C-1/00

The Commission is seeking the opinion of Community, the Republic of Hungary, the the Court on the compatibility with the Republic of Iceland, the Republic of Latvia, provisions of the EC Treaty of a proposed the Republic of Lithuania, the Kingdom of agreement on the establishment of a Euro- Norway, the Republic of Poland, Romania, pean Common Aviation Area (the 'ECAA the Slovak Republic and the Republic of Agreement') to be concluded between the Slovenia ('the Contracting Parties'), and Republic of Bulgaria, the Czech Republic, particularly of the system of legal super- the Republic of Estonia, the European vision provided for therein.

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OPINION PURSUANT TO ARTICLE 300(6) EC

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OPINION 1/00 OF 18. 4. 2002

— the Greek Government, represented by — the European Parliament, represented A. Samoni-Rantou, S. Chala and by R. Passos and A. Caiola, acting as G. Karipsiadis, acting as Agents, Agents,

— the Spanish Government, represented by R. Silva de Lapuerta, acting as Agent, — the Council of the European Union, represented by J.-P. Jacqué and R. Gos- albo Bono, acting as Agents.

— the Italian Government, represented by U. Leanza, acting as Agent, and L. Daniele, avvocato,

The Advocates General were heard by the — the United Kingdom Government, rep- Court in closed session, as provided for in resented by J.E. Collins, acting as Article 108(2) of the Rules of Procedure, Agent, and D. Wyatt QC, on 23 November 2001.

Articles 6 to 9 of the proposed agreement concern the right of establishment. Article 6 prohibits any restriction on the Articles 17 to 22 of the proposed agree- freedom of establishment of nationals of ment deal with its enforcement. Member States or States Parties. Article 7 provides for companies or firms to be treated in the same way as nationals. Article 8 provides for exceptions to Articles 6 and 7. Article 9 prohibits quanti- tative restrictions on transfers of equipment Article 17 requires the Contracting Parties and materials needed for the provision of to ensure that rights derived from the air transport services. ECAA Agreement, including the legislative provisions referred to in Annex I thereto, may be invoked before the national courts. It provides that '[i]n cases which may affect actual or potential air services to be auth- orised under this Agreement, the Commu- nity institutions shall enjoy the powers Article 10 of the proposed agreement specifically granted to them under the enables the Contracting Parties to take provisions of the acts referred to or con- action, by suspending or varying an oper- tained in Annex I to this Agreement'. ating authorisation, in case of doubt as to an airline's operating safety.

Article 17 also confers exclusive jurisdic- tion on the Court to review the legality of As regards the competition rules, Article 12 decisions taken by Community institutions of the proposed agreement prohibits agree- under the ECAA Agreement. ments between undertakings, decisions by associations of undertakings and concerted practices which adversely affect compe- tition, whilst Article 13 prohibits any abuse of a dominant position. Article 14 concerns merger operations and Article 15 deals Articles 19 to 22 make the competent with public undertakings or undertakings Community authorities responsible for

2. When a question of interpretation of this Agreement, the provisions of the acts specified in Annex I or of acts Article 23 sets out the rules of interpre- adopted in pursuance thereof identical tation. For the purposes of this Opinion, it in substance to corresponding rules of should be cited in full: the EC Treaty and to acts adopted in application of that Treaty, arises in a case pending before a court or tribunal of a State Party, the court or tribunal asks, if it considers this necessary to enable it to give a judgment and in accordance with Protocol TV, the Court '1. In so far as the provisions of this of Justice of the European Commu- Agreement and the provisions of the nities to decide on the question. A State acts specified in Annex I are identical Party may, by decision and in accord- in substance to corresponding rules of ance with Protocol IV, stipulate as to the EC Treaty and to acts adopted in what extent and according to what application of the EC Treaty, those modalities its courts and tribunals shall provisions shall, in their implemen- apply this provision. Such a decision tation and application, be interpreted shall be notified to the depositary and in conformity with the relevant rulings the Court of Justice of the European and decisions of the Court of Justice Communities. The depositary shall and the Commission of the European inform the other Contracting Parties. Communities given prior to the date of signature of this Agreement. The rul- ings and decisions given after the date of signature of this Agreement shall be communicated to the other Contract- ing Parties. At the request of one of the Contracting Parties, the implications of 3. Where, in accordance with the provi- such later rulings and decisions shall be sions of the paragraph above, a court determined by the Joint Committee in of a Contracting Party against whose view of ensuring [sic] the proper func- decisions there is no judicial remedy tioning of this Agreement. Existing under national law is not able to make interpretations shall be communicated a reference to the Court of Justice of prior to the date of signature of the the European Communities, any judg- Agreement to the State Parties to this ment of such court shall be transmitted Agreement. Decisions taken by the by such a Contracting Party to the Joint Joint Committee under this procedure Committee which shall act so as to shall be in conformity with the case- preserve the homogeneous interpre-

