For the second time in three months, the president of the European Commission is threatening to impose EU export restrictions on vaccines, which, if not explicitly, are nevertheless aimed primarily at the United Kingdom.
The threat of restrictive measures is based on the frustration in Brussels that the British-Swedish pharmaceutical company AstraZeneca has only delivered about a third of the contracted vaccines to the European Union while appearing to be fulfilling its agreement with the United Kingdom. The exact extent of deliveries is not known, as the agreement with the British has not been made public, but the fact is that the island nation is doing much better with vaccines than the Union. As it stands, more than 30 million Brits have been inoculated, more than half of the adult population is protected by at least one dose of vaccine, and the entire adult population is scheduled to be immunized by the end of July at the latest.
Seeing this development, Commission President Ursula von der Leyen said, “It is time for Europe to receive a fair share of vaccines”.
In order to meet this expectation, the Union is threatening to activate Article 122 of the EU Treaty to implement an export ban, which is reserved for emergencies. This attitude raises serious legal and even rule-of-law issues.
Because what is this really about? A (incidentally partly British) privately-owned pharmaceutical company has entered a commercial agreement with the European Commission, acting on behalf of and representing the member states of the European Union, to build production capacity “to the best of its ability” of 300 million (and optionally hundreds of millions) of vaccines to be delivered to the Union on a cost basis and without profit. The detailed terms are governed by an additional 40 pages of the agreement, some of which, including the delivery schedule, are covered.
It says there in black and white that in the event of a dispute the parties will first try to reach a settlement in informal consultation in good faith and, failing that, will recognize the exclusive jurisdiction of the courts of Brussels. Another paragraph stipulates that the contract is governed by Belgian law.
Therefore, if the parties are unable to reach an agreement, an independent court in a state governed by the rule of law must decide whether, on the basis of the 40 pages of conditions, there has in fact been a breach of contract. If not, the European Commission must accept that it did not conclude the agreement with due care and that it should not have allowed such a situation, which is clearly detrimental to the Union, to develop.
If, on the other hand, the court upholds the Commission’s action and finds that there has indeed been a breach of contract, the sanctions provided for in the contract — fines, damages, etc. — can be implemented. But since there is no sanction that compels the producer to deliver the vaccine after a previous failure to do so, the EU would still be without the vaccine.
Whether AstraZeneca performs deliveries to the detriment of a contract signed with a third party month in advance is a company’s own internal decision and cannot be enforced by legal means.
Title image: European Council President Charles Michel speaks next to European Commission President Ursula von der Leyen during an online news conference at the end of a EU summit at the European Council building in Brussels, Thursday, March 25, 2021. European Union leaders struggled Thursday to solve quarrels about the distribution of COVID-19 vaccine shots as they tried to ramp up inoculations across their 27 nations amid a shortage of doses, spikes in new cases and a feud with the United Kingdom. (Aris Oikonomou, Pool Photo via AP)