restitution of the territory of the SBAs to Cyprus in the event of a change in the British military needs on the island is left at the discretion of the UK; see Theodoulou, 67. 730 Ibid, 51.

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and could therefore claim the use of this provision, the situation for Greece and the UK appears straight forward, since they are both bound by the Community principle of collective EU guarantee as Member States under Article 7 EU. Since Greece and the UK are both parties to the Cyprus’ Accession Treaty, “they have agreed to put on hold their Guarantor powers to the benefit of the EU Member States by conferring to them the sanctioning power under Article 7 EU”.731 The obligation arising from Article 307(2) EC would “force them not to exercise any right under Article IV(2) Treaty of Guarantee, which might be incompatible with EU membership”.732 As a result, a solution to the Cyprus problem should no doubt have substantial constitutional implications in Cyprus.733 In the Annan Plan, however, Appendix C containing the Additional Protocol to the Treaty of Guarantee would have led to no major constitutional amendments in this direction. The proposed Additional Protocol would have merely renewed the 1960 agreements, arguably without any coercive force this time, and as a result, would have mainly “reconfirmed the sovereign legal status of the bases […] by giving the base regime and its sea extensions the highest possible authorisation and legitimisation in the form of local referenda”.734 The Annan Plan proposed that “in exchange for relinquishing 45 square miles of base (land) territory, the UK government could appoint a person who was solely charged to delimit its base (sea) territory, and over whose final ruling, whatever that might be, the Cypriot government could not appeal in any international tribunal or refer the matter to an independent mediator or arbitrator”,735 thereby relinquishing the idea of any return of sovereignty to the RoC.736 There exist however under the Treaty of Establishment itself and under the Vienna Convention more generally legal mechanisms, which if triggered, could arguably result in the revision or even the

731

Hoffmeister, 142–3. Ibid. 733 With respect to the Annan Plan, see e.g. Sözen A & Özersay K, ‘The Annan Plan: State succession or continuity’ (2007) 43(1) Middle Eastern Studies 125. 734 See Constantinou & Richmond, 81; Theodoulou, 71; Chrysostomides (2006) 76–7 and Agapiou-Josephides K, ‘Le Plan du Secrétaire Géneral de ‘ONU à l’épreuve de l’exercice communautaire’ in Agapiou & Rossetto, 67. 735 Constantinou & Richmond, 81. 736 Agapiou-Josephides in Agapiou & Rossetto, 78. 732

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nullity, in part or in whole,737 of the international agreements establishing the SBAs in Cyprus.738 In particular, the very existence and validity of the main components of the 1960 agreements relating to the establishment of the SBAs have been challenged,739 leading to the conclusion that the RoC could terminate wholly or partially the 1960 agreements even though there is no such provision in the 1960 agreements.740 In this case, Protocol 3 would no longer have any raison d’être and would need to be repealed in accordance with the intergovernmental mechanisms described above. It should be noted however that, unlike Protocol 10, Protocol 3 does not contain any provision for the repeal of its provisions, thereby pointing once more to the permanent character of the derogation granted under Protocol 3. Thus, upon reunification, it would seem possible to argue that the SBAs could become external borders within Cyprus, potentially subject to a special regime if there is no change to their legal status.741 Another major difference with Protocol 10 is that Protocol 3 sets out exclusively all the provisions applicable to the SBAs, including the current list of applicable instruments of secondary legislation under Community law.742 At the same time, it also rules out implicitly the creation of implementing measures having force of secondary law in the Community legal order, which are potentially replaced by bilateral agreements. These two remarks could certainly explain the extreme length and detailed contents of the document (main body with nine articles, Annex in four parts and one Declaration), as opposed to Protocol 10 (one part with four articles). Protocol 3 therefore also warrants careful review in light of the underlying principles identified above, as the scope and nature of the two Protocols differ, as evidenced by the difference in the drafting methods.

737 Art 44 Vienna Convention sets out the principle of the severity of the provisions of an international agreement. 738 For a detailed review of such provisions and their effect on the status of the SBAs, see Theodoulou, 60–8. 739 On the basis of several Arts of the Vienna Convention, see Theodoulou, 61–8. 740 Theodoulou, 67–8. 741 Schladebach M, ‘The EU accession of the Republic of Cyprus: legal aspects’ (2003) 52 (1/3) Südosteuropa Zeitschrift Für Gegenwartsforschung 136 (in German) 144. 742 Although this list can be extended by virtue of Art 6 Protocol 3.