Article 24 of the proposed agreement spec- 2. When a dispute has been brought ifies that the agreement 'shall be without before the Joint Committee under prejudice to the right of each Contracting paragraph 1, immediate consultations Party, subject to compliance with the shall be held between the parties to the principle of non-discrimination... unilat- dispute. In cases where the Community erally to amend its legislation on a point is not a party to the dispute, a Com- regulated by this Agreement'. It provides munity representative may be invited in that the Joint Committee is to be informed [sic] the consultations by one of those if a Contracting Party makes such an parties. The parties to the dispute may amendment. draw up a proposed solution which shall immediately be submitted to the Joint Committee. Decisions taken by the Joint Committee under this pro- cedure shall not affect the case-law of the Court of Justice of the European Communities.

The operation of the Joint Committee is governed by Articles 25 and 26 of the proposed agreement. The Joint Committee 3. If the Joint Committee after three consists of representatives of the Contract- months from the date when the matter ing Parties, the Community having as many has been brought before it has not representatives as the number of its succeeded to take [sic] a decision Member States. As a general rule, its resolving the dispute, the parties to decisions must be unanimous. They are the dispute may refer the dispute to the binding on the Contracting Parties. Court of Justice of the European Com-

4. If the Joint Committee does not take a decision on an issue which has been referred to it within three months, the Contracting Parties may take appropri- ate safeguard measures in accordance Annex I to the proposed agreement spec- with Articles 28 and 29 of this Agree- ifies the rules applicable to civil aviation ment for a period not exceeding six binding on the Contracting Parties and months. After this period each Con- Annex II thereto lists the competition rules tracting Party may denounce the Agree- in the Europe Agreements entered into by ment with immediate effect. A Con- the Community and each of the Associated tracting Party shall not take safeguard States. Annexes III, IV and V list respect- measures on a matter which has been ively the Contracting Parties' competent referred to the Court of Justice of the authorities for competition matters, their European Communities in accordance official gazettes and their competent auth- with this Agreement, except in cases orities for air safety matters. defined in Article 10(2), or in com- pliance with mechanisms provided for in individual acts specified in Annex I.'

Articles 28 and 29 of the proposed agree- Protocol I to the proposed agreement deals ment deal with safeguard measures, their with the 'horizontal adaptations' to be scope and the procedure to be adopted in applied, for the purposes of the ECAA such cases with regard to the other Con- Agreement, to all the legislation referred to tracting Parties. in Annex I thereto.

Article 30 concerns disclosure of infor- mation. Articles 31 to 34 relate to third countries and international organisations. Protocol II deals with the implementation Article 35 contains transitional arrange- of the competition rules applicable to ments and Article 36 governs the relation- undertakings.

The Commission describes the develop- Community air carriers to intra-Commu- ment of the Community rules in the air nity air routes (OJ 1992 L 240, p. 8) and transport sector, culminating in the lib- Council Regulation (EEC) No 2409/92 of eralisation epitomised by the 'third pack- 23 July 1992 on fares and rates for air age' in the single air transport market. It services (OJ 1992 L 240, p. 15), as well as mentions in particular Council Regulation a number of other measures. There has (EEC) No 2407/92 of 23 July 1992 on been standardisation at Community level of licensing of air carriers (OJ 1992 L 240, various other matters (in particular tech- p. 1), Council Regulation (EEC) nical, safety and social matters). The rel- No 2408/92 of 23 July 1992 on access for evant measures are referred to in Annex I

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to the proposed agreement. In addition, the The Commission's request for an opinion Treaty rules on competition and their goes on to analyse the provisions of the implementing rules also form part of the proposed agreement relating to the compe- acquis communautaire in the sector. tition rules, uniform enforcement and inter- pretation of the ECAA Agreement and the resolution of disputes.

