“THE COUNCIL OF EUROPE AND ITS HOST STATES: LEGAL AND PRACTICAL ASPECTS”

Address by
Mr Jörg POLAKIEWICZ

Jurisconsult and Director of Legal Advice and Public International Law
(Council of Europe)

The Hague, 19 September 2014

Madam Chair, Dear Liesbeth,

Ladies and Gentlemen,

I am very pleased to address you today and to present some legal and practical aspects of relations between the Council of Europe and its host states.

First of all I would like to thank the Dutch authorities not only for organising this seminar but also for having chosen this theme to close the Dutch Chairmanship of the CAHDI. It is of considerable relevance to states and to international organisations – and in particular to ours.

It is essential for an international organisation to have good relations with its host state. We fully depend on our host state to guarantee our legal status, our effectiveness and, consequently, our reputation.

In the case of the Council of Europe, our principal host state is the country where our headquarters are situated, i.e. France, but we also have offices in some twenty countries, some of which are and some of which are not members of our Organisation.

In my address, I will make a short presentation of the legal texts on which the relations between the Council of Europe and France are founded (I) and subsequently focus on a number of practical examples of how these texts are interpreted and applied (II). Finally I will address the subject of our “other” host states (III).

I. THE LEGAL TEXTS GOVERNING RELATIONS BETWEEN FRANCE AND THE COUNCIL OF EUROPE

There are no specific laws in France governing the legal status of international organisations which have their headquarters in France. The legal basis of these relations is the international agreements granting privileges and immunities to our Organisation [1].

The first of these is the Statute of the Council of Europe, which establishes the principle of the privileges and immunities necessary for the fulfilment of the Organisation’s functions.

Then we have the General Agreement on Privileges and Immunities of the Council of Europe – which, in house, is referred to as the “GAPI”.  This text identifies these privileges and immunities and grants the Council legal personality, which it exercises through its Secretary General. This Agreement applies throughout our member states.

Finally, there is a Special Agreement relating to the Seat of the Council of Europe, a bilateral agreement between the Organisation and its host state, governing practical aspects concerning the seat of the organisation (such as inviolability, the applicable law, access to the premises and the granting of visas).

I should also mention that some of the Council’s organs are entitled to privileges and immunities on the basis of a convention. For example the Convention for the Prevention of Torture offers specific protection for the members of the Anti-Torture Committee as stipulated in the Appendix to the Convention.

The General Agreement on Privileges and Immunities applies in the territory of all member states but also to all of our bodies, including the European Court of Human Rights and the European Directorate for the Quality of Medicine. This obvious fact has not, however, been easily acknowledged in practice.

The European Court of Human Rights is sometimes referred to as a “convention-based body” [2]. Although this is correct it is misleading because it ignores the institutional links between the Council and the Court since the latter was first founded. Despite the fact that the Court was established by a treaty that is distinct from the Statute of the Council of Europe and the fact that all member states of the Council have not always been party to the Convention [3], it was set up as part of the institutional framework of the Council of Europe and is an integral part thereof.

These considerations are by no means theoretical; they played an important role in the case which Mr Michael S. Morgan lodged with New York District Court. When his application to the European Court of Human Rights against Finland [4] was dismissed, this applicant brought a case against the Court itself and the Council of Europe on grounds of aggression, discrimination and incitement to racial hatred. In June 2002, we were obliged to plead and, above all, to justify immunity from jurisdiction before the courts of a non-member country, the United States of America. There is no agreement with the United States acknowledging the Council’s immunity from jurisdiction; nevertheless, under national legislation relating to sovereign immunities (the “Foreign Sovereign Immunities Act” of 1976), the Council of Europe was considered to be “an instrument of the State, controlled directly by Member States”.

In the end, we won the case as the American judge ruled that, given that the Court had been set up by a Council of Europe Convention, its judges were elected by the Parliamentary Assembly of the Council of Europe and an additional protocol to the GAPI (an instrument of the Organisation) recognised the immunity of the judges of the Court, it was an integral part of the Council and was therefore entitled to immunity from jurisdiction [5]. The only negative point was the legal costs, which are very high in the United States (almost €20,000 for a case which was from the outset clearly ill-founded). It would be very much in the Council of Europe’s interests to be registered on the list of international organisations to which the “International Organizations Immunities Act”, a federal law of 1945, applies.

Other simpler cases are also part of our daily work. For example the judges of one of our member states sometimes summon the judges of the European Court to appear before their national courts to explain their decisions. In such cases, we have to write to the ambassador concerned to recall the privileges and immunities of the Council and consequently of the European Court of Human Rights and its judges, especially when they hand down their decisions in Strasbourg.

