Introduction

Crisis situations call for rapid action, possibly also by legislatures. In March 2020, the European Commission adopted, against the background of the Corona pandemic, emergency rules for the export of personal protective equipment (PPE) out of the EU (Implementing Regulation 2020/402). The reason for the new regime is an increased need for PPE and the concern for shortages that could develop in the EU, in a situation where certain third countries that are traditional suppliers to the Union market had already decided to restrict exports of protective equipment. Under the new system, the export of PPE, such as medical face masks, is subject to an authorisation requirement. In a first step, this requirement applied to all third countries alike. However, in a second step the Commission exempted a number of countries and territories. How did this come about and is such different treatment of different third States legally acceptable? And what about export restrictions inside the Union’s internal market?

The new rules and their legal context

The new rules were adopted based on Regulation 2015/479 on common rules for exports, which allows for the adoption of certain protective measures by the Commission. Against that background, Article 1 of Implementing Regulation 2020/402 limits the export of certain products outside the EU by introducing, on the Union level, the obligation to obtain an authorisation for the export of the products covered by the Regulation. Article 2 sets out the procedural framework. Applications for export authorisations must be addressed to the competent authorities of the Member State where the exporter is established. Article 3 contains the usual final provisions, though with one particularity, namely a limited duration of the Regulation: For the time being, the Regulation is valid only for the duration of six weeks.

A Guidance Note of the Commission provides practical guidelines for the application of the new system. For example, the Commission notes that the authorisation system “is not an export ban.” In deciding whether to grant an export authorisation, the Member States enjoy a margin of discretion, though they must fulfil the objective of ensuring the adequacy of supply in the Union in order to meet the vital demand for PPE.

With Implementing Regulation 2020/402, the EU has introduced a common legal framework with respect to the exportation of PPE gear that binds the Member States. Before that, some Member States took different, national approaches. Given that the Common Commercial Policy falls within the exclusive competence of the Union, this was a questionable course of action. According to Article 2(1) TFEU, “only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.”

As for the powers left to the Member States in the framework of Regulation 2015/479, they relate to: 1) the application of the authorisation system within the legal framework set by the Regulation, and 2) the authorisation under Article 8 of the Regulation to implement the emergency sharing system introducing an allocation obligation vis-à-vis third countries provided for in international commitments entered into before the entry into force of the Regulation. Moreover, in exercising their powers, the Member States must act in a spirit of sincere cooperation in accordance with Article 4(3) TEU and within the limits of proportionality. As stated in the Commission note, an authorisation system is not the same as an export ban. It is therefore submitted that a general export ban is unlawful as far as the Union’s external relations are concerned.

Differentiation between different third States

In its original version, Implementing Regulation 2020/402 did not distinguish between different groups of third countries. However, Implementing Regulation 2020/426 introduced an exemption from the obligation to obtain an export authorisation with respect to the EFTA States (Iceland, Liechtenstein, Norway and Switzerland), the AMS States (Andorra, Monaco and San Marino) and the Vatican City, the EU overseas countries and territories as well as the Faeroe Islands (Art. 1(3)). The UK is not mentioned since it is not (yet) a third State for these purposes (Art. 127(6) of the Withdrawal Agreement). Conversely, it has been noted – and deplored – that the exemption does not apply to the EU candidate States in the Western Balkans.

It would appear that the amendment was linked, at least to some extent, to the situation of Switzerland. In early March 2020, protective equipment intended for Switzerland was stopped in Germany by the German authorities. Germany was not the only country to take such measures: France had ordered the confiscation of all protective masks. In order to remedy the situation, the current Swiss Federal Government contacted the European Commission. Similar contacts were also made by government officials of the EEA EFTA States (i.e. Iceland, Liechtenstein and Norway), assisted by the EFTA Secretariat. Meanwhile, Switzerland has itself introduced an export authorisation requirement, whilst exempting the same countries as the EU does (including, explicitly, the UK), though only under the condition of reciprocity (Art. 10(d) of the COVID-19 Regulation 2, amendment of 25 March 2020).

Following the amendment, Implementing Regulation 2020/402 divides the non-EU-States into two groups that are treated differently. The Commission’s argument in this respect is that the countries falling under the exemption are in a different situation than the other countries in one of two respects: namely, for the EFTA countries, “the close integration of the production value chains and distribution networks, when such equipment is an essential product necessary to prevent the further spreading of the disease and safeguard the health of medical staff treating infected patients”; and for the other States and territories benefiting from the exemption, “a particular dependency on the metropolitan supply chains of the Member States to which they are attached or on the supply chains of neighbouring Member States.”

But what about the legal perspective? According to Article 5(3) of Regulation 2015/479, which is the basis for Implementing Regulation 2020/402, the restrictive measures “may be limited to exports to certain countries or to exports from certain regions of the Union.” More generally, the CJEU has stated that there is no obligation to equal treatment either under EU law or under public international law with respect to the treatment of third States, meaning that the EU’s general principle of equal treatment is not applicable in this context (so-called “Balkan Principle”, based on the Court’s Balkan-Import decision of the 1970s; particularly illustrative: Swiss International Air Lines, paragraphs 23 et seq.; more recently e.g. CETA).

In this situation, the last potential legal anchor to find an obligation to equal treatment would appear to be WTO law with its principles of National Treatment and Most Favoured Nation Treatment – matters, however, that are outside the field of expertise of the present author. Suffice it therefore to note that quantitative export restrictions are in principle prohibited under Article XI GATT, though under the reservation of exceptions, such as for temporary restrictions to prevent critical shortages (Art. XI:2(a) GATT) and the protection of public health (Art. XX(b) GATT). Policy-wise, export restrictions of EU countries on medical equipment have been attracting criticism in the trade community (e.g. Chad P. Brown).

What about export restrictions within the EU?

In the Guidance Note, reference is also made to restrictions imposed by some EU Member States vis-à-vis other Member States. According to the Commission, Implementing Regulation 2020/402 was adopted with the understanding that Member States should revoke any restrictive national actions taken, formally or informally, concerning either exports to third countries or trade between the Member States within the internal market. Obviously, given its legal basis and context, Implementing Regulation 2020/402 itself is not able to address the intra-EU situation. As there appears to be no specific secondary internal market Union law on the matter, the Treaty rules on export restrictions continue to apply. As Devroe and Colpaert point out, the limits set by Article 36 TFEU must be respected even in an acute crisis situation.

In a Communication on a coordinated economic response to the COVID-19 outbreak, the Commission asks the Member States to apply Article 36 TFEU not simply with a view to their own, individual health concerns, but rather with a view to the EU as a whole, “in a spirit of European solidarity and cooperation” – though it refrains from making any reference to for example Article 2 TEU (listing solidarity as a fundamental Union value), Article 4(3) TEU (stating the principle of sincere cooperation) or Article 222 TFEU (solidarity clause). In practice, much will depend on the Member States’ readiness to act in this spirit.

This blog is a short version of a longer text that was published by EFTA-studies.org