Thus, uniform application of the provisions of the ECAA Agreement and of the Com- munity rules is ensured by a 'single pillar' structure, whereby responsibility for apply- The Commission states that it negotiated ing the rules of the agreement and its the proposed agreement on the basis of the annexes is given to a single body, the principles set out in Opinion 1/92 ([1992] Commission, whose powers with regard ECR I-2821) concerning a proposed agree- to application of the competition rules and ment relating to the creation of the Euro- the other rules concerning air transport will pean Economic Area ('EEA') and the be of the same scope in relation to States negotiating directives laid down by the Parties as they are in relation to Member Council. In view of both the intention of States. each of the Associated States to become a Member of the Community and the absence of any institutional links similar to those created for the purposes of the European Free Trade Association ('EFTA') it was not realistic, in the Commission's In addition, the Court has exclusive juris- submission, to envisage a separate super- diction, under Article 17(3) of the pro- visory or jurisdictional structure to be set posed agreement, to review the legality of up on the lines of the 'twin pillars' of the decisions taken by Community institutions EEA. under the ECAA Agreement. The Court has

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OPINION PURSUANT TO ARTICLE 300(61 EC

Article 23(1) of the proposed agreement preserves the autonomy of the Community legal order by requiring the ECAA Agree- Thus, the Commission considers that the ment to be interpreted in conformity with 'single pillar' structure and the interpre- decisions of the Commission and rulings of tative jurisdiction conferred on the Court the Court given prior to the date of reduce the risk of dispute as to implemen- signature of the agreement and by requiring tation of the ECAA Agreement. However, the Joint Committee to determine the in the event of disputes arising, Article 27 implications of decisions and rulings given of the proposed agreement provides for after that date in conformity with the their resolution in a manner consistent with case-law of the Court. paragraphs 23 and 24 of Opinion 1/92. Any decision taken by the Joint Committee in this context is in no way to affect the case-law of the Court. Furthermore, if the dispute is not resolved, the parties may Article 23(2) of the proposed agreement appeal to the Court, whose decision is, in enables the courts of the States Parties to the words of the proposed agreement, final ask the Court 'to decide' questions in a and binding.

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The Danish Government submits that the system of supervision put forward in the proposed agreement does not give rise to problems of Community law. It neverthe- less challenges the Commission's depiction of the degree of harmonisation achieved in So far as Article 23(1) of the proposed the air transport sector, referring to the agreement is concerned, the autonomy of so-called 'Open skies' cases which are the Community legal order is safeguarded currently before the Court. It considers as regards potential decisions of the Joint that complete harmonisation has not been Committee to determine the implications of achieved in this area and expresses the hope later Court decisions, since the Committee that, in its response to the request for an is specifically required to act in conformity opinion, the Court will not prejudge the with the decisions of the Court. The only outcome of those cases. potential problem arises from the fact that under that provision the Joint Committee may act only on the request of one of the Contracting Parties, and that in such a case it is likely that the Committee will not be able to reach the agreement necessary for a The Greek Government expresses its decision. The proposed agreement makes approval of the arrangements as to juris- no provision for such a case, apart from the diction set up by the proposed agreement general procedure for dispute resolution. A but considers that some of the relevant specific reference similar to that in provisions are too vague or are capable of Article 23(3) of the proposed agreement masking conflict with the Treaty. Referring or in Article 105 of the Agreement of to Opinions 1/91 and 1/92, it argues that 2 May 1992 on the European Economic two criteria determine whether that aspect Area (OJ 1994 L 1, p. 3; 'the EEA Agree- of the proposed agreement is compatible ment') could be considered.

