4. International Economic Law as a Possible Limit to the Implementation of Unbundling and Unbundling-Related Measures: WTO Law

While it is undisputed that natural gas is a good subject to the GATT (see Andras Lakatos, ‘Overview of the Regulatory Environment for Trade in Electricity’ in Janusz Bielecki and Melaku G Desta (eds), Electricity Trade in Europe – Review of the Economic and Regulatory Changes (Kluwer Law International 2004) 124), there has been a long controversy about the ‘goods characteristics’ of electricity. In contrast to the NAFTA and the Energy Charter Treaty, which explicitly recognize electricity as a good, the situation under the GATT is more complicated. The drafters of the original GATT 1947, which was later incorporated into the WTO framework, did not treat electric power as a commodity. With respect to the general exceptions provision of (now) Article XX GATT, the New York Drafting Committee Report of March 1947 contains the following statement: ‘As it seemed to be generally agreed that electric power should not be classified as a commodity, two delegates did not find it necessary to reserve the right for their countries to prohibit the export of electric power’, see World Trade Organization, GATT Analytical Index: Guide to GATT Law and Practice (Articles I – XXI vol 1, 6th updated edition, 1995) 585. In 1990, a commentator remarked that ‘on balance [the evidence] suggests that GATT trade rules do not apply to electricity’, see André Plourde, ‘Canada’s International Obligations in Energy and the Free-Trade Agreement with the United States’ (1990) 24 Journal of World Trade 35, 36. It seems that the main reasons for this were that electricity is not tangible and could essentially not be stored using available technology at that time. Nowadays, however, it is widely acknowledged that electrical energy, i.e. the output of the electricity generation process, is a good whose trade is governed by the GATT, see Cottier and others (n 1) 215; Christopher Frey, ‘Die Bedeutung des Welthandelsrechts für die Einfuhr von Strom aus Drittländern in den Energiebinnenmarkt’ in Thilo Rensmann and Stefan Storr (eds), Die Energiewende im rechtlichen Mehrebenensystem: Regionale, nationale und internationale Herausforderungen (Verlag Österreich 2015) 114; Lars Albath, Handel und Investitionen in Strom und Gas: Die internationalen Regeln (Schriftenreihe Energie- und Infrastrukturrecht vol 7, Beck 2005) 86–92; WTO, Council for Trade in Services, Energy Services – Background Note by the Secretariat (09 September 1998) S/C/W/52, [9]. More than two thirds of all WTO Members, including Brazil, China, the EU and its Member States, Korea, Mexico, Russia and Saudi Arabia, have undertaken tariff commitments with respect to electricity in their GATT schedules. Electrical energy is classified under the (optional) heading 2716 in the Harmonized System of the World Custom Organization.

WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Report of the Appellate Body (9 September 1997) WT/DS27/AB/R [221]; WTO, Canada – Certain Measures Affecting the Automotive Industry, Report of the Appellate Body (31 May 2000) WT/DS139/AB/R, WT/DS142/AB/R [159].

Article XXVIII(a) WTO, General Agreement on Trade in Services (15 April 1994) 1869 U.N.T.S. 183. See also ibid, Article I:3(a).

Canada – Certain Measures Affecting the Automotive Industry (n 3) [158]; European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 3) [220]; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Report of the Panel (22 May 1997) WT/DS27/R/ECU, WT/DS27/R/USA, WT/DS27/R/MEX [7.280].

Article I:2(a)–(d) GATS (n 4).

Importantly, the reference in Article I:1 GATS to measures affecting ‘trade in services’ does not require the existence of actual services trade between the respondent and the complainant or between the respondent and any other WTO Member. It is sufficient that there may be trade in services through mode 3; see WTO, Argentina – Measures Relating to Trade in Goods and Services, Report of the Panel (30 September 2015) WT/DS453/R [7.85ff]. The GATS disciplines therefore also apply to the entry of service suppliers under mode 3, i.e. service suppliers that seek to establish a commercial presence in the relevant WTO Member; see Martín Molinuevo, Protecting Investment in Services: Investor-State Arbitration versus WTO Dispute Settlement (Global Trade Law Series vol 38, Kluwer Law International 2012) 79–80. Article XXVIII(d) GATS (n 4) explicitly defines ‘commercial presence’ as ‘any type of business or professional establishment, including through (i) the constitution, acquisition or maintenance of a juridical person, or (ii) the creation or maintenance of a branch or a representative office, within the territory of a Member for the purpose of supplying a service’ (emphasis added).

See Articles 9 (OU), 13–14 (ISO) and 17–23 (ITO) of Directive 2009/72/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (13 July 2009) OJ 2009/L 211/55; Articles 9 (OU), 14–15 (ISO) and 17–23 (ITO) of Directive 2009/73/EC of the European Parliament and of the Council concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (13 July 2009) OJ 2009/L 211/94.

See Article 11 of Directive 2009/72/EC (n 8); Directive 2009/73/EC (n 8).

See Article 17 of Regulation (EC) No 714/2009 of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (13 July 2009) OJ 2009/L 211/15; Article 36 of Directive 2009/73/EC (n 8).

Christian Pitschas, ‘Allgemeines Übereinkommen über den Handel mit Dienstleistungen (GATS)’ in Prieß, Hans-Joachim and Georg M Berrisch (eds), WTO-Handbuch (C.H. Beck 2003) [11]; Martin Michaelis, ‘§ 20 Dienstleistungshandel (GATS)’ in Meinhard Hilf and Stefan Oeter (eds), WTO-Recht: Rechtsordnung des Welthandels (2nd edn. Nomos 2010) [23]; Diana Zacharias, ‘Article I GATS’ in Rüdiger Wolfrum, Peter-Tobias Stoll and Clemens Feinäugle (eds), WTO – Trade in Services (Max Planck Commentaries on World Trade Law vol 6. Martinus Nijhoff Publishers 2008) [11]; Matthias Koehler, Das Allgemeine Übereinkommen über den Handel mit Dienstleistungen (GATS): Rahmenregelung zur Liberalisierung des internationalen Dienstleistungsverkehrs unter besonderer Berücksichtigung des grenzüberschreitenden Personenverkehrs von Dienstleistungsanbietern (Schriften zum Internationalen Recht vol 106, Duncker & Humblot 1999) 90.

Zacharias (n 11) [11]; Koehler (n 11) 90.

Emphasis added.

Dietrich Barth, ‘Das Allgemeine Übereinkommen über den internationalen Dienstleistungshandel (GATS)’ [1994] Europäische Zeitschrift für Wirtschaftsrecht 455, 455.

Mireille Cossy, ‘Energy Services under the General Agreement on Trade in Services’ in Yulia Selivanova (ed), Regulation of Energy in International Trade Law: WTO, NAFTA and Energy Charter (Kluwer Law International 2012) 151; Yulia Selivanova, ‘The WTO Agreements and Energy’ in Kim Talus (ed), Research Handbook on International Energy Law (Research Handbooks in International Law. Edward Elgar 2014) 295; Yulia Selivanova, The WTO and Energy: WTO Rules and Agreements of Relevance to the Energy Sector (Issue paper vol 1, International Centre for Trade and Sustainable Development 2007) 21.

See the discussion within the WTO Committee on Specific Commitments, WTO, Committee on Specific Commitments, Report of the Meeting Held on 11 July 2000 – Note by the Secretariat (11 September 2000) S/CSC/M/16, [4–6]; WTO, Committee on Specific Commitments, Report of the Meeting Held on 4 October 2000 – Note by the Secretariat (24 November 2000) S/CSC/M/17, [4–5]; WTO, Committee on Specific Commitments, Report of the Meeting Held on 28 November 2000 – Note by the Secretariat (24 April 2001) S/CSC/M/18/Rev.1, [3–7]; WTO, Committee on Specific Commitments, Report of the Meeting Held on 22 March 2001 – Note by the Secretariat (27 April 2001) S/CSC/M/19, [34–36]. See also Energy Services – Information Note by the Secretariat (n 16) [16].

Cossy (n 17) 161, 166–168; Mireille Cossy, ‘Energy Transport and Transit in the WTO’ in Joost Pauwelyn (ed), Global Challenges at the Intersection of Trade, Energy and the Environment (Center for Economic and Policy Research 2010) 117; Mireille Cossy, ‘Energy Trade and WTO Rules: Reflexions on Sovereignty over Natural Resources, Export Restrictions and Freedom of Transit’ in Christoph Herrmann and Jörg P Terhechte (eds), European Yearbook of International Economic Law 2012 (European Yearbook of International Economic Law vol 3. Springer 2012) 287.

United Nations, Provisional Central Product Classification (1991) ST/ESA/STAT/SER.M/77, 48, 77 (emphasis added).

Ibid 77 (emphasis added).

It is interesting to note that newer versions of the Central Product Classification contain energy services which are carried out on own account. The latest version of the CPC for instance features the item ‘[t]ransmission of electricity (on own account)’, see code 69111 of the United Nations, Central Product Classification, Ver. 2.1 (2015).

Rudolf Adlung and Weiwei Zhang, ‘Trade Disciplines with a Trapdoor: Contract Manufacturing’ (2013) 16 Journal of International Economic Law 383, 387.

Pitschas (n 11) [12]; Cossy (n 17) 153.

WTO, Council for Trade in Services, Energy Services – Background Note by the Secretariat (12 January 2010) S/C/W/311, [53]; Report of the Meeting Held on 11 July 2000 (n 18) [4].

In fact, several authors have taken the view that this is a constitutive element of the concept of ‘service’ within the meaning of the GATS, see Herrmann, Weiß and Ohler (n 29) [838]; Zacharias (n 11) [22]; Koehler (n 11) 35. But see Reimold (n 30) 48–49.

See also Irene Musselli and Simonetta Zarrilli, ‘Oil and Gas Services: Market Liberalization and the Ongoing GATS Negotiations’ (2005) 8 Journal of International Economic Law 551, 562–563 (writing that the distinction based on underlying ownership patterns ‘is sometimes rather controversial’).

Cossy argues that the exclusion of in-house transportation activities has a positive effect on the competitive structure of energy markets. She takes the view that if WTO Members undertake additional commitments on energy services under Article XVIII GATS, such as non-discriminatory third party access with respect to energy transmission networks, ‘companies transporting their own energy goods … would not benefit from GATS competition disciplines’ (see Cossy (n 17) 168).

Put differently, Cossy’s argument seems to be that the TPA commitment could not be invoked by another WTO Member in relation to network access requests by companies seeking to transport their own energy goods. Therefore, there would be an incentive for companies to unbundle in order to benefit from the additional competition-related commitments. In my view, however, the important question is whether the WTO Member undertaking the additional TPA commitment prescribes unbundling domestically or not.

Michaelis (n 11) [27].

Michaelis (n 11) [27].

Herrmann, Weiß and Ohler (n 29) [839]; Pitschas (n 11) [13].

Krajewski (n 36) 71–73.

Musselli and Zarrilli (n 33) 576. See also Albath (n 2) 36, 132–133.

On the ‘dynamic’ scope of application of Article I:3(c) GATS with respect to public services, see Markus Krajewski, ‘Public Services and Trade Liberalization: Mapping the Legal Framework’ (2003) 6 Journal of International Economic Law 341, 358–359.

Krajewski (n 36) 71.

Rudolf Adlung, ‘Public Services and the GATS’ (2006) 9 Journal of International Economic Law 455, 465–466.

Krajewski (n 36) 71.

Zacharias (n 11) [64]; Krajewski (n 36) 71–72.

Krajewski (n 42) 350; Eric H Leroux, ‘What is a “Service Supplied in the Exercise of Governmental Authority” Under Article I:3(b) and (c) of the General Agreement on Trade in Services?’ (2006) 40 Journal of World Trade 345, 352.

Michaelis (n 11) [28]; Herrmann, Weiß and Ohler (n 29) [839].

Frank Schorkopf, ‘“Energie” als Thema des Welthandelsrechts’ in Christian Walter, Stefan Leible and Michael Lippert (eds), Die Sicherung der Energieversorgung auf globalisierten Märkten (Mohr Siebeck 2012) 106; Energy Services – Background Note by the Secretariat (n 2) [1, 72]; Energy Services – Background Note by the Secretariat (n 28) [69]; Peter C Evans, Liberalizing Global Trade in Energy Services (The AEI Press 2002) 34; Matthias Schmidt-Preuß, ‘Energieversorgung als Aufgabe der Außenpolitik?: Rechtliche Aspekte’ [2007] Recht der Energiewirtschaft 281, 285.

WTO, Scheduling of Initial Commitments in Trade in Services: Explanatory Note, MTN.GNS/W/164 (03 September 1993), [16].

Cottier and others (n 1) 223–225.

Cossy (n 17) 154.

Energy Services – Background Note by the Secretariat (n 28) [47].

CPC (n 22) 48.

The planning and construction of a pipeline does not, however, fall under the category ‘transportation of fuels’, see Energy Services – Background Note by the Secretariat (n 28) [45].