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II. Application of the acquis communautaire to the SBAs in Cyprus The current derogatory regime applicable to the SBAs is based on a limited application of the acquis, which is itself subject to ‘special arrangements’ regarding the implementation of the applicable provisions of the Treaty to the SBAs, to the effect that the lex specialis contained in Protocol 3 is both derogatory and adaptory in nature.743 The special arrangements on the application of the acquis to the SBAs concern the territorial and material scope of this application as well as the implementation of the Protocol in the SBAs. A. Territorial scope of application of the acquis The SBAs, despite being British sovereign ground outside the scope of the Treaty, are included within the customs territory of the Community for the purpose of the implementation of Protocol 3 and, as such, are subject to certain provisions of the Customs Union and CCP of the Community as set out in the Annex.744 In addition to the obvious benefits deriving from the Community Customs Union – even if these are adapted to the situation (see below) – it appears from the list of specific acts applicable to the SBAs in this field that the primary purpose of this inclusion is to avoid smuggling of any kind on the European territory. It is indeed clear that the inclusion of the SBAs in the Community Customs Union territory has implications for their borders.745 In this respect, Article 5 of the Protocol establishes a distinction between the ‘land and sea boundaries’ of the SBAs (paragraph 1) and their ‘external borders’ (paragraph 2). The land and sea boundaries of the SBAs with the RoC are not deemed external borders of the Community, to the effect that the RoC does not have to carry out checks on persons crossing these areas neither do the Community restrictions on the crossing of external borders apply to these areas. On the other 743

7th Recital, Protocol 3. Art 2(1) and Part One Annex Protocol 3. 745 The Commission reports that there is a widespread smuggling of goods across the Green Line, notably at illegal crossing points used by local residents and farmers in the villages of Pyla and Pergamos within the Buffer Zone alongside the Eastern SBA; see Commission Communication, Annual Report on the implementation of the GL Regulation and the situation resulting from its application COM(2007) 553 final, 21.9.2007 (the ‘2006 Commission report on the implementation of the GL Regulation’) 8. 744

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hand, the UK guarantees to exercise controls on persons crossing the external borders of the SBAs in accordance with Part Four of the Annex to the Protocol, which contains the Community rules on the restriction on the crossing of external borders.746 These measures relate primarily to third country nationals, as referred to in Article 3 Part Four of the Annex. Part Four of the Annex to Protocol 3 should also be read in conjunction with Article 2(2) Protocol 10, which provides that the external borders of the SBAs also include the boundary between the Eastern Sovereign Area and the areas not under the effective control of the RoC so long as the acquis is suspended in these areas. The so-called ‘Green Line Regulation’ taken on the basis of Article 2(1) Protocol 10747 thus also affects the demarcation line at the precise connection between the SBAs and the northern part of Cyprus.748 As a result, there is no preferential treatment for goods crossing the border, if any, whereas persons crossing this boundary are subject to the rules on the crossing of an external border as per Part Four of the Annex to Protocol 3. In this respect, the authorities of the Eastern SBA have recently intensified activities to participate to the effort in reducing inter alia illegal immigration across the Green Line and the number of individuals applying for asylum. In 2006, of the 100 illegal immigrants detained within the Eastern SBA, “about half were taken back by the Turkish Cypriots, the others were handed over to the [RoC] authorities on the basis of a Memorandum of Understanding”.749 The SBAs had also handed over to the UNHCR and to the RoC the fate of a group of 50 to 100 asylum seekers who had been housed on the Dhekelia British Base for the past few years, claiming that the government of the RoC would assume the administrative responsibility of the asylum seekers, giving 746 Despite Protocol No 3 annexed to the EC Treaty on the application of Art 14 EC to the UK and Ireland which delimits the British and Irish rights to impose frontier controls (they can ‘opt-in’ the relevant acquis), the UK (and Ireland) do not fully participate to measures on external border controls. The UK has urged the ECJ to overturn a Council decision preventing its full participation to the EU border agency Frontex or to certain common security features including biometric identifiers into passports but the Court confirmed their exclusion from these measures; see Cases C-77/05, UK v Council [2007] ECR I-11459; and C-137/05, UK v Council [2007] ECR I-11593. 747 Council Regulation (EC) No 866/2004 [2004] OJ L 161/128, 30.4.2004, see e.g. Arts 1(1)(b) and 2(5). 748 Berramdane A, ‘Chypre et l’UE’ in Agapiou & Rossetto, 56. 749 See the 2006 Commission report on the implementation of the GL Regulation, 4; see also Commission Communication, Annual report on the implementation of the GL Regulation and the situation resulting from its application COM(2008) 529 final, 27.8.2008 (the ‘2007 Commission report on the GL Regulation’) 4.