In relation to the procedure for preliminary decided not to exercise their option to rulings laid down by Article 23(2) and (3) make a reference to the Court. That case is of the proposed agreement, the Greek not apt to be covered by other provisions Government submits that the discretion and should be included in paragraph (3). given to States Parties as regards referrals to the Court by their national courts is comparable to the power conferred by Article 107 of the EEA Agreement, which the Court found to be consistent with the Treaty. By referring to Protocol IV to the proposed agreement, however, Article 23(2) In addition, the Greek Government submits imposes restrictions on the freedom of the that the relationship between the procedure State Party. Although that does not at first for references to the Joint Committee laid glance give rise to issues of compatibility, down in Article 23(3) and the procedure the choice provided for in Article 23(2) of, laid down in Article 27 lacks clarity, in and Protocol IV to, the proposed agreement particular as regards the point at which does not allow the States Parties to make it time starts to run for the purposes of the compulsory for their courts, o r some of time-limit referred to in those two provi- them, to make a reference since in all cases sions. those courts are bound to refer to the Court only if they consider a decision by the latter to be necessary to enable them to give judgment. Thus, provision is made only for an optional reference. That does not give rise to incompatibility, since the answers of the Court are binding, but it might be It also considers that the principle that the appropriate to complete the list of options Court's case-law must not be affected available to States Parties. should, as a general provision, be stated in Article 27(1) of the proposed agreement, and not in the paragraphs of that article relating to procedural steps. The jurisdic- tion conferred on the Court for resolving disputes pursuant to Article 27(3) of the proposed agreement is consistent with Article 234 EC read in conjunction with Article 239 EC, even if the parties to the dispute are not members of the Commu- nity, since the decisions taken are binding. Furthermore, that mechanism would allow conflicting case-law to develop through national courts which had felt it unnecess- ary to refer a question to the Court. The obligation under Article 23(3) of the pro- posed agreement to send judgments to the Joint Committee applies only in the case of The Spanish Government takes the view courts of final instance which are 'not able that Article 23(2) and (3) of the proposed to make a reference to the Court', which agreement may be considered to be com- clearly does not include courts which have patible with the Treaty.

As regards Article 23(3) of the proposed agreement, which concerns the case where The proposed agreement provides for a there is discrepancy between a decision of a form of control of application of the ECAA court of final instance of a State Party and Agreement which is exclusively political the case-law of the Court and which must and not judicial. The Joint Committee's be read in conjunction with Article 27 of role is one of diplomacy: it is responsible the proposed agreement, to which it refers, for determining the implications of the the Spanish Government considers that its Court's decisions, for ensuring uniform wording can be regarded, as it stands, as interpretation of the agreement and for compatible with the Treaty but that it lacks resolving disputes. The exercise of those

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It challenges three aspects of the proposed Second, Article 23(2) of the Italian version agreement in particular. of the proposed agreement is curiously

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The United Kingdom Government states that the system of judicial supervision and The fact that the decisions of the Commis- dispute resolution envisaged by the pro- sion and the rulings of the Court given posed agreement, including Article 23(2) prior to the date of signature of the ECAA and (3) thereof, appears to it to be com- Agreement are, under Article 23(1) of the

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OPINION PURSUANT TO ARTICLE 300(6) EC

proposed agreement, automatically binding Government submits that, since the possi- for the purposes of interpreting and apply- bility that there may be conflicting ing the ECAA Agreement is a necessary, decisions is not such as to render an but not sufficient, requirement to ensure agreement incompatible with the Treaty concordance between the two bodies of (Opinion 1/91, paragraph 60), the same is rules. true, a fortiori, of provisions designed to rectify the consequences of such a possibil- ity. Furthermore, if account is taken of Article 23(1) of the proposed agreement, the duty of the Joint Committee to act 'so as to preserve the homogeneous interpre- The fact that the Joint Committee must tation' of the ECAA Agreement can only be determine the implications of decisions and interpreted as requiring any action of the rulings given after the date of signature in Committee to be in conformity with the conformity with the case-law of the Court, case-law of the Court. Article 23(3) of the a stricter requirement than that arising proposed agreement is thus compatible under Article 105 of the EEA Agreement, with the Treaty. will ensure concordance in the evolution of those two bodies of rules and is thus compatible with the Treaty.

