Decision no. 2017-749 DC of 31 July 2017

THE CONSTITUTIONAL COUNCIL WAS ASKED TO DECIDE, on 22 February 2017, pursuant to Article 54 of the Constitution, on a matter regarding the authorisation to ratify the Comprehensive Economic and Trade Agreement between Canada, on the one hand, and the European Union and its Member States, on the other, signed on 30 October 2016 in Brussels and approved by the European Parliament on15 February 2017, if this must be preceded by a review of the Constitution. In attendance: Ms. Danielle AUROI, Ms. Laurence ABEILLE, Ms. Sylviane ALAUX, Ms. Brigitte ALLAIN, Mr. Pouria AMIRSHAHI, Mr. François ASENSI, Mr. Christian ASSAF, Ms. Isabelle ATTARD, Mr. Bruno-Nestor AZEROT, Mr. Alexis BACHELAY, Mr. Frédéric BARBIER, Mr. Serge BARDY, Ms. Delphine BATHO, Mr. Laurent BAUMEL, Mr. Philippe BAUMEL, Ms. Huguette BELLO, Ms. Karine BERGER, Mr. Jean-Pierre BLAZY, Mr. Jean-Luc BLEUNVEN, Mr. Alain BOCQUET, Ms. Michèle BONNETON, Ms. Kheira BOUZIANE, Ms. Isabelle BRUNEAU, Ms. Marie-George BUFFET, Ms. Sabine BUIS, Mr. Jean-Jacques CANDELIER, Mr. Jean-Noël CARPENTIER, Mr. Patrice CARVALHO, Mr. Christophe CAVARD, Ms. Nathalie CHABANNE, Mr. Jean-Paul CHANTEGUET, Mr. Gaby CHARROUX, Mr. André CHASSAIGNE, Mr. Pascal CHERKI, Mr. Jean-Michel CLÉMENT, Mr. Sergio CORONADO, Ms. Valérie CORRE, Mr. Jean-Jacques COTTEL, Mr. Marc DOLEZ, Ms. Jeanine DUBIÉ, Ms. Cécile DUFLOT, Mr. Jean-Louis DUMONT, Ms. Laurence DUMONT, Mr. Philippe DURON, Mr. Olivier FALORNI, Mr. Hervé FÉRON, Mr. Christian FRANQUEVILLE, Ms. Jacqueline FRAYSSE, Ms. Geneviève GAILLARD, Mr. Yann GALUT, Mr. Jean-Marc GERMAIN, Mr. Jean-Patrick GILLE, Mr. Joël GIRAUD, Mr. Yves GOASDOUÉ, Ms. Linda GOURJADE, Ms. Édith GUEUGNEAU, Mr. Benoît HAMON, Mr. Mathieu HANOTIN, Mr. Serge JANQUIN, Mr. Régis JUANICO, Mr. Laurent KALINOWSKI, Mr. Philippe KEMEL, Ms. Chaynesse KHIROUNI, Mr. Jacques KRABAL, Mr. Jean-Luc LAURENT, Ms. Annie LE HOUEROU, Mr. Patrick LEMASLE, Ms. Catherine LEMORTON, Mr. Christophe LÉONARD, Mr. Michel LESAGE, Ms. Martine LIGNIÈRES-CASSOU, Mr. Jean-Pierre MAGGI, Mr. Noël MAMÈRE, Ms. Marie-Lou MARCEL, Mr. Alfred MARIE-JEANNE, Ms. Martine MARTINEL, Mr. Jean-René MARSAC, Ms. Véronique MASSONNEAU, Mr. Kléber MESQUIDA, Mr. Pierre-Alain MUET, Mr. Jean-Philippe NILOR, Mr. Philippe NOGUÈS, Mr. Christian PAUL, Mr. Rémi PAUVROS, Ms. Christine PIRES-BEAUNE, Mr. Dominique POTIER, Mr. Michel POUZOL, Mr. Joaquim PUEYO, Ms. Catherine QUÉRÉ, Ms. Valérie RABAULT, Ms. Monique RABIN, Ms. Marie-Line REYNAUD, Mr. Denys ROBILIARD, Mr. Frédéric ROIG, Ms. Barbara ROMAGNAN, Mr. Jean-Louis ROUMÉGAS, Mr. Nicolas SANSU, Ms. Éva SAS, Mr. Gérard SÉBAOUN, Ms. Julie SOMMARUGA, Ms. Suzanne TALLARD, Mr. Stéphane TRAVERT, Ms. Catherine TROALLIC, Ms. Cécile UNTERMAIER, Mr. Michel VERGNIER, Mr. Jean-Michel VILLAUMÉ, Ms. Paola ZANETTI, and in attendance on 20 March 2017: Mr. Paul MOLAC, Mr. Philippe NAILLET and Ms. Aurélie FILIPPETTI, Members of the National Assembly.