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housing allowances and/or official status to recognised refugees.750 As these refugees do not appear to be covered by the Memorandum of Understanding,751 their future in the RoC remains uncertain. Having in mind the above clarifications, through which the issue of the partition of the island is addressed with respect to the SBAs under Community law, Article 1(a) Part Four of the Annex to Protocol 3 determines the external borders of the SBAs as “their sea boundaries and their airports and seaports, but not their land or sea boundaries with the RoC”, the latter boundaries being subject to agreements between the relevant parties. The land boundaries of the SBAs and other territories were provided for in the Treaty of Establishment.752 The sea boundaries of the SBAs can be derived a contrario from the Treaty of Establishment753 and in accordance with the case law from the Cypriot courts.754 As a result, it can be argued that “[t]he sea area which the [RoC] could not have claimed as her own, due to the Treaty of Establishment, could not, under any reasonable or historical circumstances, exceed 3 miles” and that, consequently, “the sea area of the Bases is contained within the territorial sea of the [RoC]”.755

750

Cyprus Weekly, 16–23.2.2007, 6. Memorandum of Understanding between the Government of the RoC and the Government of the UK concerning the implementation of Protocol 3 in so far as it concerns Illegal Migrants and Asylum Seekers of 20 February 2003, indexed in Index of Treaties of the RoC 1960–2005 (Office of the Law Commissioner, Nicosia, 2006) 212 and reproduced in Makris N, The 1960 Treaties on Cyprus and selected subsequent Acts (Bibliopolis, Peleus, 2003); see also http://www.publications.parliament.uk/pa/ cm200405/cmselect/cmfaff/113/113we01.htm, last accessed on 8.10.2008. 752 In addition to the territory of the SBAs, the UK kept control over forty sites in Cyprus by virtue of Annex B ToE Part II; see Theodoulou, 57. 753 By virtue of Annex A para 3 ToE, the RoC had undertaken not to claim “as part of its territorial sea” waters lying next to the Bases. 754 In Psaras and Lincha v RoC [1988] ILR 231, the Supreme Court of Cyprus held that as there was insufficient evidence that these waters belonged to the SBAs, in particular there was no express provision to that effect, the Cypriot courts could exercise their jurisdiction, in Theodoulou, 50. 755 Chrysostomides (2006) 77; Chrysostmides also contends that it is debatable whether “the UK could ever claim that the Bases are in reality a ‘coastal State’” and as a result, “it could neither claim responsibility for exclusive policing and supervision of the area”, in Chrysostomides (2006) 79. Theodoulou concludes that “le statut juridique des BMBC est celui de territoires sur lesquels le RU a retenu, pour des raisons purement militaires et de défense, un agrégat de droits souverains disparates, bien définis par les accords de 1960, accompagnés des limitations et des précisions qui se trouvent dans ces accords”, in Theodoulou, 50. 751

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As evidenced by the above findings, it would appear that in Protocol 3 the land and sea boundaries between the RoC and the SBAs, irrespective of any issue of interpretation in accordance with the Treaty of Establishment, are mere administrative limitations to the internal jurisdiction of each country in the application and the implementation of the acquis in and around the SBAs.756 The material scope of application of the acquis is set out in the remainder of Articles 2 to 5. The principles relating to the implementation of the acquis under the Protocol are contained in Articles 6 and 7, as supplemented by the Memorandum of Understanding between the UK and the RoC concerning responsibility for the implementation of the Protocol on the SBAs (see below).757 B. Application of substantive provisions of Community law As a result of the delegation by the UK of the administration of a wide range of public services in the SBAs to the RoC under the Treaty of Establishment and in view of Cyprus’ accession to the EU, these fields are now subject to the application of the acquis by virtue of Protocol 3. This means that the initial objective of ‘granting the same treatment to Cypriots living and working on the SBAs as those living and working in the RoC’ now encompasses Community rights and as a result entails obligations as to the implementation of these rights under the Protocol. 1. Selected areas of the acquis (a) Customs duties and other taxes As additional measures relating to customs union, paragraphs (2) and (3) Article 2 Protocol 3 provide for the application of certain acts of Community law relating to excise duties and other taxes, as amended in Parts Two and Three of the Annex. Part Two of the Annex amends certain instruments of Community secondary legislation to the effect, inter alia, that the SBAs are included in the list of derogatory regimes which are not treated as third territories for the purpose of customs arrangements such as turnover taxes or

756

Theodoulou, 72. Dated 5 June 2003, indexed in Index of Treaties of the RoC 1960–2005 (Office of the Law Commissioner, Nicosia, 2006) 212 and reproduced in Makris N, The 1960 Treaties on Cyprus and selected subsequent Acts (Bibliopolis, Peleus, 2003) (‘Memorandum of Understanding’ or ‘MoU’) 210. 757