However, the purpose of this request for an The role of the Joint Committee of ensuring opinion is merely to ascertain whether that uniform interpretation of the ECAA Agree- scheme is compatible with the Treaty. For ment is comparable to that of the com- the purposes of that assessment, the essen- mittee set up by the EEA Agreement. The tial criterion is whether the system 'may Parliament raised questions, in relation to undermine the autonomy of the Commu- the EEA Agreement, regarding the ability nity legal order in pursuing its own par- of an 'administrative body' to resolve in an ticular objectives' (Opinion 1/91, para- appropriate fashion disputes stemming graph 30). The Court found, as regards from differences in case-law. However, the EEA Agreement, that the fact that there the Court accepted that conferring such a was no obligation on the part of certain power on that committee was compatible courts and tribunals to make a reference to with the Treaty, provided that the com- the Court did not pose a threat to the mittee was obliged, by a provision binding autonomy of the Community legal order. on the Contracting Parties, not to disregard the binding nature of the decisions of the Court within the Community legal order.

the Contracting Parties (Article 26(1) of the 1/91, paragraph 22). In the Council's sub- proposed agreement), (iii) decisions taken mission, Community law, the aim of which by the Committee under the dispute resol- is integration, and the ECAA, the basis for ution procedure are not to affect the case- which is cooperation, belong to different law of the Court (Article 27(2) of the legal orders. proposed agreement), (iv) the Court's decisions are, under Article 27(3) of the proposed agreement, final and binding and (v) where it is not possible to resolve the The question must therefore be asked dispute, denunciation of the ECAA Agree- whether the convergence mechanisms set ment is possible (Article 27(4) of the pro- up by the proposed agreement are capable posed agreement). of compensating for that structural differ- ence in the light of Opinions 1/91 and 1/92. The mechanism for integrating new legis- lation of the Contracting Parties (Article 24 of the proposed agreement), the method of The Council believes that the request for an integration reproducing the distinction opinion is admissible as regards the two between regulations and directives (Ar- questions of substance raised, namely the ticle 2 of the proposed agreement) and the general question concerning the compati- binding nature of Community acts (Ar- bility of the proposed agreement with the ticle 2 of the proposed agreement), together requirements of the Community legal order with the fact that they may be relied on and the specific question of the compati- before national courts (Article 17 of the bility with the Treaty of the arrangements proposed agreement), are aimed at for supervision laid down by the proposed strengthening the homogeneity of the legis- agreement. The proposed agreement con- lative rules using Article 249 EC as a tains, first, common rules, the aim of which model. However, those provisions are not is to create a common aviation area by sufficient to secure that homogeneity, integrating the air transport markets of all which is also dependent on there being the Contracting Parties, including the Com- adequate judicial mechanisms for interpre- munity, and, second, provisions intended to tation and enforcement. guarantee uniform implementation and interpretation of those rules.

In that regard, the Council observes that Nor will the Joint Committee's role as the proposed agreement does not create a dispute resolution body alter the nature of specific court or tribunal, that as regards the function of the Court, since decisions rules of Community law predating signa- t a k e n by the C o m m i t t e e u n d e r ture of the agreement, it provides for a Article 27(2) of the proposed agreement procedure for references to the Court which are not to affect the case-law of the Court, is different from the requirement in the a decision of the Court, where a dispute third paragraph of Article 234 EC to bring which the Committee has not succeeded in matters before the Court, and that it makes resolving is referred to it, is final and the Joint Committee responsible for deter- binding and if the dispute is not referred mining the implications of later rules of to the Court, the Community may Community law. denounce the ECAA Agreement with immediate effect.

