EUROPEAN COMMISSION

Brussels, 31.5.2018

COM(2018) 359 final

2018/0192(NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken on behalf of the European Union in the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems regarding the adoption of its Rules of Procedure

(Text with EEA relevance)

EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems in connection with the envisaged adoption of its rules of procedure.

2.Context of the proposal

2.1.The Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems

The Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems (‘the Agreement’) aims to connect the EU Emissions Trading System (EU ETS) with the Swiss one, by allowing that allowances issued in one system can be traded and used for compliance in the other one, expanding the opportunities for climate change mitigation. The Agreement was signed on 23 November 2017. It will enter into force on the 1 January following the exchange of the instruments of ratification or approval by the Parties. However, the Agreement provides that its Articles 11 to 13 apply on a provisional basis from the date of signature of the Agreement.

2.2.The Joint Committee

The Joint Committee, established by Article 12 of the Agreement, is responsible for administering the Agreement and ensuring its implementation. It can decide to adopt new annexes to the Agreement or amend existing ones. It can also discuss amendments to the Articles of the Agreement, facilitate the exchange of views on the Parties' legislation and conduct reviews of the Agreement.

The Joint Committee is a bilateral body composed by representatives of the Parties (the EU and Switzerland). Decisions taken by the Joint Committee shall be agreed by both Parties.

2.3.The envisaged act of the Joint Committee

On 27 June 2018, during its first meeting, the Joint Committee is to adopt its rules of procedure.

The purpose of the envisaged act is to set the rules under which the Joint Committee should function and develop its tasks.

Article 12 (4) of the Agreement provides that the Joint Committee shall adopt its rules of procedure.

3.Position to be taken on the Union's behalf

The proposal determines the Union position as regards the adoption of the rules of procedure that will govern the Joint Committee. The draft rules of procedure contain standard provisions regulating the functioning of the body: its composition, chairmanship and secretarial functions, rules on the meetings to be held, agenda setting, decision making, etc. It also provides for the possibility to create working groups, in accordance with Article 12 (5) of the Agreement.

The adoption of the rules of procedure of the Joint Committee is necessary for it to start working on the preparations to implement the Agreement. This will allow undertaking the practical arrangements to make the link between the two emissions trading systems a reality.

The development of a well-functioning international carbon market through bottom-up linking of emissions trading systems is a long term policy goal of the EU and the international community, notably as a means to achieve the climate objectives of the Paris Agreement. In this respect, Article 25 of the Directive establishing the EU's Emissions Trading System (EU ETS) allows for the EU ETS to be linked with other emissions trading systems provided they are mandatory, have an absolute cap on emissions and are compatible, as it is the case with the Swiss system. For the purposes of ensuring the continued compatibility between the EU ETS and the Swiss ETS the Joint Committee should start working on its implementation.

4.Legal basis

4.1.Procedural legal basis

4.1.1.Principles

Article 218(9) 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’ 1 .

4.1.2.Application to the present case

The Joint Committee is a body set up by an agreement, namely the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

The act which the Joint Committee is called upon to adopt constitutes an act having legal effects. The envisaged act has legal effects because it will determine the rules applicable to the Joint Committee, which is the body which administers the Agreement, and can make decisions on the adoption of new annexes or on the amendment of existing ones.

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(9) TFEU.

4.2.Substantive legal basis

4.2.1.Principles

The substantive legal basis for a decision under Article 218(9) 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(9) 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 environment.

Therefore, the substantive legal basis of the proposed decision is Article 191 TFEU.

4.3.Conclusion

The legal basis of the proposed decision should be Article 191 TFEU, in conjunction with Article 218(9) TFEU.

2018/0192 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken on behalf of the European Union in the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems regarding the adoption of its Rules of Procedure

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 191, in conjunction with Article 218(9) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The Agreement between the Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems (‘the Agreement’) was signed on 23 November 2017.

(2)Pursuant to Article 22 of the Agreement, before the entry into force of the Agreement, Articles 11 to 13 are to be applied on a provisional basis as from the date of the signature of the Agreement.

(3)Pursuant to Article 12 of the Agreement, the Joint Committee, during its first meeting on 27 June 2018, is to adopt its rules of procedure.

