2006/500/EC: Council Decision of 29 May 2006 on the conclusion by the European Community of the Energy Community Treaty

• Articles: 117

Article 1

1.   The Energy Community Treaty is hereby approved on behalf of the European Community.

2.   The text of the Energy Community Treaty is attached to this Decision.

Article 1

1.   By this Treaty, the Parties establish among themselves an Energy Community.

2.   Member States of the European Community may become Participants in the Energy Community pursuant to Article 95 of this Treaty.

Article 2

The President of the Council is hereby authorised to designate the person empowered to notify on behalf of the European Community, the act of approval provided for in Article 1(1) to the Secretary-General of the Council acting as depositary for the Energy Community Treaty pursuant to Article 105 thereof, in order to express the consent of the Community to be bound.

Article 2

1.   The task of the Energy Community shall be to organise the relations between the Parties and create a legal and economic framework in relation to Network Energy, as defined in paragraph 2, in order to:

(a)

create a stable regulatory and market framework capable of attracting investment in gas networks, power generation, and transmission and distribution networks, so that all Parties have access to the stable and continuous energy supply that is essential for economic development and social stability,

(b)

create a single regulatory space for trade in Network Energy that is necessary to match the geographic extent of the concerned product markets,

(c)

enhance the security of supply of the single regulatory space by providing a stable investment climate in which connections to Caspian, North African and Middle East gas reserves can be developed, and indigenous sources of energy such as natural gas, coal and hydropower can be exploited,

(d)

improve the environmental situation in relation to Network Energy and related energy efficiency, foster the use of renewable energy, and set out the conditions for energy trade in the single regulatory space,

(e)

develop Network Energy market competition on a broader geographic scale and exploit economies of scale.

2.   ‘Network Energy’ shall include the electricity and gas sectors falling within the scope of the European Community Directives 2003/54/EC and 2003/55/EC  ( 1 ) .

Article 3

1.   The European Community shall be represented in the Ministerial Council and the Permanent High Level Group set up under the Energy Community Treaty by:

(a)

a Council representative designated by the Member State holding the Presidency of the Council; when this Member State designates as the Council representative a representative of one of the Member States directly affected by Title III of the Energy Community Treaty, it shall do so on the basis of a rotation between those Member States; and

(b)

a Commission representative.

2.   A Commission representative shall act as Vice President of the Ministerial Council and the Permanent High-Level Group.

3.   A Commission representative shall represent the European Community in the Regulatory Board and the Forum set up under the Energy Community Treaty.

Article 3

For the purposes of Article 2, the activities of the Energy Community shall include:

(a)

the implementation by the Contracting Parties of the acquis communautaire on energy, environment, competition and renewables, as described in Title II below, adapted to both the institutional framework of the Energy Community and the specific situation of each of the Contracting Parties (hereinafter referred to as ‘the extension of the acquis communautaire’), as further described in Title II;

(b)

the setting up of a specific regulatory framework permitting the efficient operation of Network Energy markets across the territories of the Contracting Parties and part of the territory of the European Community, and including the creation of a single mechanism for the cross-border transmission and/or transportation of Network Energy, and the supervision of unilateral safeguard measures (hereinafter referred to as ‘the mechanism for operation of Network Energy markets’), as further described in Title III;

(c)

the creation for the Parties of a market in Network Energy without internal frontiers, including the coordination of mutual assistance in case of serious disturbance to the energy networks or external disruptions, and which may include the achievement of a common external energy trade policy (hereinafter referred to as ‘the creation of a single energy market’), as further described in Title IV.

Article 4

1.   The position to be taken by the European Community within the Ministerial Council, the Permanent High-Level Group and the Regulatory Board for decisions as referred to in Article 76 of the Energy Community Treaty pursuant to Articles 82, 84, 91, 92, 96, and 100 thereof, having legal effect, shall be adopted by the Council acting in accordance with the relevant provisions of the Treaty establishing the European Community.

2.   For decisions of the Energy Community falling under Title III of the Energy Community Treaty, and applicable to the territory of one or more Member States, positions adopted under paragraph 1 shall not go beyond the acquis communautaire .

3.   For decisions of the Energy Community falling under Title IV of the Energy Community Treaty, and applicable to the territories to which the Treaty establishing the European Community applies under the conditions laid down therein, positions adopted under paragraph 1 shall not go beyond the acquis communautaire . However, positions adopted under paragraph 1 may go beyond the acquis communautaire with respect to Chapter IV of that Title in the event of special circumstances.

4.   Without prejudice to the relevant procedures of the Treaty establishing the European Community, before the Commission tables a proposal for a measure under Title III of the Energy Community Treaty, it shall duly consult the Member States directly affected by the proposal.

5.   The European Parliament shall be immediately and fully informed of any decision of the Council under paragraph 1 concerning the establishment of the Community position within the Ministerial Council, the Permanent High-Level Group and the Regulatory Board.