See CPC (n 22) 77.

See discussion in Sect. 4.2.

CPC (n 22) 77.

Energy Services – Background Note by the Secretariat (n 2) [12]. See also Evans (n 49) 39; Zarrilli (n 20) 245; Energy Services – Information Note by the Secretariat (n 16) [18].

Energy Services – Background Note by the Secretariat (n 28) [44].

Gamberale (n 16) 282; Energy Services – Background Note by the Secretariat (n 2) [74].

CPC (n 22) 33.

Ibid 38.

Ibid 33.

Ibid 43 (emphasis added).

Cossy (n 17) 153. See also Sect. 4.2.

See Article XI of the Agreement Establishing the World Trade Organization (15 April 1994) 1867 U.N.T.S. 154.

Matthias Herdegen, Principles of International Economic Law (Oxford University Press 2013) 178–179; Peter van den Bossche and Werner Zdouc, Law and Policy of the World Trade Organization (3rd edn, Cambridge University Press 2013) 106–107.

See WTO, European Communities and their Member States – Schedule of Specific Commitments (15 April 1994) GATS/SC/31, including four supplements.

Covering Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom.

See WTO, Council for Trade in Services, Communication from the European Communities and its Member States – Certification: Draft consolidated GATS Schedule (09 October 2006) S/C/W/273.

At the end of 2006, the negotiations with WTO Members and the certification of the EC-25 GATS schedule were concluded. However, the consolidated schedule will only enter into force after the internal decision-making procedures of the EU and its Member States, where applicable, have been completed. So far, this has not been done. Therefore, it is the 1994 schedule, which is currently in force. Furthermore, following two further rounds of enlargement (Bulgaria and Romania in 2007 and Croatia in 2013), the GATS schedules of these three Member States have to be consolidated with that of the EU-25. To this end, negotiations under Article XXI GATS (Modification of Schedules) have to be conducted.

WTO, Croatia – Schedule of Specific Commitments (22 December 2000) GATS/SC/130, 33 (full commitment on ‘Pipeline Transport Services (CPC 713)’ for mode 3 regarding both MA and NT); WTO, Hungary – Schedule of Specific Commitments (15 April 1994) GATS/SC/40, 32 (commitment in the ‘Pipeline Transport’ sector for mode 3 regarding MA and NT, with the sole reservation (for MA) that ‘[s]ervices may be provided through a Contract of Concession granted by the state or the local authority’); WTO, Lithuania – Schedule of Specific Commitments (21 December 2001) GATS/SC/133, 23 (full commitment in the ‘Pipeline Transport (CPC 713)’ sector for mode 3 regarding both MA and NT).

Croatia – Schedule of Specific Commitments (n 76) 12 (full commitment on ‘Services incidental to energy distribution (CPC 887)’ for mode 3 regarding both MA and NT); WTO, Latvia – Schedule of Specific Commitments (22 April 1999) GATS/SC/126, 10 (full commitment on ‘Services incidental to energy distribution (CPC 887)’ for mode 3 regarding both MA and NT); WTO, Slovenia – Schedule of Specific Commitments (30 August 1995) GATS/SC/99, 18 (commitment on ‘Services Incidental to Energy Distribution’ (gas only) for mode 3 regarding both MA and NT, with the following reservation: ‘Public utility exist; concession rights can be granted to the private operators established in the Republic of Slovenia’).

European Communities and their Member States – Schedule of Specific Commitments (n 72) 52–54; WTO, Austria – Schedule of Specific Commitments (15 April 1994) GATS/SC/7, 21; Croatia – Schedule of Specific Commitments (n 76) 18; WTO, Czech Republic – Schedule of Specific Commitments (15 April 1994) GATS/SC/26, 20–21; WTO, Estonia – Schedule of Specific Commitments (05 October 1999) GATS/SC/127, 13; WTO, Finland – Schedule of Specific Commitments (15 April 1994) GATS/SC/33, 22; Hungary – Schedule of Specific Commitments (n 76) 18; Latvia – Schedule of Specific Commitments (n 77) 15; Lithuania – Schedule of Specific Commitments (n 76) 12; WTO, Poland – Schedule of Specific Commitments (15 April 1994) GATS/SC/71, 12–13; WTO, Romania – Schedule of Specific Commitments (15 April 1994) GATS/SC/72, 13; WTO, Slovak Republic – Schedule of Specific Commitments (15 April 1994) GATS/SC/77, 20–21; Slovenia – Schedule of Specific Commitments (n 77) 23; WTO, Sweden – Schedule of Specific Commitments (15 April 1994) GATS/SC/82, 25. In some cases, limitations have been scheduled.

But see Matthias Schmidt-Preuß, ‘Die Kontrolle des Verkaufs bzw. des Erwerbs von Netzen (Erwerb durch Nicht-EU-Ausländer gem. §4b EnWG; Außenwirtschaftsrecht; Fusionskontrolle)’ in Jürgen F Baur, Peter Salje and Matthias Schmidt-Preuß (eds), Regulierung in der Energiewirtschaft: Ein Praxishandbuch (2nd edn. Carl Heymanns Verlag 2016) [97] (who opines that the GATS is not applicable to the unbundling requirements and the certification procedure due to a lack of specific commitments). See also Helmut Lecheler and Claas F Germelmann, Zugangsbeschränkungen für Investitionen aus Drittstaaten im deutschen und europäischen Energierecht (Energierecht vol 1, Mohr Siebeck 2010) 100; Caroline Van den bergh, ‘Reciprocity Clause and International Trade Law’ (2009) 27 Journal of Energy & Natural Resources Law 228, 250–251 (who write state that the EU has not undertaken any commitments on energy services; they seem to ignore energy services that are included in non-energy-specific sub-sectors in the W/120, such as wholesale and retail services of electricity and gas).

European Communities and their Member States – Schedule of Specific Commitments (n 72) 2.

The explanatory note states: ‘Public utilities exist in sectors such as related scientific and technical consulting services, R&D services on social sciences and humanities, technical testing and analysis services, environmental services, health services, transport services and services auxiliary to all modes of transport. Exclusive rights on such services are often granted to private operators, for instance operators with concessions from public authorities, subject to specific service obligations. Given that public utilities often also exist at the sub-central level, detailed and exhaustive sector-specific scheduling is not practical.’

This view is even shared by the European Commission, see European Commission, Commission Proposal for the Modernisation of the Treatment of Public Services in EU Trade Agreements (26 October 2011) TRADE.B.1/SC/am D(2011), 4.

Markus Krajewski, ‘Public Services in Bilateral Free Trade Agreements of the EU’ (2011) 25–26 <http://​papers.​ssrn.​com/​sol3/​papers.​cfm?​abstract_​id=​1964288>. See also Modernisation of the Treatment of Public Services in EU Trade Agreements (n 82) 4.

Market access limitations are automatically considered to also provide a condition or qualification to Article XVII, see Article XX:2 of the GATS (n 4).

Krajewski, ‘Public Services in Bilateral Free Trade Agreements of the EU’ (n 83) 32, 35; Markus Krajewski and Britta Kynast, ‘Impact of the Transatlantic Trade and Investment Partnership (TTIP) on the Legal Framework for Public Services in Europe’ (2014) 25 <http://​papers.​ssrn.​com/​sol3/​papers.​cfm?​abstract_​id=​2576079> accessed 8 May 2016.

But see Moschetta (n 68) 120–123, 126–127 (who writes that although the ownership unbundling measures proposed by the European Commission in 2007 could be considered as restricting or requiring specific types of legal entity (contrary to Article XVI:2(e) GATS) or as limiting the number of service suppliers in the form of numerical quotas (contrary to Article XVI:2(a) GATS), there would be no violation of specific commitments undertaken by the European Community due to the ‘public utilities’ exception).

It should also be pointed out that the horizontal limitation only applies to those EU Member States that have a combined GATS schedule, together with the EU. In contrast, it does not have spillover effects on the self-standing services schedules of more recent Member States, such as Lithuania or Croatia, which have undertaken strong commitments in the energy sector. On this point, see also Erich Vranes, ‘State Measures Protecting Against “Undesirable” Foreign Investment: Issues in EU and International Law’ (2012) 67 Zeitschrift für Öffentliches Recht 639, 669.

In the EU – Energy Package case, however, the Russian Federation has not invoked the EU’s MA and NT commitments on wholesale and retail services (CPC 62271 and CPC 63297) in this respect; see WTO, European Union and its Member States – Certain Measures Relating to the Energy Sector, Request for the Establishment of a Panel by the Russian Federation (28 May 2015) WT/DS476/2. But see WTO, Trade Policy Review – European Union – Minutes of the Meeting (28 November 2013) WT/TPR/M/284/Add.1/Rev.1, 313–314 (where Russia made reference to the EU’s commitments on wholesale trade services).

This is also implied in the considerations by Thomas Cottier, Sofya Matteotti-Berkutova and Olga Nartova, ‘Third Country Relations in EU Unbundling of Natural Gas Markets: The “Gazprom Clause” of Directive 2009/73 EC and WTO Law’ in Dirk Buschle, Simon Hirsbrunner and Christine Kaddous (eds), European Energy Law: Droit européen de l'énergie (Dossier de droit européen vol 22. Helbing Lichtenhahn 2011) 279; Anatole Boute, ‘Energy Trade and Investment Law: International Limits to EU Energy Law and Policy’ in Martha M Roggenkamp and others (eds), Energy Law in Europe – National, EU and International Regulation (3rd edn. Oxford University Press 2016) [3.63].

See also the references cited in footnote 14 (this chapter).

See WTO, Communication from the European Communities and their Member States – GATS 2000: Energy Services (23 March 2001) S/CSS/W/60.

See Sect. 4.4.

In the EU – Energy Package case, the Russian Federation takes the view that all unbundling models contained in Directives 2009/72/EC and 2009/73/EC (ITO, ISO and OU) are inconsistent with the market access obligation under Article XVI GATS, see European Union and its Member States – Certain Measures Relating to the Energy Sector (n 87) 2. See also Moschetta (n 68) 120; Vranes (n 86) 669.

Footnotes omitted.

This interpretation of Article XVI:1 GATS was advocated by Antigua and Barbuda in the US – Gambling case, see WTO, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, Report of the Panel (10 November 2004) WT/DS285/R [3.124, 3.129–3.130, 3.134, 3.142]; United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 63) [66].

In the US – Gambling case, the Appellate Body decided to exercise judicial economy and not pronounce itself on the issue, see United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 63) [256]. Krajewski suggests, referring to ibid [215], that the Appellate Body in fact shared the Panel’s view, namely that the restrictions on market access that are covered by Article XVI GATS are only those explicitly listed in paragraph 2 of the provision, see Markus Krajewski, ‘Playing by the Rules of the Game?: Specific Commitments after US – Gambling and Betting and the Current GATS Negotiations’ (2005) 32 Legal Issues of Economic Integration 417, 431.

United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 95) [6.318]. See also ibid [6.298–9]. Two other Panels simply held that the complainant had failed to meets its burden to present a prima facie case under Article XVI:1 GATS, see WTO, China – Certain Measures Affecting Electronic Payment Services, Report of the Panel (16 July 2012) WT/DS413/R [7.628–7.631]; Argentina – Measures Relating to Trade in Goods and Services (n 7) [7.434].

Krajewski (n 36) 82–85; Aaditya Mattoo, ‘National Treatment in the GATS – Corner-Stone or Pandora’s Box?’ (1997) 31 Journal of World Trade 107, 109; Pierre Sauvé, ‘Assessing the General Agreement on Trade in Services: Half-Full or Half-Empty?’ (1995) 29 Journal of World Trade 125, 132; Leroux (n 94) 256–258; Michaelis (n 11) [47]; Koehler (n 11) 124–125. But see Pitschas (n 11) [109].

Krajewski (n 36) 82; Michaelis (n 11) [52]; Scheduling of Initial Commitments in Trade in Services: Explanatory Note (n 50) [4]; WTO, Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services (GATS), S/L/92 (28 March 2001), [8].

Article XVI:2(d) GATS does not seem to be applicable in the present context.

In US – Gambling, the Appellate Body suggested that the terms ‘monopoly’ and ‘exclusive service supplier’ in Article XVI:2(a) GATS could be defined by reference to Article XXVIII(h) GATS (which provides that ‘monopoly supplier of a service’ means ‘any person, public or private, which in the relevant market of the territory of a Member is authorized or established formally or in effect by that Member as the sole supplier of that service’) and Article VIII:5 GATS (which provides that ‘exclusive service suppliers’ exist where a WTO Member ‘formally or in effect, (a) authorizes or establishes a small number of service suppliers and (b) substantially prevents competition among those suppliers in its territory’), see United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 63) [228–230]. For a discussion of the scope of the terms ‘monopoly supplier of a service’ and ‘exclusive service supplier’, as defined in these provisions, see Sect. 6.​3.​1. What is clear is that the existence of monopoly or exclusive service supplier in the EU energy sector, if any, cannot be attributed to the ownership unbundling requirements in Directives 2009/72/EC and 2009/73/EC, but would be the consequence of the natural monopoly character of gas and electricity transmission networks.

