EU Law

Depending on the degree of limitation of the sovereign powers of the Member States, the EU competence is divided into three types (article 2 of the Treaty on the Functioning of the EU)

In some areas, the European Union has the power to circumvent this classification. For example, the EU’s General foreign and security policy does not fall under any of the three categories of competence listed.

• Exclusive competence

  Within the framework of its exclusive competence, the European Union (its institutions) is vested with the right to carry out legislative activities and to adopt legally binding regulations for States. Member States have the right to adopt acts only to comply with the relevant EU regulations.

  These areas include (part 1 of article 3 of the Treaty on the Functioning of the EU):

  • customs Union;
  • establishment of competition rules necessary for the functioning of the domestic market;
  • monetary policy (only for member States whose currency is the Euro);
  • conservation of marine biological resources as part of the overall fisheries policy;
  • common commercial policy.

  Despite the fact that the above list of areas is quite small and it seems that the EU has exclusive powers in a very narrow range of issues, the EU has been very productive in terms of the final result, if we do not take into account the pidgaluzevogo distribution of norms.

  In the field of external affairs, the EU also has the exclusive competence to conclude international agreements if:

  • such agreements are provided by the legislative act of the Union, or
  • it is essential that the Union be able to exercise its internal competence or
  • its conclusion may affect common rules or alter their scope.

  This is often controversial, regardless of whether a separate international Treaty should be concluded by the EU, which acts independently, or by the European Union together with its member States.

  For example.

  The recent decision of the EU court of Justice on the free trade agreement between the EU and Singapore (Conclusion 2/15) is a good example of the legal challenges faced in determining the competence to conclude an international Treaty. The Court held the Conclusion that although many of the matters regulated in the FTA between the EU and Singapore were within the exclusive competence of the EU, indirect foreign investment fell within the General competence. Therefore, the relevant transaction can only be concluded as a mixed transaction (as well as the Association Agreement between Ukraine and the EU).

• Shared competence

  Shared competence covers areas within which both the EU and Member States can operate. Most EU legislation acts falls under the category of Shared competence. This list is given in article 4 of the Treaty on the Functioning of the EU:

  • domestic market;
  • social policy;
  • economic, social and territorial unity;
  • agriculture, fisheries (except for the conservation of marine biological resources);
  • environment;
  • consumer protection;
  • transport;
  • trans-European networks;
  • energy;
  • space of freedom, security and justice;
  • shared safety issues in health matters (regarding aspects defined in the Treaty on the Functioning of the EU).

  This list is not exhaustive and is based on a residual principle: the areas of competence of the EU that are not covered by its exclusive and subsidiary competence are areas of joint competence.

  Even a very short assessment of the above list makes it clear that most of the EU secondary legislation, to which Ukraine is obliged to bring its legal norms closer, falls under one of these categories. Therefore, it is extremely important to understand how joint competence affects the content of regulations and directives specified in the Association Agreement between Ukraine and the EU.

  Within the Shared competence of both the EU and the Member States, legislation can be adopted. This provision, however, has reservations. Member States may exercise their competence to the extent that the Union has not used its own. At the same time, Member States should exercise their competence to the extent that the Union has decided to end its activities. Thus, competencies are not only transferred from EU Member States, but can also be returned to Member States. This may have consequences for the process of adaptation of EU legislation in Ukraine and affect the efforts of authorities in the process of their implementation.

  The EU legislation acts often consist of General provisions with many gaps that are filled by the national legislator. This means that the Ukrainian authorities have to develop many internal regulations to fill such gaps. Without this work, the legislative framework will be incomplete.

  The determination of which Part (EU or Member States) will adopt legally binding acts in the areas of joint competence is based on the principle of subsidiarity. This means that the EU will act legislatively only if the specific objective cannot be achieved if the member States acted separately. This principle is permanent and affects the content of EU legislation.

  The principle of subsidiarity is tested at many stages of the EU decision-making process. The verification process involves not only EU institutions, but also national parliaments, which have the right to monitor compliance with the principle of subsidiarity.

• Subsidiary competence

  According to article 6 of the Treaty on the Functioning of the EU, the EU subsidiary competence covers the following areas:

  • protection and improvement of human health;
  • industry;
  • culture;
  • tourism;
  • education, training, youth and sports;
  • civil protection;
  • administrative cooperation.

  In these areas, the EU can carry out activities aimed at supporting, coordinating or complementing the actions of Member States, but not replace their competence. In article 2(5) of the Treaty on the functioning of the EU clearly stated that legally binding norms of the EU, adopted on the basis of the provisions of the treaties relating to these areas, should not lead to harmonization of the legislation or regulations in the member States of the EU. Thus, the EU’s competence in these areas is rather limited.