6.   The positions of the European Community to be taken within the institutions of the Energy Community shall ensure that the Energy Community does not take any measure having legal effect that

—

conflicts with any part of the acquis communautaire ,

—

creates any discrimination between Member States, or

—

affects the competence and rights of an EU Member State as regards the determination of the conditions for exploiting its energy resources, the choice between energy resources and the general structure of its energy supply.

7.   The positions of the European Community to be taken within the Regulatory Board shall be determined after the European Regulators Group for Electricity and Gas (ERGEG) has been consulted in accordance with Commission Decision 2003/796/EC of 11 November 2003 on establishing the European Regulators Group for Electricity and Gas  ( 2 ) .

Article 4

The Commission of the European Communities (hereinafter referred to as ‘the European Commission’) shall act as coordinator of the three activities described in Article 3.

Article 5

1.   The procedure set out in paragraph 2 shall apply before a position can be taken by the European Community pursuant to Article 4(1) for decisions adopted by the Energy Community pursuant to Article 100(i), (iii) and (iv) of the Energy Community Treaty.

2.   Upon recommendation by the Commission, the Council, acting in accordance with the relevant provisions of the Treaty establishing the European Community, shall authorise the Commission to deliberate within the institutions of the Energy Community. The Commission shall conduct these deliberations in consultation with a special committee appointed by the Council to assist it in this task and within the framework of such directives as the Council may issue to it.

Article 5

The Energy Community shall follow the acquis communautaire described in Title II, adapted to both the institutional framework of this Treaty and the specific situation of each of the Contracting Parties, with a view to ensuring High-Levels of investment security and optimal investments.

Article 6

1.   Without prejudice to paragraph 2, the position of the European Community shall be expressed by the representative of the Commission within the institutions of the Energy Community.

2.   Within the Ministerial Council, the position of the European Community shall be expressed by the representative of the Council for decisions taken under Article 92 of the Energy Community Treaty.

Article 6

The Parties shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty. The Parties shall facilitate the achievement of the Energy Community's tasks. The Parties shall abstain from any measure which could jeopardise the attainment of the objectives of this Treaty.

Article 7

Three years after the entry into force of this Decision, the Commission shall submit to the European Parliament and to the Council a report on the experiences gained from the implementation of this Decision, accompanied, if appropriate, by a proposal for further measures.

Article 7

Any discrimination within the scope of this Treaty shall be prohibited.

Article 8

This Decision shall be published in the Official Journal of the European Union .

Article 8

Nothing in this Treaty shall affect the rights of a Party to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply.

Article 9

The provisions of and the measures taken under this Title shall apply to the territories of the Adhering Parties, and to the territory under the jurisdiction of the United Nations Interim Administration Mission in Kosovo.

Article 10

Each Contracting Party shall implement the acquis communautaire on energy in compliance with the timetable for the implementation of those measures set out in Annex I.

Article 11

The ‘acquis communautaire on energy’, for the purpose of this Treaty, shall mean (i) the Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity, (ii) the Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas, and (iii) the Regulation 1228/2003/EC of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity  ( 2 ) .

Article 12

Each Contracting Party shall implement the acquis communautaire on Environment in compliance with the timetable for the implementation of those measures set out in Annex II.

Article 13

The Parties recognise the importance of the Kyoto Protocol. Each Contracting Party shall endeavour to accede to it.

Article 14

The Parties recognise the importance of the rules set out in Council Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control. Each Contracting Party shall endeavour to implement that Directive.

Article 15

After the entry into force of this Treaty, the construction and operation of new generating plants shall comply with the acquis communautaire on environment.

Article 16

The ‘acquis communautaire on environment’, for the purpose of this Treaty, shall mean (i) Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, as amended by Council Directive 97/11/EC of 3 March 1997 and Directive 2003/35/EC of the European Parliament and of the Council of 26 May 2003, (ii) Council Directive 1999/32/EC of 26 April 1999 relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC, (iii) Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants, and (iv) Article 4(2) of Directive 79/409/EEC of the Council of 2 April 1979 on the conservation of wild birds.

Article 17

The provisions of and the measures taken under this Chapter shall only apply to Network Energy.

Article 18

1.   The following shall be incompatible with the proper functioning of the Treaty, insofar as they may affect trade of Network Energy between the Contracting Parties:

(a)

all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition,

(b)

abuse by one or more undertakings of a dominant position in the market between the Contracting Parties as a whole or in a substantial part thereof,

(c)

any public aid which distorts or threatens to distort competition by favouring certain undertakings or certain energy resources.

2.   Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the rules of Articles 81, 82 and 87 of the Treaty establishing the European Community (attached in Annex III).

Article 19

With regard to public undertakings and undertakings to which special or exclusive rights have been granted, each Contracting Party shall ensure that as from six months following the date of entry into force of this Treaty, the principles of the Treaty establishing the European Community, in particular Article 86 (1) and (2) thereof (attached in Annex III), are upheld.

Article 20

Each Contracting Party shall provide to the European Commission within one year of the date of entry into force of this Treaty a plan to implement Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market and Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport. The European Commission shall present the plan of each Contracting Party to the Ministerial Council for adoption.

