On January 17, 2023, the Grand Chamber of the European Court of Justice (hereinafter: ECJ) pronounced its judgment in relation to the case Spain v. European Commission. The Court of Justice annulled the decision of the Commission of 18 March 2019 on the participation of the National Regulatory Authority (hereinafter: NRA) of Kosovo in the Board of Regulators of Body of European Regulators for Electronic Communications (hereinafter: BEREC) and its other organs (OJ 2019 C 115, p. 26). Although the Court did not go into clarifying what the EU position is regarding the recognition of Kosovo’s independence, the judgment is an important stance of the ECJ on the issue whether there is a difference between the concepts of “third country” and “third State”.
Contrary to Spain’s claim, the ECJ did not annul the Commission’s decision on the grounds that the European Union (hereinafter: EU) and some of its Member States – among which there is Spain – do not recognize Kosovo as a sovereign State. The Court of Justice, instead, found that the General Court’s reasoning was vitiated by an error of law when holding that the Commission had the unilateral power to draw up working arrangements for the participation of NRAs of third countries in BEREC.
The case Spain v. Commission before the ECJ arose from the decision of the European Commission in 2019 to admit Kosovo’s NRA in BEREC, hence treating Kosovo as a “third country” within the meaning of Article 35(2) of Regulation 2018/1971. Spain, which strongly opposes to Kosovo’s independence, brought action pursuant to Article 263 of the Treaty on the Functioning of the European Union (hereinafter: TFEU), seeking the annulment of the Commission’s decision on the grounds that Kosovo is not legally a third country and Article 35 restricts NRAs participation in BEREC to NRAs of third countries. Spain contested in its application that the Commission treated implicitly Kosovo as an independent country when it had no legal basis to do so. However, the action was dismissed by the General Court in its decision of 23 September 2020. Spain appealed the decision to the Court of Justice.
In order to understand the judgment of the Court of Justice, it is crucial to analyze the background and the legal framework of the dispute. BEREC was established by Regulation (EC) No. 2018/1971 of the European Parliament and the Council to “contribute to the development and better functioning of the internal market for electronic communications networks and services”. BEREC aims to ensure a consistent application of the EU regulatory framework for electronic communications, by assisting both the European Commission and the national regulatory authorities (NRAs). The regulatory body is composed of a Board of Regulators, made up of one representative per member State (the head or the high-level representative of the NRA of the Member State). Moreover, the Regulation established that NRAs from European Economic Area States and States candidates for accession have observer status and participate in the Board of Regulators and the other organs of BEREC.
Since 1999 the EU has developed a policy to support the gradual integration of the Western Balkan countries with the Union, by launching the Stabilisation and Association Process (SAP) which is based on bilateral contractual relations, financial assistance, political dialogue and trade relations. In particular, the contractual relations take the form of stabilization and association agreements (SAAs), that establish political and economic cooperation between the EU and the Western Balkan countries and create free trade areas. The EU accession is at the center of SAP, whose aim is to bring forward reforms in Western Balkan countries so that they can meet the criteria to be eligible for EU membership, established at the Copenhagen European Council in June 1993. Between 2001 and 2015, the EU signed a variety of SAAs in the fields of electronic communications with six of the Western Balkan countries, among which there is Kosovo (‘the Kosovo SAA’, between Kosovo and the EU and the European Atomic Energy Community). The Kosovo SAA, however, states that “none of the terms, wording or definitions used in this Agreement, including the Annexes and Protocols thereto, constitute recognition of Kosovo by the EU as an independent State nor does it constitute recognition by individual Member States of Kosovo in that capacity where they have not taken such a step” (Article 2).
In this context, the European Commission recommended aligning the legislation of Western Balkan countries with EU legislation and to incorporate such countries into existing regulatory bodies, such as BEREC (COM(2018) 65 final). Consequently, on 18 March 2019, the Commission adopted six decisions concerning the participation of NRAs of the Western Balkan countries in BEREC, based on Article 35(2) of Regulation 2018/1971. One of the decisions adopted allows Kosovo’s NRA to participate in the BEREC’s Board of Regulators and other organs. Spain brought action against that decision, the “contested decision”, alleging that Kosovo does not fall within the category of “third countries” mentioned in Article 35.
In September 2020, the General Court (hereinafter: GC) delivered its judgment rejecting the three pleas in law raised by Spain. First, Spain alleged that the Commission’s decision infringed Article 35 of Regulation 2018/1971 in so far as Kosovo is not a “third country”. Therefore, the GC examined the scope of the concept of “third country”, stating that such concept “has a broader scope which goes beyond sovereign States alone, with the result that Kosovo is capable of falling within it, without prejudice to the position of the European Union or its Member States as regards the status of Kosovo as an independent State”. In particular, the GC highlighted that the provisions of the TFEU refer to both “third countries” and “third States” and that the former term is mostly used in Part V of the TFEU, “The Union’s external action”, namely provisions concerning external relations. Therefore, the Court interpreted the term “third countries” used in the Treaty in a way that it paves “the way for the conclusion of international agreements with entities ‘other than States’”, so that the EU may conclude international agreements with territorial entities that do not necessarily fall within the category of “States” for the purposes of international law. The Court recognizes that the EU can validly conclude international agreements with international actors, different from States. In this regard, the GC stressed that the EU had already concluded agreements with Kosovo (such as the Kosovo SAA), which was legally possible only if the term “third countries” in the TFEU was broadly interpreted.
