BREXIT and the EU: Any lessons for ECOWAS? (3) By Kaine Agary

Though the language of Article 260 can be read to mean that the CJEU, in finding that a member state has failed in its obligations, has an either-or option of imposing a lump sum payment or penalty payment, the CJEU has ruled that is not the case. In the case of Commission v France (Case C-304/02) the CJEU said:

“The procedure laid down in Article [260 TFEU] has the objective of inducing a defaulting Member State to comply with a judgment establishing a breach of obligations and thereby of ensuring that Community law is in fact applied. The measures provided for by that provision, namely a lump sum and a penalty payment, are both intended to achieve this objective.

“Application of each of those measures depends on their respective abilities to meet the objective pursued according to the circumstances of the case. While the imposition of a penalty payment seems particularly suited to inducing a Member State to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist, the imposition of a lump sum is based more on assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period since the judgment which initially established it.

“That being so, recourse to both types of penalty provided for in Article [260(2) TFEU] is not precluded, in particular where the breach of obligations both has continued for a long period and is inclined to persist.

“This interpretation cannot be countered by reference to the use in Article [260(2) TFEU] of the conjunction ‘or’ to link the financial penalties capable of being imposed. As the Commission and the Danish, Netherlands, Finnish and United Kingdom Governments have submitted, that conjunction may, linguistically, have an alternative or a cumulative sense and must therefore be read in the context in which it is used. In light of the objective pursued by Article [260 TFEU], the conjunction ‘or’ in Article [260(2) TFEU] must be understood as being used in a cumulative sense.” (emphasis added)

The CJEU has therefore had no difficulty in using financial sanctions to get erring member states in line. For instance, in the case of the Commission v Ireland (Case C-374/11), for their failure to comply with regulations concerning waste water treatment systems (septic tanks), Ireland received a lump sum penalty in the amount of €2 million, and a daily penalty of €648,000 representing €12,000 per day for each of the 54 days it took them to achieve full compliance with the judgment after the date of the judgment.

While the EU is set up to run a representative democratic system, the principles of supremacy, direct effect, and state liability as they have been developed by the CJEU and its interpretation of the Treaties have tilted the balance of power in favour of the EU. This shift, of course, has Europhobes frothing at the mouth and wanting to exit the Union.

While the result of BREXIT may shake the core of the EU and force reform, the Economic Community of West African States (ECOWAS) is looking to strengthen its union and foster further cooperation as envisioned by the ECOWAS Treaty. The first ECOWAS Treaty signed in 1975 stated as one of the Community’s aims to “promote co-operation and development in all fields of economic activity particularly in the fields of industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial questions and in social and cultural matters for the purpose of raising the standard of living of its peoples, of increasing and maintaining economic stability, of fostering closer relations among its members and of contributing to the progress and development of the African Continent.”

The Treaty was revised in 1993, but the purpose of economic integration is still the same. Article 3 (1) states, “The aims of the Community are to promote cooperation and integration, leading to the establishment of an economic union in West Africa in order to raise the living standards of its peoples, and to maintain and enhance economic stability, foster relations among Member States and contribute to the progress and development of the African Continent.” One of the vehicles for achieving the aim stated in Article 3 (1) is the establishment of a common market that, like the EC, stands on the pillars of free movement of persons, goods, services and capital (see ECOWAS Treaty Article 3 (2)(d)). Other vehicles are the establishment of an economic union through the adoption of common policies in the economic, financial, social and cultural sectors, and the creation of a monetary union (Article 3 (2)(e)); and the promotion of joint ventures by private sectors enterprises and other economic operators, in particular through the adoption of a regional agreement on cross-border investments.

Achievement of the objectives of the Community requires cooperation amongst member states in different areas. But how is this sort of cooperation encouraged or enforced, if necessary? The ECOWAS Treaty provides for sanctions in Article 77.

Article 77 – Sanctions Applicable for Non-Fulfilment of Obligations

1. Where a Member State fails to fulfil its obligations to the Community, the Authority may decide to impose sanctions on that Member State:
2. These sanctions may include:
3. Suspension of new Community loans or assistance;
4. Suspension of disbursement ongoing Community projects or assistance programmes;

iii. Exclusion from presenting candidates for statutory and professional posts;

1. Suspension of voting rights; and
2. Suspension from participating in the activities of the Community.
3. Notwithstanding the provisions of paragraph 1 of this Article, the Authority may suspend the application of the provisions of the said Article if it is satisfied on the basis of a well supported and detailed report prepared by an independent body and submitted through the Executive Secretary, that the non-fulfilment of its obligations is due to causes and circumstances beyond the control of the said Member State;
4. The Authority shall decide on the modalities for the application of this Article.

How effective are these sanctions in practice, particularly when one considers the power that the big economies like Nigeria and Ghana wield in the region? Are these sanctions an effective deterrent to member states failing to meet their obligations under the Treaty?

PUNCH

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