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Intergovernmental agreements with non-EU countries in the field of energy [Policy Podcast]

Written by Gregor Erbach,

In February 2016, the Commission proposed a decision that would require Member States to submit draft intergovernmental agreements (IGA) with non-EU countries in the field of energy to it before they are signed. The Commission would then check whether they are compliant with EU law, and Member States would have to take full account of the Commission’s opinion. The Council and Parliament’s ITRE Committee have started to develop their positions on the proposal.

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The purpose of IGAs has typically been to provide legal certainty for the construction of import and export infrastructure, in order to facilitate the purchase of oil and gas or establish a more general framework for energy cooperation. IGAs are usually bilateral agreements that form the basis of more detailed commercial contracts. At present, Member States are required to submit such agreements to the Commission after signature. The Commission considers the present system as ineffective. Although a third of the IGAs on energy infrastructure have been found to be non-compliant with EU law, none have been renegotiated so far. The IGAs concerning the planned construction of the South Stream gas pipeline are a high-profile example. In December 2013, the Commission found that the IGAs which EU Member States had concluded with Russia were in breach of EU law.

Listen to podcast: Intergovernmental agreements with non-EU countries in the field of energy [Policy podcast]

Under the proposed new rules, Member States would have to inform the Commission when they intend to start negotiations with a third country for concluding a new binding IGA or amending an existing one. Before the formal conclusion of negotiations, a draft IGA would have to be submitted to the Commission for ex-ante verification. A Member State would not be able to sign an IGA before the Commission has informed it of any doubts or issued an opinion.

Member States would also have to notify non-binding instruments (such as joint political declarations or memoranda of understanding) or any amendments to them to the Commission after they have been adopted. Where the Commission considers that implementation of a non-binding instrument could conflict with EU law, it may inform the Member State concerned.

The Commission says the proposal would lead to greater legal certainty and reduced risks for investors and business partners. It would also lead to increased transparency on energy supply, supporting the aims of Energy Union.

Parliament and Council have started to develop their positions on the Commission proposal. On 30 May 2016, the rapporteur Zdzisław Krasnodębski (ECR, Poland) presented a draft report that would also require Member States to submit non-binding instruments to the Commission for ex-ante verification. On 6 June 2016, energy ministers in the Council will discuss a draft general approach to make the information mechanism for non-binding instruments voluntary, and to restrict the scope of ex-ante verification to binding agreements in the field of gas supply only. Three Member States have raised concerns that the proposed decision violates the principle of subsidiarity.

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