Il saggio si concentra sul principio di condizionalità nei rapporti tra l’UE e gli Stati terzi che ricadono nell’ambito della politica di vicinato. L’Unione condiziona la cooperazione (o il suo sviluppo) con questi Stati al rispetto del buon governo in materia fiscale, alla convergenza normativa rispetto all’acquis dell’Unione e allo sforzo di integrazione nel mercato del lavoro dei rifugiati presenti sul loro territorio, in cambio di preferenze tariffarie. In alcuni casi l’UE agisce più che per esportare i suoi valori (come nel caso della condizionalità politica classica) per tutelare i suoi interessi. Il saggio riflette sulla compatibilità delle tre nuove forme del principio di condizionalità sopra descritte con il principio di coerenza a cui l’azione esterna dell’Unione è soggetta. La conclusione è che le clausole degli accordi internazionali riguardanti il buon governo nel settore fiscale sono compatibili con il principio della coerenza poiché possono essere considerate come uno strumento per promuovere il multilateralismo. Quanto alla condizionalità relativa alla convergenza normativa, questa non solo è in linea con il principio della coerenza ma può essere qualificata come un vero e proprio requisito necessario della cooperazione, considerate le aspirazioni degli Stati interessati a diventare membri dell’UE. Infine, è dubbia la compatibilità dell’ultima forma di condizionalità (che si esplica nel Compact con la Giordania) con il principio di coerenza. Infatti, l’UE ha modificato il trattamento tariffario delle merci provenienti dalla Giordania sulla base di un meccanismo eccessivamente restrittivo la cui attuazione è rivolta non tanto ad incentivare la crescita economica in tale Paese, come sarebbe previsto dalla politica di vicinato dell’Unione, quanto a creare le condizioni affinché i siriani rimangono in Giordania.

SOMMARIO:

I. Introduction. - II. The modernisation of the political conditionality in the association agreements with Georgia, Moldova and Ukraine and the principle of good governance. - III. From promoting EU values through good governance to protecting EU’s interests from harmful tax competition. - IV. The principle of good governance in tax matters and its reconciliation with the principle of consistency in the EU’s relations with ENP countries. - V. 'Converge conditionality': conditions for deeper integration in various sectors related to the internal market. - VI. The New partnership framework with third countries under the European Agenda on migration. - VII. The new frontiers of the principle of conditionality and the principle of consistency: conclusive remarks. - NOTE

I. Introduction.

The European Union (the «EU») has attempted to influence the domestic policies of its partner countries, and in particular developing ones, in a number of ways. The so-called «human right clauses», included in bilateral[1] or multilateral agreements [2] are one of the legal instruments that have been used in the EU practice for this purpose since the 1990s [3]. They are designed to encourage third countries to respect human rights and democratic principles [4] by qualifying them as «essential elements» for cooperation with the EU. Indeed, the EU is set to contribute to the protection of human rights and to advance democracy and the rule of law (all values upon which the EU is based) [5], through its action on the international scene [6]. «Human rights clauses» are usually accompanied by non-execution provisions: these make it possible for one party to react to breaches of essential elements of agreements by the other party and to take «appropriate measures». The latter include the suspension of the application of the Treaty, as a last resort [7]. This technique is referred to as «political conditionality» [8] and is a mechanism designed to exert pressure on EU partner countries to undertake domestic reforms inspired by respect of international standards. In recent years, we have seen the modernisation of the elements qualified as «essential» in the bilateral cooperation with third countries on the one hand, and the development of new forms of conditionality, particularly in the context of the European Neighbourhood Policy, on the other [9]. In the association agreements concluded with Georgia, Moldova and Ukraine (2014) [10] the EU has not only expanded the scope of these clauses but has also devised a new form of conditionality by including special provisions [11] requiring that the partner country respect good governance principles in tax matters [12]. Secondly, the Union has developed other specific forms of conditionality which are neither expressed by «essential elements» clauses nor are they intended to export EU political values. They are enshrined both in formal treaties and in «soft law» acts. For example, the association agreements with Georgia, Moldova and Ukraine and, to some extent, the agreement signed with Armenia (2017) [13], are [continua ..]

II. The modernisation of the political conditionality in the association agreements with Georgia, Moldova and Ukraine and the principle of good governance.

One of aims of the European Neighbourhood Policy is to bring stability, security and prosperity in the neighbourhood[17]. However, as the High Representative puts it, «There is no stability without democracy. There is no security, without human rights. Stability and security cannot exist without a fair trial system, a serious commitment towards good governance, the rule of law and the fight against corruption […]» [18]. The EU considers that the effective promotion of good governance [19], democracy, rule of law and human rights in neighbour countries is important for the long-term stability of neighbour countries [20]. It is therefore not surprising that political conditionality underlies association agreements with Georgia, Moldova and Ukraine [21]. For example, the agreement with Ukraine provides that: «Respect for democratic principles, human rights and fundamental freedoms, as defined in particular in the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe and the Charter of Paris for a New Europe of 1990, and other relevant human rights instruments, [...], and respect for the principle of the rule of law shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement» [22]. Cooperation with third countries in these domains is crucial for the EU itself, which is interested in having stable and functioning democracies in the neighbourhood and for the security of the EU, both internally as well as internationally. However, the EU has modernised and contextualised the «essential elements» of the cooperation with Ukraine by expanding their scope so as to include: the promotion of respect for the principles of sovereignty and territorial integrity, inviolability of borders and independence and the countering of the proliferation of weapons of mass destruction. In the agreements with the three associated countries the EU also mentions the principle of good governance, without making it an essential element of the cooperation. Before examining the content of the association agreements, it is necessary to briefly set this principle in the context of EU external relations and outline the reasons the EU attaches importance to it.  Good governance was mentioned for the first time in the context of the development cooperation policy [23]. In a 1998 Communication dedicated to the [continua ..]