In light of the following texts:

• the Constitution, and in particular Article 88-1 thereof;
• Ordinance no. 58-1067 of 7 November 1958 concerning the Organic Law on the Constitutional Council;
• the Treaty on the Functioning of the European Union;
• the Treaty on the European Union;
• the Opinion 2/15 of the European Union Court of Justice of 16 May 2017;
• the Decision (EU) 2017/38 of the Council of 28 October 2016 relating to the provisional application of the Comprehensive Economic and Trade Agreement (CETA) between Canada, on the one hand, and the European Union and its Member States, on the other;
  And having heard the Rapporteurs;
  THE CONSTITUTIONAL COUNCIL WAS ASKED TO DECIDE ON THE FOLLOWING:

1. The Comprehensive Economic and Trade Agreement between Canada, on the one hand, and the European Union and its Member States, on the other, was signed on 30, October 2016. It was approved by the European Parliament on 15 February 2017. The CONSTITUTIONAL COUNCIL was asked to decide if this Agreement contains a clause that is unconstitutional.

2. The applicant Members of Parliament claim that the Agreement introduces binding rules in regard to setting national legal standards insofar as they affect the essential condition of exercising national sovereignty. They also contest the constitutionality of the stipulations in Section F of Chapter 8 of the Agreement regarding investments and claim that the Agreement infringes on the principle of precaution laid out in Article 5 of the Environmental Charter. Finally, they claim that the stipulations related to the provisional application of the Agreement and its termination are unconstitutional.

3. The Agreement contains 30 chapters. Chapter 1 lays out the purpose and the goals of the Agreement and includes all of the general definitions. Chapter 2 relates to national treatment and access to markets for merchandise. Chapter 3 relates to commercial recourse. Chapters 4 and 5 relate to non-tariff obstacles to the trade of merchandise relating to technical regulations and health and safety measures. Chapter 6 contains customs stipulations. Chapter 7 relates to subsidies. Chapter 8 relates to investments and establishes, in its Section F, a mechanism for conflict resolution relating to investments between States and investors. Chapter 9 concerns cross-border trade for services. Chapter 10 includes stipulations relating to the temporary entry and stay of physical persons for professional reasons. Chapter 11 relates to the mutual recognition of professional qualifications. Chapter 12, entitled "Internal Regulations", applies to granting licenses. Chapters 13 to 16 relate to financial services, international maritime shipping services, telecommunications and e-commerce. Chapter 17 relates to competition policy. Chapter 18 relates to State companies, monopolies, and companies benefiting from special rights or privileges. Chapters 19 and 20 relate to public procurement and intellectual property. Chapter 21 relates to regulatory cooperation. Chapters 22 to 24 contain interdisciplinary stipulations regarding trade and sustainable development, trade and work, and trade and the environment. Chapter 25 relates to cooperation and bilateral dialogue. Chapter 26 relates to administrative and institutional provisions. Chapter 27 relates to transparency. Chapter 28 relates to certain exceptions. Chapter 29 institutes procedures for conflict resolution. Chapter 30 contains general and final provisions.

4. These chapters are supplemented by a common interpretive instrument, by thirty-eight declarations, and by annexes. As is indicated in Article 30.1 of the Agreement, the "protocols, annexes, statements, joint declarations, memoranda of agreement, and notes at the bottom of the page” of the Agreement make up an integral part of it.

• ON THE REFERENCE STANDARDS AND THE CONTROL EXERCISED BY THE CONSTITUTIONAL COUNCIL:

5. According to the Preamble to the 1958 Constitution, "the French people solemnly proclaim their attachment to the Rights of Man and the principles of national sovereignty as defined by the Declaration of 1789, confirmed and complemented by the Preamble to the Constitution of 1946".

6. In its Article 3, the Declaration of the Rights of Man and the Citizen of 1789 establishes that “the principle of all sovereignty essentially resides within the nation”. Article 3 of the Constitution of 1958 establishes, in its first Subparagraph, that “national sovereignty belongs to the people, who shall exercise it through their representatives and through referendum”.

7. The Preamble to the Constitution of 1946 establishes, in its fourteenth Subparagraph, that the French Republic is “in compliance with the rules of international public law” and, in its 15th Subparagraph, that “subject to reciprocity, France shall consent to the limits of sovereignty necessary for instituting and defending peace”.

8. In its Article 53, the Constitution of 1958 establishes the existence of “treaties or agreements relating to international organisation”. These treaties or agreements may only be ratified or approved by the President of the Republic if provided for by law.

9. The French Republic participates in the European Union under the conditions set forth in Title XV of the Constitution. Pursuant to Article 88-1 of the Constitution: "The Republic shall participate in the European Union, constituted by States which have freely chosen to exercise some of their powers in common, by virtue of the treaties of the European Union and the Functioning of the European Union, as derived from the Treaty signed in Lisbon on 13 December 2007". It is also dedicated to the existence of a legal order of the European Union integrated within the national legal order and distinct from the international legal order.