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Opinion of the Court

1 According to some of the language versions of point 15 of the request for an opinion, the Court is asked to rule on the compatibility with the provisions of the Treaty of the system of 'judicial' supervision provided for by the proposed agreement (for example 'gerichtliche Kontrolle' in the German version, 'judicial supervision' in the English version and 'controllo giurisdizionale' in the Italian version). However, it is clear from other language versions of the request for an opinion that it concerns the system of 'legal' supervision envisaged by the proposed agreement (for example 'surveillance juridique' in the French version and 'vigilancia jurídica' in the Spanish version). Likewise, it is apparent from the request for an opinion as a whole, and specifically from the statement in which the Commission raises the issue of the compatibility with the Treaty of 'in particular' Article 23(2) and (3) of the proposed agreement, that the request concerns not only the compatibility of the mechanisms of a judicial nature provided for by the proposed agreement but also that of all the provisions thereof which seek to ensure uniform implementation and interpretation of the ECAA Agreement and the annexes thereto and to avoid or resolve disputes. Accordingly, the request for an opinion concerns Articles 17, 23 and 27 of, and Protocol IV to, the agreement. It does not deal with the issue of the extent of the Community's external competence. The ECAA Agreement will be concluded, as the Commis- sion points out in its request for an opinion, between the Community and the States Parties, namely States which are not members of the Community.

4 The Contracting Parties have also set themselves the task, in particular in order to avoid any distortion of the rules of competition, of implementing and complying with those common rules as uniformly as possible, endeavouring to cooperate in good faith. That is how the provisions of the ECAA Agreement relating to legal supervision, the wording of which is, on many points, directly inspired by that of the EEA Agreement, are to be understood.

6 Conversely, where an agreement more clearly separates the Community from the other Contracting Parties from an institutional point of view and no longer affects either the exercise by the Community and its institutions of their powers by changing the nature of those powers, or the interpretation of Community law, the autonomy of the Community legal order can be considered to be secure. In particular, the risk that the foundations of the Community might be affected as a result of implementation of an agreement is even lower where the States Parties to that agreement are members of a single organisation, which has its own judicial body and surveillance authority, distinct from the Community institutions. That was the position in the case of the second version of the agreement relating to the creation of the EEA submitted to the Court for an opinion, which the Court found to be compatible with the Treaty in view of the different framework: the proposal for an EEA Court had been abandoned, the EFTA Court had been created and decisions taken by the committee responsible for resolving differences between the Community and the EFTA States and for ensuring uniform interpretation as regards the EEA rules could in no circumstances affect the case-law of the Court (Opinion 1/92, paragraphs 18 to 35).

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territory, a degree of uniformity in the interpretation of the rules of the ECAA Agreement.

8 The proposed agreement therefore extends the powers of the Commission, making it responsible for ensuring that the competition rules of the ECAA are complied with throughout that area. It also confers on the Joint Committee of the ECAA responsibilities which may prove to be more far-reaching than those entrusted to the EEA Joint Committee. Cases liable to come before the ECAA Committee involving divergent interpretation or implementation of the rules of the ECAA Agreement could be more numerous as a result of the fact that the States Parties have neither a specific umbrella organisation comparable to the EFTA nor a common judicial body.

9 The fact that a 'single-pillar' structure has been selected, in which the Commission, in particular, is to perform a new regulatory function, may help to ensure the high level of integration in the various air transport markets sought by the Contracting Parties. Similarly, the fact that the wording of the proposed agreement and the corresponding provisions of Community law are largely identical is likely to promote compliance with the common rules applying within the ECAA as regards competition, safety, the environment and social matters, making it easier for the Commission to carry out its new functions. It constitutes the main guarantee that conditions of market access will be the same for operators and nationals of States Parties or States covered by the ECAA Agreement.

10 However, the effect of the policies thus reflected in the proposed agreement is, first, to bring about the juxtaposition within a single geographical area (that of the ECAA) of rules of Community law and rules replicating them, which will not be applied or interpreted systematically by the same authorities or bodies. That might give rise to differences prejudicial to the operation of the ECAA Agreement. Another consequence of those policies is that the Commission is made responsible for applying a number of rules in that agreement outside the Community, thereby creating specific relations between the Community and the States Parties.

