The EU and Cyprus (Studies in Eu External Relations)

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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

vi

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

viii

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

introduction

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

6

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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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7

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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9

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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chapter one B. Regulatory scope of the association

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 conformity with Community law in view of prior international obligations is expressed in Article 6(12) of the 2003 Act of Accession which appears more strongly worded than Article 307 EC “in order to minimise any potential incompatibilities in advance of accession”.800 New Member States are under an obligation to take ‘all appropriate measures’ to adjust their position deriving from international agreements to their rights and obligations under Community law. This stricter provision could also be said to derive from the general duty of sincere co-operation arising out of Article 10 EC.801 It can be derived from the Court’s case law in this matter802 that “[t]o the extent that unilateral action by individual Member States is insuﬃcient to ensure full compliance with Community law, the States have a duty to co-operate among each other (horizontal co-operation) in the light of their duty of loyalty towards the Community (vertical co-operation)”.803 The principle of ‘horizontal co-operation’ has been recognised, in

796

Case 286/86, Deserbais [1988] ECR 4907. Case C-307/99, OGT Früchthandelsgesellschaft [2001] ECR I-3159. 798 Case 10/61, Commission v Italy [1962] ECR 1. 799 Lenaerts & Van Nuﬀel, 753. 800 Inglis (2004) 942. 801 Although Art 10 EC is not directly eﬀective, it can be used as an additional argument in the event of a breach of Community law, see Lenaerts & Van Nuﬀel, 116. 802 Where a bilateral agreement between Member States is likely to impede the application of a provision of Community law, the Member States parties to the agreement are under an obligation to assist each other in order to facilitate the application of the relevant provisions of Community law (Case 235/87, Mateucci [1988] ECR 5589 paras 17–19); see Lenaerts & Van Nuﬀel, 120. 803 De Witte in De Burca & Scott, 52. 797

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particular for contributing to the smooth implementation of Community law, as it seems to be the case under the Memorandum of Understanding.804 This would be in line with the previous ﬁnding that this derogation to Community law is within the EU orbit and actually derives from Community law. As such, it would also be compatible with the principle of subsidiarity, whereby the Member States can act on their own, but subject to Article 10 EC805 and within the Community framework.806 Interaction with other principles. The interaction between the principle of subsidiarity and the principle of sincere co-operation deriving from Article 10 EC is well illustrated by the joint action of the UK and the RoC in this case, which appears necessary, especially in view of the monist nature of the Cypriot system based on constitutional supremacy. The Memorandum of Understanding by its very nature certainly does not belong to the category of self-executing international agreements which are directly applicable as an integral part of the domestic legal order and which must be interpreted in accordance with international law and in conformity with the international obligations of the Republic, as per the Malachtou jurisprudence.807 In view of the parliamentary resolution noting the Memorandum of Understanding, there could however appear to be a presumption of compatibility of the obligations arising under this document with other obligations of the RoC, deriving in particular from Community law808 but also from the Constitution and its Annexes (the Treaty of Guarantee in particular). In the UK, on the other hand, where the primacy of international treaties and a fortiori of other international agreements over later Acts

804 Art 10 EC is binding on ‘all the authorities of Member States’, including the courts and decentralised authorities for matters within their jurisdiction (Case 80/86, Kolpinghuis Nijmegen [1987] ECR 3969, para 12); see Lenaerts & Van Nuﬀel, 116. 805 By virtue of Protocol (No 30) annexed to the EC Treaty on the application of the principles of subsidiarity and proportionality [1997] OJ C340/105, 10.11.1997, pt 8, where the application of the principle of subsidiarity leads to no action being taken by the Community, Member States are any way required in their action to comply with the general rules laid down in Art 10 EC; ibid, 104; see also Tridimas, 177. 806 It could be discussed “whether co-operation between Member States outside the Community framework is or is not an option which is supported by the Community principle of subsidiarity”, see De Witte in De Burca & Scott, 52–53. 807 See Lenaerts & Van Nuﬀel, 694–5. 808 De Witte recommends that all inter se agreements contain a clause of compatibility with Community law. It is quite clear that this is implied if the speciﬁc agreement falls within the EU orbit, in De Burca & Scott, 51.

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of Parliament is not recognised, a “brutal ‘treaty override’ through the adoption of national legislation contrasting with an earlier international agreement would have been enough to restore compatibility with Community law”809 as far as the implementation of Protocol 3 in the SBAs is concerned. It appears from the above that the special treatment of the SBAs in Community law by virtue of Protocol 3 and the Memorandum of Understanding diﬀers both from the “disequilibrium in the application of EC law in various extra-European territories of Member States”810 and from the diﬀerentiation introduced by Maastricht and Amsterdam. This ﬁnding has far-reaching implications, inter alia on the role of the institutions vis-à-vis the Member States, in particular the role of the ECJ. These implications are reﬂected in the substantive provisions of the Memorandum of Understanding. (b) Substantive provisions of the Memorandum of Understanding The express objective of the Memorandum of Understanding is to set out responsibilities in the implementation of Protocol 3 in favour of the Cypriot citizens living and working in the SBAs as well as vis-à-vis the European institutions in the event of a breach of Community law by the parties to the Memorandum. To that intent, paragraph 2 of the Memorandum of Understanding grants to the Administrator of the SBAs legislative powers to ensure that the Protocol is implemented and that the UK meets its obligations. As a result, measures deriving from the Protocol “may result from directly applicable Community law or from implementing legislation adopted by the Administrator of the SBAs”.811 As a safeguard to these legislative powers, paragraph 2 institutionalises the commitment taken by the UK in Article 3(2) of its unilateral Declaration dated 16 August 1960 regarding the administration of the SBAs (Appendix O to the Treaty of Guarantee) that the “laws applicable to the Cypriot population of the [Areas] will be as far as possible the same as the laws of the [RoC]”. There were doubts as to the legal implications of the UK 1960 unilateral Declaration;812 its institutionalisation in the Memorandum of Understanding has the merit of clarifying the

809 810 811 812

Ibid. Lyons in De Burca & Scott, 96. Arts 3.1 and 3.2 MoU. Theodoulou, 72.

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situation by potentially granting to the Cypriot citizens concerned a legal recourse in the event of a breach of this undertaking by the UK. The legal nature of this recourse and its practical operation remain however uncertain. It has been argued that the Memorandum of Understanding creates in principle a ‘functional system of recourse’ before the ECtHR,813 provided however all the conditions for this type of judicial proceedings beyond the State are met, in particular the exhaustion of local eﬀective remedies under Article 35(1) of the ECHR. It is very important in this context to determine the parties to the legal recourse brought on this basis. As far as administrative functions are concerned, paragraph 3.1 Memorandum of Understanding provides that “the exercise of the powers and the performance of the duties required by the Protocol measures” is the responsibility of the RoC acting “on behalf of the [SBAs] Administration, by the relevant oﬃcer of body who exercises or performs the corresponding power or duty in the [RoC]”. There are exceptions to paragraph 3.1 whereby oﬃcers of the SBAs will exercise the powers, respectively in the designated areas as deﬁned in paragraph 1.4 of the Memorandum,814 with respect to coercive enforcement powers unless otherwise provided in legislation by the Administrator in accordance with paragraph 1815 as well as customs control as per Article 7.1(b) Protocol 3.816 As a result, the RoC is liable for any breach of Community law within the SBAs due to the ‘alleged commission of an administrative oﬀence by a Cypriot’ under a legislative provision administered pursuant to paragraph 3.1817 or due to ‘a decision, act or omission’ by a representative of the RoC challenged by a Cypriot citizen.818 In such a case, legal proceedings arising under enactments of the SBAs implementing the Protocol measures will be ‘arranged’. There is no further explanation as to the nature of these arrangements, especially the venue, which remain in the hands of the Administration of the SBAs. But it would seem reasonable to deduct from the fact that the Memorandum of Understanding was discussed and approved by the Council of Ministers of the RoC

813 814 815 816 817 818

Ibid. Para 3.2 MoU. Para 3.3. Para 3.4. Para 4(a). Para 4(b).

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and was potentially subjected to judicial scrutiny, that the Cypriot courts would be competent to hear such disputes relating to the implementation of the Protocol, especially in view of Articles 239 and 240 EC.819 The responsibility of the RoC extends up to the indemniﬁcation of the UK for any sums paid in the event of a breach of Community law or of the improper exercise of an administrative function under the Protocol.820 Should the possibility of a payment by the UK arise, which the RoC would need to indemnify, the UK merely undertakes to assist Cyprus during the conduct of the corresponding legal proceedings.821 Finally, as a reminder of the inter se agreement origins of the Memorandum of Understanding,822 the parties have agreed to exclude the jurisdiction of any court, be they national courts or international courts, to the beneﬁt of consultation between the participating States in the event of any dispute arising out of the interpretation or application of the Memorandum.823 Relying on its interpretation of its own role under Article 220 EC in Opinion 1/91,824 the Court also recently explicitly determined the scope of its exclusive jurisdiction based on Article 292 EC with respect to international disputes between Member States.825 It can be said to have extended its jurisdiction regarding mixed agreements and imposed on the Member States “a duty of prior information… limiting the right of the Member States to choose a dispute settlement system … [and] pre-empting the exercise of jurisdiction of other international courts and tribunals in cases that potentially involve the Community”.826 This paragraph should in any case be read in conjunction with paragraph 4 where it was argued that the Cypriot courts would be competent to hear cases relating to the commission of administrative oﬀences

819

Even when the EU/EC is a party to an agreement, the jurisdiction of the courts and tribunals of the Member States is not excluded; see Art 240 EC. In fact, there have been very few cases concerning implementing agreements before the EU Courts; see Hofmann, 807. 820 Para 5.1 MoU. 821 Para 5.2 MoU. 822 Para 6 provides that amendments must be by mutual written consent of the parties. 823 Para 7. 824 [1991] ECR I-6079, para 72. 825 Case C-459/03, Commission v Ireland [2006] ECR I-4635. 826 Lavranos N, ‘The scope of the exclusive jurisdiction of the Court of Justice’ (2007) 32(1) ELRev 83, 90.

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by Cypriots or by the RoC regarding the implementation of the Protocol as administered by the Memorandum of Understanding. As a result, it could be argued that the mechanisms of enforcement of Community law involving both the national and the EU Courts should be applicable in such instances, if not under the traditional jurisdiction of the EU Courts (as this would require the passing of a ‘special arrangement’ between the parties on the basis of Article 239 EC), perhaps by virtue of the fundamental principles of Community law, in particular Articles 12–18 EC.827 Concluding remarks Looking at the contents of the Memorandum of Understanding, it is obvious that there is an intermingling of several principles deriving from international, European and national law which is characteristic of an inter se or mixed agreement. It is quite clear that such a result would not have been achieved through any traditional instrument of Community law and that Protocol 3 and the Memorandum of Understanding provide pragmatic legal instruments of EC law within the existing legal and institutional EU framework. To that extent, this type of intergovernmental diﬀerentiation promoting a certain degree of national diversity can be said to contribute to the accommodation of national policies through the traditional supranational integration method. As outlined in this chapter, this type of intergovernmental differentiation however rests on a very particular interpretation of the principles of Community law, which remains an exception as it sets out a permanently derogatory regime, and does not set any kind of precedents. In particular, it cannot be said to provide the basis for the integration of Cyprus into the EU, which must be found elsewhere.

827 With reference to the OCTs for instance, all OCT nationals are in principle European citizens as per Art 17 EC and, as such, are entitled to the rights conferred by Union citizenship as laid down in Arts 18 to 22 EC (including the right to move and reside freely within the territory of Member States, but not to work). The Commission notes in its Green Paper that “even though the general provisions of the EC Treaty do not apply to the OCTs in the absence of a express reference, the jurisdiction of the Court of Justice of the [EC] covers preliminary rulings requested under the EC Treaty by a court whose jurisdiction covers an OCT, as well as proceedings instituted under the conditions laid down in the EC Treaty by plaintiﬀs from an OCT against acts adopted by the Community”, see Commission Green Paper on the OCTs, 7.

CHAPTER FIVE

THE INSTITUTIONALISATION OF THE INTEGRATION OF CYPRUS: ANOTHER INSTANCE OF SUPRANATIONAL DIFFERENTIATION?

It appears from the previous Chapters that Cyprus follows a diﬀerentiated path of integration, the main components of which have already been presented and/or examined. In Chapter 3, diﬀerent types of differentiation contained in the 2003 Treaty of Accession were identiﬁed, leading to the “asymmetric non-participation of individual Member States in selected areas of Union activity”,828 including Cyprus. In Chapter 4, it was demonstrated that Protocol 3 is rather an instance of intergovernmental diﬀerentiation at the EU constitutional and institutional level, to the extent that it amends the EC Treaty on the basis of an international agreement between Member States and that it provides for further bilateral co-operation between Member States within the framework of EU law. Drawing on the terminology on diﬀerentiation identiﬁed by Stubb,829 the 2003 Treaty of Accession appears to constitute an intense exercise of supranational ‘graduated’ or ‘multi-speed’ integration determined in time and/or space, completed by substantial elements of ‘multi-level’ integration or ‘variable geometry’ in certain policy areas, triggered either at the supranational level (Schengen, EMU, freedom of movement of workers) or by intergovernmental mechanisms (Protocol 3). In any case, membership ‘à-la-carte’ seems to be absent from the menu. Whereas Stubb associates ‘multi-speed’ integration to time and ‘variable geometry’ to space as a determining factor respectively, it is contended that ‘variable geometry’, like integration ‘à-la-carte’, is determined by the substance of integration as opposed to any other factor. It is rather the

828 Thym D, ‘The political character of supranational diﬀerentiation’ (2006) 31(6) ELRev 781 (‘Thym (2006)’) 782. 829 Stubb A, The semantic indigestion of diﬀerentiated integration: the political rhetoric of the pre-1996 IGC debate as quoted in Elhermann; see also Stubb A, ‘Dealing with Flexibility in the IGC’ in Best E, Gray M and Stubb A (eds), Rethinking the European Union: IGC 2000 and Beyond (EIPA, The Netherlands, 2000).

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scope of the restraint on the substance of integration that matters,830 to the eﬀect that ‘variable geometry’ and integration ‘à-la-carte’ are variations of the same type of diﬀerentiation, determined by the intensity of the exception/derogation as a variable. All the instances of ﬂexibility studied so far have one point in common, in so far as they are part of the EU legal order. The legal instruments concerned normally apply to all Member States “with only their legal eﬀects being suspended or modiﬁed with regard to some Member States. The law does not have a limited geographic scope which generally exempts a Member State from its geographic ﬁeld of application. This common ground extends to transitional periods which have been a regulatory tool of successive enlargements”.831 Protocol 3 would also appear to fall within this broader network of diﬀerentiation, like any other territory of a Member State falling prima facie into the EU legal order but beneﬁting from a diﬀerentiated regime, whereby Community law is applicable albeit to a limited extent. A study of Cyprus’ diﬀerentiated path of integration would not be complete however without a thorough examination of Protocol 10 annexed to the 2003 Treaty of Accession, as it does not appear to ﬁt into the types of diﬀerentiation described above. The regime put in place by Protocol 10 deals with the de facto division of the island and, as such, is deemed to be temporary. With respect to the duration of a diﬀerentiation, Ehlermann argues as follows: There is no easy answer to the question whether rules which diﬀerentiate have to be limited and what are their ultimate deadlines. The two most important factors are the type of situation which justiﬁes diﬀerentiation and the existence or absence of an obligation to act. While natural diﬀerences (like climate and distance) are likely to justify permanent diﬀerentiation, situations that are the product of historical development of human societies (diﬀerences of taste according to the terminology used by H. and W. Wallace) are more likely to call for only temporary diﬀerentiation. This is particularly so if they are at the root of diﬀerentiation in areas where the Community has a precise obligation to act in order to bring about a certain result.832

830 “Dans le cas du concept de ‘géometrie variable’, la majeure partie de l’activité et du droit communautaires est considerée comme inaccessible au recours à une diﬀérenciation en fonction de la matière. Dans le cas du concept ‘à-la-carte’, le domaine inaccessible est très restraint, voire inexistent”; in Ehlermann, 194. 831 Thym (2006) 783. 832 Ehlermann, 195.

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It is quite clear that Protocol 10, like Protocol 3, addresses a situation created by human kind deriving from a combination of internal and international factors preceding even the creation of the EU. Nevertheless, it remains that the EU must in all instances ensure peace and stability on its territory.833 Whereas Protocol 3 appears to set up a permanent regime leading to the partial application of the acquis, as it deals with the entry of a speciﬁc territory into the realm of substantive Community law following a total exclusion, Protocol 10 sets out the principles of the application of Community law per se and provides for its total suspension pending a settlement, thereby leading to a strong presumption that Protocol 10 constitutes a temporary measure. Since Protocol 10 appears to be characterised inter alia by its temporary nature and its geographical delimitation, it could be seen as falling prima facie into the traditional category of ‘multi-speed’ integration. But it is submitted that this assumption is ﬂawed for several reasons, which are interconnected. Firstly, the origins of Protocol 10 cannot be ignored. It was created for the sole purpose of regulating the unprecedented situation in the EU of a Member State not exercising eﬀective control over all its territory, which led to the creation of exceptional mechanisms conferring a priori rather centralised powers of decisionmaking to the institutions. It should be noted in particular that by virtue of Article 2(3) 2003 Treaty of Accession, the EU institutions were entitled to adopt measures deriving from Articles 1, 2 and 4 of Protocol 10 prior to accession, even if these measures would only enter into force together with the Treaty of Accession. It meant that measures concerning Cyprus under Protocol 10 could have been adopted prior to Cyprus joining the EU, thus eﬀectively without the vote of Cyprus at the Council. As such, it would appear to reﬂect a process of supranational diﬀerentiation rather than of intergovernmental diﬀerentiation, even if Cyprus was associated to the negotiations pertaining to eventual measures addressing the division of the island at all times. As an instance of supranational diﬀerentiation, Protocol 10 could a priori ﬁt into the description of ﬂexibility determined by reference to the substance of integration as follows: [t]he diﬀerentiated legal eﬀects do not ﬂow from the contents of the legal act in question, but are the direct result of its general non-application to

833

8th Recital EC; 10th and 11th Recitals EU.

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one or several Member States. Supranational diﬀerentiation in this meaning is deﬁned by the limited geographical scope of Community law and the corresponding suspension of the voting rights of the non-participating Member States in the Council.834

The legal implications of Protocol 10 may resemble a priori the ones arising out of other instances of supranational diﬀerentiation determined by reference to the substance of integration. Nevertheless, such instances of diﬀerentiation were obviously not created to address the situation arising under Protocol 10, but rather to materialise the asymmetric realisation or the opt-out from an objective of the Treaty or to introduce a general mechanism for enhanced co-operation for Member States. In the latter instances, Member States and/or Community objectives form the subject-matter of the diﬀerentiation, which is not the case for Protocol 10. In fact, Protocol 10 appears to be concerned most importantly with the substance of integration or rather with the absence of any substance of integration in a delimited territory within a Member State. Thus, Protocol 10 appears prima facie to be an exception to the principles of Community law of a diﬀerent type. Firstly, the scope of the nonapplication of Community law in this territory extends a priori to the integrality of Community law. Secondly, this non-application occurs ab initio, as the acquis was never applied in the ﬁrst place although applicable in principle and, hence, is referred to as a ‘suspension’ (Article 1(1) ). The only other instance of total non-application of Community law – and not of integral suspension of the acquis – in a delimited territory associated with a Member State appears to be the German experience prior to reuniﬁcation. But the analogy between the two situations appears to end with this apparent similarity.835 In the case of Germany, “[a]lthough the western Allies recognised the West German government as the sole legitimate government of Germany as a whole, it never acted with legal eﬀect for the territory of the [GDR]”.836 Following Germany’s membership to the Communities, EC law was deemed to 834

Thym (2006) 783. See Scharpf F, ‘The joint-decision trap: lessons from German Federalism and European integration’ (1988) 66 Public Administration 239; see also Krossa A S, ‘Integration of unequal units: comparing the German and the European uniﬁcation process’ (2007) 3(1) JCER 1; and Gruel-Dieudé M, Chypre et l’UE: mutations diplomatiques et politiques (L’Harmattan, Paris, 2007) 136–47. 836 Hoﬀmeister, 208. 835

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apply only to the territory governed by the Basic Law of the FRG.837 On the contrary, the accession negotiations with Cyprus were conducted by the RoC on behalf of the whole island. As a result, Protocol 10 appears to indicate that Community law was applicable in principle to the areas beyond the control of the RoC, even though it was suspended ab initio. Upon reuniﬁcation, the European Council decided to integrate the GDR into the Communities without any amendments to the Treaty,838 since the Länder of the former GDR merely acceded to the FRG on 3 October 1990 by virtue of Article 23 of the Basic Law of the FRG.839 As a result, Community law became applicable per se in the former GDR and the Council merely adopted a package of adjusting and transitional measures to deal with the impact of the German reuniﬁcation.840 The Commission had suggested a gradual integration of the GDR into the Communities in three stages, namely an intermediary phase of adaptation, a transitional period starting with the German reuniﬁcation and a ﬁnal phase leading to the integral application of the acquis.841 Under the failed Annan Plan for the reuniﬁcation of Cyprus, the settlement of the Cyprus problem did not entail the accession of the Turkish Cypriot de facto entity to the RoC, but created a new hybrid entity,842 with therefore no possible comparison with the German reuniﬁcation. The EU had nevertheless promised to accommodate a UN settlement along these lines in the EU legal order.843 To that intent, a Cyprus protocol would have been prepared but following the signature of the Treaty of Accession, the discussion was by nature restricted 837

Art 299(1) EEC. Dublin European Council conclusions, 28.4.1990 (1990) 4 EC Bull, pt I.5; see Lenaerts & Van Nuﬀel, 355; see also Berramdane in Agapiou & Rossetto, 43. 839 Preamble of the GDR-FRG Treaty (Staatsvertrag) pertaining to the creation of a monetary, economic and social union dated 18 May 1990 and Art 10 Treaty of German Reuniﬁcation (Einigungsvertrag) of 31 August 1990. 840 [1990] OJ L 353/1, 17.12.1990. 841 See package of measures proposed by the Commission for the German reuniﬁcation COM(90) 400 ﬁnal (1990) 4 EC Bull; see Berramdane in Agapiou & Rossetto, 43; see also Spence D, Enlargement without accession: the EC’s response to German uniﬁcation (Discussion Paper 36, The Royal Institute of International Aﬀairs, London, 1991) 17. 842 Berramdane talks about “une juxtaposition de positions diﬀérentes avec un toit commun” in Agapiou & Rossetto, 43; see also Weiler JHH, Cyprus, Towards a European solution (working paper for the La Pietra workshop, Florence, 18–19/10/06); and Gruel-Dieudé M, Chypre et l’UE: mutations diplomatiques et politiques (L’Harmattan, Paris, 2007) 136–47. 843 Seville European Council, 21–22.6.2002. 838

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to the form and the scope of the adaptations required under EU law, to be embodied in Protocol 10.844 Article 4 Protocol 10 provided for the possibility for the Council to decide unanimously on the terms of accession of Cyprus with respect to the Turkish Cypriot community upon a settlement of the partition of the island. A Draft Act of Accession845 was even prepared prior to Cyprus’ accession to the EU and pending a settlement. But following the failure of the Annan Plan and the accession of Cyprus as a divided island, the Council had to resort to alternative instruments of Community law taken on the basis of the remainder of Protocol 10 to regulate the situation in the northern part of the island. The integral suspension of the acquis in these areas meant indeed that Protocol 10 became a priori the exclusive legal basis for the said areas upon Cyprus’ accession to the EU. It is quite clear that Protocol 10 is of prime importance for Cyprus, as it embodies some of the most basic principles of its diﬀerentiated integration. The relationship between the principles of Community law and Protocol 10 as well as the substantive principle of the suspension of the acquis must be examined, so as to identify the foundations of the diﬀerentiated integration of Cyprus and examine the instruments taken in application of these principles. I. Nature of Protocol  of the Act of Accession: relationship with other sources of Community law A. Political background of Protocol 10 1. Supranational determination of the terms of accession of Cyprus The political background to the Protocol can be found in the various Presidential conclusions of meetings of the European Council during the accession negotiations.846 It appeared quite clearly during the course of the negotiations that the case of Cyprus had to be addressed not only through the ‘traditional’ wave of transitional periods and measures and 844

Hoﬀmeister, 185. COM(2004) 189 ﬁnal, 7.4.2004. 846 See in particular Helsinki Presidency conclusions, 10/11.12.1999, para 9; Seville Presidency conclusions, 21/22.6.2002, para 24; Brussels Presidency conclusions, 24/25.10.2002, para 5; Copenhagen Presidency conclusions, 12/13.12.2002, para 10; Brussels Presidency conclusions, 20/21.3.2003, para 85; Thessaloniki Presidency conclusions, 19/20.6.2003, para 39. 845

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the introduction of a territorial exclusion principle, commonly found in enlargements, but also through the special treatment of its political situation. The need arose therefore to address this question in conjunction with, but somehow distinctly, from the accession negotiations, as it addressed mainly political concerns and as such, could not really justify a diﬀerentiated regime at the constitutional and institutional level in the context of enlargement. This was conﬁrmed at the Copenhagen European Council summit in December 2002, which oﬃcially closed the accession negotiations. It was decided that: [i]n case of a settlement, the Council, acting by unanimity on the basis of proposals by the Commission, shall decide upon adaptations of the terms concerning the accession of Cyprus to the EU with regard to the Turkish Cypriot community.847

This Statement constituted speciﬁc mandate for the Commission to propose an adaptation of the terms of accession for the Turkish Cypriot community. Since it was not clear yet at that time what would be the outcome of the ongoing UN talks on Cyprus and in order to avoid being seen as taking any stand, the Commission transmitted to the Council and to the European Parliament two draft protocols, namely Draft Protocol A for the case of a settlement and Draft Protocol B for the event of no settlement.848 Draft Protocol A contained only one article, which resembled Article 4 of Protocol 10 in its current form, fully reﬂecting the will expressed in the Copenhagen conclusions to accommodate the terms of a settlement into a potentially sui generis type of supranational diﬀerentiation. An adaptation of the terms of accession decided by the Council had occurred before with respect to the 1995 enlargement to deal with the consequences of Norway’s failure to ratify the Act of Accession.849 But, as opposed to being caused by the informed rejection by a candidate country to join the Union, the adaptation of the terms of accession in the case of Cyprus was due to the actual incapacity of a Member State to implement the consequences of accession in its entire territory.

847

Copenhagen Presidency conclusions, 12/13.12.2002, para 11. Uebe M, ‘Cyprus in the EU’ (2003) 46 German Ybk of International L 375 (‘Uebe’) 382. 849 Council Decision of 1 January 1995 adjusting the instruments concerning the accession of new Member States to the EU [1995] OJ 1995 L 1/1, 1.1.1995. 848

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Given that no settlement of the Cyprus problem had been reached by March 2003 under the UN good oﬃces,850 Draft Protocol B was adopted and annexed as Protocol 10 to the Treaty of Accession, which was signed on 16 April 2003 in Athens. Protocol 10 was therefore the subject-matter of supranational and/or intergovernmental forces mainly outside the framework of the accession negotiations, which had been oﬃcially closed for over six months. 2. Socio-legal implications pertaining to the acquis Issues relating to the implementation of the acquis in the occupied areas of Cyprus arose immediately in the context of the accession negotiations and had to be addressed in the Protocol. Several scenarios regarding Cyprus’ EU membership were open until Copenhagen. Cyprus could have acceded as a uniﬁed island together with Turkey (highly hypothetical), could have acceded following a settlement of the Cyprus problem or could have acceded without any guarantee as to the outcome of a settlement.851 There had been unoﬃcial talks on the side of the government of the RoC as to what position it should adopt regarding the areas where it exercised no control due to the de facto partition, but nothing was put on paper until the Protocol was drafted. The then Attorney General of the Republic, Alekos Markides, proposed that the government of the RoC be released from the obligation to implement the acquis in the occupied areas, “for as long as it is impeded from doing so by force majeure resulting from the presence of Turkish occupying troops and the continued forcible occupation of part of Cypriot territory by Turkey”. But, in his own words, this did not constitute oﬃcial State policy as it appeared that the political consensus in Cyprus was “to leave the matter to be examined at the end”.852 The Copenhagen summit brought an end to speculations by deciding that pending a settlement, the application of the acquis to the northern part of the island shall be suspended, until the Council decides unanimously otherwise, on the 850 Brussels Presidency conclusions, 21.3.2003; see Theophanous (2004) 42–3; see also Hoﬀmeister, Chaps VI and VII. 851 Klebes-Pélissier A, ‘L’adhésion de la République de Chypre à l’UE’ (2003) 39(3) RTDE 441 (‘Klebes-Pélissier’) 442. 852 Markides A, ‘The Cyprus problem as a legal issue within Europe’ (2000) 12(4) Revue Européenne de Droit Public 1195 (‘Markides (2000)’) 1210.

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chapter five basis of a proposal by the Commission. Meanwhile, the Council invites the Commission, in consultation with the government of Cyprus, to consider ways of promoting economic development of the northern part of Cyprus and bringing it closer to the Union.853

The power to deal with the situation in the northern part of Cyprus was thus transferred from the Member States to the Council, thereby indicating a priori a powerful supranational decision-making mechanisms underlying Protocol 10. Any revision of primary law necessary to accommodate the above measures are deemed to fall under the special competence of the Council, at the initiative of the Commission, giving these two institutions a large ‘power of appraisal’ and potentially rendering any review by the ECJ marginal. The conclusions of the Copenhagen summit, as set out above, constitute the political and legal foundation of the Protocol and of the instruments of secondary legislation taken on its basis. It is clear that certain Community principles had to be bended to accommodate the terms of the Protocol. Although these adaptations appear a priori to be legitimised at the supranational level, they nevertheless raise the issue of their proportionality under Community law in the ‘traditional sphere of public law’ which aims to provide ‘a check on public power’ and ‘to protect the individual’.854 B. Protocol 10 and the Treaties: political goals embodied in legal instruments of economic integration The principle of proportionality, as one of the most fundamental principles of European integration, addresses in this context the issue of necessity and of suitability of Protocol 10 as lex specialis, as opposed to the general bases for adaptation/derogation from Community principles available in the Treaties.855 Why and to what extent was the creation of a Protocol deemed necessary, whereas diﬀerentiated regimes were available in the Treaties, including the Treaty of Accession? Some elements of answer have already been given in Chapter 3. The socio-legal

853

Copenhagen Presidency conclusions 12/13.12.2002, para 12. Tridimas, 193. 855 For a legal analysis of Protocol 5 2003 Act of Accession as lex specialis for the transit of persons between Kaliningrad and the Russian Federation to the extent that it requires unanimity under Art 3 Protocol 5 in derogation to Arts 62 and 67 EC, see Van Elsuwege, 345 & 356. 854

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analysis of European integration promoted by this book should produce a more exhaustive answer. 1. Applicability of the Treaty framework (a) To the status of the northern part of Cyprus As previously seen, Protocols annexed to Treaties of Accession usually relate to the Act of Accession itself and address issues which do not ‘ﬁt’ comfortably into the main body of the act. Also as previously outlined, there exist several precedents of diﬀerentiated integration of European territories aﬀecting the application of certain EU policies or leading to the implementation of a speciﬁc status as far as the EU boundaries are concerned, including territories situated in Cyprus. Thus, prima facie, the diﬀerent treatment of the northern part of the island could have been achieved through the application of the existing principles of differentiated integration contained in the Treaties.856 But, in fact, it appears that this situation should be handled exclusively through the special legal basis provided by Protocol 10, as any existing mechanisms of exclusion or adaptation available in the Treaties would not be politically acceptable.857 Forming an association858 with the northern part of the island for the handling of certain EU policies, such as external relations, or leading to the creation of a special status for the handling of the various EU boundaries, could have implied the recognition of this territory of the Republic as a separate entity in contradiction with the international principle of non-recognition of the ‘TRNC’.859 The obvious advantage of forming an association with overseas territories is that it does not imply the conclusion of an agreement within the meaning of Article 310 EC, since overseas territories do not form separate legal entities in international law. In any case, the northern part of Cyprus fell within the ambit of 1972 EC-Cyprus Association Agreement and would not therefore qualify on its own as a ‘third State, an association of States or an international organisation’ to enter into any kind of association arrangement with the EU.

856

Hoﬀmeister argues that Art 3(1) Protocol 10 refers back to the general provisions of the EC Treaty, in Hoﬀmeister, 217. 857 Klebes-Pélissier, 459. 858 Ibid, 460. 859 Klebes-Pélissier, 459–60.

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On the other hand, to qualify the northern part of the island as a ‘territory’ of Cyprus, within the meaning of Article 299 EC, would have been misleading too, as it is not an overseas territory either.860 Under international law, Cyprus remains one State with one territory. Article 46 of the Vienna Convention, reﬂecting a rule of customary law, provides that internal irregularities do not in principle aﬀect the power which a government enjoys to enter into binding commitments with other States or association of States. The idea of any sort of ‘closely integrated’ but ‘external relationship’ with the EU was therefore not an option.861 In any case, the formation of any association arrangement assumes a certain level of cooperation between the various parties involved,862 which was nonexisting, at least until the partial opening of the Green Line in 2003 and despite the ruling of the ECJ in Anastasiou III. On the other hand, it appeared quite clearly that the government of the RoC was not in a position to ensure the fulﬁlment of Community obligations in its northern part. (b) To the acquis in the northern part of Cyprus The accession of Cyprus to the EU would normally imply the participation of Cyprus to the EC Customs Union and would therefore exclude the possibility of any fresh association. Even the territory of the SBAs is considered to be part of the Customs Union of the Community,863 thereby implying that the surrounding territory is also part of the Community Customs Union in principle. Thus the issue of the application of the acquis in Cyprus arises as a result. 860 The Council Decision 86/283/EEC of 30 June 1986 on the association of the OCTs with the EEC deﬁnes overseas territories/countries as being located outside of Europe [1986] OJ L 175/1, 1.7.1986 (Annex I). Art 182 EC qualiﬁes them technically as ‘non-European’ and the Community acquis is therefore not applicable to OCTs unless otherwise provided. 861 For an overview of the various mechanisms of economic integration of third countries into the EU, including through the EEA Agreement and the EAs, see e.g. Evans A, The integration of the EC and third States in Europe (Clarendon Press, Oxford, 1996). With respect to the OCTs, the Commission notes that “simply considering the OCTs as if they were just third parties would not correspond to the reality in the ﬁeld. Indeed, while the OCTs do not form an integral part of the EU, they are part of or at least closely related to an EU Member State, which means that they cannot be uncoupled from the EU and, in a sense, are ‘part of its ultimate frontiers’” (emphasis added); see the Commission’s Green Paper on the OCTs, 6. 862 Klebes-Pélissier, 460. 863 Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code [1992] OJ L 302/1, 19.10.1992, Art 3(2) as amended.

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Article 1(1) Protocol 10 does not refer to the non-application of the Act of Accession, which would have been justiﬁed in view of the special situation in Cyprus, but to the integral ‘suspension’ of the acquis, ab initio. As a result, the northern part of the island was declared outside of the Customs Union, of the ﬁscal territory and of the area of freedom, justice and security of the Union under Protocol 10. Under these circumstances, the consideration of the rules of the Internal Market constitutes a good illustration of the speciﬁcity of the suspension of the acquis in Cyprus, which aﬀects primarily the four freedoms.864 2. Implementation of the rules of the Internal Market (a) The 2003 Treaty of Accession as lex specialis With respect to the Internal Market, the 2003 Treaty of Accession was previously found to allow for increased demands on the part of the old Member States relating to the accession obligations themselves and to the consequences of enlargement. This is not to mean that old Member States do not have themselves speciﬁc obligations arising out of the Treaty of Accession.865 It was also found that there is an acute sense (or obligation) of compliance imposed on the new Member States, resulting in an increasing number of derogatory measures or other adaptations of an exceptional, quasi-permanent, gradual, temporary and/or future nature. In principle, all derogations to the acquis should be laid down in the Treaty of Accession and should be interpreted strictly. Restrictions on CEE workers’ access to the EU labour market however provide a good illustration of derogations imposed on the new Member States in several stages left at the discretion of the old Member States, since the latter are free to repeal or maintain unilaterally the restrictions within the total transitional period of seven years.866 For Member States who have not implemented restrictions to the access of their national labour market or who have lifted them, they still have the

864 See e.g. Berramdane and Blumann in Agapiou & Rossetto, 46–9 & 130–4 respectively. 865 Old Member States are restricted in particular in their acquisition of real estate in the new Member States for a limited period of time (Art 24 Act of Accession together with s 4 in Annexes V-XIV) extending up to 12 years for agricultural land in Poland (s 4 Annex XII). 866 See Annexes V-XIV to Art 24 Act of Accession.

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option of invoking the safeguard clause set out in paragraph 7 of Annexes V-XIV, to the eﬀect that they can still suspend the rights of access to their labour market and resort to restrictions in the transitional arrangements.867 The regime appears even stricter, all the more as the Act of Accession provides for additional transitional arrangements also aﬀecting the free movement of workers throughout.868 The rationale for such a strict regime could be justiﬁed by the fact that the free movement of workers constituted the main challenge to economic integration remaining after accession; most other barriers to trade, to foreign direct investments or to other capital movements having been removed before accession.869 The Commission submitted to the Council a report on the functioning of the transitional arrangements for workers set out in the 2003 Treaty of Accession for the period from accession to 30 April 2006.870 In this report, it encouraged Member States having imposed restrictions to ‘reconsider’.871 Several Member States had opened their labour market and/or lifted completely the restrictions during the ﬁrst phase ending in April 2006, while others did so in the second phase running up to April 2009 (in accordance with the ‘2-plus-3-plus-2’ formula).872 A further extension of these restrictions after April 2009 and until April 2011 at the latest is only possible if there is ‘a serious disturbance of the labour market or threat thereof ’. 873 The provisions of the Treaty of Accession leading to such measures can be said to be special legal bases, to the extent that they may not have been initially envisaged in the founding Treaties, especially in relation to the uniform rules of the Internal Market. This is particularly true for the so-called ‘implicit’ safeguard clauses. For instance, the conditional application of the Schengen acquis to the new Member States as set out in Article 3 of the 2003 Act of Accession is a good illustration

867 See e.g. Currie S, ‘ “Free” movers? The post-accession experience of accession-8 migrant workers in the UK’ (2006) 31(2) ELRev 207, 210. 868 Hillion (2004a) 599; see also Inglis (2004) 956–70. 869 See ‘The free movement of labour in an enlarged EU’ (Chapter V) in European Commission, Five years of an enlarged EU: economic achievements and challenges SEC(2009) 177, 113. 870 COM(2006) 48 ﬁnal, 8.2.2006. 871 Ibid, para 36. 872 As of January 2009, four of the old Member States still maintained restrictions albeit simpliﬁed (Belgium, Denmark, Germany and Austria), see n 869 above, 122–6. 873 For more information on transitional arrangements, see last accessed on 15.5.2009.

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of a new type of derogation characterised by the diﬀerentiation between the beneﬁts of the policy and the duties deriving from such a policy. On the one hand, new Member States are bound by the Schengen acquis in full from accession,874 beneﬁt from the Schengen Protocol and from secondary Schengen rules listed in Annex I Act of Accession, while the application of other rules of the Schengen acquis is postponed until the Council decides otherwise following the satisfaction of a Schengen application procedure (ﬁnalised in 2008 for nine of the ten new Member States). On the other hand, the duties deriving from the Schengen policy are imposed on them, regarding border controls in particular,875 to the eﬀect that “accession has not meant instant lifting of internal border controls between new and old Member States”.876 In that sense, the Treaty of Accession can be considered as lex specialis, to the extent that it is an elaboration or an application of the general rules to a given situation, the 2004 enlargement, and may even lead to exceptions to the general rules. It is argued that the restrictions of the freedom of movement of workers could be qualiﬁed as exceptions to the general rules. The Schengen acquis, on the other hand, could appear to be merely a partial and graduated application of the general rule, albeit a diﬀerentiated one, justiﬁed by the fact inter alia that most of the new Member States are external borders of the EU. The situation regarding the temporary exclusion of the new Member States from the EMU could also tend to an exception, since although the general rules are merely suspended until the Member States satisfy all conditions to fully participate to the EMU, there is no time limit for this suspension. 874 The Schengen acquis was amended through the adoption of the second-generation Schengen Information System (SIS II) for the 1st Pillar (Regulation (EC) No 1987/2006 of the EP and of the Council of 20 December 2006 on the establishment, operation and use of the SIS II [2006] OJ L 381, 28.12.2006 and Council Regulation (EC) No 1988/2006 of 21 December 2006 amending Regulation (EC) No 2424/2001 on the development of the SIS II [2006] OJ L 411, 30.12.2006) and for the 3rd Pillar (Council Decision 2007/533/JHA of 12 June 2007 on the establishment, operation and use of the SIS II). 875 See Decision (EC) No 895/2006 of the EP and the Council of 14 June 2006 introducing a simpliﬁed regime for the control of persons at the external borders based on the unilateral recognition by the new Member States of certain documents as equivalent to their national visas for the purposes of transit through their territories [2006] OJ L 167/1, 20.6.2006. 876 Hillion (2004a) 595; see also Adinolﬁ A, ‘Free movement and access to work of citizens of the new Member States: the transitional measures’ (2005) 42 CMLRev 469.

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(b) Inclusion of Cyprus in the lex specialis (i) The ‘dichotomy’ of the legal regime in Cyprus. As a Member State, Cyprus is subject to these particular rules. The main text of the Treaty of Accession is applicable to Cyprus as a result of the accession negotiations conducted exclusively with the RoC. The situation in the northern part of the island is addressed in parallel and separately in a Protocol, under even more special rules, addressing the fact that the acquis is suspended. This ‘dichotomy’ is due to the fact that the regime established in the 1972 Association Agreement providing for the application of certain Community principles to the whole of the Cypriot territory could not be reproduced here, given the de facto partition of the island since 1974. It has been argued that having similar provisions in the Treaty of Accession would be “no more than a hollow gesture”,877 although it should be noted that the 7th Recital of the Preamble of Protocol 10 outlines the EU ‘desire’ that “ the accession of Cyprus to the EU shall beneﬁt all Cypriot citizens and promote civil peace and reconciliation”. With respect to persons, the situation had to reﬂect the policy of the RoC on the crossing of the line, which cannot constitute an EU external border. The RoC has allowed the crossing of the line by all EU citizens, including the Cypriot citizens, and third country nationals legally residing in the northern part of Cyprus, as well as by all EU citizens and third country nationals who entered the island through the government controlled area of the RoC.878 Taking into consideration this policy879 and the ‘legitimate concerns’ of the government of the RoC, it was nevertheless necessary “to enable EU citizens to exercise their rights of free movement within the EU and set the minimum rules880 for carrying out checks on persons at the line and to ensure the eﬀective surveillance of it, in order to combat the illegal immigration of third

877

Tomuschat C, ‘The accession of Cyprus to the EU’ in Häberle et al (eds), Festschrift für Dimitris Tsatsos (Nomos, Baden-Baden, 2003) (‘Tomuschat’) 684–6. 878 Recital (6) Council Regulation (EC) No 866/2004 of 29 April 2004 on a regime under Art 2 of Protocol 10 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 (‘GL Regulation’). 879 Any change in the policy of the government of the RoC on the line should be notiﬁed to the Commission in order to avoid any inconsistencies between the policy and the rules established in the GL Regulation, Recital (10) GL Regulation. 880 Emphasis added.

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country nationals as well as any threat to public security and public policy. It is also necessary to deﬁne the conditions under which third country nationals are allowed to cross the line”.881 These objectives were formulated in Articles 2 and 3 of the Green Line Regulation. With respect to goods, the objective of the 7th Recital of the Preamble of Protocol 10 could have been achieved through the granting of a privileged treatment exempting Cyprus from “establishing the external customs wall along the dividing line”, where goods from the northern part “could be introduced into the common customs area without having to overcome the barriers of the common customs tariﬀ ”.882 But including the northern part of Cyprus in the European Customs Union territory obviously raises issues of implementation and of enforcement of Community rules which are beyond the de jure control of the RoC; hence the principles of exclusion of these areas of the Republic from the Community Customs Union and ﬁscal territory. The treatment of goods originating from the northern part of the island should however be subject to special rules contained in the Protocol, so that they are not considered as originating from a third country. This means that a ‘legal formula’ had to be found prior to accession in order to promote and facilitate trade through the line between the northern part of the island on the one hand and the RoC and the rest of the EU on the other hand.883 Notwithstanding the above, the distinction between the Treaty of Accession and Protocol 10 may appear to be blurred when considering the treatment of Cyprus and of its de facto partition under Protocol 10. Beyond considerations drawn from international law (there is no recognised entity in the occupied areas), it may be diﬃcult to separate the implementation of the rules of the Internal Market in the ‘government controlled area’ and in the ‘non-government controlled area’ of the RoC, whereas it is the same country with no legal ban on the free movement of goods and persons. A Bill for a law prohibiting trade between the

881 Recital (7) GL Regulation. It is not clear under what circumstances persons entering the RoC unlawfully, i.e. through points of entry not mentioned in the Cypriot migration law, could face legal action, especially EU citizens. Initially, an EU citizen as well as a third country national were condemned for unlawful entry on the territory of the RoC (through the Ercan airport) but not sentenced by virtue of the principle of equal treatment (in view of the large number of persons crossing the line); see also Hoﬀmeister, 214. 882 Tomuschat, 684–6. 883 Skoutaris (2008) 732.

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two sides was indeed tabled before the Cypriot Parliament, but was subsequently withdrawn and never acquired the force of binding law.884 Despite being arguably an internal matter,885issues relating to the legal implications of such a ban under Community law could have arisen at least indirectly in view of the ECJ’s case law on ‘wholly internal’ situations with regards to workers/persons886 and/or of the Court’s review of fundamental rights,887 especially after the Walloon case.888 In the meantime, with respect to goods, the ECJ conﬁrmed in the Anastasiou jurisprudence that the prohibition of the exports of Turkish Cypriot goods merely derived from the non-compliance with Community rules on food safety. In practice, however, there had been no free circulation of goods, persons, services and capital for the past 30 years, at least up and until the partial opening of the Green Line by the ‘authorities’ in the north of Cyprus in 2003 (see below). (ii) The lex specialis on Cyprus within the lex specialis of the Treaty of Accession. Seen from this angle, there could appear to be an inherent contradiction in the terminology when speaking about the implementation of the Internal Market in Cyprus in accordance with the existing rules of the Treaty of Accession, unless these rules are adapted

884

Markides (2000) 1208. Following the Demirel case, Member States are not obliged to comply with the general principles of EC law in situations falling ‘outside the scope of Community law’. Subsequent ECJ’s case law has however outlined the diﬃculty in determining whether a speciﬁc measure will be deemed by the ECJ to fall ‘outside’ or ‘inside’ the ﬁeld of application of EC law for the purpose of human rights review; see Craig & De Burca (2008) 401. 886 See e.g. Cases C-64 and 65/96, Uecker and Jacquet v Land Nordrhein-Westfalen [1997] ECR I-3171; Case C-299/95, Kremzow v Austria [1997] ECR I-2629 (absence of a ‘connecting factor’ to Art 39 EC); compare to Case C-148/02, Garcia Avello [2003] ECR I-11613 (holding of two nationalities including the one of the Member State of permanent residence); see Craig & De Burca (2008) 762–3. 887 The ECJ has refused to scrutinise national measures for compatibility with fundamental rights; see the Kremzow case, ibid, regarding ‘wholly internal’ situations. 888 Case C-212/06, Government of the French Community and Walloon Government v Flemish Government, 1 April 2008 (nyr) (‘Walloon’), where with respect to Arts 39 and 43 EC, the ECJ held that the “interpretation of provisions of Community law may possibly be of use to the national court, having regard too to situations classed as purely internal, in particular if the law of the Member State concerned were to require every national of that State to be allowed to enjoy the same rights as those which a national of another Member State would derive from Community law in a situation considered to be comparable by that court”, despite the apparent absence of link with Community law, paras 38–40. 885

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to the particular internal situation of the island and, as such, become a new set of lex specialis applicable exclusively to Cyprus. Should the principles of the Treaty of Accession be applicable per se, Cyprus would for example be caught by the safeguard clause of Article 38, as its de facto division arguably causes a serious breach of the functioning of the Internal Market. Moreover, even if certain transitional measures of the Treaty of Accession can be deemed very relevant for Cyprus, they could not have been triggered due to the absence of the very subject-matter of the measure as a result of the suspension of the acquis ab ibitio. Article 42 Act of Accession for instance creates a new legal basis in the hands of the Commission for the diﬀerent treatment of the new Member States, to the extent that it introduces additional transitional arrangements for the new Member States who have failed to meet the veterinary and phytosanitary rules of the Community.889 But the triggering of this provision presupposes that there has been application of the acquis in this area of Community policy, which has subsequently not been complied with. Despite its relative importance for Cyprus in view of the Anastasiou saga, this scenario is not applicable to its northern part, due to the initial suspension of the acquis, and as a result, a special regime as to the phytosanitary status of the northern part of Cyprus had to be established. This special regime should also extend to the situation where goods transit from the northern part of Cyprus into the de jure jurisdiction of the Cypriot government, as it would otherwise be placing a disproportionate burden on the RoC to comply with the rules of the Internal Market deemed fully applicable in the governemnt controlled areas upon the crossing of the line. Overall, it is argued that the diﬀerentiated regime created in the 2003 Treaty of Accession may not be utilised adequately in practice for Cyprus, as no particular diﬃculties arose out of its application. The application of the Schengen acquis remains however problematic. As of May 2009, no oﬃcial date had been given for the entry of Cyprus into the Schengen area. It is however relevant to Cyprus in a diﬀerent way in comparison with the other new Member States due to the combination of several factors. It is a borderless State, an island located at close proximity with the Middle East region and is currently characterised

889

The scope of this provision is however limited to three years following accession; see Inglis in Hillion (2004b) 92.