The term ‘economic needs test’ is not legally defined in the GATS. It may however be said that an economic needs test ‘refers to a mechanism controlled by a Member or an entity with delegated power … that allows them to decide whether the entry into the market of new (domestic or foreign) service suppliers is required on economic grounds’ (emphasis added), see Panagiotis Delimatsis and Martín Molinuevo, ‘Article XVI GATS’ in Rüdiger Wolfrum, Peter-Tobias Stoll and Clemens Feinäugle (eds), WTO – Trade in Services (Max Planck Commentaries on World Trade Law vol 6. Martinus Nijhoff Publishers 2008) [49].

Example taken from Mattoo (n 98) 110.

Ibid [6.319–6.355].

Ibid [6.332].

Ibid [232].

Ibid [227].

Ibid [238–239].

Ibid [252].

See in particular Joost Pauwelyn, ‘Rien Ne Va Plus? Distinguishing Domestic Regulation from Market Access in GATT and GATS’ (2005) 4 World Trade Review 131; Federico Ortino, ‘Treaty Interpretation and the WTO Appellate Body Report in US–Gambling: A Critique’ (2006) 9 Journal of International Economic Law 117, 141; Erich Vranes, ‘The WTO and Regulatory Freedom: WTO Disciplines on Market Access, Non-Discrimination and Domestic Regulation Relating to Trade in Goods and Services’ (2009) 12 Journal of International Economic Law 953, 975ff.

Pauwelyn (n 112) 166 (emphasis in the original).

Vranes (n 112) 976f.

It is on this understanding of the US – Gambling case that Moschetta argues that the unbundling requirements in the EU energy sector could violate Article XVI:2(a)–(c) GATS, see Moschetta (n 68) 121–123. See also Vranes (n 86) 669 (who writes that ‘unbundling requirements relating to legal form, organisation and decision-making … may have side effects on market access’ and that in view of the US – Gambling case, ‘there is a risk that other WTO Members could try to challenge the EU regime [i.e. Directive 2009/73/EC] by relying on Art XVI’.

Example taken from Pauwelyn (n 112) 160, 162, 166, 170.

Ibid [6.290, 6.335, 6.352].

Ibid [6.287, 6.338, 6.355].

In contrast, the draft Directives originally proposed by the Commission in 2007 would squarely fall within the ‘zero quota’ concept found in US – Gambling. Article 8a of the Commission’s draft electricity Directive and Article 7a of the Commission’s draft gas Directive provided that, in principle, transmission systems or transmission system operators ‘shall not be controlled by a person or persons from third countries’, see European Commission, Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/54/EC concerning common rules for the internal market in electricity (19 September 2007) COM(2007) 528 final, 29; European Commission, Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/55/EC concerning common rules for the internal market in natural gas (19 September 2007) COM(2007) 529 final, 30. This would have effectively blocked ‘market access to the whole or part of a scheduled sector or sub-sector’ and thus established a ‘zero quota’ for foreign service suppliers wishing to supply electricity/gas transmission services. See on this, without however referring to US – Gambling, Victor van Hoorn, ‘“Unbundling”, “Reciprocity” and the European Internal Energy Market: WTO Consistency and Broader Implications for Europe’ (2009) 1 European Energy and Environmental Law Review 51, 66, 72; Van den bergh (n 79) 251–252.

It is assumed here that the transmission and distribution of electricity falls under the sub-sector of ‘services incidental to energy distribution’, see Sect. 4.4.

It could be questioned whether the ‘means of delivery zero quota’ reasoning from US – Gambling also works in a situation of trade in services through mode 3 (instead of mode 1), but it seems that there are no cogent reasons why it should not. See also the position of the EU and Australia on this issue, WTO, ‘Third Party Written Submission by the European Communities: China – Publications and Audiovisual Products: WT/DS363/R’ (4 July 2008) [46ff] <http://​trade.​ec.​europa.​eu/​doclib/​docs/​2008/​august/​tradoc_​140292.​pdf> accessed 28 January 2016; WTO, ‘Reply of the European Communities to Third Party Questions: China – Publications and Audiovisual Products: WT/DS363/R’ (4 August 2008) 8 <http://​trade.​ec.​europa.​eu/​doclib/​docs/​2008/​august/​tradoc_​140294.​pdf> accessed 28 January 2016; WTO, ‘Australian Responses to Panel Questions to Third Parties: China – Publications and Audiovisual Products: WT/DS363/R’ (11 August 2008) <http://​dfat.​gov.​au/​international-relations/​international-organisations/​wto/​wto-dispute-settlement/​pages/​china-measures-affecting-trading-rights-and-distribution-services-for-certain-publications-and-audiovisual-entertainment-pr.​aspx> accessed 28 January 2016.

For an excellent discussion, see Douglas A Irwin and Joseph Weiler, ‘Measures Affecting the Cross-Border Supply of Gambling and Betting Services (DS 285)’ (2008) 7 World Trade Review 71, 85–89.

I.e. a zero quota on the ‘whole or part of a scheduled (sub-)sector’ or on ‘one, several or all means of delivery’.

Joel P Trachtman, ‘United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services’ (2005) 99 American Journal of International Law 861, 866.

See Bart De Meester, Liberalization of Trade in Banking Services: An International and European Perspective (Cambridge University Press 2014) 227–230 (who states: ‘Arguably, an individual supervisory decision whereby the access of a service supplier to the market of another WTO member is refused amounts to a violation of Article XVI. Indeed, in the light of the decision by the panel and the Appellate Body in US – Gambling, one could conclude that the refusal by a banking supervisor to grant an authorization to supply banking services amounts for this individual applicant to a zero quota. The applicant sees its access to the market refused.’; this interpretation of Article XVI GATS is, however, rejected by De Meester). See also Bart De Meester and Dominic Coppens, ‘Mode 3 of the GATS: A Model for Disciplining Measures Affecting Investment Flows?’ in Zdenek Drabek and Petros C Mavroidis (eds), Regulation of Foreign Investment: Challenges to International Harmonization (World Scientific Studies in International Economics vol 21. World Scientific 2013) 116–118.

Christian Tietje, ‘Beschränkungen ausländischer Unternehmensbeteiligungen zum Schutz vor “Staatsfonds”: Rechtliche Grenzen eines neuen Investitionsprotektionismus’ [2007] Policy Paper on Transnational Economic Law, 4, 8–9 (who states: ‘Sofern in einem Dienstleitungssektor … spezifische Marktzugangsverpflichtungen übernommen wurden … ist es gem. Art. XVI:2 (c) GATS unzulässig, einen entsprechenden Marktzugang eines Investors aus einem anderen WTO-Mitgliedstaat teilweise oder vollständig zu beschränken …’).

See Ulrich Forsthoff, ‘AEUV Art. 49 Niederlassungsfreiheit’ in Eberhard Grabitz, Meinhard Hilf and Martin Nettesheim (eds), Das Recht der Europäischen Union: EUV/AEUV (54^th edn. C.H. Beck 2014) [88–118]; Steffen Hindelang, The Free Movement of Capital and Foreign Direct Investment: The Scope of Protection in EU Law (Oxford University Press 2009) 118; Paul Craig and Gráinne de Búrca, EU Law: Text, Cases, and Materials (5th edn, Oxford University Press 2011) 773–776. For relevant case law, see in particular European Court of Justice, Kraus v Land Baden-Württemberg, Judgment (31 March 1993) C-19/92 [32]; European Court of Justice, Reinhard Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano, Judgment (30 November 1995) C-55/94 [37].

See Georg Ress and Jörg Ukrow, ‘AEUV Art. 63 Freier Kapital- und Zahlungsverkehr’ in Eberhard Grabitz, Meinhard Hilf and Martin Nettesheim (eds), Das Recht der Europäischen Union: EUV/AEUV (54^th edn. C.H. Beck 2014) [158–186]; Hindelang (n 128) 119–122. For relevant case law, see in particular European Court of Justice, Commission v. Portugal, Judgment (4 June 2002) C-367/98 [44–45].

Hindelang (n 128) 115ff.

The ECJ referred inter alia to Commission v. Portugal (n 129) [45–46].

For Article 49 TFEU, see Forsthoff (n 128) [122–124]. For Article 63 TFEU, see Ress and Ukrow (n 129) [225–285].

See also Sect. 4.9.1.

As the prohibitions of the ownership unbundling model work both ways, the criterion could also be whether or not a company exercises, directly or indirectly, control or any right over a transmission system operator or over a transmission system.

European Communities and their Member States – Schedule of Specific Commitments (n 72) 14–16.

Ibid 15–16.

Krajewski (n 36) 92.

Delimatsis and Molinuevo (n 102) [56].

Tania Voon and Andrew Mitchell, ‘Open for Business? China’s Telecommunications Service Market and the WTO’ (2010) 13 Journal of International Economic Law 321, 359; Van den bergh (n 79) 252; van Hoorn (n 120) 66.

Todd Tucker, ‘How to Reform WTO and FTA Rules to Confront Too-Big-To-Fail Banks’ (2011) <https://​www.​citizen.​org/​documents/​memo-gats-conflict-with-bank-size-limits-may-10-2011.​pdf> accessed 24 September 2016.

Ibid.

Ibid 27.

Annex III – Non-Conforming Measures of Chile with Respect to Financial Services, US – Chile Free Trade Agreement (06 June 2003) 42 I.L.M. 1026 (2003), 33 (emphasis added). The corresponding market access provision can be found in Article 12.4 (Market Access for Financial Institutions). Example taken from Tucker, ‘How to Reform WTO and FTA Rules to Confront Too-Big-To-Fail Banks’ (n 149) 14.

See Annex III – Non-Conforming Measures of Chile with respect to Financial Services, Australia – Chile Free Trade Agreement (30 July 2008) <http://​dfat.​gov.​au/​trade/​agreements/​aclfta/​pages/​australia-chile-fta.​aspx> accessed 20 January 2018, 21. The corresponding market access provision can be found in Article 12.5 (Market Access for Financial Institutions).

Annex 10B – Singapore Financial Services Reservations, US – Singapore Free Trade Agreement (06 May 2003) 42 I.L.M. 1026 (2003), 5–6. The corresponding market access provision can be found in Article 10.4 (Market Access for Financial Institutions). Example taken from Tucker, ‘How to Reform WTO and FTA Rules to Confront Too-Big-To-Fail Banks’ (n 149) 14.

WTO, Armenia – Schedule of Specific Commitments (29 April 2004) GATS/SC/137, 22–24.

WTO, Chile – Schedule of Specific Commitments (15 April 1994) GATS/SC/18, 20.

WTO, Lao PDR – Schedule of Specific Commitments (22 April 2013) GATS/SC/150, 12.

Lithuania – Schedule of Specific Commitments (n 76) 14.

WTO, Montenegro – Schedule of Specific Commitments (05 June 2012) GATS/SC/146, 19.

WTO, Slovenia – Schedule of Specific Commitments – Supplement 1 (26 February 1998) GATS/SC/99/Suppl.1, 8.

Krajewski (n 36) 79.

According to Article XX:3 GATS, the schedules of specific commitments form an ‘integral part’ of the GATS. In interpreting the GATS, they can thus be taken into account as ‘context’ within the meaning of Article 31(1) of the Vienna Convention on the Law of Treaties (23 May 1969) 1155 U.N.T.S. 331. In US – Gambling, the Appellate Body held that ‘Members’ Schedules constitute relevant context for the interpretation of subsector 10.D of the United States’ Schedule’, which was, in its view, the ‘logical consequence of Article XX:3’ (see United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 63) [182]). However, in quoting the Panel, it cautioned that the ‘use of other Members’ Schedules as context must be tempered by the recognition that “[e]ach Schedule has its own intrinsic logic, which is different from the US Schedule.”’, see ibid.

Rudolf Adlung and others, ‘Fog in GATS Commitments – Boon or Bane?’ (Staff Working Paper ERSD-2011-04 2011) 12 <https://​www.​wto.​org/​english/​res_​e/​reser_​e/​ersd201104_​e.​pdf> accessed 29 January 2016.

Rudolf Adlung and Martin Roy, ‘Turning Hills into Mountains? Current Commitments Under the General Agreement on Trade in Services and Prospects for Change’ (2005) 39 Journal of World Trade 1161, 1177–1178. See also Adlung and others, ‘Fog in GATS Commitments – Boon or Bane?’ (n 164) 12.

For similar considerations, see ibid 5.

See Krajewski (n 36) 92.

Guidelines for the Scheduling of Specific Commitments under the GATS (n 99) [5].

For a general commentary on this provision, see Munin (n 140) 199–200; Krajewski (n 36) 93–94; Delimatsis and Molinuevo (n 102) [62–66].

