ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (86) 367
Vol. 1986/0164
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Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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COMMISSION OF THE EUROPEAN COMMUNITIES
C0MC86) 367 final
Brussels, 24 July 1986
COMMISSION RECOMMENDATION TO THE COUNCIL
Case for the defence of the Community and i t s Member States with
regard to the cris is affecting the International Tin Council
C0MC86) 367 final
Commission Recommendation to the Council
Case for the defence of the Community and i ts Member States
with regard to the cris is affecting the International Tin Council
1. The International Tin Council (ITC), established by the previous
International Tin Agreements, had i t s membership, powers and functions
confirmed by the Sixth Agreement. It has legal personality in international
law, and on the terr i tory of the host Government - the United Kingdom -
has the privileges and immunities governed by a Headquarters Agreement
and by the International Tin Council (Immunities and Privileges) Order
1972.
2. The Sixth International Tin Agreement was signed by 22 States (including
the ten Member States which constituted the Community at 31 December 1985)
and by the European Economic Community.
The Community is a ful l member of the ITC under Article 56 of the Agreement,
which mentions i t expressly and gives i t the right to vote on al l matters
falling within i ts sphere of competence. Decisions on the management of
the buffer stock, as an instrument of commercial policy, fa l l within this
sphere of competence, and the Community has regularly exercised i ts powers
in this respect.
3. The members of the ITC are responsible for i t s financing, and within
the Community i t was agreed that this responsibility should lie with
the Member States only. They have systematically paid to the ITC all
the Community's contributions, which - in practice - were demanded of
them direct.
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This arrangement seems to be contested by the creditors. It should be
pointed out in this connection that Annex B of the Agreement - which
contains the distribution table - indicates a specific percentage share
of the expenditure for the Community, and this share is then broken
down among the ten Member States.
4. Since 24 October 1985 the ITC has suspended payments for buffer stock
operations, as i ts available funds are practically exhausted. Its debts
to the banks and the London Metal Exchange brokers amount to several
million pounds sterling. One creditor (the Standard Chartered Bank)
has init iated legal proceedings before the High Court of Justice to
have al l the ITC's members, including the European Community, charged
jointly with the ITC. This creditor was given satisfaction by a
settlement through which the ITC placed the remaining quantities of
t in available at i t s disposal. Other creditors have init iated legal
and arbitration proceedings against the ITC alone.
Since i t is obvious that the ITC will no longer be able to honour any
of i ts debts, the banks on the one hand and the brokers on the other
have formed consortia to try and assign financial responsibility for
the ITC's debts to the members of the ITC.
5. It is inevitable, given the Community's legal position within the
ITC and also the advantage to be gained by the creditors in assigning
responsibility to yet another party in a case of such proportions,
that if the consortia decide to take the members of the ITC to court
in Britain, they wilL follow the precedent set by the Standard Chartered
Bank and take the Member States and the Community to court.
6. Such action would undermine the commercial policy measures taken
in the form of the ITC operations on the t in market and on the capital
market linked with the financing of the t in market - and these are measures
which, according to the creditors, were decided on by al l the members
responsible for the commercial policy applied by the ITC. As regards
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intra-Community relations, the Community should therefore assume its
responsibilities in order to cope with the consequences of the commercial
policy measures involved. Given the polit ical arrangements governing
commodity agreements, this responsibility must be borne by stating in a
single voice a common position for the Community and i t s Member States.
The fact that the legal proceedings would implicate at the same level,
within the context of a commodity agreement, the Community's finances
and also those of i t s Member States is another argument for adopting
this course of action.
7. Apart from this legal and polit ical aspect - which is fundamental
as regards intra-Community relations in the sphere of commodity agreements
- there is decidedly a dis tinct advantage to be drawn from organizing
joint action against the claims made by ITC's creditors. The creditors
are preparing to call into question a number of fundamental principles,
which must inevitably be defended on a common basis, as folio· s:
(i) the sovereign or functional immunity of the States;
(i i ) the sovereign or functional immunity of the Community;
( i i i ) the limited or unlimited financial responsibility of members of
international organizations;
(iv) the right of creditors to be subrogated to the international
organization in order to claim from i t s members the resources
which i t requires in order to pursue i t s aims.
If just one of the defendants were to be defeated on one of these points
this would have detrimental consequences for the Community as a whole
and for al l i t s Member States.
For example, if i t was decided not to recognize the Community's sovereign
immunity, this could ultimately call into question the Community's Budget.
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8. In order to express effectively and rapidly the common position
of the Community and of i t s Member States in the relatively short
time (15 days for the Community) allowed under the legal procedure,
the Commission recommends that the Council decide on the principle
of designating a single legal representative (a so l ic i tor together
with a barris ter) representing the Community and i t s Member States.
Under the pol i t ica l arrangement governing commodity agreements, the
Member States which so wish may of course be represented by a
second legal representative whose statements - which will concern
any aspects peculiar to the Member State in question - will remain
s t r i c t ly within the framework of the common position and will be
intended to back up, and expand on, this position and will be
made in agreement with the legal representative of the Community
and a l l i t s Member States.
*
* *
The Commission therefore requests the Council to decide:
(i) that a single sol ic i tor together with a barr is te r represent
and defend the Community and a l l i t s Member States, on the
basis of a common position, in the court cases which might
be brought against them by creditors of the International
Tin Council;
( i i ) that the Member States which so wish may be assisted and
represented, as regards the aspects peculiar to them, by
a second legal representative, whose statements shall
remain s t r i c t ly within the framework of the common position,
shall be designed to back up, and expand on, that position,
and shall be made with the agreement of the legal
representative of the Community and a l l i t s Member States.
Full & Egal Universal Law Academy