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by a lack of border control on the Green Line since the line does not constitute an EU external border. Nevertheless, no oﬃcial border control by the RoC beyond the line into the occupied areas is possible in accordance with Article 2 of the Green Line Regulation.890 On the other hand, the entry into the third phase of the EMU was not considered to be a controversial issue, given Cyprus’ good economic health.891 Despite a delay compared to original plans,892 Cyprus entered the Eurozone on 1 January 2008.893 Cyprus was also the only country to be completely excluded from the very controversial restrictions on the access to the EU labour market for workers from the new Member States (the safeguard clause could be invoked in the case of Malta). The exclusion of Cypriot workers from the restrictions to the EU labour market appear justiﬁed mainly on pure internal grounds, both economic (small size of the island, characteristics of the local market) and legal (indirect restrictions to the free movement of workers and/or

890 In its 2006 report on the implementation of the GL Regulation, the Commission notes that “[w]ith regard to surveillance of the Green Line, the [RoC] is reluctant to take any measure which possibly could lead to the Green Line taking on the appearance of an external border. Thus, no additional equipment for surveillance of the Green Line was purchased or is forseen and the number of personnel dealing with illegal migratory ﬂows (also police) beside the crossing points was not increased. Contrary to the intentions of the [RoC] as reported in last year’s Green Line Report, more restrictive rules related to the issuance of visas by the [RoC] were not introduced and a new detention centre for illegal immigrants has not been established. The Commission recommends that the authorities of the [RoC] take concrete steps without delay in order to comply with their obligation under the [GL] Regulation, also with a view to the future participation of Cyprus in the Schengen area. While the Green Line does not constitute an external border, the surveillance obligations of the [RoC] on the government-controlled side of the Green Line should be met eﬀectively while at the same time minimising any hindrance to contacts between the two Communities”, 5. 891 See Verdun A, ‘The adoption of the Euro by Cyprus’ (unpublished paper, 21 April 2007). 892 See Theophanous A & Tirkides Y (eds), Accession to the Eurozone and the reuniﬁcation of the Cyprus economy (Intercollege Press, Nicosia, 2006). 893 See Commission’s Convergence Report 2007 on Cyprus COM(2007) 255 ﬁnal, 16.5.2007 presented at the ECOFIN Council on 5.6.2007, Doc 10319/07 (Press 126) and adopted by the EU Council on 21.6.2007, Doc 11078/07 (Press 148); see also the decision at the ECOFIN meeting on 10.7.2007 to allow Cyprus to adopt the euro and setting permanent conversion rates, Doc 11608/07 (Press 164) and Commission’s Communication on the adoption of the euro in Cyprus and Malta COM(2008) 204 ﬁnal. See Council Regulation (EC) No 835/2007 of 10 July 2007 amending Regulation (EC) No 974/98 as regards to the introduction of the euro in Cyprus [2007] OJ L 186/1 and Council Decision (EC) No 503/2007 of 10 July 2007 in accordance with Art 122(2) EC on the adoption by Cyprus of the single currency on 1 January 2008 [2007] OJ L 186/29.

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service providers in force on the island as a result of the application of the laws of the State). Like any new Member State, there was of course a series of transitional measures for Cyprus contained in Annex VII of the Act of Accession as well as permanent adjustments to all the areas of Community law as per Annex II of the Act of Accession (these adjustments are applicable to all the new Member States). But these derive primarily from traditional derogatory mechanisms available in the Treaties and as such, should not raise abnormal diﬃculties as to their implementation, which can in any case be addressed through judicial review at the national and/or supranational level (see below). This last remark has brought certain scholars to observe that the only speciﬁcity associated to Cyprus in the last enlargement is political and military and that as far as the application of the Treaty of Accession is concerned, Cyprus is a candidate of ‘common law’.894 This is conﬁrmed by the idea developed in this book that diﬀerentiation cannot occur on mere political grounds and by the fact that the principles of integration or of diﬀerentiation contained in the main body of the Treaty of Accession do not recognise any speciﬁcity to the new Member States at the institutional level. But this approach is potentially restrictive and could lead to omissions in the analysis, as this is ignoring the fact that Protocol 10 is not merely an instrument of political diﬀerentiation, but is actually also justiﬁed on social and economic grounds. Protocol 10 contains technical rules on the implementation of Community policies in Cyprus (in view of its political situation), inter alia with respect to the four freedoms, which is argued embody some of the most basic principles of its diﬀerentiated integration. This analysis is reinforced by the ﬁnding that the impact of the Treaty of Accession is limited in the case of Cyprus due to the practical inapplicability or alienation of some of its main provisions. This could be diﬃcult to justify if taken in isolation from the wider context expressed in Protocol 10, precisely because Cyprus appears prima facie to be a straight forward case in view of the Act of Accession. (iii) Socio-legal considerations and lex specialis, implications for the EU institutions. Beyond the normal implementation of Treaty obligations binding on Cyprus, Protocol 10 should be used as the main legal basis

894

Blumann in Agapiou & Rossetto, 120.

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for the implementation of the Internal Market in Cyprus. Article 1(1) Protocol 10 provides for the suspension of the acquis, including the rules of the Internal Market, while Article 1(2) is the legal basis for the application of the acquis, but only upon the withdrawal of the suspension. Thus, pending a withdrawal of the suspension under Article 1(2), reference should be made to the legal bases contained in the other articles of Protocol 10, namely Articles 2 and 3 (Article 4 is concerned with the terms of accession of the Turkish Cypriot community after a settlement). To that extent, Protocol 10 appears as a kind of lex specialis for Cyprus895 within the lex specialis of the Treaty of Accession, entailing not only a derogatory eﬀect to the general rules contained in the Treaties, but also a substituting eﬀect to the elaboration or adaptation of the general rules contained in the Treaty of Accession and, as such, must prevail as lex posterior and lex specialis.896 Be as it may, it is clear that the justiﬁcation for the existence of the Protocol does not derive from mere formal and/or drafting considerations, but comes from broader socio-legal considerations justifying the special treatment of Cyprus through Protocol 10. Given that Cyprus is a Member State and also an external border of the Union, the treatment of its northern part entailed wider socio-legal issues pertaining to its integration into the EU than the mere implementation of the technical rules of the Internal Market. The main body of the 2003 Treaty of Accession appeared ill-equipped to consider these issues. It would have meant in particular to transpose the special powers granted to the Commission as analysed above to the situation in Cyprus, so as to overview the integration of its northern part, but without the appropriate competences and tools. Some key areas of policy for Cyprus, such as Schengen or the application of the foreign and defence policy given its proximity and its relations with Turkey, were arguably not considered within the framework

895 Contra Hoﬀmeister who argues that only Art 1(2) Protocol 10 is lex specialis, in the event of the withdrawal of the acquis, 217. 896 Lex specialis derogate lex generali. This is not to mean that there is a conﬂict between the general rules and the special ones, as “there are only laws that determine their sphere of validity either by a reference to a relatively wide or a relatively narrow subject-matter or sphere of legal subjects’. In the present case, the subject-matter is very speciﬁc. See Report of the International Law Commission on the “Fragmentation of international law”, study group on fragmentation, Koskenniemi (‘International Law Commission Report’) last accessed on 12.12.2006, 7.

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of the Treaty of Accession to the extent they deserved for Cyprus as they entailed considerations of an intergovernmental or bilateral nature under Pillars 2 and 3 and/or beyond into the realm of international law.897 Cyprus fully satisﬁed the Union acquis in these ﬁelds as delimited before accession.898 Any additional considerations of a non-mandatory nature pertaining to military issues899 for instance could have been addressed through ﬁnal declarations attached to the Treaty of Accession, but there was nothing alike, thereby arguably leading to an incomplete set of measures promoting the European integration of Cyprus. It is also quite clear that the considerations associated with the de facto partition of the island have implications beyond the Green Line onto or into the de jure jurisdiction of the RoC. Any restriction on the freedom of movement of persons deriving from the policy of the Cypriot government on the Green Line would have sat uneasily with Article 18 EC in the absence of a special regime to be adopted under Article 2 Protocol 10.900 It is also doubtful whether any such restriction 897 Van Elsuwege reaches similar conclusions with respect to the relations between the Baltic States and Russia. He notes that the “essential bilateral nature of the accession preparations largely ignored the historically burdened relationhsip” between them. He argues in particular that the Commission was reluctant “to link trade relations with political questions” pertaining for instance to Russia’s recognition of the Baltic thesis of State continuity. On the external side, he indicates that the Baltic States were well aware of the fact that only the ‘subordination’ of their individual relations with Russia to a ‘wider EU-Russia strategy’ could provide security and stability and that they were therefore supportive of a ‘further deepening of the EU-Russia Strategic Partnership on the basis of legally binding agreements’, in Van Elsuwege, 483. With respect to Cyprus on the external side, the geo-political dimension of Cyprus is mentioned in the political chapter of the Euro-Mediterranean Partnership, see Benoit L, ‘L’élargissement, Chypre et la PESC: un pôle méditerranean pour la politique étrangère et la sécurité européenes?’ in Agapiou & Rossetto, 191. 898 Benoit argues that the CSDP acquis to be implemented in Cyprus was never clearly deﬁned in the texts, to the eﬀect that it also contains provisions of soft law under Pillar 2, in Agapiou & Rossetto, 179–194; see however Art 5 Act of Accession. 899 For a review of the Cyprus military status in international law and under Community law, see Benoit in Agapiou & Rossetto, 191–4. 900 In accordance with the analysis of ‘wholly internal’ situations previously presented, it is debatable whether Art 18 EC can be applied directly to any restriction of movement among Cypriots as this would seem to amount to a situation to which EU law would not apply due to the absence of movement. Assuming otherwise and applying Art 18 EC to this situation could raise the issue of the recognition of the Areas as a separate entity from which and to which Cypriots could exercise their freedom of movement (this was discussed with Dr. Alina Tryfonidou, University of Leicester, 11.11.2008). It remains nevertheless that following the Walloon case, the principles underlying Art 18 EC may possibly be ‘of use’ to the Cypriot courts when considering purely internal situation cases which apparently do not have any link with Community law, in an attempt in particular to prevent any reverse discrimination.

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could have been legitimised under Article 297 EC, as the situation had been ongoing for the past 30 years, and as such, did not really reﬂect the three scenarios triggering the application of Article 297 EC. Moreover, any such restriction would also have had to satisfy the ‘improper use’ test of Article 298 EC.901 In any case, the crossing of the Green Line by nationals from other Member States from the occupied areas to the government controlled area of the RoC had to be allowed freely by virtue of Article 18 EC and the relevant secondary legislation,902 save in case of threat to public policy or public security, and could only be restricted under Cypriot law if it pursued a legitimate purpose and met the proportionality test as a principle of Community substantive law (the ‘less restrictive alternative test’).903 The above considerations could explain why following Copenhagen, the Commission derives a special mandate from the Council to implement any Community rule in the northern part of the island as well as to adapt the terms of accession of the Turkish Cypriot community, if and when necessary. It is accountable to the Council on that speciﬁc ground, thereby arguably creating a separate instance of supranational diﬀerentiation applicable to Cyprus. At the same time, the use of a Protocol to deal with the situation in Cyprus limits the role of the Court of Justice mainly to the mere application and/or interpretation of existing principles, due to the primary law nature of the Protocol, thereby reinforcing the role of the Council as the ultimate authority in the implementation of Protocol 10 at the supranational level. Save an express provision in the Protocol on the suspension of the acquis in the northern part of the island,904 the door would have been open to legal challenges before the Court. The latter would have been entrusted with the task of deciding “on possible justiﬁcations for the non-fulﬁlment of Cyprus’ duties”905 under Community

901

Uebe, 392–8. E.g. Directive (EC) No 38/2004 of the EP and of the Council of 29 April 2004 on the right of citizens of the Union and their family to move and reside freely within the territory of the Member States, amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/ EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC, [2004] OJ L 229/35. 903 Tridimas, 138. 904 Tomuschat suggested that a tacit agreement on the non-applicablity of the acquis would have been more appropriate than a protocol, as it would avoid any ‘disillusionment’ on both sides, in Tomuschat, 685. 905 Uebe, 383. 902

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law through an intense review of the principles of equality and proportionality as instruments of integration in Community substantive law. The Protocol remains however a transitional instrument, limited and ad hoc in nature, and, save perhaps under Article 4,906 cannot constitute the framework for the full integration of Cyprus beyond a settlement, as it would otherwise constitute a de facto opt-out of the rules of the Internal Market and/or result in a manifest and persistent breach of Community law. Derogatory measures contained in the 2003 Treaty of Accession such as the ones concerning the EMU or the Schengen acquis could eﬀectively be more permanent than the regime provided in Protocol 10. With respect to restrictions on workers’ access to the EU labour market, the Commission had initially proposed a complete derogation from the acquis for a limited period of time, i.e. a status quo, comparable to the status of the suspension of the acquis in the northern part of Cyprus. But the former would have been inserted into the main body of the Treaty of Accession and limited in scope (applicable to a limited part of the acquis dealt with under the Chapter of the free movement of persons and not covering all persons), as opposed to the ad hoc and open ended nature of Protocol 10. Under Protocol 10, the Commission appears to have inherited wide powers of implementation of the framework regime set out in the Protocol.907 This might present a priori similarities with the powers granted to the Commission under the Treaty of Accession with respect to the implementation of the Internal Market in the new Member States, especially in view of the fact that it is claiming exclusive competence to implement the special regime in areas of Cyprus where the supranational rules of the Internal Market cannot apply (see below). But such powers are clearly placed under the supranational decision-making power of the Council in the case of Cyprus, as opposed to deriving from intergovernmental treaty-making mechanisms in the Treaty of Accession. In Chapter 3, the mechanisms contained in the Treaty of Accession itself were distinguished from the ones eventually used in Protocol 10 to address the implementation

906 Measures taken under Art 4 Protocol 10 could provide the terms of accession solely for the Turkish Cypriot community beyond a settlement, provided such measures have force of primary law, see next Pt of this book. 907 By virtue of Art 4(12) GL Regulation, the Commission must adopt speciﬁc rules for the treatment of goods falling within the ambit of the Regulation; it did so in an implementing Regulation.

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of the Internal Market in Cyprus, to the eﬀect that the Protocol arguably constitutes the main legal basis for the diﬀerentiated integration of Cyprus. II. The substantive principle of Protocol : the suspension of the acquis This part aims at identifying the mechanisms of suspension and of withdrawal of the suspension of the acquis under Article 1 Protocol 10. As an instance of supranational decision-making, it is argued that this provision determines the principles of diﬀerentiated integration of Cyprus as a divided island and beyond. A. Underlying principles of the suspension of the acquis 1. The exclusion of liability for the RoC Article 1(1) Protocol 10 provides for the suspension of the acquis “in those areas of the [RoC] in which the [g]overnment of the [RoC] does not exercise eﬀective control” (or the Areas). It derives from the above that this express formulation of the suspension of the acquis enables the RoC to limit its duties and liabilities under Community law,908 as it cannot guarantee the implementation and the enforcement of EU rules in the Areas, hence in breach of its commitment under the 2003 Treaty of Accession. This is a consequence drawn from international law. The Vienna Convention on the Law of Treaties does not establish rules for initial impossibility of performance, as this is very unlikely to occur at the conclusion of an agreement, but only for “supervening impossibility of performance” under Article 61, and hence, does not cover the situation of Cyprus which is a pre-existing condition to the conclusion of the Treaty of Accession.909 The study of the key provisions of the Treaty of Accession has outlined the high level of duties and responsibilities required from the new Member States, against whom the Commission may take action should 908 Uebe argues that Art 1 “openly and oﬀensively addresses the de facto division of the island and the initial impossibility of performance on the Cypriot side”, in Uebe, 383. 909 Tomuschat argues that the “kind of impossibility in issue [in Cyprus] would not be a hidden, but an open impossibility” leading to a “consensus on the non-applicability of EU law in northern Cyprus”, in Tomuschat, 685.

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they fail to keep the momentum of enlargement by implementing and enforcing Community rules under the Treaty of Accession. Save the express suspension of the acquis in Protocol 10, Cyprus would have been exposed to immediate actions by the Commission and/or by other Member States on the basis inter alia of Articles 226 and 227 EC for the non-implementation of the acquis in the Areas. This express provision on the suspension of the acquis entails however more than a mere ‘exclusion of liability clause’ and in fact sets out the principles underlying the Community policy towards the Turkish Cypriot community. The formalisation of this policy results in a special regime applicable in the Areas, including to their relationship with the rest of the EU and with the government controlled area of the RoC. This regime is intended “to protect the EU and to counter the temptation to the de facto and de jure extension of the EU regulations and privileges to the northern part before the division of Cyprus has ended”.910 2. The non-extension of EU rules: the institutionalisation of a transitional regime set out by the Court of Justice? As previously explained, the policy expressed in Protocol 10 is the outcome of the EU strategy on Cyprus gradually developed during the process of accession, to the eﬀect that the EU has accepted to consider speciﬁcally the socio-legal implications of the de facto division of the island for the Turkish Cypriot community, if an when necessary. This policy was backed by judicial integration, when the Court of Justice conﬁrmed in Anastasiou III the beneﬁts of accession to all Cypriot citizens through a procedure of application of EC/EU law involving intra-state co-operation rather than through the mere extension of EU supranational regulatory powers (as proposed by the Commission with respect to direct trade). The doctrinal principle developed by the Court addressing the freedom of movement of goods in Cyprus provided a priori a temporary framework for the implementation of the Internal Market in Cyprus where the EU acted as a ‘facilitator’ of free trade rather than a ‘regulator’.911 The next step was thus the formalisation in the Protocol of this transitional regime for the regulation of the freedoms of movement in Cyprus, through the partial or 910 911

Neuwahl in Neuwahl (2004) 17. Tridimas, 181.

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the total continuation of the jurisprudence912 as a principle of the European integration of Cyprus. Two immediate questions arise out of the relationship between the Court’s jurisprudence on the free movement of goods and Protocol 10, namely whether the Court’s jurisprudence was maintained in Protocol 10 and whether the doctrinal principle allegedly established by the Court in this matter can have any authority in the future, given the ad hoc nature of the Protocol. The Protocol could be said a priori to maintain the rationale of the Court’s jurisprudence, to the extent that it provides for a special regime applicable to the Turkish Cypriot community, based on the suspension of the acquis and not on the extension of EU rules and principles, where the EU acts as a facilitator. In order to conﬁrm this preliminary analysis, it will be necessary to scrutinise the implementation of the Protocol through instruments of secondary legislation taken on the basis of Articles 1(2), 2 and/or 3, so as to identify the working mechanisms of the special regime established in the Protocol as well as the role attributed to the various parties involved. Such an exercise should also provide an answer to the second question as to the future of the Court’s doctrinal principle within the framework of the European integration of Cyprus, to be addressed in the next and ﬁnal Part.913 Thus, Protocol 10 appears prima facie to draw conclusions from the Court’s jurisprudence914 by generalising it and formalising it. This formalisation is crucial since, following accession as a divided island, recourse to the judiciary at the supranational level may be restricted as a result of the suspension of the acquis. 3. The limitations on judicial integration Through the suspension of the acquis in the territory not under the eﬀective control of the RoC under Protocol 10, the EU was hoping to “prevent the potentially explosive915 progressive inclusion of the Turkish Cypriot part without settlement”,916 including through negative

912

Klebes-Pélissier, 456 ; contra Tomuschat, 684. The impact of the alleged doctrinal principal on the EU external relations (external dimension of the matter) has already been addressed in Pt I of this book. 914 Berramdane in Agapiou & Rossetto, 52. 915 Emphasis added. 916 Axt H-J & Neuwahl N, ‘The Cyprus ouverture’ in Neuwahl (2004) 18. 913

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integration as a result of judicial action. It remains however that EU membership gives rise to the exercise by individuals of a set of rights deriving from EU law against Member States, the EU institutions and/ or other individuals in cross-border disputes which Protocol 10 cannot fully restrict.917 The use of transnational litigation by Cypriots on both sides of the divide for the infringement of their rights was potentially given a new turn through EU membership, as they can now bring legal actions before the supranational and/or national courts under EC law against both public or other private parties, provided there is a breach of EC law that falls outside the scope of Protocol 10. This is in addition to the intergovernmental remedies traditionally available under the ECHR for the violation of their fundamental rights as a result of the Turkish invasion/occupation of the island ever since Turkey submitted herself to the jurisdiction of the ECtHR in 1990. Thus, during the course of litigation, fundamental rights deriving inter alia from Member State actions and protected as such under EU law are bound to play an important role, particularly at the supranational level, given the impossibility of exercise of these rights by individuals at the national level in the part of Cyprus not under the eﬀective control of the Republic. The questions arising in this context concern not only the scope of Protocol 10 but also the standard(s) of protection of fundamental rights aﬀorded by the EU in this case.918 For the purpose

917 The suspension of the acquis is territorial by deﬁnition and is therefore limited to the territory as deﬁned in Protocol 10. This means that any Cypriot residing in the north – whether Greek or Turkish Cypriot – can in theory enjoy all his/her rights as a Cypriot citizen upon the satisfaction of the material requirements of the Cypriot citizenship law and hence all the rights deriving from citizenship of the Union in the RoC in view of Art 17(1) EC. The suspension of the acquis does not aﬀect prima facie the exercise of personal rights of Turkish Cypriots not linked to that territory. They are thus entitled to exercise their freedom of movement in other Member States or work for the EU institutions under certain conditions; see Cases T-455/04, Beyatli and Candan v Commission and C-238/07 P, Derya Beyatli v Commission [2007] ECR I-149, where the ECJ dismissed an appeal against an order of the CFI rejecting an application seeking the annulment of a decision (of the selection board in Competition EPSO/A/1/03 for the establishment of a reserve list of assistant administrators of Cypriot nationality) not to admit the appellants to the oral tests in that competition (in Greek). Several other legal actions brought by Turkish Cypriots are pending before the European Courts; see Hoﬀmeister, 208–211. 918 The UN Secretary-General noted that “[t]he persisting de facto partition of the island of Cyprus continues to constitute an obstacle to the enjoyment of human rights. The situation of human rights in Cyprus would therefore greatly beneﬁt from the achievement of a comprehensive settlement of the Cyprus problem” and pointed to a

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of the discussion, reference will be made to the property issue in Cyprus, as it is most probably the most comprehensive illustration of transnational litigation to date.919 (a) Supranational versus intergovernmental judicial systems Unlike the Annan Plan, which contained a property settlement mechanism precluding any further individual legal action before the ECtHR,920 Protocol 10 does not appear to restrict individual access to the ECtHR for the protection of human rights in Cyprus, in particular with respect to property issues. This is in addition to the previous remarks made with respect to the individual exercise of rights granted under EU law before the courts at the national and supranational level. Considerations relating to the relationship between the intergovernmental and the supranational judicial systems available in Europe therefore arise, into the realm of the Strasbourg Court and the Luxembourg Court as instances of transnational judicial integration in Europe and, as such, as modes of European governance. This book being concerned with Cyprus’ path towards EU integration, the case law of the ECtHR is only relevant to the extent that “human rights provide a fresh focus for European integration in a new millennium”, thereby potentially involving more deeply the Strasbourg Court in EU aﬀairs (now that the Common Market is largely achieved and that the ‘conﬂict’ between European integration and human rights is no longer the main focal point).921 Douglas-Scott speaks about human rights as “an increasingly important feature of European integration and governance – a symbiotic interaction of fragile complexity, continuously working out a solution to the sometimes awkward co-existence of the EU and the ECHR”.922

number of ‘human rights concerns’ in Report of the Oﬃce of the High Commissioner for Human Rights on the question of human rights in Cyprus, Human Rights Council of the UN General Assembly, 9.3.2007 (Doc A/HRC/4/59) 6. 919 See e.g. Hoﬀmeister 55–9, 137–141, 177 & 198–9. 920 “It was in eﬀect crucial that any property settlement negotiated should be accepted by the [ECtHR] as invalidating the base for bringing individual proceedings before the Court”, in Hannay D, The search for a solution (IB Tauris, New York, 2005) 39. 921 For the relationship between the two European Courts, see e.g. Douglas-Scott S, ‘A tale of two courts: Luxembourg, Strasbourg and the growing European human rights acquis’ (2006) 43 CMLRev 629 (‘Douglas-Scott (2006a)’) 630. 922 The ECtHR was set up in 1959 for the exclusive purpose of protecting human rights in Europe on the basis of the ECHR; the ECJ was established with a much broader jurisdiction as the Court of the European Communities; see Douglas-Scott (2006a) 631–2.

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The ECtHR may indeed, in some instances involving human rights, review Community law923 by challenging in particular the compatibility with the ECHR of certain instruments of Community law or EU law such as directives.924 In this context, the ECtHR even took the opportunity to review instruments of primary legislation like in the Matthews case.925 Community primary law has come before the scrutiny of the Strasbourg Court through the lens of human rights, given the lack of competence of the Luxembourg Court to review the validity of primary legislation and therefore the alleged ‘gap’ in remedies, thereby encouraging in a certain manner an even more eﬀective application of EU law in the Member States.926 This case is of interest to this book as it concerned the right to vote in the European Parliament elections for residents of Gibraltar,927 which has already been found to beneﬁt from

923 The European Commission of Human Rights in M & Co v Germany [1990] 64 Decisions and Reports 138 did however ﬁnd the EC legal system to provide ‘equivalent protection’ to the ECHR in the case of an alleged breach of the right to a fair trial under Art 6 ECHR in the course of the execution of an ECJ judgment in a competition case), thereby acknowledging the ‘existence of a separate, autonomous EC human rights law’; see Douglas-Scott (2006a) 637. 924 See e.g. Cantoni v France [1996] Reports 1996-V ECHR where the Court reviewed a French law, which implemented ‘word for word’ the medicines directive; see Douglas-Scott (2006a), 637 and fn 38. This case came right after the ECJ’s Opinion 2/94 on the lack of legal capacity of the EU to accede to the ECHR and therefore, irrespectively of its apparent lack of competence to sanction directly instruments created by the EU institutions, which lie at the heart of the integration process. Commenting on the ECtHR’s decision in Senator Lines GmbH v the 15 Member States [2004] 39 EHRR SE3 which failed to go to judgment when proceedings against the EU institutions involved (Commission and ECJ) were resolved in a separate action before the CFI (Cases T-191/98 and T-212–214/98, Atlantic Container Lines [2003] ECR II-3275), Burgorgue-Larsen writes that “[s]anctionner directement l’Union – système juridique tiers à la Convention et voisin institutionel – apparaît autrement plus délicat que mettre à l’index des Etats, qui est ni plus ni moins la raison d’être de la Cour européenne”, in ‘Jurisprudence européenne comparée’ [2005] 4 Revue du Droit Public 1126. 925 ECtHR, Matthews v UK [1999] 28 EHRR 361 (‘Matthews’). 926 See Burgorgue-Larsen, ‘Jurisprudence européenne comparée’ [2005] 4 Revue du Droit Public 1126. 927 The ECtHR judgment in Aziz v Cyprus [2005] 41 EHRR 11 forms the basis of the rights of Turkish Cypriots residing in the government controlled area of the RoC to be included in the Greek Cypriot electoral system for national Cypriot elections in accordance with Art 3 Protocol No 1 ECHR (a law came into force in 2006 and as a result, Turkish Cypriots residing in the government controlled area of the RoC voted in the Parliamentary elections of 21 May 2006 for the ﬁrst time since 1964). With respect to their rights to vote and to be elected at the EP elections in accordance with Art 190 EC, unlike the Gibraltar residents before the Matthews case, all Cypriots have the right to vote in the EP elections as EU citizens, including Turkish Cypriots residing in the Areas provided they have satisﬁed the material requirements of the Cypriot citizenship law

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a special status within the EU deriving from the principle of the territorial scope of application of the EC Treaty as set out in Article 299 EC and leading to the selective application of EC law to measures of economic integration.928 As far as political rights are concerned, a British court had found that there were allegedly no rights relating to the elections at the European Parliament for Gibraltar residents arising under EC law929 in accordance with the special status granted to Gibraltar under the 1972 Act of Accession regarding rights attached to nationality.930 Following the Strasbourg Court judgment,931 the UK introduced a right for Commonwealth citizens resident in Gibraltar who are not Community nationals to vote and stand as candidates in elections to the European Parliament,932 reﬂecting the position under UK national law regarding qualifying Commonwealth citizens. The UK’s compliance with the judgment was subsequently challenged before the ECJ by Spain, which argued inter alia that the UK was in breach of its obligations under Articles 189, 190, 17 and 19 EC respectively by allowing

and are registered as voters in the RoC. In order to avoid the territorial restrictions under Protocol 10, they must travel to the government controlled area of the RoC to cast their votes on the day of the EP elections. In the 2004 EP elections, around 500 Turkish Cypriots were registered but not all of them actually voted. There was also a Turkish Cypriot independent candidate who received 681 votes; see Hoﬀmeister, 210. With respect to the 2009 EP elections held on 6 June 2009 in Cyprus, 1305 Turkish Cypriots were registered on the electoral lists, out of which 757 are residents in the Areas (117 actually voted). More ballot centres were created alongside the Green Line in Nicosia, Larnaka and surrounding areas to accommodate them (information obtained from the governmental electoral services, 19.5.2009 and 20.8.2009). 928 See Art 28, 1972 Act of Accession. 929 See the Act concerning the election of the representatives of the European Parliament by direct universal suﬀrage, annexed to Council Decision 76/787/ECSC, EEC, Euratom of 20 September 1976 [1976] OJ L 278/1, as amended by Council Decision 2002/772/EC, Euratom of 25 June 2002 and 23 September 2002 [2002] OJ L 283/1. 930 See the declaration annexed to the Final Act, 1972 Treaty of Accession on the term ‘nationals’, as replaced in 1982 following the entry into force in the UK of new legislation on nationality, to the eﬀect that nationals in the UK are the following: (i) British citizens; (ii) Persons who are British subjects by virtue of Part IV of the British Nationality Act 1981 and who have the right of abode in the UK and are therefore exempt from UK immigration control; and (iii) British Dependent Territories citizens who acquire their citizenship from a connection with Gibraltar [1983] OJ C 23/1, 28.1.1983. 931 The ECtHR held that the interpretation of EC law by the British court could amount to a denial of the applicant’s right to vote as guaranteed by Art 3 Protocol 1 ECHR (para 32) and that the applicant was completely denied any opportunity to express her opinion in the choice of the members of the EP (para 64). 932 European Parliament (Representation) Act 2003.

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non-EU citizens to vote.933 The Court dismissed the action on the ground that the rights of EU citizenship could be extended at the discretion of a Member State to citizens other than EU citizens on its territory, provided they had ‘speciﬁc links’ with the said Member State and that such changes were consistent with EU law (principle of proportionality).934 The Court nevetheless immediately recalled that it was to comply with the judgment of the ECtHR in Matthews that the UK adopted the legislation challenged by Spain and that this occurred ‘despite’ the existence of the 1976 Act.935 To conﬁrm that the UK’s action was proportionate under EU law, the Court relied on the 2002 UK declaration,936 as if this instrument of soft law could prevail over the 1976 Act,937 which as an instrument of primary law in the EU legal order can only be amended through unanimity.938 The Court refers to 933 Case C-145/04, Spain v UK [2006] ECR I-7917 (‘Spain v UK’); see BurgorgueLarsen L, ‘L’identité de l’Union européenne au coeur d’une controverse territoriale. Quand le statut de Gibraltar réapparaît sur la scène judiciaire européenne’ [2007] 1 RDP 22. This case should also be read in conjunction with Case C-300/04, Eman et Sevinger [2007] 1 CMLR 4 (‘Eman et Sevinger’) regarding the right of Ducth residents in the OCT of Aruba to vote in European elections. The Court here ruled that EU nationals residing in an OCT are subject to a special regime under Part IV EC Treaty, which means that general provisions of the Treaty are not applicable to them unless speciﬁed otherwise and that therefore, Arts 189 and 190 EC are not applicable. As a result, Member States could delimit the right to vote and to participate in EP elections in accordance with the territory on which nationals of the said Member State should reside, provided such territorial restrictions are objectively justiﬁable. 934 Paras 63, 66, 69, 74, 78, 79, Spain v UK. 935 Paras 60, 64, 90, 94, 95, 96, ibid. 936 The original version of the 1976 Act was amended by Council Decision 2002/772/ EC, Euratom of 25 June 2002 and of 23 September 2002 amending the Act concerning the election of the representatives of the European Parliament by direct universal suffrage, annexed to Decision 76/787/ECSC, EEC, Euratom [2002] OJ L 283, 21.10.2002, which entered into force on 1 April 2004. At the time of that amendment, Spain opposed the revocation suggested by the UK of Annex I to the 1976 Act. However, a declaration on the holding of EP elections in Gibraltar, reﬂecting a bilateral agreement concluded between the UK and Spain was formally recorded in the minutes of the Council meeting of 18 February 2002, see para 12, Spain v UK. This declaration apparantly justiﬁed the equivalent treatment (‘on the same terms’) between voters in Gibraltar and in the rest of the UK, which Spain argued was discriminatory but which the Court found put voters in Gibraltar and in the rest of the UK in a ‘similar situation’, see paras 91, 92 and 93, ibid. 937 Lenaerts & de Smijter recall that the term ‘primary Union law’ refers to all acts adopted by the Member States ‘as the constituent power’ of the EU legal order and the ‘equivalent acts’, such as the Act of 1976 referred to earlier or the Statute and the Rules of Procedure of the ECJ and the general principles of law, see Lenaerts K & de Smijter E, ‘The Charter and the role of the European courts’ (2001) 8(1) MJ 93 (‘Lenaerts K & de Smijter’). 938 Para 90, Spain v UK; see Burgorgue-Larsen, ‘Chronique de jurisprudence européenne comparée’ [2006] 4 RDP 1104.

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the Strasbourg Court’s decision in Matthews in several parts of its judgment as well as to other decisions of the Strasbourg Court relevant to its ruling,939 and appears to be merely applying this jurisprudence as opposed to using it in a critical manner thereby aﬃrming its own jurisdiction on the matter.940 In the Bosphorus saga,941 the Strasbourg Court accepted jurisdiction whereas the measure had been previously challenged and upheld in an action before the Luxembourg Court.942 With respect to fundamental rights, the ECJ had reminded its settled case law that fundamental rights are not ‘absolute’ and that their exercise may be subject to ‘restrictions justiﬁed by objectives of general interest pursued by the Community’. In the Bosphorus case, such restrictions were found proportionate “in the light of the important aims pursued by the sanctions, namely bringing about an end to the State of war and human rights violations in the relevant area”.943 The jurisdiction of the Strasbourg Court over this case was contested by the Irish government as well as by third parties, including the EU Commission and the UK and Italian governments,944 but the Court found that the complaint brought against the Irish government945 was compatible ratione loci, personae

939 In particular to ECtHR, Mathieu-Mohin et Clerfayt v Belgium [1988] 10 EHRR 1, which sets out the principle of free elections, see para 94, Spain v UK. 940 See Burgorgue-Larsen, ‘Chronique de jurisprudence européenne comparée’ [2006] 4 RDP 1105; see also Douglas-Scott (2006a), 644–52 for a legal appraisal of the use of the Strasbourg Court’s jurisprudence by the ECJ ‘by analogy’ where she concludes that even if the two Courts do refer to each other’s case law, they do not usually engage in ‘detailed jurisprudential analysis’, 652. In Case C-88/99, Roquette [2000] ECR I-10465, paras 23 and 29, the ECJ stated that the ECHR has ‘special signiﬁcance’ and that “regard must be had to case law of the [ECtHR] subsequent to the judgment in Hoechst”. 941 ECtHR, Bosphorus Airways v Ireland [2006] 42 EHRR 1 (‘Bosphorus’). See Kuhnert K, “Bosphorus – double standards in European human rights protection” (2006) 2(2) Utrecht Law Review 177. 942 ECJ, Case C-84/95, Bosphorus v Ireland [1996] ECR I-3953. 943 Para 21, ibid. Council Regulation (EEC) 990/93 concerning trade between the EEC and FRY [1993] OJ L 102/4 furthered the existing embargo of the FRY established by two earlier EEC Council Regulation in 1992 implementing at Community level sanctions imposed by the UN on the FRY (UNSC Resolution 820, 24 UN Doc S/RES/820, April 2003). 944 See case note by Douglas-Scott S, (2006) 43 CMLRev 243 (‘Douglas-Scott (2006b)’) 245. 945 The challenge before the ECtHR in Bosphorus Airways concerned the compatibility with the ECHR of a national act taken by a Member State to comply with a nondiscretionary obligation to implement Community secondary law conﬁrmed by the ECJ and not acts of the European institutions directly, see Eckes C, ‘Does the ECtHR provide protection from the EC? The case of Bosphorus Airways’ (2007) 13(1) EPL 47.

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and materiae with the provisions of the ECHR according to Article 1 of the Convention.946 Through the doctrine of ‘equivalent protection’,947 the Court managed to reconcile its position on the legitimate interest of non-discretionary compliance with EU law by an EU Member State (in accordance with the international law principles of pacta sunt servanda), with the principle of transfer of sovereign powers to international or supranational organisations like the EU, which does not absolve ECHR contracting parties completely from responsibility under Article 1.948 But the Court added that the ﬁnding of minimum equivalence of protection of fundamental rights oﬀered by the said organisation was only a presumption, which could be rebutted by the applicant if “in the circumstances of a particular case, it is considered that the protection of the Convention’s rights was manifestly deﬁcient”.949 In such cases, “the interest of international co-operation would be outweighed by the Convention’s role as a ‘constitutional instrument of European public order’ in the ﬁeld of human rights”.950 The potential review of acts originating in EU law by the ECtHR has wider implications for the modalities of European governance by the Courts. Whereas some of the acts challenged are supranational acts of EU law involving the EU institutions, including the ECJ, the fact that the EU is not a party to the ECHR means that the Member States themselves become a party to the action in Strasbourg and that the EU is only an intervener.951 As a result, the mode of governance shifts from supranational governance to intergovernmental governance, thereby undermining the role of the EU institutions and eﬀectively rendering the Member States primarily responsible for an action taken at the supranational level in the EU. Thus, it is quite clear that the jurisdiction of the ECtHR over acts originating in EU law should remain limited to instances where the Union and/or its institutions cannot provide ‘equivalent’ protection of fundamental rights.952 Such instances apparently 946 Art 1 ECHR holds the contracting parties responsible for violations of Convention rights committed within their jurisdiction, see Douglas-Scott (2006b) 245. 947 Paras 155–6, Bosphorus (ECtHR). 948 Douglas-Scott (2006b) 246. 949 Joined Concurring Opinion of Judges Rozakis et al, Concurring Opinion of Judge Ress, para 113, Bosphorus. 950 Para 156, Bosphorus, emphasis added; see Douglas-Scott (2006b) 247; see also Eckes, n 945 above, 54. 951 Douglas-Scott (2006a) 639; see also Tridimas, 349–53. 952 In Matthews, the Court did not expressly refer to the principle of ‘equivalent protection’ since primary law cannot be reviewed by the ECJ and focused instead on the UK’s obligations under the ECHR.

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include the review of EU primary law as well as other categories of acts which fall outside the jurisdiction of the Court (wholly or partly),953 as they cannot be the object of judicial review by the ECJ (the Court lacks the ratione materiae competence). In that case, the ECtHR will accept jurisdiction to hold the EU Member States responsible for violations of the Convention by an EU institution in these areas.954 Other instances could include the improper or inadequate protection by the Court of Justice of the rights guaranteed by the ECHR as evidenced by a ‘manifest deﬁciency’ of the protection.955 There has been a substantial amount of scholar work in relation to the jurisprudence of the Strasbourg Court on the violation of human rights in Cyprus, which does not need to be repeated here.956 References to certain aspects of the ECtHR’s jurisprudence will be made if and when necessary, especially in the cases of Cyprus v Turkey,957 Loizidou v Turkey958 and/or Xenides-Arestis v Turkey,959 since the ECtHR is a priori the only non-domestic forum in Europe open for the judicial review of litigation arising in connection with the Areas and involving the violation of fundamental human rights. With its Loizidou and Bosphorus jurisprudence, the Strasbourg Court has been said to use the ECHR as an instrument of European public order. It has been described as a result as providing an “abstract constitutional identity for an entire continent”,960 thereby reinforcing its role in Europe through the “collective enforcement of fundamental rights and the maintenance and the

953

See Arts 46 EU and 68 EC. See Lenaerts & de Smijter, 94. 955 Basically where the protection oﬀered by the Luxembourg Court is more restrictive; for a review of the Strasbourg Court’s case law in this respect before Bosphorus, see Lenaerts & de Smijter, 95 and fns 26–29. 956 See e.g. Chrysostomides (2000); Palley; and Hoﬀmeister. See also the various case notes in the ELRev and numerous speeches by lawyer Achilleas Demetriades, representing Mrs Loizidou and Mrs Arestis (eg ‘Some human rights cases in Cyprus’, speech, University of Nicosia 26 April 2007); and Özersay K & Gürel A, ‘Property and human rights in Cyprus: the European Court of Human Rights as a platform of political struggle’ (2008) 44(2) Middle Eastern Studies 291. 957 ECtHR (no 25781/94) 10 May 2001 [2002] 35 EHRR 30; see Hoﬀmeister F, case note (2002) 96 AJIL 445. 958 ECtHR (no 15318/89) 23 March 1995 (preliminary objections) [1995] 20 EHRR 99; 18 December 1996 (Merits) [1997] EHRR 513; see Rudolf B, case note (1997) 91 AJIL 532. 959 ECtHR (no 46347/99) 22 December 2005 (preliminary objections); 7 December 2006 (Just Satisfaction) [2007] 44 EHRR SE13. 960 Gearty, ‘The ECtHR and protection of civil liberties: an overview’ (1993) CLJ 125 as quoted in Douglas-Scott (2006a) 662. 954

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promotion of the ideals and values of a democratic society”, which obviously leaves very little room for limitations or derogations to human right protection.961 In the meantime, the ECJ is also being increasingly used as a forum for the protection of human rights ever since it proclaimed that the “respect for human rights forms an integral part of the general principles of Community law protected by the Court of Justice”.962 As the EU is not a party to the ECHR as such, it ‘imported’ human rights from national and international legal systems in a formula that was later inserted into Article 6 EU,963 thereby revealing the interaction between the two courts, involving “overlapping jurisdictions and segmented authority”.964 EU law is considered to present certain advantages to litigants over actions in Strasbourg since there is no prior requirement of exhaustion of all domestic remedies, thereby oﬀering a ‘one-stop forum’ for the protection of fundamental rights.965 The accrued use of the Court’s jurisdiction in the area of fundamental rights touches upon the broader question of a European public order within the EU legal order and, if any, of its legal basis under EU law. It is contended that the litigation at the supranational level arising in connection with trade and even more so with property issues in Cyprus, as outlined in this book, could participate to the wider debate on the legal nature of the European public order as an exception under EU law.966 Should it be given the right opportunity, the ECJ could be called upon, via the preliminary reference route in particular,967 to consider fundamental rights issues arising inter alia out of the implementation of the four freedoms in Cyprus.968 It is submitted that the Court has already been given such an opportunity by examining the various conﬂicts of laws and/or of jurisdictions arising out of trade and property 961

See Giegerich in Giegerich, 277. Case C-11/70, Internationale Handelsgesellschaft [1970] ECR 1125, paras 3 and 4. 963 Douglas-Scott (2006a) 633. 964 Ibid, 639. 965 Tridimas, 340. 966 Following Nold (Case 4/73, Nold v Commission [1974] ECR 491), the ECJ emphasised that the rights to property and to trade in particular were far from absolute and could therefore be restricted in the name of the overall objectives of the Community, thereby indicating a priori some of the delimitations of the European public order within the EU legal order. 967 The direct route to the ECJ under Arts 230 and 232 EC in particular being much narrower. 968 In the Schmidberger case, the Court has already applied a softer proportionality test to national measures in the name of fundamental rights; see Tridimas, 337–41. 962

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issues with the Areas. By balancing the principles of non-discrimination and of uniformity of the CCP in favour of the latter in the Anastasiou saga, the Court can be said to have restricted fundamental rights embodied in the principle of non-discrimination among all Cypriots in the name of economic rights expressed in the CCP, to the eﬀect that trade under the EC-Cyprus Association Agreement could be restricted legitimately to the government controlled areas of the RoC. In the Apostolides case recently decided by the ECJ under an Article 234 EC preliminary reference,969 the Court was asked to clarify the scope of the suspension of the acquis under Protocol 10 to the 2003 Treaty of Accession in view in particular of the Brussels Regulation.970 Given the legal nature of the Brussels Regulation, which contains elements of public policy, and its international law origins, one is entitled to wonder whether the suspension of the acquis in the territory beyond the eﬀective control of the Republic of Cyprus can extend to the application of such an instrument of EU law in connection to this territory. The Brussels Regulation arguably serves the double purpose of the promotion of the Internal Market and of the protection of fundamental rights recognised as such both in the international and in the EU legal orders and, as such, involves the protection of ‘fundamentally equal’ norms which need to be carefully considered by the Court in the light of Protocol 10. The exercise by individuals of their right to remedy under EC law does not however usually take place directly before the ECJ but depends on the possibility to bring legal proceedings on the basis of EC law before the national courts. (b) Legal proceedings in the domestic legal order At the national level, the various laws on immovable property in Cyprus have come under the legal scrutiny of the courts in view of the fundamental and constitutional rights derived inter alia from national law and from EU law. These also include rights derived from the ECHR within the realm of EU law as per Article 6(2) EU and indirectly from the judgments of the ECtHR, which are however not binding erga omnes but only on the parties to the litigation who should implement 969

ECJ, Case C-420/07, Meletios Apostolides v David Charles and Linda Elizabeth Orams, 28 April 2009 (Grand Chamber) (nyr) (‘Apostolides’). 970 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 (‘Brussels Regulation’).