Relations with our host state are also based on the application of national law. We are quite legitimately subject to a large number of provisions of French law, such as those relating to the safety of buildings or the stocking of certain products. For example, with the authorisation of and a certain degree of oversight by the host state, the European Directorate for the Quality of Medicine stocks products (such as GMOs) which are subject to declaration. Our buildings also contain a certain amount of asbestos, which obliges us to comply with established regulations. Such procedures are carried out with the utmost seriousness and co-operation with the authorities on these issues is optimal.

Finally, some of our bodies have civil society branches and therefore have an institutional basis in national law. For example, some of our activities are implemented by associations governed by the local legislation of Alsace-Moselle. Associations such as the European Roma and Travellers Forum (2004), or the European Association of Schools of Political Studies (2008) are examples. Through such bodies it is possible to work directly with civil society.

II. PRACTICAL QUESTIONS RAISED BY THE APPLICATION OF THE AGREEMENTS

I would like to focus on two practical questions which have posed problems of interpretation: the scope of tax exemptions and access to the CoE headquarters.

Like other international organisations, the Council of Europe benefits from tax exemptions. The General Agreement on Privileges and Immunities of the Council of Europe explicitly provides for exoneration from “all direct taxes”. However, unlike the UN Convention on Privileges and Immunities, from which it is to a large extent derived, it does not include the possibility for the Organisation to be exempt from sales taxes.

This is probably an oversight which was not clarified during the preparatory work on these arrangements. It was soon noticed and partly remedied by the signature of another bilateral agreement with France, containing a single clause on exemption from indirect taxes.

However, the fact that our exemption from indirect taxes is based on a bilateral agreement has had serious consequences.

Tax exemption is based on the principle of the Organisation’s independence but also on the idea that it is unlawful, and contrary to the principle of equality among states, that one state in particular should make undue gain from the activities of an international organisation through taxation.

Exemption from indirect taxes on a bilateral basis soon caused problems, since it meant that the Organisation was unable to take advantage of the common market to which it should have had access. The quandary is and continues to a certain extent to be that we have the choice between buying in France and being exonerated or buying abroad and being faced with a sort of legal vacuum.

Admittedly, EU law has partly overcome this problem: each EU member state has acknowledged the bilateral agreement between France and the Council in European directives and acknowledged that the Organisation is entitled to exemption from indirect taxes. [6]

In practice, however, the matter is more complex. When the Council of Europe buys goods or services in France for its headquarters, it is refunded a posteriori. In other words, we first have to pay the tax and are refunded several months later. On the other hand, when the Council buys from another member of the EU, it must first obtain from the French authorities a certificate of exemption for each purchase in order to be authorised to pay the goods or the service without paying the corresponding taxes. This procedure is cumbersome, time-consuming and offers little incentive.

It has also had a very negative effect on the responsiveness of our departments. They sometimes even decide to pay the VAT, thereby waiving their right to the Organisation’s immunities and privileges, whereas they are in theory entitled to exemption.

In view of the negative consequences for the Organisation’s effectiveness, the French authorities and the Council have recently succeeded in reducing the time taken to obtain exemption certificates from between 6 and 8 weeks to between 1 and 3 weeks. Nevertheless this procedure remains more cumbersome than some of the procedures put in place in other EU member states where we have offices. In these countries we receive a single certificate per year and there are a number of random verifications to which we willingly submit.

The other practical question raised by our exemption from VAT concerns the tax authorities’ definition of “official expenditure” in respect of which VAT may be refunded. The example of the European Directorate for the Quality of Medicine clearly illustrates this problem.

The European Pharmacopeia, which is celebrating its 50th anniversary this year, is a partial agreement of the Council of Europe, in other words an activity in which only some of our member states take part. The partial agreement is based on the 1964 Convention on the Elaboration of a European Pharmacopoeia and the Pharmacopoeia’s main mission is to guarantee the quality of medicines and medical components sold on the European market.

The functioning of the Pharmacopeia poses another interesting problem. This Directorate makes available to it users – mainly laboratories and regulating authorities – paper publications, certificates of conformity and reference standards, i.e. substances and preparations. These reference standards are sold to the laboratories concerned. The question has therefore arisen as to whether these sales could be considered to be commercial activities by analogy with acts iure gestionis to which the jurisdictional immunity of states does usually not apply.

