Wednesday, 12 March 2008

Lisbon Treaty ratification: Finland without Åland Islands?

Eleven local legislators out of 30 would be enough to fail the required two thirds majority in the Åland Islands, but would Finland desist from ratifying the Treaty of Lisbon if the regional parliament (lagtinget) of the autonomous Åland Islands refrained from giving its consent?

Commission actions to pursue bans on ingrained local customs like ‘snus’ (snuff), a powder tobacco product for oral use, allowed in neighbouring Sweden under a derogation (see ECJ C-344/03), and the spring hunt of water fowl (see ECJ C-343/05) have won the European Union few friends in the province.

A glimpse at letters to the editor in the local Åland newspapers would lead one to believe that the province could either leave the European Union and be better off, or that the province could exact any concessions from Finland ahead of ratification.

On the one hand, there is the special status of the internally autonomous and internationally demilitarised Åland Islands (population 26,000), part of Finland, but with derogations concerning the applicability of the EU treaties.

Within its extensive areas of legislative competence, Åland has to give its consent to new EU legislation, which has led to a number of proceedings for late transposition against Finland as the member state responsible.

On the other hand, if Finland abstained from ratifying the Lisbon Treaty following a possible Åland refusal, the country’s own intention to ratify would be thwarted and the ratification process concerning 490 million EU citizens would grind to a halt.

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The intergovernmental conference (IGC 2007) inserted the following Article 49c on applicability and territorial scope into the Treaty on European Union (TEU), of the amending Treaty of Lisbon (ToL). See OJ 17.12.2007 C 306/40:

60) An Article 49 C shall be inserted:

Article 49c TEU (ToL), after renumbering Article 52 TEU

1. The Treaties shall apply to the Kingdom of Belgium, Republic of Bulgaria, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Grand Duchy of Luxembourg, the Republic of Hungary, the Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, the Portuguese Republic, Romania, the Republic of Slovenia, the Slovak Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland.

2. The territorial scope of the Treaties is specified in Article 311a of the Treaty on the Functioning of the European Union.

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As we see, the territorial scope of the Treaties is specified more exactly in the Treaty on the Functioning of the European Union (TFEU), where Article 311a(4) [TFEU (ToL), after renumbering Article 355(4) TFEU] would take over the the provision on the Åland Islands of Article 299(5) in the current Treaty on establishing the European Community (TEC). (OJ 17.12.2007 C 306/132):

4. The provisions of the Treaties shall apply to the Åland Islands in accordance with the provisions set out in Protocol 2 to the Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden.

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Protocol 2 attached to the 1994 accession treaty spell out the Finnish derogations concerning Åland:

Protocol No 2 on the Åland islands

Taking into account the special status that the Åland islands enjoy under international law, the Treaties on which the European Union is founded shall apply to the Åland islands with the following derogations:

Article 1

The provisions of the EC Treaty shall not preclude the application of the existing provisions in force on 1 January 1994 on the Åland islands on:

- restrictions, on a non-discriminatory basis, on the right of natural persons who do not enjoy hembygdsrätt/kotiseutuoikeus (regional citizenship) in Åland, and for legal persons, to acquire and hold real property on the Åland islands without permission by the competent authorities of the Åland islands;

- restrictions, on a non-discriminatory basis, on the right of establishment and the right to provide services by natural persons who do not enjoy hembygdsrätt/kotiseutuoikeus (regional citizenship) in Åland, or by legal persons without permission by the competent authorities of the Åland islands.

Article 2

(a) The territory of the Åland islands - being considered as a third territory, as defined in Article 3 (1) third indent of Council Directive 77/388/EEC as amended, and as a national territory falling outside the field of application of the excise harmonization directives as defined in Article 2 of Council Directive 92/12/EEC - shall be excluded from the territorial application of the EC provisions in the fields of harmonization of the laws of the Member States on turnover taxes and on excise duties and other forms of indirect taxation. This exemption shall not have any effect on the Community's own resources.