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the common system of value added tax. The SBAs are added to the Principality of Monaco and the Isle of Man as ‘territories’758 having their own customs arrangements with Member States of the EU, but nevertheless benefiting from preferential treatments for the exchange of goods as set out in Part Two of the Annex. For such purposes, the transactions taking place in the SBAs are treated as “originating in or intended for the [RoC]” in accordance with the Treaty of Establishment.759 The privileged treatments granted to the UK through the SBAs are also reflected in Article 2(3) Protocol 3, which provides for certain express rights to relief and exemption from duties and taxes deriving from the Treaty of Establishment. Goods and services imported for the use of the staff and personnel of the SBAs are specifically exempted from customs duties, turnover taxes or value added taxes as set out in Part Three of the Annex. The above provisions must be read in conjunction with Article 7(1) of the Protocol which makes an express reference to the responsibility of the UK in the application of the acquis in the fields of customs, indirect taxation and CCP, despite the fact that the SBAs are considered part of the territory of the RoC for the purpose of obtaining privileged treatment under Community law. The Protocol provides that the UK is responsible for the application of the acquis with respect to the exports and imports of goods in Cyprus in three instances: (a) when occurring through the ports and airports within the SBAs, in which case the acquis specified in Protocol 3 applies; (b) when occurring through the ports and airports of the RoC but staff of the SBAs is involved, in which case customs controls may be carried out within the SBAs; (c) when relating to any import or export by forces of the UK, in which case the UK is responsible for the issue of any licences, authorisations or certificates required under Community law.760 In view of the above, the scope of the administrative delegation to the RoC in this field appears very limited. In this respect, it should be noted that under paragraph (a), the UK can apply the acquis as

758 Although there is obviously no possible comparison of the status of the SBAs with the one of the other territories mentioned in the Annex, which are independent and/or autonomous, there is nevertheless equation of treatment for the purpose of certain customs arrangements, as it appeared necessary to grant continuity of treatment under the Customs Union and for the sake of the implementation of the Internal Market in Cyprus in accordance with the Treaty of Accession. 759 Arts 1(b) and 2, Part Two, Annex, Protocol 3. 760 Each point corresponds respectively to paras (a), (b) and (c) of Art 7(1) Protocol 3.

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specified in Protocol 3, whereas under paragraph (c), any applicable provision of Community law may apply. There is also an express reference in Article 2(2) Protocol 3 to the provisions set out in this field in the 2003 Act of Accession being applicable to the RoC. Most of these provisions are in the form of transitional measures by virtue of Article 27 Act of Accession or adaptations of the acts of the institutions as set out in Annex II of the Act of Accession. As such, they impose obligations on the RoC to comply and do not on the other hand contain any obligations upon the UK as an existing Member State, other than general ones deriving from the enforcement of the Treaty of Accession itself, in view in particular of the possibilities of differentiation sometimes to the detriment of the new Member States as identified in Chapter 3. In practice, the UK has reported to the Commission difficulties for the services of the Eastern Sovereign Base to handle goods requiring a phytosanitary certificate in accordance with Community law, due to a lack of technical facilities.761 A practical arrangement with the RoC authorities was however found in 2007 to carry out the required phytosanitary checks.762 Also, the point could be made in relation to paragraph (c) of Article 7(1) Protocol 3 that in accordance with the principle of sovereignty of the RoC on its ground, it is not an obligation for the UK to carry out customs controls at the SBAs but rather a possibility.763 (b) Agriculture and ancillary issues Article 3 Protocol 3 specifically provides that Title II of Part Three of the EC Treaty on agriculture as well as the provisions adopted on that basis and on the basis of Article 152(4) (b) EC apply to the SBAs, with no specific amendments. This provision is supplemented by Article 7(2) Protocol 3 which provides for the responsibility of the RoC towards the “administration and payment of any Community funds to

761 Commission’s yearly report on the implementation of the GL Regulation and the situation resulting from its application COM(2006) 551 final, 25.9.2006 (‘the 2005 Commission report on the implementation of the GL Regulation’) 6; see also the 2006 Commission report on the implementation of the GL Regulation, 8. 762 See the 2007 Commission report on the implementation of the GL Regulation, 7. 763 In this respect, Theodoulou pointed to another potential violation of the sovereignty of the RoC, to the extent that Art 7(1) Protocol 3 could be interpreted as giving the right to the SBAs to operate commercial ports and airports, in contradiction with para 2(v) Appendix O ToE. It is commonly accepted however that goods in this context are limited to the needs of the forces in the SBAs; see Theodoulou, 72.

