[Premium] EC Nord Stream Mandate 'Wrong': Legal Service

The European Commission (EC) has lost a battle to impose further conditions on Nord Stream 2.

The legal service of the Council of the European Union told it in a restricted document dated September 27 that its request for a legal mandate to negotiate the gas pipeline's terms with the Russian Federation was not legally sustainable.

EU vice-president for the energy union, Maros Sefcovic, had surprised the German Chancellor Angela Merkel, when he announced in June that he would appeal for a negotiating mandate to determine the legal position of Nord Stream 2. She said that existing legislation was enough. The mandate could have allowed opponents of Nord Stream 2 to impose conditions on Gazprom's use of the line. But this is no longer an option.

For example, the legal service flatly denied that Nord Stream 2 would be operating in a legal void, and also ruled that the EU cannot determine the import route for gas to a member state – in this case Germany.

It said "the provisions of the draft mandate must not amount to structurally regulating the gas supply of one or several member states from a third country, including via choices of supply routes."

Further the EC was “unable to demonstrate a link between the operation of the Nord Stream 2 pipeline and any substantiated market or security concern for energy supply into the Union” as alternative routes with augmented capacity will only increase the EU's external supply networks," it said.

“The assumption that the opening of supplementary routes or capacities might increase the Union's dependence on its external energy providers is, at the very least, counter intuitive.... [and] It is not the case that the limited jurisdiction of the EU and its member states, on the one hand, and a third country, on the other hand, would lead to a 'legal void'," it said.

The legal service argued that there are no third-party entry or exit points and so the line falls either under Russian or EU jurisdiction at any point, depending on which territory it is in. The pipeline would in any event be subject to the relevant rules of international law, and that there cannot be a conflict of laws, contrary to what the EC claims.

The legal service recalls in the first place that the notions of "legal void" and "conflict of laws" advanced by the EC in support of the need for the envisaged agreement do not imply any legal need to negotiate it but contain mere political arguments. The EC’s draft mandate “does not and cannot aim at precluding the construction or opening of the pipeline.”

The legal service also said the EC had failed to justify why the draft mandate connects Nord Stream 2 to Ukrainian gas transit: "Whether the measures proposed by the EC would actually (…) be "necessary" in order to achieve the EU's energy objectives (…) is impossible to establish on the basis of the EC's analysis“ and “(…) the soundness of the underlying reasoning of the EC remains to be established," it said.

William Powell