We are admittedly talking about sales, but these sales take place in the context of the Council of Europe’s statutory mission. Although the Council is exempt from VAT when it buys material for establishing and producing reference standards, it is for the buyer to whom these standards are sold to contact the national tax or customs authorities with regard to the payment of duties and taxes, which can in no circumstances be paid by the Council of Europe or deducted from the amount payable. This well-established practice is of direct financial interest to member states as it means that these activities are self-funded. However, we regularly have to point this out to external auditors, who on occasions suggested that the Council should levy a tax to be paid to our host state. In fact the General Agreement does not mention tax exemption on sales but only on purchases.

This example clearly shows that the Council of Europe, including its partial agreements, enjoys immunity in respect of all of its administrative, scientific and technical operations. Although the distinction made with regard to state immunities between acts iure gestionis and acts iure imperii may in the past have made sense from the standpoint of international organisations, it no longer makes sense in the current context where international organisations are seeking to diversify their sources of funding, at the request of their member states. The tax exemptions granted to the Council enable it, as I said before, to remain independent from its member states, including the host state, and, ultimately, to ensure strict equality between them.

In our day-to-day work we are frequently confronted with borderline cases when it comes to complying with our statutory texts, but the latter are applied by our host state on the basis of a certain pragmatism, ongoing dialogue and a mutually respectful headquarters policy.

While on the subject, I would like to mention the matter of access to the headquarters of the Council of Europe.

In the Special Agreement on the Seat, France undertook not to interfere with access to the Council’s buildings in Strasbourg and must, insofar as possible, grant visas to persons coming to the Council of Europe headquarters. These procedures are sometimes cumbersome for the host state. In this regard, I would mention the excellent initiative taken by France when it decided to make provide free visas to anyone attending the World Forum for Democracy, which will take place in Strasbourg in November this year.

Other questions concerning the application of Article 5 of the Special Agreement are less obvious, for example whether experts or other invited persons by the Council enjoy immunity. Or to be more precise, what happens when such a person is subject to an arrest warrant or to sanctions that are applicable on the territory of the host state?

It is of course, first and foremost for the authorities of the host state to interpret and apply the law. I would just like to point out that our host state is often proactive in such matters and allows us to invite some such persons, even to meetings concerning very sensitive matters. It is obvious that France makes a clear distinction between its foreign policy and its headquarters policy and we are extremely grateful to the French authorities for the efforts made to observe this distinction. In the current geopolitical situation, it would be a considerable disadvantage for the Council if it were unable to play its role as a mediator in the difficult situations in some of our member states. By way of example I would mention the participation of the President of the State Duma in recent meetings of the Parliamentary Assembly. Mr Sergey Naryshkin is on the list of Russian leaders on whom sanctions have been imposed by the European Union in the context of the crisis in Ukraine. Nevertheless, the EU decision allows for exceptions with regard to countries hosting international organisations[7]. On the other hand, there seems no clear legal basis in the wording of the Seat Agreement for granting immunity to such persons and this would undoubtedly fall outside the scope of its aims and purpose.

As you can see, these practical arrangements, both fiscal and political, go beyond the letter of the applicable multilateral and bilateral agreements, and the exercise of our privileges and immunities relies more on the common sense of the host state than on a sound legal basis.

III. RELATIONS BETWEEN THE COUNCIL OF EUROPE ITS “OTHER HOST STATES”

The Council of Europe is increasingly present in both its member states and in non-member states. So-called “external” offices have been opened in response to several objectives of the reform currently taking place, for example to strengthen relations between the Organisation and the states where the Council of Europe is implementing major co-operation programmes as well as with other international institutions or organisations (in Brussels, Geneva, Vienna or Warsaw).

The applicable texts (in particular the General Agreement on privileges and immunities) in no way limit the application of the Organisation’s privileges and immunities to France. On the contrary, the General Agreement has been ratified by all member states and is applicable in all of their territories. Nevertheless, given that we extended our presence beyond our Strasbourg headquarters after the Agreement came into force, when we open an external office we traditionally officialise our presence through a bilateral agreement with the state concerned. This is obviously inevitable when an office is opened in a non-member state where the General Agreement is not applicable.

These bilateral agreements basically repeat the provisions set out in the General Agreement. They sometimes also go further by applying, mutatis mutandis, provisions of the Vienna Convention on Diplomatic Relations, such as the obligation for the Council to inform the host state of the appointment of the Head of Office and the specific status of the head of mission. A clause on exemption from indirect taxes is generally included, in particular in member states which are not members of the European Union and which have not officially acknowledged our bilateral agreement with France exempting us from indirect taxes. However, some states have not accepted this provision and the organisation pays indirect taxes in these countries, despite the fact that the activities it carries out there are official activities. The question therefore arises as to whether the principle of equality between member states is respected in this regard.