10. In confirming the place of the Constitution at the pinnacle of the national legal order, these constitutional provisions enable France to participate in the creation and development of a permanent European organisation vested with legal personality and endowed with decision-making powers as a result of the transfer of competence consented to by the Member States.

11. However, when the commitments signed to this effect or those which are closely related to this goal contain a clause that is unconstitutional, call into question the rights and freedoms guaranteed by the Constitution or run contrary to the essential conditions for the exercise of national sovereignty, authorisation to ratify them may only be granted after amending the Constitution.

12. In the event that the Constitutional Council is called to decide, on the basis of Article 54 of the Constitution, on an agreement that must be signed and entered into both by the European Union and by each of its Member States, it is its responsibility to distinguish between, on the one hand, the stipulations of this agreement that relate to the exclusive competence of the European union pursuant to the commitments previously agreed to by France that led to the transfer of competence agreed to by Member States, and on the other, the stipulations of this agreement that relate to the competence shared between the European Union and the Member States or competence belonging only to Member States.

13. In regard to stipulations of the agreement relating to shared competence between the European Union and the Member States or a competence belonging only to Member States, it is up to the Constitutional Council, as is established in Paragraph 11, to determine if these stipulations contain a clause that is unconstitutional, calls into question the rights and freedoms guaranteed by the Constitution or runs contrary to the essential conditions for the exercise of national sovereignty.

14. However, if the stipulations of the agreement establish exclusive competence of the European Union, the Constitutional Council is only asked to determine if authorisation to ratify this agreement requires amendments to the Constitution, to establish that they do not call into question a rule or a principle inherent to the constitutional identity of France. If this is not called into question, it is up to the judge of the European Union to oversee the compatibility of the agreement with European Union law.

15. It is in terms of these principles that it falls to the Constitutional Council to analyse the Comprehensive Economic and Trade Agreement between Canada, on the one hand, and the European Union and its Member States, on the other, as is defined in Paragraphs 3 and 4.

• ON THE DISTINCTION BETWEEN THE STIPULATIONS OF THE AGREEMENT RELATING TO EXCLUSIVE COMPETENCE OF THE EUROPEAN UNION AND THOSE RELATING TO COMPETENCE SHARED BETWEEN MEMBER STATES:

16. According to its Preamble, the purpose of the agreement is to create a larger and more secure market for the merchandise and services of the parties, and to establish clear, transparent, predictable, and mutually advantageous rules to govern their commercial exchanges and their investments.

17. It follows from the principles in the Opinion of the European Union Court of Justice of 16 May 2017 mentioned herein above, that neither the stipulations of the Agreement appearing in Chapter 8 relating to non-direct investments, nor those that define, in its Section F, the procedure for conflict resolution related to investments between investors and States fall under the exclusive competence of the European Union. The same is true for the stipulations in Chapters 1, 21, 26, 27, 28, 29 and 30, insofar as they relate to competence shared between the European Union and its Member States.

ON THE STIPULATIONS IN CHAPTER 8 THAT RELATE TO COMPETENCE SHARED BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES:

18. Chapter 8 of the Agreement relates to investments. Its Section A contains definitions, sets the scope of the Chapter's application, and contains stipulations relating to its relationship with other Chapters. The stipulations of Chapter 8 apply to “any type of asset that an investor holds or controls, directly or indirectly, and that has the characteristics of an investment, including a certain term as well as other characteristics such as the commitment of capital or other resources, expectations of an increase in profit, or the acceptance of risk”. Section B relates to “establishing investments” and, in particular, deals with access to markets. Section C relates to non-discriminatory treatment. Section D establishes the principles that govern the protection of investments. Section E covers reservations and exceptions. Section F establishes a mechanism for conflict resolution relating to investments between investors and States.

19. Chapter 8 of the Agreement also recognises, for investors entering in the applicable scope of the Agreement, certain substantial rights, such as national treatment, most favoured nation treatment, just and equitable treatment, and protection against direct or indirect expropriations.

20. Furthermore, these investors, in the event of dispute with the investment host State or European Union, are subject to specific procedures for conflict resolution, that include access to a “Court” and a “Court of Appeal”. After a consultation phase as established in Article 8.19, and given the possibility offered by Article 8.20 of a recourse to mediation, the investor may, after a period of 90 days following the request for consultation, request determination of the European Union. According to Article 8.21, the European Union shall determine if it relates to a Member State or the Union itself. According to Article 8.22, once proceedings have been initiated, which must follow several formal requirements, no further proceedings are possible before a tribunal or a court under national or international law. Pursuant to Article 8.25, the defendant consents to the court settling the dispute. The conflict resolution mechanism is composed of two jurisdiction levels, Article 8.27 and 8.28 respectively relating to the court and the court of appeal. The court shall include fifteen members, five from Member States of the European Union, five from Canada, and five from third-party states. The “joint panel”, established in Article 26.1 of the Agreement may nevertheless carry out additional nominations by multiples of three. There are qualification requirements. The terms of the members' mandates are determinate. Applications are examined by a panel of three members. The members of the court shall be remunerated. The decision handed down by the court may be contested before the court of appeals for a restricted list of reasons. Article 8.30 establishes the ethical rules applicable to members of the court and the court of appeals. Articles 8.32 to 8.38 set the procedural rules. Article 8.39 relates to the power of the court's decision, which may grant damages and interests or the return of goods. Article 8.41 relates to the enforcement of the court's sentences. Its Section 4 establishes that "the enforcement of the sentence is governed by the legislation relating to the enforcement of decisions or sentences that is in force where the enforcement is sought ".