1 4 The proposed ECAA Agreement does not affect the essential character of the powers of the Community and its institutions to such an extent that it must be declared to be incompatible with the Treaty. I - 3521

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15 First, the ECAA Agreement will not affect the allocation of powers between the Community and the Member States.

16 The Member States will not be parties to the ECAA Agreement. Thus, there is no risk of the Joint Committee, or a court seised of a dispute concerning the interpretation of certain provisions of the agreement, applying or interpreting 'Contracting Party' in such a way as to define the respective powers of the Member States and the Community (see, to that effect, reaching the opposite conclusion, Opinion 1/91, paragraphs 31 to 36).

17 Furthermore, the fact that the Member States are not parties to the ECAA Agreement ensures that disputes between the Member States, or between those States and the Community institutions, concerning interpretation of the rules of Community law applicable to air transport will continue to be dealt with exclusively by the machinery provided for by the Treaty. The procedure for dispute resolution by the Joint Committee set up by Article 27 of the proposed agreement concerns only disputes between the States Parties or disputes between those States, or one of them, and the Community. Consequently, it does not conflict with Article 292 EC, under which 'Member States undertake not to submit a dispute concerning the interpretation or application of this Treaty to any method of settlement other than those provided for therein'.

21 Although the proposed ECAA Agreement affects the powers of the Community institutions, it does not alter the essential character of those powers and, accordingly, does not undermine the autonomy of the Community legal order.

22 So far as the Commission is concerned, the provisions of the proposed agreement are directly inspired by the provisions of the Treaty defining its responsibilities in the field of competition with regard to the Member States. The fact that the basic rules of the ECAA Agreement to be implemented by the Commission together with the States Parties are identical to those of Community law, and the choice of the 'single-pillar' structure, must also be regarded as guarantees that the essential character of the powers of the Community institutions will remain unchanged. I - 3523

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23 As regards the Court, the indispensable conditions for safeguarding the essential character of its powers are satisfied by the provisions of the proposed ECAA Agreement.

24 First, Article 17(3) of the proposed agreement makes the Court responsible for ruling on '[a] 11 questions concerning the legality of decisions taken by Community institutions under this Agreement'. Thus, the Court's exclusive task of reviewing the legality of acts of the Community institutions, whether the latter are acting under the Treaty or under another international instrument, conferred on it by inter alia Articles 230 EC and 234 EC, is not called in question.

25 Second, contrary to the concerns expressed in that regard by the Italian Government in its observations, in every case where the proposed agreement confers powers on the Court, the binding nature of the latter's decisions is safeguarded (see Opinion 1/91, paragraphs 59 to 65). That is true both of the procedures for references for preliminary rulings provided for in Article 23(2) of, and Protocol IV to, the proposed agreement and of the dispute resolution procedures laid down in Article 27(3), which provides that '[the Court's] decision... shall be final and binding'.

29 First, the proposed agreement provides that the rules of the ECAA Agreement will, in accordance with the intention of the Contracting Parties, retain the general characteristics of Community law. The preamble to the agreement thus restates 'the commitment of each of the Associated States in the Europe Agreements to make its laws compatible with those of the Community'. Article 2 of the proposed agreement states, in the same way as Article 249 EC, that an act referred to in Annex I thereto and corresponding to an EC regulation is 'as such [to] be made part of the internal legal order of the Contracting Parties' and that an act corresponding to a Community directive is to 'leave to the authorities of the Contracting Parties the choice of form and method of implementation'. Article 17(1) of the proposed agreement further provides that the Contracting Parties are to ensure that rights derived from the ECAA Agreement may 'be invoked before national courts'. Taken together, those provisions show that the essential characteristics of Community law will be respected in the endeavour to ensure uniform implementation of the rules of the ECAA Agreement.

30 Second, the procedures for preliminary references provided for in Article 23(2) of, and Protocol IV to, the proposed agreement, which give the States Parties the power to authorise their courts to make references to the Court, may be considered to be compatible with the Treaty. I - 3525

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31 Those provisions are certainly not intended to enable courts of States Parties to bring matters before the Court as of right. Protocol IV to the proposed agreement provides that the options which it puts forward for making referrals for preliminary rulings are available to each State Party 'when [it] adopts a decision on... the modalities of [application of Article 23(2) of the proposed agreement]'. That interpretation is borne out by Article 23(3) of the proposed agreement, which envisages a situation in which a court of a State Party 'is not able to make a reference to the Court'.

