The implicit powers theory assert that competence in external matters derives from explicit internal competence. The Treaties assign direct powers to the EU in a particular area, such as transport, the subject of this case law, must also have similar powers to conclude agreements with non-EU countries in the same field.
The EU can act internationally on its own behalf; it can conclude or be a party to international agreements with third countries. This can only be done to achieve objectives in areas where the EU has competence under the Treaties, as expressly stated in TITLE V about International Agreements of the TFEU.
In this case law, it has been stated that the Community has the competence to enter into international obligations that can result in not only from explicit provisions of Treatyeaty but may also derive implicitly from measures adopted, within the framework of provisions, by the community institutions. The CJUE provided that Community law had conferred on the institutions of the Community powers at an internal level to achieve a particular objective; the Community was entitled to enter into the international obligations necessary to attain that objective, even if there was no express provision to that effect.
There is another principle that was deduced from this historical and essential jurisprudence. The interpretation given by the CJEU regarding article 173 of the ECC Treaty, in which Council based to prove that the agreement cannot be challenged, was that “since the only matters excluded from the scope of the action for annulment open to the member states and the institutions are” recommendations or opinions” – which by the final paragraph of article 189 are declared to have no binding force – article 173 treats as acts open to review by the court all measures adopted by the institutions which are intended to have legal force”. So, an action for annulment must be available in all measures adopted by the institutions, whatever their nature or form, intended to have legal effects.
The Commission of the European Communities brought an action for annulment against the Council’s Proceedings of 20 March 1970 regarding the Negotiation and conclusion by the Member States of the Community, within the framework of the UN Economic Commission for Europe, of the European Agreement concerning the work of drivers of vehicles engaged in international road transport (AETR).
The Commission considered that Article 75 of the ECC Treaty, which conferred on the community powers to lay down the appropriate provisions to implement the standard transport policy, must apply to external relations just as much as to domestic measures in the sphere envisaged, so the AETR had to be concluded and negotiated through the procedure established by the EEC in Article 228 that set down that such agreements should be arranged by the Commission and completed by the Council, infringing Articles 75, 228 and 235 concerning the distribution of powers between the Council and the Commission, and consequently the rights which it was the commission’ s duty to exercise in the negotiations on the AETR.
The CJUE states that in the absence of specific provisions in Treatyeaty applicable to the Negotiation and implementation of the agreement under discussion, the appropriate rules must be inferred from the general tenor of Articles 75, 228 and 116 Treatyeaty, which relate to the negotiations undertaken on the AETR. From those Articles, read in conjunction, the CJEU understood that wherever a matter forms the subject of a standard policy, the Member States are bound in every case to collaborate in defence of the Community’s interests. Therefore, the Council did not fail to fulfil its obligations under Articles 75 and 228 and that the right to conclude the agreement was vested in the Council. Moreover, the Commission made no proper use of the right to submit proposals open to it under articles 75 and 116, and it did not demand the simple application of article 228 regarding its ownership of Negotiation. As a consequence of all the above, the CJEU dismissed the application.
The CJEU in this case law also deducted from Council consideration that the proceedings of 20 march 1970 do not constitute an act against which an appeal can be lodged since it was only coordination of policies amongst the Member States within the framework of the Council and not a Regulation, Directive or Decision, that “an action for annulment must be available in the case of all measures adopted by the institutions, whatever their nature of form, which are intended to have legal effects”.