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which persons in the [SBAs] may be entitled pursuant to the application of the [CAP]” and for its accountability to the Commission for this purpose. Protocol 3 must however be read in conjunction with the rest of the 2003 Treaty of Accession, which has established a temporary derogatory regime to the CAP and ancillary matters for all new Member States, including Cyprus.764 In particular, direct payments to new EU farmers have been phased in over a period of 10 years, to the effect that new Member States have no other solution but to ‘top-up’ EU direct payments with subsidies paid out of national budgets.765 The RoC has negotiated in this respect a transitional period of five years whereby the relevant Community rules on State aid will not apply to the provision of financial aid to certain families of farmers deprived of subsidies.766 It appears that the duty on the RoC to manage agriculture deriving from the Treaty of Establishment has been stretched to new limits, since the UK has effectively imposed the entire financial burden related to the implementation of the CAP in the SBAs onto Cyprus. Of course, given the exclusively military purpose of the SBAs in Cyprus, it is quite clear that the only persons entitled to such farming subsidies under Article 7(2) Protocol 3 are a priori Cypriot farmers living on the SBAs. The door is however open to further delegation to the RoC corresponding to the Treaty of Establishment in accordance with Article 7(3) Protocol 3, even if such delegation appears very unlikely in the field of agriculture up and until the CAP is fully applicable in Cyprus.767 (c) Social security Similarly, it derived from the Treaty of Establishment and the associated Exchange of Notes dated 16 August 1960 that the RoC was responsible for the payment of social security for the persons residing and working on the SBAs, provided they were covered by Cypriot social

764 Arts 41 (CAP) and 42 (veterinary and phytosanitary rules) Act of Accession. Such adaptations are however reviewable by virtue of Art 23 Act of Accession; see Inglis (2004) 951. 765 Hillion (2004a) 600. 766 Art 1, Part A, Chap 5 of Annex VII to Art 24 Act of Accession. 767 In addition to the initial three year period under Arts 41 and 42 Act of Accession, which can be extended by the Council unanimously, Cyprus also negotiated transitional periods of up to five years from the date of accession with respect to the compliance of certain agricultural products with the acquis, see Arts 3 and 4 Part A (agriculture legislation) as well as Arts 1 and 2 Part B (veterinary and phytosanitary legislation) Chap 5, Annex VII to Art 24 Act of Accession.

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security legislation. Following EU accession, persons resident or in employment in the SBAs are now eligible for social security schemes under Council Regulation EEC/1408/71 as amended768 “as if they were resident or employed in the territory of the RoC” when they are migrating to another EU Member State by virtue of Article 4 Protocol 3. 2. Principles of selection of the acquis to the SBAs In an attempt to assemble the pieces of the puzzle, it could be said that Articles 2 to 5 Protocol 3 provide a careful selection of provisions of the acquis which, after undergoing a process of adaptation, form the basis of a very special regime applicable to the SBAs under Community law, outside any considerations arising out of the implementation of the Internal Market in Cyprus. Albeit permanent in nature, this regime does not appear to be static in view of Article 6 of Protocol 3, which sets out a procedure for its amendment or for its supplementation by other provisions of the acquis. In this respect, it has been argued that this regime potentially leaves some margin of manoeuvre to the UK to determine to which extent the acquis shall be implemented in the SBAs and that this could create a situation whereby Cypriots residing on the SBAs could find themselves caught between two different legal systems in their everyday life.769 This possibility should however be minimised in view of the two countries’ mutual duty of cooperation so as to ensure the effective implementation of Protocol 3 (Article 7(4) Protocol 3) and given the responsibilities deriving from its proper implementation under the Memorandum of Understanding. It remains to be seen how this cooperation operates in practice. C. Implementation of Protocol 3: bilateral type of ‘closer co-operation’? 1. General provisions in Protocol 3: the need for deeper co-operation The implementation of Protocol 3 appears a priori to be determined in accordance with the Treaty of Establishment and, as such, is based on the double principle of good cooperation and delegation of powers. The established practices deriving from the application of this double 768 769

[1971] OJ L 149/2, 5.7.1971. Theodoulou, 72.