21. The applicant Members of the National Assembly claim that the stipulations of Article 8 are contrary to the principle of precaution. Furthermore, they claim that the stipulations of Section F of Chapter 8 are unconstitutional. According to them, the mechanism for conflict resolution that they enact is counter to the essential conditions for exercising national sovereignty and to Article 88-1 of the Constitution insofar as, on the one hand, it allows Canadian investors, at their sole discretion, to fall outside of the competence of French jurisdiction in bringing France before the court established in the Agreement, and on the other hand, that it infringes on the exclusive competence of the European Union Court of Justice. The rules relating to the members making up the court are also counter to the principles of independence and impartiality of jurisdictions. Finally, by granting jurisdictional privilege to Canadian investors that has not been justified by a difference in situation or by reason of public interest, the Agreement infringes on the principle of equality before the law.
    . In regard to respecting the essential conditions for exercising national sovereignty:

22. Firstly, it follows from all of the stipulations of the Agreement that the latter seeks the objective of reducing or removing obstacles to free exchange between the parties. Within this framework, the purpose of Chapter 8 is to contribute to the protection of investments made in the State parties by investors covered under the Agreement, without obstructing any measure that the States may take in regard to control over foreign investments.

23. Secondly, the powers granted to the court and the court of appeals are defined under Article 8.39 of the Agreement and exclusively cover “the payment of pecuniary damages and any applicable interest” and “the return of goods”. Furthermore, regarding provisional measures, the court, pursuant to Article 8.34, may not “order a seizure or prohibit the application of the measure that is alleged to constitute a violation as described in Article 8.23". The court shall not have, under the same terms of the Agreement, any powers of interpretation or nullification of the decisions taken by European Union organisations or its Member States. According to Section 4 of Article 8.41 regarding the enforcement of sentences: “The enforcement of the sentence is governed by the legislation relating to the enforcement of decisions or sentences that is in force where the enforcement is sought”.

24. Thirdly, the mechanism for conflict resolution established in Chapter 8 only applies, according to Article 8.18, in the event of infringement on an established obligation, in regard to non-discriminatory treatment, “in Section C, regarding the expansion, leadership, exploitation, management, maintenance, use, enjoyment, sale, or provision” of its investment, or in regard to the protection of investments, “in Section D, if the investor admits having been subject to loss or damage due to the alleged violation”.

25. Fourthly, on the one hand, it follows from the stipulations of Article 8.27 and 8.28 of the Agreement that the court and the court of appeal shall include members designated by the European Union and by Canada. The latter are designated by the joint panel, the competence and decision-making methods of which are described in Paragraph 15 herein below. The designation of members of the court and the court of appeals are carried out by “mutual consent” between the parties pursuant to Section 3 of Article 26.3. The position of European Union thus must be set by a common agreement between the Member States.

26. On the other hand, Article 8.27 establishes that the “members of the Court possess the required qualifications in their respective countries to be nominated to judicial positions, or are jurists who possess the recognised competencies. They have proven their specialised knowledge in public international law. It is preferable if they possess specialised knowledge specifically in the area of international investment law, international commercial law, and conflict resolution arising from international agreements in regard to investments or international commercial agreements ".

27. Finally, in order to avoid conflict or discrepancies between the courts called under the Agreement and the jurisdictions of national laws, Article 8.22 requires the investor to not initiate proceedings before a national or international jurisdiction regarding the measure that is alleged to be a violation under its claim and, if necessary, to withdraw or abandon any such proceedings that are underway. Furthermore, in order to guarantee the interpretation that the parties make regarding the stipulations of the Agreement, Section 3 of Article 8.31 establishes that the interpretation adopted by the joint panel is binding on the court.

28. Finally, the conditions of the Agreement's scope of application do not prohibit foreign investors from, preferentially, if they wish, bringing the dispute before a national judge rather than the court established in the Agreement.