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its judgments into their national legal order. The extent to which such judgments can be used as precedents by other courts therefore appears limited. They are nevertheless relevant to the protection of fundamental rights at the supranational level, as outlined above, and also at the national level as shown below. With respect to Turkish Cypriot property in the government controlled area of the RoC, Judge Hadjihambis gave a landmark ruling for the Limassol District Court in Arif Mustafa v Minister of Interior.971 He held that a Turkish Cypriot who had returned to the government controlled area could claim his property back although currently occupied by a Greek Cypriot family. This judgment was initially appealed by the then Attorney General on the ground that guardianship of the property as a result of the invasion of Cyprus could not end upon the mere return of the Turkish Cypriot owner but had to be decided by the Council of Ministers in accordance with Article 3 of Law No 139/91.972 This appeal was settled by the issue of a Legal Opinion by the Legal Services of the Republic conﬁrming the right of Turkish Cypriots to get their property back upon their return to live on the said property.973 A contrario, the Supreme Court of Cyprus has rejected an application by a Turkish Cypriot living in the Areas to have his property in the government controlled area returned to him with compensation for loss of use, in a direct challenge of the legality of the Custodian set up in 1989.974 The Court ruled that the law setting up the Custodian (the Interior Minister of the RoC) was within the ambit of the Constitution in view of the absence of a decision by the Council of Ministers signalling the oﬃcial end of the guardianship and that it was not rendered obsolete by the partial ease on restrictions of movement in 2003.975 It should be noted that no application can be made in the above situation to the ECtHR until and unless there is exhaustion of local eﬀective remedies in Cyprus, through a judgment of the Supreme Court in particular. In this respect, reference should be made to the case of Eugania Michaelidou Developments Ltd and Michael Tymvios v Turkey,976

971

No 125/2004, 24 September 2004. Hoﬀmeister, 198. 973 Information obtained at the Attorney General’s Oﬃce (Nicosia, 1.4.2007). 974 Kiamil Ali Riza v Ministry of Interior, No 133/2005, 24 March 2005. 975 Ibid. 976 ECtHR, Eugania Michaelidou Developments Ltd and Michael Tymvios v Turkey (2004) 39 EHRR 36 where the Court found against Turkey ordering it to pay Mr. Tymvios pecuniary and non-pecuniary damages amounting to 750,000 euros. 972

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where the ECtHR welcomed a settlement brokered by the so-called ‘Turkish Cypriot Immovable Property Commission’ which provides for the payment of USD 1 million in compensation and also for a property exchange involving property on both sides of the Green Line. The implementation of this friendly agreement regarding property in the government controlled area of the RoC is nevertheless subject to the Custodian law of the Republic as outlined above and to a public order exception, which means prima facie that this transaction is not valid under Cyprus law.977 This case could nevertheless give more credibility to the compensation mechanism put in place by Turkey in the occupied areas in order to address the property rights of displaced persons, which were previously examined by the ECtHR in Xenides-Arestis in accordance with the ECHR.978 This mechanism was found by the Court to fulﬁl ‘in principle’ the requirements previously set out by the Court979 and, as a result, the so-called Commission continued receiving requests for compensation. But the ECtHR has not assessed whether the available remedy is eﬀective for all relevant issues.980 Moreover, Turkey has

Mr. Tymvios subsequently signed a declaration of acceptance of a friendly settlement oﬀered by Turkey rather than to accept the compensation awarded to him by the ECtHR; see Cyprus Weekly, 15–21/02/2008, 11. It is this declaration of acceptance that the ECtHR welcomed on 22 April 2008. 977 The application made by the RoC to take part in the proceedings before the ECtHR was rejected by the Court. The refusal by the Court to allow the RoC to participate was considered by the legal profession in Cyprus as a serious threat to the institution of the Custodian for Turkish Cypriot properties since it could amount indirectly to the nonrecognition of the jurisdiction of the government of the RoC over Turkish Cypriot properties in the government controlled area of the RoC; see Demetriou C & Trimikliniotis N, Cyprus update of the Data Collection Report on Ethnic and Racial Discrimination (RAXEN National Data Collection Report 2007 – Cyprus, February 2008) 50. 978 For a legal analysis of this mechanism of compensation and/or of restitution, see Özersay K & Gürel A, ‘Property and human rights in Cyprus: the European Court of Human Rights as a platform of political struggle’ (2008) 44(2) Middle Eastern Studies 291, 300–1. 979 See the decision of the Court on admissibility of March 14, 2005 and the judgment on the merits of December 22, 2005 in the Xenides-Arestis case. 980 In the Just Satisfaction judgment on 7 December 2006 in Xenides-Arestis, para 37, ibid, the Court noted that the parties failed to reach an agreement on the issue of just satisfaction where it would have been possible for the Court to address ‘in detail’ all the relevant issues of the eﬀectiveness of the remedy proposed by Turkey in the form of a new compensation and restitution mechanism. Thus, the Court rejected the argument of the Turkish government that the applicant had to apply to the new Commission implementing the said mechanism in order to seek reparation for her damages ‘at this stage of the proceedings’ (as per the previous fn, the Court had already judged on the merits of this case).

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not yet fully implemented the judgments of the Court in the Loizidou and Xenides-Arestis cases.981 As far as property in the Areas is concerned and within the context of EU membership, the suspension of the acquis has signiﬁcant implications for legal actions brought in the RoC, in particular with respect to EU nationals having purchased property in the Areas. Despite the factual impossibility of legal enforcement in the Areas, it is nevertheless possible to consider legal enforcement in the country of origin of the buyer, where the pecuniary aspect of the remedy in the form of compensation (in default of restitution) could be enforced in light in particular of the Brussels Regulation. In Apostolides v Orams,982 Mr Apostolides obtained a judgment in default of appearance in the Nicosia District Court against Mr and Mrs Orams, British citizens who purchased property in the Areas which was originally owned by Mr Apostolides. On 19 April 2005, a second judgment was delivered in the District Court refusing to set aside the earlier judgment on the ground that there was no valid defence to the claim. Those judgments were then registered in, and declared enforceable by, the Queen’s Bench Division of the High Court of England, pursuant to the Brussels Regulation. The Orams brought a successful challenge against the registration and enforcement order before the High Court Judge (Mr Justice Jack) under Article 43 of the Brussels Regulation.983 Justice Jack ruled that the Brussels Regulation is of no eﬀect in relation to matters concerning the Areas in accordance with the suspension of the acquis under Protocol 10 and hence, that Mr Apostolides could not rely on this Regulation to seek enforcement of the judgments obtained in the Cypriot courts as in his view, the said judgments were contrary inter alia to Article 34 of the Brussels Regulation.984 Mr Apostolides contested that judgment by an appeal under Article 44 of the Brussels Regulation before the Court of Appeal.985 In the meantime, the Supreme Court in Cyprus rejected unanimously the Oramses’ latest appeal, thereby bringing the legal proceedings in Cyprus to an end.986 It was held inter alia that the appellants failed to 981

Turkey 2008 Progress Report SEC(2008) 2699, 5.11.2008, 12. No 9968/04, 9 November 2004 and 19 April 2005 (Nicosia District Court). 983 Orams v Apostolides (QB) [2007] 1 WLR 241 (‘Orams’) (England and Wales). 984 Para 30, Orams. 985 Apostolides v Orams, Appeal A2/2006/2114, CA (England and Wales) hearing 18–19 June 2007. 986 Apostolides v Orams, No 121/2005, 21 December 2006 (Supreme Court of Cyprus). 982

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show that they acted in good faith when they purchased the property in the Areas. Unlike the English judgment, this case does not appear to be based directly on the interpretation of Community law but rather on the respect of fundamental rights deriving from the invasion of the island. But the fact that two sets of national courts in the EU, both competent, have reached diﬀerent conclusions, can only indicate the importance of seeking clariﬁcation from the European Court of Justice on the application of Community law, which probably oﬀers in this instance the most direct and immediate way to obtain eﬀective remedy at the transnational level. (c) Transnational versus national judicial systems Through his own interpretation of supranational instruments of Community law, Justice Jack recognised that the purpose of Protocol 10 was probably the protection of the RoC from liability under Community law for matters occurring in the Areas. But he also interpreted the intention of the parties as providing ‘in practical eﬀect’ that the Areas should not be subject to Community law ‘for any purpose’.987 He also casted doubts as to whether the question before the court “was in the minds of any of those who were involved with the content of the Treaty and its Protocols at that time”.988 The issue at stake seemed to him to be rather “an international problem ill-suited to be resolved by private litigation”.989 He then referred to the case law of the ECtHR which shows that “compensation can be obtained at a higher level of litigation, with the State of Turkey as a defendant”.990 If Justice Jack may appear to disregard the possibility of eﬀective remedy at the national level (provided by the ‘authorities’ in the Areas in particular),991 it is primarily because in his view, this goes beyond his competence and does not seem to reveal the conclusions of a process of legal analysis. As a result, Justice Jack potentially dismissed the whole legal action

987

Para 29, Orams. Para 29, ibid. 989 Para 30, ibid. 990 Ibid. 991 Hoﬀmeister had formulated the hypothesis that the courts in the Areas could be relied on “for the purpose of exhaustion of local remedies in a human rights context on a case-to-case basis” in line with the ECHR’s local-remedies principle including for property issue and in light of the ECtHR’s judgment in Xenides-Arestis, in Hoﬀmeister, 212. The Court has not however judged in this case whether the remedy oﬀered by Turkey through the property commission in the northern part of Cyprus was an eﬀective remedy in accordance with the ECHR. 988

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before the UK courts for lack of competence to the beneﬁt of the jurisdiction of the ECtHR, perhaps indicating a misjudgement of the mandatory requirement in transnational litigation that there be exhaustion of local eﬀective remedies under Article 35(1) of the ECHR before moving on at the intergovernmental level. In this case of enforcement of individual rights between private parties, local remedies were available in the form of pecuniary compensation, thereby leaving to the national judge the task of determining the eﬀectiveness of such remedies. In this context, it was reasonable to expect the Court of Appeal of England to initiate a preliminary reference procedure seeking interpretation of the Brussels Regulation in the light of Protocol 10,992 in particular as its scope had been deﬁned very openly by Justice Jack (no eﬀect in relation to any matters arising in the Areas and for any purpose). The Court of Appeal referred ﬁve questions to the ECJ in its June 2007 Order.993 The ﬁrst question related to the extent of the suspension of the acquis as per Article 1 Protocol 10 in view of the Brussels Regulation, which is part of the acquis. The second concerned the mandatory or discretionary nature of the refusal of the recognition or enforcement by a Member State in accordance with Article 35(1) of the Brussels Regulation of a judgment given by the courts of another Member State concerning land located in the non-government controlled area of this Member State, in light in particular of the jurisdictional rules contained in Article 22 of the Brussels Regulation. The third question looked at the recognition or enforcement of these judgments in light of the exception of public order set out in Article 34(1) of the Brussels Regulation, on the grounds that ‘as a practical matter’ the judgments could not be enforced where the land is situated, although they remained enforceable in the government controlled area of the Member State.994 The two remaining questions related to the interpretation of Art 34(2) of the Brussels Regulation and to the protection of fundamental rights more speciﬁcally (serving of documents, rights of defence).

992 Private conversation with Sir Francis Jacobs, former AG at the ECJ (Limassol, 4.11.2006). 993 Order No 2153/2007 in the CA (England and Wales), 19 June 2007. 994 See Case C-420/07, Reference for a preliminary ruling from Court of Appeal (Civil Division) (England and Wales) made on 13 September 2007, Meletis Apostolides v David Charles Orams, Linda Elizabeth Orams [2007] OJ C 297/20, 8.12.2007.

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There was no reason why the Court of Justice would not accept jurisdiction in accordance with Article 220 EC.995 The Brussels Regulation is an instrument of secondary law and the Court was merely asked to give its interpretation on an instrument of primary legislation aﬀecting it, Protocol 10.996 The hearing in the Apostolides case took place before the ECJ in September 2008.997 In addition to the arguments put forward by the parties, the Greek and Polish governments as well as the Commission submitted written observations to the Court.998 The Commission in particular observed that judgments concerning land situated in the non-government controlled area of a Member State should be denied recognition and enforcement in ‘exceptional circumstances’ if such a recognition would be manifestly contrary to the international public order, thereby placing the Brussels Regulation into the wider context of international public law (the case is deemed to fall outside the scope of the Brussels Regulation on civil and commercial matters). (d) Eﬀective litigation: interactions between intergovernmental, supranational and national systems The Apostolides case involves several important competing legal interests originating at the supranational, intergovernmental and/or national level interacting with each other, which need to be reconciled in the supranational framework of the EU constitutional legal order. In this respect, the ‘balancing exercise’ conducted by Advocate General Kokott in her Opinion delivered in the case and largely followed by the Court in its judgment is very relevant to this book to the extent that it considers the delimitations of a European public order.999 It is clear from the outset that the Brussels Regulation promotes the exercise of the fundamental freedoms through the clear delimitation of the jurisdictions of the courts in the Community and the recognition

995 Art 220 EC “mandates the Court to work out a system of legal principles in accordance with which the legality of Community and Member State action must be determined”; in Tridimas, 20. 996 The Brussels Regulation provides that its provisions will not aﬀect other rules on the enforcement of judicial decisions contained in speciﬁc Community instruments. Protocol 10 does not contain such express rules, as opposed to Protocol 3, but provides for the suspension of the acquis which in turn aﬀects the Brussels Regulation. 997 See Rapport d’audience in Case 420/07, obtained from the Press and Information Oﬃce of the European Courts, September 2008. 998 Ibid, I-15. 999 Case C-420/07, Opinion of AG Kokott delivered on 18 December 2008 (‘AG Kokott’s Opinion’).

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and enforcement of judgments in the name of the proper functioning of the Internal Market.1000 As such, any exception to this should be interpreted strictly.1001 Protocol 10 restricts the territorial scope1002 of the Brussels Regulation to the extent that the recognition and enforcement of a judgment of a court of a Member State in the territory beyond the eﬀective control of the Republic of Cyprus cannot at present be based on the Regulation; neither can a judgment from a court situated in this territory be recognised and enforced in another Member State on the basis of the Regulation.1003 But the Apostolides case is not concerned with any of the above situations; rather the Court of Appeal of England is required to rule on the application for the enforcement in the UK of two judgments of a court situated in the government controlled area of the RoC (regarding property located in the non-government controlled area).1004 Thus, in this case, the scope of the application of the Brussels Regulation is restricted neither by the object nor by the eﬀect of Protocol 10. The object of Protocol 10 is clearly the suspension of the acquis in the territory not under the eﬀective control of the Republic and not in relation to that area (Article 1(1) ).1005 A brief consideration of the eﬀects of the Protocol deriving from the application of Articles 2 and 3 can only conﬁrm that “it was not the intention to exclude the application of all provisions of Community law with a bearing on areas 1000 Art 65 EC; see pt 37, AG Kokott’s Opinion. See in this respect the Commission Report and Green paper on the review and application of the Brussels Regulation (MEMO/09/169, 21.4.2009). 1001 This is conﬁrmed by the ECJ, see para 35, Apostolides. 1002 AG Kokott distinguishes between the territorial scope of the Brussels Regulation and its ‘reference area’, which is broader and may extend to a ‘non-member-country element’ (the area to which judgments of a court of a Member State to be recognised and enforced under the Regulation relate). In support of this instance of Europeanisation, she refers to case law of the Court (Case C-281/02, Owusu [2005] ECR I-1383, para 29; and Opinion 1/03, Lugano Convention [2006] ECR I-1145, para 143) where disparities between national legislations on international jurisdiction and on the recognition and enforcement of judgments given by foreign courts had aﬀected detrimentally the Internal Market, even when they concerned judgments relating only to a non-Member State; see pts 25–9, AG Kokott’s Opinion. 1003 Pt 31, ibid. 1004 See pt 32, ibid; see also para 38, Apostolides: “[t]he fact that those judgments concern land situated in the northern area does not preclude the interpretation [of Art 1(1) Protocol 10] since, ﬁrst, it does not nullify the obligation to apply [the Brussels Regulation] in the Government-controlled area and, second, it does not mean that that regulation must thereby be applied in the northern area (see, by analogy, Case C-281/02, Owusu [2005] ECR I-1383, para 31)”. 1005 See pt 34, AG Kokott’s Opinion; see also para 37, Apostolides.

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under the control of the Turkish Cypriot community”.1006 In particular, it was previously outlined in this book that Turkish Cypriots derive individual rights under EU law in the name inter alia of the protection of EU fundamental rights.1007 The fundamental freedoms are also promoted in relation to the non-government controlled territory of the Republic. The freedom of movement of goods and persons crossing the Green Line is regulated by a Council Regulation1008 and Community procedures are applicable to Turkish Cypriot goods crossing the Green Line and entering the Internal Market.1009 It would therefore appear unjustiﬁed (beyond what is ‘absolutely necessary’)1010 to require the suspension of the application of the Brussels Regulation in relation to the issues at stake in the Apostolides case, the liability of the RoC under EU law not being at risk in this instance of recognition and enforcement of judgments in civil and commercial matters.1011 The Brussels Regulation also promotes the protection of fundamental rights1012 by providing inter alia for more favourable rules in relation to certain types of contracts1013 and by preserving the rights of the defence,1014 in the name of which the primary objective of the recognition and the enforcement of foreign judgments promoted by the Regulation 1006

See pt 40, AG Kokott’s Opinion; point also made by the Commission. See n 917 and 927 above. 1008 Council Regulation (EC) No 866/2004 of 29 April 2004 on a regime under Art 2 of Protocol 10 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. 1009 Chap 7 of this book will examine to what extent the fundamental freedoms are promoted in the Areas. 1010 See pt 38, AG Kokott’s Opinion. 1011 The recognition and enforcement of the Cypriot judgments in the UK “does not give rise to any unrealisable obligations for the [RoC] in relation to [n]orthern Cyprus which bring it into conﬂict with Community law. On the contrary, only the courts in the [UK] are required to act”, see pt 42, AG Kokott’s Opinion. In its judgment, the ECJ conﬁrmed that the case falls within the material scope of the Brussels Regulation as the concept of ‘civil and commercial matters’ is an independent concept which must be interpreted “by referring, ﬁrst, to the objectives and scheme of the regulation and, second, to the general principles which stem from the corpus of the national legal systems”. The Court refers to its case law (see e.g. Case C-167/00 Henkel [2002] ECR I-8111, para 26) which conﬁrms the exclusion from the scope of the regulation of actions between a public authority exercising its public powers and a person governed by private law, from which the present case diﬀers (only private parties are involved); see para 43, Apostolides. 1012 See e.g. Recital 11 Brussels Regulation (principle of legal certainty); see Case C-462/06, Glaxosmithkline, 22 May 2008 (nyr) para 33. 1013 See Recital 13, Brussels Regulation (positive discrimination in favour of the weaker party in insurance, consumer and employment contracts). 1014 See Recital 18, ibid (eﬀective access to justice). 1007

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can be restricted in accordance with Article 34(2) to (4) and Article 35(1). On the application of Article 35(1) in conjunction with Article 22(1) of the Brussels Regulation to the present case,1015 AG Kokott concluded that there was no conﬂict of jurisdictional rules arising as there was no doubt as to the exclusive jurisdiction of the courts of the RoC.1016 The ECJ in its judgment found it necessary to remind the parties that the mandatory and exhaustive list of the grounds of exclusive international jurisdiction of the Member States contained in Article 22 of the Regulation does not allocate jurisdiction internally but only internationally.1017 Moreover, it clariﬁed that the principle prohibiting the review of the jurisdiction of the court of the Member State of origin laid down in Article 35(3) of the Brussels Regulation1018 prevents in particular “a review of the domestic jurisdiction of the court of the Member State of origin concerned being conducted in the case of the main proceedings”.1019 As a result, “[t]he fact that the land is situated in the northern area may possibly have an eﬀect on the domestic jurisdiction of the Cypriot courts, but cannot have any eﬀect for the purpose of that regulation”.1020 Article 34(1) of the Brussels Regulation provides for the possibility of non-recognition of a foreign judgment “if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought”, thereby conﬁrming a priori the national origin of the public order exception in the EU constitutional legal order. Although each Member State remains free ‘in principle’ to determine the content of its own public policy, the ECJ previously held that there are ‘limits’ to this freedom in the supranational context of the EU, precisely because such public policies infringe the fundamental freedoms in this context.1021 Recourse to the public policy clause should therefore be limited to

1015 Art 35 Brussels Regulation provides for speciﬁc grounds for the non-recognition of a judgment in the event that it conﬂicts inter alia with the provisions on exclusive jurisdiction contained in Art 22. 1016 See AG Kokott’s Opinion, pts 81 & 85. 1017 Paras 48 & 50, Apostolides. 1018 The Court conﬁrmed in para 49 of the judgment in Apostolides that a review of the jurisdiction of the court of the Member State of origin may only be permitted in relation to Art 35(1), meaning in ‘exceptional circumstances’ (as per AG Kokott’s Opinion, pt 87). 1019 Para 49, Apostolides. 1020 Para 51, ibid. 1021 Case C-7/98 Krombach v Bamberski [2000] ECR I-1935, paras 19–21 (‘Krombach’), in the context of Art 27 of the Brussels Convention (predecessor to Art 34 Brussels Regulation).

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‘exceptional circumstances’.1022 As a result, the alleged infringement of the national public order would have to constitute a ‘manifest breach’ of a rule of law regarded as ‘essential’ in the legal order of the State in which enforcement of the foreign judgment is sought (or of a right recognised as being fundamental within that legal order).1023 The Court made clear in Krombach that while it cannot deﬁne the content of national public policy, it is nonetheless required to ‘review the limits’ within which the courts of a contracting State (in the context of the Brussels Convention)1024 may have recourse to that concept for the purpose of refusing recognition of a judgment emanating from another contracting State,1025 thereby contributing to the delimitation of a European public order within the EU legal order. In this respect, the Court clariﬁed in Apostolides that the court of the State in which enforcement is sought cannot “review the accuracy of the ﬁndings of law or fact made by the court of the State of origin”, neither can it refuse recognition or enforcement on the mere ground of ‘discrepancy’ between the legal rules involved in both jurisdictions1026 or of alleged ‘improper’ application of national or Community law by the court in the State of origin.1027 The ECJ tried to balance the public order exception vis-à-vis public and private interests at stake in the EU constitutional legal order given that this exception restricts

1022

Para 21, Krombach. See para 37, Krombach; see also pt 93, AG Kokott’s Opinion. 1024 Brussels Convention on the jurisdiction and the enforcement of judgments in civil and commercial matters, as amended [1998] OJ C 27/1, 26.1.1998, consolidated version, entered into between the Member States on the basis of Art 293 EC and subsequently replaced by the Brussels Regulation. Although continuity between the two legal instruments is ensured, the Brussels Convention remains in force in relations between Denmark and the other Member States, as Denmark did not participate to the adoption of this Regulation. Moreover, the Brussels Convention continues to apply to the territories of the Member States falling under the territorial scope of the Brussels Convention and which are excluded from the Brussels Regulation pursuant to Art 299 EC. For a legal appraisal of the transition from the Brussels Convention to the Brussels Regulation, see Athanassiou P, ‘Orams v Apostolides: a case study on the application in English law of the Brussels I Regulation in the light of the Act of Accession 2003’ (2007) 14(2) Maastricht Journal of European and Comparative Law 119. 1025 See pt 94, AG Kokott’s Opinion. 1026 Para 58, Apostolides. 1027 Para 60, ibid. The Court considered that the system of legal remedies in each Member State together with the preliminary ruling procedure under Art 234 EC “aﬀords a suﬃcient guarantee to individuals”, unless that error of law constitutes a manifest breach of an essential rule of law in the legal order of the Member State where enforcement is sought; see Case C-38/98 Renault [2000] ECR I-2973, paras 33–4. 1023

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fundamental rights at the supranational level.1028 Thus, the requirement of ‘manifest breach’ as expressed in Article 34(1) of the Brussels Regulation and in the ECJ’s case law1029 is only applicable to the violation of a fundamental right considered as such in the domestic system and likely to trigger the public policy exception there, within the limits of Krombach.1030 In the Apostolides case, the Court considered the extent to which the ‘factual non-enforceability’ of a judgment in the State where it was given can constitute a manifest contravention of public policy in the Member State in which recognition is sought. It ruled that there was no such contravention in the UK legal order which would justify the triggering of the public order exception under Article 34(1) of the Brussels Regulation.1031

1028 The Commission takes the view that there are no private interests at stake as there has been an exclusion of civil claims by operation of international law through the compensation framework approved, in principle, by the ECtHR in Xenides-Arestis and that the Apostolides case is therefore comparable to the Lechouritou case (Case C-292/05, Lechouritou and Others [2007] ECR I-1519, para 29) involving a legal action brought by a private individual against the FRG for damages suﬀered as a result of war crimes committed by the German armed forces; see AG Kokott’s Opinion, pts 59 & 66. The ECJ rejected this argument on the basis that the main proceedings in Apostolides are between individuals and have as their object the obtention of “damages for unlawfully taking possession of land, the delivery up of that land, its restoration to its original state and the cessation of any other unlawful intervention”; para 45, Apostolides. 1029 In the context of the Brussels Regulation, judgments ‘manifestly’ contrary to national public policy must be denied recognition under Article 34(1), which seems to indicate the continuation between the Brussels Convention as interpreted by the Court and the Brussels Regulation on this aspect. 1030 See paras 25–7 and 38–40, Krombach; see also para 59, Apostolides: “where recognition and enforcement of the judgment given in another Member State would be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought inasmuch as it would infringe a fundamental principle”. 1031 See para 62, Apostolides: “in the absence of a fundamental principle in the legal order of the [UK] which the recognition or enforcement of the judgments concerned would be liable to infringe, no refusal to recognise them, under [Art] 34(1) of Regulation No 44/2001, would be justiﬁed on the ground that a judgment given by the courts of a Member State, concerning land situated in an area of that State over which its Government does not exercise eﬀective control, cannot, as a practical matter, be enforced where the land is situated”. The Court continued on its own motion by examining the facts of the case in the light of Art 38(1) Brussels Regulation which provides that a judgment given in a Member State and enforceable in that State is to be enforced in another Member State provided it has originally been declared enforceable and concluded that “in the case of the main proceedings, it cannot be reasonably argued that the judgments concerned are totally unenforceable in the Member State of origin”. In particular, “[t]he fact that claimants might encounter diﬃculties in having judgment enforced in the northern area cannot deprive them of their enforceability and, therefore does not prevent the courts of the Member State in which enforcement is sought from declaring such judgments enforceable”; see paras 63–71, Apostolides.

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In Krombach, the Court made clear that national public policy ought to include also international human rights as deﬁned by the ECHR and by the case law of the Strasbourg Court, including with respect to Article 6 of the ECHR which promotes the right to a fair trial (in the contracting State where the judgment was given).1032 In the Apostolides case, other legal interests were proposed by the parties or by the Commission for inclusion in the EU constitutional legal order, allegedly in the name of the protection of fundamental rights in the EU. These legal interests were not however always considered by the Court, as they were sometimes beyond the scope of the preliminary questions referred to the Court (the Advocate General had however proposed her interpretation to the Court). With respect to the public enforcement of fundamental rights at the international level,1033 reference was made by Mr Apostolides to the Loizidou and Xenides-Arestis jurisprudence of the ECtHR, which requires, in his opinion, the application of the Brussels Regulation in the present case. There appears to be however no requirement of direct compliance with the Strasbourg Court’s case law arising in this case, as none of the judgments cited relates directly to the situation of Mr Apostolides in the context of the private enforcement of his rights through a civil claim for restitution of land and (further claims) for loss of enjoyment of his property against another private party.1034 Advocate 1032 For a legal appraisal of the jurisprudence of the Strasbourg Court with respect to Art 6 ECHR and its (indirect) impact on the case law of the Luxembourg Court, see Cuniberti G, ‘The recognition of foreign judgments lacking reasons in Europe: access to justice, foreign court avoidance, and eﬃciency’ (2008) 57(1) ICLQ 25; see also with respect to criminal sanctions amending Council Framework Decision 2009/299/JHA of 26 February 2009 enhancing the procedural rights of persons and fostering the application of the principle of mutual recognition to decisions rendered in the absence of the person concerned at the trial [2009] OJ L 81/24, 27.3.2009. 1033 AG Kokott suggested that it is rather doubtful whether any ‘obligation’ to refrain from recognising judgments of the Cypriot courts situated in the government controlled area pertaining to property located in the non-government controlled area of the RoC can be derived from ‘general appeals’ of the international community to refrain from action which might ‘exacerbate the conﬂict’, as embodied in particular in UNSC Resolutions on Cyprus, given their predominantly political nature. Judicial enforcement therefore remains the main avenue, as the application of the Regulation cannot depend on ‘complex political assessments’ so as to determine the eﬀect of the suspension on the political process for resolving the Cyprus problem (that would be contrary to the principle of legal certainty which, as already outlined, is one of the objectives of the Brussels Regulation); see pts 45–8, AG Kokott’s Opinion. 1034 The resolution of individual property disputes following armed conﬂicts may be assigned to specialised institutions like the ECtHR granting alternative or additional legal remedy available under the ECHR but these actions, falling under public law as

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General Kokott notes that ‘at most’, the right to a fair hearing and to eﬀective legal protection as embodied in Article 6(1) ECHR could be considered so as to determine whether the judgment of the District Court of Nicosia (which concerns directly Mr Apostolides) should be enforced, but reminds that the case law of the ECtHR on this matter concerns only enforcement in the contracting State where the judgement was given.1035 In any case, there would appear to be no conﬂict of norms arising here, as the Brussels Regulation, applicable in this case, arguably guarantees an ‘equivalent’ level of protection of fundamental rights. It would therefore be beyond the point to consider whether Article 6(1) ECHR also makes the recognition and enforcement of foreign judgments ‘obligatory’ outside of the State of origin.1036 Thus, it was clear that there was nothing for the Court to consider in this respect. With respect to the public order exception under Article 34(1) of the Brussels Regulation, the Commission, in an attempt to raise a diﬀerent ground of public policy exception, contended that judgments concerning land situated in the non-government controlled area of a Member State may be denied recognition and enforcement in ‘exceptional circumstances’ if such a recognition would be contrary to the international public order. Although this was not the subject-matter of the reference for a preliminary ruling and despite the absence of information as to what constitutes public policy in the UK,1037 Advocate General Kokott proposed her analysis to the Court.1038 It was previously concluded that a court of a Member State can refuse recognition of a foreign judgment reached ‘in manifest breach of fundamental rights’ deriving from the national public order of a Member State, including fundamental rights as enunciated in the ECHR and protected by the ECtHR. It can also be derived from the ECJ case law that courts in Member States can – or must – refuse enforcement of a foreign judgment manifestly infringing

they consist in claims for restitution or compensation against a government authority, do not ‘alter in nature’ or even replace claims governed by private law against other private persons before a civil court (there has been no such exclusion of civil claims by the RoC, nor any international agreement or case law of the ECtHR to that intent, not even in the Xenides-Arestis III judgment; it is in any case a point of law which cannot be reviewed by the Court of Appeal under the Brussels Regulation); see pts 51, 60–1, 63, 65, 68–9, AG Kokott’s Opinion. 1035 Pt 52, AG Kokott’s Opinion. 1036 Ibid. 1037 It can however be easily presumed (and veriﬁed) that the UK is calling for caution when dealing with Greek Cypriot properties in the Areas. 1038 Pts 105–111, AG Kokott’s Opinion.

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Community fundamental rights since they are bound by fundamental rights protected as such in the EU when they are dealing with a situation falling under the scope of Community law.1039 The Commission did not however contend that the enforcement of the judgment in this case constituted a violation of fundamental rights but merely that it could infringe the ‘requirements of international policy’ regarding the Cyprus problem which acquired ‘to a certain extent’ legally binding status in the international legal order (through UNSC Resolutions). The question arising therefore was whether this ground constituted a suﬃciently manifest violation of the public order in the country where enforcement of the judgment was sought, to justify its non-recognition (which is subject in any case to the ECJ’s review within the limits set out in Krombach). Advocate General Kokott had no diﬃculty to strongly reject this argument.1040 The ‘requirements of international policy’ embodied inter alia in the UNSC Resolutions are too general to permit interference with a speciﬁc obligation arising under EU law1041 and do not in any case give rise to any binding rule of law recognised as such in the EU constitutional legal order.1042 The Court did not comment on this as it did not have to. As far as the rights of the defence are concerned (in the last two preliminary questions), the Apostolides case considers to what extent irregularities in the service of a document instituting the proceedings can trigger Article 34(2) of the Brussels Regulation, whereas the judgment has already been reviewed in national proceedings (brought by the defendant to challenge it) and upheld on two occasions following a full

1039

See e.g. the Schmidberger case. “The preservation of peace and the restoration of the territorial integrity of Cyprus are certainly noble causes. However, whether those goals constitute a ‘rule of law regarded as essential in the legal order of the State in which enforcement is sought or of a right recognised as being fundamental within that legal order’ within the meaning of the Krombach case law is extremely doubtful”; see pt 110, AG Kokott’s Opinion. 1041 Pt 111, ibid. 1042 No Community act has been taken in order to implement any UNSC Resolution on Cyprus. See also Case T-54/08 R, Cyprus v Commission, developed in Chap 7, where the President of the CFI dismissed several applications for interim relief due to the absence of urgency and of manifest and serious breach of international law (mandatory rules and UNSC Resolutions) and/or of Community law, even if he accepted that the conduct of the Commission was unlawful and that it amounted to a violation of the sovereignty of the RoC (moral prejudice), which could be adequately remedied through the annulment of the instruments concerned given the various socio-legal interests at stake (economic development of the Turkish Cypriot community); see paras 66–80, Order of the President of the CFI, 8 April 2008. 1040

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and fair court hearing.1043 The Orams argued that a number of ‘circumstances’ in connection with the service of the statement of claim made it more diﬃcult for them to arrange for their defence ‘in due time’ and relied on case law relating to Article 27(2) of the Brussels Convention.1044 The Court however recalled the diﬀerence of scope between Article 27(2) of the Brussels Convention and Article 34(2) of the Brussels Regulation, where more emphasis is given in the latter to the attainment of the fundamental freedoms under Article 65 EC, without undermining the right to a fair hearing protected as a fundamental right by the Court.1045 Taking into consideration this ‘re-balancing’ of interests in the EU constitutional legal order, the Court reiterated its previous case law that the emphasis was put on the eﬀective protection of the rights of the defence and that the due service of the document instituting proceedings was not necessarily a decisive factor.1046 Thus, if the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so, Article 34(2) now presumes that the rights of the defence have been respected notwithstanding the irregularities in service.1047 In the present case, the Orams had the opportunity to commence proceedings to challenge the default judgment and it is common knowledge that they did so. As a result, recognition and enforcement cannot be refused under Article 34(2) of the Brussels Regulation, as none of the circumstances alleged indicates a violation of the right to a fair hearing under the Regulation.1048 Conclusion The assessment of the relationship between the Brussels Regulation and Protocol 10 appeared as a test case to determine the extent of the

1043

Pts 113, 115 & 121, AG Kokott’s Opinion. As referred in fn 65 of AG Kokott’s Opinion; see also pt 115 of her Opinion. Under Art 27(2) Brussels Convention, a judgment shall not be recognised “where it was given in default of appearance, if the defendant was not duly served with the document which instituted the proceedings … in suﬃcient time to enable him to arrange for his defence”. 1045 See para 75, Apostolides. Point also developed in AG Kokott’s Opinion, pts 117–8. 1046 See Case C-283/05, ASML [2006] ECR I-12041, para 20. 1047 See paras 77–78, Apostolides. 1048 The organisation of the appeal proceedings in Cyprus, including before the Supreme Court, and the necessity under Cypriot law to put forward an arguable defence in order to obtain the setting aside of a default judgment cannot be deemed under the Brussels Regulation to undermine the Orams’s rights as defendants; see pts 121–22, AG Kokott’s Opinion. 1044

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suspension of the acquis with respect to the Areas, as there was uncertainty as to the territorial and the substantive scope of Protocol 10. The answer from the Court is clear: the scope of Protocol 10 is limited to a ‘literal’ interpretation of its Article 1(1), which provides for the suspension of the application of the acquis in the Areas, and does not extend a priori to the application of the acquis beyond the Areas (at least as far as the application of the Brussels Regulation is concerned). The remainder of this book will be concerned with the implications of the suspension of the acquis beyond the Areas, if any, and with the scope of the suspension of the acquis in the Areas, which the Court does not examine in this case. This literal interpretation of the main provision of Protocol 10 by the Court should put an end to any suspicions of a political nature surrounding the legal proceedings in this case.1049 The Court did not take the opportunity given to it, arguably in the name of the protection of fundamental rights in the EU, to consider certain fundamental rights allegedly protected as such in the international legal order for insertion into the EU constitutional legal order. Instead, it chose to limit itself to considering the clear case of (non-)application of Community law arising in Apostolides, arguably in an attempt of judicial restraint. On a possible conﬂict of jurisdiction arising between the Luxembourg and the Strasbourg Courts,1050 it would appear that there is no such conﬂict arising given that the two actions are located at diﬀerent levels (State/individual). It remains that the Apostolides case probably opens up for individuals the most direct and immediate way to obtain alternative and/or additional remedies at the transnational level against other individuals for the breach of their right to property in the Areas, provided however one fulﬁls all the prerequisites for the application of the Brussels Regulation. The heart of this remedy therefore lies with the national courts and is dependent on the good cooperation between national courts in the various Member States (on the basis of interpretations of EC law given by the ECJ). The Court of Appeal of England is now expected to rule on the Apostolides case before the end of the calendar year. It is likely that the Orams will try to argue under English law that they bought the property in good faith. This argument was already rejected in Cyprus on the basis of its own national law. This last remark raises the question of the extent to which the Court of Appeal will 1049 1050

See e.g. Cyprus Weekly, 1–7.5.09, 4–5. As argued by the Commission in Apostolides.

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enforce the two Cypriot judgments against the Orams and grant remedies to Mr Apostolides. The Court of Appeal should render its decision before the end of 2009. B. Extent of the suspension of the acquis It is important to delimit the acquis in the context of Protocol 10 so as to be in a position to determine the extent of its suspension. 1. Notions of ‘embedded acquis’, Europeanisation and socialisation The 2003 Act of Accession deﬁnes the scope of the acquis like any other Treaty of Accession1051 and also sets a time constrain for the applicability of the acts of the institutions in the new Member States.1052 Due to the peculiar situation of Cyprus, it is argued that the scope of the acquis referred to in Protocol 10 goes beyond this mere notion of applicability within a certain time limit. It should be understood as referring to the embedded acquis elaborated in Chapter 2, whereby norms are created through a process of institutionalisation of European governance embodied in Protocol 10. As a result, it is argued that it is the process of Europeanisation as a whole that is potentially put on hold in the Areas. The advantage of referring to the embedded acquis immediately transpires. It may be impossible to implement the formal acquis as deﬁned in the Treaty of Accession for so long as there is a formal suspension, even more so within a deﬁnite time constrain. But it may be possible to proceed with the socialisation of the Turkish Cypriot community by reference to formal and informal norms which may have been ‘routinised’ but remain largely unprocessed, in order to pave the way for its Europeanisation and thereby facilitate the future withdrawal of the suspension of the acquis in the Areas through measures ‘short of recognition’.1053 It has been suggested that the socialisation undertaken by the Annan Plan had a negative impact on the population due to the methods used,1054 which could explain its failure.1055 All initiatives taken at the

1051

Art 2–6 2003 Act of Accession; see Hillion (2004a) 593. Art 54 2003 Act of Accession. 1053 Expression borrowed from Giegerich in Giegerich, 261. 1054 Agapiou-Josephides in Agapiou & Rossetto, 84. 1055 For an analysis of the process of social and political transformation in the northern part of Cyprus, see e.g. Lacher H & Kaymak E, ‘Transforming identities: beyond the politics of non-settlement in [n]orth Cyprus’ (2005) 10(2) Mediterranean Politics 147. 1052

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EU supranational level point towards this very aim of the socialisation of the Turkish Cypriot community, as a preliminary step to its successful Europeanisation. But this will not happen without the involvement of Cyprus as a whole; hence the numerous European and/or international programmes aiming at bringing the two communities closer1056 or the initiatives of bi-communal dialogue or rapprochement1057 taking place among various Greek Cypriot and Turkish Cypriot bodies and associations,1058 trade unions1059 or political parties. In line with the trend noted prior to accession of ‘selling Europe’ to the ‘nongovernmental’ stakeholders in the Areas, the bi-communal initiatives continued ﬂourishing following accession, leading to a conﬁdence building process in the society,1060 targeting economically but also noneconomically active citizens. 2. Socialisation and conﬁdence building process It is argued that the policy of encouragements of the Cypriot government vis-à-vis the Turkish Cypriots should be seen within the wider context of the socialisation of the Turkish Cypriot community. The conﬁdence building measures in favour of the Turkish Cypriots allow them to acquaint themselves with their rights as citizens of the Republic and as EU citizens by exercising their mobility within the RoC and beyond.1061 This was made possible following the unilateral decision taken by the ‘authorities’ in the north to open up check points in April 2003 thereby working towards free movement through the Green Line.1062

1056 Most of these activities are carried out on behalf of the Commission by the United Nations Development Programme (UNDP) through a dedicated oﬃce on the ground, the Partnership for the Future Team accessed on 20.05.09. 1057 Wolleh O, ‘Gesellschaftliches Rapprochement in Zypern’ (2002) 42(2) Südosteuropa 82. 1058 See Bertrand G, ‘L’adhésion de Chypre à l’Union Européenne : un déblocage du conﬂit par le bas?’ [2001] Politique Européenne no 3, 118, 126–131, for a summary of the past individual non-political initiatives of dialogue in and outside Cyprus. 1059 Through the All Cyprus Trade Union Forum, ibid, 133. 1060 The divided wall in Nicosia along with the Ledra checkpoint was demolished by the Cypriot military on the night of 8–9 March 2007. 1061 Uebe, 384–5; see also Klebes-Pélissier, 457. 1062 For the latest packages of conﬁdence building measures agreed between the two sides following the renewal of the talks in 2008, see accessed on 20.05.09.

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As previously outlined, the suspension of the acquis is territorial by deﬁnition and is therefore limited to the territory as deﬁned in Protocol 10, i.e. the Areas and the Green Line, excluding the SBAs. Cypriots can therefore enjoy in the government controlled area of the RoC all their rights as Cypriot citizens (upon the satisfaction of the material requirements of the Cypriot citizenship law),1063 and hence all their rights deriving from citizenship of the Union.1064 It has been argued that the

1063 Under Arts 14 and 198 Cyprus Constitution (annex D of ToE) and the Cyprus Citizenship law of 1967, as amended in 1972 and 1983, which provide for the acquisition, renunciation and deprivation of citizenship in Cyprus; see Hoﬀmeister, 208; for a review of the Cyprus Constitution and of the Citizenship laws of the RoC, see Skoutaris N, ‘Diﬀerentiation in EU Citizenship law’ in Inglis & Ott (2005) 167–9; see also Trimikliniotis N, ‘Nationality and citizenship in Cyprus since 1945: communal citizenship, gendered nationality and the adventures of a post-colonial subject in a divided country’ in Bauböck R et al (eds), Citizenship policies in the new Europe (Amsterdam University Press, Amsterdam, 2007). 1064 Despite the fact that it is possible under EU law to extend the beneﬁts of EU citizenship to non-EU nationals on the territory of a Member State, the application of the principle of EU citizenship could not prima facie extend to the Turkish settlers residing in the Areas since their presence is deemed illegal under international law and under Cyprus law (the Turkish policy of ‘colonisation’ of the Areas following the invasion in 1974 is contrary to the 1960 ToE). Turkey’s accession negotiations to the EU however raises the question of the legal status of the Turkish settlers under EU law, as when and if Turkey joins the EU, Turkish citizens would normally be entitled to claim EU citizenship beneﬁts in Cyprus as they would be holding the nationality of one Member State and residing in another Member State, provided they can prove the connection with Community law through ‘some sort of mobility’ (it would otherwise be deemed to fall under the ‘wholly internal’ situation doctrine where Art 18 EC may be deemed ‘of use’ by the national courts under the Walloon jurisprudence). In the meantime, any mobility by the settlers is the result of a collective action deemed illegal under international and national law, which raises the question of the meaning of ‘illegal immigrants’ in the case of families of Turkish settlers in the Areas (in view in particular of the ECtHR case law on the right to family life under Art 8 ECHR) and of Turkish settlers married to Cypriot citizens of T/C origins. In this respect, the ECJ has produced an important body of case law on non-economically active third country nationals and spouses of an EU national who can show ‘some sort of mobility’ like in the Carpenter case (Case C-60/00, Carpenter v Home Secretary [2002] ECR I-6279, protection of fundamental rights of a non-EU national spouse as there was mobility by the EU spouse thereby falling under the scope of EC law), in the Akrich case (Case C-109/01, Home Secretary v Akrich [2003] ECR I-9607, protection of fundamental rights of a non-EU national spouse as there was mobility between two Member States, despite the fact that the spouse was not a lawful resident on the territory of one of the two Member States and thus not covered by EC law provisions on the freedom of movement) and more recently in the Metock case (Case C-127/08, Metock et al v Minister for Justice, Equality and Law Reform, 25 July 2008 (nyr), respect for family life of an EU citizen living in another Member State with a nonEU national spouse who had no prior lawful residence anywhere in the Union but whose protection nevertheless falls under the EC competence since it aﬀects EU citizenship rights). Tryfonidou argues that the recent ECJ judgments in Eind (Case C-291/05, Minister voor Vreemdelingenzaken en Integratie v R N G Eind [2007] ECR I-10719)

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Turkish Cypriots possess an EU citizenship ‘in hibernation’ which can be activated upon the presentation of the proper documentation to the authorities of the RoC.1065 Although the concept of EU citizenship was institutionalised in the Maastricht Treaty, it should be noted that the citizens of the DRG were in a similar situation before the German reuniﬁcation, since they were considered as falling under the ratione personae of the EEC Treaty.1066 It is however debatable whether Turkish Cypriots may be deemed ‘de facto EU citizens’,1067 as the concept of EU citizenship entails other attributes which are not covered under Protocol 10, nor under the Regulation regulating the crossing of the Green Line, the so-called Green Line Regulation.1068 The socialisation of the Turkish Cypriot community took a new turn following the start of the operations of the DG Enlargement Programme Team in Cyprus under the “Turkish Cypriot community Task Force” and the opening of an EU programme support oﬃce in the Areas. The Task Force in particular manages the Green Line Regulation and produces an annual report which must be adopted by the Commission in a Communication and sent to the Council. The DG Enlargement is also implementing an Institution Building programme through the TAIEX instrument in order to help prepare the Turkish Cypriot community for the future application of Community law.1069 Socialisation can also occur through education. Higher education has been acknowledged as a fundamental right and key indicator

and Metock as well as the Sahin order (Case C-551/07, Sahin v Bundesminister für Inneres, 19 December 2008 (nyr) ) “have shifted the pendulum towards the ‘liberal approach’ side by making it clear that it is not necessary a) that the family members of migrant economic actors have been lawfully resident in another Member State, prior to their move to the host State where they accompany or join the migrant; or b) (according to Metock and Sahin) that they have been family members of the migrant economic actor at the time that that person had exercised his freedom to move”; Tryfonidou A, ‘Family reuniﬁcation rights of (migrant) Union citizens: towards a more liberal approach’ (EUSA paper available at http://www.unc.edu/euce/eusa2009/papers/ tryfonidou_07H.pdf). 1065 Skoutaris in Inglis & Ott (2005) 169. 1066 Ibid. 1067 The Commission advertises on its website that “the suspension does not aﬀect the personal rights of Turkish Cypriots as EU citizens. They are citizens of a Member State, the Republic of Cyprus, even though they may live in the northern part of Cyprus, the areas not under government control”, see http://ec.europa.eu/enlargement/turkish_ cypriot_community/index_en.htm, last accessed on 21.05.09. 1068 Skoutaris in Inglis & Ott (2005) 172; see also Hoﬀmeister, 208–11. 1069 See last accessed on 20.05.09.

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for the Turkish Cypriot economy.1070 The membership of some Turkish Cypriot universities in European or international academic associations (European University Association, International Association of Universities) has prompted some observers to argue that Turkish Cypriot universities are de facto in the European Higher Education Area.1071 In this respect, the Turkish Cypriot ‘authorities’ have proceeded with the unilateral ‘ratiﬁcation’ of the Lisbon Convention on the Recognition of Qualiﬁcations concerning Higher Education in the European Region and hope as a result that Turkish Cypriot universities will be included in the Bologna process.1072 Beyond this intergovernmental initiative1073 conducted “outside the formal decision-making framework of the EU”,1074 a group of MEPs has asked the Commission to ‘ﬁnd ways’ to let Turkish Cypriot universities participate in the SOCRATES and ERASMUS programmes “without requiring explicit recognition from Greek-Cypriot State institutions”.1075 As a ‘replacement participation’ to these programmes,1076 the Commission launched a Community scholarship programme through the Turkish Cypriot community Task Force and as part of the EU external aids programme,1077 under which individual Turkish Cypriot students and teachers are oﬀered the possibility of mobility throughout the EU and beneﬁt from rights directly granted to them on an ad hoc basis since such rights do not derive from the acquis strictly speaking. Moreover, such rights are not necessarily

1070

World Bank Report (Vol I) 49–50. The Report also notes the weak emphasis on research in higher education in the Areas. 1071 Cyprus Policy Center, Position Paper (Famagusta, 2 March 2007) 2. 1072 Letter from the Ministry of Education and Culture of the RoC to the Secretariat and Members of the Bologna Follow Up Group, 15.5.2007 (Doc 4.2.09.2.6.1/6). 1073 The President of the Parliamentary Assembly of the Council of Europe conﬁrmed his support to the participation in the Bologna process of some Turkish Cypriot universities; see Cyprus News Agency last accessed on 23.2.2007. 1074 Letter by Jan Figel member of the European Commission to MEPs, 14.2.2007 (A 194 D (2007) 231). 1075 Letter by MEPs Bozkurt, Wiersma, van der Berge and Swoboda to Commissioner Figel, 11.1.2007. It should also be noted that the Alliance of Liberals and Democrats for Europe of the European Parliament organised a seminar entitled ‘The other side of the coin. Giving Turkish Cypriots a voice’ in Brussels on 16.5.2007. Brus, Akgün et al refer to more initiatives of ‘lobbying’ by individual MEPs and/or their political parties to ensure some form of representation for the Turkish Cypriots in the EP, 42–3. 1076 Letter by Commissioner Figel to MEPs, see n 1074 above. 1077 see call for Interests – Community scholarships programme 2007/2008 EuropeAid/125055/C/ACT/CY accessed on 10.2.2007; see also accessed on 20.05.09. Up to 500 scholarships were granted in 2008–2009.