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principle should result in the smooth division of powers between the authorities of the SBAs and the RoC.770 By virtue of Article 7(1) Protocol 3, the prime responsibility for the implementation of the Protocol in the SBAs lies with the UK, unless otherwise delegated to the competent authorities of the RoC in Protocol 3 by virtue of Article 7(3) and without prejudice inter alia to Article 7(1) and (2). The delegation should in any case relate to “the performance of any functions imposed on a Member State by or under any provision referred to in Articles 2 to 5 above” and should be made in accordance with “arrangements made pursuant to the Treaty of Establishment”. The formula of the delegation appears sufficiently general to confer a certain degree of flexibility and dynamism to the overall structure, which is needed in this very particular instance of alleged closer co-operation. As previously seen with respect to Article 7(1) and (2), the UK however appears in a relatively stronger position when delegating administrative duties to the RoC, the latter finding itself restricted even further in its sovereignty or carrying the entire financial burden of the implementation of the Protocol. A lack of balance between the two parties is however more likely to occur in the context of intergovernmental co-operation deriving from international law than from the application of Community law principles given the degree of integration of the EU, where the fundamental principles of non-discrimination, of solidarity and of loyalty among Member States provide safeguards. The relevance of intergovernmental co-operation to Protocol 3 is however confirmed in Article 7(4), which arguably contains the real dynamism or flexibility of Protocol 3, as it promotes the effective implementation of the Protocol through the proper bilateral cooperation between the UK and the RoC. The insertion of such a provision in the Protocol seems to serve a double purpose. First of all, it is quite clear that it introduces further flexibility in the arrangements between the UK and the RoC, which may vary in accordance with internal circumstances (needs of the SBAs, constitutional change in Cyprus, etc) or with external circumstances deriving from EU membership or from international agreements involving inter alia both parties. Secondly, and perhaps more importantly, the promotion of

770

Hoffmeister, 204.

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such form of bilateral co-operation as an exception to EC/EU rules of collective decision-making and uniformity opens a new door to the differentiated relationship between the UK and the RoC within the EU framework, on the basis of Protocol 3. The mechanisms provided in Article 7(4) of the Protocol were actually triggered upon accession through the drafting of the two Memoranda of Understanding previously referred to in this book as well as more recently with the signing of a Memorandum of Understanding establishing a framework for developing a stronger relationship between the UK and the RoC.771 This book is primarily concerned with the Memorandum of Understanding on the implementation of Protocol 3 and on the responsibility of its implementation.772 2. The Memorandum of Understanding as a form of institutionalised flexibility (a) Nature of the Memorandum of Understanding in the Community legal order (i) The conceptual background of flexibility. It is quite clear from the above that the rationale underlying the differentiation promoted by Protocol 3 and the Memorandum of Understanding is different from the one underlying flexibility in the context of enlargement previously examined in Chapter 3. The issue arising here is not one of “size of the gap between the inner core that are willing to integrate faster and further and those left behind” arising in the context of the accession negotiations and addressed primarily by transitional measures. Neither is it a case of deeper differentiation as an instance of how Member States are “repeatedly segmenting and dividing, based on internal divergent perspective and the resulting crises”.773 In the case of Protocol 3, the differentiation derives from international law and constitutes an example of inter se agreements concluded between some of the Member States of the EU parties to an earlier agreement, the Treaty of Guarantee. Inter se agreements are usually concluded away from EU law in the realm of international law, as opposed to arrangements arising out of

771 Dated 05.06.2008, available at< http://www.moi.gov.cy/moi/pio/pio.nsf/all/863D 506A9BFD02D5C225745F005066A0?opendocument>, last accessed on 8.09.2008. 772 See n 757 above. 773 Maresceau in Laurent & Maresceau, 19.

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closer cooperation ‘within’ the framework of EU law.774 A Memorandum of Understanding has been defined as an international instrument ‘of a less formal kind’, often setting out operational arrangements or the regulation of technical or detailed matters under a framework international agreement and typically in the form of a single instrument which does not require ratification.775 The ‘old-fashioned’ type flexibility ‘outside’ EU law has some obvious advantages in comparison with the Treaty of Amsterdam provisions on closer cooperation, namely “(i) the legal conditions for taking the ‘outside’ route are less onerous than the conditions set for intra-EU closer cooperation; and (ii) Member States preserve, when acting under international law, complete control over the negotiating process and almost complete control over the implementation and enforcement of the obligations which they accept in the agreement”.776 De Witte provides several examples of such agreements between Member States of the EU, including bilateral agreements, especially in the pre-Maastricht era, and classifies them in accordance with their scope and purpose.777 Although intergovernmental co-operation is possible outside EU law, at least as far as shared Community competences are concerned, EU membership “imposes certain legal constraints on the scope and content of such co-operation.”778 In the post-Maastricht era, however, it is clear that the type of differentiation emerging from IGCs is “firmly situated within the EU legal order” and does not “involve the creation of extra facilities for international agreements between Member States”.779 As such, there exist several types of agreements between the EU and/or Member States of the EU,780 “both for normative purposes and single case decisions”,781 used in particular as tools for the implementation of EU and EC law and hence falling within the realm of EU 774 See De Witte B, ‘International Agreements between Member States of the EU’ in De Burca & Scott, 31–58. 775 UN Treaty Collection last accessed on 4.12.2006. 776 De Witte in De Burca & Scott, 33. 777 With respect to bilateral agreements, De Witte mentions in particular “transfrontier co-operation agreements, agreements on the use and protection of common river resources, conventions for the avoidance of double taxation, cultural and educational co-operation agreements and special political treaties” in De Burca & Scott, 38. 778 Ibid, 31. 779 De Witte in De Burca & Scott, 35. 780 For a detailed review of the different types of international agreements under EU law, see Hofmann H, ‘Agreements in EU law’ (2006) 31(6) ELRev 800 (‘Hoffman’). 781 Ibid, 800.