29. Additionally, in terms of the Agreement's purpose, relating to the powers granted to the court and the court of appeals, their composition, and the scope of application of the conflict resolution mechanism, the stipulations establishing this mechanism do not infringe upon the essential conditions for exercising national sovereignty. On these grounds and those established in Paragraphs 44 to 52, the stipulations of Chapter 8 that do not relate to exclusive competence of the European Union, do in no way infringe on these conditions.
    . Regarding the respect of Article 88-1 of the Constitution:

30. It is the responsibility of the Constitutional Council, asked to decide under Article 54 of the Constitution, to assess the compatibility of an international commitment with France's other international and European commitments. Article 88-1 of the Constitution does not grant to it further competence to monitor the compatibility of an international commitment with the stipulations of the treaties mentioned in this Article. As a result, it is not the responsibility of the Constitutional Council to assess the stipulations of Section F of Chapter 8 regarding the prescriptions of the European Union law that governs the competence of the European Union Court of Justice. The claim of the violation of Article 88-1 of the Constitution should thus be set aside.
    . Regarding respect of the principles of independence and impartiality:

31. Article 16 of the 1789 Declaration provides that: “A society in which the observance of the law is not assured, nor the separation of powers defined, has no Constitution at all”. The principles of independence and impartiality are not dissociable from the exercise of judicial roles.

32. Firstly, according to Section 1 of Article 8.30 of the Agreement regarding “Ethical Rules”: “The members of the court are independent. They are not attached to any government. They do not follow the instructions of any organisation or any government in regard to the matters brought before them relating to the dispute. They shall not take part in deciding on a dispute that could give rise to any direct or indirect conflict of interest. They shall comply with the guidelines of the International Bar Association regarding conflicts of interest in international arbitration, or any additional regulations adopted under Article 8.44.2. Furthermore, upon their nomination, they shall cease to act as legal counsel, witness, or expert designated by any party in any dispute, new or underway, regarding investments that relate to this Agreement or any other international agreement”. Section 2 of the same Article establishes: “A party to a dispute who feels that a member of the Court is in a position of conflict of interest may request of the president of the International Court of Justice to make a decision regarding the objection of this member's nomination. Any opinion on this objection shall be sent to the president of the International Court of Justice within 15 days following the date that the composition of the Court was sent to the party to said dispute, or within 15 days following the date upon which this party became aware of pertinent facts, that it could not reasonably have known at the time that composition was taking place. The objection opinion shall include the grounds for this objection”. According to its Section 4, “upon motivated recommendation of the president of the Court or upon their joint initiative, the Parties may, upon the decision by the Joint Panel … revoke a member of the Court whose conduct is not in compliance with the obligations established in Paragraph 1 and is incompatible with its capacity as a member of the Court”. The stipulations of Article 8.30 shall apply, according to Section 4 of Article 8.28, to the court of appeals.

33. Secondly, Section 5 of Article 8.27 establishes that the members of the court are, in principle, named for a mandate of five years, renewable one time.

34. It follows from the foregoing that the stipulations of Section F of Chapter 8 that govern the procedures for conflict resolution relating to investments between investors and States does not infringe on the principles of independence and impartiality.
    . Regarding the principle of equality before the law:

35. Pursuant to Article 6 of the 1789 Declaration, the law "must be the same for all, whether it protects or punishes". The principle of equality does not prevent the legislature from regulating different situations in different ways, nor does it depart from equality in the public interest, provided that in both cases the resulting difference in treatment is directly related to the subject matter of the law providing for such different treatment.

36. Firstly, the stipulations of Chapter 8 of the Agreement include, in favour of investors who are not residents of the host State of the investment, provisions relating to certain substantial rights. These, which are, in particular, related to national treatment, most favoured nation treatment, just and equitable treatment, and the protection against direct or indirect expropriations, have the sole purpose of guaranteeing these investors the rights that their national investments benefit from. Additionally, Subparagraph A of Paragraph 6 of the common interpretive instrument establishes that the Agreement "shall not lead to granting a more favourable treatment to foreign investors than to national investors". Therefore, the stipulations of Chapter 8 do not, in this matter, create any difference in treatment.

37. However, secondly, Subparagraph F of Chapter 8 creates a difference in treatment between persons investing in France by allowing access to courts that it only grants to Canadian investors.

38. This difference in treatment between Canadian investors and other foreign investors in France, however, responds in two ways to the objective of general interest, on the one hand by reciprocally creating a protective framework for French investors in Canada and, on the other hand, attracting Canadian investors in France.

39. This objective of general interest is directly in line with the purpose of the Agreement, which is to favour exchanges between the parties, the stipulations of Chapter 8 may thus introduce a procedural mechanism of conflict resolution that may apply, in regard to investments made in France, only to Canadian investors.

40. It follows from the foregoing that the stipulations of Chapter 8 of the Agreement do not infringe on the principle of equality before the law.

41. Furthermore, on the grounds established in Paragraphs 56 to 59, the stipulations of Chapter 8 do not infringe on the principle of precaution.

42. It follows from the foregoing that the stipulations of Chapter 8 regarding shared competence between the European Union and the Member States contain no clause that is contrary to the Constitution, does not call into question the guaranteed constitutional rights, and does not infringe on the essential conditions of the exercise of national sovereignty. Therefore, no amendment to the Constitution is required.