III. From promoting EU values through good governance to protecting EU’s interests from harmful tax competition.

Good governance does not have a prominent position in international agreements with non-developing countries. In selected association or partnership agreements good governance features at best as a mere «principle of cooperation» [35]and can be discussed in the framework of the political dialogue between the parties [36]. What is more interesting is that in these treaties, including in the three association agreements with Georgia, Moldova and Ukraine, the parties undertake to cooperate so as to strengthen «good governance» in tax matters. The identically worded provisions of these texts state: «The Parties shall cooperate to enhance good governance in the tax area, with a view to the further improvement of economic relations, trade, investment and fair competition» [37]. This implies that the cooperation in the concerned field seems to be conditional upon the deepening of the economic ties between the parties. Positive conditionality also lies at the heart of the partnership agreement with Armenia concluded in 2017, which encapsulates an identical «good governance» provision in art. 25. The three associated countries mentioned above: «recognise and commit themselves to implement the principles [...] such as transparency, exchange of information and fair tax competition, as subscribed to by Member States at EU level» [38]. To that effect, without prejudice to EU and Member States’ competences, the Parties will improve international cooperation in the tax area, facilitate the collection of legitimate tax revenues, and develop measures for the effective implementation of the above-mentioned principles [39]. These provisions do not simply set out «best endeavour efforts» or aspirational objectives but genuine obligations. It is noteworthy that there are other treaties that refer to the cooperation in the tax domain based on similar provisions. This is the case of the partnership agreements with Afghanistan [40], Cuba [41], Khazakhstan [42], the Philippinnes [43], Mongolia, South Korea, the framework agreement on Comprehensive Partnership and Cooperation with Vietnam and the EU-Central America Association Agreement amongst others [44]. In some treaties the partner countries are expected to develop measures in line with international standards for the effective implementation of the principles of good governance [continua ..]

IV. The principle of good governance in tax matters and its reconciliation with the principle of consistency in the EU’s relations with ENP countries.

One may wonder whether the conditionality principle in the field of good tax governance is consistent or not with the principles underlying EU external action, if applied in the context of EU’s relations with its neighbours. It is submitted that the new form of conditionality is reconcilable with the Treaty. Indeed, the EU has a clear mandate to ensure the implementation of principles agreed in a multilateral context. Art. 21(2) (h) of the TEU states that one of the EU’s objectives is to promote «an international system based on stronger multilateral cooperation andgood global governance [emphasis added]». Here, the EU, in its role as a global actor, is given the task of contributing to a rule-based international order within multilateral frameworks and organisations [59]. We have seen that the motivation at the basis of the transformation of the principle of good governance from a quasi-EU value to a principle of cooperation in tax matters is to protect Member States from harmful tax policies. However, the EU’s practice of including good governance clauses could also be considered to be consistent with the EU’s mandate to support multilateral cooperation and in particular the OECD’s efforts to ensure respect of minimum good governance standards in the area of taxation [60]. Taking into account that the promotion of multilateralism is one of the principles of the  EU external action, resorting to «good governance» conditionality in tax matters, in the context of EU’s relations with neighbour countries, does not seem to be per se in conflict with the objectives of EU external action. It should be noted that a good-governance clause is also present in the recently signed framework agreement with Australia [61], a developed country. Art. 25 places emphasis on the purpose of the cooperation, which is to avoid harmful tax practices, and on the efforts to cooperate in multilateral fora. In contrast, demanding respect for good governance principles from developing countries is not justifiable and is inconsistent with the objective of the development cooperation policy, which is fighting poverty. The EU should promote good governance in an effort to incentivise developing countries to strengthen state-building and fight corruption rather than demanding cooperation from them in avoiding harmful tax policies. The EU institutions should not insist on good governance [continua ..]