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linked to the conduct of an economic activity, thereby conﬁrming that the process of socialisation can extend to the citizens traditionally qualiﬁed as ‘non-economically’ active.1078 Key sectors of the Turkish Cypriot economy such as education, human resources, energy or environment are gradually undergoing a process of socialisation, which should pave the way for the withdrawal of the suspension of the acquis as a result of the Europeanisation of the Areas. C. Withdrawal of the suspension of the acquis By virtue of Article 1(2) Protocol 10, the suspension of the acquis can be lifted by a unanimous decision of the Council on the basis of a proposal from the Commission, thereby transferring the initiative from the Member States to the EU supranational power-making. It is not made explicit however whether the suspension can be withdrawn partially in various stages. It would arguably be advantageous to be able to do so, in view of the socialisation of the Turkish Cypriot community currently taking place. 1. Extent of the withdrawal of the suspension As there is no express provision to the contrary in the Protocol, it could be assumed that a maiore ad minus a gradual lifting of the suspension in accordance with the procedure laid down in Article 1(2) Protocol 10 would be possible,1079 leading to the partial and phased application of the acquis as a result. It could be argued that the preamble of the Protocol supports such an assumption, to the extent that a ‘solution’ as opposed to a ‘comprehensive settlement’ could trigger the partial lifting of the suspension.1080 But beyond the concepts of ‘settlement’ and ‘solution’ which may only be a matter of terminology,1081 the real question is whether the withdrawal of the suspension of the acquis is conditional 1078 See in particular the Commission’s initiatives entitled ‘Civil Society Support Team’ and ‘People-to-People contacts’ both accessed on 20.05.09. 1079 Hoﬀmeister, 216. 1080 Uebe, 386. It could however be argued that two diﬀerent concepts are applied respectively to the ‘settlement’ of the Cyprus problem (1st, 2nd and 5th Recital of the Preamble) and to the ‘solution’ deriving from a successful settlement of the Cyprus problem (4th Recital). 1081 The meaning of the terms ‘solution’, ‘settlement’, ‘agreement’ and ‘comprehensive’ were points of discussions during the negotiations pertaining to the Protocol.

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upon a full or ‘comprehensive’ settlement of the Cyprus problem. If so, then it would mean that Article 1(2) Protocol 10 should only be read in conjunction with Article 4 of the Protocol and hence would become lex specialis applicable to the situation in the Areas only upon a settlement. It is submitted that there is nothing a priori in the text to indicate so. Such a reading of Protocol 10 implies that the Protocol is the lex specialis for the Areas in any event, including in the event of a partial application of the acquis, even in the absence of a settlement and that any acts of the institutions created to deal with the situation in the Areas would need to be taken on the basis of Protocol 10 as far as possible. 2. Legal implications for the acts of the institutions The Commission made proposals for a set of measures to promote inter-state trade from the Areas to the rest of the EU,1082 which could eﬀectively constitute a partial lift of the suspension of the acquis, leading to the application of the acquis inter alia in the area of the free movement of goods. If so and based on the above interpretation of Article 1(2) Protocol 10, it would mean that all these measures must be taken on the basis of the Protocol as lex specialis, more speciﬁcally under Articles 1(2), 2 and/or 3 in the absence of a comprehensive settlement. Even if these measures are not deemed to constitute a partial withdrawal of the acquis under Article 1(2) Protocol 10, it is argued that they should still be taken on the basis of Protocol 10 as it was previously found that Article 1(1) constitutes lex specialis for measures concerning the Areas. Thus, Articles 1(2), 2 and 3 Protocol 10 appear to be the relevant legal bases irrespective of the type of measures concerned, so long as they are applicable to the Green Line and/or the Areas, although the extent of the lex specialis beyond the Green Line in one direction and in the other remains to be clariﬁed. The Commission however appears to reject this approach as it derives its measures from general Treaty provisions to the extent that they do not constitute a withdrawal of the suspension of the acquis and, as such, do not fall within the ambit of the lex specialis of Protocol 10.

1082 Communication to the Council and to the EP 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 (‘2003 Commission Communication’).

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The RoC shows reluctance towards some of these instruments or proposals. A thorough analysis of the corresponding instruments of secondary legislation adopted by the Council and/or proposed by the Commission in the next and ﬁnal Part of this book will outline some diﬃculties with the triggering of Article 1(2) Protocol 10 and will attempt to give some elements of explanation of the situation from a socio-legal perspective. It remains that ﬁve years onwards, no comprehensive settlement has been reached; hence the need to look for partial solutions which could derive from the establishment of a trading relationship between the Areas and Europe. The nature of this relationship as well as the relevant legal basis will need to be examined. Preliminary considerations of the relationship between the Protocol and the Court’s jurisprudence have revealed common aspirations. But it is doubtful whether Protocol 10 reﬂects the Court’s jurisprudence to its full extent, in particular as far as inter-state trade is concerned. In fact, it is argued that the Court’s proposal primarily consisted in adapting the existing Community rules on intra-state trade contained in the Green Line Regulation to inter-state trade relations between the Areas, the government controlled area of the RoC and the EU. Adopting a common approach to the trading relationship between the two communities both for intra-state and for inter-state trade could have the merit of allowing for a partial implementation of the acquis in the Areas, at least in trade related matters, which the government of the RoC would have little or no reason to oppose in the form suggested by the Court. But the issue of the legal basis remains controversial. Concluding remarks Protocol 10 marks the institutionalisation of the principles of European integration of Cyprus applicable in the Areas, on the Green Line and possibly extending into the government controlled area of the RoC. Protocol 10 appears to be based on an atypical type of integration embodied inter alia in the general suspension of the acquis and in the eventual withdrawal of this suspension in the Areas. Nevertheless, Protocol 10 remains transitional and limited in nature, arguably acting as a bridge towards a new regime which could lead to the integration of Cyprus into the EU or, on the contrary, to its nonintegration into the EU or to its disintegration. As such, it is argued

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that the consideration of the wider socio-legal implications deriving from the instruments of Community law taken on the basis of Protocol 10 allows the analysis to shift from the principles of supranational differentiation to policy principles deriving from the wider framework of soft governance.1083 In this respect, the characteristics of the alleged regime of European integration for Cyprus remain to be clariﬁed, in particular concerning the triggering of Article 1(2) Protocol 10 and its relationship with Articles 2 and 3, on the one hand, and with Article 4 on the other hand. Whereas the adaptation of the terms of accession of the Turkish Cypriot community envisaged in Article 4 remains hypothetical in the absence of a comprehensive settlement, the deﬁnition of the terms of application of EU law in the Areas pending a settlement addressed in Articles 1(2), 2 and 3 of the Protocol reﬂect the current reality of the alleged regime of integration.

1083 Bulmer argues that “soft law is perhaps the principal means of operational policy principles outside the domain of the supranational treaties”; in Bulmer, 367–8.

PART THREE

THE RE-REGULATORY REGIME IN CYPRUS: ELEMENTS OF (DIS)INTEGRATION?

INTRODUCTION TO PART THREE

It appears from the previous Part that Protocol 10 acts as a derogatory regime within the 2003 Treaty of Accession, to the extent that it addresses a speciﬁc instance of (non)application of EU law in a given EU territory. As a result, there is in principle no implementation of the Internal Market in the Areas while at the same time, it is clear that this territory cannot live in complete isolation within the EU. Isolation should be understood in the context of the suspension of the acquis and is deprived from any political meaning.1084 Thus, the derogatory regime of Protocol 10 is deemed to create a new regulatory framework, aiming at deconstructing the rules of the Internal Market and substituting them with a re-regulatory regime to avoid the complete isolation of the territory from the rest of Cyprus and from the EU pending the reuniﬁcation of the island. It will be argued in this Part that the outcome of the application of this re-regulatory regime amounts in fact to the diﬀerentiated re-implementation of the rules of the Internal Market. This outcome is deemed to occur irrespective of whether the independent variable of the process is a reuniﬁed Cyprus (Chapter 6) or a divided Cyprus (Chapter 7); the substance of the diﬀerentiated re-implementation may however vary. It is argued that the (non)implementation of the Internal Market is central to the (non)integration of Cyprus into the EU in the same way 1084 Claims of isolation are being made regularly by the Turkish Cypriot community, Turkey and/or the UK and are being rejected by the RoC, see Kozakou-Marcoulis E, The alleged ‘isolation’ of Turkish Cypriots, myth and reality (CD rom, PIO, Nicosia 2007); contra Brus, Akgün et al who advocate that the political and legal issue of nonrecognition of States (or of goverments) must be distinguished from the issue of isolation which does not have a particular meaning in international law. They note that a ‘policy of isolation’ can be the result of “(1) a binding resolution of the Security Council or of an organ of another international organisation, (2) obligations following from a treaty in existence for a particular state or a group of states, (3) a binding ad hoc agreement between states to isolate a particular state or entity or (4) customary international law” and that it amounts to a sanction; in Brus, Akgün et al, 18–9. They also situate the alleged isolation of the Turkish Cypriot community within the broader perspective of the right to development, as stated in the UN Declaration on the Right to Development (1986); ibid, 56. From a legal point of view, no such ‘policy of isolation’ appears to exist with respect to the Turkish Cypriot community. For an interpretation of the ECJ’s

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as the construction of the Internal Market through a “paradoxical combination of deregulation and re-regulation” was essential to European integration.1085 The Internal Market should be understood in this book as encompassing institutional, economic and political elements lying at the foundations of the process of European integration, and not merely as the technical rules of economic integration, as it is also relevant to the broader legal and political framework of EU integration. The Internal Market is the main component of internal integration and also opens to wider horizons,1086 as its predecessor, the Common Market did. Amstrong argues that the Internal Market “was a new spin on the idea of a common market, representing a new political commitment to economic integration and ultimately a broadening of the integration agenda”1087 and refers to the following ‘matrix’ of the Internal Market: 1. An understanding of the relationship between the activities of political and legal actors; 2. A recognition that this relationship is one which is not isolated at times of major Treaty revision but carries on across time; 3. A conception of economic integration as one which is evolving both in terms of the widening of its material and geographical scope, while also deepening in terms of the management of the structures, strategies and instruments of governance.

It is contended that the above parameters are all represented in Cyprus’ quest towards full integration and that the Internal Market has a real central place in the attainment of this objective. While it appeared clearly in the previous Part that the process of EU integration does not guarantee uniformity of action, this is traditionally less true of the core rules of the Internal Market.1088 With reference to the law/policy/politics interface promoted by this book, the ﬂexibility case law on the relationship between trade (CCP) and economic development in the context of the alleged Turkish Cypriot isolation, see “Legal opinion on the Commission proposal for a Council Regulation on special conditions for trade with northern Cyprus” (tepav, Ankara, 2007). 1085 Majone G, Regulating Europe (Routledge, London, 1996) 2. 1086 “EU integration is a multifaceted package of legislation and policies which binds the Member States together, yet the reach and impact of this law and policy goes beyond the borders of the EU”; see Szyszcak & Cygan, 2. 1087 Amstrong K, ‘Governance and the Single European Market’ in Craig P & De Burca G (eds), The evolution of EU law (OUP, Oxford, 1999) (‘Craig & De Burca (1999)’) 747. Pescatore referred to the SEA as a ‘political manifesto’; ibid, 750. 1088 H & W Wallace refer to the ‘cluster of commitments’ of the Internal Market and to the fact that “full acceptance of the Internal Market is a sine qua non of full EU membership”, as quoted in De Burca G, ‘Diﬀerentiation within the core: the case of the Common Market’ in De Burca & Scott, 134.

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introduced in Amsterdam has been described as ‘both instrumental and reﬂexive’ thereby pointing to the dual role of law: This dualism – which ﬁts a broader pattern of retrospective or incremental constitutionalisation within the EU framework1089 – suggests how law, and in particular the ideal of legal uniformity within the EU, can simultaneously exhibit both vulnerability to wider political forces and an independent capacity to make a positive diﬀerence to the prospects of the European polity.1090

As an indication of the presence of a certain degree of ‘political initiative and compromise’1091 in the traditional judicial realm of Community law,1092 some ﬂexibility can also be found in the core and rigid rules of the Internal Market. This diﬀerentiation concerns primarily instruments of secondary legislation and, as such, can be said to be ‘less disruptive’ to Community aims than the kind of Treaty-based diﬀerentiation or ‘micro-ﬂexibility’ studied so far.1093 Flexibility in the application of the rules of the Internal Market or ‘meso-level ﬂexibility’ can be characterised by the fact that the legislation “do[es] not actually incorporate a degree of ﬂexibility into the deﬁnition of the general policy requirement”, but rather expressly exempts a named Member State(s), “usually for a speciﬁed period but sometimes more open-endedly, from an otherwise fairly concrete, distinct and uniform obligation”.1094 Hence, there is no clear ex ante exemption from any diﬃculty arising from the

1089 “This can be seen, for example, in the belated recognition given to the European Council in the [SEA], long after it had become an institutional fact; or arguably, in the development of a general concept of subsidiarity in the Treaty of Maastricht, after many years of executive and, to an even lesser extent, legislative practice and procedure which paid uneven attention to the logic of subsidiarity. This type of constitutional reﬂexivity is also commonly found in state constitutions, but arguably it is more pronounced at the EU level precisely because of the ambiguous status of its foundational documentation. Originating as an international treaty rather than a self-styled constitution, it retains much of the detailed legislation typical of Treaty law. Consequently, it has a more pronouncedly two-tier structure than many state constitutions, more likely to contain both the detailed instruments of governance and – often as a later addition – principled reﬂection on these instruments”. 1090 Walker N, ‘Flexibility within a metaconstitutional frame’ in De Burca & Scott, 13. 1091 Lyons in De Burca & Scott, 109. 1092 Walker argues that ﬂexibility poses a great ‘challenge’ to law, deeper than the mere revision of legal instruments, potentially threatening law’s legitimacy and technical capacity, which he calls ‘metaconstitutionalism’ in De Burca & Scott, 13–14; contra Lyons who argues that the ‘ﬂexible future’ of the EU is not considered primarily as a legal issue, ibid, 97. 1093 De Burca in De Burca & Scott, 138; Contra Amstrong who warns against the use such a ‘top-down model’ in Craig & De Burca (1999) 749. 1094 De Burca in De Burca & Scott, 138.

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operation of the Internal Market, but rather an ad hoc and gradual examination of a measure and of its diﬀerentiated impact, if any, in various Member States.1095 Instances of ‘meso-level ﬂexibility’ can be found primarily in directives given the nature and attributes of this type of instrument. But it will appear in this Part that regulations can also eﬀectively lead to a certain degree of ﬂexibility, even if their object is by deﬁnition more rigid (they are instruments of supranational governance which do not usually allow for much discretion at the national level). Given that the Internal Market forms the core of the EU, the next question arising concerns the possible extent of the diﬀerentiation. This issue, already addressed in the previous Part with respect to Treatybased diﬀerentiation, now concerns the detailed substantive policies of the Internal Market, which clearly outline economic governance as the main constituent in the Treaties even if policy competences have expanded through the development of the political project of the Union.1096 As such, “the Internal Market is not only an important and central part of the EU’s political strategy,1097 but is also presented as the core of the acquis to which applicant Member States are increasingly expected to subscribe.1098,1099 The ﬂexibility allegedly found in the Internal Market seems to outline the paradox between the political and the legal process of European integration, as perceived by the supranational institutions in particular. It has arguably introduced dynamism into the concept of diﬀerentiated integration, as “ ‘we Europeans’ do not have to do everything together outwith the common market core”.1100 In this respect, the importance of the administrative powers of the Commission and of the counterbalance provided to these powers by the ECJ in the “concrete application of the modalities of accession” under the 2003 Act of Accession,1101 in particular with respect to the Internal Market, have been underlined in the previous Part. The role of the supranational institutions thus becomes central in the determination of the desired gap between

1095

Maillet P, ‘Convergence et géometrie variable’ (1995) RMCUE 145, 145. De Burca in De Burca & Scott, 141. 1097 Amstrong in Craig & De Burca (1999) 747. 1198 See Cremona M, ‘Flexible models: external policy and the European Economic Constitution’ in De Burca & Scott, 59. 1199 De Burca in De Burca & Scott, 141. 1100 Lyons in De Burca & Scott, 111. 1101 Ott in Inglis & Ott (2005) 130. 1096

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“minimal unity and unavoidable diversity” at the transnational level,1102 as shown in their handling of market regulation. This has implications for legislative powers as well; the Court has ruled for instance that when the EC gives the Commission a task, at the same time it gives it impliedly the legislative power to implement this task.1103 This can be illustrated in the context of the external dimension of the core of the Internal Market, encompassing primarily the CCP,1104 where the Court has used Article 133 EC to grant exclusive powers to the Commission in the ﬁeld of EC external relations.1105 Thus, the ﬂexibility emerging in the development of the Internal Market characterised by the ‘striking of a balance between market integration and national regulatory autonomy’ also appears to be reﬂected in the EC external trade policy.1106 There even seems to be a reciprocal spillover eﬀect, whereby divergence in external trade policy entails further ﬂexibility in the operation of intra-Community trade.1107 In this context, market regulation seems to be ‘reconciled’ with market integration through supranational mechanisms of re-regulation,1108 indicating that there may be various degrees of integration and of diﬀerentiation across policy ﬁelds, leading to the consideration of the merit of uniformity at a sectoral level.1109 Following a similar rational, ﬂexibility can be envisaged within the framework of the re-regulatory regime of Cyprus at the supranational level. The diﬀerentiation would be characterised in that case by the ad hoc consideration of elements of uniformity and/or divergence in certain policy areas, lying at the foundation of the integration of Cyprus into the EU.

1102

Ibid. Cases 281, 283–285, 287/85, Germany & others v Commission [1987] ECR 3203, para 3. 1104 Cremona M, ‘The external dimension of the Internal Market’ in Barnard C & Scott J (eds), The law of the Single European Market (Hart, Oxford, 2002) (‘Barnard & Scott’) 351. 1105 Opinion 1/75, Draft OECD Understanding on a Local Cost Standard [1975] ECR 1355, 1363–1365. 1106 Cremona in Barnard & Scott, 353; see also Koutrakos (2006) 19–21. 1107 Koutrakos (2006) 20. 1108 See in particular the ‘indirect rule’ developed by Weatherill S, ‘Pre-emption, harmonisation and the distribution of competence to regulate the Internal Market’ in Barnard & Scott, 66–7. 1109 Dougan M, ‘Enforcing the Internal Market: the judicial harmonisation of national remedies and procedural rules’ in Barnard & Scott, 162. 1103

CHAPTER SIX

THE REREGULATORY REGIME OF A REUNIFIED CYPRUS: A HYPOTHETICAL INSTANCE OF ‘FULL’ INTEGRATION?

Protocol 10 provides in Article 4 a legal basis for the adaptation by the Council of the terms of accession of the Turkish Cypriot community to the EU in the event of a settlement following accession. This provision provides a simpliﬁed procedure for the adaptation of the terms of accession of Cyprus at the supranational level, which could resemble prima facie ordinary procedures for the adoption of secondary law, with a requirement of unanimity from the Council on the basis of a proposal by the Commission. It is in fact an ‘enabling clause’ which actually entitles the Council to amend the 2003 Treaty of Accession without resorting to intergovernmental treaty-making mechanisms and, as such, appears prima facie to transfer to the Council the power of making primary law in this limited instance of diﬀerentiation. The situation in Cyprus, and in particular the accommodation of a political settlement into the European legal order, seems to justify that “usual ‘law-making’ by the Council” be transcended.1110 The enabling clause apparently only provides for the adaptation of the terms of accession, as opposed to providing for derogations from the terms of accession for the Turkish Cypriot community. This could be seen as a limit to the powers of the Council, who is entitled on the other hand to deﬁne the terms of application of EU law to the Green Line under Article 2 Protocol 10. Nevertheless, the terms of adaptation under Article 4 Protocol 10 seem to encompass the constitutional and institutional level of the EU legal order, whereas Article 2 appears a priori mainly concerned with the policies of the Community, mainly with respect to the Internal Market. I. Principles of adaptation beyond a settlement Like in the German case, there was no talk of accession procedures by virtue of Article 49 EU (Article 237 EEC in the case of Germany), but 1110

Hoﬀmeister, 185.

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of adjustments to be determined at the supranational level. This part is concerned with the nature and the scope of the adjustments envisaged under the enabling clause. A. Nature of the enabling clause 1. Selected aspects of supranational adaptation (a) Scope of gradual integration It should be noted that Article 4 Protocol 10 was drafted at a time where the accession of the uniﬁed island was still hopeful. The terms of accession of Cyprus were therefore prepared on this basis, in particular in the Draft Act of Adaptation,1111 which had to be adopted immediately following the reuniﬁcation of the island, as follows: [T]his act should be submitted to the Council without delay for its immediate adoption by the Council after a successful outcome of the referunda. Moreover, following the reuniﬁcation of the island, the application of the acquis will need to be extended step by step to the Turkish Cypriot constituent State according to Article 1(2) Protocol 10. In a ﬁrst step, the institutional acquis as well as general provisions need to be extended to the Turkish Cypriot constituent State.1112

The formal integration of the Turkish Cypriot community to the EU was therefore meant to happen immediately upon reuniﬁcation since Cyprus was about to become a Member State and the RoC had negotiated on behalf of the whole island. The modalities of this integration could however resemble the ones of accession with a gradual application of the acquis, commencing with what could be qualiﬁed as the Union acquis. But it is argued that this is only the result of the ‘undoing’ of the ﬁrst limb of Article 1 Protocol 10 by the second limb of this Article, to the extent that the non-application of the acquis is brought to an end and is replaced by a gradual extension of the acquis encompassing ﬁrst constitutional and institutional principles, followed by Community policies. This would seem to conﬁrm the hypothesis formulated in Chapter 5 that the withdrawal of the suspension of the acquis under Article 1(2) Protocol 10 can be staged, at least when applied to Article 4, i.e. in the 1111 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 (‘Draft Act of Adaptation’ or ‘Draft A/A’). 1112 Explanatory Memorandum Draft A/A, 2.

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event of a comprehensive settlement. It remains to be seen whether the reverse argument previously made in this book can be validated, i.e. whether the eﬀective partial withdrawal of the suspension of the acquis under Article 1(2) Protocol 10 could trigger a proportionate integration of the Turkish Cypriot community within the EU, outside the scope of Article 4 Protocol 10 (to be studied in the next and ﬁnal Chapter). Assuming that the relevant legal basis is still Protocol 10 (as per Chapter 5), it would mean that the supranational powers of the Council and of the Commission would be enhanced, since they apparently derive (limited) derogatory powers from Article 2 Protocol 10 as opposed to mere adaptory powers under Article 4. Such a scenario may not be in the interest of the Member States themselves in this instance of supranational diﬀerentiation, but is arguably more adapted to the current situation than the original scenario envisaged in the draft Act of Adaptation. (b) Measurement of the degree of integration One of the prerequisites to the smooth integration of the Turkish Cypriot community as identiﬁed above was the occurrence of most adjustments prior to formal integration, through in particular the process of Europeanisation previously identiﬁed in this book. It is however debatable whether the concept of Europeanisation on its own can be used as an objective instrument of measurement of readiness for the compliance and the absorption of the acquis. In the German experience, many of the economic adjustments were expected to occur before formal integration by virtue of the State Treaty on economic, monetary and social union, which preceded the Treaty of German Reuniﬁcation. So in this case, there was a formal basis for harmonisation, due to the fact that accession negotiations were never held with the GDR itself.1113 There was also a formal date for the compliance with the harmonisation process, which was the date for the completion of the Internal Market, as the institutions made clear that the German reuniﬁcation should not “take place to the detriment of European integration”.1114 In the case of Cyprus, there was a clear and unique ultimate date for all initiatives, which was 1 May 2004, date on which formal integration was to take place. This was in any case based on the – wrong – assumption

1113 Spence D, Enlargement without accession: the EC’s response to German uniﬁcation (Discussion Paper 36, The Royal Institute of International Aﬀairs, London, 1991) 17. 1114 Ibid, 15.

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that the reuniﬁcation of the island would occur prior or upon accession. In that context, it is reasonable to talk about the gradual application of the acquis in the northern part of the island rather than about derogations from the acquis, especially of a permanent nature, which are deemed not to exist under Article 4 Protocol 10.1115 It should nevertheless be noted as a preliminary remark that by virtue of the Draft Act of Adaptation, some transitional periods could last as much as 19 years, thereby arguably becoming quasi-permanent if not permanent derogations after all! In order to get a complete picture of the situation upon accession, the Draft Act of Adaptation ought to be considered into the broader framework of the Annan Plan which was brought into the realm of Community law. 2. Intergovernmental mechanism of derogation The instance of supranational diﬀerentiation a priori embodied in Article 4 Protocol 10 can be said to be sui generis as far as the procedure and the resulting act are concerned.1116 With respect to the procedure, it should be noted that the power of initiative in the hands of the Commission was in fact shared with other parties, including other international organisations such as the UN, and other States, including but not limited to some Member States of the EU. As such, the resulting act prepared on the basis of Article 4 Protocol 10 was in fact a joint draft approved by the Commission, which formed part of the ‘package deal’ oﬀered by the Annan Plan, in Appendix D.1117 As envisaged in the Annan Plan, the Draft Act of Adaptation was merely presented by the Commission to the Council in the form previously agreed during the negotiations.1118 It is clear that most demands and pressures with respect to the drafting of the Act of Adaptation to address the full integration of the Turkish Cypriot community into the EU were estranged to the European institutions and originated even from outside the EU. The initial supranational instance of adaptation of the terms of accession identiﬁed above was in fact transformed into an instance of derogation 1115 “It should be stressed that the proposal for the act does not include permanent derogations from the acquis, but only transitional periods”; see Explanatory Memorandum Draft A/A. 1116 Berramdane in Agapiou & Rossetto, 44. 1117 Ibid, 45. 1118 Commission proposal for Draft A/A COM(2004) 145 ﬁnal, 2.3.2004.

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from Community law principles based on intergovernmental mechanisms of decision-making originating mainly from outside the EU.1119 This raises the issue of the compatibility of the derogations envisaged in the Draft Act of Adaptation and in the Annan Plan overall with Community law. A legal analysis of the Annan Plan, in particular of the Foundation Agreement, in light of the provisions of Community law would be outside the scope of this book. It has already been reviewed in the literature.1120 It is more appropriate in this instance to concentrate the debate on fundamental issues arising with respect to Community law, namely to what extent the Draft Act of Adaptation is an instrument of Community law, whether this instrument should acquire force of primary law and whether and to what extent the regime created under this instrument is derogatory. In view of the Union’s support for a solution prior to accession, it is clear that the EU was aware of the fact that the Annan Plan contained “a request for substantial derogations from the acquis relating, inter alia, to property and residency rights”1121 and of the implications of these derogations.1122 This is reﬂected in the Draft Act of Adaptation which expressly acknowledges the compatibility of the Foundation Agreement of the Annan Plan with primary sources of Community law.1123 As a result, it could be argued that the EU implicitly guaranteed the existence of the Foundation Agreement and granted it the protection aﬀorded in Article 6(1) EU, to the eﬀect that the EU might have been bound by this agreement.1124 Based on the above, it would appear that the Draft Act of Adaptation derives from a set of inter se agreements concluded in the realm of

1119 Ziegler insists however on the role played by the Commission during the negotiations of the Annan Plan, using “its inﬂuence to prevent permanent derogations from happening and to shorten transition periods” throughout the various versions of the Plan; in 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 12.05.09) (‘Ziegler’) 9. 1120 For the compatibility of each version of the Annan Plan with Community law, see Hoﬀmeister 132–161 for ‘Annan I-III’ and 189–195 for ‘Annan IV and V’; see also Agapiou-Josephides in Agapiou & Rossetto 81–95; Papasavvas S, The Annan Plan, a ‘constructively dubious’ constitutional ‘future’ for Cyprus (Sakkoulas, Athens, 2003) 168; and Giegerich. 1121 Appendix E in versions of 11.11.2002 (Annan I) and 10.12.2002 (Annan II) respectively; Attachment 2 of Annex IX in version of 26.2.2003 (Annan III). 1122 Uebe, 390. 1123 4th and 8th Recitals Draft A/A. 1124 Berramdane in Agapiou & Rossetto, 45.

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international law,1125 but also binding on the EU.1126 The Union in particular having committed itself to accommodating any political settlement agreed by the parties,1127 it has been argued that a sort of agreement at the political level was created between the two international institutions as a backbone to the Annan Plan.1128 As a result, there were expectations that the Draft Act of Adaptation be integrated into the EU legal order even if its hybrid nature meant that its legal status in the EU legal order remained unclear. The double legal nature of this instrument in the EU legal order implied that a diﬀerentiated regime created primarily outside the realm of EU law through intergovernmental mechanisms had been brought within the realm of EU law. As this occurred before or upon Cyprus’ accession to the EU, the diﬀerentiated regime created in this set of inter se agreements ought to be accommodated as far as possible within the EU legal order in accordance with Article 307 EC.1129 As it appears however from the wording of Article 4 that the adaptations cannot be derogatory in nature, the issue at stake relates to the scope of such adaptations and, in particular, whether they can be extended so as to provide a derogatory regime in eﬀect, if and when needed. In this respect, the issue of the relationship of Article 4 Protocol 10 with the rest of the acquis is crucial, as it will determine the exact nature of the Draft Act of Adaptation and/or any other acts passed under Article 4 and in particular whether it can derogate from primary law. B. Implications of the enabling clause in the EU legal order 1. Legal nature of the implementing instrument(s) As far as the Commission is concerned, Article 4 “delegates treaty-making power in respect of the adaptation of the terms of accession of 1125 For a review of the Annan Plan in international law, see Chrysostomides (2006); see also Palley; and Christou (2004). 1126 Agapiou-Josephides talks about the supremacy of the Foundation Agreement in international law and in Community law, against all expectations; in Agapiou & Rossetto, 93. 1127 See Report by the UN Secretary General to the Security Council, 1.4.2003 S/2003/398, 8. 1128 Agapiou-Josephides in Agapiou & Rossetto, 93. 1129 Kabaalioğlu argues that the EU demanded at a later stage that any solution be compatible with the acquis and would not allow permanent derogations, especially to the free movement of persons into the northern part of Cyprus. He notes however that the restrictions of movement on both sides of the divide were ‘one of the cornerstones’ of the Annan Plan; in Giegerich, 237.

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Cyprus and therewith primary law from the Member States to the Council”.1130 To the extent that acts taken under Article 4 constitute primary law, they could then a priori deviate from the EU primary acquis, but not by virtue of Article 48 EC.1131 There exists in the Treaties ‘deviant procedures’ for their amendments.1132 Of interest to this book are the simpliﬁed procedures provided for in Article 17(1) EU (common foreign policy), Article 42 EU (area of freedom, security and justice) and Article 22(2) EC (citizenship of the Union), which do not require an IGC.1133 The Council merely recommends to the Member States the adoption of such a decision in accordance with their respective constitutional requirements.1134 It therefore appears that it is possible to generate Community primary law without a ratiﬁcation process in speciﬁc instances and it could be argued that it is the case for the creation of the terms of accession of Cyprus under Article 4 Protocol 10.1135 This seems to be conﬁrmed by Article 2(3) 2003 Treaty of Accession, which provides that measures on the terms of accession of Cyprus to the EU could be taken by the Council under Article 4 Protocol 10 before the entry into force of the Treaty of Accession and the Protocols and pending ratiﬁcation of the Treaty by all the Member States. It therefore derives from these ﬁndings that any legal act created under Article 4 Protocol 10 is prima facie an act of primary Community law, of a sui generis nature, as it has not gone through the ratiﬁcation process.1136

1130

Explanatory Memorandum Draft A/A, 2. Uebe, 389. 1132 For a detailed explanation of these procedures, see Uebe, 389. 1133 Ibid. 1134 Turkey was however insisting that an act of the Council could not have the status of primary law, “the latter being created only by ratiﬁcation of the national Parliaments”. In order to meet this concern, the Commission agreed to a ‘double-track’ approach whereby it commited to “submitting the appended Draft [A/A] of the terms of accession of the United Cyprus Republic to the [EU] for consideration by the Council […] prior to 24 April 2004, and for its adoption after successful outcome of the separate simultaneous referenda before 1 May 2004. Furthermore, the European Commission is also committed to bringing about a ﬁnal outcome, without delay, which will result in the adaptation of primary law and ensure legal certainty and security within the [EU] legal system for all concerned”; see Letter of UN Secretary-General Annan of 31 March 2004 to the leaders of the Greek Cypriot and the Turkish Cypriot community, Turkey, Greece and the UK, as quoted in Hoﬀmeister, ‘The role of the EU in the Cyprus conﬂict’ in Giegerich, 214. 1135 See Giegerich in Giegerich, 271. 1136 “The resulting legal act inevitably is of a sui generis nature”Explanatory Memorandum Draft A/A, 2. 1131

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Granting the status of primary law to acts taken under Article 4 Protocol 10 also means that they would not be submitted to the jurisdiction of the ECJ as far as their validity is concerned. Thus, the judicial control of the ECJ would appear to be restricted to the interpretation of the Draft Act of Adaptation and in particular to the question of whether the Act “would contain ‘adaptations’ with regard to the Turkish Cypriot community only or go beyond”.1137 But as outlined in Chapter 5, this analysis would need to take into account fundamental rights (including human rights) in acts originating in the EU legal order which are subject to the principle of proportionality applied as a general principle of Community law protecting the public interest. The competence of the Court extends a priori to acts emanating from the UN in accordance with the CFI’s case law in Yusuf and Kadi,1138 which are deemed reviewable in the EU legal order under international jus cogens principles.1139 The point was also made in Chapter 3 that certain adjustments deriving from the Treaties of Accession could also be submitted to the judicial review of the ECJ in limited instances. The application of these ﬁndings to the legal instruments taken on the basis of Article 4 Protocol 10 would seem to conﬁrm that despite their alleged primary law status, such acts would not be completely outside of the scope of judicial review of the Court, due mainly to their sui generis nature in the EU legal order.1140 2. The re-regulatory regime of a reuniﬁed Cyprus and soft governance Thus, having in mind the example provided by the Council decision adjusting the terms of accession contained in the ‘Norvegian clause’,1141 1137 1138

Hoﬀmeister, 186. Cases T-306/01, Yusuf [2005] ECR II-3533 and T-315/01, Kadi [2005] ECR II-

3649. 1139

Douglas-Scott (2006a) 633. Kabaalioğlu notes that “[t]he Turkish government had originally demanded a clear derogation clause in the Treaty or Act of Accession so as to ensure that restrictions on the movement would be on the same level as the fundamental freedoms of the internal market … A mere secondary act of legislation, e.g. a regulation, would run the risk of being successfully challenged by individuals in the courts because it might be considered incompatible with the EC Treaty provisions mentioned … But now there is no derogation clause in the primary law. The only provision we have is [Article] 4 of Protocol 10”. He describes it as a ‘very general unspeciﬁc provision’ and expresses doubts as to whether any future derogation taken by the Council on its basis “will survive challenges in the courts”; in Giegerich, 238. 1141 In the Treaty for Norway, Austria, Finland and Sweden following Norway’s failure to ratify its accession to the EU, see n 849 above. 1140

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the instruments taken by the Council in the case of Cyprus could be deemed to constitute prima facie acts of primary law but of a diﬀerent kind since in this case, the terms of adaptation are future. As such, they appear to fall outside the scope of the traditional Community method of regulation into the realm of soft governance. This would mean in particular that the traditional legal mechanisms of implementation and of enforcement of Community law may not be adapted to this situation, as they pre-suppose that the exact nature of the instruments be identiﬁable. As a result, more ﬂexible parameters of governance at the transnational level may be needed. This approach could perhaps explain the rationale behind the re-regulatory regime of a uniﬁed Cyprus, which appears prima facie to be very atypical if measured as against traditional Community method of regulation.1142 II. Derogatory re-regulatory regime of a reunified Cyprus As a sui generis instrument in the EU legal order, the Draft Act of Adaptation is characterised by the fact that the proposed re-regulatory regime is derogatory in scope, by default of being so in nature and arguably contains restrictions which may become quasi-permanent or permanent derogations to the fundamental principles underlying the four freedoms. As with any derogation to the principles of Community law, the issue of the proportionality both in public and in substantive law is of essence. The Draft Act of Adaptation sets out the necessary adjustments to the acquis before addressing the constitutional and institutional issue of a reuniﬁed Cyprus in the Union, the scope of which must be examined. A. Derogations to the acquis communautaire 1. Adjustments with respect to the Internal Market (a) The right of establishment Article 1 provides for non-discriminatory restrictions on the right of natural persons and legal persons to purchase property in the Turkish

1142 This section has appeared in an amended version in Laulhé Shaelou S, ‘Cyprus reuniﬁed under the Annan Plan: a hypothetical instance of ‘full’ integration into the EU?’ in Stavridis S, (ed) Understanding, interpreting and evaluating the EU in 2008: theoretical and empirical approaches (Nicosia University Press, Nicosia, 2009).

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Cypriot entity without permission of the competent authority in this entity. This is a derogation to the freedom of establishment, of services and/or of capital for 15 years or “for as long as the gross domestic product per capita in that constituent State does not reach the level of 85% of the gross domestic product per capita in the Greek Cypriot State, whichever is the earlier”.1143 The Commission undertakes to report every ﬁve years to the European Parliament and the Council on the application of the provision and may as a result recommend to the Turkish Cypriot entity to “abolish in total or in part the restrictions, if it considers that the political, economic and social conditions in Cyprus so allow”.1144 This restriction appears a priori to be temporary, since there should normally be a cutting-oﬀ date. It should be recalled that most new Member States beneﬁted from temporary transitional periods eﬀectively restricting the purchase of immovable property,1145 including Cyprus regarding the acquisition of secondary residences for a period of 5 years.1146 The restrictions contained in the Draft Act of Adaptation regarding property would not therefore appear to be the most ﬁnal ones in the context of the 2004 enlargement, even if the time span originally envisaged would extend to a ﬁve year period and/or beyond. Provided the restrictions remain temporary and given the special context arising under the Draft Act of Adaptation, it would appear prime facie that the restrictions can be justiﬁed inter alia on economic grounds1147 and are proportionate to the extent that they are ‘necessary to achieve a legitimate aim’, which cannot be achieved through ‘less restrictive measures’.1148 The absence of a clear cutting-oﬀ date in this instance would on the other hand potentially amount to a breach of 1143

Arts 1(1) and (2) Draft A/A combined. Art 1(3) Draft A/A. 1145 See Protocol 6 Act of Accession for permanent restrictions regarding Malta; see also Annex XII to Art 24 Act of Accession, Chap 4 (free movement of capital), s 2 with respect to the restrictions for up to 12 years on the purchase of certain categories of immovable property in some regions of Poland, which correspond ‘grosso modo’ to the former German territories of today’s Poland. Ziegler argues that “[t]he Poles feared that the Germans could regain control over their former eastern territories by buying property, […] at relatively low prices. If the EU was ready to accommodate such fears stemming from Second World War experiences […], why should it not accept temporary deviations in the ﬁeld of free capital movements in a situation where there is still an ongoing, unsolved conﬂict, with little trust between the communities?”; in Ziegler, 8. 1146 Annex VII to Art 24 Act of Accession, Chap 3. 1147 Hoﬀmeister, 186. 1148 Tridimas, 138. 1144

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fundamental rights under Community law, as the purpose of the measure is clearly to prevent a massive return of the Greek Cypriot population in the northern part of the island.1149 This cannot be regulated indeﬁnitely, as no proportionality test – even soft1150 – would satisfy what appear to be non-economic restrictions on fundamental rights within the EU. The ECJ has raised the right to property to the status of fundamental right under Community law.1151 With respect to the protection of fundamental rights as embodied in national measures falling within the scope of Community law, the Court seems to have accepted that measures potentially hampering intra-Community trade under the free movement provisions fall under its jurisdiction, even if such review does not fall within the scope of the free movements at stake (goods and services in this case).1152 This seems to stretch to new limits the principle expressed in ERT concerning the respect of fundamental rights by national measures based on express derogations from the Treaty,1153 previously extended to national measures based on mandatory requirements and on ‘overriding requirements in the public interest’ and now also apparently to ‘measures potentially restricting free movement’.1154 Save these cases of judicial review of fundamental rights breaches where the level of scrutiny has increased for measures falling within the scope of Community law in its broadest possible interpretation,1155 the Court would normally strike a balance between public interests and economic freedoms in the EU in the interest of the ‘good functioning of the internal market’.1156 It has already been seen elsewhere in this book that the rights to property and to trade in particular are not deemed absolute and may be restricted accordingly provided the restrictions imposed pursue Community objectives of general interest and do not “constitute a disproportionate and intolerable interference, impairing

1149

Berramdane in Agapiou & Rossetto, 46. In view of Art 295 EC which potentially restricts the possibility of supranational judicial review of national rules regarding property ownership in Member States. 1151 Case 44/79, Hauer v Land Rheinland-Pfalz [1979] ECR 3727, para 14. 1152 See Case C-71/02, Herbert Karner Industrie-Auktionen GmbH v Troostwijk GmbH [2004] ECR I-3025, para 49 (‘Karner’). 1153 Case C-260/89 [1991] ECR I-2925. 1154 Tridimas, 39–40. 1156 Tridimas talks about an ‘uncertain criterion’ in Karner which nevertheless expands ‘signiﬁcantly’ the scope of human rights protection by the ECJ, 336. 1156 Sweeney J, ‘A “margin of appreciation” in the Internal Market: lessons from the ECtHR’ (2007) 34(1) Legal Issue of Economic Integration 27, 38. 1150

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the very substance of the right”.1157 With respect to the right to property, the Court has indicated that the right may be substantially restricted “where the measure deprives a person of his property or of the freedom to use it”1158 but without giving more speciﬁc guidelines, thereby indicating a priori that the purpose of the right is to prevent expropriation.1159 In any case, the Court would not review a national measure falling under the non-exclusive competence of the Community and not aﬀecting Community legislation in any manner in line with Article 295 EC, even if such measures may become increasingly subject to a soft proportionality test in view of the Court’s interpretation in Karner.1160 It is indeed the task of the ECtHR to protect fundamental rights for the sake of the ‘universality of human rights’ and in this respect, its jurisprudence on the right to compensation under Article 1 Protocol 1 of the ECHR for expropriation should be noted. With respect to German property in the ex GDR, the ECtHR conﬁrmed that it was justiﬁed to take the property without any compensation whatsoever due to the ‘unique context of German reuniﬁcation’.1161 The so-called ‘Modrow Law’ had been passed “by a parliament that had not been democratically elected during a transitional period between two regimes that had inevitably been marked by upheavals and uncertainties”, had only been in force for a limited period of time and had been corrected for “reasons of social justice”.1162 The Draft Act of Adaptation on the other hand draws its legitimacy from higher levels of decisionmaking beyond the nation State. (b) Free movement of persons (i) Right of residence. In accordance with the rationale identiﬁed above, the Draft Act of Adaptation sets out restrictions on residence rights for Cypriot citizens (Article 2(1) ) and for Greek and Turkish nationals 1157

Tridimas, 313. Case 59/83, Biovilac v EEC [1984] ECR 4057, para 22. 1159 See Tridimas, 317. 1160 Tridimas talks about a new function of proportionality, the ‘collateral review’ which consists in the assessment of the proportionality of a national measure “not visà-vis its adverse impact on the primary Community interest (ie free movement)”, which makes the measure fall under the scope of Community law in the ﬁrst instance, but “on an incidental Community objective (ie human rights) with which the measure must conform”; in Tridimas, 550. 1161 ECtHR, Jahn and others v Germany (Nos 46720/99, 72203/01 and 72552/01) 30 June 2005 [2006] 42 EHRR 49, para 116. 1162 See Cameron I, ‘ECtHR: January 2005-March 2006’ (2007) 13(1) EPL 3, 23–4. 1158

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(Article 3(1) ), for up to 19 years in both cases or until Turkey’s accession to the EU.1163 These provisions also appear a priori limited in time and as such, could be deemed temporary. But beyond these cutting-oﬀ dates, it is still possible for the constituent States of Cyprus to introduce safeguard measures to protect their special identity, on their own under Article 2(2) and in consultation with the Commission under Article 3(2). The presence of the latter option seems to conﬁrm that these measures entail interests protected by the Community, from which derives the obligation on the national measures to respect fundamental rights protected as such by the EU and to comply with the principle of proportionality.1164 It remains that it is possible to extend the restrictions on residency beyond the cutting-oﬀ dates, thereby clearly indicating that these identity safeguard measures are not intended to be temporary in nature.1165 Such ‘identity safeguards’ aimed at “protect[ing] the demographic ratio of a new Member State’s main communities” has “no precedent in previous Accession Treaties or counterpart in the present one”.1166 Like any ‘prototype’ national measure interfering with the fundamental freedoms protected as such in the EU, they must successfully pass a stricter proportionality test of suitability and of necessity. In light of the general principles of Community law as embodied inter alia in Article 18 EC and in the provisions on the four freedoms, it is diﬃcult to see how these quasi-permanent or permanent restrictions to the fundamental freedom of European citizens can be justiﬁed under Community law.1167 The rights deriving from the concept of Union 1163 Ziegler argues that the reference to Turkey’s accession could only “shorten, but never prolong the transition period” and that the provisions of the ﬁnal version of the Annan Plan were ‘decoupled’ from Turkey’s EU accession; in Ziegler, 9. 1164 See Tridimas, 40. 1165 See Hoﬀmeister, 187; see also Berramdane in Agapiou & Rossetto, 47; and Palley, 170; contra Ziegler, 9. 1166 Hoﬀmeister, 187. 1167 In the case of Cypriot citizens, although the situation could have been described as a ‘wholly internal situation’ to which Community law would not directly apply in the absence of movement, provisions of EU citizenship and/or of the four substantive freedoms could nevertheless be ‘of use’ within the meaning determined in the Walloon jurisprudence of the ECJ. This is in view of the fact that EU citizens from other Member States exercising their freedom of movement in Cyprus, in particular Greek citizens (and Turkish citizens under the conditions as set out in this book, see n 1064 above) could have beneﬁted from such rights deriving from EU law in arguably a comparable situation, thereby potentially leading to a situation of reverse discrimination within the meaning of Singh (Case C-370/90 [2003] ECR I-4265). For a legal appraisal of reverse discrimination in the EU, see Tryfonidou A, Reverse discrimination in EC Law (Kluwer Law International, London, 2009).