• ON THE STIPULATIONS OF CHAPTERS 1, 21, 26, 27, 28, 29, AND 30 REGARDING SHARED COMPETENCE BETWEEN THE EUROPEAN UNION AND THE MEMBER STATES:
  . In regard to respecting the essential conditions for exercising national sovereignty by the stipulations relating to enacting standards:

43. The applicant Members of Parliament claim that the Agreement introduces binding rules in regard to setting national legal standards insofar as they affect the essential condition of exercising national sovereignty. They claim, in particular, that this is the case for certain stipulations of Article 8.4 relating to access to markets in the framework of protecting investments. The inclusion of Canada in the establishment of national standards, specifically laid out in Chapters 21 and 27 of the Agreement, also has the effect of requiring an amendment to the Constitution. The attributes conferred to the joint panel by the Agreement constitutes another infringement on the competence of national standards insofar as it creates an impediment to the ratification of the treaty without prior amendment to the Constitution. The same is true for the provision regarding conflict resolution bearing on the interpretation or application of the Agreement's standards as established in its Chapter 29.

44. Once France ratifies the Agreement and once it enters into force, the rules therein shall be imposed on France. France will be tied by these stipulations that it must in good faith apply in terms of the “rules of public international law”. The Agreement would have, pursuant to Article 55 of the Constitution, an authority that is superior to that of laws. It shall be the responsibility of various State organisations to oversee the application of this Agreement within the framework of their respective competences. Additionally, national judicial order defined by the Constitution imposes on the legislature to respect the stipulations of international treaties and agreements that are ratified or approved. However, it falls to the Constitutional Council to ensure that the capacity to establish the standards of national law is not limited in a way that it would result in infringement on the essential conditions of exercising national sovereignty.

45. Firstly, the Agreement contains stipulations regarding the parties' capacity to legislate and govern. Additionally, according to Section 2 of the common interpretive instrument, the Agreement “preserves the capacity of the European Union and its Member States as well as that of Canada to adopt and apply their own legislative and regulatory provisions in order to govern economic activities in the general interest, to implement the legitimate objectives of public policy, such as the protection and promotion of public health, social services, public education, safety, the environment and public ethics, social or consumer protection, protection of private life and protection of data, as well as the promotion and protection of cultural diversity”. According to Chapter 8 of the Agreement, Article 8.9 establishes that: “1. To apply this Chapter, the Parties reaffirm their right to govern their territories in order to implement the legitimate objectives of public policy, such as the protection and promotion of public health, social services, public education, safety, the environment and public ethics, social or consumer protection, and the promotion and protection of cultural diversity.

• 2. It is understood that the simple act of a Party exercising its regulatory rights, specifically to change its legislation, in a way that may have unfavourable effects on an investment or that interferes with the expectations of an investor, including its hopes for profit, does not constitute a violation of an obligation established in this Section”.

46. Secondly, on the one hand if Section 1 of Article 8.4 prohibits different measures for limiting or restricting in a way that impedes access to the markets covered by the Agreement, these measures would apply to direct investments, which are the exclusive competence of the European Union. On the other hand, Section 2 of Article 8.4 excludes from the scope of application of Section 1 different categories of measures. In particular, these are the measures “that restrain the concentration of ownership with the goal of ensuring fair competition” or that “seek to ensure the conservation and protection of natural resources and the environment”.

47. Thirdly, Chapter 21 stipulates in its Article 21.2 that the parties shall “undertake to develop more cooperation in terms of regulation taking into account their mutual interests” with a view to attain different objectives. However, on the one hand, Section 6 of Article 21.2 establishes that “the Parties may establish cooperation activities in terms of regulation on a voluntary basis. It is understood that a Party is not required to participate in any cooperation activity in terms of regulation, and may refuse or stop cooperating”. On the other hand, the common interpretive instrument stipulates that “this cooperation shall be carried out on a voluntary basis, the regulatory authorities may choose freely to cooperate, without being constrained to do so and without having to implement the results of their cooperation”.

48. Fourthly, the joint panel established in Article 26.1, made up of representatives from the European Union and representatives from Canada, has key functions such as those specified in Section 4 of this Article, in particular those of supervising and facilitating the implementation of the Agreement, promoting its general objectives, supervising the work of the specialised committees, and resolving the differences that may surface in regard to the interpretation or application of the Agreement in certain areas. Section 5 of the same Article 26.1 further confers different options to the joint panel, in particular, those of adopting the interpretation of the Agreement's stipulations that are binding on the courts instituted as per Section F of Chapter 8 and of Chapter 29. Finally, Article 26.3 establishes that the joint panel, in order to reach the objectives of the Agreement, has “decision-making power regarding all matters” in the cases established by the Agreement. Pursuant to Section 2 of this same Article, the decisions taken by the joint panel “are binding upon the Parties”.

49. However, on the one hand, if Section 2 of Article 30.2 of the Agreement grants the joint panel powers to decide on amending protocols and annexes, this competence may not be applied in terms of Annexes 8-A and 8-B of Chapter 8, regarding expropriation and the public debt.