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law.782 The advantage of such a form of differentiation within the EU orbit is that agreements are “forms of act which are not unilaterally set but which are the result of a negotiation between various parties” and, as such, are “particularly apt to regulate within the increasingly less hierarchical structure of the EU”.783 It is argued that the treatment of the SBAs in Protocol 3 and in the Memorandum of Understanding reveals a single case of permanent deviation from the principles of the Community contained in Pillar I within the common institutional framework. Such a deviation however remains difficult to classify among the existing types of differentiation deriving from the Treaties, as the treatment of the SBAs was nonetheless linked to the process of enlargement, even if kept separate and distinct from the accession negotiations themselves. It is clear that Protocol 3 deepens and intensifies the establishment of the differentiation of the SBAs within the realm of Community law. The SBAs were previously totally excluded from its realm whereas the principle of their territorial exclusion was embodied within the Community institutional framework through an amendment to the EEC Treaty. The nature of the Memorandum of Understanding may appear a priori less clear, but it could be argued that it is a particular type of inter se agreement created within the Community common institutional framework,784 since it concerns the application of the acquis on a specific territory partly subjected to Community law and derives from an instrument of Community primary legislation. As such, the Memorandum of Understanding could constitute a bilateral instrument of ‘joint implementation’ of EC law and not a ‘competing co-operation regime’,785 between two Member States, restricted to special fields of application of the acquis, as set out in Protocol 3. The intergovernmental nature of the instrument of primary Community law itself containing the express authorisation on which the 782 “[A]s long as EU/EC law does not contain any specific provisions requiring implementation by mean of unilateral act or by agreement, generally, Member States have discretion to decide about whether to use agreements as a legal tool for implementation” provided they act within the ambit of Community law, see Hoffman, 818–9. 783 Ibid, 800. 784 It is therefore argued that inter se agreements can be concluded within the framework of EU law; contra De Witte in De Burca & Scott, 33. Both opinions can however be joined by arguing that this agreement concerns co-operation, the legal basis of which remains to be identified. 785 Ibid, 37.

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Memorandum of Understanding is taken is a reminder that intergovernmental co-operation of a type envisaged in the Memorandum of Understanding can not only be within the Community institutional framework but can also actually derive from it! It could therefore be contended as a result that the bilateral co-operation envisaged in this case amounts to an obligation imposed on Member States by EU membership, which ultimately distinguishes this type of co-operation from inter se agreements, which are normally taken on a voluntary basis. This nevertheless raises the issue of the appropriate legal basis under Community law. (ii) Legal regime of the Memorandum of Understanding under Community law. The Treaty of Maastricht has institutionalised the acceptance of the principle of differentiation within the EU, at least as far as ‘history-making decisions’ relating to the agreement of new Treaties are concerned. It was however left to the Treaties of Amsterdam and Nice “to set out the actual workings of flexibility”786 in the various Protocols and additional provisions.787 Kortenberg categorises the various levels of closer co-operation provided in the Amsterdam Treaty as follows: closer co-operation predetermined by the Treaty of Amsterdam itself (such as integration of the Schengen Agreement and the various arrangements under Title IV EC), undetermined closer co-operation which will be governed by general enabling clauses and specific conditions laid out in both the First and Third Pillars, and finally, co-operation on a case-by-case basis, as in the Second Pillar.788

Protocol 3 appears a priori restricted to the First Pillar and predetermined on an individual basis not apparently deriving from the Treaty of Amsterdam, thereby confirming the difficulty of identification of the right legal basis under Community law. Selected Treaty Provisions on deeper co-operation. Among the mechanisms of differentiation available in the Treaties, the principle of

786 Warleigh A, Flexible integration (Sheffield Academic Press, London, 2002) 41; see also Kolliker A, Flexibility and European unification (Rowman & Littlefield Publishers, Lanham, 2006). 787 For a summary of the EC and EU provisions on closer cooperation as introduced by the Treaty of Amsterdam and the amendments made thereto by the Treaty of Nice (‘enhanced co-operation’), see Ott in Inglis & Ott (2005) 106–112. 788 See Lyons C, ‘Flexibility and the Court of Justice’ in De Burca & Scott, 103.