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citizenship demand that restrictive measures be interpreted very strictly.1168 Directive 2004/38/EC only provides limited provisions for the proportionate restrictions on the right of entry and residency on grounds of public policy, public security or public health, and on an individual basis;1169 any ex-ante collective restriction would be against Community law and the spirit of the Union.1170 This is also true of the mandatory requirements, which could perhaps justify collective restrictions taken on a non-discriminatory basis allegedly found in the Draft Act of Adaptation. The Court of Justice has recognised for some time cultural aims as mandatory requirements, which would entitle Member States to restrict the free movement of goods, persons and services provided they would satisfy the test of proportionality applicable to national measures interfering with the fundamental freedoms.1171 These judgments were however limited to instances of very speciﬁc discrimination1172 and it is argued cannot extend to measures of such a wide scope as the ones envisaged in the Draft Act of Adaptation, even if they could be deemed to be an expression of the national identity clause of Article 6(3) EU in accordance with Recital 7 of the Draft Act of Adaptation.1173 Finally, the fundamental principles of the Community deriving from the ECHR as interpreted in particular by the Court in Strasbourg would vow against the permanent institutionalisation of such discriminations on the European ground, in particular in the light of its

1168 ECJ, Joined Cases C-482/01 and C-493/01, Orfanopoulos [2005] 1 CMLR 18, para 65. 1169 Art 27 Directive (EC) No 2004/38 of the EP and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States [2004] OJ L 158/77, 30.4.2004. 1170 ECJ, Case C-101/94, Commission v Italy [1996] ECR I-2691, paras 25–26; Case C-294/00, Deutsche Paracelsus Schulen für Naturheilverfahren [2002] ECR I-6515, paras 38–66. 1171 On the basis of Art 3(1) (q) EC; cultural rights are not deemed fundamental rights protected by the EU; see Tridimas, 311. 1172 ECJ, Case C-274/96, Bickel and Franz [1998] ECR I-7637, paras 23–30 (“discrimination where nationals of other Member States who do not reside in the Member State concerned are precluded from the right conferred on the minority to use their language in judicial proceedings”); Case C-281/98, Angonese [2000] ECR I-4139, paras 37–45 (“discrimination where proof of bilingualism is conditional upon possession of a language diploma that may be obtained only in the national territory”); see Lenaerts & Van Nuﬀel, 310. 1173 Contra Hoﬀmeister: “the special safeguards in Arts 2 and 3 [Draft A/A] could be regarded as implementing the respect of the EU accords to the needs of a bi-communal Member State in a post-conﬂict situation”; in Hoﬀmeister, 187.

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jurisprudence on Cyprus, which is directed primarily to Turkey.1174 It should be noted that Article 11 of the Foundation Agreement contained in the Annan Plan recognised in principle the ECHR and inserted it into the Constitution of the newly created Cypriot entity. But numerous limitations, exceptions or derogations to this principle were then following, to the eﬀect that the supremacy of the ECHR was put in jeopardy.1175 (ii) Equivalent rights of entry and residence. By virtue of Article 5 of the Draft Act of Adaptation, Cyprus agrees to grant to Turkish citizens, i.e. non EU nationals, equivalent rights of entry and residence to the ones aﬀorded to Greek nationals, i.e. EU nationals. Such treatment is granted “without prejudice to the restrictions applied under Articles 1–3 and rules applying to entry and residency of Turkish nationals in other Member States”. Such rules are also deemed “compatible with the participation of Cyprus in the Schengen area” and “shall be negotiated between the EC and Turkey within six months”. This provision constitutes prima facie a substantial derogation to the Community rules on freedom, justice and security, embodied in particular in the Schengen protocol, to which Turkey is not a participant. A certain degree of ﬂexibility is however aﬀorded by this provision for two reasons. First of all, Article 5 grants ‘equivalent rights’ to Turkish nationals, as opposed to ‘equal treatment’, thereby implying that the treatment between EU nationals, in particular Greeks and Turkish nationals, may diﬀer in Cyprus. In other words, Turkish nationals are guaranteed non-discriminatory access to the territory of Cyprus through measures having equivalent eﬀect to the measures for EU and non-EU nationals, even though the two sets of measures may not be identical.1176 This interpretation seems to be conﬁrmed by the fact that the negotiations on the rules of implementation of this provision should be conducted between the EC and Turkey, meaning that the EC itself may decide to deviate from the current Schengen rules.1177 As a result, it has been argued that Article 5 “may be seen as lex specialis for Cyprus, which does not result in an opting-out of Cyprus” in 1174 Berramdane argues that such restrictions “…visent à pérenniser des discriminations, à légitimiser l’acquis par la force et à ﬁger une séparation ethnique d’un autre âge”; in Agapiou & Rossetto, 47. 1175 Agapiou-Josephides in Agapiou & Rossetto, 92. 1176 Hoﬀmeister, 178. 1177 Ibid.

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line with Article 8 of the Schengen protocol.1178 In accordance with the Act of Accession, Cyprus was at that time outside of the Schengen area, like all the other new Member States. It remains nonetheless that this provision is potentially derogatory not only in nature, but also in scope, both for Cyprus and for the EU as a whole, especially in view of the fact that a non-EU State would be given the possibility of negotiating the terms of its participation to the Schengen area and/or to the Schengen acquis. 2. Safeguard measures on the implementation of the Internal Market Under Article 4 of the Draft Act of Adaptation, the Turkish Cypriot entity may take appropriate safeguard measures for a duration of up to 3 months “if until the end of a period of up to six years after the entry into force of [the] Act, the operation of the [EU]’s internal market causes, or threatens to cause, diﬃculties which are serious and likely to persist in any sector of the economy, or which could bring a serious deterioration in the economic situation in the Turkish Cypriot constituent State”. This is “without prejudice to Articles 37 and 38 of the Act of Accession”, which are binding on Cyprus even if it was argued in Chapter 3 that the triggering of the economic safeguard clauses in the Act of Accession, especially the speciﬁc safeguard clause under Article 38, is ‘waived’ de facto given the situation in Cyprus. Thus, it could be argued that Article 4 constitutes lex specialis for Cyprus in the event of a settlement, replacing the safeguard measures under Articles 37 and/ or 38 Act of Accession. In any case, these safeguard measures appear limited in time, in scope and territorially,1179 to the eﬀect that they are unlikely to aﬀect the Internal Market as a whole and could therefore stand the proportionality test, at least in their original form of national measures under the ﬁrst limb of Article 4. They nevertheless remain derogatory in nature and appear to be more open-ended under the second limb of Article 4, since the Commission may extend them as it thinks ﬁt. The proportionality test could however be more ﬂexible in that case.

1178 Art 8 Schengen Protocol (1997) [2006] OJ C321/191, 29.12.2006 provides that the Schengen acquis must be accepted in full by candidate countries for admission; see Hoﬀmeister, 188. 1179 Hoﬀmeister, 187.

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3. Derogation from the Union acquis The participation of Cyprus in the European Security and Defence Policy is limited by virtue of Article 6 of the Draft Act of Adaptation, to the extent that it must respect the Foundation Agreement and the various international treaties annexed to the Treaty of Establishment and amended by the Annan Plan in Additional Protocols. It has been argued that this is a mere application of the general rule under international law of pacta sunt servanda contained in Article 26 of the Vienna Convention and that, as such, it bears only a “declaratory signiﬁcance”.1180 It should however be noted that this provision could potentially exclude Cyprus from the scope of Pillar 2, to the eﬀect that Cyprus could be seen as a Union member ‘à la carte’, whereas it initially accepted all the Union acquis upon accession. This would without any doubt raise once more the issue of the extent of the ﬂexibility aﬀorded under EU law, especially when the Union acquis is concerned, possibly undermining the path towards the ‘full’ integration of Cyprus into the EU.1181 B. Derogations to fundamental constitutional and institutional principles 1. Representation in the EU institutions The analysis concentrates on the two main institutions representing the national interests at the supranational level, the Council and the European Parliament. (a) The Council Representation at the Council of Ministers, including at the European Council, had to reﬂect the constitutional arrangements of the newly created Cypriot entity.1182 These constitutional arrangements, including 1180

Ibid. An amended version of this section appears in Laulhé Shaelou S, ‘Cyprus reuniﬁed under the Annan Plan: a hypothetical instance of ‘full’ integration into the EU?’ in Stavridis S, (ed) Understanding, interpreting and evaluating the EU in 2008: theoretical and empirical approaches (Nicosia University Press, Nicosia, 2009). 1182 The constitutional aspects related to the Annan Plan fall outside the scope of the present book. Sözen and Özersay have analysed from an international law perspective to what extent the Annan Plan contributes to the debate on the principle of State succession/State continuity by examining four criteria, namely “(i) the membership status of successor state in international organisations, (ii) continuation of treaty obligations of predecessor state or states, (iii) allocation of the predecessor state’s debts and 1181

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the choice of the method and the ‘quasi-equalisation’ in law of the representation of the 20% with the 80% of the population, have been said not to respect the fundamental principles of Community law and Article 6 EU.1183 But they remain primarily internal constitutional issues protected by the right of national sovereignty of Member States in the EU, thereby potentially limiting the binding eﬀects of general principles of Community law onto such measures.1184 (b) The European Parliament Article 7 of the Draft Act of Adaptation expressly sets out the representation of Cyprus to the European Parliament “according to proportional representation, provided that each constituent State is attributed no less than one third of the Cypriot seats in the European Parliament”. This provision may not prima facie appear to be necessary, since Community law does not currently require a legislative electoral system based on strict proportionality, the proposal for a uniform procedure for elections to be taken by virtue of Article 190(4) EC being pending.1185 Even though the Draft Act of Adaptation does not seem to derogate stricto sensu from any provision of Community law at present in this respect, it may deviate from established principles or practices in the Union regarding equal representation to the European Parliament. Such a discrepancy may have been justiﬁed in theory given the special meaning of the European elections for Cyprus within the context of the Annan Plan (establishing two constituencies).1186 But in fact, European elections were scheduled to be held shortly after Cyprus’ accession to the EU (10–13 June 2004) and, since the Draft Act of Adaptation never entered into force in accordance with its Article 9,

(iv) state property (including archives)”. They concluded that the Annan Plan does not clearly contribute to this discussion as it borrows from both principles; see Sözen A & Özersay K, ‘The Annan Plan: State succession or continuity’ (2007) 43(1) Middle Eastern Studies 125, 132–9 1183 Agapiou-Josephides in Agapiou & Rossetto, 91; see also Anastasakis et al, Getting to yes: suggestions for embellishment of the Annan Plan for Cyprus (South East European Studies Programme, Oxford, 2004). 1184 See Tridimas, 40. 1185 Hoﬀmeister, 188; see also the Eman et Sevinger case of the ECJ as developed in n 933 above. 1186 Agapiou-Josephides talks about the “sui generis character of European elections” in ‘South European integration watch: European Parliament elections in the new South European Member States’ (2005) 10(1) South European Society & Politics 105, 109 and 119.

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further measures had to be taken. The Council therefore adopted a Decision,1187 arguably on the basis of Article 4 Protocol 10 since it addressed the situation in case of a settlement during the electoral term 2004–2009 and beyond.1188 In accordance with Article 11 of the 2003 Act of Accession, the number of representatives elected in Cyprus for the 2004–2009 term was ﬁxed to six. In view of the suspension of the acquis in the Areas by virtue of Protocol 10, it was decided that elections would not be held in the Areas,1189 although Turkish Cypriots retained the right to vote in the RoC by crossing the Green Line on the day of the elections.1190 In the meantime, anticipating the occurrence of a comprehensive settlement triggering Article 4 Protocol 10, the Council decided that: in the event of a comprehensive settlement, it is necessary to provide for an early ending of the mandate of the representatives of the people of Cyprus in the [EP] elected in June 2004 or in subsequent elections and to hold extraordinary elections in the whole of Cyprus for the remaining term of the [EP].1191

In order to achieve the above objective, the Council adopted a Decision on the proposal from the Commission providing for derogations from Article 190(3) EC as well as from Articles 5, 10(1) and 11(2) of the 1976 Act,1192 to the eﬀect that the term of oﬃce of the elected representatives for Cyprus could end (Article 1(a)), extraordinary elections could be held (Article 1(b)) and the newly elected members could take up their term of oﬃce (Article 1(c)). The Council clariﬁed that the holding of extraordinary elections in accordance with Article 1(b) of the Decision was conditional upon the triggering of Article 1(2) of Protocol 10 “after 1187 Council Decision (EC) No 511/2004 of 10 June 2004 concerning the representation of the people of Cyprus in the EP in case of a settlement of the Cyprus problem [2004] OJ L 211/22, 12.6.2004. 1188 It clearly appears from Art 1(b) of the Decision that the special arrangements apply to ‘any subsequent term’ of the EP, hence to the 2009 EP elections and potentially to the whole of the 2009–2014 electoral term if necessary. 1189 3rd Recital Council Decision, see n 1187 above. 1190 See Law 10(I)/2004 on the election of the MEPs in Cyprus, as amended by Law 13(I)/2009 (Oﬃcial Gazette No 3807, 6.2.2004) setting out the rights to vote and to be elected in the EP elections; see also n 927 above. 1191 4th Recital Council Decision, see n 1187 above. 1192 Act concerning the election of the members of the EP by direct universal suffrage, annexed to Council Decision (ECSC, EEC, Euratom) 787/1976 [1976] OJ L 278/1, 8.10.1976, as amended by Council Decision (EC, Euratom) No 772/2002 [2002] OJ L 283/1, 21.10.2002. It was previously said that the 1976 Act is an instrument of primary legislation; see n 937 above.

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adoption by the Council … of the ﬁrst decision on the withdrawal of the suspension of the application of the acquis”, thereby expressly setting out the possibility of partial withdrawal of the suspension triggered under Article 4 Protocol 10. This Decision of the Council does not a priori seem to sit comfortably with the rest of the alleged re-regulatory regime for a uniﬁed Cyprus for several reasons. First of all, it could be argued that Article 4 Protocol 10 is not the right legal basis for this Decision, since there is no comprehensive settlement as such; rather, it is envisaged in the future. In that case, it would extend the scope of Article 4 Protocol 10 to regulate future terms of accession of the Turkish Cypriot community to the EU and beyond, since these terms clearly have an impact on the whole of Cyprus in the EU, without a comprehensive settlement. It was previously argued that pending a settlement, the terms of accession should be envisaged under Articles 1(2), 2 and 3 Protocol 10. It may be that there is a priori no better legal basis in the Protocol to accommodate derogations to the constitutional or institutional principles of the Community, like the ones envisaged in this Decision. Articles 2 and 3 Protocol 10 are prima facie restricted to the implementation of the Community acquis and Article 1(2), in the view of the Commission, must be triggered only with reference to Article 4 Protocol 10 (the above mentioned Decision is conditional upon the triggering of Article 1(2) by a future decision of the Council). Secondly, the Decision of the Council could prima facie appear to be an instrument of secondary legislation. If so, it would not really seem to ﬁt with the previous analysis of the re-regulatory regime of a uniﬁed Cyprus, which was found to constitute primary law, albeit with sui generis implications. It could be argued that Article 4 Protocol 10 ‘opens up’ primary law to secondary law exceptions ‘along the lines’ of Articles 18(1), 45(2) or 57(2) EC for the fundamental freedoms,1193 provided however Article 4 can be given the same ranking as these Articles in the Community constitutional legal order. In this case, the ECJ would in principle have jurisdiction to review the validity of the Decision under Article 230 EC or Article 234 EC. Alternatively, it could be said that this Decision is an instrument of primary legislation, like the Council decision adjusting the terms of

1193

Giegerich in Giegerich, 271.

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accession contained in the Treaty for Norway, Austria, Finland and Sweden following Norway’s failure to ratify its EU accession was before it. This time though, the adjustments to the terms of accession are taken on the basis of a provision in a Protocol, the legal nature of which remains unclear, as opposed to being based on the provisions of the Treaty of Accession itself,1194 and concern future terms. It is therefore unclear whether this instrument can fall under the judicial scrutiny of the ECJ as regards to its validity. In favour of this last point, it could be said that the derogations envisaged in the Decision may be compatible prima facie with the principles of Community law and, as such, would not require the passing of primary legislation. The said Decision does in fact appear to be merely “an appropriate normative instrument for executive acts of the institutions”1195 in application of the implied ﬂexibility contained in Article 190(4) EC. This last remark, combined to the emergency of the matter and the fact that only Cyprus is concerned, could explain a priori the choice by the Council of a decision as a legal instrument to address the European Parliamentary elections in Cyprus within the broader socio-legal context of the full integration of Cyprus into the EU. It could be said on the other hand that this very same context requires the passing of primary legislation. In this respect, it should be noted that this instrument of Community law was taken after Cyprus’ accession to the EU (9 June 2004), which means that Cyprus had the possibility to vote on this item at the Council, and normally without any external pressure this time (it appears to be a purely EU internal matter concerning the participation of one Member State to an institution). Thus, the analysis of the intergovernmental mechanisms of derogation should be less relevant here, although by no mean obsolete in the context of Cyprus’ EU membership, as the ongoing discussions and/or negotiations between Cyprus, Turkey, the EU and/or the UN post accession reveal.1196

1194 The adjustments of the terms of accession were taken on the basis of Art 2 1994 Treaty of Accession. 1195 Lenaerts & Van Nuﬀel, 781. 1196 For a discussion of the relationship between Cyprus, Turkey, the EU and/or the UN post accession, see e.g. Stavridis S, ‘Towards a ‘European solution’ of the Cyprus problem: false promise or real opportunity’ (2006) 18(1) The Cyprus Review 87; Evriviades E, ‘Why Cyprus, perhaps surprisingly, wants Turkey to join the Club’ (2005) 6(4) European Aﬀairs 55; and Ker-Lindsay J & Webb K, ‘Cyprus’ (2006) 45 European J of Political Research 1071.

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2. Turkish as EU language The issue of Turkish as an oﬃcial language of the EU, in view of a comprehensive settlement in Cyprus and prior to Turkey’s accession to the EU, touches upon the wider issue of fundamental rights in the EU.1197 The RoC had requested that Turkish become an oﬃcial language of the Union after the approval of a settlement, which is reﬂected in Article 8 of the Draft Act of Adaptation. The ‘oﬃcial languages’ of the EU should be distinguished from the ‘Treaty languages’ (and the ‘working languages’). The ‘oﬃcial language’ status “operates on a diﬀerent level than the political category of ‘Treaty languages’”.1198 Article 290 EC provides that the Council decides unanimously on the language framework of the EU and on the use of oﬃcial languages.1199 There are currently 23 oﬃcial and working languages in the EU and, at present, they correspond to the Treaty languages with the addition of Irish Gaelic as an oﬃcial and working language in 2005 with eﬀect as of October 2006.1200 It had been a Treaty language ever since the UK and Ireland joined the EEC in 1973, as recorded in Article 314 EC (Irish is also spoken in the UK territory of Northern Ireland). Thus, Irish provides an interesting example of an oﬃcial and/ or regional language at the national level a priori not recognised as an oﬃcial and working language at the supranational level for a long time.1201 The oﬃcial language of the Member State is normally the ‘state language’ described as a language “that is oﬃcial throughout the territory of a state”.1202 This political rather than legal criterion has led to exclusions, as not all the oﬃcial languages of a Member State can become

1197 For a review of language rights as general principles of Community law protected as fundamental rights in the EU legal order or as general principles in the national legal orders when Community law applies (or not), see 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 (‘Urrutia I & Lasagabaster’). 1198 Ibid, 3. 1199 See Council Regulation No 1/1958/EEC/Euratom of 15 April 1958 determining the language to be used by the EEC and the Euratom [1958] OJ 17/401. 1200 See Council Regulation No 920/2005/EC amending Regulation No 1/1958 and introducing temporary derogation measures [2005] OJ L 156/3. 1201 Urrutia & Lasagabaster refer to an “intermediary status between oﬃcial status and non-oﬃcial status of languages in which, obviously, oﬃcial uses were recognised”; in Urrutia & Lasagabaster, fn 5. 1202 Ibid, 4.

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oﬃcial languages of the EU. In the name of the recognition of linguistic diversity, the Council on 13 June 2005 took conclusions on the oﬃcial use of additional languages within the Council and possibly other institutions and bodies of the EU which apply to languages other than the ones initially listed as oﬃcial languages and “whose status is recognised by the Constitution of a Member State on all or part of its territory or the use of which as a national language is authorised by law”.1203 As such, it could cover in theory the use of the Turkish language as a ‘joint’ oﬃcial language in Cyprus.1204 The possibility of using these languages depends on an administrative agreement to be signed between the Member State concerned and the Council (or other corresponding European institution).1205 Such agreements have been concluded with the Council, the Committee of the Regions, the Commission, the Economic and Social Committee, the European Parliament and the European Ombudsman for the use of Basque, Catalan and Galician.1206 The use of these languages under the Council Conclusion is however limited to certain categories of acts, speeches and communications1207 and thus are deemed to have ‘little practical eﬀect’.1208 The above option was open to Cyprus in the context of the reuniﬁcation of the island. In the Draft Act of Adaptation, the parties however opted for a gradual application of Turkish as an oﬃcial and working language in all the institutions, “upon fulﬁlment of the necessary personnel and technical requirements”. Article 8 therefore appears to act as lex specialis, to the extent that it provides for a more speciﬁc procedure than the EC Treaty itself,1209 apparently within the limits of the EU constitutional and institutional legal order. The apparent absence of permanent adjustments at the constitutional and institutional level of the EU pending a settlement appears to be in line with the general rule that the 2004 enlargement recognised no such speciﬁcities to the new Member States. The derogations to Community policies envisaged in the Draft A/A appear however more problematic.

1203 1204 1205 1206 1207 1208 1209

[2005] OJ C 148/1, 18.6.05, para 1. Urrutia & Lasagabaster, 6. Council Conclusion, para 4, see n 1203 above. See n 1204 above. See n 1203 above, para 5. See n 1204 above. Hoﬀmeister has described it as a ‘more ﬂexible option’, 188.

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Concluding remarks Despite arguably leading to a sui generis regime in the EU which may not always be in line with Community fundamental principles, it is clear that the principles created under Article 4 Protocol 10 represented the potential compromised terms of accession of the Turkish Cypriot community beyond a settlement, on the way towards the full integration of Cyprus into the EU. The Commission presented the framework of the Draft Act of Adaptation as encompassing “all the decisions to be taken by the Council”.1210 It is however unlikely that the re-regulatory regime of a uniﬁed Cyprus as envisaged in this framework contained all indispensable elements leading to the full integration of Cyprus into the EU. As a result and in view of a future settlement, the Council showed its willingness to address these terms of accession on an individual and ad hoc basis under Article 4 Protocol 10, provided though such acts could indeed be taken on the basis of Article 4. It was argued that this provision could only support future terms of accession in the absence of a comprehensive settlement if taken within the broader socio-legal context of the reuniﬁcation of Cyprus. Even then, it seems that only pressing matters involving no other conﬂicting interests within the EU could be dealt with in this manner. The re-regulatory regime of a uniﬁed Cyprus cannot however apply by default, in the absence of a settlement, save for certain restricted future terms of accession. This should normally indicate a contrario that the full integration of Cyprus is put on hold for the duration of the division of the island on the basis of Article 4 Protocol 10. It remains however that other instruments of Community law had to be created in accordance with Protocol 10 to ensure the transitional regime pending a settlement, based on a common understanding by all the Member States as to what the terms of accession of the Turkish Cypriot community should be. It was quite clear in particular that following the accession of Cyprus as a divided island, such a hybrid situation as the one arising under the Draft Act of Adaptation could not be accommodated in the EU legal order any longer.1211 1210

COM(2004) 145 ﬁnal, 2.3.2004, Explanatory Memorandum. Ziegler writes that the deviations from the acquis accepted by the European Commission in its proposal for the Draft A/A come in his opinion “quite close to an absolute limit of what could be possibly accommodated in a future settlement”; in Ziegler, 10. It remains however ‘illusionary’ to assume that there could be a settlement without any temporary deviations from the acquis; ibid, 7. 1211

CHAPTER SEVEN

MARKET REGULATION WITHOUT REUNIFICATION: AN INSTANCE OF DISINTEGRATION?

The basic common understanding by all the Member States as to what the terms of accession of the Turkish Cypriot community should be pending a settlement is contained in the political declaration of the Council dated 26 April 2004, whereby the Member States agreed that: [t]he Turkish Cypriot community have expressed their clear desire for a future within the [EU]. The Council is determined to put an end to the isolation of the Turkish Cypriot community and to facilitate the reuniﬁcation of Cyprus by encouraging the economic development of the Turkish Cypriot community. The Council invited the Commission to bring forward comprehensive proposals to this end, with particular emphasis on the economic integration of the island1212 and on improving contact between the two communities and with the EU.1213

Given the absence of a comprehensive settlement but in view of the growing socialisation of the Turkish Cypriot community in the EU, the route privileged by the Council appears to reﬂect a process of market integration trough the economic governance of Cyprus. This method reminds a priori of the regulatory reform which created the Internal Market in the 1980’s. Back then, the main ‘problem’ was national “rules and regulations that created barriers to trade and distortions to competition”; the ‘solution’ brought forward was ‘Community harmonisation’.1214 ‘Good governance’, in this context, was “identiﬁed with the beneﬁts to ﬂow from economic integration” and was “produced through the instrument of Community legislation”.1215 This process has already been said in the Introduction to be not only ‘deregulatory’ in nature through the removal of trade barriers and distortions to competition, but also ‘re-regulatory’ through the building of the Internal Market.

1212

Emphasis added. Outcome of the GAERC proceedings on Cyprus, 26.4.2004, Doc 8907/04. 1214 Amstrong K, Regulation, deregulation, re-regulation (Kogan Page, London, 2000) (‘Amstrong’) 1. 1215 Ibid, 1–2. 1213

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As such, the Community appears to be relying on the traditional ‘export of the economic logic’ of the Internal Market or spillover eﬀect, to justify a prima facie case for Community action even for the satisfaction of non-economic objectives.1216 As an expression of the political will of the Council, the Commission was requested to utilise the legal basis provided for in Article 2 Protocol 10 to address the terms of accession of a divided Cyprus. Such terms had to be in place before Cyprus’ accession to the EU, thereby reinforcing the supranational character of the regime as opposed to the intergovernmental characteristics of the terms of accession of a uniﬁed Cyprus studied in the previous Chapter. It would appear prima facie that the terms of accession of the Turkish Cypriot community pending a settlement are based primarily on the centralised decision-making mechanisms used for the creation of secondary legislation and primarily in the hands of the Commission. The exact nature and the appropriate legal basis for these supranational instruments of centralised decision-making must however be determined. This exercise is very much dependent on the interpretation of the scope of Article 1 Protocol 10 as lex specialis for Cyprus. This in turn has implications for the triggering of the other Articles of the Protocol, which apparently have not been considered by the Commission as lex specialis for all the terms of accession of a divided Cyprus. As a result, recourse to certain general legal bases of the Treaties was deemed necessary, which would appear justiﬁed provided the special legal bases contained in Protocol 10 have been exhausted. The relevant instruments of secondary legislation deriving from Protocol 10 and/or from general provisions of the Treaties would in any case need to comply with Community law rules and principles, especially to the extent that they might be derogatory. Instruments of secondary legislation cannot in principle deviate from Community rules and principles contained in the Treaties and in other sources of primary law. As a result, the re-regulatory regime for Cyprus pending a settlement should normally remain within the boundaries of Community law and, as such, be ‘less derogatory’ than the re-regulatory regime for a uniﬁed Cyprus previously analysed. The speciﬁc instance of Cyprus’ integration as a divided island could illustrate the hypothesis of a ‘self-contained regime’, whereby “a set of

1216

See the Tobacco Advertising case, Case C-376/98 [2000] ECR I-8419.

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primary rules relating to a particular subject-matter is connected with a special set of secondary rules that claims priority to the secondary rules provided by general law” and as such, could constitute a “special case of lex specialis”.1217 The issue of the extent of the ﬂexibility aﬀorded by this special case of lex specialis arises as a result. In this respect, the socio-legal perspective of this book raises the issue of whether market regulation in Cyprus can ever lead to – full – integration into the EU or if, on the contrary, it deepens the gap created by the division of the island and potentially leads to disintegration in the EU as a result. On the way to economic union, Pinder refers to integration as “the combination of parts into a whole” and to union as “a whole resulting from the combination of parts or members”.1218 To achieve union through integration, the ‘important choice’ would be lying in the deﬁnition of union, namely “in deciding when a combination of economic parts or members, […], is to be regarded as a ‘whole’”.1219 Pinder has deﬁned economic integration and economic union as follows: … both the removal of discrimination as between the economic agents of the member countries [‘negative integration’], and the formation and application of co-ordinated and common policies on a suﬃcient scale to ensure that major economic and welfare objectives are fulﬁlled [‘positive integration’]. It follows that economic union is a State in which discrimination has been largely removed, and co-ordinated and common policies have been, and are being, applied on a suﬃcient scale.1220

In order words, “[n]egative and positive integration together comprise economic integration, whose end is economic union”.1221 In the EU post-ontological debate, it could be argued that economic integration has been replaced by market integration, which represents far more than the concept of Common Market,1222 as outlined in the Introduction to this Part. Applied to the case of Cyprus, it could be argued that market regulation could lead to market integration provided there is both negative and positive integration taking place to a satisfactory extent. If so, the 1217

International Law Commission Report, 8–9. Pinder J, ‘Positive integration and negative integration’ [1968] The World Today 88 (‘Pinder) 88. 1219 Ibid. 1220 Pinder, 90. 1221 Ibid. 1222 Pinder, 91. 1218

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remaining step would be to determine whether all the elements for a market union of the Turkish Cypriot community with the EU (which includes the government controlled area of the RoC as part of the Internal Market and without prejudice to the fact that the Areas belong to the RoC) are present, in which case it would mean that market union could constitute a major step towards the full integration of Cyprus into the EU, thereby ‘bypassing’ the current internal status quo. Should the achievement of market union trigger the ‘undoing’ of the provision of Article 1(1) Protocol 10, it could open the way to full integration; in the absence of a ‘solution’ through market union, it could mean that a process of disintegration of Cyprus within the EU is underway. I. Principles of market regulation in a divided Cyprus In view of the total suspension of the acquis in the Areas, it is argued that Protocol 10 serves as a legal basis for instruments of secondary legislation establishing the re-regulatory regime in Cyprus encompassing the substitution of the rules of the Internal Market in Cyprus (Article 2) and/or the economic development of the northern part of the island (Article 3). Both aspects have been created and interrelated at the supranational level. If Article 1(1) Protocol 10 provides for the suspension of the acquis in the Areas, thereby creating a special regime there, this suspension does not apply in principle to the government controlled area of the RoC who is bound by its obligations to implement the acquis,1223 including the rules of the Internal Market under the Treaty of Accession and under the EC Treaty, in particular with respect to the freedoms of movement of goods,1224 persons1225 and services.1226 The suspension of the acquis and the regime deriving therefrom may however have implications or ramiﬁcations in the government controlled part of the RoC, as outlined in Chapter 5. It could be argued that the separation of the regimes applicable in the non-government controlled part and in the government controlled part of the RoC respectively may seem idealistic

1223

9th Recital Protocol 10. Title I Part Three EC. 1225 Title III Chapter 1 EC. The applicability of Article 18 EC was discussed in Chap 5 of this book. 1226 Title II Chapters 2 and 3 EC. 1224

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and quite diﬃcult to achieve in practice. This is so in particular with respect to the implementation of instruments of secondary legislation both deriving from the Treaty of Accession and from Protocol 10. A. The establishment of a supranational re-regulatory regime 1. Regime on the Green Line (a) Background of soft governance Protocol 10 expressly provides that a special regime for the Green Line had to be created and, in the absence of a settlement, it was clear that this had to occur before accession, as the dividing line between the two sides could not constitute an external border of the EU,1227 hence the creation of a supranational derogatory regime. Time was of essence, as the premature arrival of the regime may have prejudged the outcome of the ongoing eﬀorts to solve the Cyprus problem before accession,1228 whereas its belated arrival would have exposed Cyprus to a serious and manifest breach of Community law under the Treaties. This framework of governance, which could be characterised as ‘soft’,1229 created some ‘legitimate expectation’ as to the conduct of the parties to the European integration of Cyprus, leading in particular to ‘State action’ in Cyprus.1230 The restrictions applied by the RoC following the 1974 invasion of the island were deemed to be the result of the proper implementation of the laws of the State, and not of an embargo imposed on Turkish Cypriot goods, persons and services.1231 The RoC on the other hand endorsed the partial lifting of the restrictions by the

1227

Uebe, 386. Ibid. 1229 Art 5(3) 2003 Act of Accession provides that Cyprus (and the other new Member States) are bound in the same way as the old Member States by the various Council declarations and resolutions. See Bulmer’s review of the instruments of governance in Bulmer, 365–70. 1230 See the implications of soft governance on EU policy as seen by Edwards G, ‘Reforming the Union’s institutional framework: a new EU obligation?’ in Hillion (2004b) 27, inter alia that soft law can provide a legal basis for ‘State action’, for negotiation thereby “acting as a precursor for hard law” and as a result, soft law may create “expectations about conduct, raising the question of ‘legitimate expectations’”. Soft law, during the process of creation of hard law, “can have a legitimising eﬀect on conduct” and may even “bind the institutions”, ibid. 1231 There have never been any oﬃcial restrictions on the free movement of Turkish Cypriots in the RoC, although practical diﬃculties remained with respect to goods, workers and services (vehicles); see Markides (2000) 1208; contra Neuwahl in Neuwahl (2004) fn 18 in particular. 1228

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‘authorities’ in the northern part of Cyprus in April 2003 based on the rationale that, in accordance with the Namibia precedent, it could: tolerate the results of certain actions of the subordinate local administration of Turkey in the occupied areas – without this negating or aﬀecting the fact that they are produced illegally or by organs or bodies established and operating illegally – in those instances, which, if disregarded, would constitute or would have as a consequence the deprivation or violation of fundamental rights of the Turkish Cypriot citizens of the Republic.1232

The above framework also served “as a basis for negotiations, thus acting as a precursor of hard law”.1233 Within the framework of the supranational powers granted to the institutions in Copenhagen, the Commission presented inter alia to the Council in March 2004 a proposal for a Council Regulation on a regime under Article 2 of Protocol 10.1234 Reﬂecting on the need for soft governance, this proposal took into account “the particularity of the situation and the political sensitivities on the island”, so as to “ﬁnd a balance between the need to establish a clear legal framework and the need to avoid the deepening of the divide”.1235 (b) Legal framework (i) Choice of the legal instrument. The very choice of the legal instrument is reﬂective of the type of governance in a particular subject matter. The choice of a regulation comes to reinforce prima facie the supranational character of the re-regulatory regime on the Green Line, given its attributes embodied in Article 249 EC. A regulation is normally addressed to private economic actors, binding in its entirety, may be very precise, and may confer executive tasks expressly on the Community institutions and/or implicitly on the Member States.1236 It is normally used to implement measures “in areas in which Community legislation imposes extensive administrative tasks on the Community, such as … the application of the Common Custom Tariﬀ ”,1237 and could be extended a fortiori to its non-application, like in the case of Cyprus.

1232 last accessed on 5.10.2004. 1233 Edwards in Hillion (2004b) 27. 1234 COM(2004) 145 ﬁnal, 2.3.2004 (‘GL Proposal’). 1235 Explanatory Memorandum GL Proposal. 1236 Lenaerts and Van Nuﬀel, 764. 1237 Ibid.

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In accordance with the Amsterdam Protocol on the subsidiarity principle, “[o]ther things being equal, directives shall be preferred to regulations and framework directives to detailed measures”.1238 Regulations are deemed to be ‘more regulatory’ as the underlying objective is the uniform application of Community law. From a simpliﬁcation and transparency perspective, regulations are instruments of intense regulation, less transparent than directives and more costly as lying at several levels of regulation;1239 they leave less latitude to the Member States than directives. Regulations nevertheless have the merit of creating a ‘clear legal framework’, as stated in the GL Proposal, although it may be doubted whether the regulations pertaining to Cyprus are fully compatible with all the intrinsic characteristics of a regulation under Community law. A regulation is normally “applicable to objectively determined situations and involves consequences for categories of persons viewed in a general and abstract manner”,1240 without any speciﬁc or individual ﬁeld of application, including to a special situation.1241 Although the ECJ has clariﬁed that a measure does not lose its “character as a regulation simply because it may be possible to ascertain with a greater or lesser degree of accuracy the number or even the identity of the persons to whom it applies”,1242 it is the general scope of the regulation which diﬀerentiates it from a decision whose “essential characteristics … arise from the limitation of the persons to whom it is addressed”.1243 The diﬀerentiation between a regulation and a decision is of essence, since it will determine primarily the locus standi of non-privileged applicants under Article 230 EC. Decisions normally reﬂect the ultimate discretionary power of the EU institutions, in particular the Commission, and should therefore be challengeable more directly. Such considerations should not arise with respect to regulations, since they can be directly eﬀective before the national courts, provided they are suﬃciently clear and unconditional.1244 Overall, it can be said that the re-regulatory regime of Cyprus envisaged in the various

1238 Protocol 30 annexed to the EC in the framework of amendments made by the 1997 Amsterdam Treaty [1997] OJ C 340/140, 10.11.1997. 1239 Amstrong, 8. 1240 ECJ, Case 6/68, Zuckerfabrik Watenstedt v Council [1968] ECR 409, 415. 1241 Lenaerts & Van Nuﬀel, 764. 1242 Case 6/68, see n 1240 above, 415. 1243 ECJ, Joined Cases 16–17/62, Confédération Nationale des Procureurs des Fruits et Légumes v Council [1962] ECR 471, 478. 1244 ECJ, Case 43/71, Politi [1971] ECR 1039, para 9.

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regulations remains of a suﬃciently general scope to be ‘true’ regulations, as it potentially concerns the whole of the EU. It also reﬂects on the need to address (non)economic actors in the Areas directly, in view of the lack of recognition of oﬃcial authorities there. (ii) Interconnected legal bases. Following the results of the referenda held in Cyprus on 24 April 2004, which deﬁnitively closed the door to the accession to the EU of a uniﬁed Cyprus, the Council asked Coreper to act as follows: to expedite discussion on the Regulation on a regime under Article 2 of Protocol 10 of the Act of Accession with a view to its adoption before 1 May, taking due account1245 of the Council’s desire to send a signal of encouragement to the Turkish Cypriot community that its future rests in a united Cyprus within the [EU].1246

Thus, the Council indicated a priori a link between the implementation of the special regime under Article 2 Protocol 10 and the objective set in Article 3 Protocol 10. To that intent, when adopting the GL Regulation prior to accession and following agreement reached by Coreper, the Council inserted in its Minutes a statement by the Commission undertaking to give eﬀect to its conclusions on Cyprus by creating simultaneously measures promoting the economic development of the Turkish Cypriot community,1247 thereby conﬁrming the link between the two initiatives deriving from two diﬀerent legal bases. The Commission undertook in this statement to report regularly to the Council on the implementation of the GL Regulation, including any concern arising out of such implementation and to make recommendation thereon.1248 The Council anticipated the possibility of conﬂicts arising out of the implementation of the GL Regulation in view of the other set of measures to promote development in the Areas. Under the speciﬁc mandate of the Council and in accordance with the exclusive right of legislative initiative of the Commission under Community law, both types of instruments were placed in the hands of the Commission, whose role was enhanced, as it was made responsible to implement measures under Articles 2 and 3 Protocol 10, to monitor them as well as to amend them, if and when necessary. 1245

Emphasis added. GAERC conclusions, 26.4.2004. 1247 Doc 8984/04, 28.4.2004. 1248 Ibid. The 2008 report was issued by the Commission on 14.09.2009 and could not therefore be included in this book. 1246

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2. Regime beyond the Green Line (a) Economic development in the Areas Following the Brussels European Council meeting of 21 March 2003, which regrettably noted the failure of the UN talks in The Hague in early March, the Commission had produced a 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.1249 In accordance with its mandate under paragraph 12 of the Copenhagen Presidency conclusions and in cooperation with the RoC, the Commission had proposed in the Communication measures on ﬁnancial assistance to the Turkish Cypriot community as well as on the promotion of trade. Whereas the legal basis used by the Commission for the set of measures on ﬁnancial assistance remained to be formally identiﬁed (the Commission did not refer expressly to Article 3 of the Protocol),1250 the legal basis for measures on trade promotion was identiﬁed as being the EC-Cyprus Association Agreement prior to accession and Article 2(1) Protocol 10 following accession. Thus, as far as the objectives of the measures were concerned,1251 the Commission seemed to acknowledge and materialise the linkage of instruments relating to ﬁnancial assistance and to trade promotion. This clearly indicates that the reregulatory regime for Cyprus equally extends to the Green Line and beyond it, potentially onto each side of the line. (b) Implications for the re-regulatory regime in the Areas Some conclusions can be drawn from the above as to the characteristics of Articles 2 and 3 Protocol 10, in an attempt to provide an explanation to the Council’s approach. Article 3 Protocol 10 does not appear to constitute a suﬃcient and autonomous legal basis for the provision of continued support to the northern part of the island, which should be based on a speciﬁc instrument of secondary legislation such as the

1249 Communication to the Council and to the EP 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 (‘2003 Commission Communication’). 1250 The then legal basis for expenditure on pre-accession support to Cyprus and Malta (Council Regulation (EC) 555/2000 of 13 March 2000 [2000] OJ L 068/3) was due to expire on 31 December 2003. 1251 The choice of the legal basis must be “based on objective factors which are amenable to judicial review” (ECJ, Case 45/86, Commission v Council [1987] ECR 1493, para 1) such as the aim or the content of the measure (ECJ, Case C-300/89, Commission v Council [1991] ECR I-2867, para 10); see Lenaerts & Van Nuﬀel, 89.

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one applicable to the whole of Cyprus prior to accession.1252 The fact in particular that Article 3 Protocol 10 was not mentioned in Article 2(3) of the 2003 Treaty of Accession as one of the legal bases which could be triggered prior to accession and pending ratiﬁcation seems to conﬁrm this analysis, at least prior to accession. If Article 3 cannot constitute an autonomous legal basis, the question of its role arises. It has been argued that Article 3 allows the avoidance of any ‘uncertainties’ as to the implications of the suspension of the acquis in the Areas.1253 Thus, mirroring the fact that the suspension of the acquis had to be provided for expressly in the Protocol so as to avoid any legal challenge before the EU Courts, Article 3 could merely perform a similar function as far as the assistance to the Areas during the suspension of the acquis is concerned.1254 This however leaves the question of the legal basis for the assistance in the Areas unanswered. Nevertheless, this would seem to explain the willingness of the Council to link instruments of Community law created directly by virtue of Article 2 Protocol 10, which constitutes a strong legal basis in the Protocol (even before accession), with Article 3 of the Protocol, which refers to autonomous measures of secondary legislation independent from the suspension of the acquis, to be taken a priori on the basis of the EC Treaty. It enables the Council to keep these instruments of Community law within a supranational context deriving from the lex specialis of the Protocol and/or from the EC Treaty, as opposed to more intergovernmental mechanisms of decision-making involving Cyprus prior to accession. Following accession, it is argued that the lex specialis of Protocol 10 supersedes the traditional supranational modes of governance applied to the creation of instruments of secondary legislation under Community law, to the extent in particular that the role of the Commission is enhanced. B. Components of the re-regulatory regime Following accession, Article 2 Protocol 10 provides in principle the legal basis for the enactment of secondary legislation regulating the regime 1252 The Commission therefore proposed that “[I]n the event of no comprehensive settlement before 2004, [it] will ensure further speciﬁc and targeted actions. A suitable proposal for a legal basis supporting continued assistance in 2004 would be presented in due time”; see the 2003 Commission Communication, pt 1.3. 1253 Uebe, 388; contra Hoﬀmeister who argues for an independent and autonomous role of Art 3; in Hoﬀmesiter, 217. 1254 Uebe, 388; see also Berramdane in Agapiou & Rossetto, 54.

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applicable to the Green Line itself through a unanimous decision of the Council on the basis of a proposal from the Commission (paragraph 1) and further deﬁnes the border of the Areas with the Eastern British sovereign military base (paragraph 2). The deﬁnition of the Green Line may appear ‘cumbersome’, but is nevertheless needed due to the territorial interaction of the government controlled area of the RoC, the nongovernment controlled area of the RoC and the SBAs.1255 Article 2 Protocol 10 therefore deals indirectly with the implications of the suspension of the acquis in the Areas and determines the status of this territory in the EU. In the meantime, Article 3 legitimises prima facie any measure favouring the economic and ﬁnancial support to the Areas. 1. Principles of inclusion/exclusion (a) Inclusion in the EU territory Article 1(1) Protocol 10 is a clear application of the principle that the whole territory of a Member State is included in the EU, unless stated otherwise. The principle of territorial inclusion has been examined at length in Chapter 3 with respect to the application of the 2003 Treaty of Accession and in Chapter 4 with respect to the exception in favour of the BSAs in Cyprus and does not therefore raise any diﬃculty of interpretation here. (b) Exclusion from the Customs Union, the ﬁscal territory and from the area of freedom, justice and security of the Union In light of the fact that the Areas are included in the European territory but in view of the above exclusion deemed temporary,1256 special rules securing “an equivalent standard of protection of the security of the EU with regard to illegal immigration and threats to public order, and of its economic interests as far as the movement of goods is concerned” were needed.1257 The re-regulatory regime in the Areas therefore arguably lies in between the non-preferential status of third countries and the preferential status aﬀorded to Member States leading to free movement by virtue of the rules of the Internal Market. A preferential treatment normally entails the non-compliance by persons and goods with EU 1255 1256 1257

Uebe, 386; see also Chap 4 of this book. 4th Recital GL Regulation. Ibid.

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formalities applicable to third countries, subject however to the transitional measures and adjustments in Treaties of Accession. The re-regulatory regime of the Areas appears to be preferential, to the extent that it provides an “equivalent standard of protection” in the area of the freedom of movement of goods and of persons as opposed to the normal non-preferential regime, but is accompanied by substantial restrictions imposed by the EU institutions at their discretion.1258 The prohibition on the movement of animals and animal products over the Green Line until the precautionary principle is lifted partially or totally is one instance of such restrictions.1259 A comparison could be drawn with the German experience, whereby problems for trade were circumvented as, under the Protocol annexed to the EEC Treaty on German internal trade and connected problems,1260 the FRG was entitled to regard trade with the GDR as part of German internal trade.1261 The Court of Justice conﬁrmed in its interpretation of the German Protocol on internal trade that goods from the GDR did not have to comply with EU formalities for third country goods either.1262 But the diﬀerence in that case is that the GDR did not form part of the Community1263 and thus, goods coming from there “were not regarded as originating in the FRG”.1264 This does not reﬂect the scenario adopted for the Areas. As a result of the Anastasiou saga and before accession, direct exports to the EU of goods produced or obtained in the Areas did not beneﬁt from the customs preferential treatment granted under the 1972

1258

Hoﬀmeister, 215. 4th Recital GL Regulation. The Commission adopted Decision (EC) No 330/2007 of 4 May 2007 lifting prohibitions on the movement of certain animal products in Cyprus under the GL Regulation and laying down conditions for the movement of those products [2007] OJ L 123/30, 12.5.2007. It ﬁrst obtained the unanimous approval by the Member States in the Standing Committee on the Food Chain and Animal Health on 22.3.2007; see Enlargement Newsletter 11.5.2007 accessed on 15.5.2007, 5. On 18 October 2007, the Commission adopted a Decision C(2007) 4666 on the appointment of independent experts to carry out inspections and take samples to allow the movement of certain animal products across the line through the inspection of ﬁshing vessels and of honey samples in the Areas in order to allow trade in honey and fresh ﬁsh across the line; see the 2007 Commission report on the implementation of the GL Regulation, 3. 1260 Bundesgesetzblatt 1957 II 984 (‘German Protocol on internal trade’). 1261 Art (1) German Protocol on internal trade, ibid; see Lenaerts & Van Nuﬀel, 355. 1262 Case 14/74, Norddeutsches Vieh- und Fleischkontor [1974] ECR 899, para 6. 1263 Ibid. 1264 Case 14/74, see n 1262, above. 1259

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Association Agreement. The Commission therefore came up with ideas for a special regime for the exports of goods originating in the Areas,1265 as in its view, trade with the Areas was not subject to any formal restriction decided by the Council on the basis of Article 301 or 133 EC. Applying a similar system as the one provided in the 1977 Protocol concerning the deﬁnition of the concept of ‘originating products’ and methods of administrative co-operation annexed to the Association Agreement,1266 the Commission suggested that the TCCoC could be granted the power to issue movement certiﬁcates by virtue of Article 8, provided that: the applicant exporter agrees to submit, at the request of the Chamber, any supporting evidence which it may require and that he undertakes to agree to any inspection of his accounts and to any check on the process of manufacture of the goods, carried out in the presence of the appropriate authorities.1267

In the meantime, the issue of additional certiﬁcation such as phytosanitary certiﬁcates would be subject to the speciﬁc requirements under Community law and be issued by the appropriate authorities, thereby reﬂecting on the Court’s case law. The regulation of the above mentioned procedure was left in the hands of the EC-Cyprus Association Council in order to implement the Protocol and lay down any other conditions necessary to the preferential access of goods produced or obtained in the Areas to the EU markets.1268 The Commission conﬁrmed that the procedure following accession would be based on Article 2(1) Protocol 10 but remained to be presented. The Commission’s Communication therefore appears to focus on inter-state trade between the northern part of Cyprus and the rest of the EU, whereas the initial purpose of Article 2(1) Protocol 10 was said to be intra-state trade through the deﬁnition of the ‘terms under which EU law will apply’ to the Green Line.1269 Thus, it could be deducted from the Commission’s Communication that inter-state trade should also be addressed by virtue of Article 2(1) Protocol 10 following 1265

2003 Commission Communication, pt 2. [1977] OJ L 339/2, 28.12.1977. 1267 2003 Commission Communication, pt 2. 1268 Ibid; see Decision No 1/2003 of the EC-Cyprus Association Council of 24 June 2003 (2003/594/EC) derogating from the provisions concerning the deﬁnition of the concept of ‘originating products’ laid down in the EC-Cyprus Association Agreement [2003] OJ L 202/10, 9.8.2003. 1269 Doc 8208/04, 28.4.2004. 1266

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accession, while measures supporting ﬁnancial assistance to the Turkish Cypriot community should be taken simultaneously. 2. Substitution of the rules of the Internal Market (a) Choice of legal basis and procedure Article 2(1) Protocol 10 gives wide powers to the Commission under the Council’s mandate to determine the conditions of the crossing of the Green Line for goods, persons and services in both directions through instruments of secondary legislation. It speciﬁcally requires unanimity in the Council, as instruments taken under Article 2(1) are cross-disciplinary in nature, so as to provide a comprehensive set of measures applicable to the crossing of the Green Line under Community law. Thus, “for political reasons and for coherence throughout the Protocol”, unanimity had to be maintained, even though certain areas of EU policy concerned would normally be subject to QMV if considered on their own, like matters falling under Article 133 EC such as customs rules.1270 There is however no doubt that such powers fall within the ratione materiae competence of the Community; it is rather the procedure for the creation of these measures under the right legal basis that is at stake. In the context of the multiplicity of legal bases, the choice of the right legal basis becomes ‘of constitutional importance’.1271 As previously stated, the special regime regulating the areas of Cyprus where the rules of the Internal Market have been waived is quite likely to have implications beyond the Green Line, possibly into one direction and/or the other as well as onto the EU market. It has been demonstrated that the legal basis of Article 2(1) Protocol 10 was apparently interpreted by the Commission as allowing such wider considerations pertaining to the Internal Market, in particular regarding inter-state trade. But, contrary to what seemed to be initially envisaged, the Commission did not eventually use the special legal basis set up for Cyprus when creating its Proposal on direct trade.1272 (b) Conﬂicting legal bases The Commission argues that direct trade does not concern the Green line itself or the government controlled part of the RoC, but the Areas 1270 1271 1272

Uebe, 387. Lenaerts & Van Nuﬀel, 89. COM(2004) 466 ﬁnal, 7.7.2004 (‘DT Proposal’).

