The Council Legal Service’s assessment of the European Commission’s negotiating mandate and what it means for Nord Stream 2

 On 12 June 2017 the European Commission (EC) asked the Council of the European Union (EU) (Council) for a mandate to negotiate an agreement with the Russian government on the operation of the Nord Stream 2 pipeline. On 27 September 2017 the Council’s legal service delivered an opinion, which stated that there is no legal rationale for granting the mandate and that the decision would be a matter of political choice for which the consent of all member states would be required. By rejecting the applicability of the EU energy acquis (specifically the Third Gas Directive) to Nord Stream 2, the Council’s legal service destroyed the main premise of the EC’s argument that the mandate – and the agreement – is necessary to avoid a ‘conflict of laws’ and a ‘legal void’.

The weakness of its legal position led the EC to seek amendments to the Directive to make it applicable to offshore pipelines from third countries, with a view of creating a legal rationale for a Nord Stream 2 mandate. This suggests that the EU, uncomfortable with the idea of explicitly political decisions being made in respect of energy, is determined to continue using the legal/regulatory framework by amending it to achieve its political objectives.

This Insight analyses several scenarios illustrating ways in which Nord Stream 2 could proceed depending on whether or not the mandate is granted. It argues that as there is no legal basis either for the EU or the member states to stop construction of Nord Stream 2, it is likely to be built under any scenario. At most, should some member states try to argue that there is a basis for rejecting the project on environmental and foreign policy/security grounds, the project could be delayed beyond 2020.

By: Katja Yafimava