Article 21

Within one year of the date of entry into force of this Treaty, the Secretariat shall draw up a list of the Generally Applicable Standards of the European Community, to be submitted to the Ministerial Council for adoption.

Article 22

The Contracting Parties shall, within one year of the adoption of the list, adopt development plans to bring their Network Energy sectors into line with these Generally Applicable Standards of the European Community.

Article 23

‘Generally Applicable Standards of the European Community’ shall refer to any technical system standard that is applied within the European Community, and is necessary for operating network systems safely and efficiently, including aspects of transmission, cross-border connections, modulation and general technical system security standards issued where applicable via the European Committee for Standardization (CEN), the European Committee for Electrotechnical Standardization (Cenelec) and similar normation bodies or as issued by the Union for the Coordination of Transmission of Electricity (UCTE) and the European Association for the Streamlining of Energy Exchanges (Easeegas) for common rule setting and business practices.

Article 24

For the implementation of this Title, the Energy Community shall adopt Measures adapting the acquis communautaire described in this Title, taking into account both the institutional framework of this Treaty and the specific situation of each of the Contracting Parties.

Article 25

The Energy Community may take measures to implement amendments to the acquis communautaire described in this Title, in line with the evolution of European Community law.

Article 26

The provisions of and the measures taken under this Title shall apply to the territories of the Adhering Parties, to the territory under the jurisdiction of the United Nations Interim Administration Mission in Kosovo, and to the territories of the European Community referred to in Article 27.

Article 27

As regards the European Community, the provisions of and the measures taken under this Title shall apply to the territories of the Republic of Austria, of the Hellenic Republic, of the Republic of Hungary, of the Italian Republic, and of the Republic of Slovenia. Upon accession to the European Union of an Adhering Party, the provisions of and the measures taken under this Title shall, without any further formalities, also apply to the territory of that new Member State.

Article 28

The Energy Community shall take additional measures establishing a single mechanism for the cross-border transmission and/or transportation of Network Energy.

Article 29

The Parties shall, within one year of the date of entry into force of this Treaty, adopt security of supply statements describing in particular diversity of supply, technological security, and geographic origin of imported fuels. The statements shall be communicated to the Secretariat, and shall be available to any Party to this Treaty. They shall be updated every two years. The Secretariat shall give guidance and assistance with respect to such statements.

Article 30

Article 29 does not imply a necessity to change energy policies or purchasing practices.

Article 31

The Energy Community shall promote High-Levels of provision of Network Energy to all its citizens within the limits of the public service obligations contained in the relevant acquis communautaire on energy.

Article 32

For this purpose, the Energy Community may take Measures to:

(a)

allow for the universal provision of electricity;

(b)

foster effective demand management policies;

(c)

ensure fair competition.

Article 33

The Energy Community may also make recommendations to support effective reform of the Network Energy sectors of the Parties, including inter alia to increase the level of payment for energy by all customers, and to foster the affordability of Network Energy prices to consumers.

Article 34

The Energy Community may take measures concerning compatibility of market designs for the operation of Network Energy markets, as well as mutual recognition of licenses and measures fostering free establishment of Network Energy companies.

Article 35

The Energy Community may adopt Measures to foster development in the areas of renewable energy sources and energy efficiency, taking account of their advantages for security of supply, environment protection, social cohesion and regional development.

Article 36

In the event of a sudden crisis on the Network Energy market in the territory of an Adhering Party, the territory under the jurisdiction of the United Nations Interim Administration Mission in Kosovo, or a territory of the European Community referred to in Article 27, where the physical safety or security of persons, or Network Energy apparatus or installations or system integrity is threatened in this territory, the concerned Party may temporarily take necessary safeguard measures.

Article 37

Such safeguard measures shall cause the least possible disturbance in the functioning of the Network Energy market of the Parties, and not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen. They shall not distort competition or adversely affect trade in a manner which is at variance with the common interest.

Article 38

The Party concerned shall without delay notify these safeguard measures to the Secretariat, which shall immediately inform the other Parties.

Article 39

The Energy Community may decide that the safeguard measures taken by the Party concerned do not comply with the provisions of this Chapter, and request that Party to put an end to, or modify, those safeguard measures.

Article 40

The provisions of and the measures taken under this Title shall apply to the territories to which the Treaty establishing the European Community applies under the conditions laid down in that Treaty, to the territories of the Adhering Parties and to the territory under the jurisdiction of the United Nations Interim Mission in Kosovo.

Article 41

1.   Customs duties and quantitative restrictions on the import and export of Network Energy and all measures having equivalent effect, shall be prohibited between the Parties. This prohibition shall also apply to customs duties of a fiscal nature.

2.   Paragraph 1 shall not preclude quantitative restrictions or measures having equivalent effect, justified on grounds of public policy or public security; the protection of health and life of humans, animals or plants, or the protection of industrial and commercial property. Such restrictions or measures shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

Article 42

1.   The Energy Community may take Measures with the aim of creating a single market without internal frontiers for Network Energy.

2.   Paragraph 1 shall not apply to fiscal measures, to those relating to the free movement of persons nor to those relating to the rights and interests of employed persons.