(4)It is appropriate to establish the position to be taken on the Union's behalf in the Joint Committee, as the rules of procedure will determine the functioning of this body responsible for administering the Agreement and ensuring its implementation.

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken on the Union's behalf in the first meeting of the Joint Committee established by the Agreement between the Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems regarding the adoption of its Rules of Procedure shall be based on the draft Decision of the Joint Committee attached to this Decision.

Article 2

This Decision is addressed to the Commission.

Done at Brussels,

(1)    Judgment of the Court of Justice of 7 October 2014, Germany v Council, C-399/12, ECLI:EU:C:2014:2258, paragraphs 61to 64.

EUROPEAN COMMISSION

Brussels,31.5.2018

COM(2018) 359 final

ANNEX

to the

Proposal for a COUNCIL DECISION

on the position to be taken on behalf of the European Union in the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems regarding the adoption of its Rules of Procedure

Annex

DECISION No 1/2018 OF THE JOINT COMMITTEE ESTABLISHED BY THE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE SWISS CONFEDERATION ON THE LINKING OF THEIR GREENHOUSE GAS EMISSIONS TRADING SYSTEMS

regarding the adoption of its Rules of Procedure

THE JOINT COMMITTEE ESTABLISHED BY THE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE SWISS CONFEDERATION

Having regard to the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems and in particular Article 12 thereof,

Whereas:

(1) Articles 11 to 13 of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems have been provisionally applied since its signature.

(2) In accordance with Article 12 (1) of the Agreement, a Joint Committee composed of representatives of the Parties is established.

(3) In accordance with Article 12 (4) of the Agreement, the Joint Committee is to establish its rules of procedure.

(4) In accordance with Article 12 (5) of the Agreement, the Joint Committee may decide to set up working groups to assist it in its work.

HAS ADOPTED THIS DECISION:

Sole Article

The Rules of Procedure of the Joint Committee, as set out in the Annex to this Decision, are hereby adopted.

Done in English at Zurich.

For the Joint Committee

The Chair

Secretary for the European Union

Secretary for Switzerland

Rules of procedure of the EUROPEAN UNION/SWITZERLAND ETS COMMITTEE ('THE JOINT COMMITTEE')

Article 1

Composition of the Joint Committee

1. The Joint Committee shall be composed of representatives of the European Commission (‘the Commission’) who act on behalf of the "European Union", on the one side, and representatives of the Swiss Confederation (‘Switzerland’), on the other side. The two sides shall hereinafter be referred to individually as ‘the Party’ or jointly as ‘the Parties’.

2. The representatives of the Parties may be accompanied by other officials acting on behalf of the Parties.

Article 2

Chairmanship

1. The chairmanship of the Joint Committee shall alternate between the Parties every 12 months. In the first calender year the chairmanship shall be held by Switzerland.

2. The Party that holds the chairmanship shall appoint the Chair of the Joint Committee, as well as his or her replacement.

3. The Chair directs the work of the Joint Committee.

Article 3

Observers

The Joint Committee may decide by common agreement of the Parties to invite experts or representatives of other bodies to attend meetings of the Joint Committee as observers in order to provide information on specific subjects. The Joint Committee shall agree on the terms and conditions under which such observers may attend the meetings.

Article 4

Secretariat

1. An official of the European Commission and an official of the government of Switzerland shall act jointly as Secretaries of the Joint Committee.

2. The Secretaries of the Joint Committee shall be responsible for the communication between the Parties, including the transmission of documents.

3. The secretarial functions fall within the responsibility of the Party that holds the chairmanship.

Article 5

Meetings of the Joint Committee

1. The Joint Committee shall meet as and when necessary, in principle once a year. The Chair shall convene, after consultation with the Parties, the meeting of the Joint Committee at a mutually agreed time and place. If the Parties so agree, telephone and video conferences may also be held. The Chair shall convene a special session of the Joint Committee at the request of either the European Union or Switzerland. The Joint Committee shall meet within 30 calendar days of a request under Article 12(2) of the Agreement.

2. The Joint Committee shall meet in Brussels or in Switzerland, depending on the Party that holds the chairmanship, unless the Parties agree otherwise.

3. The Chair shall send the notice regarding the convening of the meeting, together with the draft agenda and the documents for the meeting, to the representatives of the Parties at least 21 calendar days before the meeting. Documents for meetings convened in accordance with Article 12(2) of the Agreement shall be sent at least seven calendar days before the meeting.