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and the rest of Europe and does not therefore fall within the scope of this special legal basis but rather under the general provisions of EC law applicable to trade as set out mainly in Article 133 EC.1273 Such a treatment of the Areas through Article 133 EC would mean that the Areas are eﬀectively outside the European territory, which has been said not to be the case. It is true that the relationship between special territories of Member States lying outside the Customs Union by virtue of Article 299 EC and the rest of the EU has usually been addressed through Article 133 EC. The Commission recalls that Ceuta, Melilla and Gibraltar are subject to trade rules adopted under Article 133 EC.1274 For territories like Helgoland, third country rules apply. As a result, the relation of the EU with these territories normally follows the general rules of the CCP, unless more speciﬁc rules apply under Community law. Most of these speciﬁc rules are adopted anyway on the basis of Article 133 EC, unless primary law requires a diﬀerent legal basis. In the present case, there appears in the Commission’s view to be nothing to the contrary deriving from Treaty provisions or from the Court’s case law, in the Anastasiou saga in particular. The argumentation of the Commission appears to be based either on the application of the external trade policy of the Community outside of the EU or on very limited instances of this policy within the Community territory, which may nevertheless be diﬃcult to apply to the case of Cyprus.1275 The speciﬁcity of Cyprus within the context of Article 299 EC has already been explained with respect to the BSAs and could perhaps be extended to the present analysis. More importantly, it is submitted that this reasoning ignores the alleged derogating and substituting lex specialis nature of Protocol 10, to the eﬀect that primary law does require a diﬀerent legal basis than Article 133 EC. This reasoning is based on the assumption – ﬂawed as demonstrated in this book – that only the second limb of Article 1 Protocol 10 is lex specialis for Cyprus and not the whole contents of Article 1 Protocol 10, as is argued in this book. As a result, the use of the Protocol appears unduly limited. As far as the Commission is concerned, there is no need to trigger the provisions of Protocol 10 as there is no consideration of the 1273

Explanatory Memorandum DT Proposal, 3. Ibid. 1275 Hoﬀmeister writes that this is the only ‘caveat’ arising out of the use of the speciﬁc legal basis contained in Art 133 EC; in Hoﬀmeister, 217. 1274

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application of the acquis in the Areas arising out of the proposed Regulation on direct trade. The extension of the acquis in the Areas is dependent on a settlement of the Cyprus problem and Article 1(2) appears to be connected exclusively with Article 4 Protocol 10. It was however suggested in the previous Chapters that Article 1(2) could also be triggered with reference to Article 2 and/or 3 of the Protocol in order to facilitate the reuniﬁcation of the island. Hence, the proposed Regulation should not be seen as an extension of the acquis in the Areas, neither as being applicable in Cyprus, as such a situation is covered by the GL Regulation. It should be considered as aimed at the 24 other Member States (back then) and as such, does not fulﬁll the conditions to apply Article 1(2) Protocol 10. This however deviates from the initial procedure envisaged by the Commission in preparatory works, where the scope of Article 2(1) was deemed wider. This may have implications at the constitutional level, in view in particular of the exclusive powers of the Community under the CCP,1276 thereby pushing the supranational dimension of the regime even further. This entails consequences on the procedure too since voting on the proposed measure will vary from unanimity under Protocol 10 to QMV under Article 133 EC; the latter approach having as a consequence the potential neutralisation of the vote by the RoC, should a majority of Member States vote in favour of the measure and Cyprus against.1277 The Commission’s current reading of Protocol 10 appears therefore more restrictive than under the initial mandate of the Council. It rejects that there is any triggering of Article 1(2) Protocol 10 in the case of inter-state trade, to the eﬀect that Protocol 10 cannot be the right legal basis. This would seem to mean for the Commission that, pending a comprehensive settlement, only very limited measures could be taken in favour of the Turkish Cypriot community on the basis of the Protocol. Article 133 EC is nonetheless deemed applicable, as trade is actually taking place in the Areas (in compliance with the general policy of non-recognition of any authorities in the Areas). More references to the EC Treaty are rendered possible in principle by virtue of Article 3 Protocol 10.

1276 See Schutze R, ‘Dual federalism constitutionalised: the emergence of exclusive competences in the EC legal order’ (2007) 32(1) ELRev 3, 7–10. 1277 For ex, the German Parliament voted in 2007 a resolution urging Berlin holding the ﬁrst six months of 2007 of the EU presidency to ensure that negotiations on the special conditions for trade with the Areas resume; see Cyprus Weekly 1–7.6.2007, 5.

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3. Economic and ﬁnancial support for the Areas (a) Choice of the legal basis Article 3(1) of the Protocol provides that nothing in this Protocol “should preclude the application of measures favouring the economic and ﬁnancial support to the northern part of Cyprus”. Thus, any instrument of secondary legislation promoting the economic development of the Turkish Cypriot community could a priori be justiﬁed by this provision. It is however important to understand what this objective entails. Despite the lex specialis nature of the Protocol, it is debatable whether the mandate of the EU institutions under Article 3(1) should extend to measures for the creation of autonomous economic and technical assistance of such a wide scope, usually envisaged under Article 177 EC (development cooperation) or Article 181a EC (economic, ﬁnancial and technical cooperation with third countries). The Areas are not however deemed a developing country, nor a third country, which means that the above legal bases, although speciﬁc, are not really appropriate either.1278 Article 3 has been found on the other hand to be limited to the prevention of any legal challenge of the measures taken to assist the Turkish Cypriot community during the duration of the suspension of the acquis and not to extend a priori to the taking of such measures. As a result, it appears that any measure on economic and technical assistance would need to be taken on one of the general legal bases of the EC,1279 provided such measures are deemed compatible with the Protocol by virtue of Article 3. The Commission chose to base its proposal on ﬁnancial assistance1280 on the ‘residual powers’ clause1281 of Article 308 EC.1282 The use of Article 308 EC instead of a speciﬁc Treaty provision raises once more the crucial issue of the choice of the proper legal basis, as it is in the hands of the political decision-making bodies and is intergovernmental in nature. The proposed measure could certainly be said to participate to the attainment of at least one Community objective in accordance with Article 2 EC and be in the course of the operation of the Common Market, although this would seem to contrast with the previous ﬁnding 1278 1279 1280 1281 1282

Contra Hoﬀmeister, 220. Ibid, 217. COM(2004) 465 ﬁnal, 7.7.2004 (‘FA Proposal’). Stone Sweet in Börzel & Cichowski, 53. 7th Recital FA Proposal.

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of the Commission’s strict interpretation of Protocol 10. The promotion of Community objectives is left to the EC Treaty but the use of Article 308 EC can be controversial. It is a fact that the Court of Justice has in a series of disputes on legal bases of secondary legislation considerably narrowed down the scope of unanimity voting under Article 308, thereby enhancing the powers of the Commission1283 (and potentially of the European Parliament if the more speciﬁc Treaty provision triggered provides a more active role for the Parliament).1284 As a result, this ancillary legal basis may not be used to supplement a speciﬁc legal basis of the Treaty which limits Community competence in any manner.1285 The Community competence under Article 181a EC in particular appears limited by the principle of subsidiarity, as the Community action is deemed ‘complementary’ to national actions.1286 The Commission had actually agreed in principle to the use of Article 181a EC for the proposed regulation on ﬁnancial assistance, should the Council so wish.This is an important decision, since the use of Article 181a requires QMV, as opposed to unanimity voting by the Council. In view of the Community system of conferred powers, the Council’s decision on the use of Article 308 is anyway limited, as this provision cannot be used to pass measures which amount in substance to the amendment of Treaty provisions without recourse to the necessary procedures under the Treaty.1287 (b) Standstill clause In view of the analysis under Article 3(1) Protocol 10, paragraph (2) could be said to act as a standstill clause setting territorial limits to the scope of these measures, which should not aﬀect the application of the acquis in the rest of Cyprus, in view in particular of the Treaty of Accession. It is argued that this clause should be interpreted in the context of the previous ﬁnding that the proposed measures on trade promotion are linked to the measures promoting the economic and ﬁnancial support to the northern part of Cyprus under Article 3 Protocol 10. Seen from this angle, it is questionable whether the Commission’s DT Proposal is compatible with Article 3(2), as it potentially sets aside

1283

Stone Sweet in Börzel & Cichowski, 43. ECJ, Case 45/86, Commission v Council [1987] ECR 1493. 1285 ECJ, Opinion 2/94, Accession by the Communities to the ECHR [1996] ECR I-1759, para 30. 1286 Art 181a (1) EC. 1287 Opinion 2/94, see n 1285 above. 1284

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the RoC as the competent authority to deal with trade when exports to the rest of the Community are involved.1288 There could be in that case a risk of deviation from the acquis on Cyprus, in view in particular of the ECJ ruling in Anastasiou III and given the oﬃcial position of the EU based on the exclusive recognition of the government of the RoC as the competent authority in Cyprus.1289 Protocol 10 was deemed prima facie compatible with the jurisprudence of the Court to the extent that it provides for the promotion of the economic development of the Areas within the framework of the suspension of the acquis. This interpretation could be reinforced a priori by the addition of Article 3(2) Protocol 10 which potentially outlines the importance of coordination between the two sides in this special regime. But what happens to the standstill clause if measures are not taken on the basis of Article 3(1), as it appears to be the case for the implementing measures proposed by the Commission? The above considerations all boil down to the analysis of one crucial issue, i.e. whether measures promoting economic and ﬁnancial assistance in the northern part of Cyprus amount to eﬀectively partially withdrawing the suspension of the acquis, which was imposed in accordance with Article 1(1) Protocol 10. This raises the issue of the relationship between Article 1 and Article 3 Protocol 10, as the measures envisaged under Article 3(1) may aﬀect the suspension of the acquis provided for in Article 1(1). It would appear quite rational to argue that Article 3 must be read in conjunction with Article 1. Trade concessions could therefore be prevented if not passed on the basis of Article 2(1) Protocol 10, to the extent that they would circumvent Article 1(1).1290 Arguing along these lines would amount to saying that Article 3(1) Protocol 10 only allows ﬁnancial assistance through implementing measures taken on an appropriate legal basis drawn from the EC Treaty and that, as a result, Article 3(2) would not be applicable to trade measures, thereby conﬁrming that the standstill clause is ‘toothless’. In this case, the application of Article 3(2) could very well be limited to the proper implementation of Protocol 3 Act of Accession. This analysis is reinforced by the fact that Protocol 10 fails to refer to the role of the RoC in the process of inter-state trade, since all initiatives and 1288

Laulhé Shaelou (2005) 116–7. Ibid. 1290 The Commission on the other hand presents these measures as typical trade measures falling under Article 133 EC and which, as such, should not be prevented. 1289

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controls appear to be centralised through the Commission, and avoids any clear reference to the principle of co-operation between the two sides, which is so central to the Court’s jurisprudence in its attempt to apply the rules of the Internal Market to the situation. (c) Interconnection of legal instruments The choice of the proper legal basis is of the essence, as it has a crucial impact on the nature and the scope of the legal instruments implementing the Protocol, to be examined next. While the GL Regulation was adopted prior to Cyprus’ accession, the proposed Regulation on ﬁnancial assistance did not pose major hurdles and was approved in 2006.1291 The DT Proposal has however been the subject of criticisms both at the level of the Council during oﬃcial and informal meetings as well as among Member States.1292 The Proposal has been on hold at the level of the Council’s Coreper meetings since 2004 but the External Relations Council meeting in 2007 announced its intention to resume work aiming at its approval ‘without delay’.1293 Both the Council and the Commission have expressed diﬀerent opinions as to what the legal basis for the DT Proposal should be, having an impact on the extent of the EU competence and powers as well as on the procedure. As far as the Council is concerned, the requirement of unanimity as set out in the Protocol is a major obstacle to the passing of this Proposal in its current form. The Commission, on the other hand, had been insisting on the linking of this implementing measure of the Protocol with the FA Regulation for a long time, trying to force a political consensus, which did not materialise among the Member States. The proper analysis of these instruments adopting the socio-legal mode of analysis of European integration of this book is nevertheless of essence, so as to fully determine the extent of the market integration of Cyprus as a divided island.

1291 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 (‘FA Regulation’). 1292 See e.g. Second Report of the Foreign Aﬀairs Committee on Cyprus of the House of Common, accessed on 9.2.2007 (‘House of Common’s second report on Cyprus’) para 103. 1293 Conclusions of the GAERC meeting, 22.1.2007.

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II. Achievement of market integration in Cyprus: aspects of negative and positive integration Upon the completion of the Internal Market, it could be argued that there was a ‘regulatory gap’ between negative and positive integration in the Community.1294 A regulatory gap can be said to emerge “when international economic liberalisation precedes corresponding political or policy integration and that inherent in the former is a diminution of both de jure and de fact political sovereignty”.1295 Whereas the loss of de jure sovereignty is “directly attributable to positive normative prohibitions associated with negative integration”, the de fact political sovereignty “has its origins in increasing economic mobility and [regulatory competition]”.1296 Political or policy integration appears necessary in order to achieve positive integration, which could lead to the ultimate stage of supranational (re)construction. It may be easier for the Community institutions to ‘deconstruct’ at the national level through negative integration, leading at best to the replacement of national regulatory intervention at Community level,1297 than to reconstruct or re-regulate at the transnational level through positive integration, which involves a process of Europeanisation of national regulatory competence through inter alia the spillover eﬀect of the Internal Market.1298 The nature of the evolution of the EU since its inception has conﬁrmed the closure of the regulatory gap mainly through the re-regulatory nature of the Internal Market. Thanks to the jurisprudence of the Court of Justice and to the amending Treaties, policy integration has been granted constitutional recognition, to the eﬀect that market regulation is now interconnected with horizontal or ‘ﬂanking’ policies of the EU, including non-economic objectives.1299 Cyprus, as a Member State of the EU, is subject to these movements, which could ultimately lead to Union integration upon the attainment of (full) market integration. Market regulation, leading to market

1294 Scott J, ‘GATT and Community law: rethinking the ‘regulatory gap’ in Shaw J & More G (eds), New legal dynamics of the EU (Clarendon Press, Oxford, 1995) (‘Shaw & More’) 155; see also Weatherill S, ‘The Internal Market’ in Peers S & Ward A, The EU Charter of Fundamental Rights (Hart, Oxford, 2004) (‘Weatherill (2004)’) 198. 1295 Scott in Shaw & More, 155. 1296 Ibid, 154. 1297 Weatherill (2004) 198. 1298 Ibid, 192–8. 1299 Szyszczak & Cygan, 89.

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integration, can be envisaged through several types of instruments which are subject to diﬀerent modes of EU governance.1300 The ‘marketmaking’ policies of negative integration are usually submitted to centralised modes of supranational governance and as such tend to be quite eﬀective instruments of problem-solving.1301 The ‘marketcorrecting’ policies, pointing towards positive integration, are subject to joint-decision or intergovernmental modes of EU governance, “in anticipation of conﬂicting interests”.1302 As such, these instruments may face more diﬃculties from a governance perspective as their problemsolving eﬀectiveness can be jeopardised at the national level.1303 The foundations of a market-making (‘old’ regulatory) policy may have been laid for the removal of discriminations in Cyprus but the extent of the desirable removal must be determined. On the other hand, the achievement of a market-shaping (‘new’ regulatory) policy tending towards positive integration may appear more problematic. A. Market-making policy in Cyprus 1. Underlying mechanisms The process of negative integration implies that there is no European model prescribed to create integrated markets by removing barriers to trade or to freedom of people or of establishment. It therefore entails rather horizontal mechanisms of Europeanisation involving adjustments to Europe based on the market or on patterns of socialisation.1304 Following the demise of harmonisation as the main process of market building and the re-conceptualisation of the Internal Market in more ‘holistic’ terms,1305 softer modes of governance are privileged to allow diversity within the EU. Regulatory competition appears for many as the key transitional mechanism between vertical and horizontal Europanisation and/or negative and positive integration,1306 to the extent that it is “based on the choices of market players, but […] exists 1300 See Scharpf F, ‘Legitimate diversity: the new challenge of European integration’ in Börzel & Cichowski, 86. 1301 Ibid. 1302 Scharpf in Börzel & Cichowski, 86. 1303 Ibid, 84–5. 1304 Radaelli C, ‘The Europeanisation of public policy’ in Featherstone K & Radaelli C (eds), The politics of Europeanisation (OUP, Oxford, 2003) (‘Featherstone & Radaelli’) 40. 1305 Craig P, ‘From the SEA to the Treaty on EU’ in Barnard & Scott, 23–40. 1306 For other ‘softer’ framing mechanisms of EU governance for market regulation; see Radaelli in Featherstone & Radaelli, 43.

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only in the context of an institutional choice, ‘vertically’ enforced by the [ECJ], such as mutual recognition”.1307 So once the barriers have been removed at a satisfactory level, devised mechanisms of Europeanisation should ensure market integration encompassing a certain level of national regulatory ﬂexibility inherent in the rules of the Internal Market, through mutual recognition in particular.1308 In order to establish whether there is a satisfactory level of market regulation in Cyprus, reference must be made ﬁrst to negative integration through the removal of discriminations as it appears to be the main objective of the re-regulatory regime in Cyprus. This book is limited to the removal of discrimination as far as goods are concerned; the freedom of movement of persons being guaranteed prima facie by the policy of the government of the RoC1309 and through the GL Regulation,1310 leading to a stronger response of labour than of goods to the easing of the restrictions on the crossing of the Green Line in 2003.1311 2. The removal of trade barriers in Cyprus The regulation of the so-called preferential treatment for the crossing of goods from the Areas into the government controlled area of the RoC is contained in Article 4 of the GL Regulation, which regulates their entry into the territory of the Internal Market. The crossing of goods ‘exported’ from the government controlled area of the RoC into the Areas is regulated by Articles 5 and 6 of the said Regulation. (a) ‘Imports’ into the Internal Market (i) Entry into the Customs Union. In accordance with Article 4(1) GL Regulation, goods in conformity with Articles 23 and 24 of the Council Regulation establishing the Community Customs Code1312 can be imported into the government controlled area of the RoC. Such goods are granted preferential treatment on entry of the Customs Union territory, since they are not subject to customs declaration or to customs duties or charges having equivalent eﬀect in accordance with Articles

1307

Ibid, 41. See Bernard N, ‘Flexibility in the European Internal Market’ in Barnard & Scott, 102. 1309 6th Recital GL Regulation. 1310 7th Recital GL Regulation; see also s 2 on the crossing of persons in the various Commission reports on the implementation of the GL Regulation. 1311 World Bank Report (Vol II) 156. 1312 (EEC) No 2913/92 [1992] OJ L 302/1, 19.10.1992. 1308

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23 and 25 EC.1313 This is so unless they are eligible for export refunds or intervention measures, and even these payments can be subject to “privileged conditions and arrangements” for agricultural products to be determined by the Commission “in accordance with the relevant management committee procedure” established under the CAP.1314 The treatment granted to products originating in the Areas has already been said to be preferential albeit with some restrictions. Evidence of this can be found in procedural requirements, to the extent that the quantities of goods crossing the Green Line must be registered1315 whereas the crossing can only occur at speciﬁc locations listed in Annex I of the GL Regulation.1316 Further restrictions can also be found in substantive provisions regarding the types of goods crossing the line1317 and on the restriction on goods processed or transformed in the Areas (rules of origin restrictions), which require further regulation at the EC level.1318 The goods shall also be subject to certain requirements and undergo the checks as required by EC legislation set out in Annex II of the Regulation; these concern veterinary, phytosanitary and food safety requirements and checks, with a particular reference to plants to be checked by ‘duly authorised experts’ following the Anastasiou jurisprudence. As a result of compliance with the above requirements, Article 4(7) GL Regulation provides that the RoC “shall treat the goods referred to in paragraph 1 as not being imported within the meaning of [the relevant provisions of EC legislation], provided the goods are destined for local consumption on the inter-state market”. Although the procedure appears cumbersome, the result could resemble the situation put in place for the reuniﬁcation of Germany under the German Protocol on internal trade. But goods from the DRG were not deemed Community goods. On the other hand, Article 4(10) GL Regulation provides that “goods complying with the conditions set out in paragraphs 1 to 10 shall have the status of Community goods, within the meaning of Article 4(7) of Regulation (EEC) No 2913/92”. Unlike the conclusions reached in Chapter 4 regarding the SBAs in Cyprus, the status of 1313

Art 4(2) GL Regulation. Art 4(1) 2nd sentence, ibid. 1315 Art 4(1) 3rd sentence, ibid. 1316 Art 4(3). 1317 Art 4(9) concerning the movement across the line of live animals and animal products. 1318 Art 4(12), ibid. 1314

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Community goods appears to ﬂow naturally from the procedure set out in the GL Regulation this time. (ii) Implementing measures. With a view to furthering the negative integration of the Areas, some ﬂexibility has been allowed in the establishment of the supranational re-regulatory regime in the Areas so as to render it fully operational.1319 The GL Regulation in particular contains various provisions for the taking of further implementing measures and/or amendment to Annexes.1320 Article 9 speciﬁcally states that supranational action must be taken by the Commission in agreement with the RoC as well as with the other parties involved, namely a representative entity for the Areas, duly authorised by the RoC, and the UK for the SBAs. In accordance with the mandate given to it by the Council in Article 4(12) GL Regulation, the Commission after consultation of the Line Regulation Committee, created an Implementing Regulation for the goods entering the government controlled area of the RoC.1321 The instrument taken by the Commission on this basis may prima facie go beyond the mandate given to it under the GL Regulation. It can be deducted from the reading of Article 4(12) that reference is only made to goods processed or transformed in the Areas as per Article 4(1) and/ or goods wholly obtained in the Areas but not in compliance with Annex II. Such goods, if primarily ‘exported’ into the Areas before entry into the government controlled area, should be submitted to speciﬁc rules to be contained in a Commission decision. The Commission may however appear legitimised in its choice of legal instrument in view of its regulatory role and of the extent of its discretionary powers under the GL Regulation. As such, the Commission deemed that more detailed rules were required for “all goods within the remit of the Regulation”,1322 therefore requiring an instrument of both general and direct applicability. This could be seen

1319 For a full list of additional implementing measures, see the various Commission reports on the implementation of the GL Regulation. 1320 Art 9 GL Regulation; see e.g. Commission Regulations (EC) No 601/2005 of 18 April 2005 [2005] OJ L 99/10, 19.4.2005 and (EC) No 1283/2005 of 3 August 2005 [2005] OJ L 203/8, 4.8.2005 regarding Annex I GL Regulation. 1321 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 (‘Implementing Regulation’). 1322 2nd Recital Implementing Regulation.

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as an implicit reference to the fact that most manufactured goods and sometimes even agricultural produce in the Areas originate from Turkey,1323 in view in particular of the limited manufacturing resources in the Areas, especially for intermediate produce, and of its alleged role as distribution centre of Turkish produce.1324 It is however clear that by taking a regulation instead of a decision, the Commission renders the potential legal challenge of this instrument under Article 230 EC more unlikely, as traders would simply not be able to prove locus standi under the Plaumann case.1325 A right to judicial review by traders is however important in view of the powers granted to the authorities of the RoC to determine whether the products meet the criteria. It could perhaps be argued in certain instances that this Regulation is in fact a succession of decisions on ﬁxed and ascertainable goods,1326 which could render the Regulation void for breach of a Community rule of law and/ or lack of competence on the part of the Commission. But this course of action has generally been very limited in Community law. The purpose of this Implementing Regulation is arguably the adaptation of certain rules of the Internal Market to the special regime in the Areas. Article 1 renders the Community provisions on the rules of origins applicable to the Areas, albeit with some restrictions. The document accompanying the goods crossing the line, as well as the procedure to obtain such a document, is further detailed in Article 2. A special regime for phytosanitary inspection and reporting is established in Article 3, as a direct consequence of the Court’s case law on the issue.1327 Further restrictions are imposed on goods for food safety and product safety reasons as well as to avoid counterfeiting and piracy,1328 or for defence material.1329 1323 Whereas the trade between the RoC and Turkey is almost inexistent both ways, the imports from Turkey to the Areas totalled USD 512,426,000 in 2004 (IMF sources) following the opening of the GL; see World Bank’s Report (Vol II) 164. With respect to the economic dimension of Turkey’s EU membership, see Uğur M, ‘The economic dimension of Turkey’s EU membership: a stock-taking exercise at the start of accession negotiations’ in Joseph (2006). 1324 World Bank’s Report (Vol I) 27. 1325 Case 25/62, Plaumann & Co v Commission [1963] ECR 95. 1326 Cases 41–4/70, International Fruit No 1 [1971] ECR 411. 1327 On 28 December 2004, the Commission adopted a decision on the appointment of phytosanitary experts to carry out inspections in the Areas on the basis of Art 3 Implementing Regulation. This Decision was supplemented on 29 September 2007; see the 2007 Commission report on the implementation of the GL Regulation, 2. 1328 Art 4 Implementing Regulation. 1329 Art 5 ibid.

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The result of the above provisions is that some goods are left out of the special regime and the ones covered are systematically subject to checks. It is so in particular in view of the fact that the EU institutions enjoy a broad discretional power to determine which goods may beneﬁt from the preferential regime. Since the commencement of trade across the Green Line, the Council adopted amendments to the GL Regulation as regards agriculture and facilities for persons crossing the line,1330 whereas the Commission adopted implementing measures allowing certain products (citrus fruits, honey) and/or animals (ﬁsh) to cross the Green Line without being subject to customs duties or charges having equivalent eﬀect.1331 (iii) Scope of the application of the rules of the Internal Market. According to the Court’s case law, the rules of the Internal Market are also deemed applicable to the movement of goods within a Member State.1332 The external factor justifying the application of Community law in that case would be the potential impact on inter-state trade through the re-export or the transit of such goods in the EU.1333 Thus, in view of the context of the Internal Market eﬀectively promoted to a limited extent by these measures (the object of these measures is clearly the non-application of the rules of the Internal Market), it could be argued

1330 Council Regulation (EC) 293/2005 of 17 February 2005 [2005] OJ L 50/1, 23.2.2005. 1331 Commission Regulation (EC) No 1624/2005 of 4 October 2005 [2005] OJ L 259/17, 5.10.2005 for citrus fruits. 1332 See Case C-293/02, Jersey Produce Marketing Organisation Ltd v State of Jersey and others [2005] ECR I-9543 (‘Jersey Potato’); see Kvesko I, ‘Is there anything left outside the reach of the ECJ?’ (2006) 33(4) Legal Issues of Economic integration 405. 1333 See Tryfonidou A, The outer limits of Article 28 EC: purely internal situations and the development of the Court’s approach through the years (Outer Limit Papers, CELS, University of Cambridge, 2008) available at http://ssrn.com/abstract =1029248 where she argues that “[i]f the speciﬁc goods that are involved in the facts of the case have moved – or are deﬁnitely […] going to move – between two or more Member States, and the contested national measure is capable of impeding that movement, the situation falls within the scope of [Art] 28 EC and further examination as to whether the impugned measure actually amounts to a violation of [Art] 28 EC has to take place”, 5. Although there is no such express pronouncement in the context of Art 28 EC, she argues that this requirement was ‘implicit’ in the Jersey Potato case in the context of Art 29 EC. In the case of Turkish Cypriot goods, it is quite clear that one of the main aims of the GL Regulation is to allow such goods to enter the Customs Union territory so that they can then be exported to the rest of the EU (there is no other legal way to export them at present), thereby indicating a priori that such goods should almost certainly move Member State and satisfy the ‘economic reality’ test arguably set out by the ECJ in Jersey Potato.

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that some of these provisions could be deemed similar to quantitative restrictions or measures having equivalent eﬀect under Article 28/29 EC if put in the context of the Internal Market.1334 The restrictions on rules of origin of goods from the Areas have been said to constitute an obstacle to free trade in view of the discretionary powers granted to the authorities of the RoC,1335 potentially leading to indirect discrimination in a so-called internal situation.1336 Several technical obstacles or barriers to trade across the line have also been reported to the Commission. Turkish Cypriot commercial vehicles cannot move freely through the island due to the fact that the RoC does not accept the roadworthiness certiﬁcates of commercial vehicles nor professional licences issued by the Turkish Cypriot ‘authorities’.1337 As a result, their freedom of movement as workers and/or as service providers is impaired whereas any attempt by the government of the Republic to liberalise the system1338 has been opposed by the Greek Cypriot drivers.1339 Turkish Cypriot traders have also reported diﬃculties to stock their produce in shelves of supermarket in the government controlled areas and with advertising in parts of the press in the RoC or delays in the clearing of goods, in particular when crossing the line temporarily.1340

1334 There is traditionally a diﬀerence of scope between Art 28 EC and Art 29 EC to the extent that the latter does not cover indistinctly applicable measures as far as exports are concerned. In Case C-15/79, Groenveld [1979] ECR 3409, the ECJ held that Art 29 EC was only aimed at national measures which had as their speciﬁc object or eﬀect the restriction of exports and thereby promoted protectionism to the detriment of inter-state trade. This is so provided there is no dual burden imposed on the exporter, the way a dual burden can be imposed on the importer and caught by Art 28 EC. According to Craig & De Burca, there might however be instances where a dual burden on the exporter exists and this is reﬂected in the Court’s case law under what is now Art 49 EC. In the Alpine case (Case C-384/93, Alpine Investments BV v Minister van Financien [1995] ECR I-1141), the Court found that the rules applying to exporters could be caught even if they were not discriminatory; see Craig & De Burca (2008) 680. 1335 See World Bank Report (Vol II) 137. 1336 Upon the full implementation of the Additional Protocol to the Ankara Agreement, goods originating from Turkey will not be subject to rules of origin requirements when entering the RoC, as opposed to goods originating from the Areas under the GL Regulation. 1337 2005 Commission report on the implementation of the GL Regulation, 5. 1338 Exams in the Turkish language so that the Turkish Cypriot drivers could get a driving licence recognised by the government of the RoC have been organised and passed by around 65 of them. 1339 2005 Commission report on the implementation of the GL Regulation, 5. 1340 Ibid; see also the 2006 Commission report on the implementation of the GL Regulation, 8.

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The latter type of incidents was justiﬁed by the RoC on the ground of public health, public safety or due to the implementation of certain mandatory measures arising under the GL Regulation.1341 Thus, still in the supposed context of the Internal Market, it could be that the prohibitions or restrictions on imports contained in Article 30 EC as well as the mandatory requirements created by the Court under the Cassis jurisprudence are also potentially present in the regime.1342 This raises the issue of the exercise of ‘functional parallelism’1343 by the RoC in the context of the Internal Market applied to the Areas, as some of the restrictions may be unrelated to economic regulation. As a result, it may just be that certain barriers to trade remain, as they express “national regulatory choices which simply do not conﬂict with the requirements of market integration” in a given instance.1344 Fundamental rights with respect to the Turkish Cypriot community are likely to play a central role in the determination of the appropriate ‘margin of appreciation’ of the national regulatory authority, as they might aﬀect free movement in the Internal Market in one way or another, either restricting or promoting the four freedoms.1345 As previously outlined in this book, there could be a potential ‘clash of presumptions’ between the free movement of goods and the fundamental rights recognised as such in Community law and which therefore ought to be protected, potentially leading to the strict interpretation of any exception to these principles.1346 The above remarks also raise the issue of the application of the principle of mutual recognition in the context of the Internal Market, with which the special regime in the Areas appears to display some common features. Like mutual recognition, the approach is mainly horizontal “setting general principles across a range of sectors”.1347 Also, like mutual recognition, the regime involves private bodies for the certiﬁcation, even if in this case, there is no voluntary reliance involved.1348 But there 1341

2005 Commission report on the implementation of the GL Regulation, 5. See for example Art 4(2) GL Regulation. 1343 See Weiler, ‘The constitution of the common market place: text and context in the evolution of the free movement of goods’ in Craig & De Burca (1999) 349. 1344 Weatherill (2004) 188. 1345 See Sweeney J, ‘A “margin of appreciation” in the Internal Market: lessons from the ECtHR” (2007) 34(1) Legal Issues of Economic Integration 27, 45–6. 1346 For the free movement of goods, see Case 46/76, Bauhuis v Netherlands [1977] ECR 5; see also Tridimas & Nebbia, 169–70. 1347 Szyszczak & Cygan, 92. 1348 Ibid. 1342

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does not appear to be any reciprocity, as evidenced by the numerous checks imposed under the measures. The principle of mutual recognition has been described as a “mechanism of allocation of regulatory competence to the country of origin (‘home country control principle’), designed to avoid goods being subject to a dual burden of regulation by home and host country”.1349 But it is also a non-absolute principle1350 as it allows for some regulatory diversity as long as it is justiﬁable and proportionate.1351 The Court in particular initially created a presumption in Cassis, which could be reversed when the state of production had failed to take account of a public interest protected in the importing State,1352 in a sort of ‘boomerang eﬀect’ of mutual recognition. It is obvious that there cannot be mutual recognition if there is nothing to ‘mutually recognise’,1353 which appears to be the case in the Areas. But it also appears that the idea of ‘economic supranationalism’ underlying mutual recognition binds both the importing State and the production State, leading to the ‘extraterritoriality’ of foreign public interests and of foreign trade interests in each State respectively.1354 In this context, the (non)application of the principle of mutual recognition for goods coming from the Areas addresses broader issues pertaining to the exercise of national regulatory powers in Cyprus, as trade in the Areas could be considered of a ‘foreign’ nature although within one country.1355 (iv) Mutual recognition and regulatory powers. The principle of mutual recognition encompasses in this context the relationship between the various authorities or bodies involved in trade across the Green Line. Such considerations may arise under the normal application of the rules of the Internal Market, but would in that case be limited to an issue of administrative recognition between diﬀerent authorities actually

1349

Bernard in Barnard & Scott, 105. Weatherill (2004) 189. 1351 In this context, the Court has derived from the principle of proportionality two ‘speciﬁc, interrelated, requirements’, namely of ‘equivalence’ and of ‘co-operation between national authorities’; see Tridimas, 218. 1352 Chalmers et al, EU law (CUP, Cambridge, 2006) (‘Chalmer’) 680. 1353 Ibid. 1354 Chalmers, 680. 1355 Chap 6 of the World Bank’s Report (Vol II) entitled ‘Foreign trade performance, policies and integration into the EU’ deals with the economic integration of the Areas into the EU. 1350

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conducting the same activity in two Member States. It could be argued that the principle of mutual recognition is not appropriate when the roots of the diﬀerential at stake are deeper than a mere discrepancy between regulatory policies in Member States.1356 It remains nevertheless that the foundations of the principle of mutual recognition associated with functional parallelism in case of substantial policy diﬀerentials are deemed applicable to the above situation.1357 The point has been made that the eﬀective operation of mutual recognition should not only be an instrument of private judicial enforcement but also that “[a]n active policy of identiﬁcation of problems in the operation of the principle and the machinery to solve them is necessary”.1358 It is submitted that this is what the GL Regulation attempts to do based on the need to prove the origin of goods crossing from the Areas into the government controlled area of the RoC. The principle of mutual recognition appears to be based on the legitimacy of control by the home State in all instances,1359 save where the presumption is reversed for the sake of the promotion of foreign public interests. This is reﬂected in the GL Regulation, to the extent that the RoC is responsible to check the authenticity of the document accompanying the goods and whether it corresponds with the consignment.1360 But since the RoC does not exercise eﬀective control in the Areas, another body, the TCCoC, duly authorised by the Commission in agreement with the RoC,1361 is responsible for the issue of the documents and for the recording of such documents under Article 4(5). This situation raises the issue of the nature and the extent of any delegation of powers to the TCCoC in view of the eventual promotion of ‘foreign public interests’ in the Areas (but within the home State). The Decision authorising the TCCoC to proceed with so-called acts of certiﬁcation and/or of recording was taken at the supranational level, albeit with the consent of the Member State concerned, but relates to national regulatory powers. Article 4(5) of the GL Regulation seems to

1356

Bernard in Barnard & Scott, 108. Ibid, 109. 1358 Bernard in Barnard & Scott, 110. 1359 Bernard argues that even Keck is a reﬂection of the principle of mutual recognition, where it just happened that the home State is the country of sale of the goods, and not the country of manufacture; in Barnard & Scott, 105–6. 1360 Art 4(6) GL Regulation. 1361 See Commission Decision (EC) No 604/2004 of 7 July 2004 on the authorisation of the TCCoC according to Art 4(5) GL Regulation [2004] OJ L 272/12, 20.8.2004. 1357

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be worded suﬃciently clearly and narrowly to avoid any claim of ius imperii functions granted to the TCCoC.1362 It is clear that the delegation of powers, if any, originates from the RoC exercising its sovereignty within the framework of the principle of subsidiarity, while the Commission formalised it at the supranational level given the subjectmatter. The documents issued by the TCCoC, which is a private body, could have arguably been issued during the course of a commercial transaction and appear to be purely factual, thereby constituting prima facie acts jure gestionis. As such, they do not a priori bind either the Commission, who only asked the TCCoC to record the volume of trade through these documents, nor the customs authorities in the RoC, who will check these documents and take the ﬁnal decision according to their own assessment. It would therefore appear to be mainly an internal question of interpretation of the Cypriot legal order and, in particular of the Cyprus Constitution, as to whether any delegation of powers to the TCCoC is possible (such discussions were regularly held over the past decades). But it seems that there is no delegation of powers in this case,1363 as there are no public powers at stake, but rather the issue of a document which does not even have force of private law. The only document which the TCCoC can issue is the certiﬁcate of origin, which is not normally delivered by customs authorities and is certainly not binding on them or on the Commission.1364 Thus, it would rather appear to be a ‘facilitating procedure’,1365 whereby the oﬃcial authorities in the RoC are able to co-operate with the TCCoC for the purpose of the entry of goods crossing the Green Line into the Customs Union. Such an interpretation would reﬂect the Court’s jurisprudence in Anastasiou III. (b) Transactions from within the RoC In view of the implementation of the rules of the Internal Market in the government controlled area of the RoC, the principle of mutual recognition is directly relevant to the analysis of all transactions taking place with respect to goods crossing the line in the direction of the Areas or goods coming from the Areas on their way to the European markets.

1362

Hoﬀmeister, 219. Prof Palley talks about ‘informal delegation of powers’ (book launch, 30.6.2005, Nicosia). 1364 Private discussion with Dr Lycourgos (26.1.2006, Nicosia). 1365 Ibid. 1363

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(i) Trade from the government controlled area of the RoC to the Areas. Under normal circumstances of application of the Internal Market, goods exported to another Member State do not have to comply with any export formalities since they circulate within the Customs Union and beneﬁt from the principle of mutual recognition. The exports of goods in the Areas raise the issue of their treatment when leaving the Customs Union territory to enter an ‘intermediary’ zone1366 of a Member State regulated by a regime having certain characteristics of a third country (the Green Line is not an oﬃcial EU ‘economic border’ but EU-wide rules do not apply to it).1367 Here again, it can be argued that whereas the stated object of the re-regulatory regime is the nonapplication of the rules of the Internal Market and the substitution of these rules by a special regime, the eﬀect of the regime nevertheless leads to a restricted and asymmetrical application of the rules of the Internal Market. Article 5 GL Regulation conﬁrms this analysis by providing that goods crossing the line from the government controlled area of the RoC into the Areas are not subject to export formalities,1368 to refund1369 or to exemption for the supply of goods in accordance with the relevant EC legislation.1370 They are also submitted to any restriction on the movement, removal or export of goods under Community law.1371 Checks of the documentation as may be required under the relevant laws of Cyprus remain possible, although Article 5(1) does not give any details as to who shall carry out these checks and on what basis. Any such checks would not a priori contradict the principle of mutual recognition since the laws of the home country are concerned and they could be deemed necessary for the protection of so-called ‘foreign’ public and trade interests in Cyprus. Finally, Article 6 provides for certain temporary and permanent adjustments to be made for the exemption from turnover tax and excise duty on imports in international travel for non-commercial purposes. 1366

Skoutaris refers to it as a “sui generis ‘no man’s land’” in Inglis & Ott (2005) 180. World Bank Report (Vol II) 158. 1368 Art 5(1) GL Regulation. 1369 Art 5(2). This concerns agricultural and processed agricultural goods, arguably in line with Cyprus’ obligations deriving from the Treaty of Accession, subject inter alia to Commission Regulation (EC) No 2122/2005 of 22 December 2005 ﬁxing the additional amount to be paid for citrus fruits in Cyprus under Regulation (EC) No 634/2004 [2005] OJ L 340/25, 23.12.2005. 1370 Art 5(3). 1371 Art 5(4). 1367

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Due to the preferential treatment granted to goods crossing the line from the government controlled area of the RoC into the Areas and the lack of reciprocity of this preferential treatment, trade in that direction is quite insigniﬁcant, apparently representing only one fourth of the trade in the opposite direction.1372 Oﬃcial complaints emanating from the Chamber of Commerce of the RoC that goods from the Republic were stopped at the line, eﬀectively prohibiting intra-state trade in the direction of the Areas, were received by the Commission.1373 In the context of an alleged restricted and asymmetrical re-application of the rules of the Internal Market in the Areas, these barriers could be deemed contrary to the rules of the Internal Market. Given that the actual intra-state trade volume is rather low, the GL Regulation has been seen as only ‘indirectly fostering’ trade between the Areas and the EU,1374 thereby potentially raising the issue of other means of exports of goods from the Areas to the rest of the EU. (ii) Exports from the government controlled area of the RoC within the Internal Market. Although it could be argued that the extension by the Commission of the preferential regime to citrus fruits in 2005 was foreseeable in view of the Court’s ruling in Anastasiou III, it appears that there is no legal obligation on the part of the Community to keep the regime under the GL Regulation in place or even to extend it to other goods.1375 In an attempt to ‘delimit’ the obligations of the EU towards Cyprus, it would seem reasonable to argue that the ‘vertical’ duty of loyal cooperation as embodied in Article 10 EC does not require from the EU to assist a Member State to secure the application of a national security policy, such as the decision of closure of the ports and airports in the Areas. It would otherwise amount to an ‘embargo’ to be decided by the Council on the basis of Article 301 EC, but such a scenario appears diﬃcult to apply to a Member State of the EU. The decision to close all ports and airports in the Areas was taken by the RoC as a result of the Turkish invasion in 1974 for several reasons. It was ﬁrst of all a matter of

1372

2005 Commission report on the implementation of the GL Regulation, 6. See Emiliou N, ‘Cyprus is ready for settlement talks’, European Voice, 31/3– 6/4.2005, 15. 1374 Hoﬀmeister, 220; see also World Bank Report (Vol II) which states that the Green Line “is more restrictive than an international border” and that certain mechanisms are missing to promote full economic integration of the Areas in the EU, 138. 1375 Hoﬀmeister, 215. 1373

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international responsibility vis-à-vis the Areas although it is debatable whether the RoC would still incur liability for acts occurring in ports and airports in the Areas,1376 in particular in view of the ECtHR’s jurisprudence in Loizidou designating Turkey as responsible for unlawful acts occurring in the Areas.1377 Secondly and perhaps more importantly given that Cyprus is both an internal and an external frontier of the EU, it was the right of exercise by the RoC of its sovereignty so as to decide the various points of entry and exit of goods, persons and services on its territory.1378 There exists in international law no obligation for a State to keep all its ports open,1379 while every State has “complete and exclusive sovereignty over the airspace above its territory”.1380 Article 10 EC does impose a mutual duty of sincere and loyal co-operation between the EU and the Member States,1381 to the eﬀect that such national restrictions must be respected by all.1382 Likewise, Cyprus is clearly bound by Protocol 10 and should promote the economic development of the Areas as far as possible within this framework, provided it is compatible with its obligations under Community law and international law. It therefore appears reasonable for the EU to allow goods imported from third countries into the ports and airports of the Areas to be ‘(re) exported’ through the government controlled area of the RoC upon

1376 Normal rules of State responsibility in international law exclude the liability of a de jure government for the action of a de facto government on its territory; hence a fortiori when there is no de facto government but merely de facto ‘authorities’. 1377 For a critical legal analysis of the thesis of the international responsibility of the RoC, see Hoﬀmeister, 218–9. 1378 Discussion with Dr Lycourgos (Nicosia, 24.6.2007). 1379 Every State can regulate access to its ports; see ICJ, Case concerning military and paramilitary activities in and against Nicaragua (Nicaragua v USA) (Merits) (1986) ICJ Reports 138; see also legal opinion by Prof Lowe and Wyatt of 19.5.2004, ordered by the RoC. 1380 Art 1 Chicago Convention on International Civil Aviation; scheduled air services are only allowed with the permission and authorisation of the State concerned (Art 6); regular air services is usually regulated through bilateral or multilateral conventions between States; see Brus, Akgün et al, 46–7. 1381 ECJ, Case C-339/00, Ireland v Commission [2003] ECR I-11757, paras 71–2. 1382 International air transport requires the prior permission of a State to take place; international maritime transport is not subject to such prior approval, to the eﬀect that ships are free to chose which ports to use, including in the Areas despite the legal constraints in force by the RoC, which does not seem to impose legal sanctions for the breach of these restrictions, see Cyprus Weekly 2–8.3.2007, 10; see also Brus, Akgün et al, 45.