50. On the other hand, the decisions of the joint panel that are binding on the parties may only be adopted, according to Section 3 of Article 26.3, “by mutual consent” between the representatives from the European Union and the representatives from Canada that make up this joint panel. Furthermore, in such an event, the position of the European Union must be established by the Council pursuant to the procedure established in Paragraph 9 of Article 218 of the treaty on the functioning of the European Union mentioned herein above. In this case, according to Declaration no. 19 of the Council of the Member States of 14 January 2017, when a decision of the joint panel falls under the competence of the Member States, the position of the European Union and its Member States in terms of the joint panel shall be “adopted by common agreement” of the Council.

51. Additionally, if an interpretation adopted by the joint panel is binding on the established court under Section F of Chapter 8, the objective of this stipulation is to guarantee that the European Union, its Member States, and Canada, parties to the Agreement, shall not have imposed upon them, by the court, an interpretation that is different than the one that received their consent.

52. Finally, on the one hand, Chapter 29 of the Agreement is limited to, according to the terms of its Article 29.2, instituting a procedure for conflict resolution “relating to the interpretation or application” of these stipulations. On the other hand, the arbitration mechanism established therein and the requirements weighing on the parties -- to take the necessary measures to be in compliance, according to the terms of Chapter 29, with the “conclusions” of the “final report” of the arbitration group -- have the sole objective of overseeing the proper application of the Agreement. Consequently, these stipulations, by themselves, do not have the effect of issuing national law standards.

53. It follows from the foregoing that the stipulations of Chapters 1, 21, 26, 27, 28, 29 and 30 that contain text relating to establishing standards of national law and concern shared competence between the European Union and the Member States contain no clause that is contrary to the Constitution, do not call into question the guaranteed constitutional freedoms and rights, and do not infringe on the essential conditions of the exercise of national sovereignty.
    . Regarding respect of the principle of precaution:

54. The applicant Members of the National Assembly claim that the agreement makes no reference to the principle of precaution and does not impose any such obligation on the parties, including in the case of serious and irreversible risk. The principle of precaution is further infringed upon by several stipulations of the Agreement.

55. Pursuant to Article 5 of the Environmental Charter:
    "Upon the realisation that a damage, even one that is uncertain in terms of scientific knowledge, may seriously and irreversibly affect the environment, the public authorities, by applying the principle of precaution and in their applicable domains, shall oversee procedures for the assessment of risk and adopt proportionate and provisional measures to avoid causing such damage". These provisions, as with all of the rights and responsibilities defined in the Environmental Charter, have constitutional value. Therefore, it falls to the Constitutional Council, asked to decide, pursuant to Article 54 of the Constitution, to determine if an international commitment under its assessment infringes on the principle of precaution.

56. In the first place, in Chapter 22 relating to commerce and sustainable development, the parties to the agreement “recognise that economic development, social development, and the protection of the environment are interdependent and make up the components of sustainable development that are mutually reinforcing, and reaffirm their commitment to promote the development of international commerce in a way that contributes to the objective of sustainable development”. In this regard, the parties seek the following objectives: “To favour sustainable development by increased coordination and integration of their respective policies and measures in terms of work, the environment and commerce … to promote dialogue and cooperation between them with a view to tightening their commercial and economic relationships in a way that supports their respective measures and standards in terms of the protection of work and the environment … to improve the application of their respective rights in terms of work and the environment … to favour consultation and participation of the public in the discussion of issues relating to sustainable development”.

57. Secondly, on the one hand, the absence of express mention of the principle of precaution in the Agreement's stipulations regarding shared competence between the European Union and the Member States does not infringe upon this principle. Furthermore, the decisions of the joint panel taken under the conditions laid out in Paragraphs 48 to 50 herein above are subject to respecting the principle of precaution protected by European Union law, specifically by Article 191 of the Treaty on the Functioning of the European Union.

58. Section 2 of Article 24.8 of the Agreement stipulates: “The parties recognise that, in the event of a risk of serious and irreversible damage, the absence of absolute scientific certitude may not serve as a pretext for delaying the adoption of economically efficient measures that seek to prevent environmental degradation”. These stipulations authorise the parties to take economically efficient measures that seek to prevent environmental degradation in the event of a risk of serious or irreversible damage.

59. Finally, according to Paragraph 9 of the common interpretive instrument “the European Union and its Member States as well as Canada shall ensure and encourage higher levels of environmental protection, and continually improve their legislation and policies in this regard as well as the protection levels on which they are based”. According to its Subparagraph b, the agreement “expressly recognises, for Canada as well as the European Union and its Member States, the right to define their own environmental priorities, establish their own levels of environmental protection, and consequently adopt or modify their legislation and their policies in this regard, while taking into account their international obligations, including those established in multilateral agreements on the environment”.

60. Additionally all of these stipulations are proper for guaranteeing respect for the principle of precaution in Article 5 of the Environmental Charter.