Guidelines for the Scheduling of Specific Commitments under the GATS (n 99) [5].

Ibid [7.1395–7.1397].

See Michael Schäfer and Thomas Voland, ‘Staatsfonds: Die Kontrolle ausländischer Investitionen auf dem Prüfstand des Verfassungs-, Europa- und Welthandelsrechts’ [2008] Europäisches Wirtschafts- und Steuerrecht 166, 171 (who conclude that: ‘Eine Beeinträchtigung des Marktzugangs ist gem. Art. XVI:2(f) GATS u.a. dann gegeben, wenn … eine Investition im Einzelfall komplett verboten wird.‘).

See De Meester (n 126) 218ff, and in particular 229 (with respect to Article XVI:2(f) GATS).

It is recalled that the Commission’s proposal for a Third Energy Package would have completely prohibited foreign investment in electricity and gas transmission systems. The draft Directives stated that transmission systems or transmission system operators ‘shall not be controlled by a person or persons from third countries’, see Proposal for a Directive amending Directive 2003/54/EC (n 120) 29; Proposal for a Directive amending Directive 2003/55/EC (n 120) 30. It is important to note that the prohibition on foreign investment in the draft Directives did not refer to an explicit numerical threshold. The lack of such a reference does not, however, dis-apply Article XVI:2(f) GATS. In China – Publications and Audiovisual Products, the Panel also examined a Chinese measure that did not set a clear numerical limitation. In that context, the Panel observed that ‘“holding a majority of shares” means simply that one must hold over 50% of the shares’ (see China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (n 19) [7.1392]; see also De Meester and Coppens (n 126) 115–116). Accordingly, the draft Directives would have constituted a violation of Article XVI:2(f), because ‘shall not be controlled’ effectively implies that foreign service suppliers cannot obtain more than 49% of the shares with voting rights of a transmission system operator (European Commission, Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (no date) OJ 2008/C 95/1, [54, 56]). This results from the definition of the term ‘control’ provided in the draft Directives, which corresponded to the concept of control in the EU Merger Regulation. In this way, the draft Directives would have amounted to a limitation on foreign equity in the form of a maximum percentage of capital that can be held by foreign investors, in violation of Article XVI:2(f) GATS (for the same result, see van Hoorn (n 120) 66; Moschetta (n 68) 121; see also Schmidt-Preuß (n 49) 285).

Delimatsis and Molinuevo (n 102) [64].

Vranes (n 86) 666; Delimatsis and Molinuevo (n 102) [62].

24^th recital of the preamble to Directive 2009/72/EC (n 8); 21^st recital of the preamble to Directive 2009/73/EC (n 8).

Comprehensive Economic and Trade Agreement between the European Union and Canada – Consolidated text (2016) <http://​trade.​ec.​europa.​eu/​doclib/​docs/​2014/​september/​tradoc_​152806.​pdf> accessed 20 January 2018, 43.

E-mail from me to DG Trade (6 February 2015).

Among the rare exceptions are a number of bilateral preferential trade agreements concluded by Korea (with, inter alia, the US, EU, Colombia, Canada and Australia). An understanding appended to each of these PTAs lists several measures which are declared consistent with the applicable market access provision. Interestingly, the list includes, inter alia, ‘regulations that prohibit an enterprise from concurrently holding two or more business licenses to supply different services’. This description covers line-of-business restrictions and thus also ownership unbundling measures.

Energy Services – Background Note by the Secretariat (n 2) [6] (emphasis added).

See Cottier, Matteotti-Berkutova and Nartova (n 88) 279; Alexey S Ispolinov and Tatiana Dvenadtcatova, ‘Принудительное выделение сетевого бизнеса в рамках Третьего Энергопакета ЕС (unbundling): практика применения’ [2014] Закон 111, 120; Monica Waloszyk, Law and Policy of the European Gas Market (Edward Elgar 2014) 70–71; Guillaume Van Der Loo, ‘EU-Russia Trade Relations: It Takes WTO to Tango?’ (2013) 40 Legal Issues of Economic Integration 7, 21; Boute (n 88) [3.63]. The third country certification procedure is also challenged by the Russian Federation in the EU – Energy Package case, see European Union and its Member States – Certain Measures Relating to the Energy Sector (n 87) 3.

Cf. China – Certain Measures Affecting Electronic Payment Services (n 97) [7.641]; China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (n 19) [7.942, 7.956, 7.1272]; European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 5) [7.314].

See Sect. 4.4.

The terminology is adopted from Diebold (n 192) 204ff.

See, for instance, Diebold (n 192) 209–210.

See, sometimes using different terminology, Krajewski (n 36) 106–107; Krajewski and Engelke (n 194) [35]; Kalypso Nicolaïdis and Joel P Trachtman, ‘From Policed Regulation to Managed Recognition in GATS’ in Pierre Sauvé and Robert M Stern (eds), GATS 2000: New Directions in Services Trade Liberalization (Brookings Institution Press 2000) 253–254; Joel P Trachtman, ‘Negotiations on Domestic Regulation and Trade in Services (GATS Article VI): A Legal Analysis of Selected Current Issues’ in Ernst-Ulrich Petersmann and James Harrison (eds), Reforming The World Trading System: Legitimacy, Efficiency, and Democratic Governance (Oxford University Press 2005) 209–210; Diebold (n 192) 209–210.

Nicolaïdis and Trachtman (n 196) 254.

Diebold (n 192) 217–219.

Ibid.

Ibid.

WTO, Argentina – Measures Affecting the Export of Bovine Hides and the Import of Finished Leather, Report of the Panel (19 December 2000) WT/DS155/R [11.168–11.169]; WTO, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, Report of the Panel (6 April 2004) WT/DS276/R [6.164–6.167].

Ibid [7.705].

Ibid [7.706].

Ibid [7.708].

Ibid [6.30–32].

Ibid [6.35ff]. The Appellate Body, however, cautioned that for different reasons, the scope for such a presumption of likeness under the GATS would be more limited than under the GATT.

Diebold (n 192) 195–197.

Ibid [6.29].

Verhoosel (n 218) 60.

Krajewski (n 42) 104.

Herrmann, Weiß and Ohler (n 29) [866].

The issue of likeness of public and private companies has surfaced in WTO dispute settlement practice. In US – Gambling, the United States argued that its State-owned lotteries were unlike the private, non-State suppliers of gambling services of Antigua, see United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 95) [3.154]. In contrast, Antigua and the European Union argued that the ownership structure of a company has no bearing on the likeness of service suppliers, see ibid [3.170, 4.39].

Cossy (n 191) 337.

Although some authors have stressed that distinguishing between public and private companies could be vital in order to protect public services (see Krajewski (n 42) 360–361; Diebold (n 192) 200; Katherine Connolly, ‘Finding Space for Regulatory Autonomy in GATS Article XVII after EC – Seals: Public Services and the ‘Likeness’ of Public and Private Service Providers’ (2015) 42 Legal Issues of Economic Integration 57, 69ff), the structure of the GATS likewise suggests that the public or private nature of a company should play no role in determining likeness. It is recalled that the GATS already contains a clause that indirectly deals with services provided by public entities, namely Article I:3(b) GATS. According to this provision, services supplied in the ‘exercise of governmental authority’ are removed from the scope of application of the GATS. However, and importantly, the GATS governmental service exclusion was not drafted so as to cover a priori all services supplied by State-owned undertakings. Public services are only caught by Article I:3(b) GATS if they are ‘supplied neither on a commercial basis, nor in competition with one or more service suppliers’ (Article I:3(c) GATS). Conversely, services are subject to the GATS disciplines if they are supplied on a commercial basis or in competition with other suppliers, irrespective of whether ownership is in public or private hands; see WTO, Environmental Services – Background Note by the Secretariat (06 July 1998) S/C/W/46, [53] (where the Commission stated with respect to Article I:3 GATS that ‘if services were deemed to be supplied on a commercial basis, then, regardless of whether ownership was in public or private hands, the sector would be subject to the main GATS disciplines and to the negotiation of commitments under Articles XVI and XVII’). Against this background, it appears contradictory to assume that the likeness test operates to the effect that services supplied by public companies are, to a large extent, exempted from GATS disciplines.

This applies to the special ownership unbundling regime for public companies in Article 9(6) the Directives.

This applies to the third-country certification procedure in Article 11 of the Directives.

Cossy (n 191) 337 and footnote 30 (who also writes that Article XXVIII(h) and (l) GATS ‘suggest that the GATS is neutral with respect to ownership’).

Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.35ff]. See also China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (n 19) [7.975].

That the CPC can play a role in determining likeness has been accepted by the WTO dispute settlement organs, see Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.32] (referring to the Panel report in European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 5) [7.322, 7.346]). See also Michaelis (n 11) [67].

The requirements for an exemption from the OU requirements, laid down in Article 17 of Regulation (EC) No 714/2009 (n 10) and Article 36 Directive 2009/73/EC (n 8), seem to relate mainly to the conditions for the supply of services (and not to the service providers).

Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.25] (referring to European Communities – Measures Affecting Asbestos and Asbestos-Containing Products (n 207) [117]; emphasis in the original).

Thomas W Wälde and Andreas Gunst, ‘International Energy Trade and Access to Networks: The Case of Electricity’ in Janusz Bielecki and Melaku G Desta (eds), Electricity Trade in Europe – Review of the Economic and Regulatory Changes (Kluwer Law International 2004) 184–185; Christopher Decker, Modern Economic Regulation: An Introduction to Theory and Practice (Cambridge University Press 2015) 227, 283.

Weiss (n 146) 1211; Herrmann, Weiß and Ohler (n 29) [867]; van den Bossche and Zdouc (n 71) 405, 413.

European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 3) [233]; Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.105].

Krajewski and Engelke (n 194) [42].

China – Certain Measures Affecting Electronic Payment Services (n 97) [7.687]; China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (n 19) [7.1130].

European Commission, ‘Commission Staff Working Paper – Interpretative Note on Directive 2009/72/EC concerning common Rules for the Internal Market in Electricity and Directive 2009/73/EC concerning common Rules for the Internal Market in Natural Gas – The Unbundling Regime’ (22 January 2010) 23 <https://​ec.​europa.​eu/​energy/​sites/​ener/​files/​documents/​2010_​01_​21_​the_​unbundling_​regime.​pdf> accessed 24 September 2016.

Cottier, Matteotti-Berkutova and Nartova (n 88) 279; Waloszyk (n 186) 70–71; Boute (n 88) [3.63].

See, for example, Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part (27 June 2014) OJ 2014/L 260/4, 349; Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part (27 June 2014) OJ 2014/L 261/4, 215.

See Sect. 4.4.

This is highlighted by Cottier, Matteotti-Berkutova and Nartova (n 88) 279; Boute (n 88) [3.63].

See on this Sect. 4.9.

Article XXVIII(a) GATS (n 4) provides that the term ‘measure’ includes decisions and administrative action.

Ibid.

See De Meester (n 126) 233–234.

Ibid [8.144, 8.150].

Ibid [3.101–3.103].

The Panel report in United States – Malt Beverages contains similar reasoning, see GATT, United States – Measures Affecting Alcoholic and Malt Beverages, Report of the Panel (19 June 1992) DS23/R – 39S/206 [5.19].

Ehring (n 255) 924.

Fauchald (n 255) 221.

European Commission, Commission Decision on the exemption of the “Gazelle” interconnector from ownership unbundling within the meaning of Article 9 of Directive 2009/73/EC (01 December 2011) C(2011) 8777 final.

Diebold (n 192) 41.

For an overview, see Robert E Hudec, ‘GATT/WTO Constraints on National Regulation: Requiem for an “Aim and Effects” Test’ (1998) 32 The International Lawyer 619; Diebold (n 192) 75–80; Munin (n 140) 177–178; van den Bossche and Zdouc (n 71) 366–367, 392–393.

Note that the ‘aims and effects’ test has its origin in the likeness analysis under Article III:2 GATT. The ‘aims and effects’ of a measure can, however, also be considered as part of the analysis of ‘treatment no less favourable’, see Cossy (n 191) 347–348.

United States – Measures Affecting Alcoholic and Malt Beverages (n 262) [5.23–5.26, 5.70–5.77]; GATT, United States – Taxes on Automobiles, Report of the Panel (11 October 1994) DS31/R (unadopted) [5.10].

Krajewski (n 36) 160–161.

Ibid 111–112.

Ibid 112.

Ehring (n 255) 924–925.

Munin (n 140) 159; Krajewski and Engelke (n 194) [44]; De Meester and Coppens (n 126) 121–122.

Nicholas DiMascio and Joost Pauwelyn, ‘Nondiscrimination in Trade and Investment Treaties: Worlds Apart or Two Sides of the Same Coin?’ (2008) 102 American Journal of International Law 48, 54, 61–62.

Ibid 61–62 (emphasis added).

De Meester (n 126) 233–234.