V. 'Converge conditionality': conditions for deeper integration in various sectors related to the internal market.

In recent years, the EU has introduced a new form of conditionality by including specific provisions in the trade chapters of the association agreements with Georgia, Moldova and Ukraine. As it is known, these Treaties envisage the setting up of Deep and Comprehensive Free Trade areas (“DCFTA”) designed to reduce or eliminate non-tariff barriers to trade. Taking the association agreement with Ukraine as a reference text[63], this objective will be achieved in ten years. The aim of this Treaty is, amongst others, «to establish conditions for enhanced economic and trade relations leading towards Ukraine’s gradual integration in the EU Internal Market, [...] and to support Ukrainian efforts to complete the transition into a functioning market economy by means of, amongst others, the progressive approximation of its legislation to that of the Union [64]». Ukraine is required to gradually approximate its legislation to the EU acquis in many sectors covered by the agreement [65], although based on different adaptation techniques [66]. What is noteworthy is that in a number of these sectors «legislative approximation to the EU acquis is a conditio sine qua non to obtain additional access to the EU Internal Market» [67]. More precisely, in sectors such as public procurement, cross supply of services, postal and courier, financial and transport services, electronic communications and establishment, the benefits offered by the EU are – save the exceptions or the reservations indicated by the Parties in the agreements – the highest possible for the partner country. That is to say the EU commits to apply to Ukrainian legal persons (in some cases to natural persons) the same rules that are applicable to domestic companies, upon the condition that this country progressively incorporates a selection of the existing legislation set out in the annexes of the agreement (or even, in some cases, also future EU legislation) [68]. As far as technical obstacles to trade are concerned, the approximation of the Ukrainian technical regulations and standards to those of the EU triggers the possibility of concluding an agreement on the Conformity Assessment and Acceptance of Industrial Products («ACAA»), which has the effect of easing trade in industrial products despite the Parties’ different technical regulations. As to other «behind the border» trade obstacles, [continua ..]

VI. The New partnership framework with third countries under the European Agenda on migration.

In 2016 a Commission Communication launched the idea of establishing a new partnership framework with third countries in order to tackle immigration upstream. It aims to conclude Compacts with countries of origin or transit of migrants, designed to help those in need but also to incentivise the cooperation with third countries in preventing uncontrolled movements of peoples and in ensuring the readmission of irregular migrants. The Commission takes the view that: «The ultimate aim of the Partnership Framework is a coherent and tailored engagement where the Union and its Member States act in a coordinated manner putting together instruments, tools and leverage to reach comprehensive partnerships (compacts) with third countries to better manage migration in full respect of our humanitarian and human rights obligations»[76]. Target countries are Mali, Niger, Nigeria and Senegal [77]. The Commission uses language imbued with the conditionality principle: «Positive and negative incentives should be integrated in the EU’s development policy, rewarding those countries that fulfil their international obligation to readmit their own nationals, and those that cooperate in managing the flows of irregular migrants from third countries» [78]; trade incentives should also be used to encourage cooperation in the area of migration; finally, there will be «consequences» for those countries showing no willingness to cooperate [79]. The Commission argues that setting up the described partnerships with third countries increases the coherence between the migration and development policies [80]. This may be criticised given that development aid should not be tied up to cooperation in the field of migration; indeed, such an approach jeopardises the achievement of the most important objective of the development cooperation which is to fight poverty. Political conditions were traditionally attached to the disbursement of aid: however, these were related to respect of values such as democracy and human rights rather than to border controls and cooperation on readmission. It should also be mentioned that developing countries are often unable (rather than unwilling) to cooperate on border managements. In the Commission Communication announcing the new partnership framework with third countries one passage is noteworthy: this concerns the possibility to reward those countries «taking action to adequately host [continua ..]

VII. The new frontiers of the principle of conditionality and the principle of consistency: conclusive remarks.

By way of conclusion, it can be said that the «good governance» conditionality in the fiscal domain is justified in light of the principle of intra-EU consistency as it is a way for the EU to promote multilateral solutions to common problems. In contrast, the application of this new form of conditionality is not justifiable in EU’s relations with developing countries. As to the «migrant integration» conditionality of the EU-Jordan Compact, this does not sit comfortably with the principle mentioned above. Indeed, by offering limited trade incentives to Jordan and upon the achievement of impossible-to-reach targets [123], the EU acts in the field of the common commercial policy in a manner which is not fully consistent with the ENP. Although the Compact is presented as an occasion to turn the challenges posed by the Syria crisis into concrete opportunities to the benefit of the population of Jordan, the Syrian refugees and the EU, this instrument does not favour Jordan’s prosperity, which is one of the objectives of the ENP. In addition, the EU decision to limit exceptions to the rules of origin to products coming from the designated zones is not consistent with the objectives of the Euro-Mediterranean agreement concluded with Jordan, in particular with the commitment to integrate Jordan’s economy into the European economy [124]. The Compact intends to strengthen Jordan’s stability and, more broadly, regional stability by integrating Syrian refugees in the job market [125], thus preventing migration flows. It is not at all certain that the trade scheme will actually have a positive impact on Jordan’s growth [126]. Although the trade preferences given to goods manufactured in Jordan’s designated industrial sites cover 85% of the exports to the EU [127], the EU could have been more generous in drafting the exceptions to the rules of origin. For example, this organization could have eased the exports of Jordan’s manufactured agricultural products [128], as requested by this country. The EU could have fully liberalised trade flows from Jordan, merely on accounts of the hardships that this country had to tackle in hosting Syrian refugees. It is regrettable that the EU has only made trade concessions linked to the objective of integrating Syrians in the job market. It is to be hoped that in the near future the exceptions to the rules of origin will be expanded so [continua ..]

NOTE