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crossing the Green Line. Cyprus will support this regime provided these goods have been lastly processed or transformed in the Areas, thereby eﬀectively excluding goods imported from Turkey in transit in the Areas and industrial products ﬁnished in the Areas but using Turkish imported inputs.1383 As previously examined, this is clearly envisaged in the Implementing Regulation and should be interpreted strictly, as not all goods can be processed and transformed in the Areas.1384 Thus, under the Green Line regime, the EU allowed a priori preferential entry conditions for goods ‘made in the Areas’ crossing the line into the government controlled area of the RoC and later exported to other Member States. As such, it is argued that there is no breach of the mutual duties to co-operate in good faith between the Community and the Member States deriving from Article 10 EC, as reﬂected in Articles 10 and 11 GL Regulation. The implementation of the GL Regulation clearly lies in the hands of the RoC who can take ‘all appropriate measures’ (Article 8). Moreover, the RoC is involved in all instances and made ultimately responsible and accountable in accordance with international law, subject to communicating and acting in consultation with the EU institutions and/or the other Member States. To that intent, Article 6 of the Implementing Regulation provides with respect to the transfer of goods originating in the Areas that their ‘previous entry’ into the RoC shall be treated as having been an importation of goods in accordance with Article 7 of Council Directive 77/388/EEC1385 entailing the payment of VAT. The RoC has proposed on several occasions amendments to the GL Regulation, the Implementing Regulation and/or to the 6th VAT Directive in order to simplify VAT provisions for trade across the line, especially in view of ‘(re)export’ to Europe.1386 But the Commission came to the conclusion that “the majority of the proposals would have deviated too much from the acquis to be taken up by the Commission, even though some of

1383 See World Bank Report (Vol II) addressing the negative impact of the Additional Protocol to the Ankara Agreement on trade with the Turkish Cypriot community and on Cypriot intra-state trade, 160–3. 1384 The Commission was made aware by the RoC of suspicions of traded goods through the line originating from Turkey including tomatoes; see the 2005 Commission report on the implementation of the GL Regulation, 5. 1385 [1977] OJ L 145/1, 13.6.1977. 1386 For a summary of these proposals, see the 2005 Commission report on the implementation of the GL Regulation, 7–8.

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them may be attractive from the point of view of simpliﬁcation”.1387 It could create problems in particular with the status of the Green Line, which may become an external border when talking oﬃcially about exports and imports.1388 It is rather surprising to ﬁnd an express reference to the acquis with respect to the Areas, where it is suspended, even if it appears to concern a priori its application to the Green line itself. The concrete example of VAT treatment seems to illustrate quite well one of the key arguments in this book, namely that the re-regulatory regime established in the Areas has implications for the whole of Cyprus and is based on a diﬀerentiated application of the Internal Market-related rules. As far as the Turkish Cypriot side is concerned, the technical problem of the VAT is deemed to be the most serious obstacle to the transfer of goods originating from the Areas to the rest of Europe through the Green Line, as there is in their view double taxation.1389 The VAT is however refundable in the RoC, provided Turkish Cypriot traders satisfy all administrative requirements under Cypriot law, which may raise some diﬃculties relating in particular to the registration for VAT purposes in the Republic.1390 Eventually, in November 2006, the Value Added Tax Committee1391 endorsed a ‘simpliﬁed scheme’ for Turkish Cypriot traders established in the Areas and who sell goods directly to end consumers in the government-controlled area of the RoC. The scheme allows the traders to account for VAT directly at the Green Line for the goods sold beyond it, so that they do not have to be registered for VAT purposes in the government controlled area of the RoC.1392 There exist also other barriers hampering the ‘(re)export’ of such goods to Europe, which would resemble mostly measures caught under Article 28 EC in the context of the Internal Market. European traders have complained about “various forms of pressure from within the Turkish Cypriot community” forcing them to cancel the transaction

1387

Ibid. Ibid. 1389 Private discussion with Dr Lycourgos (Nicosia 26.1.2006). 1390 Ibid. 1391 Set up in accordance with Art 398 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax [2006] OJ L 347/1. 1392 See the 2006 Commission report on the implementation of the GL Regulation, 9. 1388

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through the Green Line.1393 As a result, trade across the Green Line with a ﬁnal destination another Member State is extremely limited, with one instance in 2005,1394 in 20071395 and in 2008 respectively.1396 (c) Negative integration under the re-regulatory regime The Green Line regime appears to oﬀer some sort of ﬂexibility, which implies in particular that it could be amended in the future. But the overall framework appears to be rather ﬁnal and shows a priori the extent of negative integration possible in the Areas under the reregulatory regime. It is clear that there cannot be a total removal of discriminations in the Areas, where the concept of discrimination itself is suspended save with respect to fundamental rights. In any case, it has already been noted that there is room for ﬂexibility in the trade rules of the EU and that a ‘large’ removal of discriminations could be deemed suﬃcient. Under these circumstances and keeping all proportions, it appears that the initial objective of assistance to the Turkish Cypriot community through the removal of barriers to trade is a priori achievable through the re-regulatory regime. Christou argues that the GL Regulation is “an instrument that deﬁned speciﬁc rules for intra-island trade designed to secure EU citizenship rights to individual Turkish Cypriots though the acquis is not applicable in the north”.1397 It may be questionable if this objective has been fully reached yet, as the system can always be ‘perfected’. But bearing in mind the context of the ‘imperfect’ situation created by the division of the island, it is argued that the scale of the removal of discriminations could be deemed satisfactory. Signiﬁcant amendments were made to the GL Regulation

1393 See the 2005 Commission report on the implementation of the GL Regulation, 6. 1394 Consignment of Cyprus Delights in December 2005; ibid, 5. 1395 On 30 April 2007, a consignment of aluminium scrap crossed the Green Line and was subsequently shipped on to the UK. In July 2006, two major consignments of potatoes destined to be sent through the port of Limassol to EU Member States were cancelled at the last minute after ‘politically motivated pressure’ had been exerted on the Turkish Cypriot traders; see the 2006 Commission report on the implementation of the GL Regulation, 6. 1396 At the beginning of February 2008, a small consignment of citrus fruits crossed the line and was then ﬂown to Germany to be exhibited at a trade fair; see the 2007 Commission report on the implementation of the GL Regulation, 6. 1397 Christou G, ‘The EU: what role in the Cyprus conﬂict?’ (2006) 2 The International Spectator 19 (‘Christou (2006)’) 24.

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in 2008,1398 including through the provision of a general lifting of duties on agricultural products originating in the Areas and being traded across the Green Line, an increase in the total maximum value of goods contained in the personal luggage of persons crossing the line,1399 as well as a transparant system regulating the temporary introduction of goods for up to six months from the Areas into the government controlled area of the RoC.1400 Following these amendments, the Commission concluded that the GL Regulation “continues to provide a workable basis for allowing the passage of persons and goods to the government controlled areas of the [RoC]”.1401 The GL Regulation constitutes a transitional instrument between EU enlargement policy and EU internal policy.1402 Following Cyprus’ accession to the EU, the ‘institutional milieu’ is modiﬁed, to the eﬀect in particular that Cyprus can inﬂuence the ‘Council dynamics’,1403 thereby potentially creating the right conditions to move towards a deeper level of market integration through the creation of measures of positive integration. With respect to the various measures proposed by Cyprus to improve trade over the Green Line, including under the GL Regulation, the Commission notes that “it remains to be seen whether the set of measures will indeed foster Green Line trade and economic interaction on the island which would be a positive development. These measures, however, cannot be considered as a substitute for the Commission proposal for a Council Regulation on special conditions for trade with the [Areas]”, the so-called Direct Trade Regulation which the Commission reminds is still pending in the Council.1404 B. Market-correcting policy in Cyprus Following accession, the objective of the EU clearly appeared to be the normalisation of the relations between the Turkish Cypriot community

1398 Council Regulation EC No 587/2008 of 16 June 2008 amending the GL Regulation [2008] OJ L 163/1, 24.6.2008. 1399 From 135 to 260 euros. Goods up to this amount can now be introduced free of customs, excise duties and taxes across the line into the government controlled area of the RoC. 1400 See the 2007 Commission report on the implementation of the GL Regulation, 2. 1401 Ibid, 9. 1402 Christou (2006) 24. 1403 Ibid, 24–5. 1404 2007 Commission report on the implementation of the GL Regulation, 11.

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and the RoC, as well as with the rest of the EU. In order to meet this objective, the Commission had proposed two measures potentially leading to positive integration. While the FA Regulation was eventually accepted at the level of the Council, the DT Proposal has been a major source of conﬂict within the Council, reﬂecting on the procedural mechanisms of EU decision-making. 1. Financial aid to the Areas (a) Socio-legal parameters Express reference is made to Article 3 Protocol 10 in the FA Regulation.1405 Article 3 has already been said to trigger general and autonomous provisions of Community law. Although it has been argued that Article 3 should be read in conjunction with Article 1(1) Protocol 10, this could still leave room for speciﬁc measures promoting the economic development of the Areas, “whilst not amounting at the same time to a withdrawal of the suspension of the acquis there”.1406 The Council agreed that it was the case for the FA Proposal but nevertheless acted upon the Commission’s proposal on the basis of Article 308 EC, thereby triggering the rules of unanimity voting. As previously emphasised, such an interpretation of Article 3 Protocol 10 potentially rules out the use of this provision to justify inter-state trade measures, thereby arguably depriving this provision from any alleged ﬂexibility. In any case, the margin of manoeuvre of the Commission appears to be quite limited, as the ﬁnancial measures envisaged under Article 3 Protocol 10 can only be of an exceptional and transitional nature. Overall, it can be said that the implementation mechanisms provided in the FA Regulation reﬂect the ‘ad hoc nature’ of the aid programme itself and of its beneﬁciaries.1407 Such mechanisms are nevertheless intended inter alia “to prepare and facilitate, as appropriate, the full application of the acquis communautaire in the [A]reas following a solution to the Cyprus problem”.1408

1405

4th Recital FA Regulation. Ibid. 1407 See the second Annual Report on the implementation of the FA Regulation COM(2008) 551 ﬁnal, 15.9.2008 (the ‘2007 Commission report on the implementation of the FA Regulation’) 2. 1408 5th Recital FA Regulation. 1406

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(b) Substantive provisions (i) Scope of assistance. The assistance is geared towards the ‘economic integration of the island’1409 through inter alia the promotion of social and economic development, of projects for the development and restructuring of infrastructures, of bi-communal activities, of information on the Union’s political and legal order, of the preparation of the harmonisation of the Turkish Cypriot legal system and of implementation of the acquis (under TAIEX).1410 The beneﬁciaries of the aid are identiﬁed in Article 1(2) as being ‘local bodies, cooperatives and representatives of civil society’ without prejudice to the oﬃcial policy of non-recognition of any public authority in the Areas.1411 In this context, the Regulation provides for the principle of direct supply of assistance to the beneﬁciaries.1412 The assistance extends inter alia to procurement contracts, grants and ﬁnancial aid (see below).1413 Participation to the award of procurement or grant contracts is in accordance with existing Community principles1414 and, as such, is deemed to include natural or legal persons established in the Areas.1415 The overall allocation of the 259 million euros was ‘committed’ by the Commission through the adoption of ﬁve Financing Decisions in 2006.1416 Out of this total amount, more than 240 million was allocated to the ‘operational part of the aid programme’, whereas the remainder 18 million or so will be used ‘to support the implementation of the aid programme’ by the Commission in accordance with Article 4(3) of the FA Regulation.1417 It is interesting to note that among the ﬁve objectives of the operational projects of the ﬁnancial assistance, there are provisions for actions ‘to promote the competitiveness of the private sector’ including through a loan scheme and direct support to SMEs1418 1409

Art 1(1) FA Regulation. Arts 1(1) and 2. 1411 Art 1(3) and 10th Recital. 1412 6th Recital and Art 2. 1413 Art 4. 1414 Art 9. 1415 This point was clariﬁed by the Commission in Statement ad Art 9 FA Regulation; see Hoﬀmeister, 202. 1416 See Annex 1 of the 2006 Annual Report on the implementation of Community assistance under the FA Regulation COM(2007) 536 ﬁnal, 18.9.2007 (the ‘2006 Commission report on the implementation of the FA Regulation’) 5. 1417 Ibid. 1418 Under Objective 2 of “Promoting social and economic development” (approx 70.2 million euros); see the 2006 Commission report on the implementation of the FA Regulation, 5. 1410

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or for ‘grants for people-to-people contacts’ between the Turkish Cypriot community and ‘counterparts organisations’ in the EU in addition to the already examined community scholarship scheme for students and teachers and the establishment of an EU information point.1419 (ii) Management of assistance. The Commission is responsible for the administration of the aid, assisted by a Committee composed of representatives of Member States and chaired by a representative of the Commission, which may have a consultative or an informative role.1420 The Commission has reportedly declared that it would consult the RoC about the implementation of the Regulation, including for feasibility studies in case of doubt as to whether ﬁnanced actions may aﬀect property rights.1421 The implementing powers are supranational since they lie with the Commission in accordance with existing Community rules1422 and are subject to reporting to the European Parliament and the Council.1423 For the implementation of the assistance, the Commission has put in place a Programme Team composed of Commission oﬃcials and contract agents working both in Brussels and in Cyprus as part of the Turkish Cypriot community Task Force within DG Enlargement.1424 The addresses of the members of the team are in Brussels and at the Commission’s Representation in Cyprus, while the team is using the Programme Support Oﬃce in the Areas “with a view to ensuring costeﬀective coordination, preparation and implementation of the assistance, whilst also providing a venue for meetings and seminars”.1425 Oﬃce management, necessary premises and support staﬀ (secretaries, drivers) are provided by a private contractor, namely GTZ (Deutsche Gesellschaft für Technische Zusammenarbeit). Also as part of the Programme Team, a TAIEX Local Support Point aimed at ‘co-ordinating visits by Member State experts’ was established.1426 1419 Under Objective 4 of “Bringing the Turkish Cypriot community closer to the EU” (approx 9.5 million euros), ibid. 1420 Art 3 FA Regulation. 1421 Statement ad Art 3 FA Regulation; see the 2007 Commission report on the implementation of the FA Regulation, 9; see also Hoﬀmeister, 202. 1422 11th Recital FA Regulation. 1423 Art 10 ibid. 1424 For more information, see accessed on 16.5.2007. 1425 Doc 6810 (Press 60) 27.10.2006. 1426 2006 Commission report on the implementation of the FA Regulation, 9.

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In application of Articles 5(2) and 6 FA Regulation,1427 the aid programme is implemented by the Commission in accordance with Article 53(1) (a) and (c) of Council Regulation (EC, Euratom) No 1605/2002 on the ﬁnancial regulation applicable to the general budget of the EC,1428 to the eﬀect that mechanisms of centralised and joint management with international organisations are involved. DG Enlargement of the Commission normally acts as the Contracting Authority and procurement is carried out in line with the provisions of Part 2, Title IV (External actions) of the Council Regulation (EC, Euratom) No 1605/2002 and Chapter 3 of Part 2, Title III of its implementing rules,1429 as well as the Commission Decisions C(2006)117 of 24 January 2006 and C(2007)2034 of 24 May 2007 on “Rules and procedures for services, supplies and works contracts ﬁnanced from the General Budget of the European Communities for the purposes of co-operation with third countries”.1430 There is therefore a priori no delegation of powers to any authority in the Areas.1431 This gave rise to practical diﬃculties associated with the operation of the aid as ﬁnancing agreements with the government of the beneﬁciary country normally set the rules and conditions for the implementation of EC funded aid programmes. In the case of ﬁnancial assistance to the Turkish Cypriot community, ‘ad hoc arrangements’ were put in place by the Commission which meant that it potentially faced more liabilities than under the traditional ﬁnancial agreements, due in particular to the uncertainty of the legal environment and the higher cost of contractor services deriving from these uncertainties.1432 Thus, the implementing powers apparently remain at the transnational and/or national level in accordance with international and

1427 The Commission may delegate tasks of public authority to the European Agency for Reconstruction or to other bodies provided they are (i) of an internationally recognised standing; (ii) in compliance with internationally recognised systems of management and control; and (iii) supervised by a public authority of a Member State or by an international organisation/institution. 1428 [2002] OJ L 248/1, 16.9.2002. 1429 Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 [2002] OJ L 537/1, 31.12.2002), as last amended by Regulation (EC, Euratom) No 478/2007 [2007] OJ L 111/13. 1430 2006 Commission report on the implementation of the FA Regulation, 9. 1431 Any ‘operational centre’ of the Agency, if needed, shall be established in the RoC, Statement ad Art 5 FA Regulation reported in the relevant Council Minutes; see Hoﬀmeister, 202. 1432 2007 Commission report on the implementation of the FA Regulation, 3.

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Community principles, in particular Articles 5 and 10 EC. Pursuant to Article 53(d) of Council Regulation (EC, Euratom) No 1605/2002, the activies in the ﬁeld of upgrading of local and urban infrastructure and support to the private sector are jointly managed with the UNDP,1433 to the eﬀect that there are some elements of ‘joint management’ at the transnational level. There is also the possibility of ‘indirect centralised management’ in accordance with Articles 54.2(c) and 56 of Council Regulation (EC, Euratom) No 1605/2002 and to that intent, an agreement was concluded with GTZ until the end of 2008 for the whole of the TAIEX programme.1434 In view of (and despite) the safeguards measures set out in the FA Regulation (see below), aiming precisely at safeguarding the lawfulness of the implementing powers as previously described, the government of the RoC applied to the CFI for the annulment of the operation of a number of procurement notices issued by the Commission for the encouragement of economic development in the northern part of Cyprus in the ﬁelds of energy, the environment, agriculture, telecommunications, education and crop management and irrigation.1435 According to the RoC, the Commission’s notices are unlawful both under EU law (abuse of powers/infringement of the relevant legal basis under the FA Regulation, violation of Article 299 EC as amended by the 2003 Treaty of Accession and of Protocol 10, and/or nonpublication to the OJ, and/or violation of the duty of sincere cooperation under Article 10 EC)1436 and under international law (mandatory 1433

2006 Commission report on the implementation of the FA Regulation, 9. Ibid. 1435 Case T-54/08, Cyprus v Commission, action brought on 4 February 2008 [2008] OJ C 79/34, 29.3.2008; Cases T-87/08 and T-88/08, Cyprus v Commission, actions brought on 18 February 2008 [2008] OJ C 142/27; Cases T-91/08, T-92/08 and T-93/08, Cyprus v Commission, actions brought on 22 February 2008 [2008] OJ C 142/29, 7.6.2008; Case T-119/08, Cyprus v Commission, action brought on 7 March 2008 [2008] OJ C 142/29; and Case T-122/08, Cyprus v Commission, action brought on 14 March 2008 [2008] OJ C 142/30. 1436 The RoC argued inter alia that contrary to what is provided in the FA Regulation, the Turkish Cypriot community is treated in these notices like a separate state entity having legal personality and being able to beneﬁt from the aid (paras 29 and 31, Case T-54/08 R, Cyprus v Commission, Order of the President of the CFI, 8 April 2008), as if it constituted a third country (para 30, ibid). In this respect, it derives from the disputed notices that the beneﬁciaries would be exempted from any customs duties, import taxes, VAT or any other taxes imposed on goods entering the Areas, whereas the legal regime and the currency applicable in the Areas would be diﬀerent from what currently applies in the government controlled area of the RoC, in violation of the principle of self-determination of the RoC (paras 32 and 33). 1434

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rules and UNSC Resolutions 541(1983) and 550(1984) on Cyprus), which justiﬁes in its view the granting of interim relief through inter alia the suspension of the operation of the notices. The President of the CFI issued several orders1437 whereby he dismissed the applications for interim relief in these cases due to the absence of urgency and of manifest and serious breach of international and/or of Community law by the Commission.1438 He nevertheless accepted that the conduct of the Commission was unlawful and that it amounted to a violation of the sovereignty of the RoC (moral prejudice), which could be adequately remedied through the annulment of the said instruments,1439 given the various socio-legal interests at stake.1440 Following these Orders, the cases were removed from the Court Register,1441 as the RoC was satisﬁed with their outcome and did not wish to pursue the annulment of these notices any further (some of the calls were closed and/or had been unsuccessful anyway).1442 (iii) Safeguard measures. Article 7 FA Regulation provides a safeguard for the protection of the rights of natural or legal persons, including the rights to possession and property. There is an express reference to the case law of the ECtHR in this respect, which is argued should be treated with caution. 1437 Case T-54/08 R, Order of the President of the CFI of 8 April 2008, Cyprus v Commission; Joined Cases T-54/08 R, T-87/08 R, T-88/08 R, T-91/08 R, T-92/08 R and T-93/08 R, Order of the President of the CFI of 11 April 2008, Cyprus v Commission; Case T-119/08 R, Order of the President of the CFI of 11 April 2008, Cyprus v Commission; Case T-122/08 R, Order of the President of the CFI of 11 April 2008, Cyprus v Commission [2008] OJ C 171/38. 1438 See Case T-54/08 R, Commission v Cyprus, paras 66–80 of the Order of the President of the CFI, 8 April 2008. 1439 See paras 77–8, ibid. 1440 «Cette solution est conﬁrmée par la mise en balance des intérêts en cause. Ainsi que la Commission l’a relevé à juste titre …, l’octroi des sursis à exécution sollicités porterait atteinte aux intérêts de tiers qui ne sont pas parties à la présente procédure et n’ ont pas été entendus par le juge des référés. … Tout retard dans la mise en œuvre des ces mesures risquerait de pérenniser le sous-développement structurel et économique des ces zones et les conditions de vie diﬃciles de leurs habitants, d’autant plus que l’aide communautaire vise, aux termes de l’article 2 du même règlement, la promotion du développement social et économique, notamment rural, le développement des infrastructures ainsi que le rapprochement entre la communauté chypriote turque et l’[UE]»; see para 79, ibid. 1441 Case T-54/08 R, Cyprus v Commission, Order of the CFI of 29 April 2008; Cases T-91/08, T-92/08, T-93/08, T-119/08 and T-122/08, Order of the CFI of 16 June 2008. 1442 These legal proceedings should be placed in the context of the 2008 presidential elections in the RoC which led to a reorientation of the governmental policy on the Cyprus problem.

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In Cyprus v Turkey, the Strasbourg Court has potentially recognised the competence of the Turkish Cypriot courts to the extent that they promote the protection of human rights, so as to avoid a ‘vacuum’ in their protection.1443 Such a vacuum exists due to the fact that while the citizens of the RoC are EU citizens and the Turkish citizens enjoy the rights provided under the Ankara Agreement, the Turkish Cypriot community in the Areas is subject to no de jure jurisdiction. There could be a temptation to extend the above ruling potentially to other ‘authorities’ in the Areas in line with the ICJ jurisprudence in Namibia, provided the protection of human rights is at stake.1444 It is however clear that the TCCoC does not constitute an ‘authority’ in the Areas. In addition to all the obvious arguments deriving from international law regarding the de jure competence of the RoC, such an ‘extrapolation’ or spillover eﬀect of the ECtHR’s case law would also bear risks inherent to the fact that the Commission can only exercise a factual control over the ‘authorities’ in the Areas.1445 Alternatively and perhaps more likely, there would always be the solution of holding Turkey responsible for the acts of the ‘authorities’ in the Areas, in line with the Court’s jurisprudence in Loizidou. It is however doubtful whether the ECJ would endorse an analogous ratio decidendi in view of its competence under the EC Treaty and as this would go against the already established Anastasiou jurisprudence. It would in any case lead to a radical change in the status of the Areas in Community law, since the EU would have to accept the loss of sovereignty of the RoC vis-à-vis a third country.1446 The recent case law on the FA Regulation analysed above gives some elements of answer indicating in particular the margin of manoeuvre of the EU institutions including the Commission in this respect.1447 (iv) Socio-legal considerations on the nature of the FA Regulation. The FA Regulation is deemed to be the continuation of the pre-accession 1443

Cyprus v Turkey case note, Hoﬀmeister (2002) 96 AJIL 445, 446. Berramdane in Agapiou & Rossetto, 54. 1445 Ibid, 55. 1446 For the consequences deriving from the ECJ adopting such a rationale, see Skoutaris in Inglis & Ott (2005) 179–80. 1447 Following the legal proceedings in Cyprus v Commission, the Commission is even more careful to ensure documents pertaining to the procurement process do not contain any statement which could be deemed by the government of the RoC as implying recognition of the ‘TRNC’. It should be noted however that the legal proceedings in Cyprus v Commission technically only concerned the procurement notices issued at the beginning of the tender process. 1444

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ﬁnancial assistance for Cyprus – following accession – in view of the fact that the integration of the island is not complete.1448 As such, the ‘post-accession’ regime restricted to the Areas falls under the EU Enlargement strategy.1449 This Regulation is however deemed applicable beyond a settlement in Cyprus, subject to any necessary adaptations the Council may pass unanimously.1450 The objective pursued therefore appears to extend beyond the mere provision of a transitional regime pending a settlement to the deeper – albeit still temporary – goal of positive integration, as evidenced by the 2004 July ‘comprehensive package’ of aid and trade measures for the economic integration of the Turkish Cypriot community.1451 This however raises the issue of the nature and of the scope of the FA Regulation beyond a settlement, caught in between pre-accession aid delivered ‘post accession’ and regional policy towards an area of a Member State in need of further co-ordinating and common policies promoting the development of its economy and of its welfare, but which is not a region. The Commission notes in this respect that “[t]he legal, diplomatic and political context within which the Commission is operating is unique. This context poses a number of challenges and risks to the successful implementation of this aid regulation” such as the ‘tight contracting deadlines’ and the ‘squeezing of the programme duration’ as a result of the late adoption of the FA Regulation,1452 the property issue (many investments require the consent of the Greek Cypriot 1448 Art 3(3) FA Regulation requires for instance the Phare Management Committee’s opinion on draft ﬁnancing decisions where they are in excess of 5 million euros and cover operational rather than supporting activities. 1449 DG Enlargement, Unit A 3, Task Force Turkish Cypriot community last accessed on 18.5.2007. 1450 Art 11 FA Regulation. 1451 Press Doc IP/04/857, 7.7.2004. 1452 Some activities could not take place, activities planned on an annual basis can only take place between 2007 and 2009 instead of 2005-2009 (no funding is available for the Community scholarship scheme for the academic year 2009/10, the last call for proposal for grants to farmers, local communities, civil society organisations, etc, was issued in the ﬁrst half of 2009); see the 2007 Commission report on the implementation of the FA Regulation, 12. By the end of May 2009, the total amount contracted reached €84.5 million and the total amount disbursed €38.5 million. Remaining funds must be contracted before the end of 2009, although implementation can follow in later years (up to 2011). Tenders and calls for proposals have now been launched covering all of the remaining funds; see http://ec.europa.eu/enlargement/turkish_cypriot_ community/aid_implementation_en.htm, last accessed on 29.05.09.

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owners),1453 the low absorption capacity of the beneﬁciary community or political issues “not directly related to the aid programme per se but rather to the overall political context on the island”.1454 Implementation of the FA Regulation in 2007 has proven diﬃcult and is marked with uncertainty regarding future funding (beyond 2009). 2. Direct trade between the Areas and the rest of the EU (a) Socio-legal considerations of soft governance Indications of the ‘coupling’ of the measures regarding ﬁnancial assistance with trade promotion found in the preparatory work of the Commission on the basis of the Copenhagen conclusions were conﬁrmed at the decision-making level of the Council. Despite ﬁnalising the preparatory work on the FA Regulation in November 2004,1455 it was adopted by the GAERC only in February 2006,1456 causing the loss of 120 million euros at the end of 2005. Certain Member States were insisting on the coupling of this proposal with the more controversial DT Proposal under the package deal of the Commission. Thus, there were pressures at the supranational and intergovernmental level for both proposals to be adopted simultaneously,1457 thereby triggering instances of informal and formal consensus of EU decision-making. After many months of hard negotiations at the level of Coreper and/or informal consultations under the successive EU Presidencies

1453

For the purpose of upgrading urban and local infrastructures in the Areas, the Commission requested the support of the RoC to conﬁrm the names of the private owners whose property was involved. The Commission notes that “[t]he time required by the [RoC] to answer such requests is proving long. This risks becoming a major stumbling block putting investment projects at risk. Obtaining the private owners’ names is only the ﬁrst step. The Commission must then request and receive their consent before signing works contracts”; see 2007 Commission report on the implementation of the FA Regulation, 10. The involvement of privately-owned Greek Cypriot property is therefore a signiﬁcant additional risk factor to the implementation of the foreseen projects. 1454 2006 Commission report on the implementation of the FA Regulation, 12. 1455 Hoﬀmeister, 202. 1456 Press Doc 6810, 27.2.2006. In February 2007, the government of the RoC made strong representations to the EU over the inspection of sea and airport facilities in the Areas by EU oﬃcials. It should be noted that maritime transport is not covered by the FA Regulation; see Cyprus Weekly 2–8.2.2007, 5. 1457 The UK in particular; see House of Common’s second report of the Foreign Aﬀairs Committee on Cyprus; see also Dodd C, ‘Report of the House of Commons Foreign Aﬀairs Committee on Cyprus: a review’ (2006) 95 The Round Table no 383, 65. The Turkish Cypriot side was also in favour of this coupling; see European Voice 31/ 3–6/4.2005, 10.

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involving the Member States, the Commission, the RoC and/or the Turkish Cypriot side,1458 the ‘decoupling’ of the two proposals was eventually achieved under the Austrian Presidency in the ﬁrst half of 2006. It led to the adoption of the FA Regulation by the Council and to the discrete re-launch of the discussion of the DT Proposal on a new legal basis triggering unanimity at the Council,1459 allegedly Article 308 EC.1460 This eﬀectively meant that Cyprus would have an oﬃcial right of veto1461 regarding this measure but it had to commit on the other hand not to block the undergoing political and diplomatic process with the Turkish Cypriot community and/or Turkey, thereby eﬀectively framing the scope of its right to veto. The Cypriot government had presented in July 2004 to Coreper a counter-proposal to the original DT Proposal based inter alia on the return of the occupied town of Famagusta to its lawful inhabitants, the opening of the part of Famagusta with a bi-communal authority under the supervision of the Commission, a moratorium on Greek-Cypriot properties in the Areas and improvements to the GL Regulation.1462 Under the Luxembourg Presidency in the ﬁrst half of 2005, a ‘formula’ was adopted on the basis of this counter-proposal, whereby the FA Regulation should be adopted without any further delay while other ‘relevant issues’ contained in the counter-proposal would be examined at a later stage.1463 This formula was perceived by some Member States including the UK as introducing new conditions to the ongoing political process and led to the further delay of the decoupling of the two regulations, in particular under the Dutch Presidency.1464 The Turkish

1458 For an overview of the policy of the various EU Presidencies in 2004–2005, see Hoﬀmeister, 203. 1459 Cyprus Weekly 3–9.3.2006, 3. 1460 The German Presidency at the time, acknowledging the impasse over the DT Proposal, had asked Member States to break forward any ideas or proposals that may help break the deadlock, indicating it did not favour ‘circumventing Nicosia’; Cyprus Weekly, 25–31.5.2007, 5. 1461 Adopting a political sciences analysis, Christou suggests that the voting of the DT Proposal under Art 133 EC reﬂected a situation of de facto unanimity in view of the certain degree of ‘solidarity’ among small Member States in the EU, who “do not want to set any precedent that might work against them in the future”; in Christou (2006) 25. 1462 Cyprus Weekly, 3–9.3.2006, 2; see also Christou (2006) 27; Hoﬀmeister, 203. 1463 Christou (2006) 27. Under the Finnish Presidency in the second half of 2006, there were – failed – discussions on the fate of Varosha, the sealed-oﬀ section of Famagusta, see Enlargement Newsletter 17.11.2006 accessed on 23.11.2006. 1464 House of Common’s second report on Cyprus, paras 120–2.

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Cypriots, on the other hand, wanted to see the opening of more ports in the Areas (under the formula, the RoC would have revoked its decision of 1974 to close the port of Famagusta to international trade).1465 Finally, the RoC wanted to see an explanatory declaration attached to the FA Regulation clarifying the Luxembourg formula. They merely achieved amendments to the FA Regulation pertaining to property issues and political recognition,1466 which they nevertheless considered satisfactory.1467 (b) Compatibility of the Proposal with the acquis While the DT Proposal was aimed at remedying in part the suspension of the acquis in the Areas, its object and eﬀect may actually not be in line with the existing EU acquis on Cyprus. (i) Object and eﬀect of the Proposal.The stated objective of the Proposal is clearly to oﬀer a preferential regime for products originating in the Areas, entering the Customs Territory of the EU.1468 The preferential regime takes the form of a tariﬀ quota system with a view to “encourage economic development while avoiding the creation of artiﬁcial trade patterns or facilitating fraud”.1469 To that intent, the Proposal contains a set of measures establishing special rules under the Community’s external trade policy.1470 These rules contain inter alia numerous safeguard provisions on food and product safety,1471 on the prohibition of the trade of certain goods,1472 on phytosanitary inspection1473 and in the event of ineﬀective co-operation,1474 irregularities or fraud.1475 The last safeguard provision aims at ensuring that goods originating from third countries, in particular from Turkey, are not traded in the EU through the Areas without satisfying the necessary Community requirements applicable in that case under the Ankara Agreement. The Commission in this instance is granted a special power of temporary

1465 1466 1467 1468 1469 1470 1471 1472 1473 1474 1475

Hoﬀmeister, 203. Christou (2006) 27. I Simerini, 25.2.2006, 3. Explanatory Memorandum, Arts 1(1) and 2(1) DT Proposal. 4th Recital, Arts 1(1) and 4, ibid. 11th Recital. Art 1(4)-(6). Art 1(3). Art 6. Art 9. Art 7.

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suspension of the regime1476 in addition to the general implementing powers granted under the Proposal.1477 The task of issuing the accompanying documentation to the goods for proof of origin under the special regime is entrusted in the Proposal to the TCCoC or to any other body duly authorised by the Commission.1478 This implies that the power of issuing such certiﬁcates was deemed originally supranational, as opposed to being deemed national under the GL Regulation in accordance with the concept of regulatory competence and the principle of mutual recognition underlying the Internal Market. This may be in line with the Commission’s – ﬂawed – rationale that the DT Proposal falls under the ambit of Article 133 EC. But it may appear much more diﬃcult to justify under Article 308 EC, since this Treaty provision is suppletive and cannot be used to extend Community competence in any way. At present, however, the DT Proposal remains oﬃcially unchanged; the Commission has not produced a new proposal modifying in particular the required legal basis. It should be noted in any case that even under Article 133 EC, delegation to Member States in matters of CCP is possible, Member States acting in that case “as trustees of the common interest” following a speciﬁc authorisation from the Community.1479 Such a ‘crack’ in the exclusive competence of the Community in matters of CCP is deemed to be in line with the principles of European integration, as it conﬁrms that even the external dimension of the Internal Market can entail some ﬂexibility in favour of national regulatory governance.1480 Such a situation seems to have arisen under the German Protocol on internal trade, which also dealt with direct trade from the DRG to the rest of Europe but without any reference to Article 133 EC. Article 2 merely provided that each Member State had to inform the other Member States and the Commission of any existing trade agreements with the DRG and had to ensure that the implementation of such agreements did not raise any concern for the Common Market, in particular 1476

Art 7(1) DT Proposal. Art 8. 1478 Arts 2(2) and 5. 1479 ECJ, Case 41/76, Donckerwolcke [1976] ECR 1921, paras 32–33; see Lenaerts, ‘Regulating the regulatory process: “delegation of powers” in the EC’ (1993) ELRev 23, 27–32. 1480 See Koutrakos (2006) 17–27, for a review of the scope of the Community exclusive competence in matters of CCP and its ‘disuniform’ application. 1477

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as far as the other Member States were concerned. As a result, Article 3 of the Protocol entitled Member States to take protective measures so as to avoid any diﬃculty arising from such trade. Of course, in the case of Cyprus, the ‘authorities’ in the Areas are not recognised and there can be no oﬃcial trade link between Member States and the Areas after the Anastasiou jurisprudence; all the oﬃcial authorities are situated in the government controlled part of the RoC. These remarks raise the issue of the competence of the RoC with respect to inter-state trade, which appears to be eﬀectively ‘by-passed’ in the Proposal, whereas it can be deducted from the acquis that such a competence should exist in principle in all instances of economic integration of Cyprus. (ii) Legitimacy of the Proposal in view of the acquis Primary legislation. It was previously concluded with respect to the appropriate legal basis of the Proposal that it would be incompatible with the acquis as embodied in the lex specialis of Article 1(1) Protocol 10, if not taken on the basis of Article 1(2) as it would eﬀectively amount to a partial withdrawal of the acquis.1481 Thus, while the object of the Proposal may not be the withdrawal of the suspension of the acquis, it is argued that the eﬀect of the measure amounts to such a withdrawal and therefore requires the use of Protocol 10 as the proper legal basis. The Commission may be correct in its analysis that there is no extension of the application of the acquis per se. But it is argued that this may only appear so because the acquis applicable as a result of this withdrawal is a diﬀerentiated re-implementation of the rules of the Internal Market in Cyprus. This is so in view in particular of some intrinsic characteristics of the special regime, which if interpreted strictly, would otherwise constitute a prima facie breach of Article 28 EC.1482 As a result, using another legal basis than Protocol 10 to eﬀectively reach the purpose of the withdrawal of the suspension of the acquis could constitute a misuse of power by the Commission, rendering the act illegal by virtue of Article 230 EC. The Council had proposed an ‘unlocking mechanism’ with respect to the adoption of the Proposal through the taking of a general decision based on Article 1(2) Protocol 10 regarding the suspension of the acquis and the import of goods from 1481 1482

Contra Hoﬀmeister, 217. Hoﬀmeister, 217.

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the Areas, while more detailed rules would be subject to qualiﬁed majority. This unlocking mechanism would have the advantage of bringing the Proposal from intergovernmental to supranational mechanisms of joint decision-making through the delegation of substantive authority to the Council, even if unanimity requirements under Article 308 EC as opposed to Article 133 EC would render its application more diﬃcult (but more fair). The implementing measures could then be entrusted to the Commission through the delegation of procedural authority from the Council. The measure would in that case advance one step further into the realm of supranational governance involving mechanisms of centralised decision-making resembling the ones of Article 133 EC and thereby increasing potentials for problem solving in the EU. Such mechanisms would imply delegation to the EU institutions away from intergovernmental agreements towards deeper integration and would therefore require modiﬁcations to the current Proposal. Secondary legislation. Whereas the GL Regulation not only refers to the primary responsibility of the RoC in intra-state trade but also promotes co-operation between trade authorities/bodies in Cyprus as a result of national regulatory governance, the DT Proposal does not express such concerns at least directly. Recital (9) of the DT Proposal provides that certain provisions of Community law, in particular of the Implementing Regulation, “ought also to apply in the framework” of the Proposal. Nevertheless, the Proposal fails to refer expressly to the competent authorities of the RoC or to the possibility of co-operation between authorities, based on the idea that only the Areas and the then 24 other Member States are concerned. This situation may be comparable to the German Protocol on internal trade, but there was no issue arising as to the recognition of the DRG in that case. In the case of Cyprus, this appears prima facie contrary to international law, especially in view of the fact that goods in an unﬁnished state could arrive through closed ports, as opposed to the GL Regulation where they have to transit through the Green Line. It also appears contrary to Community law, as it contradicts Article 8(3) of the Implementing Regulation, which refers to the monitoring and reporting obligations by the authorities of the RoC for goods, the ﬁnal destination of which is a Member State other than Cyprus. One main point of diﬀerence between the GL Regulation and the DT Proposal in this respect is that the communication of information

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on the trading of goods remains limited to the authorities of the RoC and to the Commission in the former instance of direct trade. There is no tripartite reporting exercise under the Implementing Regulation, which would involve a certain degree of cooperation between the various authorities in Cyprus and in Europe. This is justiﬁed by the fact that the TCCoC cannot and should not be considered as a governmental body exercising public authority in Cyprus, as it would not derive its power from any recognised source of authority. But should the DT Proposal be ﬁnally abandoned, perhaps there would be room for improvement in the GL Regulation in this respect, under the authority of the RoC.1483 The above remarks can also extend to the FA Regulation, in which clear references to the situation arising in international law and in Community law were made with respect to Cyprus, thereby rendering it prima facie incompatible with the DT Proposal. Again, a modiﬁed version of the FA Regulation could perhaps cover some of the ﬁnancial aspects relating to direct trade. ECJ case law. It also seems diﬃcult to reconcile the proposed Regulation with the ECJ ruling in Anastasiou III. A direct implication of the ECJ case law can be found in Article 6(1) of the DT Proposal, which speciﬁcally provides for the appointment of independent experts by the Commission, who shall verify the satisfaction of the special requirements under Community law in the case of citrus fruits. Article 6 of the Proposal is however a pure reproduction of Article 3 Implementing Regulation, which tends to demonstrate a certain degree of redundancy between the two documents. The future of the Court’s doctrinal principle within the framework of the European integration of Cyprus therefore remains uncertain in view of the current proposal on inter-state trade. In this exercise of market integration, the emphasis appears to be on the functions of ‘supranational entrepreneur’1484 of the Commission allowing it to utilise its own political insights and technical tools for the exercise of supranational regulatory authority. This power appears to

1483 In this respect, the Government of the RoC had introduced a package of measures totaling 30 million euros aimed at promoting ﬁnancial cooperation between the two sides through joint venture schemes to further stimulate trade under the GL Regulation; see Cyprus Weekly, 25–31.5.2007, 5. 1484 Wincott, 607.

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be independent from the traditional intergovernmental exercise of pooling of sovereignty in the EU,1485 but is nevertheless subject to the normal mechanisms of judicial review of instruments of secondary legislation. The Court’s intervention as a power ‘moderator’ could result in changes in the re-regulatory regime of a divided Cyprus should the DT Proposal be adopted in its current form and be challenged before the Court. Concluding remarks The re-regulatory regime of a divided Cyprus in its current form represents an incomplete attempt of institutionalisation of the principles of the Europeanisation of Cyprus through economic governance due to the conservative application of the framework designed in Protocol 10. As a result, the spillover eﬀects of the Internal Market onto other areas of EU policy, which could lead to the positive integration of the Turkish Cypriot community into the EU and hopefully to Cyprus’ full integration into the EU, appear limited. Incomplete does not however mean failed attempt, which would lead to the disintegration of Cyprus in the EU through the consolidation of the divide of the island and the creation of a ‘Taiwan in the Mediterranean’, provided international direct connections can be envisaged.1486 On the contrary, it appears that the market integration of the Turkish Cypriot community is well underway and requires further measures of positive integration to fully institutionalise the process of its socialisation/Europeanisation leading to European integration. The measures of positive integration currently envisaged cannot arguably constitute the ultimate step of integration, as Protocol 10 provides a transitional framework focused primarily on the implementation

1485 Contra Moravcsik who sees the Commission as a mere “eﬀective informal agenda-setter in international negotiations”, in Moravcsik A, ‘Liberal Intergovernmentalism and integration: a rejoinder’ (1995) 33(4) JCMS 611, 615. 1486 The UK in particular has been putting pressure on Cyprus to open up airspace above the Areas and has been treating it as a separate issue from direct trade since it concerns mainly international passenger transport; see House of Common’s second report on Cyprus, paras 144–6. In a letter by the British Department of transport to a Turkish Cypriot airline, the UK government however recognised that the RoC “has complete and exclusive sovereignty over the entire island of Cyprus and alone has the right to designate an airport for the purposes of the Chicago Convention”; Cyprus Weekly, 2–8.3.2007, 10.

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of Internal Market-related policies including non-economic objectives, but leaving out market-correcting policies subject to intergovernmental mechanisms of decision-making at the EU level as well as ‘redistributive’ policies largely in the hands of Member States.1487 There are however strong indications that the existing re-regulatory regime of a divided Cyprus, in an improved version so as to reach an optimum level of market integration,1488 could lay down the right socio-legal conditions for a market union of the Turkish Cypriot community with the EU thereby potentially closing the regulatory gap.1489 With reference to the spillover eﬀect in particular, EU market-making and market-correcting policies ‘constrain’ the redistributive capacity of Member States, leading to the potential expansion of the EU tasks in the area of distributive policies to secure the achievements of market integration.1490

1487 Börzel T, ‘Mind the gap! European integration between level and scope’ in Börzel (2006) 8. 1488 The rules of origin requirements under the GL Regulation could be softened so as to allow more Turkish Cypriot goods to cross the Green Line. It could be a way to re-weight Turkey’s “growing integration into EU-based networks of production and distribution” including the potential for a ‘rapid growth’ in trade between the RoC and Turkey; see World Bank Report (Vol II) 162. 1489 Referring to the World Bank Report, the Commission itself notes that the GL Regulation does not allow products brought into the northern part of the island from other EU Member States or Turkey to cross to the government controlled areas and that these restrictions “might signiﬁcantly reduce beneﬁts to producers, service providers and consumers north and south of the Green Line”; see the 2006 Commission report on the implementation of the GL Regulation, 9. 1490 Börzel in Börzel (2006) 8–9.

CONCLUSION: THE STATE OF THE UNION OF CYPRUS WITH THE EU

It has been established in this book that the adoption of a socio-legal method of analysis of the European integration of Cyprus allows to ‘depoliticise’ the debate by establishing a speciﬁc law/politics/policy interface1491 and to take into account a softer framework of governance as opposed to traditional Community methods of integration. Adopting this method of analysis, it was found that while the re-regulatory regime of a uniﬁed Cyprus proposed prior to accession could have potentially led to the disintegration of Cyprus into the EU, the transitional reregulatory regime of a divided Cyprus promoted by Protocol 10 could have the potential to lead to the full integration of Cyprus into the EU. On a scale ranging from disintegration to full integration, it could be said that Protocol 3 stands towards the point of equilibrium, as it contains both elements of disintegration and of further integration and cannot be considered on its own in an attempt to determine Cyprus’ path towards full European integration. On the way towards full integration and in the absence of a comprehensive settlement in Cyprus, it was established in this book that for the duration of the status quo, Protocol 10 should form the legal basis of all measures taken with respect to the Turkish Cypriot community. It was also determined that Protocol 10 could be used to trigger a ‘solution’ beyond the status quo eﬀectively leading to the factual integration of the Turkish Cypriot community into the EU through the notion of market citizenship. Given the transitional, ad hoc and limited nature of Protocol 10, the remaining questions 1491 Using Cotterell’s ‘ratio/voluntas dichotomy’, the balance between the two elements of law seems to be favouring law’s political authority to the detriment of law’s moral explaining the supranational EU interest for the promotion of the economic and ﬁnancial support to the Areas with a view to facilitating the reuniﬁcation of the island. At present, the legitimacy or ratio of the European integration of Cyprus seems to be based rather on the normative value of ‘order’, perhaps to the detriment of the one of ‘justice’; the doctrine of the rule of law being merely “a technical attempt to equate both values” in the law’s ratio thereby creating “legitimacy for the coercive power of law as voluntas”, in Cotterell (1995) 315–20. For a detailed analysis, see Lauhé-Shaelou (2005) 118–9.