Claus-Dieter Ehlermann and Lothar Ehring, ‘WTO Dispute Settlement and Competition Law: Views from the Perspective of the Appellate Body’s Experience’ (2002) 26 Fordham International Law Journal 1505, 1529; De Meester (n 126) 234–235; Bart De Meester, ‘The Global Financial Crisis and Government Support for Banks: What Role for the GATS?’ (2010) 13 Journal of International Economic Law 27, 51.

De Meester (n 126) 235.

Katja Yafimava, The Transit Dimension of EU Energy Security: Russian Gas Transit Across Ukraine, Belarus, and Moldova (Oxford University Press 2011) 127. See also Jürgen F Baur, ‘Ausschließliche Nutzungsrechte an bestimmten Großinvestitionen im Gas- und im Elektrizitätsbereich’ in Jürgen F Baur and others (eds), Festschrift für Gunther Kühne zum 70. Geburtstag (Verlag Recht und Wirtschaft 2009) 70–71; Katja Yafimava, ‘Transit: The EU Energy Acquis and the Energy Charter Treaty’ in Kim Talus (ed), Research Handbook on International Energy Law (Research Handbooks in International Law. Edward Elgar 2014) 606. The discretion on the part of NRAs and the European Commission is also criticized by the Russian Federation, see European Union and its Member States – Certain Measures Relating to the Energy Sector (n 87) 4; Trade Policy Review – European Union (n 87) 313.

Or, for that matter, under the TPA-related exemption regime in the Second Energy Package.

See also in this connection the decision-making practice concerning the notion of ‘interconnector’ in the Gas Directive in Sect. 4.8.1.1.

Some authors have suggested that the infrastructure-related exemption regime is discriminatory; see, for example, Ivan Gudkov, ‘Газовый диалог России и ЕС: взаимодействие и конфликт международного и европейского права’ [2014] Научный журнал Российского газового общества 49, 53.

Article 36(1)(a)–(e) of Directive 2009/73/EC (n 8); Article 17(1)(a)–(f) of Regulation (EC) No 714/2009 (n 10).

Ortino (n 280) 185–186.

Ortino (n 280) 179.

See footnotes 279–281 (this chapter) and accompanying text.

See Sect. 2.​3.​3.​2.

European Commission, Commission Decision on the exemption of ElecLink Limited under Article 17 of Regulation (EC) No. 714/2009 for an electricity interconnector between France and Great Britain (28 July 2014) C(2014) 5475 final.

European Commission, Commission Decision on the exemption of Adria Link s.r.l. (Italy), Holding Slovenske Elektrarne d.o.o. (Slovenia) and E3 d.o.o. (Slovenia) under Article 17 of Regulation (EC) No. 714/2009 for two electricity interconnectors between Italy and Slovenia (17 December 2014) C(2014) 9904 final.

See ibid [5.336] (emphasis in the original). The Appellate Body made these statements in applying the chapeau of Article XX GATT.

WTO, United States – Certain Country of Origin Labelling (COOL) Requirements, Reports of the Appellate Body (29 June 2012) WT/DS384/AB/R, WT/DS386/AB/R [270] (citing Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef (n 240) [149]).

See also Ortino (n 280) 186.

Exemptions for LNG terminals and gas storage facilities are excluded from the analysis.

See European Commission, Commission Decision on the exemption of the Trans Adriatic Pipeline from the requirements on third party access, tariff regulation and ownership unbundling laid down in Articles 9, 32, 41(6), 41(8) and 41(10) of Directive 2009/73/EC (16 May 2013) C(2013) 2949 final.

Commission Decision – Exemption of the Gazelle interconnector (n 265).

European Commission, Commission Decision on the exemption of the Slovakian-Hungarian natural gas interconnector from ownership unbundling rules in Article 9 of Directive 2009/73/EC (17 September 2013) C(2013) 6159 final.

Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.106]; European Communities – Measures Prohibiting the Importation and Marketing of Seal Products (n 305) [5.117].

The non-discrimination disciplines in GATT and GATS are, ultimately, about discrimination based on origin; see Joost Pauwelyn, ‘Comment: The Unbearable Lightness of Likeness’ in Marion Panizzon, Nicole Pohl and Pierre Sauvé (eds), GATS and the Regulation of International Trade in Services (Cambridge University Press 2008).

See Sect. 3.​3.

With respect to Article 9(6) of the Directives, the Commission stated that ‘the reason for the obligation to strictly separate the public bodies is to ensure independence with regard to transmission on the one hand and generation and supply on the other’; see European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – the Netherlands – Certification of TenneT TSO B.V. (01 July 2013) C(2013) 4206 final, 4; European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 715/2009 and Article 10(6) of Directive 2009/73/EC – the Netherlands – Certification of Gas Transport Services B.V. (01 July 2013) C(2013) 4205 final, 4.

According to Article XXVIII(g) GATS (n 4), a ‘service supplier’ is defined as ‘any person that supplies a service’, which includes natural and juridical persons (see lit (j)). A ‘juridical person’, in turn, means ‘any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association’ (see lit (l)).

Article 37(6)(a) in conjunction with 36^th recital of the preamble to Directive 2009/72/EC (n 8); Article 41(6)(a) in conjunction with 32^nd recital of the preamble to Directive 2009/73/EC (n 8). See also Article 14(1) of Regulation (EC) No 714/2009 (n 10); Article 13(1) of Regulation (EC) No 715/2009 of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (13 July 2009) OJ 2009/L 211/36. For more details, see Floris Gräper and Christof Schoser, ‘Third Party Access’ in Christopher Jones (ed), The Internal Energy Market – The Third Liberalisation Package (EU Energy Law Series vol 1, 3rd edn. Claeys & Casteels Publishing 2010) [3.45ff].

Calliess (n 320) 114.

European Commission, ‘Commission Staff Working Paper – Interpretative Note on Directive 2009/72/EC concerning common Rules for the Internal Market in Electricity and Directive 2009/73/EC concerning common Rules for the Internal Market in Natural Gas – The Unbundling Regime’ (n 245) 10.

European Court of Justice, French Republic v. Commission, Judgment (16 May 2002) C-482/99 [23]. See also European Court of Justice, Italy v. Commission, Judgment (21 March 1991) C-305/89 [13].

Jürgen F Baur and others, Eigentumsentflechtung der Energiewirtschaft durch Europarecht: Mittel, Schranken und Rechtsfolgen (Veröffentlichungen des Instituts für Energierecht an der Universität zu Köln vol 138, Nomos 2008) 67–68; Jürgen F Baur, Kai U Pritzsche and Sebastian Pooschke, ‘Ownership Unbundling von Energienetzen und der europäische Schutz des Eigentums’ [2008] Deutsches Verwaltungsblatt 483, 492 (both referring to Monopolkommission, ‘Strom und Gas 2007: Wettbewerbsdefizite und zögerliche Regulierung’ (2007), Sondergutachten 49, [611], footnote 598); Franz J Säcker and Jochen Mohr, ‘§ 8 Eigentumsrechtliche Entflechtung’ in Franz J Säcker (ed), Berliner Kommentar zum Energierecht (vol 1, 3rd edn. Dt. Fachverl. Fachmedien Recht und Wirtschaft 2014) [47].

Dirk Buschle, ‘Unbundling of State-owned Transmission System Operators – Effective Remedy or Eyewash?’ [2013] European Networks Law and Regulation Quarterly 49, 63.

Ibid 64.

In one specific case the Commission took the view that ‘the separation of the interests concerned must be ensured not only at the level of the members of government, but also at the level of supporting staff and administration’, see European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – Austria – Certification of Vorarlberger Übertragungsnetze GmbH (29 March 2012) C(2012) 2244 final, 6.

See Sect. 2.​3.​1.​3.

European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – Denmark – Certification of Energinet.dk (electricity) (09 January 2012) C(2012) 87 final, 5; European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 715/2009 and Article 10(6) of Directive 2009/73/EC – Denmark – Certification of Energinet.dk (gas) (09 January 2012) C(2012) 88 final, 5.

Commission Opinion – Certification of Energinet.dk (electricity) (n 331) 5–6; Commission Opinion – Certification of Energinet.dk (gas) (n 331) 5. See also European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – Czech Republic – Certification of ČEPS (electricity) (04 October 2012) C(2012) 7059 final, 4; European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – Slovak Republic – Certification of Slovenská elektrizačná prenosová sústava a.s (09 August 2013) C(2013) 5376 final, 4.

See also Buschle (n 327) 64.

See Article II:2 GATS (n 4).

Cossy (n 17) 161–162.

This was argued by the Russian Federation, see Trade Policy Review – European Union (n 87) 313.

Ibid 313.

See Sect. 4.1.

In terms of the following analysis, it is the MFN obligation of the EU as a whole that is particularly relevant.

In Japan – Alcoholic Beverages II, the Appellate Body stated that the concept of likeness evokes the image of an accordion which ‘stretches and squeezes in different places as different provisions of the WTO Agreement are applied’. It further noted that the ‘width of the accordion in any one of those places must be determined by the particular provision in which the term “like” is encountered as well as by the context and the circumstances that prevail in any given case to which that provision may apply’; see Japan – Taxes on Alcoholic Beverages (n 273) 21. See also European Communities – Measures Affecting Asbestos and Asbestos-Containing Products (n 207) [88].

See Krajewski (n 36) 121–122.

See Sect. 4.6.1.

It has been argued that the security of supply test in Article 11 of the Directives involves such a distinction.

This relates to the fact that energy companies can be subject to different unbundling models (OU, ISO, ITO), depending on the EU Member State in which they are located.

See the requirements for an exemption from OU in the Electricity Regulation and the Gas Directive.

Michaelis (n 11) [76].

European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 3) [233–234]; Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.105]. See also Pitschas (n 11) [53]; Herrmann, Weiß and Ohler (n 29) [853].

In fact, the Panel in EC – Bananas III construed the GATS MFN obligation in the light of Panel reports interpreting Article XVII GATS, see European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 5) [7.301–7.304].

See Sect. 4.6.2.2.

Argentina – Measures Relating to Trade in Goods and Services (n 199) [6.106]. See also WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 by Ecuador, Report of the Panel (12 April 1999) WT/DS27/RW/ECU [6.133]; van den Bossche and Zdouc (n 71) 335; Ortino (n 280) 195.

This view is shared by De Meester and Coppens (n 126) 120–122. See also Sidhu (n 283) 236–238 (who, however, mainly refers to the interpretation of the MFN principle in the context of international investment law).

See Sect. 4.6.2.2.

De Meester (n 126) 234–235.

Ibid 235–236.

Or under the TPA-related exemption regime provided for in the SEP. The Russian Federation, however, argues that through the OPAL and NEL exemption decisions, both rendered under the SEP, ‘the EU accorded Russian services and service suppliers less favorable treatment than it accorded to like services and service suppliers of other third-countries pursuant to relevant decisions granting exemptions to those suppliers’, contrary to its obligations under Article II:1 GATS; see European Union and its Member States – Certain Measures Relating to the Energy Sector (n 87) 4. While the merits of this claim will be analyzed in detail by the WTO dispute settlement bodies in the EU – Energy Package case, I take the view that the claim is unfounded. As regards the NEL pipeline, it is reasonably clear that the pipeline does not constitute an ‘interconnector’ within the meaning of Directive 2009/73/EC and that no exemption was granted to other pipelines that also do not meet the definition (for more, see Sect. 4.8.1.1). As regards OPAL, the ‘gas release requirement’ that was identified by Russia to be discriminatory has also been imposed in other infrastructure-related exemption decisions, such as in the case of the Trans Adriatic Pipeline, see Italian Regulatory Authority for Energy AEEG, Albanian Regulatory Authority for Energy ERE and Greek Regulatory Authority for Energy RAE, ‘Final Joint Opinion of the Energy Regulators on TAP AG’s Exemption Application’ (2013) 63–67 <http://​www.​autorita.​energia.​it/​allegati/​docs/​13/​249-13all.​pdf> accessed 21 September 2016.

But see Ispolinov and Dvenadtcatova (n 186) 119–120, who write that in comparison to the exemption decision relating to the OPAl pipeline, the exemption granted to the Trans Adriatic Pipeline is a good example of a ‘highly selective, if not discriminatory’ approach of the EU, in violation of the WTO’s MFN principle. In my view, however, the same restrictions on dominant undertakings imposed in the case of OPAL were also applied in the case of the TAP; see furthermore the remarks in footnote 361 (this chapter).

See also, in this connection, the decision-making practice with respect to the notion of ‘interconnector’ in Sect. 4.8.1.1.

Calliess (n 320) 113–114.

Ibid 114.

