Case C‑660/13

Council of the European Union

v

European Commission

‛Action for annulment — The European Union’s external relations — Access by the Swiss Confederation to the internal market — The Swiss Confederation’s financial contribution to economic and social cohesion in an enlarged Union — Memorandum of Understanding on a financial contribution by the Swiss Confederation to the Member States which acceded to the Union as a result of the 2004 enlargement — Enlargement of the Union to include the Republic of Croatia — Addendum to the Memorandum of Understanding concerning a financial contribution by the Swiss Confederation for the Republic of Croatia — Addendum signed by the European Commission on behalf of the European Union without the prior approval of the Council of the European Union — Powers — Article 13(2), Article 16(1) and (6) and Article 17(1) TEU — Principles of allocation of powers, institutional balance and sincere cooperation’

Summary — Judgment of the Court (Grand Chamber), 28 July 2016

1. European Union — Institutional balance — Implications — Respect for the allocation of powers

   (Art. 13(2) TEU)

2. Commission — Powers — Power of external representation of the Union — Power to sign a non-binding agreement on behalf of the Union without the Council’s prior approval — Not included

   (Arts 13(2) TEU, 16(1) and (6) TEU, 17(1) TUE and 21(1) and (2) TEU)

3. Actions for annulment — Judgment annulling a measure — Effects — Limitation by the Court — Maintenance of the effects of the contested measure until its replacement within a reasonable period — Justification on grounds of legal certainty

   (Art. 264, second para., TFEU)

1.  See the text of the decision.

   (see paras 31, 32)

2.  The Commission cannot be regarded as having the right, by virtue of its power of external representation under Article 17(1) TEU, to sign a non-binding agreement resulting from negotiations conducted with a third country. The decision concerning the signing of an agreement with a third country covering an area for which the Union is competent — irrespective of whether or not that agreement is binding — requires an assessment to be made, in compliance with strategic guidelines laid down by the European Council and the principles and objectives of the Union’s external action laid down in Article 21(1) and (2) TEU, of the Union’s interests in the context of its relations with the third country concerned, and the divergent interests arising in those relations to be reconciled. Therefore, a decision concerning the signature of a non-binding agreement is one of the measures by which the Union’s policy is made and its external action planned for the purpose of the second sentence of Article 16(1) and the third subparagraph of Article 16(6) TEU.

   Moreover, the signature of a non-binding agreement entails the assessment by the Union of whether the agreement still reflects its interest, as defined by the Council in particular in the decision to open negotiations on the conclusion of the agreement. That assessment requires, inter alia, verification of the actual content of the non-binding agreement resulting from negotiations with a third country and that content cannot be determined in advance or predicted when the decision to start such negotiations is made. Thus, the mere fact that the content of a non-binding agreement negotiated by the Commission with a third country corresponds to the negotiating mandate given by the Council is not sufficient to confer on the Commission the power to sign such a non-binding measure without the Council’s prior approval, on the basis that the approval is already covered by a position previously established by the Council.

   (see paras 38-40, 42, 43)

3.  See the text of the decision.

   (see paras 50, 51)