61. It follows from the foregoing that the stipulations of Chapters 1, 21, 26, 27, 28, 29, and 30 relating to shared competence between the European Union and the Member States do not infringe on the principle of precaution.
    . Regarding provisional application of the Agreement:

62. According to Subparagraph A of Section 3 of Article 30.7 of the Agreement: “The Parties may provisionally apply this Agreement from the first day of the month following the date upon which they have been reciprocally informed of accomplishing their respective national obligations and procedures necessary for the provisional application of this Agreement, or on any other date agreed to between the Parties”. According to its Subparagraph C, “a party may end provisional application of this Agreement by written notice to the other Party. The provisional application shall come to an end the first day of the second month following this notification”.

63. The applicant Members of the National Assembly claim that the ability of the Member States to end this provisional application of the Agreement on the basis of these stipulations is uncertain. In terms of this provisional application concerning the stipulations regarding the competence of Member States, this uncertainty calls into question the essential conditions for exercising national sovereignty.

64. On the one hand, given Paragraph 17 of this decision, it follows from the Decision of 28 October 2016 of the Council of the European Union mentioned herein above that no stipulation of the Agreement regarding shared competence between the European Union and the Member States or competence of only the Member States are part of the provisional application decided upon by the parties to the Agreement.

65. On the other hand, as established in Declaration no. 20 of the Council of 14 January 2017, if ratifying the Agreement “definitively fails because of a decision handed down by a Constitutional Court, or following the termination of another constitutional procedure, and an official notification by the government of the State in question, the provisional application should and shall be terminated. The necessary provisions shall be taken pursuant to European Union procedures”.

66. Additionally, provisional application of the Agreement only pertains to stipulations relating to the exclusive competence of the European Union and the Agreement establishes the possibility of suspending this provisional application in the case of the impossibility of one party to ratify it, the stipulations contested by the applicant Members of Parliament do not infringe upon the essential condition of exercising national sovereignty.
    . Regarding the conditions for terminating of the Agreement:

67. According to Article 30.9 of the Agreement: “1. A Party may terminate this Agreement by giving written notice of termination to the Secretary General of the Council of the European Union and to the Department of Foreign Affairs, Trade and Development of Canada, or their respective successors. This Agreement shall be terminated 180 days after the date of this notice. The Party giving termination notice shall also provide a copy of this notice to the joint panel… 2. Notwithstanding Paragraph 1, in the event that the current Agreement is terminated, the provisions of Chapter Eight (investment) shall remain in force for a term of 20 years after the termination date of this Agreement, in regard to the investments carried out before this date”.

68. The applicant Members of Parliament claim that the Agreement is irrevocably binding on France, and this infringes on the essential condition of exercising national sovereignty.

69. The irrevocable participation in an international commitment relating to an inherent domain of national sovereignty infringes on the essential conditions of its exercise.

70. However, on the one hand, the terms of Article 30.9 state that the parties are not irrevocably bound by the Agreement submitted to the Constitutional Council's assessment. On the other hand, the Agreement, in terms of its purpose, does not relate to an inherent domain of national sovereignty.

71. Therefore, the conditions denouncing the Agreement established in the above-mentioned stipulation do not infringe on the essential conditions for exercising national sovereignty.

72. It follows from the foregoing that the stipulations of Chapters 1, 21, 26, 27, 28, 29 and 30 relating to shared competence between the European Union and the Member States contain no clause that is contrary to the Constitution, do not call into question the guaranteed constitutional freedoms and rights, and do not infringe on the essential conditions of the exercise of national sovereignty. Therefore, no amendment to the Constitution is required.

• ON THE OTHER PROVISIONS OF THE AGREEMENT:

73. The other stipulations of the Agreement do not contain any clauses that are unconstitutional, do not call into question constitutionally guaranteed rights and freedoms, do not infringe on the essential conditions for exercising national sovereignty, and moreover, do not call into question any rule or principle inherent to the constitutional identity of France.

74. Therefore, none of the other stipulations of the agreement submitted to the Constitutional Council, pursuant to Article 54 of the Constitution, gives rise to the amendment to the Constitution.

• ON THE TOTALITY OF THE AGREEMENT:

75. On the grounds indicated herein above, the Comprehensive Economic and Trade Agreement between Canada, on the one hand, and the European Union and its Member States, on the other, does not contain unconstitutional clauses.

THE CONSTITUTIONAL COUNCIL RULES:

Article 1. - The Comprehensive Economic and Trade Agreement between Canada, on the one hand, and the European Union and its Member States, on the other, signed on 30 October 2016 in Brussels, does not contain unconstitutional clauses.
Article 2. - This decision shall be published in the Journal Officiel of the French Republic.

Deliberated by the Constitutional Council in its session of 27 July 2017, in attendance: Mr. Laurent FABIUS, Chairman, Ms. Claire BAZY MALAURIE, Mr. Michel CHARASSE, Mr. Valéry GISCARD d'ESTAING, Mr. Jacques HYEST, Mr. Lionel JOSPIN, Ms. Corinne LUQUIENS, Ms. Nicole MAESTRACCI and Mr. Michel PINAULT.

Made public on 28 July 2017.