Frank Hoffmeister, ‘Litigating against the European Union and Its Member States – Who Responds under the ILC’s Draft Articles on International Responsibility of International Organizations?’ (2010) 21 European Journal of International Law 723, 737–738. In EC – Asbestos, for example, the Panel accepted that the EU was responsible for a 1996 French decree banning asbestos and products containing asbestos, see European Communities – Measures Affecting Asbestos and Asbestos-Containing Products (n 256) [2.3, 3.4]. Likewise, in EC – Approval and Marketing of Biotech Products, the Panel held that the independent safeguard measures of several Member States prohibiting the import and marketing of specific biotech products within their respective territories were attributable to the EU under international law, see WTO, European Communities – Measures Affecting the Approval and Marketing of Biotech Products, Reports of the Panel (29 September 2006) WT/DS291/R, WT/DS292/R, WT/DS293/R [7.101].

It is thus irrelevant that the regulatory framework adopted at EU level, i.e. Directives 2009/72/EC and 2009/73/EC, is the same for all (foreign) service suppliers.

Also, it has received only little attention in academic writing. Abu-Akeel (n 334) 121–122 identified the problem, stating that the ‘broad language’ of the GATS MFN clause ‘seemingly requir[es] uniformity at the national, regional or local level, of measures affecting the activities of foreign service suppliers’.

See Government of Canada, ‘2004 Canada Model Foreign Investment Promotion and Protection Agreement’ (2004) <http://​www.​italaw.​com/​documents/​Canadian2004-FIPA-model-en.​pdf> accessed 13 April 2015. Article 4 on MFN treatment is supplemented by the following footnote: ‘[F]or greater certainty, the treatment accorded by a Party under this Article means, with respect to a sub-national government, treatment accorded, in like circumstances, by that sub-national government to investors, and to investments of investors, of a non-Party.’

CETA – Consolidated text (n 181) 76–77.

Abu-Akeel (n 334) 121–122.

European Commission, Commission Opinion correcting Opinion C(2014) 5483 final of 28 July 2014 pursuant to Article 3(1) of Regulation (EC) No 715/2009 and Article 10(6) and 11(6) of Directive 2009/73/EC – Greece – Certification of DESFA (17 October 2014) C(2014) 7734 final, 2–3.

This seems to have been argued by the Russian Federation, see Trade Policy Review – European Union (n 87) 313.

Article 11(3)(b)(i) and (ii) as well as Article 11(7)(b) of Directive 2009/72/EC (n 8); Article 11(3)(b)(i) and (ii) as well as Article 11(7)(b) of Directive 2009/73/EC (n 8).

Therefore, the phrasing differs from the formulation used in Articles 7a(1) and 7b(2) of the Commission’s draft gas Directive and Articles 8a(1) and 8b(2) of the Commission’s draft electricity Directive, which provided that the foreign ownership prohibition was ‘[w]ithout prejudice to the international obligations of the Community’; see Proposal for a Directive amending Directive 2003/54/EC (n 120) 29; Proposal for a Directive amending Directive 2003/55/EC (n 120) 30. For a different view, see Schmidt-Preuß (n 79) [25]; Polish Regulatory Authority for Energy ERO, Final Decision on the Certification of the Transmission System Operator Gaz-System (19 May 2015) DRG-4720-2(28)/2014/2015/6154/KF, 52.

Even the European Commission stated in 2010 that ‘… an agreement between the EU and the third country concerned would clearly be the best basis allowing to come to the conclusion that granting certification will not put at risk the security of energy supply of the EU’, see European Commission, ‘Reply to Questions from Mr Shmatko on the Third Package’ (29 June 2010) 9 <http://​www.​asktheeu.​org/​de/​request/​168/​response/​558/​attach/​3/​Annex%20​reply%20​GHP%20​Shmatko%20​3rd%20​package%20​2.​pdf> accessed 24 September 2016 (emphasis added).

See, for example, Jörg Gundel and Claas F Germelmann, ‘Kein Schlussstein für die Liberalisierung der Energiemärkte’ [2009] Europäische Zeitschrift für Wirtschaftsrecht 763, 770 (referring to 25^th recital of the preamble to Directive 2009/72/EC (n 8); 22^nd recital of the preamble to Directive 2009/73/EC (n 8)).

Cabau (n 376) [4.105] (emphasis added).

For an example related to the EU’s emission trading system, see Lorand Bartels, ‘The WTO Legality of the Application of the EU’s Emission Trading System to Aviation’ (2012) 23 European Journal of International Law 429, 447, 464; Joshua Meltzer, ‘Climate Change and Trade – The EU Aviation Directive and the WTO’ (2012) 15 Journal of International Economic Law 111, 138, 149–150.

The Polish Ministry of Foreign Affairs has pointed out that, within the framework of the third-country certification procedure, the Energy Charter Treaty could be considered as an agreement which addresses the issues of security of energy supply, see Final Decision on Certification of TSO Gaz-System (n 375) 52.

Van den bergh (n 79) 250; van Hoorn (n 120) 64–65.

See, for example, the cases of TIGF and WMR.

George Lagaris and Alexia Trokoudi, ‘Application of Article 11 of the Gas Directive – TSOs Controlled by Companies from Non-Member States’ (2014) 19–20 <https://​www.​energy-community.​org/​portal/​page/​portal/​ENC_​HOME/​DOCS/​2950031/​0633975AD7C27B9C​E053C92FA8C06338​.​PDF> accessed 18 April 2016 (emphasis added).

See European Commission, Recommendation for a Council Decision authorising the opening of negotiations on an Agreement between the European Union and the Republic of Azerbaijan on a legal framework governing the control of DESFA by SOCAR (12 February 2014) COM(2014) 68 final.

Commission Opinion – Certification of DESFA (n 372) 6 (emphasis added).

Article 11(3)(b)(iii) Directive 2009/72/EC (n 8); Article 11(3)(b)(iii) Directive 2009/73/EC (n 8) (emphasis added).

European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 715/2009 and Article 10(6) of Directive 2009/73/EC – France – Certification of TIGF (04 June 2014) C(2014) 3837 final, 5.

Ibid.

See, with similar reasoning in a different context, Bartels (n 380) 445, 464.

These additional elements are not, however, mentioned in the final decision of the French regulator CRE, see French Regulatory Authority for Energy CRE, Délibération de la Commission de régulation de l’énergie portant décision de certification de la société TIGF (03 July 2014).

See Sect. 4.9.

Note, however, that Article X:3(a) GATT and Article V:1 GATS are not congruent: The former refers to the criteria ‘uniform, impartial and reasonable’, whereas the latter uses the words ‘reasonable, objective and impartial’.

See Sects. 4.6.2.2, 4.6.2.3 and 4.7.2.1.

See Sect. 4.4.

Panagiotis Delimatsis, ‘Due Process and “Good” Regulation Embedded in the GATS – Disciplining Regulatory Behaviour in Services Through Article VI of the GATS’ (2007) 10 Journal of International Economic Law 13, 18; Michaelis (n 11) [96, 99]; Herrmann, Weiß and Ohler (n 29) [880]; Pitschas (n 11) [129]; Munin (n 140) 273; European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 3) [200] (regarding Article X:3(a) GATT); WTO, European Communities – Measures Affecting the Importation of Certain Poultry Products, Report of the Appellate Body (13 July 1998) WT/DS69/AB/R [115] (regarding Article X GATT).

The substance of a measure could, however, be challenged if it is administrative in nature. For the (to some extent inconsistent) case-law on this issue, see Argentina – Measures Affecting the Export of Bovine Hides and the Import of Finished Leather (n 204) [11.69–11.72]; WTO, European Communities – Selected Customs Matters, Report of the Panel (16 June 2006) WT/DS315/R [7.102–7.119]; WTO, European Communities – Selected Customs Matters, Report of the Appellate Body (13 November 2006) WT/DS315/AB/R [190–201].

Delimatsis (n 397) 20; Markus Krajewski, ‘Article VI GATS’ in Rüdiger Wolfrum, Peter-Tobias Stoll and Clemens Feinäugle (eds), WTO – Trade in Services (Max Planck Commentaries on World Trade Law vol 6. Martinus Nijhoff Publishers 2008) [8]; Andrew Mitchell and Tania Voon, ‘Reasonableness, Impartiality and Objectivity’ in Aik H Lim and Bart De Meester (eds), WTO Domestic Regulation and Services Trade: Putting Principles into Practice (Cambridge University Press 2014) 69–71. For a different view, see De Meester (n 126) 239–240, who concludes that ‘if a complainant is able to show that the administration of a measure of general application in an individual case is “unreasonable, not objective or not impartial”, this administrative act “as such” already violates Article VI:1’ (emphasis added). See also Torje Sunde, Möglichkeiten und Grenzen innerstaatlicher Regulierung nach Art. VI GATS (Beiträge zum Transnationalen Wirtschaftsrecht vol 59, 2006) 13–14.

Cf. WTO, European Communities and its Member States – Tariff Treatment of Certain Information Technology Products, Reports of the Panel (16 August 2010) WT/DS375/R, WT/DS376/R, WT/DS377/R [7.1034]; WTO, European Communities – Measures Affecting the Importation of Certain Poultry Products, Report of the Panel (12 March 1998) WT/DS69/R [269]; European Communities – Measures Affecting the Importation of Certain Poultry Products (n 397) [113].

Krajewski (n 400) [10].

Ibid.

Krajewski (n 400) [12].

Ibid.

Molinuevo (n 7) 165.

Given that so far there are no exemption decisions with a ‘third country dimension’ under the Electricity Regulation (see Sect. 2.​3.​3.​2), the focus here will be on the Gas Directive.

Article 2 No. 17 of Directive 2009/73/EC (n 8).

See below footnotes 423, 428–429 (this chapter), and accompanying text.

Bundesnetzagentur, Antrag auf Freistellung von der Regulierung – OPAL NEL Transport GmbH (25 February 2009) Az. BK7-08-009, 22–34.

Ibid.

Ibid 26.

Ibid 30–32. For the exemption decisions of the Austrian national regulatory authority, see Energie-Control Kommission, Bescheid – Nabucco Gas Pipeline International GmbH (09 April 2008) GZ K NIS G 01/07; Energie-Control Kommission, Bescheid – Nabucco Gas Pipeline International GmbH (26 November 2008) GZ K NIS G 01/08.

European Commission, Exemption decision on the Austrian section of the Nabucco pipeline (08 February 2008) CAB D(2008)142; European Commission, Exemption decision on the Austrian section of the Nabucco pipeline (22 October 2008) CAB D(2008) 1094, C(2008) 6254.

European Commission, Ausnahmegenehmigung der Bundesnetzagentur für die OPAL-Gasleitung gemäß Art. 22 der Richtlinie 2003/55 (12 June 2009) C(2009) 4694, 23–24.

35^th recital of the preamble to Directive 2009/73/EC (n 8) (emphasis added).

Heller (n 415) 225.

Antrag auf Freistellung von der Regulierung – OPAL NEL (n 416) 20–21.

Commission Decision – Exemption of the Trans Adriatic Pipeline (n 310) 55 (emphasis added).

Ibid.

Ivan Gudkov, ‘Проблемы международноправового регулирования энергетических отношений на примере взаимодействия России и Европейского союза’ [2015] Закон 84, 92.

This is the argument of the Russian Federation in the EU – Energy Package case, see European Union and its Member States – Certain Measures Relating to the Energy Sector (n 87) 4.

Ibid (footnotes omitted).

See WTO, Peru – Additional Duty on Imports of Certain Agricultural Products, Report of the Panel (27 November 2014) WT/DS457/R [7.494]. For a similar statement, see also United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan (n 403) [7.267].

As of now, there is no relevant practice in the electricity sector.

See Simon Pirani and Katja Yafimava, Russian Gas Transit Across Ukraine Post-2019: Pipeline Scenarios, Gas Flow Consequences, and Regulatory Constraints (Oxford Institute for Energy Studies 2016) 31; Alan Riley, ‘Nordstream 2: Too Many Obstacles, Legal, Economic, and Political to be Delivered?’ (2015) 7 <http://​www.​atlanticcouncil.​org/​images/​publications/​Nordstream_​2_​web_​1125.​pdf> accessed 31 July 2016.

Pirani and Yafimava (n 435) 31; Deutscher Bundestag, ‘Ausarbeitung: Nord Stream 2 – Vorgaben des europäischen Energierechts’ (2016) 5–6 <https://​www.​bundestag.​de/​blob/​420194/​7f62ba1e54f37cac​aab01d4db4d1f65a​/​pe-6-027-16-pdf-data.​pdf> accessed 1 August 2016. It seems that there are diverging views even within the European Commission. Whereas the Commission’s Legal Service opined that the Gas Directive does not apply to the part of a pipeline running through the exclusive economic zone and territorial waters of an EU Member State, DG Energy adopted a contrary position; see Karel Beckman, ‘Can Nord Stream 2 Be Stopped?’ (14 April 2016) <http://​www.​energypost.​eu/​can-nord-stream-2-stopped/​> accessed 23 June 2016.

‘Bulgaria, Commission, Lost in Translation over South Stream’ EurActiv (25 April 2014) <http://​www.​euractiv.​com/​sections/​energy/​bulgaria-commission-lost-translation-over-south-stream-301751>.