Another aspect that generally poses problems is the question of the acknowledgement of the privileges and immunities of locally recruited staff, who are among those who most need protection. According to our statutory regulations, it is for the Secretary General to stipulate which members of staff are entitled to privileges and immunities. Some of them are locally recruited staff. However, it is sometimes difficult to get our interlocutors to acknowledge this, despite the fact that they have ratified the General Agreement. With a view to allaying any fears, I would point out that the Council lays great store by its reputation as guarantor of the rule of law. If a staff member were to be prosecuted on the basis of reliable and consistent evidence, it would be our responsibility to apply the rules that make it possible to waive the immunity to which staff members are entitled solely in the course of their official duties.

I cannot address the matter of bilateral agreements without mentioning the example of Belgium. We, like many international organisations, have an office in Brussels. We therefore have an agreement with the Belgian authorities, which every now and again needs to be updated. We are currently negotiating a second protocol to the agreement with the Inter-ministerial Committee for Headquarters Policy, a body comprising representatives of the different ministries dealing with our Representation (finances, social security and of course foreign affairs). Through this committee it is possible to have direct dialogue with all parties concerned and the headquarters policy can be clearly defined and explained. The committee ensures that the negotiations are constructive and clear, even though considerable time is sometimes spent discussing the details, as is the case in all negotiations of this type.

Our experience with these offices is therefore generally positive, even if the same problem keeps cropping up: how to facilitate relations between host states and international organisations with a view to striking a balance between the effectiveness of the work done by international organisations - which are faced with considerable administrative constraints - and the exercise of legitimate prerogatives in the host state, within the limit of the organisation’s privileges and immunities, which are often based on out-dated and incomplete texts.

CONCLUSIONS

The fact that international organisations are legal creations, without any territory or population, makes them somewhat vulnerable. I should also draw your attention to a structural weakness to which reference was already made in Resolution (69) 29 of the Committee of Ministers of the Council of Europe:

“the principle of reciprocity was inapplicable in determining the privileges and immunities to be accorded by a State to an International Organisation and its staff, because the different nature of the parties did not permit Organisations to offer equivalent advantages in return for privileges and immunities granted to them” [8].

The privileges and immunities granted to international organisations are therefore essential to their smooth functioning.

These few examples drawn from the Council of Europe’s practice show that we are increasingly frequently faced with situations that are not covered by the applicable texts and to which we need to find solutions which are both practical and pragmatic but always in keeping with the statutes of our organisation, to ensure its effectiveness in the interests of all its member states.

I should also point out that the implementation of the Organisation’s privileges and immunities is not mainly the responsibility of the Directorate of Legal Advice and Public International Law Direction but of the Council of Europe’s Protocol Department and the same sometimes applies in your countries. I must acknowledge that, in practice, in the Protocol Department’s relations with the Protocol Department of the French Ministry of Foreign Affairs, legal arguments often play only a secondary role and texts, which are sometimes too out-dated, are often soon forgotten or interpreted in the light of our current activities.

The Council of Europe’s experience shows that, as a result of the out-dated and sometimes fragmentary legal framework, good relations with the host state often depend on a certain amount of day-to-day pragmatism, and this obviously has a cost in terms of resources. However, we are fortunate to have a host state which respects our status.

Thank you for your attention.

[1] See Edwige BELLIARD ‘Le cadre général: questions juridiques liées à l’implantation des organisations internationales’ in Gérard CAHIN, Florence POIRAT and Sandra SZUREK (eds.) La France et les organisations internationales (Pedone 2014).

[2]See, for example, G. Ress 'Die Organisationsstruktur internationaler Gerichte, insbesondere des neuen Europäischen Gerichtshofs für Menschenrechte' in Hafner et al. (ed) Liber amicorum für Ignaz Seidl-Hohenveldern (1998) 541 ff.

[3] See the decision of the UK Court of Appeal in the Zoernsch v. Waldock and McNulty case (1964) I WLR 675.

[4] Application No. 41947/98, A.M. v. Finland. The applicant claimed that there had been a violation of Articles 5, 6 and 14 of the Convention, on the grounds that he had been suspected of drug-trafficking and had been sentenced without substantial proof.

[5] Morgan v. Council of Europe and al., 02-CV-0891 (CBA) (E.D.N.Y. Dec. 31, 2002). His appeal was dismissed .

[6] See in particular Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.

[7] See Article 1, paragraph 3 (a) of Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

[8] ‘Privileges and immunities of international organisations, Resolution (69) 29, adopted by the Committee of Ministers of the Council of Europe on 26 September 1969.