36 Although recognition of the binding authority of the decisions of the Commission and the case-law of the Court is restricted by that provision to decisions and rulings given prior to the date of signature of the ECAA Agreement, that fact does not, of itself, give rise to incompatibility with the Treaty, since adequate procedures are put in place to ensure that the Court's later case-law will not be affected, thus guaranteeing uniform interpretation of the rules of Community law (Opinion 1/92, paragraphs 21 to 23).

39 First, Article 23(1) of the proposed agreement specifically requires, in such a way as to be binding on the Contracting Parties, decisions of the Joint Committee to 'be in conformity with the case-law of the Court', even though the Committee is not charged with keeping the case-law of the Court and the courts and tribunals of the States Parties constantly under review. The Joint Committee, whose role when matters are referred to it by one of the Contracting Parties is to ensure the 'proper functioning' of the ECAA Agreement, cannot therefore oblige represen- tatives of the Community who sit on it to accept an interpretation of the rules of the agreement which conflicts with the case-law of the Court. Nor does the wording of the proposed agreement preclude the position adopted by the Community in the Joint Committee from being referred to the Court, where appropriate, by means of the actions provided for by the Treaty.

40 Further, it is true that the requirement laid down in Article 25(3) of the proposed agreement that decisions of the Committee must be unanimous may prove prejudicial to the proper functioning of the ECAA Agreement in that it may not allow completely homogeneous interpretation of its rules. It must, however, be regarded as a further guarantee that the Community will not, in its relations with Member States or Community nationals, be bound by an interpretation which is at variance with Community case-law.

41 Finally, the fact that Article 23(1) of the proposed agreement does not specifically set up any means of legal redress for cases in which the Joint Committee fails to reach a decision is liable to have adverse effects only on the proper functioning of the ECAA Agreement. Any divergences in the interpretation of the rules of the ECAA Agreement which may arise as between the Community and the States Parties as a result of that lacuna will not, in themselves, have any impact on the Community legal order, whose rules, which are identical as to substance but distinct as to form, will continue to be interpreted autonomously.

44 Lastly, the mechanism for resolving disputes established by Article 27 of the proposed agreement, a procedure to which Article 23(3) refers, is based on the procedures provided for by the EEA Agreement, which the Court found to be compatible with the Treaty, and is presented in the proposed agreement in a more restrictive form. Thus, first, it is stated in the proposed agreement itself that decisions of the Joint Committee taken in that context 'shall not affect the case-law of the Court'. Second, the Court's analysis of the provisions of Article 23(1) of the proposed agreement as regards the effects of the rule of unanimity can be applied in its entirety in this instance. Furthermore, any disputes which the Joint Committee does not succeed in resolving may be referred to the Court, whose decision will be 'final and binding'. Although under part 3 of Protocol IV to the proposed agreement disputes may be referred to the Court only 'in the same manner as those submitted to [it] in accordance with Article 239 of the EC Treaty', that is to say pursuant to an agreement entered into by the parties to the dispute, the effect of the provision will be to limit the cases in which the

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Court will have to give a ruling, but it will not oblige the Community's representatives on the Joint Committee to apply rules that conflict with Community law.

45 Therefore, the mechanisms for ensuring uniform interpretation of the rules of the ECAA Agreement and for resolving disputes will not have the effect of binding the Community and its institutions, in the exercise of their internal powers, to a particular interpretation of the rules of Community law incorporated in the agreement.

gives the following Opinion:

The system of legal supervision proposed by the Agreement on the establishment of a European Common Aviation Area in Articles 17, 23 and 27 and Protocol IV is compatible with the EC Treaty.

Rodriguez Iglesias Jann Macken

Colneric von Bahr Gulmann

Edward Puissochet Wathelet

Schintgen Skouris