4. The Chair may, in agreement with the Parties, shorten the time limits indicated in paragraph 3 in order to take account of the requirements of a particular matter.

5. At least seven calendar days before each meeting, the Chair shall be informed of the composition of the delegation of each Party.

6. Meetings of the Joint Committee shall not be public unless the Parties decide otherwise.

Article 6

Agenda

1. The Chair, assisted by the Secretaries, shall draw up the provisional agenda for each meeting.

2. Each Party may request that additional items be included in the agenda. Any such request shall be duly substantiated and sent in writing to the Chair at least seven calendar days before the meeting.

3. The Joint Committee shall approve the agenda at the beginning of the meeting.

Article 7

Working groups of the Joint Committee

1. The composition and functioning of the working groups or subcommittees to be set up in accordance with Article 12(5) of the Agreement shall be agreed upon by the Joint Committee.

2. The working groups or subcommittees shall apply these Rules of Procedure mutatis mutandis.

3. The working groups or subcommittees shall work under the authority of the Joint Committee, to which they shall report after each of their meetings. They shall not be authorised to take decisions, but may make recommendations to the Joint Committee.

4. The Joint Committee may decide, in accordance with Article 8 of these Rules of Procedure, to amend or to terminate the mandate of the working groups or subcommittees.

Article 8

Decisions and recommendations

1. The Joint Committee shall take decisions and draw up recommendations by common agreement of the Parties in accordance with the Agreement. They shall be entitled ‘Decision’ or ‘Recommendation’, followed by a sequential number, the date of adoption and a reference to their subject matter.

2. The decisions and recommendations of the Joint Committee shall be signed by the Chair and the Secretaries and shall be circulated to the Parties.

3. Each Party may decide to publish any decision or recommendation adopted by the Joint Committee in its respective official journal. The Parties shall inform each other of their intention to publish a decision or recommendation.

4. The Joint Committee may adopt its decisions or recommendations by written procedure if the Parties so agree. The written procedure shall consist of an exchange of notes between the Secretaries, acting in agreement with the Parties. For that purpose, the text of the proposal shall be circulated, within a time-limit of no less than 21 calendar days, within which any reservations or amendments shall be made known. The Chair may reduce that time-limit, in consultation with the Parties, in order to take account of special circumstances. Once the text is agreed, the decision or the recommendation shall be signed by the Chair and the Secretaries.

5. Decisions of the Joint Committee that amend the Annexes to the Agreement shall be adopted in the authentic languages of the Agreement.

6. During the provisional application of Articles 11-13 of the Agreement, the Joint Committee may prepare decisions that are necessary for implementing the Agreement. A formal decision of the Joint Committee with a binding effect will only have effects after the entry into force of the Agreement.

Article 9

Minutes

1. The Secretariat shall draw up draft minutes of each meeting. The draft shall indicate the decisions taken and the recommendations drawn up. The draft minutes shall be submitted to the Joint Committee for adoption. Once they have been adopted by the Joint Committee, the minutes shall be signed by the Chair and the Secretaries.

2. The draft minutes shall be drawn up within 21 calendar days of the meeting and submitted for approval by the Joint Committee either by written procedure or at the following meeting of the Joint Committee.

Article 10

Correspondence

All correspondence to or from the Chairman of the Joint Committee shall be sent to the Secretariat of the Joint Committee.

Article 11

Regular exchange of information and consultation

1. In accordance with Article 10(2) of the Agreement a Party shall notify the other Party about delevopments of its legislation in an area of relevance to this Agreement.

2. To this end, a regular exchange of information and consultation shall take place between the Parties through the Secretaries of the Joint Committee.

Article 12

Confidentiality

Where a Party submits to the Joint Committee information designated as confidential, the other Party shall treat that information as such.

Article 13

Expenses

Each Party shall bear any expenses it incurs in relation to its participation in the meetings of the Joint Committee and of the working groups or subcommittees.

Article 14

Amendment

These Rules of Procedure may be amended by a decision of the Joint Committee in accordance with Article 8.

Article 15

Provisional Application

During the provisional application of Articles 11-13 of the Agreement, these rules of procedure shall apply mutatis mutandis.