Republic of Bulgaria, Draft Law on the Amendment and Supplement of the Energy Act (Законопроект за изменение и допълнение на Закона за енергетиката) (2014) 454-01-23.

Ibid 3.

Ibid 2. Specifically, the draft law specified that the following provisions of the Energy Act shall not apply to ‘sea water gas pipelines’: Section IV of Chapter Three (price regulation), Chapter Four (licenses), Chapter Eight ‘a’ (certification of TSOs; rules for investment execution; independence of TSOs), Article 170 (obligation of TSOs), Articles 172–172e (third party access; exemption) and Article 197 (interconnection).

Ibid 4–8.

‘Bulgaria, Commission, Lost in Translation over South Stream’ (n 437).

Martin Banks, ‘Battle Rages between Bulgaria and Brussels over Future of Energy Supplies’ EU Reporter (7 May 2014) <http://​www.​eureporter.​co/​world/​2014/​05/​07/​battle-rages-between-bulgaria-and-brussels-over-future-of-energy-supplies/​>.

Ibid.

See European Commission, DG Energy, ‘Exemption Decisions and Pending Notifications of National Exemption Decisions for Gas and Electricity’ (no date) <https://​ec.​europa.​eu/​energy/​sites/​ener/​files/​documents/​exemption_​decisions_​15.​pdf> accessed 24 September 2016; European Commission, DG Energy, ‘Opinions and Decisions on Operator Certifications’ (no date) <https://​ec.​europa.​eu/​energy/​sites/​ener/​files/​documents/​certifications_​decisions.​pdf> accessed 24 September 2016. See also Philipp Offenberg, ‘The European Neighbourhood and the EU’s Security of Supply with Natural Gas’ (2016) 19 <http://​www.​institutdelors.​eu/​media/​euneighbourhooda​ndgas-offenberg-jdib-jan16.​pdf?​pdf=​ok> accessed 31 January 2016; Riley, ‘Nordstream 2: Too Many Obstacles, Legal, Economic, and Political to be Delivered?’ (n 435) 7; Yafimava (n 290) 128, 328; European Union, Question for Written Answer E-001009/14 to the Commission – Radvilė Morkūnaitė-Mikulėnienė (PPE) – European Law Exemptions for Energy Infrastructure Projects with Russia (31 March 2014) OJ 2014/C 300/290.

Nord Stream, ‘The Pipeline’ (no date) <https://​www.​nord-stream.​com/​the-project/​pipeline/​> accessed 21 April 2015.

‘Nord Stream: A View from Poland’ Natural Gas Europe (9 November 2011) <http://​www.​naturalgaseurope​.​com/​nord-stream-a-view-from-poland-3421>; Hanna Smith, ‘Russian Foreign Policy and Energy: The Case of the Nord Stream Gas Pipeline’ in Pami Aalto (ed), Russia’s Energy Policies – National, Interregional and Global Levels (Edward Elgar 2012) 124, 134.

See European Union, Decision No 1364/2006/EC of the European Parliament and of the Council laying down guidelines for trans-European energy networks and repealing Decision 96/391/EC and Decision No 1229/2003/EC (06 September 2006) OJ 2006/L 262/1.

Article 2 No. 2 of Directive 2009/73/EC (n 8).

The reason for this is that the definition of the term ‘transmission’, which triggers the application of the unbundling and third party access obligations, explicitly excludes upstream pipeline networks; see ibid, Article 2 No. 3. Some disciplines regarding access to upstream pipeline networks nevertheless apply, see ibid, Article 34.

The Russian foreign minister Sergey Lavrov made the following statement in a press conference on 21 January 2015: ‘The South Stream situation is utterly clear: the project, regrettably, has been cancelled – primarily because of the European Commission’s discriminatory stance. The exemptions from the Third Energy Package (TEP) that were made for other projects confirm that, given the political will and elementary willingness, all the barriers could have been removed. … [The European Commission] made an exception … for maritime sections of a number of other pipelines in the Mediterranean, such as Transmed, Greenstream, and others. There were many cases, in which the European Commission made exceptions from the Third Energy Package, but not for Bulgaria. I won’t go into detail – South Stream has been cancelled.’, see Ministry of Foreign Affairs of the Russian Federation, ‘Foreign Minister Sergey Lavrov’s Address and Annual News Conference on Russia’s Diplomatic Performance in 2014’ (2015) <http://​www.​mid.​ru/​brp_​4.​nsf/​0/​D1AFD0A22ABD9AB4​43257DD4004F33B5​> (emphasis added). See also Christian Oliver and Jack Farchy, ‘Gazprom Criticises EU over South Stream Gas Pipeline’ Financial Times (30 May 2014) <http://​www.​ft.​com/​intl/​cms/​s/​0/​949eb796-e7f2-11e3-9af8-00144feabdc0.​html>.

Eni, ‘Interim Consolidated Report’ (30 June 2016) 146 <https://​www.​eni.​com/​docs/​en_​IT/​enicom/​publications-archive/​publications/​reports/​reports-2016/​interim-consolidated-report-as-of-june-30-2016.​pdf> accessed 31 July 2016.

See European Commission, DG Energy, ‘Opinions and Decisions on Operator Certifications’ (n 445).

See Beckman, ‘Can Nord Stream 2 Be Stopped?’ (n 436).

Anca Gurzu, ‘Nord Stream 2’s Opponents Look for Legal Ammunition’ (30 December 2015) <http://​www.​politico.​eu/​article/​nord-stream-2s-opponents-look-for-legal-ammunition/​> accessed 23 June 2016.

Riley, ‘Nordstream 2: Too Many Obstacles, Legal, Economic, and Political to be Delivered?’ (n 435) 7–8. But see Pirani and Yafimava (n 435) 31.

To the extent that the offshore sections of these pipelines are located within EU jurisdiction.

WTO, Decision on Professional Services – Adopted by the Council for Trade in Services on 1 March 1995 (04 April 1995) S/L/3.

WTO, Decision on Disciplines Relating to the Accountancy Sector – Adopted by the Council for Trade in Services on 14 December 1998 (15 December 1998) S/L/63. For the text of the disciplines, see WTO, Disciplines on Domestic Regulation in the Accountancy Sector – Adopted by the Council for Trade in Services on 14 December 1998 (17 December 1998) S/L/64.

WTO, Decision on Domestic Regulation – Adopted by the Council for Trade in Services on 26 April 1999 (28 April 1999) S/L/70.

WTO, Council for Trade in Services, Negotiations on Trade in Services – Report by the Chairman, Ambassador Fernando de Mateo, to the Trade Negotiations Committee (21 April 2011) TN/S/36, [2].

WTO, Working Party on Domestic Regulation, Report on the Meeting Held on 11 May 2001 – Note by the Secretariat (07 June 2001) S/WPDR/M/11, [29].

This argument was raised by the Russian Federation, see Trade Policy Review – European Union (n 87) 313–314.

See Sect. 4.4.

WTO, Working Party on Domestic Regulation, Disciplines on Domestic Regulation Pursuant to GATS Article VI:4 – Chairman’s Progress Report (14 April 2011) S/WPDR/W/45, 10. Qualification requirements are described as ‘substantive requirements relating to the competence of a natural person in relation to the supply of a service, and which are required to be demonstrated for the purpose of obtaining authorization to supply a service’ (ibid 12).

For a comprehensive study of this concept, see Frieder Roessler, ‘The Concept of Nullification and Impairment in the Legal System of the World Trade Organization’ in Ernst-Ulrich Petersmann (ed), International Trade Law and the GATT/WTO Dispute Settlement System (Kluwer Law International 1997); Ernst-Ulrich Petersmann, The GATT/WTO Dispute Settlement System: International Law, International Organizations and Dispute Settlement (Kluwer Law International 1997) 135–176.

GATT, United States – Taxes on Petroleum and Certain Imported Substances (Superfund), Report of the Panel (17 June 1987) L/6175 – 34S/136 [5.1.7]; European Communities – Regime for the Importation, Sale and Distribution of Bananas (n 3) [249–254]; Delimatsis (n 405) 120.

Rainer Grote, ‘Article XXIII GATS’ in Rüdiger Wolfrum, Peter-Tobias Stoll and Clemens Feinäugle (eds), WTO – Trade in Services (Max Planck Commentaries on World Trade Law vol 6. Martinus Nijhoff Publishers 2008) [1, 9]. See also WTO, Mexico – Measures Affecting Telecommunications Services, Report of the Panel (2 April 2004) WT/DS204/R [8.4].

Pitschas (n 11) [138]; Michaelis (n 11) [106]; Sunde (n 400) 60–63.

Herrmann, Weiß and Ohler (n 29) [882a].

Jan Wouters and Dominic Coppens, ‘GATS and Domestic Regulation: Balancing the Right to Regulate and Trade Liberalization’ in Kern Alexander and Mads Andenas (eds), The World Trade Organization and Trade in Services (Martinus Nijhoff Publishers 2008) 258; Markus Krajewski, ‘Disziplinen für innerstaatliche Regulierung nach Artikel VI GATS’ in Dirk Ehlers, Hans-Michael Wolffgang and Marc Lechleitner (eds), Rechtsfragen des internationalen Dienstleistungsverkehrs: Tagungsband zum 10. Münsteraner Außenwirtschaftsrechtstag 2005 (Verlag Recht und Wirtschaft 2006) 197.

Delimatsis (n 405) 122.

Ibid 122–123.

Emphasis added.

Delimatsis (n 405) 123–124.

Trachtman (n 196) 213; Krajewski (n 400) [68].

Trachtman (n 196) 213 (‘an extremely vague standard’).

Ibid [10.82]. The Panel inter alia referred to GATT, Follow-Up on the Panel Report “European Economic Community – Payments and Subsidies Paid to Processors and Producers of Oilseeds and Related Animal-Feed Proteins”, Report of the Members of the Original Oilseeds Panel (31 March 1992) DS28/R – 39S/91 [77].

See Krajewski (n 400) [67].

See Sect. 4.4.

Cf. GATT, European Economic Community – Payments and Subsidies Paid to Processors and Producers of Oilseeds and Related Animal-Feed Proteins, Report of the Panel (25 January 1990) L/6627 – 37S/86 [148].

See Sect. 6.​1.

See Sect. 6.​4.​1.

Energy Services – Background Note by the Secretariat (n 2) [6] (emphasis added).

It should also be noted in this connection that although a number of non-violation complaints have been brought under the GATT, alleging nullification or impairment of benefits, none of them has been successful; see van den Bossche and Zdouc (n 71) 175.

Wouters and Coppens (n 476) 258; Michaelis (n 11) [106]; Herrmann, Weiß and Ohler (n 29) [882a]; Delimatsis (n 405) 119; WTO, Article VI:4 of the GATS: Disciplines on Domestic Regulation Applicable to All Services – Note by the Secretariat (01 March 1999) S/C/W/96, [11].

De Meester (n 126) 196–197; Luff (n 488) 203.

Trachtman (n 477) 68.

For another example in the context of hospital services, see Adlung (n 44) 480.

Disciplines on Domestic Regulation in the Accountancy Sector – Adopted by the Council for Trade in Services on 14 December 1998 (n 461) [2].

The WTO Secretariat opines that there is a difference in meaning, see WTO, Working Party on Domestic Regulation, Report on the Meeting Held on 29 November 2000 – Note by the Secretariat (12 March 2001) S/WPDR/M/9, 8. Similarly, Krajewski takes the view that the concept of ‘burdensomeness’ is broader than the concept of ‘trade-restrictiveness’ and that, accordingly, a measure could be found to be more burdensome than necessary, while not being overly trade-restrictive. In his view, such an application of the necessity test in Article VI:4(b) GATS could have a detrimental effect on national regulatory autonomy, see Krajewski (n 36) 141–142. WTO Members, however, appear to treat the two terms as synonymous, see Delimatsis (n 502) 387.

Krajewski (n 36) 142.

For a full proportionality analysis, see Sect. 5.​7.​3.​2.

9^th, 11^th-12^th, 16^th and 19^th recital of the preamble to Directive 2009/72/EC (n 8); 6^th, 8^th-9^th, 13^th and 16^th recital of the preamble to Directive 2009/73/EC (n 8). See also Cabau (n 376) [4.24]; Buschle (n 327) 54, 62.

European Commission, ‘Commission Staff Working Paper – Interpretative Note on Directive 2009/72/EC concerning common Rules for the Internal Market in Electricity and Directive 2009/73/EC concerning common Rules for the Internal Market in Natural Gas – The Unbundling Regime’ (n 245) 4; European Commission, Commission Decision pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – Ireland – Eirgrid/ESB (12 April 2013) C(2013) 2169 final, [17]; European Commission, Commission Decision on the application of Article 9(9) of Directive 2009/72/EC to Transmission System Operation in Scotland (14 May 2012) C(2012) 3284 final, [8]; European Commission, Commission Decision pursuant to Article 3(1) of Regulation (EC) No 714/2009 and Article 10(6) of Directive 2009/72/EC – United Kingdom (Northern Ireland) – SONI/NIE (12 April 2013) C(2013) 2170 final, [11].