This paragraph shall not apply to the provisions of Council Directive 69/335/EEC, as amended, relating to capital duty.

(b) This derogation is aimed at maintaining a viable local economy in the islands and shall not have any negative effects on the interests of the Union nor on its common policies. If the Commission considers that the provisions in paragraph (a) are no longer justified, particularly in terms of fair competition or own resources, it shall submit appropriate proposals to the Council, which shall act in accordance with the pertinent articles of the EC Treaty.

Article 3

The Republic of Finland shall ensure that the same treatment applies to all natural and legal persons of the Member States in the Åland islands.

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In other words, there are restrictions on EU citizens’ chances to buy property, to establish a business and to provide services in the province, because permissions are required. These restrictions apply to Finnish nationals as well (non-discriminatory).

In VAT matters Åland is a ‘third country’.

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In practice, Åland has excellent opportunities to voice its opinion, during preparation of EU matters within the government from civil servants’ committees to political decision making, including the possibility to send its plead its case in the all-important EU committee of the cabinet. I

In the parliament including Åland has one representative (out of 200, despite its small population), and this MP sits on the important EU committee of the parliament.

Åland has a watchdog attached to the Finnish EU Council representation, and thus direct contact with intergovernmental proceedings (and all other matters of concern flowing through the Council).

The province is extensively consulted, but it can not dictate the final decisions of the state, which is responsible for foreign policy in general and as treaty state in relation to the European Union.

It is not easy to see how Åland could achieve much more as a part of Finland and the European Union, taking into account some measure of proportional representation and influence, but a fudge to defuse the situation is a possibility. Leading Finnish politicians have used conciliatory language, without signalling specific concessions.

The former Supreme Court President and ECJ member Leif Sevón has given interviews, where he has outlined the possible outcomes of Åland’s refusal to consent to ratification.

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When Finland acceded to the European Union, it notified that the treaties apply to Åland in accordance with Protocol No 2 (above).

If Åland rejects the Lisbon Treaty, it is difficult to imagine that Finland would let its own ratification be derailed, although some secessionists seem to think that Finland’s international reputation would be hurt by leaving Åland to its own devices. (Realists may be forgiven for thinking that derailing the ratification process for 490 million Europeans might seem a more worrying aspect for the Finnish political leadership.)

If Åland refused and Finland ratified, a notification on the altered territorial scope would be the probable first official manifestation of the change.

As far as I understand, there are no absolutely watertight rules to follow, if the wording of a treaty does not forsee a later development during the cumbersome ratification process.

In practice, there would probably be a few months of grace between the announcement and the scheduled date for the Lisbon Treaty to enter into force. The situation is resembles the one after Norway withdrew its membership application in 1994.

There would be need for negotiations between Åland and Finland, between Åland and the EU and between Finland and the EU on their future relations. This would then have to be patched together somehow, perhaps in a treaty adaptation and other agreements.

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When I noticed Mark Mardell’s blog on the subject, I tried to post a comment, but there seemed to be a technical hitch, so the comment was probably left hanging. Therefore I am going to post it here, especially since I saw that the Federal Union blog had also mentioned the Åland problem (as the starting point for a discussion on the consequences of unanimity).

Here is the intended comment for Mardell’s blog:

I don't see Finland playing hardball against the EU, but of certain members of the local Åland parliament (lagtinget), where more than one third of 30 provincial legislators would suffice to scupper ratification (consent) on the behalf of Åland, against Finland.

The opposition is trying to wring concessions out of the Finnish government, although it is hard to see what more Åland could reasonably get (without total independence), being heard at every stage of preparation and legislation in EU affairs.

Two Åland issues, with the province represented by Finland, as the member state responsible, have led to defeat in the ECJ, one on the ban on 'snus' tobacco (where Sweden has a derogation) and the spring hunt for water fowl, both deeply felt local affinities.

Hounding these customs through the courts has made the EU few friends in the islands. A healthy reminder, perhaps, of catchwords like 'diversity', 'subsidiarity' and 'proportionality'.



Ralf Grahn