Explanatory Memorandum to COM(2024)383 - - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)383 - . |
|---|---|
| source | COM(2024)383 |
| date | 02-09-2024 |
1. Subject matter of the proposal
This proposal concerns the decision establishing the position to be taken on the Union's behalf in the International Sugar Council in connection with the envisaged adoption of a decision concerning extending the International Sugar Agreement, 1992 until 31 December 2026.
2. Context of the proposal
2.1. The International Sugar Agreement, 1992
The International Sugar Agreement, 1992 (‘the Agreement’) aims to enhance international cooperation on world sugar matters and related issues, provide a forum for intergovernmental consultations on sugar and ways to improve the world sugar economy, facilitate trade by collecting and sharing information on the world sugar market and other sweeteners and encourage increased demand for sugar, particularly for non-traditional uses. The Agreement entered into force on 1 January 1993.
The European Union is a party to the Agreement1.
2.2. The International Sugar Council
The International Sugar Council (‘ISC’) is the body responsible for the performance of all functions necessary to carry out the provisions of the Agreement. It adopts rules and regulations including rules of procedure for the ISC and its committees and the financial and staff regulations of the International Sugar Organisation (‘ISO’). The ISC keeps the necessary records and publishes an annual report and other information if deemed appropriate.
Members to the Agreement hold 2000 votes in total. Each Member to the Agreement holds a specified number of votes, which is annually adjusted following predefined criteria in the Agreement. All decisions of the ISC shall be taken in principle by consensus unless stipulated otherwise in the Agreement. In the absence of consensus, decisions shall be made by simple majority vote unless the Agreement provides for a special vote.
2.3. The envisaged act of the International Sugar Council
On 29 November 2024, during its 65th session, the ISC is to adopt a decision regarding the extension of the Agreement (‘the envisaged act’).
The Agreement was originally concluded for a period of three years until 31 December 1995 and since then, has been regularly extended for further periods of two years, as provided for by Article 45 of the Agreement. The last extension was adopted in November 20212 and remains in force until 31 December 2024.
Following negotiations among the members of the ISO, the ISC proposed in its 59th session amendments to the Agreement. These amendments concern Article 25 of the Agreement, which governs the adoption of the administrative budget and member contributions as well as the objectives set out in Article 1 of the Agreement, the work priorities of the ISO under Articles 32, 33 and 34 of the Agreement, and the rules for the appointment of the Executive Director set out in Article 23 of the Agreement. In line with Council Decision 2021/18513, the EU voted in favour of amending the Agreement in November 2021.
According to the planning, Members would have until 30 April 2024 to deposit their instrument of acceptance. The amendments to the Agreement would enter into force on 1 January 2025 on the condition that members holding at least two thirds of the votes deposited the instrument of acceptance. During the 64th Council Session that took place in June 2024, the ISC agreed to prolong the period in which Members could deposit their instrument of acceptance until 30 June 2026 while the entry into force of the amended Agreement was postponed to 1st January 2027. In consequence, the current Agreement needs to be extended by two years until 31 December 2026. The EU contribution to the ISO budget for 2025 and 2026 will therefore be calculated using the current formula under Article 25 of the Agreement.
The purpose of the envisaged act is to enable ISO to continue with its work for an additional two years.
3. Position to be taken on the Union's behalf
The International Sugar Agreement, 1992 was concluded by the Union by Decision 92/580/EEC and entered into force on 1 January 1993 for a period of three years until 31 December 1995. Since then, it has been regularly extended for further periods of two years, in force until 31 December 2024.
The Union has always been an active member of the ISO and a further extension of the Agreement is in the interest of the Union. The Union is a major sugar producer as well as a leading sugar-trading partner for many ISO Members.
The EU counts as one Member to the Agreement. For budgetary procedures (see Article 25 of the Agreement), i.e., for fixing the annual financial contributions of Members, the number of votes allocated to the Union is 501 out of the total of 2000 votes in 2024. Each vote has a weight of £780 for the 2024 administrative budget and therefore the contribution due for 2024 amounts to £390,780. These figures are adjusted on a yearly basis.
A formal decision about the extension of the Agreement up to 31 December 2026 is scheduled for the 65th Session of the International Sugar Council to be held on 29 November 2024 in London.
The purpose of this proposal is to seek the Council’s authorisation for the Commission to vote in the International Sugar Council, on the Union’s behalf, in favour of the extension of the Agreement up to 31 December 2026.
4. Legal basis
4.1. Procedural legal basis
4.1.1. Principles
Article 218 i of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’
The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the rules of international law governing the body in question. It also includes instruments that do not have a binding effect under international law, but that are ‘capable of decisively influencing the content of the legislation adopted by the EU legislature’4.
4.1.2. Application to the present case
The International Sugar Council has been set up by Articles 3 and 8 of the Agreement and can be called upon to adopt certain decisions.
The envisaged act, for which the International Sugar Council is empowered under Article 45(2) of the Agreement, has the effect of extending the validity of the Agreement, which is an international agreement binding the Union. The envisaged act has therefore legal effects.
The envisaged act does not supplement or amend the institutional framework of the Agreement.
Therefore, the procedural legal basis for the proposed decision is Article 218 i TFEU.
4.2. Substantive legal basis
4.2.1. Principles
The substantive legal basis for a decision under Article 218 i TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union's behalf. If the envisaged act pursues two aims or has two components and if one of those aims or components is identifiable as the main one, whereas the other is merely incidental, the decision under Article 218 i TFEU must be founded on a single substantive legal basis, namely that required by the main or predominant aim or component.
4.2.2. Application to the present case
The main objective and content of the envisaged act relate to common commercial policy (trade in agricultural products).
Therefore, the substantive legal basis of the proposed decision is Article 207 TFEU.
4.3. Conclusion
The legal basis of the proposed decision should be Article 207 TFEU, in conjunction with Article 218 i TFEU.
5. Publication of the envisaged act
As the act of the International Sugar Council will amend the Agreement, it is appropriate to publish it in the Official Journal of the European Union after its adoption.