In doing so, the Member States could point to statements of the European Commission and the European Parliament, which were made during the legislative procedure leading to the adoption of the TEP and which suggest that ownership unbundling is, in fact, superior to other unbundling options, see European Commission, Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report) (10 January 2007) COM(2006) 851 final, [55]; European Parliament, Resolution on Prospects for the Internal Gas and Electricity Market (10 July 2007) P6_TA(2007)0326, [2].

See the reasoning of the Dutch Hoge Raad in Hoge Raad der Nederlanden, Staat der Nederlanden v. Essent N.V. Judgment (26 June 2015) 10/03851 [3.20].

See Sect. 4.6.2.1.

Footnotes in the original omitted.

Michaelis (n 11) [109].

Pitschas (n 11) [154].

Herrmann, Weiß and Ohler (n 29) [884]; Pitschas (n 11) [154].

For a similar argument in a different context, see Martin Nettesheim, ‘Unternehmensübernahmen durch Staatsfonds: Europarechtliche Vorgaben und Schranken’ (2008) 172 Zeitschrift für das gesamte Handels- und Wirtschaftsrecht 729, 739, footnote 17.

Cottier, Delimatsis and Diebold (n 518) [40] (referring to United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (n 95) [6.538]). See also GATT, EEC – Regulation on Imports of Parts and Components, Report of the Panel (16 May 1990) L/6657 – 37S/132 [5.14–5.18].

Security of supply considerations could also play a role under Article XIV(b) GATS. See, for instance, Albath (n 2) 122 (who briefly discusses whether the security of energy supply could fall within the scope of Article XX(b) GATT).

See 11^th recital of the preamble to Directive 2009/72/EC (n 8); 8^th recital of the preamble to Directive 2009/73/EC (n 8).

See 25^th recital of the preamble to Directive 2009/72/EC (n 8); 22^nd recital of the preamble to Directive 2009/73/EC (n 8).

Here, the security of supply dimension is particularly strong in the gas sector. According to ibid, Article 36(1)(a) an infrastructure-related exemption can only be granted if the new infrastructure enhances security of supply. See also ibid, 35^th recital of the preamble.

The official German translation of this footnote reads: ‘Die Ausnahmeregelung in bezug auf die öffentliche Ordnung kann nur in Anspruch genommen werden, wenn eine wirkliche, ausreichend schwerwiegende Bedrohung der Grundwerte der Gesellschaft vorliegt.’, see Federal Republic of Germany, Act concerning the Agreement of 15 April 1994 Establishing the World Trade Organization and concerning the Amendment of other Laws (Gesetz zu dem Übereinkommen vom 15. April 1994 zur Errichtung der Welthandelsorganisation und zur Änderung anderer Gesetze) (09 September 1994) BGBl. II S. 1438, 1650. The translation is partially inaccurate, as ‘Grundwerte’ would usually be translated as ‘fundamental values’ and not as ‘fundamental interests’. This has led some authors to (erroneously) state that Article XIV(a) GATS refers to ethical categories of fundamental conceptions of social order, see Mario Martini, ‘Zu Gast bei Freunden?: Staatsfonds als Herausforderung an das europäische und internationale Recht’ (2008) 61 Die Öffentliche Verwaltung 314, 321.

In accordance with the English text, the equally authentic Spanish and French language versions refer to ‘intereses fundamentales’ and ‘intérêts fondamentaux’, respectively.

Some commentators have opined that the Panel’s statement regarding standards of security should not be taken to mean that national security interests also fall within the scope of Article XIV GATS. In their view, such interests would only be covered by the security exception in Article XIV ^bis GATS, see Cottier, Delimatsis and Diebold (n 518) [22]; Krajewski (n 36) 158. This clarification relating to the scopes of application of Articles XIV and XIV^bis GATS should not, however, be understood so as to imply that State security interests cannot overlap with societal interests. While ‘pure’ national security interests are covered exclusively by Article XIV^bis GATS, it is submitted here that the security of energy supply can be seen as a fundamental interest of both the State and the society.

25^th recital of the preamble to Directive 2009/72/EC (n 8); 22^nd recital of the preamble to Directive 2009/73/EC (n 8).

See European Court of Justice, Campus Oil, Judgment (10 July 1984) C-72/83 [34–35]; European Court of Justice, Commission v. Belgium, Judgment (4 June 2002) C-503/99 [46]; European Court of Justice, Commission v. Italy, Judgment (2 June 2005) C-174/04 [40]; Staat der Nederlanden v Essent NV and Others (n 131) [59] (holding, moreover, that Treaty-based justifications in relation to ‘public security’ in principle also cover measures taken to enhance security of energy supply and that the security of energy supply is recognized as being an overriding reason in the public interest).

For the internal and external dimensions of the security of energy supply, see Kim Talus, Vertical Natural Gas Transportation Capacity, Upstream Commodity Contracts and EU Competition Law (Kluwer Law International 2011) 60ff, 65ff; Sanam S Haghighi, Energy Security: The External Legal Relations of the European Union with Major Oil and Gas Supplying Countries (Modern Studies in European Law vol 16, Hart 2007) 18ff.

Ibid [306].

Brazil – Measures Affecting Imports of Retreaded Tyres (n 540) [140]; European Communities – Measures Affecting Asbestos and Asbestos-Containing Products (n 207) [168].

See, for instance, the statement of the Polish national regulator ERO, which argued that granting a certificate of independence under the ISO model to a particular TSO will ‘contribute to an increased level of security of gaseous fuel supply both to Poland and to the European Union as a whole’, see Final Decision on Certification of TSO Gaz-System (n 375) 75 (translation provided by the European Commission).

See, for example, Monopolkommission (n 326) [606].

OECD, ‘Report on Experiences with Structural Separation’ (2012) 111 <http://​www.​oecd.​org/​daf/​competition/​50056685.​pdf> accessed 24 June 2015.

Ibid. See also ibid [4.4, 4.8.1–4.8.2].

Baur and others (n 326) 51. See also Monopolkommission (n 326) [609].

Christian Koenig, Kristina Schreiber and Kristin Spiekermann, ‘Defizitäres Entflechtungsregime? Eine kritische Analyse der Entflechtungsvorschriften in dem Entwurf des dritten Liberalisierungspakets der Kommission der Europäischen Gemeinschaften’ [2008] Netzwirtschaften & Recht 7, 12.

Klaus Gugler, Margarethe Rammerstorfer and Stephan Schmitt, ‘Ownership Unbundling and Investment in Electricity Markets – A Cross Country Study’ (2013) 40 Energy Economics 702, 711–712.

Ibid 711.

OECD, ‘Report on Experiences with Structural Separation’ (n 545) 110.

European Commission, Commission Staff Working Document – Report on the ITO Model (13 October 2014) SWD(2014) 312 final, 6.

See the reasoning of the Dutch Hoge Raad in Staat der Nederlanden v. Essent N.V. (n 509) [3.21, 3.22.2, 4.9.1].

Commission Opinion – Certification of DESFA (n 372) 4–7; European Commission, Commission Opinion pursuant to Article 3(1) of Regulation (EC) No 715/2009 and Article 10(6) and 11(6) of Directive 2009/73/EC – Poland – Certification of Gaz-System as the operator of the Polish section of Yamal-Europe Pipeline (19 March 2015) C(2015) 2008 final, 5–6.

The third-country certification procedure provides for a case-specific examination of security of supply concerns. Certification is denied only if security of supply risks actually exist in the specific case at hand and if such risks cannot be counterbalanced by additional safeguards. To date, there has not yet been a case in which certification was denied under Article 11 of the Directives.

Oliver Budzinski, The Governance of Global Competition: Competence Allocation in International Competition Policy (Edward Elgar 2008) 37–38; Florian Wagner-von Papp, ‘§ 11 Internationales Wettbewerbsrecht’ in Christian Tietje (ed), Internationales Wirtschaftsrecht (De Gruyter 2015) [82ff].

See Schmidt-Preuß (n 79) [98].

This is due to the definition of the term ‘interconnector’, see Article 2(1) of Regulation (EC) No 714/2009 (n 10); Article 2 No. 17 of Directive 2009/73/EC (n 8).

Marek Szydło, ‘Regulatory Exemptions for New Gas Infrastructure. A Key Challenge for European Energy Policy’ (2009) 18 European Energy and Environmental Law Review 254, 254.

Hans Heller, ‘Neue Erdgasinfrastrukturen und Freistellung von der Regulierung: Art. 36 der Erdgasrichtlinie 2009/73/EG (§ 28a EnWG) als legitimes Instrument der Investitionsförderung?’ (2015) 12 Netzwirtschaften & Recht 66, 71.

Pitschas (n 11) [159]; Michaelis (n 11) [112].

Van den Bossche and Zdouc (n 71) 599.

See, with respect to the negotiating history of Article XXI GATT, World Trade Organization (n 2) 600.

Dapo Akande and Sope Williams, ‘International Adjudication on National Security Issues: What Role for the WTO?’ (2003) 43 Virginia Journal of International Law 365, 384 (emphasis added).

Thomas Cottier and Panagiotis Delimatsis, ‘Article XIV^bis GATS’ in Rüdiger Wolfrum, Peter-Tobias Stoll and Clemens Feinäugle (eds), WTO – Trade in Services (Max Planck Commentaries on World Trade Law vol 6. Martinus Nijhoff Publishers 2008) [14].

Akande and Williams (n 569) 379ff; Schloemann and Ohlhoff (n 572) 438ff; Andrew Emmerson, ‘Conceptualizing Security Exceptions: Legal Doctrine or Political Excuse?’ (2008) 11 Journal of International Economic Law 135, 145; Hestermeyer (n 572) [20].

Cottier and Delimatsis (n 570) [8].

In line with the former view, some authors have taken the position that the concept of essential security interests ‘amounts to an objective criterion’ and that judicial review is possible in this regard (see ibid [17–18]). Others, following the latter view, have opined that, except for an examination of whether the WTO Member was acting in good faith, panels should not second-guess its definition of what constitutes an essential security interest (see Akande and Williams (n 569) 396–399). Although the latter approach is preferable in my opinion, it seems that under both views the security of energy supply could be relied upon as an ‘essential security interest’ within the meaning of Article XIV ^bis :1 GATS.

Lorand Bartels, ‘The Separation of Powers in the WTO: How to Avoid Judicial Activism’ (2004) 53 International and Comparative Law Quarterly 861, 871.

Michael J Hahn, ‘Vital Interests and the Law of GATT: An Analysis of GATT’s Security Exception’ (1991) 12 Michigan Journal of International Law 558, 588–589; Akande and Williams (n 569) 398ff; Schloemann and Ohlhoff (n 572) 445–446.

See Schloemann and Ohlhoff (n 572) 446, who opine that the adjective ‘other’ creates a ‘connection to the term “war”’. See also Cottier and Delimatsis (n 570) [28].

Hestermeyer (n 572) [34].

Cottier and Delimatsis (n 570) [28].

Cottier and Delimatsis (n 570) [28]. See also Hahn (n 581) 357.

Emphasis added.

According to the ILC’s Commentary to the Articles on State Responsibility, government ownership, in and of itself, is not sufficient to attribute acts of corporate entities to the State (see paragraph 6 of the commentary to Article 8 of the International Law Commission, Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries (2001) YBILC 2001/II(2), 48, where the ILC states that ‘[s]ince corporate entities, although owned by and in that sense subject to the control of the State, are considered to be separate, prima facie their conduct in carrying out their activities is not attributable to the State unless they are exercising elements of governmental authority within the meaning of article 5’). This is also the position of the Appellate Body (see WTO, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, Report of the Appellate Body (27 June 2005) WT/DS296/AB/R [112], footnote 179; In that case, the Appellate Body dealt with the attribution of conduct to the State under Article 1.1 of the SCM Agreement). By way of example, even though Gazprom is majority-owned by the Russian Federation, its conduct cannot automatically be attributed to the Russian State. The involvement of a State-owned entity cannot substitute for the lack of an inter-State dimension.

This conclusion is supported by Nikolay Mizulin, ‘EC Experience in Creating an Internal Energy Market: Lessons for the WTO’ in Joost Pauwelyn (ed), Global Challenges at the Intersection of Trade, Energy and the Environment (Center for Economic and Policy Research 2010) 73 (who states that ‘nothing in [Article XXI GATT] appears to provide for the security-of-supply justification’). For a different view, see Waloszyk (n 186) 71 (who, without having discussed the scope of Article XIV ^bis GATS, writes that ‘the introduction of a supplementary condition in article 11 of Directive 2009/73/EC regarding security of supply is justified by article XIV bis GATS’).