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enhanced co-operation for matters falling under Pillar 1 by virtue of Article 11 EC (as amended) and to a lesser extent under Title VII EU (Article 27a, c or e) for Pillar 2 could potentially apply to the type of co-operation envisaged in Protocol 3. The very essence of enhanced cooperation as set out in Article 43 EU however reveals the incompatibility of the bilateral closer-cooperation envisaged in the Memorandum of Understanding with these provisions. Outside of the framework of enhanced co-operation strictly speaking, the special pre-emption rule of Article 293 EC could also be deemed applicable, to the extent that the rationale for the partial application of the acquis in the SBAs through Protocol 3 derives from the need to grant to Cypriots residing or working in the SBAs equal treatment, as far as possible, with the Cypriots residing or working in the RoC. Article 293 EC is however usually interpreted as meaning that negotiations should occur between all Member States on the matters listed therein, thereby excluding the possibility of ‘partial agreements’ between Member States.789 It has been argued that the Treaty provisions on enhanced co-operation overall are used more “as a political instrument or bargaining tool to ‘convince’ Member States and achieve a consensus” and that “[i]n practice the last resort of enhanced co-operation or of co-operation among some Member States on the basis of international law is not used”.790 It is clear that in view of their obligations under the 2003 Treaty of Accession, recourse to such provisions by the new Member States might be limited at present. Upon accession, they could see the general obligation of solidarity and of coherence ‘as being strained’ or they could be worried about the application of the principle of solidarity to an enlarged Union.791 As such, the Treaty provisions on enhanced co-operation could be temporarily out of the reach of the new Member States, which would need to acquire a certain degree of maturity in the exercise and application of the general principles of Community law before they can use such Community instruments of deeper integration. Protocol 3 may show a greater degree of maturity on the handling of international co-operation through the Memorandum of Understanding, but one crucial element of closer co-operation is nevertheless

789 790 791

De Witte in De Burca & Scott, 43. Ott in Inglis & Ott (2005) 110. Ibid, 111.

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missing, the non-contingency. The provisions on closer co-operation are worded positively and, as such, express a certain degree of free will, whereas the negative wording of the Memorandum of Understanding illustrates its contingency to other events and instruments in international law and/or Community law. The General duty of co-operation. It would seem rather that the justification for such type of bilateral co-operation could be found in the general principles of Community law. Article 307(2) EC in particular provides some sort of flexibility or closer co-operation to the extent that Member States are requested to cooperate with each other to eliminate any incompatibility arising out of international agreements binding on them, through the adoption in particular of a ‘common attitude’. There is nothing to indicate that this provision cannot be triggered by two Member States being parties to a multilateral agreement and subsequently negotiating a common attitude in order to satisfy certain requirements of Community law deriving from EU membership, neither that such a common attitude cannot be binding on them. It should be noted in this respect that the Cypriot House of Representatives has adopted an official position on the SBAs following the entry into the Memorandum of Understanding,792 thereby granting to this document some sort of recognition in the national legal order. This sould however be in line with usual practices under international customary law for such a type of documents pertaining to a modus vivendi793 and with Article 169(1) of the Cyprus Constitution.794 This incorporation prima facie into the national legal order however could remedy some of the weaknesses of Article 307 EC, which does not seem to provide a sufficient legal basis to explain the creation of the Memorandum of Understanding. It is indeed quite clear from the case law of the Court of Justice that a Member State is not entitled to rely on Article 307 EC to derive rights vis-à-vis other Member States contrary to Community law from international agreements,795 unless the rights

792

Resolution 144(2005) of 30.6.2005. A modus vivendi has been defined in the UN Treaty Reference Guide as “an instrument recording an international agreement of temporary or provisional nature intended to be replaced by an arrangement of a more permanent and detailed character. It is usually made in an informal way, and never requires ratification”; see n 775 above. 794 Theodoulou, 73. 795 Case C-475/93, Thévenon [1995] ECR I-3813; see Lenaerts & Van Nuffel, 751. 793

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of non-Member States are involved.796 Neither does Article 307 EC have the effect of conferring rights on individuals who seek to rely on an agreement concluded prior to the entry into force of the Treaty or prior to EU accession.797 It remains nevertheless that an institution cannot compel a Member State to ‘back out’ of its obligations under a prior agreement,798 without implying however that this institution is ‘barred’ from taking action ‘at variance’ with those obligations towards the Member States concerned.799 Although the use of Article 307 EC appears justified in some instances as an exception to the rules of the Internal Market, it could be that Cyprus has gone beyond its responsibilities arising out of the application of Article 307(2) EC, towards a duty to co-operate with the UK on the implementation of the Protocol in line with its obligations under Community law. The duty of c