Secondly, Spain alleged that there was no “agreement” on the participation of Kosovo in the Board of Regulators and other organs of BEREC, because Article 111 of Kosovo SAA simply envisages the strengthening of cooperation between EU and Kosovo – so as to enabling it to adopt the EU acquis – but does not provide for Kosovo’s participation in European bodies. The GC rejected also this second allegation by stating that the wording of Article 111 of the Kosovo SAA, that call for a strong cooperation in the area of electronic communications, should be interpreted broadly. As the purpose of Article 111 is to ensure that Kosovo adopts the EU acquis in the area of electronic communication, the GC asserted that the participation of Kosovo’s NRA in the work of BEREC would facilitate that process. Therefore, the GC concluded that Article 111 is an “agreement” within the meaning of Article 35(2) of Regulation 2018/1971.
Lastly, Spain alleged that the decision was invalid because the Commission departed from the established procedure for the participation of NRAs of third countries in BEREC. Article 35 indeed establishes that the working arrangements are to be drawn up in the provisions of the “agreement” for the participation in BEREC. Spain alleged that, when these are stipulated, the Commission cannot unilaterally lay down such working arrangements. The GC, on the contrary, confirmed the power of the Commission to establish such working arrangement under the powers conferred on it by Article 17 of the Treaty on the European Union (hereinafter: TEU). Indeed, BEREC is an agency of the EU that enjoys derived powers normally attributed to the Commission by virtue of its executive functions and powers of external representation. Hence, powers that are not expressly delegated to an EU agency remain within the competence of the Commission. Since Art. 35(2) does not provide for such delegation of power, the power continues to fall within the competence of the Commission.
On Spain’s appeal to the GC’s decision, the Court of Justice delivered its judgment, annulling the Commission’s decision that admitted Kosovo’s NRA to BEREC’s Board of Regulators. Surprisingly, the Court of Justice upheld the appeal only in so far as it relates to the Commission’s lack of competence in laying down the working arrangements for BEREC.
As far as the concept of “third country” is concerned, the Court agreed with Spain that there is no difference between the terms “third countries” and “third States” in the EU Treaties and that, therefore the General Court’s reasoning was vitiated by an error of law when broadly interpreting the term “third countries” as to go beyond sovereign States alone. The Court noted that the two terms are often used in an interchangeable way in EU Treaties, and that the term “third countries” does not appear in some language versions of the EU Treaties. Thus, the General Court did not take into account the differences between the different language versions of EU Treaties, the wording of which does not support that there is any difference between the two terms. In this regard, the Court recalled that “according to settled case-law, the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions”.
Nonetheless, the Court of Justice held that the General Court was entitled to conclude that the Commission had not erred in treating Kosovo as a ‘third country’ within the meaning of Article 35 of Regulation 2018/1971: “(…) for the purposes of ensuring the effectiveness of Article 35(2) of Regulation 2018/1971, a territorial entity situated outside the European Union which the European Union has not recognized as an independent State must be capable of being treated in the same way as a ‘third country’ within the meaning of that provision, without infringing international law”.
In giving its conclusion, the Court referred to the advisory opinion of the International Court of Justice (22 July 2010), where it stated that Kosovo’s declaration of independence had not violated international law. Thus, Kosovo may be considered a country within the meaning of Article 35 as its independence is not illegal. The Court of Justice subsequently stated “that treatment of Kosovo as a third country does not affect the individual positions of the Member States as to whether Kosovo has the status of an independent State that is claimed by its authorities”, without going deeper on the question of statehood.
Therefore, the Court of Justice annulled the decision of the Commission merely on the ground of its incompetence, as the Commission’s role in the adoption of working arrangements is intended to exercise only a supervisory function. The General Court erred in relying on Art. 17 of TEU because the purpose of the working arrangements, by virtue of Article 35(2), is not the external representation of EU but, more specifically, is to develop “the nature, extent and manner in which the regulatory authorities of the third countries concerned will participate without the right to vote in the work of BEREC”. Also, the Commission’s power to unilaterally decide on certain working arrangements for participation in BEREC is incompatible with the independence of the EU regulatory body and would go beyond the Commission’s supervisory power. Because of this error in law, the GC’s judgment was set aside and the Court of Justice, in accordance with Article 61 of the Statute of the Court of Justice of the European Union, gave the final judgment, annulling the decision of the Commission.
However, with regards to the effects of the Commission’s decision, the Court has maintained the effects of the decision until new working arrangements between BEREC, the BEREC Office and the NRA of Kosovo will enter into force, so as not to jeopardize the position of Kosovo. The Court recalled that, when an act is declared void, “the effects of such an act may be maintained, in particular where the immediate effects of its annulment would give rise to serious negative consequences for the persons concerned and where the lawfulness of the act in question is contested, not because of its aim or content, but on grounds of lack of competence or infringement of an essential procedural requirement”. In any case, the Court stated that the effects of the Commission’s decision may be maintained for a reasonable period of time, which cannot exceed six months from the day of the delivery of the judgment.
The judgment of the ECJ is extremely relevant because it confirmed that in the European legal framework there is no difference between the terms “countries” and “States”. At the same time, it sent a clear signal that Kosovo is treated as a third country, capable of concluding international agreements with the EU, without prejudice to those Member States that do not recognize Kosovo as an independent State. While observing that the court has artfully avoided addressing the question of statehood in-depth, the judgment has drawn a clear line between the issues that are related to the accession/participation of territorial entities to international mechanisms of cooperation and the international recognition of such entities.