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concern the regime applicable to the European integration of the Turkish Cypriot community beyond a ‘solution’ triggered by market integration under Protocol 10, towards the full integration of Cyprus into the EU. Although the 2004 enlargement was largely political for all Member States including for Cyprus, the Treaty of Accession was found to be rather of remote importance in the quest towards the full integration of Cyprus. The Areas being neither a State, nor a region, nor a territory, but part of a Member State of the EU, a regime leading to their European integration was nevertheless needed given that all ‘intermediate’ integration options were closed (association agreement, free trade area or customs union). Whereas Protocol 10 was found to be the main legal basis promoting an atypical type of integration embodied inter alia in the general suspension of the acquis in the Areas, it was determined that the Areas could only be integrated through the withdrawal of the suspension of the acquis. This presupposes the ‘undoing’ of the provision of Article 1(1) Protocol 10 through an ‘acquis-driven strategy’ for the Areas. The acquis is said to oﬀer “not only a package of non-negotiable rules to help both sides converge to European norms – and consequently to each other – but also an instrument to help set into motion the steps necessary to integration”.1492 In line with the enlargement strategy, this should encompass a gradual adoption of the acquis aiming at the deeper ‘EU-isation of intra-Cyprus relations’.1493 This would entail ﬁrst the transposition into local ‘law’ of all relevant pieces of the acquis starting with all Internal Market-related aspects and deepening further with the implementation of objectives of the Union not connected to market integration as far as possible. This would also imply some sort of Europeanisation of the Turkish Cypriot ‘institutions’, ‘policies’ and ‘regulatory framework’. Unlike the enlargement process however, the legal and technical implications produced by this Europeanisation

1492

World Bank Report (Vol II) 170. The World Bank draws lessons from the EU accession process and from the experience of enlargement for the economic integration of Cyprus; in World Bank Report (Vol I) 6. It also identiﬁes the acquis-driven strategy as being centred around two economic areas, namely the “harmonisation of border measures with those of the EU external economic border rules for entry of goods and the removal of competition distorting measures including ‘State’ aids” in the Areas; see World Bank Report (Vol II) 165. 1493

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process at the national1494 and at the supranational1495 institutional level would be diﬀerent, in view of the lack of political legitimacy of these ‘institutions’ and of their ‘policies’ deriving from international law. Given that the ultimate goal of every process of integration could be said to be the state of political union,1496 even more so in the postmodern EU, the fundamental question relates to the state of union of Cyprus with the EU, whether it is achievable and, if so, what it will take to reach it and, if not, what is the scope of the integration in that case. The socio-legal analysis of the European integration of Cyprus leads to the consideration that a ‘solution’ based on market integration is possible before a settlement of the division of the island. As such, it would appear that the elements for a market union of the Turkish Cypriot community with the EU (which includes the government controlled area of the RoC as part of the Internal Market and without prejudice to the fact that the Areas belong to the RoC) are potentially present and could constitute the ultimate step of integration of Cyprus into the EU as follows:

1494 The question arises as to what authority, if any, can bind the Turkish Cypriot community to the integration process and how. The possibility of a ‘unilateral’ transposition of the acquis in the Areas has been advanced by the ‘authorities’ there. For an appraisal of the legal status of the Turkish Cypriot community in international law, see Potier T, A functional Cyprus settlement: the constitutional dimension (Peleus collection, Verlag F P Rutzen, Germany, 2007). 1495 In view in particular of the information and consultation procedure granted to new Member States through the observer status at the Council; see Case C-413/04, European Parliament v Council [2006] ECR I-11221, paras 44 and 67. With respect to the observer status at the EP, Brus, Akgün et al argue that there is no ‘pre-existing legal impediments’ to the EP inviting as observers to its working groups representatives of the Turkish Cypriot community as a “temporary arrangement to prepare them for full integration into the EU after a settlement of the Cyprus conﬂict.” Such representatives would be appointed by the Turkish Cypriot leader “in his capacity as the internationally recognised leader of the Turkish Cypriot community (and not in his capacity as President of [the ‘TRNC’])”; see Brus, Akgün et al, 38–9. The Conference of Presidents of the EP had however concluded in 2007 that “from a legal point of view, it is not possible for the [EP] to invite observers from the Turkish Cypriot community”; ibid, 42. Pending a resolution to the conﬂict, the EP has been developing since 2005 a High Level Contact Group for strengthening the relations with the Turkish Cypriot community and to set up ‘informal working arrangements’ with the EP “in a manner which is constructive and respectful to all sensitivities”; see Enlargement Newsletter, 13.1.09 available at http://ec.europa.eu/enlargement/press_corner/newsletter/index_en.htm, accessed on 15.1.09. 1496 “In a ‘political economy’ the suggestion that one can have economic indivisibility without political indivisibility is intellectually dishonest and smacks of the empirebuilding that has been so forcefully criticised” (Rasmussen, 1986) cited in Chalmers, ‘The Single Market: from prima dona to journeyman’ in Shaw & More, 72.

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As European integration has succeeded in removing economic boundaries among Member States, it has also reduced the political salience of national boundaries to such a degree that territorial disputes among Member States have become a non-issue, and that war among them has become unthinkable. … For the functions that are in fact performed [… by] European governing modes, though they cannot be considered ‘democratic’ in the sense prevailing in national constitutional democracies, are supported by suﬃciently persuasive (consensus-based) legitimating arguments.1497

The conﬂict in Cyprus is not one of national boundaries but one of internal boundaries and, put in the context of European integration, outlines the interaction between European integration and boundary governance where the centre-periphery relations have been ‘depoliticised’ through inter alia the notions of EU governance and of Europeanisation. Thus, in line with the principle of Union citizenship which is an “autonomous source of rights bringing within the scope of application of Community law a range of situations not directly linked with free movement”,1498 it is argued that the re-regulatory regime of a divided Cyprus promoted by Protocol 10 establishes the foundations for a set of direct rights granted to the Turkish Cypriot community as part of the European integration process through market citizenship and beyond. Given the lack of legitimacy of the Turkish Cypriot ‘public sector’, ‘authorities’ and ‘institutions’, the fundamental importance of the ‘entrepreneurship’ component of the Turkish Cypriot community is acknowledged through the process of socialisation.1499 The Turkish Cypriot community is deemed to be composed of legal and natural persons of Cypriot origins, whether economically active or not, but cannot extend to non-EU nationals, with reference in particular to

1497

Scharpf in Börzel & Cichowski, 86. Tridimas, 39. 1499 Throughout the various Commission reports on the implementation of the GL Regulation and the FA Regulation, one can note the increasing emphasis put on measures facilitating trade between the two communities like national conﬁdence building measures including through the ‘Round Table Meetings’ of the three chambers involved, the Cyprus Chamber of Commerce and Industry (‘CCCI’) the TCCoC and the Cyprus Turkish Chamber of Industry (‘CTCI’), or the promotion of the ‘Cyprus Producer Network’, a network of Turkish Cypriot and Greek Cypriot producers established with the aim of increasing cooperation and collaboration and providing technical assistance, training and advice to ease the constraints to GL trade. There are also measures promoted at the EU level. For instance, in order to facilitate potato trade across the line – which represents most of the trade – the Commission ensured the permanent presence of phytosanitary experts during the main harvest season while 1498

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the Turkish community present in the Areas, whose personal rights deriving from the application of Community law should be subject to diﬀerent rules deriving prima facie from the Ankara Agreement.1500 With respect to the enforcement of their rights by the Turkish Cypriot community in the Areas, the question arises as to what extent such rights could be deemed horizontally enforceable and against whom, since in any case there is no possibility of oﬃcial vertical enforcement in the Areas.1501 It is assumed in any case that the principles of Community liability arising under Article 288 EC remain applicable in connection with EU instruments implemented in the Areas, even if it was outlined that the issue of governing law could be problematic.1502 In the regime of integration applicable to the Turkish Cypriot community beyond the ‘solution’ based on market regulation promoted by Protocol 10 and pending a settlement, the ‘entrepreneurship’ component of the community could be considered as a ‘sub-State actor’ in a modern pluralist Cypriot State.1503 The involvement of sub-State actors in EU policies is not unknown, with the example of Belgium in particular,1504

during other periods, their availability was guaranteed within a few working days; see 2007 Commission report on the implementation of the GL Regulation, 7–8. With respect to ﬁnancial aid, the Commission notes that it “heavily relies on the support of the Turkish Cypriot community to make the programme a success” and that it “strives to instil ownership of EC ﬁnanced projects in local beneﬁciaries”; see 2007 annual report on the FA Regulation, 8. 1500 See however n 1064 above regarding the status of the Turkish settlers in the Areas. 1501 The Enforcement of rights by the Turkish Cypriots in the government controlled areas of the RoC should not be an issue since it was already said that they are entitled to exercise their rights in the RoC as Cypriot citizens, including the ones deriving from EU citizenship, subject to any public order exception. With respect to public order in Cyprus, it should be noted that the Cyprus Criminal Code was amended in 2006 to penalise any illegal use, including rent, of property in Cyprus with a sentence of seven years of imprisonment. The Commission notes that 78% of the private property in the northern part of Cyprus is Greek Cypriot property and that this amendment could have an impact on the crossings of Turkish Cypriots. It appears however that the authorities of the RoC follow a policy of non-application of the amendment to ‘ordinary’ Turkish Cypriots, potentially resulting in a lack of legal certainty; see the 2007 Commission report on the GL Regulation, 3. 1502 As of March 2009, there had been no reported instance of dispute arising out of the implementation of Community instruments taken on the basis of the FA Regulation. As per the contracts, the governing law of these instruments is Belgian law and the Belgian courts would normally be competent to hear such dispute, thereby rendering more acute the problem of legal enforcement on the ground with respect to these instruments. This justiﬁes on the part of the Commission a reinforced control on the ground even before the ﬁrst payment is made as well as a closer working relationship with the grant recipients than usual. 1503 Expression borrowed from Tridimas, 47. 1504 For a review of the Belgium decentralised model, see e.g. Tocci (2004) 147–50.

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leading to the creation of direct links between the sub-State actors and the EU. The supranational level has arguably developed policy competences in areas that “aﬀect or are domestically dealt with by the regions” in accordance with the principle of subsidiarity, including “environmental protection, technology and R & D, regional policy, social policy, education and culture” as well as ﬁnancial instruments and structural funds.1505 Although these sub-State actors are normally local governments, no such consideration should arise in the case of Cyprus due to the lack of oﬃcial recognition of the ‘authorities’ in the Areas. In any case, the traditional ‘public-private dichotomy’ in a modern pluralist State can be said to be no longer valid,1506 to the eﬀect that the ‘entrepreneurship’ element of the Turkish Cypriot community can be favoured. Along the lines of the current status of the TCCoC, the ‘sub-State actor’ in the Areas could involve traders, local ‘non-governmental’ bodies, societal groups or the civil society as stakeholders.1507 It could exercise a functional role with respect to the implementation of the Internal Market-related policies, trade in goods including aspects of transportation, the euro,1508 ﬁnancial aid through structural funds1509 and other horizontal and ﬂanking policies interconnected with market integration always under the supervision of the government of the RoC and/ or the EU depending on the competence at stake.1510 With respect to the conﬂict in Northern Ireland, which recently reached a historical 1505

Ibid, 151. Tridimas, 47. 1507 Regarding the Turkish Cypriot commercial vehicles for instance, the government has proposed to empower a Turkish Cypriot NGO to issue roadworthiness certiﬁcates on its behalf instead of assisting Turkish Cypriot lorry and bus drivers in obtaining the normal roadworthiness certiﬁcates; see the 2007 Commission report on the implementation of the GL Regulation, 7. 1508 It can be argued that the adoption of a common currency for the whole territory of Cyprus at least for economic transactions would play a positive role towards the building of a ‘collective identity’ and would participate to the Europeanisation of the Turkish Cypriot community; see Verdun A, ‘The adoption of the Euro by Cyprus’ (unpublished paper, 21 April 2007). The practical diﬃculties associated with the accession of the Areas to the Eurozone should not however be undermined; see Brey H, ‘The German experience of reuniﬁcation and useful lessons for Cyprus’ in Theophanous A & Tirkides Y, Accession to the Eurozone and the reuniﬁcation of the Cyprus economy (Intercollege Press, Nicosia, 2006) 167–77. 1509 Had Cyprus joined as a uniﬁed island, the Areas would have fallen under ‘Objective 1 Priority Region’ of the EU regional policy. The current ﬁnancial aid envelope to the Areas represents more or less what the Areas would have received in structural funds in pre-accession aid for the period 2004–2006; see Tocci (2004) 155. 1510 With respect to the FA Regulation for instance, the Commission set up in 2007 an Implementation Review Mechanism involving Turkish Cypriot beneﬁciaries of the aid; see 2007 Commission report on the implementation of the FA Regulation, 9. 1506

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breakthrough through the formation of a fully representative and devolved government1511 and with no intention of comparison, it is worth noting that the PEACE programme for Northern Ireland is part of the EU’s structural funds and ﬁnancial assistance and supports projects involving both Republicans and Unionists.1512 In view of the above, it is argued that the instance of ‘fuller’ EU integration of Cyprus provided in this book does not necessarily encompass political integration1513 and that there may be no regulatory gap arising in that case. This ﬁnding alone could further consolidate the way to a mode or model of European integration for troubled European States with strong ethnic, religious or linguistic minorities, based on a diﬀerentiated path towards European integration, applicable both to current and aspiring Member States. Regarding current Member States other than Cyprus and seen mainly from the point of view of the external relations with their immediate neighbours, one could consider the russophone minority in the Baltic States which has been subject to a diﬀerent treatment under domestic legislation even after EU accession,1514 with some of them being treated as non-citizens.1515 This treatment arguably derives from

1511 Millett P, British High Commissioner in Cyprus, and Brady T, Irish Ambassador in Cyprus, ‘Devolution in Northern Ireland’ (conference, Nicosia 14.5.2007). Referring in particular to Northern Ireland, Giegerich warns against any exaggerated expectations regarding the positive impact of EU membership on the prospect of ‘settling long-entrenched and bitter conﬂicts’. The positive examples in the EU of ‘settled ethnic (including religious and linguistic) conﬂicts’ such as Belgium, South Tyrol/Alto Aidge or Switzerland show “that constant and determined eﬀorts of all sides are required to maintain and develop the standard achieved”, in Giegerich, 258. 1512 See http://ec.europa.eu/regional_policy/sources/docoﬃc/oﬃcial/regulation/ newregl0713_en.htm, last accessed on 26.05.09. For a socio-legal appraisal of the Good Friday Agreement within the EU context of conﬂict resolution, see Grote R, ‘Comment I: the case of Northern Ireland’ in Giegerich, 113. 1513 According to Deutsch’s transactionalist or communications approach to the integration of security communities, transactionalism or peaceful change does not require a political solution to be manifest in advance of social integration; social integration is the priority which may or may not then require political integration; cited in Hamer C, ‘The idea of the EU: layered identities and future focus for people divided by the past’ (unpublished paper, April 2007). 1514 Issues arising out of the treatment of Russian-speaking minorities in the new Member States which joined in 2004, in particular Lithuania with the Kaliningrad Oblast, were already examined in Chap 1 of this book in the context of the external impact of enlargement onto Russia. It was already pointed out however that the Russianspeaking minorities are much stronger in Latvia and in Estonia, reaching 30 to 40%. 1515 See e.g. Guliyeva G, ‘Lost in transition: Russian-speaking non-citizens in Latvia and the protection of minority rights in the EU’ (2008) 33(6) ELRev 843; see also Van Elsuwege, 390–1 & 484–5.

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the “hidden agenda of ‘russiﬁcation’” of these ex-Soviet Republics “to undermine the deﬁant attitude of the Baltic population against Soviet rule”, to the eﬀect that after the break-up of the Soviet empire, Latvia and Estonia in particular refused citizenship to the Russian ‘occupant’.1516 The terminology of ‘russiﬁcation’ and of ‘occupation’, as reﬂected in particular in the ECtHR’s case law on this matter,1517 could remind observers of the previously examined idea of ‘colonisation’ of the occupied areas in Cyprus by the Turkish settlers and could lead to some points of comparison (albeit no claim that the two situations are similar should be derived from such comparison).1518 In view of the ECJ’s willingness to follow the ECtHR’s case law on Article 8 ECHR as the ‘central source of EU human rights standards’ applied in its review of substantive EC immigration law,1519 special attention should be paid to the ECtHR’s case law in this matter. In Slivenko et al v Latvia,1520 the Court ‘confronted’ with the precarious situation of the russophone minority in the Baltic States, ‘re-conceptualised’ the rights to family and private life to extend to them to the eﬀect that the long-term residence status “now enjoys autonomous human rights protection independent of the family situation and the existence of formal bonds with siblings and parents”.1521 In Sisojeva et al v Latvia,1522 while the Grand Chamber conﬁrmed that Article 8 ECHR extends to situation of

1516 Thym D, ‘Respect for private and family life under Article 8 ECHR in immigration cases: a human right to regularise illegal stay?’ (2008) 57(1) ICLQ 87 (‘Thym (2008)’) 88. 1517 In Slivenko et al v Latvia (ECtHR), No 48321/99, judgment of 9 October 2003 (GC) (‘Slivenko v Latvia’), Judge Maruste from Estonia elaborated on the principle of State continuity and on the presumption of restitutio ad integram in the context of the ‘forced removal’ of a Soviet military oﬃcer and his family on the basis of the LatvianRussian Treaty on the withdrawal of Russian troops. He provided in particular that: “According to generally recognised principles of international law every internationally wrongful act of a State entails international responsibility and gives rise to the obligation of that State to restore the status quo ante. Consequently, the restoration of the independence of the Baltic States on the basis of legal continuity and the withdrawal of the Soviet-Russian troops has to be regarded as redress for an historical injustice”; see dissenting Judge Maruste’s opinion available at http://cmiskp.echr.coe.int/tkp197/ portal.asp?sessionId=24078753&skin=hudoc-en&action=request, 50–2. For a legal appraisal of the case, see Van Elsuwege, 66–80. 1518 With regard to the Turkish settlers in the Areas, who could be regarded as ‘noncitizens’ there, it is doubtful whether the ECtHR’s case law on illegal immigration can be of any use as the illegal occupation of Cyprus by Turkey is still ongoing. 1519 ECJ, Case C-540/03, Parliament v Council [2006] ECR I-5769; see Thym (2008), 95. 1520 See n 1517 above. 1521 Thym (2008) 88–93. 1522 ECtHR, No 60654/00, judgment of 15 January 2007 (GC).

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illegal residents in principle, it stated that “Article 8 cannot be construed as guaranteeing, as such, the right to a particular type of residence permit” to be determined by the national authorities once the Court is satisﬁed that the particular permit “allows the holder to reside within the territory of the host country and to exercise freely there the right to respect for his or her private and family life”,1523 thereby addressing the issue of the proportionality test applicable in this case. Thus, in the opinion of the ECtHR, the level of protection of the rights to family and private life under Article 8 ECHR appears to be satisﬁed through the issue of temporary titles of residency for irregular migrants, which raises in turn the issue of the socio-economic integration of the Russianspeaking minorities in the various EU Member States. Reference in this respect could be made to some aspects of the EU market integration of the Turkish Cypriot community residing in the non-governmental controlled areas of the RoC, bearing in mind of course that this community itself is not ‘stateless’ but ﬁnds itself in the incapacity of exercising their rights as Cypriot and EU citizens in the Areas.1524 With respect to the alleged mode or model of European integration applied this time to countries or territories currently outside of the EU but aspiring to join one day, reference could be made in particular to the Western Balkans as they are also characterised by multi-ethnical conﬂicts.1525 With respect to Kosovo’s aspirations towards EU membership (under UNSCR 1244/1999) and following its declaration of independence on 17 February 2008,1526 the Commission noted that 1523

Sisojeva et al v Latvia, para 91, ibid. Turkish Cypriots enjoy in principle personal rights under EU law as EU citizens; Russian-speaking ‘non-citizens’ in Estonia and Latvia derive their rights as long-term resident third country nationals; for the diﬃculties in the implementation of Directive 2003/109 in this respect, see Van Elsuwege, 484–5. 1525 The EU policy towards the region has already been set out in Chap 1of this book. For an update on this policy, see Commission’s Communication on the Enlargement Strategy and main Challenges 2008–2009 COM(2008) 674 ﬁnal and European Council Conclusions, 8–9.12.2008 outlining the Council’s strategy towards Enlargement including to the Western Balkans. 1526 Just before the declaration of independence, Brey wrote: “Like Cyprus, Kosovo is today divided. The authority of both the Provisional Institutions of Self-Government and UNMIK ends at the Ibar River. The Serb population north of this line is economically and mentally oriented towards Belgrade. Indeed, in Kosovo, a ‘Cyprus scenario’ might become reality once the Albanians, because of their frustration of not being granted independence, unilaterally declare an independent Kosovo. As a result, North Mitrovica could become the capital of an unstable separatist entity, without international recognition, being highly dependent on the Serbian “mother nation”. Thus, a ‘Cyprus situation’ is pending over Kosovo like a nightmare”, in Brey H, ‘Kosovo and the Cyprus scenario – a nightmare and a missed opportunity’ (2007) 47(4) Südosteuropa-Mitteilungen 30, 30. 1524

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Kosovo needs to commit to ‘a democratic and multi-ethnic society’ and that it is ready to encourage Kosovo’s political and socio-economic development in view of its integration into the EU ‘as part of the region’.1527 It should be noted in particular that while the declaration of independence of Kosovo has prompted reactions worldwide including among EU Member States, with some of them recognising the ‘breakaway province’ and others not including Cyprus,1528 Kosovo has beneﬁted from EU autonomous trade preferences since 2000 with the EU being the main partner with respect to trade and to foreign direct investments,1529 thereby outlining the importance of the notion of market integration preceding any sort of political integration.1530 The Council invited the Commission in particular to use EU law instruments “to promote economic and political development and to propose to the broader region concrete measures in order to advance in that direction”.1531 Pending a settlement, the market union of the Turkish Cypriot community with the EU (and a fortiori with the government controlled area of the RoC) could provide the foundations of a regime of integration, thereby arguably triggering the right conditions for the institutionalisation

1527 See Enlargement Newsletter, special issue, 11.11.08, available at http://ec.europa .eu/enlargement/press_corner/newsletter/index_en.htm, accessed on 1.12.08. 1528 In its conclusions addressing Kosovo’s declaration of independence, the Council reiterated “the EU’s adherence to the principles of the UN Charter and the Helsinki Final Act, inter alia the principles of sovereignty and territorial integrity and all UN Security Council resolutions. It underlines its convinction that in view of the conﬂict of the 1990s and the extended period of international administration under SCR 1244, Kosovo constitutes a sui generis case which does not call into question these principles and resolutions”; see GAERC conclusions on Kosovo, 18 February 2008 (Doc 6262/08). 1529 See http://ec.europa.eu/enlargement/potential-candidate-countries/kosovo/eu_ kosovo_relations_en.htm, last accessed on 10.12.2008. 1530 See the “Factsheet on the EU in Kosovo” published on 16 February 2008, ie one day before Kosovo’s declaration of independence, where it was indicated that “the EU is working in Kosovo on the understanding that there will be a major shift from international governance towards Kosovo governance”, available at http://www.consilium .europa.eu/cms3_Applications/applications/search/newsDocDetails.asp?cmsid=650& dockey=98770&doclang=EN&lang=EN, last accessed on 10.12.2008, thereby pointing to the main diﬀerence between the ‘breakaway province’ of Kosovo and the internationally non-recognised ‘TRNC’. 1531 See GAERC conclusions on Kosovo, 18 February 2008 (Doc 6262/08); see also Enlargement Newsletter 13.01.09, accessed on 15.01.09 which reports that Kosovo is one of the particular beneﬁciaries of the 2009 general EU buget while during the approval of the budget, the EP recalled the commitments to EU assistance in Kosovo.

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of the main dimensions of European integration. The linkage between market integration and internal security in particular is quite clear. It arises out of the functional spillover eﬀect of the Internal Market onto the external dimensions of the free movement of persons (immigration, organised crime or transnational terrorism) and in the area of foreign and security policy (economic sanctions under the CCP, political and economic instability of neighbouring countries). This leads to the ‘crosspillarisation’ of EU competencies without necessarily involving the ‘communitarisation’ of decision-making rules and procedures,1532 but nevertheless promotes integration. As such, the European integration of Cyprus, albeit incomplete at present, can be said to be a relatively successful instance of integration potentially leading to ‘unioness’, in default of ‘unionhood’ usually presented as one possible aim of European integration. Such an instance of integration reﬂects on a ‘multi-speed’ Europe of a new type, which should nevertheless remain limited to instances where political integration is not achievable in the short or medium term.

1532

Börzel in Börzel (2006) 14.

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INDEX Absorption capacity 44, 313 Accession Act 3, 13, 24, 55, 62, 89, 90, 93, 95, 98–9, 102–3, 105–20, 123, 125–6, 130, 145, 156–7, 166, 177–8, 180–1, 183–7, 189, 191, 193, 202, 216, 218, 225, 240, 249, 251, 257, 260, 270, 273, 284 Negotiations 2, 6, 38–9, 41–9, 50–1, 56, 58, 60, 62–3, 65–6, 68, 70, 77, 79, 88, 94, 111, 114, 126, 141, 160, 162, 176–9, 186, 227, 244 Partnerships 25, 48, 54, 66 Process 40, 43, 45, 47, 67, 97, 323 Treaty 89, 96, 100, 105, 125, 130, 134, 138, 141–2, 146, 149, 155–7, 164, 172–4, 176, 179–81, 183–9, 191–3, 195–7, 202, 208, 225, 237, 242, 248–9, 262, 269–70, 275–7, 283, 298, 309, 323 Acquis communautaire 5–6, 20–4, 29, 38, 43, 46, 48, 50, 63, 66–7, 69, 79, 81–2, 87, 93–4, 98–9, 100–2, 107–12, 115–6, 126–7, 130, 141–2, 147, 151–2, 154–5, 157–8, 162, 164, 174–7, 179, 182–6, 189, 192–200, 208, 211, 213–5, 224–5, 227, 229–32, 237, 240, 243–8, 250–1, 256–8, 260–1, 265, 269, 275–6, 281–2, 283–4, 301–3, 305–6, 315, 317, 323–4 Agenda 2000 46–7 Anastasiou cases (saga) (ECJ) 27, 29, 71, 80–4, 189, 208, 277, 280, 289, 311, 317 Anastasiou I 32–3, 35, 37, 39, 71–2, 74–6, 79, 84 Anastasiou II 71–9 Advocate General’s Opinion 74, 78 Anastasiou III 77–9, 81–2, 182, 197, 284, 297, 299, 319 Annan Plan 6, 9, 18, 82, 149, 176–7, 200, 225, 245–7, 254, 256, 258–9 Apostolides case (ECJ) 6, 102, 208, 213–20, 222–4 Advocate General’s Opinion 118, 214–23 Court of Appeal (England and Wales) 211, 213, 215, 221, 224–5

Apostolides v Orams (see also Orams v Apostolides) District Court (Nicosia) 211, 221 Supreme Court (Cyprus) 211, 223 Article 48 EU 97, 102 Article 49 EU 22, 52, 92, 97–8, 106, 243 Article 18 EC 171, 193–4, 227, 254, 269 Article 28 EC 292–3, 302, 317 Association Agreements 24–34, 36–7, 39–41, 52, 63–4, 66, 72, 103, 181, 186, 208, 274, 278, 323 Additional Protocols 28, 60–9, 110, 293, 301 Councils 29, 46, 63, 66, 278 Athens Treaty 95–6, 114 (see also Accession Treaty) Baltic States 2, 56, 58, 63, 134, 138–9, 193, 328–9 Bulgaria 51, 58, 93 Capital (free movement of) 68, 184, 188, 251 Central and Eastern European Countries (CEECs) 3, 9–10, 12, 20, 25–6, 29, 45–50, 183 Citizenship Baltic States 329 Cyprus 199, 201, 227 EU 140, 171, 203, 227–8, 248, 254–5, 303, 326 UK 202 Closer co-operation 158–9, 161, 163–5 (see also enhanced co-operation) Common Agricultural Policy (CAP) 118–20, 125, 157, 289 Common Commercial Policy (CCP) 32, 36–7, 39, 71, 81–4, 88, 106, 125–6, 151, 155, 208, 238, 241, 280–1, 316, 332 Common Foreign and Security Policy (CFSP) 35, 84, 248 Common spaces 57 Conditionality 11, 43–4, 53–4, 59, 61, 111–2

356

index

Conﬁdence building process/ measures 226, 325 Constitution Baltic States 138–9 Cyprus 28, 68, 129–30, 133–5, 137–40, 149, 165, 167, 209, 227, 256, 258, 297 Czech Republic 136 France 100 Germany 9, 100, 136 Greece 9, 136 Ireland 133, 138 Poland 136 Turkey 61, 63, 67 Constitutional legal order/ Constitutionalisation (EU) 23–4, 35–6, 43, 73, 89–90, 97, 99–101, 130, 135, 214, 217–8, 220, 222–4, 239, 242, 261, 264, 286 Copenhagen criteria 22, 42–4, 61 Court of First Instance (CFI) 22, 119, 121, 125, 199, 201, 222, 249, 309–10 Croatia 25, 51, 53, 56 Customs union 26–7, 31–2, 36, 61, 63–4, 66–7, 151, 154–5, 182–3, 187, 276, 280, 288, 292, 297–8, 323 Cyprus Additional Protocol 28, 30, 32–4, 36, 38, 278 Association Agreement (see also Association, Agreement) 24, 26–37, 39–41, 72, 181, 186, 208, 274, 278 Citizenship (see Citizenship, Cyprus) Constitution (see Constitution, Cyprus) Courts 28, 122–3, 133–7, 139–40, 153, 167, 209, 211–2, 221, 223 Languages 123, 199, 263–4, 293 Republic 31, 122, 126, 131, 133, 137–8, 167, 181, 187, 199, 208–10, 215–6, 226, 228, 243, 248, 271, 293, 299, 302 Authorities 32–4, 40, 71, 78, 80–1, 129, 133, 152, 156, 159, 190, 228, 278, 291, 293, 297, 318–9, 326 Government ((non-)governmentcontrolled) 1, 3, 5, 30–4, 40–1, 47, 68–9, 77, 81, 83, 117, 119–22, 126, 149, 152–3, 179–80, 182, 186–7, 189–90, 193–4, 197, 201–2, 208–10, 213–6, 219–21, 226–28, 232, 269, 276, 279, 284, 288, 290, 293, 296–302, 304, 308–11, 313–4, 317, 319, 321, 324, 326–7, 330–1

Treaty of Alliance 129, 131 Treaty of Establishment 129–32, 142–3, 147–9, 153–9, 227, 258 Treaty of Guarantee 129, 131, 148–9, 160, 167–8 Cyprus problem Division of the island/partition 3, 5, 6, 13, 27, 34, 39, 41, 127, 148, 173–4, 177–9, 186–7, 189, 193, 196–7, 199, 226, 237, 265, 267–9, 272, 285, 303, 320–2, 324–5, 327 Solution 6–7, 47, 59–60, 70, 75, 83, 148–9, 230, 232, 246–7, 269, 305, 322–4, 326 Settlement (comprehensive) 7, 9, 47, 51, 60–1, 69–70, 126–7, 174, 176–8, 192, 195, 198–9, 230–3, 242–4, 247, 257, 260–1, 263–7, 270, 275, 281, 312, 322, 324, 326, 331 Negotiations 7, 69–70, 82, 174, 230, 245–6, 262, 271, 281, 313 Reuniﬁcation 7, 13, 150, 237, 242–3, 245, 249–50, 264–5, 266, 281, 322 Denmark 101, 107, 128, 184, 218 Derogations 6, 90, 97–9, 101–8, 110–1, 113, 115, 127, 143, 145–7, 150–1, 154, 157, 167, 171, 173, 175, 180, 183–5, 191–2, 195, 207, 237, 242, 244–7, 249–52, 256–8, 260–4, 267, 270, 280 Diﬀerentiation (multi-speed, à-la-carte, variable geometry) 2–3, 6, 9, 49–50, 85, 89–90, 93–4, 98, 100–2, 104, 106, 108–9, 116, 125, 127–8, 144–8, 156, 160–3, 168, 171–8, 180–1, 185, 189, 191, 194, 196, 233, 237, 239–42, 244–5, 247, 258, 302, 317, 328 Direct trade 32, 71, 76–7, 80–1, 197, 279, 316, 319–20 (see also European Commission, Direct trade proposal) Discrimination Direct/indirect 64, 216, 255–6, 293 Principle of non- 25, 30, 32, 34, 36, 65, 84, 99, 114, 116, 121, 125, 159, 208, 303 Removal of 268, 287–8, 303 Reverse 193, 254 Enhanced co-operation 163–4, 175 (see also closer co-operation)

index Enhanced Pre-accession strategy 47–50, 61 Establishment (free movement of) 66, 250–1, 287 Estonia 2, 46, 51, 56, 119, 123, 328–30 Europe Agreements (EAs) 10–2, 25–9, 53, 182 European arrest warrant 134–8 European Commission Annual reports (on the implementation of instruments of secondary legislation related to Cyprus) 69, 151–2, 156, 190, 228, 273, 277, 288, 290–1, 293–4, 299, 301–9, 312–3, 321, 325–7 Direct trade proposal 81, 279–81, 283, 285, 305, 313–20 Opinions on EU membership 9, 22, 27, 40, 46, 61 Progress reports 44, 47, 49–50, 57, 61, 111, 113–4, 211 European Council Copenhagen 29, 51–2, 62, 177–80, 274 Essen 20, 29 Helsinki 49, 52, 60, 177 Luxembourg 47 European Convention on Human Rights (ECHR) 136, 169, 199–213, 220–1, 227, 253, 255–6, 283, 329–30 European Court of Human Rights (ECtHR) Case law 140, 201–2, 204, 206, 209–10, 212, 219, 227, 253, 300, 310–1, 329–30 Jurisdiction (conﬂict of) 169, 199–213, 220–1, 224, 253 European Court of Justice (ECJ) Competence 21–4, 28–9, 32, 34–9, 41, 43, 70, 73–6, 78–84, 87–8, 97, 100, 104–5, 108, 115, 117, 121, 125, 135, 137–8, 168, 170–1, 180, 188, 194, 197–8, 201, 203, 205–8, 212, 214, 218, 222, 224, 240, 249, 252–3, 255, 261–2, 277, 283, 287, 295, 319–20 Jurisdiction (see also ECtHR) 27, 35, 73, 104, 135, 170–1, 200, 204–8, 212, 214, 220, 224, 249, 252, 261 Europeanisation (see also socialisation) 1–2, 4–5, 8, 12–13, 17–21, 24, 41, 52, 54, 57–8, 83–5, 87–8, 91, 127, 215, 225–6, 230, 244, 286–8, 320, 323, 325, 327

357

European Monetary Union (EMU) 98, 100–1, 107, 110, 117, 172, 185, 190, 195 European Neighbourhood Policy (ENP) 55 European Parliament (EP) Cyprus (representation of) 229, 259–62, 324 Elections 201–3, 262 Institution 69, 88, 178, 229, 251, 258, 264, 274, 283, 307, 331 Exclusion (of) Liability 196–7, 216, 219, 221 Territorial 13, 90, 108, 128, 130, 140–1, 144, 147, 162, 174, 178 (see also Derogation) Policy of 9, 47, 64, 94, 113, 152, 181, 185, 187, 190, 263, 276 (see also Diﬀerentiation) Financial aid regulation (FA Regulation) 282, 285, 305–15, 319, 325–7 Flexibility (see Diﬀerentiation) Fundamental Freedoms 6, 39–40, 84, 214, 216–7, 223, 249, 254–5, 261 Principles 34, 36, 84, 90, 99–102, 130, 143, 159, 171, 180, 250, 255, 259, 265 Rights 61, 84, 125, 136, 140, 188, 199, 204–9, 212–13, 216, 218–24, 227–8, 249, 252–4, 263, 271, 294, 303 General principles of EC law (see also Fundamental, Principles) 35, 39, 76, 80, 164–5, 188, 203, 207, 216, 249, 254, 259, 263 Germany Constitution (see Constitution, Germany) Courts 136 Cyprus (relations with) 50, 281, 303, 314 EC membership/accession 9, 175, 184, 242–4, 277, 289, 316, 318 Reuniﬁcation 175–6, 228, 244, 253, 289 Gibraltar 93, 144, 201–3, 280 Good neighbourliness (Bon voisinage) 20, 53, 59–60, 67 Goods (free movement of) 32, 50, 63–4, 66, 81, 84, 187, 197–8, 216, 231, 252,

358

index

255, 269, 270, 276, 277, 289, 292, 294, 298 Governance Boundary 51, 53–5, 58, 89–91, 94, 101, 109, 325 Economic 18–9, 238, 240, 266, 320 European (see also Europeanisation) 1, 10, 12–3, 18, 21, 23–4, 53–5, 80, 87–91, 101, 103–4, 126, 200, 205, 225, 239–40, 266, 271, 275, 287, 318, 325 Regulatory 21, 80, 316, 318 Soft 88, 233, 249–50, 270–1, 288, 313, 322 Great Britain Courts 32–40, 71–80, 132, 202, 211–3, 215–6, 221, 224 Cyprus (relations with) 31, 140–3, 147–60, 168–71, 237, 303, 313–4, 320 Government 129, 149, 320 EU accession/membership 13, 93, 101, 107–8, 126, 132, 140–58 Legal order 132, 140, 167–8, 202–3, 205, 219, 221 Military bases in Cyprus (SBAs) 1, 3, 6, 93, 101, 108, 126–31, 140–59, 162, 164–5, 168–9, 182, 227, 276, 290–1 Memorandum of Understanding 154, 160–71 Greece Courts 136 Cyprus (relations with) 31, 46–7, 131, 148–9 EU accession/membership 9, 25–6, 92, 118 Greek Cypriot Leader 69, 248 Property (land) 30, 221, 312–5, 326 Traders (producers, associations) 226, 325 Green Line Demarcation line/Crossing 38, 69, 81, 127, 151–2, 182, 186–90, 193–4, 202, 210, 216, 226–7, 231, 242, 260, 270–1, 274, 276–9, 288–9, 292, 295, 297–304, 318, 321 Regulation (GL Regulation) 69, 151–2, 156, 187, 186–7, 190, 195, 228, 232, 273, 276–7, 281, 288–304, 314, 316, 318–9, 321, 325–7 Implementing Regulation 195, 290–1, 301, 318–20

Harmonisation 37, 41, 46, 50, 244, 266, 287, 306, 323 Home State principle 80, 295–6, 298 Host country 228, 295, 330 Human rights (see also Fundamental, Rights) 26, 56, 61, 84, 100, 136, 140, 188, 199–201, 204–7, 212, 220, 230, 249, 252–3, 311, 329 Immigration Illegal (see also Green Line, Crossing) 152–3, 186, 190, 227, 276, 229 Third country nationals 110, 152, 186–7, 227, 330 Indirect trade (see Direct trade) Internal (Common) Market Construction of/Evolution of 2, 5, 20, 37, 39, 45, 70–1, 74, 79, 82, 87, 146–7, 155, 158, 183, 200, 208, 238, 240, 244, 266, 268, 286–7 Functioning of (rules, principles and exceptions) 3, 18, 20, 34, 40, 50, 68, 71, 74, 76, 79–83, 100, 106–8, 111, 113–7, 125–6, 146, 166, 183–4, 187–9, 192, 195–6, 197, 215–6, 237–9, 242, 249–52, 257, 269, 276, 279, 283, 285, 288–302, 316–7, 323, 327 Theories 5, 8–9, 18, 74–5, 80, 82, 84, 238–41, 267, 286, 320–1, 332 (Spillover eﬀect) Integration European (theories of) 3–5, 8–10, 18, 89–94, 101, 200, 238, 240, 285, 316, 322, 324–5, 328, 330, 332 Disintegration (elements of) 9, 13, 90, 232, 268–9, 320, 322 Negative (see also Market, Integration) 18, 21, 41, 70, 83, 199, 268, 286–90, 303 Positive 268, 286–7, 304–5, 312, 320–1 Ireland (see also Constitution, Ireland) 101, 128, 152, 203, 263 Northern Ireland 327–8 Justice and Home Aﬀairs (JHA) 5, 48, 111, 117, 134, 185, 220 Kaliningrad (see also Russia) 51, 57, 99, 180, 328 Kosovo 25, 54, 330–1

index Latvia 2, 51, 56, 119, 123, 328–30 Lithuania 2, 51, 57, 99, 123, 328 Lex specialis 143, 145, 151, 180, 183, 185, 186, 188–9, 191–2, 231–2, 256–7, 264, 267–8, 275, 281–2, 318, 143, 145, 151, 180, 183, 185–6, 188–9, 191–2, 231–2, 256–7, 264, 267–8, 275, 280–2, 317 Loizidou case (ECtHR) 206, 211, 220, 300, 311 Malta 48–9, 51, 98, 117, 119, 123, 190, 251, 274 Mandatory requirements 213, 252, 255, 294 Market Citizenship 322, 325 Integration 10, 13, 21, 39, 41, 241, 266, 285–6, 288, 294, 304, 319–21, 323–4, 327, 330–2 (de/re-)Regulation 92, 109, 111, 241, 265, 268–71, 274–9, 286–8, 290, 294–6, 298, 302–3, 316, 318–22, 325–6, 328 Union (see also Union, Economic) 269, 321, 324, 331 Mobility 57, 127, 226–7, 229, 286 (See also persons, free movement of) Mutual recognition 82–3, 115, 146, 220, 288, 294–8, 316 National courts Competence/Case law 28, 32, 34–5, 40, 63, 71–2, 75, 78, 104, 118, 122–3, 132–7, 139–40, 153, 167, 170, 188, 193, 199–200, 202, 208–9, 211–13, 224, 227, 249, 272, 326 Jurisdiction (conﬂict of) 214–21, 223 Necessity (doctrine of) 139–40 Non-recognition (principle of) ‘TRNC’ 5, 31, 33–4, 38, 73, 75–6, 127, 181, 210, 229, 237, 273, 280–1, 284, 306, 311, 315, 324, 327, 330–1 State continuity/succession 60, 63, 65, 68–9, 149, 193, 258–9, 329 Norwegian clause 96, 249 Orams v Apostolides (High Court, England and Wales) 211–3 (see also Apostolides case, Court of Appeal (England and Wales)) Overseas countries and territories (OCTs) (Outermost regions (ORs)) 93, 128, 144–6, 171, 181–2

359

Partnership and Co-operation Agreements (PCAs) 53, 55–6 Persons (free movement of) 25, 57, 126, 151–2, 186–8, 193, 195, 216, 247, 253–5, 269–70, 277, 279, 288, 292, 300, 304, 332 Poland Constitution (see Constitution, Poland) Courts 136 EU accession/membership 26, 46, 51, 123, 183, 251, 214 Pre-accession strategy 10, 20, 24, 26, 29, 43, 45–7, 53, 58, 65, 70, 108, 112 Enhanced 43, 47–50, 61 Financial aid/assistance 48–9, 274, 312, 327 Preliminary references/rulings (Article 234 EC) 32, 34, 72, 74–9, 82, 104, 125, 135, 171, 207–8, 213, 218, 220–2, 261 Product requirements Certiﬁcation 30, 32–4, 40, 71–81, 278, 294, 296–7, 316 Rule of origin 30, 32–3, 35–6, 40–1, 71–80, 187, 278, 289–91, 293–7, 301–4, 314–6, 321 Proportionality (principle of) 34–6, 113–4, 116–7, 119–20, 123, 147, 167, 180, 194–5, 203, 207, 249–50, 252–5, 257, 259, 295, 330 Protocol 3 13, 90, 99, 101, 108, 126, 128–30, 141–3, 145–8, 150–64, 168–69, 171–4, 214, 272, 284, 322 Protocol 10 6, 13, 90, 99, 101, 109, 117, 126, 143, 150, 173–7, 179–81, 183, 186–7, 191–2, 194–5, 197–200, 202, 208, 211–5, 223–5, 227–8, 231–3, 237, 260, 265, 267, 269–70, 275, 280–1, 283–5, 300, 305, 309, 317, 320, 322–3, 325–6 Article 1 174, 183, 192, 213, 215, 224, 230–3, 243–4, 260–1, 267, 269, 276, 280–1, 284, 305, 317, 323 Article 2 152, 174, 193, 231, 233, 242, 244, 261, 267, 271, 273–6, 278–9, 284 Article 3 181, 231, 233, 261, 273–5, 281, 283–4, 305 Article 4 174, 177–8, 195, 242–9, 260–1, 265, 281 Public order (policy/security) 187, 194, 205–8, 210, 213–4, 217–22, 255, 276, 326 Purely (wholly) internal situation 188, 193, 227, 254

360

index

Ratiﬁcation 27–8, 31, 56, 65, 68–9, 89, 95–7, 133–4, 161, 165, 178, 229, 248–9, 262, 275 Referendum Accession 134 Annan Plan 149, 243, 248, 273 Regulation Regulatory competition / competence 18, 286–7, 294–6, 316 Regulatory gap 286, 321, 328 Regulatory governance 21, 80, 286–8, 316, 318 Republic of Cyprus (RoC) (see Cyprus, Republic) Romania 51, 58, 93 Russia Baltic States (relations with) 56–7, 63, 193, 328–9 EU (relations with) 51–2, 55–8, 92, 94, 110, 180, 193, 330 Russiﬁcation (policy of) 329 Safeguard clauses (measures) 44, 97–8, 105–7, 109–17, 133, 184, 189, 190, 254–5, 257, 309–10, 315 Schengen 98–99, 110, 115, 117, 163, 172, 184–5, 189–90, 192, 195, 256–7 Services (free movement of) 64, 66, 188, 251–2, 255, 269–70, 279, 300 Sovereignty (of nations) 7, 41, 57, 127–8, 132, 140–1, 143–4, 148–9, 151, 156, 159, 205, 222, 259, 286, 297, 300, 310–1, 320–2, 331 Socialisation (see also Europeanisation) 1, 19, 49, 57, 225–6, 228, 230, 266, 287, 320, 325 Social policy (EU) 100–1, 108, 125, 157–8, 327 Socio-legal (method of, elements of) 1, 2, 6–7, 10, 12, 21, 23–4, 35–6, 38, 41–3, 46, 58, 70, 75, 79, 83, 90, 101, 126–7, 146, 179–80, 191–2, 197, 222, 232–3, 262, 265, 268, 285, 305, 310–1, 313, 321–2, 324, 328 Subsidiarity (principle of) 35, 80, 167, 239, 272, 283, 297, 327 Sugar trade litigation 118–25 Supremacy (primacy) EU/EC law 36, 133–4, 136–9, Constitutional 28, 133, 138, 167, International treaties 63, 247, 256 TAIEX (see also pre-accession strategy, ﬁnancial aid/assistance) 228, 306–7, 309

Trade Barriers (removal of) 184, 187, 266, 268, 287–8, 293–4, 299, 302–3, 323 Inter-state (between Member States) 80, 231–2, 278–9, 281, 285, 289, 292–3, 305, 317, 319 Intra-state 80–1, 197, 232, 278, 299, 301, 303, 318 Intra-Community 241, 252 Turkey Ankara Agreement 26, 60–9, 92, 293, 301, 311, 315, 326 (see also Association Agreement) Additional Protocol 60–1, 63–9, 110, 293, 301 Constitution (see Constitution, Turkey) Cyprus (relations with) 4, 6–7, 9, 17, 30, 45–6, 51, 56, 59–61, 63, 65–70, 72–7, 80, 148, 179, 192, 199, 206, 209–12, 227, 237–8, 248–9, 253–6, 262, 271, 291, 293, 300–1, 311, 314–5, 321, 326, 329 EU (relations with) 4, 17, 25–6, 44, 46–9, 51–2, 56, 58–75, 80, 92, 110, 192–3, 248–9, 253–4, 256, 262, 291, 293, 314–5 Settlers 227, 326, 329 Language 263–4, 293 Turkish Cypriot Chamber of Commerce (TCCoC) Activities 40, 81, 278, 296–7, 316, 325 Status 296–7, 311, 319, 327 Turkish Cypriot ‘Authorities’ 30, 32, 34, 38, 152, 176, 188, 212, 226, 229, 271, 273, 281, 293, 300, 311, 317, 323–5, 327 Community (socialisation) 38–9, 47, 49–50, 57, 177, 197, 225–30, 266, 279, 293, 306–8, 320, 325 EU integration (economic, beyond a settlement) 6–7, 63, 70–1, 178, 192, 195, 197–8, 222, 233, 242–5, 249, 251, 257, 261, 265–7, 269–70, 273–4, 279, 281–2, 292–3, 301–9, 312–4, 320–7, 331 Rights (fundamental, free movement, political participation) 47, 50, 199, 201–2, 216, 229, 260, 271, 294, 303, 308, 322, 326, 330 Leader 67, 69, 248, 324 Goods (imports, exports) 30–1, 37, 40, 71, 188, 216, 270, 277–9, 288, 293–304, 309, 315–21, 323, 327 ‘Isolation’ 82, 237–8, 266

index Property 209–10 Task Force 228–9, 307, 312 UK (see Great Britain) Ukraine 51–2, 55, 58, 94, 110 Union 20–1, 24, 29, 45–6, 49–50, 60, 65, 70, 82, 89–90, 94, 97, 99, 127–8, 130, 133, 139, 164, 172, 178, 180, 192, 199, 201, 203, 205, 227, 240, 246–7, 250, 255, 258–9, 263, 274, 286, 306, 322–4 Acquis (see also acquis communautaire) 22, 193, 243, 258, Citizenship (see also Citizenship, EU) 171, 227, 248, 254–55, 325 Economic (market) 268–9, 286, 321, 324, 331 Political 324, 332 United Nations (UN) Acts 249 Charter 56, 144, 331 Declaration (Right to development) 237 Reference Guide 165 Treaties 131, 161 Conflict-resolution initiatives (Cyprus) 9, 50–1, 69–70, 127, 176, 178–9, 245, 262, 274 UNFICYP 69 UNDP (Cyprus) 226, 309

361 Secretary General 69, 199–200, 247–8 Resolutions Cyprus 31, 220, 222, 310 Former Republic of Yugoslavia (FRY) 204 Kosovo 25, 330–1 UNHCR 152

Vienna Convention of the Law of Treaties 26, 129, 132, 149–50, 182, 196, 258 Voting rights 110, 175, 314 QMV 279, 281, 283 Unanimity 55, 65, 147, 157, 177–9, 180, 203, 242, 263, 276–7, 279, 281, 283, 285, 305, 312, 314, 318 Veto 46, 67, 314 Western Balkans 25, 53–5, 330 World Bank 7, 229, 288, 291, 293, 295, 298–9, 301, 321, 323 Workers (free movement of) 25, 172, 183–5, 188, 190, 195, 270, 293 WTO 58 Xenides-Arestis case (ECtHR) 206, 210–2, 219–21