Opinion procedure 2/15

Arguments

545.The Commission submits that the purpose of Chapter Seventeen is to establish an institutional and procedural framework ensuring that the EUSFTA is effective. Since the provisions in Chapter Seventeen are therefore ancillary to the rest of the EUSFTA, the European Union also enjoys exclusive competence over that chapter. That conclusion also applies to the provisions setting out exceptions concerning taxation (Article 17.6), current account and capital movements (Article 17.7), sovereign wealth funds (Article 17.8), safeguard measures as regards balance-of-payments (Article 17.9), security (Article 17.10) and the disclosure of information (Article 17.11).

546.Neither the Parliament nor the Council has taken a position on Chapter Seventeen.

547.Only one Member State has addressed that chapter, arguing that the Commission has put forward nothing to demonstrate that Article 17.6 of the EUSFTA relates specifically to international trade and that, in any event, that provision goes beyond the scope of competences attributed to the European Union by the Treaties in tax matters.

Analysis

548.The provisions in Chapter Seventeen of the EUSFTA that have a purely procedural or institutional dimension are commonly found in international (trade) agreements. Those provisions set up bodies entrusted with specific tasks under the agreement and regulate their operation (Articles 17.1, 17.2 and 17.3); govern the relationship between the agreement and other international commitments of the Parties (Articles 17.3 and 17.17); and lay down rules on amendment (Article 17.5), entry into force (Article 17.12), duration (Article 17.13), fulfilment of obligations (Article 17.14), the effect of the agreement in the legal orders of the Parties (Article 17.15), the agreement’s coverage and authentic versions (Articles 17.16 and 17.20), future accessions to the European Union and the territorial scope of application of the agreement (Articles 17.18 and 17.19). Because those provisions are purely accessory in nature, they are not such as to alter the allocation of competences between the European Union and the Member States as regards the other provisions of the EUSFTA.

549.The other provisions in Chapter Seventeen are of a more substantive character.

550.The purpose of Article 17.6 of the EUSFTA (‘Taxation’) (read together with Understanding 1) is to clarify the extent to which the EUSFTA applies to taxation measures and to preserve the competence of both Singapore and the European Union or its Member States to conduct their tax policies. As a result, that provision is accessory to the rest of the EUSFTA; it does not constitute a distinct component.

551.The same is true of Article 17.9 of the EUSFTA (‘Restrictions to Safeguard the Balance-of-payments’). That provision enables each Party, if it finds itself in serious balance-of-payments and external financial difficulties, to restrict benefits granted under the EUSFTA in relation to trade in goods, services and establishment and payments and transfers related to investments. It is thus relevant only in relation to other provisions of the EUSFTA, to which it constitutes an exception. That provision therefore does not form a distinct component of that agreement. Likewise, Articles 17.10 (‘Security Exceptions’) and 17.11 (‘Disclosure of Information’) are both purely accessory to the rest of the EUSFTA.

552.Finally, Articles 17.7 (‘Current Account and Capital Movements’) and 17.8 (‘Sovereign Wealth Funds’) contain rules which are autonomous in relation to the other provisions of the EUSFTA. However, those provisions are very limited in scope and therefore cannot be regarded as a distinct component of the EUSFTA.

553.I therefore conclude that the provisions of Chapter Seventeen of the EUSFTA are either purely accessory to the other provisions of that agreement or very limited in scope, and that, for those reasons, they are not capable of altering the allocation of competences between the European Union and the Member States as regards the various components of the EUSFTA.