Thread by @GeorgePeretzQC

The legal status of the “clarification” (the word used in the statement) of the meaning of Article 10 of the Protocol (State aid) is unclear.

https://twitter.com/pmdfoster/status/1336303503896154116

That is because Article 12 of the Protocol says this.

The 1st sentence of para 4 tells you, for present purposes, that the Commission has all the powers over the UK in relation to Article 10 as it has over Member States under Articles 107-108 TFEU. Powers to find that aid has been granted under Article 10 and to order repayment.

The 2nd sentence tells you that the Court of Justice of the EU has the same jurisdiction in relation to Article 10 as it has in relation to Articles 107-108 in a Member State.

Those powers are: powers to hear and decide appeals from the Commission about decisions to find, or not to find, State aid. Also powers to rule on questions of law when national courts ask it to (and they are sometimes are required to ask): see the reference to Article 267 TFEU.

What does all that mean? Well, it means that the decision as to what Article 10 means is for the CJEU, not for the Commission or the UK, or for the Joint Committee.

If the Commission decides that a measure does not fall under Article 10 (applying the “clarification”) that is not the end of the matter.

A dissatisfied party could appeal to the General Court of the EU on the ground that the “clarification” is not what Article 10 actually means. Or it could argue that before a UK court, seeking a request for a ruling from the CJEU. Either way, the matter gets to the CJEU.

The CJEU might pay attention to the “clarification”. It might not. That is a matter for it. But what it says is law. The clarification is not law.

What about the dispute settlement mechanism? What if the UK says that the CJEU has got the law wrong and goes to the Joint Committee?

The real issue there is that - under Article 174 of the main agreement - questions of interpretation of concepts of EU law are for the CJEU to resolve. So the invocation of the JC just appears to lead straight back to the CJEU.

But that assumes that the questions at issue are “concepts of EU law”. Is that assumption right?

The problem with the answer “no” is that the key Article 10 concept (“measures which affect that trade”) picks up on the “affects trade between Member States” concept in Article 107 TFEU.

And the idea that it is a “concept of EU law” is strengthened by the fact that the CJEU is given power in Article 12 to interpret it: a fact that makes more sense if the concept is one of EU law.

Further, the answer that it is not a concept of EU law gives rise to the obvious risk that the result of the arbitration could differ from the result arrived at by the CJEU, even though Article 12 gives jurisdiction to the CJEU.

In my view, therefore, the JC route would not assist the UK in those circumstances: it just sends the issue back to the CJEU.

So my initial conclusion stands: the “clarification” is not law and does not change the law. What Article 10 means, and what it applies to, are for the courts, and ultimately the CJEU, to decide.

If the UK government does not like the result, there are two answers. 1. You shouldn’t have signed it, then.

2. Instead of spending 2020 prevaricating and veering around on the subsidy issue, you should have used the time to produce a robust UK subsidy regime, agreed to commit to it, and then sought the EU’s agreement to cut back or remove Article 10.

That would have been a far more sensible use of your time than the damaging fiasco of Part 5 of the Internal Market Bill.